MATTHEWS STUDIO EQUIPMENT GROUP
EXHIBIT (11.4) $4,900,000 SENIOR SUBORDINATED NOTE
THE SECURITY REPRESENTED BY THIS INSTRUMENT WAS ORIGINALLY ISSUED ON JULY 27,
1995 AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR FILED WITH OR QUALIFIED BY THE STATE SECURITIES REGULATORY AUTHORITY OF
CALIFORNIA, OR ANY OTHER STATE. THE TRANSFER OF SUCH SECURITY IS SUBJECT TO THE
CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT, DATED AS OF JULY 27, 1995, AS
AMENDED FROM TIME TO TIME, BETWEEN THE ISSUER HEREOF AND ING EQUITY PARTNERS,
L.P. I, AND THE ISSUER HEREOF RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH
SECURITY UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH
TRANSFER. UPON WRITTEN REQUEST, A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY
THE ISSUER HEREOF TO THE HOLDER HEREOF WITHOUT CHARGE.
MATTHEWS STUDIO EQUIPMENT GROUP
Senior Subordinated Note
due July 27, 2000
No. R-002 New York, New York
$4,900,000 July 27, 1995
MATTHEWS STUDIO EQUIPMENT GROUP, a California corporation (the "Company"), for
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value received, hereby promises to pay to the order of ING Equity Partners, L.P.
I ("ING"), or registered assigns, on July 27, 2000, the principal amount of
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$4,900,000, with interest (computed on the basis of the number of days elapsed
in a year of 360 days) on the unpaid balance of such principal amount at the
rate of (i) 10.0% per annum for the period from the date hereof to the third
anniversary of the date hereof, (ii) 12.5% per annum from the day following the
third anniversary of the date hereof to the fourth anniversary of the date
hereof and (iii) 15.0% per annum from the day following the fourth anniversary
of the date hereof to the fifth anniversary of the date hereof, payable
quarterly on each October 27, January 27, April 27 and July 27 (each, an
"Interest Payment Date") after the date hereof, commencing October 27, 1995,
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until such unpaid principal shall become due and payable (whether at maturity or
at a date fixed for prepayment or by declaration or otherwise), and with
interest on any overdue principal and premium, if any, and (to the extent
permitted by applicable law) on any overdue interest at a per annum rate equal
to the sum of the interest rate then in effect plus 2.0%, payable quarterly as
aforesaid or, at the option of the registered holder hereof, on demand.
Payments of principal and interest on this Note shall be made in lawful money of
the United States of America at the
principal office of ING Equity Partners, L.P. I, at 135 East 57th Street, New
York, New York or at such other office or agency in New York, New York as the
registered holder of this Note shall have designated by written notice to the
Company as provided in the Purchase Agreement referred to below. The Company
may treat the person in whose name this Note is registered on the register kept
by the Company as provided in such Purchase Agreement as the owner of this Note
for the purpose of receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
This Note is one of the Company's Senior Subordinated Notes due July 27, 2000
(the "Notes"), originally issued in the aggregate principal amount of $5,000,000
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pursuant to a Purchase Agreement, dated as of July 27, 1995, as amended by
Amendment No. 1 to the Purchase Agreement, dated as of April 5, 1996, between
the Company and ING (as amended the "Purchase Agreement"), between the Company
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and ING. The registered holder of this Note is entitled to the benefits of the
Purchase Agreement and may enforce the agreements of the Company contained
therein and exercise the remedies provided for thereby or otherwise available in
respect thereof.
This Note is issued in partial substitution and exchange for, and not in
satisfaction or payment of, the Senior Subordinated Note, dated July 27, 1995,
payable to the order of ING in the original principal amount of $5,000,000 and
issued under the Purchase Agreement (the "Old Note"), and the Indebtedness
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evidenced by such Old Note (as now evidenced by this Note and the Ten Year Note
(as defined in the Purchase Agreement) shall be a continuing Indebtedness, and
nothing herein contained shall be construed to deem such Old Note paid.
The Notes are subject to optional prepayment, in whole or in part, and are
entitled to mandatory prepayments and redemption, all as specified in the
Purchase Agreement. This Note is subject to the subordination provisions set
forth in Article VIII of the Purchase Agreement.
This Note is a registered Note and, as provided in the Purchase Agreement, is
transferable only upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or his attorney duly authorized in writing.
In case an Event of Default, as defined in the Purchase Agreement, shall occur
and be continuing, the unpaid balance of the principal of this Note may be
declared and become due and payable in the manner and with the effect provided
in the Purchase Agreement.
This Note is made and delivered in New York, New York and shall be governed
by the internal laws of the State of New York.
MATTHEWS STUDIO EQUIPMENT GROUP
By: /s/ Carlos D. De Mattos
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Carlos D. De Mattos
Chairman of the Board