Exhibit 10.5




 




 




COPYRIGHT COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT




 




THIS AGREEMENT

(“Agreement”), dated March 31, 2003, is by and between MACKIE DESIGNS INC., a

Washington corporation (“Debtor”), and CONGRESS FINANCIAL CORPORATION

(FLORIDA), a Florida corporation in its capacity as agent (“Secured Party”),

pursuant to the Loan Agreement (as hereinafter defined) acting for and on

behalf of the financial institutions which are parties thereto as lenders (each

individually, a “Lender” and collectively, “Lenders”).




 




W  I  T

N  E  S  S  E  T  H :




 




WHEREAS, Debtor has adopted,

used and is using, and is the owner of the entire right, title, and interest in

and to the copyrights described in Exhibit A hereto and made a part hereof;




 




WHEREAS, Secured Party,

Debtor, certain of its affiliates and Lenders have entered into or are about to

enter into financing arrangements pursuant to which Lenders (or Secured Party

on behalf of Lenders) may make loans and advances and provide other financial

accommodations to Debtor and certain of its affiliates as set forth in the Loan

and Security Agreement, dated of even date herewith, by and among Debtor,

certain of its affiliates, Secured Party and Lenders (as the same now exists or

may hereafter be amended, modified, supplemented, extended, renewed, restated

or replaced, the “Loan Agreement”), and the other agreements, documents and

instruments referred to therein or at any time executed and/or delivered in

connection therewith or related thereto, including, but not limited to, this

Agreement (all of the foregoing, together with the Loan Agreement, as the same

now exist or may hereafter be amended, modified, supplemented, extended,

renewed, restated or replaced, being collectively referred to herein as the

“Financing Agreements”); and




 




WHEREAS, in order to induce

Secured Party and Lenders to enter into the Loan Agreement and the other

Financing Agreements and to make loans and advances and provide other financial

accommodations to Debtor and certain of its affiliates pursuant thereto, Debtor

has agreed to grant to Secured Party certain collateral security as set forth

herein;




 




NOW, THEREFORE, in

consideration of the premises and for other good and valuable consideration,

the receipt and sufficiency of which are hereby acknowledged, Debtor hereby

agrees as follows:




 




1.  GRANT OF SECURITY INTEREST




 




As collateral security for

the prompt performance, observance and indefeasible payment in full of all of

the Obligations (as hereinafter defined), Debtor hereby grants to Secured Party

for the benefit




 





























 




of itself and Lenders a

continuing security interest in and a general lien upon, and a conditional

assignment of, the following (being collectively referred to herein as the

“Collateral”):  (a) all of Debtor’s now

existing or hereafter acquired right, title, and interest in and to all of

Debtor’s copyrights and all applications, registrations and recordings relating

to such copyrights in the United States Copyright Office or in any similar

office or agency of the United States, any State thereof, any political

subdivision thereof or in any other country, including, without limitation, the

copyrights and applications, registrations and recordings described in Exhibit

A hereto, together with all rights and privileges arising under applicable law

with respect to Debtor’s use of any copyrights, and all reissues, extensions,

continuations and renewals thereof (all of the foregoing being collectively

referred to herein as the “Copyrights”); (b) all present and future license and

distribution agreements pertaining to the Copyrights; (c) all income, fees,

royalties and other payments at any time due or payable with respect thereto,

including, without limitation, payments under all licenses at any time entered

into in connection therewith; (d) the right to sue for past, present and future

infringements thereof; (e) all rights corresponding thereto throughout the

world; and (f) any and all other proceeds of any of the foregoing, including,

without limitation, all damages and payments or claims by Debtor against third

parties for past or future infringement of the Copyrights.  Notwithstanding anything to the contrary

contained in this Section 1, the Collateral shall not include any rights or

interest in any contract, license or license agreement covering personal property

of Debtor, so long as under the terms of such contract, license or license

agreement, or applicable law with respect thereto, the grant of a security

interest or lien therein to Secured Party is prohibited and such prohibition

has not been or is not waived or the consent of the other party to such

contract, license or license agreement has not been or is not otherwise

obtained; provided, that the foregoing exclusion shall in no way be construed

(i) to apply if any such prohibition is unenforceable under the Uniform

Commercial Code or other applicable law or (ii) so as to limit, impair or

otherwise affect Secured Party’s unconditional continuing security interests in

and liens upon any rights or interests of such Debtor in or to monies due or to

become due under any such contract, license or license agreement.




 




2.  OBLIGATIONS SECURED




 




The security interest, lien

and other interests granted to Secured Party for the benefit of Lenders

pursuant to this Agreement shall secure the prompt performance, observance and

payment in full of any and all obligations, liabilities and indebtedness of

every kind, nature and description owing by Debtor to Secured Party, any Lender

and/or their respective affiliates, including principal, interest, charges,

fees, costs and expenses, however evidenced, whether as principal, surety,

endorser, guarantor or otherwise, whether arising under this Agreement, the

Loan Agreement, the other Financing Agreements or otherwise, whether now

existing or hereafter arising, whether arising before, during or after the

initial or any renewal term of the Loan Agreement or after the commencement of

any case with respect to Debtor under the United States Bankruptcy Code or any

similar statute (including, without limitation, the payment of interest and

other amounts which would accrue and become due but for the commencement of

such case), whether direct or indirect, absolute or contingent, joint or

several, due or not due, primary or secondary, liquidated or unliquidated,

secured or unsecured, and however acquired




 




2





























 




by Secured Party or any

Lender (all of the foregoing being collectively referred to herein as the

“Obligations”).




 




3.  REPRESENTATIONS, WARRANTIES AND COVENANTS




 




Debtor hereby represents,

warrants and covenants with and to Secured Party the following (all of such

representations, warranties and covenants being continuing so long as any of

the Obligations are outstanding):




 




(a)  Debtor shall pay and perform all of the

Obligations according to their terms.




 




(b) To the Debtor’s

knowledge, all of the existing Copyrights are valid and subsisting in full

force and effect, and Debtor owns the sole, full and clear title to the

Collateral, and the right and power to grant the security interest and

conditional assignment granted hereunder. 

Debtor shall, at Debtor’s expense, perform all acts and execute all

documents necessary to maintain the existence of the Collateral consisting of

registered Copyrights as registered copyrights and to maintain all of the

Collateral as valid and subsisting, including, without limitation, the filing

of any renewal affidavits and applications. 

The Collateral is not subject to any liens, claims, mortgages,

assignments, licenses, security interests or encumbrances of any nature

whatsoever, except:  (i) the security

interests granted hereunder and pursuant to the Loan Agreement, (ii) the

security interests permitted under the Loan Agreement, and (iii) the licenses

permitted under Section 3(e) below.




 




(c)  Debtor shall not assign, sell, mortgage,

lease, transfer, pledge, hypothecate, grant a security interest in or lien

upon, encumber, grant an exclusive license relating to the Collateral, or

otherwise dispose of any of the Collateral, in each case without the prior written

consent of Secured Party, except as otherwise permitted herein or in the Loan

Agreement.  Nothing in this Agreement

shall be deemed a consent by Secured Party or any Lender to any such action,

except as such action is expressly permitted hereunder.




 




(d)  Debtor shall, at Debtor’s expense, promptly

perform all acts and execute all documents requested at any time by in writing

Secured Party or any Lender to evidence, perfect, maintain, record or enforce

the security interest in and conditional assignment of the Collateral granted

hereunder or to otherwise further the provisions of this Agreement.  Debtor hereby authorizes Secured Party to

execute and file one or more financing statements (or similar documents) with respect

to the Collateral, signed only by Secured Party or as otherwise determined by

Secured Party or any Lender.  Debtor

further authorizes Secured Party to have this Agreement or any other similar

security agreement filed with the United States Copyright Office or any other

appropriate federal, state or government office.




 




(e)  As of the date hereof, Debtor, to its

knowledge, does not have any Copyrights registered, or the subject of pending

applications, in the United States Copyright Office or any similar office or

agency in the United States, any State thereof, any political subdivision

thereof or in any other country,




 




3





























 




other than those described

in Exhibit A hereto and has not granted any licenses with respect thereto other

than as set forth in Exhibit B hereto.




 




(f)  Debtor shall, concurrently with the

execution and delivery of this Agreement, execute and deliver to Secured Party

five (5) originals of a Special Power of Attorney in the form of Exhibit C

annexed hereto for the implementation of the assignment, sale or other

disposition of the Collateral pursuant to Secured Party’s exercise of the

rights and remedies granted to Secured Party hereunder.




 




(g)  Secured Party may, in its discretion, pay

any amount or do any act which Debtor fails to pay or do as required hereunder

or as requested by Secured Party or any Lender to preserve, defend, protect,

maintain, record or enforce the Obligations, the Collateral or the security

interest and conditional assignment granted hereunder, including, but not

limited to, all filing or recording fees, court costs, collection charges,

reasonable attorneys’ fees and legal expenses. 

Debtor shall be liable to Secured Party for any such payment, which

payment shall be deemed an advance by Secured Party to Debtor, shall be payable

on demand together with interest at the rate then applicable to the Obligations

set forth in the Loan Agreement and shall be part of the Obligations secured

hereby.




 




(h) In the event Debtor

shall file any application for the registration of a Copyright with the United

States Copyright Office or any similar office or agency in the United States,

any State thereof, any political subdivision thereof or in any other country,

Debtor shall provide Secured Party with written notice of such action as soon

as practicable but in no event later than 30 days after such action. If, after

the date hereof, Debtor shall (i) obtain any registered Copyright, or apply for

any such registration in the United States Copyright Office or in any similar

office or agency in the United States, any State thereof, any political

subdivision thereof or in any other country or (ii) become an owner of any

copyright registrations or applications for copyright registration used in the

United States, any State thereof, any political subdivision thereof or in any

other country, the provisions of Section 1 hereof shall automatically apply

thereto.  Upon the request of Secured

Party, Debtor shall promptly execute and deliver to Secured Party any and all

assignments, agreements, instruments, documents, and such other papers as may

be requested by Secured Party to evidence the security interests in and

conditional assignment of such Copyright in favor of Secured Party for the

benefit of Lenders..




 




(i)  Debtor has not abandoned any of the

Copyrights and Debtor shall not do any act, nor omit to do any act, whereby the

Copyrights may become invalidated, unenforceable, avoided or avoidable;

provided, that, Debtor may, after written notice to Secured Party, abandon,

cancel, not renew or otherwise not maintain a Copyright so long as (i) such

Copyright is no longer used or useful in the business of Debtor or any of its

affiliates or subsidiaries, (ii) such Copyright has not been used in the

business of Debtor or any of its affiliates or subsidiaries for a period of six

(6) consecutive months, (iii) such Copyright is not otherwise material to the

business of Debtor or any of its affiliates or subsidiaries in any respect,

(iv) such Copyright has little or no value, and (v) no Default (as defined in

the Loan Agreement) or Event of Default (as hereinafter defined) shall exist or

have occurred as of such time. Debtor shall notify Secured Party promptly if it

knows or has reason to know of any reason why any




 




4





























 




application, registration,

or recording with respect to the Copyrights may become canceled, invalidated,

avoided or avoidable.




 




(j)  Debtor shall render any assistance, as

Secured Party shall determine is necessary, to Secured Party in any proceeding

before the United States Copyright Office, any federal or state court, or any

similar office or agency in the United States, any State thereof, any political

subdivision thereof or in any other country, to maintain such application and

registration of the Copyrights as Debtor’s exclusive property and to protect

Secured Party’s and Lenders’ interests therein, including, without limitation,

filing of renewals.




 




(k) To Debtor’s knowledge,

no material infringement or unauthorized use presently is being made of any of

the Copyrights that would adversely affect in any material respect the fair

market value of the Collateral or the benefits of this Agreement granted to

Secured Party and Lenders, including, without limitation, the validity,

priority or perfection of the security interest granted herein or the remedies

of Secured Party and Lenders hereunder. 

To Debtor’s knowledge, there has been no judgment holding any of the

Copyrights invalid or unenforceable, in whole or in part, nor is the validity

or enforceability of any of the Copyrights presently being questioned in any

litigation or proceeding in which the Debtor is a party.  Debtor shall promptly notify Secured Party

if Debtor (or any affiliate or subsidiary thereof) learns of any use by any

person of any process or product which infringes upon any Copyright.  If requested by Secured Party or any Lender

in writing, Debtor, at Debtor’s expense, shall join with Secured Party and any

Lender in such action as Secured Party, in Secured Party’s discretion, may deem

advisable for the protection of Secured Party’s and Lenders’ interests in and

to the Copyrights.




 




(l)  Debtor assumes all responsibility and

liability arising from the use of the Copyrights and Debtor hereby indemnifies

and holds Secured Party and Lenders harmless from and against any claim, suit,

loss, damage, or expense (including reasonable attorneys’ fees and legal

expenses) arising out of any alleged defect in any product manufactured,

promoted, or sold by Debtor (or any affiliate or subsidiary thereof) in

connection with any Copyright or out of the manufacture, promotion, labeling,

sale or advertisement of any such product by Debtor (or any affiliate or

subsidiary thereof).  The foregoing

indemnity shall survive the payment of the Obligations, the termination of this

Agreement and the termination or non-renewal of the Loan Agreement.




 




(m)  Debtor shall promptly pay Secured Party for

any and all expenditures made by Secured Party or any Lender pursuant to the

provisions of this Agreement or for the defense, protection, or enforcement of

the Obligations, the Collateral, or the security interests and conditional

assignment granted hereunder, including, but not limited to, all filing or

recording fees, court costs, collection charges, travel expenses, and

reasonable attorneys’ fees and legal expenses. 

Such expenditures shall be payable on demand, together with interest at

the rate then applicable to the Obligations set forth in the Loan Agreement and

shall be part of the Obligations secured hereby.




 




5





























 




4.  EVENTS OF DEFAULT




 




The occurrence or existence

of any Event of Default under the Loan Agreement is referred to herein

individually as an “Event of Default” and collectively as “Events of Default”.




 




5.  RIGHTS AND REMEDIES




 




At any time an Event of

Default exists or has occurred and is continuing, in addition to all other

rights and remedies of Secured Party or any Lender, whether provided under this

Agreement, the Loan Agreement, the other Financing Agreements, applicable law

or otherwise, Secured Party shall have the following rights and remedies which

may be exercised without notice to, or consent by, Debtor except as such notice

or consent is expressly provided for hereunder:




 




(a)  Secured Party may require that neither

Debtor nor any affiliate or subsidiary of Debtor make any use of the Copyrights

for any purpose whatsoever.  Secured

Party may make use of any Copyrights for the sale of goods, completion of work-in-process

or rendering of services or otherwise in connection with enforcing any other

security interest granted to Secured Party by Debtor or any subsidiary or

affiliate of Debtor or for such other reason as Secured Party may determine.




 




(b)  Secured Party may grant such license or

licenses relating to the Collateral for such term or terms, on such conditions,

and in such manner, as Secured Party shall in its discretion deem

appropriate.  Such license or licenses

may be general, special or otherwise, and may be granted on an exclusive or non-exclusive

basis throughout all or any part of the United States of America, its

territories and possessions, and all foreign countries.




 




(c)  Secured Party may assign, sell or otherwise

dispose of the Collateral or any part thereof, either with or without special

conditions or stipulations except that if notice to Debtor of intended

disposition of Collateral is required by law, the giving of ten (10) days prior

written notice to Debtor of any proposed disposition shall be deemed reasonable

notice thereof and Debtor waives any other notice with respect thereto.  Secured Party or any Lender shall have the

power to buy the Collateral or any part thereof, and Secured Party shall also

have the power to execute assurances and perform all other acts which Secured Party

may, in its discretion, deem appropriate or proper to complete such assignment,

sale, or disposition.  In any such

event, Debtor shall be liable for any deficiency.




 




(d)  In addition to the foregoing, in order to

implement the assignment, sale or other disposition of any of the Collateral

pursuant to the terms hereof, upon the occurrence and during the continuance of

an Event of Default, Secured Party may at any time execute and deliver on

behalf of Debtor, pursuant to the authority granted in the Powers of Attorney

described in Section 3(f) hereof, one or more instruments of assignment of the

Copyrights (or any application, registration, or recording relating thereto),

in form suitable for filing, recording, or registration.  Debtor agrees to pay Secured Party and

Lenders on demand all costs incurred in any such transfer of the Collateral,

including, but not limited to, any taxes, fees, and reasonable attorneys’ fees

and legal expenses.  Debtor agrees that

Secured Party and Lenders have no obligation to preserve rights to the

Copyrights against any other parties.




 




6





























 




(e)  Secured Party may first apply the proceeds

actually received from any such license, assignment, sale or other disposition

of any of the Collateral to the costs and expenses thereof, including, without

limitation, reasonable attorneys’ fees and all legal, travel and other expenses

which may be incurred by Secured Party or Lenders.  Thereafter, Secured Party or Lenders may apply any remaining

proceeds to such of the Obligations as Secured Party and Lenders may in their

discretion determine.  Debtor shall

remain liable to Secured Party and Lenders for any of the Obligations remaining

unpaid after the application of such proceeds, and Debtor shall pay Secured

Party on demand any such unpaid amount, together with interest at the rate then

applicable to the Obligations set forth in the Loan Agreement.




 




(f)  Debtor shall supply to Secured Party or to

Secured Party’s designee, Debtor’s knowledge and expertise relating to the

manufacture, sale and distribution of the products to which the Copyrights

relate.




 




(g)  Nothing contained herein shall be construed

as requiring Secured Party or any Lender to take any such action at any

time.  All of Secured Party’s and

Lenders’ rights and remedies, whether provided under this Agreement, the other

Financing Agreements, applicable law or otherwise, shall be cumulative and none

is exclusive.  Such rights and remedies

may be enforced alternatively, successively, or concurrently.




 




6.  JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW




 




(a)  The validity, interpretation and enforcement

of this Agreement and the other Financing Agreements and any dispute arising

out of the relationship between the parties hereto, whether in contract, tort,

equity or otherwise, shall be governed by the internal laws of the State of

Florida but excluding any principles of conflicts of law that would cause the

application of the law of any jurisdiction other than the State of Florida.




 




(b)  Debtor and Secured Party irrevocably consent

and submit to the non-exclusive jurisdiction of the Circuit Court of Dade

County, Florida and the United States District Court for the Southern District

of Florida and waive any objection based on venue or forum  non  conveniens

with respect to any action instituted therein arising under this Agreement or

any of the other Financing Agreements or in any way connected with or related

or incidental to the dealings of Debtor and the Secured Party or any Lenders in

respect of this Agreement or any of the other Financing Agreements or the

transactions related hereto or thereto, in each case whether now existing or

hereafter arising, and whether in contract, tort, equity or otherwise, and

agree that any dispute with respect to any such matters shall be heard only in

the courts described above (except that Secured Party shall have the right to

bring any action or proceeding against Debtor or its property in the courts of

any other jurisdiction which Secured Party or any Lender deems necessary or

appropriate in order to realize on the Collateral or to otherwise enforce its

rights against Debtor or its property).




 




7





























 




(c)  Debtor hereby waives personal service of any

and all process upon it and consents that all such service of process may be

made by certified mail (return receipt requested) directed to its address set

forth herein and service so made shall be deemed to be completed five (5) days

after the same shall have been so deposited in the U.S. mails, or, at Secured

Party’s option, by service upon Debtor in any other manner provided under the

rules of any such courts.




 




(d)  DEBTOR AND SECURED PARTY EACH HEREBY WAIVES

ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i)

ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii)

IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF DEBTOR

AND SECURED PARTY OR ANY LENDER IN RESPECT OF THIS AGREEMENT OR ANY OF THE

OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN

EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,

TORT, EQUITY OR OTHERWISE.  DEBTOR AND

SECURED PARTY EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,

ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND

THAT DEBTOR OR SECURED PARTY MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS

AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF DEBTOR AND SECURED

PARTY TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.




 




(e) Notwithstanding any

other provisions contained herein, Secured Party and Lenders shall not have any

liability to Debtor (whether in tort, contract, equity or otherwise) for losses

suffered by Debtor in connection with, arising out of, or in any way related to

the transactions or relationships contemplated by this Agreement, or any act,

omission or event occurring in connection herewith, unless it is determined by

a final and non-appealable judgment or court order binding on Secured Party,

that the losses were the result of acts or omissions constituting gross

negligence or willful misconduct.  In

any such litigation, Secured Party and each Lender shall be entitled to the

benefit of the rebuttable presumption that it acted in good faith and with the

exercise of ordinary care in the performance by it of the terms of this

Agreement and the other Financing Agreements.




 




7.  MISCELLANEOUS




 




(a)  All notices, requests and demands to or upon

the respective parties hereto shall be in writing and shall be deemed to have

been duly given or made:  if delivered

in person, immediately upon delivery; if by telex, telegram or facsimile

transmission, immediately upon sending and upon confirmation of receipt; if by

nationally recognized overnight courier service with instructions to deliver

the next business day, one (1) business day after sending; and if by registered

or certified mail, return receipt requested, five (5) days after mailing.  All notices, requests and demands upon the

parties are to be given to the following addresses (or to such other address as

any party may designate by notice in accordance with this Section):




 




8





























 




	

  If to Debtor:


  	

  Mackie Designs Inc.


  
	

   


  	

  16220 Woodinville-Redmond Rd., N.E.


  
	

   


  	

  Attention: Chief Financial Officer


  
	

   


  	

  Telephone No.: 425-487-4335


  
	

   


  	

  Telecopy No.: 425-483-6595


  
	

   


  	

   


  
	

  with a copy to: Sun Capital Partners Management, LLC


  
	

   


  	

  5355 Town Center Road, Suite 802


  
	

   


  	

  Boca Raton, Florida 33486


  
	

   


  	

  Attention: Marc J. Leder,


  
	

   


  	

  Rodger R. Krouse and


  
	

   


  	

  C. Deryl Couch, Esq.


  
	

   


  	

  Telephone No.: 561-394-0550


  
	

   


  	

  Telecopier No.: 561-394-0540


  
	

   


  	

   


  
	

  with a copy to: Kirkland & Ellis


  
	

   


  	

  200 East Randolph Drive


  
	

   


  	

  Chicago, Illinois


  
	

   


  	

  Attention: Francesco Penati, Esq.


  
	

   


  	

  Telephone No.: 312-861-2000


  
	

   


  	

  Telecopier No.: 312-861-2200


  
	

   


  	

   


  
	

  If to Secured Party:


  	

  Congress Financial Corporation (Florida)


  
	

   


  	

  777 Brickell Avenue


  
	

   


  	

  Miami, Florida 33131


  
	

   


  	

  Attention: Portfolio Manager


  
	

   


  	

  Telephone No.:305-371-6671


  
	

   


  	

  Telecopy No.:305-371-9456


  





 




(b)  All references to the plural herein shall

also mean the singular and to the singular shall also mean the plural.  All references to Debtor and Secured Party

and Lenders pursuant to the definitions set forth in the recitals hereto, or to

any other person herein, shall include their respective successors and

assigns.  The words “hereof,” “herein,”

“hereunder,” “this Agreement” and words of similar import when used in this

Agreement shall refer to this Agreement as a whole and not any particular

provision of this Agreement and as this Agreement now exists or may hereafter

be amended, modified, supplemented, extended, renewed, restated or

replaced.  An Event of Default shall

exist or continue or be continuing until such Event of Default is waived in

accordance with Section 7(e) hereof. 

All references to the term “Person” or “Persons” herein shall mean any

individual, sole proprietorship, partnership, corporation (including any

corporation which elects subchapter S status under the Internal Revenue Code of

1986, as amended), limited liability company, limited liability partnership,

business trust, unincorporated association, joint stock company, trust, joint

venture or other entity or any government or any agency, instrumentality or

political subdivision thereof.




 




9





























 




(c)  This Agreement, the other Financing

Agreements and any other document referred to herein or therein shall be

binding upon Debtor and its successors and assigns and inure to the benefit of

and be enforceable by Secured Party, Lenders and their successors and assigns.




 




(d)  If any provision of this Agreement is held

to be invalid or unenforceable, such invalidity or unenforceability shall not

invalidate this Agreement as a whole, but this Agreement shall be construed as

though it did not contain the particular provision held to be invalid or

unenforceable and the rights and obligations of the parties shall be construed

and enforced only to such extent as shall be permitted by applicable law.




 




(e)  Neither this Agreement nor any provision

hereof shall be amended, modified, waived or discharged orally or by course of

conduct, but only by a written agreement signed by an authorized officer of

Secured Party.  Secured Party and

Lenders shall not, by any act, delay, omission or otherwise be deemed to have

expressly or impliedly waived any of its rights, powers and/or remedies unless

such waiver shall be in writing and signed by an authorized officer of Secured

Party.  Any such waiver shall be

enforceable only to the extent specifically set forth therein.  A waiver by Secured Party of any right,

power and/or remedy on any one occasion shall not be construed as a bar to or

waiver of any such right, power and/or remedy which Secured Party would

otherwise have on any future occasion, whether similar in kind or otherwise.




 




(f) This Agreement (i) may

be executed in separate counterparts, each of which taken together shall

constitute one and the same instrument and (ii) may be executed and delivered

by telecopier with the same force and effect as if it were a manually executed

and delivered counterpart.




 




(g) Upon payment and

satisfaction in full of the Obligations and the termination of the Financing

Agreements and upon Debtor’s written request and at Borrowers’ and Debtor’s

expense, Secured Party shall promptly deliver the Collateral to Debtor which

has not been used or applied towards payment of the Obligations and shall

execute such documents and instruments necessary to release the Secured Party’s

lien on the Collateral.




 




(BALANCE

OF PAGE INTENTIONALLY LEFT BLANK




 




10





























 




IN WITNESS WHEREOF, Debtor

and Secured Party have executed this Agreement as of the day and year first

above written.




 




	

   


  	

  MACKIE DESIGNS INC.


  
	

   


  	

   


  
	

   


  	

  By:


  	

  James T. Engen


  	

   


  
	

   


  	

   


  
	

   


  	

  Title:


  	

  President & CEO


  	

   


  
	

   


  	

   


  
	

   


  	

  CONGRESS FINANCIAL CORPORATION


  (FLORIDA), as Agent


  
	

   


  	

   


  
	

   


  	

  By:


  	

  Daniel Cott


  	

   


  
	

   


  	

   


  
	

   


  	

  Title:


  	

  Sr. Vice President


  	

   


  
						





 




11





























 




	

  STATE OF WASHINGTON


  	

  )


  
	

   


  	

  )  ss.:


  
	

  COUNTY OF KING


  	

  )


  





 




On this 21st day of March,

2003, before me personally came Jamie Engen, to me known, who being duly sworn,

did depose and say, that he is the CEO of MACKIE DESIGNS INC., the corporation

described in and which executed the foregoing instrument; and that he signed

his name thereto by order of the Board of Directors of said corporation.




 




	

   


  	

  Nancy L. Keller


  
	

   


  	

  Notary Public


  





 




	

  STATE OF NEW YORK


  	

  )


  
	

   


  	

  )  ss.:


  
	

  COUNTY OF NEW YORK


  	

  )


  





 




On this 28th day of March,

2003, before me personally came Daniel Cott, to me known, who, being duly

sworn, did depose and say, that he is the Senior Vice-President of CONGRESS

FINANCIAL CORPORATION (FLORIDA), the corporation described in and which

executed the foregoing instrument; and that he signed his name thereto by order

of the Board of Directors of said corporation.




 




	

   


  	

   


  
	

   


  	

  Notary Public


  





 




12





























 




EXHIBIT

A




TO




COPYRIGHT

COLLATERAL ASSIGNMENT


AND SECURITY AGREEMENT




 




List

of Copyrights and Copyright Applications




 




See

Exhibit A Attached Hereto




 




13





























 




EXHIBIT

B




TO




COPYRIGHT

COLLATERAL ASSIGNMENT




AND

SECURITY AGREEMENT




 




Licenses




 




None




 




B-1





























 




EXHIBIT

C




TO




COPYRIGHT

COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT




 




SPECIAL

POWER OF ATTORNEY




 




	

  STATE OF


  	

  )


  
	

   


  	

  )  ss.:


  
	

  COUNTY OF


  	

  )


  





 




KNOW ALL MEN BY THESE

PRESENTS, that MACKIE DESIGNS INC. (“Debtor”), having an office at 16220

Woodinville-Redmond Rd., N.E., Woodinville, Washington 98072, hereby appoints

and constitutes CONGRESS FINANCIAL CORPORATION (FLORIDA), as Agent (“Secured

Party”), and each officer thereof, its true and lawful attorney, with full

power of substitution and with full power and authority to perform the

following acts on behalf of Debtor:




 




1.  Execution and delivery of any and all agreements, documents,

instrument of assignment, or other papers which Secured Party, in its

discretion, deems necessary or advisable for the purpose of assigning, selling,

or otherwise disposing of all right, title, and interest of Debtor in and to

any copyrights and all registrations, recordings, reissues, extensions, and

renewals thereof, or for the purpose of recording, registering and filing of,

or accomplishing any other formality with respect to the foregoing.




 




2.  Execution and delivery of any and all documents, statements,

certificates or other papers which Secured Party, in its discretion, deems

necessary or advisable to further the purposes described in Subparagraph 1

hereof.




 




This Power of Attorney is

made pursuant to a Copyright Collateral Assignment and Security Agreement,

dated of even date herewith, between Debtor and Secured Party (the “Security

Agreement”) and is subject to the terms and provisions thereof.  This Power of Attorney, being coupled with

an interest, is irrevocable until all “Obligations,” as such term is defined in

the Security Agreement, are paid in full and the Security Agreement is

terminated in writing by Secured Party.




 




Dated: March

    , 2003




 




	

   


  	

  MACKIE DESIGNS INC.


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  Title:


  	

   


  	

   


  
					





 




C-1





























 




	

  STATE OF


  	

  )


  
	

   


  	

  )  ss.:


  
	

  COUNTY OF


  	

  )


  





 




As of this

       day of

               ,

2003, before me personally came

                            ,

to me known, who being duly sworn, did depose and say, that he/she is the

                                        

of Mackie Designs Inc., the corporation which executed the foregoing

instrument; and that he signed his name thereto by order of the Board of

Directors of said corporation.




 




	

   


  	

   


  	

   


  
	

   


  	

  Notary Public


  	

   


  





 




C-2