<PAGE>

                                                                  EXECUTION COPY


                                   PLEDGE AGREEMENT

          This PLEDGE AGREEMENT ("PLEDGE AGREEMENT") is made as of this 31st day
of July, 1998 between PLATINUM ENTERTAINMENT, INC., a Delaware corporation
("PLEDGOR"), and FIRST SOURCE FINANCIAL LLP, as agent, for its benefit and the
benefit of the Lenders (in such capacity, "AGENT").

          WHEREAS, Pledgor is the legal and beneficial owner of 100% of the
issued and outstanding capital Stock described on EXHIBIT 1 hereto issued by the
corporations named therein; 

          WHEREAS, Pledgor, Agent and the Persons from time to time designated
as lenders thereunder ("LENDERS") have entered into that certain Secured Credit
Agreement dated as of the date hereof (as amended, supplemented, restated or
otherwise modified from time to time, the "CREDIT AGREEMENT") providing for the
extension of loans and other financial accommodations from Lenders to Pledgor;

          WHEREAS, in connection with the making of the loans and other
extensions of credit under the Credit Agreement and as security for the
obligations of Pledgor under the Credit Agreement, Lenders and Agent are
requiring that Pledgor shall have executed and delivered this Pledge Agreement
and granted the security interests contemplated hereby; and

          NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor hereby agrees with Agent as follows:

          1.   DEFINED TERMS.  As used in this Pledge Agreement,

          "PLEDGED COLLATERAL" means the Pledged Stock and the Stock Rights,
including the proceeds of each.

          "PLEDGED STOCK" means the respective shares of capital stock described
on EXHIBIT 1 hereto, together with the certificates or other instruments or
securities representing such shares.

          "SECURED OBLIGATIONS" shall have the meaning assigned to such term in
SECTION 2 hereof.

          "STOCK RIGHTS" means any stock (including, without limitation,
securities entered on the books of any financial intermediaries), any dividend
or other distribution and any other right or property which Pledgor shall
receive or shall become entitled to receive for any reason whatsoever with
respect to, in substitution for or in exchange for any shares of the Pledged
Stock and any stock, 

<PAGE>

any right to receive stock and any right to receive earnings, in which Pledgor
now has or hereafter acquires any right, issued by the issuer of the Pledged
Stock.

          The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.  In addition, unless otherwise
defined herein, all defined terms herein shall have the respective meanings
ascribed thereto in the Credit Agreement as in effect on the date hereof.

          2.   PLEDGE.  To secure all indebtedness, liabilities and obligations
of Pledgor now or hereafter existing under this Pledge Agreement and under the
Credit Agreement (collectively, the "SECURED OBLIGATIONS") Pledgor hereby
delivers to Agent and hereby pledges, assigns, transfers and grants to Agent a
first Lien on the Pledged Collateral.  All of the Pledged Stock, together with
undated stock powers duly executed in blank by Pledgor, are being delivered to
Agent simultaneously herewith.

          3.   REPRESENTATIONS AND WARRANTIES OF PLEDGOR.  Pledgor represents
and warrants to Agent that:

          3.1  EXISTENCE AND STANDING.  Pledgor is duly existing and in good
standing under the laws of jurisdiction of its formation and is duly qualified
and in good standing in each jurisdiction where, because of the nature of its
activities or properties, such qualification is required or where the failure to
so qualify could have a Material Adverse Effect.

          3.2  AUTHORIZATION, VALIDITY AND ENFORCEABILITY.  Pledgor has full
power, authority and legal right to execute this Pledge Agreement and to pledge
the Pledged Collateral to Agent.  The execution and delivery by Pledgor of this
Pledge Agreement have been duly authorized by all necessary corporate action and
this Pledge Agreement constitutes a legal, valid and binding obligation of
Pledgor enforceable against Pledgor in accordance with its terms, creates a
security interest which is enforceable against Pledgor in the Pledged Collateral
and will create a security interest enforceable against Pledgor in the Stock
Rights and the proceeds of the Pledged Stock and the Stock Rights at the time
Pledgor acquires any right therein, in each such case subject to bankruptcy,
insolvency, liquidation, reorganization and other laws of general application
affecting the rights and remedies of creditors.

          3.3  CONFLICTING LAWS AND CONTRACTS.  Neither the execution and
delivery by Pledgor of this Pledge Agreement, nor the creation and perfection of
the Lien on the Pledged Collateral granted hereunder, nor compliance with the
terms and provisions hereof violates or will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on Pledgor or
Pledgor's Certificate of Incorporation or By-laws or the provisions of any
material indenture, instrument or agreement to which Pledgor is a party or is
subject, or by which it, or its property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
Lien pursuant to the terms of any such indenture, instrument or agreement.


                                         -2-
<PAGE>

          3.4  OWNERSHIP OF PLEDGED STOCK.  Pledgor is the direct legal and
beneficial owner of the Pledged Stock, and such Pledged Stock represents 100% of
the issued and outstanding stock of its issuer.

          3.5  OTHER AGREEMENTS.  Pledgor has not performed any act or executed
any instrument, agreement or other document that might prevent or hinder Agent
from obtaining and enjoying fully and completely all of the benefits, rights and
powers conferred, or sought to be conferred, upon Agent by this Pledge
Agreement.

          3.6  ISSUANCE OF PLEDGED STOCK.  Each share of the Pledged Stock has
been duly and validly issued, is fully paid and non-assessable and is owned by
Pledgor free and clear of any Lien other than the Lien created by this Pledge
Agreement.

          3.7  CONSENTS.  No consent, approval or authorization of, notice to,
designation or filing with, or other action by, any Person is required in
connection with the execution, delivery and performance of the pledge and Lien
granted under this Pledge Agreement by Pledgor, or in connection with the
exercise of remedies with respect to the Pledged Collateral pursuant to this
Pledge Agreement.

          3.8  PRIORITY.  The pledge, assignment and delivery of the Pledged
Collateral pursuant to this Pledge Agreement creates a valid first perfected
Lien on Pledgor's interest in such Pledged Collateral and the proceeds thereof
in favor of Agent, subject to no prior Lien of any other Person.

          4.   COVENANTS.  From the date of this Pledge Agreement until the
Pledge Agreement is terminated pursuant to SECTION 7.13:

          4.1  Pledgor shall:

               4.1.1 DELIVERY OF CERTAIN ITEMS.  Except as otherwise permitted
     by the Credit Agreement, hold in trust for Agent and deliver forthwith (and
     without any necessity for any request or demand by Agent) to Agent, in the
     exact form received, with the endorsement of Pledgor when necessary and/or
     appropriate instruments of transfer, assignment or endorsement as
     applicable, duly executed in blank, any additional stock certificates,
     cash, checks, draft, remittances, documents, promissory notes, instruments,
     debt securities or other proceeds evidencing or constituting Pledged
     Collateral, whether as an addition to, in substitution for, or in exchange
     for any of the Pledged Collateral, or otherwise.  In case any property
     shall be distributed upon or with respect to any Pledged Collateral
     pursuant to the recapitalization or reclassification of the capital of the
     issuer thereof or pursuant to the reorganization thereof, except as
     otherwise permitted by the Credit Agreement, the property so distributed
     shall be delivered to Agent to be held by it as additional collateral
     security for the Secured Obligations.  Except as otherwise permitted by the
     Credit Agreement, all sums of money and property so paid or distributed in
     respect of any Pledged Collateral which are 


                                         -3-
<PAGE>

     received by Pledgor shall, until paid or delivered to Agent in accordance
     with the terms hereof, be held by Pledgor in trust as additional collateral
     security for the Secured Obligations.

               4.1.2  TAXES.  Pay when due all taxes, assessments and
     governmental charges and levies upon the Pledged Collateral, except those
     being contested in good faith by appropriate proceedings and with respect
     to which no Lien exists.

               4.1.3  NOTICE OF DEFAULT.  In accordance with the provisions of
     Section 11.1(h) of the Credit Agreement, give prompt notice in writing to
     Agent of the occurrence of any Unmatured Event of Default or Event of
     Default and of any other development, financial or otherwise, which could
     reasonably be expected to materially adversely affect the value of the
     Pledged Collateral or the ability of Pledgor to perform the Secured
     Obligations.

               4.1.4  STOCK POWERS AND OTHER ACTIONS.  Execute and deliver to
     Agent all stock powers, assignments, financing statements, endorsements,
     instruments and other documents and take all further action, at the expense
     of Pledgor, from time to time requested by Agent in order to perfect or
     maintain a first perfected Lien on the Pledged Collateral in favor of Agent
     or to enable Agent to exercise and enforce its rights and remedies
     hereunder with respect to the Pledged Collateral or to effect a transfer of
     the Pledged Collateral, or any part thereof.  All instruments representing
     or evidencing the Pledged Collateral shall be delivered to and held by
     Agent pursuant hereto and shall be in suitable form for transfer or
     assignment in blank, all in form and substance satisfactory to Agent.

               4.1.5  REPORTS.  Furnish to Agent such reports relating to the
     Pledged Collateral as Agent shall from time to time may reasonably request.

               4.1.6  DEFENSE OF COLLATERAL.  Defend for the benefit of Agent,
     Agent's right, title and Lien acquired by this Pledge Agreement in and to
     the Pledged Collateral and the proceeds thereof against the claims and
     demands of all other Persons except by, through or under Agent.

          4.2  Pledgor shall not: 

               4.2.1  LIENS.  Create, incur, or suffer to exist any Lien on the
     Pledged Collateral except the Lien created by this Pledge Agreement or
     perform any act or execute any instrument that might prevent or hinder
     Agent from obtaining and enjoying, fully and completely, all of the
     benefits, rights and privileges conferred or sought to be conferred upon
     Agent by this Pledge Agreement.

               4.2.2  DISPOSITION OF COLLATERAL.  Except as otherwise provided
     in the Credit Agreement, sell or otherwise dispose of all or any part of
     the Pledged Collateral.


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               4.2.3  CHANGES IN CAPITAL STRUCTURE OF ISSUER.  Except as
     otherwise provided in the Credit Agreement, (a) permit or suffer any issuer
     of the Pledged Stock to dissolve, liquidate, retire any of its capital
     stock, reduce its capital or merge or consolidate with any other Person, or
     (b) vote any of the Pledged Stock or Stock Rights in favor of any of the
     foregoing.

               4.2.4  ISSUANCE OF ADDITIONAL STOCK.  Permit or suffer the issuer
     of the Pledged Stock to issue any stock, any right to receive stock or any
     right to receive earnings, except to Pledgor.

          5.   REMEDIES.

          5.1  ACCELERATION AND REMEDIES.  If any Event of Default has occurred
and is continuing, then, upon the election of Agent, the Secured Obligations
shall immediately become due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived, and Agent may (a)
exercise all rights set forth in SECTION 7.3 and (b) exercise any or all of the
rights and remedies provided (i) in this Pledge Agreement, (ii) in the Code to a
secured party when a debtor is in default under a security agreement and (iii)
by any other applicable law or agreement.

          5.2  FORECLOSURE SALES.  (a) Without limiting the provisions of
SECTION 5.1, Agent may, following the occurrence and during the continuance of
an Event of Default, without notice except as specified below, and to the extent
permitted under applicable law, sell the Pledged Collateral or any part thereof
in one or more transactions at public or private sale, for cash or property and
at such price or prices and upon such other terms as Agent may deem commercially
reasonable, irrespective of the impact of any of such sales on the value of any
of the Pledged Collateral.  To the extent permitted under applicable law, Agent
may be the purchaser of any or all of the Pledged Collateral at any such sale. 
Each purchaser at any such sale shall hold the property sold absolutely free
from any claim or right on the part of Pledgor, and Pledgor hereby waives (to
the extent permitted by law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted.  Agent shall not be obligated to make
any sale with respect to the Pledged Collateral regardless of a notice of sale
having been given.  Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.

          (b)  Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the "SECURITIES ACT"), and
applicable state securities laws, Agent may be unable to effect a public sale or
disposition of any or all of the securities included within the Pledged
Collateral but may be compelled to resort to one or more private sales or
dispositions thereof to a restricted group of purchasers who will agree, among
other things, to acquire the Pledged Collateral for their own account, for
investment and not with a view to the distribution or resale thereof.  Pledgor
acknowledges that any sales under such restrictions may be at prices and on
terms 


                                         -5-
<PAGE>

less favorable than those obtainable through a sale without such restrictions
(including, without limitation, a public offering made pursuant to a
registration statement under the Securities Act), and notwithstanding such
circumstances, agrees that any sale under such restrictions shall be deemed to
have been made in a commercially reasonable manner and that Agent shall have no
obligation to engage in sales without such restrictions and no obligation to
delay the sale of any securities included within the Pledged Collateral for the
period of time necessary to permit the issuer thereof to register it for a form
of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if Pledgor would agree to do so.

          6.   WAIVERS, AMENDMENTS AND REMEDIES.  No course of dealing between
Agent and Pledgor and no delay or omission of Agent to exercise any right,
power, privilege or remedy granted under this Pledge Agreement, the Credit
Agreement or any other Related Document or any collateral document or guaranty
related thereto shall impair such right or remedy or be construed to be a waiver
of any Event of Default or an acquiescence therein, and any single or partial
exercise of any such right or remedy shall not preclude other or further
exercise thereof or the exercise of any other right, power, privilege or remedy,
and no waiver, amendment or other variation of the terms, conditions or
provisions of this Pledge Agreement whatsoever shall be valid unless in writing
signed by Agent, and then only to the extent in such writing specifically set
forth.  All rights, power, privilege and remedies contained in this Pledge
Agreement shall be cumulative, are in addition to such other rights, power,
privileges and remedies Agent may have by law or otherwise and shall be
available to Agent until the Secured Obligations have been paid in full.

          7.   GENERAL PROVISIONS.

          7.1  SPECIAL COLLATERAL ACCOUNT.  All cash received by Agent with
respect to the Pledged Collateral pursuant to SECTION 4.1.1 or upon the exercise
of the remedies provided for in SECTION 5.1, shall be deposited into a special
collateral account with Agent and shall be held by Agent as security for the
Secured Obligations.  Pledgor shall have no control whatsoever over said special
collateral account.  Agent shall apply any part of the credit balance in said
special collateral account to the payment of the Secured Obligations, whether or
not any of them shall be then due.

          7.2  APPLICATION OF PROCEEDS.  All cash, property or other proceeds
received by Agent pursuant to the enforcement of this Pledge Agreement, the
Credit Agreement or any other Related Document or any collateral document or
guaranty related to any of the foregoing after acceleration of the Secured
Obligations shall be distributed in the manner set forth in the Credit
Agreement.

          7.3  EXERCISE OF RIGHTS IN PLEDGED COLLATERAL.  After the occurrence
and during the continuance of an Event of Default, Agent or its nominee may, but
shall not be obligated to, at any time and from time to time, without notice to
Pledgor, exercise all voting and corporate rights relating to the Pledged
Collateral including, without limitation, exchange, subscription or any other
rights, privileges, or options pertaining to any shares of the Pledged Stock and
the Stock Rights, as if it were the absolute owner thereof.  Upon the occurrence
and during the continuance of an Event 


                                         -6-
<PAGE>

of Default, in the event that Pledgor, as record and beneficial owner of the
Pledged Stock, shall receive or shall become entitled to receive, any cash
dividends or other distributions, Pledgor shall deliver to Agent, and Agent
shall be entitled to receive and retain, all such cash or other distributions. 
At all times when no Event of Default has occurred and is continuing, Pledgor
shall be entitled to vote its Pledged Stock and otherwise exercise the incidents
of ownership of the Pledged Stock.

          7.4  NOTICE OF DISPOSITION OF COLLATERAL.  Notice of the time and
place of any public sale or the time after which any private sale or other
disposition of all or any part of the Pledged Collateral may be made shall be
reasonable if sent to Pledgor, addressed as set forth in SECTION 8, at least ten
days prior to any such public sale or the time after which any such private sale
or other disposition may be made.

          7.5  POSSESSION OF COLLATERAL.  Beyond the exercise of reasonable care
to assure the safe custody of the Pledged Collateral in the physical possession
of Agent pursuant hereto, neither Agent nor any nominee of Agent, shall have any
duty or liability to collect any sums due in respect thereof or to protect,
preserve or exercise any rights pertaining thereto, and shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it to Pledgor.

          7.6  SPECIFIC PERFORMANCE OF CERTAIN COVENANTS.  Pledgor acknowledges
and agrees that a breach of any of the covenants contained in SECTIONS 4.1.1,
4.1.4, 4.1.6, 4.2.2, 4.2.3 or 4.2.4 will cause irreparable injury to Agent and
that Agent has no adequate remedy at law in respect of such breaches and
therefore agrees, without limiting the right of Agent to seek and obtain
specific performance of other obligations of Pledgor contained in this Pledge
Agreement, that the covenants of Pledgor contained in the Sections referred to
in this SECTION 7.6 shall be specifically enforceable against Pledgor.

          7.7  DEFINITION OF CERTAIN TERMS.  Terms defined in the Code which are
not otherwise defined in this Pledge Agreement are used in this Pledge Agreement
as defined in the Code as in effect on the date hereof.

          7.8  BENEFIT OF AGREEMENT.  The terms and provisions of this Pledge
Agreement shall be binding upon and inure to the benefit of Agent and Pledgor
and their respective successors and assigns, except that Pledgor shall not have
the right to assign its rights or obligations under this Pledge Agreement or any
interest herein.

          7.9  SURVIVAL OF REPRESENTATIONS.  All representations and warranties
of Pledgor contained in this Pledge Agreement shall survive the execution and
delivery of this Pledge Agreement.

          7.10 TAXES AND EXPENSES.  Pledgor will upon demand pay to Agent (a)
any taxes (excluding income taxes, franchise taxes or other taxes levied on
gross earnings, profits or the like) payable or ruled payable by any Federal or
State authority in respect of this Pledge Agreement, 


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<PAGE>

together with interest and penalties, if any, and (b) all reasonable expenses,
including the reasonable fees and expenses of counsel for Agent and of any
experts and agents that Agent may incur in connection with (i) the
administration of this Pledge Agreement, (ii) the custody or preservation of, or
the sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of Agent
hereunder, or (iv) the failure of Pledgor to perform or observe any of the
provisions hereof.

          7.11 CHOICE OF LAW.  THIS PLEDGE AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS PROVISIONS)
OF THE STATE OF ILLINOIS.

          7.12 HEADINGS.  The title of and section headings in this Pledge
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Pledge Agreement.

          7.13 TERMINATION.  This Pledge Agreement shall continue in effect
until no Secured Obligations (other than unmatured Secured Obligations for which
no claim has been asserted) shall be outstanding.

          7.14 SEVERABILITY.  The provisions of this Pledge Agreement are
severable and if any clause or provision thereof shall be held invalid or
unenforceable in whole or in part, then such invalidity or unenforceability
shall attach only to such clause or provision, or part thereof, and shall not in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision in this Pledge Agreement or any jurisdiction.

          7.15 ATTORNEY-IN-FACT.  Pledgor hereby irrevocably appoints Agent as
Pledgor's attorney-in-fact, with full authority in the place and stead of
Pledgor and in the name of Pledgor or otherwise, from time to time in Collateral
Agent's discretion reasonably exercised, to take any action and to execute any
instrument that Agent deems reasonably necessary or advisable to accomplish the
purposes of this Pledge Agreement, including, without limitation, to receive,
endorse and collect all instruments made payable to Pledgor representing any
dividend, principal, interest payment or other proceeds or distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same, when and to the extent permitted by this Pledge Agreement.

          7.16 INCORPORATION BY REFERENCE.  The security interests granted
hereunder are granted in conjunction with the security interests granted to
Agent, for the benefit of Lenders, pursuant to the Credit Agreement.  Pledgor
hereby acknowledges and affirms that the rights and remedies of Agent with
respect to the Pledged Collateral made and granted hereunder are more fully set
forth in the Credit Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.

          8.   NOTICES.  Except as otherwise expressly provided herein, any
notice required or desired to be served, given or delivered hereunder shall be
in writing, and shall be deemed to have 


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been validly served, given or delivered five (5) days after deposit in the
United States mails (by certified mail, return receipt requested), with proper
postage prepaid, or upon delivery by courier or upon transmission by telex,
telecopy or similar electronic medium to the following addresses:

          (i)  If to Agent, at:

               First Source Financial LLP
               2850 West Golf Road - Fifth Floor
               Rolling Meadows, Illinois  60008
               Attn:  Contract Administration
               Telecopy No.:  (847) 734-7910, 7911

         (ii)  If to Pledgor at:

               Platinum Entertainment, Inc.
               2001 Butterfield Road
               Suite 1400
               Downers Grove, Illinois 60515
               Attn:  Douglas C. Laux
               Telecopy No.:  (630) 769-0049

               With a copy to:

               Katten, Muchin & Zavis
               525 W. Monroe
               Suite 1600
               Chicago, Illinois  60661
               Attn:  Matthew S. Brown
               Telecopy No.:  (312) 902-1061

or to such other address as each Person designates to the other in the manner
herein prescribed.

          9.   WAIVERS.  Pledgor waives presentment and demand for payment of
any of the Secured Obligations, protest and notice of dishonor or default with
respect to any of the Secured Obligations, and all other notices to which
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein.

          10.  COUNTERPARTS.  This Pledge Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Pledge Agreement
by signing any such counterpart.


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                               [SIGNATURE PAGE FOLLOWS]


                                         -10-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their duly authorized officers on
the date first above written.


                                        PLATINUM ENTERTAINMENT, INC.

                                        By:   /s/ Douglas Laux
                                             -------------------------------
                                        Name:     Douglas Laux
                                             -------------------------------
                                        Title:    Vice President
                                              ------------------------------


ACCEPTED AS OF THE DATE
FIRST SET FORTH ABOVE:

FIRST SOURCE FINANCIAL LLP,
as Agent

By:  First Source Financial, Inc.
Its: Manager

By:    /s/ Gregory R. Cooper
      --------------------------------
Name:  Gregory R. Cooper
      --------------------------------
Title: Sr. Vice President
      --------------------------------


                                        [S-1]

<PAGE>

                                      EXHIBIT 1

                                    PLEDGED STOCK

<TABLE>
<CAPTION>
Issuer                   Certificate No(s).            Number of Shares
<S>                      <C>                           <C>
Lexicon Music, Inc.                1                        3,000

PEG Publishing, Inc.               1                        3,000

Royce Publishing, Inc.             1                        3,000

JustMike Music, Inc.               1                        3,000

</TABLE>