MATTHEWS STUDIO EQUIPMENT GROUP
EXHIBIT (11.5) $100,000 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. 1, 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, 2005
No. R-003 New York, New York
$100,000 July 27, 1995
MATTHEWS STUDIO EQUIPMENT GROUP, a California corporation (the "Company"),
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for value received, hereby promises to pay to the order of ING Equity Partners,
L.P. I ("ING"), or registered assigns, on July 27, 2005, the principal amount of
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$100,000, 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; provided, however, that if all of the
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Indebtedness with respect to the Five Year Notes (as defined in the Purchase
Agreement, dated as of July 27, 1995, between the Company and ING, 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")) has been paid and
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performed in full prior to the third anniversary of the date hereof, the
interest rate shall remain 10.0% per annum until July 27, 2005, (ii) if the
Indebtedness with respect to the Five Year Notes has not been paid and performed
prior to the third anniversary of the date hereof, 12.5% per annum from the day
following the third anniversary of the date hereof to the fourth anniversary of
the date hereof; provided, however, that if the Indebtedness with respect to the
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Five Year Notes has been paid in full between the third anniversary and the
fourth anniversary of the date hereof, the interest rate shall remain 12.5% per
annum until July 27, 2005, and (iii) if the Indebtedness with respect to the
Five Year
Notes has not been paid and performed in full prior to the fourth anniversary of
the date hereof, 15.0% per annum from the day following the fourth anniversary
of the date hereof to July 27, 2005, payable quarterly on each October 27,
January 27, April 27 and July 27 (each, an "Interest Payment Date") after the
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date hereof, commencing October 27, 1995, 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. If pursuant to the terms of Section 4.12
of the Purchase Agreement, one or more holders of the Five Year Notes have
elected to extend the due date of a portion of the Indebtedness under one or
more Five Year Notes, then for purposes of determining the applicable interest
rate on this Note, the Indebtedness under the Five Year Notes which is subject
to such extension shall be deemed to have been paid in full.
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 (the "Notes"),
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originally issued in the aggregate principal amount of $5,000,000 pursuant to
the Purchase Agreement. 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 Five 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.
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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
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