Exhibit 10.11




 




 




THIS WARRANT HAS NOT BEEN

REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER

ANY OTHER APPLICABLE SECURITIES LAWS. 

IT MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, PLEDGED, HYPOTHECATED OR

OTHERWISE DISPOSED OF WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR

EXEMPTION THEREFROM.




 




MACKIE DESIGNS INC.


STOCK PURCHASE WARRANT




 




	

  Date of Issuance: March 31, 2003


  	

   


  	

  Certificate No. W-1


  





 




FOR VALUE RECEIVED, Mackie Designs Inc., a Washington

corporation (the “Company”), hereby grants to Sun Mackie, LLC, a Delaware

limited liability company, or its registered assigns (the “Registered Holder”)

the right to purchase from the Company 1,179,429 shares of the Common Stock

(the “Common Stock”), no par value, of the Company, less the number of shares

of Common Stock already issued, if any, in connection with partial exercises of

this Warrant, at a price per share of $.01 (the “Exercise Price”).  The amount and kind of securities obtainable

pursuant to the rights granted hereunder are subject to adjustment pursuant to

the provisions contained in this Warrant.




 




For tax purposes, the value of this Warrant as of the

date hereof is $589,714.50.




 




This Warrant is subject to the following provisions:




 




Section 1.               Exercise of Warrant.




 




1A.          Exercise

Period.  The Registered Holder may

exercise, in whole or in part (but not as to a fractional share of Common

Stock), the purchase rights represented by this Warrant at any time and from

time to time after the Date of Issuance to and including March

    , 2008 (the “Exercise Period”).  The Company shall give the Registered Holder

written notice of the expiration of the Exercise Period at least 30 days, but

not more than 90 days, prior to the end of the Exercise Period.




 




1B.          Exercise

Procedure.




 




(i)            This

Warrant shall be deemed to have been exercised when the Company has received

all of the following items (the “Exercise Time”):




 





























 




(a)           a

completed Exercise Agreement, in the form set forth in Section 1C below,

executed by the person exercising all or part of the purchase rights

represented by this Warrant (the “Purchaser”);




 




(b)           this

Warrant;




 




(c)           if

this Warrant is not registered in the name of the Purchaser, an Assignment or

Assignments in the form set forth in Exhibit II hereto evidencing the

assignment of this Warrant, or part thereof, to the Purchaser, in which case

the Registered Holder shall have complied with the provisions set forth in

Section 7 hereof; and




 




(d)           either

(1) a check payable to the Company in an amount equal to the product of the

Exercise Price multiplied by the number of shares of Common Stock being

purchased upon such exercise (the “Aggregate Exercise Price”), (2) the

surrender to the Company of debt or equity securities of the Company having a

Market Price (as defined below) equal to the Aggregate Exercise Price of the

Common Stock being purchased upon such exercise (provided that for purposes of

this subparagraph, the Market Price of any note or other debt security or any

preferred stock shall be deemed to be equal to the aggregate outstanding

principal amount or liquidation value thereof plus all accrued and unpaid

interest thereon or accrued or declared and unpaid dividends thereon) or (3) a

written notice to the Company that the Purchaser is exercising the Warrant (or

a portion thereof) by authorizing the Company to withhold from issuance a

number of shares of Common Stock issuable upon such exercise of the Warrant

which when multiplied by the Market Price of the Common Stock is equal to the

Aggregate Exercise Price (and such withheld shares shall no longer be issuable

under this Warrant).  The “Market Price”

shall be the average of the closing bid and asked share prices quoted for the

Company’s Common Stock on the National Association of Securities Dealers, Inc.

Over-the-Counter Bulletin Board or, if the Company’s Common Stock is then

traded on The Nasdaq Stock Market or an exchange, the average of the high and

low share prices of the Company’s Common Stock reported on The Nasdaq Stock

Market or such exchange.




 




(ii)           Certificates

for shares of Common Stock purchased upon exercise of this Warrant shall be

delivered by the Company to the Purchaser within five business days after the

date of the Exercise Time.  Unless this

Warrant has expired or all of the purchase rights represented hereby have been

exercised, the Company shall prepare a new Warrant, substantially identical

hereto, representing the rights formerly represented by this Warrant which have

not expired or been exercised and shall, within such five-day period, deliver

such new Warrant to the person designated for delivery in the Exercise

Agreement.




 




(iii)          The

Common Stock issuable upon the exercise of this Warrant shall be deemed to have

been issued to the Purchaser at the Exercise Time, and the Purchaser shall be

deemed for all purposes to have become the record holder of such Common Stock

at the Exercise Time.




 




(iv)          The

issuance of certificates for shares of Common Stock upon exercise of this

Warrant shall be made without charge to the Registered Holder or the Purchaser

for any 




 




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issuance tax in

respect thereof or other cost incurred by the Company in connection with such

exercise and the related issuance of shares of Common Stock.  Each share of Common Stock issuable upon

exercise of this Warrant shall, upon payment of the Exercise Price therefor, be

fully paid and nonassessable and free from all liens and charges with respect

to the issuance thereof.




 




(v)           The

Company shall not close its books against the transfer of this Warrant or of

any share of Common Stock issued or issuable upon the exercise of this Warrant

in any manner which interferes with the timely exercise of this Warrant.




 




(vi)          The

Company shall assist and cooperate with any Registered Holder or Purchaser

required to make any governmental filings or obtain any governmental approvals

prior to or in connection with any exercise of this Warrant (including, without

limitation, making any filings required to be made by the Company).




 




(vii)         Notwithstanding

any other provision hereof, if an exercise of any portion of this Warrant is to

be made in connection with a registered public offering or the sale of the

Company, the exercise of any portion of this Warrant may, at the election of

the holder hereof, be conditioned upon the consummation of the public offering

or sale of the Company in which case such exercise shall not be deemed to be

effective until the consummation of such transaction.




 




(viii)        The

Company shall at all times reserve and keep available out of its authorized but

unissued shares of Common Stock solely for the purpose of issuance upon the

exercise of the Warrant, such number of shares of Common Stock issuable upon

the exercise of the Warrant.  All shares

of Common Stock which are so issuable shall, when issued, be duly and validly

issued, fully paid and nonassessable and free from all taxes, liens and

charges.  The Company shall take all

such actions as may be necessary to assure that all such shares of Common Stock

may be so issued without violation of any applicable law or governmental

regulation or any requirements of any domestic securities exchange upon which

shares of Common Stock may be listed (except for official notice of issuance

which shall be immediately delivered by the Company upon each such

issuance).  The Company shall not take

any action which would cause the number of authorized but unissued shares of

Common Stock to be less than the number of such shares required to be reserved

hereunder for issuance upon exercise of the Warrants.




 




1C.          Exercise

Agreement.  Upon any exercise of

this Warrant, the Exercise Agreement shall be substantially in the form set

forth in Exhibit I hereto, except that if the shares of Common Stock are not to

be issued in the name of the person in whose name this Warrant is registered,

the Exercise Agreement shall also state the name of the person to whom the

certificates for the shares of Common Stock are to be issued, and if the number

of shares of Common Stock to be issued does not include all the shares of Common

Stock purchasable hereunder, it shall also state the name of the person to whom

a new Warrant for the unexercised portion of the rights hereunder is to be

delivered.  Such Exercise Agreement

shall be dated the actual date of execution thereof.




 




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1D.          Fractional

Shares.  If a fractional share of

Common Stock would, but for the provisions of Section 1A, be issuable upon

exercise of the rights represented by this Warrant, the Company shall, within

five business days after the date of the Exercise Time, deliver to the

Purchaser a check payable to the Purchaser in lieu of such fractional share in

an amount equal to the difference between the Market Price of such fractional

share as of the date of the Exercise Time and the Exercise Price of such

fractional share.




 




Section 2.               Dilution Protection.




 




2A.          Subdivision

or Combination of Shares.  If the

Company at any time subdivides (by any stock split, distribution,

recapitalization or otherwise) its outstanding Common Stock into a greater

number of shares of Common Stock, the number of shares of Common Stock into

which this Warrant is exercisable in effect immediately prior to such

subdivision will be proportionately increased. 

If the Company at any time combines (by reverse stock split or

otherwise) its outstanding Common Stock into a smaller number of shares of

Common Stock, the number of shares of Common Stock into which this Warrant is

exercisable in effect immediately prior to such combination will be proportionately

decreased.




 




2B.          Reorganization,

Reclassification, Consolidation, Merger or Sale.  Any recapitalization, reorganization, reclassification,

consolidation, merger, sale of all or substantially all of the Company’s assets

or other transaction, in each case which is effected in such a way that the

holders of Common Stock are entitled to receive (either directly or upon

subsequent liquidation) stock, securities or assets with respect to or in

exchange for Common Stock, is referred to herein as “Organic Change”.  Prior to the consummation of any Organic

Change, the Company shall make appropriate provision (in form and substance

satisfactory to the Registered Holders of the Warrant representing a majority

of the Common Stock obtainable upon exercise of all of the Warrant then

outstanding) to insure that each of the Registered Holders of the Warrant shall

thereafter have the right to acquire and receive, in lieu of or addition to (as

the case may be) the shares of Common Stock immediately theretofore acquirable

and receivable upon the exercise of such holder’s Warrant, such shares of

stock, securities or assets as would have been issued or payable in such

Organic Change (if the holder had exercised this Warrant immediately prior to

such Organic Change) with respect to or in exchange for the number of shares of

Common Stock immediately theretofore acquirable and receivable upon exercise of

such holder’s Warrant had such Organic Change not taken place.  In any such case, the Company shall make

appropriate provision (in form and substance satisfactory to the Registered

Holders of the Warrant representing a majority of the Common Stock acquirable

and receivable upon exercise of all of the Warrant then outstanding) with

respect to such holders’ rights and interests to insure that the provisions of

this Section 2 and Sections 3 and 4 hereof shall thereafter be applicable to

the Warrant (including, in the case of any such consolidation, merger or sale

in which the successor entity or purchasing entity is other than the Company,

an immediate adjustment in the number of shares of Common Stock acquirable and

receivable upon exercise of the Warrant based on the relative value of the

Common Stock and the common stock of the successor entity or purchasing

entity).  The Company shall not effect

any such consolidation, merger or sale, unless prior to the consummation

thereof, the successor entity (if other than the Company) resulting from

consolidation or merger or the entity purchasing such assets assumes by written

instrument (in form and substance reasonably satisfactory to the Registered

Holders of the 




 




4





























 




Warrant representing a majority of the shares of

Common Stock originally acquirable and receivable upon exercise of the Warrant,

excluding any shares previously issued under the Warrant), the obligation to

deliver to each such holder such shares of stock, securities or assets as, in

accordance with the foregoing provisions, such holder may be entitled to

acquire.




 




2C.          Notices.




 




(i)            The

Company shall give written notice to the Registered Holder at least 20 days

prior to the date on which the Company closes its books or takes a record (A)

with respect to any dividend or distribution upon the Common Stock, (B) with

respect to any pro rata subscription offer to holders of Common Stock or

(C) for determining rights to vote with respect to any Organic Change,

dissolution or liquidation.




 




(ii)           The

Company shall give written notice to the Registered Holders at least 20 days

prior to the date on which any Organic Change, dissolution or liquidation shall

take place.




 




Section 3.               Liquidating Dividends.  If the Company declares or pays a dividend

upon the Common Stock payable otherwise than in cash out of earnings or earned

surplus (determined in accordance with generally accepted accounting

principles, consistently applied) except for a stock dividend payable in shares

of Common Stock (a “Liquidating Dividend”), then the Company shall pay to the

Registered Holder of this Warrant (or any person designated by the Registered

Holder) at the time of payment thereof the Liquidating Dividend which would

have been paid to such Registered Holder on the Common Stock had the number of

shares of Common Stock acquirable and receivable upon exercise of this Warrant

(excluding any shares previously issued under the Warrant) been fully exercised

immediately prior to the date on which a record is taken for such Liquidating

Dividend, or, if no record is taken, the date as of which the record holders of

Common Stock entitled to such dividends are to be determined.




 




Section 4.               Purchase Rights.  If at any time the Company grants, issues or

sells any options, convertible securities or rights to purchase stock,

warrants, securities or other property pro rata to the record holders of any

class of Common Stock (the “Purchase Rights”), then the Registered Holder of

this Warrant (or any person designated by the Registered Holder) shall be

entitled to acquire, upon the terms applicable to such Purchase Rights, the

aggregate number of Purchase Rights which such holder could have acquired if

such holder had held the number of shares of Common Stock acquirable and

receivable upon exercise of this Warrant (excluding any shares previously

issued under the Warrant) immediately before the date on which a record is

taken for the grant, issuance or sale of such Purchase Rights, or, if no such

record is taken, the date as of which the record holders of Common Stock are to

be determined for the grant, issue or sale of such Purchase Rights.




 




Section 5.               No Voting Rights; Limitations

of Liability.  This Warrant shall

not entitle the holder hereof to any voting rights or other rights as a

shareholder of the Company.  No

provision hereof, in the absence of affirmative action by the Registered Holder

to purchase Common Stock, and no enumeration herein of the rights or privileges

of the Registered Holder 




 




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shall give rise to any

liability of such holder for the Exercise Price of Common Stock acquirable by

exercise hereof or as a shareholder of the Company.




 




Section 6.               Legend.  The Common Stock issued upon conversion of

this Warrant shall not have been registered under the Securities Act of 1933,

as amended, and will be issued in reliance upon an exemption from the

registration requirements thereof. 

Pursuant to the foregoing, the Registered Holder of this Warrant

acknowledges that the certificates representing the shares issued upon

conversion of this Warrant shall each bear a restrictive legend substantially

as follows:




 




THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES

SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES

LAWS.  THEY MAY NOT BE SOLD, OFFERED FOR

SALE, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF WITHOUT

EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM.




 




Section 7.               Warrant Transferable.  Subject to the transfer conditions referred

to in the legend endorsed hereon, this Warrant and all rights hereunder are

transferable, in whole or in part, without charge to the Registered Holder,

upon surrender of this Warrant with a properly executed Assignment (in the form

of Exhibit II hereto) at the principal office of the Company.




 




Section 8.               Warrant Exchangeable for

Different Denominations.  This

Warrant is exchangeable, upon the surrender hereof by the Registered Holder at

the principal office of the Company, for a new Warrant or Warrants of like

tenor representing in the aggregate the purchase rights hereunder, and each such

new Warrant shall represent such portion of such rights as is designated by the

Registered Holder at the time of such surrender.  The date the Company initially issues this Warrant shall be

deemed to be the “Date of Issuance” hereof regardless of the number of times

new certificates representing the unexpired and unexercised rights formerly

represented by this Warrants shall be issued. 

All Warrants representing portions of the rights hereunder are referred

to herein as the “Warrant”.




 




Section 9.               Replacement.  Upon receipt of evidence reasonably

satisfactory to the Company (an affidavit of the Registered Holder shall be

satisfactory) of the ownership and the loss, theft, destruction or mutilation

of any certificate evidencing this Warrant, and in the case of any such loss,

theft or destruction, upon receipt of indemnity reasonably satisfactory to the

Company (provided that if the holder is a financial institution or other

institutional investor its own agreement shall be satisfactory), or, in the

case of any such mutilation upon surrender of such certificate, the Company

shall (at its expense) execute and deliver in lieu of such certificate a new

certificate of like kind representing the same rights represented by such lost,

stolen, destroyed or mutilated certificate and dated the date of such lost,

stolen, destroyed or mutilated certificate.




 




Section 10.             Notices.  Except as otherwise expressly provided

herein, all notices referred to in this Warrant shall be in writing and shall

be delivered personally, sent by reputable overnight courier service (charges

prepaid) or sent by registered or certified mail, return receipt 




 




6





























 




requested, postage

prepaid and shall be deemed to have been given when so delivered, sent or

deposited in the U.S. Mail (i) to the Company, at its principal executive

offices and (ii) to the Registered Holder of this Warrant, at such holder’s

address as it appears in the records of the Company (unless otherwise indicated

by any such holder).




 




Section 11.             Amendment and Waiver.  Except as otherwise provided herein, the

provisions of the Warrant may be amended and the Company may take any action

herein prohibited, or omit to perform any act herein required to be performed

by it, only if the Company has obtained the written consent of the Registered

Holders of the Warrant representing a majority of the shares of Common Stock

originally acquirable and receivable upon exercise of the Warrant, excluding

any shares previously issued under the Warrant.




 




Section 12.             Descriptive Headings; Governing

Law.  The descriptive headings of

the several Sections and paragraphs of this Warrant are inserted for

convenience only and do not constitute a part of this Warrant.  The corporation laws of the State of Washington

shall govern all issues concerning the relative rights of the Company and its

shareholders.  All other questions

concerning the construction, validity, enforcement and interpretation of this

Warrant shall be governed by the internal law of the State of Delaware, without

giving effect to any choice of law or conflict of law provision or rule

(whether of the State of Delaware or any other jurisdictions) that would cause

the application of the laws of any jurisdictions other than the State of

Delaware.




 




*     

*      *      *




 




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IN WITNESS WHEREOF, the Company has caused this

Warrant to be signed and attested by its duly authorized officers under its

corporate seal and to be dated the Date of Issuance hereof.




 




 




	

   


  	

   


  	

  MACKIE DESIGNS INC.


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

  By:


  	

  James T. Engen


  	 

	

   


  	

   


  	

   


  	

  Name: James T. Engen


  
	

   


  	

   


  	

   


  	

  Its: President & CEO


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  [Corporate

  Seal]


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Attest:


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  William A. Ganard


  	

   


  	

   


  
	

  Secretary


  	

   


  	

   


  





 




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EXHIBIT I




 




EXERCISE AGREEMENT




 




	

  TO:


  	

   


  	

  DATED:


  





 




The undersigned, pursuant to the provisions set forth

in the attached Warrant (Certificate No.

W-        ), hereby agrees to subscribe

for the purchase of           shares

of the Common Stock covered by such Warrant and makes payment herewith in full

therefor at the price per share provided by such Warrant.




 




	

   


  	

  SIGNATURE


  	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  ADDRESS


  	

   


  	

   


  
					





 




 




EXHIBIT II




 




ASSIGNMENT




 




FOR VALUE RECEIVED,

                                                

hereby sells, assigns and transfers all of the rights of the undersigned under

the attached Warrant (Certificate No.

W-        ) with respect to the number

of shares of the Common Stock covered thereby set forth below, unto:




 




	

  Names of Assignee


  	

   


  	

  Address


  	

   


  	

  No. of

  Shares


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Dated:


  	

   


  	

   


  	

   


  	

  Signature


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

  Witness


  	

   


  





 




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