1 Exhibit 10.6 THIS AMENDMENT AGREEMENT dated October 22, 1997 ; AMONG: SPARKLING SPRING WATER LIMITED, ("SSWL")
1
Exhibit 10.6
THIS AMENDMENT AGREEMENT dated October 22, 1997 ;
AMONG:
SPARKLING SPRING WATER LIMITED, ("SSWL")
OF THE FIRST PART
- and -
C.F. CAPITAL CORPORATION, ("C.F.")
OF THE SECOND PART
- and -
G. ▇▇▇▇ ▇▇▇▇▇▇▇, ("KREDIET")
OF THE THIRD PART
- and -
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ("▇▇▇▇▇▇")
OF THE FOURTH PART
- and -
SPARKLING SPRING WATER GROUP LIMITED, ("GROUP")
OF THE FIFTH PART
WITNESS THAT in consideration of the premises and the mutual agreements
and covenants herein contained and the sum of $10 now paid by each of the
parties to the other (the receipt and sufficiency whereof as to each of the
parties is mutually admitted), the parties covenant and agrees as hereinafter
set out.
2
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ARTICLE I.
INTERPRETATION
I.1 In this Agreement, unless the context requires otherwise:
(a) "ORIGINAL AGREEMENT" means the Management Agreement dated the
16th day of December. 1993, as amended and restated the 12th
day of January, 1996 among SSWL, C.F., Krediet and ▇▇▇▇▇▇;
(b) "EFFECTIVE DATE" means October 22, 1997;
(c) Words and expressions defined in the Original Agreement have
the same meaning when used herein as contained therein.
I.2 The provisions contained herein shall be deemed to be additions to the
provisions contained in the Original Agreement to the extent necessary
to give full and complete effect to the provisions contained herein,
and this Agreement shall be supplemental to the Original Agreement and
shall be read and construed therewith as if the Original Agreement and
this Agreement constituted but one document.
ARTICLE II.
INTENT
II.1 C.F. provides management services to SSWL pursuant to the terms and
premises of the Original Agreement.
II.2 The parties have agreed to amend the Original Agreement with effect on
and from the Effective Date in accordance with the provisions set out
herein.
ARTICLE III.
AMENDMENT AGREEMENT
III.1 Notwithstanding anything contained in the Original Agreement, the
parties hereby agree that on and from the Effective Date the Original
Agreement be and is hereby amended by:
3
-3-
(i) adding the following immediately following paragraph 2.04(iii)
"(iv) C.F. shall be entitled to an additional bonus
commencing January 1, 1998 for any year that the base
fee is greater than or equal to US$750,000, such
additional bonus to be an amount equal to 25% of the
base fee paid to C.F. in respect of such fiscal year,
provided that SSWL achieves the EBTDAPS target for
such year as set out in Schedule "B" attached hereto.
For greater certainty, the EBTDAPS target in Schedule
"B" is for this additional bonus only and shall not
affect any other bonus paid under the Original
Agreement;" and
(ii) adding the attached schedule as "Schedule "B" to the Original
Agreement;
ARTICLE IV.
GENERAL
IV.1 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
IV.2 The parties hereto shall with reasonable diligence do all such things,
provide all such reasonable assurances as may be required to consummate
the transactions contemplated by this Agreement and carry out its
provisions whether in the present or future.
IV.3 This Agreement shall be governed by and construed in accordance with
the laws of the Province of Nova Scotia.
IV.4 This Agreement may be executed in one or more counterparts each of
which shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument.
4
-4-
IN WITNESS WHEREOF the parties hereto have set their hands and affixed
their seals on the day and year first above written.
SIGNED, SEALED AND DELIVERED
in the presence of: SPARKLING SPRING WATER LIMITED
Per: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- -----------------------------------
SPARKLING SPRING WATER GROUP LIMITED
Per: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- -----------------------------------
C.F. CAPITAL CORPORATION
Per: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- -----------------------------------
Per:
---------------------------------- -----------------------------------
/s/G. ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------- ---------------------------------------
G. ▇▇▇▇ ▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- ---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
5
SCHEDULE A
CONSOLIDATED SPARKLING SPRING WATER INCOME STATEMENT
(C$ Thousands)
Revenue 1991 1992 1993 1994 1995 1996 1997
------- ------- ------- ------- ------- ------- -------
▇▇▇▇▇▇ 5,770 7,440 7,876 8,902 11,436 13,151 14,729
Aquaporte 0 1,224 1,592 2,324 2,823 3,244 3,568
SSW 3,813 4,595 4,975 6,109 7,246 8,128 8,776
CS 5,419 6,461 8,079 10,179 12,138 13,331 14,853
------- ------- ------- ------- ------- ------- -------
15,002 19,720 22,522 27,515 33,642 37,856 41,926
Growth 31.5% 14.2% 22.2% 22.3% 12.5% 10.8%
Cost of Sales and
Operating Costs
▇▇▇▇▇▇ 6,273 6,682 6,266 6,624 7,724 8,627 9,226
Aquaporte 0 1,146 1,224 1,763 1,874 1,945 2,030
SSW 2,908 3,873 3,925 4,728 5,440 5,938 6,346
CS 3,650 4,491 6,392 7,601 9,205 9,707 9,860
------- ------- ------- ------- ------- ------- -------
12,831 16,172 17,808 20,713 24,243 26,217 27,463
Operating Cash Flow
▇▇▇▇▇▇ (503) 778 1,609 2,278 3,711 4,524 5,503
Aquaporte 0 78 368 562 949 1,299 1,538
SSW 905 722 1,050 1,384 1,806 2,191 2,439
CS 1,769 1,970 1,687 2,578 2,933 3,624 4,993
------- ------- ------- ------- ------- ------- -------
2,171 3,548 4,714 6,801 9,399 11,639 14,463
Margin % 14.5% 18.0% 20.9% 24.7% 27.9% 30.7% 34.5%
Growth % 63.4% 32.9% 44.3% 38.2% 23.8% 24.3%
Corporate Overhead, which
includes ▇▇▇▇▇▇ & Krediet
Compensation & C.F.
Capital expenses 1,367 1,469
------- -------
EBITDA 10,272 12,994
Depreciation and Amort. 4,205 4,289
Interest Expense 3,059 2,852
Other Expense/(Income) 126 126
------- -------
Pre-Tax Income 2,881 5,727
Income Tax 299 2,205
Dividends 0 0
------- -------
Net Income Available to Common 2,582 3,522
Revenue 1998 1999 2000 2001 2002
------- ------- ------- ------- -------
▇▇▇▇▇▇ 16,202 17,822 19,605 21,565 23,721
Aquaporte 3,925 4,318 4,76 0,225 5,747
SSW 9,464 10,208 11,013 11,882 12,823
CS 16,339 17,972 19,419 20,603 21,861
------- ------- ------- ------- -------
45,930 50,320 54,785 59,275 64,152
Growth 9.5% 9.6% 8.9% 8.25 8.2%
Cost of Sales and
Operating Costs
▇▇▇▇▇▇ 10,028 10,908 11,874 12,934 14,102
Aquaporte 2,229 2,392 2,588 2,760 2,970
SSW 6,787 7,262 7,775 8,330 8,930
CS 10,817 11,888 12,799 13,560 14,366
------- ------- ------- ------- -------
29,862 82,430 35,016 37,585 40,368
Operating Cash Flow
▇▇▇▇▇▇ 6,174 6,914 7,731 8,631 9,619
Aquaporte 1,696 1,926 2,181 2,484 2,777
SSW 2,677 2,946 3,237 3,552 3,893
CS 5,521 6,104 6,620 7,043 7,494
------- ------- ------- ------- -------
16,068 17,890 19,769 21,690 23,783
Margin % 35.0% 35.6% 36.1% 36.6% 37.1%
Growth % 11.1% 11.3% 10.5% 9.7% 9.6%
Corporate Overhead, which
includes ▇▇▇▇▇▇ & Krediet
Compensation & C.F
Capital expenses 1,569 1,679 1,790 1,903 2,024
------- ------- ------- ------- -------
EBITDA 14,499 16,211 17,979 19,788 21,759
Depreciation and Amort 4,024 4,043 3,882 2,395 2,403
Interest Expense 2,404 1,840 1,153 379 (465)
Other Expense/(Income) 126 83 0 0 0
------- ------- ------- ------- -------
Pre-Tax Income 7,945 10,265 12,945 17,014 19,811
Income Tax 3,059 3,952 4,984 6,550 7,627
Dividends 0 0 0 0 0
------- ------- ------- ------- -------
Net Income
Available to
Common 4,886 6,313 7,961 10,463 12,184
Notes
(1) Prior to 1996 CS figures represent a March 31 Year-end. (The 3/31/95 year
is placed in the 1994 column.)
6
CONSOLIDATED SPARKLING SPRING WATER
INCOME STATEMENT
($ Thousands)
Revenues 1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- ---------
United Kingdom 7,490 8,590 10,607 14,360 16,345 18,968
Maritime Provinces 3,358 3,635 4,519 5,153 5,595 6,284
British Columbia 4,721 5,904 9,326 10,928 12,855 14,980
United States 0 6,066 7,227 8,588 9,463 10,252
--------- --------- --------- --------- --------- ---------
$ 15,569 $ 24,195 $ 31,680 $ 39,029 $ 44,257 $ 50,485
Growth 109.9% 55.4% 30.9% 23.2% 13.4% 14.1%
Cost of Sales/Operating Costs
United Kingdom 6,668 6,720 7,805 10,236 11,224 12,305
Maritime Provinces 2,830 3,006 3,695 4,219 4,485 4,985
British Columbia 3,282 4,671 6,949 8,264 8,770 10,133
United States 0 4,590 5,523 6,540 7,140 7,466
--------- --------- --------- --------- --------- ---------
12,779 18,986 23,971 29,258 31,618 34,889
--------- --------- --------- --------- --------- ---------
Operating Cash Flow $ 2,789 $ 5,209 $ 7,708 $ 9,771 $ 12,639 $ 15,596
========= ========= ========= ========= ========= =========
Margin % 17.9% 21.5% 24.3% 25.0% 28.6% 30.9%
Growth % 981.9% 86.7% 48.0% 26.8% 29.4% 23.4%
Performance to Forecast 100.0% 100.0%
Corporate Overhead $ 764 $ 1,430
Depreciation and Amort 6,354
Interest Expense 2,455 8,805
Other Expense/(Income) 136
--------- ---------
Pre-Tax Income ($ 1,130)
Income Tax @ 40.0% 0
Dividends 0
=========
Net Income Available to Common ($ 1,130)
=========
Fully Diluted Shares Outstanding 1,612
EPS ($ 0.70)
Revenues 1998 1999 2000 2001 2002 2003
--------- --------- --------- --------- --------- ---------
United Kingdom 21,895 25,106 28,695 32,577 36,992 42,014
Maritime Provinces 6,810 7,380 7,995 8,659 9,378 10,158
British Columbia 16,660 18,395 20,163 21,767 23,501 25,375
United States 11,488 12,765 14,021 15,245 16,488 17,836
--------- --------- --------- --------- --------- ---------
$ 56,852 $ 63,646 $ 70,874 $ 78,247 $ 86,359 $ 95,383
Growth 12.6% 12.0% 11.4% 10.4% 10.4% 10.4%
Cost of Sales/Operating Costs
United Kingdom 13,271 14,507 15,840 17,228 18,760 20,451
Maritime Provinces 5,287 5,611 5,960 6,335 6,741 7,178
British Columbia 11,093 12,129 13,206 14,224 15,327 16,522
United States 7,788 8,491 9,191 9,874 10,522 11,218
--------- --------- --------- --------- --------- ---------
37,438 40,739 44,197 47,663 51,350 55,369
--------- --------- --------- --------- --------- ---------
Operating Cash Flow $ 19,414 $ 22,908 $ 26,677 $ 30,585 $ 35,009 $ 40,014
========= ========= ========= ========= ========= =========
Margin % 34.1% 36.0% 37.6% 39.1% 40.5% 42.0%
Growth % 24.5% 18.0% 16.5% 14.7% 14.5% 14.3%
Performance to Forecast 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Corporate Overhead $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500
Depreciation and Amort 6,302 6,447 6,582 6,504 6,089 6,176
Interest Expense 8,726 8,514 8,195 7,749 7,167 6,462
Other Expense/(Income) 136 136 35 35 35 35
--------- --------- --------- --------- --------- ---------
Pre-Tax Income $ 2,750 $ 6,311 $ 10,365 $ 14,797 $ 20,218 $ 25,841
Income Tax @ 40.0% 648 2,524 4,146 5,919 8,087 10,336
Dividends 0 0 0 0 0 0
========= ========= ========= ========= ========= =========
Net Income Available to Common $ 2,102 $ 3,787 $ 6,219 $ 8,878 $ 12,131 $ 15,505
========= ========= ========= ========= ========= =========
Fully Diluted Shares Outstanding 1,612 1,612 1,612 1,612 1,612 1,612
EPS $ 1.30 $ 2.35 $ 3.86 $ 5.51 $ 7.53 $ 9.62
Revenues 2004 2005 2006 2007
--------- --------- --------- ---------
United Kingdom 45,795 49,917 54,409 59,306
Maritime Provinces 11,072 12,069 13,155 14,339
British Columbia 27,658 30,148 32,861 35,818
United States 19,441 21,191 23,098 25,177
--------- --------- --------- ---------
$ 103,967 $ 113,324 $ 123,523 $ 134,640
Growth 9.0% 9.0% 9.0% 9.0%
Cost of Sales/Operating Costs
United Kingdom 22,291 24,298 26,484 28,868
Maritime Provinces 7,824 8,528 9,296 10,133
British Columbia 18,009 19,630 21,397 23,323
United States 12,227 13,328 14,527 15,835
--------- --------- --------- ---------
60,352 65,784 71,705 78,158
--------- --------- --------- ---------
Operating Cash Flow $ 43,615 $ 47,540 $ 51,819 $ 56,482
========= ========= ========= =========
Margin % 42.0% 42.0% 42.0% 42.0%
Growth % 9.0% 9.0% 9.0% 9.0%
Performance to Forecast 100.0% 100.0% 100.0% 100.0%
Corporate Overhead $ 1,500 $ 1,500 $ 1,500 $ 1,500
Depreciation and Amort 6,732 7,338 7,998 8,718
Interest Expense 5,627 4,654 3,545 (127)
Other Expense/(Income) 0 0 0 0
--------- --------- --------- ---------
Pre-Tax Income $ 29,755 $ 34,048 $ 38,776 $ 46,391
Income Tax @ 40.0% 11,902 13,619 15,510 18,556
Dividends 0 0 0 0
========= ========= ========= =========
Net Income Available to Common $ 17,853 $ 20,429 $ 23,265 $ 27,835
========= ========= ========= =========
Fully Diluted Shares Outstanding 1,612 1,612 1,612 1,612
EPS $ 11.08 $ 12.67 $ 14.43 $ 17.27
Notes
-------------
1) All acquisitions are included from 1991.
2) No new acquisitions are assumed.
Pre-Senior Mgmt EBTDA 6,421 10,318 14,024 18,112 22,466
Pre-Senior Mgmt EBTDA per share US$ $ 3.98 $ 6.40 $ 8.70 $ 11.24 $ 13.94
Pre-Senior Mgmt EBTDA per share C$ C$5.49 C$8.83 C$12.00 C$15.50 C$19.22
Pre-Senior Mgmt EBTDA 27,472 33,182 37,617 42,516 47,904 56,239
Pre-Senior Mgmt EBTDA per share US$ $ 17.04 $ 20.58 $ 23.34 $ 26.37 $ 29.72 $ 34.89
Pre-Senior Mgmt EBTDA per share C$ C$23.51 C$28.39 C$32.19 C$36.38 C$40.99 C$48.12
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7
CONSOLIDATED SPARKLING SPRING WATER
POST REORGANIZATION SHARE OWNERSHIP
($ Thousands)
OPTIONS
--------------------------------------------
Total Warrants Mgmt Mgmt Mgmt
Description Voting % @$1 @ C$1.82 @ C$5.5 @ $4.326
------------ ------- ----- -------- -------- ------- --------
▇▇▇▇▇▇/Krediet Management 705,050 50.6% 0
▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Family 94,010 6.8%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Management 119,209 8.6% 41,787
▇▇▇▇▇▇▇ ▇▇▇▇▇ Management 5,672 0.4% 55,111 39,595
▇▇▇▇▇ ▇▇▇▇▇▇ Financial Advisor 28,203 2.0%
Art ▇▇▇▇▇▇▇ Management 180 0.0% 5,000 5,000
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Family 0 0.0% 9,354
▇▇▇▇ ▇▇▇▇▇▇ Management 3,500 0.3%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Management 0 0.0%
Clairvest Merchant Banker 423,190 30.4% 0
▇▇▇▇ ▇▇▇ Investor 8,994 0.6%
▇▇▇ Ferries Management 1,800 0.1%
▇▇▇▇▇ ▇▇▇▇▇▇ Management 1,700 0.1%
▇▇▇ ▇▇▇▇▇▇▇▇▇ Management 1,000 0.1%
▇▇▇▇▇ ▇▇▇▇▇▇▇ Management 180 0.0%
Natwest Markets Senior Lender 0 0.0% 51,100
------- ----- ------ ------ ----- ------
1392688 100.0% 51,100 55,111 5,000 95,736
======= ===== ====== ====== ===== ======
Proceeds from Issuance 1 100 28 567
Exchange 0.73
OPTIONS Fully
---------------------------------
Mgmt Mgmt Mgmt Diluted
@ $10.27 @ $14 @ $20 Shares %
-------- ------ ------ ------- -----
▇▇▇▇▇▇/Krediet 8,250 713,300 43.4%
▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ 94,010 5.7%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 12,000 172,996 10.5%
▇▇▇▇▇▇▇ ▇▇▇▇▇ 10,000 110,378 6.7%
▇▇▇▇▇ ▇▇▇▇▇▇ 28,203 1.7%
Art ▇▇▇▇▇▇▇ 5,000 15,180 0.9%
▇▇▇▇▇ ▇▇▇▇▇▇ 9,354 0.6%
▇▇▇▇ ▇▇▇▇▇▇ 5,000 8,500 0.5%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 5,000 5,000 0.3%
Clairvest 423,190 25.7%
▇▇▇▇ ▇▇▇ 8,994 0.5%
▇▇▇ Ferries 1,800 0.1%
▇▇▇▇▇ ▇▇▇▇▇▇ 1,700 0.1%
▇▇▇ ▇▇▇▇▇▇▇▇▇ 1,000 0.1%
▇▇▇▇▇ ▇▇▇▇▇▇▇ 180 0.0%
Natwest Markets 51,100 3.1%
----- ----- ------ ------- -----
5,000 5,000 35,250 1644885 100.0%
===== ===== ====== ======= =====
Proceeds from Issuance 70 96 966 1,732
Exchange 0.73
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