Exhibit 10.16
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Secured Credit Agreement (this "AGREEMENT") is
dated as of January ___, 1999, and is between Platinum Entertainment, Inc., a
Delaware corporation (the "BORROWER"), and First Source Financial LLP, an
Illinois limited liability partnership, as Agent and Lender (the "AGENT").
RECITALS
WHEREAS, the parties hereto are parties to that certain Secured Credit
Agreement, dated as of July 31, 1998 (as amended by that certain First
Amendment to Credit Agreement, dated as of November 1, 1998 and as from time
to time further amended, restated, supplemented or otherwise modified and in
effect, the "SECURED CREDIT AGREEMENT"); and
WHEREAS, Borrower and Agent desire to amend the Secured Credit Agreement
to make certain changes thereto and to correct certain matters, all as set
forth below.
NOW THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS. Capitalized terms used but not otherwise defined
herein shall have the meanings as set forth in the Secured Credit Agreement.
2. WAIVER.
Lenders and Agent hereby waive any Unmatured Event of Default or Event
of Default caused by Borrower's failure to comply with the restrictions on
investments set forth in Section 11.11 of the Secured Credit Agreement
through September 30, 1998.
3. AMENDMENT TO SECURED CREDIT AGREEMENT. Section 11.11 of the
Secured Credit Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:
SECTION 11.11 LOANS, ADVANCES OR INVESTMENTS. Not make or permit any
Subsidiary to make any loans or advances to, investments in, or
contributions to the capital of, any other Person, except for (i) the
endorsement, in the ordinary course of collection, of instruments payable
to it or to its order, (ii) loans and royalty advances to recording artists
in the ordinary course of business, (iii) investments in Cash Equivalents,
(iv) investments in Subsidiaries and other investments existing on the
Closing Date and disclosed on SCHEDULE 11.11 and
(v) investments made on or before September 30, 1998 by Borrower in Music
Connection Corporation in connection with the exchange of 1,320,000 shares
of common stock of Music Connection Corporation for 11,457 shares of common
stock of Borrower.
4. REPRESENTATIONS AND WARRANTIES. To induce Agent to enter into this
Agreement and to make all future Loans under the Secured Credit Agreement,
Borrower represents and warrants to Agent that:
(a) DUE AUTHORIZATION, ETC. The execution, delivery and performance by
Borrower of this Agreement and the First Amendment to Pledge Agreement (as
hereinafter defined) executed as of the date hereof are within its corporate
powers, have been duly authorized by all necessary corporate action, have
received all necessary governmental approval (if any shall be required), and
do not and will not contravene or conflict with any Requirement of Law or
Contractual Obligation binding upon such entity. Each of this Agreement and
the First Amendment to Pledge Agreement is the legal, valid, and binding
obligation of Borrower enforceable against Borrower in accordance with its
respective terms.
(b) CERTAIN AGREEMENTS. To the best of Borrower's knowledge, on the
date hereof all warranties of the Borrower thereto set forth in the Secured
Credit Agreement are true and correct in all material respects, without any
waiver or modification thereof and no default of any party exists under the
Secured Credit Agreement or any Related Document.
(c) FINANCIAL INFORMATION. All balance sheets, all statement of
operations, of shareholders' equity and of changes in financial position, and
other financial data which have been or shall hereafter be furnished to Agent
for the purposes of or in connection with this Agreement have been and will
be prepared in accordance with GAAP consistently applied throughout the
periods involved and do and will, present fairly the financial condition of
the entities involved as of the dates thereof and the results of their
operations for the periods covered thereby.
(d) LITIGATION. No material litigation (including, without limitation,
derivative actions), arbitrations, governmental investigation or proceeding
or inquiry shall, on the date hereof, be pending which was not previously
disclosed in writing to Agent and no material adverse development shall have
occurred in any litigation (including, without limitation, derivative
actions), arbitration, government investigations, or proceeding or inquiry
previously disclosed to Agent in writing.
5. CONDITIONS TO EFFECTIVENESS. This Agreement shall be effective as
of September 30, 1998 upon the satisfaction of the conditions set forth in
this SECTION 5 and delivery of the following documents to Agent on or prior
to the date hereof (unless another date is specified), in form and substance
satisfactory to Agent:
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(a) AMENDMENTS. Borrower shall have delivered to Agent executed
originals of this Agreement and of that certain First Amendment to Pledge
Agreement of even date herewith (the "FIRST AMENDMENT TO PLEDGE AGREEMENT")
between Borrower and Agent.
(b) CONSENTS AND ACKNOWLEDGMENTS. Borrower shall have obtained all
consents, approvals and acknowledgments which may be required with respect to
the execution, delivery and performance of this Agreement and the First
Amendment to Pledge Agreement.
(c) NO DEFAULT. As of the date hereof after giving effect to this
Agreement, the First Amendment to Pledge Agreement and the waiver set forth
in SECTION 2 hereof, no Unmatured Event of Default or Event of Default under
any Related Document shall have occurred and be continuing.
(d) STOCK CERTIFICATES AND STOCK POWERS. Borrower shall have delivered
to Agent such stock certificates, stock powers, assignments, financing
statements, endorsements, instruments and other documents as are necessary in
order to perfect Agent's Lien on the shares of common stock of Music
Connection Corporation pledged by Borrower to Agent pursuant to the First
Amendment to Pledge Agreement.
6. AFFIRMATION OF GUARANTIES.
Each Guarantor (i) consents to and approves the execution and delivery
of this Agreement and the First Amendment to Pledge Agreement by Borrower and
Agent, (ii) agrees that neither this Agreement nor the First Amendment to
Pledge Agreement does and nor shall limit or diminish in any manner its
obligations under its Guaranty or under any of the other Related Documents
to which it is a party, (iii) agrees that neither this Agreement nor the
First Amendment to Pledge Agreement shall be construed as requiring the
consent of any Guarantor in any other circumstance, (iv) reaffirms its
obligations under its Guaranty and all of the other Related Documents to
which it is a party, and (v) agrees that its Guaranty and such other Related
Documents remain in full force and effect and are each hereby ratified and
confirmed.
7. MISCELLANEOUS.
(a) CAPTIONS. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.
(b) GOVERNING LAW. This Agreement shall be a contract made under and
governed by the laws of the State of Illinois, without regard to conflict of
laws principles. Wherever possible each provision of this Agreement shall be
interpreted in such manner to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid
under such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provision of this Agreement.
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(c) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute one and the same Agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopy shall
be effective as delivery of a manually executed counterpart of this Agreement.
(d) SUCCESSORS AND ASSIGNEES. This Agreement shall be binding upon
Borrower, the Lenders and Agent and their respective successors and
assignees, and shall inure to the sole benefit of Borrower, Agent and each
Lender and their successors and assignees.
(e) REFERENCES. Any reference to the Secured Credit Agreement
contained in any notice, request, certificate, or other document executed
concurrently with or after the execution and delivery of this Agreement shall
be deemed to include this Agreement unless the context shall otherwise
require.
(f) CONTINUED EFFECTIVENESS. Notwithstanding anything contained
herein, the terms of this Agreement are not intended to and do not serve to
effect a novation as to the Secured Credit Agreement, any Note or any of the
Collateral Documents provided to furnish security therefor. The parties
hereto expressly do not intend to extinguish the Secured Credit Agreement,
any Note or the Collateral Documents. Instead, it is the express intention
of the parties hereto to reaffirm the existence of the indebtedness created
under the Secured Credit Agreement which is evidenced by Notes and secured by
the various Collateral Documents. The Secured Credit Agreement and each of
the Related Documents as amended hereby remain in full force and effect. The
execution, delivery and effectiveness of this Agreement shall not operate as
a waiver of any right, power or remedy of the Lenders or Agent under the
Secured Credit Agreement or any Related Document to which the Lenders and
Agent are a party nor, except as set forth in SECTION 2 hereof, constitute a
waiver of any provision in or Event of Default or Unmatured Event of Default
(now or hereafter existing) under the terms of the Secured Credit Agreement
or any Related Document.
(g) FEES AND EXPENSES. In accordance with Section 14.4 of the Secured
Credit Agreement, Borrower agrees to pay on demand all fees, costs and
expenses incurred by Agent and the Lenders in connection with the
preparation, execution and delivery of this Agreement.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers on the date first
above written.
PLATINUM ENTERTAINMENT, INC.,
as Borrower:
By: /s/ Xxxxxx Xxxxxx
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Name Printed: Xxxxxx Xxxxxx
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Title: President
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FIRST SOURCE FINANCIAL LLP,
as a Lender and as Agent
By: First Source Financial, Inc.,
Its: Manager
By: /s/ Xxxx X. Xxxxxxx
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Name Printed: Xxxx X. Xxxxxxx
--------------------------
Title: Senior Vice President
---------------------------------
LEXICON MUSIC, INC., as Guarantor
By: /s/ Xxxxxx Xxxxxx
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Name Printed: Xxxxxx Xxxxxx
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Title: President
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PEG PUBLISHING, INC., as Guarantor
By: /s/ Xxxxxx Xxxxxx
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Name Printed: Xxxxxx Xxxxxx
-------------------------------
Title: President
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[TO SECOND AMENDMENT TO SECURED CREDIT AGREEMENT]
ROYCE PUBLISHING, INC., as Guarantor
By: /s/ Xxxxxx Xxxxxx
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Name Printed: Xxxxxx Xxxxxx
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Title: President
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JUSTMIKE MUSIC, INC., as Guarantor
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Name Printed: Xxxxxx Xxxxxx
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Title: President
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S-2
[TO SECOND AMENDMENT TO SECURED CREDIT AGREEMENT]
