Exhibit 10.1
FOURTH AMENDMENT TO SECURED CREDIT AGREEMENT
This Fourth Amendment to Secured Credit Agreement (this "Agreement") is
dated as of August 11, 1999, and is between Platinum Entertainment, Inc., a
Delaware corporation (the "Borrower"), and First Source Financial LLP, an
Illinois limited liability partnership, as Agent for Lenders party to the
Secured Credit Agreement (as defined below) (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 Secured Credit Agreement, dated as of November 1, 1998, that
certain Second Amendment to Secured Credit Agreement, dated as of
January ___, 1999, and that certain Third Amendment to Secured Credit Agreement,
dated as of April 14, 1999, and as from time to time further amended, restated,
supplemented or otherwise modified and in effect, the "Secured Credit
Agreement"); and
WHEREAS, Borrower and Lenders 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. Amendments to Secured Credit Agreement. The Secured Credit Agreement is
hereby amended as follows:
(a) The definition of "Borrowing Base" set forth in Section 1.1 of the
Secured Credit Agreement is hereby amended by deleting it in its entirety
and replacing it with the following:
"Borrowing Base" shall mean an amount equal to: (i) eighty
percent (80%) of the face amount (less maximum discounts, credits
and allowances which may have been taken by or granted to Account
Debtors in connection therewith) then outstanding of existing
Eligible Accounts minus (ii) the then current Return Credit Reserve,
plus (iii) the lesser of (x) fifty percent (50%) of the book value
of Borrower's then existing finished goods portion of Eligible
Inventory and (y) the Inventory Sublimit (the book value of Eligible
Inventory to be determined at the lower of cost (determined on a
first-in-first-out ("FIFO") basis) or market), plus (iii) the lesser
of (x) fifty percent (50%) of the Music Catalog Appraised Value and
(y) $25,000,000.
(b) Section 2.7 of the Secured Credit Agreement is hereby amended by
inserting the following new Section 2.7(c) immediately following
Section 2.7(b):
(c) Upon receipt by Borrower of the Assets Sale Proceeds from
the Country Publishing Sale, Borrower shall make a mandatory prepayment
of Revolving Loans outstanding in an amount equal to 50% of such Asset
Sale Proceeds. Each such payment shall be accompanied by accrued
interest on such principal amount and amounts payable under
Section 4.4(f), if any. Concurrently with the payment set forth in this
Section 2.7(c), the Revolving Commitment shall be reduced by an amount
equal to such payment. As used in this Section 2.7(c), "Asset Sale
Proceeds" shall mean the aggregate cash proceeds payable to Borrower in
connection with the Country Publishing Sale after deduction of all
reasonable, customary and documented costs and expenses (including,
without limitation, taxes) of such Country Publishing Sale.
(c) Section 11.12 of the Secured Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
SECTION 11.12 Mergers, Consolidations, Sales. Not, nor
shall it permit any Subsidiary to, (a) be a party to any merger or
consolidation or purchase or otherwise acquire all or substantially all
of the assets or stock of any class of, or any partnership or joint
venture interest or other interest in, any other Person other than (i)
the House of Blues Venture and (ii) other joint ventures entered into
in Borrower's ordinary course of business with respect to the music or
related entertainment business; provided, that Borrower continues to
won, free and clear of any interest of the joint venture (other than
allocation of profits therefrom), all music rights and recording product
used in such joint venture; or (b) sell, transfer, convey or lease all
or any substantial part of its assets or sell or assign with or without
recourse any Account, other than (i) any sale of inventory in the
ordinary course of business; provided, that the sale, transfer,
conveyance or lease of assets shall be in addition subject to the
limitations set forth in the Collateral Documents and (ii) a sale of all
or substantially all of the assets of the Double J Music, Xxxxxxxx Xxx
Music (ASCAP) and Xxxx Xxxx Music (BMI) divisions of Borrower (the
"Country Publishing Sale") for cash at a price determined to be fair and
reasonable by Borrower's board of directors; provided, that no Event of
Default or Unmatured Event of Default exists after giving effect to such
sale.
(d) Exhibit 1.2 of the Secured Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with Exhibit 1.2 attached
hereto and made a part hereof.
3. 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 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. This 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.
4. Conditions to Effectiveness. This Agreement shall be effective as of the
date hereof upon the satisfaction of the conditions set forth in this Section 4
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:
(a) Amendment. Borrower shall have delivered to Agent executed originals
of this Agreement.
(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.
(c) No Default. As of the date hereof after giving effect to this
Agreement no Unmatured Event of Default or Event of Default under any
Related Document shall have occurred and be continuing.
5. Affirmation of Guaranties.
Each Guarantor (i) consents to and approves the execution and delivery of
this Agreement by Borrower and Agent, (ii) agrees that this Agreement does not
nor shall it 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 this Agreement shall not 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.
6. 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.
(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 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]
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/ XXXXXXX X. XXXX
Name Printed: XXXXXXX X. XXXX
Title: CHIEF FINANCIAL OFFICER
FIRST SOURCE FINANCIAL LLP,
as a Lender and as Agent
By: First Source Financial, Inc.,
Its: Manager
By: /s/ XXXX X. XXXXXXX
Name Printed: XXXX X. XXXXXXX
Title: SENIOR VICE PRESIDENT
LEXICON MUSIC, INC., as Guarantor
By: /s/ XXXXXXX X. XXXX
Name Printed: XXXXXXX X. XXXX
Title: CHIEF FINANCIAL OFFICER
PEG PUBLISHING, INC., as Guarantor
By: /s/ XXXXXXX X. XXXX
Name Printed: XXXXXXX X. XXXX
Title: CHIEF FINANCIAL OFFICER
ROYCE PUBLISHING, INC., as Guarantor
By: /s/ XXXXXXX X. XXXX
Name Printed: XXXXXXX X. XXXX
Title: CHIEF FINANCIAL OFFICER
JUSTMIKE MUSIC, INC., as Guarantor
By: /s/ XXXXXXX X. XXXX
Name Printed: XXXXXXX X. XXXX
Title: CHIEF FINANCIAL OFFICER