EXHIBIT 10.27
[LETTERHEAD OF BNY FINANCIAL CORPORATION]
September __, 1997
Yes! Entertainment Corporation
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Ladies/Gentlemen:
Reference is made to the Accounts Receivable Management and Security
Agreement between us, dated as of July 31, 1995, as supplemented and amended
(the "Agreement"). All capitalized terms not otherwise defined herein shall have
such meaning as are ascribed to them in the Agreement.
It is hereby agreed that effective as of the date hereof the Agreement
shall be amended in the following manner:
1. The definition of "Term" as set forth in Section 1 of the
Agreement shall be restated in its entirety as follows:
"Term" means the period from the Closing Date through September
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3, 2001 subject to acceleration upon the occurrence of an Event
of Default hereunder or other termination hereunder."
2. The text of the last two sentences of Section 17 of the
Agreement shall be deleted in their entirety and the following text shall be
inserted in their place and stead:
"The Borrower may terminate this agreement at any time upon 90
days prior written notice ("Termination Date") upon payment in
full of the Obligations; provided that Borrower pays an early
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termination fee in an amount equal to (a) $600,000.00 if such
termination shall occur on or after September 4, 1997 through
September 3, 1998, (b) $400,000.00 if such termination shall
occur on or after September 4, 1998 through September 3, 1999,
and (c) $200,000.00 if such termination shall occur on or after
September 4, 1999 through September 3, 2001."
3. The definition of "Receivables Advance Rate" as set forth in the
definition of "Receivables Availability" in Section 1 of the Agreement shall be
temporarily amended such that the percentage of "Seventy percent (70%)" which is
presently in
effect shall be reduced during the following periods to the following amounts:
effective November 1, 1997 through November 30, 1997 the percentage shall be
reduced to "Fifty-Five percent (55%)" and shall further be reduced to Fifty
percent (50%) effective December 1, 1997 through March 31, 1998.
4. The definition of "Inventory Advance Rate" as set forth in clause
"(a)" in the definition of "Inventory Availability" in Section 1 of the
Agreement shall be temporarily amended by deleting the dollar amount of
"$4,000,000.00" (appearing on the fifth line of that definition) presently in
effect and by inserting in its place and stead, during the period of September
4, 1997 through October 31, 1997 the dollar amount of "$6,500,000.00", and
during the period November 1, 1997 through March 31, 1998 the dollar amount of
"$6,000,000.00", and said definition shall also be temporarily amended by
increasing the percentage of "thirty per cent (30%)" as set forth in clause
"(b)" in the definition of "Inventory Availability" (on the sixth line of that
definition) to "forty per cent (40%)" for the period from September 4, 1997
through March 31, 1998.
This letter shall also serve to confirm that without in any way limiting or
modifying the discretionary nature on the part of the Lender of the lending
facility under the Agreement, during the balance of September and the month of
October, we will consider in our sole discretion extending overformula advances
to you in excess of the lending formula set forth in Section 2(d) of the
Agreement of up to $500,000.00 at any one time outstanding, should you indicate
to us that such overformula advances are required by you.
Except as hereby or heretofore modified or amended all of the terms and
provisions set forth in the Agreement shall continue to remain in full force and
effect in accordance with their original terms.
If the foregoing correctly sets forth the agreement between us, please execute a
copy of this letter in the space provided below and return a fully executed copy
to our offices.
Very truly yours,
BNY FINANCIAL CORPORATION
By: /s/
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Title:
READ & AGREED:
YES! ENTERTAINMENT CORPORATION
By: /s/
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Title: CFO
