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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 21, 2005
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ADVANCED MARKETING SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-16002 95-3768341
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
5880 Oberlin Drive, San Diego,
California 92121
(Address of principal executive offices) (Zip Code)
(858) 457-2500
Registrant's telephone number, including area code
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry Into a Material Definitive Agreement.
On September 21, 2005, Advanced Marketing Services, Inc., a Delaware
corporation (the "Company"), Publishers Group West Incorporated, a California
corporation, and Publishers Group Incorporated, a California corporation
(collectively, the "Company Borrowers"), entered into Amendment Number Four
("Amendment No. 4") to that certain Loan and Security Agreement dated April 27,
2004 (the "Loan Agreement") by and among the Company Borrowers, certain lenders,
and Wells Fargo Foothill, Inc. ("Wells Fargo"), as amended by that certain
Amendment Number One dated October 8, 2004 ("Amendment No. 1"), that certain
Amendment Number Two dated February 28, 2005 ("Amendment No. 2") and that
certain Amendment Number Three dated May 12, 2005 ("Amendment No. 3"). Amendment
No. 4 amends the Loan and Security Agreement to (a) increase to two the number
of collateral audits for which the Company Borrowers must reimburse Wells Fargo
so long as no Event of Default (as defined) has occurred and is continuing, and
provide Wells Fargo with the right to have the Inventory (as defined)
reappraised up to once a year or at any time following an unsatisfactory
appraisal or an Event of Default which is continuing; (b) define the Company's
minimum EBITDA requirement to be ($5.1 million) for the 6-month period ending
September 30, 2005, $10.8 million for the 9-month period ending December 31,
2005, and $7.3 million for the 12-month period ending March 31, 2006; (c) expand
the definition of Event of Default to include the announcement in connection
with any restatement or re-audit of the financial statements for the seven year
period ending March 31, 2003 of revised or restated aggregate net income for
that period that reflects a reduction from the previously reported aggregate net
income for the period by an amount that is greater than 130% of the expected
aggregate reduction of net income for the period as disclosed in writing to
Wells Fargo prior to the Closing Date (as defined); (d) provide Wells Fargo with
the right to create a security interest in, or pledge all or any portion of its
rights and interest under the Loan Agreement to an Eligible Transferee (as
defined); (e) waive the EBITDA Default that occurred for the period ended June
30, 2005; and (f) extend the deadline to deliver certain audited consolidated
financial statements for the fiscal year ended March 31, 2004 to October 31,
2005 and for the fiscal year ended March 31, 2005 to February 28, 2006.
A copy of Amendment No. 4 is filed as Exhibit 10.1 to this report and is
incorporated herein by reference. A copy of the Loan Agreement was filed as an
exhibit to the Company's Current Report on Form 8-K filed with the Commission on
April 30, 2004, and is incorporated herein by reference. Copies of Amendments
No. 1 and No. 2 were filed as an exhibit to the Company's Current Report on Form
8-K filed with the Commission on March 9, 2005, and are incorporated herein by
reference. A copy of Amendment No. 3 was filed as an exhibit to the Company's
Current Report on Form 8-K filed with the Commission on May 18, 2005, and is
incorporated herein by reference. The descriptions of the transactions contained
in this report are qualified in their entirety by reference to such exhibits.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
10.1 Amendment No. 4 to Loan and Security Agreement. Schedules and
exhibits to this Amendment No. 4 have not been included herewith,
but will be furnished supplementally to the Securities and
Exchange Commission upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 23, 2005 Advanced Marketing Services, Inc.
/S/ Curtis R. Smith
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Curtis R. Smith
Executive Vice President and
Chief Financial Officer
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