PLATINUM ENTERTAINMENT, INC.
STOCK AND WARRANT PURCHASE AGREEMENT
This Stock and Warrant Purchase Agreement (this "Agreement"), dated
December 12, 1997, is between PLATINUM ENTERTAINMENT, INC., a Delaware
corporation (the "Corporation"), and the persons and entities named on
Schedule 1 attached hereto (the "Purchasers").
RECITALS
A. The Corporation has entered into an Investment Agreement, dated as
of October 12, 1997 (as amended by amendments dated October 26, 1997, October
30, 1997 and November 26, 1997, by and between the Corporation, MAC Music LLC
and SK-Palladin Partners, LP (the "Investment Agreement").
B. The closing of the transactions contemplated by this Agreement is a
condition precedent to the obligation of the Investment Agreement purchasers
to consummate the transactions contemplated by the Investment Agreement.
C. The Purchasers desire to purchase from the Corporation, and the
Corporation desires to issue and sell to the Purchasers in the aggregate, (x)
2,500 shares of Series C Convertible Preferred Stock of the Corporation, par
value $.001 per share (the "Series C Shares"), and (y) warrants (the
"Warrants") to purchase 450,000 shares of Common Stock of the Corporation,
par value $.001 per share (the "Common Stock"), for an aggregate purchase
price of $2,500,000, all upon the terms and subject to the conditions set
forth herein.
AGREEMENTS
In consideration of the recitals and the mutual covenants herein
contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, as used in this
Agreement:
"Closing" means the closing of the sale and purchase of the Series C
Shares and Warrants pursuant to this Agreement.
"Commission" means the Securities and Exchange Commission.
"Person" means a natural person, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization or other entity or a governmental entity or any
department, agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended.
ARTICLE II
AUTHORIZATION AND SALE OF COMMON SHARES
2.1 AUTHORIZATION. The Corporation will, prior to the Closing,
authorize the issuance and sale to the Purchasers of the Series C Shares and
Warrants.
2.2 SALE OF SERIES C SHARES AND WARRANTS TO THE PURCHASERS. Upon the
terms and subject to the conditions herein set forth and in reliance upon the
representations and warranties set forth herein, the Corporation agrees to
sell to each Purchaser, free and clear of any liens, claims, charges and
encumbrances whatsoever (except for any created by or through the
Purchasers), and each Purchaser agrees to purchase from the Corporation, at
the Closing, the number of Series C Shares and Warrants for the number of
shares of Common Stock set forth opposite each such Purchaser's name on
Schedule 1 attached hereto, for the aggregate purchase price set forth
opposite each such Purchaser's name on Schedule 1 attached hereto.
ARTICLE III
CLOSING; DELIVERY
3.1 CLOSING. The Closing will be held at the offices of Xxxxxx Xxxxxx &
Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, on December 12, 1997, at
10:00 a.m., or at such other time, date and place as may be agreed to by the
Corporation and the Purchasers.
3.2 DELIVERY. At the Closing, the Corporation will deliver to each
Purchaser a certificate for such Purchaser's Series C Shares and a Warrant
for the appropriate number of shares of Common Stock, each duly executed and
registered in the name of such Purchaser, against payment by such Purchaser
of the aggregate purchase price therefore by wire transfer to an account
designated by the Corporation.
ARTICLE IV
CONDITIONS TO CLOSING BY THE PURCHASERS
The obligation of the Purchasers to purchase the Series C Shares and
Warrants at the Closing is subject to the fulfillment by the Corporation of
all covenants and agreements contained in this Agreement to be performed or
complied with by the Corporation at or prior to the Closing.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
The Corporation hereby represents and warrants to the Purchasers on the
date hereof and as of the date of the Closing as follows:
5.1 ORGANIZATION AND STANDING. The Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware.
5.2 CORPORATE POWER. The Corporation has the requisite corporate power
to own all the properties owned by it and to conduct its business as
presently being and as proposed to be conducted by it. The Corporation has
all requisite corporate power to enter into this Agreement, to issue and sell
the Series C Shares and Warrants and to carry out and perform its obligations
under the terms of this Agreement.
5.3 AUTHORIZATION. All corporate action on the part of the Corporation,
its directors and stockholders necessary for the authorization, execution,
delivery and performance by the Corporation of this Agreement, and the
consummation of the transactions contemplated hereby, and for the
authorization, issuance, sale and delivery of the Series C Shares and
Warrants, has been taken.
5.4 ENFORCEABILITY. This Agreement constitutes the legal, valid and
binding obligation of the Corporation, enforceable against it in accordance
with their terms, subject to any applicable bankruptcy, reorganization,
insolvency, moratorium, or other laws or equitable principles affecting the
enforcement of creditors' rights generally.
5.5 VALIDITY OF SECURITIES. The Series C Shares, when issued, sold and
delivered in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid, non-assessable and free and clear of
all liens, charges, claims and encumbrances whatsoever, except for any
created by or through the Purchasers. The Warrants, when issued, sold and
delivered in accordance with the terms of this Agreement, will be duly
authorized and validly issued, non-assessable and free and clear of all
liens, charges, claims and encumbrances whatsoever, except for any created by
or through the Purchaser. The shares of Common Stock to be issued upon
conversion of the Series C Shares and exercise of the Warrants have been
reserved for issuance and when issued will, assuming payment of the exercise
price for the Warrants, be duly authorized, validly issued, fully paid,
non-assessable and free and clear of all liens, charges, claims and
encumbrances whatsoever, except for any created by or through the Purchasers.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby represents and warrants to the Corporation on the
date hereof and as of the date of the Closing as follows:
6.1 ENFORCEABILITY. This Agreement constitutes the legal, valid and
binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with its terms, subject to any applicable bankruptcy,
reorganization, insolvency, moratorium, or other laws or equitable principles
affecting the enforcement of creditors' rights generally.
6.2 PURCHASE FOR INVESTMENT. Such Purchaser will acquire the Series C
Shares, the Warrants and the shares of Common Stock issuable upon conversion
of the Series C Shares and exercise of the Warrants for investment and not
with a view to distributing all or any part thereof in any transaction which
would constitute a "distribution" within the meaning of the Securities Act.
Such Purchaser acknowledges that neither the Series C Shares, the Warrants
nor the shares of Common Stock issuable upon conversion of the Series C
Shares and exercise of the Warrants have not been registered under the
Securities Act and the Corporation is under no obligation to file a
registration statement with the Commission with respect to the such
securities.
6.3 INVESTOR QUALIFICATIONS. Such Purchaser (a) has such knowledge and
experience in financial and business matters that such Purchaser is capable
of evaluating the merits and risks of an investment in the Series C Shares
and Warrants; (b) is able to bear the complete loss of such Purchaser's
investment in the Series C Shares and Warrants; and (c) has had the
opportunity to ask questions of, and receive answers from, the Corporation
and its management concerning the terms and conditions of the offering of the
Series C Shares and Warrants and to obtain additional information. The
Purchaser is not relying upon any statements or instruments made or issued by
any Person other than the Corporation and its officers in making its decision
to invest in the Series C Shares and Warrants.
ARTICLE VII
COVENANTS OF THE CORPORATION
7.1 LEGENDS. Until (i) the securities represented by such certificate
are effectively registered under the Securities Act, or (ii) the holder of
such securities delivers to the Corporation a written opinion acceptable to
the Corporation from legal counsel to such holder to the effect that such
legend is no longer necessary under the Securities Act, the Corporation will
cause each certificate representing securities issued pursuant to this
Agreement or in exchange for or replacement of or as a distribution with
respect to such securities to be stamped or otherwise imprinted with a legend
in substantially the following form:
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"The securities represented by this certificate have not
been registered under the Securities Act of 1933, as
amended, and thus may not be transferred unless so
registered or unless an exemption from registration is
available."
ARTICLE VIII
MISCELLANEOUS
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained herein will survive the execution and delivery of this
Agreement and any investigation made at any time by or on behalf of the
Purchasers or the Corporation.
8.2 SUCCESSORS AND ASSIGNS. All covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto will bind and
inure to the benefit of the respective successors and assigns of the parties
hereto, whether so expressed or not.
8.3 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part
of this Agreement.
8.4 NOTICES. Any notices desired, required or permitted to be given
hereunder will be delivered personally or mailed, certified mail, return
receipt requested, or delivered by overnight courier service, to the
following addresses, or such other address as any party hereto designates by
written notice to the Corporation, and will be deemed to have been given upon
delivery, if delivered personally, five days after mailing, if mailed, or one
business day after delivery to the overnight courier service, if delivered by
overnight courier service:
If to the Corporation, to:
Platinum Entertainment, Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
If to the Purchasers, to the addresses set forth on the stock record book
of the Corporation.
8.5 GOVERNING LAW. The validity, meaning and effect of this Agreement
will be determined in accordance with the internal laws of the State of
Illinois applicable to contracts made and to be performed in that state.
8.6 EXHIBITS. All exhibits hereto are an integral part of this
Agreement.
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8.7 FINAL AGREEMENT. This Agreement, together with those documents
referred to herein, constitutes the final agreement of the parties concerning
the matters referred to herein, and supersedes all prior agreements and
understandings.
8.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument.
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The parties hereto have executed this Stock and Warrant Purchase
Agreement as of the date first set forth above.
PLATINUM ENTERTAINMENT, INC.
By:______________________________________
Its:_____________________________________
PLATINUM VENTURE PARTNERS I, L.P.
By:______________________________________
Its:_____________________________________
PLATINUM VENTURE PARTNERS II, L.P.
By:______________________________________
Its:_____________________________________
SCHEDULE 1
NUMBER OF NUMBER OF
PURCHASER SERIES C SHARES WARRANT SHARES PURCHASE PRICE
Platinum Venture 2,500 450,000 $2,500,000
Partners II, L.P.,
as nominee
