EXHIBIT 10.6
PLATINUM ENTERTAINMENT, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
Xxxxxx Trust and Savings Bank
Bank of Montreal
Ladies and Gentlemen:
The undersigned, Platinum Entertainment, Inc., a Delaware corporation
(the "COMPANY") refers to the Credit Agreement dated as of December 12, 1997,
currently in effect between the Company and each Lender party thereto as
heretofore amended (as so amended, the "CREDIT AGREEMENT"). All capitalized
terms used herein without definition shall have the same meanings herein as
such terms have in the Credit Agreement.
The Company and the Lenders wish to amend the Credit Agreement, all on
the terms and conditions set forth in this agreement (herein, the
"AMENDMENT").
1. AMENDMENTS.
Effective upon the acceptance hereof by the Agent and each Lender
currently party to the Credit Agreement in the space provided for that
purpose below, the Credit Agreement shall be amended (effective as of March
31, 1998) as set forth below:
1.1 Sectin 8.9 shall be and hereby is amended and restated in its
entirety (effective as of March 31, 1998) to read as follows:
SECTION 8.9 CONSOLIDATED NET WORTH. The Company will,
as of the close of each calendar quarter, maintain Consolidated
Net Worth of not less than the Minimum Required Amount. For
purposes thereof, the term "MINIMUM REQUIRED AMOUNT" shall
mean (a) $12,000,000 through March 31, 1998, and (b) shall
increase (but never decrease) as of each monthly accounting
period of the Company ending on or about April 30, 1998
and as of the last day of each month occurring thereafter,
in each case by an amount equal to 50% of Net Income
(if positive) for the month then ended.
1.2 Section 8.11 shall be and hereby is deleted and the phrase
"[Intentionally omitted]" is substituted therefor.
1.3 Section 8.13 is hereby amended by striking the phrase "CURRENT
MATURITIES AS OF THE CLOSE OF SUCH FISCAL QUARTER BUT EXCLUDING, HOWEVER, TO
THE EXTENT OTHERWISE
INCLUDED, THE FINAL INSTALLMENT ON THE TERM NOTES" and substituting therefor
the phrase "DEBT SERVICE DURING THE SAME SUCH FISCAL QUARTER."
2. WAIVER.
The May 13, 1998 Compliance Certificate which the Company furnished to
the Agent reflects that the Company was not in compliance with Section 8.9 of
the Credit Agreement as of March 31 of this year. Such Section 8.9 requires,
among other things, that the Company maintain a certain minimum Consolidated
Net Worth. The Company has requested that the Lenders waive the Company's
noncompliance with such Sectiion as of that date.
Accordingly, effective upon the acceptance hereof by the Agent and each
Lender currently party to the Credit Agreement in the space provided for that
purpose below, the Lenders hereby waive the Company's noncompliance with
Section 8.9 of the Credit Agreement as of March 31, 1998 to the extent and
only to the extent that the Company is in compliance with such Section after
giving effect to this Amendment, and hereby agree that such noncompliance
shall not constitute a Default or Event of Default. The Lenders are not with
this Amendment waiving the Company's compliance with such Section as modified
by this Amendment.
3. MISCELLANEOUS.
(a) Except as specifically amended or waived hereby, all of the terms,
conditions and provisions of the Credit Agreement shall stand and remain
unchanged and in full force and effect. No reference to this Amendment need
be made in any instrument or document at any time referring to the Credit
Agreement, a reference to the Credit Agreement in any of such items to be
deemed to be a reference to the Credit Agreement as amended hereby.
(b) The Company agrees to pay on demand all reasonable out-of-pocket
costs and expenses of the Agent (including the fees and expenses of counsel
for the Agent) incurred in connection with the negotiation, preparation,
execution and/or delivery of this Amendment. This Amendment may be executed
in counterparts and by separate parties hereto on separate counterparts, each
to constitute an original but all to constitute but one and the same
instrument. This Amendment shall be governed by, and construed in accordance
with, the internal laws of the State of Illinois.
[SIGNATURE PAGES TO FOLLOW]
Dated this 20th day of May, 1998.
PLATINUM ENTERTAINMENT, INC.
By /s/ Xxxxxxx X. Xxxx
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Its Chief Financial Officer
Accepted and agreed to as of the date and year last above written.
XXXXXX TRUST AND SAVINGS BANK,
individually and as Administrative Agent
and as Syndication Agent
By /s/ Xxxxxxx Xxxx
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Its Vice President
