SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(A)
YES! ENTERTAINMENT CORPORATION
------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
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(Title of Class of Securities)
985834100
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(CUSIP Number)
Mr. Stuart J. Chasanoff
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1601 Elm Street, Suite 4000
Dallas, Texas 75201
(214) 720-1600
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 25, 1998
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(Date of Event Which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-l(b)(3) or (4), check the following box ( )
(Continued on following pages)
<PAGE>
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CUSIP NO. 985834100 13D PAGE 2 OF 14 PAGES
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1 NAME OF REPORTING PERSON INFINITY INVESTORS LIMITED
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON N/A
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ( )
(b) (X)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS* WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) ( )
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6 CITIZENSHIP OR PLACE OF ORGANIZATION NEVIS, WEST INDIES
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NUMBER OF SHARES 7 SOLE VOTING POWER 17,757,939
BENEFICIALLY OWNED
BY EACH REPORTING
PERSON WITH: 8 SHARED VOTING POWER 0
9 SOLE DISPOSITIVE POWER 17,757,939
10 SHARED DISPOSITIVE POWER 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 17,757,939
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* ( )
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 52.2%
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14 TYPE OF REPORTING PERSON* CO
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* SEE INSTRUCTIONS
<PAGE>
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CUSIP NO. 985834100 13D PAGE 3 OF 14 PAGES
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1 NAME OF REPORTING PERSON INFINITY EMERGING OPPORTUNITIES LIMITED
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON N/A
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ( )
(b) (X)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS* WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION NEVIS, WEST INDIES
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NUMBER OF SHARES 7 SOLE VOTING POWER 188,698
BENEFICIALLY OWNED
BY EACH REPORTING
PERSON WITH: 8 SHARED VOTING POWER 0
9 SOLE DISPOSITIVE POWER 188,698
10 SHARED DISPOSITIVE POWER 0
- ---------------------- -------- ------------------------------------------------
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 188,698
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* ( )
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.1%
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14 TYPE OF REPORTING PERSON* CO
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* SEE INSTRUCTIONS
<PAGE>
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CUSIP NO. 985834100 13D PAGE 4 OF 14 PAGES
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1 NAME OF REPORTING PERSON GLACIER CAPITAL LIMITED
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON N/A
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ( )
(b) (X)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS* WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION NEVIS, WEST INDIES
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NUMBER OF SHARES 7 SOLE VOTING POWER 2,017,448
BENEFICIALLY OWNED
BY EACH REPORTING
PERSON WITH: 8 SHARED VOTING POWER 0
9 SOLE DISPOSITIVE POWER 2,017,448
10 SHARED DISPOSITIVE POWER 0
- ---------------------- -------- ------------------------------------------------
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 2,017,448
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* ( )
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.9%
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14 TYPE OF REPORTING PERSON* CO
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* SEE INSTRUCTIONS
<PAGE>
1. SECURITY AND ISSUER.
This statement on Schedule 13D (this "Statement") relates to the common
stock, par value $.001 per share (the "Common Stock"), of YES!
Entertainment Corporation, a Delaware corporation, which has its
principal executive offices located 3875 Hopyard Road, Suite 375,
Pleasanton, California 94588 (the "Issuer" or "YES!").
2. IDENTITY AND BACKGROUND.
(a) Pursuant to Rule 13d-1(a) of Regulation 13D-G of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Act"), this Schedule 13D Statement is hereby
filed jointly by Infinity Investors Limited ("Infinity"),
Infinity Emerging Opportunities Limited ("Emerging") and Glacier
Capital Limited ("Glacier") (the "Reporting Persons").
Additionally, pursuant to Instruction C to Schedule 13D,
information is included herein with respect to the following
persons (collectively, the "Controlling Persons"): HW Partners,
L.P. ("HW Partners"), HW Finance, L.L.C. ("HW Finance"), Hunt
Financial Partners, L.P. ("Hunt LP"), Hunt Financial Group, L.L.C
("Hunt LLC"), Lion Capital Partners, L.P. ("Lion"), Mountain
Capital Management, L.L.C. ("Mountain"), Randall Fojtasek
("Fojtasek"), Clark K. Hunt ("C. Hunt"), Lamar Hunt ("L. Hunt")
and Barrett Wissman ("Wissman"). The Reporting Persons and the
Controlling Persons are sometimes hereinafter collectively
referred to as the "Item 2 Persons." The Reporting Persons have
included as Exhibit 99.1 to this Statement an agreement in
writing that this Statement is filed on behalf of each of them.
(b) & (c) REPORTING PERSONS
The Reporting Persons are Nevis, West Indies Corporations. The
principal business of each Reporting Person is the purchase,
sale, exchange, acquisition and holding of investment securities.
The principal address of each Reporting Person, which also serves
as its principal office, is Hunkins Waterfront Plaza, Main
Street, P.O. Box 556, Charlestown, Nevis, West Indies.
The names, business addresses, principal occupations or
employments and citizenships of each officer and director of the
Reporting Persons are set forth on Schedule A attached hereto and
incorporated herein by reference.
CONTROLLING PERSONS
Pursuant to Instruction C to Schedule 13D of the Act, information
with respect to the Controlling Persons is set forth below. The
principal address of each Controlling Person (other than
Fojtasek), which also serves as such person's principal office,
is 1601 Elm Street, Suite 4000, Dallas, Texas 75201. Fojtasek's
principal address and principal place of business is 3801
Maplewood Avenue, Dallas, Texas 75205.
Infinity:
HW Partners is a Texas limited partnership, the principal
business of which is acting as advisor to Infinity and Emerging
and activities related thereto.
HW Finance is a Texas limited liability company, the principal
business of which is serving as the general partner of HW
Partners and activities related thereto. C. Hunt and Wissman are
the Managers of HW Finance.
The principal occupation or employment of each of Wissman and C.
Hunt is financial management.
Emerging:
HW Partners is a Texas limited partnership, the principal
business of which is acting as advisor to Infinity and Emerging
and activities related thereto.
HW Finance is a Texas limited liability company, the principal
business of which is serving as the general partner of HW
Partners and activities related thereto. C. Hunt and Wissman are
the Managers of HW Finance.
The principal occupation or employment of each of Wissman and
C. Hunt is financial management.
Glacier:
Glacier is a wholly-owned subsidiary of Lion, the sole general
partner of which is Mountain, which is managed by C. Hunt,
Wissman and Fojtasek.
Lion is a Texas limited partnership, the principal business of
which is the purchase, sale, exchange, acquisition and holding of
investment securities.
Mountain is a Texas limited liability company, the principal
business of which is serving as the general partner of Lion and
activities related thereto. C. Hunt, Wissman and Fojtasek are the
Managers of Mountain.
The principal occupation or employment of Fojtasek is serving as
President to Atrium Door and Window Company of New York, Atrium
Door and Window Company of New England, Inc., Atrium Door and
Window Company of the Northeast, Connecticut corporations, and
Atrium Door and Window Company - - West Coast, a Texas
corporation, and financial management.
(d) & (e) During the last five (5) years, no Item 2 Person has been
convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors) and no Item 2 Person is a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction such that, as a result of such
proceeding, any Item 2 Person was or is subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activity subject to, federal or state
securities laws or finding any violation with respect to such
laws.
(f) Fojtasek, C. Hunt, and Wissman are U.S. citizens and residents of
the State of Texas.
3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The following disclosure is qualified in its entirety by reference to the
Second Amendment, the Form of New Debentures and the Certificate of
Designation for the Series B Preferred Stock (each as defined below) as
filed by the Issuer as Exhibits 4.1, 4.2 and 4.3 to the Issuer's Report on
Form 8-K, dated as of August 4, 1997. On January 28, 1997, Infinity and
Fairway Capital Limited, a Nevis, West Indies corporation ("Fairway")
entered into a purchase agreement which was subsequently amended and
restated as of March 18, 1997 (effective as of January 28, 1997, the "First
Amendment"), to provide for the purchase by Infinity and Fairway of (i) an
aggregate of $1.5 million principal amount of Old Debentures and (ii)
85,000 shares of YES! Series A Convertible Preferred Stock (the "Series A
Preferred") having an aggregate value of $8,500,000. On July 25, 1997
(effective as of April 30, 1997), YES!, Infinity, Fairway and Capello &
Laffer Capital Corp. entered into a Second Amended and Restated Purchase
Agreement (the "Second Amendment"), providing, among other things, for the
exchange by Infinity and Fairway of all of the Old Debentures and shares of
Series A Preferred for (i) an aggregate principal amount of $1,908,313
principal amount of YES! Convertible Debentures due April 30, 2002 (the
"New Debentures"), (ii) an aggregate of 381,313 shares of YES!'s Series B
Convertible Preferred Stock (the "Series B Preferred") with an aggregate
liquidation value of $9,532,825, and (iii) an aggregate amount of 225,000
warrants to purchase common stock at an exercise price of $3.55 per share
(the "Warrants"). On December 31, 1997, Fairway transferred all of its New
Debentures and Series B Preferred to Glacier in a private placement
transaction exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"). On May 15, 1998,
Infinity sold $100,000 of New Debentures to Emerging in a separate private
placement transaction pursuant to Section 4(2) of the Securities Act.
The New Debentures are convertible into the number of shares of YES! Common
Stock equal to the product of (i) the aggregate principal amount of the New
Debentures, together with all accrued but unpaid interest thereon through
the date of conversion, multiplied by (ii) the Conversion Ratio (as defined
in the Second Amendment) which currently equals approximately 1.875. Each
share of Series B Preferred Stock is convertible into the number of shares
of YES! Common Stock equal to the liquidation preference of the Series B
Preferred Stock ($25.00 per share) divided by the applicable Conversion
Ratio (as defined in the Second Amendment), which currently equals
approximately 46.887 shares of Common Stock for each share of Series B
Preferred.
Pursuant to the Second Amendment, prior to the occurrence of an Event of
Default (as defined in the New Debentures and the Certificate of
Designation with respect to the Series B Preferred Stock), YES! was
restricted from issuing Common Stock, either as a dividend or upon
conversion of any of the New Debentures or the shares of Series B Preferred
Stock, if, as a result of such issuance, the Purchasers would hold more
than 4.9% of the issued and outstanding YES! Common Stock. However, if an
Event of Default is declared and such default is not cured by YES! within
10 days of such declaration, such restriction ceases to be effective.
Infinity declared an Event of Default under the New Debentures in a letter
dated May 15, 1998. Such default has not been cured and therefore the
restriction regarding the conversion into greater than 4.9% of the
outstanding Common Stock ceased to be effective on May 25, 1998.
In addition, each of the New Debentures and the Series B Preferred Stock
limits the aggregate number of shares of common stock which may be issued
upon conversion of the New Debentures or the Series B Preferred Stock
(together with all shares previously issued upon conversion of both the New
Debentures and the Series B Preferred) to 20% of the number of shares
outstanding on the Closing Date of the Second Amendment (the "Maximum
Number of Shares"). If such limit does not permit the full conversion of
the New Debentures or the Series B Preferred Stock, the holders thereof
have the option to require YES! (i) to convene a meeting of stockholders
within 60 days to obtain their approval of the issuance of such shares of
Common Stock, or (ii) to repay the balance of the New Debentures or redeem
the Series B Preferred Stock at the specified redemption price, as
applicable. If the stockholders do not approve such issuance within 60
days, YES! must pay a repayment premium in addition to repaying the
principal of and accrued but unpaid interest on the New Debentures and/or
the aggregate liquidation preference and accrued but unpaid dividends on
the Series B Preferred Stock.
The funds used to acquire the Series B Preferred Stock and the Debentures
were derived from the Purchasers' working capital accounts. As used herein
the term "Working Capital" includes income from the business operations of
the entity plus sums borrowed from, among other sources, banks and
brokerage firm margin accounts, to operate such business in general.
4. PURPOSE OF TRANSACTION.
Each Reporting Person acquired the New Debentures and the Series B
Preferred Stock for investment purposes only. On several occasions in April
1998, YES! refused to honor Notices of Conversion tendered by Infinity with
respect to shares of Series B Preferred Stock. As a result, by letter dated
May 15, 1998, Infinity declared an Event of Default. Since then, the
Reporting Persons have attempted to negotiate a standstill agreement with
the Issuer but have, as yet, been unable to agree on definitive terms. Such
negotiations are ongoing.
Although the Reporting Persons have no immediate intention to effect any
additional transactions in the Common Stock of the Issuer, they may acquire
additional shares of Common Stock of the Issuer (by conversion of the
Series B Preferred Stock and/or the New Debentures, exercise warrants owned
by the Reporting Persons, open-market purchases or otherwise) or dispose of
some or all of the New Debentures, Series B Preferred Stock or Common Stock
based upon a number of factors, including the Reporting Persons' evaluation
of the Issuer's business prospects and financial condition, the market for
the Issuer's shares, general economic and stock market conditions and other
investment opportunities. Pursuant to the Second Amendment the Reporting
Persons may, among other things, exercise their right to cause the Issuer
to convene a stockholders meeting to authorize an issuance upon conversion
of New Debentures and/or Series B Preferred Stock of more than the Maximum
Number of Shares, or may accelerate the New Debentures and/or cause the
redemption of the Series B Preferred. If the Issuer's stockholders approves
such issuance, and if the Reporting Persons then elect to convert all of
the New Debentures and Series B Preferred Stock into Common Stock, the
Reporting Persons would have a sufficient majority of the then issued and
outstanding Common Stock to, among other things, engage in extraordinary
corporate transactions, effect changes in the Issuer's management or its
directors, business, corporate structure, capitalization, dividend policy,
Certificate of Incorporation or Bylaws, or to delete, delist or terminate
the registration of any securities of the Issuer. If the Issuer's
stockholders do not approve the issuance of shares of Common Stock upon
conversion of the New Debentures and Series B Preferred Stock in an amount
greater than 20% of the shares of Common Stock outstanding as of the second
Amendment, YES! is obligated to pay the Reporting Persons a redemption
premium in respect of the New Debentures and the Series B Preferred Stock,
as specified. The Reporting Persons are currently considering a number of
options, including, without limitation, those described above.
Except as set forth in this Item 4, the Item 2 Persons have no present
plans or proposals that relate to or that would result in any of the
actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of
the Act.
5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The following list sets forth the aggregate number and percentage of
shares of Common Stock beneficially owned by the Reporting Persons
(based on applicable current conversion ratios, which are subject to
change, and 16,440,733 shares of Common Stock outstanding as reported
in the Issuer's Form 10-Q for the quarter ended March 31, 1998):
<PAGE>
<TABLE>
<CAPTION>
REPORTING PERSONS
- ---------- ----------- ------------ ----------- -------------- ----------------- ----------- --------- ------------
Reporting Principal Shares of Number of Shares of Shares of Shares of Total Percentage
Person Amount of Common shares of Common Stock Common Stock Common Number of Common
New Stock Series B Underlying Received upon Stock of Stock*
Debentures Underlying Preferred Series B Conversion of Upon Common
New Preferred New Debentures Exercise Shares
Debentures and/or Series B of
Preferred Stock Warrants
- ---------- ----------- ------------ ----------- -------------- ----------------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Infinity 1,546,708 2,900,077 313,457 14,697,058 160,084 202,500 17,960,439 52.2%
Emerging 100,639 188,698 -- -- -- -- 188,698 1.1%
Glacier 189,494 355,301 35,216 1,651,172 10,975 22,500 2,039,948 11.0%
Total 20,189,085 55.1%
- ---------- ----------- ------------ ----------- -------------- ----------------- ----------- --------- ------------
</TABLE>
* The percentage for each Reporting Person is calculated as if only such
Reporting Person had converted. The total percentage is calculated as if
all Reporting Persons had converted.
<PAGE>
CONTROLLING PERSONS
Each of (1) HW Partners, as advisor to each of Infinity and Emerging, and
(2) HW Finance, as the general partner of HW Partners, may be deemed to be
the beneficial owner of the shares of Common Stock beneficially owned by
each of Infinity (the "Infinity Shares") and Emerging (the "Emerging
Shares") pursuant to Rule 13d-3 of the Act.
In their capacities as controlling persons of HW Partners, each of C. Hunt
and Wissman, may be deemed to be the beneficial owner of the Emerging
Shares and the Infinity Shares pursuant to Rule 13d-3 of the Act.
Each of (1) Lion as sole shareholder of Glacier, and (2) Mountain as the
general partner of Lion, may be deemed to be the beneficial owner of the
shares of Common Stock beneficially owned by Glacier (the "Glacier Shares")
pursuant to Rule 13d-3 of the Act.
In their capacities as controlling persons of Mountain, each of (1) C.
Hunt, (2) Wissman and (3) Fojtasek, may be deemed to be the beneficial
owner of the Glacier Shares pursuant to Rule 13d-3 of the Act.
(b) REPORTING PERSONS
Acting through is advisor, HW Partners, Infinity would have the sole power
to vote or to direct the vote and to dispose or to direct the disposition
of the Infinity Shares.
Acting through its advisor, HW Partners, Emerging would have the sole power
to vote or to direct the vote and to dispose or to direct the disposition
of the Emerging Shares.
Acting through its sole shareholder Lion, Glacier would have the sole power
to vote or to direct the vote and to dispose or to direct the disposition
of the Glacier Shares.
CONTROLLING PERSONS
Acting through its sole general partner HW Finance, HW Partners would have
the sole power to vote or to direct the vote and to dispose or to direct
the disposition of the Infinity Shares and the Emerging Shares.
In their capacities as controlling persons of HW Partners, each of C. Hunt
and Wissman would have the sole power to vote or to direct the vote and to
dispose or to direct the disposition of the Infinity Shares and the
Emerging Shares.
Acting through its sole general partner Mountain, Lion would have the sole
power to vote or to direct the vote and to dispose or to direct the
disposition of the Glacier Shares.
In their capacities as controlling persons of Mountain, each of (1) C.
Hunt, (2) Wissman and (3) Fojtasek would have the sole power to vote or to
direct the vote and to dispose or to direct the disposition of the Glacier
Shares.
<PAGE>
(c) The following chart lists sales of Common Stock by Infinity and Glacier:
- ------------------- -----------------------------------------------------------
Sales
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------------------- ------------------- ------------------- -------------------
Avg. Sales
Date Infinity Glacier Price
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/2/98 9,000 1,000 1.7697
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/2/98 13,500 1,500 1.4292
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/3/98 22,500 2,500 1.3594
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------------------- ------------------- ------------------- -------------------
3/9/98 40,500 4,500 1.2986
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/10/98 31,500 3,500 1.1321
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/11/98 27,000 3,000 1.1250
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/11/98 9,000 1,000 1.1369
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/12/98 40,500 4,500 1.0035
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/16/98 58,500 6,500 1.0192
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------------------- ------------------- ------------------- -------------------
3/17/98 54,000 6,000 1.0000
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/23/98 22,500 2,500 1.0188
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/24/98 63,000 7,000 0.9118
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/30/98 3,600 400 0.9375
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
3/31/98 31,500 3,500 0.8750
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
4/1/98 7,200 800 0.8125
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
4/6/98 17,100 1,900 0.7582
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
4/7/98 13,500 1,500 0.7292
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
4/8/98 22,500 2,500 0.6875
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
4/9/98 13,500 1,500 0.6719
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
4/13/98 67,500 7,500 0.6892
------------------- ------------------- ------------------- -------------------
------------------- ------------------- ------------------- -------------------
4/20/98 18,000 2,000 0.6328
------------------- ------------------- ------------------- -------------------
Except as specifically set forth herein, no Item 2 Person has effected any
transactions in the shares of Common Stock of the Issuer during that period
beginning sixty (60) days preceding the date of the notice of the event of
default.
(d) Not applicable
(e) Not applicable
6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
In addition to the contracts and arrangements described above, the Issuer
agreed to file a Registration Statement with the United States Securities
and Exchange Commission covering the resale of the Common Stock received
upon conversion of the New Debentures and the Series B Preferred Stock. The
Issuer further agreed to maintain the effectiveness of the Registration
Statement until such Common Stock is sold and all steps are taken to remove
any legends or restrictions on transfer thereof or until such Common Stock
is otherwise available for resale pursuant to Rule 144(k) promulgated under
the Securities Act.
7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Exhibit
99.1 Joint Filing Agreement, dated July 17, 1998.
99.2 Letter dated May 15, 1998, to Chief Financial Officer
of YES! Entertainment Corporation.
<PAGE>
SIGNATURE
After reasonable inquiry, I certify that to the best of my knowledge and
belief the information set forth in this Statement is true, complete and
correct.
Date: July 31, 1998
Infinity Investors Limited
By: /s/ Stuart J. Chasanoff
------------------------------
Name: Stuart J. Chasanoff
Title: Attorney-in-fact
Infinity Emerging Opportunities Limited
By: /s/ Stuart J. Chasanoff
------------------------------
Name: Stuart J. Chasanoff
Title: Attorney-in-fact
Glacier Capital Limited
By: /s/ Stuart J. Chasanoff
------------------------------
Name: Stuart J. Chasanoff
Title: Attorney-in-fact
<PAGE>
SCHEDULE A
Set forth below is the name, citizenship (or place of
organization, as applicable), business address and present principal occupation
or employment of each director and executive officer of Glacier Capital Limited
<TABLE>
<CAPTION>
NAME AND CITIZENSHIP BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OR POSITION WITH REPORTING PERSON
OR PLACE OF EMPLOYMENT
ORGANIZATION
<S> <C> <C> <C>
James A. Loughran 38 Hertford Street, London Lawyer Director
(Irish) England W1Y 7TG
James E. Martin 38 Hertford Street, London Accountant President & Treasurer
(British) England W1Y 7TG
SECORP Limited (Nevis, 38 Hertford Street, London Nevis, West Indies business Secretary
West Indies) England W1Y 7TG corporation that serves as
secretary of various entities
</TABLE>
<PAGE>
Set forth below is the name, citizenship (or place of organization, as
applicable), business address and present principal occupation or employment of
each director and executive officer of Infinity Investors Limited
<TABLE>
<CAPTION>
NAME AND CITIZENSHIP BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OR POSITION WITH REPORTING PERSON
OR PLACE OF EMPLOYMENT
ORGANIZATION
<S> <C> <C> <C>
James A. Loughran 38 Hertford Street, London Lawyer Director
(Irish) England W1Y 7TG
James E. Martin 38 Hertford Street, London Accountant Director
(British) England W1Y 7TG
SECORP Limited (Nevis, 38 Hertford Street, London Nevis, West Indies business Secretary
West Indies) England W1Y 7TG corporation that serves as
secretary of various entities
Margareta Hedstrom 37 Shepherd Street, London Business Executive President and Treasurer
(Swedish) England W1Y 7LH
</TABLE>
<PAGE>
Set forth below is the name, citizenship (or place of organization, as
applicable), business address and present principal occupation or employment of
each director and executive officer of Infinity Emerging Opportunities Limited
<TABLE>
<CAPTION>
NAME AND CITIZENSHIP BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OR POSITION WITH REPORTING PERSON
OR PLACE OF EMPLOYMENT
ORGANIZATION
<S> <C> <C> <C>
James A. Loughran 38 Hertford Street, London Lawyer Director
(Irish) England W1Y 7TG
James E. Martin 38 Hertford Street, London Accountant Director
(British) England W1Y 7TG
SECORP Limited (Nevis, 38 Hertford Street, London Nevis, West Indies business Secretary
West Indies) England W1Y 7TG corporation that serves as
secretary of various entities
Margareta Hedstrom 37 Shepherd Street, London Business Executive President and Treasurer
(Swedish) England W1Y 7LH
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JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, the persons named below agree to the joint filing on behalf of
each of them of a Statement on Schedule 13D (including amendments thereto) with
respect to common stock of YES! Entertainment Corporation. This Joint Filing
Agreement shall be included as an exhibit to such filing. In evidence thereof,
each of the undersigned, being duly authorized where appropriate, hereby
executes this Joint Filing Agreement as of the 30th day of July 1998.
Infinity Emerging Opportunities Limited
By: /s/ Stuart J. Chasanoff
-------------------------------
Name: Stuart J. Chasanoff
Title: Attorney-in-fact
Glacier Capital Limited
By: /s/ Stuart J. Chasanoff
-------------------------------
Name: Stuart J. Chasanoff
Title: Attorney-in-fact
Infinity Investors Limited
By: /s/ Stuart J. Chasanoff
-------------------------------
Name: Stuart J. Chasanoff
Title: Attorney-in-fact
EXHIBIT 99.2
INFINITY INVESTORS LIMITED
38 HERTFORD STREET
LONDON, ENGLAND W1Y 7TG
May 15, 1998
VIA FACSIMILE (510) 734-0997
Yes! Entertainment, Inc.
Chief Financial Officer
3875 Hopyard Road, Suite 375
Pleasonton, California 94588
Dear Sir:
In my letter to you dated April 30, 1998 (the "April Letter"), I
described in detail how Yes! Entertainment, Inc. (the "Company") is currently in
default of various provisions of the 5% Convertible Debentures (the
"Debentures") Due April 30, 2002 in the principal amount of $1,717,481.83 and
$190,831.72, respectively, issued to Infinity Investors Limited ("Infinity") and
Fairway Capital Limited ("Fairway") and the Certificate of Designation of the
Series B Preferred Stock of the Company (the "Series B Designation"), filed with
the Delaware Secretary of State on July 22, 1997, authorizing the issuance of a
series of up to 540,000 shares of Series B Convertible Preferred Stock of the
Company, par value $.001 per share (the "Series B Shares"), of which 343,252
shares were issued to Infinity and 38,061 shares were issued to Fairway on July
22, 1997. The aforementioned defaults are a result of the Company's failure to
deliver stock certificates to Infinity within three trading days after the
Company received conversion notices on each of April 6, 1998, April 7, 1998,
April 8, 1998, April 9, 1998, April 13, 1998 and April 20, 1998.
I further stated in the April Letter that the Company's failure to cure
the defaults described therein in five business days would result in Infinity
exercising its right to (1) declare immediately due and payable the full
outstanding principal amount of the Debentures, together with all accrued but
unpaid interest thereon and other amounts owing thereunder; (2) force the
Company to redeem the Series B Shares at the Redemption Price (as defined in the
Series B Designation) as well as pay all accrued but unpaid dividends in cash;
and (3) take any actions that may be necessary (including without limitation,
the initiation of legal proceedings) to collect all other amounts owed Infinity.
Because the Company has failed to cure the defaults outlined in the
April Letter by refusing to deliver the shares certificates relating to the
aforementioned conversion notices, Infinity hereby (1) declares the full
outstanding principal amount of the Debentures, together with all accrued but
unpaid interest thereon and other amounts owing thereunder, as being immediately
due and payable, and (2) requests that the Company redeem the Series B Shares at
the Redemption Price (as defined in the Series B Designation) as well as pay all
accrued but unpaid dividends on the Series B Shares in cash.
Infinity, by delivering this letter to the Company, is not waiving any
rights Infinity has to declare any further defaults or Events of Default under
the aforementioned agreements and is in no way limiting any remedies available
to Infinity under such agreements.
[Signature Page to Follow]
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Should you have any questions regarding this letter, please feel free
to call Stuart Chasanoff of HW Partners, L.P. (214) 720-1608, or Shawn Wells,
also of HW Partners, L.P. at (214) 720-1698.
INFINITY INVESTORS LIMITED
By: HW PARTNERS, L.P., adviser
By: HW FINANCE, L.L.C., its General Partner
By: __________________________________________
Name: __________________________________________
Title: __________________________________________
SJC/jlw
Enclosures
cc: Vic Zanetti, Esq.
Elizabeth Yingling, Esq.
