PLATINUM ENTERTAINMENT, INC.
FIRST 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 (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, modify
and 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.
As of February 28, 1997, the Company was not in compliance with the
financial covenants regarding EBITDA and SG&A Expenditures set forth in Sections
8.11 and 8.12(b), respectively, of the Credit Agreement. The Banks hereby waive
compliance with Sections 8.11 and 8.12(b) of the Credit Agreement at all times
through and including (but not after) February 28, 1997; provided that this
waiver shall not become effective unless and until the conditions precedent set
forth in Section 3.0 hereof have been satisfied.
2. AMENDMENTS.
Upon satisfaction of the conditions precedent to the effectiveness hereof
set forth below, the Credit 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 June 15, 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) June 15, 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 FINANCIAL COVENANTS. Sections 8.11 and 8.12(b) of
the Credit Agreement shall be and hereby are amended and as so amended shall be
restated in their entirety to read as follows:
Section 8.11. EBITDA. The Company will have EBITDA of not less than
$1,363,500 for the fiscal quarter of the Company ending on or about February 28,
1997 and will have EBITDA of not less than (i) negative $205,000 for the monthly
accounting period of March; (ii) positive $495,000 for the monthly accounting
period of April; and (iii) positive $2,463,000 for each monthly accounting
period thereafter.
Section 8.12. (b) SG & A Expenditures. The Company shall not and shall
not permit its Subsidiaries to expend or become obligated for SG&A Expenditures
during the fiscal quarter of the Company ending on or about February 28, 1997 in
excess of $3,000,000 for the Company and its Subsidiaries taken together. The
Company shall not and shall not permit its Subsidiaries to expend or become
obligated for SG&A Expenditures aggregating for the Company and its Subsidiaries
taken together in excess of (i) $1,581,000 for the Company's monthly accounting
period of March; (ii) $1,500,000 for each monthly accounting period thereafter.
Section 2.03. Miscellaneous. Section 12.13 of the Credit Agreement shall
be and hereby is amended by deleting the phrase "substantial (in value)"
appearing in the tenth line thereof.
3. CONDITIONS PRECEDENT.
Section 3.01. The effectiveness of this Amendment with respect to Sections
1 and 2.02 of this Amendment is subject to the satisfaction of all of the
following conditions precedent:
(a) The Company, the Guarantor, 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.
Section 3.02. The effectiveness of this Amendment with respect to Section
2.01 of this Amendment is subject to the Agent having received on or before May
1, 1997, for the ratable account of each Bank, an extension fee equal to one
percent (1.0%) of the outstanding principal
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amount of the sum of (i) the Term Credit Loans and (ii) the Revolving Credit
Loans as of May 1, 1997.
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 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. 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 costs and expenses of or
incurred by the Agent in connection with the negotiation, preparation,
execution and delivery of this Amendment, including the fees and expenses
of counsel for the Agent.
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(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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Dated as of April 23, 1997
PLATINUM ENTERTAINMENT, INC.
By:/S/ XXXXXX XXXXXX
----------------------------
Xxxxxx Xxxxxx
Its PRESIDENT
----------------------------
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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: /S/ XXXXXXXX X. XXXXX
----------------------------
Xxxxxxxx X. Xxxxx
Its Senior Trader
----------------------------
PPM AMERICA SPECIAL INVESTMENTS
FUND L.P.
By: /S/ Xxxxxxxx X. Xxxxxxx
----------------------------
Its Managing Director
----------------------------
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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 First
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 STUDIOS, 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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