<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1999
Commission File Number 1-6018
TOKHEIM CORPORATION
(Exact name of Registrant as Specified in its Charter)
INDIANA 35-0712500
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
10501 CORPORATE DRIVE, FORT WAYNE, IN 46845
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number including area code): (219) 470-4600
NOT APPLICABLE
(Former name, former address, and former fiscal year if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No
As of February 28, 1999, 12,668,879 shares of voting common stock were
outstanding.
The exhibit index is located on page 13.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TOKHEIM CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Consolidated Condensed Statement of Earnings
(Amounts in thousands except amounts per share)
<TABLE>
<CAPTION>
(UNAUDITED)
Three Months Ended
February 28, February 28,
1999 1998
------------ ------------
<S> <C> <C>
NET SALES.................................................. $166,193 $90,852
Cost of sales, exclusive of items listed below............. 133,297 67,074
Selling, general, and administrative expenses.............. 25,767 16,257
Depreciation and amortization.............................. 6,892 2,500
Merger and acquisition costs and other unusual items....... 1,123 5,987
------------- ----------
Operating Loss............................................. (886) (966)
------------- ----------
Interest expense, net...................................... 12,307 4,011
Foreign currency loss...................................... 1,438 35
Minority Interest.......................................... 94 73
Other (income), net........................................ (154) 221
------------- ----------
Loss before income taxes................................... (14,571) (5,306)
Income taxes............................................... (393) 300
------------- ----------
Loss before extraordinary item............................. (14,178) (5,606)
Extraordinary loss on debt extinguishment.................. (6,249)
------------- ----------
NET LOSS................................................... $(20,427) $(5,606)
============= ==========
Preferred stock dividends.................................. (374) (374)
Loss applicable to common stock......................... $(20,801) $(5,980)
Loss per common share:
Basic:
Before extraordinary loss............................... $ (1.15) $ (0.72)
Extraordinary loss on debt extinguishment............... (0.49) --
------------- ----------
Net Loss................................................ $ (1.64) $ (0.72)
============= ==========
Weighted average shares outstanding..................... 12,662 8,250
Diluted:
Before extraordinary loss............................... $ (1.15) $ (0.72)
Extraordinary loss on debt extinguishment............... (0.49) --
------------- ----------
Net loss................................................ $ (1.64) $ (0.72)
============= ==========
Weighted average shares outstanding..................... 12,662 8,250
</TABLE>
2
<PAGE>
TOKHEIM CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Consolidated Condensed Balance Sheet
(In thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
February 28, November 30,
1999 1998
------------ -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................. $ 34,720 $ 26,801
Accounts receivables, net ................................. 146,946 172,693
Inventories:
Raw materials and supplies ............................. 67,062 70,545
Work in process ........................................ 22,557 27,418
Finished goods ......................................... 22,816 25,070
----------- ---------
112,435 123,033
Other current assets ...................................... 21,132 19,139
----------- ---------
Total current assets ...................................... 315,233 341,666
Property, plant, and equipment, net ....................... 75,874 77,905
Other tangible assets ..................................... 3,746 4,873
Goodwill, net ............................................. 300,489 324,113
Other non-current assets and deferred charges, net ........ 29,564 28,085
----------- ---------
Total assets .............................................. $ 724,906 $ 776,642
=========== =========
LIABILITIES AND SHAREHOLDERS EQUITY
Current maturities of long-term debt ...................... $ 1,911 $ 2,110
Notes payable to banks .................................... 383 410
Cash overdrafts ........................................... 15,012 15,064
Accounts payable .......................................... 74,908 95,322
Accrued expenses .......................................... 134,151 136,164
---------- ---------
Total current liabilities ................................. 226,365 249,070
Notes payable, bank credit agreement ...................... 185,146 182,145
Senior notes .............................................. 22,500
Senior subordinated notes ................................. 205,690 170,000
Junior subordinated Payment In Kind note .................. 41,200 40,000
Other long-term debt, less current maturities ............. 3,570 4,115
Guaranteed Employees' Stock Ownership Plan obligation ..... 6,347 6,987
Post-retirement benefit liability ......................... 14,799 14,418
Minimum pension liability ................................. 3,135 3,135
Other long-term liabilities ............................... 7,141 7,511
---------- ---------
693,393 699,881
---------- ---------
Redeemable convertible preferred stock .................... 24,000 24,000
Guaranteed Employees' Stock Ownership Plan obligation ..... (6,347) (6,987)
Treasury stock, at cost ................................... (4,712) (4,883)
---------- ---------
12,941 12,130
---------- ---------
Common stock .............................................. 90,354 90,354
Common stock warrants ..................................... 20,000 20,000
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
Minimum pension liability ................................ (3,135) (3,135)
Foreign currency translation adjustments ................. (47,855) (22,598)
Accumulated deficit ...................................... (40,096) (19,295)
---------- ---------
19,104 65,326
Less treasury stock, at cost ............................. (695) (695)
---------- ---------
18,572 64,631
---------- ---------
Total liabilities and shareholders' equity ............... $ 724,906 $ 776,642
========== =========
</TABLE>
4
<PAGE>
TOKHEIM CORPORATION AND SUBSIDIARIES
============================================================== =================
<TABLE>
<CAPTION>
Consolidated Condensed Statement of Cash Flows
(In thousands) (UNAUDITED)
February 28, February 28,
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.......................................................... $ (20,427) $ (5,606)
Adjustments to reconcile net loss to cash used in operations;
Write-off of in process research and development............... 5,879
Payment In Kind interest....................................... 1,200 --
Extraordinary loss on debt extinguishment...................... 6,249 --
Depreciation and amortization.................................. 6,892 2,500
Gain on sale of equipment...................................... (18) --
Deferred income taxes.......................................... (135) (183)
Changes in assets and liabilities:
Accounts receivables, net...................................... 20,529 11,281
Inventories.................................................... 4,247 (4,192)
Other current assets........................................... (2,774) (451)
Accounts payable............................................... (17,921) (6,707)
Accrued expenses............................................... 1,222 (8,340)
Other.......................................................... (372) 478
--------- --------
Net cash used in operations....................................... (1,308) (5,341)
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition, net of cash acquired................................. (10,641)
Plant and equipment additions..................................... (4,996) (1,885)
--------- --------
Net cash used in investing........................................ (4,996) (12,526)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of senior notes........................................ (22,500) --
Proceeds from senior subordinated notes.......................... 209,647 --
Redemption of senior subordinated notes........................... (170,000) --
Decrease in other debt............................................ (438) (122)
Increase notes payable, banks..................................... 3,001 20,644
Increase (decrease) in cash overdraft............................. 463 (504)
Debt issuance costs............................................... (6,084) --
Proceeds from issuance of common stock............................ -- 158
Premiums paid on debt redemption.................................. (555) --
Treasury stock, net............................................... 170 4
Preferred stock dividends......................................... (374) (374)
--------- --------
Net cash provided from financing activities....................... 13,330 19,806
--------- --------
EFFECT OF TRANSLATION ADJUSTMENT ON CASH.......................... 893 (250)
CASH AND CASH EQUIVALENTS:
Increase in cash................................................. 7,919 1,689
Beginning of year................................................. 26,801 6,438
--------- --------
End of period..................................................... $ 34,720 $ 8,127
========= ========
</TABLE>
5
<PAGE>
Notes to the Consolidated Financial Statements
The interim financial statements are unaudited and reflect all adjustments
(consisting solely of normal recurring adjustments) that, in the opinion of
management, are necessary for a fair statement of the interim periods presented.
This report includes information in a condensed format and should be read in
conjunction with the audited consolidated financial statements included in
Tokheim Corporation's (the "Company") Annual Report to Shareholders for the year
ended November 30, 1998. The results of operations for the three months ended
February 28, 1999 are not necessarily indicative of the results to be expected
for the full year or any other interim period.
Amounts for interim periods are unaudited. Amounts for the year ended November
30, 1998 were derived from audited financial statements included in the 1998
Annual Report to Shareholders.
Certain prior period amounts in these financial statements have been
reclassified to conform with current year presentation.
New Accounting Pronouncements
- -----------------------------
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," and SFAS No. 132, "Employers' Disclosures about Pensions and
Other Postretirement Benefits," are effective for the year ending November 30,
1999. In the opinion of management, these statements will not have a material
impact on the Company's financial position, results of operations, or cash flows
since they are "disclosure only" standards. The Company is currently
evaluating the impact that SFAS No. 131 will have on its current segment
groupings. SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" was issued in June 1998 and is effective for the year ending
November 30, 2000. SFAS No. 133 establishes a new model for accounting for
derivatives in the balance sheet as either assets or liabilities and measures
them at fair value. Certain disclosures concerning the designation and
assessment of hedging relationships are also required. Management has not yet
determined the impact of this statement on the Company's consolidated financial
statements.
The Company will adopt SFAS No. 130, "Reporting Comprehensive Income," for the
year ending November 30, 1999 by including a separate statement of comprehensive
income as part of the consolidated financial statements. Total comprehensive
loss for the three months ended February 28, 1999 and 1998 was $45.7 million and
$7.9 million, respectively. The other components of comprehensive loss in
addition to net loss for these three month periods consist of foreign currency
translation adjustments and minimum pension liability.
Senior Subordinated Notes
- -------------------------
On January 29, 1999, the Company issued $123.0 million aggregate principal
amount of its 11.375% Senior Subordinated Notes due 2008 (the "Dollar Notes")
and Euro 75.0 million ($87.0 million equivalent) aggregate principal amount of
its 11.375% Senior Subordinated Notes due 2008 (the "Euro Notes," and together
with the Dollar Notes, the "Notes") in a private placement pursuant to Rule 144A
and Regulation S (the "Offering"). The Notes will mature on August 1, 2008, and
interest is payable semi-annually on February 1 and August 1 of each year,
commencing August 1, 1999. The Company used the net proceeds from the Offering
to redeem in whole, the $170.0 million in 12.0% senior subordinated notes due
January 29, 1999 (the "Senior Subordinated Notes") and the $22.5 million of
senior notes due 2005 (the "Senior Notes"). In addition, the Company used
approximately $9.1 million of the net proceeds to reduce borrowings under the
revolving credit facility under the Company's new bank credit agreement (the
"New Credit Agreement") and to permanently reduce the bank working capital
commitment from $120.0 million to $110.0 million.
6
<PAGE>
During the first quarter of 1999, the Company incurred an extraordinary loss on
debt extinguishment of approximately $6.2 million in connection with the
refinancing of the Senior Notes and the Senior Subordinated Seller Notes. This
amount consists of $0.5 million of premiums paid on the redemption of the Senior
Notes and approximately $5.7 million of unamortized deferred issuance costs that
were written off.
Each of the Dollar Notes and the Euro Notes will be redeemable, at the Company's
option, in whole at any time, or in part from time to time, on and after
February 1, 2004, upon not less than 30 nor more than 60 days' notice, at the
following redemption prices (expressed as percentages of the principal amount
thereof) if redeemed during the twelve-month period commencing on February 1 of
the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the date of redemption:
<TABLE>
<CAPTION>
Year Percentage
<S> <C>
2004 .......... 105.688%
2005 .......... 103.792%
2006 .......... 101.896%
2007 and thereafter .......... 100.000%
</TABLE>
Optional Redemption upon Public Equity Offerings
- ------------------------------------------------
At any time, or from time to time, on or prior to February 1, 2002, the Company
may, at its option, use the net cash proceeds of one or more public equity
offerings to redeem up to 35% of the original principal amount of the Dollar
Notes issued in the Offering and up to 35% of the original principal amount of
the Euro Notes issued in the Offering, each at a redemption price equal to
111.375% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of redemption; provided that at least 55% of the
original principal amount of the Dollar Notes issued in the Offering or the Euro
Notes issued in the Offering, as the case may be, remains outstanding
immediately after any such redemption and the Company shall make such redemption
not more than 120 days after the consummation of any such public equity
offering.
The Notes are unsecured and subordinated to all of the Company's existing and
future senior debt, including its obligations under the New Credit Agreement.
All of the Company's current and future U.S. subsidiaries will guarantee the
Notes with guarantees that will be unsecured and subordinated to senior debt of
subsidiaries. The indentures under which the Notes were issued contain covenants
limiting the Company's ability to, among other things, incur additional debt;
pay dividends on capital stock, repurchase capital stock or make certain other
restricted payments; make certain investments; create liens on its assets to
secure debt; enter into transactions with affiliates; merge or consolidate with
another company; and transfer and sell assets.
The Company and the subsidiary guarantors have entered into a Registration
Rights Agreement pertaining to the Dollar Notes and another Registration Rights
Agreement pertaining to the Euro Notes (together, the "Registration Rights
Agreements"). Per the Registration Rights Agreements the Company will, at its
own cost, (i) within 90 days after the issue date of the Notes, file a
registration statement on the appropriate registration form (the "Exchange
Offer Registration Statement") with the Securities and Exchange Commission (the
"Commission") with respect to an exchange offer (the "Exchange Offer") to
exchange the Euro Notes and Dollar Notes for new notes (the "Exchange Notes")
which will have terms substantially identical in all material respects to the
Dollar Notes or the Euro Notes, as the case may be, except that the Exchange
Notes will not contain terms with respect to transfer restrictions or liquidated
damages, (ii) use its best efforts to cause the Exchange Offer Registration
Statement to be declared effective under the Securities Act within 150 days
after the issue date of the Notes and (iii) use its best efforts to consummate
the Exchange Offer within 195 days after the issue date of the Notes. Upon the
Exchange Offer Registration Statement being declared effective, the Company will
offer the Exchange Notes in exchange for surrender of the Euro Notes and the
Dollar Notes.
7
<PAGE>
Although the Company intends to file the registration statement described above,
there can be no assurance that such registration statement will be filed, or, if
filed, that it will become effective. If the Company fails to comply with the
above provisions or if such registration statement fails to become effective,
then, as liquidated damages, additional interest (the "Additional Interest")
shall become payable with respect to the Euro Notes or the Dollar Notes, as
applicable, at an increasing rate of 0.5% for every ninety days that the Company
fails to register such notes.
8
<PAGE>
Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
General
Tokheim Corporation, including its subsidiaries ("Tokheim" or the "Company"), is
the world's largest manufacturer and servicer of electronic and mechanical
petroleum dispensing systems. These systems include petroleum dispensers and
pumps, retail automation systems (including point-of-sale ("POS") systems),
dispenser payment or "pay-at-the-pump" terminals, replacement parts and upgrade
kits. The Company provides products and services to customers in more than 80
countries. The Company is the largest supplier of petroleum dispensing systems
in Europe, Africa, Canada and Mexico, and one of the largest in the United
States. The Company also has established operations in Asia and Latin America.
On January 29, 1999, the Company redeemed the $170.0 million in 12.0% senior
subordinated notes due January 29, 1999 (the "Senior Subordinated Seller Notes")
and the $22.5 million of senior notes due 2005 (the "Senior Notes") with the
proceeds from the issuance of $123.0 million aggregate principal amount of its
11.375% Senior Subordinated Notes due 2008 (the "Dollar Notes") and (Euro) 75.0
million aggregate principal amount (approximately $87.0 million) of its 11.375%
Senior Subordinated Notes due 2008 (the "Euro Notes," and together with the
Dollar Notes, the "Notes") in a private placement pursuant to Rule 144A and
Regulation S (the "Offering"). The Senior Subordinated Seller Notes were
redeemed at an aggregate price of $176.7 million, representing principal of
$170.0 million and accrued and unpaid interest thereon of $6.7 million. The
Senior Notes were redeemed at an aggregate price of $23.2 million, representing
principal of $22.5 million, accrued and unpaid interest hereon of $0.2 million
and an applicable call premium of $0.5 million.
Results of Operations
Consolidated sales for the three month period ended February 28, 1999 were
$166.2 million compared to $90.9 million for the 1998 three month period. Sales
for North America, excluding export sales, have increased 38.0% for the three
month period from $36.1 million in 1998 to $49.9 million in 1999. International
sales, including domestic export sales, have increased 112.6% for the three
month period from $54.7 million in 1998 to $116.3 million in 1999. These
increases in sales from the prior year are primarily attributable to the
acquisition of the RPS Division, offset by decreased sales to major oil
companies ("MOC's") due to their merger activity and the low barrel price of
crude oil which has resulted in a delay of capital spending. Those factors,
however, were ameliorated by the purchasing momentum of the jobber and mini-
major market segments, the growing importance of the hypermarket segments,
demand in commercial and consumer products lines, and increased service
revenues.
Gross margins as a percent of sales (defined as net sales less cost of sales
divided by net sales) decreased from 26.3% in the three month period ended
February 28, 1998 to 19.8% in the 1999 three month period. This decline was
primarily driven by historically lower margins recognized in the RPS Division.
In addition, the first quarter sales mix is composed of a larger portion of
service contracts, which provide lower margins than dispenser sales.
Furthermore, the first three months of the Company's business cycle are
generally lower sales volume months creating less opportunity to recover
manufacturing fixed cost to the extent of other quarters.
Selling, general, and administrative expenses as a percent of sales for the
three month period ended February 28, 1999 were 15.5% compared to 17.9% for the
1998 three month period. This decline is primarily due to the inclusion of the
RPS Division, elimination of redundant staffing positions and the closure of the
RPS Division headquarters in Montrouge, France. All remaining Montrouge
personnel and job functions were consolidated at the Company's existing European
headquarters in Trembley, France.
Net interest expense for the three month period ended February 28, 1999 was
$12.3 million compared to $4.0 million in the comparable 1998 period. This
increase is due to increased debt levels associated with the September 1998
acquisition and financing of the RPS Division.
Depreciation and amortization expense for the three month period ended February
28, 1999 was $6.9 million compared to $2.5 million in the comparable 1998
period. The majority of the increase between periods is associated with the
inclusion of the newly acquired RPS Division and increased amortization expense
related to intangible assets recorded in connection with the acquisition of the
RPS Division.
9
<PAGE>
Merger and acquisition costs and other unusual items for the three month period
ended February 28, 1999 of $1.1 million, relates to closure expenses and
severance payments incurred in connection with the closing and consolidation of
certain pre-acquisition Tokheim facilities.
Foreign currency loss for the three month period ended February 28, 1999 was
$1.4 million compared to loss of less than $0.1 million in the comparable 1998
period. The increase in the loss is driven by short term receivables and
payables being revalued at the currency rate of exchange in effect at February
28, 1999.
Other income, net for the first quarter of 1999 was $0.2 million compared to net
expense of $0.2 million for the comparable 1998 period. This difference is
attributable to various income and expense items, which are individually
insignificant.
Income taxes for the three month period ended February 28, 1999 were a benefit
of $0.4 million compared to an expense of $0.5 million in the comparable 1998
period. This change is due to earnings in subsidiaries where net operating loss
carryforwards are available to offset book pretax earnings, and tax benefits
being recorded in subsidiaries with first quarter losses who will recover these
benefits in future 1999 quarters.
During the first quarter of 1999, the Company incurred an extraordinary loss on
debt extinguishment of approximately $6.2 million in connection with the
refinancing of the Senior Notes and the Senior Subordinated Seller Notes. This
amount consists of $0.5 million of premiums paid on the redemption of the Senior
Notes and approximately $5.7 million of unamortized deferred issuance costs that
were written off.
As a result of the above mentioned items, loss before extraordinary item was
$14.2 million or $1.15 per diluted common share for the three months ended
February 28, 1999 compared to a loss of $5.6 million or $0.72 per diluted common
share for the same period in 1998. Loss from extraordinary loss on debt
extinguishment was $6.2 million or $0.49 per diluted common share for the three
months ended February 28, 1999. Net loss for the three months ended February 28,
1999 was $1.64 per diluted common share compared to a net loss of $0.72 per
diluted common share for the comparable 1998 period.
Liquidity and Capital Resources
Cash used in operations for the three month period ended February 28, 1999 was
$1.3 million versus $5.3 million in the comparable period of 1998. During the
first quarter of 1999, the Company was able to collect receivables and reduce
inventory levels by a combined amount of $24.8 million. This cash inflow was
used to reduce the outstanding payables by approximately $17.9 million. These
working capital sources and uses are primarily related to the seasonallity of
the business.
Cash used in investing activities for the three month period ended February 28,
1999 was $5.0 million compared to a cash usage of $12.5 million in the
comparable 1998 period. The cash usage in the 1998 period is attributable to the
acquisition of Management Solutions, Inc. ("MSI").
Cash provided from financing activities for the three month period ended
February 28, 1999 was $13.3 million compared to cash provided in the comparable
1998 period of $19.8 million. The cash provided in 1998 is largely attributable
to an increase in notes payable to banks of $20.6 million used primarily to
finance the acquisition of MSI and for short term working capital needs. The
most significant item in the 1999 period was the issuance of the Dollar Notes
and the Euro Notes in the Offering, the proceeds of which were used to refinance
the Senior Subordinated Seller Notes and the Senior Notes which were originally
issued in connection with the acquisition of the RPS Division and to refinance
certain other debt of the Company at the date of the acquisition.
On January 29, 1999, the Company issued $123.0 million aggregate principal
amount of Dollar Notes and Euro 75.0 million ($87.0 million equivalent)
aggregate principal amount of Euro Notes in the Offering. The Notes will mature
on August 1, 2008, and interest is payable semi-annually on February 1 and
August 1 of each year, commencing August 1, 1999.
Net proceeds from the issuance of the Notes were used to redeem the Senior
Subordinated Seller Notes and the Senior Notes. The Senior Subordinated Seller
Notes were redeemed at an aggregate price of $176.7 million, representing
principal of $170.0 million and accrued and unpaid interest thereon of $6.7
million. The Senior Notes were redeemed at an aggregate price of $23.2 million,
10
<PAGE>
representing principal of $22.5 million, accrued and unpaid interest hereon of
$0.2 million and an applicable call premium of $0.5 million. In addition, the
Company used approximately $9.1 million of the net proceeds to reduce borrowings
under the revolving credit facility under the New Credit Agreement and to
permanently reduce the bank working capital commitment from $120.0 million to
$110.0 million.
During the first quarter of 1999, the Company incurred an extraordinary loss on
debt extinguishment of approximately $6.2 million in connection with the
refinancing of the Senior Notes and the Senior Subordinated Seller Notes with
proceeds received from the Offering. This amount consists of $0.5 million of
premiums paid on the redemption of the Senior Notes and approximately $5.7
million of unamortized deferred issuance costs that were written off.
As part of the purchase price of the RPS Division, the Company has provided
$20.3 million for certain costs it expects to incur to close down redundant
operations in connection with the reorganization and rationalization of the RPS
Division's operations. As of February 28, 1999 the Company has incurred and
charged approximately $2.2 million against this accrual for projects initiated
since the acquisition date, leaving a remaining balance of $18.1 million. The
Company expects to incur approximately $5.0 million of expenditures during the
second quarter of 1999 representing severance and closure costs related to the
Bonham, Texas, Tulla, Ireland and Belgium facilities. In addition, at November
30, 1998 the Company set up a restructuring reserve related to the closure of
its Glenrothes, Scotland facility in the amount of $5.1 million. During the
first quarter of 1999 the Company charged approximately $3.0 million against the
reserve. These charges relate to severance costs, facility closure expenses and
write down in value of impaired assets. The Company expects the closure of this
facility to be completed during the second quarter of 1999.
The Company has guaranteed loans to the Employees' Stock Ownership Plan ("ESOP")
in the amounts of $6.4 million and $7.0 million at February 28, 1999 and
November 30, 1998, respectively. The Trustee who holds the ESOP Preferred Stock,
may elect to convert each preferred share to one common share in the event of a
redemption by Tokheim, certain consolidations or mergers of Tokheim, or a
redemption by the Trustee that is necessary to provide for distributions under
the Company's Retirement Savings Plan. A participant may elect to receive a
distribution from the plan in cash or common stock. If redeemed by the Trustee,
the Company is responsible for purchasing the preferred stock at the twenty-five
dollar floor value. The Company may elect to pay the redemption price in cash or
an equivalent amount of common stock. Preferred stock dividends paid were $0.4
million for the three month periods ended February 28, 1999 and 1998,
respectively.
In December 1997, the Company initiated its Year 2000 plan, including the
organization and staffing of a full-time Year 2000 program office. The Company
has organized the process into the following sections: product certification
(ensuring all products sold by the Company are Year 2000 ready); internal
information systems (ensuring all internal hardware and software is Year 2000
ready through upgrades or replacement); suppliers, distributors and external
agents (ensuring all suppliers, distributors and external agents used by the
Company to purchase or sell goods and services are Year 2000 ready); and
manufacturing and infrastructure (ensuring manufacturing and infrastructure
systems are Year 2000 ready).
As of February 28, 1999 most of the Company's products worldwide have been
tested for Year 2000 readiness. A substantial majority of the Company's total
product lines are Year 2000 ready, and the Company believes that the remaining
products will be Year 2000 ready by December 1999. The Company's products
presently being sold are Year 2000 ready. The Company is currently assessing
which products in the field are not Year 2000 ready and its responsibility to
the customers, if any, to remedy non-compliant products. This assessment is
being done for all products sold by each entity with the assessment efforts
focused on the recently acquired RPS Division locations. There is a possibility
that certain third-party networks over which the POS systems must operate may
not be Year 2000 ready, but the Company's products will still allow the pumping
of petroleum products. The Company has surveyed its critical suppliers, and
about half of the respondents have indicated that they are Year 2000 ready. The
other half of those responding have indicated that they are still working to
achieve Year 2000 readiness, but none has indicated that it expects not to be
ready. The Company believes that all of its information systems will be Year
2000 ready no later than the third quarter of 1999. To date, the Company has not
uncovered any material Year 2000 problems. The total costs associated with
required modifications to become Year 2000 ready are not expected to be material
to the Company's financial position, results of operations or cash flows. The
Company
11
<PAGE>
estimates that it will spend a total of approximately $3.7 million by December
31, 1999, of which approximately $1.3 million had been spent by February 28,
1999, to become Year 2000 ready. The Company has enlisted the assistance of a
third-party consulting company to provide independent verification and
validation of its entire Year 2000 plan.
The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operation, liquidity, and financial condition. The Company believes
that the most likely failure scenario is that its POS systems that have not been
corrected may fail, but the Company's dispensers will still allow the pumping of
petroleum products. Under such a scenario, purchasers of petroleum products
would still be able to use the dispensers but would be required to pay for their
purchases at the cashier rather than at the pump.
Due to the general uncertainty inherent in the Year 2000 problem, resulting in
part from the uncertainty of the Year 2000 readiness of third-party suppliers,
customers, and devices that interface with the Company's products, the Company
is unable to determine at this time whether the consequences of Year 2000
failures will have a material impact on the Company's results of operations,
liquidity, or financial condition. The Year 2000 plan is expected to
significantly reduce the Company's level of uncertainty about the Year 2000
problem and, in particular, about the Year 2000 readiness of its material
external agents. The Company believes that with the implementation of new
business systems and completion of the Year 2000 plan as scheduled, the
possibility of significant interruptions of normal operations should be reduced.
However, contingency planning for all sections discussed above commenced in the
fourth quarter of 1998, and the Company is currently focusing on assessing the
potential Year 2000 problems that may arise and the risks of not becoming Year
2000 ready for each section mentioned. The Company expects to have a contingency
plan in place by the end of the second quarter of 1999.
The Company's principal sources of liquidity in the future are expected to be
cash flow from operations, including cash flow anticipated to be generated from
the RPS Division, and available borrowings under the New Credit Agreement. It is
expected that the Company's principal uses of liquidity will be to provide
working capital, finance capital expenditures, fund costs associated with the
Company's integration and rationalization plan and meet debt service
requirements. As a result of the acquisition of the RPS Division, the Company
has a significant level of debt. Based upon current levels of operations and
anticipated cost savings and future growth, the Company believes that its
expected cash flows from operations, together with available borrowings under
the New Credit Agreement and its other sources of liquidity, including leases,
will be adequate to meet its anticipated requirements for working capital,
capital expenditures, lease payments and scheduled principal and interest
payments. There can be no assurance, however, that the Company's business will
continue to generate cash flows at or above current levels, that estimated cost
savings or growth will be achieved or that the Company will be able to refinance
its existing indebtedness in whole or in part.
The indentures under which the Dollar Notes and the Euro Notes were issued (the
"Indentures") and the New Credit Agreement contain a number of significant
covenants. The New Credit Agreement requires the Company to maintain specified
financial ratios and satisfy certain financial tests. The Company's ability to
meet such financial ratios and tests may be affected by events beyond its
control. There can be no assurance that the Company will meet such financial
ratios and tests. In addition, the Indentures limit the ability of the Company
and its subsidiaries to, among other things: incur additional debt; pay
dividends on capital stock or repurchase capital stock or make certain other
restricted payments; use the proceeds of certain asset sales; make certain
investments; create liens on assets to secure debt; enter into transactions with
affiliates; merge or consolidate with another company; and transfer and sell
assets.
New Accounting Pronouncements
- -----------------------------
The Company has considered the impact that accounting pronouncements recently
issued by the Financial Accounting Standards Board and American Institute of
Certified Public Accountants will have on the Consolidated Financial Statements
as of February 28, 1999. None of the pronouncements that have been issued but
not yet adopted by the Company are expected to have a material impact on the
Company's financial position, results of operations or cash flows. See the Notes
to the Consolidated Financial Statements for additional information regarding
recently issued accounting pronouncements.
12
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information
Shareholder proposals intended to be presented at the year 2000 Annual Meeting
of Shareholders pursuant to Rule 14a-8 under the Exchange Act must be received
by the Company at the Company's principal executive offices by December 1, 1999.
In order for shareholder proposals made outside of Rule 14a-8 under the Exchange
Act to be considered "timely" within the meaning of Rule 14a-4(c) under the
Exchange Act, such proposals must be received by the Company at the Company's
principal executive offices by January 28, 2000. To be considered for
presentation at the Annual Meeting, although not included in the proxy
statement, proposals must be received not less than 50 days nor more than 90
days prior to the 2000 Annual Meeting. All shareholder proposals should be
marked for the attention of Secretary, Tokheim Corporation, P.O. Box 360, Fort
Wayne, IN 46801.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Document
- ------- --------
<C> <S>
2.1 Stock Purchase Agreement, dated as of December 29, 1997 between Tokheim Corporation and Arthur S. ("Rusty")
Elston, Ronald H. Elston, Eric E. Burwell and Curt E. Burwell (incorporated herein by reference to the Registrant's
Current Report on Form 8-K, dated December 31, 1997).
2.2 Master Agreement for Purchase and Sale of Shares, Assets, and Liabilities, dated as of June 19, 1998, between
Tokheim Corporation and Schlumberger Limited (incorporated herein by reference to the Registrant's Current
Report on Form 8-K/A dated October 1, 1998).
2.3 Amendment No. 1 to the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities, dated as of
September 30, 1998 between Tokheim Corporation and Schlumberger Limited (incorporated herein by reference to
the Registrant's Current Report on Form 8-K/A dated October 1, 1998).
3.1 Restated Articles of Incorporation of Tokheim Corporation, as amended, as filed with the Indiana Secretary of State
on February 5, 1997 (incorporated herein by reference to the Registrant's Annual Report on Form 10-K/A for the
year ended November 30, 1996).
3.2 Bylaws of Tokheim Corporation, as restated on July 12, 1995 and amended March 2, 1998 (incorporated herein by
reference to the Registrant's Quarterly Report on Form 10-Q for the period ended May 31, 1998).
4.1 Rights Agreement, dated as of January 22, 1997, between Tokheim Corporation and Harris Trust and Savings Bank,
as Rights Agent (incorporated herein by reference to the Registrant's Current Report on Form 8-K, filed February
23, 1997).
4.2 Amendment No. 1 to Rights Agreement, dated as of September 30, 1998, between Tokheim Corporation and Harris
Trust and Savings Bank (incorporated herein by reference to the Registrant's Current Report on Form 8-K/A dated
October 1, 1998).
4.3 Indenture, dated as of August 23, 1996, between Tokheim Corporation and Harris Trust and Savings Bank, as
Trustee (incorporated herein by reference to the Registrant's Current Report on Form 8-K, filed September 23,
1996).
4.4 Credit Agreement, dated as of September 3, 1996, among Tokheim Corporation, certain subsidiaries of Tokheim
Corporation, certain banks and NBD Bank, N.A. (incorporated herein by reference to the Registrant's Current
Report on Form 8-K, filed September 6, 1996).
4.5 Amendment No. 1 to Credit Agreement, dated as of May 15, 1997 (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K, for the year ended November 30, 1997, filed February 13, 1997).
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
4.6 Amendment No. 2 to Credit Agreement, dated as of June 30, 1997 (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K, for the year ended November 30, 1997, filed February 13, 1997).
4.7 Amendment No. 3 to Credit Agreement, dated as of September 25, 1997 (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K, for the year ended November 30, 1997, filed February 13, 1997).
4.8 Amendment No. 4 to Credit Agreement, dated as of December 29, 1997 (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K, for the year ended November 30, 1997, filed February 13, 1997).
4.9 Amendment No. 5 to Credit Agreement, dated as of March 20, 1998 (incorporated herein by reference to the
Registrant's Quarterly Report on Form 10-Q for the period ended February 28, 1998).
4.10 Securities Purchase Agreement, dated September 30, 1998, between Tokheim Corporation and Schlumberger
Limited (incorporated herein by reference to the Registrant's Current Report on Form 8-K/A dated October 1,
1998).
4.11 12% Senior Subordinated Note due January 28, 1999 in the amount of $170,000,000 (incorporated herein by
reference to the Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.12 Senior Subordinated Note Indenture, dated as of September 30, 1998, among Tokheim Corporation, Management
Solutions, Inc., Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt Hose & Petroleum Equipment, Inc.,
Envirotronic Systems, Inc., Gasboy International, Inc., Tokheim Automation Corporation, Tokheim Investment
Corp., as guarantors, and Harris Trust and Savings Bank, as trustee (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.13 12% Junior Subordinated Note due 2008 in the amount of $40,000,000 (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.14 Junior Subordinated Note Indenture, dated as of September 30, 1998, among Tokheim Corporation, Management
Solutions, Inc., Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt Hose & Petroleum Equipment, Inc.,
Envirotronic Systems, Inc., Gasboy International, Inc., Tokheim Automation Corporation, Tokheim Investment
Corp., as guarantors, and Harris Trust and Savings Bank, as trustee (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.15 Amendment No. 1 to Junior Subordinated Note Indenture, dated as of January 25, 1999 (incorporated herein by
reference to the Registrant's Annual Report on Form 10-K, for the year ended September 30, 1998, filed March 1,
1999).
4.16 Warrant to Purchase up to 19.9% of the Shares of Common Stock of Tokheim Corporation (incorporated herein by
reference to the Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.17 Form of Roll-Over Note (incorporated herein by reference to the Registrant's Current Report on Form 8-K/A dated
October 1, 1998).
4.18 Registration Rights Agreement, dated September 30, 1998, between Tokheim Corporation and Schlumberger
Limited (incorporated herein by reference to the Registrant's Current Report on Form 8-K/A dated October 1,
1998).
4.19 Note Purchase Agreement, dated as of September 30, 1998, among Tokheim Corporation, the Subsidiaries and the
Purchasers (incorporated herein by reference to the Registrant's Current Report on Form 8-K/A dated October 1,
1998).
4.20 Amended and Restated Credit Agreement, dated as of September 30, 1998, among Tokheim Corporation, the
Borrowing Subsidiaries, the Lenders and NBD Bank, N.A. as administrative agent and Credit Lyonnais as
documentation and collateral agent and Gleacher NatWest Inc. and Bankers Trust Company as co-syndication
agents (incorporated herein by reference to the Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.21 Second Amended and Restated Credit Agreement, dated as of December 14, 1998, among Tokheim Corporation,
the Borrowing Subsidiaries, the Lenders and NBD Bank, N.A. as administrative agent and Credit Lyonnais as
documentation and collateral agent and Gleacher NatWest Inc. and Bankers Trust Company as co-syndication
agents (incorporated herein by reference to the Registrant's Annual Report on Form 10-K, for the year ended
September 30, 1998, filed March 1, 1999).
</TABLE>
14
<PAGE>
4.22 Consent and Amendment No. 1 to Amended and Restated Credit Agreement,
dated as of January 11, 1999.
4.23 Amendment No. 2 to Amended and Restated Credit Agreement, dated as of
March 1, 1999.
4.24 Amendment No. 3 to Second Amended and Restated Credit Agreement, dated
as of February 27, 1999.
4.25 Dollar Notes Indenture, dated as of January 29, 1999, among Tokheim
Corporation, BT Alex. Brown, Credit Lyonnais Securities, First Chicago
Capital Markets, Inc., Gleacher NatWest International, ABN AMRO
Incorporated, PaineWebber Incorporated, Schroder & Co. Inc. and certain
subsidiary guarantors of Tokheim Corporation (incorporated herein by
reference to the Registrant's Annual Report on Form 10-K, for the year
ended September 30, 1998, filed March 1, 1999).
4.26 Euro Notes Indenture, dated as of January 29, 1999, among Tokheim
Corporation, BT Alex. Brown, Credit Lyonnais Securities, First Chicago
Capital Markets, Inc., Gleacher NatWest International, ABN AMRO
Incorporated, PaineWebber Incorporated, Schroder & Co. Inc. and certain
subsidiary guarantors of Tokheim Corporation (incorporated herein by
reference to the Registrant's Annual Report on Form 10-K, for the year
ended September 30, 1998, filed March 1, 1999).
4.27 Dollar Registration Rights Agreement, dated as of January 29, 1999,
among Tokheim Corporation, BT Alex. Brown, Credit Lyonnais Securities,
First Chicago Capital Markets, Inc., Gleacher NatWest International,
ABN AMRO Incorporated, PaineWebber Incorporated, Schroder & Co. Inc.
and certain subsidiary guarantors of Tokheim Corporation (incorporated
herein by reference to the Registrant's Annual Report on Form 10-K, for
the year ended September 30, 1998, filed March 1, 1999).
4.28 Euro Registration Rights Agreement, dated as of January 29, 1999, among
Tokheim Corporation, BT Alex. Brown, Credit Lyonnais Securities, First
Chicago Capital Markets, Inc., Gleacher NatWest International, ABN AMRO
Incorporated, PaineWebber Incorporated, Schroder & Co. Inc. and certain
subsidiary guarantors of Tokheim Corporation (incorporated herein by
reference to the Registrant's Annual Report on Form 10-K, for the year
ended September 30, 1998, filed March 1, 1999).
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established December 15,
1992 (incorporated herein by reference to the Registrant's Registration
Statement on Form S-8, File No. 33-52167, dated February 4, 1994).
10.2 Retirement Savings Plan for Employees of Tokheim Corporation and
Subsidiaries (incorporated herein by reference to Amendment No. 1 to
the Registrant's Registration Statement on Form S-8, File No. 33-29710,
dated August 1, 1989).
10.3 Tokheim Corporation 1996 Key Management Incentive Bonus Plan
(incorporated herein by reference to the Registrant's Report on Form
10-Q/A, for the quarter ended February 29, 1996, filed November 20,
1996).
10.4 Employment Agreement, dated December 10, 1997, between the Registrant
and Douglas K. Pinner (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.5 Employment Agreement, dated December 23, 1997, between the Registrant
and John A. Negovetich (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.6 Employment Agreement, dated December 23, 1997, between the Registrant
and Jacques St-Denis (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.7 Employment Agreement, dated December 23, 1997, between the Registrant
and Norman L. Roelke (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.8 Employment Agreement, dated December 23, 1997, between the Registrant
and Scott A. Swogger. (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.9 Technology License Agreement, effective as of December 1, 1997, between
Tokheim and Gilbarco, Inc. (incorpo rated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.10 Tokheim Corporation 1997 Incentive Plan (incorporated herein by
reference to the Registrant's Annual Report on Form 10-K for the year
ended November 39, 1997).
10.11 Employment Agreement, dated December 31, 1997, between Management
Solutions, Inc. and Arthur S. Elston (incorporated herein by reference
to the Registrant's Annual Report on Form 10-K for the year ended
November 30, 1997).
15
<PAGE>
11.1 Statement re computation of per share earnings.
27.1 Financial Data Schedule
b. Reports on Form 8-K
On December 14, 1998 the Company filed Amendment No. 2 on Form 8-K/A ("Amendment
No. 2") to its Current Report on Form 8-K, filed August 3, 1998. Amendment No. 2
was filed to report on the required interim period financial statements and
interim pro forma information, which were not available when the Company filed
its Current Report on Form 8-K/A on October 1, 1998 to report the Company's
acquisition of the RPS Division.
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 thereunto duly authorized.
TOKHEIM CORPORATION
Date: April 14, 1999 /s/ Douglas K. Pinner
------------------------------------
Chairman, President and Chief
Executive Officer
Date: April 14, 1999 /s/ John A. Negovetich
------------------------------------
Executive Vice-President,
Finance and Administration and
Chief Financial Officer
16
<PAGE>
Exhibit Index
Exhibit
No. Document
- ------- -----------------------------------------------------------------------
4.22 Consent and Amendment No. 1 to Amended and Restated Credit Agreement,
dated as of January 11, 1999.
4.23 Amendment No. 2 to Amended and Restated Credit Agreement, dated as of
March 1, 1999.
4.24 Amendment No. 3 to Second Amended and Restated Credit Agreement, dated
as of February 27, 1999.
11.1 Statement re computation of per share earnings.
27.1 Financial Data Schedule
17
<PAGE>
Tokheim Corporation and Subsidiaries
Exhibit (4.22)
Execution Copy
CONSENT AND AMENDMENT NO. 1
TO AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of January 11, 1999
THIS CONSENT AND AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT
AGREEMENT ("Amendment") is made as of January 11, 1999 by and among TOKHEIM
CORPORATION, an Indiana corporation (the "Company"), GASBOY INTERNATIONAL, INC.,
a Pennsylvania corporation ("Gasboy"), the financial institutions listed on the
signature pages hereof (the "Lenders"), NBD BANK, N.A., in its individual
capacity as a Lender and as contractual representative on behalf of the Lenders
(the "Administrative Agent"), CREDIT LYONNAIS, as Documentation and Collateral
Agent, and GLEACHER NATWEST INC. and BANKERS TRUST COMPANY, as Co-Syndication
Agents under that certain Second Amended and Restated Credit Agreement dated as
of December 14, 1998 by and among the Company, Gasboy, the Lenders, the
Administrative Agent, the Documentation and Collateral Agent, and the Co-
Syndication Agents (as amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"). Defined terms used herein and not
otherwise defined herein shall have the meaning given to them in the Credit
Agreement.
WITNESSETH
WHEREAS, the Company, Gasboy, the Lenders, the Administrative Agent,
the Documentation and Collateral Agent, and the Co-Syndication Agents are
parties to the Credit Agreement;
WHEREAS, the Company intends to issue (i) up to $210 million in
aggregate principal amount of Senior Subordinated Notes due 2008 bearing
interest at a per annum rate not more than 12% (the "Senior Subordinated Notes")
and (ii) up to $70 million in aggregate principal amount of Junior Subordinated
Notes due 2009 and bearing interest at a per annum rate not more than 14% (the
"Junior Subordinated Notes", and, together with the Senior Subordinated Notes,
the "Subordinated Notes"); and
WHEREAS, the Company has requested that the Lenders (a) amend the
Credit Agreement (i) to permit the offering and issuance of the Subordinated
Notes, (ii) to reduce permanently the Aggregate Revolving Loan Commitment, and
(iii) to amend the Credit Agreement in certain other respects and (b) consent to
the offering and issuance of the Subordinated Notes; and
WHEREAS, the Lenders, the Administrative Agent, the Documentation and
Collateral Agent, and the Co-Syndication Agents are willing to amend the Credit
Agreement and consent to the offering and issuance of the Subordinated Notes on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company, Gasboy, the Lenders, the Administrative Agent, the Documentation and
Collateral Agent, and the Co-Syndication Agents have agreed to the following
amendments to the Credit Agreement.
1. Amendments to Credit Agreement. Effective as of January 11, 1999 and
subject to the satisfaction of the conditions precedent set forth in Section 3
below, the Credit Agreement is hereby amended as follows:
1.1 Section 1.1 of the Credit Agreement is hereby amended (i) to
insert the phrase "; provided, that the Aggregate Revolving Loan Commitment
shall be reduced on a dollar-for-dollar basis ratably among the Lenders with
Revolving Loan Commitments in an amount equal to the proceeds received by the
<PAGE>
Company from the sale of any Senior Subordinated Notes in an original principal
amount in excess of $200,000,000 net of costs, fees and expenses allocated
ratably to such notes in excess of $200,000,000" immediately at the end of the
definition of Aggregate Revolving Loan Commitment; (ii) to delete the definition
of "Change in Control" and to substitute the following therefor:
"Change in Control" means (a) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission of the Securities
Exchange Act of 1934) of 25% or more of the outstanding shares of voting
stock of the Company, or (b) any other event occurs which would constitute
a "Change of Control" (under and as defined in the Junior Subordinated
Indenture and/or the Senior Subordinated Indenture).
; (iii) to insert the phrase "plus the fees, costs and expenses of the Company
incurred in connection with the issuance on the Closing Date of the Seller
Subordinated Notes and Seller Equity Interests issued to Schlumberger or any
other Person in payment of, or to finance payment of, a portion of the purchase
price for the Schlumberger Acquisition that had been capitalized to the extent
they have been written off by the Company" immediately prior to the period (".")
now appearing at the end of the definition of "Consolidated Net Worth"; (iv) to
delete the phrase "Seller Junior Subordinated Note" now appearing in the
definition of "Leverage Ratio", and to substitute the phrase "prior to the
Junior Subordinated Note Issuance Date, the Seller Junior Subordinated Notes,
and from and after the Junior Subordinated Note Issuance Date, the Junior
Subordinated Notes" therefor; (v) to delete the phrase "Seller Subordinated
Notes" now appearing in the definition of "Permitted Subordinated Debt", and to
substitute the phrase "prior to the Issuance Date, the Seller Subordinated
Notes, and from and after the Issuance Date, the Subordinated Notes" therefor;
(vi) to delete the phrase "Seller Subordinated Notes" now appearing in the
definition of "Senior Leverage Ratio", and to substitute the phrase "prior to
the Issuance Date, the Seller Subordinated Notes, and from and after the
Issuance Date, the Subordinated Notes" therefor; and (vii) to insert the
following new definitions alphabetically therein:
"Issuance Date" means the Junior Subordinated Note Issuance Date
and/or the Senior Subordinated Note Issuance Date, as applicable.
"Junior Subordinated Indenture" means that certain Indenture, dated as
of or prior to April 30, 1999, between the Company, certain of the
Company's Subsidiaries, as junior subordinated guarantors thereunder, and
Harris Trust and Savings Bank, as Trustee, as amended, restated or modified
in accordance with Section 6.27.
"Junior Subordinated Note Issuance Date" shall mean the date of the
issuance and sale by the Company of the Junior Subordinated Notes.
"Junior Subordinated Notes" means those certain Junior Subordinated
Notes due 2009 bearing interest at an effective per annum rate not more
than 14% and providing for payment in kind in lieu of cash of any portion
of the interest due through January 2005, issued by the Company in the
aggregate original principal amount of up to $70,000,000 plus any
additional principal amount accruing from the payment of interest in kind
pursuant to the Junior Subordinated Indenture, as amended, restated or
modified in accordance with Section 6.27 and shall include all guaranties
by Subsidiaries of the Company with respect to such Junior Subordinated
Notes .
"Junior Subordinated Offering Memorandum" means the Offering
Memorandum, dated January __, 1999, relating to the Company's offering and
placement of the Junior Subordinated Notes.
"Senior Subordinated Indenture" means that certain Indenture, dated as
of or prior to April 30, 1999, between the Company, certain of the
Company's Subsidiaries, as senior subordinated guarantors thereunder, and
Harris Trust and Savings Bank, as Trustee, as amended, restated or modified
in accordance with Section 6.27.
2
<PAGE>
"Senior Subordinated Note Issuance Date" shall mean the date of the
issuance and sale by the Company of the Senior Subordinated Notes.
"Senior Subordinated Notes" means those certain Senior Subordinated
Notes due 2008 bearing interest at a per annum rate not more than 12%,
issued by the Company in the aggregate principal amount of up to
$210,000,000 pursuant to the Senior Subordinated Indenture, as amended,
restated or modified in accordance with Section 6.27 and shall include all
guaranties by Subsidiaries of the Company with respect to such Senior
Subordinated Notes.
"Senior Subordinated Offering Memorandum" means the Offering
Memorandum, dated January __, 1999, relating to the Company's offering and
placement of the Senior Subordinated Notes.
"Subordinated Notes" means the Senior Subordinated Notes and the
Junior Subordinated Notes issued by the Company primarily to refinance all
or a portion of certain subordinated notes issued to Schlumberger or any
other Person in payment of, or to finance payment of, a portion of the
purchase price for the Schlumberger Acquisition, in each case as amended,
restated or otherwise modified from time to time in accordance with Section
6.27.
1.2 Section 6.28 of the Credit Agreement is hereby deleted in its
entirety, and the following is substituted therefor:
6.28 Payments and Prepayments. Neither the Company nor any of its
Subsidiaries shall make any (a) payment or prepayment of principal, fees or
other charges (other than payments of interest due on an unaccelerated
basis and subject to the provisions of the Senior Subordinated Indenture)
on or with respect to, or any redemption, purchase, retirement, defeasance,
sinking fund or payment on any claim for damages or rescission with respect
to the Senior Subordinated Notes and Permitted Refinancing Indebtedness in
respect thereof except for any refinancing otherwise permitted under this
Agreement, or (b) payment or prepayment of principal, fees or other charges
(other than payment in kind in lieu of cash of any portion of the interest
due on an unaccelerated basis and subject to the provisions of the Junior
Subordinated Indenture) on or with respect to, or any redemption, purchase,
retirement, defeasance, sinking fund or payment on any claim for damages or
rescission with respect to the Junior Subordinated Notes and Permitted
Refinancing Indebtedness in respect thereof except for any refinancing
otherwise permitted under this Agreement, or (c) payment or prepayment on
or with respect to, or any redemption, purchase, retirement, defeasance,
sinking fund or payment on any claim for damages or rescissions with
respect to the Seller Equity Interests at any time after April 30, 1999.
1.3 Section 8.2 of the Credit Agreement is hereby amended to delete
the phrase "; provided, further that no such supplemental agreement shall permit
or consent to the prepayment, purchase, redemption, defeasance or refinancing
(other than through the incurrence of Permitted Refinancing Indebtedness or the
issuance of Equity Interests) of the Seller Junior Subordinated Note or the
Seller Equity Interests without the consent of the Required Lenders (including
the Administrative Agent)" now appearing therein.
2. Consent. The Administrative Agent and the Required Lenders consent to
the issuance of the Junior Subordinated Notes and the Senior Subordinated Notes
on the following terms and conditions:
(a) On or before April 30, 1999, the offering and sale of the
Subordinated Notes shall have been consummated in compliance with the
provisions of the Securities Act of 1933, as amended, any other federal
securities law, state securities or "Blue Sky" law or applicable general
corporation law, and, in each case, the rules and regulations thereunder.
(b) On or before April 30, 1999, all conditions precedent to, and all
consents necessary to permit, the offering and sale of the Subordinated
Notes shall have been satisfied or delivered, or, to the extent material to
the Lenders, waived with the prior written consent of the Administrative
Agent, and no action
3
<PAGE>
shall have been taken by any competent authority which restrains, prevents
or imposes material adverse conditions upon, or seeks to restrain, prevent
or impose material adverse conditions upon, the offering or sale of the
Subordinated Notes.
(c) On or before April 30, 1999, the offering and sale of the Senior
Subordinated Notes shall have been consummated, the Senior Subordinated
Notes due 2008 in an aggregate original principal amount of not greater
than $210,000,000 bearing interest at a per annum rate not more than 12%
shall have been issued pursuant to the Senior Subordinated Indenture (which
shall contain other terms substantially identical in all material respects
to those contained in the Description of the Senior Subordinated Notes
(draft December 29, 1998) distributed to the Lenders by Sidley & Austin on
December 30, 1998), the Junior Subordinated Notes due 2009 in an aggregate
original principal amount of not greater than $70,000,000 bearing interest
at an effective per annum rate not more than 14% and providing for payment
in kind in lieu of cash of any portion of the interest due through January
2005 shall have been issued pursuant to the Junior Subordinated Indenture
(which shall contain other terms substantially identical in all material
respects to those contained in the Description of the Junior Subordinated
Notes (draft December 29, 1998) distributed to the Lenders by Sidley &
Austin on December 30, 1998), and the Company shall have received the
proceeds thereof and applied such proceeds as provided in the Senior
Subordinated Offering Memorandum and the Junior Subordinated Offering
Memorandum, respectively with no portion thereof being required by the
Lenders to be applied as a prepayment of the Obligations under the Credit
Agreement except, to the extent necessary, in connection with any reduction
of the Aggregate Revolving Loan Commitment.
3. Conditions of Effectiveness. This Amendment shall become effective
and be deemed effective as of January 11, 1999, only so long as the
Administrative Agent shall have received each of the following on or before
January 20, 1999:
(a) duly executed originals of this Amendment from the Company,
Gasboy, the Administrative Agent and the Required Lenders;
(b) duly executed originals of the Reaffirmation attached hereto from
each Guarantor Subsidiary; and
(c) such other documents, instruments and agreements as the
Administrative Agent may reasonably request.
4. Amendment Fee. Each Lender that delivers a duly executed signature
page to this Amendment to James E. Clark, Sidley & Austin, at 312-853-7036 by
5:00 p.m. (Chicago time) on Monday, January 11, 1999, shall be entitled to an
Amendment Fee of 0.125% of such Lender's Commitment (as defined in the Credit
Agreement) provided this Amendment is approved by the Required Lenders
(including the Administrative Agent) and the Company issues any of the Junior
Subordinated Notes (as defined in this Amendment). The Amendment Fee shall be
due and payable upon the first date of the issuance by the Company of any of the
Junior Subordinated Notes.
5. Representations and Warranties of the Company. The Company and Gasboy
hereby represent and warrant as follows:
(a) This Amendment and the Credit Agreement as previously executed
and as amended hereby, constitute legal, valid and binding obligations of the
Company and Gasboy and are enforceable against the Company and Gasboy in
accordance with their terms.
(b) Upon the effectiveness of this Amendment, the Company and Gasboy
hereby reaffirm all covenants, representations and warranties made in the Credit
Agreement, to the extent the same are not amended hereby, and agree that all
such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment (unless expressly made as of a
different date).
4
<PAGE>
6. Reference to the Effect on the Credit Agreement.
-----------------------------------------------
(a) Upon the effectiveness of Section 1 hereof, on and after the date
hereof, each reference in the Credit Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Second Amended and Restated Credit Agreement dated as of December 14, 1998, as
amended hereby.
(b) Except as specifically amended above, the Credit Agreement and
all other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Administrative Agent or any of the Lenders, nor
constitute a waiver of any provision of the Credit Agreement or any other
documents, instruments and agreements executed and/or delivered in connection
therewith.
7. Costs and Expenses. The Company agrees to pay all reasonable costs,
internal charges and out-of-pocket expenses (including reasonable attorneys'
fees charged to the Administrative Agent) incurred by the Administrative Agent
in connection with the preparation, execution and enforcement of this Amendment.
8. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING WITHOUT LIMITATION, 735 ILCS
105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS)
OF THE STATE OF ILLINOIS.
9. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
10. Counterparts. This Amendment may be executed by one or more of the
parties to the Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
TOKHEIM CORPORATION, as a Borrower
By: ______________________________
Name:
Title:
GASBOY INTERNATIONAL, INC., as a Borrower
By: ______________________________
Name:
Title:
5
<PAGE>
NBD BANK, N.A., as Administrative Agent, as a Lender,
as Issuing Lender, and a Swing Loan Lender
By: ______________________________
Name:
Title:
CREDIT LYONNAIS, CHICAGO BRANCH,
as Documentation and Collateral Agent and as a Lender
By: ______________________________
Name:
Title:
NATIONAL WESTMINSTER BANK PLC, as Co-Syndication Agent
and as a Lender
By: ______________________________
Name:
Title:
BANKERS TRUST COMPANY, as Co-Syndication Agent and as a
Lender
By: ______________________________
Name:
Title:
ABN AMRO BANK N.V., as a Lender
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
6
<PAGE>
CREDIT AGRICOLE INDOSUEZ, as a Lender
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
HARRIS TRUST AND SAVINGS BANK, as a Lender
By: ______________________________
Name:
Title:
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION EUROPEENNE,
as a Lender
By: ______________________________
Name:
Title:
MERCANTILE BANK N.A., as a Lender
By: ______________________________
Name:
Title:
THE PROVIDENT BANK, as a Lender
By: ______________________________
Name:
Title:
FINOVA CAPITAL CORPORATION, as a Lender
By: ______________________________
Name:
Title:
7
<PAGE>
IMPERIAL BANK, as a Lender
By: ______________________________
Name:
Title:
NATEXIS BANQUE BFCE, as a Lender
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
BANK POLSKA KASA OPIEKI S.A. - PEKAO S.A. GROUP, NEW
YORK BRANCH, as a Lender
By: ______________________________
Name:
Title:
SENIOR DEBT PORTFOLIO, as a Lender
By: Boston Management and Research, as Investment
Advisor
By: ______________________________
Name:
Title:
EATON VANCE SENIOR INCOME TRUST, as a Lender
By: Eaton Vance Management, as Investment Advisor
By: ______________________________
Name:
Title:
OXFORD STRATEGIC INCOME FUND, as a Lender
By: Eaton Vance Management, as Investment Advisor
By: ______________________________
Name:
Title:
8
<PAGE>
ML CLO XX PILGRIM AMERICA (CAYMAN) LTD., as a Lender
By: Pilgrim Investments, Inc., as its Investment
Manager
By: ______________________________
Name:
Title:
ML CLO XII PILGRIM AMERICA (CAYMAN) LTD., as a Lender
By: Pilgrim Investments, Inc., as Investment Manager
By: ______________________________
Name:
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO , as a Lender
By: Merrill Lynch Asset Management, L.P., as
Investment Advisor
By: ______________________________
Name:
Title:
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC., as a
Lender
By: ______________________________
Name:
Title:
OCTAGON LOAN TRUST, as a Lender
By: Octagon Credit Investors, as Manager
By: ______________________________
Name:
Title:
INDOSUEZ CAPITAL FUNDING IIA, LIMITED, as a Lender
By: Indosuez Capital Luxembourg, as Collateral Manager
By: ______________________________
Name:
Title:
9
<PAGE>
INDOSUEZ CAPITAL FUNDING IV, LP, as a Lender
By: Indosuez Capital Luxembourg, as Collateral Manager
By: ______________________________
Name:
Title:
ALLIANCE INVESTMENT OPPORTUNITIES FUND, L.L.C., as a
Lender
By: ALLIANCE INVESTMENT OPPORTUNITIES MANAGEMENT,
L.L.C., as Managing Member
By: ALLIANCE CAPITAL MANAGEMENT L.P., as Managing
Member
By: ALLIANCE CAPITAL MANAGEMENT CORPORATION, as
General Partner
By: ______________________________
Name:
Title:
KZH RIVERSIDE LLC, as a Lender
By: ______________________________
Name:
Title:
10
<PAGE>
REAFFIRMATION
Each of the undersigned hereby acknowledges receipt of a copy of the
foregoing Consent and Amendment No. 1 to the Second Amended and Restated Credit
Agreement dated as of December 14, 1998 by and among TOKHEIM CORPORATION, an
Indiana corporation (the "Company"), GASBOY INTERNATIONAL, INC., a Pennsylvania
corporation ("Gasboy"), the financial institutions listed on the signature pages
hereof (the "Lenders"), NBD BANK, N.A., in its individual capacity as a Lender
and as contractual representative on behalf of the Lenders (the "Administrative
Agent"), CREDIT LYONNAIS, as Documentation and Collateral Agent, and GLEACHER
NATWEST INC. and BANKERS TRUST COMPANY, as Co-Syndication Agents (as amended and
as the same may be amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement") which Consent and Amendment No. 1 is dated
as of January __, 1999 (the "Amendment"). Capitalized terms used in this
Reaffirmation and not defined herein shall have the meanings given to them in
the Credit Agreement. Without in any way establishing a course of dealing by
the Administrative Agent or any Lender, each of the undersigned reaffirms the
terms and conditions of the Subsidiary Guaranty and any other Loan Document
executed by it and acknowledges and agrees that such agreement and each and
every such Loan Document executed by the undersigned in connection with the
Credit Agreement remains in full force and effect and are hereby reaffirmed,
ratified and confirmed. All references to the Credit Agreement contained in the
above-referenced documents shall be a reference to the Credit Agreement as so
modified by the Amendment and as the same may from time to time hereafter be
amended, modified or restated.
Dated: January __, 1999
TOKHEIM AUTOMATION CORPORATION
ENVIROTRONIC SYSTEMS, INC.
TOKHEIM INVESTMENT CORP.
SUNBELT HOSE & PETROLEUM
EQUIPMENT, INC.
GASBOY INTERNATIONAL, INC.
MANAGEMENT SOLUTIONS, INC.
TOKHEIM EQUIPMENT CORPORATION
TOKHEIM RPS, LLC
By: Gasboy International, Inc.
On behalf of each of the above-listed parties
By: _______________________________
Name:
Title:
11
<PAGE>
Tokheim Corporation and Subsidiaries
Exhibit (4.23)
Execution Copy
AMENDMENT NO. 2
TO AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 1, 1999
THIS AMENDMENT NO. 2 TO AMENDED AND RESTATED CREDIT AGREEMENT
("Amendment") is made as of March 1, 1999 by and among TOKHEIM CORPORATION, an
Indiana corporation (the "Company"), GASBOY INTERNATIONAL, INC., a Pennsylvania
corporation ("Gasboy"), the financial institutions listed on the signature pages
hereof (the "Lenders"), NBD BANK, N.A., in its individual capacity as a Lender
and as contractual representative on behalf of the Lenders (the "Administrative
Agent"), CREDIT LYONNAIS, as Documentation and Collateral Agent, and GLEACHER
NATWEST INC. and BANKERS TRUST COMPANY, as Co-Syndication Agents under that
certain Second Amended and Restated Credit Agreement dated as of December 14,
1998 by and among the Company, Gasboy, the Lenders, the Administrative Agent,
the Documentation and Collateral Agent, and the Co-Syndication Agents (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Defined terms used herein and not otherwise defined herein
shall have the meaning given to them in the Credit Agreement.
WITNESSETH
WHEREAS, the Company, Gasboy, the Lenders, the Administrative Agent,
the Documentation and Collateral Agent, and the Co-Syndication Agents are
parties to the Credit Agreement;
WHEREAS, the Required Lenders are willing to amend the Credit
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company, Gasboy and the Required Lenders have agreed to the following amendments
to the Credit Agreement.
1. Amendments to Credit Agreement. Effective as November 30, 1998 and
subject to the satisfaction of the conditions precedent set forth in Section 2
below, Section 6.11 of the Credit Agreement is hereby amended to delete the
language now contained therein that precedes the ":" and to substitute therefor
the following:
"The Company and its Subsidiaries shall not incur in the aggregate
expenses for Rentals in any fiscal year in excess of the amounts set
forth below for the fiscal years ended as of the dates set forth
below:"
2. Conditions of Effectiveness. This Amendment shall become effective
and be deemed effective as January 31, 1999 upon the delivery of duly executed
originals of this Amendment from the Required Lenders.
3. Representations and Warranties of the Company. The Company and Gasboy
hereby represent and warrant as follows:
<PAGE>
(a) This Amendment and the Credit Agreement as previously executed
and amended and as amended hereby, constitute legal, valid and binding
obligations of the Company and Gasboy and are enforceable against the Company
and Gasboy in accordance with their terms.
(b) Upon the effectiveness of this Amendment, the Company and Gasboy
hereby reaffirm all covenants, representations and warranties made in the Credit
Agreement, to the extent the same are not amended hereby, and agree that all
such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment.
4. Reference to the Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 1 hereof, on and after the date
hereof, each reference in the Credit Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Second Amended and Restated Credit Agreement dated as of December 14, 1998, as
amended previously and as amended hereby.
(b) Except as specifically amended above, the Credit Agreement and
all other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Administrative Agent or any of the Lenders, nor
constitute a waiver of any provision of the Credit Agreement or any other
documents, instruments and agreements executed and/or delivered in connection
therewith.
5. Costs and Expenses. The Company agrees to pay all reasonable costs,
fees and out-of-pocket expenses (including attorneys' fees and expenses charged
to the Administrative Agent) incurred by the Administrative Agent in connection
with the preparation, execution and enforcement of this Amendment.
6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING WITHOUT LIMITATION, 735 ILCS 105/5-
1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS) OF
THE STATE OF ILLINOIS.
7. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
8. Counterparts. This Amendment may be executed by one or more of the
parties to the Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
TOKHEIM CORPORATION, as a Borrower
By: ______________________________
Name:
Title:
2
<PAGE>
GASBOY INTERNATIONAL, INC., as a Borrower
By:
------------------------------------
Name:
Title:
NBD BANK, N.A., as Administrative Agent,
as a Lender, as Issuing Lender, and a
Swing Loan Lender
By:
------------------------------------
Name:
Title:
CREDIT LYONNAIS, CHICAGO BRANCH, as
Documentation and Collateral Agent and as
a Lender
By:
------------------------------------
Name:
Title:
BANKERS TRUST COMPANY, as Co-Syndication
Agent and as a Lender
By:
------------------------------------
Name:
Title:
ABN AMRO BANK N.V., as a Lender
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
3
<PAGE>
CREDIT AGRICOLE INDOSUEZ, as a Lender
By:
-------------------------------------
Name:
Title:
HARRIS TRUST AND SAVINGS BANK,
as a Lender
By:
-------------------------------------
Name:
Title:
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE, as a Lender
By:
-------------------------------------
Name:
Title:
MERCANTILE BANK N.A., as a Lender
By:
-------------------------------------
Name:
Title:
THE PROVIDENT BANK, as a Lender
By:
-------------------------------------
Name:
Title:
FINOVA CAPITAL CORPORATION, as a Lender
By:
-------------------------------------
Name:
Title:
4
<PAGE>
IMPERIAL BANK, as a Lender
By:
-------------------------------------
Name:
Title:
NATEXIS BANQUE BFCE, as a Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
BANK POLSKA KASA OPIEKI S.A. - PEKAO S.A.
GROUP, NEW YORK BRANCH, as a Lender
By:
-------------------------------------
Name:
Title:
SENIOR DEBT PORTFOLIO, as a Lender
By: Boston Management and Research, as
Investment Advisor
By:
-------------------------------------
Name:
Title:
EATON VANCE SENIOR INCOME TRUST,
as a Lender
By: Eaton Vance Management as,
Investment Advisor
By:
-------------------------------------
Name:
Title:
OXFORD STRATEGIC INCOME FUND, as a Lender
By: Eaton Vance Management,
as Investment Advisor
By:
-------------------------------------
Name:
Title:
5
<PAGE>
ML CLO XX PILGRIM AMERICA (CAYMAN) LTD.,
as a Lender
By: Pilgrim Investments, Inc., as its
Investment Manager
By:
-------------------------------------
Name:
Title:
ML CLO XII PILGRIM AMERICA (CAYMAN) LTD.,
as a Lender
By: Pilgrim Investments, Inc.,
as Investment Manager
By:
-------------------------------------
Name:
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO,
as a Lender
By: Merrill Lynch Asset Management,
L.P., as Investment Advisor
By:
-------------------------------------
Name:
Title:
MERRILL LYNCH SENIOR FLOATING RATE FUND,
INC., as a Lender
By:
-------------------------------------
Name:
Title:
OCTAGON LOAN TRUST, as a Lender
By: Octagon Credit Investors,
as Manager
By:
-------------------------------------
Name:
Title:
INDOSUEZ CAPITAL FUNDING IIA, LIMITED,
as a Lender
By: Indosuez Capital Luxembourg,
as Collateral Manager
By:
-------------------------------------
Name:
Title:
6
<PAGE>
INDOSUEZ CAPITAL FUNDING IV, LP,
as a Lender
By: Indosuez Capital Luxembourg,
as Collateral Manager
By:
-------------------------------------
Name:
Title:
ALLIANCE INVESTMENT OPPORTUNITIES FUND,
L.L.C., as a Lender
By: ALLIANCE INVESTMENT OPPORTUNITIES
MANAGEMENT, L.L.C., as Managing
Member
By: ALLIANCE CAPITAL MANAGEMENT L.P.,
as Managing Member
By: ALLIANCE CAPITAL MANAGEMENT
CORPORATION, as General Partner
By:
-------------------------------------
Name:
Title:
KZH RIVERSIDE LLC, as a Lender
By:
-------------------------------------
Name:
Title:
AMSOUTH BANK, as a Lender
By:
-------------------------------------
Name:
Title:
7
<PAGE>
Tokheim Corporation and Subsidiaries
Exhibit (4.24)
AMENDMENT NO. 3
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
("Amendment") is made as of February 27, 1999 by and among TOKHEIM CORPORATION,
an Indiana corporation (the "Company"), GASBOY INTERNATIONAL, INC., a
Pennsylvania corporation ("Gasboy"), the financial institutions listed on the
signature pages hereof (the "Lenders"), NBD BANK, N.A., in its individual
capacity as a Lender and as contractual representative on behalf of the Lenders
(the "Administrative Agent"), CREDIT LYONNAIS, as Documentation and Collateral
Agent, and BANKERS TRUST COMPANY, as Co-Syndication Agent under that certain
Second Amended and Restated Credit Agreement dated as of December 14, 1998 by
and among the Company, Gasboy, the Lenders, the Administrative Agent, the
Documentation and Collateral Agent, and the Co-Syndication Agent (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"). Defined terms used herein and not otherwise defined herein shall
have the meaning given to them in the Credit Agreement.
WITNESSETH
WHEREAS, the Company, Gasboy, the Lenders, the Administrative Agent,
the Documentation and Collateral Agent, and the Co-Syndication Agent are parties
to the Credit Agreement;
WHEREAS, the Required Lenders are willing to amend the Credit
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company, Gasboy and the Required Lenders have agreed to the following amendments
to the Credit Agreement.
1. Amendments to Credit Agreement. Effective as of February 27, 1999 and
subject to the satisfaction of the conditions precedent set forth in Section 2
below, the Credit Agreement is hereby amended as follows:
1.1. Section 6.1 is hereby amended to insert the following new clause
(ix) immediately at the end thereof:
"(ix) As soon as practicable, and in any event within thirty (30) days
after the close of each calendar month, with sufficient copies for the
Lenders, copies of internal management financial statements for the
most recently completed calendar month."
1.2 Section 6.12 is hereby deleted in its entirety, and the following
is substituted therefor:
"6.12. Consolidated Net Worth. The Company shall maintain, as of the
end of each fiscal quarter, Consolidated Net Worth of not less than
(x) for each of the fiscal quarters ending on February 28, 1999, May
31, 1999 and August 31, 1999, the sum of (i) $64,000,000 plus (ii)
100% of Net Cash Proceeds received after the Effective Date from the
issuance of Capital Stock of the Company or any of its Subsidiaries to
any Person other than the Company or its Subsidiaries and (y) for each
fiscal quarter thereafter, the sum of (i) $75,000,000 plus (ii) sixty
percent (60%) of
<PAGE>
Consolidated Net Income (if positive) for each fiscal year of the
Company commencing with the fiscal year ending on or about November
30, 1999 and concluding with the fiscal year ending most recently
prior to the date of determination but without deduction for any
fiscal year in which there is a loss plus (iii) 100% of Net Cash
Proceeds received after the Effective Date from the issuance of
Capital Stock of the Company or any of its Subsidiaries to any Person
other than the Company or its Subsidiaries."
1.2. Section 6.23 is hereby deleted in its entirety, and the
following is substituted therefor:
" 6.23 Leverage Ratio and Senior Leverage Ratio. (a) At any and
all times, the Company shall not permit the Leverage Ratio to exceed
the amounts set forth below during the fiscal periods set forth below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Maximum Ratio
- -------------------------- -------------
<S> <C>
August 31, 1999 7.0 to 1.00
November 30, 1999 5.5 to 1.00
February 29, 2000 5.5 to 1.00
May 31, 2000 5.0 to 1.00
August 31, 2000 5.0 to 1.00
November 30, 2000 4.0 to 1.00
February 28, 2001 4.0 to 1.00
May 31, 2001 4.0 to 1.00
August 31, 2001 4.0 to 1.00
November 30, 2001 3.5 to 1.00
February 28, 2002 3.5 to 1.00
May 31, 2002 3.5 to 1.00
August 31, 2002 3.5 to 1.00
And at all times
during each fiscal quarter thereafter 3.0 to 1.00
</TABLE>
(b) At any and all times, the Company shall not permit the
Senior Leverage Ratio to exceed the amounts set forth below during the
fiscal periods set forth below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Maximum Ratio
- -------------------------- -------------
<S> <C>
February 28, 1999 4.75 to 1.00
May 31, 1999 4.25 to 1.00
August 31, 1999 4.0 to 1.00
November 30, 1999 3.5 to 1.00
February 29, 2000 3.5 to 1.00
May 31, 2000 3.5 to 1.00
August 31, 2000 3.5 to 1.00
November 30, 2000 3.0 to 1.00
February 28, 2001 3.0 to 1.00
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
May 31, 2001 3.0 to 1.00
August 31, 2001 3.0 to 1.00
November 30, 2001 2.5 to 1.00
February 28, 2002 2.5 to 1.00
May 31, 2002 2.5 to 1.00
August 31, 2002 2.5 to 1.00
And at all times
during each fiscal quarter thereafter 2.0 to 1.00
</TABLE>
The Leverage Ratio and Senior Leverage Ratio shall be calculated, in
each case, determined as of the last day of each fiscal quarter based
upon (A) for Indebtedness, Indebtedness as of the last day of each
such fiscal quarter; and (B) for EBITDA, the actual amount for the
four-quarter period ending on such day (provided, however, that the
Leverage Ratio and Senior Leverage Ratio shall be calculated for the
Company and its Consolidated Subsidiaries (a) for the fiscal quarter
ending February 28, 1999, using EBITDA for the two fiscal quarters
ending on February 28, 1999 multiplied by two (2) and (b) for the
fiscal quarter ending May 31, 1999, using EBITDA for the three fiscal
quarters ending on May 31, 1999 multiplied by four-thirds (4/3))."
1.3. Section 6.24 is hereby deleted in its entirety, and the
following is substituted therefor:
"6.24 Interest Expense Coverage Ratio. The Company shall not
permit the Interest Expense Coverage Ratio to be less than the amounts
set forth below for the fiscal periods set forth below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Minimum Ratio
-------------------------- -------------
<S> <C>
February 28, 1999 1.00 to 1.00
May 31, 1999 1.15 to 1.00
August 31, 1999 1.45 to 1.00
November 30, 1999 1.50 to 1.00
February 28, 2000 through
November 30, 2000 2.00 to 1.00
February 28, 2001 through
November 30, 2001 2.25 to 1.00
And for each fiscal quarter
ending thereafter 2.50 to 1.00"
</TABLE>
1.4. Section 6.25 is hereby deleted in its entirety, and the
following is substituted therefor:
"6.25 Fixed Charge Coverage Ratio. The Company shall not permit
the Fixed Charge Coverage Ratio to be less than the amounts set forth
below for the fiscal periods set forth below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Minimum Ratio
---------------------------------------- -------------
<S> <C>
August 31, 1999 1.00 to 1.00
November 30, 1999 through November 30, 2000 1.10 to 1.00
</TABLE>
3
<PAGE>
February 28, 2001 through November 30, 2001 1.20 to 1.00
And for each fiscal quarter ending thereafter 1.25 to 1.00"
1.5. Section 6.33 is hereby deleted in its entirety, and the
following is substituted therefor:
"6.33. Minimum EBITDA. The Company shall not permit EBITDA to
be less than the amounts set forth below for the fiscal periods ending
on the dates set forth below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending on or About
the Dates Set Forth Below: Minimum EBITDA
-------------------------- --------------
<S> <C>
November 30, 1998 $ 17,000,000
February 28, 1999 $ 21,200,000
May 31, 1999 $ 39,200,000
August 31, 1999 $ 61,700,000
November 30, 1999 $ 75,000,000
February 28, 2000 $ 78,000,000
May 31, 2000 $ 82,000,000
August 31, 2000 $ 85,000,000
November 30, 2000 $ 90,000,000
February 28, 2001 $ 92,000,000
May 31, 2001 $ 94,000,000
August 31, 2001 $ 97,000,000
November 30, 2001 and each fiscal quarter
thereafter $100,000,000
</TABLE>
In each case, EBITDA shall be determined as of the last day of each
fiscal quarter then ended for the four fiscal quarter period ending on
such date (provided, however that (a) EBITDA for the period ending on
November 30, 1998 shall be calculated using EBITDA for the fiscal
quarter ending on November 30, 1998, (b) EBITDA for the period ending
on February 28, 1999 shall be calculated using EBITDA for the two
fiscal quarters ending on February 28, 1999, and (c) EBITDA for the
period ending on May 31, 1999 shall be calculated using EBITDA for the
three fiscal quarters ending May 31, 1999)."
2. Conditions of Effectiveness. This Amendment shall become effective
and be deemed effective as of February 27, 1999 upon the delivery of (i) duly
executed originals of this Amendment from the Required Lenders, Gasboy and the
Company and (ii) duly executed originals of a Reaffirmation in the form of
Exhibit A attached hereto from Tokheim Automation Corporation, Envirotronic
Systems, Inc., Tokheim Investment Corp., Sunbelt Hose & Petroleum Equipment,
Inc., Gasboy International, Inc., Management Solutions, Inc., Tokheim Equipment
Corporation, and Tokheim RPS, LLC.
3. Amendment Fee. Each Lender that delivers a duly executed signature
page to this Amendment to James E. Clark, Sidley & Austin (fax: 312-853-7036) by
5:00 p.m. (Chicago time) on Monday, April 12, 1999, shall be entitled to an
Amendment Fee of 0.25% of such Lender's Commitment (as defined in the Credit
Agreement) outstanding as of April 12, 1999 provided this Amendment is approved
by the Required Lenders (including the Administrative Agent). The Amendment Fee
shall be due and payable on the date the Company executes this Amendment.
4
<PAGE>
4. Representations and Warranties of the Company. The Company and Gasboy
hereby represent and warrant as follows:
(a) This Amendment and the Credit Agreement as previously executed
and amended and as amended hereby, constitute legal, valid and binding
obligations of the Company and Gasboy and are enforceable against the Company
and Gasboy in accordance with their terms.
(b) Upon the effectiveness of this Amendment, the Company and Gasboy
hereby reaffirm all covenants, representations and warranties made in the Credit
Agreement, to the extent the same are not amended hereby, and agree that all
such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment (unless expressly made as of a
different date).
5. Reference to the Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 1 hereof, on and after the date
hereof, each reference in the Credit Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Second Amended and Restated Credit Agreement dated as of December 14, 1998, as
amended previously and as amended hereby.
(b) Except as specifically amended above, the Credit Agreement and
all other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Administrative Agent or any of the Lenders, nor
constitute a waiver of any provision of the Credit Agreement or any other
documents, instruments and agreements executed and/or delivered in connection
therewith.
6. Costs and Expenses. The Company agrees to pay all reasonable costs,
fees and out-of-pocket expenses (including reasonable attorneys' fees and
expenses charged to the Administrative Agent) incurred by the Administrative
Agent in connection with the preparation, execution and enforcement of this
Amendment.
7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING WITHOUT LIMITATION, 735 ILCS
105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS) OF THE STATE OF ILLINOIS.
8. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. Counterparts. This Amendment may be executed by one or more of the
parties to the Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
TOKHEIM CORPORATION, as a Borrower
By: ______________________________
Name:
Title:
GASBOY INTERNATIONAL, INC., as a Borrower
By: ______________________________
Name:
Title:
NBD BANK, N.A., as Administrative Agent,
as a Lender, as Issuing Lender,
and a Swing Loan Lender
By: ______________________________
Name:
Title:
CREDIT LYONNAIS, CHICAGO BRANCH,
as Documentation and Collateral Agent and
as a Lender
By: ______________________________
Name:
Title:
BANKERS TRUST COMPANY, as Co-Syndication
Agent and as a Lender
By: ______________________________
Name:
Title:
6
<PAGE>
ABN AMRO BANK N.V., as a Lender
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
CREDIT AGRICOLE INDOSUEZ, as a Lender
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
HARRIS TRUST AND SAVINGS BANK, as a Lender
By: ______________________________
Name:
Title:
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE, as a Lender
By: ______________________________
Name:
Title:
MERCANTILE BANK N.A., as a Lender
By: ______________________________
Name:
Title:
7
<PAGE>
THE PROVIDENT BANK, as a Lender
By: ______________________________
Name:
Title:
FINOVA CAPITAL CORPORATION, as a Lender
By: ______________________________
Name:
Title:
IMPERIAL BANK, as a Lender
By: ______________________________
Name:
Title:
NATEXIS BANQUE BFCE, as a Lender
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
BANK POLSKA KASA OPIEKI S.A. - PEKAO S.A.
GROUP, NEW YORK BRANCH, as a Lender
By: ______________________________
Name:
Title:
SENIOR DEBT PORTFOLIO, as a Lender
By: Boston Management and Research,
as Investment Advisor
By: ______________________________
Name:
Title:
8
<PAGE>
EATON VANCE SENIOR INCOME TRUST, as a Lender
By: Eaton Vance Management as,
Investment Advisor
By: ______________________________
Name:
Title:
OXFORD STRATEGIC INCOME FUND, as a Lender
By: Eaton Vance Management,
as Investment Advisor
By: ______________________________
Name:
Title:
ML CLO XX PILGRIM AMERICA (CAYMAN) LTD.,
as a Lender
By: Pilgrim Investments, Inc.,
as its Investment Manager
By: ______________________________
Name:
Title:
ML CLO XII PILGRIM AMERICA (CAYMAN) LTD.,
as a Lender
By: Pilgrim Investments, Inc.,
as Investment Manager
By: ______________________________
Name:
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO ,
as a Lender
By: Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By: ______________________________
Name:
Title:
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.,
as a Lender
By: ______________________________
Name:
Title:
9
<PAGE>
OCTAGON LOAN TRUST, as a Lender
By: Octagon Credit Investors, as Manager
By: ______________________________
Name:
Title:
INDOSUEZ CAPITAL FUNDING IIA, LIMITED,
as a Lender
By: Indosuez Capital Luxembourg,
as Collateral Manager
By: ______________________________
Name:
Title:
INDOSUEZ CAPITAL FUNDING IV, LP, as a Lender
By: Indosuez Capital Luxembourg,
as Collateral Manager
By: ______________________________
Name:
Title:
ALLIANCE INVESTMENT OPPORTUNITIES FUND,
L.L.C., as a Lender
By: ALLIANCE INVESTMENT OPPORTUNITIES
MANAGEMENT, L.L.C., as Managing Member
By: ALLIANCE CAPITAL MANAGEMENT L.P.,
as Managing Member
By: ALLIANCE CAPITAL MANAGEMENT CORPORATION,
as General Partner
By: ______________________________
Name:
Title:
KZH RIVERSIDE LLC, as a Lender
By: ______________________________
Name:
Title:
10
<PAGE>
AMSOUTH BANK, as a Lender
By: ______________________________
Name:
Title:
11
<PAGE>
EXHIBIT A
REAFFIRMATION
Each of the undersigned hereby acknowledges receipt of a copy of the
foregoing Amendment No. 3 to the Second Amended and Restated Credit Agreement
dated as of December 14, 1998 by and among TOKHEIM CORPORATION, an Indiana
corporation (the "Company"), GASBOY INTERNATIONAL, INC., a Pennsylvania
corporation ("Gasboy", and, together with the Company, the "Borrowers"), the
financial institutions from time to time party thereto (the "Lenders") and NBD
BANK, N.A., in its individual capacity as a Lender and as contractual
representative on behalf of the Lenders (the "Administrative Agent"), CREDIT
LYONNAIS, as Documentation and Collateral Agent, and BANKERS TRUST COMPANY, as
Co-Syndication Agent, as amended by an Amendment No.1 and an Amendment No. 2,
dated as of January 11, 1999 and March 1, 1999, respectively (as amended and as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), which Amendment No. 3 is dated as of February
27, 1999 (the "Amendment"). Capitalized terms used in this Reaffirmation and not
defined herein shall have the meanings given to them in the Credit Agreement.
Without in any way establishing a course of dealing by any Agent or any Lender,
each of the undersigned reaffirms the terms and conditions of the Guaranty,
Pledge Agreement, Security Agreement and any other Loan Document executed by it
and acknowledges and agrees that such agreement and each and every such Loan
Document executed by the undersigned in connection with the Credit Agreement
remains in full force and effect and is hereby reaffirmed, ratified and
confirmed. All references to the Credit Agreement contained in the above-
referenced documents shall be a reference to the Credit Agreement as so modified
by Amendment No. 1, Amendment No. 2 and the Amendment and as the same may from
time to time hereafter be amended, modified or restated.
Dated: February 27, 1999 TOKHEIM AUTOMATION CORPORATION
ENVIROTRONIC SYSTEMS, INC.
TOKHEIM INVESTMENT CORP.
SUNBELT HOSE & PETROLEUM
EQUIPMENT, INC.
GASBOY INTERNATIONAL, INC.
MANAGEMENT SOLUTIONS, INC.
TOKHEIM EQUIPMENT CORPORATION
TOKHEIM RPS, LLC
By: Gasboy International, Inc.
By: ______________________________
Name:
Title:
12
<PAGE>
Tokheim Corporation and Subsidiaries
Exhibit (11) - Earnings Per share
For the three month period ended February 28, 1999 and 1998.
Basic earnings per share ("EPS") is calculated based on earnings (loss)
available to common shareholders and the weighted average number of common stock
shares outstanding during each period. Diluted EPS includes additional dilution
from potential common stock equivalents such as stock issued pursuant to the
conversion of preferred stock, the exercise of stock options outstanding and the
common stock warrants outstanding.
The following table presents information necessary to calculate earnings per
share for the three month periods ended February 28, 1999 and 1998.
<TABLE>
<CAPTION>
Basic
=============================
Three Months Ended
=============================
February 28, February 28,
1999 1998
------------ ------------
<S> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding...................................................... 12,662 8,250
======== ========
Net earnings (loss):
Before extraordinary item......................................................... $(14,178) $(5,606)
Extraordinary loss on debt extinguishment, net of tax benefit..................... (6,249) --
--------- --------
Net earnings (loss)............................................................... (20,427) (5,606)
Preferred stock dividend.......................................................... (374) (374)
--------- --------
Earnings (loss) applicable to common stock........................................ $(20,801) $(5,980)
======== ========
Net earnings (loss) per common share:
Before extraordinary item......................................................... $ (1.15) $ (0.72)
Extraordinary loss on debt extinguishment, net of tax benefit..................... (0.49) --
--------- --------
Net earnings (loss)............................................................... $ (1.64) $ (0.72)
======== ========
For financial reporting purposes, the loss per share, assuming full dilution, is
considered to be the same as basic since the effect of the common stock
equivalents would be antidilutive.
Diluted
=============================
Three Months Ended
=============================
February 28, February 28,
1999 1998
------------ ------------
Shares outstanding (in thousands):
Weighted average outstanding...................................................... 12,662 8,250
Share equivalents................................................................. 2,549 283
Weighted conversion of preferred stock............................................ 771 772
-------- -------
Adjusted outstanding.............................................................. 15,983 9,305
======== =======
Net earnings (loss):
Before extraordinary item......................................................... $(14,178) $(5,606)
Extraordinary loss on debt extinguishment, net of tax benefit..................... (6,249) --
-------- -------
Net earnings (loss)............................................................... (20,427) (5,606)
Incremental RSP expense........................................................... (374) (374)
-------- -------
Earnings (loss) applicable to common stock........................................ $(20,801) $(5,980)
======== =======
Net earnings (loss) per common share:
Before extraordinary item......................................................... $ (0.91) $ (0.64)
Extraordinary loss on debt extinguishment, net of tax benefit..................... (0.39) --
-------- -------
Net earnings (loss)............................................................... $ (1.30) $ (0.64)
======== =======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> FEB-28-1999
<CASH> 34,720
<SECURITIES> 0
<RECEIVABLES> 156,375
<ALLOWANCES> 9,429
<INVENTORY> 112,435<F1>
<CURRENT-ASSETS> 315,233
<PP&E> 151,053<F2>
<DEPRECIATION> 75,179
<TOTAL-ASSETS> 724,906
<CURRENT-LIABILITIES> 226,365
<BONDS> 205,690
12,941<F3>
0
<COMMON> 89,658<F4>
<OTHER-SE> (71,086)<F5>
<TOTAL-LIABILITY-AND-EQUITY> 724,906
<SALES> 166,193
<TOTAL-REVENUES> 166,193
<CGS> 133,297<F6>
<TOTAL-COSTS> 133,297
<OTHER-EXPENSES> 1,123
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,307
<INCOME-PRETAX> (14,571)
<INCOME-TAX> (393)
<INCOME-CONTINUING> (14,178)
<DISCONTINUED> 0
<EXTRAORDINARY> (6,249)
<CHANGES> 0
<NET-INCOME> (20,427)
<EPS-PRIMARY> (1.64)
<EPS-DILUTED> (1.64)
<FN>
<F1>Represents gross inventory net of loss reserve.
<F2>Represents gross PP&E.
<F3>Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of
$6,347 and treasury stock of $4,712.
<F4>Represents common stock of $90,190 less treasury stock of $532.
<F5>Represents accumulated deficit of ($40,096) less minimum pension liability
of ($3,135) less foreign currency translation adjustments of $(47,855) plus
common stock warrants of $20,000.
<F6>Includes product development expenses and excludes depreciation and
amortization.
</FN>
</TABLE>
