Exhibit 10.2
AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT
This Amendment Number One to Loan and Security Agreement ("Amendment") is
entered into as of October 8, 2004, by and among, on the one hand, ADVANCED
MARKETING SERVICES, INC., a Delaware corporation, PUBLISHERS GROUP WEST
INCORPORATED, a California corporation, and PUBLISHERS GROUP INCORPORATED, a
California corporation (collectively, "Borrowers"), and, on the other hand, the
lenders identified on the signature pages to the Agreement (as defined below)
("Lenders"), and ▇▇▇▇▇ FARGO FOOTHILL, INC., a California corporation ("Agent"),
as the arranger and administrative agent for the Lenders, in light of the
following:
A. Borrowers and the Lender Group have previously entered into that certain
Loan and Security Agreement, dated as of April 27, 2004 (the "Agreement").
B. Borrowers and the Lender Group desire to amend the Agreement as provided
for and on the conditions herein.
NOW, THEREFORE, Borrowers and the Lender Group hereby amend and supplement
the Agreement as follows:
1. DEFINITIONS. All initially capitalized terms used in this Amendment
shall have the meanings given to them in the Agreement unless specifically
defined herein.
2. AMENDMENTS.
(a) Section 6.3(a)(i) of the Agreement is hereby amended in its
entirety to read as follows:
(i) an unaudited consolidated and consolidating balance sheet and
income statement covering Parent's and its Subsidiaries' operations during such
period, together with a statement of all Intercompany Advances for such fiscal
month, and
(b) A new Section 6.3(i) is added to the Agreement as follows:
(i) as soon as available, but in any event within 45 days after
the end of each of Parent's fiscal quarters, a statement of cash flow covering
Parent's and its Subsidiaries' operations during such period.
(c) Section 7.18(a) of the Agreement is hereby amended in its entirety
to read as follows:
(a) Following the occurrence of the Financial Covenant Triggering
Event, fail to maintain or achieve:
(i) Minimum EBITDA. EBITDA, measured on a quarterly basis, of at
least the required amount set forth in the following table for the applicable
period set forth opposite thereto:
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Applicable Period Applicable Amount
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For the 3 month period ($3,700,000)
ending June 30, 2004
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For the 6 month period $(13,800,000)
ending September 30, 2004
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For the 9 month period $4,172,000
ending December 31, 2005
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For the 12 month period $3,967,000
ending March 31, 2005
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For the trailing 12 month period ending The "Applicable Amount(s)" for such
on the last day of each fiscal quarter future periods shall be determined by
of Administrative Borrower thereafter Agent in its sole discretion based
upon, among other things, the
Projections to be delivered to Agent
(pursuant to Section 6.3(c) of the
Agreement) prior to the commencement
of Parent's 2006 fiscal year. Within
30 days of Agent's receipt of such
Projections, Agent shall advise
Borrowers in writing of such future
Applicable Amount(s).
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3. REPRESENTATIONS AND WARRANTIES. Borrowers hereby affirm to the Lender
Group all of Borrowers' representations and warranties set forth in the
Agreement are true, complete and accurate in all respects as of the date hereof.
4. NO DEFAULTS. Borrowers hereby affirm to the Lender Group that no Event
of Default has occurred and is continuing as of the date hereof.
5. CONDITION PRECEDENT. The effectiveness of this Amendment is expressly
conditioned upon: (i) the receipt by Agent of a fully executed copy of this
Amendment; and (ii) payment to Agent, for the benefit of the Lenders, of an
amendment fee of $10,000, which fee will be charged to Borrowers' Loan Account
pursuant to Section 2.6(d) of the Agreement.
6. COSTS AND EXPENSES. Borrowers shall pay to Agent all of the Lender
Group's out-of-pocket costs and expenses (including, without limitation, the
fees and expenses of its counsel, which counsel may include any local counsel
deemed necessary, search fees, filing and recording fees, documentation fees,
appraisal fees, travel expenses, and other fees) arising in connection with the
preparation, execution, and delivery of this Amendment and all related
documents.
7. LIMITED EFFECT. In the event of a conflict between the terms and
provisions of this Amendment and the terms and provisions of the Agreement, the
terms and provisions of this Amendment shall govern. In all other respects, the
Agreement, as amended and supplemented hereby, shall remain in full force and
effect.
8. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which when so executed and delivered shall be deemed to be an original. All
such counterparts, taken together, shall constitute but one and the same
Amendment. This Amendment shall become effective upon the execution of a
counterpart of this Amendment by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first set forth above.
▇▇▇▇▇ FARGO FOOTHILL, INC.,
a California corporation, as Agent and a
Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Vice President
ADVANCED MARKETING SERVICES, INC., a
Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Executive Vice President and
Chief Financial Officer
PUBLISHERS GROUP WEST INCORPORATED, a
California corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Chief Financial Officer
PUBLISHERS GROUP INCORPORATED, a
California corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Chief Financial Officer