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March 1, 1999


Hank Caldwell
=========================


Dear Hank:

     The following are the terms of your employment by Platinum Entertainment,
Inc. ("Platinum") as Vice President/General Manager of the Urban Department.

     1.   You shall exercise all of the executive and administrative
responsibilities of Vice President/General Manager, subject to the by-laws of
Platinum and the supervision of the Chief Executive Officer of Platinum. You
also agree to perform such other duties and services as may be entrusted to you
by the Chief Executive Officer and the Board of Directors of Platinum that are
consistent with your position and title and shall report to the Chief Executive
Officer of Platinum. You agree to discharge your responsibilities diligently, in
good faith, and to the best of your abilities and to at all times give Platinum
full information and truthful explanation of all matters relative to your
employment responsibilities. You shall devote all of your time during ordinary
business hours to the interests and business of Platinum and shall not, except
as otherwise agreed to by the Board of Directors, work with or receive any
compensation or consideration from any other party for services performed or to
be performed by you.

     2.   (a) Your employment will be for a term of one (1) year, beginning
March 1, 1999 (the "Term"), at the annual base salary of $135,000.00, less
withholding ("Base Salary"), which will be paid in accordance with Platinum's
regular payroll policies. In addition, during the term of your employment, you
and your family will be entitled to participate in Platinum's regular health and
dental insurance plan under Platinum's policies with respect to such plans.
During each annual period of your employment you shall be entitled to vacation
and personal leave days in accordance with Platinum's regular policies. You
shall also be eligible to participate in the 401(K), life insurance, and all
other benefit plans of Platinum under Platinum's policies with respect to such
plans for its employees. You shall also be reimbursed for reasonable expenses
incurred by you for promoting the business of Platinum and in performance of
your duties hereunder in accordance with Platinum's expense policies. You will
be issued a company credit card and long distance telephone charge card.

          (b)  Platinum hereby acknowledges that, at the date


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hereof, you reside in Los Angeles, California. Platinum has asked you to
relocate to Atlanta, Georgia area, and you hereby agree to such relocation.
Accordingly, promptly following any such relocation of the principal residence
of you and your family, Platinum shall reimburse you for the reasonable expense
of such relocation in accordance with Platinum's regular policies upon your
delivery to Platinum of proper documentation evidencing such expense.

     3.   (a) In further consideration of your services hereunder, Platinum
agrees to grant to you an option (the "Purchase Option") to purchase an
aggregate of Ten Thousand (10,000) shares of Platinum's common stock at a
purchase price established pursuant to the 1995 Employee Incentive Compensation
Plan, as amended in 1996, at the next grant date as approved by the Board of
Directors of shareholders of Platinum (the "Grant Date"). The Purchase Option
shall be exercisable with respect to a portion of the shares subject to the
Purchase Option over the course of the option period as follows: up to and
including one-third (1/3) of the shares subject to the Purchase Option shall be
exercisable on and after the first anniversary of the Grant Date; up to and
including two thirds (2/3) of the shares subject to the Purchase Option shall be
exercisable on and after the second anniversary of the Grant Date; and up to and
including one hundred percent (100%) of the shares subject to the Purchase
Option shall be exercisable on and after the third anniversary of the Grant
Date. The Purchase Option shall be subject to the provisions of a separate stock
option agreement, in the form of other Platinum employee stock options, to be
entered between Platinum and you, as well as the terms of Platinum's Stock
Option Plan existing as of the Grant Date.

          (b)  In further consideration of your services hereunder, Platinum
agrees that you shall be entitled to receive such bonuses, including stock
options, as are determined by the Compensation Committee of the Board of
Directors of Platinum for the term of this Agreement. Platinum agrees that the
formula for the calculation of your bonus shall be based upon the EBITDA
performance of Platinum's Urban Department, and that your bonus shall be equal
to the product of (i) Forty Thousand Dollars ($40,000) and (ii) the amount
obtained by dividing (A) the actual EBITDA results of the Urban Department in
1999 by (B) the bonus EBITDA target established for the Urban Department for the
year 1999; provided, however, that in no event shall your bonus exceed the
amount of Forty Thousand Dollars ($40,000.00).

     4.   Unless otherwise mutually extended, this agreement shall terminate on
March 1, 2000, or the first to occur of the following:

          (a)  Your death.

          (b)  Your absence or inability to render the services required
hereunder by reason of a state of physical or mental

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incapacity for more than a period of eight (8) consecutive weeks and upon
thirty (30) days prior written notice by Platinum to you of an intent to
terminate because of such absence or inability.

          (c)  (i) Your act or acts which constitute a felony;

               (ii) Your act or acts in the course of your employment that
constitute a fraud, misappropriation of property of Platinum or any of its
affiliates, or dishonesty;

               (iii) Your act or acts which constitute any crime involving moral
turpitude; or

               (iv) Your willful engagement in one or more acts, or your willful
failure to act, which is damaging to Platinum or any of its affiliates in a
material manner, or your willful failure to comply with reasonable directions of
the Chief Executive Officer, Chief Operating Officer, or General Counsel of
Platinum, after (A) written notice is delivered to you describing such willful
failure or engagement in one or more acts and (B) you fail to cure such willful
failure or engagement after a reasonable period of time as determined by the
Chief Executive Officer, Chief Operating Officer, or General Counsel in their
reasonable discretion (not to be less than five (5) days).

          (d)  In the event Platinum terminates this Agreement for any reason
other than those reasons set forth in Paragraph 4(a), 4(b) or 4(c), Platinum
shall continue to pay you, as severance compensation, all compensation payable
hereunder in the form of Base Salary for a period beginning on the date of your
termination and ending on the end of the Term. You shall not be required to
mitigate the amount of any payment provided for pursuant to this Paragraph 4(d)
by seeking other employment or otherwise. Further, in the event Platinum
terminates this Agreement for any reason other than those reasons set forth in
Paragraph 4(a), 4(b), or 4(c), Platinum agrees to vest all unvested Purchase
Options as of the date of such termination.

     5.   (a) You acknowledge that the relationship between the parties hereto
is exclusively that of employer and employee and that Platinum's obligations to
you are exclusively contractual in nature. Platinum shall be the sole owner of
all the fruits and proceeds of your services hereunder, including but not
limited to all ideas, concepts, formats, suggestions, developments,
arrangements, designs, packages, programs, promotions, musical compositions,
inventions pertaining to or useful in or to the activities of Platinum, and
other such intellectual properties which you may create during the Term of your
employment hereunder (all of the foregoing being collectively referred to herein
as "Work Product"), free and clear of any claims by you (or anyone claiming
under you) of any kind or character whatsoever, other than your right to
compensation hereunder, provided however that this shall only apply to Work
Product that is conceived or made on Platinum's time or with the use of
Platinum's facilities or


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materials. You shall, at the request of Platinum, execute such assignments,
certificates or other instruments as Platinum may from time to time deem
necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend its right, title and interest in or to any Work Product of
which Platinum shall be the sole owner as hereinabove provided.

          (b)  All memoranda, notes, business records and other documents made
or compiled by you or made available to you during the Term of this Agreement
concerning the business of Platinum shall be Platinum's property and on request
shall be delivered to Platinum on the termination or expiration of this
Agreement or at any other time on request.

          (c)  You agree that, during the term of this agreement and at all
times thereafter, you will maintain the confidentiality of all Confidential
Information regarding Platinum and its subsidiaries, affiliates, successors, and
assigns (hereinafter collectively the "Protected Entities") that you have, or
will have received or had access to as an employee, officer or director and that
you will not make any disclosure thereof to anyone else except as to matters
that have been the subject of public announcement or disclosure, is generally
available to the public from sources not subject to confidentiality agreements
with Platinum, or except as required by law. "Confidential Information" shall
mean any information relating to the business or affairs of the Protected
Entities, including but not limited to information relating to plans,
developments, financial statements, customer identities, potential customers,
employees, suppliers, servicing methods, equipment, programs, strategies and
information, analyses, profit margins, inventions, improvements, copyrightable
work, or other proprietary information used by the Protected Entities in
connection with their businesses. Nothing herein shall prevent you subsequent to
the termination or expiration of your employment pursuant to this Agreement from
using and availing yourself of your general technical skills, knowledge and
experience, including that pertaining to or derived from the non-secret or
non-confidential aspects of the Protected Entities.

          (d)  For a period of one year after the Term of this Agreement, unless
approved by the Board of Directors of Platinum, you will not, directly or
indirectly, except for secretarial or clerical employees who have theretofore
rendered services for you:

               (i)  solicit any employee of the Protected Entities, or any
     performing artist or other person then under contract with or rendering
     services to or making phonograph or other recordings for the Protected
     Entities to terminate his or her employment by, or contractual relationship
     with, the Protected Entities, or to refrain from extending or renewing the
     same (upon the same or new terms) or to refrain from rendering services to
     or making phonograph or other recordings for the Protected Entities, or to
     become employed

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     by or to enter into contractual relations with, or to make phonograph or
     other recordings for, persons other than the Protected Entities;

               (ii) approach any such employee, performing artist, producer or
     other person for any of the foregoing purposes; or

               (iii) authorize or knowingly approve or assist in the taking of
     any such actions by any other person.

          (e)  Platinum shall be entitled, in addition to any other right or
remedy it may have, to an injunction, without the posting of any bond or
other security, enjoining or restraining you from any violation or threatened
violation of any part of Paragraphs 5(a), 5(b), 5(c), or 5(d).

     6.   This agreement (a) represents the entire agreement between you and
Platinum; (b) is not to be amended, supplemented, varied or discharged except by
an instrument in writing; (c) may be executed in counterparts, each of which
shall be deemed an original; and (d) shall be interpreted in accordance with and
in all respects governed by the laws of the State of Illinois. If any provision
of this agreement is declared void, or otherwise unenforceable, such provision
shall be deemed to have been severed from this agreement, which shall otherwise
remain in full force and effect.

     If the foregoing correctly states our agreement, please so confirm by
signing below where indicated.

                                              Platinum Entertainment, Inc.


                                              By:/s/ THOMAS R. LEAVENS
                                                 -----------------------
Accepted and Agreed:


/s/ HANK CALDWELL
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Hank Caldwell