Exhibit 10.21
PLATINUM ENTERTAINMENT, INC.
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
Bank of Montreal, as Agent
Chicago, Illinois
Ladies and Gentlemen:
Reference is hereby made to that certain Amended and Restated Credit
Agreement dated as of January 31, 1997 as amended by that certain First
Amendment to Amended and Restated Credit Agreement dated as of April 22, 1997
(as so amended, the "CREDIT AGREEMENT") between the undersigned, Platinum
Entertainment, Inc., a Delaware corporation (the "COMPANY"), and you as Agent
for the Banks (the "AGENT"). All capitalized terms used herein without
definition shall have the same meanings herein as such terms have in the
Credit Agreement.
The Company has requested that each Bank party to the Credit Agreement
extend the maturity of the credit outstanding under the Credit Agreement
waive compliance with certain financial covenants in the Credit Agreement and
make certain other corresponding modifications to the Credit Agreement, and
the Banks are willing to do so under the terms and conditions set forth in
this Amendment.
1. WAIVER.
The Banks hereby waive compliance with Section 8.10, 8.11 and 8.12 of
the Credit Agreement at all times through and including the earlier of (i)
August 1, 1997 or (ii) the Revolving Credit Termination Date and the Term
Credit Maturity Date; provided that this waiver shall not become effective
unless and until the conditions precedent set forth in Section 3.01 hereof
have been satisfied.
2. AMENDMENTS.
Upon satisfaction of the conditions precedent to the effectiveness
hereof set forth below, the Credit Agreement shall be and hereby is amended
as follows:
Section 2.01. AMENDED DEFINITIONS. Section 1.1 of the Credit
Agreement shall be and hereby is amended by amending the definitions of
"REVOLVING CREDIT TERMINATION DATE" and "TERM CREDIT MATURITY DATE" and as so
amended the definitions shall be restated in their entirety to read as
follows:
"REVOLVING CREDIT TERMINATION DATE" shall mean August 1, 1997, or
such earlier date on which the Commitments are terminated in whole
pursuant to Section 4.5 or Section 9 hereof.
"TERM CREDIT MATURITY DATE" means the earlier of (i) August 1,
1997, (ii) such earlier date on which the Commitments are terminated in
whole pursuant to Section 4.5 or Section 9 hereof.
Section 2.02. AMENDED EVENTS OF DEFAULT AND REMEDIES. Section 9.1 of
the Credit Agreement shall be and hereby is amended as follows:
(a) Section 9.1(m) shall be amended by striking the word "or"
that appears on the last line thereof;
(b) Section 9.1(n) shall be amended by deleting the period at the
end of the last line thereof and substituting a semicolon therefor;
(c) Section 9.1 shall be amended by adding the following
subsection immediately following Section 9.1(n):
(o) the Company has not obtained by July 15, 1997, a written firm
commitment in amount of not less than $30,000,000 from a person, firm
or corporation (which may be an affiliate of the Borrower) to provide
senior financing to the Borrower, provided such commitment (i)
constitutes a binding contract enforceable against such lender, (ii) is
not subject to any material contingencies other than a contingency with
respect to the closing of the K-Tel Acquisition (for the purposes of
this subsection, "K-Tel Acquisition" shall mean the Company's
acquisition of the music business of K-Tel International, Inc.
("K-Tel") (but excluding K-Tel's business in former Soviet Union,
Europe and England) through the purchase of all of the outstanding
stock of Dominion Music, Inc. and K-Tel International (USA), Inc.) and
(iii) is from a lender which is reasonably acceptable to the Banks;
(p) DLJ Capital Funding, Inc. shall (i) withdraw at any time as
manager in the Company's proposed private placement of convertible
preferred stock or (ii) state that the convertible preferred stock
private placement shall not be successful; or
(q) a change has occurred in the condition (financial or otherwise) or
prospects of either the Company or the Company and its Subsidiaries
taken as a whole that would cause a Material Adverse Effect.
Section 2.03. Amended Sections. (a) Section 3.4 shall be and
hereby is amended and as so amended shall be restated in its entirety
to read as follows:
Section 3.4 Late Charge. Any principal not paid when due
(without giving effect to any grace period applicable thereto)
shall bear late charges. Such late charges shall be due and
payable on demand. The initial late charge shall be equal to 1%
of such overdue principal as of the date such principal became
due. Such overdue principal shall bear an additional late charge
each 30 days until paid equal to 2% of the overdue principal
outstanding on the same
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day of each and every month after the date of such default (if any
such principal is overdue on such date). The payment of a late
charge does not impair or otherwise affect the rights and remedies
of the Agent and the banks upon any Default of event of Default
resulting from any such overdue principal.
(b) Section 4.9(b) of the Credit Agreement shall be and hereby
is amended and as so amended shall be restated in its entirety to read
as follows:
(b) U.S. Withholding Tax Exemptions. Each Bank that is not a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) shall submit to the Company and the Agent on or before the
earlier of the date the initial Borrowing is made hereunder and thirty
(30) days after the date hereof, two duly completed and signed copies of
(i) either Form 1001 (relating to such Bank and entitling it to a
complete exemption from withholding under the Code on all amounts to be
received by such Bank, including fees, pursuant to the Loan Documents and
the Loans) or Form 4224 (relating to all amounts to be received by such
Bank, including fees, pursuant to the Loan Documents and the Loans) of
the United States Internal Revenue Service or (ii) a United States
Internal Revenue Service Form W-8 and a certificate representing that
such non-U.S. person is not a bank for purposes of Section 881(c) of the
Code and that it is otherwise eligible to receive interest hereunder
without United States federal withholding tax pursuant to Section 871(h)
or Section 881(c) of the Code. Thereafter and from time to time, each
Bank shall submit to the Company and the Agent such additional duly
completed and signed copies of one or the other of such forms (or such
successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may be (i) requested by the Company
in a written notice, directly or through the Agent to such Bank and (ii)
required under then-current United States law or regulations to avoid or
reduce United States withholding taxes on payments in respect of all
amounts to be received by such Bank, including fees, pursuant to the Loan
Documents or the Loans.
(c) The second line of Section 9.2 shall be and hereby is amended by
inserting the phrase "and 9.1(o) to 9.1(q), both inclusive," immediately
after the phrase "both inclusive," appears therein.
(d) Section 12.12 shall be and hereby is amended by (i) inserting the
phrase "(a)" immediately after the phrase "Section 12.12. Assignment
Agreements" and (ii) adding the following subsection immediately after
Section 12.12;
(b) The Agent, on behalf of the Company, shall maintain at the
address of the Agent referred to in subsection 12.6 a copy of each
Assignment and Agreement delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Banks and the
Commitments of, and principal amounts of the Loans owing to each Bank
from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Company, the Agent and the Banks
shall treat each Person whose name is recorded in the Register as the
owner of a Loan or other obligation hereunder as the owner thereof for
all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan
or other obligation hereunder (whether or not evidenced by a Note) shall
be effective only upon appropriate entries with respect thereto being
made in the Register. The Register shall be available for inspection by
the Company or any Bank at any reasonable time and from time to time upon
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reasonable prior notice. This Section 12.12(b) shall remain in effect
until the Term Credit Maturity Date and the Revolving Credit termination
Date of all Loans hereunder and all payments of principal and interest
due hereunder have been made.
3. CONDITIONS PRECEDENT.
Section 3.01. The effectiveness of this Amendment is subject to the
satisfaction of all of the following conditions precedent:
(a) The Company, the Guarantors, the Agent and each Bank then
party to the Credit Agreement shall have executed and delivered
this Amendment.
(b) The Company's representations in Section 4 hereof shall be
true and correct.
(c) The Agent shall have received certified copies of the
resolutions of the Board of Directors of the Company authorizing
the execution, delivery and performance of, and indicating the
authorized signers of, this Amendment and all other documents
relating thereto.
(d) Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Agent and its counsel.
4. REPRESENTATIONS.
In order to induce each Bank party to the Credit Agreement to
execute and deliver this Amendment, the Company hereby represents to
each such Bank that as of the date hereof and as of the date this
Amendment becomes effective, but in each case after giving effect to
this Amendment, (i) the representations and warranties set forth in
Section 6 of the Credit Agreement are and shall be and remain true and
correct (except that the representations contained in Section 6.5 shall
be deemed to refer to the most recent financial statements of the
Company audited by Ernst & Young LLP and delivered to the Agent for the
account of the Banks) and (ii) unless specifically waived herein, the
Company is in full compliance with all of the terms and conditions of
the Credit Agreement and (iii) no Default or Event of Default has
occurred and is continuing under the Credit Agreement or shall result
after giving effect to this Amendment.
5. MISCELLANEOUS.
(a) The Company has heretofore executed and delivered to the Agent
that certain (i) Security Agreement (the "SECURITY AGREEMENT"); (ii) Security
Agreement Re: Intellectual Property (the "INTELLECTUAL PROPERTY SECURITY
AGREEMENT") and (iii) Pledge Agreement (the "PLEDGE AGREEMENT") each dated as
of January 31, 1997 between the Company, the Subsidiary Guarantors and the
Agent and the Company hereby acknowledges and agrees that, notwithstanding
the execution and delivery of this Amendment, the Security Agreement, the
Intellectual Property Security Agreement and the Pledge Agreement remain in
full force and effect and the rights and remedies of the Agent thereunder,
the obligations of the Company thereunder and the liens and
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security interests created and provided for thereunder remain in full force
and effect for the benefit and security of the indebtedness purported to be
secured thereby (including the Loans as modified hereby) and shall not be
affected, impaired or discharged hereby. Nothing herein contained shall in
any manner affect or impair the priority of the liens and security interests
created and provided for by the Security Agreement, the Intellectual Property
Security Agreement and the Pledge Agreement as to the indebtedness which
would be secured thereby prior to giving effect to this Amendment.
(b) Except as specifically amended herein, the Loan Documents
shall continue in full force and effect in accordance with its original
terms. Reference to this specific Amendment need not be made in the
Loan Documents or any other instrument or document executed in
connection therewith, or in any certificate, letter or communication
issued or made pursuant to or with respect to the Credit Agreement, any
reference in any of such items to the Credit Agreement being sufficient
to refer to the Credit Agreement as amended hereby.
(c) The Company agrees to pay on demand all reasonable costs and
expenses of or incurred by the Agent in connection with the
negotiation, preparation, execution and delivery of this Amendment,
including the reasonable fees and expenses of counsel for the Agent.
(d) This Amendment may be executed in any number of counterparts,
and by the different parties on different counterpart signature pages,
all of which taken together shall constitute one and the same
agreement. Any of the parties hereto may execute this Amendment by
signing any such counterpart and each of such counterparts shall for
all purposes be deemed to be an original. This Amendment shall be
governed by the internal laws of the State of Illinois.
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Accepted and agreed to in Chicago, Illinois as of the date and
year last above written.
BANK OF MONTREAL, individually
and as Agent
By:-----------------------------
Its-----------------------------
PPM AMERICA SPECIAL INVESTMENTS FUND
L.P.
By: /S/ Xxxxxx X. Xxxxxxxx
--------------------------
Its Managing Director
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Accepted and agreed to in Chicago, Illinois as of the date and
year last above written.
BANK OF MONTREAL, individually
and as Agent
By: Xxxxxxxx X. Xxxxx
-----------------------------
Its Senior Trader
-----------------------------
PPM AMERICA SPECIAL INVESTMENTS FUND
L.P.
By:---------------------------------
Its---------------------------------
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GUARANTORS' CONSENT
Each of the undersigned have heretofore executed and delivered to
the Agent its respective Guaranty dated January 31, 1997 and hereby
consents to the Second Amendment to the Credit Agreement as set forth
above and confirms that its Guaranty and all of its obligations
thereunder remain in full force and effect. Each of the undersigned
further agrees that the consent of each of the undersigned to any
further amendments to the Credit Agreement shall not be required as a
result of this consent having been obtained, except to the extent, if
any, required by the respective Guaranty referred to above.
Each of the undersigned, except for Xxxxxx Xxxxxx, have heretofore
executed and delivered to the Agent that certain (i) Security
Agreement; (ii) Security Agreement Re: Intellectual Property; and (iii)
Pledge Agreement, each dated as of January 31, 1997 and hereby confirms
that the Collateral Documents to which each is a party remain in full
force and effect and the rights and remedies of the Agent thereunder,
the obligations of the Subsidiary Guarantors thereunder and the liens
and security interests created and provided for thereunder remain in
full force and effect for the benefit and security of the indebtedness
purported to be secured thereby and shall not be affected, impaired or
discharged hereby.
/S/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx, individually
RIVER NORTH STUDIOS, INC.
By: /S/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: President
RIVER NORTH RECORDS, INC.
By: /S/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: President
CGI RECORDS, INC.
By: /S/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: President
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LEXICON MUSIC, INC.
By: /S/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: President
LIGHT RECORDS, INC.
By: /S/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: President
THE RECORDING EXPERIENCE, INC.
By: /S/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: President
JUSTMIKE MUSIC, INC.
By: /S/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: President
PEG PUBLISHING, INC.
By: /S/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: President
ROYCE PUBLISHING, INC.
By: /S/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: President
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