---------------------------------
OMB APPROVAL
---------------------------------
OMB Number: 3235-0145
Expires: October 31, 1997
Estimated average burden
hours per response 14.90
---------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____2_____)*
Matthews Studio Equipment Group
(Name of Issuer)
Common Stock
(Title of Class of Securities)
577140106
(CUSIP Number)
Benjamin P. Giess
ING Equity Partners, L.P. I
135 East 57th Street, New York, New York 10022
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 10, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement |_|. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-l(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- ----------------------------------- ----------------------------
CUSIP No. 577140106 Page 2 of 6 Pages
------------- --- ---
- ----------------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ING Equity Partners, L.P. I
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a|_|
(b|_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC and OO (See Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 4,132,464 (See Item 5)
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
------------------------------------------------------------------
8 SHARED VOTING POWER
None (See Item 5)
------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
4,132,464 (See Item 5)
------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
None (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,132,464
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Page 3 of 6 pages
----- -----
The Statement on Schedule 13D (the "Statement"), dated June 29, 1995, and
filed with the Securities and Exchange Commission on June 30, 1995, of ING
Equity Partners, L.P.I (the "Investment Partnership"), relating to the Common
Stock, no par value (the "Common Stock"), of Matthews Studio Equipment Group, a
California corporation (the "Company"), amended by the Amendment No.1 to
Schedule 13D, dated July 27, 1995 ("Amendment No.1"), is hereby further amended
by this Amendment No.2 to Schedule 13D, dated January 24, 1997 ("Amendment
No.2"). Unless otherwise defined herein, all capitalized terms have the
respective meanings ascribed to such terms in the Statement, as amended.
Item 3 is amended to add the following subsections (c), (d) and (e) as follows:
Item 3. Source and Use of Funds.
(c) Upon becoming a director of the Company, Benjamin P. Giess, one of
the two designees of the Investment Partnership to the board of directors
of the Company, became eligible to receive an Option (the "Option") to
purchase 15,000 shares of Common Stock pursuant to the Matthews Studio
Equipment Group 1994 Stock Option Plan for Directors (the "Plan"). Mr.
Giess assigned his right to the Option to the Investment Partnership
pursuant to a letter agreement, dated November 17, 1995, to the Company and
the Investment Partnership and a Waiver of Option Rights Under Matthews
Studio Equipment Group 1994 Stock Option Plan for Directors. The Option
held by the Investment Partnership is governed by the Stock Option
Agreement between the Company and the Investment Partnership (the "Option
Partnership"). As provided in the Option Agreement, the Option vests over
time. As of January 24, 1997, the Option has vested with respect to 10,000
shares. With respect to the remaining 5,000 shares the Option is scheduled
to vest on November 17, 1997, provided that the Investment Partnership
designee to the board of directors remains serving as a director of the
Company. The exercise price for the Option is $3.00 per share.
(d) The Investment Partnership and Edward Phillips ("Phillips") are
parties to a Stock Purchase Agreement, dated as of December 5, 1996,
pursuant to which the Investment Partnership purchased 200,000 shares of
Common Stock of the Company from the Phillips for $1.80 per share or
$360,000 in the aggregate. The Investment Partnership used the Investment
Partnership's working capital as the source for the purchase price.
(e) The Investment Partnership and Carlos D. De Mattos ("De Mattos")
are parties to a Stock Purchase Agreement (the "Stock Purchase Agreement"),
dated as of December 5, 1996,
<PAGE>
Page 4 of 6 pages
----- -----
pursuant to which the Investment Partnership purchased 200,000 shares of
Common Stock of the Company from De Mattos for $1.80 per share or $360,000
in the aggregate. The Investment Partnership used the Investment
Partnership's working capital as the source for the purchase price.
Item 5(a) is amended and restated as follows:
Item 5. Interest in Securities of Issuer.
(a) As of the date hereof, the Investment Partnership beneficially
owns 4,132,464 shares of Common Stock, which represents 32.6% of the
outstanding Common Stock as calculated in accordance with the provisions of
this item. The Investment Partnership also holds 1,800,000 shares of Common
Stock, which represents approximately 17.4% of the Company's outstanding
shares of Common Stock as calculated in accordance with the provisions of
this item, Warrants to purchase 2,322,464 shares of Common Stock which
represents 18.5% of the outstanding Common Stock as calculated in
accordance with the provisions of this item, and the Option to purchase
15,000 shares of Common Stock. The Option has vested over time, and as of
January 24, 1997, the Option has vested with respect to 10,000 shares of
Common Stock which represents less than one percent of the outstanding
Common Stock. With respect to the remaining 5,000 shares the Option is
scheduled to vest on November 17, 1997, provided that the Investment
Partnership's designee to the board of directors remains serving as a
director of the Company. The other ING Persons do not own or hold any
Common Stock or have the sole or shared power to vote or dispose of Common
Stock other than through their affiliation with the Investment Partnership
as described in Item 1.
Item 6 is amended and restated to read in its entirety as follows:
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Other than as described in Items 3, 4 and 5 no such contracts,
arrangements, understandings or relationships exist.
Item 7 is amended as follows:
<PAGE>
Page 5 of 6 pages
----- -----
Item 7. Material to Be Filed as Exhibits.
The following documents are filed as Exhibits (numbered as indicated
below) to this Amendment No.2:
Exhibit 1 - Stock Purchase Agreement, dated December
5, 1996 between ING Equity Partners,
L.P.I. an Edward Phillips.
Exhibit 2 - Stock Purchase Agreement, dated as of
December 5, 1996, between ING Equity
Partners, L.P.I. and Carlos D. De
Mattos.
Exhibit 3 - Letter Agreement, dated November 17, 1995, from
Benjamin P. Giess to the Company and the Investment
Partnership.
Exhibit 4 - Waiver of Option Rights Under Matthews
Studio Equipment Group 1994 Stock Option
Plan for Directors.
Exhibit 5 - Stock Option Agreement, dated November 17, 1995, by
and between the Company and the Investment
Partnership.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Date: January 24, 1997
ING EQUITY PARTNERS, L.P.I
By: Lexington Partners, L.P.,
its general partner
By: Lexington Partners, Inc.,
its general partner
By:/s/ Benjamin P. Giess
Benjamin P. Giess
Vice President
<PAGE>
EXHIBIT 1
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of December 5, 1996,
by and among Edward Phillips ("EP") and the Edward and Norma Phillips Family
Trust dated June 5, 1991 (the "Trust") (EP and the Trust shall be collectively
referred to herein as the "Shareholder") and ING Equity Partners, L.P. I, a
Delaware limited partnership ("ING Equity Partners").
WHEREAS, as of the date hereof, the Shareholder is the record and
beneficial owners of, and has the sole right to vote and dispose of, 2,116,450
shares of common stock (the "Common Stock"), no par value per share, of Matthews
Studio Equipment Group (the "Company"), 200,000 of which shares the Shareholder
desires to sell (the "Subject Shares"); and
WHEREAS, ING Equity Partners desires to purchase from the Shareholder the
Subject Shares;
NOW, THEREFORE, in consideration of the foregoing, other good and valuable
considerations the sufficiency of which each of the parties hereto hereby
acknowledges, and the agreements set forth below, the parties hereto agree as
follows:
1. The Subject Shares.
(a) Share Price. The price to be paid for the Subject Shares on the Closing
Date (as defined in Section 1(b)) (the "Share Price") shall be $1.80 per share,
payable in cash.
(b) Closing. Subject to the terms and conditions set forth herein on or
before January 10, 1997 (the "Closing Date"), (i) the Shareholder will deliver
to ING Equity Partners a certificate or certificates representing the Subject
Shares to be purchased by ING Equity Partners, duly endorsed for transfer or
accompanied by appropriate stock powers, together with evidence satisfactory to
ING Equity Partners of payment of all stock transfer taxes or exemption
therefrom, (ii) the Shareholder shall deliver a certificate certifying that the
representation and warranties of such party set forth in this Agreement are true
and correct as of the date of the Closing, and (iii) ING Equity Partners will
pay the aggregate Share Price for the Subject Shares to be purchased by wire
transfer or by certified check or bank cashier's check. The Shareholder will use
the Shareholder's best efforts to cause the Company, as soon as practicable
after the Closing to register on the books of the Company the transfer of
Subject Shares in accordance with this Agreement.
<PAGE>
2. Certain Covenants.
(a) Certain Prohibited Transfers. During the term of this Agreement, the
Shareholder shall not:
(i) sell, transfer, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, encumbrance, assignment or
other disposition of, any Subject Shares owned by the Shareholder other
than as provided herein;
(ii) grant any proxies or enter into a voting agreement or other
arrangement with respect to any Subject Shares owned by the Shareholder,
other than pursuant to that certain Stockholders' Agreement, dated as of
July 27, 1995, among the Shareholder, ING Equity Partners, the Company and
the other parties listed on the signature pages thereto (the
"Stockholders' Agreement") or as provided herein; or
(iii) deposit any Subject Shares owned by the
Shareholder into a voting trust.
(b) Efforts. The Shareholder shall not take any action that would make any
representation or warranty herein of the Shareholder untrue or incorrect in any
material respect or that would have the effect of preventing or disabling the
Shareholder from performing the Sharholder's obligations under this Agreement.
(c) Filings and Other Actions. The Shareholder agrees to prepare and file
all applications, reports and other documentation and take all other actions in
connection with this Agreement, the Shareholder, and the sale of the Subject
Shares to ING Equity Partners, necessary and appropriate to comply with
applicable law.
(d) Pledges. The Shareholder covenants that the Shareholder's ownership of
the Subject Shares is not encumbered by any security interests, liens, changes,
encumbrances, equities, claims, options, limitations or restrictions of whatever
nature, other than pursuant to the Stockholders' Agreement.
3. Representations and Warranties of the Shareholder. The Shareholder
represents and warrants to ING Equity Partners as follows:
(a) Binding Agreement. The Shareholder has the capacity to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The
-2-
<PAGE>
Shareholder has duly and validly executed and delivered this Agreement and
this Agreement constitutes a legal, valid and binding obligation of the
Shareholder, enforceable against the Shareholder in accordance with its
terms.
(b) No Conflict. Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, nor
the compliance with any of the provisions hereof, by the Shareholder, (a)
require any consent, approval, authorization or permit of, registration,
declaration or filing with, or notification to, any governmental entity
except for filings under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (b) result in a default (or an event which, with
notice or lapse of time or both, would become a default) or give rise to
any right of termination by any third party, cancellation, amendment or
acceleration under any contract, agreement, instrument, commitment,
arrangement or understanding, or result in the creation of a security
interest, lien, charge, encumbrance, equity or claim with respect to any
of the Subject Shares, (c) require any consent, authorization or approval
of any person other than a governmental entity, or (d) violate or conflict
with any order, writ, injunction, decree or law applicable to the
Shareholder or the Subject Shares.
(c) Ownership of Subject Shares. The Shareholder is the record and
beneficial owner of the Subject Shares, free and clear of any security
interests, liens, charges, encumbrances, equities, claims, options or
limitations of whatever nature and free of any other limitation or
restriction (including any restriction on the right to vote, sell or
otherwise dispose of the Subject Shares), other than pursuant to the
Stockholders' Agreement. There are no outstanding options or other rights
to acquire from the Shareholder or obligations of the Shareholder to sell
or to acquire, any shares of capital stock of the Company, other than
pursuant to the Stockholders' Agreement. ING Equity Partners, upon the
purchase of the Subject Shares in accordance with the terms and conditions
of this Agreement shall be the beneficial owner of the Subject Shares,
free and clear of any security interests, liens, changes, encumbrances,
equities claims, options or limitations of whatever nature and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of the Subject Shares), other than
pursuant to the Stockholders' Agreement.
(d) Sophistication. EP is a senior executive and director of the
Company, and as such, was and is generally familiar with the Company and
its business. The Shareholder
-3-
<PAGE>
is a sophisticated, experienced investor capable of analyzing and
evaluating investments such as the Shareholder's investment in the Common
Stock and the disposition of such investment. The Shareholder has
consulted such experts and advisors as the Shareholder considers
appropriate in connection with the Agreement.
(e) Status of ING Equity Partners. The Shareholder acknowledges and
accepts that ING Equity Partners may be deemed to have knowledge of facts
and information about the Company not available to the general public.
(f) Broker's, Finder's, Investment Banker's Fees. No broker, finder or
investment banker is entitled to any fee or commission in connection with
this Agreement, based upon arrangements made by or on behalf of the
Shareholder.
4. Representations and Warranties of ING Equity Partners. ING Equity
Partners represents and warrants to each of the other parties hereto as follows:
(a) Binding Agreement. ING Equity Partners is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
ING Equity Partners and its general partner. This Agreement has been duly
and validly executed on behalf of ING Equity Partners, and this Agreement
constitutes a legal, valid and binding obligation of ING Equity Partners,
enforceable against ING Equity Partners in accordance with its terms.
(b) No Conflict. Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, nor
the compliance with any of the provisions hereof by ING Equity Partners
will (i) conflict with or result in a breach of any provision of its
governing documents, (ii) require any consent, approval, authorization or
permit of, registration, declaration of filing with, or notification to,
any governmental entity, except for filings under the Exchange Act, (iii)
result in a default (or an event which, with notice or lapse of time or
both, would become a default) or give rise to any right of termination by
any third party, cancellation, amendment or acceleration under any
contract, agreement, instrument, commitment, arrangement or understanding,
(iv) require any consent, authorization or approval of any person other
than a governmental entity, or (v) violate or conflict with any
-4-
<PAGE>
order, writ, injunction, decree or law applicable to ING Equity Partners
or the Subject Shares.
(c) Sophistication. ING Equity Partners is a sophisticated,
experienced investor capable of analyzing and evaluating investments such
as its investment in the Common Stock and the disposition of such
investment. ING has consulted such experts and advisors as it considers
appropriate in connection with the Agreement.
(d) Securities Law Matters. ING Equity Partners acknowledges and
accepts that the Subject Shares may be deemed to be "restricted
securities" as that term is defined in Rule 144 of the Securities Act of
1933, as amended. ING Equity Partners represents and warrants that the
acquisition by ING Equity Partners of the Subject Shares pursuant to this
Agreement would be solely for investment purposes and not with a view to
or for sale in connection with a distribution of any or all of the Subject
Shares. ING Equity Partners also acknowledges that it has had full access
to such information regarding the business, finances and properties of the
Company that it has reasonably requested, and that it has been afforded
the opportunity to ask questions and receive answers from the
representatives of the Company concerning same.
5. Indemnification.
(a) Indemnification by the Shareholder. The Shareholder hereby agrees
to indemnify and hold harmless ING Equity Partners and its affiliates and
the respective directors, officers, partners, agents, representatives,
advisors and employees of ING Equity Partners and its affiliates and each
other person, if any, controlling ING Equity Partners or any of its
affiliates (each an "Indemnified Person") from and against all losses,
claims, damages, liabilities, actions and expenses incurred by any
Indemnified Person (including fees, expenses and disbursements of counsel)
which are related to or arise, directly or indirectly, out of or in
connection with any breach by the Shareholder of its representations,
warranties, covenants and agreements herein, and the Shareholder will
reimburse the Indemnified Person for all expenses (including fees,
expenses and disbursements of counsel) as they are incurred by the
Indemnified Person in connection with investigation, preparation or
defense of any such action or claim, whether or not in connection with
pending or threatened litigation in which the Indemnified Person is a
party. The Shareholder also agrees that the Shareholder will not, without
the prior written consent of the Indemnified Person (such consent not to
be unreasonably
-5-
<PAGE>
withheld), settle or compromise or consent to the entry of any judgement
in any pending or threatened claim, action, suit or proceeding in respect
of which indemnification may be sought hereunder.
(b) Indemnification by ING Equity Partners. ING Equity Partners
hereby agrees to indemnify and hold harmless the Shareholder and the
Shareholder's affiliates (each an "Indemnitee") from and against all
losses, claims, damages, liabilities, actions and expenses incurred by any
Indemnitee (including fees, expenses and disbursements of counsel) which
are related to or arise, directly or indirectly, out of or in connection
with any breach by ING Equity Partners of its representations, warranties,
covenants and agreements herein, and ING Equity Partners will reimburse
the Indemnitee for all expenses (including fees, expenses and
disbursements of counsel) as they are incurred by the Indemnitee in
connection with investigation, preparation or defense of any such action
or claim, whether or not in connection with pending or threatened
litigation in which the Indemnitee is a party. ING Equity Partners also
agrees that ING Equity Partners will not, without the prior written
consent of the Indemnitee (such consent not to be unreasonably withheld),
settle or compromise or consent to the entry of any judgement in any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder.
(c) Indemnification Procedures. If any action, proceeding, or
investigation is commenced, as to which an Indemnified Person or
Indemnitee proposes to demand such indemnification, the party demanding
indemnification shall notify the Shareholder or ING Equity Partners, as
the case may be (each an "Indemnitor"), with reasonable promptness;
provided, however, that any failure by the party demanding indemnification
to notify the Indemnitor shall not relieve the Indemnitor from its
obligations hereunder unless and then, only to the extent, that the
Indemnitor is not materially prejudiced by such failure. The Indemnitor
will be entitled, at its own expense, to assume the defense thereof and
the Indemnitor shall be subrogated to the rights the Indemnified Person or
Indemnitee may have in connection with such action, proceeding or
investigation to the extent the Indemnitor assumes such defense; provided
that the party demanding indemnification may assume the defense thereof,
at the Indemnitor's expense, if the Indemnitor fails to assume such
defense on a timely basis (and in any event, within 30 days of such
notification) or if the Indemnitor has adverse legal positions or
materially different defenses from the Indemnified Parties, in which case
the party demanding indemnification shall have the right to retain counsel
of
-6-
<PAGE>
its own choice to represent it, and the Indemnitor shall pay the fees and
expenses of such counsel; and such counsel shall, to the extent consistent
with its professional responsibilities, cooperate with the Indemnitor and
any counsel designated by the Indemnitor. ING Equity Partners may, in any
event, retain separate counsel, at its own expense, to participate in its
defense. The Indemnitor and the Indemnified Person or Indemnitee will
cooperate in connection with any such defense. The Indemnitor shall be
liable for any settlement of any indemnified claim against the Indemnified
Person or the Indemnitee made with the Indemnitor's written consent, which
consent shall not be unreasonably withheld.
(d) Contribution. The Indemnitor agrees that if any indemnification
sought by an Indemnified Person or Indemnitee pursuant to Section 5(a) is
determined by a court of competent jurisdiction to be unavailable for any
reason (other than the gross negligence, recklessness, bad faith or
willful misconduct of the Indemnified Person or Indemnitee) or
insufficient to hold it harmless to the extent contemplated hereby, then
(whether or not ING Equity Partners is the Indemnified Person) the
Indemnitor and the Indemnified Person or Indemnitee, will contribute to
the losses, claims, damages, liabilities, actions, taxes and expenses for
which such indemnification is held unavailable in such proportion as is
appropriate to reflect the relative benefits and relative faults to the
Indemnitor and the Indemnified Person or Indemnitee, as applicable, in
connection with this Agreement.
(e) Other rights. The indemnity, reimbursement and contribution
obligations of the Indemnitor pursuant to this Section 5 shall be in
addition to any rights the Indemnitor or any Indemnified Person or
Indemnitee may have at common law or otherwise, and shall be binding and
inure to the benefits of any successors, assigns, heirs and personal
representatives of the Indemnitor, Indemnified Person and Indemnitee.
6. Conditions to Closing. As of the date hereof and the Closing Date:
(a) Capital Stock. The Company has not (i) declared or issued any
dividends or distributions which the Shareholder is entitled to receive
from the Company by reason of being a record holder during such period;
and (ii) there has not occurred any conversion of shares or issuance of
additional shares by the Company, whether by amendment to the Articles of
Incorporation of the Company, merger, consolidation or otherwise.
-7-
<PAGE>
(b) Representations and Warranties of the Shareholder.
All representations and warranties of the Shareholder set
forth in this Agreement are true and correct.
7. Securities and Exchange Commission Reports. The parties hereto shall
use their best efforts to cooperate with respect to filing all necessary and
appropriate reports and other documentation in connection with the execution and
delivery of this Agreement and the purchase and sale of the Subject Shares
pursuant to this Agreement, including the use in such reports and other
documentation of the same or similar descriptions of the transactions
contemplated by this Agreement.
8. Costs and Expenses. Each party hereto agrees to pay its own expenses in
connection with the negotiation, preparation, execution and delivery of this
Agreement and amendments, as necessary, to the other Transaction Documents in
connection with this Agreement (including the reasonable fees and expenses of
counsel).
9. Amendment. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto against whom the terms of such modification,
amendment, alteration or supplement may be enforced.
10. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon (a) transmitter's confirmation of a
receipt of a facsimile transmission, (b) confirmed delivery by a standard
overnight carrier or when delivered by hand or (c) the expiration of five
business days after the day when mailed by certified or registered mail, postage
prepaid, addressed at the following addresses (or at such other address for a
party as shall be specified by like notice):
If to the Shareholder, to:
Edward Phillips
Matthews Studio Equipment Group
2405 Empire Avenue
Burbank, California 91504
with a copy to:
Whitman, Breed, Abbott & Morgan
633 West Fifth Street
Twenty First Floor
Los Angeles, California 90071
Attention: Francis W. Costello
-8-
<PAGE>
If to ING Equity Partners, to:
Benjamin P. Giess
ING Equity Partners, L.P.I
135 East 57th Street
New York, New York 10022
with a copy to:
James B. Carlson
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
or to such other address or addresses as any party hereto shall have designated
by notice in writing to the other parties hereto.
11. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter of this Agreement
and supersedes all prior agreements and understandings, oral and written, among
the parties hereto with respect to the subject matter of this Agreement.
12. Successors and Assigns. Neither this Agreement nor any of the parties'
rights hereunder shall be assignable by any party hereto, whether by operation
of law or otherwise, without the prior written consent of the other parties
hereto. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, beneficiaries, executors,
representatives and permitted successors and assigns.
13. Counterparts. For the convenience of the parties, this Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
14. LITIGATION. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE
PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS
AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD NOT BE
MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY TO
WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED TO
SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. EACH PARTY AGREES
THAT JURISDICTION AND VENUE WILL BE PROPER IN THE SOUTHERN DISTRICT OF NEW YORK
AND WAIVES ANY OBJECTIONS BASED UPON FORUM NON CONVENIENS. EACH PARTY WAIVES
PERSONAL SERVICE OF PROCESS AND AGREES THAT A SUMMONS AND COMPLAINT COMMENCING
AN ACTION OR
-9-
<PAGE>
PROCEEDING SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF
SERVED BY REGISTERED OR CERTIFIED MAIL TO THE PARTY AT THE ADDRESS SET FORTH IN
THIS AGREEMENT, OR AS OTHERWISE PROVIDED BY THE LAWS OF THE STATE OF NEW YORK OR
THE UNITED STATES. THE CHOICE OF FORUM SET FORTH IN THIS SECTION 14 SHALL NOT BE
DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM
OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE JURISDICTION.
15. ARBITRATION. THE PARTIES HERETO WAIVE THEIR RIGHTS, IF ANY, TO JURY
TRIAL IN RESPECT TO ANY DISPUTE OR CLAIMS BETWEEN OR AMONG THE PARTIES TO THIS
AGREEMENT RELATING TO OR IN RESPECT OF THIS AGREEMENT, ITS NEGOTIATION,
EXECUTION, PERFORMANCE, SUBJECT MATTER, OR ANY COURSE OF CONDUCT OR DEALING OR
ACTIONS UNDER OR IN RESPECT OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION ANY
CLAIM UNDER THE SECURITIES ACT, THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
ANY OTHER STATE OR FEDERAL LAW RELATING TO SECURITIES OR FRAUD OR BOTH, THE
RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT, AS AMENDED, OR FEDERAL OR
STATE COMMON LAW, AND ANY SUCH DISPUTE OR CLAIMS SHALL BE SUBMITTED TO, AND
RESOLVED EXCLUSIVELY PURSUANT TO, ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. SUCH ARBITRATION
SHALL TAKE PLACE IN NEW YORK, NEW YORK, AND SHALL BE SUBJECT TO THE SUBSTANTIVE
LAW OF THE STATE OF NEW YORK. DECISIONS AS TO FINDINGS OF FACT AND CONCLUSIONS
OF LAW PURSUANT TO SUCH ARBITRATION SHALL BE FINAL, CONCLUSIVE AND BINDING ON
THE PARTIES, SUBJECT TO CONFIRMATION, MODIFICATION OR CHALLENGE PURSUANT TO 9
U.S.C. ss.ss. 1 ET SEQ. ANY FINAL AWARD SHALL BE ENFORCEABLE AS A JUDGMENT OF A
COURT OF RECORD.
16. Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
17. Termination. This Agreement shall terminate on the earliest to occur
of (i) the Closing Date and (ii) the agreement of the parties hereto to
terminate this Agreement provided, however, that the provisions of Sections 14
and 15 hereof, shall survive the termination of this Agreement. The parties'
covenants, representations and warranties shall survive the consummation of the
sale of the Subject Shares.
-10-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto on the day and year first written above.
/s/ Edward Phillips ,
Edward Phillips
The Edward and Norma Phillips
Family Trust dated June 5, 1991
By: /s/ Edward Phillips
Edward Phillips, Trustee
ING EQUITY PARTNERS, L.P. I
By: Lexington Partners, L.P.,
its General Partner
By: Lexington Partners, Inc.,
its General Partner
By: /s/ Benjamin P. Giess
Benjamin P. Giess
Partner
-11-
<PAGE>
EXHIBIT 2
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of December 5, 1996,
by and among Carlos D. De Mattos ("CDM") and the Carlos and Elena De Mattos
Family Trust dated February 12, 1991 (the "Trust") (CDM and the Trust shall be
collectively referred to herein as the "Shareholder") and ING Equity Partners,
L.P. I, a Delaware limited partnership ("ING Equity Partners").
WHEREAS, as of the date hereof, the Shareholder is the record and
beneficial owners of, and has the sole right to vote and dispose of, 2,016,450
shares of common stock (the "Common Stock"), no par value per share, of Matthews
Studio Equipment Group (the "Company"), 200,000 of which shares the Shareholder
desires to sell (the "Subject Shares"); and
WHEREAS, ING Equity Partners desires to purchase from the Shareholder the
Subject Shares;
NOW, THEREFORE, in consideration of the foregoing, other good and valuable
considerations the sufficiency of which each of the parties hereto hereby
acknowledges, and the agreements set forth below, the parties hereto agree as
follows:
1. The Subject Shares.
(a) Share Price. The price to be paid for the Subject Shares on the Closing
Date (as defined in Section 1(b)) (the "Share Price") shall be $1.80 per share,
payable in cash.
(b) Closing. Subject to the terms and conditions set forth herein on or
before January 10, 1997 (the "Closing Date"), (i) the Shareholder will deliver
to ING Equity Partners a certificate or certificates representing the Subject
Shares to be purchased by ING Equity Partners, duly endorsed for transfer or
accompanied by appropriate stock powers, together with evidence satisfactory to
ING Equity Partners of payment of all stock transfer taxes or exemption
therefrom, (ii) the Shareholder shall deliver a certificate certifying that the
representation and warranties of such party set forth in this Agreement are true
and correct as of the date of the Closing, and (iii) ING Equity Partners will
pay the aggregate Share Price for the Subject Shares to be purchased by wire
transfer or by certified check or bank cashier's check. The Shareholder will use
the Shareholder's best efforts to cause the Company, as soon as practicable
after the Closing to register on the books of the Company the transfer of
Subject Shares in accordance with this Agreement.
<PAGE>
2. Certain Covenants.
(a) Certain Prohibited Transfers. During the term of this Agreement, the
Shareholder shall not:
(i) sell, transfer, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, encumbrance, assignment or
other disposition of, any Subject Shares owned by the Shareholder other
than as provided herein;
(ii) grant any proxies or enter into a voting agreement or other
arrangement with respect to any Subject Shares owned by the Shareholder,
other than pursuant to that certain Stockholders' Agreement, dated as of
July 27, 1995, among the Shareholder, ING Equity Partners, the Company and
the other parties listed on the signature pages thereto (the
"Stockholders' Agreement") or as provided herein; or
(iii) deposit any Subject Shares owned by the Shareholder into a
voting trust.
(b) Efforts. The Shareholder shall not take any action that would make any
representation or warranty herein of the Shareholder untrue or incorrect in any
material respect or that would have the effect of preventing or disabling the
Shareholder from performing the Shareholder's obligations under this Agreement.
(c) Filings and Other Actions. The Shareholder agrees to prepare and file
all applications, reports and other documentation and take all other actions in
connection with this Agreement, the Shareholder, and the sale of the Subject
Shares to ING Equity Partners, necessary and appropriate to comply with
applicable law.
(d) Pledges. The Shareholder covenants that the Shareholder's ownership of
the Subject Shares is not encumbered by any security interests, liens, changes,
encumbrances, equities, claims, options, limitations or restrictions of whatever
nature, other than pursuant to the Stockholders' Agreement.
3. Representations and Warranties of the Shareholder. The Shareholder
represents and warrants to ING Equity Partners as follows:
(a) Binding Agreement. The Shareholder has the capacity to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The
-2-
<PAGE>
Shareholder has duly and validly executed and delivered this Agreement and
this Agreement constitutes a legal, valid and binding obligation of the
Shareholder, enforceable against the Shareholder in accordance with its
terms.
(b) No Conflict. Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, nor
the compliance with any of the provisions hereof, by the Shareholder, (a)
require any consent, approval, authorization or permit of, registration,
declaration or filing with, or notification to, any governmental entity
except for filings under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (b) result in a default (or an event which, with
notice or lapse of time or both, would become a default) or give rise to
any right of termination by any third party, cancellation, amendment or
acceleration under any contract, agreement, instrument, commitment,
arrangement or understanding, or result in the creation of a security
interest, lien, charge, encumbrance, equity or claim with respect to any
of the Subject Shares, (c) require any consent, authorization or approval
of any person other than a governmental entity, or (d) violate or conflict
with any order, writ, injunction, decree or law applicable to the
Shareholder or the Subject Shares.
(c) Ownership of Subject Shares. The Shareholder is the record and
beneficial owner of the Subject Shares, free and clear of any security
interests, liens, charges, encumbrances, equities, claims, options or
limitations of whatever nature and free of any other limitation or
restriction (including any restriction on the right to vote, sell or
otherwise dispose of the Subject Shares), other than pursuant to the
Stockholders' Agreement. There are no outstanding options or other rights
to acquire from the Shareholder or obligations of the Shareholder to sell
or to acquire, any shares of capital stock of the Company, other than
pursuant to the Stockholders' Agreement. ING Equity Partners, upon the
purchase of the Subject Shares in accordance with the terms and conditions
of this Agreement shall be the beneficial owner of the Subject Shares,
free and clear of any security interests, liens, changes, encumbrances,
equities claims, options or limitations of whatever nature and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of the Subject Shares), other than
pursuant to the Stockholders' Agreement.
(d) Sophistication. CDM is a senior executive and director of the
Company, and as such, was and is generally familiar with the Company and
its business. The Shareholder
-3-
<PAGE>
is a sophisticated, experienced investor capable of analyzing and
evaluating investments such as the Shareholder's investment in the Common
Stock and the disposition of such investment. The Shareholder has
consulted such experts and advisors as the Shareholder considers
appropriate in connection with the Agreement.
(e) Status of ING Equity Partners. The Shareholder acknowledges and
accepts that ING Equity Partners may be deemed to have knowledge of facts
and information about the Company not available to the general public.
(f) Broker's, Finder's, Investment Banker's Fees. No broker, finder or
investment banker is entitled to any fee or commission in connection with
this Agreement, based upon arrangements made by or on behalf of the
Shareholder.
4. Representations and Warranties of ING Equity Partners. ING Equity
Partners represents and warrants to each of the other parties hereto as follows:
(a) Binding Agreement. ING Equity Partners is a limited partnership
duly organized, validly existing and in good standing under the laws of
the State of Delaware and has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
ING Equity Partners and its general partner. This Agreement has been duly
and validly executed on behalf of ING Equity Partners, and this Agreement
constitutes a legal, valid and binding obligation of ING Equity Partners,
enforceable against ING Equity Partners in accordance with its terms.
(b) No Conflict. Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, nor
the compliance with any of the provisions hereof by ING Equity Partners
will (i) conflict with or result in a breach of any provision of its
governing documents, (ii) require any consent, approval, authorization or
permit of, registration, declaration of filing with, or notification to,
any governmental entity, except for filings under the Exchange Act, (iii)
result in a default (or an event which, with notice or lapse of time or
both, would become a default) or give rise to any right of termination by
any third party, cancellation, amendment or acceleration under any
contract, agreement, instrument, commitment, arrangement or understanding,
(iv) require any consent, authorization or approval of any person other
than a governmental entity, or (v) violate or conflict with any
-4-
<PAGE>
order, writ, injunction, decree or law applicable to ING Equity Partners
or the Subject Shares.
(c) Sophistication. ING Equity Partners is a sophisticated,
experienced investor capable of analyzing and evaluating investments such
as its investment in the Common Stock and the disposition of such
investment. ING has consulted such experts and advisors as it considers
appropriate in connection with the Agreement.
(d) Securities Law Matters. ING Equity Partners acknowledges and
accepts that the Subject Shares may be deemed to be "restricted
securities" as that term is defined in Rule 144 of the Securities Act of
1933, as amended. ING Equity Partners represents and warrants that the
acquisition by ING Equity Partners of the Subject Shares pursuant to this
Agreement would be solely for investment purposes and not with a view to
or for sale in connection with a distribution of any or all of the Subject
Shares. ING Equity Partners also acknowledges that it has had full access
to such information regarding the business, finances and properties of the
Company that it has reasonably requested, and that it has been afforded
the opportunity to ask questions and receive answers from the
representatives of the Company concerning same.
5. Indemnification.
(a) Indemnification by the Shareholder. The Shareholder hereby agrees
to indemnify and hold harmless ING Equity Partners and its affiliates and
the respective directors, officers, partners, agents, representatives,
advisors and employees of ING Equity Partners and its affiliates and each
other person, if any, controlling ING Equity Partners or any of its
affiliates (each an "Indemnified Person") from and against all losses,
claims, damages, liabilities, actions and expenses incurred by any
Indemnified Person (including fees, expenses and disbursements of counsel)
which are related to or arise, directly or indirectly, out of or in
connection with any breach by the Shareholder of its representations,
warranties, covenants and agreements herein, and the Shareholder will
reimburse the Indemnified Person for all expenses (including fees,
expenses and disbursements of counsel) as they are incurred by the
Indemnified Person in connection with investigation, preparation or
defense of any such action or claim, whether or not in connection with
pending or threatened litigation in which the Indemnified Person is a
party. The Shareholder also agrees that the Shareholder will not, without
the prior written consent of the Indemnified Person (such consent not to
be unreasonably
-5-
<PAGE>
withheld), settle or compromise or consent to the entry of any judgement
in any pending or threatened claim, action, suit or proceeding in respect
of which indemnification may be sought hereunder.
(b) Indemnification by ING Equity Partners. ING Equity Partners
hereby agrees to indemnify and hold harmless the Shareholder and the
Shareholder's affiliates (each an "Indemnitee") from and against all
losses, claims, damages, liabilities, actions and expenses incurred by any
Indemnitee (including fees, expenses and disbursements of counsel) which
are related to or arise, directly or indirectly, out of or in connection
with any breach by ING Equity Partners of its representations, warranties,
covenants and agreements herein, and ING Equity Partners will reimburse
the Indemnitee for all expenses (including fees, expenses and
disbursements of counsel) as they are incurred by the Indemnitee in
connection with investigation, preparation or defense of any such action
or claim, whether or not in connection with pending or threatened
litigation in which the Indemnitee is a party. ING Equity Partners also
agrees that ING Equity Partners will not, without the prior written
consent of the Indemnitee (such consent not to be unreasonably withheld),
settle or compromise or consent to the entry of any judgement in any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder.
(c) Indemnification Procedures. If any action, proceeding, or
investigation is commenced, as to which an Indemnified Person or
Indemnitee proposes to demand such indemnification, the party demanding
indemnification shall notify the Shareholder or ING Equity Partners, as
the case may be (each an "Indemnitor"), with reasonable promptness;
provided, however, that any failure by the party demanding indemnification
to notify the Indemnitor shall not relieve the Indemnitor from its
obligations hereunder unless and then, only to the extent, that the
Indemnitor is not materially prejudiced by such failure. The Indemnitor
will be entitled, at its own expense, to assume the defense thereof and
the Indemnitor shall be subrogated to the rights the Indemnified Person or
Indemnitee may have in connection with such action, proceeding or
investigation to the extent the Indemnitor assumes such defense; provided
that the party demanding indemnification may assume the defense thereof,
at the Indemnitor's expense, if the Indemnitor fails to assume such
defense on a timely basis (and in any event, within 30 days of such
notification) or if the Indemnitor has adverse legal positions or
materially different defenses from the Indemnified Parties, in which case
the party demanding indemnification shall have the right to retain counsel
of
-6-
<PAGE>
its own choice to represent it, and the Indemnitor shall pay the fees and
expenses of such counsel; and such counsel shall, to the extent consistent
with its professional responsibilities, cooperate with the Indemnitor and
any counsel designated by the Indemnitor. ING Equity Partners may, in any
event, retain separate counsel, at its own expense, to participate in its
defense. The Indemnitor and the Indemnified Person or Indemnitee will
cooperate in connection with any such defense. The Indemnitor shall be
liable for any settlement of any indemnified claim against the Indemnified
Person or the Indemnitee made with the Indemnitor's written consent, which
consent shall not be unreasonably withheld.
(d) Contribution. The Indemnitor agrees that if any indemnification
sought by an Indemnified Person or Indemnitee pursuant to Section 5(a) is
determined by a court of competent jurisdiction to be unavailable for any
reason (other than the gross negligence, recklessness, bad faith or
willful misconduct of the Indemnified Person or Indemnitee) or
insufficient to hold it harmless to the extent contemplated hereby, then
(whether or not ING Equity Partners is the Indemnified Person) the
Indemnitor and the Indemnified Person or Indemnitee, will contribute to
the losses, claims, damages, liabilities, actions, taxes and expenses for
which such indemnification is held unavailable in such proportion as is
appropriate to reflect the relative benefits and relative faults to the
Indemnitor and the Indemnified Person or Indemnitee, as applicable, in
connection with this Agreement.
(e) Other rights. The indemnity, reimbursement and contribution
obligations of the Indemnitor pursuant to this Section 5 shall be in
addition to any rights the Indemnitor or any Indemnified Person or
Indemnitee may have at common law or otherwise, and shall be binding and
inure to the benefits of any successors, assigns, heirs and personal
representatives of the Indemnitor, Indemnified Person and Indemnitee.
6. Conditions to Closing. As of the date hereof and the Closing Date:
(a) Capital Stock. The Company has not (i) declared or issued any
dividends or distributions which the Shareholder is entitled to receive
from the Company by reason of being a record holder during such period; and
(ii) there has not occurred any conversion of shares or issuance of
additional shares by the Company, whether by amendment to the Articles of
Incorporation of the Company, merger, consolidation or otherwise.
-7-
<PAGE>
(b) Representations and Warranties of the Shareholder. All
representations and warranties of the Shareholder set forth in this
Agreement are true and correct.
7. Securities and Exchange Commission Reports. The parties hereto shall
use their best efforts to cooperate with respect to filing all necessary and
appropriate reports and other documentation in connection with the execution and
delivery of this Agreement and the purchase and sale of the Subject Shares
pursuant to this Agreement, including the use in such reports and other
documentation of the same or similar descriptions of the transactions
contemplated by this Agreement.
8. Costs and Expenses. Each party hereto agrees to pay its own expenses in
connection with the negotiation, preparation, execution and delivery of this
Agreement and amendments, as necessary, to the other Transaction Documents in
connection with this Agreement (including the reasonable fees and expenses of
counsel).
9. Amendment. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto against whom the terms of such modification,
amendment, alteration or supplement may be enforced.
10. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon (a) transmitter's confirmation of a
receipt of a facsimile transmission, (b) confirmed delivery by a standard
overnight carrier or when delivered by hand or (c) the expiration of five
business days after the day when mailed by certified or registered mail, postage
prepaid, addressed at the following addresses (or at such other address for a
party as shall be specified by like notice):
If to the Shareholder, to:
Carlos D. De Mattos
Matthews Studio Equipment Group
2405 Empire Avenue
Burbank, California 91504
with a copy to:
Whitman, Breed, Abbott & Morgan
633 West Fifth Street
Twenty First Floor
Los Angeles, California 90071
Attention: Francis W. Costello
-8-
<PAGE>
If to ING Equity Partners, to:
Benjamin P. Giess
ING Equity Partners, L.P.I
135 East 57th Street
New York, New York 10022
with a copy to:
James B. Carlson
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
or to such other address or addresses as any party hereto shall have designated
by notice in writing to the other parties hereto.
11. Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, oral and written, among the
parties hereto with respect to the subject matter of this Agreement.
12. Successors and Assigns. Neither this Agreement nor any of the parties'
rights hereunder shall be assignable by any party hereto, whether by operation
of law or otherwise, without the prior written consent of the other parties
hereto. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, beneficiaries, executors,
representatives and permitted successors and assigns.
13. Counterparts. For the convenience of the parties, this Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
14. LITIGATION. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE
PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS
AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD NOT BE
MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY TO
WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED TO
SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. EACH PARTY AGREES
THAT JURISDICTION AND VENUE WILL BE PROPER IN THE SOUTHERN DISTRICT OF NEW YORK
AND WAIVES ANY OBJECTIONS BASED UPON FORUM NON CONVENIENS. EACH PARTY WAIVES
PERSONAL SERVICE OF PROCESS AND AGREES THAT A SUMMONS AND COMPLAINT COMMENCING
AN ACTION OR
-9-
<PAGE>
PROCEEDING SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF
SERVED BY REGISTERED OR CERTIFIED MAIL TO THE PARTY AT THE ADDRESS SET FORTH IN
THIS AGREEMENT, OR AS OTHERWISE PROVIDED BY THE LAWS OF THE STATE OF NEW YORK OR
THE UNITED STATES. THE CHOICE OF FORUM SET FORTH IN THIS SECTION 14 SHALL NOT BE
DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM
OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE JURISDICTION.
15. ARBITRATION. THE PARTIES HERETO WAIVE THEIR RIGHTS, IF ANY, TO JURY
TRIAL IN RESPECT TO ANY DISPUTE OR CLAIMS BETWEEN OR AMONG THE PARTIES TO THIS
AGREEMENT RELATING TO OR IN RESPECT OF THIS AGREEMENT, ITS NEGOTIATION,
EXECUTION, PERFORMANCE, SUBJECT MATTER, OR ANY COURSE OF CONDUCT OR DEALING OR
ACTIONS UNDER OR IN RESPECT OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION ANY
CLAIM UNDER THE SECURITIES ACT, THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
ANY OTHER STATE OR FEDERAL LAW RELATING TO SECURITIES OR FRAUD OR BOTH, THE
RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT, AS AMENDED, OR FEDERAL OR
STATE COMMON LAW, AND ANY SUCH DISPUTE OR CLAIMS SHALL BE SUBMITTED TO, AND
RESOLVED EXCLUSIVELY PURSUANT TO, ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. SUCH ARBITRATION
SHALL TAKE PLACE IN NEW YORK, NEW YORK, AND SHALL BE SUBJECT TO THE SUBSTANTIVE
LAW OF THE STATE OF NEW YORK. DECISIONS AS TO FINDINGS OF FACT AND CONCLUSIONS
OF LAW PURSUANT TO SUCH ARBITRATION SHALL BE FINAL, CONCLUSIVE AND BINDING ON
THE PARTIES, SUBJECT TO CONFIRMATION, MODIFICATION OR CHALLENGE PURSUANT TO 9
U.S.C. ss.ss. 1 ET SEQ. ANY FINAL AWARD SHALL BE ENFORCEABLE AS A JUDGMENT OF A
COURT OF RECORD.
16. Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
17. Termination. This Agreement shall terminate on the earliest to occur
of (i) the Closing Date and (ii) the agreement of the parties hereto to
terminate this Agreement provided, however, that the provisions of Sections 14
and 15 hereof, shall survive the termination of this Agreement. The parties'
covenants, representations and warranties shall survive the consummation of the
sale of the Subject Shares.
-10-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto on the day and year first written above.
/s/ Carlos D. De Mattos ,
Carlos D. De Mattos
The Carlos and Elena De Mattos
Family Trust dated February 12,
1991
By: /s/ Carlos D. De Mattos
Carlos D. De Mattos, Trustee
ING EQUITY PARTNERS, L.P. I
By: Lexington Partners, L.P.,
its General Partner
By: Lexington Partners, Inc.,
its General Partner
By: /s/ Benjamin P. Giess
Benjamin P. Giess
Partner
-11-
<PAGE>
EXHIBIT 3
<PAGE>
November 17, 1995
Matthews Studio Equipment Group
2405 Empire Avenue
Burbank, California 91504
ING Equity Partners, L.P.I
135 East 57th Street - 9th Floor
New York, New York 10022
Re: Matthews Studio Equipment Group (the "Company)/
Compensation of Directors
Dear Sirs:
Pursuant to Section 2.1(a)(ii) of the Stockholders Agreement, dated as of
July 27, 1995, by and among the Company, ING Equity Partners, L.P.I ("ING"), and
the other parties listed on the signature pages thereto (the "Stockholders
Agreement"), I have been elected to the Board of Directors of the Company as an
ING Director (as defined in the Stockholders Agreement). Section 2.1(c) of the
Stockholders Agreement provides that the ING Directors shall be provided the
same compensation, stock incentive and reimbursement benefits as other
independent directors of the Company.
As of the date hereof, and for so long as I am an affiliate of ING and a
director of the Company, I hereby assign and convey to ING (the "Assignment")
any and all rights I have pursuant to Section 2.1(c) of the Stockholders
Agreement as an ING Director, to compensation, stock incentive and reimbursement
benefits, which the Company may provide from time to time to the Company's
independent directors; provided, however, that I shall retain all my rights and
obligations pursuant to the Directors Indemnification Agreement, dated as of
July 27, 1995, by an between the Company and myself.
Please indicate your acknowledgement, agreement and consent to the
Assignment by executing the enclosed copy of this letter and returning the same
at your earliest convenience.
<PAGE>
Matthews Studio Equipment Group
November 17, 1995
Page 14
Sincerely,
/s/ Benjamin P. Giess
Benjamin P. Giess
ACKNOWLEDGEMENT, AGREEMENT AND
CONSENT TO THE ABOVE:
ING EQUITY PARTNERS, L.P.I
By: Lexington Partners, L.P.,
its general partner
By: Lexington Partners, Inc.,
its general partner
By: /s/ David H. Morse
Name: David H. Morse
Title: Vice President
MATTHEWS STUDIO EQUIPMENT GROUP
By: /s/ Carlos D. De Mattos
Name: Carlos D. De Mattos
Title: President
<PAGE>
EXHIBIT 4
<PAGE>
Waiver of Option Rights
Under
Matthews Studio Equipment Group
1994 Stock Option Plan for Directors
The undersigned is a director but not an employee of Matthews Studio
Equipment Group (the "Company"). The undersigned understands that the Matthews
Studio Equipment Group 1994 Stock Option Plan for Directors (the "Plan")
provides that each non-employee director of the Company is to be issued options
to purchase fifteen thousand (15,000) shares of common stock of the Company,
under terms specified under the Plan (the "Plan Options").
The undersigned by his signature below hereby acknowledges and agrees that
in consideration for options to be issued to ING Equity Partners, L.P.I.
("ING"), and pursuant to that certain letter agreement of even date herewith
from the undersigned to the Company and ING, the undersigned relinquishes and
waives all rights of the undersigned to receive the Plan Options. The
undersigned further acknowledges and agrees that the options to be issued to
ING, (in place of the Plan Options) shall provide for an exercise price (per
share of the Company's common stock) of $3.00, shall be assignable by ING
(subject to compliance with applicable securities laws) and shall be subject to
such other terms as shall be fixed by the Company.
IN WITNESS WHEREOF, the undersigned has duly executed this Waiver of
Option Under Matthews Studio Equipment Group 1994 Stock Option Plan for
Directors (the "Waiver") on the date set forth below, and has delivered this
Waiver to the Company on the date
set forth below.
Dated: November 17, 1995
/s/ Benjamin P. Giess
Benjamin P. Giess
<PAGE>
EXHIBIT 5
<PAGE>
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement") made and entered into as of
November 17, 1995 by and between Matthews Studio Equipment Group, a California
corporation (the "Company"), and ING Equity Partners, L.P.I., (the "Optionee").
W I T N E S S E T H :
WHEREAS, directors of the Company are entitled to certain options to
purchase Common Stock of the Company under the Matthews Studio Equipment Group
1994 Stock Option Plan for Directors (the "Plan");
WHEREAS, the Optionee pursuant to section 2.1(a)(ii) of the Stockholder's
Agreement, dated as of July 27, 1995 by and between the Company and Optionee,
(the "Stockholders Agreement"), has designated Benjamin P. Giess ("Giess") as an
ING director (as defined in the Stockholders Agreement) and he has thereafter
been elected as a director of the Company;
WHEREAS, Optionee's ING Director Giess has assigned, pursuant to a letter
agreement, dated November 17, 1995, certain of his rights as a director of the
Company to compensation, stock incentive and reimbursement benefits to Optionee;
WHEREAS, the Company is willing to issue to Optionee options to purchase
Common Stock of the Company under terms different from those terms provided for
under the Plan and outside of the Plan, under the terms and provisions set forth
below;
NOW THEREFORE, it is granted by and between the parties hereto as follows:
1. The Company hereby evidences and confirms the grant to the Optionee on
this 17th day of November, 1995, (the "Date of Grant") of an option (the
"Option") to purchase Fifteen Thousand (15,000) shares of the Company's Common
Stock (subject to the terms set forth below) at an option price of $3.00 per
share (the "Option Shares").
2. This Option shall vest in three (3) Five Thousand Option Share
installments as follows: (i) Five Thousand (5,000) Option Shares may be
purchased at any time after the execution and delivery of this Agreement; (ii)
thereafter, provided Giess (or another ING Director designated by Optionee
pursuant to section 2.1(a)(ii) of the Stockholders Agreement to succeed Giess
(together with each appropriately designated successor thereto, the "Option
Director")) is serving as a member of the Board of Directors of the Company,
Optionee will be entitled to purchase an additional Five Thousand (5,000) Option
Shares at any time after the first anniversary of the Date of Grant in the
following year; (iii) and, provided Giess (or
-1-
<PAGE>
another Option Director designated by Optionee pursuant to section 2.1(a)(ii) of
the Stockholders Agreement to succeed Giess) is still serving as a member of the
Board of Directors of the Company, another Five Thousand (5,000) Option Shares
after the second anniversary of the Date of Grant. This Option shall expire on
November 17, 2005, subject to earlier cancellation or termination as provided in
this Agreement.
3. Except as otherwise provided in this Paragraph 3, Optionee may not
exercise this Option more than 30 days after the first date on which there
ceases to be an Option Director. This Option may be exercised following the date
there ceases to be an Option Director with respect to such number of Option
Shares as to which the right of exercise had accrued on or before such date. In
no event may this Option be exercised after the expiration of the term of such
Option.
4. In order to exercise this Option, in whole or in part, the Optionee
shall give written notice to the Company, specifying the number of Option Shares
purchased and the purchase price being paid, and accompanied by payment of the
purchase price. Such purchase price may be paid in cash or by a certified check
or cashier's check payable to the Company. Alternatively, the Option may be
exercised in whole or in part by delivering a properly executed notice together
with irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds necessary to pay the purchase price and
applicable withholding taxes, and such other documents as the Company may
determine. Upon receipt of payment, the Company shall deliver to the Optionee
(or other person entitled to exercise the Option) a certificate or certificates
for such Option Shares.
5. The Optionee shall be required to pay in cash to the Company the amount
of any taxes the Company is required by law to withhold with respect to the
exercise of the Option. Such payment may also be made at the election of the
Optionee by surrender of shares of the Company's Common Stock then owned by the
Optionee, or the withholding of shares of the Company's Common Stock otherwise
to be issued to the Optionee on exercise, valued at the fair market value of the
Company's Common Stock on the date of exercise.
6. This is a nonstatutory option not qualifying as an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as amended. This
Option is not being issued pursuant to the Plan.
7. This Option shall not be exercisable and no Option Shares will be
delivered hereunder except in compliance with all applicable federal and state
laws and regulations including, without limitation, compliance with withholding
tax requirements and with the rules of all domestic stock exchanges on which the
Company's Common Stock may be listed. Any share certificate issued to evidence
Option Shares for which this Option is exercised may bear such legends and
statements as the Company shall deem advisable to assure compliance with federal
and state laws and regulations. No Option shall be exercisable, and no Option
Shares shall be delivered hereunder, until the Company has obtained consent or
-2-
<PAGE>
approval from regulatory bodies, federal or state, having jurisdiction over such
matters as the Company may deem advisable.
8. This Option may be assigned or transferred, in whole or in part, by
Optionee without the prior written consent of the Company.
9. Optionee represents and warrants to the Company that Optionee is
acquiring the Option (and the Option Shares purchasable thereunder) for its own
account as principal, with no view to any resale or distribution of the Option,
or any portion thereof, or any Option Shares purchasable thereunder, or any
beneficial interest therein. Optionee understands that the Option and Option
Shares have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), or applicable state securities laws, and therefore
Optionee agrees that it will not sell or otherwise transfer any or all of the
Option or Option Shares unless it or they are registered under the Securities
Act and qualified under any applicable state securities law or unless an
exemption from such registration or qualification is available.
10. In the event of any change in the outstanding Common Stock of the
Company by reason of any stock dividend, stock split, combination of shares,
recapitalization, or other similar change in the capital stock of the Company,
or in the event of the merger or consolidation of the Company into or with any
other corporation or the reorganization of the Company, there shall be
substituted for or added to each Option Share theretofore appropriated for the
purposes of this Agreement or thereafter subject, or which may become subject,
to an Option under this Agreement, the number and kind of Option Shares of stock
or other securities into which each outstanding Option Share shall be so changed
or for which each such Option Share shall be exchanged or to which each such
Option Share shall be entitled, as the case may be. The Option shall be
appropriately amended as to price and other terms in a manner consistent with
the aforementioned adjustment to the Option Shares or the Company's Common Stock
subject to this Agreement. Adjustments under this paragraph 10 will be made by
the Company's Board of Directors, whose determination as to what adjustments
will be made, and the extent thereof, will be final, binding and conclusive.
11. Nothing contained in this Agreement, shall confer upon Giess any right
to the continuation of his directorship or limit in any way the right of the
Company or Optionee to terminate his directorship pursuant to the terms and
conditions of the Stockholders Agreement. Other than as a holder of Preferred
Stock (as defined in the Stockholder Agreement) neither Optionee nor any other
person legally entitled to exercise this Option will be entitled to any of the
rights or privileges of a shareholder of Company in respect of any Option Shares
issuable upon any exercise of Option unless and until a certificate or
certificates representing such shares has actually been issued and delivered to
the Optionee or such other person.
-3-
<PAGE>
12. This Agreement shall be construed and enforced in accordance with the
laws of the State of California, and shall be binding upon and inure to the
benefit of any successor or assignee of the Company and to any permitted assign
of Optionee, and any executor, administrator, legal representative, legatee, or
distributee entitled by law to the Optionee's rights hereunder.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer and the Optionee has duly executed this Agreement
as of the date first above written.
MATTHEWS STUDIO EQUIPMENT GROUP
By /s/ Carlos D. DeMattos
------------------------------
Carlos D. De Mattos, President
By /s/ Gregory Moiseeff
------------------------------
Gregory Moiseeff, Secretary
/s/ Benjamin P. Giess
------------------------------
Benjamin P. Giess, Optionee
ING EQUITY PARTNERS, L.P.I.
By: Lexington Partners, L.P.,
its general partner
By: Lexington Partners, L.P.,
its general partner
By: /s/ David H. Morse
--------------------
Name: David H. Morse
Date: 1/30/95
-4-
<PAGE>