-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IhP+aBDoBsJNJU4MQwLxE8MxjCzPOC5hWAMhjo68aDFX6E5HJbAjlGCvVQZi0Y38 T0wORQ8zM+/iZ+P8pbxPEQ== 0000950131-99-002298.txt : 19990415 0000950131-99-002298.hdr.sgml : 19990415 ACCESSION NUMBER: 0000950131-99-002298 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990228 FILED AS OF DATE: 19990414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOKHEIM CORP CENTRAL INDEX KEY: 0000098559 STANDARD INDUSTRIAL CLASSIFICATION: REFRIGERATION & SERVICE INDUSTRY MACHINERY [3580] IRS NUMBER: 350712500 STATE OF INCORPORATION: IN FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06018 FILM NUMBER: 99593865 BUSINESS ADDRESS: STREET 1: 10501 CORPORATE DRIVE CITY: FORT WAYNE STATE: IN ZIP: 46845 BUSINESS PHONE: 2194704600 MAIL ADDRESS: STREET 1: 10501 CORPORATE DRIVE CITY: FORT WAYNE STATE: IN ZIP: 46845 10-Q 1 TOKHEIM CORPORATION 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. PART I. FINANCIAL INFORMATION Item 1. Financial Statements TOKHEIM CORPORATION AND SUBSIDIARIES - -------------------------------------------------------------------------------- Consolidated Condensed Statement of Earnings (Amounts in thousands except amounts per share)
(UNAUDITED) Three Months Ended February 28, February 28, 1999 1998 ------------ ------------ 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
2 TOKHEIM CORPORATION AND SUBSIDIARIES - -------------------------------------------------------------------------------- Consolidated Condensed Balance Sheet (In thousands)
(UNAUDITED) February 28, November 30, 1999 1998 ------------ ----------- 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
3 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 ========== =========
4 TOKHEIM CORPORATION AND SUBSIDIARIES ============================================================== =================
Consolidated Condensed Statement of Cash Flows (In thousands) (UNAUDITED) February 28, February 28, 1999 1998 ------------ ------------ 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 ========= ========
5 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 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:
Year Percentage 2004 .......... 105.688% 2005 .......... 103.792% 2006 .......... 101.896% 2007 and thereafter .......... 100.000%
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 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 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 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 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 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 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
Exhibit No. Document - ------- -------- 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).
13
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).
14 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 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 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 EX-4.22 2 RESTATED CREDIT AGREEMENT DATED JANUARY 11, 1999 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 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 "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 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 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 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 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 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 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 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 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 EX-4.23 3 AMENDED AND RESTATED CREDIT AGREEMENT, MARCH 1 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: (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 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 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 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 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 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 EX-4.24 4 AMENDED AND RESTATED CREDIT AGREEMENT, FEBRUARY 27 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 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:
Fiscal Quarter Ending On or About the Dates Set Forth Below: Maximum Ratio - -------------------------- ------------- 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
(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:
Fiscal Quarter Ending On or About the Dates Set Forth Below: Maximum Ratio - -------------------------- ------------- 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
2 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
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:
Fiscal Quarter Ending On or About the Dates Set Forth Below: Minimum Ratio -------------------------- ------------- 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"
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:
Fiscal Quarter Ending On or About the Dates Set Forth Below: Minimum Ratio ---------------------------------------- ------------- August 31, 1999 1.00 to 1.00 November 30, 1999 through November 30, 2000 1.10 to 1.00
3 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:
Fiscal Quarter Ending on or About the Dates Set Forth Below: Minimum EBITDA -------------------------- -------------- 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
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 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 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 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 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 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 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 AMSOUTH BANK, as a Lender By: ______________________________ Name: Title: 11 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 EX-11 5 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS 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.
Basic ============================= Three Months Ended ============================= February 28, February 28, 1999 1998 ------------ ------------ 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) ======== =======
EX-27 6 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS NOV-30-1999 DEC-01-1998 FEB-28-1999 34,720 0 156,375 9,429 112,435 315,233 151,053 75,179 724,906 226,365 205,690 12,941 0 89,658 (71,086) 724,906 166,193 166,193 133,297 133,297 1,123 0 12,307 (14,571) (393) (14,178) 0 (6,249) 0 (20,427) (1.64) (1.64) Represents gross inventory net of loss reserve. Represents gross PP&E. Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of $6,347 and treasury stock of $4,712. Represents common stock of $90,190 less treasury stock of $532. 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. Includes product development expenses and excludes depreciation and amortization.
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