Exhibit 4
PURCHASERS' AGREEMENT
PURCHASERS' AGREEMENT (this "Agreement"), dated as of December 18,
1997, between MAC Music LLC ("MAC") and SK-Palladin Partners, LP ("Palladin").
Each of MAC and Palladin is sometimes referred to herein as a "Purchaser" or,
collectively, "Purchasers".
WHEREAS, MAC and Palladin are parties to that certain Investment
Agreement, dated as of October 12, 1997, among Platinum Entertainment, Inc. (the
"Company"), MAC and Palladin, as amended by the Letter Amendments between the
parties dated October 28, 1997, October 30, 1997 and November 26, 1997, and as
hereafter further amended from time to time (the "Investment Agreement").
Capitalized terms used but not defined herein shall have the respective meanings
ascribed to them in the Investment Agreement;
WHEREAS, pursuant to Section 6.2.5(b) of the Investment Agreement,
so long as the Purchasers, or their Affiliates, employees, partners or members
hold, in the aggregate, not less than 35% of the Warrant Shares represented
immediately following the Closing by the Warrants being sold to each of MAC and
Palladin pursuant to the Investment Agreement, the Purchasers shall be entitled
to designate (i) four Purchaser Directors to the Board of Directors of the
Company and (ii) two Purchaser Directors to each Committee of the Company's
Board of Directors (including, without limitation, the executive, audit and
compensation committees) ("Committee Members");
WHEREAS, pursuant to Section 6.2.5(c) of the Investment Agreement,
so long as the Purchasers, or their Affiliates, employees, partners or members
hold, in the aggregate, not less than 15% of the Warrant Shares represented
immediately following the Closing by the Warrants being sold to each of MAC and
Palladin pursuant to the Investment Agreement, the Purchasers shall be entitled
to designate (i) two Purchaser Directors to the Board of Directors of the
Company and (ii) one Committee Member to each Committee;
WHEREAS, pursuant to Section 6.2.5(d) of the Investment Agreement,
under certain enumerated circumstances, the Purchasers shall be entitled to
designate additional Purchaser Directors so that the total number of Purchaser
Directors constitutes a majority of the Board of Directors of the Company;
WHEREAS, pursuant to Section 5.1 of the Certificate of Designation
for the Series B Preferred Stock (the "Series B Certificate"), if on the fifth
anniversary of the Issue Date any shares of Series B Preferred Stock remain
outstanding, the holders of shares of Series B Preferred Stock shall have the
right, voting separately as a class, to elect eight (8) directors of the
Corporation;
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WHEREAS, in order to avoid possible conflict between the Purchasers
in connection with the designation of Purchaser Directors pursuant to the
Investment Agreement or the election of directors pursuant to the Series B
Certificate, the parties hereto wish to provide for a mechanism for determining
the allocation of Purchaser Director designees as between the Purchasers to the
extent the Purchasers have such designation rights pursuant to the Investment
Agreement and to agree to vote together in the event that holders of shares of
Series B Preferred Stock are entitled to elect directors to the Corporation.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. As long as the Purchasers are entitled to designate four
Purchaser Directors and two Committee Members pursuant to Section 6.2.5(b) of
the Investment Agreement, each Purchaser will be entitled to designate two
Purchaser Directors and one Committee Member to each Committee; provided that:
(a) If a Purchaser has sold in the aggregate, pursuant to a
registration statement which has been declared effective under the Act or
pursuant to Rule 144 or Rule 144A of the Act (each such sale, a "Public Sale"),
in excess of 50% of the number of such Purchaser's Warrant Shares, as such
number may be adjusted from time to time under Section 6.1 of the Warrant (the
"Adjusted Warrant Shares"), then the selling Purchaser shall be entitled to
designate only one Purchaser Director (and the other Purchaser shall be entitled
to designate three Purchaser Directors) for so long as the ratio of the other
Purchaser's Adjusted Warrant Shares not sold in any Public Sale to the selling
Purchaser's Adjusted Warrant Shares not sold in any Public Sale is equal to or
exceeds two to one (2:1); and
(b) If a Purchaser has sold in the aggregate, in one or more
Public Sales, in excess of 95% of such Purchaser's Adjusted Warrant Shares, then
the selling Purchaser shall not be entitled to designate any Purchaser Director
or Committee Member (and the other Purchaser shall be entitled to designate all
four Purchaser Directors and both Committee Members) for so long as the ratio of
the other Purchaser's Adjusted Warrant Shares not sold in any Public Sale to the
selling Purchaser's Adjusted Warrant Shares not sold in any Public Sale is equal
to or exceeds two to one (2:1).
2. As long as the Purchasers are entitled to designate two Purchaser
Directors and one Committee Member pursuant to Section 6.2.5(c) of the
Investment Agreement, each Purchaser will be entitled to designate one Purchaser
Director, and the single Committee Member shall be designated by the Purchaser
with the greater number of Adjusted Warrant Shares not sold in any Public Sale;
provided that, if a Purchaser has sold in the aggregate, in one or more Public
Sales, in excess of 95% of such Purchaser's Adjusted Warrant Shares, then the
selling Purchaser shall
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not be entitled to designate any Purchaser Director (and the other Purchaser
shall be entitled to designate both Purchaser Directors) for so long as the
ratio of the other Purchaser's Adjusted Warrant Shares not sold in any Public
Sale to the selling Purchaser's Adjusted Warrant Shares not sold in any Public
Sale is equal to or exceeds two to one (2:1).
3. As long as the Purchasers are entitled to designate a majority of
directors to the Board of Directors of the Company pursuant to Section 6.2.5(d)
of the Investment Agreement, each Purchaser will be entitled to designate such
number of directors, rounded to the nearest whole number, in direct proportion
to the ratio of such Purchaser's number of Adjusted Warrant Shares not sold in
any Public Sale to the total number of both Purchasers' Adjusted Warrant Shares
not sold in any Public Sale; provided that, notwithstanding anything in this
paragraph 3 to the contrary, each Purchaser will be entitled to designate at
least one of the directors which the Purchasers are entitled to designate
pursuant to Section 6.2.5(d) for so long as such Purchaser has not sold in the
aggregate, in one or more Public Sales, in excess of 95% of such Purchaser's
Adjusted Warrant Shares.
4. As long as the holders of the Series B Preferred Stock are
entitled to elect eight directors to the Board of Directors of the Company (the
"Series B Directors") pursuant to Section 5.1 of the Series B Certificate, each
Purchaser agrees to vote all shares of Series B Preferred Stock owned at the
time by such Purchaser (and cause to be voted all shares of Series B Stock
controlled at the time by such Purchaser) at any meeting of stockholders called
for electing directors pursuant to Section 5.1 of the Series B Certificate, or
in any written consent executed for such purpose, in favor of the election to
the Board of Directors of the Corporation of the Series B Directors designated
by each Purchaser in accordance with the following sentence.
Each Purchaser will be entitled to designate such number of Series B
Directors, rounded to the nearest whole number, in direct proportion to the
ratio of such Purchaser's number of shares of Series B Preferred Stock ("Series
B Shares") not sold in any Public Sale to the total number of both Purchasers'
Series B Shares not sold in a Public Sale; PROVIDED THAT, notwithstanding
anything in this paragraph 4 to the contrary, each Purchaser will be entitled to
designate at least one of the Series B Directors for which the Purchasers are
entitled to vote pursuant to Section 5.1 of the Series B Certificate so long as
such Purchaser has not sold in the aggregate, in one or more Public Sales, in
excess of 95% of such Purchaser's Series B Shares.
5. This Agreement embodies the entire agreement between the parties
relating to the subject matter hereof and supersedes any and all prior oral or
written agreements, contracts, understandings, correspondence, conversations and
memoranda, whether written or oral, between MAC and Palladin, or between their
respective agents, representatives, parents, Subsidiaries or Affiliates, with
respect to the subject matter hereof.
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6. Any amendment, supplement or modification of or to any provision
of this Agreement, any waiver of any provision of this Agreement, and any
consent to any departure by any party hereto from the terms of any provision of
this Agreement, shall be effective only if (i) it is made or given in writing
and (ii) only in the specific instance and for the specific purpose for which
made or given.
7. This agreement shall inure to the benefit of and be binding upon
the successors and assigns of the parties hereto.
8. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to Agreements made and
performed entirely within such State. Each of the parties hereto agrees to
submit to the jurisdiction of the State and Federal Courts in the State of New
York in any action or proceeding arising out of or relating to this Agreement.
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9. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first written above.
MAC MUSIC LLC
By: Alpine Equity Partners L.P.,
Managing Member
By: Alpine Equity Partners L.L.C.,
General Partner
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Managing Director
By: Maroley Media Group LLC,
Managing Member
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
SK-PALLADIN PARTNERS, LP
By: SK-Palladin Holdings, LP,
General Partner
By: SK-Palladin Gen Par, Inc.
General Partner
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Title: President and
Chief Executive Officer
