Document:

Prepared by MerrillDirect

                    Exhibit 10.19

July, 28 2000

 

FIFTH AMENDMENT TO CREDIT AGREEMENT

This fifth amendment to credit agreement
(this “Amendment”) is made and entered into as of July 28, 2000, by and
among U.S. BANK NATIONAL ASSOCIATION, a national banking association
(“U.S. Bank”), and MACKIE DESIGNS INC., a Washington corporation
(“Borrower”).

R E C I T A L S:

A.      On
or about June 18, 1998, U.S. Bank and Borrower entered into that
certain credit agreement (together with all amendments, supplements, exhibits,
and modifications thereto, the “Credit Agreement”) whereby U.S. Bank
agreed to extend certain credit facilities to Borrower.  U.S. Bank and Borrower have entered
into four amendments to the Credit Agreement.

B.       Borrower
has requested U.S. Bank to (1) increase the amount of the Revolving
Loan to $7,500,000, and (2) increase the sublimit for the issuance of
Letters of Credit.  The purpose of this
Amendment is to set forth the terms and conditions upon which U.S. Bank
will grant Borrower’s requests.

NOW, THEREFORE, in consideration of the
mutual covenants and conditions set forth herein, the parties agree as follows:

ARTICLE I. AMENDMENT

The Credit Agreement, as well as all of
the other Loan Documents, are hereby amended as set forth herein.  Except as specifically provided for herein,
all of the terms and conditions of the Credit Agreement and each of the other
Loan Documents shall remain in full force and effect throughout the terms of
the Loans, as well as any extensions or renewals thereof.

 

ARTICLE II.          DEFINITIONS

As used herein, capitalized terms shall
have the meanings given to them in the Credit Agreement, except as otherwise
defined herein, or as the context otherwise requires.

ARTICLE
III.         MODIFICATIONS TO REVOLVING
LOAN

3.1     Loan
Commitment

Section 2.1 of the Credit Agreement
is hereby deleted in its entirety and replaced with the following:

          Subject
to and upon the terms and conditions set forth herein and in reliance upon the
representations, warranties, and covenants of Borrower contained herein or made
pursuant hereto, U.S. Bank will make Fundings to Borrower from time to
time during the period ending on April 30, 2002 the (“Commitment Period”),
but such Fundings (together with any outstanding Letters of Credit) shall not
exceed, in the aggregate principal amount at any one time outstanding,
$7,500,000 (the “Revolving Loan”). 
Borrower may borrow, repay, and reborrow hereunder either the full
amount of the Revolving Loan or any lesser sum.

3.2     Renewal
Revolving Note

Concurrently with the execution of this
Amendment, Borrower shall execute and deliver to U.S. Bank a renewal
promissory note in the form attached hereto as Exhibit A (“Renewal
Revolving Note”) which shall continue to evidence the Revolving Loan.  The Revolving Note and all previous renewals
thereof shall be marked “Renewed” and retained by U.S. Bank until the
Revolving Loan is paid in full and U.S. Bank’s commitment to advance
Fundings thereunder is terminated.

3.3     Revolving
Loan Fee

Concurrently with the execution of this
Amendment, Borrower shall pay U.S. Bank a nonrefundable loan fee for the
Revolving Loan in the amount of $2,343.

3.4     Letters
of Credit

Section 2.7(a) of the Credit
Agreement is hereby deleted in its entirety and replaced with the following:

          (a)      Subject to and upon the terms and
conditions set forth herein and in reliance upon the representations,
warranties, and covenants of Borrower contained herein or made pursuant hereto,
U.S. Bank will issue standby and commercial letters of credit (the
“Letters of Credit”) for the benefit of Borrower in forms acceptable to
U.S. Bank from time to time during the Commitment Period.  The expiration date of any Letter of Credit
shall not extend beyond October 31, 2002. 
The maximum aggregate amount of outstanding Letters of Credit plus the
aggregate outstanding amount of principal and interest on the Revolving Loan
shall not exceed, at any one time, $7,500,000.

          

ARTICLE IX.         CONDITIONS PRECEDENT

The modifications set forth in this
Amendment shall not be effective unless and until the following conditions have
been fulfilled to U.S. Bank’s satisfaction:

(a)      U.S. Bank
shall have received this Amendment and the Renewal Revolving Note duly executed
and delivered by the parties hereto.

(b)      Borrower
shall have paid the loan fees provided for in this Amendment.

(c)      There
shall not exist any Default or Event of Default under the Credit Agreement or
any other Loan Document.

(d)      All
representations and warranties of Borrower contained in the Credit Agreement or
otherwise made in writing in connection therewith or herewith shall be true and
correct and in all material respects have the same effect as though such
representations and warranties had been made on and as of the date of this
Amendment.

ARTICLE X.          GENERAL PROVISIONS

5.1     Representations
and Warranties

Borrower hereby represents and warrants
to U.S. Bank that as of the date of this Amendment, there exists no
Default or Event of Default.  All
representations and warranties of Borrower contained in the Credit Agreement and
the Loan Documents, or otherwise made in writing in connection therewith, are
true and correct as of the date of this Amendment.  U.S. Bank acknowledges
the disclosure by Borrower of the existence of the case entitled The Travelers
Insurance Company v. Eastern Acoustic Works, Inc., et al vs. Eastern Acoustic
Works, Inc., Superior Court Department, Worcester Massachusetts, Civil Action
No. 97-0922-B, and agrees that neither the existence of such case nor the
results of any trial or any pending motions in such case will be deemed a
violation of any warranty or representation given by Borrower or Eastern
Acoustic Works, Inc. either in this Agreement or any other agreement or
documentation given in connection herewith. 
Borrower acknowledges and agrees that all of Borrower’s
Indebtedness to U.S. Bank is payable without offset, defense, or
counterclaim.

5.2     Security

All Loan Documents evidencing
U.S. Bank’s security interest in the Collateral shall remain in full force
and effect, and shall continue to secure, without change in priority, the
payment and performance of the Loans, as amended herein, and any other
Indebtedness owing from Borrower to U.S. Bank.

5.3     Guaranty

The parties hereto agree that each
Guaranty shall remain in full force and effect and continue to guarantee the
repayment of the Loans to U.S. Bank as set forth in such Guaranty.

 

5.4     Payment
of Expenses

Borrower shall pay on demand all costs
and expenses of U.S. Bank incurred in connection with the preparation,
negotiation, execution, and delivery of this Amendment, including, without
limitation, reasonable attorneys’ fees incurred by U.S. Bank.

5.5     Survival
of Credit Agreement

The terms and conditions of the Credit
Agreement and each of the other Loan Documents shall survive until all of
Borrower’s obligations under the Credit Agreement are satisfied in full.

5.6     Year
2000

Borrower has
reviewed and assessed its business operations and computer systems and
applications to address the “year 2000 problem” (that is, that computer
applications and equipment used by Borrower, directly or indirectly through
third parties, may have been or may be unable to properly perform
date-sensitive functions before, during and after January 1, 2000).  Borrower represents and warrants that the
year 2000 problem has not resulted in and to the best knowledge of Borrower
will not result in a material adverse change in Borrower’s business condition
(financial or otherwise), operations, properties or prospects or ability to
repay U.S. Bank.  Borrower agrees
that this representation and warranty will be true and correct on and shall be
deemed made by Borrower on each date Borrower requests any Funding under this
Agreement or Revolving Note or delivers any information to U.S. Bank.  Borrower will promptly deliver to U.S. Bank
such information relating to this representation and warranty as U.S. Bank
requests from time to time.

5.7     Counterparts

This Amendment may be executed in one or
more counterparts, each of which shall constitute an original agreement, but
all of which together shall constitute one and the same agreement.

5.8     Statutory
Notice

ORAL AGREEMENTS OR ORAL COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.

[The remainder of this page
intentionally left blank.]

IN WITNESS WHEREOF, U.S. Bank and
Borrower have caused this Amendment to be duly executed by their respective
duly authorized signatories as of the date first above written.

	 

  	

MACKIE DESIGNS INC.

  
	 

  	

By_____________________________________

  
	

:

  	
  Name:________________________________

  
	 

  	
  Title:_________________________________

  

 

	 

  	 

  	

U.S. BANK NATIONAL ASSOCIATION

  
	 

  	 

  	

By_____________________________________

  
	 

  	 

  	

           
  Ann B. Caldwell, Vice President

  

REAFFIRMATION OF GUARANTY AND
COLLATERAL DOCUMENTS

Each of the undersigned hereby:  (a) acknowledges that it has read the
foregoing Fifth Amendment to Credit Agreement, (b) reaffirms its
obligations under the Guaranty and the Security Agreement and other collateral
documents evidencing security interests granted by the undersigned to U.S. Bank
to secure the obligations of Borrower to U.S. Bank, (c) agrees that
its Guaranty guarantees and its Security Agreement secures the repayment of the
Loans as amended by the foregoing Fifth Amendment to Credit Agreement, and (d) acknowledges
that its obligations pursuant to its Guaranty and the Security Agreement are
enforceable without defense, offset, or counterclaim.

	 

  	
  MACKIE
  DESIGNS MANUFACTURING INC.

  
	 

  	
  By______________________________________

  
	 

  	
  Name: 
  ____________________________

  
	 

  	
  Title: 
  _____________________________

  

  
	 

  	
  EASTERN
  ACOUSTIC WORKS, INC.

  
	 

  	
  By______________________________________

  
	

:

  	
  Name: 
  ____________________________

  
	 

  	
  Title: 
  _____________________________

  

  
	 

  	
  BLACKSTONE
  TECHNOLOGIES, INC., a Massachusetts corporation

  
	 

  	
  By______________________________________

  
	

:

  	
  Name: 
  ____________________________

  
	 

  	
  Title: 
  _____________________________

  

  
	 

  	
  SIA
  SOFTWARE COMPANY, INC., a New York corporation

  
	 

  	
  By_____________________________________

  
	 

  	
  Name: 
  ____________________________

  
	 

  	
  Title:  _____________________________

  

 

RENEWAL REVOLVING NOTE

	
  $7,500,000
  	
  July 28, 2000
  

For value received, the undersigned,
MACKIE DESIGNS INC. (“Borrower”), promises to pay to the order of
U.S. BANK NATIONAL ASSOCIATION (“U.S. Bank”), at 1420 Fifth
Avenue, Seattle, Washington 98101, or such other place or places as the holder
hereof may designate in writing, the principal sum of Seven Million Five
Hundred Thousand Dollars ($7,500,000) or so much thereof as advanced by
U.S. Bank in lawful, immediately available money of the United States of
America, in accordance with the terms and conditions of that certain credit
agreement dated June 18, 1998, by and between Borrower and U.S. Bank
(together with all supplements, exhibits, amendments and modifications thereto,
including the fifth amendment to credit agreement of even date herewith, the
“Credit Agreement”).  Borrower also
promises to pay interest on the unpaid principal balance hereof, commencing as
of the first date of an advance hereunder, in like money in accordance with the
terms and conditions, and at the rate or rates provided in the Credit
Agreement.

Borrower and all endorsers, sureties, and
guarantors hereof jointly and severally waive presentment for payment, demand,
notice of nonpayment, notice of protest, and protest of this Note, and all
other notices in connection with the delivery, acceptance, performance,
default, dishonor, or enforcement of the payment of this Note except such
notices as are specifically required by this Note or by the Credit Agreement,
and they agree that the liability of each of them shall be unconditional
without regard to the liability of any other party and shall not be in any
manner affected by any indulgence, extension of time, renewal, waiver, or
modification granted or consented to by U.S. Bank.  Borrower and all endorsers, sureties, and
guarantors hereof, if any, (1) consent to any and all extensions of time,
renewals, waivers, or modifications that may be granted by U.S. Bank with
respect to the payment or other provisions of this Note and the Credit
Agreement; (2) consent to the release of any property now or hereafter
securing this Note with or without substitution; and (3) agree that
additional makers, endorsers, guarantors, or sureties may become parties hereto
without notice to them and without affecting their liability hereunder.

This Note is a renewal of the Revolving
Note referred to in the Credit Agreement and as such is entitled to all of the
benefits and obligations specified in the Credit Agreement, including but not
limited to any Collateral and any conditions to making advances hereunder.  Terms defined in the Credit Agreement are
used herein with the same meanings. 
Reference is made to the Credit Agreement for provisions for the
repayment of this Note and the acceleration of the maturity hereof.Prepared by MerrillDirect

Exhibit
10.21

July
26, 2000

EMPLOYMENT
AGREEMENT

OF

WYATT
HYORA

 

This
Employment Agreement (“Agreement”) is made this __ day of July, 2000 by and
between Mackie Designs Inc., a Washington corporation (“Employer”), and Wyatt
Hyora (“Employee”).

In consideration of
the promises and mutual covenants set forth in this Agreement, Employer and
Employee promise and agree as follows:

1.       Term of Employment.   Employer hereby employs Employee, and Employee hereby accepts employment
with Employer, until such time as this Agreement or such employment is
terminated as set forth in Section 5 of this Agreement.

2.       Scope of Duties.

2.1.    Duties.  
Employee shall
serve as Executive Vice President, with responsibility for the Manufacturing of
the Employer and all of its subsidiaries, including, but not limited to,
Eastern Acoustic Works, Inc. and Radio Cine Forniture (RCF) S.r.L.  Employee shall have such other and further
responsibilities, duties and goals as are reasonably established for him from
time to time by the Chief Executive Officer, or such other person specified by
management from time to time.  Employee
shall report directly to the Chief Operating Officer, upon request to
Employer’s Board of Directors, or to such other person as is specified by
management from time to time.

2.2.    Facilities and Staff.   Employee will be furnished with such facilities, services, staff and
working conditions, consistent with Employer’s current practices, as are
suitable to his position and adequate for the performance of his duties.

2.3.    Full Time and Attention.   Employee will loyally and conscientiously devote substantially all of his
business and professional time, attention and energies (exclusive of periods of
sickness and disability and such normal holiday and vacation periods as have
been established by Employer) to the affairs of Employer.  Notwithstanding the above:

 

2.3.1.  Employee
may expend a reasonable amount of time for educational, professional or
charitable activities; and,

2.3.2. This
Agreement shall not be interpreted to prohibit Employee from making passive
personal investments or conducting private business affairs, as long as those
activities do not materially interfere with the services required under this
Agreement.

 

2.4     Competitive Activities.   During the term of his employment, Employee shall not, directly or
indirectly, either as an officer, director, investor, Employee, consultant,
agent, independent contractor, principal, partner, shareholder, or in any other
capacity whatsoever, engage or participate in any business activities or
business entity which is, in any way, competitive with any of the business of
Employer, provided however, Employee shall not be restricted from holding less
than 5% of the outstanding securities of any company whose securities are listed
on a national securities exchange or automated quotation system.

2.5     Indemnification and Insurance.   During the entire term of his
employment, Employee will receive the full benefit of the indemnification
provisions for officers and directors that are then contained in Employer’s
Articles of Incorporation and Bylaws, and shall be a named insured under
Employer’s Director’s and Officer’s liability insurance policy, as such
indemnification provisions and insurance policies are in effect from time to time.

 

3.       Compensation and Expenses.

3.1.    Compensation.   During
the term of this Agreement, Employer will pay Employee as follows:

3.1.1. An initial base salary of $175,000.00 per year, payable at such times and
in such increments as are consistent with Employer’s usual policies, but in no
event less frequently than monthly.  Any
proposed annual salary increase and any salary decrease will be determined by
the Board; provided that Employee’s salary shall never be less than that set
forth above; and

3.1.2. Employee
shall be a member of any bonus pool maintained by Employer from time to time on
behalf of senior management.  The bonus
pool is established annually by the Compensation Committee of the Board, with
the goals and criteria adjusted from time to time as the Compensation Committee
determines in its sole discretion, and Employee’s right of membership in the
bonus pool shall give him no vested rights in any particular criteria or
amounts allocated to the bonus pool.

3.2     Expenses.  
Employer will
reimburse Employee for all reasonable travel, entertainment and miscellaneous
expenses incurred in connection with the performance of his duties under this
Agreement.  Such reimbursement will be
made in accordance with general policies and procedures of Employer in effect
from time to time relating to reimbursement.

3.3.    Taxes and Withholding.   Employer shall withhold or deduct from sums due to Employee all sums
required by applicable state or federal law.

3.4.    Stock Options.   Employee
shall receive 100,000 nonqualified stock options per the Mackie Designs Inc.
Amended and Restated 1995 Stock Option Plan (“Plan”), as of the date of this
Agreement.  All of Employee’s options
shall be subject to, and vest in accordance with, the terms and conditions of
the Plan.  The options shall be at the
market price for Mackie’s shares as of the close of business on the date of
this Agreement and shall vest 25% per year over a four (4) year period
commencing with the date of this Agreement. 

 

3.5     Moving Expenses.  
Employer shall pay Employee an amount equal to one month’s salary to
cover all of the costs and expenses of his move from his present location in
Meridian, Mississippi to Seattle, Washington. 
In addition the employer will pay a $20,000 signing bonus to the
employee to assist with the sale of the Employee’s home in Mississippi.

4. Benefits.

4.1.    Vacation.  
During the
term of this Agreement, Employee will be entitled to at least 3 weeks of
vacation per year, to be taken and accounted for in accordance with Employer’s
policies for same in effect from time to time, or such additional time as is in
accordance with Employer’s published rules regarding vacation.  If additional personal time is requested by
Employee, it shall be as determined from time to time by the Chief Operating
Officer.

4.2.    Group Benefits.   Employee
shall participate in any pension, insurance or other Employee benefit plan that
is maintained by Employer from time to time for employees similarly
situated.  To the extent possible,
Employer will waive any waiting period required for Employee’s enrollment in
any group medical plan.

 

5. Termination.

5.1.
   Termination.   This
Agreement, and Employee’s employment with Employer, shall be terminated upon
the occurrence of any one of the following events:

5.1.1  The conviction of Employee for any crime which is a felony under
applicable law (other than one arising from the operation of a motor vehicle
unless Employee is imprisoned following a conviction or after entering a plea
in connection therewith);

5.1.2. The dishonesty of Employee in the performance of his duties or in his
reporting to the management of Employer;

5.1.3. At the option of Employer if any one of the following conditions occurs
and persists after Employer has given Employee prior written notice of intent
to terminate his employment with specific reasons therefor, and Employee fails
to correct the specified problems within a period of 30 days of the effective
date of the notice:

(A)     Chronic
alcoholism, drug abuse, or addiction;

(B)     Failure
of Employee to apply his full–time attention and best efforts to the
business of Employer, other than due to the disability of Employee;

(C)     Failure
of Employee to perform consistently the duties assigned to him by Employer;

(D)     Failure
of Employee to handle his work or assignments in accordance with the policies
of Employer, reasonably stated; or,

(E)     Breach by
Employee of any of the terms and conditions of this Agreement.

5.1.4. The death or disability of Employee;

5.1.5. At the option of Employee in the event of the insolvency of Employer;

5.1.6. At the option of Employee, without good reason, upon giving 30 days prior
written notice;

5.1.7. At the option of the Employee, with good reason in accordance with
subsection 5.2.2, upon giving 30 days prior written notice; provided, that
Employer has not corrected any breach of this Agreement specified within such
notice within such 30 day period; or,

5.1.8. At the option of Employer without cause upon giving written notice
oftermination.

5.2.    Effect of Termination.   In the event of the termination of this Agreement and Employee’s
employment hereunder:

5.2.1  If the termination was pursuant to Sections 5.1.7 or 5.1.8, Employee
shall be entitled to receive, during the Payment Period (as hereinafter
defined), (i) the equivalent monthly salary to that set forth in Section 3.1.1;
(ii) a prorata share of any bonus earned by Employer senior management pursuant
to Section 3.1.2 of this Agreement, with such pro rata share being determined
by multiplying Employee’s usual share thereof by a fraction, the numerator of
which is equal to the total number of working days worked by Employee during
the relevant period over which the bonus is calculated, and the denominator of
which is equal to the total number of working days during the relevant period
over which the bonus is calculated; provided, that the amount payable under
this subsection, if any, shall be payable at the next regularly scheduled date
for payment of such bonus pool; and, (iii) continued participation at
Employer’s expense in all relevant Employee benefit programs to which he would
have been entitled if he had continued to serve in the capacity set forth in
Section 2.1 during the Payment Period. 
All payments required to be made to Employee pursuant to this Section
5.2.1 shall continue to be made regardless of whether Employee secures other
employment with any other employer.  For
purposes of this section, the term “Payment Period” shall mean a period of 6
consecutive months following the month in which Employee is terminated.

 

5.2.2  Employee
may terminate this Agreement for good reason. 
For purposes of this Agreement, the term “good reason” shall mean (i)
any breach of this Agreement by Employer which is not cured within 30 days of
written notice from Employee specifying the basis for the breach; (ii) 
the Employee’s functions or duties are materially diminished; provided that
such functions or duties will not be deemed to have been materially diminished
if the Employee’s title, functions and/or duties have been changed so long as
the Employee remains employed as a senior member of the Employer’s senior
management staff; or (iii) repeated and consistent bad faith attempts by
Employer to bring about Employee’s resignation through obstruction by the
Employer of Employee’s ability to perform his duties on the Employer’s
behalf.  In the event that the Employee
terminates this Agreement for good reason, Employee shall be entitled to the
benefits set forth in subsection 5.2.1 of this Agreement.

5.2.3  If the termination was pursuant to Section 5.1.4, Employee (or his
estate, as the case may be) will be entitled to receive his salary as set forth
in Section 3.1.1 through the end of the calendar month in which his death
or disability occurs, and bonus pursuant to Section 3.1.2, if any, for the
fiscal year during which his death or disability occurs, prorated through the
end of the calendar month during which his death or disability occurs.  For purposes of this Agreement
"disability" means (i) the inability of Employee to perform the
duties of Employee's employment due to physical or emotional incapacity or
illness, where such inability continues for ninety (90) consecutive days and is
expected to be of long-continued and indefinite duration, or (ii) Employee
shall be entitled to (A) disability retirement benefits under the federal
Social Security Act or (B) recover benefits under any long-term disability
plan or policy maintained by the Employer. 
In the event of a dispute, the determination of disability shall be made
reasonably by the Board of Directors of the Employer and shall be supported by
advice of a consulting physician competent in the area to which such disability
relates.  The consulting physician shall
be agreed to jointly by Employee and the Employer.  In the event that Employer’s physician who diagnosed the
disability and the consulting physician reach different conclusions, the
physician who diagnosed the disability and the consulting physician shall
select a third physician who shall advise the Board of Directors on Employer’s
disability.

5.2.4  If
Employee was terminated pursuant to Section 5.1.5, Employee shall be relieved
of the obligations set forth in Sections 8.1, 8.2 and 8.3 of this Agreement.

 

5.2.5  If the
termination is for any other reason than those set forth in Sections 5.1.4,
5.1.7 or 5.1.8, Employee shall (i) have no rights to compensation or
reimbursement for salary or bonus for any period subsequent to the date of such
termination, (ii) have no right to participate in any Employee benefit programs
under Section 4 for any period subsequent to the date of such termination; provided
that Employer will remain obligated to meet any obligations it may have under
COBRA, and (iii) have no right to any bonus that would have been payable on a
date subsequent to Employee’s termination date.

 

5.3.    Effect of Merger, Dissolution or Transfer of
Assets.   In the event of any voluntary or involuntary
dissolution of Employer, any merger or consolidation of Employer with a third
party whereby Employer is not a surviving entity, or any sale of all or
substantially all of the assets of Employer to any third party and in the
further event that the surviving or acquiring entity declines to assume this
Agreement and/or Employee’s employment is terminated by Employer or the
surviving entity within 90 days of the effective date thereof, such
nonassumption or termination will be deemed to have taken place pursuant to
section 5.1.8 and Employee shall be entitled to the benefits set forth in
section 5.2.1.

6.       Inventions.   Inventions
made or conceived entirely or partially by Employee while employed by Employer
will be the property of Employer.  As
used in this Section, the term “inventions” includes all creations, whether or
not patentable or copyrightable, and all ideas, reports, or other creative
works, including, without limitation, computer programs, manuals and related
material, which relate to the existing or proposed business of Employer or any
other business or research and development effort conducted by Employer.  All of Employee’s inventions which are
copyrightable shall be works for hire. 
Employee will cooperate with Employer to patent or copyright all
inventions by executing all documents tendered by Employer for such purpose, at
Employer’s expense.  Employee hereby
grants to Employer a power of attorney coupled with an interest, whereby
Employer may execute and deliver any and all documents necessary to so patent
or copyright any inventions in Employee’s name, place and stead as if such
execution and delivery were done by him, with such power of attorney accruing
in the event that he fails to cooperate as required by the preceding
sentence.  Notwithstanding the above,
this provision does not apply to any invention which was developed solely on
Employee’s own time and not using any of Employer’s equipment, supplies,
facilities or information, unless (i) (a) the invention relates directly
to the business of Employer or to Employer’s actual or demonstrably anticipated
research or development, or (b) the invention results from any work performed
by Employee for Employer and (ii) the invention was developed during the
term of his employment with Employer or any Affiliate.  For purposes of this Agreement, the term
“Affiliate” shall mean Mackie Designs Inc., a Washington corporation, Radio Cine
Forniture (RCF) S.r.L., an Italian corporation, or any entity which controls,
is controlled by or is under common control with Employer.  The obligations contained in this Section
shall survive the termination of this Agreement.

7.       Nondisclosure of Confidential
Information.   Employee acknowledges that during the term of
this Agreement he will learn and will have access to confidential information
regarding Employer and its affiliates, including without limitation (i)
confidential or secret plans, programs, documents, agreements or other material
relating to the business, services or activities, and (ii) trade secrets,
market reports, customer investigations, customer lists, files, accounts and
other similar information that is proprietary information (collectively
referred to as “Confidential Information”). Employee acknowledges that such
Confidential Information is a special, valuable and unique asset. All records,
file materials and Confidential Information obtained by Employee in the course
of employment with Employer or its affiliates or service as a director of
Employer or its affiliates are confidential and proprietary and shall remain
the exclusive property of the appropriate entity owning the same.  Employee will not for any reason use for his
own benefit, or for the benefit of any person with whom Employee becomes
associated, any Confidential Information or disclose any such Confidential
Information to any person for any reason or purpose whatsoever without the
prior written consent of Employer, unless such Confidential Information
previously shall have became public knowledge through no action or omission of
Employee.  Employee, within three (3)
days from the date upon which his employment with Employer is terminated or
otherwise upon the request of Employer, shall return to Employer any and all
documents and material that constitutes Confidential Information.  The obligations contained in this Section
shall survive the termination of this Agreement.

 

8.       Covenant Not to Compete:   But for the provisions of this Section 8, Employer would not enter into
this Agreement as it does not wish competition from Employee.  Accordingly:

 

8.1.    Noncompetition of Employee:   Except pursuant to the terms and conditions of this Agreement and any
services provided to any Affiliate, for a period of six months from and after
his last date of employment with Employer, Employee shall not, directly or
indirectly, singly or in partnership or in conjunction with any other person or
persons, firm, association, syndicate, company or corporation, as officer,
director, consultant, employee, independent contractor, principal, agent,
shareholder, partner, owner or otherwise, carry on, finance, guarantee the
indebtedness of, be engaged in or permit its name or credit to be used in any
way in conjunction with any manufacturer of professional loudspeakers located
anywhere in the United States, provided however, Employee shall not be
restricted from holding less than 5% of the outstanding securities of any
company whose securities are listed on a national securities exchange or
automated quotation system;

8.2.    Nonsolicitation of Customers:  
During the one (1) year period from and after his last date of
employment with Employer, Employee shall not, directly or indirectly, either
for its own benefit or for the benefit of others or in conjunction with any
business or entity which is then in competition with Employer, solicit, call
on, interfere with, or attempt to divert away from Employer or any Affiliate
any person or firm who was a customer of Employer or such Affiliate at any
time;

8.3.    Nonsolicitation of Employees:   During the one (1) year period from and after his last date of employment
with Employer, Employee shall not, directly or indirectly, offer to employ,
solicit or enlist any employee of Employer or such Affiliate to leave his or
her respective employment for any reason;

8.4.    Injunctive
Relief:   In addition to damages suffered by Employer
as a result of Employee’s breach of this paragraph, Employer shall be entitled
to the granting of an injunction to prohibit violations of this paragraph upon
reasonable proof of the occurrence of any event which contravenes its
terms.  If a bond is required with
respect to the securing of any such injunction, the parties agree that the
maximum amount of any such bond shall be $1,000;

8.5.    Terms:  
Employee acknowledges that the provisions of this Section 8 have been
considered by him and are reasonable as to time, area, and extent, having
regard to all circumstances of this transaction; and,

8.6.    Severability:   If
any provision of this Section 8 shall be unenforceable, illegal, or contrary
to the public policy of the jurisdiction in which it is sought to be enforced,
such provision shall be deemed to be deleted from this Agreement and the remaining
provisions of this Section shall be and remain valid and binding upon and
enforceable by the parties hereto.  In
addition, the duration and coverage of each separate covenant may be limited by
a court in which enforcement of such covenant is sought to the extent necessary
to permit the enforcement of such separate covenant.

 

9.       Specific Performance.   Employer and Employee recognize that the services rendered under this
Agreement by Employee are special, unique and of an extraordinary character.
Accordingly, in the event of any breach by Employee of the provisions of
Sections 6, 7 or 8 of this Agreement and in addition to any other remedies
available to Employer by law, Employer may specifically enforce Employee’s
obligations under such sections.

10.     Miscellaneous.

10.1.  Assignability.   Except
as provided in Section 5.3, the rights and obligations of Employer under
this Agreement shall inure to the benefit of and be binding up the successors
and assigns of Employer.  The rights and
obligations of Employee hereunder may not be assigned or alienated and any
attempt to do so by Employee will be void.

10.2.  Separability.   If
any provision of this Agreement otherwise is deemed to be invalid or
unenforceable or is prohibited by the laws of the state or jurisdiction where
it is to be performed, this Agreement shall considered divisible as to such
provisions and such provision shall be inoperative in such state or
jurisdiction and shall not be part of the consideration moving from either of
the parties to the other.  The remaining
provisions of this Agreement shall be valid and binding and of like effect as
though such provision were not included.

10.3.  Notice.  
All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have duly given if personally delivered,
telexed or telecopied to, or, if mailed, when mailed to the other party by
certified mail, return receipt requested, at (a) in the case of Employer, the
location of its principal executive offices, or (b) in the case of Employee,
the location of his principal residence or last known principal residence.

10.4.  Arbitration.   All
disputes under this Agreement shall be settled by arbitration in Boston,
Massachusetts, before a single arbitrator pursuant to the rules of the American
Arbitration Association.  Arbitration
may be commenced at any time by any party hereto giving written notice to the
other party that such dispute has been referred to arbitration under this Section
10.4.  The arbitrator shall be selected
by the joint agreement of the Board of Directors of the Employer and Employee,
but if they do not so agree within 20 days after the date of the notice
referred to above, the selection shall be made pursuant to the rules maintained
by such Association.  Any award rendered
by the arbitrator shall be conclusive and binding upon the parties hereto;
provided, however, that any such award shall be accompanied by a written
opinion of the arbitrator giving the reasons for the award.  This provision for arbitration shall be
specifically enforceable by the parties and the decision of the arbitrator in
accordance herewith shall be final and binding and there shall be no right of
appeal therefrom.  Each party shall pay
its own expenses of arbitration and the expenses of the arbitrator shall be
equally shared; provided, however, that if in the opinion of the arbitrator any
claim or any defense or objection thereto was unreasonable, the arbitrator may
assess, as part of his award, all or any part of the arbitration expenses of
the other party (including reasonable attorneys’ fees) and of the arbitrator
against the party raising such unreasonable claim, defense or objection.

 

10.5.  Injunctive Relief, Jurisdiction and Venue.  The
Employee acknowledges that the injury that would be suffered by the Employer as
a result of a breach of the provisions of this Agreement would be irreparable
and that an award of monetary damages to the Employer for such a breach would
be an inadequate remedy.  Consequently,
the Employer will have the right, in addition to any other rights it may have,
to obtain injunctive relief to restrain any breach or threatened breach or
otherwise to specifically enforce any provision of this Agreement.  The jurisdiction and venue of all actions
between the parties pursuant to this section shall lie exclusively in any state
or federal court sitting in Boston, Massachusetts.

10.6.  Governing Law.   The
validity, performance, construction and effect of this Agreement shall be
governed by the internal, substantive laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of laws rules thereof.

10.7.  Waiver; Amendment.   The
waiver by any party to this Agreement of a breach of any provision hereof by
any party shall not be construed as a waiver of any subsequent breach by any
party.  No provision of this Agreement
may be terminated, amended, supplemented, waived or modified other than by an
instrument in writing signed by the party against whom the enforcement of the
termination, amendment, supplement, waiver or modification is sought.

10.8.  Attorneys’ Fees.   In
the event of any litigation arising out of the execution of this Agreement or
any claimed breach thereof, the prevailing party in such litigation shall be
entitled to recover its reasonable attorneys’ fees and reasonable costs of
litigation (including on appeal thereof) in addition to any other award or
decree given or granted by the court.

10.9.  Entire Agreement.  
This Agreement constitutes the entire agreement between the parties regarding
the subject matter, and there are no other understandings, either written or
oral, which affect the terms hereof. 
This Agreement may be supplemented, modified or amended only by a
subsequent written agreement between the parties.

 

DATED the day and year first above
written.

MACKIE DESIGNS INC.

 

By:_______________________________             ______________________________

   Title:          Chief Operating Officer                    
                                              
         Wyatt Hyora

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