Exhibit 4.8
-----------
Execution Copy
THIS WARRANT CERTIFICATE AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE OF THIS WARRANT CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR FILED OR
QUALIFIED UNDER THE STATE SECURITIES LAW OF CALIFORNIA OR ANY OTHER STATE AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THEY HAVE BEEN
REGISTERED OR QUALIFIED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION OR
QUALIFICATION IS AVAILABLE.
MATTHEWS STUDIO EQUIPMENT GROUP
W-__ Warrant to Purchase
150,000 Shares
of Common Stock
January 12, 1999
Common Stock Purchase Warrant
-----------------------------
THIS Common Stock Purchase Warrant (the "Warrant") CERTIFIES that, for value
-------
received, ING Equity Partners, L.P. I, a Delaware limited partnership, or its
registered assigns (the "Holder") is entitled to purchase from Matthews Studio
------
Equipment Group, a California corporation (the "Company"), 150,000 shares of the
-------
Common Stock, no par value (the "Common Stock"), of the Company (representing
------------
1.07% of the Common Stock outstanding on a Fully Diluted Basis at the date
hereof) at the price (the "Exercise Price") of $2.50 per share (subject to
--------------
certain adjustments as set forth in Section 3.3 hereof), at any time or from
time to time during the period commencing on the date hereof and ending at 5:00
P.M. on the tenth anniversary of the date hereof (the "Expiration Date").
---------------
This Warrant is subject to the terms and conditions, and entitled to the
benefits, of the following agreements, each dated as of July 27, 1995: (i) the
Stockholders Agreement between, among others, the Company and ING, and (ii) the
Registration Rights Agreement between, among others, the Company and ING (as
amended, supplemented or altered from time to time, the "Stockholders
------------
Agreement," and the "Registration Rights Agreement," respectively).
-----------------------------
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Unless the context shall otherwise
-----------
require, capitalized terms used and not defined herein shall have the meanings
set forth in the Amended and Restated Credit Agreement, dated as of April 1,
1998, between, among others, the Company and The Chase Manhattan Bank (as
amended or otherwise modified from time to time, the "Credit Agreement"). In
----------------
addition, the following terms shall have the following meanings:
"Affiliate" shall mean with respect to any Person, (a) any Person
---------
which directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such Person, or (b) any
Person who is a director or executive officer (i) of such Person, (ii) of any
Subsidiary of such Person, or (iii) of any Person described in clause (a) above,
or with respect to any Stockholder, the Company; provided, that any Affiliate of
a corporation shall be deemed an Affiliate of such corporation's stockholders.
For purposes of this definition, "control" of a Person shall mean the power,
direct or indirect, (i) to vote or direct the voting of more than 5% of the
outstanding shares of voting stock of such Person, or (ii) to direct or cause
the direction of the management and policies of such Person, whether by contract
or otherwise.
"Assignment Form" shall mean the assignment form attached as Annex 2
--------------- -------
hereto.
"Business Day" shall mean any day other than a Saturday, Sunday or a
------------
day on which banks within New York, New York are authorized or required to be
closed.
"Closing Date" shall mean the date this Warrant was granted.
------------
"Common Stock" shall mean the Common Stock, no par value, of the
------------
Company, having the terms, conditions, rights and limitations described in the
Articles of Incorporation of the Company attached as Exhibit A hereto.
---------
"Company" shall have the meaning given to such term in the Preamble.
-------
"Convertible Securities" shall have the meaning given to such term in
----------------------
Section 3.3.1(b).
- ----------------
"Credit Agreement" shall have the meaning given to such term in the
----------------
introduction to this Section 1.1.
-----------
"Delivery Date" shall have the meaning given to such term in Section
------------- -------
3.2.
- ---
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended.
"Exchange Form" shall mean the exchange form attached as Annex 3
------------- -------
hereto.
"Excluded Securities" shall mean:
-------------------
(i) shares of capital stock issued pursuant to a stock dividend or
a stock split or other subdivision of shares;
(ii) Common Stock issued upon exercise of the ING Warrants;
(iii) Common Stock issued by the Company in any public offering
registered under the Securities Act, which offering results in net proceeds to
the Company of at least $10,000,000 and a price per share of Common Stock of not
less than $2.50 (appropriately adjusted to reflect all recapitalization events);
(iv) securities issued upon conversion, exercise or exchange of
convertible securities, warrants, options, subscriptions, calls or other rights
to acquire Common Stock, provided that the foregoing rights are (x) outstanding
on the date hereof and are issued in conformity with such rights as issued and
in effect at the date hereof, or (y) are issued hereafter in compliance with
Section 4.2 hereof; or
- -----------
(v) Common Stock issued pursuant to the Company's Amended and
Restated 1989 Stock Option Plan, the Company's 1994 Stock Option Plan, the
Company's 1994 Stock Option Plan for Directors, options granted pursuant to the
Amended and Restated Employment Agreement dated October 1, 1997 between the
Company and Carlos D. DeMattos, the employment terms letter dated October 1,
1998 between the Company and John Murray and the Employment Agreement dated
November 23, 1998 between the Company and Alan Unger, any other employee benefit
plan (including any future adopted employee stock option plan), and pursuant to
any acquisition permitted under the Purchase Agreement and the Credit Agreement.
"Exercise Form" shall mean the exercise form attached as Annex 1
------------- -------
hereto.
"Exercise Price" shall mean $2.50 per share of Common Stock, subject
--------------
to adjustment from time to time in the manner provided in Section 3.3.
-----------
"Expiration Date" shall mean January 12, 2009.
---------------
"Fully Diluted Basis" means, as applied to the calculation of the
-------------------
number of shares of Common Stock outstanding at any time, after giving effect to
(a) all shares of Common Stock outstanding at the time of determination, (b) all
shares of Common Stock issuable upon the conversion, exercise or exchange
of any convertible security, warrant, option, subscriptions, calls or other
rights to acquire Common Stock outstanding at the time of determination,
irrespective of whether such conversion, exercise or exchange is permitted,
restricted or vested at the time of determination, and irrespective of the price
or consideration required by such conversion, exercise or exchange, and (c) all
other commitments, promises or understandings to issue any shares of Common
Stock or any convertible security, warrant, option, subscription, call or other
rights outstanding at the time of determination. Such calculation will reflect
the ING Warrants, and will not be made in accordance with the "treasury method
in accordance with GAAP."
"GAAP" shall mean generally accepted accounting principles in the
----
United States of America in effect from time to time.
"Governmental Authority" shall mean any federal, state, municipal or
----------------------
other governmental department, commission, board, bureau, agency or
instrumentality, or any court, in each case whether of the United States of
America or foreign.
"Holder" shall have the meaning given to such term in the Preamble.
------
"ING" shall mean ING Equity Partners, L.P. I, a Delaware limited
---
partnership.
"ING Security Agreement" shall mean the Security Agreement, dated as
----------------------
of the Closing Date, between the Company and ING, as amended, supplemented or
altered from time to time.
"ING Warrants" shall mean all Common Stock Purchase Warrants and all
------------
Options issued to ING by the Company as of the date hereof.
"Market Price" shall mean, with respect to a share of Common Stock on
------------
any Business Day:
(a) if the Common Stock is Publicly Traded at the time of
determination, the average of the closing prices for the Common Stock on
all domestic securities exchanges on which such security may at the time be
listed, or, if there have been no sales on any such exchange on such day,
the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted on
the Nasdaq Stock Market as of 4:00 P.M., New York time, on such day, or if
on any day such security is not quoted on the Nasdaq Stock Market, the
average of the highest bid and lowest asked prices on such day in the
domestic over-the-counter market as reported by the National Quotation
Bureau, Incorporated, or any similar successor organization, in each such
case averaged over a period of twenty-one (21) days
consisting of the day as of which "Market Price" is being determined and
the twenty (20) consecutive Business Days prior to such day; or
(b) if the Common Stock is not Publicly Traded at the time of
determination then, solely for purposes of Section 3, then the Market Price
shall be the Market Value Per Share.
"Market Value" shall mean the highest price that would be paid for all
------------
of the Common Stock of the Company on a going-concern basis in a single arm's-
length transaction between a willing buyer and a willing seller (neither acting
under compulsion), using valuation techniques then prevailing in the securities
industry and always determined in accordance with the Valuation Procedures, and
assuming full disclosure and understanding of all relevant information and a
reasonable period of time for effectuating such sale. For the purposes of
determining the Market Value, (i) the exercise price of options, warrants or
rights to acquire Common Stock which are included for the purpose of determining
the number of shares of Common Stock outstanding on a Fully Diluted Basis shall
be deemed to have been received by the Company if and to the extent that the
aggregate Market Value of such shares of Common Stock exceeds the aggregate
exercise price of such options, warrants or rights, (ii) the liquidation
preference or indebtedness, as the case may be, represented by securities which
are included for the purpose of determining the number of shares of Common Stock
outstanding on a Fully Diluted Basis shall be deemed to be converted or
exchanged if and to the extent that the aggregate Market Value of such shares of
Common Stock exceeds the aggregate amount of such liquidation preference or
indebtedness, (iii) any contract or legal limitation in respect of the shares of
Common Stock, including their transfer, voting and other rights shall be
ignored, and (iv) any illiquidity arising by contract or law in respect of the
shares of Common Stock and any voting rights or control rights amongst the
Stockholders, shall be ignored.
"Market Value Per Share" shall mean the price per share of Common
----------------------
Stock obtained by dividing (A) the Market Value by (B) the number of shares of
Common Stock outstanding (on a Fully-Diluted Basis) at the time of
determination.
"Nasdaq Stock Market" shall mean the Nasdaq National Market or the
-------------------
Nasdaq SmallCap Market.
"Options" shall have the meaning given to such term in Section
------- -------
3.3.1(b) hereof.
- --------
"Other Anti-Dilution Instruments" shall mean any option, warrant,
-------------------------------
convertible security, subscription, call or other rights to acquire Common Stock
whether outstanding as of the date hereof or hereafter issued, together with any
agreements relating thereto, which provide for anti-dilution or other
adjustments in the number of shares of Common Stock and/or exercise, exchange or
conversion price thereof.
"Person" means any individual, sole proprietorship, partnership, joint
------
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, limited liability company, joint stock
company, estate entity or Governmental Authority.
"Proportionate Percentage" shall mean, with respect to any Holder at
------------------------
any time, the quotient obtained by dividing (a) the aggregate number of Warrant
Shares and other shares of Common Stock then held by such Holder by (b) the
total number of shares of Common Stock then outstanding (on a Fully-Diluted
Basis).
"Publicly Traded" shall mean, with respect to any security, that such
---------------
security is (a) listed on a domestic securities exchange, (b) quoted on the
Nasdaq Stock Market or (c) traded in the domestic over-the-counter market, which
trades are reported by the National Quotation Bureau, Incorporated, and in the
cases of clauses (b) and (c), the average weekly trading volume on the 20
trading days preceding the time of determination equals or exceeds 1/2 of 1% of
the outstanding Common Stock on a Fully Diluted Basis.
"Purchase Agreement" shall mean the Purchase Agreement dated as of
------------------
July 27, 1995 between the Company and ING, as amended from time to time.
"Refused Securities" shall have the meaning given to such term in
------------------
Section 4.2(c).
- --------------
"Registration Rights Agreement" shall have the meaning given to such
-----------------------------
term in the Preamble.
"Reimbursement Agreement" means the Reimbursement Agreement, dated as
-----------------------
of the Closing Date, between the Company and ING, as amended, supplemented or
altered from time to time.
"Requisite Holders" shall mean Holders holding ING Warrants or
-----------------
securities representing at least 51% of all securities issued or issuable upon
exercise of the ING Warrants outstanding on the date of determination.
"Section 4.2 Notice of Acceptance" shall have the meaning given to
--------------------------------
such term in Section 4.2 hereof.
-----------
"Section 4.2 Offer" shall have the meaning given to such term in
-----------------
Section 4.2 hereof.
- -----------
"Section 4.2 Offer Notice" shall have the meaning given to such term
------------------------
in Section 4.2 hereof.
-----------
"Section 4.2 Offered Securities" shall have the meaning given to such
------------------------------
term in Section 4.2(a).
--------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Standby Letter of Credit" shall mean the Standby Letter of Credit
------------------------
issued by ING (U.S.) Capital Corporation as of the date hereof for the account
of the Company and in favor of The Chase Manhattan Bank, as agent for the
Lenders.
"Stockholders Agreement" shall have the meaning given to such term in
----------------------
the Preamble.
"Valuation Procedure" shall mean, with respect to the determination of
-------------------
any amount or value required to be determined in accordance with such procedure,
a determination (which shall be final and binding on the Company and the
Holders) made (i) by agreement among the Company and the Requisite Holders
within thirty (30) days following the event requiring such determination or (ii)
in the absence of such an agreement, by an Appraiser (as defined below) selected
in accordance with the further provisions of this definition. If required, an
Appraiser shall be selected within 10 days following the expiration of the 30-
day period referred to above, either by agreement among the Company and the
Requisite Holders or, in the absence of such agreement, by lot from a list of
four potential Appraisers remaining after the Company nominates three, the
Requisite Holders nominate three, and each side eliminates one potential
Appraiser. The Appraiser shall be instructed by the Company and the Requisite
Holders to make its determination within thirty (30) days of its selection. The
fees and expenses of an Appraiser selected hereunder shall be borne fifty
percent (50%) by the Company and fifty percent (50%) by the Holders (on a pro
---
rata basis) participating in the transaction to which the determination relates.
- ----
As used herein, "Appraiser" shall mean (a) with respect to a determination of
Market Value, a nationally-recognized investment banking firm and (b) with
respect to a determination of Liquidation Value (or any other valuation required
hereunder), a firm of the type generally considered to be qualified in making
determinations of the type required.
"Warrant" shall have the meaning given to such term in the Preamble.
-------
"Warrant Register" shall have the meaning given to such term in
----------------
Section 2.1.
- -----------
"Warrant Shares" shall mean (a) the shares of Common Stock issued or
--------------
issuable upon exercise of a Warrant in accordance with Section 4.1 or upon
-----------
exchange of a Warrant in accordance with Section 4.2 and (b) any securities of
-----------
the Company distributed with respect to the securities referred to in the
preceding clause (a). As used in this Warrant, the phrase "Warrant Shares then
----------
held" by any Holder or Holders shall mean Warrant Shares held at the time of
determination by such Holder or Holders, and shall include Warrant Shares
issuable upon exercise of ING
Warrants held at the time of determination by such Holder or Holders.
SECTION 1.2. Interpretation. Unless the context of this Warrant
--------------
clearly requires otherwise, references to the plural include the singular, to
the singular include the plural, and to the part include the whole. The term
"including" is not limiting and the term "or" has the inclusive meaning
represented by the term "and/or." The words "hereof," "herein," "hereunder,"
and similar terms in this Warrant refer to this Warrant as a whole and not to
any particular provision of this Warrant. References to "Articles," "Sections,"
"Subsections," "Exhibits," and "Schedules" are to Articles, Sections,
Subsections, Exhibits and Schedules, respectively, of this Warrant, unless
otherwise specifically provided. Terms defined herein may be used in the
singular or the plural.
ARTICLE II
FORM; EXCHANGE FOR WARRANTS; TRANSFER; TAXES
SECTION 2.1. Warrant Register. Each Warrant issued, exchanged or
----------------
transferred in accordance with the terms hereof shall be registered in a warrant
register (the "Warrant Register"). The Warrant Register shall set forth the
----------------
number of each Warrant, the name and address of the Holder thereof, and the
original number of Warrant Shares purchasable upon the exercise thereof. The
Warrant Register will be maintained by the Company and will be available for
inspection by any Holder at the principal office of the Company or such other
location as the Company may designate to the Holders in the manner set forth in
Section 5.1. The Company shall be entitled to treat the Holder of any Warrant as
- -----------
the owner in fact thereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in such Warrant on the part of any
other Person. The Company shall not be liable for complying with a request by a
fiduciary or nominee of a fiduciary to register a transfer of any Warrant which
is registered in the name of such fiduciary or nominee, unless made with the
actual knowledge that such fiduciary or nominee is committing a breach of trust
in requesting such registration of transfer, or with knowledge of such facts
that the Company's participation therein amounts to bad faith.
SECTION 2.2. Exchange of Warrants for Warrants. (a) The Holder may
---------------------------------
exchange this Warrant for another Warrant or Warrants of like kind and tenor
representing in the aggregate the right to purchase the same number of Warrant
Shares which could be purchased pursuant to the Warrant being so exchanged. In
order to effect an exchange permitted by this Section 2.2, the Holder shall
-----------
deliver to the Company such Warrant accompanied by an Exchange Form in the form
attached hereto as Annex 3 signed by the Holder thereof specifying the number
-------
and denominations of Warrants to be issued in such exchange and the names in
which
such Warrants are to be issued. Within ten (10) Business Days of receipt of
such a request, the Company shall issue, register and deliver to the Holder
thereof each Warrant to be issued in such exchange.
(b) Upon receipt of evidence reasonably satisfactory to the Company
(an affidavit of the Holder being satisfactory) of the ownership and the loss,
theft, destruction or mutilation of any Warrant, and in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory
to the Company (if the Holder is a creditworthy financial institution or other
creditworthy institutional investor its own agreement being satisfactory) or, in
the case of any such mutilation, upon surrender of such Warrant, the Company
shall (at its expense) execute and deliver in lieu of such Warrant a new Warrant
of like kind representing the same rights represented by and dated the date of
such lost, stolen, destroyed or mutilated Warrant. Any such new Warrant shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time
enforceable by any Person.
(c) The Company shall pay all taxes (other than any applicable income
or similar taxes payable by a Holder of a Warrant) attributable to an exchange
of a Warrant pursuant to this Section 2.2; provided, however, that the Company
----------- -------- -------
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance of any Warrant in a name other than that of
the Holder of the Warrant being exchanged.
SECTION 2.3. Transfer of Warrant. (a) Subject to Section 2.3(c)
------------------- --------------
hereof, each Warrant may be transferred by the Holder thereof by delivering to
the Company such Warrant accompanied by a properly completed Assignment Form in
the form of Annex 2. Within ten (10) Business Days of receipt of such
-------
Assignment Form the Company shall issue, register and deliver to the Holder,
subject to Section 2.3(c) hereof, a new Warrant or Warrants of like kind and
--------------
tenor representing in the aggregate the right to purchase the same number of
Warrant Shares which could be purchased pursuant to the Warrant being
transferred. In all cases of transfer by an attorney, the original power of
attorney, duly approved, or a copy thereof, duly certified, shall be deposited
and remain with the Company. In case of transfer by executors, administrators,
guardians or other legal representatives, duly authenticated evidence of their
authority shall be produced and may be required to be deposited and remain with
the Company in its discretion.
(b) Each Warrant issued in accordance with this Section 2.3 shall
-----------
bear the restrictive legend set forth on the face of this Warrant, unless the
Holder or transferee thereof supplies to the Company an opinion of counsel,
reasonably satisfactory to the Company, that the restrictions described in such
legend are no longer applicable to such Warrant.
(c) The transfer of Warrants and Warrant Shares shall be permitted,
so long as such transfer is pursuant to a transaction that (i) complies with, or
is exempt from, the provisions of the Securities Act, and the Company may
require an opinion of counsel (which may be internal counsel to a Holder) in
form and substance reasonably satisfactory to it to such effect prior to
effecting any transfer of Warrants or Warrant Shares and (ii) complies with the
applicable provisions of the Stockholders Agreement.
ARTICLE III
EXERCISE OF WARRANT; EXCHANGE FOR WARRANT SHARES
SECTION 3.1. Exercise of Warrants. On any Business Day prior to the
--------------------
Expiration Date, a Holder may exercise a Warrant, in whole or in part, by
delivering to the Company such Warrant accompanied by a properly completed
Exercise Form in the form of Annex 1 and a check in an aggregate amount equal to
-------
the product obtained by multiplying (a) the Exercise Price by (b) the number of
Warrant Shares being purchased; provided, however, in the event the Holder
-------- -------
exercises this Warrant in connection with or immediately prior to a sale by the
Holder of Warrant Shares, in lieu of paying the applicable Exercise Price
therefor, the Holder may elect to receive that number of Warrant Shares which is
equal to the number of shares for which this Warrant is being exercised less the
number of shares having a Market Price equal to such applicable Exercise Price,
where such Market Price per share shall be equal to the price per share at which
the Holder is selling Warrant Shares. Any partial exercise of a Warrant shall
be for a whole number of Warrant Shares only.
SECTION 3.2. Issuance of Common Stock. (a) Within ten (10) Business
------------------------
Days following the delivery date (the "Delivery Date") of (i) an Exercise Form
-------------
or Exchange Form in accordance with Section 3.1 or 3.2, (ii) a Warrant and (iii)
----------- ---
any required payments of the Exercise Price, the Company shall issue and deliver
to the Holder a certificate or certificates, registered in the name or names set
forth on such notice, representing the Warrant Shares being purchased or to be
received upon such exchange.
(b) If a Holder shall exercise or exchange a Warrant for less than
all of the Warrant Shares which could be purchased or received thereunder, the
Company shall issue to the Holder, within ten (10) Business Days of the Delivery
Date, a new Warrant evidencing the right to purchase the remaining Warrant
Shares. Each Warrant surrendered pursuant to Section 3.1 shall be canceled.
-----------
(c) The Company shall not be required to issue fractional shares of
Common Stock upon the exercise or exchange of a Warrant. If any fraction of a
share of Common Stock would be issuable on the exercise or exchange of any
Warrant, the
Company may, in lieu of issuing such fractional share, pay to such Holder for
any such fraction of a share an amount in cash equal to the product obtained by
multiplying (i) such fraction by (ii) the Market Price in effect on the Delivery
Date.
(d) The Company shall pay all taxes (other than any applicable income
or similar taxes payable by a Holder of a Warrant) attributable to the initial
issuance of Warrant Shares upon the exercise or exchange of a Warrant; provided,
--------
however, that the Company shall not be required to pay any tax which may be
- -------
payable in respect of any transfer involved in the issuance of any Warrant or
any certificate for Warrant Shares in a name other than that of the Holder of
the Warrant being exercised or exchanged.
(e) The Person in whose name any certificate for shares of Common
Stock is issued upon exercise or exchange of a Warrant shall for all purposes be
deemed to have become the holder of record of such shares on the Delivery Date,
irrespective of the date of delivery of such certificate, except that, if the
Delivery Date is a date when the stock transfer books of the Company are closed,
such Person shall be deemed to have become the holder of record of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open.
(f) Any Exercise Form or Exchange Form delivered under Section 3.1 or
-----------
2.2 may condition the exercise or exchange of any Warrant on the consummation of
- ---
a sale of Warrant Shares pursuant to a public offering registered under the
Securities Act, and such exercise or exchange shall not be deemed to have
occurred except concurrently with the consummation of any such sale.
SECTION 3.3. Adjustment of Exercise Price and Number of Warrant
--------------------------------------------------
Shares. The number and kind of Warrant Shares purchasable upon exercise of each
- ------
Warrant shall be subject to adjustment from time to time in accordance with this
Section 3.3.
- -----------
SECTION 3.3.1. Adjustment upon Issuance of Common Stock. (a) If, at
----------------------------------------
any time after the Closing Date, the Company shall issue or sell (or, in
accordance with Section 3.3.1(b), shall be deemed to have issued or sold) any
----------------
shares of Common Stock without consideration or for a consideration per share
less than either the Market Price determined as of the date of such issuance or
sale or the Exercise Price in effect immediately prior to such issuance or sale,
then, effective immediately upon such issuance or sale, the Exercise Price shall
be reduced (without regard to any other provisions hereof) to an amount equal to
the product obtained by multiplying (A) the Exercise Price in effect immediately
prior to such issuance or sale, by (B) a fraction, the numerator of which shall
be the sum of (x) the product obtained by multiplying (1) the number of shares
of Common Stock outstanding (on a Fully-Diluted Basis) immediately prior to such
issuance or sale by (2) the lesser
of the Market Price as of the date of such issuance or sale and the Exercise
Price in effect immediately prior to such issuance or sale, and (y) the
consideration, if any, received by the Company upon such issuance or sale, and
the denominator of which shall be the product obtained by multiplying (C) the
number of shares of Common Stock outstanding (on a Fully-Diluted Basis)
immediately after such issuance or sale, by (D) the lesser of the Market Price
as of the date of issuance or sale and the Exercise Price in effect immediately
prior to such issuance or sale. Upon each such adjustment of the Exercise Price
hereunder, the number of Warrant Shares which may be obtained upon exercise of
such Warrant shall be increased to the number of shares determined by
multiplying (A) the number of Warrant Shares which could be obtained upon
exercise of such Warrant immediately prior to such adjustment by (B) a fraction,
the numerator of which shall be the Exercise Price in effect immediately prior
to such adjustment and the denominator of which shall be the Exercise Price in
effect immediately after such adjustment.
(b) For the purpose of determining the adjusted Exercise Price under
Section 3.3.1(a), the following shall be applicable:
- ----------------
(i) Issuance of Rights or Options. If the Company in any manner
-----------------------------
issues or grants any rights or options to subscribe for or to purchase (A)
Common Stock or (B) any stock or other securities convertible into or
exchangeable for Common Stock (such rights or options being herein called
"Options" and such convertible or exchangeable stock or securities being
--------
herein called "Convertible Securities"), and the price per share for which
----------------------
Common Stock is issuable upon the exercise of such Options or upon
conversion or exchange of such Convertible Securities is less than either
the Market Price determined as of the date of issuance or grant of such
Options or the Exercise Price in effect immediately prior to such issuance
or grant of such Options, then the total maximum number of shares of Common
Stock issuable upon the exercise of such Options (or upon conversion or
exchange of the total maximum amount of such Convertible Securities
issuable upon the exercise of such Options) shall be deemed to be
outstanding and to have been issued and sold by the Company for such price
per share. For purposes of this paragraph, the price per share for which
Common Stock is issuable upon exercise of Options or upon conversion or
exchange of Convertible Securities issuable upon exercise of Options shall
be determined by dividing (A) the total amount, if any, received or
receivable by the Company as consideration for the issuing or granting of
such Options, plus the minimum aggregate amount of additional consideration
payable to the Company upon the exercise of all such Options, plus in the
case of such Options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable to the
Company upon issuance or sale of such Convertible Securities and the
conversion or exchange
thereof, by (B) the total maximum number of shares of Common Stock issuable
upon exercise of such Options or upon the conversion or exchange of all
such Convertible Securities issuable upon the exercise of such Options. No
further adjustment of the Exercise Price shall be made upon the actual
issuance of such Common Stock or of such Convertible Securities upon the
Exercise of such Options or upon the actual issuance of such Common Stock
upon conversion or exchange of such Convertible Securities.
(ii) Issuance of Convertible Securities. If the Company in any
----------------------------------
manner issues or sells any Convertible Securities having an exercise or
conversion or exchange price per share of Common Stock which is less than
either the Market Price determined as of the date of such issuance or sale
or the Exercise Price in effect immediately prior to such issuance or sale,
then the maximum number of shares of Common Stock issuable upon the
conversion or exchange of such Convertible Securities shall be deemed to be
outstanding and to have been issued and sold by the Company for such lower
price per share. For purposes of this paragraph, the price per share for
which Common Stock is issuable upon conversion or exchange of Convertible
Securities is determined by dividing (A) the total amount received or
receivable by the Company as consideration for the issuance or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible
Securities. No further adjustment of the Exercise Price shall be made upon
the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities, and if any such issuance or sale of such
Convertible Securities is made upon exercise of any Options for which
adjustments of the Exercise Price had been or are required to be made
pursuant to other provisions of this Section 3.4.1(b), no further
----------------
adjustment of the Exercise Price shall be made by reason of such issuance
or sale.
(iii) Change in Option Price or Conversion Rate. If the purchase
-----------------------------------------
price provided for in any Options, the additional consideration, if any,
payable upon the issuance, conversion or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible
into or exchangeable for Common Stock change at any time, then the Exercise
Price in effect at the time of such change shall be readjusted to the
Exercise Price which would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold and
the number of Warrant Shares shall be correspondingly readjusted.
(iv) Treatment of Expired Options and Unexercised Convertible
--------------------------------------------------------
Securities. Upon the expiration of any Option or the termination of any
----------
right to convert or exchange any Convertible Securities listed on Schedule
--------
3.3.1(b)(iv) without the exercise of such Option or right, the Exercise
------------
Price then in effect and the number of Warrant Shares acquirable hereunder
shall be adjusted to the Exercise Price and the number of shares which
would have been in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been issued.
(v) Calculation of Consideration Received. If any Common Stock,
-------------------------------------
Options or Convertible Securities are issued or sold or deemed to have been
issued or sold for cash, then the consideration received therefor shall be
deemed to be the net amount received by the Company therefor. If any
Common Stock, Options or Convertible Securities are issued or sold for
consideration other than cash, then the amount of the consideration other
than cash received by the Company shall be the fair value of such
consideration determined by the Board of Directors of the Company.
(vi) Treasury Shares. The number of shares of Common Stock
---------------
outstanding at any given time does not include shares owned or held by or
for the account of the Company or any Subsidiary of the Company, and the
disposition of any shares so owned or held shall be considered an issue or
sale of Common Stock.
(vii) Record Date. If the Company takes a record of the holders of
-----------
Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible
Securities or (B) to subscribe for or purchase Common Stock, Options or
Convertible Securities, then such record date shall be deemed to be the
date of the issuance or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
SECTION 3.3.2. Subdivisions or Combinations of Common Stock. If, at
--------------------------------------------
any time after the Closing Date, (a) the number of shares of Common Stock
outstanding is increased by a dividend or other distribution payable in shares
of Common Stock or by a subdivision or split-up of shares of Common Stock or (b)
the number of shares of Common Stock outstanding is decreased by a combination
or reverse stock split of shares of Common Stock, then, in each case, effective
as of the effective date of such event retroactive to the record date, if any,
of such event, (i) the Exercise Price shall be adjusted to a price determined by
multiplying (A) the Exercise Price in effect immediately prior to such event by
(B) a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such event and
the denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such event, and (ii) the number of Warrant
Shares subject to purchase upon the exercise of any Warrant shall be adjusted
effective at such time, to a number equal to the product of (A) the number of
Warrant Shares subject to purchase upon the exercise of such Warrant immediately
prior to such event by (B) a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding after giving effect to such event
and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event.
SECTION 3.3.3. Capital Reorganization or Capital Reclassifications.
---------------------------------------------------
If, at any time after the Closing Date, there shall be any capital
reorganization or any reclassification of the capital stock of the Company
(other than a change in par value or from par value to no par value or from no
par value to par value or as a result of a stock dividend or subdivision, split-
up or combination of shares), then in each case the Company shall cause
effective provision to be made so that each Warrant shall, effective as of the
effective date of such event retroactive to the record date, if any, of such
event, be exercisable or exchangeable for the kind and number of shares of
stock, other securities, cash or other property to which a holder of the number
of shares of Common Stock deliverable upon exercise or exchange of such Warrant
would have been entitled upon such reorganization or reclassification and any
such provision shall include adjustments in respect of such stock, securities or
other property that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant with respect to such Warrant.
SECTION 3.3.4. Consolidations and Mergers. If, at any time after the
--------------------------
Closing Date, the Company shall consolidate with, merge with or into, or sell
all or substantially all of its assets or property to, another corporation, then
the Company shall cause effective provision to be made so that each Warrant
shall, effective as of the effective date of such event retroactive to the
record date, if any, of such event, be exercisable or exchangeable for the kind
and number of shares of stock, other securities, cash or other property to which
a holder of the number of shares of Common Stock deliverable upon exercise or
exchange of such Warrant would have been entitled upon such event.
SECTION 3.3.5. Notice; Calculations; Etc. Whenever the Exercise
-------------------------
Price and the number of Warrant Shares shall be adjusted as provided in this
Section 3.3, the Company shall provide to each Holder a statement, signed by the
- -----------
President or Chief Financial Officer/Treasurer of the Company, describing in
detail the facts requiring such adjustment and setting forth a calculation of
the Exercise Price and the number of Warrant Shares applicable to each Warrant
after giving effect to such adjustment. All calculations under this Section 3.3
-----------
shall be
made to the nearest one hundredth of a cent ($.0001) or to the nearest one-tenth
of a share, as the case may be. Adjustments pursuant to Sections 3.3.1, 3.3.2
-------------- -----
and 3.3.3 shall apply to successive events or transactions of the type covered
-----
thereby.
SECTION 3.3.6. Certain Adjustments. (a) Subject to the limitations
-------------------
set forth in Section 4.5, the Company may make such reductions in the Exercise
-----------
Price or increase in the number of Warrant Shares to be received by any Holder
upon the exercise or exchange of a Warrant, in addition to those adjustments
required by this Section 3.3, as it in its sole discretion shall determine to be
-----------
advisable in order that any consolidation or subdivision of the Common Stock, or
any issuance wholly for cash of any shares of Common Stock, or any issuance
wholly for cash of shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, or any stock
dividend, or any issuance of rights, options or warrants hereinafter made by the
Company to the holders of its Common Stock shall not be taxable to such holders.
(b) In the event that the Company in any manner issues or grants
Options or Convertible Securities, or any other transaction, circumstances or
events occur which give rise to anti-dilution adjustments under Other Anti-
Dilution Instruments, then the Company will promptly make proportional,
equitable and corresponding adjustments in the number of shares of Common Stock
issuable upon exercise of the Warrants to protect the Holders against dilution
as a result of such events.
SECTION 3.3.7. Excluded Transactions. Notwithstanding any other
---------------------
provision of this Warrant, no adjustment shall be made pursuant to this Section
-------
3.3 in respect of the issuance of Excluded Securities.
- ---
SECTION 3.3.8. Adjustment Rules. (a) Any adjustments pursuant to
----------------
this Section 3.3 shall be made successively whenever an event referred to herein
-----------
shall occur.
(b) Notwithstanding any other provision of this Warrant, the actual
amount payable by a Holder in connection with the exercise of a Warrant
hereunder shall not be less than the par value per share of the Common Stock,
unless and until the Exercise Price, as adjusted pursuant to this Section 3.3,
-----------
has been reduced to an amount less than 1% of the par value per share of the
Common Stock. Before taking any action which would cause an adjustment pursuant
to this Section 3.3 which would reduce the Exercise Price below 1% of the par
-----------
value per share, the Company shall be required to take any corporate action
which may be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
SECTION 3.4. Cancellation. If the Standby Letter of Credit is released
------------
prior to December 31, 1999, this Warrant shall be
deemed to be automatically canceled, without further action required of the
Company or the Holders.
ARTICLE IV
CERTAIN OTHER RIGHTS
SECTION 4.1. Payments in Respect of Dividends and Distributions. If, at
--------------------------------------------------
any time prior to the Expiration Date, the Company pays any dividend, other than
in the ordinary course of business and to the Company's public stockholders, or
makes any distribution (whether in cash, property or securities of the Company)
on its capital stock which does not result in an adjustment under Section 3.3
-----------
then the Company shall simultaneously pay to the Holder of each Warrant, the
dividend or distribution which would have been paid to such Holder on the
Warrant Shares receivable upon the exercise in full of such Warrant had such
Warrant been fully exercised immediately prior to the record date for such
dividend or distribution or, if no record is taken, the date as of which the
record holders of Common Stock entitled to such dividend or distribution are to
be determined.
SECTION 4.2. Preemptive Rights. (a) The Company shall not issue, sell or
-----------------
exchange, agree to issue, sell or exchange, or reserve or set aside for
issuance, sale or exchange, any (i) Common Stock, (ii) any other equity security
of the Company, (iii) any debt security of the Company which by its terms is
convertible into or exchangeable for any equity security of the Company or has
any other equity feature, (iv) any security of the Company that is a combination
of debt and equity or (v) any option, warrant or other right to subscribe for,
purchase or otherwise acquire any equity security or any such debt security of
the Company, unless, in each case, the Company shall have first offered (the
"Section 4.2 Offer") to sell to each Holder its Proportionate Percentage of such
- ------------------
securities (the "Section 4.2 Offered Securities") (and to sell thereto Section
------------------------------
4.2 Offered Securities not subscribed for by other Holders as hereinafter
provided), at a price and on such other terms as shall have been specified by
the Company in a written notice (the "Section 4.2 Offer Notice") delivered to
------------------------
such Holder, which Offer by its terms shall remain open and irrevocable for a
period of ten (10) Business Days from the date it is delivered by the Company to
the Holders.
(b) Notice of each Holder's intention to accept, in whole or in part,
a Section 4.2 Offer shall be evidenced by a writing signed by such Holder and
delivered to the Company prior to the end of the 10-day period of such Section
4.2 Offer, setting forth such portion of the Section 4.2 Offered Securities as
such Holder elects to purchase (the "Section 4.2 Notice of Acceptance"). If any
--------------------------------
Holder shall subscribe for less than its Proportionate Percentage of the Section
4.2 Offered Securities available to such Holder, the other subscribing Holders
shall be
entitled to purchase the balance of such Holder's Proportionate Percentage in
the same proportion in which they were initially entitled to purchase the
Section 4.2 Offered Securities (excluding for such purposes such Holder
subscribing for less than its Proportionate Percentage). The Company shall
notify each other Holder within five (5) Business Days following the expiration
of the 10-day period described above of the amount of Section 4.2 Offered
Securities which each Holder may purchase pursuant to the foregoing sentence,
and each Holder shall then have five (5) Business Days from the delivery of such
notice to indicate such additional amount, if any, that such Holder wishes to
purchase.
(c) In the event that Section 4.2 Notices of Acceptance are not given
by the Holders in respect of all the Section 4.2 Offered Securities, the Company
shall have ninety (90) days from the expiration of the foregoing 10-day or 20-
day period, as applicable, to sell all or any part of such Section 4.2 Offered
Securities as to which Section 4.2 Notices of Acceptance have not been given by
the Holders (the "Refused Securities") to any other Person or Persons, but only
------------------
upon terms and conditions in all respects (including, without limitation, unit
price and interest rates) which are no more favorable, in the aggregate, to such
other Person or Persons or less favorable to the Company than those set forth in
the Section 4.2 Offer. Upon the closing of the sale of the Refused Securities,
the Holders shall purchase from the Company, and the Company shall sell to the
Holders, the Section 4.2 Offered Securities in respect of which Section 4.2
Notices of Acceptance were delivered to the Company, at the terms specified in
the Section 4.2 Offer.
(d) The preemptive rights granted in this Section 4.2 shall not
-----------
apply to the issuance or sale of Excluded Securities.
(e) The preemptive rights granted in this Section 4.2 shall apply
-----------
only to Holders who are not parties to the Stockholders Agreement.
(f) The Holder hereof and any transferee shall have the benefit of
the Registration Rights set forth in the Stockholders Agreement, whether or not
the Holder or transferee is a party to the Stockholders Agreement or the
Registration Rights Agreement.
SECTION 4.3. Fiduciary Duties of the Company. The Company and its
-------------------------------
directors shall owe the holders of the Warrants the same fiduciary duties that
the Company and its directors would owe to the Warrant Shares underlying the
Warrants.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Notices. All notices, demands and requests of any kind
-------
to be delivered to any party hereto in connection with this Warrant shall be in
writing (i) delivered personally, (ii) sent by nationally-recognized overnight
courier, (iii) sent by first class, registered or certified mail, return receipt
requested or (iv) sent by facsimile, in each case to such party at its address
as follows:
(a) if to the Company, to:
Matthews Studio Equipment Group
3111 North Kenwood Street
Burbank, California 91505
Attention: Carlos DeMattos
Telephone: (818) 525-5217
Facsimile: (818) 525-5216
with a copy to:
Francis W. Costello
Whitman Breed Abbott & Morgan
633 West Fifth Street
Los Angeles, California 90071
Telephone: (213) 896-2452
Telecopier: (213) 896-2450
(b) if to ING, to:
ING Equity Partners, L.P. I
520 Madison Avenue, 33rd Floor
New York, New York 10022
Attention: Benjamin P. Giess
Telephone: (212) 453-1708
Telecopier: (212) 750-2970
with a copy to:
James B. Carlson, Esq.
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019-5820
Telephone: (212) 506-2515
Telecopier: (212) 262-1910
Any notice, demand or request so delivered shall constitute valid notice under
this Warrant and shall be deemed to have been received (i) on the day of actual
delivery in the case of
personal delivery, (ii) on the next Business Day after the date when sent in the
case of delivery by nationally-recognized overnight courier, (iii) on the fifth
Business Day after the date of deposit in the U.S. mail in the case of mailing
or (iv) upon receipt in the case of a facsimile transmission. Any party hereto
may from time to time by notice in writing served upon the other as aforesaid
designate a different mailing address or a different Person to which all such
notices, demands or requests thereafter are to be addressed.
SECTION 5.2. Voting Rights; Limitations of Liability. No Warrant
---------------------------------------
shall entitle the holder thereof to any voting rights or other rights of a
stockholder of the Company, as such. No provision hereof, in the absence of
affirmative action by the Holder to purchase Warrant Shares, and no enumeration
herein of the rights or privileges of the Holder shall give rise to any
liability of such Holder for the Exercise Price of Warrant Shares acquirable by
exercise hereof or as a stockholder of the Company. Each Holder agrees this
Warrant is not a warrant issued to ING pursuant to the Purchase Agreement, as
amended to date.
SECTION 5.3. Amendments and Waivers. Any provision of this Warrant
----------------------
may be amended or waived, but only pursuant to a written agreement signed by the
Company and the Requisite Holders.
SECTION 5.4. Severability. Any provision of this Warrant which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Warrant
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 5.5. Specific Performance. Each Holder shall have the right
--------------------
to specific performance by the Company of the provisions of this Warrant, in
addition to any other remedies it may have at law or in equity. The Company
hereby irrevocably waives, to the extent that it may do so under applicable law,
any defense based on the adequacy of a remedy at law which may be asserted as a
bar to the remedy of specific performance in any action brought against the
Company for specific performance of this Warrant by the Holders of the Warrants
or Warrant Shares.
SECTION 5.6. Binding Effect. This Warrant shall be binding upon and
--------------
inure to the benefit of the Company, each Holder and their respective successors
and assigns.
SECTION 5.7. Counterparts. This Warrant may be executed by the
------------
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement. This Warrant shall become effective when counterparts hereof
executed on behalf of the Company and each Holder shall have been received.
SECTION 5.8. Governing Law; Entire Agreement. THIS WARRANT AND THE
-------------------------------
WARRANTS, SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK. This Warrant and the Warrants,
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof and supersede any prior agreements, written or oral, with
respect thereto.
SECTION 5.9. Benefits of this Warrant. Nothing in this Warrant shall
------------------------
be construed to give to any Person other than the Company and each Holder of a
Warrant or a Warrant Share any legal or equitable right, remedy or claim
hereunder.
SECTION 5.10. Headings. The various headings of this Warrant are
--------
inserted for convenience only and shall not affect the meaning or interpretation
of this Warrant or any provisions hereof or thereof.
SECTION 5.11. Expenses. The Company will promptly (and in any event
--------
within thirty (30) days of receiving any statement or invoice therefor) pay all
reasonable fees, expenses and costs relating hereto, including, but not limited
to, (i) the cost of reproducing this Warrant and the Warrants, (ii) the fees and
disbursements of counsel to the Holder in preparing this Warrant, (iii) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect hereof or any other
document referred to herein, (iv) fees and expenses (including, without
limitation, reasonable attorneys' fees) incurred in respect of the enforcement
by Holders of the rights granted to Holders under this Warrant, and (v) the
expenses relating to the consideration, negotiation, preparation or execution of
any amendments, waivers or consents requested by the Company pursuant to the
provisions hereof, whether or not any such amendments, waivers or consents are
executed.
SECTION 5.12. Attorneys' Fees. In any action or proceeding brought
---------------
by a party to enforce any provision of this Warrant, the prevailing party shall
be entitled to recover the reasonable costs and expenses incurred by it in
connection with that action or proceeding (including, but not limited to,
attorneys' fees).
SECTION 5.13. Filings. The Company shall, at its own expense,
-------
promptly execute and deliver, or cause to be executed and delivered, to any
holder of Warrants all applications, certificates, instruments and all other
documents and papers that such holder of Warrants may reasonably request in
connection with the obtaining of any consent, approval, qualification, or
authorization of any federal, provincial, state or local government (or any
agency or commission thereof) necessary or appropriate in connection with, or
for the effective exercise of, any Warrants then held by such holder.
SECTION 5.14. Other Transactions. Nothing contained herein shall
------------------
preclude the Holder from engaging in any transaction, in addition to those
contemplated by this Warrant with the Company or any of its Affiliates in which
the Company or such Affiliate is not restricted hereby from engaging with any
other Person.
SECTION 5.15. Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
WARRANT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL
OR WRITTEN) OR ACTIONS OF THE HOLDERS OR THE COMPANY SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; THE COMPANY HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS WARRANT.
SECTION 5.16. Jury Trial. THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY,
----------
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
WARRANT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO CAUSING
THE ISSUANCE OF THE LETTER OF CREDIT AND ENTERING INTO THE REIMBURSEMENT
AGREEMENT AND THE ING SECURITY AGREEMENT. THE COMPANY ACKNOWLEDGES THAT IT HAS
HAD THE ASSISTANCE OF COUNSEL IN THE REVIEW AND EXECUTION OF THIS WARRANT,
INCLUDING THIS SECTION 5.16 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE MEANING
AND EFFECT OF THE FOREGOING WAIVER OF JURY TRIAL HAVE BEEN FULLY EXPLAINED TO
THE COMPANY BY SUCH COUNSEL.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be
duly executed and delivered by their authorized officers, all as of the date and
year first above written.
MATTHEWS STUDIO EQUIPMENT GROUP
By: /s/ Carlos D. DeMattos
---------------------------
Name: Carlos D. DeMattos
Title: Chairman & Chief
Executive Officer
[CORPORATE SEAL]
ATTEST:
By: /s/ Lori Snell
----------------------
Name: Lori Snell
Title: Secretary