EXHIBIT 4.1

EXECUTION COPY

$40,000,000

CREDIT AGREEMENT

Dated as of August 19, 1999

among

COTT CORPORATION,

and

Certain of its U.S. Subsidiaries,
as Borrowers

EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.6 HEREOF,
as Lenders,

FIRST UNION NATIONAL BANK,
as Administrative Agent

and

NATIONAL BANK OF CANADA,
as Canadian Agent

FIRST UNION CAPITAL MARKETS CORP.,
AS ARRANGER

TABLE OF CONTENTS

                                                                                                   Page
                                                                                                   ----
ARTICLE I  DEFINITIONS AND ACCOUNTING TERMS..........................................................1
         1.1 General Definitions.....................................................................1
         1.2 Accounting Terms.......................................................................30
         1.3 Other Definitional Provisions..........................................................30
         1.4 Dollar Equivalent Provisions...........................................................31
ARTICLE II  THE REVOLVING LOANS.....................................................................31
         2.1 The U.S. Revolving Loans...............................................................31
         2.2 U.S. Letter of Credit Subfacility......................................................32
         2.3 The Canadian Revolving Loans...........................................................37
         2.4 Canadian Letter of Credit Subfacility..................................................38
         2.5 Bankers' Acceptances...................................................................44
         2.6 Minimum Amounts of Loans...............................................................48
         2.7 Funding of Loans to Borrowers..........................................................48
         2.8 Term...................................................................................54
         2.9 Revolving Notes........................................................................54
         2.10 Reduction of Revolving Loan Commitments...............................................54
ARTICLE III  CASH MANAGEMENT ARRANGEMENTS...........................................................55
         3.1 U.S. Lockbox Arrangements..............................................................55
         3.2 Canadian Collection and Payment Arrangements...........................................56
         3.3 Maintenance of Account.................................................................57
         3.4 Statement of Account...................................................................58
ARTICLE IV  ADDITIONAL PROVISIONS REGARDING LOANS AND LETTERS OF CREDIT.............................59
         4.1 Continuations and Conversions..........................................................59
         4.2 Interest...............................................................................60
         4.3 Place and Manner of Payments...........................................................61
         4.4 Prepayments............................................................................62
         4.5 Fees...................................................................................64
         4.6 Pro Rata Treatment.....................................................................65
         4.7 Allocation of Payments After Event of Default..........................................66
         4.8 Sharing of Payments....................................................................67
         4.9 Capital Adequacy.......................................................................68
         4.10 Inability To Determine Interest Rate or Create Bankers' Acceptances...................68
         4.11 Illegality............................................................................69
         4.12 Requirements of Law...................................................................69
         4.13 Taxes.................................................................................71
         4.14 Compensation..........................................................................73
         4.15 Replacement Lender....................................................................74
ARTICLE V  CONDITIONS PRECEDENT.....................................................................75
         5.1 Closing Conditions.....................................................................75
         5.2 Conditions to All Extensions of Credit.................................................79
ARTICLE VI  REPRESENTATIONS AND WARRANTIES..........................................................80
         6.1 Organization and Good Standing.........................................................80

         6.2 Due Authorization......................................................................80
         6.3 No Conflicts...........................................................................80
         6.4 Consents...............................................................................81
         6.5 Enforceable Obligations................................................................81
         6.6 Financial Condition....................................................................81
         6.7 No Default.............................................................................81
         6.8 Liens..................................................................................82
         6.9 Indebtedness...........................................................................82
         6.10 Litigation............................................................................82
         6.11 Material Contracts....................................................................82
         6.12 Taxes.................................................................................82
         6.13 Compliance with Law...................................................................83
         6.14 ERISA.................................................................................83
         6.15 Subsidiaries..........................................................................85
         6.16 Ownership of Stock....................................................................85
         6.17 Use of Proceeds; Margin Stock.........................................................85
         6.18 Government Regulation.................................................................85
         6.19 Hazardous Substances..................................................................85
         6.20 Patents, Franchises, etc..............................................................86
         6.21 Solvency..............................................................................86
         6.22 Location of Assets....................................................................86
         6.23 D/B/A or Trade Names..................................................................87
         6.24 Year 2000 Compliance..................................................................87
         6.25 No Employee Disputes..................................................................87
         6.26 Certain Subsidiaries..................................................................87
         6.27 Labor Matters.........................................................................88
         6.28 Status of Accounts....................................................................88
         6.29 Trade Suppliers.......................................................................88
         6.30 Key Members of Management.............................................................88
         6.31 Accuracy and Completeness of Information..............................................89
ARTICLE VII  AFFIRMATIVE COVENANTS..................................................................89
         7.1 Information Covenants..................................................................89
         7.2 Preservation of Existence and Franchises...............................................92
         7.3 Books and Records......................................................................92
         7.4 Compliance with Law....................................................................92
         7.5 Payment of Taxes and Other Indebtedness................................................92
         7.6 Insurance; Casualty Loss...............................................................93
         7.7 Maintenance of Property................................................................94
         7.8 Performance of Obligations.............................................................94
         7.9 ERISA..................................................................................95
         7.10 Use of Proceeds.......................................................................95
         7.11 Additional Subsidiaries...............................................................96
         7.12 Audits/Inspections....................................................................96
         7.13 Inventory.............................................................................97
         7.14 Collateral Records....................................................................97
         7.15 Security Interests....................................................................97

         7.16 Schedules of Accounts and Purchase Orders............................................ 98
         7.17 Collection of Accounts............................................................... 99
         7.18 Notice; Credit Memoranda; and Returned Goods......................................... 99
         7.19 Acknowledgment Agreements............................................................ 99
         7.20 Trademarks...........................................................................100
         7.21 Year 2000 Compliance.................................................................100
ARTICLE VIII  FINANCIAL COVENANTS..................................................................100
         8.1 Leverage Ratio........................................................................100
         8.2 Fixed Charge Coverage Ratio...........................................................100
         8.3 Capital Expenditures..................................................................100
         8.4 Minimum Shareholders' Equity..........................................................101
ARTICLE IX  NEGATIVE COVENANTS.....................................................................101
         9.1 Indebtedness..........................................................................101
         9.2 Liens.................................................................................102
         9.3 Nature of Business....................................................................102
         9.4 Consolidation or Merger...............................................................102
         9.5 Sale or Lease of Assets...............................................................103
         9.6 Acquisitions..........................................................................103
         9.7 Transactions with Affiliates..........................................................103
         9.8 Ownership of Subsidiaries.............................................................103
         9.9 Fiscal Year...........................................................................103
         9.10 Investments..........................................................................103
         9.11 Restricted Payments..................................................................104
         9.12 No Additional Bank Accounts..........................................................104
         9.13 Amendments of Material Contracts; Organizational Documents...........................104
         9.14 Additional Negative Pledges..........................................................105
         9.15 Other Indebtedness...................................................................105
         9.16 Licenses, Etc........................................................................105
         9.17 Limitations..........................................................................105
ARTICLE X  POWERS..................................................................................106
         10.1 Appointment of Administrative Agent as Attorney-in-Fact..............................106
         10.2 Limitation on Exercise of Power......................................................106
ARTICLE XI  EVENTS OF DEFAULT AND REMEDIES.........................................................107
         11.1 Events of Default....................................................................107
         11.2 Acceleration; Remedies...............................................................109
         11.3. Conversion and Redenomination Certain Loans; Purchase of Risk  Participations.......110
ARTICLE XII  TERMINATION...........................................................................111
ARTICLE XIII  THE AGENTS...........................................................................111
         13.1 Appointment..........................................................................111
         13.2 Delegation of Duties.................................................................112
         13.3 Exculpatory Provisions...............................................................112
         13.4 Reliance on Communications...........................................................112
         13.5 Notice of Default....................................................................113
         13.6 Non-Reliance on Agents and Other Lenders.............................................113
         13.7 Indemnification......................................................................114
         13.8 Agent in its Individual Capacity.....................................................114

         13.9 Successor Agent......................................................................114
         13.10 Collateral Matters..................................................................115
ARTICLE XIV  MISCELLANEOUS.........................................................................117
         14.1 Notices..............................................................................117
         14.2 Right of Set-Off.....................................................................117
         14.3 Benefit of Agreement.................................................................117
         14.4 No Waiver; Remedies Cumulative.......................................................120
         14.5 Payment of Expenses; Indemnification.................................................120
         14.6 Amendments, Waivers and Consents.....................................................121
         14.7 Defaulting Lender....................................................................121
         14.8 Counterparts.........................................................................121
         14.9 Headings.............................................................................122
         14.10 Survival of Indemnification and Representations and Warranties......................122
         14.11 Currency............................................................................122
         14.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE....................................122
         14.13 Arbitration.........................................................................123
         14.14 Waiver of Jury Trial................................................................124
         14.15 Severability........................................................................124
         14.16 Loan Entirety.......................................................................125
         14.17 Binding Effect; Amendment and Restatement of Existing Credit Agreement;
               Further Assurances..................................................................125
         14.18 Confidentiality.....................................................................125
         14.19 Judgment Currency...................................................................126
         14.20 Maximum Rate........................................................................126
         14.21 Concerning Joint and Several Liability of the U.S. Borrowers........................127
         14.22 Concerning Joint and Several Liability of the Canadian Borrowers....................129
         14.23 Nonliability of Agents and Lenders..................................................132
         14.24 Independent Nature of Lenders' Rights...............................................132
         14.25 Power of Attorney...................................................................132

Exhibit A           Form of Acknowledgment Agreement
Exhibit B           Form of Guaranty Agreement
Exhibit C           Form of Landlord Agreement
Exhibit D           Form of Notice of Borrowing/Continuation/Conversion
Exhibit E           [Intentionally Omitted]
Exhibit F           Form of Revolving Credit Note
Exhibit G           Form of Bankers' Acceptance Notice
Exhibit H-1         Form of U.S. Security Agreement
Exhibit H-2         Form of Canadian Security Agreement
Exhibit I-1         Form of Lockbox Agreement
Exhibit I-2         Form of Lockbox Letter
Exhibit J           Form of Borrowing Base Certificate
Exhibit K           Form of Solvency Certificate
Exhibit L           Form of Compliance Certificate
Exhibit M           Form of Assignment and Acceptance
Exhibit N           Form of Joinder Agreement

                                    SCHEDULES

Schedule 1.1A       Lenders and Commitments
Schedule 1.1B       Eligible Inventory Locations
Schedule 1.1C       Investments
Schedule 1.1D       Liens
Schedule 5.1(n)     Corporate Structure
Schedule 6.1        Jurisdictions of Organization
Schedule 6.2        Authorization
Schedule 6.9        Indebtedness
Schedule 6.10       Litigation
Schedule 6.15       Subsidiaries
Schedule 6.19       Hazardous Substances
Schedule 6.22       Collateral Locations
Schedule 6.23       Fictitious Business Names
Schedule 6.26(a)    Inactive Subsidiaries
Schedule 6.26(b)    Ownership Structure of Cott Beverages UK
Schedule 6.29       Trade Suppliers
Schedule 6.30       Key Members of Management
Schedule 7.6        Insurance
Schedule 9.12       Bank Accounts
Schedule 9.17       Limitations
Schedule 14.1       Addresses for Notices

Schedule of Fiscal Quarters

CREDIT AGREEMENT

THIS CREDIT AGREEMENT is entered into as of August 19, 1999, among COTT CORPORATION, a Canada corporation (the "Company"), its U.S. and Canadian Subsidiaries identified as Subsidiary Borrowers on the signature pages hereto and any additional U.S. or Canadian Subsidiaries of the Company which become parties hereto in accordance with the terms hereof (collectively referred to as the "Subsidiary Borrowers" or individually referred to as a "Subsidiary Borrower") (hereinafter, the Company and the Subsidiary Borrowers are collectively referred to as the "Borrowers" or individually referred to as a "Borrower"), each of the financial institutions identified as Lenders on Schedule 1.1A hereto (together with each of their successors and assigns, referred to individually as a "Lender" and, collectively, as the "Lenders"), FIRST UNION NATIONAL BANK ("First Union"), acting in the manner and to the extent described in Article XIII hereof (in such capacity, the "Administrative Agent") and NATIONAL BANK OF CANADA acting in the manner and to the extent described in Article XIII hereof (in such capacity, the "Canadian Agent").

W I T N E S S E T H:

WHEREAS, the Borrowers wish to obtain a revolving credit facility to provide for the working capital, letter of credit and general corporate needs of the Borrowers; and

WHEREAS, upon the terms and subject to the conditions set forth herein, the Lenders are willing to make loans and advances to the Borrowers;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Borrowers, the Lenders, the Administrative Agent and the Canadian Agent agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS.

1.1 GENERAL DEFINITIONS.

As used herein, the following terms shall have the meanings herein specified:

"Acceptance Fee" means, in respect of a particular Bankers' Acceptance accepted by a Canadian Lender, an amount equal to the product of (a) the Applicable Percentage for Eurodollar Loans and Bankers' Acceptances as at the date of acceptance of such Bankers' Acceptance; (b) the aggregate Face Amount of such Bankers' Acceptance; and (c) a fraction (i) the numerator of which is the number of days in the term of such Bankers' Acceptance, and (ii) the denominator of which is the number of days in the then current calendar year.

"Accounts" means all of each Credit Party's "accounts" (as defined in the UCC or the PPSA, as applicable), whether now existing or existing in the future, and shall include (whether or not otherwise included in such definitions, and without limiting the generality thereof), all (i) accounts receivable (whether or not specifically listed on schedules furnished to the Administrative Agent), including, without limitation, all accounts created by or arising from all of each Credit Party's sales of goods or rendition of services made under any of each Credit Party's trade names or styles, or through any of each Credit Party's divisions; (ii) unpaid seller's rights (including rescission, replevin, reclamation and stopping in transit) relating to the foregoing or arising therefrom, (iii) rights to any goods represented by any of the foregoing, including returned or repossessed goods; (iv) reserves and credit balances held by each Credit Party with respect to any such accounts receivable or account debtors; (v) guarantees or collateral for any of the foregoing; and (vi) insurance policies or rights relating to any of the foregoing.

"Acknowledgment Agreements" means (i) the acknowledgment agreements, substantially in the form of Exhibit A hereto, between each Credit Party's warehousemen, fillers, packers, processors and mortgagees and the Administrative Agent, in each case acknowledging and agreeing, among other things, (A) that such warehousemen, fillers, packers, processors and mortgagees waive any Liens on any of the property of any Credit Party and (B) to the collateral assignment by each Credit Party to the Administrative Agent of each such Credit Party's interest in the contracts with each of such warehousemen, fillers, packers, processors and mortgagees and (ii) Landlord Agreements.

"Acquired Company" means any Person (or assets thereof) which is acquired pursuant to an Acquisition.

"Acquisition" means the acquisition of (a) all of the capital stock of another Person or (b) all or substantially all of the assets of another Person.

"Adjusted Eurodollar Rate" means the Eurodollar Rate, plus the Applicable Percentage.

"Administrative Agent" means First Union National Bank, a national banking association.

"Administrative Agent Fee Letter" means the letter agreement, dated as of May 12, 1999, among the Company, the Administrative Agent and First Union Capital Markets Corp., as amended, modified and replaced from time to time.

"Affiliate" of any Person means any other Person directly or indirectly controlling (including but not limited to all directors and officers of such Person), controlled by or under direct or indirect common control with such Person. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power (a) to vote twenty-five percent (25%) or more of the securities having ordinary voting power for the election of directors of such corporation or (b) to direct or cause direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.

"Agents" means the Administrative Agent and the Canadian Agent.

"Applicable BA Discount Rate" means with respect to any Canadian Lender named on Schedule I to the Bank Act (Canada), as applicable to a Bankers' Acceptance being purchased by such Lender on any day, the respective percentage discount rate per annum for a Canadian Dollar bankers' acceptance for the term and face amount comparable to the term and face amount of such Bankers' Acceptance that appears on the Reuters Screen CDOR Page as of 10:00 a.m., Toronto, Ontario time, on the date of determination as reported by the Canadian Agent; provided, however, that if on such day no rate appears on the Reuters Screen CDOR Page as contemplated, the rate for such day shall be the average (as calculated by the Canadian Agent) of the respective percentage discount rates (expressed to two decimal places and rounded upward, if necessary, to the nearest 1/100th of 1%) quoted to the Canadian Agent by each of the five largest Canadian chartered banks named on Schedule I to the Bank Act (Canada) (each a "Schedule I Reference Bank") as the percentage discount rate at which such Schedule I Reference Bank would, in accordance with its normal practices, at or about 10:00 a.m., Toronto, Ontario time, on such day, be prepared to purchase bankers' acceptances accepted by such Schedule I Reference Bank having a term and a face amount comparable to the term and face amount of such Bankers' Acceptance.

"Applicable Percentage" means for Eurodollar Loans, Base Rate Loans, Bankers' Acceptances, Letter of Credit Fees and Non-Use Fees, the appropriate applicable percentages corresponding to the Leverage Ratio in effect as of the most recent Calculation Date as shown below:

                               Applicable Percentage        Applicable             Applicable
 Tier       Leverage          for Eurodollar Loans,     Percentage for Base      Percentage for
Levels       Ratio             Bankers' Acceptances         Rate Loans            Non-Use Fees
                               and Letter of Credit
                                       Fees
------       -----             --------------------         ----------            ------------
 1        > 5.0 to 1.0                 2.25%                   1.00%                  0.50%
 2        > 4.0 to 1.0,                2.00%                   0.75%                  0.50%
          but < to 5.0
              -
 3        > 3.0 to 1.0,                1.75%                   0.50%                 0.375%
            but < 4.0
                -
 4        < 3.0 to 1.0                 1.50%                   0.25%                 0.375%
          -

The Applicable Percentages shall be determined and adjusted quarterly on the date (each a "Calculation Date") which is five (5) Business Days after the date on which the Company provides the quarterly officer's certificate for each fiscal quarter in accordance with the provisions of Section 7.1(c); provided, however, that (i) the initial Applicable Percentages shall be based on Tier Level 1 (as shown above) and shall remain at Tier Level 1 until the first Calculation Date subsequent to June 30, 2000, and, thereafter, the Tier Level shall be determined by the then current Leverage Ratio, and (ii) if the Company fails to provide the officer's certificate to the Administrative Agent for any fiscal quarter as required by and within the time

limits set forth in Section 7.1(c), the Applicable Percentages from the applicable date of such failure shall be based on Tier Level 1 until five (5) Business Days after an appropriate officer's certificate is provided, whereupon the Tier Level shall be determined by the then current Leverage Ratio. Except as set forth above, each Applicable Percentage shall be effective from one Calculation Date until the next Calculation Date. Any adjustment in the Applicable Percentage shall be applicable to all existing Loans and Letters of Credit as well as any new Loans made or Letters of Credit issued.

"Asset Disposition" means the disposition of any or all of the Accounts or Inventory of a Credit Party whether by sale, lease, transfer or otherwise, other than (a) sales of Inventory in the ordinary course of business and (b) transfers of Accounts or Inventory among the Credit Parties or such other transfers of Accounts or Inventory to other members of the Consolidated Cott Group if such transfers are otherwise permitted by this Credit Agreement.

"BA Discount Proceeds" means proceeds in respect of any Bankers' Acceptance to be purchased on any day under Section 2.5(b), in an amount (rounded to the nearest whole Canadian cent, and with one-half of one Canadian cent being rounded up) calculated on such day by dividing:

(a) the Face Amount of such Bankers' Acceptance; by

(b) the sum of one plus the product of:

(i) the Applicable BA Discount Rate (expressed as a decimal) applicable to such Bankers' Acceptance; and

(ii) a fraction, the numerator of which is the number of days in the term of such Bankers' Acceptance and the denominator of which is the number of days in the then current calendar year;

with such product being rounded up or down to the fifth decimal place and .000005 being rounded up to .00001.

"BA Documents" means with respect to any Bankers' Acceptance, such documents and agreements as the Canadian Lenders accepting the same may require in connection with the creation of such Bankers' Acceptance.

"BA Obligations" means all obligations of the Canadian Borrowers with respect to Bankers' Acceptances created under the Canadian Revolving Loan Commitment.

"Bankers' Acceptance" means a depository bill as defined in the Depository Bills and Notes Act (Canada) in Canadian Dollars that is in the form of an order signed by the Canadian Borrowers and accepted by a Canadian Lender pursuant to this Credit Agreement or, for Lenders not participating in clearing services contemplated in that Act, a draft or bill of exchange in Canadian Dollars payable in Canada that is drawn in Canada by the Canadian Borrowers and accepted by a

Canadian Lender pursuant to this Credit Agreement. Orders that become depository bills, drafts and bills of exchange are sometimes collectively referred to in this Credit Agreement as "orders".

"Bankruptcy Event" means, with respect to any Person, the occurrence of any of the following with respect to such Person: (a) a court or governmental agency having jurisdiction in the premises shall enter a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its property or ordering the winding up or liquidation of its affairs; or (b) any proceeding shall be instituted against such Person seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property including, but not limited to, an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect is commenced against a Person and any such proceeding or petition remains unstayed and in effect for a period of sixty (60) consecutive days; or (c) such Person shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or any substantial part of its property or make any general assignment for the benefit of creditors; or (d) such Person shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally as they become due or any action shall be taken by such Person in furtherance of any of the aforesaid purposes.

"Base Rate Loans" means all Loans accruing interest based on the U.S. Base Rate, the CA U.S. Base Rate or the Canadian Prime Rate.

"BCB" means BCB USA Corp., a Georgia corporation.

"Borrower" means any of the U.S. Borrowers or the Canadian Borrowers.

"Borrowers" means the U.S. Borrowers and the Canadian Borrowers.

"Borrowing Base Certificate" means such term as defined in Section 7.1(h).

"Business Day" means any day other than a Saturday, a Sunday, a legal holiday in Charlotte, North Carolina, New York, New York or Toronto, Ontario or a day on which banking institutions located in Charlotte, North Carolina, New York, New York or Toronto, Ontario are authorized by law or other governmental actions to close; except that in the case of Eurodollar Loans, a Business Day shall also be a day on which dealings between banks are carried on in U.S. dollar deposits in the London interbank Eurodollar market.

"CA U.S. Base Rate" means the higher of (a) the Federal Funds Rate plus 0.5% or (b) the CA U.S. Prime Rate; provided, however, that if, in the reasonable judgment of the Canadian Agent, the Federal Funds Rate cannot be determined, then the CA U.S. Prime Rate.

"CA U.S. Base Rate Loans" means Revolving Loans made by the Canadian Lenders in U.S. Dollars accruing interest based on the CA U.S. Base Rate.

"CA U.S. Prime Rate" means, for any day, the fluctuating rate of interest per annum publicly announced by the Canadian Agent as its "prime rate" or "reference rate" for loans made in U.S. dollars, which rate is not necessarily the best or lowest rate of interest offered for loans in U.S. dollars by the Canadian Agent.

"Canadian Agent" or "CA" means National Bank of Canada.

"Canadian Base Rate Loans" means, collectively, CA U.S. Base Rate Loans and Canadian Prime Rate Loans.

"Canadian Borrowers" means the Company and such other Persons organized under the laws of Canada or any province thereof, and resident in Canada or any province thereof, that become parties hereto pursuant to Joinder Agreements in accordance with Section 7.11.

"Canadian Borrowing Base" means a U.S. dollar amount equal to the lesser of
(i) the sum of (a) 80% of the net book Accounts of the Canadian Credit Parties, plus (b) 50% of the net book Inventory of the Canadian Credit Parties and (ii) the sum of (A) an amount equal to 85% of Eligible Accounts Receivable of the Canadian Credit Parties, plus (B) an amount equal to the sum of (1) an amount equal to 50% of Eligible Inventory of the Canadian Credit Parties consisting of raw materials (other than packaging raw materials), plus (2) an amount equal to 70% of Eligible Inventory of the Canadian Credit Parties consisting of finished goods (up to a 120-day supply thereof), minus (iii) reserves established by the Administrative Agent from time to time in its reasonable discretion. Notwithstanding the foregoing, the amount of Eligible Inventory based on the calculations set forth in clause (ii)(B) above shall not exceed 50% of the aggregate Canadian Borrowing Base.

"Canadian Central Account - Cdn" means Account No. 6127, established and maintained in the name of the Canadian Agent at its offices located at Mississauga, Ontario, Canada, Transit No. 00521.

"Canadian Central Account - US" means Account Number 6860, established and maintained in the name of the Canadian Agent at its offices located at Mississauga, Ontario, Canada, Transit No. 00521.

"Canadian Central Accounts" means the Canadian Central Account - Cdn. and the Canadian Central Account - US.

"Canadian Collateral" means any and all assets and rights and interests in or to property of the Canadian Credit Parties pledged from time to time as security for the Canadian Obligations

pursuant to the Security Documents whether now owned or hereafter acquired, including, without limitation, all of the Accounts and Inventory of the Canadian Credit Parties, any Chattel Paper, Documents or Instruments evidencing or relating to such Accounts or Inventory, Deposit Accounts and all Proceeds thereof, as defined in the Canadian Security Agreement.

"Canadian Credit Parties" means the Canadian Borrowers and all of their Canadian Subsidiaries whether direct or indirect and whether now owned or hereafter acquired, excluding 965646 Ontario Ltd., 156775 Canada Inc., 967979 Ontario Limited, 804340 Ontario Limited, Menu Foods Corporation, 2282214, Inc., 973974 Ontario Limited and Menu Foods Limited.

"Canadian Dollars" and "C$" mean dollars in the lawful currency of Canada.

"Canadian Lenders" means National Bank of Canada, and such other Lenders permitted under Canadian law to carry on business in Canada as may be added as Canadian Lenders in accordance with the terms of this Agreement.

"Canadian Letter of Credit" means a Letter of Credit issued under the Canadian LOC Subfacility, as referenced in Section 2.4(a).

"Canadian LOC Obligations" means LOC Obligations relating to Canadian Letters of Credit.

"Canadian LOC Subfacility" means the Letter of Credit subfacility established pursuant to Section 2.4.

"Canadian Local Account" means such term as defined in Section 3.2.

"Canadian Obligations" means the Obligations of the Canadian Borrowers.

"Canadian Prime Rate" means, for any day, the fluctuating rate of interest per annum publicly announced by the Canadian Agent as its "prime rate" or "reference rate" for loans made in Canadian dollars, which rate is not necessarily the best or lowest rate of interest offered for loans in Canadian dollars by the Canadian Agent.

"Canadian Prime Rate Loans" means Revolving Loans made by the Canadian Lenders in Canadian Dollars accruing interest based on the Canadian Prime Rate.

"Canadian Revolving Loan Commitment" means $10,000,000 (U.S.), or its equivalent as determined from time to time in Canadian Dollars, as such amount may be reduced in accordance with Section 2.10, minus, to the extent that the U.S. Borrowers have borrowed U.S. Revolving Loans in excess of $30,000,000 under the U.S. Revolving Loan Commitment then in effect, an amount equal to such excess.

"Canadian Revolving Loan Commitment Percentage" means, for each Canadian Lender, the percentage identified as its Canadian Revolving Loan Commitment Percentage opposite such

Canadian Lender's name on Schedule 1.1A as such percentage may be modified by assignment in accordance with the terms of this Agreement.

"Canadian Revolving Loans" means the revolving loans made by the Canadian Lenders to the Canadian Borrowers pursuant to Section 2.3.

"Canadian Security Agreement" means the Security Agreement, of even date herewith, among the Canadian Agent, the Administrative Agent and the Canadian Credit Parties, in the form attached hereto as Exhibit H-2.

"Canadian Unutilized Revolving Commitment" means, for any period, the amount by which (a) the then applicable Canadian Revolving Loan Commitment exceeds (b) the daily average sum for such period of the outstanding aggregate principal amount of all Canadian Revolving Loans, Canadian LOC Obligations and BA Obligations.

"Capital Expenditures" means any current expenditure by the Consolidated Cott Group for fixed or capital assets as reflected on the financial statements of the Consolidated Cott Group, as prepared in accordance with U.S. GAAP.

"Capital Stock" means (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership interests (whether general or limited), (iv) in the case of a limited liability company, membership interests and (v) any other equity interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

"Cash Equivalents" means (a) securities issued directly or fully guaranteed or insured by the United States of America or Canada or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America or Canada is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (b) U.S. or Canadian dollar denominated time deposits and certificates of deposit of (i) any U.S. or Canadian commercial bank of recognized standing having capital and surplus in excess of $100,000,000 or (ii) any bank whose short-term commercial paper rating from Standard & Poor's Corporation ("S&P") is at least A-1 or the equivalent thereof or from Moody's Investors Service, Inc. ("Moody's") is at least P-1 or the equivalent thereof (any such bank being an "Approved Bank"), in each case with maturities of not more than one year from the date of acquisition, (c) Bankers' Acceptances accepted by any Approved Bank, (d) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any U.S. or Canadian corporation to the extent that such paper or notes are rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody's and maturing within one year of the date of acquisition and (e) repurchase agreements with a bank or trust company or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America or Canada in which a Credit Party shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations.

"Cash Taxes" means, for any applicable period of computation, the aggregate of all taxes of the Consolidated Cott Group determined in accordance with applicable law and U.S. GAAP applied on a consistent basis, to the extent the same are paid in cash during such period.

"Casualty Loss" means such term as defined in Section 7.6.

"Change of Control" means the occurrence of any of the following events:
(a) the acquisition, directly or indirectly, whether voluntarily or by operation of law, by any person (as such term in used in Section 13(d) of the Exchange Act) of (i) beneficial ownership of a sufficient portion of the voting power of the outstanding Voting Stock of the Company to elect a majority of the Board of Directors of the Company (the "Board") (either immediately or upon the expiration of their respective current terms) pursuant to a transaction that is not approved by such Board as constituted immediately prior to the consummation of such transaction or (ii) all or substantially all of the assets of the Company or (b) the failure of the Company to own, directly or indirectly, 100% of the outstanding shares of Capital Stock of the other Credit Parties.

"Closing Date" means the date hereof.

"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute thereto, as interpreted by the rules and regulations issued thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed also to refer to any successor sections.

"Collateral" means collectively, the U.S. Collateral and the Canadian Collateral.

"Commitments" means the U.S. Revolving Loan Commitment and the Canadian Revolving Loan Commitment.

"Commitment Percentage" means, with respect to any Lender, at any time after the Commitments have terminated, the percentage which such Lender's Credit Exposure constitutes of the aggregate principal amount of all Loans, LOC Obligations and BA Obligations then outstanding under this Credit Agreement.

"Commitment Termination Event" means such term as defined in Section 11.3.

"Company" has the meaning set forth in the introductory paragraph hereof.

"Consolidated Cott Group" means the Company and all of its consolidated Subsidiaries whether direct or indirect and whether now owned or hereafter acquired.

"Conversion Date" means such term as defined in Section 11.3.

"Cott Beverages UK" means Cott Beverages Limited, an English limited liability company.

"Cott Beverages USA" means Cott Beverages USA, Inc., a Georgia corporation.

"Cott USA" means Cott USA Corp., a Georgia corporation.

"Credit Agreement" or "Agreement" means this credit agreement, dated as of the date hereof, as the same may be modified, amended, extended, restated or supplemented from time to time.

"Credit Documents" means this Credit Agreement, the Revolving Credit Notes, the LOC Documents, the BA Documents, the Guaranty Agreements, the Security Documents, the Subordination Agreement and all other documents and instruments executed or delivered in connection therewith, as the same may be modified, amended, extended, restated or supplemented from time to time.

"Credit Exposure" means such term as defined in the definition of Required Lenders.

"Credit Parties" means, collectively, the U.S. Credit Parties and the Canadian Credit Parties.

"Default" means any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

"Defaulting Lender" means, at any time, any Lender that, at such time, (a) has failed to make a Loan or purchase a Participation Interest required pursuant to the terms of this Agreement, (b) has failed to pay to the Administrative Agent, the Canadian Agent or any Lender an amount owed by such Lender pursuant to the terms of this Agreement or (c) has become insolvent or has become subject to a receiver, trustee or similar official.

"DOL" means the U.S. Department of Labor and any successor department or agency.

"EBITDA" means, for any applicable period of computation, the sum of (i) Net Income for such period, but excluding therefrom all extraordinary items of income or loss, plus (ii) the aggregate amount of depreciation and amortization charges made in calculating Net Income for such period, plus (iii) aggregate Interest Expense for such period, plus (iv) the aggregate amount of all income taxes reflected on the consolidated statements of income of the Consolidated Cott Group for such period. The applicable period of computation, as of each fiscal quarter end, shall be for the four (4) consecutive quarters ending as of the date of determination, except that (a) for the fiscal quarter ending July 3, 1999, EBITDA shall be calculated for the two (2) consecutive fiscal quarters then ending multiplied by two (2) and for the fiscal quarter ending October 2, 1999, EBITDA shall be calculated for the three (3) consecutive fiscal quarters then ending multiplied by four thirds (4/3rds).

"Effective Date" means the date on which all of the conditions set forth in
Section 5.1 have been fulfilled or waived by the Lenders.

"Eligible Accounts Receivable" means the aggregate face amount of the Credit Parties' Accounts that conform to the warranties contained herein, less the aggregate amount of all

returns, discounts, claims, credits, charges (including warehousemen's charges) and allowances of any nature (whether issued, owing, granted or outstanding), and less the aggregate amount of all reserves for slow paying accounts, foreign sales, bill and hold (or deferred shipment) transactions and the Lenders' charges as set forth in this Credit Agreement. Unless otherwise approved in writing by the Administrative Agent, no Account, without duplication, shall be deemed to be an Eligible Account Receivable if:

(i) it arises out of a sale made by any Credit Party to an Affiliate; or

(ii) the Account is unpaid more than ninety (90) days after the original invoice date or more than sixty (60) days after the original payment due date; or

(iii) such Account is from the same account debtor (or any affiliate thereof) and fifty percent (50%) or more, in face amount, of all Accounts from such account debtor (or any affiliate thereof) are due or unpaid more than ninety (90) days after the original invoice date or sixty (60) days after the original payment due date; or

(iv) (A) the account debtor is also a creditor of any Credit Party, to the extent of the amount owed by such Credit Party to the account debtor, (B) the account debtor has disputed its liability on, or the account debtor has made any claim with respect to, such Account due from such account debtor to such Credit Party, which has not been resolved or (C) the Account otherwise is subject to any right of setoff by the account debtor, to the extent of the amount of such setoff; or

(v) the Account is owing by an account debtor that has commenced a voluntary case under the federal bankruptcy laws, as now constituted or hereafter amended, or made an assignment for the benefit of creditors, or if a decree or order for relief has been entered by a court having jurisdiction in the premises in respect to such account debtor in an involuntary case under the federal bankruptcy laws, as now constituted or hereafter amended, or if any other petition or other application for relief under the federal bankruptcy laws has been filed by or against the account debtor, or if such account debtor has failed, suspended business, ceased to be solvent, or consented to or suffered a receiver, trustee, liquidator or custodian to be appointed for it or for all or a significant portion of its assets or affairs; or

(vi) the sale is to an account debtor outside the continental United States or Canada, unless the sale is (A) on letter of credit, guaranty or acceptance terms, or subject to credit insurance, in each case acceptable to the Administrative Agent in its reasonable discretion (such Accounts supported by guaranty or acceptance terms or credit insurance not to exceed more than $5,000,000 of aggregate Eligible Accounts Receivable), or (B) otherwise approved by and acceptable to the Administrative Agent in its reasonable discretion; or

(vii) the sale to the account debtor is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval or consignment basis or made pursuant to any other written agreement providing for repurchase or return; or

(viii) the account debtor is the United States of America or any department, agency or instrumentality thereof, unless the applicable Credit Party duly assigns its rights to payment of such Account to the Administrative Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727 et seq.); or

(ix) the account debtor is the government of Canada or any department, agency or instrumentality thereof to which Part VII of the Financial Administration Act (Canada) applies, or the government of a province or territory of Canada (or any department, agency or instrumentality thereof) in which legislation is in force which limits or restricts the assignment of Crown debts, unless the applicable Borrower has complied with the provisions of such Part (or such legislation, as the case may be) in respect of the assignment of such Account to the Administrative Agent; or

(x) the goods giving rise to such Account have not been shipped and delivered to and accepted by the account debtor or its designee or the services giving rise to such Account have not been performed by or on behalf of the applicable Credit Party and accepted by the account debtor or its designee or the Account otherwise does not represent a final sale; or

(xi) the Administrative Agent does not have a first priority, perfected security interest in the Account.

"Eligible Assignee" means (a) any Lender or Affiliate or subsidiary of a Lender and (b) any other commercial bank, financial institution, institutional lender or "accredited investor" (as defined in Regulation D of the Securities and Exchange Commission) with a net worth of at least $2,000,000,000.

"Eligible Inventory" means (i) the aggregate gross amount of each Credit Party's Inventory, valued at the lower of cost (on a FIFO basis) or market, which (A) is owned solely by such Credit Party and with respect to which such Credit Party has good, valid and marketable title, (B) is stored on property that is either (1) owned or leased by such Credit Party or (2) owned or leased by a warehouseman that has contracted with such Credit Party to store Inventory on such warehouseman's property or by a filler, processor or packer of such Credit Party (provided that, with respect to Inventory stored on property leased by such Credit Party at the locations set forth on Schedule 1.1B hereto, such Credit Party shall have delivered in favor of the Administrative Agent, on or prior to the Closing Date or within ninety (90) days following the Closing Date (as noted in such Schedule), an Acknowledgment Agreement from the landlord of such leased location, and, with respect to Inventory stored on property owned or leased by a warehouseman, filler, processor or packer at the locations set forth on Schedule 1.1B hereto, such Credit Party shall have delivered to the Administrative Agent, on or prior to the Closing Date or within ninety (90) days following the Closing Date (as noted in such Schedule), an Acknowledgment Agreement executed by such warehouseman, filler, processor or packer); (C) is subject to a valid, enforceable and first priority Lien in favor of the Administrative Agent, except, with respect to Inventory stored at sites described in clause (B)(2) above for normal and customary warehouseman, filler, packer and processor charges); (D) is located in the United

States or Canada; and (E) is not obsolete or slow moving, and which otherwise conforms to the warranties contained herein, less (ii) markdown reserves, less
(iii) any goods returned or rejected by such Credit Party's customers for which a credit has not yet been issued and goods in transit to third parties (other than to such Credit Party's agents, warehouses, fillers, processors or packers that comply with clause (i)(B)(2) above), less (iv) damaged Inventory, less (v) any Inventory that is a no charge or sample item, less (vi) packaging supplies, including but not limited to returnable or reuseable containers, less (vii) a reserve equal to the amount of all accounts payable of such Credit Party owed or owing to any filler, packer or processor of such Credit Party, less (viii) any reserves required by the Administrative Agent in its reasonable discretion for special order goods and market value declines, and less (ix) any Inventory which is held by a Credit Party pursuant to consignment, sale or return, sale on approval or similar arrangement.

"Environmental Laws" means any current or future Requirement of Law of any Governmental Authority applicable to the Credit Parties pertaining to (a) the protection of health, safety, and the environment, (b) the conservation, management, or use of natural resources and wildlife, (c) the protection or use of surface water and groundwater or (d) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, release, threatened release, abatement, removal, remediation or handling of, or exposure to, any hazardous or toxic substance or material and includes, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984, 42 USC 6901 et seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous Materials Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., Ontario Water Resources Act, Canadian Environmental Protection Act, any analogous implementing or successor law, and any amendment, rule, regulation, order, or directive issued thereunder.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto, as interpreted by the rules and regulations thereunder, all as the same may be in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections.

"ERISA Affiliate" means an entity, whether or not incorporated, which is under common control with the U.S. Borrowers within the meaning of Section 4001(a)(14) of ERISA, or is a member of a group which includes the U.S. Borrowers and which is treated as a single employer under Sections 414(b) or (c) of the Code.

"ERISA Event" means (a) with respect to any Plan, the occurrence of a Reportable Event or the substantial cessation of operations (within the meaning of Section 4062(e) of ERISA); (b) the

withdrawal of the U.S. Borrowers or any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was a substantial employer (as such term is defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan; (c) the distribution of a notice of intent to terminate or the actual termination of a Single Employer Plan or Multi-Employer Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to terminate or the actual termination of a Single Employer Plan or a Multiemployer Plan by the PBGC under Section 4042 of ERISA; (e) the termination of, or the appointment of a trustee to administer, any Single Employer Plan or Multiemployer Plan pursuant to Section 4042 of ERISA; (f) the complete or partial withdrawal of the U.S. Borrowers or any ERISA Affiliate from a Multiemployer Plan; (g) the conditions for imposition of a Lien under Section 302(f) of ERISA exist with respect to any Single Employer Plan; or (h) the adoption of an amendment to any Single Employer Plan requiring the application of Section 307 of ERISA.

"Eurodollar Loans" means Loans accruing interest at the Adjusted Eurodollar Rate. All Eurodollar Loans shall be made in U.S. dollars.

"Eurodollar Rate" means, for the Interest Period for each Eurodollar Loan comprising part of the same borrowing (including continuations and conversions), a per annum interest rate determined pursuant to the following formula:

"Eurodollar Reserve Percentage" means for any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D of the Board of Governors of the Federal Reserve System (or any successor), as such regulation may be amended from time to time or any successor regulation, as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of Eurodollar Loans is determined), whether or not a Lender has any Eurocurrency liabilities subject to such reserve requirement at that time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credits for proration, exceptions or offsets that may be available from time to time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Reserve Percentage.

"Event of Default" means such terms as defined in Section 11.1.

"Face Amount" means, in respect of a Bankers' Acceptance, the amount payable to the holder thereof at maturity.

"Federal Funds Rate" means, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve Bank of New York, or if such rate is not released on any Business Day, the arithmetic average (rounded upwards to the next 1/100th of 1%), as determined by the Administrative Agent, of the quotations for the day of such

transactions, received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

"Financial Statements" means such term as defined in Section 6.6.

"First Union" means First Union National Bank, having its principal office in North Carolina, and its successors and permitted assigns.

"First Union Account" means the internal First Union concentration account into which funds transferred from the First Union Cash Collateral Accounts will be deposited and applied to the Obligations, established and maintained in the name of the Administrative Agent at First Union.

"First Union Cash Collateral Accounts" means each of Cash Collateral Account No. 2000007396304 and Cash Collateral Account No. 2000007396317, established and maintained in the name of the U.S. Borrowers at First Union, with the Administrative Agent named as secured party thereon.

"First Union Funding Account" means Fund Account No. 2080000070582, established and maintained in the name of the U.S. Borrowers at First Union, with the Administrative Agent named as secured party thereon.

"Fixed Charge Coverage Ratio" means, as of the last day of any fiscal quarter, the ratio of (i) EBITDA less Unfinanced Capital Expenditures to (ii) total Fixed Charges. Except as otherwise provided herein, the applicable period of computation shall be for the four (4) consecutive quarters ending as of the date of determination.

"Fixed Charges" means, for any applicable period of computation, without duplication, the sum of (i) all cash Interest Expense for the applicable period plus (ii) all Cash Taxes paid during the applicable period plus (iii) cash dividends paid by the Company for the period of four consecutive fiscal quarters ending on such day plus (iv) all scheduled principal payments on long term Funded Debt of the Consolidated Cott Group for the period of four consecutive fiscal quarters beginning on such day (excluding optional prepayments on the Senior Notes). The applicable period of computation shall be for the four (4) consecutive quarters ending as of the date of determination, except that (a) for the fiscal quarter ending July 3, 1999, the applicable period of computation shall be for the two (2) consecutive fiscal quarters then ending and for the fiscal quarter ending October 2, 1999, the applicable period of computation shall be for the three (3) consecutive fiscal quarters then ending.

"Funded Debt" means, without duplication, the sum of (a) all Indebtedness of the Consolidated Cott Group for borrowed money (other than purchase money Indebtedness (as distinguished from capital lease obligations) incurred in accordance with the terms of Section 9.1), (b) the principal portion of all obligations of the Consolidated Cott Group under capital leases (including capital leases incurred in accordance with the terms of Section 9.1), (c) all commercial letters of credit and the maximum or face amount of all performance and standby letters of credit issued or bankers' acceptance facilities created for the account of a member of the Consolidated

Cott Group, including, without duplication, all unreimbursed draws thereunder,
(d) all Guaranty Obligations of the Consolidated Cott Group with respect to Funded Debt of another Person, (e) all Funded Debt of another entity secured by a Lien on any property of the Consolidated Cott Group, to the extent of the book value of the property secured thereby, whether or not such Funded Debt has been assumed by a member of the Consolidated Cott Group, (f) all Funded Debt of any partnership or unincorporated joint venture to the extent a member of the Consolidated Cott Group is legally obligated or has a reasonable expectation of being liable with respect thereto, net of any assets of such partnership or joint venture and (g) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product of a member of the Consolidated Cott Group where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with U.S. GAAP. The $25,000,000 letter of credit issued in favor of First Union for the account of Cott Beverages USA shall, to the extent terminated and/or reduced on or prior to the Closing Date, be excluded from the calculation of Funded Debt

"Government Acts" means such term as defined in Section 2.2(k)(i).

"Governmental Authority" means any Federal, State, Provincial, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

"Guarantor" means any U.S. Credit Party.

"Guaranty Agreements" means the Guaranty Agreement in the form attached hereto as Exhibit B executed by the U.S. Borrowers with respect to the obligations of the Canadian Borrowers and any future Guaranty Agreement executed in accordance with the terms of this Agreement, as each such Guaranty Agreement may be amended, modified or replaced from time to time.

"Guaranty Obligations" of any Person means any obligations (other than (a) endorsements in the ordinary course of business of negotiable instruments for deposit or collection, (b) obligations arising under the Guaranty Agreements and
(c) obligations arising under guaranties by a Credit Party of another Credit Party) guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations of any other Person in any manner, whether direct or indirect, and including, without limitation, any obligation, whether or not contingent to, (i) purchase any such Indebtedness or other obligation or any property constituting security therefor, (ii) advance or provide funds or other support for the payment or purchase of such indebtedness or obligation or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements), (iii) lease or purchase property, securities or services primarily for the purpose of assuring the owner of such Indebtedness or obligation, or (iv) otherwise assure or hold harmless the owner of such Indebtedness or obligation against loss in respect thereof.

"Hedging Agreements" means any Interest Rate Protection Agreement or other interest rate protection agreement, foreign currency exchange agreement, commodity purchase or option agreement or other interest or exchange rate or commodity price hedging agreements

"Highest Lawful Rate" means, at any given time during which any Obligations shall be outstanding hereunder, the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness under this Credit Agreement, under the laws of the State of North Carolina (or the law of any other jurisdiction whose laws may be mandatorily applicable notwithstanding other provisions of this Credit Agreement and the other Credit Documents), or under applicable United States or Canadian federal laws which may presently or hereafter be in effect and which allow a higher maximum nonusurious interest rate than under North Carolina or such other jurisdiction's law, in any case after taking into account, to the extent permitted by applicable law, any and all relevant payments or charges under this Credit Agreement and any other Credit Documents executed in connection herewith, and any available exemptions, exceptions and exclusions. Without limiting the generality of the foregoing, in relation to any amount payable hereunder by any Canadian Borrower or to any Canadian Lender, "Highest Lawful Rate" shall mean a rate of "interest" on the "credit advanced", calculated in accordance with the definition of "criminal rate" (all such terms being used herein as defined by section 347 of the Criminal Code of Canada or any successor provision in force at the relevant time) equal to 59%.

"Indebtedness" of any Person means, without duplication, (a) all obligations of such Person with respect to Funded Debt, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person to the extent of the value of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations, including without limitation intercompany items, of such Person issued or assumed as the deferred purchase price of property or services purchased by such Person which would appear as liabilities on a balance sheet of such Person, (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of Property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed,
(f) all Guaranty Obligations of such Person, (g) the principal portion of all obligations of such Person under (i) capital leases and (ii) any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with U.S. GAAP, (h) all payment obligations of such Person in respect of Hedging Agreements, (i) the maximum amount of all standby letters of credit issued or bankers' acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (j) all preferred stock issued by such Person and required by the terms thereof to be redeemed, or for which mandatory sinking fund payments are due, by a fixed date, in cash or other property (other than shares of common stock or the same class of preferred stock), (k) all other obligations which would be shown as a liability on the balance sheet of such Person and (l) the aggregate purchase price paid by third parties for the purchase of the accounts receivable of such Person subject at such time to a sale of receivables (or similar transaction) regardless of whether such transaction is effected without recourse to such Person or in a manner that would not be reflected on the balance sheet of such Person in accordance with U.S. GAAP. The Indebtedness of any Person shall include the Indebtedness of any partnership or unincorporated joint venture but

only to the extent such Person is legally obligated or has a reasonable expectation of being liable with respect thereto; provided, however, Indebtedness shall not include (i) any accumulated provisions for deferred taxes or deferred credits reflected as a liability on the balance sheet of such Person, or (ii) any Indebtedness in respect of which moneys sufficient to pay and discharge the same in full (either on the expressed date of maturity thereof or on such earlier date as such indebtedness may be duly called for redemption and payment) have been deposited with a depository, agency or trustee in trust for the payment thereof.

"Interest Expense" means, for any period, all interest expense of the Consolidated Cott Group for such period, net of interest income for such period, all as determined in accordance with U.S. GAAP.

"Interest Payment Date" means (a) as to all Loans, other than Eurodollar Loans, the last day of each month and (b) as to Eurodollar Loans, the last day of each applicable Interest Period; provided, that if an Interest Payment Date falls on a date which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of an Interest Period where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day.

"Interest Period" means, with respect to Eurodollar Loans, a period of one, two, three or six month's duration, as the Borrowers may elect from time to time, commencing, in each case, on the date of the borrowing (or continuation or conversions thereof); provided, however, (a) if any Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (except that where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day), (b) no Interest Period shall extend beyond the Maturity Date and (c) where an Interest Period begins on a day for which there is no numerically corresponding day in the calendar month in which the Interest Period is to end, such Interest Period shall end on the last Business Day of such calendar month.

"Interest Rate Protection Agreement" means any interest rate protection agreement, foreign currency exchange agreement, commodity purchase or option agreement or other interest or exchange rate or commodity price hedging agreements or any other derivative product hedging arrangement between any Borrower and any Lender, or any affiliate of a Lender.

"Inventory" means all of each Credit Party's inventory, including without limitation, (i) all raw materials, work in process, parts, components, assemblies, supplies and materials used or consumed in the Credit Parties' business; (ii) all goods, wares and merchandise, finished or unfinished, held for sale; and (iii) all goods returned to or repossessed by the Credit Parties.

"Investment" means, with respect to any Person, (a) the acquisition (whether for cash, property, services, assumption of Indebtedness or securities or otherwise) of assets comprising a business, shares of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of another Person, (b) any deposit with, or advance, loan or other extension of credit to, such other Person (other than deposits made in connection with the purchase of equipment or other assets in the ordinary course of business) or (c) any other investment in such other Person, including without limitation, any Guaranty Obligation for the benefit of such other Person.

"Irish Affiliate" means Cott International Financial.

"Issuing Lender" means (i) as to the U.S. LOC Subfacility, First Union and
(ii) as to the Canadian LOC Subfacility, National Bank of Canada.

"Issuing Lender Fee" means such term as defined in Section 4.5.

"Joinder Agreement" means the form of Joinder Agreement to be executed by each new Borrower under the Credit Agreement pursuant to Section 7.11 hereof, substantially in the form of Exhibit N hereto.

"Landlord Agreement" means a Landlord Lien Waiver Agreement, substantially in the form of Exhibit C hereto, between a Credit Party's landlord and the Administrative Agent acknowledging and agreeing, among other things, (i) that such landlord waives any Liens on any of the property of such Credit Party and
(ii) to permit the Administrative Agent access to the property for the purposes of exercising its remedies under the applicable Security Agreement.

"Lenders" means U.S. Lenders and Canadian Lenders.

"Leverage Ratio" means, as of the last day of any fiscal quarter, the ratio of (a) total Funded Debt of the Consolidated Cott Group, as determined in accordance with U.S. GAAP, to (b) EBITDA. Except as otherwise provided herein (including, without limitation, in the definition of EBITDA), the applicable period of computation shall be for the four (4) consecutive quarters ending as of the date of determination.

"Letter of Credit" means (a) a Letter of Credit issued for the account of a U.S. Borrower or one of its U.S. Subsidiaries by the Issuing Lender pursuant to
Section 2.2, as such Letter of Credit may be amended, modified, extended, renewed or replaced and (b) a Letter of Credit issued for the account of a Canadian Borrower or one of its Canadian Subsidiaries by the Issuing Lender pursuant to Section 2.4 as such Letter of Credit may be amended, modified, extended, renewed or replaced.

"Letter of Credit Fee" means such term as defined in Section 4.5.

"Lien" means any mortgage, pledge, hypothecation, collateral assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority, or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction, the PPSA, or other similar recording or notice statute, and any lease in the nature thereof).

"Loans" means the Revolving Loans.

"LOC Documents" means, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered thereunder, and any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of

Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk or (b) any collateral security for such obligations.

"LOC Obligations" means, at any time, the sum of (a) the maximum amount which is, or at any time thereafter may become, available to be drawn under all Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit plus (b) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.

"Lockbox Agreement" means such term as defined in Section 3.1.

"London Interbank Offered Rate" means, with respect to any Eurodollar Loan for the Interest Period applicable thereto, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in U.S. dollars at approximately 11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Telerate Page 3750, the applicable rate shall be the arithmetic mean of all such rates. If, for any reason, such rate is not available, the term "London Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan for the Interest Period applicable thereto, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in U.S. dollars at approximately 11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.

"Material Adverse Effect" means a material adverse effect, after taking into account any applicable insurance (to the extent the provider of such insurance has the financial ability to support its obligations with respect thereto and is not disputing or refusing to acknowledge same), on (a) the business, assets, operations or condition (financial or otherwise) of the Consolidated Cott Group, taken as a whole, (b) the ability of (i) the U.S. Borrowers to perform their material obligations under this Credit Agreement or any of the other Credit Documents, (ii) the Canadian Borrowers to perform their material obligations under this Credit Agreement or any of the other Credit Documents, or (iii) the Credit Parties, taken as a whole, to perform their material obligations under this Agreement or any of the other Credit Documents,
(c) the Collateral or (d) the validity or enforceability of this Agreement, any of the other Credit Documents, or the rights and remedies of the Lenders hereunder or thereunder taken as a whole.

"Material Contract" means any contract or other arrangement (other than any of the Leases or the Credit Documents), whether written or oral, to which any Credit Party is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.

"Maturity Date" means August 19, 2002.

"Merchandise Returns" means any of the products manufactured and sold by the Credit Parties that are returned.

"Multiemployer Plan" means a Plan which is a multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.

"Multiple Employer Plan" means a Plan (other than a Multiemployer Plan) which the U.S. Borrowers or any ERISA Affiliate and at least one other employer other than any U.S. Borrower or any ERISA Affiliate are contributing sponsors.

"Net Income" means, for any period, the net income after taxes of the Consolidated Cott Group for such period, as determined in accordance with U.S.
GAAP.

"Net Proceeds" means all cash proceeds received in connection with an Asset Disposition, net of (a) the actual cash costs incurred in connection with and attributable to such Asset Disposition, (b) any tax liability attributable to such transaction and (c) amounts applied to repayment of Indebtedness (other than the Obligations) secured by a Permitted Lien on a disposed asset.

"Non-Use Fees" means such term as defined in Section 4.5.

"Notes" means the Revolving Credit Notes.

"Notice of Borrowing" means the request by a Borrower for a Revolving Loan in the form of Exhibit D.

"Notice of Continuation/Conversion" means a request by (a) the U.S. Borrowers to (i) continue an existing Eurodollar Loan, (ii) convert a U.S. Base Rate Loan to a Eurodollar Loan, or (iii) convert a Eurodollar Loan to a U.S. Base Rate Loan or (b) the Canadian Borrowers to (i) continue a maturing Bankers' Acceptance to a new maturity date, (ii) convert a maturing Bankers' Acceptance to a Canadian Prime Rate Loan, (iii) convert a Canadian Prime Rate Loan to a Bankers' Acceptance, (iv) continue an existing Eurodollar Loan, (v) convert a CA U.S. Base Rate Loan to a Eurodollar Loan or (vi) convert a Eurodollar Loan to a CA U.S. Base Rate Loan, in the form of Exhibit D.

"Obligations" means the Loans, any other loans and advances or extensions of credit made or to be made by any Lender to any Borrower, or to others for any Borrower's account in each case pursuant to the terms and provisions of this Credit Agreement, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and, including, without limitation, any reimbursement obligation or indemnity of the Borrowers on account of Letters of Credit and all other LOC Obligations, all BA Obligations, and all indebtedness, fees, liabilities, guarantees and obligations which may at any time be owing by any Borrower or any other Credit Party to any Lender in each case pursuant to this Credit Agreement or any other Credit Document, whether now in existence or incurred by a Borrower or any other Credit Party from time to time hereafter, whether unsecured or secured by pledge, Lien upon or security interest in any of a Borrower's or other

Credit Party's assets or property or the assets or property of any other Person, whether such indebtedness is absolute or contingent, joint or several, matured or unmatured, direct or indirect and whether such Borrower or other Credit Party is liable to such Lender for such indebtedness as principal, surety, endorser, guarantor or otherwise. Obligations shall also include any other indebtedness owing to any Lender by any Borrower or other Credit Party under this Credit Agreement and the other Credit Documents, any Borrower's liability to any Lender pursuant to this Credit Agreement as maker or endorser of any promissory note or other instrument for the payment of money, any Borrower's or other Credit Party's liability to any Lender pursuant to this Credit Agreement or any other Credit Document under any instrument of guaranty or indemnity, or arising under any guaranty, endorsement or undertaking which any Lender may make or issue to others for any such Borrower's account pursuant to this Credit Agreement, including any accommodation extended with respect to applications for Letters of Credit, and all liabilities and obligations owing from any Borrower to any Lender, or any affiliate of a Lender, arising under Interest Rate Protection Agreements entered into for the purpose of hedging interest rate risk under this Credit Agreement and the other Credit Documents.

"Participation Interest" means a participation in Letters of Credit or LOC Obligations purchased pursuant to Section 2.2 or Section 2.4 or in Loans or BA Obligations purchased pursuant to Section 4.6 or Section 11.3.

"PBGC" means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA, and any successor thereof.

"Permitted Acquisition" means an Acquisition by any Credit Party that
(a)(i) has been consented to by the Administrative Agent and (ii) is not financed with all or any part of the proceeds of any Loan or Bankers' Acceptance made under this Credit Agreement or (b) complies with the following requirements:

(i) the Acquired Company shall be (or shall own, directly or indirectly, all of the Capital Stock of) an operating company that engages in a line of business substantially similar to the line of business of the Credit Parties engaged in on the Closing Date;

(ii) no Default or Event of Default shall exist immediately prior to or after the consummation of the Acquisition;

(iii) immediately after giving effect to the Acquisition, at least $5,000,000 shall be available to be loaned to the Borrowers under the Commitments and the Total Borrowing Base;

(iv) the purchase price for any Acquired Company acquired during any fiscal year, together with all other Acquisitions made pursuant to this clause (b) in such fiscal year, shall not exceed $10,000,000 in the aggregate; and

(v) the aggregate purchase price of all Acquisitions made pursuant to this clause (b) in any fiscal year, together with all Capital Expenditures made in such fiscal year, shall not exceed the Capital Expenditures limit for such fiscal year set forth in Section 8.3

"Permitted Investments" means:

(a) cash and Cash Equivalents;

(b) money market investment programs that invest exclusively in Cash Equivalents and that are classified as a current asset in accordance with U.S. GAAP and that are administered by broker-dealers reasonably acceptable to the Administrative Agent;

(c) Investments of a Credit Party into another Credit Party;

(d) loans or advances in the usual and ordinary course of business to officers, directors and employees for expenses incidental to carrying on the business of the Credit Parties, including, without, limitation, relocation and other reasonable expenses associated with employee compensation and perquisites;

(e) accounts receivable arising from the sale of goods and services in the ordinary course of business of the Credit Parties;

(f) stock or securities received in settlement of debts (created in the ordinary course of business) owing to a Credit Party;

(g) Investments existing on the Closing Date and set forth on Schedule 1.1C attached hereto;

(h) (i) in addition to loans to Cott Beverages UK existing as of the Closing Date, on and after the Closing Date share capital investments and loans up to $20,000,000 in the aggregate to Cott Beverages UK and (ii) in addition to the share capital investments and loans described in the immediately preceding clause (i), share capital investments and loans up to $17,000,000 in the aggregate to the Cott Beverages UK made from the proceeds of the sale of the Company's stock in Menu Foods Limited so long as the proceeds of any such share capital investments and loans are applied to repay outstanding indebtedness of Cott Beverages UK;

(i) loans to officers and employees of the Company to purchase the Capital Stock of the Company in an amount up to $2,000,000 in the aggregate at any time outstanding;

(j) transactions permitted pursuant to Sections 9.6 and 9.10;

(k) promissory notes issued as consideration in connection with asset sales permitted hereunder; and

(l) such other Investments as the Administrative Agent may approve in its reasonable discretion.

"Permitted Liens" means:

(a) Liens in favor of the Lenders pursuant to any Credit Document or any Interest Rate Protection Agreement;

(b) Liens for taxes not yet due or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with U.S. GAAP have been established;

(c) Liens in respect of property imposed by law arising in the ordinary course of business such as materialmen's, mechanics', warehousemen's, supplier's or vendor's and other like Liens provided that such Liens secure only amounts not yet due and payable or if overdue are being contested in good faith by appropriate actions or proceedings and adequate reserves have been established;

(d) pledges or deposits made to secure payment of worker's compensation insurance, unemployment insurance, pensions or social security programs;

(e) Liens arising from good faith deposits in connection with or to secure performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business (other than obligations in respect of the payment of borrowed money);

(f) easements, rights-of-way, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar charges or encumbrances not impairing, in any material respect, the use of such property for its intended purposes or interfering, in any material respect, with the ordinary conduct of business of the Credit Parties;

(g) Liens securing purchase money indebtedness (it being understood for the purposes of this Agreement that conditional sales contracts shall constitute purchase money indebtedness) permitted by Section 9.1(d);

(h) Liens existing on property or assets of any Credit Party as of the date of this Agreement and disclosed on Schedule 1.1D; provided that the Liens set forth on Schedule 1.1D shall not extend to or secure any Indebtedness other than any such Indebtedness outstanding on the date hereof;

(i) financing statements filed in connection with operating leases made in the ordinary course of business; and

(j) judgments and other similar Liens arising in connection with court proceedings to the extent such judgments do not constitute Events of Default; provided the execution or other enforcement of such Lien is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings.

"Person" means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

"Plan" means any employee benefit plan (as defined in Section 3(3) of ERISA) which is covered by ERISA and with respect to which the U.S. Borrowers or any ERISA Affiliate is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" within the meaning of
Section 3(5) of ERISA.

"PPSA" means the Personal Property Security Act in effect from time to time in Ontario, Canada (or such other analogous statute in effect from time to time in any other province of Canada, as applicable).

"Regulation U or X" means Regulation U or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

"Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the notice requirement has been waived by regulation.

"Required Lenders" means Lenders whose aggregate Credit Exposure (as hereinafter defined) constitute at least 51% of the aggregate Credit Exposure of all Lenders at such time; provided, however, that Required Lenders shall be comprised of at least two (2) Lenders and provided, further, that if any Lender shall be a Defaulting Lender at such time then there shall be excluded from the determination of Required Lenders at such time the aggregate principal amount of Credit Exposure of such Lender at such time. For purposes of the preceding sentence, the term "Credit Exposure" as applied to each Lender shall mean (a) at any time prior to the termination of the Commitments, the sum of (i) the U.S. Revolving Loan Commitment Percentage of such Lender multiplied times the U.S. Revolving Loan Commitments, plus (ii) the Canadian Revolving Loan Commitment Percentage of such Lender multiplied times the Canadian Revolving Loan Commitments, and (b) at any time after the termination of the Commitments, the sum of (i) the principal balance of outstanding Revolving Loans of such Lender, plus (ii) the Face Amount of all Bankers' Acceptances created by such Lender plus (iii) such Lender's Participation Interests in the face amount of outstanding Letters of Credit. In determining each Lender's Credit Exposure as set forth above, amounts denominated in Canadian Dollars shall be converted into U.S. Dollars based on an exchange rate determined by the Administrative Agent in accordance with its normal practices.

"Requirement of Law" means, as to any Person, the articles or certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or final, non-appealable determination of an arbitrator or a court or other Governmental Authority, in each case applicable to our binding upon such Person or to which any of its property is subject.

"Restricted Payment" means (i) any cash dividend or other cash distribution, direct or indirect, on account of any shares of any class of Capital Stock of any member of the

Consolidated Cott Group, now or hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of Capital Stock of any member of the Consolidated Cott Group now or hereafter outstanding by such member of the Consolidated Cott Group, except for any redemption, retirement, sinking funds or similar payment payable solely in such shares of that class of stock or in any class of stock junior to that class, (iii) any cash payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any shares of any class of Capital Stock of any member of the Consolidated Cott Group now or hereafter outstanding or (iv) any payment to any Affiliate of any Credit Party except to the extent otherwise expressly permitted in this Credit Agreement.

"Revolving Credit Notes" means the promissory notes of the Borrowers in favor of each Lender evidencing the Revolving Loans and substantially in the form of Exhibit F, as such promissory notes may be amended, modified, supplemented or replaced from time to time.

"Revolving Loan Commitments" means the U.S. Revolving Loan Commitment and the Canadian Revolving Loan Commitment.

"Revolving Loans" means the loans made pursuant to Section 2.1 and 2.3, which may be U.S. Revolving Loans and/or Canadian Revolving Loans.

"Security Agreements" means the Canadian Security Agreement and the U.S. Security Agreement.

"Security Documents" means, collectively, the Security Agreements, any Acknowledgment Agreements and any Lockbox Agreement.

"Senior Financial Officers" means the Chief Executive Officer, Chief Financial Officer, Controller and Treasurer of the Company or any other Credit Party.

"Senior Management Members" means such term as defined in Section 6.30.

"Senior Officers" means each of the Senior Financial Officers and each Senior Management Member of the Credit Parties.

"Senior Notes" means each of (i) the Senior Unsecured Notes due July 1, 2005, issued by the Company in the aggregate principal amount of $160,000,000 and (ii) the Senior Unsecured Notes due May 1, 2007, issued by the Company in the aggregate principal amount of $125,000,000.

"Settlement Period" means such term as defined in Section 2.7(a) and (b).

"Shareholders' Equity" means, at any time, the consolidated shareowners' equity of the Consolidated Cott Group at such time as determined in accordance with U.S. GAAP; provided, however, that in determining Shareholders' Equity for any purpose hereunder, the deduction for the foreign currency translation adjustment shall be fixed at $25,200,000.

"Single Employer Plan" means any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.

"Solvent" means, with respect to any Person as of a particular date, that on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person's assets would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair value of the assets of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person and (e) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

"Subordinated Affiliate Notes" means those certain subordinated promissory notes, bearing various dates, in each case executed by Cott Beverages USA in favor of the Irish Affiliate, in the aggregate outstanding principal amount of $207,018,794 as of June 30, 1999, issued pursuant to that certain Loan Agreement, dated as of August 19, 1997 between the Irish Affiliate and Cott Beverages USA, as such promissory notes may be amended, modified, supplemented, extended, renewed, refinanced or replaced from time to time.

"Subordinated Debt" means (i) the unsecured Indebtedness evidenced by the Subordinated Affiliate Notes which is expressly subordinated and made junior to the payment and performance in full of the Obligations pursuant to the Subordination Agreement and (ii) any other unsecured debt of the Company which is expressly subordinated and made junior to the payment and performance in full of the Obligations and contains terms and conditions reasonably satisfactory to the Required Lenders.

"Subordination Agreement" means the Subordination Agreement dated as of the Closing Date among Cott Beverages USA, the Irish Affiliate and the Agent, as amended, modified or supplemented from time to time.

"Subsidiary" of any Person means (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time, any class or classes of the capital stock of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries of such Person, and (b) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries of such Person has more than 50% of the equity interest at any time.

"Total Borrowing Base" means a U.S. dollar amount equal to the sum of the U.S. Borrowing Base and the Canadian Borrowing Base.

"UCC" means such term as defined in Section 1.3.

"Unfinanced Capital Expenditures" means, for any period, all Capital Expenditures not financed from proceeds of Funded Debt (other than Loans made under this Agreement).

"U.S. Base Rate" means the higher of (a) the Federal Funds Rate plus 0.5% or (b) the U.S. Prime Rate; provided, however, that if in the reasonable judgment of the Administrative Agent the Federal Funds Rate cannot be determined then the U.S. Prime Rate.

"U.S. Base Rate Loans" means any Loans accruing interest based on the U.S. Base Rate.

"U.S. Borrowers" means Cott USA, Cott Beverages USA and BCB and such other Persons organized under the laws of, and resident in, the United States that become parties hereto pursuant to a Joinder Agreement in accordance with Section 7.11.

"U.S. Borrowing Base" means a U.S. dollar amount equal to the lesser of (i) the sum of (a) 80% of the net book Accounts of the U.S. Credit Parties, plus (b) 50% of the net book Inventory of the U.S. Credit Parties and (ii) the sum of (a) an amount equal to 85% of Eligible Accounts Receivable of the U.S. Credit Parties, plus (b) an amount equal to the sum of (1) an amount equal to 50% of Eligible Inventory of the U.S. Credit Parties consisting of raw materials (other than packaging raw materials), plus (2) an amount equal to 70% of Eligible Inventory of the U.S. Credit Parties consisting of finished goods (up to a 120-day supply thereof), minus (iii) reserves established by the Administrative Agent from time to time in its reasonable discretion. Notwithstanding the foregoing, the amount of Eligible Inventory based on the calculations set forth in clause (ii)(B) above shall not exceed 50% of the aggregate U.S. Borrowing Base.

"U.S. Collateral" means any and all assets and rights and interests in or to property of the U.S. Credit Parties pledged from time to time as security for the Obligations pursuant to the Security Documents whether now owned or hereafter acquired, including, without limitation, all of the Accounts and Inventory of the U.S. Credit Parties, any Chattel Paper, Documents or Instruments evidencing or relating to such Accounts or Inventory, Deposit Accounts and all Proceeds thereof, as defined in the U.S. Security Agreement.

"U.S. Credit Parties" means the U.S. Borrowers and all of their U.S. Subsidiaries whether direct or indirect and whether now owned or hereafter acquired.

"U.S. Dollar Equivalent" means such term as defined in Section 1.4.

"U.S. GAAP" means generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.2.

"U.S. Lenders" means the Lenders identified as such on Schedule 1.1A and such other Lenders as may be added in accordance with the terms of this Agreement.

"U.S. Letter of Credit" means a Letter of Credit issued under the U.S. LOC Subfacility, as referenced in Section 2.2(a).

"U.S. Lockbox" means such term as defined in Section 3.1.

"U.S. Lockbox Account" means such term as defined in Section 3.1.

"U.S. Lockbox Bank" means such term as defined in Section 3.1.

"U.S. LOC Obligations" means LOC Obligations relating to U.S. Letters of Credit.

"U.S. LOC Subfacility" means the Letter of Credit subfacility established pursuant to Section 2.2.

"U.S. Obligations" means the Obligations of the U.S. Borrowers.

"U.S. Prime Rate" means the per annum rate of interest established from time to time by the Administrative Agent at its principal office in Charlotte, North Carolina (or such other principal office of the Administrative Agent as communicated in writing to the Borrowers and the Lenders) as its Prime Rate. Any change in the interest rate resulting from a change in the U.S. Prime Rate shall become effective as of 12:01 a.m. of the Business Day on which each change in the U.S. Prime Rate is announced by the Administrative Agent. The U.S. Prime Rate is a reference rate used by the Administrative Agent in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit to any debtor.

"U.S. Revolving Loan Commitment" means $30,000,000 (U.S.), as such amount may be reduced in accordance with Section 2.10, plus, to the extent that the Canadian Revolving Loan Commitment in effect at the time a U.S. Revolving Loan is requested hereunder exceeds the outstanding Canadian Revolving Loans and LOC Obligations, an amount equal to such excess.

"U.S. Revolving Loan Commitment Percentage" means, for each U.S. Lender, the percentage identified as its U.S. Revolving Loan Commitment Percentage opposite such U.S. Lender's name on Schedule 1.1A, as such percentage may be modified by assignment in accordance with the terms of this Agreement.

"U.S. Revolving Loans" means the revolving loans made by the U.S. Lenders to the U.S. Borrowers pursuant to Section 2.1.

"U.S. Security Agreement" means the Security Agreement, of even date herewith, between the Administrative Agent and the U.S. Credit Parties, in the form attached hereto as Exhibit H-1.

"U.S. Unutilized Revolving Commitment" means, for any period, the amount by which (a) the then applicable U.S. Revolving Loan Commitment exceeds (b) the daily average sum for such period of the outstanding aggregate principal amount of all U.S. Revolving Loans plus the daily average balance of U.S. LOC Obligations for such period.

"Voting Stock" means, with respect to any Person, Capital Stock issued by such Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

1.2 ACCOUNTING TERMS.

Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall be prepared in accordance with U.S. GAAP applied on a consistent basis. All calculations made for the purposes of determining compliance with this Agreement shall (except as otherwise expressly provided herein) be made by application of U.S. GAAP applied on a basis consistent with those used in the preparation of the latest annual or quarterly financial statements under Section
7.1 (or prior to the delivery of the first financial statements under Section 7.1 used in the preparation of the financial statements described in Section 6.6). In determining "pro forma" compliance with the financial covenants herein, as required pursuant to any provision hereof, any Indebtedness incurred or asset sale made or Acquisition completed shall be deemed to have been incurred, made or completed, as the case may be, on the first day of the four fiscal quarters most recently ended prior to such occurrence.

The Borrowers shall deliver to the Lenders at the same time as the delivery of any annual or quarterly financial statement under Section 7.1, (a) a description in reasonable detail of any material variation between the application of accounting principles employed in the preparation of such statement and the application of accounting principles employed in the preparation of the most recent preceding annual or quarterly financial statements as to which no objection has been made in accordance with the paragraph above and (b) reasonable estimates of the difference between such statements arising as a consequence thereof.

1.3 OTHER DEFINITIONAL PROVISIONS.

Terms not otherwise defined herein which are defined in the Uniform Commercial Code as in effect in the State of North Carolina (the "UCC") shall have the meanings given them in the UCC. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Credit Agreement shall refer to the Credit Agreement as a whole and not to any particular provision of this Credit Agreement, unless otherwise specifically provided. References in this Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to this Agreement unless otherwise specifically provided. Any of the terms defined in Section 1.1 may, unless the context otherwise requires, be used in the singular or plural depending on the reference. "Include", "includes" and "including" shall be deemed to be followed by "without limitation" whether or not they are in fact followed by such words or words of like import. "Writing", "written" and comparable terms refer to printing, typing, computer

disk, e-mail and other means of reproducing words in a visible form. References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of such Person. References "from" or "through" any date mean, unless otherwise specified, "from and including" or "through and including", respectively. References to any times herein unless otherwise specified herein shall refer to Eastern Standard or Daylight time, as from time to time in effect.

1.4 DOLLAR EQUIVALENT PROVISIONS.

For the purpose of any provision of this Credit Agreement in which any limitation, requirement, condition, event or circumstance is expressed by reference to an amount in U.S. dollars: (a) any amount outstanding in Canadian Dollars shall be converted to an amount in U.S. dollars (the "U.S. Dollar Equivalent") based on an exchange rate as of the relevant date(s) determined by the Canadian Agent in accordance with normal practices ; and (b) such U.S. dollar amount shall be converted to an amount in Canadian Dollars (the "Canadian Dollar Equivalent) based on an exchange rate as of the relevant date(s) determined by the Canadian Agent in accordance with normal practices. The Canadian Agent shall use the applicable noon or closing exchange rate of the Bank of Canada as the basis for any such determinations.

ARTICLE II

THE REVOLVING LOANS

2.1 THE U.S. REVOLVING LOANS.

(a) U.S. Revolving Loan Commitment. Subject to the terms and conditions set forth herein, each U.S. Lender agrees, severally and not jointly, at any time and from time to time from the Effective Date to the Maturity Date, to make revolving loans (each a "U.S. Revolving Loan" and collectively, the "U.S. Revolving Loans") in U.S. dollars to the U.S. Borrowers; provided, however, that (i) the aggregate amount of U.S. Revolving Loans outstanding plus U.S. LOC Obligations outstanding at any one time may not exceed the lesser of the U.S. Borrowing Base and the U.S. Revolving Loan Commitment; (ii) the aggregate amount of U.S. Revolving Loans outstanding plus Canadian Revolving Loans outstanding plus LOC Obligations outstanding plus the aggregate Face Amount of Bankers' Acceptances at any one time may not exceed the lesser of the Total Borrowing Base and $40,000,000 (U.S.); and (iii) with regard to each individual U.S. Lender, the U.S. Lender's pro rata share of outstanding U.S. Revolving Loans plus U.S. LOC Obligations outstanding shall not exceed such U.S. Lender's U.S. Revolving Loan Commitment Percentage of the U.S. Revolving Loan Commitment. U.S. Revolving Loans shall consist of U.S. Base Rate Loans or Eurodollar Loans (or a combination thereof) as the U.S. Borrowers may request, and the U.S. Borrowers may borrow, repay and reborrow in accordance with the terms hereof.

(b) Method of Borrowing for U.S. Revolving Loans.

(i) U.S. Base Rate Loans. By no later than 11:00 a.m., on the date of the request, the applicable U.S. Borrower shall submit a Notice of Borrowing to the Administrative Agent setting forth the amount requested, the desire to have such Revolving Loan made as a U.S. Base Rate Loan and complying in all respects with Section 5.2; provided, however, that certain U.S. Base Rate Loans may be made without a Notice of Borrowing in accordance with Section 2.7(a).

(ii) Eurodollar Loans. By no later than 11:00 a.m., three (3) Business Days prior to the date of the requested Eurodollar Loan, the applicable U.S. Borrower shall submit a Notice of Borrowing to the Administrative Agent setting forth the amount thereof, the desire to have such Revolving Loan made as a Eurodollar Loan, the Interest Period applicable thereto and complying in all respects with Section 5.2.

2.2 U.S. LETTER OF CREDIT SUBFACILITY.

(a) Issuance. Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions which the Issuing Lender may reasonably require (so long as such terms and conditions do not impose any financial obligation on or require any Lien not otherwise contemplated by this Agreement to be given by any Credit Party or conflict with any obligation of, or detract from any action which may be taken by, any Credit Party under this Agreement), the Issuing Lender shall from time to time upon request issue, in U.S. dollars, and the U.S. Lenders shall participate in, letters of credit (the "U.S. Letters of Credit") for the account of the U.S. Borrowers or any of their U.S. Subsidiaries, from the Effective Date until the Maturity Date, in a form reasonably acceptable to the Issuing Lender; provided, however, that (i) the aggregate amount of U.S. LOC Obligations shall not at any time exceed $3,000,000 (U.S.), (ii) the sum of the aggregate amount of U.S. LOC Obligations outstanding plus U.S. Revolving Loans shall not exceed the lesser of the U.S. Borrowing Base and the U.S. Revolving Loan Commitment, (iii) with respect to each individual U.S. Lender, the U.S. Lender's pro rata share of outstanding U.S. Revolving Loans plus its pro rata share of outstanding U.S. LOC Obligations shall not exceed such U.S. Lender's Revolving Loan Commitment Percentage of the U.S. Revolving Loan Commitment and (iv) the sum of U.S. Revolving Loans outstanding plus Canadian Revolving Loans outstanding plus LOC Obligations outstanding plus the aggregate Face Amount of Bankers' Acceptances at any one time shall not exceed the lesser of the Total Borrowing Base and $40,000,000 (U.S.). The issuance and expiry date of each U.S. Letter of Credit shall be a Business Day. Except as otherwise expressly agreed upon by all the U.S. Lenders, no U.S. Letter of Credit shall have an original expiry date more than one year from the date of issuance, or as extended, shall have an expiry date extending beyond the Maturity Date, except that prior to the Maturity Date a U.S. Letter of Credit may be issued or extended with an expiry date extending beyond the Maturity Date, if and to the extent that the U.S. Borrowers shall provide cash collateral to the Issuing Lender on the Maturity Date in an amount equal to the maximum amount available to be drawn under such U.S. Letter of Credit and the Required Lenders or the Issuing Lender shall not otherwise object. Each U.S. Letter of Credit shall be either (x) a standby letter of

credit issued to support the obligations (including pension or insurance obligations), contingent or otherwise, of a U.S. Borrower or any of its U.S. Subsidiaries, or (y) a commercial letter of credit in respect of the purchase of goods or services by a U.S. Borrower or any of its U.S. Subsidiaries in the ordinary course of business. Each U.S. Letter of Credit shall comply with the related LOC Documents.

(b) Notice and Reports. The request for the issuance of a U.S. Letter of Credit shall be submitted to the Issuing Lender at least three (3) Business Days prior to the requested date of issuance. The Issuing Lender will, at least quarterly and more frequently upon request, provide to the Administrative Agent for dissemination to the Lenders a detailed report specifying the U.S. Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of the prior report, and including therein, among other things, the account party, the beneficiary, the face amount, and the expiry date as well as any payments or expirations which may have occurred. The Issuing Lender will further provide to the Administrative Agent, promptly upon request, copies of the U.S. Letters of Credit.

(c) Participations. Each U.S. Lender, upon issuance of a U.S. Letter of Credit, shall be deemed to have purchased without recourse a risk participation from the Issuing Lender in such U.S. Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to its U.S. Revolving Loan Commitment Percentage of the obligations under such U.S. Letter of Credit, and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Issuing Lender therefor and discharge when due, its U.S. Revolving Loan Commitment Percentage of the obligations arising under such U.S. Letter of Credit. Without limiting the scope and nature of each U.S. Lender's participation in any U.S. Letter of Credit, to the extent that the Issuing Lender has not been reimbursed as required hereunder or under any such U.S. Letter of Credit, each such U.S. Lender shall pay to the Issuing Lender its U.S. Revolving Loan Commitment Percentage of such unreimbursed drawing in same day funds on the day of notification by the Issuing Lender of an unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The obligation of each U.S. Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of the U.S. Borrowers or any other U.S. Credit Party to reimburse the Issuing Lender under any U.S. Letter of Credit, together with interest as hereinafter provided.

(d) Reimbursement. In the event of any drawing under any U.S. Letter of Credit, the Issuing Lender will promptly notify the U.S. Borrowers. Unless the U.S. Borrowers shall immediately notify the Issuing Lender of its intent to otherwise reimburse the Issuing Lender, the U.S. Borrowers shall be deemed to have requested a U.S. Revolving Loan made as a U.S. Base Rate Loan, in the amount of the drawing as provided in subsection (e) hereof, the proceeds of which will be used to satisfy the reimbursement obligations. The U.S. Borrowers shall reimburse the Issuing Lender on the day of drawing under any U.S. Letter of Credit either with the proceeds of a U.S. Revolving Loan obtained

hereunderor otherwise in same day funds as provided herein or in the LOC Documents. If the U.S. Borrowers shall fail to reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the U.S. Base Rate, plus the sum of the Applicable Percentage for Base Rate Loans and two percent (2%). Subject to
Section 2.2(k)(v), the U.S. Borrowers' reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of (but without waiver of) any rights of set-off, counterclaim or defense to payment that the applicable account party or the U.S. Borrowers may claim or have against the Issuing Lender, the Administrative Agent, the U.S. Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including without limitation, any defense based on any failure of the applicable account party, the U.S. Borrowers or any other U.S. Credit Party to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit. The Issuing Lender will promptly notify the U.S. Lenders of the amount of any unreimbursed drawing and each U.S. Lender shall promptly pay to the Administrative Agent for the account of the Issuing Lender, in Dollars and in immediately available funds, the amount of such U.S. Lender's Revolving Loan Commitment Percentage of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such U.S. Lender from the Issuing Lender if such notice is received at or before 2:00 p.m., otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the day such notice is received. If such U.S. Lender does not pay such amount to the Issuing Lender in full upon such request, such U.S. Lender shall, on demand, pay to the Administrative Agent for the account of the Issuing Lender interest on the unpaid amount during the period from the date the U.S. Lender received the notice regarding the unreimbursed drawing until such U.S. Lender pays such amount to the Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal Funds Rate and thereafter at a rate equal to the U.S. Base Rate. Each U.S. Lender's obligation to make such payment to the Issuing Lender, and the right of the Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever. Simultaneously with the making of each such payment by a U.S. Lender to the Issuing Lender, such U.S. Lender shall, automatically and without any further action on the part of the Issuing Lender or such U.S. Lender, acquire a participation in an amount equal to such payment (excluding the portion of such payment constituting interest owing to the Issuing Lender) in the related unreimbursed drawing portion of the LOC Obligation and in the interest thereon and in the related LOC Documents, and shall have a claim against the U.S. Borrowers and the other applicable U.S. Credit Parties with respect thereto.

(e) Repayment with Revolving Loans. On any day on which the U.S. Borrowers shall have requested, or been deemed to have requested, a U.S. Revolving Loan borrowing to reimburse a drawing under a U.S. Letter of Credit, the Administrative Agent shall give notice to the U.S. Lenders that a U.S. Revolving Loan has been requested or deemed requested in connection with a drawing under a U.S. Letter of Credit, in which case a U.S. Revolving Loan borrowing comprised solely of U.S. Base Rate Loans (each such

borrowing, a "Mandatory Borrowing") shall be immediately made from all U.S. Lenders (without giving effect to any termination of the Commitments pursuant to
Section 9.2) pro rata based on each U.S. Lender's respective U.S. Revolving Loan Commitment Percentage and the proceeds thereof shall be paid directly to the Issuing Lender for application to the respective LOC Obligations. Each such U.S. Lender hereby irrevocably agrees to make such U.S. Revolving Loans immediately upon any such request or deemed request on account of each such Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (i) the amount of Mandatory Borrowing may not comply with the minimum amount for borrowings of U.S. Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in Section 5.2 are then satisfied, (iii) whether a Default or Event of Default then exists,
(iv) the failure of any such request or deemed request for U.S. Revolving Loans to be made by the time otherwise required hereunder, (v) the date of such Mandatory Borrowing, or (vi) any reduction in the U.S. Revolving Loan Commitment or any termination of the Commitments. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the U.S. Bankruptcy Code with respect to the U.S. Borrowers or any other U.S. Credit Party), then each such U.S. Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the U.S. Borrowers on or after such date and prior to such purchase) its Participation Interest in the outstanding U.S. LOC Obligations; provided, further, that in the event any U.S. Lender shall fail to fund its Participation Interest on the day the Mandatory Borrowing would otherwise have occurred, then the amount of such U.S. Lender's unfunded Participation Interest therein shall bear interest payable to the Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of such date, the Federal Funds Rate, and thereafter at a rate equal to the U.S. Base Rate.

(f) Designation of Subsidiaries as Account Parties. Notwithstanding anything to the contrary set forth in this Agreement, a U.S. Letter of Credit issued hereunder may contain a statement to the effect that such U.S. Letter of Credit is issued for the account of a U.S. Subsidiary of a U.S. Borrower; provided that notwithstanding such statement, such U.S. Borrower shall be the actual account party for all purposes of this Agreement for such Letter of Credit and such statement shall not affect the U.S. Borrowers' reimbursement obligations hereunder with respect to such Letter of Credit.

(g) Modification and Extension. The issuance of any supplement, modification, amendment, renewal, or extensions to any U.S. Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new U.S. Letter of Credit hereunder.

(h) Uniform Customs and Practices. The U.S. Letters of Credit shall be subject to The Uniform Customs and Practice for Documentary Credits, as published as of the date of issue by the International Chamber of Commerce (Publication No. 500 or the most recent publication, the "UCP").

(i) Responsibility of Issuing Lender. It is expressly understood and agreed that the obligations of the Issuing Lender hereunder to the U.S. Lenders are only those expressly

set forth in this Agreement and that the Issuing Lender shall be entitled to assume that the conditions precedent set forth in Section 5.2 have been satisfied unless it shall have acquired actual knowledge that any such condition precedent has not been satisfied; provided, however, that nothing set forth in this Section 2.2 shall be deemed to prejudice the right of any U.S. Lender to recover from the Issuing Lender any amounts made available by such U.S. Lender to the Issuing Lender pursuant to this Section 2.2 in the event that it is determined by a court of competent jurisdiction that the payment with respect to a U.S. Letter of Credit constituted gross negligence or willful misconduct on the part of the Issuing Lender.

(j) Conflict with LOC Documents. In the event of any conflict between this Agreement and any LOC Document, this Agreement shall govern.

(k) Indemnification of Issuing Lender.

(i) In addition to its other obligations under this Agreement, the U.S. Borrowers hereby agree to protect, indemnify, pay and save the Issuing Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees) that the Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (A) the issuance of any U.S. Letter of Credit or (B) the failure of the Issuing Lender to honor a drawing under a U.S. Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority (all such acts or omissions, herein called "Government Acts").

(ii) As between the U.S. Borrowers and the Issuing Lender, the U.S. Borrowers shall assume all risks of the acts, omissions or misuse of any U.S. Letter of Credit by the beneficiary thereof. The Issuing Lender shall not be responsible for: (A) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any U.S. Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any U.S. Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (C) failure of the beneficiary of a U.S. Letter of Credit to comply fully with conditions required in order to draw upon a U.S. Letter of Credit; (D) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (E) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under a U.S. Letter of Credit or of the proceeds thereof; and (F) any consequences arising from causes beyond the control of the Issuing Lender, including, without limitation, any Government Acts. None of the above shall affect, impair, or prevent the vesting of the Issuing Lender's rights or powers hereunder.

(iii) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Issuing Lender, under or in connection with any U.S. Letter of Credit or the related certificates, if taken or omitted in good faith, shall not put the Issuing Lender under any resulting liability to the U.S. Borrowers or any U.S. Credit Party. It is the intention of the parties that this Agreement shall be construed and applied to protect and indemnify the Issuing Lender against any and all risks involved in the issuance of the U.S. Letters of Credit, all of which risks are hereby assumed by the U.S. Borrowers, including, without limitation, any and all risks of the acts or omissions, whether rightful or wrongful, of any present or future Government Acts. The Issuing Lender shall not, in any way, be liable for any failure by the Issuing Lender or anyone else to pay any drawing under any U.S. Letter of Credit as a result of any Government Acts or any other cause beyond the control of the Issuing Lender.

(iv) Nothing in this subsection (k) is intended to limit the reimbursement obligation of the U.S. Borrowers contained in this Section
2.2. The obligations of the U.S. Borrowers under this subsection (k) shall survive the termination of this Agreement. No act or omission of any current or prior beneficiary of a U.S. Letter of Credit shall in any way affect or impair the rights of the Issuing Lender to enforce any right, power or benefit under this Agreement.

(v) Notwithstanding anything to the contrary contained in this subsection (k), the U.S. Borrowers shall have no obligation to indemnify the Issuing Lender in respect of any liability incurred by the Issuing Lender arising out of the gross negligence or willful misconduct of the Issuing Lender, as determined by a court of competent jurisdiction. Nothing in this Agreement shall relieve the Issuing Lender of any liability to the U.S. Borrowers in respect of any action taken by the Issuing Lender which action constitutes gross negligence or willful misconduct of the Issuing Lender or a violation of the UCP or Uniform Commercial Code (as applicable), as determined by a court of competent jurisdiction.

2.3 THE CANADIAN REVOLVING LOANS.

(a) Canadian Revolving Loan Commitment. Subject to the terms and conditions set forth herein, each Canadian Lender agrees, severally and not jointly, at any time and from time to time from the Effective Date to the Maturity Date, to make revolving loans (each a "Canadian Revolving Loan" and collectively, the "Canadian Revolving Loans") to the Canadian Borrowers in Canadian Dollars or U.S. Dollars, as requested by the Canadian Borrowers; provided, however, that (i) the aggregate amount of Canadian Revolving Loans outstanding plus Canadian LOC Obligations outstanding plus the aggregate Face Amount of Bankers' Acceptances at any one time may not exceed the lesser of the Canadian Borrowing Base and the Canadian Revolving Loan Commitment; (ii) the aggregate amount of U.S. Revolving Loans outstanding plus Canadian Revolving Loans outstanding plus LOC Obligations outstanding plus the aggregate Face Amount of Bankers' Acceptances at any one time may not exceed the lesser of the Total Borrowing Base and $40,000,000 (U.S.); and (iii) with regard to each individual Canadian Lender, the Canadian

Lender's pro rata share of Canadian Revolving Loans outstanding plus Canadian LOC Obligations outstanding plus such Canadian Lender's pro rata share of the aggregate Face Amount of Bankers' Acceptances at any one time shall not exceed such Canadian Lender's Canadian Revolving Loan Commitment Percentage of the Canadian Revolving Loan Commitment. Canadian Revolving Loans shall consist of Canadian Base Rate Loans, Eurodollar Loans or the creation of Bankers' Acceptances (or a combination thereof) as the Canadian Borrowers may request and the Canadian Borrowers may borrow, repay and reborrow in accordance with the terms hereof. All Canadian Revolving Loans advanced on the Effective Date shall be Canadian Base Rate Loans and may thereafter be converted to Eurodollar Loans in accordance with Section 4.1.

(b) Method of Borrowing for Canadian Revolving Loans.

(i) Canadian Base Rate Loans. By no later than 11:00 a.m., Toronto, Ontario time, on the date of the request, the applicable Canadian Borrower shall submit a Notice of Borrowing to the Canadian Agent setting forth the amount requested, the desire to have such Revolving Loan made as a CA U.S. Base Rate Loan or a Canadian Prime Rate Loan and complying in all respects with Section 5.2; provided, however, that certain Canadian Base Rate Loans may be made without a Notice of Borrowing in accordance with Section 2.7(b). All or any portion of such CA U.S. Base Rate Loans may be converted into Eurodollar Loans and all or any portion of such Canadian Prime Rate Loans may be converted into Bankers' Acceptances, in each case, in accordance with the terms of Section 4.1.

(ii) Eurodollar Loans. By no later than 11:00 a.m., Toronto, Ontario time, three (3) Business Days prior to the date of the requested Canadian Revolving Loan, the applicable Canadian Borrower shall submit a Notice of Borrowing to the Canadian Agent setting forth the amount thereof, the desire to have such Revolving Loan made as a Eurodollar Loan, the Interest Period applicable thereto, and complying in all respects with Section 5.2.

(iii) Bankers' Acceptances. In addition to Canadian Base Rate Loans and Eurodollar Loans, the Canadian Revolving Loan Commitment may be utilized by the creation of Bankers' Acceptances pursuant to
Section 2.5 hereof.

2.4 CANADIAN LETTER OF CREDIT SUBFACILITY.

(a) Issuance. Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions which the Issuing Lender may reasonably require (so long as such terms and conditions do not impose any financial obligation on or require any Lien not otherwise contemplated by this Agreement to be given by any Credit Party or conflict with any obligation of, or detract from any action which may be taken by, any Credit Party under this Agreement), the Issuing Lender shall from time to time upon request issue, in U.S. Dollars or Canadian Dollars, and the Canadian Lenders shall participate in, letters of credit (the "Canadian Letters of Credit") for the account of the Canadian Borrowers or any of their Canadian Subsidiaries, from the Effective Date until the

Maturity Date, in a form reasonably acceptable to the Issuing Lender; provided, however, that (i) the aggregate amount of Canadian LOC Obligations shall not at any time exceed $3,000,000 (U.S.), (ii) the sum of the aggregate amount of Canadian Revolving Loans outstanding plus Canadian LOC Obligations outstanding plus the aggregate Face Amount of Bankers' Acceptances at any one time shall not exceed the lesser of the Canadian Borrowing Base and the Canadian Revolving Loan Commitment, (iii) with respect to each individual Canadian Lender, the Canadian Lender's pro rata share of outstanding Canadian Revolving Loans plus its pro rata share of outstanding Canadian LOC Obligations plus its pro rata share of the Face Amount of Bankers' Acceptances outstanding shall not exceed such Canadian Lender's Revolving Loan Commitment Percentage of the Canadian Revolving Loan Commitment and (iv) the sum of U.S. Revolving Loans outstanding plus Canadian Revolving Loans outstanding plus LOC Obligations outstanding plus the aggregate Face Amount of Bankers' Acceptances at any one time shall not exceed the lesser of the Total Borrowing Base and $40,000,000 (U.S.). The issuance and expiry date of each Canadian Letter of Credit shall be a Business Day. Except as otherwise expressly agreed upon by all the Canadian Lenders, no Canadian Letter of Credit shall have an original expiry date more than one year from the date of issuance, or as extended, shall have an expiry date extending beyond the Maturity Date, except that prior to the Maturity Date a Canadian Letter of Credit may be issued or extended with an expiry date extending beyond the Maturity Date, if and to the extent that the Canadian Borrowers shall provide cash collateral to the Issuing Lender on the Maturity Date in an amount equal to the maximum amount available to be drawn under such Canadian Letter of Credit and the Required Lenders or the Issuing Lender shall not otherwise object. Each Canadian Letter of Credit shall be either (x) a standby letter of credit issued to support the obligations (including pension or insurance obligations), contingent or otherwise, of the Canadian Borrowers or any of their Canadian Subsidiaries, or (y) a commercial letter of credit in respect of the purchase of goods or services by the Canadian Borrowers or any of their Canadian Subsidiaries in the ordinary course of business. Each Canadian Letter of Credit shall comply with the related LOC Documents.

(b) Notice and Reports. The request for the issuance of a Canadian Letter of Credit shall be submitted to the Issuing Lender at least three (3) Business Days prior to the requested date of issuance. The Issuing Lender will, at least quarterly and more frequently upon request, provide to the Administrative Agent for dissemination to the Lenders a detailed report specifying the Canadian Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of the prior report, and including therein, among other things, the account party, the beneficiary, the face amount, and the expiry date as well as any payments or expirations which may have occurred. The Issuing Lender will further provide to the Administrative Agent, promptly upon request, copies of the Canadian Letters of Credit.

(c) Participations. Each Canadian Lender, upon issuance of a Canadian Letter of Credit, shall be deemed to have purchased without recourse a risk participation from the Issuing Lender in such Canadian Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to its Canadian Revolving Loan Commitment Percentage of the obligations under such Canadian Letter of Credit, and

shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Issuing Lender therefor and discharge when due, its Canadian Revolving Loan Commitment Percentage of the obligations arising under such Canadian Letter of Credit. Without limiting the scope and nature of each Canadian Lender's participation in any Canadian Letter of Credit, to the extent that the Issuing Lender has not been reimbursed as required hereunder or under any such Canadian Letter of Credit, each such Canadian Lender shall pay to the Issuing Lender its Canadian Revolving Loan Commitment Percentage of such unreimbursed drawing in same day funds on the day of notification by the Issuing Lender of an unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The obligation of each Canadian Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of the Canadian Borrowers or any other Canadian Credit Party to reimburse the Issuing Lender under any Canadian Letter of Credit, together with interest as hereinafter provided.

(d) Reimbursement. In the event of any drawing under any Canadian Letter of Credit, the Issuing Lender will promptly notify the Canadian Borrowers. Unless the Canadian Borrowers shall immediately notify the Issuing Lender of their intent to otherwise reimburse the Issuing Lender, the Canadian Borrowers shall be deemed to have requested a Canadian Revolving Loan made as a Canadian Base Rate Loan at the Canadian Prime Rate or the CA U.S. Prime Rate, as appropriate, in the amount of the drawing as provided in subsection (e) hereof, the proceeds of which will be used to satisfy the reimbursement obligations. The Canadian Borrowers shall reimburse the Issuing Lender on the day of drawing under any Canadian Letter of Credit either with the proceeds of a Canadian Revolving Loan obtained hereunder or otherwise in same day funds as provided herein or in the LOC Documents. If the Canadian Borrowers shall fail to reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Canadian Prime Rate or the CA U.S. Prime Rate, as appropriate, plus the sum of the Applicable Percentage for Base Rate Loans and two percent (2%). Subject to Section 2.4(k)(v), the Canadian Borrowers' reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of (but without waiver of) any rights of set-off, counterclaim or defense to payment the applicable account party or the Canadian Borrowers may claim or have against the Issuing Lender, the Administrative Agent, the Canadian Agent, the Canadian Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including without limitation, any defense based on any failure of the applicable account party, the Canadian Borrowers or any other Canadian Credit Party to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit. The Issuing Lender will promptly notify the Canadian Lenders of the amount of any unreimbursed drawing and each Canadian Lender shall promptly pay to the Canadian Agent for the account of the Issuing Lender, in immediately available funds, the amount of such Canadian Lender's Revolving Loan Commitment Percentage of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such Canadian Lender from the Issuing Lender if such notice is received at or before 2:00 p.m., otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the day such notice is received. If such

Canadian Lender does not pay such amount to the Issuing Lender in full upon such request, such Canadian Lender shall, on demand, pay to the Canadian Agent for the account of the Issuing Lender interest on the unpaid amount during the period from the date the Canadian Lender received the notice regarding the unreimbursed drawing until such Canadian Lender pays such amount to the Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal Funds Rate and thereafter at a rate equal to the Canadian Prime Rate for Loans made in Canadian Dollars or the CA U.S. Prime Rate for Loans made in U.S. Dollars, as appropriate. Each Canadian Lender's obligation to make such payment to the Issuing Lender, and the right of the Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever. Simultaneously with the making of each such payment by a Canadian Lender to the Issuing Lender, such Canadian Lender shall, automatically and without any further action on the part of the Issuing Lender or such Canadian Lender, acquire a participation in an amount equal to such payment (excluding the portion of such payment constituting interest owing to the Issuing Lender) in the related unreimbursed drawing portion of the Canadian LOC Obligation and in the interest thereon and in the related LOC Documents, and shall have a claim against the Canadian Borrowers and the other Canadian Credit Parties with respect thereto.

(e) Repayment with Revolving Loans. On any day on which the Canadian Borrowers shall have requested, or been deemed to have requested, a Canadian Revolving Loan borrowing to reimburse a drawing under a Canadian Letter of Credit, the Canadian Agent shall give notice to the Canadian Lenders that a Canadian Revolving Loan has been requested or deemed requested in connection with a drawing under a Canadian Letter of Credit, in which case a Canadian Revolving Loan borrowing comprised solely of Canadian Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be immediately made from all Canadian Lenders (without giving effect to any termination of the Commitments pursuant to
Section 9.2) pro rata based on each Canadian Lender's respective Canadian Revolving Loan Commitment Percentage and the proceeds thereof shall be paid directly to the Issuing Lender for application to the respective Canadian LOC Obligations. Each such Canadian Lender hereby irrevocably agrees to make such Canadian Revolving Loans immediately upon any such request or deemed request on account of each such Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding
(i) the amount of Mandatory Borrowing may not comply with the minimum amount for borrowings of Canadian Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in Section 5.2 are then satisfied, (iii) whether a Default or Event of Default then exists, (iv) the failure of any such request or deemed request for Canadian Revolving Loans to be made by the time otherwise required hereunder, (v) the date of such Mandatory Borrowing, or (vi) any reduction in the Canadian Revolving Loan Commitment or any termination of the Commitments. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the U.S. Bankruptcy Code (or applicable Canadian bankruptcy law) with respect to

the Canadian Borrowers or any other Canadian Credit Party), then each such Canadian Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Canadian Borrowers on or after such date and prior to such purchase) its Participation Interest in the outstanding Canadian LOC Obligations; provided, further, that in the event any Canadian Lender shall fail to fund its Participation Interest on the day the Mandatory Borrowing would otherwise have occurred, then the amount of such Canadian Lender's unfunded Participation Interest therein shall bear interest payable to the Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of such date, the Federal Funds Rate, and thereafter at a rate equal to the Canadian Prime Rate, plus two percent (2%).

(f) Designation of Subsidiaries as Account Parties. Notwithstanding anything to the contrary set forth in this Agreement, a Canadian Letter of Credit issued hereunder may contain a statement to the effect that such Canadian Letter of Credit is issued for the account of a Canadian Subsidiary of the Canadian Borrowers; provided that notwithstanding such statement, the Canadian Borrowers shall be the actual account parties for all purposes of this Agreement for such Letter of Credit and such statement shall not affect the Canadian Borrowers' reimbursement obligations hereunder with respect to such Letter of Credit.

(g) Modification and Extension. The issuance of any supplement, modification, amendment, renewal, or extensions to any Canadian Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Canadian Letter of Credit hereunder.

(h) Uniform Customs and Practices. The Canadian Letters of Credit shall be subject to The Uniform Customs and Practice for Documentary Credits, as published as of the date of issue by the International Chamber of Commerce (Publication No. 500 or the most recent publication, the "UCP"). ---

(i) Responsibility of Issuing Lender. It is expressly understood and agreed that the obligations of the Issuing Lender hereunder to the Canadian Lenders are only those expressly set forth in this Agreement and that the Issuing Lender shall be entitled to assume that the conditions precedent set forth in Section 5.2 have been satisfied unless it shall have acquired actual knowledge that any such condition precedent has not been satisfied; provided, however, that nothing set forth in this Section 2.4 shall be deemed to prejudice the right of any Canadian Lender to recover from the Issuing Lender any amounts made available by such Canadian Lender to the Issuing Lender pursuant to this Section 2.4 in the event that it is determined by a court of competent jurisdiction that the payment with respect to a Canadian Letter of Credit constituted gross negligence or willful misconduct on the part of the Issuing Lender.

(j) Conflict with LOC Documents. In the event of any conflict between this Agreement and any LOC Document, this Agreement shall govern.

(k) Indemnification of Issuing Lender.

(i) In addition to its other obligations under this Agreement, the Canadian Borrowers hereby agree to protect, indemnify, pay and save the Issuing Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees) that the Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (A) the issuance of any Canadian Letter of Credit or (B) the failure of the Issuing Lender to honor a drawing under a Canadian Letter of Credit as a result of any Government Act.

(ii) As between the Canadian Borrowers and the Issuing Lender, the Canadian Borrowers shall assume all risks of the acts, omissions or misuse of any Canadian Letter of Credit by the beneficiary thereof. The Issuing Lender shall not be responsible for: (A) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any Canadian Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Canadian Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (C) failure of the beneficiary of a Canadian Letter of Credit to comply fully with conditions required in order to draw upon a Canadian Letter of Credit; (D) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (E) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under a Canadian Letter of Credit or of the proceeds thereof; and (F) any consequences arising from causes beyond the control of the Issuing Lender, including, without limitation, any Government Acts. None of the above shall affect, impair, or prevent the vesting of the Issuing Lender's rights or powers hereunder.

(iii) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Issuing Lender, under or in connection with any Canadian Letter of Credit or the related certificates, if taken or omitted in good faith, shall not put the Issuing Lender under any resulting liability to the Canadian Borrowers or any other Canadian Credit Party. It is the intention of the parties that this Agreement shall be construed and applied to protect and indemnify the Issuing Lender against any and all risks involved in the issuance of the Canadian Letters of Credit, all of which risks are hereby assumed by the Canadian Borrowers, including, without limitation, any and all risks of the acts or omissions, whether rightful or wrongful, as a result of any Government Act. The Issuing Lender shall not, in any way, be liable for any failure by the Issuing Lender or anyone else to pay any drawing under any Canadian Letter of Credit as a result of any Government Acts or any other cause beyond the control of the Issuing Lender.

(iv) Nothing in this subsection (k) is intended to limit the reimbursement obligation of the Canadian Borrowers contained in this
Section 2.4. The obligations of the Canadian Borrowers under this subsection (k) shall survive the termination of this Agreement. No act or omission of any current or prior beneficiary of a Canadian Letter of Credit shall in any way affect or impair the rights of the Issuing Lender to enforce any right, power or benefit under this Agreement.

(v) Notwithstanding anything to the contrary contained in this subsection (k), the Canadian Borrowers shall have no obligation to indemnify the Issuing Lender in respect of any liability incurred by the Issuing Lender arising out of the gross negligence or willful misconduct of the Issuing Lender, as determined by a court of competent jurisdiction. Nothing in this Agreement shall relieve the Issuing Lender of any liability to the Canadian Borrowers in respect of any action taken by the Issuing Lender which action constitutes gross negligence or willful misconduct of the Issuing Lender or a violation of the UCP or Uniform Commercial Code (as applicable), as determined by a court of competent jurisdiction.

2.5 BANKERS' ACCEPTANCES.

(a) Form.

(i) To facilitate the acceptance of Bankers' Acceptances hereunder, the Canadian Borrowers hereby appoint each Canadian Lender as its attorney to sign and endorse on its behalf, as and when considered necessary by such Canadian Lender, an appropriate number of orders in the form prescribed by such Canadian Lender.

(ii) Each Canadian Lender may, at its option, execute any order in handwriting or by the facsimile or mechanical signature of any of its authorized officers, and the Canadian Lenders are hereby authorized to accept or pay, as the case may be, any order of the Canadian Borrowers which purports to bear such a signature notwithstanding that any such individual has ceased to be an authorized officer of such Canadian Lender. Any such order or Bankers' Acceptance shall be as valid as if he or she were an authorized officer at the date of issue of the order or Bankers' Acceptance.

(iii) Any order signed by a Canadian Lender as attorney for the Canadian Borrowers, whether signed in handwriting or by the facsimile or mechanical signature of an authorized officer of a Canadian Lender, may be dealt with by the Canadian Agent or any Canadian Lender to all intents and purposes and shall bind the Canadian Borrowers as if duly signed and issued by the Canadian Borrowers.

(iv) The receipt by the Canadian Agent of a notice under Section 2.5(d) requesting Bankers' Acceptances shall be each Canadian Lender's sufficient authority to execute, and each Canadian Lender shall, subject to the terms and conditions of this Credit Agreement, execute orders in accordance with such

request, and the orders so executed shall thereupon be deemed to have been presented for acceptance.

(b) Issuance. Subject to the terms and conditions hereof and of the BA Documents executed in connection with the creation of each Banker's Acceptance and any other terms and conditions which the Canadian Lenders may reasonably require (so long as such terms and conditions do not impose any financial obligation on or require any Lien (not otherwise contemplated by this Credit Agreement) to be given by the Canadian Borrowers or any other Credit Party or conflict with any obligation of, or detract from any action which may be taken by, any Credit Party under this Agreement), each Canadian Lender agrees, severally and not jointly, at any time and from time to time (from the Effective Date to the Maturity Date or such earlier date on which the Canadian Revolving Loan Commitment has been terminated as provided herein), to create Bankers' Acceptances by accepting orders of the Canadian Borrowers presented to it for acceptance equal to such Canadian Lender's Canadian Revolving Loan Commitment Percentage of such Bankers' Acceptances as the Canadian Borrowers may request on such date; provided, however, that (i) the sum of the aggregate Face Amount of Bankers' Acceptances outstanding plus the aggregate amount of Canadian Revolving Loans outstanding plus Canadian LOC Obligations outstanding shall not exceed the Canadian Revolving Loan Commitment, (ii) with respect to each individual Canadian Lender, such Lender's pro rata share of outstanding Canadian Revolving Loans plus its pro rata share of outstanding Canadian LOC Obligations plus its pro rata share of the Face Amount of Bankers' Acceptances outstanding shall not exceed such Lender's Canadian Revolving Loan Commitment Percentage of the Canadian Revolving Loan Commitment, and (iii) if the Face Amount of a Bankers' Acceptance, which would otherwise be accepted by a Canadian Lender, would not be C$100,000 or a larger multiple thereof, such Face Amount shall be increased or reduced by the Canadian Agent in its discretion to the nearest multiple of C$100,000. Upon the acceptance of any order of the Canadian Borrowers pursuant hereto, the Canadian Borrowers shall pay to each of the applicable Canadian Lenders, in advance, the Acceptance Fee. Forthwith after each request for drawdown of, continuation of or conversion into Bankers' Acceptances, the Canadian Agent shall notify each Canadian Lender of the amount of Bankers' Acceptances to be accepted by such Canadian Lender. The Canadian Borrowers shall as soon as practical deliver to the Canadian Agent a notice confirming the issuance of Bankers' Acceptances and specifying the BA Discount Proceeds derived therefrom. For greater certainty, with respect to each extension of credit by way of Bankers' Acceptances, each Bankers' Acceptance shall have the same term and, upon sale, each Bankers' Acceptance shall be discounted at the Applicable BA Discount Rate.

(c) Requirements of Bankers' Acceptances. Each Bankers' Acceptance shall comply with the related BA Documents and shall be executed by the Canadian Borrowers and presented to the Canadian Lenders pursuant to such procedures as are provided for in such BA Documents or as otherwise provided or required by a Canadian Lender. The creation and maturity date of each Bankers' Acceptance shall be a Business Day and no Bankers' Acceptance shall have a maturity date later than the Maturity Date.

(d) Method of Requesting a Bankers' Acceptance. By no later than 11:00
a.m., Toronto, Ontario time, two Business Days prior to the date of the requested Bankers' Acceptance, the Canadian Borrowers shall submit an irrevocable notice, substantially in the form of Exhibit G, to the Canadian Agent setting forth the aggregate amount of Bankers' Acceptances requested and the maturity date of the requested Bankers' Acceptances which shall be from 30 up to 180 days, at the election of the Canadian Borrowers, and complying in all respects with subsection 5.2.

(e) Safekeeping of Orders. Any executed orders to be used as Bankers' Acceptances which are delivered to a Canadian Lender shall be held in safekeeping with the same degree of care as if they were such Canadian Lender's own property, and shall be kept at the place at which such orders are ordinarily held by such Canadian Lender, provided that such Canadian Lender shall not be deemed to be an insurer thereof.

(f) Maturity/Continuations. The Canadian Borrowers shall pay to the Canadian Agent, and there shall become due and payable, at 1:00 p.m., Toronto, Ontario time, on the maturity date for each Bankers' Acceptance an amount in Canadian Dollars in same day funds equal to the Face Amount of such Bankers' Acceptance (notwithstanding that any Canadian Lender which accepted any such Bankers' Acceptance may be the holder thereof at maturity); provided, however, that subject to Section 4.10 and provided that the Canadian Borrowers have, by giving notice in accordance with Section 2.5(c) or Section 4.1, requested the Canadian Lenders to accept its orders to replace all or a portion of outstanding Bankers' Acceptances as they mature, each Canadian Lender shall, on the maturity of such Bankers' Acceptances, accept the Canadian Borrowers' order(s) having an aggregate Face Amount equal to such Canadian Lender's pro rata share of such new Face Amount as will result in the aggregate BA Discount Proceeds, net of the Acceptance Fees, of the new order(s) being equal to (or, due to the operation of 2.5(h), exceeding to the least extent possible) the aggregate Face Amount of the matured Bankers' Acceptances or the portion thereof to be replaced.

(g) Repayments Prior to Maturity. Repayment of the Face Amount of a Bankers' Acceptance may be made, prior to the maturity date thereof, by the Canadian Borrowers to the Canadian Lender which has accepted such Bankers' Acceptance, but the amount repaid shall be held on deposit by such Canadian Lender until the maturity date of such Bankers' Acceptance. The Canadian Borrowers shall be entitled to the benefit of any interest accruing on such deposit, and on the maturity date of such Bankers' Acceptance, such Canadian Lender shall apply such interest in payment of amounts owed by the Canadian Borrowers hereunder. Any such repayment of the Face Amount of a Bankers' Acceptance by the Canadian Borrowers to a Canadian Lender shall satisfy the Canadian Borrowers' obligations under the Bankers' Acceptance so repaid, and such Canadian Lender shall thereafter be solely responsible for the payment of such Bankers' Acceptance.

(h) Minimum Amounts. Each request for Bankers' Acceptances shall be in a minimum aggregate amount of C$1,000,000 and in an integral multiple of C$100,000 above such amount. The Face Amount of each Bankers' Acceptance created hereunder shall be C$100,000 or any multiple thereof.

(i) Funding of Bankers' Acceptances.

(i) Subject to subsections (ii) and (iii) below, each Canadian Lender shall, not later than 1:00 p.m., Toronto, Ontario time, on the date of creation of Bankers' Acceptances, accept orders of the Canadian Borrowers which are presented to it for acceptance in an amount equal to each Canadian Lender's Canadian Revolving Loan Commitment Percentage of the aggregate Face Amounts of Bankers' Acceptances created on such date; provided, however, that if the Face Amount of a Banker's Acceptance, which would otherwise be accepted by a Canadian Lender, would not be C$100,000 or a larger multiple thereof, such Face Amount shall be increased or reduced by the Canadian Agent in its discretion to the nearest multiple of C$100,000. Subject to the provisions hereof, the Canadian Agent shall be responsible for making all necessary arrangements with each of the Canadian Lenders with respect to the acceptance of Bankers' Acceptances.

(ii) Each Canadian Lender shall transfer to the Canadian Agent for value on such creation date immediately available Canadian Dollars in an aggregate amount equal to the BA Discount Proceeds of all Bankers' Acceptances accepted and sold or purchased by such Canadian Lender on such date net of the applicable Acceptance Fee and net of the amount required to pay any of its previously accepted Bankers' Acceptances that are maturing on such date or its percentage of any Canadian Revolving Loan that is being converted to Bankers' Acceptances on such date.

(iii) Subject to subsection 4.10, in the sole judgment of a Canadian Lender, if such Canadian Lender is unable to create a Bankers' Acceptance in accordance with this Agreement, such Canadian Lender shall give an irrevocable notice to such effect to the Canadian Agent and the Canadian Borrowers prior to 11:00 a.m., Toronto, Ontario time, on the date of the requested creation of the Bankers' Acceptances. Such Canadian Lender shall make available to the Canadian Borrowers prior to 1:00 p.m., Toronto, Ontario time, one Business Day prior to the date of such requested Bankers' Acceptance, a Canadian Dollar loan in a principal amount equal to the BA Discount Proceeds of such Canadian Lender's pro rata share of the aggregate of the Face Amounts of Bankers' Acceptances to be created on such date and all of such Canadian Dollar loans to be made pursuant to this Section 2.5(i)(iii) on such date, such loan to be funded in the same manner as the Bankers' Acceptances provided by the other Canadian Lenders. Such loan shall have the same term as the Bankers' Acceptance for which it is a substitute and shall bear such interest per annum throughout the term thereof as shall permit such Canadian Lender to obtain the same effective rate as if such Canadian Lender had accepted and purchased a Bankers' Acceptance at the same Acceptance Fee and pricing at which the Canadian Agent would have accepted and purchased such Bankers' Acceptance on the bid side of the market at approximately 1:00 p.m., Toronto, Ontario time, on the date such loan is made. The Canadian Borrowers hereby agree that if such loan is made by a Canadian Lender interest shall be

payable in advance on the date of such loan by deducting the interest payable in respect thereof from the principal amount of such loan.

The Canadian Agent shall promptly inform the Administrative Agent of the creation of Bankers' Acceptances and the terms thereof. No Canadian Lender shall be responsible for the failure or delay by any other Canadian Lender in its obligation to create Bankers' Acceptances hereunder; provided, however, that the failure of any Canadian Lender to fulfill its Commitment hereunder shall not relieve any other Canadian Lender of its Commitment hereunder.

2.6 MINIMUM AMOUNTS OF LOANS.

Revolving Loans consisting of less than $1,000,000 shall be made as Base Rate Loans. Revolving Loans of $1,000,000 or more may be made as Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrowers may request; provided that no more than five (5) Canadian Eurodollar Loans and five (5) U.S. Eurodollar Loans shall be outstanding hereunder at any one time; and provided, further, that Eurodollar Loans shall be in a minimum principal amount of at least $1,000,000 and integral multiples of $500,000 in excess thereof. For the purposes of this Section, (i) Eurodollar Loans with the same Interest Period shall be considered as one Eurodollar Loan and (ii) Eurodollar Loans with different Interest Periods shall be considered as separate Eurodollar Loans, even if they begin on the same date, although borrowings, conversions and continuations may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new Eurodollar Loan with a single Interest Period.

2.7 FUNDING OF LOANS TO BORROWERS.

(a) U.S. Revolving Loans.

(i) Upon receipt of a Notice of Borrowing requesting U.S. Revolving Loans, the Administrative Agent shall promptly inform the U.S. Lenders as to the terms thereof. Each U.S. Lender will make its pro rata share of each U.S. Revolving Loan available to the Administrative Agent by 1:00 p.m., Charlotte, North Carolina time, on the date specified in the Notice of Borrowing by deposit (in U.S. dollars) of immediately available funds at the offices of the Administrative Agent at the address provided in Section 14.1, or at such other address as the Administrative Agent may designate in writing. All U.S. Revolving Loans shall be made by the U.S. Lenders pro rata on the basis of each U.S. Lender's U.S. Revolving Loan Commitment Percentage. The amount of the U.S. Revolving Loans will then be made available to the U.S. Borrowers by the Administrative Agent by crediting the account of the U.S. Borrowers on the books of such office of the Administrative Agent to the extent of the amount of such U.S. Revolving Loans are made available to the Administrative Agent.

(ii) Because the U.S. Borrowers anticipate requesting borrowings of U.S. Revolving Loans on a daily basis and repaying U.S. Revolving Loans on a daily basis through the collection of Accounts and the proceeds of other Collateral, resulting in the

amount of outstanding U.S. Revolving Loans fluctuating from day to day, in order to administer the U.S. Revolving Loans in an efficient manner and to minimize the transfer of funds between the Administrative Agent and the U.S. Lenders, the U.S. Lenders hereby instruct the Administrative Agent, and the Administrative Agent may (but is not obligated to) (A) make available, on behalf of the U.S. Lenders, the full amount of all U.S. Revolving Loans requested by the U.S. Borrowers (by telephone, followed by written confirmation) without requiring that the U.S. Borrowers give the Administrative Agent a written Notice of Borrowing with respect to such borrowing and without giving each U.S. Lender prior notice of the proposed borrowing, of such U.S. Lender's Revolving Loan Commitment Percentage thereof and the other matters covered by the Notice of Borrowing and (B) if the Administrative Agent has made any such amounts available as provided in clause (A), upon repayment of U.S. Revolving Loans by the U.S. Borrowers, apply such amounts repaid directly to the amounts made available by the Administrative Agent in accordance with clause (A) and not yet settled as described below; provided that the Administrative Agent shall not advance funds as described in clause (A) above if the Administrative Agent has actually received prior to such borrowing (1) an officer's certificate from the Company or any U.S. Borrower pursuant to and in accordance with Section 7.1(f) that a Default or Event of Default is in existence, which Default or Event of Default has not been cured or waived in accordance with the terms hereof, or (2) a Notice of Borrowing with respect to such borrowing from any U.S. Borrower wherein the certification provided therein states that the conditions to the making of the requested U.S. Revolving Loans have not been satisfied or (3) a written notice from any U.S. Lender that the conditions to such borrowing have not been satisfied, which officer's certificate, Notice of Borrowing or notice, in each case, shall not have been rescinded.

Notwithstanding any provision in the immediately preceding paragraph to the contrary, (x) each of the U.S. Borrowers hereby appoints the Administrative Agent as its attorney-in-fact, and requests that the Administrative Agent act for its benefit for the purpose of requesting U.S. Revolving Loans pursuant to this Section 2.7(a)(ii), (y) the Administrative Agent hereby agrees to act as attorney-in-fact and for the benefit of the U.S. Borrowers for the purpose of this Section 2.7(a)(ii) and (z) accordingly, unless the U.S. Borrowers shall withdraw such appointment or at any time less than $5,000,000 is available to be borrowed by the U.S. Borrowers under the U.S. Revolving Loan Commitment and the U.S. Borrowing Base, all borrowings permitted to be made by the U.S. Borrowers pursuant to this Section 2.7(a)(ii) shall be made by the Administrative Agent acting in its capacity as attorney-in-fact for the U.S. Borrowers. The Lenders hereby acknowledge and consent to the appointment of the Administrative Agent as attorney-in-fact for the purpose of requesting U.S. Revolving Loans pursuant to this Section 2.7(a)(ii). All other conditions to borrowings in this Section 2.7(a)(ii) shall be fully applicable. The Administrative Agent shall have the right (but not the obligation), prior to requesting any borrowing hereunder on behalf of the U.S. Borrowers, to require that the U.S. Borrowers certify in writing that no Event of Default exists at the time of such borrowing.

Proceeds of U.S. Revolving Loans made pursuant to this Section 2.7(a)(ii) shall be transferred directly to the First Union Funding Account and applied to the payment of control disbursement checks and other appropriate charges to such account designated from time to time by the U.S. Borrowers or as otherwise provided for herein and in the other Credit Documents. Wire transfers on any Business Day from the First Union Funding Account must be specifically requested by the U.S. Borrowers by telecopy by no later than 1:00 P.M. (Eastern time) on such Business Day.

If the Administrative Agent advances U.S. Revolving Loans on behalf of the U.S. Lenders, as provided in the immediately preceding paragraphs, the amount of outstanding U.S. Revolving Loans and each U.S. Lender's U.S. Revolving Loan Commitment Percentage thereof shall be computed weekly rather than daily and shall be adjusted upward or downward on the basis of the amount of outstanding U.S. Revolving Loans as of 5:00 P.M. on the Business Day immediately preceding the date of each computation; provided, however, that the Administrative Agent retains the absolute right at any time or from time to time to make the aforedescribed adjustments at intervals more frequent than weekly. The Administrative Agent shall deliver to each of the U.S. Lenders after the end of each week, or such lesser period or periods as the Administrative Agent shall determine, a summary statement of the amount of outstanding U.S. Revolving Loans for such period (such week or lesser period or periods being hereafter referred to as a "Settlement Period"). If the summary statement is sent by the Administrative Agent and received by the U.S. Lenders prior to 12:00 Noon on any Business Day each U.S. Lender shall make the transfers described in the next succeeding sentence no later than 3:00 P.M. on the day such summary statement was sent; and if such summary statement is sent by the Administrative Agent and received by the U.S. Lenders after 12:00 Noon on any Business Day, each U.S. Lender shall make such transfers no later than 3:00 P.M. on the next succeeding Business Day. If in any Settlement Period, the amount of a U.S. Lender's U.S. Revolving Loan Commitment Percentage of the U.S. Revolving Loans is in excess of the amount of U.S. Revolving Loans actually funded by such U.S. Lender, such U.S. Lender shall forthwith (but in no event later than the time set forth in the next preceding sentence) transfer to the Administrative Agent by wire transfer in immediately available funds the amount of such excess; and, on the other hand, if the amount of a U.S. Lender's U.S. Revolving Loan Commitment Percentage of the U.S. Revolving Loans in any Settlement Period is less than the amount of U.S. Revolving Loans actually funded by such U.S. Lender, the Administrative Agent shall forthwith transfer to such U.S. Lender by wire transfer in immediately available funds the amount of such difference. The obligation of each of the U.S. Lenders to transfer such funds shall be irrevocable and unconditional and without recourse to or warranty by the Administrative Agent.

Each of the Administrative Agent and the U.S. Lenders agree to mark their respective books and records at the end of each Settlement Period to show at all times the dollar amount of their respective U.S. Revolving Loan Commitment Percentages of the outstanding U.S. Revolving Loans. Because the Administrative Agent on behalf of the U.S. Lenders may be advancing and/or may be repaid U.S. Revolving Loans prior to the time when the U.S. Lenders will actually advance and/or be repaid U.S. Revolving Loans, interest with respect to U.S. Revolving Loans shall be allocated by the Administrative

Agent to each U.S. Lender (including the Administrative Agent) in accordance with the amount of U.S. Revolving Loans actually advanced by and repaid to each U.S. Lender (including the Administrative Agent) during each Settlement Period and shall accrue from and including the date such U.S. Revolving Loans are advanced by the Administrative Agent to but excluding the date such U.S. Revolving Loans are repaid by the U.S. Borrowers in accordance with Section 4.3 or actually settled by the applicable U.S. Lender as described in this Section 2.7(a)(ii). For purposes hereof, the U.S. Revolving Loans shall be deemed paid as and to the extent set forth in
Section 3.1(b). All such U.S. Revolving Loans shall be made as U.S. Base Rate Loans.

(b) Canadian Revolving Loans.

(i) Upon receipt of a Notice of Borrowing requesting a Canadian Revolving Loan, the Canadian Agent shall promptly inform the Canadian Lenders of the receipt thereof. Each Canadian Lender will make its pro rata share of such Canadian Revolving Loan available to the Canadian Agent by 1:00 p.m., Toronto, Ontario time, on the date specified in the Notice of Borrowing by deposit (in Canadian Dollars or U.S. dollars, as appropriate, as requested by the Canadian Borrowers) of immediately available funds at the office of the Canadian Agent at the address provided in Section 14.1. All Canadian Revolving Loans shall be made by the Canadian Lenders pro rata on the basis of each Canadian Lender's Canadian Revolving Loan Commitment Percentage. The amount of the Canadian Revolving Loans will then be made available to the applicable Canadian Borrower by the Canadian Agent by crediting the account of such Canadian Borrower on the books of such office of the Canadian Agent to the extent of the amount of such Canadian Revolving Loan made available to the Canadian Agent.

(ii) Because the Canadian Borrowers anticipate requesting borrowings of Canadian Revolving Loans on a daily basis and repaying Canadian Revolving Loans on a daily basis through the collection of Accounts and the proceeds of other Collateral, resulting in the amount of outstanding Canadian Revolving Loans fluctuating from day to day, in order to administer the Canadian Revolving Loans in an efficient manner and to minimize the transfer of funds between the Canadian Agent and the Canadian Lenders, the Canadian Lenders hereby instruct the Canadian Agent, and the Canadian Agent may (but is not obligated to) (A) make available, on behalf of the Canadian Lenders, the full amount of all Canadian Revolving Loans requested by the Canadian Borrowers (by telephone, followed by written confirmation) without requiring that the Canadian Borrowers give the Canadian Agent a written Notice of Borrowing with respect to such borrowing and without giving each Canadian Lender prior notice of the proposed borrowing, of such Canadian Lender's Revolving Loan Commitment Percentage thereof and the other matters covered by the Notice of Borrowing and (B) if the Canadian Agent has made any such amounts available as provided in clause (A), upon repayment of Canadian Revolving Loans by the Canadian Borrowers, apply such amounts repaid directly to the amounts made available by the Canadian Agent in accordance with clause (A) and not yet settled as described below; provided that the Canadian Agent shall not advance funds as described in clause (A) above if the Canadian Agent has actually received prior to such borrowing (1) an officer's certificate from the Company pursuant

to and in accordance with Section 7.1(f) that a Default or Event of Default is in existence, which Default or Event of Default has not been cured or waived in accordance with the terms hereof, or (2) a Notice of Borrowing with respect to such borrowing from the Canadian Borrowers wherein the certification provided therein states that the conditions to the making of the requested Canadian Revolving Loans have not been satisfied or (3) a written notice from any Canadian Lender that the conditions to such borrowing have not been satisfied, which officer's certificate, Notice of Borrowing or notice, in each case, shall not have been rescinded.

Notwithstanding any provision in the immediately preceding paragraph to the contrary, (x) each of the Canadian Borrowers hereby appoints the Canadian Agent as its attorney-in-fact, and requests that the Canadian Agent act for its benefit for the purpose of requesting Canadian Revolving Loans pursuant to this Section 2.7(b)(ii), (y) the Canadian Agent hereby agrees to act as attorney-in-fact and for the benefit of the Canadian Borrowers for the purpose of this Section 2.7(b)(ii) and (z) accordingly, unless the Canadian Borrowers shall withdraw such appointment or at any time less than $1,500,000 is available to be borrowed by the Canadian Borrowers under the Canadian Revolving Loan Commitment and the Canadian Borrowing Base, all borrowings permitted to be made by the Canadian Borrowers pursuant to this Section 2.7(b)(ii) shall be made by the Canadian Agent acting in its capacity as attorney-in-fact for the Canadian Borrowers. The Lenders hereby acknowledge and consent to the appointment of the Canadian Agent as attorney-in-fact for the purpose of requesting loans pursuant to this Section 2.7(b)(ii). All other conditions to borrowings in this Section 2.7(b)(ii) shall be fully applicable. The Canadian Agent shall have the right (but not the obligation), prior to requesting any borrowing hereunder on behalf of the Canadian Borrowers, to require that the Canadian Borrowers certify in writing that no Event of Default exists at the time of such borrowing.

Proceeds of Canadian Revolving Loans made pursuant to this Section 2.7(b)(ii) shall be transferred directly to the applicable Canadian Central Account and applied to the payment of control disbursement checks and other appropriate charges to such account designated from time to time by the Canadian Borrowers or as otherwise provided for herein and in the other Credit Documents. Wire transfers on any Business Day from the Canadian Central Accounts must be specifically requested by the Canadian Borrowers by telecopy by no later than 1:00 P.M. (Toronto, Ontario time) on such Business Day.

If the Canadian Agent advances Canadian Revolving Loans on behalf of the Canadian Lenders, as provided in the immediately preceding paragraphs, the amount of outstanding Canadian Revolving Loans and each Canadian Lender's Canadian Revolving Loan Commitment Percentage thereof shall be computed weekly rather than daily and shall be adjusted upward or downward on the basis of the amount of outstanding Canadian Revolving Loans as of 5:00 P.M. on the Business Day immediately preceding the date of each computation; provided, however, that the Canadian Agent retains the absolute right at any time or from time to time to make the aforedescribed adjustments at intervals more frequent than weekly subject to the approval of the Administrative Agent. The Canadian Agent shall deliver to each of the Canadian Lenders after the end of each week, or such lesser period or periods as the Canadian Agent shall determine, a summary

statement of the amount of outstanding Canadian Revolving Loans for such period (such week or lesser period or periods being hereafter referred to as a "Settlement Period"). If the summary statement is sent by the Canadian Agent and received by the Canadian Lenders prior to 12:00 Noon on any Business Day each Canadian Lender shall make the transfers described in the next succeeding sentence no later than 3:00 P.M. on the day such summary statement was sent; and if such summary statement is sent by the Canadian Agent and received by the Canadian Lenders after 12:00 Noon on any Business Day, each Canadian Lender shall make such transfers no later than 3:00 P.M. on the next succeeding Business Day. If in any Settlement Period, the amount of a Canadian Lender's Canadian Revolving Loan Commitment Percentage of the Canadian Revolving Loans is in excess of the amount of Canadian Revolving Loans actually funded by such Canadian Lender, such Canadian Lender shall forthwith (but in no event later than the time set forth in the next preceding sentence) transfer to the Canadian Agent by wire transfer in immediately available funds the amount of such excess; and, on the other hand, if the amount of a Canadian Lender's Canadian Revolving Loan Commitment Percentage of the Canadian Revolving Loans in any Settlement Period is less than the amount of Canadian Revolving Loans actually funded by such Canadian Lender, the Canadian Agent shall forthwith transfer to such Canadian Lender by wire transfer in immediately available funds the amount of such difference. The obligation of each of the Canadian Lenders to transfer such funds shall be irrevocable and unconditional and without recourse to or warranty by the Canadian Agent.

Each of the Canadian Agent and the Canadian Lenders agree to mark their respective books and records at the end of each Settlement Period to show at all times the dollar amount of their respective Canadian Revolving Loan Commitment Percentages of the outstanding Canadian Revolving Loans. Because the Canadian Agent on behalf of the Canadian Lenders may be advancing and/or may be repaid Canadian Revolving Loans prior to the time when the Canadian Lenders will actually advance and/or be repaid Canadian Revolving Loans, interest with respect to Canadian Revolving Loans shall be allocated by the Canadian Agent to each Canadian Lender (including the Canadian Agent) in accordance with the amount of Canadian Revolving Loans actually advanced by and repaid to each Canadian Lender (including the Canadian Agent) during each Settlement Period and shall accrue from and including the date such Canadian Revolving Loans are advanced by the Canadian Agent to but excluding the date such Canadian Revolving Loans are repaid by the Canadian Borrowers in accordance with Section 4.3 or actually settled by the applicable Canadian Lender as described in this Section
2.7(b)(ii). For purposes hereof, the Canadian Revolving Loans shall be deemed paid as and to the extent set forth in Section 3.2(b). All such Canadian Revolving Loans shall be made as Canadian Base Rate Loans.

(c) All Revolving Loans.

The Canadian Agent shall promptly inform the Administrative Agent and the Administrative Agent shall promptly inform the Canadian Agent, by telecopy, of the funding of any Revolving Loan and the terms thereof. No Lender shall be responsible for the failure or delay by any other Lender in its obligation to make Revolving Loans

hereunder; provided, however, that the failure of any Lender to fulfill its Commitment hereunder shall not relieve any other Lender of its Commitment hereunder. Unless the Administrative Agent or the Canadian Agent, as the case may be, shall have been notified by any Lender prior to the date of any Revolving Loan advance pursuant to a Notice of Borrowing that such Lender does not intend to make available to the Administrative Agent or the Canadian Agent, as the case may be, its portion of the Revolving Loan advance to be made on such date, the Administrative Agent or the Canadian Agent, as the case may be, may assume that such Lender has made such amount available to the Administrative Agent or the Canadian Agent, as the case may be, on the date of such Revolving Loan advance, and the Administrative Agent or the Canadian Agent, as the case may be, in reliance upon such assumption, may (in its sole discretion without any obligation to do so) make available to the applicable Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent or the Canadian Agent, as the case may be, the Administrative Agent or the Canadian Agent, as the case may be, shall be entitled to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent's or, as the case may be, the Canadian Agent's demand therefor, the Administrative Agent or the Canadian Agent, as the case may be, will promptly notify the applicable Borrower and such Borrower shall immediately pay such corresponding amount to the Administrative Agent or the Canadian Agent, as the case may be. The Administrative Agent or the Canadian Agent, as the case may be, shall also be entitled to recover from such Lender or such Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent or the Canadian Agent, as the case may be, to such Borrower to the date such corresponding amount is recovered by the Administrative Agent or the Canadian Agent, as the case may be, at a per annum rate equal to the Federal Funds Rate.

2.8 TERM.

The obligation of the Lenders to make Revolving Loans and to issue Banker's Acceptances shall expire at the Administrative Agent's close of business in Charlotte, North Carolina on the Maturity Date or such earlier date if the Commitments are terminated pursuant to Section 11.2. On the Maturity Date, the entire outstanding principal balance of all amounts outstanding under the U.S. Revolving Loan Commitment and the Canadian Revolving Loan Commitment, together with accrued but unpaid interest and all other sums owing under this Agreement, shall be due and payable in full, unless accelerated sooner pursuant to Section 11.2.

2.9 REVOLVING NOTES.

The Revolving Loans made by each Lender shall be evidenced by a duly executed promissory note of the applicable Borrower, dated as of the Closing Date, in an original principal amount equal to such Lender's U.S. Revolving Loan Commitment or Canadian Revolving Loan Commitment, as applicable, and substantially in the form of Exhibit F.

2.10 REDUCTION OF REVOLVING LOAN COMMITMENTS.

Upon at least three (3) Business Days' notice, (a) the Borrowers may, from time to time, permanently reduce the Canadian Revolving Loan Commitment in whole or in part; provided that, (i) such reduction must be in a minimum amount of $1,000,000 and in integral multiples of $1,000,000 above such amount and (ii) no reduction shall be made which would reduce the Canadian Revolving Loan Commitment to an amount less than the sum of Canadian Revolving Loans then outstanding plus Canadian LOC Obligations outstanding plus the aggregate Face Amount of Bankers' Acceptances; and (b) the U.S. Borrowers may from time to time permanently reduce the U.S. Revolving Loan Commitment in whole or in part; provided that, (i) such reduction must be in a minimum amount of $3,000,000 and in integral multiples of $1,000,000 above such amount and (ii) no reduction shall be made which would reduce the U.S. Revolving Loan Commitment to an amount less than the sum of U.S. Revolving Loans then outstanding plus U.S. LOC Obligations then outstanding. Notwithstanding anything above to the contrary, once the Canadian Revolving Loan Commitment is reduced to $7,000,000 or the U.S. Revolving Loan is reduced to $20,000,000, any subsequent permanent reduction of the Revolving Loan Commitments must be done on a basis such that both the Canadian Revolving Loan Commitment and the U.S. Revolving Loan Commitment reduce simultaneously on a pro rata basis.

ARTICLE III

CASH MANAGEMENT ARRANGEMENTS

3.1 U.S. LOCKBOX ARRANGEMENTS.

(a) The U.S. Borrowers shall have each established and shall maintain one or more lockboxes (each a "U.S. Lockbox") with financial institutions, including First Union, selected by them and reasonably acceptable to the Administrative Agent (each a "U.S. Lockbox Bank") and shall instruct all account debtors on the Accounts of each U.S. Credit Party to remit all payments to its respective U.S. Lockboxes. All amounts received by the U.S. Credit Parties from any account debtor, in addition to all other cash proceeds from the U.S. Collateral, shall be promptly deposited into the applicable U.S. Lockbox Account (as defined below).

(b) Each U.S. Credit Party, the Administrative Agent and each U.S. Lockbox Bank shall enter into three party agreements in the form of Exhibit I-1 hereto (each a "Lockbox Agreement"), providing, among other things, for the following:

(i) The U.S. Credit Parties will open and establish for the benefit of the Administrative Agent on behalf of the U.S. Lenders an account at each U.S. Lockbox Bank (each a "U.S. Lockbox Account").

(ii) All receipts held in the U.S. Lockboxes shall be remitted daily to the appropriate U.S. Lockbox Account. All funds deposited into the U.S. Lockbox Accounts on any Business Day shall be transferred to the applicable First Union Cash Collateral Account. All funds deposited into the First Union Cash Collateral Accounts on any Business Day shall be transferred to the First

Union Account on such Business Day. All funds deposited on any Business Day to the First Union Account shall be applied by the Administrative Agent on the following Business Day to reduce the then outstanding balance of the U.S. Revolving Loans and to pay accrued interest thereon and to pay any other outstanding Obligations of the U.S. Borrowers which are then due and payable hereunder; provided that for the purpose of determining the availability of U.S. Revolving Loans hereunder, such funds deposited into the First Union Account shall be deemed to have reduced the outstanding U.S. Revolving Loans on the Business Day such funds were deposited into such account. All amounts received directly by the U.S. Credit Parties from any account debtor, in addition to all other cash proceeds from the U.S. Collateral, shall be held in trust by the U.S. Credit Parties and promptly deposited into the applicable U.S. Lockbox Account or, if made by wire transfer, directly to the First Union Cash Collateral Account No. 2000007396317.

(iii) All funds deposited into the First Union Account shall immediately become the property of the Administrative Agent, and the U.S. Credit Parties shall obtain the agreement by the U.S. Lockbox Banks to waive any offset rights against the funds so deposited. The Administrative Agent assumes no responsibility for the U.S. Lockbox arrangements, including without limitation, any claim of accord and satisfaction or release with respect to deposits accepted by the U.S. Lockbox Banks thereunder.

(iv) The U.S. Credit Parties may close U.S. Lockboxes and/or open new U.S. Lockboxes with the prior written consent of the Administrative Agent and subject to prior execution and delivery to the Administrative Agent of Lockbox Agreements consistent with the provisions of this Section 3.1(b) and in form and substance satisfactory to the Administrative Agent.

(v) Notwithstanding the foregoing to the contrary, with respect to U.S. Lockboxes and related Lockbox Accounts in existence prior to the Closing Date, the U.S. Borrowers may, in lieu of entering into a Lockbox Agreement, deliver a Lockbox Letter, countersigned by the applicable U.S. Lockbox Bank.

(c) The U.S. Borrowers hereby authorize each U.S. Lender to charge from time to time against any or all of the U.S. Credit Parties' accounts with such U.S. Lender any of the Obligations which are then due and payable by such U.S. Borrowers. Each U.S. Lender receiving any payment as a result of charging any such account shall promptly notify the Administrative Agent thereof and make such arrangements as the Administrative Agent shall request to share the benefit thereof in accordance with Section 4.8.

3.2 CANADIAN COLLECTION AND PAYMENT ARRANGEMENTS.

(a) The Canadian Credit Parties shall have established and shall maintain one or more accounts (each a "Canadian Local Account") with the Canadian Agent, naming

the Administrative Agent as secured party. All amounts received by the Canadian Credit Parties from any account debtor, in addition to all other cash proceeds from the Canadian Collateral, shall be promptly deposited into the applicable Canadian Local Account.

(b) All funds deposited into the Canadian Local Accounts on any Business Day shall be credited to the applicable Canadian Central Account (U.S. Dollars to be credited to the Canadian Central Account - US and Canadian Dollars to be credited to the Canadian Central Account - Cdn). All good funds credited on any Business Day to the Canadian Central Accounts shall be applied by the Canadian Agent on the same Business Day to reduce the then outstanding balance of the Canadian Revolving Loans and to pay accrued interest thereon and to pay any other outstanding Obligations which are then due and payable hereunder by the Canadian Borrowers; provided that for the purpose of determining the availability of Canadian Revolving Loans hereunder, such funds credited into the Canadian Central Accounts shall be deemed to have reduced the outstanding Canadian Revolving Loans on the Business Day such funds were credited to such account. All amounts received directly by the Canadian Credit Parties from any account debtor, in addition to all other cash proceeds from the Canadian Collateral, shall be held in trust by the Canadian Credit Parties and promptly deposited into the applicable Canadian Local Account.

(c) All funds deposited into the Canadian Local Account or the Canadian Central Accounts shall immediately become the property of the Canadian Agent for the benefit of the Administrative Agent on behalf of the Lenders and the Canadian Agent, in its capacity as depository, hereby waives any offset rights against the funds so deposited. The Agents assume no responsibility for the Canadian collection and payment arrangements, including, without limitation, any claim of accord and satisfaction or release with respect to deposits accepted by the Canadian Agent, in its capacity as depository.

(d) The Canadian Borrowers hereby authorize each Canadian Lender to charge from time to time against any or all of the Canadian Credit Parties' accounts with such Canadian Lender any of the Obligations which are then due and payable by such Canadian Borrowers. Each Canadian Lender receiving any payment as a result of charging any such account shall promptly notify the Canadian Agent thereof and make such arrangements as the Agents shall request to share the benefit thereof in accordance with Section 4.8.

3.3 MAINTENANCE OF ACCOUNT.

Each Agent shall maintain an account on its books in the name of the U.S. Borrowers or the Canadian Borrowers, as applicable, in which such Borrowers will be charged with all loans and advances made by the applicable Lenders to such Borrowers or for such Borrowers' account, including the Revolving Loans, the LOC Obligations, the BA Obligations and any other Obligations, including any and all costs, expenses and attorney's fees which the Agents may incur, including, without limitation, in connection with the exercise by or for the Lenders of any of the rights or powers herein conferred upon the Agents (other than in connection with any

assignments or participations by any Lender) or in the prosecution or defense of any action or proceeding by or against any Borrower, any other Credit Party or the Lenders concerning any matter arising out of, connected with, or relating to this Credit Agreement or the Accounts, or any Obligations owing to the Lenders by any Borrower. The Borrowers will be credited in accordance with Section 3.1 or 3.2 above, as applicable, with all amounts received by the Lenders from the Borrowers or from others for the Borrowers' account, including, as above set forth, all amounts received by the Agents in payment of Accounts. In no event shall prior recourse to any Accounts or other Collateral be a prerequisite to an Agent's right to demand payment of any Obligation upon its maturity. Further, it is understood that the Agents shall have no obligation whatsoever to perform in any respect any of the Credit Parties' contracts or obligations relating to the Accounts.

3.4 STATEMENT OF ACCOUNT

After the end of each month the Agents shall send the applicable Borrowers (directed to the Borrowers' Toronto, Ontario office in the case of the Canadian Borrowers and to the Borrowers' San Antonio, Texas office in the case of the U.S. Borrowers, with a copy to the Borrowers' Toronto, Ontario office) a statement showing the accounting for the charges, loans, advances and other transactions occurring between the Lenders and the applicable Borrowers during that month. The monthly statements, absent manifest error, shall be deemed correct and binding upon the applicable Borrowers and shall constitute an account stated between the applicable Borrowers and the Lenders unless the applicable Agent receives a written statement of the applicable Borrowers' exceptions within thirty (30) days after same is mailed to the applicable Borrowers.

ARTICLE IV

ADDITIONAL PROVISIONS REGARDING LOANS AND LETTERS OF CREDIT

4.1 CONTINUATIONS AND CONVERSIONS.

(a) U.S. Borrowers. The U.S. Borrowers shall have the option, on any Business Day, to continue an existing Eurodollar Loan into a subsequent Interest Period, to convert a Base Rate Loan into a Eurodollar Loan or to convert a Eurodollar Loan into a Base Rate Loan; provided, however, that
(i) each such continuation must be requested by the U.S. Borrowers pursuant to a written Notice of Continuation/Conversion, in the form of Exhibit D, in compliance with the terms set forth below and (ii) except as provided in
Section 4.11, Eurodollar Loans may be converted into Base Rate Loans only on the last day of an Interest Period applicable thereto; (iii) Eurodollar Loans may be continued and Base Rate Loans may be converted into Eurodollar Loans only if no Default or Event of Default is in existence on the date of continuation or conversion; and (iv) failure by the U.S. Borrowers to properly continue a Eurodollar Loan at the end of an Interest Period shall be deemed a conversion to a Base Rate Loan. Each continuation or conversion must be requested by the U.S. Borrowers, directed to the Administrative Agent at the address set forth on Schedule 1.1A hereto, no later than 11:00 a.m., (A) on the date of a requested conversion of a Eurodollar Loan to a Base Rate Loan or (B) three (3) Business Days prior to the date of a requested continuation of a Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar Loan, in each case pursuant to a written Notice of Continuation/Conversion submitted to the Administrative Agent which shall set forth (x) whether the applicable U.S. Borrower wishes to continue or convert such Loans and (y) if the request is to continue a Eurodollar Loan or convert a Base Rate Loan to a Eurodollar Loan, the Interest Period applicable thereto. The Administrative Agent shall give each U.S. Lender notice as promptly as practicable of any such proposed extension or conversion pursuant to this section.

(b) Canadian Borrowers.

(i) The Canadian Borrowers shall have the option, on any Business Day, to continue an existing Eurodollar Loan into a subsequent Interest Period, to convert a CA U.S. Base Rate Loan into a Eurodollar Loan or to convert a Eurodollar Loan into a CA U.S. Base Rate Loan; provided, however, that (A) each such continuation must be requested by the Canadian Borrowers, directed to the Canadian Agent at the address set forth on Schedule 1.1A hereto, pursuant to a written Notice of Continuation/Conversion, in the form of Exhibit D, in compliance with the terms set forth below and (B) except as provided in Section 4.11, Eurodollar Loans may be converted into CA U.S. Base Rate Loans only on the last day of an Interest Period applicable thereto; (C) Eurodollar Loans may be continued and CA U.S. Base Rate Loans may be converted into Eurodollar Loans only if no Default or Event of Default is in existence on the date of continuation or conversion; and (D) failure by the Canadian Borrowers to properly continue a Eurodollar Loan at the end of an Interest Period shall be deemed a conversion to a CA U.S. Base Rate Loan. Each

continuation or conversion must be requested by the Canadian Borrowers no later than 11:00 a.m., Toronto, Ontario time, (x) on the date of a requested conversion of a Eurodollar Loan to a Base Rate Loan or (y) three (3) Business Days prior to the date of a requested continuation of a Eurodollar Loan or conversion of a CA U.S. Base Rate Loan to a Eurodollar Loan, in each case pursuant to a written Notice of Continuation/Conversion submitted to the Canadian Agent which shall set forth (1) whether the Canadian Borrowers wish to continue or convert such Loans and (2) if the request is to continue a Eurodollar Loan or convert a CA U.S. Base Rate Loan to a Eurodollar Loan, the Interest Period applicable thereto. The Canadian Agent shall give each Canadian Lender notice as promptly as practicable of any such proposed extension or conversion pursuant to this section.

(ii) The Canadian Borrowers shall have the option, on any Business Day, to convert a Canadian Prime Rate Loan into a Bankers' Acceptance, to continue a maturing Bankers' Acceptance in accordance with Section 2.5 or to convert a maturing Bankers' Acceptance into a Canadian Prime Rate Loan; provided, however, (A) each such continuation or conversion must be requested by the Canadian Borrowers pursuant to an irrevocable notice to the Canadian Agent, substantially in the form of Exhibit D, in compliance with the terms set forth below, (B) the Canadian Borrowers must comply with all the requirements of Section 2.5, and (C) failure by the Canadian Borrowers to properly continue a Bankers' Acceptance shall be deemed a conversion to a Canadian Prime Rate Loan. Each continuation or conversion must be requested by the Canadian Borrowers no later than 11:00 a.m., Toronto, Ontario time, (x) one Business Day prior to the date of a requested conversion of a Bankers' Acceptance to a Canadian Prime Rate Loan or (y) one Business Day prior to the date of a requested continuation of a Bankers' Acceptance or conversion of a Canadian Prime Rate Loan to a Bankers' Acceptance, in each case pursuant to an irrevocable notice submitted to the Canadian Agent which shall set forth (1) that the Loans to be continued or converted are Canadian Prime Rate Loans, (2) whether the Canadian Borrowers wish to continue or convert such Loans and (3) if the request is to continue a Bankers' Acceptance or convert a Canadian Prime Rate Loan to a Bankers' Acceptance, the maturity date applicable thereto. The Canadian Agent shall give each Canadian Lender notice as promptly as practicable of any such proposed continuation or conversion pursuant to this Section.

4.2 INTEREST.

(a) Interest Rate. All U.S. Base Rate Loans shall accrue interest at the U.S. Base Rate, plus the Applicable Percentage. All Canadian Prime Rate Loans shall accrue interest at the Canadian Prime Rate, plus the Applicable Percentage, payable in Canadian Dollars. All CA U.S. Base Rate Loans shall accrue interest at the CA U.S. Base Rate, plus the Applicable Percentage, payable in U.S. dollars. All Eurodollar Loans shall accrue interest at the Adjusted Eurodollar Rate for the applicable Interest Period.

(b) Default Rate of Interest. Upon the occurrence, and during the continuance, of an Event of Default, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing (but not timely paid) hereunder or under the other Credit Documents (including without limitation fees and expenses) shall bear interest, payable on demand, at a per annum rate equal to the U.S. Base Rate, plus the sum of the Tier Level 1 Applicable Percentage for Base Rate Loans and two percent (2%) per annum; provided, that the default rate of interest set forth herein shall apply in the case of an Event of Default other than an Event of Default occurring under Section 11.1(a), (c)(i), (f) and (j) only at the direction of the Required Lenders.

(c) Interest Payments. Interest on Loans shall be due and payable in arrears on each Interest Payment Date. If an Interest Payment Date falls on a date which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding day.

(d) Computation of Interest. All computations of interest hereunder on Eurodollar Loans and U.S. Base Rate Loans shall be made on the basis of the actual number of days elapsed over a year of 360 days. All computations of interest hereunder on all other Loans shall be made on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be.

(e) Interest Act (Canada). Each Borrower hereby acknowledges that the rate or rates of interest applicable to certain of the Loans and fees as specified hereunder may be computed on the basis of a year of 360 days and paid for the actual number of days elapsed. For purposes of the Interest Act (Canada), if interest computed on the basis of a 360-day year is payable for any part of the calendar year, the equivalent yearly rate of interest may be determined by multiplying the specified rate of interest by the number of days (365 or 366) in such calendar year and dividing such product by 360.

4.3 PLACE AND MANNER OF PAYMENTS.

All payments of principal, interest and fees in connection with the Canadian Revolving Loans, BA Obligations and Canadian LOC Obligations shall be made by the Borrowers to the Canadian Agent at its offices located at the address set forth on Schedule 1.1A hereto on the date due by 2:00 p.m., Toronto, Ontario time, (in Canadian Dollars or U.S. Dollars, as applicable) in immediately available funds or by direct charge against the Canadian Revolving Loan Commitment, if available, pursuant to Section 3.2(b) hereof, in each case, without setoff, deduction, counterclaim or withholding of any kind. All other payments of principal, interest, fees, expenses and other amounts to be made by the Borrowers under this Agreement (including, but not limited to, the U.S. Revolving Loans) shall be received not later than 2:00 p.m., Charlotte, North Carolina time, on the date when due in U.S. Dollars and in immediately available funds or by direct charge against the U.S. Revolving Loan Commitment, if available, pursuant to Section 3.1(b) hereof, in each case, without setoff, deduction, counterclaim or withholding of any kind, by the Administrative Agent at its offices located at the address set forth on Schedule 1.1A hereto. A Borrower shall, at the time it makes any payment under this Agreement, specify to the Administrative Agent, or the

Canadian Agent as applicable, the Loans, Letters of Credit, fees or other amounts payable by the Borrowers hereunder to which such payment is to be applied (and in the event that it fails to specify, or if such application would be inconsistent with the terms hereof, the Administrative Agent, or the Canadian Agent as applicable, shall distribute such payment to the Lenders in the manner described in Section 4.6). The Canadian Agent shall inform the Administrative Agent and the Administrative Agent shall inform the Canadian Agent, by telecopy as of the first Business Day of each month, of all principal, interest or fees received from the Borrowers during the prior month, except for fees received pursuant to Section 4.5(c). The Administrative Agent or the Canadian Agent, as applicable, will distribute such payments to the applicable Lenders on the date of receipt if any such payment is received prior to 2:00 p.m. (Charlotte, North Carolina time or Toronto, Ontario time, as applicable); otherwise the Administrative Agent or the Canadian Agent, as applicable, will distribute such payment to the applicable Lenders on the next succeeding Business Day. The Borrowers' obligations to the Lenders with respect to such payments shall be discharged by making such payments to the applicable agent pursuant to this
Section 4.3 or if not timely paid or an Event of Default then exists, may be added to the principal amount of the Revolving Loans outstanding. Whenever any payment hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day (subject to accrual of interest and fees for the period of such extension), except that in the case of Eurodollar Loans, if the extension would cause the payment to be made in the next following calendar month, then such payment shall instead be made on the next preceding Business Day.

4.4 PREPAYMENTS.

(a) Voluntary Prepayments. The Borrowers shall have the right to prepay Revolving Loans and Bankers' Acceptances in whole or in part from time to time without premium or penalty; provided, however, that (i) Eurodollar Loans may only be prepaid on three (3) Business Day's prior written notice to the Administrative Agent or the Canadian Agent, as the case may be, and any prepayment of Eurodollar Loans will be subject to
Section 4.14, (ii) each such partial prepayment of Eurodollar Loans shall be in the minimum principal amount of $1,000,000, and (iii) that portion of the Canadian Revolving Loan Commitment subject to the creation of a Bankers' Acceptance may be prepaid prior to the maturity of such Bankers' Acceptance only in accordance with Section 2.5(g). Amounts prepaid hereunder shall be applied as the Borrowers may elect; provided, that (A) if the U.S. Borrowers shall fail to specify a voluntary prepayment as to the U.S. Revolving Loans then such prepayment shall be applied first to U.S. Base Rate Loans and then to Eurodollar Loans in direct order of Interest Period maturities and (B) if the Canadian Borrowers shall fail to specify a voluntary prepayment as to the Canadian Revolving Loans or Bankers' Acceptances, then such prepayments shall be applied (1) in the case of funds received in Canadian Dollars, to the Canadian Revolving Loans and Banker's Acceptances (first to Canadian Prime Rate Loans and then to Bankers' Acceptances in direct order of maturities) and (2) in the case of funds received in U.S. Dollars, to the Canadian Revolving Loans (first to CA U.S. Base Rate Loans and then to Eurodollar Loans, in direct order of Interest Period maturities).

(b) Mandatory Prepayments.

(i) Revolving Loan Overadvance. If, at any time (A) the sum of U.S. Revolving Loans outstanding plus Canadian Revolving Loans outstanding plus LOC Obligations plus BA Obligations exceeds the lesser of the Total Borrowing Base and $40,000,000; (B) the U.S. Revolving Loans outstanding plus the U.S. LOC Obligations outstanding exceed the lesser of the U.S. Borrowing Base and the U.S. Revolving Loan Commitment; or (C) the Canadian Revolving Loans outstanding plus Canadian LOC Obligations outstanding plus BA Obligations exceed the lesser of the Canadian Borrowing Base and the Canadian Revolving Loan Commitment, then the Borrowers (or the applicable Borrower) shall immediately make a payment in an amount equal to the net deficiency. Payments made under (A) shall be applied first pro rata to U.S. Base Rate Loans and Canadian Base Rate Loans and then to Eurodollar Loans (pro rata between those made under the Canadian Revolving Loan Commitment and the U.S. Revolving Loan Commitment) in direct order of Interest Period maturities and then to Bankers' Acceptances in direct order of Interest Period maturities. Payments made under (B) shall be applied first to U.S. Base Rate Loans and then to Eurodollar Loans in direct order of Interest Period maturities. Payments made under (C) shall be applied first to Canadian Base Rate Loans and then to Eurodollar Loans in direct order of Interest Period maturities and then to Bankers' Acceptances in direct order of Interest Period maturities. Prepayments made on Bankers' Acceptances shall be made in accordance with Section 2.5(g).

(ii) Asset Sales. Immediately upon the receipt by any Credit Party of proceeds from any Asset Disposition, the Borrowers shall prepay the Loans in an amount equal to 100% of the Net Proceeds of such Asset Disposition (such prepayment to be applied as set forth in
Section 4.4(c) below).

(iii) Casualty Loss. To the extent of cash proceeds received in connection with a Casualty Loss by any Credit Party, the Borrowers shall prepay the Loans in an amount equal to one hundred percent (100%) of such cash proceeds if the Administrative Agent shall have elected to apply the proceeds realized from such Casualty Loss to the prepayment of the Loans (such prepayment to be applied as set forth in
Section 4.4(c) below).

(c) Application of Certain Prepayments. All amounts required to prepay Loans pursuant to Section 4.4(b)(ii) or (iii) above shall be applied (i) for an Asset Disposition or Casualty Loss in connection with U.S. Collateral, to the U.S. Revolving Loans (first to Base Rate Loans and then to Eurodollar Loans in direct order of maturities) and (ii) for an Asset Disposition or Casualty Loss in connection with the Canadian Collateral, (A) in the case of proceeds received in Canadian Dollars, to the Canadian Revolving Loans and Banker's Acceptances (first to Canadian Prime Rate Loans and then to Bankers' Acceptances in direct order of maturities) and (B) in the case of proceeds received in U.S. Dollars, to the Canadian Revolving Loans (first to CA U.S. Base Rate Loans and then to Eurodollar Loans, in direct order of maturities). All prepayments shall be subject to
Section 4.14. Payments on Loans denominated in U.S. Dollars shall be made in U.S. Dollars and payments on Loans denominated in Canadian Dollars shall be made in Canadian Dollars.

4.5 FEES.

(a) Non-Use Fees. In consideration of the Revolving Loan Commitments being made available by the Lenders hereunder, (i) the U.S. Borrowers agree to pay to the Administrative Agent, for the account of the U.S. Lenders, a per annum fee equal to the Applicable Percentage for the Non-Use Fees (calculated on the basis of the actual number of days elapsed in a 360 day year) on the U.S. Unutilized Revolving Commitment and (ii) the Canadian Borrowers agree to pay to the Canadian Agent, for the account of the Canadian Lenders, a per annum fee equal to the Applicable Percentage for the Non-Use Fees (calculated on the basis of the actual number of days elapsed in a 365 or 366 day year, as the case may be) on the Canadian Unutilized Revolving Commitment (collectively, the "Non-Use Fees"). The accrued Non-Use Fees shall be due and payable monthly in arrears on the last day of each calendar month (as well as on the Maturity Date and on any date that a Revolving Loan Commitment is reduced) for the month then ending (or portion thereof), beginning with the first of such dates to occur after the Closing Date.

(b) Letter of Credit Fees.

(i) Letter of Credit Fee. In consideration of the issuance of Letters of Credit hereunder, the U.S. Borrowers agree to pay to the applicable Issuing Lender in respect of outstanding U.S. Letters of Credit for the pro rata benefit of the U.S. Lenders (based on each U.S. Lender's U.S. Revolving Loan Commitment Percentage of the U.S. Revolving Loan Commitment (calculated on the basis of the actual number of days elapsed in a 360 day year)) and, the Canadian Borrowers agree to pay to the applicable Issuing Lender in respect of outstanding Canadian Letters of Credit for the pro rata benefit of the Canadian Lenders (based on each Canadian Lender's Canadian Revolving Loan Commitment Percentage of the Canadian Revolving Commitment (calculated on the basis of the actual number of days elapsed in a 365 or 366 day year, as the case may be)), an annual fee (the "Letter of Credit Fee") equal to the Applicable Percentage for the Letter of Credit Fee on the average daily maximum amount available to be drawn under each such Letter of Credit from the date of issuance to the date of expiration. The Letter of Credit Fee will be payable monthly in arrears on the last day of each calendar month and on the Maturity Date.

(ii) Issuing Lender Fee. In addition to the Letter of Credit Fees payable pursuant to subsection (i) above, each of the Borrowers shall pay to the applicable Issuing Lender for its own account, without sharing by the other Lenders, a fee equal to one-eighth of one percent (0.125%) per annum on the total sum of all Letters of Credit issued by the Issuing Lender, such fee to be paid monthly in arrears on the last day of each calendar month (as well as on the Maturity Date) (the "Issuing Lender Fee").

(c) Administrative Fees. The U.S. Borrowers agree to pay to the Administrative Agent, for its own account, an annual fee as agreed to between the U.S. Borrowers and the Administrative Agent in the Administrative Agent Fee Letter.

(d) Authorization to Charge Account. The Borrowers hereby authorize the Administrative Agent or the Canadian Agent, as the case may be, to charge the Borrowers' Revolving Loan accounts with the amount of all payments and fees due hereunder to the Lenders, the Administrative Agent, the Canadian Agent and the Issuing Lender as and when such payments become due. The Borrowers confirm that any charges which the applicable Agent may so make to the Borrowers' Revolving Loan accounts as herein provided will be made as an accommodation to the Borrowers and solely at the applicable Agent's discretion.

4.6 PRO RATA TREATMENT.

Except to the extent otherwise provided herein:

(a) Loans. Each Revolving Loan borrowing (including, without limitation, each Mandatory Borrowing), each creation of Bankers' Acceptances, each payment or prepayment of principal of any Loan, each payment of fees (other than the Issuing Lender Fee retained by each of the Issuing Lenders for its own account and the administrative fees retained by the Administrative Agent and the Canadian Agent for its own account), each reduction of the U.S. Revolving Loan Commitment or the Canadian Revolving Loan Commitment, and each conversion or continuation of any Loan, shall be allocated pro rata among the relevant Lenders in accordance with the respective U.S. Revolving Loan Commitment Percentages or Canadian Revolving Loan Commitment Percentages, as applicable, of such Lenders; it being understood that payments under the U.S. Revolving Loans shall be allocated pro rata among the U.S. Lenders and payments under the Canadian Revolving Loans shall be allocated pro rata among the Canadian Lenders (or, if the Commitments of such Lenders have expired or been terminated, in accordance with the respective principal amounts of the outstanding Loans, Bankers' Acceptances and Participation Interests of such Lenders); provided that, if any Lender shall have failed to pay its applicable pro rata share of any Revolving Loan, then any amount to which such Lender would otherwise be entitled pursuant to this subsection (a) shall instead be payable to the Administrative Agent or the Canadian Agent, as applicable; provided further, that in the event any amount paid to any Lender pursuant to this subsection (a) is rescinded or must otherwise be returned by the Administrative Agent or the Canadian Agent, as applicable, each Lender shall, upon the request of the Administrative Agent or the Canadian Agent, as applicable, repay to the Administrative Agent or the Canadian Agent, as applicable the amount so paid to such Lender, with interest for the period commencing on the date such payment is returned by the Administrative Agent or the Canadian Agent, as applicable until the date the Administrative Agent or the Canadian Agent, as applicable receives such repayment at a rate per annum equal to, during the period to but excluding the date two
(2) Business Days after such request, the Federal Funds Rate, and thereafter, the U.S. Base Rate plus two percent (2%) per annum; and

(b) Letters of Credit. Each payment of unreimbursed drawings in respect of LOC Obligations shall be allocated to each U.S. Lender pro rata in accordance with its U.S. Lender Revolving Loan Commitment Percentage or to each Canadian Lender pro rata in accordance with its Canadian Lender Revolving Loan Commitment Percentage, as appropriate; provided that, if any Lender shall have failed to pay its applicable pro rata share of any drawing under any Letter of Credit, then any amount to which such Lender would otherwise be entitled pursuant to this subsection (b) shall instead be payable to the Issuing Lender; provided further, that in the event any amount paid to any Lender pursuant to this subsection (b) is rescinded or must otherwise be returned by the Issuing Lender, each Lender shall, upon the request of the Issuing Lender, repay to the Administrative Agent for the account of the Issuing Lender the amount so paid to such Lender, with interest for the period commencing on the date such payment is returned by the Issuing Lender until the date the Issuing Lender receives such repayment at a rate per annum equal to, during the period to but excluding the date two (2) Business Days after such request, the Federal Funds Rate, and thereafter, the U.S. Base Rate, plus two percent (2%) per annum.

4.7 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.

Notwithstanding any other provisions of this Agreement, after the occurrence and during the continuance of an Event of Default, all amounts collected or received by an Agent or any Lender on account of amounts outstanding under any of the Credit Documents or in respect of the collateral shall be paid over or delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation reasonable attorneys' fees) of the Agents in connection with enforcing the rights of the Lenders under the Credit Documents and any protective advances made by the Agents with respect to the Collateral under or pursuant to the terms of the Security Documents;

SECOND, to payment of any fees owed to an Agent or an Issuing Lender hereunder or under any other Credit Document;

THIRD, to the payment of all reasonable out-of-pocket costs and expenses, (including, without limitation, reasonable attorneys' fees) of each of the Lenders in connection with enforcing its rights under the Credit Documents;

FOURTH, to the payment of all accrued fees and interest payable to the Lenders hereunder;

FIFTH, to the payment of the outstanding principal amount of the Loans and to the payment or cash collateralization of the outstanding LOC Obligations and BA Obligations, pro rata, as set forth below;

SIXTH, to all other Obligations which shall have become due and payable under the Credit Documents and not repaid pursuant to clauses "FIRST" through "FIFTH" above;

SEVENTH, to all other Obligations which shall have become due and payable and not repaid pursuant to clauses "FIRST" through "SIXTH" above; and

EIGHTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

In carrying out the foregoing, (a) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (b) each of the Lenders shall receive an amount equal to its pro rata share (based on the proportion that the then outstanding Loans, LOC Obligations and BA Obligations held by such Lender bears to the aggregate then outstanding Loans, LOC Obligations and BA Obligations) of amounts available to be applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," and "SIXTH" above; and (c) to the extent that any amounts available for distribution pursuant to clause "FIFTH" above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by the Administrative Agent in a cash collateral account and applied (x) first, to reimburse the Issuing Lender from time to time for any drawings under such Letters of Credit and (y) then, following the expiration of all Letters of Credit, to all other obligations of the types described in clauses "FIFTH", "SIXTH" and "SEVENTH" above in the manner provided in this Section 4.7 and in the Security Documents.

4.8 SHARING OF PAYMENTS.

The Lenders agree among themselves that, except to the extent otherwise provided herein, in the event that any Lender shall obtain payment in respect of any Loan or Bankers' Acceptance, unreimbursed drawing with respect to any LOC Obligations or any other obligation owing to such Lender under this Agreement through the exercise of a right of setoff, banker's lien or counterclaim, or pursuant to a secured claim under Section 506 of the U.S. Bankruptcy Code (or similar provision of the Canadian bankruptcy laws) or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, in excess of its pro rata share of such payment as provided for in this Agreement, such Lender shall promptly pay in cash or purchase from the other applicable Lenders a participation in such Loans, LOC Obligations, BA Obligations and other obligations in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all Lenders share such payment in accordance with their respective ratable shares as provided for in this Agreement. The Lenders further agree among themselves that if payment to a Lender obtained by such Lender through the exercise of a right of setoff, banker's lien, counterclaim or other event as aforesaid shall be rescinded or must otherwise be restored, each applicable Lender which shall have shared the benefit of such payment shall, by payment in cash or a repurchase of a participation theretofore sold, return its share of that benefit (together with its share of any accrued interest payable with respect thereto) to each Lender whose payment shall have been rescinded or otherwise restored. The Borrowers agree that any Lender so purchasing such a participation may, to the fullest extent permitted by law, exercise all rights of payment, including setoff, banker's lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Loan, LOC Obligation, BA Obligation or other obligation in the amount of such participation. Except as otherwise expressly provided in this Agreement, if any Lender or an Agent shall fail to remit to an Agent or any other Lender an amount payable by such

Lender or such Agent to such Agent or such other Lender pursuant to this Agreement on the date when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to such Agent or such other Lender at a rate per annum equal to the Federal Funds Rate. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section 4.8 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders under this Section 4.8 to share in the benefits of any recovery on such secured claim.

4.9 CAPITAL ADEQUACY.

If, after the date hereof, any Lender has determined that the adoption or the becoming effective of, or any change in, or any change by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof in the interpretation or administration of, any applicable law, rule or regulation regarding capital adequacy, or compliance by such Lender, or its parent corporation, with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender's (or parent corporation's) capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Lender, or its parent corporation, could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender's (or parent corporation's) policies with respect to capital adequacy), then, upon notice from such Lender to the Borrowers, the Borrowers shall be obligated to pay to such Lender such additional amount or amounts as will compensate such Lender on an after-tax basis (after taking into account applicable deductions and credits in respect of the amount indemnified) for such reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties hereto. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

4.10 INABILITY TO DETERMINE INTEREST RATE OR CREATE BANKERS' ACCEPTANCES.

(a) If prior to the first day of any Interest Period, (i) the Administrative Agent shall have determined in good faith (which determination shall be conclusive and binding upon the Borrowers) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, (ii) the Administrative Agent has received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Eurodollar Loans during such Interest Period, or (iii) U.S. Dollar deposits in the principal amounts of the Eurodollar Loans to which such Interest Period is to be applicable are not generally available in the London interbank market, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrowers and the Lenders as soon as practicable thereafter, and will also give prompt written notice to the Borrowers when such conditions no longer exist. If such notice is given, (A) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (B) any Revolving Loans that were to have been converted on

the first day of such Interest Period to or continued as Eurodollar Loans shall be converted to or continued as Base Rate Loans and (C) each outstanding Eurodollar Loan shall be converted, on the last day of the then-current Interest Period thereof, to Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrowers have the right to convert Base Rate Loans to Eurodollar Loans.

(b) If the Canadian Agent determines in good faith, which determination shall be final, conclusive and binding upon the Canadian Borrowers absent manifest error, and notifies the Canadian Borrowers and each of the Canadian Lenders that, by reason of circumstances affecting the money market (i) there is no market for Bankers' Acceptances; or (ii) the demand for Bankers' Acceptances is insufficient to allow the sale or trading of the Bankers' Acceptances created and purchased hereunder, then,

(A) the right of the Canadian Borrowers to request a borrowing by way of Bankers' Acceptances shall be suspended until the Canadian Agent determines in good faith that the circumstances causing such suspension no longer exist and the Canadian Agent so notifies the Canadian Borrowers;

(B) any notice of requested Bankers' Acceptances which is outstanding shall be canceled and the Bankers' Acceptance requested therein shall not be made; and

(C) the Canadian Agent shall promptly notify the Canadian Borrowers of the suspension of the Canadian Borrowers' right to request a Bankers' Acceptance and of the termination of any such suspension.

4.11 ILLEGALITY.

Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof occurring after the Closing Date shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) such Lender shall promptly give written notice of such circumstances to the Borrowers and the Administrative Agent (which notice shall be withdrawn whenever such circumstances no longer exist), (b) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans shall forthwith be suspended and, until such time as it shall no longer be unlawful for such Lender to make or maintain Eurodollar Loans, such Lender shall then have a commitment only to make a Base Rate Loan when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrowers shall pay to such Lender such amounts, if any, as may be required pursuant to Section 4.14.

4.12 REQUIREMENTS OF LAW.

If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof applicable to any Lender, or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority, in each case made subsequent to the Closing Date (or, if later, the date on which such Lender becomes a Lender):

(a) shall subject such Lender to any tax of any kind whatsoever with respect to any Letter of Credit or any Loans made or issued by it or its obligation to make or issue any of the foregoing, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by Section 4.13 and changes in taxes measured by or imposed upon the overall net income, or franchise tax imposed in lieu of such net income tax, of such Lender or its applicable lending office, branch, or any affiliate thereof);

(b) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate or the Acceptance Fee in respect of Bankers' Acceptances hereunder; or

(c) shall impose on such Lender any other condition (excluding any tax of any kind whatsoever);

and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender, acting reasonably, deems to be material, of making, converting into, continuing or maintaining Loans or issuing or participating in Letters of Credit or creating or accepting Bankers' Acceptances or to reduce any amount receivable hereunder in respect thereof, then, in any such case, upon notice to the Borrowers from such Lender, through either of the Agents, in accordance herewith, the Borrowers shall be obligated to promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender on an after-tax basis (after taking into account applicable deductions and credits in respect of the amount indemnified) for such increased cost or reduced amount receivable, provided that, in any such case, the Borrowers may elect to convert the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving the Administrative Agent at least one (1) Business Day's notice of such election, in which case the Borrowers shall promptly pay to such Lender, upon demand, without duplication, such amounts, if any, as may be required pursuant to Section 4.14. If any Lender becomes entitled to claim any additional amounts pursuant to this Section 4.12, it shall provide prompt notice thereof to the Borrowers, through the Administrative Agent, certifying (x) that one of the events described in this Section 4.12 has occurred and describing in reasonable detail the nature of such event, (y) as to the increased cost or reduced amount resulting from such event and (z) as to the additional amount demanded by such Lender and a reasonably detailed explanation of the calculation thereof. Such a certificate as to any additional amounts payable pursuant to this Section 4.12 submitted by such Lender, through the Administrative Agent, to the Borrowers shall be conclusive and binding on the

parties hereto in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

4.13 TAXES.

(a) Except as provided below in this Section 4.13, all payments made by the Borrowers under this Agreement, any Notes and any documents relating hereto shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any court, or governmental body, agency or other official, including interest, penalties and liabilities with respect thereto ("Taxes"), excluding taxes measured by or imposed upon the overall net income of any Lender or its applicable lending office, or any branch or affiliate thereof, and all franchise taxes, branch taxes, taxes on doing business or taxes on the overall capital or net worth of any Lender or its applicable lending office, or any branch or affiliate thereof, in each case imposed in lieu of net income taxes, imposed: (i) by the jurisdiction under the laws of which such Lender, applicable lending office, branch or affiliate is organized or is located, or in which its principal executive office is located, or any nation within which such jurisdiction is located or any political subdivision thereof; or (ii) by reason of any connection between the jurisdiction imposing such tax and such Lender, applicable lending office, branch or affiliate other than a connection arising solely from such Lender having executed, delivered or performed its obligations, or received payment under or enforced, this Agreement or any Notes. If any such non-excluded Taxes, ("Non-Excluded Taxes") are required to be withheld from any amounts payable to an Agent or any Lender hereunder or under any Notes or other documents relating thereto, (A) the Borrowers shall withhold and remit such Taxes to the relevant authority when and as due, (B) the amounts so payable to an Agent or such Lender shall be increased to the extent necessary to yield to an Agent or such Lender (after payment of all Non-Excluded Taxes, including Non-Excluded Taxes in respect of additional amounts payable hereunder) interest or any such other amounts payable hereunder or under the Notes or any other document relating hereto at the rates or in the amounts specified in this Agreement and any Notes, provided, however, that the Borrowers shall be entitled to deduct and withhold any Non-Excluded Taxes and shall not be required to increase any such amounts payable to any Lender that is not organized under the laws of the United States of America or a state thereof if such Lender fails to comply with the requirements of paragraph (b) of this Section 4.13 whenever any Non-Excluded Taxes are payable by the Borrowers, and (C) as promptly as possible thereafter the Borrowers shall send to such Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by the Borrowers showing prompt payment thereof. If the Borrowers fail to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Borrowers shall indemnify an Agent and any Lender for any incremental Taxes, interest or penalties that may become payable by an Agent or any Lender as a result of any such failure. If a Lender shall change its office that makes or maintains a Loan hereunder, the Borrowers shall not be required to pay any increased amounts to the Lender in respect of any Non-Excluded Taxes pursuant to this

subsection 4.13 over and above any obligation to withhold or deduct any amount with respect to such Non-Excluded Taxes that existed on the date the Lender changed such office, unless the Lender changed the office at the request of the Borrowers in which case the Borrower shall indemnify the Lender in respect of such increased amounts. The agreements in this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

(b) Each Lender that is not incorporated under the laws of the United States of America or a state thereof shall:

(i) (A) on or before the date of any payment by the U.S. Borrowers under this Agreement or Notes to such Lender, deliver to the U.S. Borrowers and the Administrative Agent (x) two duly completed copies of United States Internal Revenue Service Form 1001 or 4224, or successor applicable form, as the case may be, certifying that it is entitled to receive payments under this Agreement and any Notes without deduction or withholding of any United States federal income taxes and (y) an Internal Revenue Service Form W-8 or W-9, or successor applicable form, as the case may be, certifying that it is entitled to an exemption from United States backup withholding tax;

(B) deliver to the U.S. Borrowers and the Administrative Agent two further copies of any such form or certification on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to the U.S. Borrowers; and

(C) obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by the U.S.

Borrowers or the Administrative Agent; or

(ii) in the case of any such Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (A) represent to the U.S. Borrowers (for the benefit of the U.S. Borrowers and the Administrative Agent) that it is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (B) agree to furnish to the U.S. Borrowers, on or before the date of any payment by the U.S. Borrowers, with a copy to the Administrative Agent, two accurate and complete original signed copies of Internal Revenue Service Form W-8, or successor applicable form certifying to such Lender's legal entitlement at the date of such certificate to an exemption from U.S. withholding tax under the provisions of Section 881(c) of the Internal Revenue Code with respect to payments to be made under this Agreement and any Notes (and to deliver to the U.S. Borrowers and the Administrative Agent two further copies of such form on or before the date it expires or becomes obsolete and after the occurrence of any event requiring a change in the most recently provided form and, if necessary, obtain any extensions of time reasonably requested by the U.S. Borrowers or the Administrative Agent for filing and completing such forms), and (C) agree, to the

extent legally entitled to do so, upon reasonable request by the U.S. Borrowers, to provide to the U.S. Borrowers (for the benefit of the U.S. Borrowers and the Administrative Agent) such other forms as may be reasonably required in order to establish the legal entitlement of such Lender to an exemption from withholding with respect to payments under this Agreement and any Notes.

Notwithstanding the above, if any change in treaty, law or regulation has occurred after the date such Person becomes a Lender hereunder which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the U.S. Borrowers and the Administrative Agent then such Lender shall be exempt from such requirements. Each Person that shall become a Lender or a participant of a Lender pursuant to Section 14.3 shall, upon the effectiveness of the related transfer, be required to provide all of the forms, certifications and statements required pursuant to this subsection (b); provided that in the case of a participant of a Lender, the obligations of such participant of a Lender pursuant to this subsection (b) shall be determined as if the participant of a Lender were a Lender except that such participant of a Lender shall furnish all such required forms, certifications and statements to the Lender from which the related participation shall have been purchased.

(c) If any such Taxes shall be or become applicable after the date of this Agreement to such payments by the Borrowers to a Lender, such Lender shall use reasonable efforts to make, fund or maintain the Loan or Loans, as the case may be, through another lending office located in another jurisdiction so as to reduce, to the fullest extent possible, the Borrowers' liability hereunder, if the making, funding or maintenance of such Loan or Loans through such other office does not, in the reasonable judgment of the Lender, materially affect the Lender of such Loan. If the Borrowers are required to make any additional payment to a Lender pursuant to this Section 4.13, and any such Lender receives, or is entitled to receive, a credit against, remission for, or repayment of, any tax paid or payable by it in respect of, or calculated with reference to, the taxes giving rise to such payment, such Lender shall, within a reasonable time after it receives such credit, relief, remission or repayment, reimburse the Borrowers the amount of any such credit, relief, remission or repayment.

4.14 COMPENSATION.

The Borrowers promise to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur (other than through such Lender's gross negligence or willful misconduct) as a consequence of (a) default by a Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans or in creating Bankers' Acceptances after such Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by a Borrower in making any prepayment of a Eurodollar Loan after such Borrower has given a notice thereof in accordance with the provisions of this Agreement and (c) the making of a prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period with respect thereto or the repayment of a Bankers' Acceptance prior to its maturity date. Such indemnification may include an amount equal to (i) the present value of the amount of interest which would have accrued on the amount so prepaid, or not so borrowed,

converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of the applicable Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Eurodollar Loans provided for herein (excluding, however, the Applicable Percentage included therein, if any) minus (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank Eurodollar market. Such a certificate as to any amounts payable pursuant to this Section 4.14 submitted by a Lender, through the Administrative Agent to the Lenders, shall be conclusive and binding in the absence of manifest error. The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

4.15 REPLACEMENT LENDER.

If (a) any Lender has demanded compensation or indemnification pursuant to
Section 4.9, 4.12 or 4.13, (b) the obligation of any Lender to make Eurodollar Loans has been suspended pursuant to Section 4.11 or (c) any Lender is a Defaulting Lender, the Borrowers shall have the right, if no Default or Event of Default then exists, to replace such Lender (the "Retiring Lender") with one or more Eligible Assignees (each a "Replacement Lender" and, collectively, the "Replacement Lenders") acceptable to the Administrative Agent. The replacement of a Retiring Lender pursuant to this Section 4.15 shall be effective on the tenth Business Day (the "Replacement Date") following the date of notice of such replacement to the Retiring Lender and each other Lender through the Administrative Agent, subject to the satisfaction of the following conditions:

(i) the Retiring Lender and the Replacement Lender shall have satisfied the conditions to assignment and assumption set forth in Section
14.3 (with all fees payable pursuant to Section 14.3 to be paid by the Borrowers) and, in connection therewith, the Replacement Lender(s) shall pay:

(ii) to the Retiring Lender an amount equal in the aggregate to the sum of (w) the principal of, and all accrued but unpaid interest on, all outstanding Loans of the Retiring Lender, (x) all unpaid BA Obligations,
(y) all unpaid LOC Obligations, together with all accrued but unpaid interest with respect thereto and (z) all accrued but unpaid fees owing to the Retiring Lender pursuant to Section 4.5, and

(iii) to the Issuing Lenders an amount equal to the aggregate amount owing by the Retiring Lender to the Issuing Lenders as reimbursement for drawings under Letters of Credit, to the extent such amount was not theretofore funded by such Retiring Lender; and

(iv) the Borrowers shall have paid to the Administrative Agent for the account of the Retiring Lender an amount equal to all obligations owing to the Retiring Lender by the Borrowers pursuant to this Agreement and the other Credit Documents.

On the Replacement Date, each Replacement Lender shall become a Lender hereunder, and the Retiring Lender shall cease to constitute a Lender hereunder; provided that the provisions of this Agreement (including, without limitation, the provisions of Sections 4.9, 4.12, 4.13, 4.14 and 14.5) shall continue to govern the rights and obligations of a Retiring Lender with respect to any Loans made, any Letters of Credit issued or participated in, any Bankers' Acceptances issued or participated in or any other actions taken by such Retiring Lender while it was a Lender.

In lieu of the foregoing, upon the express written consent of the Required Lenders, the Borrowers shall have the right to terminate the Commitment of a Retiring Lender in full. Upon payment by the Borrowers to the Administrative Agent for the account of the Retiring Lender of an amount equal to the sum of (A) the aggregate principal amount of all Loans, LOC Obligations and BA Obligations held by the Retiring Lender and (B) all accrued interest, fees and other amounts owing to the Retiring Lender hereunder, including, without limitation, all amounts payable by the Borrower to the Retiring Lender under Sections 4.9, 4.12, 4.13, 4.14 or 14.5, such Retiring Lender shall cease to constitute a Lender hereunder; provided that the provisions of this Agreement (including, without limitation, the provisions of Sections 4.9, 4.12, 4.13, 4.14 and 14.5) shall continue to govern the rights and obligations of a Retiring Lender with respect to any Loans made, any Letters of Credit issued or participated in, any Bankers' Acceptances issued or participated in or any other actions taken by such Retiring Lender while it was a Lender.

ARTICLE V

CONDITIONS PRECEDENT

5.1 CLOSING CONDITIONS.

The obligation of the Lenders to enter into this Agreement is subject to satisfaction of the following conditions (in form and substance acceptable to the Administrative Agent):

(a) Executed Credit Documents. Receipt by the Administrative Agent of duly executed copies of (i) this Agreement; (ii) the Revolving Credit Notes; (iii) the Guaranty Agreements; (iv) the Security Agreements; and (v) all other Credit Documents.

(b) No Default; Representations and Warranties. As of the Closing Date
(i) there shall exist no Default or Event of Default and (ii) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects.

(c) Opinion of Counsel. Receipt by the Administrative Agent of an opinion, or opinions, in form and substance satisfactory to the Administrative Agent and the Canadian Agent, addressed to the Agents on behalf of the Lenders and dated as of the Closing Date, from U.S. and Canadian legal counsel to the Credit Parties.

(d) Corporate Documents. Receipt by the Administrative Agent of the following:

(i)Charter Documents. Copies of the articles or certificates of incorporation or other charter documents of each Credit Party that is a party to a Credit Document, certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation and certified by a secretary or assistant secretary as of the Closing Date to be true and correct.

(ii) Resolutions. Copies of resolutions of the Board of Directors of each Credit Party that is party to a Credit Document, approving and adopting the Credit Documents to which it is a party, the transactions contemplated therein and authorizing execution and delivery thereof, certified by a secretary or assistant secretary as of the Closing Date to be true and correct and in force and effect as of such date.

(iii) Bylaws. A copy of the bylaws of each Credit Party that is a party to a Credit Document, certified by a secretary or assistant secretary as of the Closing Date to be true and correct and in force and effect as of such date.

(iv) Good Standing. Copies of (i) certificates of good standing, existence or its equivalent with respect to each Credit Party that is a party to a Credit Document, certified as of a recent date by the appropriate Governmental Authorities of the state or other jurisdiction of incorporation and each other jurisdiction in which such Credit Party carries on business and is required by the laws of such jurisdiction to be qualified therein to do so and (ii) where applicable, a certificate indicating payment of all corporate franchise taxes certified as of a recent date by the appropriate governmental taxing authorities.

(e) Compliance with Financial Obligations. The Credit Parties shall be in compliance with all existing material financial obligations owed to third parties.

(f) Personal Property Collateral. The Administrative Agent shall have received:

(i) searches of filings under the UCC and PPSA (or corresponding local laws) in the jurisdiction of the chief executive office of each Credit Party and each jurisdiction where any Collateral is located or where a filing would need to be made in order to perfect the Administrative Agent's security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens;

(ii) duly completed financing statements under the UCC and PPSA (or corresponding local laws) for each appropriate jurisdiction as is necessary, in the Administrative Agent's reasonable discretion, to perfect the Administrative Agent's security interest in the Collateral;

(iii) searches of ownership of intellectual property in the appropriate governmental offices and such patent/trademark/copyright filings as requested by the Administrative Agent in order to perfect the Administrative Agent's security interest in the Collateral;

(iv) all instruments and chattel paper in the possession of any of the Credit Parties, together with allonges or assignments as may be necessary or appropriate to perfect the Administrative Agent's security interest in the Collateral to the extent required under the Security Agreements; and

(v) duly executed consents as are necessary, in the Administrative Agent's reasonable discretion, to perfect the Lenders' security interest in the Collateral including, without limitation, such Acknowledgment Agreements from lessors of real property as the Administrative Agent may require.

(g) No Material Adverse Effect. No event shall have occurred since January 2, 1999 that has had or could be reasonably expected to have a Material Adverse Effect.

(h) Litigation. No litigation shall be pending or threatened which, in the reasonable determination of the Administrative Agent, would have or reasonably be expected to have a Material Adverse Effect.

(i) Consents and Approvals. Receipt by the Administrative Agent of evidence that all material governmental, shareholder and third party consents and approvals necessary or desirable in connection with the execution and delivery of the Credit Documents and the consummation of the transactions set forth therein.

(j) Officer's Certificate. The Administrative Agent shall have received a certificate or certificates executed by a Senior Financial Officer of the Company on behalf of the Credit Parties as of the Closing Date stating that (A) each Credit Party is in compliance with all existing material financial obligations, (B) all material governmental, shareholder and third party consents and approvals, if any, with respect to the Credit Documents and the other transactions contemplated thereby have been obtained, (C) no action, suit, investigation or proceeding is pending or threatened in any court or before any arbitrator or governmental instrumentality that purports to effect a member of the Consolidated Cott Group or any other transaction contemplated by the Credit Documents, if such action, suit, investigation or proceeding could have or could be reasonably expected to have a Material Adverse Effect, and (D) immediately after giving effect to this Agreement, the other Credit Documents and the other transactions contemplated therein to occur on such date, (1) each Credit Party is Solvent, (2) no Default or Event of Default exists, (3) all representations and warranties contained herein and in the other Credit Documents are true and correct in all material respects, and (4) the Consolidated Cott Group is in compliance with each of the financial covenants set forth in Article VIII.

(k) Priority of Liens. The Administrative Agent shall have received satisfactory evidence that (i) subject to Permitted Liens, the Administrative Agent, on

behalf of the applicable Lenders, holds a perfected, first priority Lien on all applicable Collateral (subject to clause (i) above) and (ii) none of the Collateral is subject to any other Liens other than Permitted Liens.

(l) Opening Borrowing Base Certificate. Receipt by each of the Agents of a Borrowing Base Certificate as of the close of business on June 30, 1999, substantially in the form of Exhibit J and certified by a Senior Financial Officer of the Company to be true and correct as of the Closing Date.

(m) Evidence of Insurance. Receipt by the Administrative Agent of copies of insurance policies or certificates of insurance of the Credit Parties evidencing general comprehensive liability and property insurance meeting the requirements set forth in the Credit Documents, including, without limitation, naming the Administrative Agent as loss payee on behalf of the Lenders and each Lender as additional insured and copies of credit insurance policies insuring foreign Accounts to be included as Eligible Accounts Receivable.

(n) Corporate Structure. The corporate capital and ownership structure of the Consolidated Cott Group shall be as described in Schedule 5.1(n).

(o) Other Indebtedness. Receipt by the Administrative Agent of evidence that, after giving effect to the making of the Loans made on the Closing Date, the Credit Parties shall have no Funded Debt other than the Indebtedness under the Credit Documents and as disclosed on Schedule 6.9.

(p) Solvency Certificate. Receipt by the Administrative Agent of an officer's certificate for each of the Credit Parties prepared by a Senior Financial Officer of such Credit Party as to the financial condition, solvency and related matters of such Credit Party, in each case after giving effect to the initial borrowings under the Credit Documents, in substantially the form of Exhibit K hereto.

(q) Sources and Uses; Payment Instructions. Receipt by the Administrative Agent of (i) a statement of sources and uses of funds covering all payments reasonably expected to be made by the Company in connection with the transactions contemplated by the Credit Documents to be consummated on the Closing Date, including an itemized estimate of all fees, expenses and other closing costs and (ii) payment instructions with respect to each wire transfer to be made by the Agents on behalf of the Lenders or the Company or the Borrowers on the Closing Date setting forth the amount of such transfer, the purpose of such transfer, the name and number of the account to which such transfer is to be made, the name and ABA number of the bank or other financial institution where such account is located and the name and telephone number of an individual that can be contacted to confirm receipt of such transfer.

(r) Subordinated Debt. Receipt by the Administrative Agent of duly executed copies of the loan documentation and form of promissory note evidencing the Subordinated Debt, in form and substance acceptable to the Lenders in their reasonable discretion.

(s) Financial Statements. The Administrative Agent shall have received the Financial Statements described in Section 6.6.

(t) Fees and Expenses. All fees and expenses required to be paid under this Agreement on or prior to the Closing Date shall have been paid in full.

(u) Due Diligence. The Administrative Agent shall have completed its due diligence with respect to the Company and its Subsidiaries and their review of management information systems (including Year 2000 compliance).

(v) Agent for Service of Process. The Administrative Agent shall have received satisfactory evidence that CT Corporation System shall have been appointed as agent for service of process in the State of North Carolina on behalf of the Company.

(w) Other. The receipt by the Administrative Agent of such other documents, agreements or information as reasonably requested by any Lender.

5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.

In addition to the conditions precedent stated elsewhere herein, the Lenders shall not be obligated to make Loans or create Bankers' Acceptances, nor shall the Issuing Lender be required to issue or extend a Letter of Credit, unless:

(a) Notice. The applicable Borrower shall have delivered (i) in the case of any Loan, a Notice of Borrowing, duly executed and completed, by the time specified in Sections 2.1 or 2.3, as appropriate and (ii) in the case of any Letter of Credit, the Issuing Lender shall have received an appropriate request for issuance in accordance with the provisions of
Section 2.2 or 2.4, as applicable and (iii) in the case of a Bankers' Acceptance, to the Canadian Agent, an appropriate notice in accordance with
Section 2.5;

(b) Representations and Warranties. The representations and warranties made by a Credit Party in any Credit Document are true and correct in all material respects at and as if made as of such date;

(c) No Default. No Default or Event of Default shall exist or be continuing either prior to or after giving effect thereto;

(d) No Material Adverse Effect. There shall not have occurred any Material Adverse Effect; and

(e) Availability. Immediately after giving effect to the making of a Loan or the issuance of a Letter of Credit or the creation of a Bankers' Acceptance, as the case may be, the Borrowers shall be in compliance with
Section 4.4(b)(i).

The delivery of each Notice of Borrowing and each request for a Letter of Credit or Bankers' Acceptance shall constitute a representation and warranty by the applicable Borrower of the correctness of the matters specified in subsections
(b), (c), (d) and (e) above.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

The Borrowers hereby represent and warrant to each Lender that:

6.1 ORGANIZATION AND GOOD STANDING.

Except as set forth on Schedule 6.1, each Credit Party resident in the United States (i) is a corporation duly incorporated, validly existing and in good standing under the laws of the State of its incorporation, (ii) is duly qualified and in good standing as a foreign corporation authorized to do business in every jurisdiction where the failure to so qualify would have or reasonably be expected to have a Material Adverse Effect, and (iii) has the requisite corporate power and authority to own its properties and to carry on its business as now conducted and as proposed to be conducted. Each Credit Party resident in Canada (A) is a corporation duly incorporated or amalgamated and validly subsisting under the laws of its jurisdiction of incorporation, (B) is duly qualified and in good standing as a foreign corporation authorized to do business in every jurisdiction where the failure to so qualify would have or reasonably be expected to have a Material Adverse Effect and (C) has the corporate power and authority to carry on its business as now conducted and as proposed to be conducted.

6.2 DUE AUTHORIZATION.

Except as set forth on Schedule 6.2, each Credit Party (a) has the requisite corporate power and authority to execute, deliver and perform such of the Credit Documents to which it is a party and to incur the obligations herein and therein provided for, and (b) is duly authorized to, and has been authorized by all necessary corporate action, to execute, deliver and perform such of the Credit Documents to which it is a party.

6.3 NO CONFLICTS.

With respect to each Credit Party, neither the execution and delivery of the Credit Documents, nor the consummation of the transactions contemplated therein, nor performance of and compliance with the terms and provisions thereof will (a) violate or conflict in any material respect with any material provision of its articles or certificate of incorporation or bylaws, (b) violate, contravene or conflict in any material respect with any material law, regulation (including without limitation Regulation U or Regulation X), order, writ, judgment, injunction, decree or permit applicable to it, (c) violate, contravene or conflict in any material respect with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which it is a party or by which it may be bound,

or (d) result in or require the creation of any material Lien upon or with respect to its properties except in favor of the Lenders.

6.4 CONSENTS.

No consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party in respect of any Credit Party is required in connection with the execution, delivery or performance of this Agreement or any of the other Credit Documents other than those consents which have been obtained and copies of which have been delivered to the Administrative Agent.

6.5 ENFORCEABLE OBLIGATIONS.

This Agreement and the other Credit Documents have been duly executed and delivered and constitute legal, valid and binding obligations of each Credit Party (with regard to each agreement or instrument to which it is a party) enforceable in accordance with their respective terms, except as may be limited by bankruptcy or insolvency laws or similar laws affecting creditors' rights generally.

6.6 FINANCIAL CONDITION.

(a) The financial statements provided to the Lenders, consisting of
(i) an audited consolidated balance sheet of the Consolidated Cott Group, together with related consolidated statements of income, stockholders' equity and changes in financial position or cash flow for the fiscal years 1997 and 1998 and (ii) unaudited consolidated balance sheets of the Consolidated Cott Group, together with related consolidated statements of income, and consolidated statements of stockholders' equity and changes in financial position or cash flow for the most recently ended fiscal quarter, fairly present the financial condition and business operations of the Consolidated Cott Group as of such respective dates (together, the "Financial Statements"); such financial statements were prepared in accordance with U.S. GAAP; and since January 2, 1999, there have occurred no changes or circumstances which have had or are reasonably expected to have a Material Adverse Effect.

(b) The financial statements delivered to the Lenders pursuant to Sections 7.1(a) and (b) have been prepared in accordance with U.S. GAAP and will present fairly the consolidated and consolidating (as applicable) financial condition, results of operations and cash flows of the Consolidated Cott Group as of such date and for such periods.

6.7 NO DEFAULT.

None of the Credit Parties is in default under any term of any indenture, contract, lease, agreement, instrument or other commitment to which any of them is a party or by which any of them is bound which default has had or could be reasonably expected to have a Material Adverse Effect. None of the Credit Parties knows of any dispute regarding any indenture, contract, lease,

agreement, instrument or other commitment which could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default presently exists.

6.8 LIENS.

There are no Liens in favor of third parties with respect to any of the Collateral, including, without limitation, with respect to the Inventory, wherever located, other than Permitted Liens. To the best knowledge of the applicable Credit Party, no lessor, warehouseman, filler, processor or packer of any such Credit Party has granted any Lien with respect to the Inventory maintained by such Credit Party at the property of any such lessor, warehousemen, filler, processor or packer. Upon the proper filing of financing statements and the proper recordation of other applicable documents with the appropriate filing or recordation offices in each of the necessary jurisdictions, the security interests granted pursuant to the Credit Documents constitute and shall at all times constitute valid and enforceable first, prior and perfected Liens on the Collateral (other than Permitted Liens). The Credit Parties are or will be at the time additional Collateral is acquired by them, the absolute owners of the Collateral with full right to pledge, sell, consign, transfer and create a Lien therein, free and clear of any and all Liens in favor of third parties, except Permitted Liens. The Credit Parties will at their expense warrant, until payment in full of the Obligations and termination of the Commitments, and, at the Administrative Agent's request, defend the Collateral from any and all Liens (other than Permitted Liens) of any third party. The Credit Parties will not grant, create or permit to exist, any Lien upon the Collateral, or any proceeds thereof, in favor of any third party (other than Permitted Liens).

6.9 INDEBTEDNESS.

The Consolidated Cott Group has no Indebtedness (including without limitation guaranty, reimbursement or other contingent obligations) except (a) as disclosed in the Financial Statements referenced in Section 6.6, (b) as set forth in Schedule 6.9, and (c) as otherwise permitted under the terms of this Agreement.

6.10 LITIGATION.

Except as disclosed in Schedule 6.10, there are no actions, suits or legal, equitable, arbitration or administrative proceedings, pending or, to the knowledge of the Borrowers threatened, against any Credit Party which, if adversely determined, would have or reasonably be expected to have a Material Adverse Effect.

6.11 MATERIAL CONTRACTS.

No Credit Party is in default under any Material Contract which default could reasonably be expected to have a Material Adverse Effect.

6.12 TAXES.

Each Credit Party has filed, or caused to be filed, all material tax returns (federal, state, local and foreign) required to be filed and paid all amounts of taxes shown thereon to be due (including interest and penalties) and has paid all other material taxes, fees, assessments and other governmental charges (including mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing by it, except for such taxes (a) that are not yet delinquent or (b) that are being contested in good faith and by proper proceedings, and against which adequate reserves are being maintained in accordance with U.S. GAAP. None of the Credit Parties is aware of any proposed material tax assessments against it or any other Credit Party.

6.13 COMPLIANCE WITH LAW.

None of the Credit Parties has violated or failed to comply with any statute, law, ordinance, regulation, rule or order of any foreign, federal, state or local government, or any other Governmental Authority or any self regulatory organization, or any judgment, decree or order of any court, applicable to its business or operations except where the aggregate of all such violations or failures to comply would not have or reasonably be expected to have a Material Adverse Effect. The conduct of the business of each of the Credit Parties is in conformity with all securities, commodities, energy, public utility, zoning, building code, health, OSHA and environmental requirements and all other foreign, federal, state and local governmental and regulatory requirements and requirements of any self regulatory organizations, except where such non-conformities could not reasonably be expected to have a Material Adverse Effect. None of the Credit Parties has received any notice to the effect that, or otherwise been advised that, it is not in compliance with, and none of such Credit Parties has any reason to anticipate that any currently existing circumstances are likely to result in the violation of any such statute, law, ordinance, regulation, rule, judgment, decree or order which failure or violation could reasonably be expected to have a Material Adverse Effect.

6.14 ERISA.

(a) Except as would not reasonably be expected to have a Material Adverse Effect, during the five-year period prior to the date on which this representation is made or deemed made: (i) no ERISA Event has occurred, and, to the best of the Borrowers' or any ERISA Affiliate's knowledge, no event or condition has occurred or exists as a result of which any ERISA Event could reasonably be expected to occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, has occurred with respect to any Single Employer Plan; (iii) each Plan, Single Employer Plan and, to the best of the Borrowers' or any ERISA Affiliate's knowledge, each Multiemployer Plan has been maintained, operated, and funded in compliance in all material respects with its own terms and in material compliance with the provisions of ERISA, the Code, and any other applicable federal or state laws; and (iv) no Lien in favor of the PBGC or a Single Employer Plan has arisen or is reasonably likely to arise on account of any Single Employer Plan.

(b) Except as set forth in the Financial Statements, the actuarial present value of all "benefit liabilities" on a going concern basis, whether or not vested, under each Single Employer Plan, as of the last annual valuation date prior to the date on which this

representation is made or deemed made (determined, in each case, utilizing the actuarial assumptions used in such Plan's most recent actuarial valuation report), did not exceed as of such valuation date the fair market value of the assets of such Plan.

(c) Except as would not reasonably be expected to have a Material Adverse Effect, neither the Borrowers nor any ERISA Affiliate has incurred, or, to the best of the Borrowers' or any ERISA Affiliate's knowledge, is reasonably expected to incur, any withdrawal liability under ERISA with respect to any Multiemployer Plan or Multiple Employer Plan. Except as would not reasonably be expected to have a Material Adverse Effect, neither Borrower nor any ERISA Affiliate would become subject to any withdrawal liability under ERISA if such Borrower or any such ERISA Affiliate were to withdraw completely from all Multiemployer Plans and Multiple Employer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. Neither Borrower nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best of the Borrowers' or any ERISA Affiliate's knowledge, reasonably expected to be in reorganization, insolvent, or terminated.

(d) No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has occurred with respect to a Plan which has subjected or may subject the Borrowers or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which the Borrowers or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability, except for any such prohibited transaction or breach which would not reasonably be expected to have a Material Adverse Effect.

(e) Except as set forth in the Financial Statements, the Borrowers and their ERISA Affiliates have no material liability with respect to "expected post-retirement benefit obligations" within the meaning of the Financial Accounting Standards Board Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code apply has been administered in compliance in all material respects with such sections.

(f) All Canadian benefit plans and Canadian pension plans and any similar plans of the Canadian Borrowers and their Subsidiaries are duly registered under the provisions of the Income Tax Act (Canada), have been administered in accordance with such statute and no event has occurred which would cause a loss of such registered status. All material obligations of the Canadian Borrowers and their Subsidiaries (including fiduciary and funding obligations) under such plans required to be performed have been performed. There are no outstanding disputes concerning the assets held in the funding media for such plans. All contributions or premiums required to be made by the Canadian Borrowers or their Subsidiaries to such plans have been made in a timely fashion in accordance with the terms of such plans and applicable laws. Each of such plans is fully

funded and there exists no going concern unfunded actuarial liabilities or solvency deficiencies in respect of such plans.

6.15 SUBSIDIARIES.

Set forth in Schedule 6.15 is a complete and accurate list of all Subsidiaries of each member of the Consolidated Cott Group. Information on the attached Schedule 6.15 includes a complete and accurate list of the jurisdiction of incorporation of each member of the Consolidated Cott Group and the percentage ownership interest of voting stock owned by the direct parent company in each such member.

6.16 OWNERSHIP OF STOCK.

The outstanding capital stock and other equity interests of all Credit Parties is validly issued, fully paid and non-assessable and is owned by the Borrowers, directly or indirectly, free and clear of all Liens (other than those arising under or contemplated in connection with the Credit Documents).

6.17 USE OF PROCEEDS; MARGIN STOCK.

The proceeds of the Loans hereunder will be used solely for the purposes specified in Section 7.10. None of such proceeds will be used for the purpose of purchasing or carrying any "margin stock" as defined in Regulation U or Regulation X, or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry "margin stock" or for any other purpose which might constitute this transaction a "purpose credit" within the meaning of Regulation U or Regulation X.

6.18 GOVERNMENT REGULATION.

No Credit Party is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940 or the Interstate Commerce Act, each as amended. In addition, none of the Credit Parties is (a) an "investment company" registered or required to be registered under the Investment Company Act of 1940, as amended, and is not controlled by such a company, or (b) a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary" or a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended. No director, executive officer or principal shareholder of any Credit Party is a director, executive officer or principal shareholder of any Lender. For purposes hereof, the terms "director", "executive officer" and "principal shareholder" (when used with reference to any Lender) shall have the meanings ascribed to them in Regulation O issued by the Board of Governors of the Federal Reserve System.

6.19 HAZARDOUS SUBSTANCES.

Except as disclosed on Schedule 6.19 or except as would not reasonably be expected to have a Material Adverse Effect, to the Borrowers' knowledge without having undertaken any

environmental audit, all real property owned or leased by any Credit Party or on which any Credit Party operates (the "Subject Property") is free from "hazardous substances" "contaminants" or "pollutants" or similar substances as defined in the applicable Environmental Laws in concentrations or amounts that require cleanup under any Environmental Laws; no portion of the Subject Property is subject to federal, provincial, state or local, complaint, investigation or, to the Borrowers' knowledge without having undertaken any environmental audit, liability under applicable Environmental Laws because of the presence of leaked or spilled petroleum products, waste materials or debris, "PCB's" or PCB items (as defined in 40 C.F.R. ss.763.3), underground storage tanks, "asbestos" (as defined in 40 C.F.R. ss.763.63) or the past or present accumulation, spillage or leakage of any such substance subject to regulation under the Environmental Laws; and each Credit Party is in substantial compliance with all material Environmental Laws applicable in connection with the operation of its businesses, except to the extent that the failure to be in compliance would not have or reasonably be expected to have a Material Adverse Effect; and no Borrower knows of any complaint or investigation under Environmental Laws regarding real property which it or any other Credit Party owns or leases or on which it or any other Credit Party operates.

6.20 PATENTS, FRANCHISES, ETC.

Each Credit Party possesses or has the right to use all material patents, trademarks, service marks, trade names, copyrights, licenses and other rights, free of adverse claims, that are necessary for the operation of its respective business as presently conducted and as proposed to be conducted. Each Credit Party has obtained all material licenses, permits, franchises or other governmental authorizations necessary to the ownership of its respective property and to the conduct of its business, except to the extent that the failure to have obtained any such licenses, permits, franchises or other governmental authorizations would not have or reasonably be expected to have a Material Adverse Effect.

6.21 SOLVENCY.

Each Credit Party individually, and the Credit Parties as a whole, are and, after consummation of this Agreement and after giving effect to all Indebtedness incurred hereunder will be Solvent.

6.22 LOCATION OF ASSETS.

The Credit Parties' chief executive offices are set forth on Schedule 6.22 hereto, and the books and records of the Credit Parties and all chattel paper and all records of accounts are located at the chief executive offices of the Credit Parties or as otherwise noted on Schedule 6.22. All other locations where the company keeps, stores or maintains any Collateral are set forth on Schedule 6.22 hereto. There is no jurisdiction in which any Credit Party has any Collateral (except for Inventory held for shipment by third Persons, Inventory in transit, Inventory held for processing by third Persons, or immaterial quantities of Inventory) other than those jurisdictions listed on Schedule 6.22. Schedule 6.22 is a true, correct and complete list of (i) the names and addresses of each warehouseman, filler, processor and packer at which Inventory is stored, (ii) the address of the chief executive offices of the Credit Parties and (iii) the

address of all offices where records and books of account of the Credit Parties are kept or where Collateral is kept, stored or maintained. None of the receipts received by any of the Credit Parties from any warehouseman, filler, processor or packer states that the goods covered thereby are to be delivered to bearer or to the order of a named person or to a named person and such named person's assigns. Each of the Credit Parties agrees to provide the Administrative Agent with a revised Schedule 6.22 setting forth current principal places of business, chief executive offices, and information concerning Inventory locations on a quarterly basis at the time the financial statements described in Section 7.1(b) are required to be delivered to the Administrative Agent and the Lenders.

6.23 D/B/A OR TRADE NAMES.

None of the Credit Parties has used any corporate, d/b/a or trade name during the five (5) years preceding the date hereof, other than the corporate name shown on its or such Subsidiary's Articles or Certificate of Incorporation and as set forth on Schedule 6.23.

6.24 YEAR 2000 COMPLIANCE.

The Company has (a) initiated a review and assessment of all areas within its and each of its Subsidiaries' businesses and operations (including those affected by suppliers, vendors and customers) that could be adversely affected by the "Year 2000 Problem" (that is, the risk that computer applications may not be able to recognize and properly perform date-sensitive functions after December 31, 1999), (b) developed a plan and timeline for addressing the Year 2000 Problem on a timely basis, and (c) to date, implemented that plan in accordance with that timetable. To date, the Borrowers have not become aware of any reason to believe that the Year 2000 Problem could reasonably be expected to have a Material Adverse Effect.

6.25 NO EMPLOYEE DISPUTES.

There are no controversies pending or, to the best knowledge of the Borrowers after diligent inquiry, threatened between any Credit Parties and any of their respective employees, other than employee grievances arising in the ordinary course of business which could not, in the aggregate, have a Material Adverse Effect.

6.26 CERTAIN SUBSIDIARIES.

(a) Each of the Subsidiaries of the Borrowers listed on Schedule 6.26(a) hereto has no Accounts or Inventory and no ongoing business other than as set forth in Schedule 6.26(a) hereto.

(b) Schedule 6.26(b) hereto sets forth the ownership structure above Cott Beverages UK, and in the event that funds are transferred to Cott Beverages UK in the form of share capital, such transfer of funds shall occur through the chain of ownership as set forth on Schedule 6.26(b). Other than the Indebtedness owed by Cott Beverages UK, there is no other Funded Debt owed by Cott Corporation's subsidiaries residing in or formed under the laws of the United Kingdom.

6.27 LABOR MATTERS.

None of the Credit Parties is engaged in any unfair labor practice. There is (a) no material unfair labor practice complaint pending against any Credit Party or, to the best knowledge of the Borrowers, threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements that has or would reasonably be expected to have a Material Adverse Effect is so pending against any Credit Party or, to the best knowledge of the Borrowers, threatened against any of them, (b) no strike, labor dispute, slowdown or stoppage pending against any Credit Party or, to the best knowledge of the Borrowers, threatened against any of them, which would have or reasonably be expected to have a Material Adverse Effect and (c) to the best of the knowledge of the Borrowers, no union representation questions with respect to the employees of any of the Credit Parties and no union organizing activities which would have or reasonably be expected to have a Material Adverse Effect.

6.28 STATUS OF ACCOUNTS.

Each of the Accounts (other than Accounts owing from one Credit Party to another Credit Party) is based on an actual and bona fide sale and delivery of goods or rendering of services to customers, made by the Credit Parties in the ordinary course of business; the goods and inventory being sold and the Accounts created are exclusive property of the Credit Parties and are not and shall not be subject to any Lien, consignment arrangement, encumbrance, security interest or financing statement whatsoever, other than the Permitted Liens; and each of the Credit Parties' customers have accepted the goods or services, owe and are obligated to pay in cash the full amounts stated in the invoices according to their terms, without any dispute, offset, defense or counterclaim that could reasonably be expected to have, when aggregated with any such other disputes, offsets, defenses or counterclaims, a Material Adverse Effect. Each of the Credit Parties confirms to the Lenders that any and all taxes or fees relating to its business, its sales, the Accounts or the goods relating thereto, are its sole responsibility and that same will be paid by such Credit Party when due (unless duly contested and adequately reserved for) and that none of said taxes or fees is or will become a lien on or claim against the Accounts.

6.29 TRADE SUPPLIERS.

Attached hereto as Schedule 6.29 is a true, correct and complete list of all of the suppliers who have sold goods to the Credit Parties during the fiscal year ended January 2, 1999, for an amount representing five (5) percent or more of the accounts of the Credit Parties payable for such year.

6.30 KEY MEMBERS OF MANAGEMENT.

Attached hereto as Schedule 6.30 is a true, correct and complete list of the members of management of the Credit Parties who report to the Chief Executive Officer of the Company as of the date hereof (collectively, the "Senior Management Members").

6.31 ACCURACY AND COMPLETENESS OF INFORMATION.

All factual information heretofore, contemporaneously or hereafter furnished by or on behalf of the Credit Parties in writing to the Administrative Agent, the Canadian Agent, or any Lender for purposes of or in connection with this Credit Agreement or any Credit Documents, or any transaction contemplated hereby or thereby is or will be true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any material fact necessary to make such information not misleading at such time. There is no fact now known to any Senior Officer of any Credit Party which has, or would reasonably be expected to have, a Material Adverse Effect which fact has not been set forth herein, in the Financial Statements, or any certificate, opinion or other written statement made or furnished by any Credit Party to the Administrative Agent.

ARTICLE VII

AFFIRMATIVE COVENANTS

Each Borrower hereby covenants and agrees that so long as this Agreement is in effect and until the Loans, LOC Obligations and BA Obligations, together with interest, fees and other Obligations hereunder, have been paid in full and the Commitments and Letters of Credit hereunder shall have terminated that they will do or cause to be done the following:

7.1 INFORMATION COVENANTS.

The Borrowers will furnish, or cause to be furnished, to the Administrative Agent and each Lender:

(a) Annual Financial Statements. As soon as available and in any event within one hundred forty (140) days after the close of each fiscal year of the Consolidated Cott Group, a consolidated and consolidating balance sheet of the Consolidated Cott Group as at the end of such fiscal year together with related consolidated and consolidating statements of income, shareholder's equity and of cash flows for such fiscal year, setting forth in comparative form consolidated and consolidating figures for the preceding fiscal year, all in reasonable detail and, in the case of the consolidated financial statements, audited by independent certified public accountants of recognized national standing and whose opinion shall be to the effect that such consolidated financial statements have been prepared in accordance with U.S. GAAP and shall not be limited as to the scope of the audit or qualified as to the status of the Consolidated Cott Group as a going concern. It is specifically understood and agreed that failure of the annual financial statements to be accompanied by an opinion of such accountants in form and substance as provided herein shall constitute an Event of Default hereunder. The financial statements delivered pursuant to this Section 7.1(a) will have been prepared in accordance with U.S. GAAP and will present fairly the consolidated and consolidating financial condition, results of operations and cash flows of the Consolidated Cott Group as of the date thereof.

(b) Quarterly Financial Statements. As soon as available and in any event within ninety (90) days after the end of each fiscal quarter (other than the fourth fiscal quarter, in which case one hundred forty (140) days after the end thereof) of each fiscal year of the Consolidated Cott Group, a consolidated and consolidating balance sheet and statements of income and of cash flows of the Consolidated Cott Group as at the end of such quarterly period together with related consolidated statements of retained earnings, shareholder's equity and of cash flows for such quarterly period and for the portion of the fiscal year ending with such period, in each case setting forth in comparative form figures for the corresponding period of the preceding fiscal year, all in reasonable form and detail acceptable to the Administrative Agent, and accompanied by a certificate of a Senior Financial Officer of the Company as being true and correct and as having been prepared in accordance with U.S. GAAP, subject to changes resulting from audit and normal year-end audit adjustments. The financial statements delivered pursuant to this Section 7.1(b) will have been prepared in accordance with U.S. GAAP and will present fairly the consolidated and consolidating financial condition, results of operations and cash flows of the Consolidated Cott Group as of the date thereof.

(c) Officer's Certificate. At the time of delivery of the financial statements provided for in Sections 7.1(a) and (b), a certificate of a Senior Financial Officer of the Company substantially in the form of Exhibit L to the effect that no Default or Event of Default exists, or if any Default or Event of Default does exist specifying the nature and extent thereof and what action the Borrowers propose to take with respect thereto. In addition, such certificate shall (i) demonstrate compliance with the financial covenants contained in Article VIII by calculation thereof as of the end of each such fiscal period (including, without limitation, calculation of the Leverage Ratio for purposes of calculating the Applicable Percentage), (ii) contain information regarding expenditures made by the Credit Parties as to Permitted Investments and Capital Expenditures during the prior fiscal quarter, (iii) contain information regarding the amount of loans made to Cott Beverages UK, the amount of repurchases of the Capital Stock of the Company, the amount of repurchases of the Senior Notes, and any payments to Subsidiaries other than Credit Parties pursuant to Section 9.11 hereof, in each case during the prior fiscal quarter and (iv) contain a representation that the Borrowers have not become aware of any reason to believe that the Year 2000 Problem could reasonably be expected to have a Material Adverse Effect.

(d) Auditor's Reports. Promptly upon receipt thereof, a copy of any other report or "management letter" submitted by independent accountants to a member of the Consolidated Cott Group in connection with any annual, interim or special audit of the books of the Consolidated Cott Group.

(e) SEC and Other Reports. Promptly upon transmission or receipt thereof, (i) copies of any filings and registrations with, and material reports to or from, the Securities and Exchange Commission, or any successor agency, and copies of all financial statements, proxy statements, notices and reports as the Consolidated Cott Group shall send to its shareholders or to the holders of any other Indebtedness in their capacity as such holders and (ii) upon the request of the Administrative Agent, all material reports and written information to and from the United States Environmental Protection Agency, or any state or

local agency responsible for environmental matters, the United States Occupational Health and Safety Administration, or any state or local agency responsible for health and safety matters, or any successor agencies or authorities concerning environmental, health or safety matters relating to a member of the Consolidated Cott Group.

(f) Notices. Each Borrower will give written notice to the Administrative Agent (i) immediately of the occurrence of an event or condition consisting of a Default or Event of Default, specifying the nature and existence thereof and what action the Borrowers propose to take with respect thereto, and (ii) promptly, but in any event within five (5) Business Days, following the occurrence of any of the following with respect to a Credit Party (A) the pendency or commencement of any litigation, arbitral or governmental proceeding against such Credit Party which, if adversely determined, would have or reasonably be expected to have, a Material Adverse Effect, (B) any levy of an attachment, execution or other process against the assets of a Credit Party having a value of $500,000 or more, (C) the occurrence of an event or condition which shall constitute a default or event of default under any Indebtedness of a member of the Consolidated Cott Group in excess of $500,000, (D) any development in the business or affairs of any member of the Consolidated Cott Group which has resulted in, or which the Company reasonably believes may result in, a Material Adverse Effect, (E) the institution of any proceedings against a Credit Party with respect to, or the receipt of notice by such Person of potential liability or responsibility for violation, or alleged violation of any federal, state, provincial or local law, rule or regulation, including but not limited to, Environmental Laws, the violation of which would have or be reasonably expected to have a Material Adverse Effect or (F) promptly, of any change in the name of any Credit Party.

(g) Annual Budget. Within thirty (30) days following the end of each fiscal year, beginning with the fiscal year ending January 1, 2000, an annual budget of the Consolidated Cott Group containing, among other things, pro forma financial statements and projected loan usage and excess availability under the Credit Agreement for the next fiscal year.

(h) Borrowing Base Certificate, etc. Not later than 12:00 Noon on the 30th day of each month (or if such day is not a Business Day, then on the next succeeding Business Day) and within three (3) Business Days following the date of any Asset Disposition or Casualty Loss in excess of $5,000,000, the Borrowers shall deliver a borrowing base certificate (the "Borrowing Base Certificate") in substantially the form of Exhibit J hereto, duly completed and certified by a Senior Financial Officer of the Company detailing the Eligible Accounts Receivable and Eligible Inventory of the Credit Parties as of the last day of the immediately preceding calendar month. In addition, on the 30th day of each month (or if such day is not a Business Day, then on the next succeeding Business Day), the Company shall furnish a written report to the Lenders setting forth (i) the accounts receivable aged trial balance at the immediately preceding month end for each account debtor, (ii) the accounts payable aging summary for the immediately preceding month, (iii) an inventory summary as of the immediately preceding month end and (iv) if for any such immediately preceding month less than $5,000,000 shall be available to be loaned to the Borrowers under the Commitments and

the Total Borrowing Base, a sales and cash receipt summary for such immediately preceding month. Such aging reports shall indicate which Accounts are current, up to 30, 30 to 60 and over sixty (60) days past due and shall list the names of all applicable account debtors. The Administrative Agent may, but shall not be required to, rely on each Borrowing Base Certificate delivered hereunder as accurately setting forth the available U.S. Borrowing Base and Canadian Borrowing Base for all purposes of this Credit Agreement until such time as a new Borrowing Base Certificate is delivered to the Administrative Agent in accordance herewith; Borrowing Base Certificates may be prepared and submitted to the Lenders, and upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may request delivery of Borrowing Base Certificates, on a more frequent basis than monthly, provided that such certificate shall comply with the requirements set forth elsewhere herein.

(i) Other Indebtedness. Promptly upon receipt thereof, the Credit Parties shall deliver copies of all material notices delivered to the Company or Cott Beverages USA or sent by the Company or Cott Beverages USA with respect to Subordinated Debt or the Senior Notes, including, without limitation, any notice of default (the Company and Cott Beverages USA expressly agreeing to furnish all such notices by telecopy).

(j) Other Information. With reasonable promptness upon any such request, such other information regarding the business, properties or financial condition of the Consolidated Cott Group as the Administrative Agent or the Lenders may reasonably request.

7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.

Each Credit Party will do all things necessary to preserve and keep (and will cause each of its Subsidiaries to keep) in full force and effect its existence, franchises and authority, except for corporate reorganizations and other similar transactions which would not have or reasonably be expected to have a Material Adverse Effect.

7.3 BOOKS AND RECORDS.

The Credit Parties will keep complete and accurate books and records of its transactions in accordance with good accounting practices on the basis of U.S. GAAP. In addition, each Credit Party will maintain books and records pertaining to the Collateral in such detail, form and scope as is consistent with good business practice.

7.4 COMPLIANCE WITH LAW.

Each of the Credit Parties will comply with all material laws, rules, regulations and orders of, and all applicable restrictions imposed by all applicable Governmental Authorities applicable to it, including applicable Environmental Laws if noncompliance would have or be reasonably likely to have a Material Adverse Effect.

7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.

Each of the Credit Parties will pay and discharge (a) all material taxes, assessments and governmental charges or levies imposed upon it or them, or upon its or their capital, income or profits, or upon any of its or their properties, before they shall become delinquent, (b) all lawful claims (including claims for labor, materials and supplies) which, if unpaid, would give rise to a Lien or charge upon any of its or their properties, and (c) except as prohibited hereunder, all of its other Indebtedness as it shall become due; provided, however, that there is no requirement to pay any such tax, assessment, charge, levy, claim or Indebtedness which is being contested in good faith by appropriate proceedings and as to which adequate reserves therefor have been established in accordance with U.S. GAAP, unless the failure to make any such payment (i) shall give rise to an immediate right to foreclosure on a Lien securing such amounts or (ii) otherwise would have or reasonably be expected to have a Material Adverse Effect.

7.6 INSURANCE; CASUALTY LOSS.

(a) Each of the Credit Parties will maintain comprehensive general liability insurance covering third party property damage and insurance covering the Collateral up to the replacement value thereof, with such insurance companies, in such amounts and covering such risks as are at all times satisfactory to the Administrative Agent in its commercially reasonable judgment. The present coverage of the Credit Parties is outlined as to carrier, policy number, expiration date, type and amount on Schedule 7.6 hereto. All policies covering the Collateral are to name the applicable Credit Parties and the Administrative Agent as loss payees in case of loss, as their interests may appear, and are to contain such other provisions as the Administrative Agent may reasonably require to fully protect such Agent's interest in the Collateral and to any payments to be made under such policies. All comprehensive general liability policies of the Credit Parties are to name the Administrative Agent and each Lender as an additional insured. True copies of all original insurance policies or certificates of insurance evidencing such insurance covering the Collateral are to be delivered to the Administrative Agent on or prior to the Closing Date, premium prepaid, with the loss payable endorsement in the Administrative Agent's favor, and shall provide for not less than ten (10) days prior written notice to the Administrative Agent, of the exercise of any right of cancellation. In the event any Credit Party fails to respond in a timely and appropriate manner (as determined by the Administrative Agent in its reasonable discretion) with respect to collecting under any insurance policies required to be maintained under this Section 7.6, the Administrative Agent shall have the right, in the name of itself or any Credit Party, to file claims under such insurance policies, to receive and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

(b) Each of the Credit Parties will provide written notice to the Lenders of the occurrence of any of the following events within five (5) Business Days after the occurrence of such event: any of the Collateral is (i) damaged or destroyed, or suffers any other loss or (ii) is condemned, confiscated or otherwise taken, in whole or in part, or the use thereof is otherwise diminished so as to render impracticable or unreasonable the use of such Collateral for the purpose to which such Collateral was used immediately prior to such condemnation, confiscation or taking, by exercise of the powers of condemnation or eminent domain or otherwise, and in

either case the amount of the damage, destruction, loss or diminution in value of such Collateral is in excess of $500,000 (collectively, a "Casualty Loss"). Each Credit Party will diligently file and prosecute its claim or claims for any award or payment in connection with a Casualty Loss. In connection with any Casualty Loss, so long as no Event of Default then exists and at least $5,000,000 shall be available to be loaned to the Borrowers under the Commitments and the Total Borrowing Base, the Borrowers may, at their election and in their sole discretion, either (A) apply the proceeds realized from such Casualty Loss to payment of accrued and unpaid interest or outstanding principal of the Revolving Loans in accordance with Section 4.4 hereof or (B) pay such proceeds to the Credit Parties to be used to repair, replace or rebuild the Collateral or portion thereof that was the subject of the Casualty Loss. In connection with any loss on the Collateral after the occurrence and during the continuation of an Event of Default, or in connection with any Casualty Loss if less than $5,000,000 shall be available to be loaned to the Borrowers under the Commitments and the Total Borrowing Base, the Credit Parties will pay to the Administrative Agent, promptly upon receipt thereof, any and all insurance proceeds and payments received by any of the Credit Parties on account of damage, destruction or loss of all or any portion of the Collateral and the Administrative Agent shall, at its election and in its sole discretion, either (A) apply the proceeds realized from such loss to payment of accrued and unpaid interest or outstanding principal of the Revolving Loans in accordance with
Section 4.4 hereof or (B) pay such proceeds to the Credit Parties to be used to repair, replace or rebuild the Collateral or portion thereof that was the subject of the loss. After the occurrence and during the continuance of an Event of Default, (1) no settlement on account of any loss on the Collateral shall be made without the consent of the Lenders and (2) the Administrative Agent may participate in any such proceedings and the Credit Parties will deliver to the Administrative Agent such documents as may be requested by the Administrative Agent to permit such participation and will consult with the Administrative Agent, its attorneys and agents in the making and prosecution of such claim or claims. Each of the Credit Parties hereby irrevocably authorizes and appoints the Administrative Agent its attorney-in-fact, after the occurrence and continuance of an Event of Default, to collect and receive for any such award or payment and to file and prosecute such claim or claims, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, and each of the Credit Parties shall, upon demand of the Administrative Agent, make, execute and deliver any and all assignments and other instruments sufficient for the purpose of assigning any such award or payment to the Administrative Agent for the benefit of the Lenders, free and clear of any encumbrances of any kind or nature whatsoever.

7.7 MAINTENANCE OF PROPERTY.

Each of the Credit Parties will maintain and preserve its properties and equipment used or necessary in its business (in whomever's possession as they may be) in good repair, working order and condition, normal wear and tear excepted (and having regard to their respective ages), and will make, or cause to be made, in such properties and equipment from time to time all repairs, renewals, replacements, extensions, additions, betterments and improvements thereto as may be needed or proper, to the extent and in the manner customary for companies in similar businesses.

7.8 PERFORMANCE OF OBLIGATIONS.

Each of the Credit Parties will perform in all material respects all of its obligations under the terms of all material agreements, indentures, mortgages, security agreements or other debt instruments to which it is a party or by which it is bound.

7.9 ERISA.

Upon the Company or any ERISA Affiliate obtaining knowledge thereof, the Company will give written notice to the Administrative Agent promptly (and in any event within five (5) Business Days) of: (a) any event or condition, including, but not limited to, any Reportable Event, that constitutes, or might reasonably lead to, a ERISA Event; (b) with respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of any withdrawal liability assessed against the Company or any ERISA Affiliate, or of a determination that any Multiemployer Plan is in reorganization or insolvent (both within the meaning of Title IV of ERISA); (c) the failure to make full payment on or before the due date (including extensions) thereof of all amounts which the Company or any ERISA Affiliate is required to contribute to each Single Employer Plan or Multiemployer Plan pursuant to its terms and as required to meet the minimum funding standard set forth in ERISA and the Code with respect thereto; or (d) any change in the funding status of any Single Employer Plan that could have or be reasonably expected to have a Material Adverse Effect; together, with a description of any such event or condition or a copy of any such notice and a statement by a Senior Financial Officer of the Company briefly setting forth the details regarding such event, condition, or notice, and the action, if any, which has been or is being taken or is proposed to be taken by the Company or any ERISA Affiliate with respect thereto. Promptly upon request, the Company shall furnish the Administrative Agent and the Lenders with such additional information concerning any Plan as may be reasonably requested, including, but not limited to, copies of each annual report/return (Form 5500 series), as well as all schedules and attachments thereto required to filed with the DOL and/or the Internal Revenue Service pursuant to ERISA and the Code, respectively, for each "plan year" (within the meaning of Section 3(39) of ERISA).

All Canadian benefit plans and Canadian pension plans and any similar plans applicable to the Canadian Borrowers and their Subsidiaries will, if required by applicable law, be duly registered under the provisions of the Income Tax Act (Canada), will be administered in accordance with such statute and no event will be allowed to occur which would cause a loss of such registered status. All material obligations of the Canadian Borrowers and their Subsidiaries (including fiduciary and funding obligations) required to be performed in connection with such plans and the funding media therefor will be performed, except where the failure to perform such obligations would not have or reasonably be expected to have a Material Adverse Effect. There will be no outstanding disputes concerning the assets held in the funding media for such plans. All contributions or premiums required to be made by the Canadian Borrowers or their Subsidiaries to such plans will be made in a timely fashion in accordance with the terms of such plans and applicable laws. Each of such plans will be fully funded and no going concern unfunded actuarial liabilities or solvency deficiencies in respect of such plans will be allowed to exist.

7.10 USE OF PROCEEDS.

The proceeds of the Loans hereunder will be used solely (a) for repayment of certain amounts of existing Funded Debt of the Consolidated Cott Group to the extent permitted under this

Agreement, (b) for general corporate and working capital purposes of each Borrower in the ordinary course of business and (c) as otherwise permitted under this Agreement.

7.11 ADDITIONAL SUBSIDIARIES.

Promptly, or in any event within thirty (30) days, upon any Person becoming a direct or indirect Subsidiary of a Borrower, the Borrowers shall so notify the Administrative Agent and the Canadian Agent and shall, (a) in the case of a Person organized and resident in the United States cause (i) such Person to become a U.S. Borrower hereunder pursuant to a Joinder Agreement, (ii) such Person to execute a Guaranty Agreement in substantially the same form as the Guaranty Agreements executed by the other Guarantors organized and resident in the United States , (iii) the U.S. Collateral of such Person to be pledged to the Lenders pursuant to a Security Agreement similar to those executed by the U.S. Borrowers, (iv) such Person to execute Revolving Notes in favor of the U.S. Lenders and (v) such Person to deliver such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate UCC-1 Financing Statements, Acknowledgment Agreements, certified resolutions and other organizational and authorizing documents of such Person and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above), all in form, content and scope reasonably satisfactory to the Administrative Agent and (b) in the case of a Person organized and domiciled in Canada cause (i) such Person to become a Canadian Borrower hereunder pursuant to a Joinder Agreement, (ii) the Canadian Collateral of such Person to be pledged to the Lenders pursuant to a Security Agreement similar to those executed by the Canadian Borrowers, (iii) such Person to execute Revolving Notes in favor of the Canadian Lenders and (iv) such Person to deliver such other documentation as the Administrative Agent or the Canadian Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate UCC-1 Financing Statements (or their equivalent under the laws of Canada), Acknowledgment Agreements, certified resolutions and other organizational and authorizing documents of such Person and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above), all in form, content and scope reasonably satisfactory to the Administrative Agent.

7.12 AUDITS/INSPECTIONS.

Each of the Credit Parties agrees that the Administrative Agent or its agents may enter upon the premises of any of the Credit Parties at any time and from time to time, during normal business hours, upon reasonable notice and, on and after the occurrence and during the continuation of an Event of Default which continues and is continuing beyond the expiration of any grace or cure period applicable thereto and which has not otherwise been waived by the Administrative Agent, at any time at all, for the purpose of (a) enabling the Administrative Agent's internal auditors or other designees to conduct field examinations at such of the Credit Party `s expense, (b) inspecting the Collateral, (c) inspecting and/or copying (at the Credit Parties' expense) any and all records pertaining thereto, (d) discussing the affairs, finances and business of any Credit Party or with any officers, employees and directors of any Credit Party with its certified independent accountant and (e) verifying Eligible Accounts Receivable and/or Eligible Inventory. The Lenders, in the reasonable discretion of the Administrative Agent, may

accompany the Administrative Agent at their sole expense in connection with the foregoing inspections. Notwithstanding the foregoing, ongoing field examinations shall be conducted by the Administrative Agent's exam staff at the Credit Parties' expense (which shall include out-of-pocket expenses) (i) prior to the occurrence of an Event of Default and so long as there is at least $10,000,000 of excess availability under the Total Borrowing Base, no more than two times per year and (ii) on and after the occurrence and during the continuation of an Event of Default, at any time.

7.13 INVENTORY.

Within thirty (30) days after the end of each month, upon the request of the Administrative Agent from time to time, the Credit Parties will provide to the Administrative Agent written statements listing categories of Inventory in reasonable detail as requested by the Administrative Agent. The Credit Parties will conduct annually a physical count of their Inventory and will provide the Administrative Agent with prior written notice indicating when the physical count is to be performed, and a copy of such count will be promptly supplied to the Administrative Agent accompanied by a report of the value (valued at FIFO) of such Inventory; provided that the Credit Parties will conduct such a physical count at such other times and as of such dates as the Administrative Agent shall reasonably request during any period in which there is less than $10,000,000 of excess availability under the Total Borrowing Base.

7.14 COLLATERAL RECORDS.

Each Credit Party agrees to maintain such books and records regarding Accounts and the other Collateral as the Administrative Agent may reasonably require, and agrees that such books and records will reflect the Lenders' interest in the Accounts and such other Collateral. Each of the Credit Parties agrees to afford the Administrative Agent thirty (30) days prior written notice of any change in the location at which any Collateral valued in excess of $450,000 is stored or maintained (other than Inventory held for shipment by third Persons, Inventory in transit, Inventory held for processing by third Persons or immaterial quantities of assets, equipment or Inventory) or in the location of its chief executive office or place of business from the locations specified in Schedule 6.22, and to execute in advance of such change, cause to be filed and/or delivered to the Administrative Agent any financing statements or other documents required by the Administrative Agent, all in form and substance satisfactory to the Administrative Agent. Each of the Credit Parties agrees to advise the Administrative Agent promptly, in sufficient detail, of any material change relating to the type, quantity or quality of the Collateral or any event which could reasonably be expected to have a Material Adverse Effect. Each of the Credit Parties agrees to furnish any Lender with such other information regarding its business affairs and financial condition as such Lender may reasonably request from time to time.

7.15 SECURITY INTERESTS.

Each Credit Party will defend all or any portion of the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein, except where the amount of such Collateral is immaterial and the failure to so defend such Collateral would not reasonably be expected to have a Material Adverse Effect. Each Credit Party agrees to comply

with the requirements of all state, provincial and federal laws in order to grant to the Lenders a valid and perfected first security interest in the Collateral. The Administrative Agent is hereby authorized by each of the Credit Parties, to the extent permitted by applicable law, to file any financing statements covering the Collateral whether or not any Credit Party's signature appears thereon. Each Credit Party agrees to do whatever the Administrative Agent may reasonably request, from time to time, by way of: filing notices of liens, financing statements, fixture filings and amendments, renewals and continuations thereof; cooperating with the Administrative Agent's custodians; keeping stock records; obtaining waivers from landlords and mortgagees and from warehousemen, fillers, processors and packers and their respective landlords and mortgagees; paying claims, which might if unpaid, become a Lien (other than a Permitted Lien) on the Collateral; and performing such further acts as the Administrative Agent may reasonably require in order to effect the purposes of this Credit Agreement and the other Credit Documents. Any and all fees, costs and expenses of whatever kind and nature (including any Taxes, reasonable attorneys' fees or costs for insurance of any kind), which the Administrative Agent may reasonably incur with respect to the Collateral or the Obligations: in filing public notices; in preparing or filing documents; making title examinations or rendering opinions; in protecting, maintaining, or preserving the Collateral or its interest therein; in enforcing or foreclosing the Liens hereunder, whether through judicial procedures or otherwise; or in defending or prosecuting any actions or proceedings arising out of or relating to its transactions with any of the Credit Parties under this Credit Agreement or any other Credit Document, will be borne and paid by the Credit Parties. If same are not promptly paid by the Credit Parties, the Administrative Agent may pay same on the Credit Parties' behalf, and the amount thereof shall be an Obligation secured hereby and due to the Administrative Agent on demand.

7.16 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.

Upon the occurrence and during the continuation of an Event of Default, in furtherance of the continuing assignment and security interest in the Accounts of each of the Credit Parties granted pursuant to the Security Agreements, upon the creation of Accounts, each of the Credit Parties will execute and deliver to the Administrative Agent in such form and manner as the Administrative Agent may reasonably require, solely for its convenience in maintaining records of collateral, such confirmatory schedules of Accounts, and other appropriate reports designating, identifying and describing the Accounts as the Administrative Agent may require. In addition, upon the Administrative Agent's request, upon the occurrence and during the continuation of an Event of Default, each Credit Party will provide the Administrative Agent with copies of agreements with, or purchase orders from, the customers of each of the Credit Parties, and copies of invoices to customers, proof of shipment or delivery and such other documentation and information relating to said Accounts and other collateral as the Administrative Agent may reasonably require. Failure to provide the Administrative Agent with any of the foregoing shall in no way affect, diminish, modify or otherwise limit the security interests granted herein. Each Credit Party hereby authorizes the Administrative Agent to regard such Credit Party's printed name or rubber stamp signature on assignment schedules or invoices as the equivalent of a manual signature by such Credit Party's authorized officers or agents.

7.17 COLLECTION OF ACCOUNTS.

Unless an Event of Default has occurred and is continuing beyond the expiration of the applicable grace or cure period, or has not otherwise been waived by the Administrative Agent, each Credit Party may and will enforce, collect and receive all amounts owing on the Accounts (subject to any amounts that such Credit Party is required to rebate to the applicable account debtor pursuant to any agreement between such Credit Party and such account debtor), for the Lenders' benefit and on the Lenders' behalf but at the Credit Parties' expense in accordance with the provisions of Section 3.1 or 3.2, as applicable; such privilege shall terminate automatically, however, without notice to the Credit Parties which is hereby expressly waived by the Credit Parties, upon the occurrence of any Event of Default which occurs and continues beyond the expiration of any applicable grace or cure period, or which has not otherwise been waived by the Required Lenders. Any checks, cash, notes or other instruments or property received by any Credit Party with respect to any Accounts shall be held by such Credit Party in trust for the benefit of the Lenders, separate from such Credit Party's own property and funds, and immediately turned over to the Administrative Agent or the Canadian Agent, as applicable, with proper assignments or endorsements. No checks, drafts or other instruments received by an Agent shall constitute final payment unless and until such instruments have actually been collected.

7.18 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.

Each Credit Party will notify the Administrative Agent promptly of any matters materially affecting the value, enforceability or collectibility of any Account, and of all material customer disputes, offsets, defenses, counterclaims, returns and rejections, and all reclaimed or repossessed merchandise or goods, provided, however, that such notice shall only be required as to any such matter that affects Accounts outstanding at any one time from any account debtor, which affected Accounts have a value greater than $1,000,000, or to the extent that the outcome of such matter could reasonably be expected to have a Material Adverse Effect. Each Credit Party will issue credit memoranda promptly (with duplicates to the Administrative Agent upon its request for same) upon accepting returns or granting allowances, and may continue to do so until the occurrence of an Event of Default which continues beyond the expiration of the applicable grace or cure period, or which has not otherwise been waived by the Required Lenders. After the occurrence and during the continuance of an Event of Default, each Credit Party agrees that all returned, reclaimed or repossessed merchandise or goods shall be set aside by such Credit Party, marked with the Lenders' name and held by such Credit Party for the Lenders' account as owner and assignee.

7.19 ACKNOWLEDGMENT AGREEMENTS.

Each Credit Party will use commercially reasonable efforts (which shall not require any Credit Party to expend any material sums) to assist the Administrative Agent in obtaining executed Acknowledgment Agreements from each of the warehousemen, processors, packers, fillers, landlords and mortgagees with whom such Credit Party conducts business from time to time or who have an interest in any real property on which any of the Collateral is located (a) for the Inventory locations noted as such on Schedule 1.1B hereto, on or prior to the Closing Date,

(b) for the Inventory locations noted as such on Schedule 1.1B hereto, within ninety (90) days from the Closing Date and (c) for Inventory locations acquired or established after the Closing Date, within sixty (60) days from the date of such acquisition or establishment.

7.20 TRADEMARKS.

Each Credit Party will do and cause to be done all things necessary to preserve and keep in full force and effect all registrations of trademarks, service marks and other marks, trade names or other trade rights owned or licensed by such Credit Party, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

7.21 YEAR 2000 COMPLIANCE.

The Credit Parties shall take all action necessary to assure that the Credit Parties' computer based systems are able to operate and effectively process data including dates on and after January 1, 2000. At the request of the Administrative Agent, the Credit Parties shall provide the Lenders with assurance acceptable to the Administrative Agent, acting reasonably, of the Credit Parties' Year 2000 compatibility.

ARTICLE VIII

FINANCIAL COVENANTS

Each Borrower hereby covenants and agrees that so long as this Agreement is in effect and until the Loans, LOC Obligations and BA Obligations, together with interest, fees and other Obligations hereunder, have been paid in full and the Commitments and Letters of Credit hereunder shall have terminated that they will do or cause to be done the following:

8.1 LEVERAGE RATIO.

The Consolidated Cott Group shall maintain a Leverage Ratio of no greater than 6.0 to 1.0 as of the last day of each fiscal quarter.

8.2 FIXED CHARGE COVERAGE RATIO.

The Consolidated Cott Group shall maintain a Fixed Charge Coverage Ratio of not less than (a) 0.7 to 1.0 as of the last day of each fiscal quarter occurring on or prior to January 1, 2000, (b) 0.8 to 1.0 as of the last day of each fiscal quarter occurring on or prior to December 30, 2000, (c) 0.9 to 1.0 as of the last day of each fiscal quarter occurring on or prior to December 29, 2001 and
(d) 1.0 to 1.0 as of the last day of each fiscal quarter occurring thereafter.

8.3 CAPITAL EXPENDITURES.

The Consolidated Cott Group shall not make Consolidated Capital Expenditures in excess of $35,000,000 during the fiscal year ending January 1, 2000 and $50,000,000 in any

fiscal year thereafter; provided, however, that (a) the amount expended in any fiscal year for any Permitted Acquisition shall not reduce the Capital Expenditure limit for such fiscal year and (b) the proceeds of any asset sale permitted hereunder or of any casualty loss under any insurance policy, the proceeds of which are permitted to be applied by the Credit Parties under
Section 7.6 hereof, to the extent such proceeds are applied to replace or rebuild any such assets or affected property, shall not be included in the calculation of Consolidated Capital Expenditures for the purpose of determining compliance with this Section 8.3. The Borrowers may seek an increase to the limitations on Consolidated Capital Expenditures set forth herein by requesting the consent of the Required Lenders to any such increase.

8.4 MINIMUM SHAREHOLDERS' EQUITY.

The consolidated Shareholders' Equity of the Consolidated Cott Group shall be greater than or equal to (a) $115,000,000, plus (b) a cumulative amount, determined at the end of each fiscal year, commencing with the fiscal year ending January 1, 2000, equal to 75% of Net Income earned by the Consolidated Cott Group during each such fiscal year (with no reductions for any losses incurred during any fiscal year).

ARTICLE IX

NEGATIVE COVENANTS

Each Borrower hereby covenants and agrees that so long as this Agreement is in effect and until the Loans, LOC Obligations and BA Obligations, together with interest, fees and other Obligations hereunder, have been paid in full and the Commitments, Letters of Credit and Bankers' Acceptances hereunder shall have terminated that it will do or cause to be done the following:

9.1 INDEBTEDNESS.

The Credit Parties will not contract, create, incur, assume or permit to exist any Indebtedness, except:

(a) Indebtedness arising under this Agreement and the other Credit Documents or any Interest Rate Protection Agreement;

(b) Indebtedness existing as of the Closing Date as referenced in
Section 6.9 (and renewals, refinancings or extensions thereof, in whole or in part, on terms and conditions substantially the same as such existing Indebtedness and in a principal amount not in excess of that outstanding as of the date of such renewal, refinancing or extension);

(c) Indebtedness in respect of current accounts payable and accrued expenses incurred in the ordinary course of business including, to the extent not current, accounts payable and accrued expenses that are subject to bona fide dispute;

(d) purchase money Indebtedness (including capital leases) incurred by the Credit Parties to finance the purchase of fixed assets; provided that
(i) the total of all such Indebtedness for all of the Credit Parties taken together shall not exceed an aggregate principal amount of $10,000,000 at any one time outstanding (including any such Indebtedness referred to in subsection (b) above); (ii) such Indebtedness when incurred shall not exceed the purchase price of the asset(s) financed; and (iii) no such Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing;

(e) unsecured Indebtedness owing from one Credit Party to another Credit Party;

(f) the guaranty by one Credit Party of another Credit Party's Indebtedness, to the extent such Indebtedness is permitted hereunder;

(g) Subordinated Debt; and

(h) other Indebtedness, so long as (i) such Indebtedness is not secured by any of the Collateral; (ii) no Default or Event of Default shall exist immediately prior to or after the incurrence of such Indebtedness;
(iii) the Borrowers shall be in pro forma compliance with all financial covenants contained in Article VIII hereof; (iv) the documentation evidencing such Indebtedness shall not contain covenants which are more restrictive than the covenants contained herein; and (v) immediately after the incurrence of such Indebtedness, at least $5,000,000 shall be available to be loaned to the Borrowers under the Commitments and the Total Borrowing Base.

9.2 LIENS.

No Credit Party shall contract, create, incur, assume or permit to exist any Lien with respect to any of the Collateral, whether now owned or after acquired, except for Permitted Liens.

9.3 NATURE OF BUSINESS.

No Credit Party shall substantively alter the character of its business from that conducted as of the Closing Date.

9.4 CONSOLIDATION OR MERGER.

No Credit Party shall enter into any transaction of merger or consolidation or dissolve, liquidate, or wind up its affairs other than the merger or consolidation of a Subsidiary of a Borrower into such Borrower or into another Subsidiary of such Borrower; provided that a merger or consolidation to effect a Permitted Acquisition shall be permitted; and provided, further, that if any such merger involves a Borrower such Borrower shall be the surviving entity.

9.5 SALE OR LEASE OF ASSETS.

The Credit Parties will not convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business or assets whether now owned or hereafter acquired, including, without limitation, inventory, receivables, equipment, real property interests (whether owned or leasehold), and securities, other than (a) any inventory sold or otherwise disposed of in the ordinary course of business; (b) the sale, lease, transfer or other disposal by a Credit Party of any or all of its assets to another Credit Party; (c) the sale of the Company's stock in Menu Foods Limited (or the direct holding company thereof); and (d) any other sale, lease, transfer or other disposal of the assets of a Credit Party so long as such sale, lease, transfer or other disposal would not have or reasonably be expected to have a Material Adverse Effect (for purposes hereof, a sale, lease, transfer or other disposal of all or substantially all of the assets of a Credit Party would be deemed to have Material Adverse Effect).

9.6 ACQUISITIONS.

The Credit Parties will not make any Acquisitions other than Permitted Acquisitions.

9.7 TRANSACTIONS WITH AFFILIATES.

The Credit Parties will not enter into any transaction or series of transactions (other than transactions between the Credit Parties), whether or not in the ordinary course of business, with any officer, director, shareholder, Subsidiary or Affiliate except (i) upon terms and conditions that would be obtainable in a comparable arm's-length transaction with a Person other than an Affiliate, (ii) employment arrangements, payment of directors' fees, and transactions pursuant to employees' and directors' stock option plans, each in the ordinary course of business and (iii) transactions permitted pursuant to Sections 9.4, 9.5, or 9.11.

9.8 OWNERSHIP OF SUBSIDIARIES.

The Credit Parties will not sell, transfer or otherwise dispose of, any shares of capital stock of any of their Subsidiaries who are Credit Parties, or permit any of their Subsidiaries who are Credit Parties to issue, sell or otherwise dispose of, any shares of capital stock of any of their Subsidiaries, except to other Credit Parties.

9.9 FISCAL YEAR.

The Credit Parties will not change any of their respective fiscal years without the prior written consent of the Required Lenders, which consent shall not be unreasonably denied or delayed, with appropriate modification of the financial covenants to give effect to the partial year resulting therefrom.

9.10 INVESTMENTS.

The Credit Parties will not make any Investments except for Permitted Investments.

9.11 RESTRICTED PAYMENTS.

The Credit Parties will not make a Restricted Payment, other than (a) dividends, distributions or other payments from any Subsidiary to any Borrower or from any Credit Party to another Credit Party, (b) dividends payable solely in the same class of Capital Stock of the Company, (c) dividends, distributions or other payments applied to the payment of the Subordinated Affiliate Note to the extent any such payments are permitted to be made pursuant to Section 9.15 hereof, (d) with the consent of the Required Lenders, which consent shall not be unreasonably withheld, payments to repurchase the Company's Capital Stock, (e) loans to officers and employees of the Company to purchase the Capital Stock of the Company and such other purposes as permitted by Section 9.10, (f) redemption payments on account of the Convertible Participating Voting Second Preferred Shares, Series 1, with the consent of the Required Lenders, which consent shall not be unreasonably withheld, and (g) any dividend, distribution or other payment to any Subsidiary (other than a Credit Party) so long as a matching payment, net of applicable dividend and/or withholding taxes, is simultaneously made by one or more Subsidiaries (other than a Credit Party) to a Credit Party (for purposes hereof, "simultaneously" shall mean the period from the time such initial payment is made to any such Subsidiary and including up to one week thereafter), and the Administrative Agent shall have received prior written notice of such payment describing in reasonable detail such payment, including, without limitation, the Credit Party payor, the Subsidiary payee, the Subsidiary payor and the Credit Party payee and the purpose of such payment; provided, however, that in each case described under clauses (c), (d), (e), (f) and (g) hereof, immediately before and after giving effect to such dividend, distribution or other payment, no Event of Default shall exist and the Company shall be in compliance with the terms and provisions of the indenture for the Senior Notes.

9.12 NO ADDITIONAL BANK ACCOUNTS.

The Credit Parties will not open, maintain or otherwise have any checking, savings or other accounts at any bank or other financial institution, or any other account where money is or may be deposited or maintained with any Person, other than the accounts set forth on Schedule 9.12 hereto and, after the Closing Date, such other accounts so long as each such account is subject to a tri-party lockbox or other blocked account agreement satisfactory to the Administrative Agent. All such checking, savings or other accounts of the Credit Parties shall be under the sole dominion and control of the Administrative Agent in accordance with Section 3.1 or 3.2, as the case may be.

9.13 AMENDMENTS OF MATERIAL CONTRACTS; ORGANIZATIONAL DOCUMENTS.

The Credit Parties will not, without the prior written consent of the Administrative Agent, amend, modify, cancel or terminate or permit the amendment, modification, cancellation or termination of any of the Material Contracts or the Articles or Certificate of Incorporation or other equivalent organizational document of any of the Credit Parties, except where such amendment, modification, cancellation or termination would not reasonably be expected to have a Material Adverse Effect.

9.14 ADDITIONAL NEGATIVE PLEDGES.

The Credit Parties will not create or otherwise cause or suffer to exist or become effective, directly or indirectly, (i) any prohibition or restriction (including any agreement to provide equal and ratable security to any other Person in the event a Lien is granted to or for the benefit of the Administrative Agent and the Lenders) on the creation or existence of any Lien upon the assets of any Credit Party, other than Permitted Liens or (ii) any contractual obligation which may restrict or inhibit the Administrative Agent's rights or ability to sell or otherwise dispose of the Collateral or any part thereof after the occurrence of an Event of Default.

9.15 OTHER INDEBTEDNESS.

The Credit Parties will not effect or permit any change in or amendment to any document or instrument pertaining to the subordination, if any, terms of payment or required prepayments of any Subordinated Debt or the Senior Notes, effect or permit any change in or amendment to any document or instrument pertaining to the covenants or events of default of any Subordinated Debt or the Senior Notes if the effect of any such change or amendment is to make such covenants or events of default more restrictive, give any notice of optional redemption or optional prepayment or offer to repurchase under any such document or instrument, or, directly or indirectly, make any payment of principal of or interest on or in redemption, retirement or repurchase of any Subordinated Debt or the Senior Notes, except for (a) payments of principal of and interest on the Subordinated Debt to the extent not prohibited by the Subordination Agreement and so long as any such payments are promptly transferred from the Irish Affiliate to the Company and (b) (i) the scheduled payments required by the terms of the documents and instruments evidencing Senior Notes and permitted by the provisions of the documents and instruments evidencing the Senior Notes and
(ii) the redemption of any or all of the principal amount of the Senior Notes so long as no Default or Event of Default exists or would exist as a result of such redemption and immediately after giving affect thereto, at least $5,000,000 is available to be loaned to the Borrowers under the Commitments and the Total Borrowing Base.

9.16 LICENSES, ETC.

The Credit Parties will not enter into licenses of, or otherwise restrict the use of, any patents, trademarks or copyrights which would prevent any Credit Party from selling, transferring, encumbering or otherwise disposing of any such patent, trademark or copyright, except where such license or restriction would not reasonably be expected to have a Material Adverse Effect.

9.17 LIMITATIONS.

Except as set forth on Schedule 9.17 hereto, the Credit Parties will not, directly or indirectly, create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Credit Party to (a) pay dividends or make any other distribution on any of its Capital Stock, (b) pay any Indebtedness owed to another Credit Party, (c) make loans or advances to another Credit Party or (d) transfer any of its property to any other Credit Party, except for encumbrances or restrictions

existing under or by reason of (i) customary non-assignment provisions in any lease governing a leasehold interest, (ii) any agreement or other instrument of a Person existing at the time it becomes a Subsidiary of a Borrower; provided that such encumbrance or restriction is not applicable to any other Person, or any property of any other Person, other than such Person becoming a Subsidiary of a Borrower and was not entered into in contemplation of such Person becoming a Subsidiary of a Borrower and (iii) this Credit Agreement and the other Credit Documents.

ARTICLE X

POWERS

10.1 APPOINTMENT OF ADMINISTRATIVE AGENT AS ATTORNEY-IN-FACT.

Each Borrower hereby irrevocably authorizes and appoints the Administrative Agent, or any Person or agent the Administrative Agent may designate, as such Borrower's attorney-in-fact, at the Borrowers' cost and expense, to exercise, subject to the limitations set forth in Section 10.2, all of the following powers, which being coupled with an interest, shall be irrevocable until all of the Obligations to the Lenders have been paid and satisfied in full and all of the Commitments have been terminated:

(a) To receive, take, endorse, sign, assign and deliver, all in the name of the Administrative Agent, the Lenders or such Borrower, as the case may be, any and all checks, notes, drafts, and other documents or instruments relating to the Collateral;

(b) To receive, open and dispose of all mail addressed to such Borrower and to notify postal authorities to change the address for delivery thereof to such address as the Administrative Agent may designate;

(c) To request at any time from customers indebted on Accounts, in the name of such Borrower or a third party designee of the Administrative Agent, information concerning the Accounts and the amounts owing thereon;

(d) To give customers indebted on Accounts notice of the Lenders' interest therein, and/or to instruct such customers to make payment directly to the Administrative Agent for such Borrower's account; and

(e) To take or bring, in the name of the Administrative Agent, the Lenders or such Borrower, all steps, actions, suits or proceedings deemed by the Administrative Agent necessary or desirable to enforce or effect collection of the Accounts.

10.2 LIMITATION ON EXERCISE OF POWER.

Notwithstanding anything hereinabove to the contrary, the powers set forth in subparagraphs (b), (d) and (e) above may only be exercised by the Administrative Agent on and

after the occurrence and during the continuation of an Event of Default which has not otherwise been waived by the Administrative Agent. The powers set forth in subparagraphs (a) and (c) above may be exercised by the Administrative Agent at any time.

ARTICLE XI

EVENTS OF DEFAULT AND REMEDIES

11.1 EVENTS OF DEFAULT.

An Event of Default shall exist upon the occurrence of any of the following specified events (each an "Event of Default"):

(a) Payment. Any Borrower shall default in the payment when due of
(i) any principal owing hereunder, under any of the Credit Documents or in connection herewith or (ii) any interest, fees or other amounts owing hereunder, under any of the other Credit Documents or in connection herewith and the failure to pay any such interest, fees or other amounts shall continue for a period of three (3) or more days following receipt by such Borrower of a notice of default from the Administrative Agent, or any Lender, or if cured, any subsequent failure to pay such interest, fees or other amounts shall occur and continue for a period of three (3) or more days;

(b) Representations. Any representation, warranty or statement made or deemed to be made by any Credit Party herein, in any of the Credit Documents, or in any written statement or certificate delivered pursuant hereto or thereto shall prove untrue in any material respect on the date as of which it was made or deemed to have been made;

(c) Covenants. Any Credit Party shall

(i) default in the due performance or observance of any term condition or agreement contained in Section 7.1(f)(i), Article VIII or Article IX, or

(ii) default in the due performance or observance of any term or condition in Section 7.1(a), (b) or (c) and such default shall remain unremedied for a period of ten (10) Business Days after the earlier of a Credit Party becoming aware of such default or notice thereof given by the Administrative Agent.

(iii) default in the due performance or observance of any term, covenant or agreement (other than those referred to in subsections
(a), (b), (c)(i) or (c)(ii) of this Section 11.1) contained in this Agreement and such default shall continue unremedied for a period of thirty (30) days after the earlier of a Credit Party becoming aware of such default or notice thereof given by the Administrative Agent;

(d) Other Credit Documents. (i) Any Credit Party shall default in the due performance or observance of any term, covenant or agreement in any of the other Credit Documents (subject to applicable grace or cure periods, if any), or (ii) any Credit Document shall fail to be in full force and effect or to give an Agent and/or the Lenders the rights, powers and privileges purported to be created thereby;

(e) Guaranties. Any Guarantor or any Person acting by or on behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations under a Guaranty Agreement;

(f) Bankruptcy, etc. The occurrence of any Bankruptcy Event with respect to a Credit Party;

(g) Defaults under Other Agreements. With respect to any Funded Debt in excess of $1,000,000 (other than Funded Debt outstanding under this Agreement) or the Subordinated Debt or the Senior Notes, (i) a Credit Party shall (A) default in any payment (beyond the applicable grace period with respect thereto, if any) with respect to any such Indebtedness, or (B) default in the observance or performance relating to such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or condition shall occur or condition exist, the effect of which default or other event or condition is to cause, or permit, the holder or holders of such Indebtedness (or trustee or agent on behalf of such holders) to cause (determined without regard to whether any notice or lapse of time is required), any such Indebtedness to become due prior to its stated maturity; or (ii) any such Indebtedness shall be declared due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;

(h) Judgments. One or more judgments or decrees shall be entered against a Credit Party involving a liability of $1,000,000 or more in the aggregate (to the extent not paid or fully covered by insurance (subject to payment of the applicable deductible) provided by a carrier who, upon request, has not denied coverage) and any such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within thirty (30) days from the entry thereof;

(i) ERISA. The occurrence of any of the following events or conditions, if the result could have or be reasonably expected to have a Material Adverse Effect: (A) any "accumulated funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, shall exist with respect to any Single Employer Plan, or any lien shall arise on the assets of a Borrower or any ERISA Affiliate in favor of the PBGC or a Single Employer Plan; (B) a ERISA Event shall occur with respect to a Single Employer Plan, which is, in the reasonable opinion of the Administrative Agent, likely to result in the termination of such Plan for purposes of Title IV of ERISA; (C) a ERISA Event shall occur with respect to a Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable opinion of the Administrative Agent, likely to result in (1) the termination of such Plan for purposes of Title IV of ERISA, or (2) any Borrower or any ERISA Affiliate incurring any liability in connection with a withdrawal from,

reorganization of (within the meaning of Section 4241 of ERISA), or insolvency or (within the meaning of Section 4245 of ERISA) such Plan; or (D) any prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility shall occur which may subject any Borrower or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which any Borrower or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability;

(j) Ownership. There shall occur a Change of Control; or

(k) Subordinated Debt. The subordination provisions in any agreement relating to Subordinated Debt shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable as to any holder of the Subordinated Debt.

11.2 ACCELERATION; REMEDIES.

Upon the occurrence of an Event of Default, and at any time thereafter, the Administrative Agent shall, upon the request and direction of the Required Lenders, by written notice to the Borrowers, take any of the following actions without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against any Credit Party, except as otherwise specifically provided for herein:

(a) Termination of Commitments. Declare the Commitments terminated whereupon the Commitments shall be immediately terminated.

(b) Acceleration of Loans. Declare the unpaid principal of and any accrued interest in respect of all Loans and any and all other indebtedness or obligations of any and every kind owing by the Borrowers to any of the Lenders hereunder to be due whereupon the same shall be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers.

(c) Cash Collateral. Direct the Borrowers to pay (and the Borrowers agree that upon receipt of such notice, or upon the occurrence of an Event of Default under Section 11.1(f), they will immediately pay) to the Administrative Agent additional cash, to be held by the Administrative Agent, for the benefit of the Lenders, in a cash collateral account as security for the LOC Obligations in respect of subsequent drawings under all then outstanding Letters of Credit in an amount equal to the maximum aggregate amount which may be drawn under all Letters of Credits then outstanding. Accrued interest on the cash collateral account shall be for the account of the Borrowers, subject to the prior payment in full in cash of all of the Obligations.

(d) Enforcement of Rights. Enforce any and all rights and interests created and existing under the Credit Documents or at law, including, without limitation, the Guaranty Agreements and the Security Agreements, and all rights of set-off.

Notwithstanding the foregoing, if an Event of Default specified in Section 11.1(f) shall occur, then the Commitments shall automatically terminate and all Loans, all reimbursement obligations under Letters of Credit, all accrued interest in respect thereof, all accrued and unpaid fees and other indebtedness or obligations owing to the Lenders hereunder shall immediately become due and payable without the giving of any notice or other action by the Agents or the Lenders which notice or other action is expressly waived by the Borrowers.

11.3. CONVERSION AND REDENOMINATION CERTAIN LOANS; PURCHASE OF RISK PARTICIPATIONS.

(a) Conversion and Redenomination of Loans. Notwithstanding anything herein to the contrary, upon a termination of the Commitments following the occurrence of an Event of Default (a "Commitment Termination Event"), (i) all outstanding Loans denominated in Canadian Dollars or bearing interest at a rate other than the U.S. Base Rate shall be redenominated and/or converted into U.S. Base Rate Loans denominated in Dollars and (ii) all BA Obligations and LOC Obligations owed to a Lender in Canadian Dollars shall be redenominated into BA Obligations and LOC Obligations owed in Dollars, in each case on and with effect from the soonest practicable date following the Commitment Termination Event as determined by the Administrative Agent (the "Conversion Date") and at the Bank of Canada published noon exchange rate or closing exchange rate (whichever is closer to the time of payment) in effect as of such Conversion Date. The Borrowers hereby agree to pay to the Administrative Agent, for the pro rata benefit of the Lenders, on the Conversion Date any amounts owing pursuant to Section 4.14 as a result of any such conversion occurring prior to the end of an Interest Period. The Administrative Agent will promptly notify the Borrowers and the Lenders of any such redenomination and conversion following a Commitment Termination Event.

(b) Purchase of Risk Participations. Each Lender hereby agrees that it shall forthwith purchase, as of the Conversion Date (but adjusted for any payments received from a Borrower on or after such date and prior to such purchase), from the other Lenders such Participation Interests in the outstanding Loans, LOC Obligations and BA Obligations (whether or not such Loans, LOC Obligations and BA Obligations have been redenominated or converted pursuant to Section 11.3(a)) as shall be necessary to cause each such Lender to share in all Loans, LOC Obligations and BA Obligations ratably based upon its Commitment Percentage with respect to Participation Interests in all Loans, LOC Obligations and BA Obligations (determined before giving effect to any termination of the Commitments), provided that
(1) all interest and fees payable on a Loan, LOC Obligation or BA Obligation shall be for the account of the Lender that originally extended such Loan or issued or participated in the related Letters of Credit or Bankers' Acceptances, as the case may be, until the date as of which the respective Participation Interest is purchased and (2) if any purchase of a Participation Interest required to be made pursuant to this sentence is not made on the Conversion Date, then at the time such purchase is actually made the purchasing Lender shall be required to pay to the selling Lender, to the extent not paid to such selling Lender by the applicable Borrower in accordance with the terms of this Credit Agreement, interest on the principal amount of the Participation Interest purchased for each day from and including the day

upon which such purchase of the Participation Interest would otherwise have occurred to but excluding the date of actual payment for the purchase of such Participation Interest, at the rate equal to the Federal Funds Rate.

ARTICLE XII

TERMINATION

Except as otherwise provided in Article XI of this Credit Agreement, the Commitments made hereunder shall terminate on the Maturity Date and all then outstanding Loans shall be immediately due and payable in full and all outstanding Letters of Credit shall immediately terminate. Unless sooner demanded in accordance with this Agreement, all Obligations shall become due and payable as of any termination hereunder or under Article XI and, pending a final accounting, the Administrative Agent may withhold, or cause to be withheld, any balances in the Borrowers' Loan accounts, in an amount sufficient, in the Administrative Agent's reasonable discretion, to cover all of the Obligations, whether absolute or contingent, unless supplied with a satisfactory indemnity to cover all of such Obligations. All of the Agents' and the Lenders' rights, liens and security interests shall continue after any termination until all Obligations have been paid and satisfied in full.

ARTICLE XIII

THE AGENTS

13.1 APPOINTMENT.

Each Lender hereby designates and appoints First Union as Administrative Agent and National Bank of Canada, as Canadian Agent to act as specified herein and the other Credit Documents, and each such Lender hereby authorizes the Agents as the agent for such Lender, to take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated by the terms hereof and of the other Credit Documents, together with such other powers as are reasonably incidental thereto, including, without limitation, holding all Collateral and all payments of principal, interest, fees, charges and expenses received pursuant to this Credit Agreement or any other Credit Document for the benefit of the Lenders. Notwithstanding any provision to the contrary elsewhere herein and in the other Credit Documents, the Agents shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any of the other Credit Documents, or shall otherwise exist against the Agents. The provisions of this Article are solely for the benefit of the Agents and the Lenders and none of the members of the Consolidated Cott Group shall have any rights as a third party beneficiary of the provisions hereof. In performing its functions and duties under this Agreement and the other Credit Documents, the Agents shall act solely as agent of the Lenders and do not assume and shall not be deemed to have assumed any obligation or relationship of agency or

trust with or for the Borrowers or any other member of the Consolidated Cott Group. Notwithstanding any provision to the contrary in this Agreement or any of the other Credit Documents, the Canadian Agent shall not take or omit to take any discretionary action under this Agreement or any of the other Credit Documents without the prior authorization of the Administrative Agent.

13.2 DELEGATION OF DUTIES.

The Agents may execute any of their respective duties hereunder or under the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agents shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected with reasonable care.

13.3 EXCULPATORY PROVISIONS.

Each of the Agents or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall not be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection herewith or in connection with any of the other Credit Documents (except for its or such Person's own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any member of the Consolidated Cott Group contained herein or in any of the other Credit Documents or in any certificate, report, statement or other document referred to or provided for in, or received by an Agent under or in connection herewith or in connection with the other Credit Documents, or enforceability or sufficiency therefor of any of the other Credit Documents, or for any failure of any of the Borrowers to perform its obligations hereunder or thereunder. An Agent shall not be responsible to any Lender for the effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement, or any of the other Credit Documents or for any representations, warranties, recitals or statements made herein or therein or made by the Borrowers or any member of the Consolidated Cott Group in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by an Agent to the Lenders or by or on behalf of the Consolidated Cott Group to an Agent or any Lender or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or of the existence or possible existence of any Default or Event of Default or to inspect the properties, books or records of the Consolidated Cott Group. The Agents are not trustees for the Lenders and owe no fiduciary duty to any of the Lenders.

13.4 RELIANCE ON COMMUNICATIONS.

The Agents shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrowers or any of the other members of the Consolidated Cott Group, independent accountants

and other experts selected by the Administrative Agent with reasonable care). Each of the Agents may deem and treat the Lenders as the owner of its respective interests hereunder for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the appropriate Agent in accordance with Section 14.3(b). Each of the Agents shall be fully justified in failing or refusing to take any action under this Agreement or under any of the other Credit Documents unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any of the other Credit Documents in accordance with a request of the Required Lenders (or to the extent specifically provided in Section 14.6, all the Lenders) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders (including their successors and assigns).

13.5 NOTICE OF DEFAULT.

An Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless such Agent has received notice from a Lender or a member of the Consolidated Cott Group referring to the Credit Document, describing such Default or Event of Default and stating that such notice is a "notice of default." In the event that an Agent receives such a notice, such Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be directed by the Required Lenders.

13.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS.

Each Lender expressly acknowledges that neither of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or affiliates (including, without limitation, First Union Capital Markets Corp. ("FUCMC"); it being understood that each reference to affiliate in this Section 13.6 shall include FUCMC) has made any representations or warranties to it and that no act by an Agent or any affiliate thereof hereinafter taken, including any review of the affairs of the Consolidated Cott Group, shall be deemed to constitute any representation or warranty by an Agent to any Lender. Each Lender represents to the Agents that it has, independently and without reliance upon the Agents or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of the Consolidated Cott Group and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the Agents or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of the Consolidated Cott Group. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Agents hereunder, the Agents shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, assets, property, financial or other conditions,

prospects or creditworthiness of the Consolidated Cott Group which may come into the possession of an Agent or any of its respective officers, directors, employees, agents, attorneys-in-fact or affiliates.

13.7 INDEMNIFICATION.

The Lenders agree to indemnify each Agent in its capacity as such (to the extent not reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so), ratably according to their respective Commitments, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the payment of the Obligations) be imposed on, incurred by or asserted against an Agent in its respective capacity as such in any way relating to or arising out of this Agreement or the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by an Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of an Agent. If any indemnity furnished to an Agent for any purpose shall, in the opinion of such Agent, acting reasonably, be insufficient or become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The agreements in this Section shall survive the payment of the Obligations and all other amounts payable hereunder and under the other Credit Documents.

13.8 AGENT IN ITS INDIVIDUAL CAPACITY.

The Agents and their respective affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrowers or any other member of the Consolidated Cott Group as though such Agents were not agents hereunder. With respect to the Loans made, the Agents shall have the same rights and powers under this Agreement as any Lender and may exercise the same as though they were not agents hereunder, and the terms "Lender" and "Lenders" shall include the Administrative Agent and the Canadian Agent in their individual capacities.

13.9 SUCCESSOR AGENT.

An Agent may, at any time, resign upon twenty (20) days' written notice to the Lenders. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent or Canadian Agent, as the case may be. If no successor Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within thirty (30) days after the notice of resignation, then the retiring Agent shall select a successor Agent provided that such successor is a Lender hereunder or a commercial bank organized or licensed under the laws of the United States of America or any State thereof or of Canada, as applicable, and has a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Administrative Agent or Canadian Agent, as the case may be, hereunder by a successor, such successor Administrative Agent or Canadian Agent, as the case may be, shall

thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent or Canadian Agent, as the case may be, and the retiring Administrative Agent or Canadian Agent, as the case may be, shall be discharged from its duties and obligations as Administrative Agent or Canadian Agent, as the case may be, as appropriate, under this Agreement and the other Credit Documents and the provisions of this Section 13.9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Agent under this Agreement.

13.10 COLLATERAL MATTERS.

(a) Each Lender authorizes and directs each of the Agents to enter into the Security Documents for the benefit of the Lenders. Each Lender authorizes and directs the Administrative Agent to make such changes to the form of Acknowledgment Agreement attached hereto as Exhibit A as it deems necessary from time to time in order to obtain any Acknowledgment Agreement from any landlord, warehouseman, filler, packer, processor, mortgagee or any other party who has an interest in any real property where Collateral is located with respect to any Credit Party. Each Lender also authorizes and directs each of the Agents to review and approve all agreements regarding the lockboxes and the lockbox accounts (including the Lockbox Agreements) on such terms as the Agents deem necessary. Each Lender hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Required Lenders or each of the Lenders, as applicable, in accordance with the provisions of this Credit Agreement or the Security Documents, and the exercise by the Required Lenders or each of the Lenders, as applicable, of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. The Administrative Agent and, with the prior approval of the Administrative Agent, the Canadian Agent, is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to an Event of Default, to take any action with respect to any Collateral or Security Document which may be necessary or appropriate to perfect and maintain perfected the security interest in and liens upon the Collateral granted pursuant to the Security Documents.

(b) The Lenders hereby authorize the Administrative Agent and, with the prior approval of the Administrative Agent, the Canadian Agent, at its option and in its discretion, to release any Lien granted to or held by either such Agent upon any Collateral (i) upon termination of the Commitments and payment in cash and satisfaction of all of the Obligations (including the LOC Obligations) at any time arising under or in respect of this Credit Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii) constituting property being sold or disposed of upon receipt of the proceeds of such sale by an Agent if the applicable Credit Party certifies to such Agent that the sale or disposition is made in compliance with Section 9.5 (and such Agent may rely conclusively on any such certificate, without further inquiry) or (iii) if approved, authorized or ratified in writing by the Required Lenders, unless such release is required to be approved by all of the Lenders hereunder. Upon request by an Agent at any time,

the Lenders will confirm in writing such Agent's authority to release particular types or items of Collateral pursuant to this Section 13.10(b).

(c) Upon any sale and transfer of Collateral which is expressly permitted pursuant to the terms of this Credit Agreement, or consented to in writing by the Required Lenders or all of the Lenders, as applicable, and upon at least five (5) Business Days' prior written request by the applicable Credit Party, the Administrative Agent and, with the prior approval of the Administrative Agent, the Canadian Agent, shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Administrative Agent for the benefit of the Lenders herein or pursuant hereto upon the Collateral that was sold or transferred; provided that (i) such Agent shall not be required to execute any such document on terms which, in such Agent's opinion, acting reasonably, would expose such Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Liens upon (or obligations of such Credit Party in respect of) all interests retained by such Credit Party, including, without limitation, the proceeds of the sale, all of which shall continue to constitute part of the Collateral. In the event of any sale or transfer of Collateral, or any foreclosure with respect to any of the Collateral, the Administrative Agent and, with the prior approval of the Administrative Agent, the Canadian Agent, shall be authorized to deduct all of the expenses reasonably incurred by such Agent from the proceeds of any such sale, transfer or foreclosure.

(d) Neither Agent shall have any obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by the Credit Parties or is cared for, protected or insured or that the liens granted to either such Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to either such Agent in this Section 13.10 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Administrative Agent and, with the prior approval of the Administrative Agent, the Canadian Agent, may act in any manner it may deem appropriate, in its reasonable discretion, given either such Agent's own interest in the Collateral as one of the Lenders and that either such Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct.

(e) The Administrative Agent hereby authorizes and appoints the Canadian Agent as the Administrative Agent's attorney-in-fact, to exercise all of the powers granted to the Canadian Agent in subsections (b) and (c) of this Section 13.10 on behalf of the Administrative Agent in its capacity as collateral agent under the Canadian Security Agreement.

ARTICLE XIV

MISCELLANEOUS

14.1 NOTICES.

Except as otherwise expressly provided herein, all notices, requests and other communications shall have been duly given and shall be effective (a) when delivered by hand, (b) when transmitted via telecopy (or other facsimile device), (c) the Business Day following the day on which the same has been delivered prepaid to a reputable national overnight air courier service, or (d) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case to the respective parties at the address or telecopy numbers set forth on Schedule 14.1 attached hereto, or at such other address as such party may specify by written notice to the other parties hereto; provided, however, that if any notice is delivered on a day other than a Business Day, or after 5:00 P.M. (Eastern time) on any Business Day, then such notice shall not be effective until the next Business Day; and provided further, that notices of default shall be effective only upon delivery by hand or by a reputable national overnight air courier service (unless a telecopy notice of default is sent and receipt is confirmed by telephone or telecopy by a Senior Management Member or Senior Financial Officer of the Company, in which case such notice of default shall be effective upon receipt).

14.2 RIGHT OF SET-OFF.

In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuation of an Event of Default, each Lender is authorized at any time and from time to time, without presentment, demand, protest or other notice of any kind (all of which rights being hereby expressly waived), to set-off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Lender (including, without limitation branches, agencies or Affiliates of such Lender wherever located) to or for the credit or the account of a Credit Party against obligations and liabilities of a Credit Party to such Lender hereunder, under the Notes, the other Credit Documents or otherwise, irrespective of whether such Lender shall have made any demand hereunder and although such obligations, liabilities or claims, or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event of Default even though such charge is made or entered on the books of such Lender subsequent thereto. Each Credit Party hereby agrees that any Person purchasing a participation in the Loans and Commitments hereunder pursuant to Section 14.3(c) may exercise all rights of set-off with respect to its participation interest as fully as if such Person were a Lender hereunder.

14.3 BENEFIT OF AGREEMENT.

(a) Generally. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided that a Borrower may not assign and transfer any of its interests without prior written consent of the Lenders; and provided further that the rights of each Lender to transfer, assign or

grant participations in its rights and/or obligations hereunder shall be limited as set forth in this Section 14.3.

(b) Assignments. Subject to the consent of the Borrowers (provided, however, that no consent shall be required during the existence and continuation of an Event of Default) and of the Administrative Agent, which consent shall not be unreasonably withheld, each Lender may assign all or a portion of its rights and obligations hereunder pursuant to an assignment agreement substantially in the form of Exhibit M to one or more Eligible Assignees; provided that any such assignment shall be in a minimum aggregate amount of $5,000,000 of the Commitments and in integral multiples of $1,000,000 above such amount and that each such assignment shall be of a constant, not varying, percentage of all of the assigning Lender's rights and obligations under this Agreement. Any assignment hereunder shall be effective upon satisfaction of the conditions set forth in the preceding sentence and delivery to the Administrative Agent of written notice of the assignment together with a transfer fee of $3,500 (or with respect to an assignment of the Canadian Revolving Loan Commitment, a transfer fee of $1,750) payable to the Administrative Agent for its own account; provided that any assignment of the Canadian Revolving Loan Commitment shall require delivery of written notice of the assignment to the Canadian Agent together with a transfer fee of $1,750 payable to the Canadian Agent for its own account. Upon the effectiveness of any such assignment, the assignee shall become a "Lender" for all purposes of this Agreement and the other Credit Documents and, to the extent of such assignment, the assigning Lender shall be relieved of its obligations hereunder to the extent of the Loans and Commitment components being assigned. Along such lines, the Borrowers agree that upon effectiveness of any such assignment and surrender of the appropriate Note or Notes, it will promptly provide to the assigning Lender and to the assignee separate promissory notes in the amount of their respective interests substantially in the form of the original Note (but with notation thereon that it is given in substitution for and replacement of the original Note or any replacement notes thereof). In addition to the assignments permitted under this Section 14.3(b), any Lender may (without notice to the Borrowers, the Administrative Agent or any other Lender and without payment of any fee) (i) assign and pledge all or any portion of its Loans and its Notes to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank and (ii) assign all or any portion of its rights under this Agreement and its Loans and its Notes to an Affiliate. No such assignment, as set forth in the preceding sentence, shall release the assigning Lender from its obligations hereunder.

By executing and delivering an assignment agreement in accordance with this
Section 14.3(b), the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and the assignee warrants that it is an Eligible Assignee; (ii) except as set forth in clause (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value

of this Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto or the financial condition of any member of the Consolidated Cott Group or the performance or observance by any member of the Consolidated Cott Group of any of its obligations under this Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; (iii) such assignee represents and warrants that it is legally authorized to enter into such assignment agreement; (iv) such assignee confirms that it has received a copy of this Agreement, the other Credit Documents and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such assignment agreement; (v) such assignee will independently and without reliance upon the Agents, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Credit Documents; (vi) such assignee appoints and authorizes the Agents to take such action on its behalf and to exercise such powers under this Agreement or any other Credit Document as are delegated to the Agents by the terms hereof or thereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement and the other Credit Documents are required to be performed by it as a Lender.

(c) Participations. Each Lender may sell, transfer, grant or assign participations in all or any part of such Lender's rights, obligations or rights and obligations hereunder; provided that (i) such selling Lender shall remain a "Lender" for all purposes under this Agreement (such selling Lender's obligations under the Credit Documents remaining unchanged) and the participant shall not constitute a Lender hereunder, (ii) no such participant shall have, or be granted, rights to approve any amendment or waiver relating to this Agreement or the other Credit Documents except to the extent any such amendment or waiver would (A) reduce the principal of or rate of interest on or fees in respect of any Loans in which the participant is participating, (B) postpone the date fixed for any payment of principal (including extension of the Maturity Date but excluding any mandatory prepayment), interest or fees in which the participant is participating, or (C) release all or substantially all of the guaranties or the collateral (except as expressly provided in the Credit Documents) supporting any of the Loans or Commitments in which the participant is participating, and (iii) sub-participations by the participant (except to an affiliate, parent company or affiliate of a parent company of the participant) shall be prohibited. In the case of any such participation, the participant shall not have any rights under this Agreement or the other Credit Documents (the participant's rights against the selling Lender in respect of such participation to be those set forth in the participation agreement with such Lender creating such participation) and all amounts payable by the Borrowers hereunder shall be determined as if such Lender had not sold such participation, provided, however, that such participant shall be entitled to receive additional amounts under Sections 4.9 through 4.14; provided that such participant shall not be entitled to receive any amount greater than such selling Lender would have received had such Lender not sold such participation.

14.4 NO WAIVER; REMEDIES CUMULATIVE.

The Borrowers hereby waive due diligence, demand, presentment and protest and any notices thereof as well as notice of nonpayment. No failure or delay on the part of an Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrowers or any other Credit Party and an Agent or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies which the Agents or any Lender would otherwise have. No notice to or demand on the Borrowers in any case shall entitle the Borrowers or any other Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or the Lenders to any other or further action in any circumstances without notice or demand.

14.5 PAYMENT OF EXPENSES; INDEMNIFICATION.

The Borrowers agree to: (a) pay all reasonable out-of-pocket costs and expenses of the Administrative Agent and FUCMC in connection with the negotiation, preparation, execution and delivery of this Agreement and the other Credit Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees and expenses of Moore & Van Allen, PLLC, special counsel to the Agents as well as Canadian counsel to the Agents) and any amendment, waiver or consent relating hereto and thereto including, but not limited to, any such amendments, waivers or consents resulting from or related to any work-out, renegotiation or restructure relating to the performance by the Borrowers under this Agreement or any other Credit Party under the other Credit Documents and of the Administrative Agent and the Lenders in connection with enforcement of the Credit Documents and the documents and instruments referred to therein (including, without limitation, in connection with any such enforcement, the reasonable fees and disbursements of counsel for the Administrative Agent and each of the Lenders); (ii) pay and hold each of the Lenders harmless from and against any and all claims for Non-Excluded Taxes as set forth in Section 4.13 and hold each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such Non-Excluded Taxes; and (iii) indemnify each Agent, FUCMC and each Lender, its officers, directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other proceeding (whether or not any Agent, FUCMC or Lender is a party thereto) related to the entering into and/or performance of any Credit Document or the use of proceeds of any Loans (including other extensions of credit) hereunder or the consummation of any other transactions contemplated in any Credit Document, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such losses, liabilities, claims, damages or expenses to the extent they relate to disputes solely between or among the Lenders (excluding First Union acting in its capacity as Administrative Agent or National Bank of Canada acting in its capacity as Canadian Agent) or they are incurred by reason of gross negligence or willful misconduct on the part of the Person to be indemnified).

14.6 AMENDMENTS, WAIVERS AND CONSENTS.

Neither the amendment or waiver of any provision of this Credit Agreement or any other Credit Document, nor the consent to any departure by any Borrower or other Credit Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders, or if the Lenders shall not be parties thereto, by the parties thereto and consented to by the Required Lenders, and each such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no amendment, waiver or consent shall unless in writing and signed by all the Lenders, do any of the following: (a) increase the Commitments of the Lenders or subject the Lenders to any additional obligations, (b) except as otherwise expressly provided in this Credit Agreement, reduce the principal of, or interest on, any Note or any Letter of Credit reimbursement obligations or any fees hereunder, (c) postpone any date fixed for any payment in respect of principal of, or interest on, any Note or any Letter of Credit reimbursement obligations or any fees hereunder, (d) change the percentage of the Commitments, or any minimum requirement necessary for the Lenders or the Required Lenders to take any action hereunder, (e) amend or waive this Section 14.6, or change the definition of Required Lenders, (f) release any Borrower or any Guarantor, (g) except as otherwise expressly provided in this Credit Agreement, and other than in connection with the financing, refinancing, sale or other disposition of any asset of the Credit Parties permitted under this Credit Agreement, release any Liens in favor of the Lenders on any material portion of the Collateral or (h) increase the advance rates used to calculate the Borrowing Base and, provided, further, that no amendment, waiver or consent affecting the rights or duties of the Agents or the Issuing Lender under any Credit Document shall in any event be effective, unless in writing and signed by the Agents and/or the Issuing Lender, as applicable, in addition to the Lenders required hereinabove to take such action. Notwithstanding any of the foregoing to the contrary, the consent of the Borrowers shall not be required for any amendment, modification or waiver of the provisions of Article XIII (other than the provisions of Section 13.9). In addition, the Borrowers and the Lenders hereby authorize the Administrative Agent to modify this Credit Agreement by unilaterally amending or supplementing Schedule 1.1A from time to time in the manner requested by the Borrowers, the Agents or any Lender in order to reflect any assignments or transfers of the Loans as provided for hereunder; provided, however, that the Administrative Agent shall promptly deliver a copy of any such modification to the Borrowers and each Lender.

14.7 DEFAULTING LENDER.

Each Lender understands and agrees that if such Lender is a Defaulting Lender then it shall not be entitled to vote on any matter requiring the consent of the Required Lenders or to object to any matter requiring the consent of all the Lenders; provided, however, that all other benefits and obligations under the Credit Documents shall apply to such Defaulting Lender.

14.8 COUNTERPARTS.

This Agreement may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same

instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Delivery of an executed counterpart by telecopy shall be as effective as delivery of a manually executed counterpart hereto and shall constitute a representation that an original executed counterpart will be provided.

14.9 HEADINGS.

The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

14.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES.

All indemnities set forth herein and all representations and warranties made herein shall survive the execution and delivery of this Agreement, the making of the Loans, the issuance of the Letters of Credit, and the repayment of the Loans, LOC Obligations and other obligations and the termination of the Commitments hereunder.

14.11 CURRENCY.

The use of term "dollars" or "Dollars" or the symbol "$" or "U.S. $" in the Credit Documents shall mean a reference to lawful money of the United States of America unless specifically indicated otherwise.

14.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding with respect to this Credit Agreement or any other Credit Document shall be brought in the courts of the State of North Carolina in Mecklenburg County or of the United States for the Western District of North Carolina, and, by execution and delivery of this Credit Agreement, each of the Borrowers hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the nonexclusive jurisdiction of such courts. Each of the Borrowers further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at the address set out for notices pursuant to Section 14.1, such service to become effective three (3) days after such mailing. Nothing herein shall affect the right of the Administrative Agent or any Lender to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise proceed against any Borrower in any other jurisdiction.

(b) Each of the Borrowers hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Credit Agreement or any other Credit

Document brought in the courts referred to in subsection (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

(c) The Company hereby irrevocably appoints CT Corporation System, which currently maintains a North Carolina office situated at 225 Hillsborough Street, Raleigh, North Carolina 27603, as its agent to receive service of process or other legal summons for purposes of any legal action or proceeding. So long as the Company has any obligation under this Credit Agreement or any of the Credit Documents, it will maintain a duly appointed agent in North Carolina for the service of such process or summons, and if it fails to maintain such an agent, any such process or summons may be served by mailing a copy thereof by registered mail, or a form of mail substantially equivalent thereto, addressed to it at its address as provided for notices hereunder.

14.13 ARBITRATION.

(a) Notwithstanding the provisions of Section 14.12 to the contrary, upon demand of any party hereto, whether made before or after institution of any judicial proceeding, any dispute, claim or controversy arising out of, connected with or relating to this Credit Agreement and other Credit Documents ("Disputes") between or among parties to this Credit Agreement shall be resolved by binding arbitration as provided herein. Institution of a judicial proceeding by a party does not waive the right of that party to demand arbitration hereunder. Disputes may include, without limitation, tort claims, counterclaims, disputes as to whether a matter is subject to arbitration, claims brought as class actions, claims arising from Credit Documents executed in the future, or claims arising out of or connected with the transaction reflected by this Credit Agreement.

Arbitration shall be conducted under and governed by the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration Association (the "AAA") and Title 9 of the U.S. Code. All arbitration hearings shall be conducted in Charlotte, North Carolina. A hearing shall begin within ninety (90) days of demand for arbitration and all hearings shall be concluded within one hundred twenty (120) days of demand for arbitration. These time limitations may not be extended unless a party shows cause for extension and then no more than a total extension of sixty (60) days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall be applicable to claims of less than $1,000,000. All applicable statutes of limitation shall apply to any Dispute. The panel from which all arbitrators are selected shall be comprised of licensed attorneys selected from the Commercial Financial Dispute Arbitration Panel of the AAA. The single arbitrator selected for expedited procedure shall be a retired judge from the highest court of general jurisdiction, state or federal, of the state where the hearing will be conducted or if such person is not available to serve, the single arbitrator may be a licensed attorney. The parties hereto do not waive applicable Federal or state substantive law except as provided herein. A judgment upon the award may be entered in any court having jurisdiction. Notwithstanding the foregoing, this arbitration provision does not apply to disputes under or related to Hedging Agreements.

(b) Notwithstanding the preceding binding arbitration provisions, the Administrative Agent, the Lenders and the Borrowers agree to preserve, without diminution, certain remedies that the Administrative Agent on behalf of the Lenders may employ or exercise freely, independently or in connection with an arbitration proceeding or after an arbitration action is brought. The Administrative Agent on behalf of the Lenders shall have the right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the following remedies, as applicable (i) all rights to foreclose against any real or personal property or other security by exercising a power of sale granted under Credit Documents or under applicable law or by judicial foreclosure and sale, including a proceeding to confirm the sale; (ii) all rights of self-help including peaceful occupation of real property and collection of rents, setoff, and peaceful possession of personal property; (iii) obtaining provisional or ancillary remedies including injunctive relief, sequestration, garnishment, attachment, appointment of receiver and filing an involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by confession of judgment. Any claim or controversy with regard to the Administrative Agent's entitlement on behalf of the Lenders to exercise such remedies is a Dispute. Preservation of these remedies does not limit the power of an arbitrator to grant similar remedies that may be requested by a party in a Dispute.

(c) The parties hereto agree that they shall not have a remedy of punitive or exemplary damages against the other in any Dispute and hereby waive any right or claim to punitive or exemplary damages they have now or which may arise in the future in connection with any Dispute whether the Dispute is resolved by arbitration or judicially.

(d) By execution and delivery of this Credit Agreement, each of the parties hereto accepts, for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction relating to any arbitration proceedings conducted under the Arbitration Rules in Charlotte, North Carolina and irrevocably agrees to be bound by any final judgment rendered thereby in connection with this Credit Agreement from which no appeal has been taken or is available.

14.14 WAIVER OF JURY TRIAL.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

14.15 SEVERABILITY.

If any provision of any of the Credit Documents is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.

14.16 LOAN ENTIRETY.

This Agreement together with the other Credit Documents represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents or the transactions contemplated herein and therein; provided, however, that the Administrative Agent Fee Letter shall remain in effect subsequent to the execution and delivery of this Agreement.

14.17 BINDING EFFECT; AMENDMENT AND RESTATEMENT OF EXISTING CREDIT AGREEMENT; FURTHER ASSURANCES.

This Agreement shall become effective at such time, on or after the Closing Date, that the conditions precedent set forth in Section 5.1 have been satisfied and when it shall have been executed by each Borrower and the Agents, and the Agents shall receive copies hereof (telecopied or otherwise) which, when taken together, bear the signatures of each Lender (including the Issuing Lenders), and thereafter this Agreement shall be binding upon and inure to the benefit of each Borrower, each Lender (including the Issuing Lenders) and the Agents, together with their respective successors and assigns. The Borrowers agree, upon the request of the Administrative Agent and/or the Required Lenders, to promptly take such actions, as reasonably requested, as are appropriate to carry out the intent of this Agreement and the other Credit Documents, including, but not limited to, such actions as are reasonably necessary to ensure that the Lenders have a perfected security interest in all collateral securing the Obligations, subject to no Liens other than Permitted Liens.

14.18 CONFIDENTIALITY.

The Agents and the Lenders agree to keep confidential (and to cause their respective affiliates, officers, directors, employees, agents and representatives to keep confidential) all information, materials and documents furnished to the Agents or any such Lender by or on behalf of the Credit Parties (whether before or after the Closing Date) which relates to the Credit Parties (the "Information"). Notwithstanding the foregoing, the Agents and Lenders shall be permitted to disclose Information (i) to its affiliates, officers, directors, employees, agents and representatives in connection with their participation in any of the transactions evidenced by this Agreement or any other Credit Documents or the administration of this Agreement or any other Credit Documents (so long as such Persons are notified of the confidential nature of the information); (ii) to the extent required by applicable laws and regulations or by any subpoena or similar legal process, or requested by any Governmental Authority; (iii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Credit Agreement or any agreement entered into pursuant to clause (iv) below, (B) becomes available to the Agents or any Lender on a non-confidential basis or (C) was available to the Agents or Lenders on a non-confidential basis prior to its disclosure to the Agents or any Lender by the Credit Parties; (iv) to any assignee or participant (or prospective assignee or participant) so long as such assignee or participant (or prospective assignee or participant) first specifically agrees in a writing furnished to and for the benefit of the parties hereto to be bound by the terms of this Section; (v) to Gold Sheets and other similar bank

trade publications; such information to consist of deal terms and other information customarily found in such publications or (vi) to the extent that the Credit Parties shall have consented in writing to such disclosure. Nothing set forth in this Section shall obligate the Agents or any Lender to return any materials furnished by the Credit Parties.

14.19 JUDGMENT CURRENCY.

(a) If for the purposes of obtaining judgment in any court it is necessary to convert all or any part of the Indebtedness or any other amount due to the Lenders hereunder or under any security in respect of the Borrowers' obligations hereunder in any currency (the "Original Currency") into another currency (the "Other Currency") each Borrower to the fullest extent that it may effectively do so, agrees that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Administrative Agent could purchase the Original Currency with the Other Currency at its principal offices in Charlotte, North Carolina on the day (a "Business Day") on which the Administrative Agent is open for the transaction of its banking business at such offices immediately preceding the day on which any such judgment, or any relevant part thereof, is paid or otherwise satisfied.

(b) The obligation of each Borrower in respect of any sum due in the Original Currency from it to the Lenders hereunder or under any security in respect of the Borrowers' obligation hereunder shall, notwithstanding any judgment in any Other Currency, be discharged only to the extent that on the Business Day following receipt by the Agents of any sum adjudged to be so due in such Other Currency or of any other sum in any Other Currency the Agents may, in accordance with their normal banking procedures, purchase the Original Currency with such Other Currency. If the amount of the Original Currency so purchased is less than the sum originally due to the Lenders in the Original Currency, the Borrowers shall, as a separate obligation and notwithstanding any such judgment, indemnify the Agents against such loss, and if the amount of the Original Currency so purchased exceeds the sum originally due to the Lenders, the Agents shall remit such excess to the Borrowers.

14.20 MAXIMUM RATE.

Notwithstanding anything to the contrary contained elsewhere in this Credit Agreement or in any other Credit Document, the Borrowers, the Administrative Agent, the Canadian Agent and the Lenders hereby agree that all agreements among them under this Credit Agreement and the other Credit Documents, whether now existing or hereafter arising and whether written or oral, are expressly limited so that in no contingency or event whatsoever shall the amount paid, or agreed to be paid, to the Administrative Agent or any Lender for the use, forbearance, or detention of the money loaned to any Borrower and evidenced hereby or thereby or for the performance or payment of any covenant or obligation contained herein or therein (including, in relation to any amount payable hereunder by any Canadian Borrower or to any Canadian Lender, any amount constituting "interest" for purposes of section 347 of the Criminal Code (Canada) or any successor provision in force at the relevant time, and references in this Section 14.20 shall be read accordingly), exceed the Highest Lawful Rate. If due to any circumstance whatsoever,

fulfillment of any provisions of this Credit Agreement or any of the other Credit Documents at the time performance of such provision shall be due shall exceed the Highest Lawful Rate, then, automatically, the obligation to be fulfilled shall be modified or reduced to the extent necessary to limit such interest to the Highest Lawful Rate, and if from any such circumstance any Lender should ever receive anything of value deemed interest by applicable law which would exceed the Highest Lawful Rate, such excessive interest shall be applied to the reduction of the principal amount then outstanding hereunder or on account of any other then outstanding Obligations and not to the payment of interest, or if such excessive interest exceeds the principal unpaid balance then outstanding hereunder and such other then outstanding Obligations, such excess shall be refunded to the applicable Borrower. All sums paid or agreed to be paid to the Administrative Agent, the Canadian Agent or any Lender for the use, forbearance, or detention of the Obligations and other indebtedness of the Borrowers to the Administrative Agent, the Canadian Agent or any Lender shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the actual rate of interest on account of all such indebtedness does not exceed the Highest Lawful Rate throughout the entire term of such indebtedness. The terms and provisions of this Section shall control every other provision of this Credit Agreement and all agreements among the Borrowers, the Administrative Agent, the Canadian Agent and the Lenders.

14.21 CONCERNING JOINT AND SEVERAL LIABILITY OF THE U.S. BORROWERS.

(a) Each of the U.S. Borrowers is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the Lenders under this Credit Agreement, for the mutual benefit, directly and indirectly, of each of the U.S. Borrowers and in consideration of the undertakings of each of the U.S. Borrowers to accept joint and several liability for the obligations of each of them.

(b) Each of the U.S. Borrowers jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other U.S. Borrowers with respect to the payment and performance of all of the Obligations, it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each of the U.S. Borrowers without preferences or distinction among them.

(c) If and to the extent that any of the U.S. Borrowers shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event, the other U.S. Borrowers will make such payment with respect to, or perform, such Obligation.

(d) The obligations of each U.S. Borrower under the provisions of this
Section 14.21 constitute full recourse obligations of such U.S. Borrower, enforceable against it to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Credit Agreement or any other circumstances whatsoever.

(e) Except as otherwise expressly provided herein or in the other Credit Documents, each U.S. Borrower hereby waives notice of acceptance of its joint and

several liability, notice of any Loan made under this Credit Agreement, notice of occurrence of any Event of Default, or of any demand for any payment under this Credit Agreement, notice of any action at any time taken or omitted by any Lender under or in respect of any of the Obligations, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with this Credit Agreement. Each U.S. Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by any Lender at any time or times in respect of any default by any U.S. Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Credit Agreement, any and all other indulgences whatsoever by any Lender in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any U.S. Borrower. Without limiting the generality of the foregoing, each U.S. Borrower assents to any other action or delay in acting or failure to act on the part of any Lender, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with the applicable laws or regulations thereunder which might, but for the provisions of this Section 14.21, afford grounds for terminating, discharging or relieving such U.S. Borrower, in whole or in part, from any of its obligations under this
Section 14.21, it being the intention of each U.S. Borrower that, so long as any of the Obligations remain unsatisfied, the obligations of such U.S. Borrower under this Section 14.21 shall not be discharged except by performance and then only to the extent of such performance. The Obligations of each U.S. Borrower under this Section 14.21 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any U.S. Borrower or any Lender. The joint and several liability of the U.S. Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of any Borrower or any Lender.

(f) The provisions of this Section 14.21 are made for the benefit of the Lenders and their respective successors and assigns, and may be enforced by any such Person from time to time against any of the U.S. Borrowers as often as occasion therefor may arise and without requirement on the part of any Lender first to marshal any of its claims or to exercise any of its rights against any of the other U.S. Borrowers or to exhaust any remedies available to it against any of the other U.S. Borrowers or to resort to any other source or means of obtaining payment of any of the Obligations or to elect any other remedy. The provisions of this Section 14.21 shall remain in effect until all the Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by any Lender upon the insolvency, bankruptcy or reorganization of any of the U.S. Borrowers, or otherwise, the provisions of this Section 14.21 will forthwith be reinstated in effect, as though such payment had not been made.

(g) Notwithstanding any provision to the contrary contained herein or in any other of the Credit Documents, to the extent the joint obligations of a U.S. Borrower shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of each U.S. Borrower hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the U.S. federal Bankruptcy Code).

(h) The U.S. Borrowers hereby agree, as among themselves, that if any U.S. Borrower shall become an Excess Funding Borrower (as defined below), each other U.S. Borrower shall, on demand of such Excess Funding Borrower (but subject to the next sentence hereof and to subsection (B) below), pay to such Excess Funding Borrower an amount equal to such U.S. Borrower's Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, assets, liabilities and debts of such Excess Funding Borrower) of such Excess Payment (as defined below). The payment obligation of any U.S. Borrower to any Excess Funding Borrower under this
Section 14.21(h) shall be subordinate and subject in right of payment to the prior payment in full of the Obligations of such U.S. Borrower under the other provisions of this Credit Agreement, and such Excess Funding Borrower shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such Obligations. For purposes hereof, (i) "Excess Funding Borrower" shall mean, in respect of any Obligations arising under the other provisions of this Credit Agreement (hereafter, the "Joint Obligations"), a U.S. Borrower that has paid an amount in excess of its Pro Rata Share of the Joint Obligations; (ii) "Excess Payment" shall mean, in respect of any Joint Obligations, the amount paid by an Excess Funding Borrower in excess of its Pro Rata Share of such Joint Obligations; and (iii) "Pro Rata Share", for the purposes of this Section 14.21(h), shall mean, for any U.S. Borrower, the ratio (expressed as a percentage) of (A) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such U.S. Borrower (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such U.S. Borrower hereunder) to (B) the amount by which the aggregate present fair salable value of all assets and other properties of such U.S. Borrower and all of the other U.S. Borrowers exceeds the amount of all of the debts and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such U.S. Borrower and the other U.S. Borrowers hereunder) of such U.S. Borrower and all of the other U.S. Borrowers, all as of the Closing Date (if any U.S. Borrower becomes a party hereto subsequent to the Closing Date, then for the purposes of this
Section 14.21(h) such subsequent U.S. Borrower shall be deemed to have been a U.S. Borrower as of the Closing Date and the information pertaining to, and only pertaining to, such U.S. Borrower as of the date such U.S. Borrower became a U.S. Borrower shall be deemed true as of the Closing Date).

14.22 CONCERNING JOINT AND SEVERAL LIABILITY OF THE CANADIAN BORROWERS.

(a) Each of the Canadian Borrowers is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the Lenders

under this Credit Agreement, for the mutual benefit, directly and indirectly, of each of the Canadian Borrowers and in consideration of the undertakings of each of the Canadian Borrowers to accept joint and several liability for the obligations of each of them.

(b) Each of the Canadian Borrowers jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Canadian Borrowers with respect to the payment and performance of all of the Canadian Obligations, it being the intention of the parties hereto that all the Canadian Obligations shall be the joint and several obligations of each of the Canadian Borrowers without preferences or distinction among them.

(c) If and to the extent that any of the Canadian Borrowers shall fail to make any payment with respect to any of the Canadian Obligations as and when due or to perform any of the Canadian Obligations in accordance with the terms thereof, then in each such event, the other Canadian Borrowers will make such payment with respect to, or perform, such Canadian Obligation.

(d) The obligations of each Canadian Borrower under the provisions of this Section 14.22 constitute full recourse obligations of such Canadian Borrower, enforceable against it to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Credit Agreement or any other circumstances whatsoever.

(e) Except as otherwise expressly provided herein or in the other Credit Documents, each Canadian Borrower hereby waives notice of acceptance of its joint and several liability, notice of any Loan made under this Credit Agreement, notice of occurrence of any Event of Default, or of any demand for any payment under this Credit Agreement, notice of any action at any time taken or omitted by any Lender under or in respect of any of the Canadian Obligations, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with this Credit Agreement. Each Canadian Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Canadian Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by any Lender at any time or times in respect of any default by any Canadian Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Credit Agreement, any and all other indulgences whatsoever by any Lender in respect of any of the Canadian Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Canadian Obligations or in part, at any time or times, of any security for any of the Canadian Obligations or the addition, substitution or release, in whole or in part, of any Canadian Borrower. Without limiting the generality of the foregoing, each Canadian Borrower assents to any other action or delay in acting or failure to act on the part of any Lender, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with the applicable laws or regulations thereunder which might, but for the provisions of this Section 14.22, afford grounds for terminating, discharging or relieving such Canadian Borrower, in whole or in part, from

any of its obligations under this Section 14.22, it being the intention of each Canadian Borrower that, so long as any of the Canadian Obligations remain unsatisfied, the obligations of such Canadian Borrower under this
Section 14.22 shall not be discharged except by performance and then only to the extent of such performance. The Canadian Obligations of each Canadian Borrower under this Section 14.22 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Canadian Borrower or any Lender. The joint and several liability of the Canadian Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of any Borrower or any Lender.

(f) The provisions of this Section 14.22 are made for the benefit of the Lenders and their respective successors and assigns, and may be enforced by any such Person from time to time against any of the Canadian Borrowers as often as occasion therefor may arise and without requirement on the part of any Lender first to marshal any of its claims or to exercise any of its rights against any of the other Canadian Borrowers or to exhaust any remedies available to it against any of the other Canadian Borrowers or to resort to any other source or means of obtaining payment of any of the Canadian Obligations or to elect any other remedy. The provisions of this
Section 14.22 shall remain in effect until all the Canadian Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Canadian Obligations, is rescinded or must otherwise be restored or returned by any Lender upon the insolvency, bankruptcy or reorganization of any of the Canadian Borrowers, or otherwise, the provisions of this Section 14.22 will forthwith be reinstated in effect, as though such payment had not been made.

(g) Notwithstanding any provision to the contrary contained herein or in any other of the Credit Documents, to the extent the joint obligations of a Canadian Borrower shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable federal, state or provincial law relating to fraudulent conveyances or transfers) then the obligations of each Canadian Borrower hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal, state or provincial and including, without limitation, the U.S. federal Bankruptcy Code, or Canadian or provincial).

(h) The Canadian Borrowers hereby agree, as among themselves, that if any Canadian Borrower shall become an Excess Funding Borrower (as defined below), each other Canadian Borrower shall, on demand of such Excess Funding Borrower (but subject to the next sentence hereof and to subsection (B) below), pay to such Excess Funding Borrower an amount equal to such Canadian Borrower's Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, assets, liabilities and debts of such Excess Funding Borrower) of such Excess Payment (as defined below). The payment obligation of any Canadian Borrower to any Excess Funding Borrower under this Section 14.22(h) shall be subordinate and subject in right of payment to the prior payment in full of the Canadian Obligations of such Canadian

Borrower under the other provisions of this Credit Agreement, and such Excess Funding Borrower shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such Canadian Obligations. For purposes hereof, (i) "Excess Funding Borrower" shall mean, in respect of any Canadian Obligations arising under the other provisions of this Credit Agreement (hereafter, the "Joint Canadian Obligations"), a Canadian Borrower that has paid an amount in excess of its Pro Rata Share of the Joint Canadian Obligations; (ii) "Excess Payment" shall mean, in respect of any Joint Canadian Obligations, the amount paid by an Excess Funding Borrower in excess of its Pro Rata Share of such Joint Canadian Obligations; and (iii) "Pro Rata Share", for the purposes of this
Section 14.22(h), shall mean, for any Canadian Borrower, the ratio (expressed as a percentage) of (A) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Canadian Borrower (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Canadian Borrower hereunder) to (B) the amount by which the aggregate present fair salable value of all assets and other properties of such Canadian Borrower and all of the other Canadian Borrowers exceeds the amount of all of the debts and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Canadian Borrower and the other Canadian Borrowers hereunder) of such Canadian Borrower and all of the other Canadian Borrowers, all as of the Closing Date (if any Canadian Borrower becomes a party hereto subsequent to the Closing Date, then for the purposes of this Section 14.22(h) such subsequent Canadian Borrower shall be deemed to have been a Canadian Borrower as of the Closing Date and the information pertaining to, and only pertaining to, such Canadian Borrower as of the date such Canadian Borrower became a Canadian Borrower shall be deemed true as of the Closing Date).

14.23 NONLIABILITY OF AGENTS AND LENDERS.

The relationship between any Borrower on the one hand and the Lenders and the Agents on the other hand shall be solely that of borrower and lender. Neither the Agents nor any Lender shall have any fiduciary responsibilities to any Borrower. Neither the Agents nor any Lender undertakes any responsibility to any Borrower to review or inform such Borrower of any matter in connection with any phase of such Borrower's business or operations.

14.24 INDEPENDENT NATURE OF LENDERS' RIGHTS.

The amounts payable at any time hereunder to each Lender under such Lender's Note or Notes shall be a separate and independent debt.

14.25 POWER OF ATTORNEY.

Each Subsidiary Borrower hereby agrees that by its execution of this Agreement, such Subsidiary Borrower appoints each of Frank E. Weise, III, President & Chief Executive Officer, Raymond Silcock, Chief Financial Officer, Tina Dell'Aquila, Controller and Catherine Brennan, Treasurer, of the Company, to be its attorneys ("its Attorneys") and in its name and on its behalf and as its act and deed or otherwise to sign all documents and carry out all such acts as

are necessary or appropriate in connection with executing any Notice of Borrowing, Notice of Extension/Conversion or any Borrowing Base Certificate or any security documents (the "Documents") in connection with this Agreement or any other Credit Document. This Power of Attorney shall be valid for the duration of the term of this Agreement. Each Subsidiary Borrower hereby undertakes to ratify everything which either of its Attorneys shall do in order to execute the Documents mentioned herein.

[Remainder of page intentionally left blank]

Each of the parties hereto has caused a counterpart of this Credit Agreement to be duly executed and delivered as of the date first above written.

CANADIAN BORROWER:

COTT CORPORATION

By:    /s/ Colin Walker    /s/ Tina Dell'Aquila
   -----------------------------------------------
Name:
Title: Sr. VP              VP & Controller

U.S. SUBSIDIARY BORROWERS:

COTT USA CORP.

By:    /s/ Colin Walker    /s/ Tina Dell'Aquila
   -----------------------------------------------
Name:
Title: Sr. VP              VP & Controller

COTT BEVERAGES USA, INC.

By:    /s/ Colin Walker    /s/ Tina Dell'Aquila
   -----------------------------------------------
Name:
Title: Sr. VP              VP & Controller

BCB USA CORP.

By:    /s/ Colin Walker    /s/ Tina Dell'Aquila
   -----------------------------------------------
Name:
Title: Sr. VP              VP & Controller

LENDERS:

FIRST UNION NATIONAL BANK, in its capacity as
Administrative Agent and as a Lender

By:      /s/ John T. Tizainor
   -----------------------------------------------
Name:        John T. Tizainor
Title:       Vice President

National Bank of Canada, in its capacity as Canadian Agent and as a Lender

By:      /s/ Timothy Lohn
   -----------------------------------------------
Name:    Timothy Lohn
Title:   Regional Manager


By:      /s/ Ellis Gaston
   -----------------------------------------------
Name:    Ellis Gaston
Title:   Senior Manager

National City Commercial Finance, Inc., as a Lender

By:      /s/ Carrie C. Tate
   -----------------------------------------------
Name:    Carrie C. Tate
Title: VP

Exhibit 4.2

SUBSCRIPTION AGREEMENT

FOR

CONVERTIBLE PARTICIPATING VOTING SECOND PREFERRED SHARES, SERIES I

OF

COTT CORPORATION, AS ISSUER

DATED AS OF JUNE 12, 1998

SUBSCRIPTION AGREEMENT

THIS AGREEMENT made the as of the 12TH day of June, 1998.

BETWEEN:

THE "PURCHASERS" SET FORTH ON SCHEDULE 1.1(aa) HERETO

(individually, each a Purchaser and collectively, the
"Purchasers")

- and -

COTT CORPORATION, a corporation continued under the laws of
Canada

(the "Corporation")

RECITALS:

1. The Purchasers wish to subscribe for and the Corporation wishes to issue to the Purchasers, subject to the terms and conditions hereof, an aggregate of 4,000,000

Convertible Participating Voting Second Preferred Shares, Series I, of the Corporation having the terms set forth in the Share Provisions (as hereinafter defined).

2. The Purchasers are simultaneously entering into the Share Purchase Agreement pursuant to which they shall acquire Common Shares in the capital of the Corporation.

In consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto hereby covenant and agree as follows:

ARTICLE 1

DEFINITIONS

1.1 DEFINITIONS. In this Agreement, unless the context otherwise requires:

(a) "ACTUAL KNOWLEDGE" means the actual knowledge existing prior to the date hereof of the directors, officers or employees of the Thomas H. Lee Company and the partners or associates of KPMG, Hutchins Wheeler & Dittmar and Aird & Berlis who assisted the Thomas H. Lee Company in evaluating the transactions contemplated herein;

(b) "AFFILIATE" has the meaning set out in the Securities Act (Ontario);

(c) "AGREEMENT" means this subscription agreement between the Corporation and the Purchasers, as amended from time to time;

(d) "APPLICABLE LAWS" means, collectively, the CBCA, the Competition Act (Canada), the Investment Canada Act, the Securities Laws, the state securities or "blue-sky" laws of states of the United States and the H-S-R Act;

(e) "BOARD OF DIRECTORS" means the board of directors of the Corporation;

(f) "BUSINESS DAY" means every day except a Saturday, Sunday or a day which is a statutory holiday under the laws of Canada or the Province of Ontario;

(g) "CANADIAN SECURITIES LAWS" means (i) the securities laws of the provinces of Canada and the regulations, rules and policies promulgated thereunder, and (ii) the rules, regulations and policies of The Toronto Stock Exchange and the Montreal Exchange;

(h) "CBCA" means the Canada Business Corporations Act, as may be amended from time to time;

(i) "CLOSING" means the closing of the purchase and issuance of the Preferred Shares contemplated hereby;

(j) "CLOSING DATE" means 15 Business Days from the date hereof in the event early termination is granted under the H-S-R Act, or such other date as the Purchaser and the Corporation may agree in writing but in no event later than three business days following the date upon which all of the conditions set out in Article 6 hereof are satisfied;

(k) "COMMON SHARES" means the common shares in the capital of the Corporation;

(l) "CONSENT" means any consent or approval under Applicable Laws required to be obtained in connection with the (i) completion of the transactions contemplated by this Agreement, (ii) the execution of this Agreement, and/or (iii) the Closing or the performance of any terms of this Agreement;

(m) "CORPORATION" means Cott Corporation, a corporation continued under the laws of Canada;

(n) "COTT CORPORATION OPTION PLAN" means the Corporation's 1986 Option Plan, as amended through September 4, 1997;

(o) "FAMILY MEMBERS" means the individuals and entities listed on SCHEDULE 1.1(o);

(p) "H-S-R ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

(q) "LIABILITIES" means liabilities or obligations (direct or indirect, contingent or absolute, known or unknown, matured or unmatured) of any nature whatsoever, whether arising out of contract, tort, statute, or otherwise;

(r) "MATERIAL ADVERSE EFFECT" means a material adverse effect on the business, assets, properties, financial condition or results of operations of the Corporation and its Subsidiaries, on a consolidated basis;

(s) "MATERIAL SUBSIDIARIES" means those Subsidiaries set out in SCHEDULE 1.1(s);

(t) "MAXIMUM AMOUNT" has the meaning ascribed to it in paragraph 8.1(A) hereof;

(u) "NUMBER OF NOMINEES" means, unless otherwise agreed to in writing by the Corporation and the Purchasers with the consent of a majority of the members of the Board of Directors who are not nominees of the Purchasers and the Family Members on the Board of Directors, such number of nominees on the Board of Directors which is based on a minimum number of outstanding Common Shares or other voting shares in the capital of the Corporation (with the calculation to include Preferred

Shares being treated as if such Preferred Shares had been converted to Common Shares in accordance with provisions of the Preferred Shares) being owned collectively by the Purchasers and the Family Members, as follows:

NUMBER OF                     MINIMUM NUMBER OF COMMON SHARES
NOMINEES                           OR OTHER VOTING SHARES
---------                     -------------------------------
4                                  12,800,000
3                                   9,600,000
2                                   6,400,000
1                                   3,200,000

such minimum number of Common Shares or other voting shares to be adjusted accordingly if the number of outstanding Common Shares is changed as the result of any stock dividend, stock split, stock consolidation, recapitalization, merger or other similar change in the capital structure of the Corporation;

(v) "OSC" means Ontario Securities Commission;

(w) "PERSON" means an individual, corporation, incorporated or unincorporated association, syndicate or organization, partnership, trust, trustee, executor, administrator or other legal representative;

(x) "PREFERRED SHARES" means the Convertible Participating Voting Second Preferred Shares, Series I of the Corporation;

(y) "PUBLIC DOCUMENTS" has the meaning ascribed to it in Section 4.2 hereof;

(z) "PURCHASE PRICE" has the meaning ascribed to it in Section 2.3 hereof;

(aa)"PURCHASER" means individually, each person or entity designated as Purchasers on SCHEDULE 1.1(AA) hereto and "PURCHASERS" means collectively, the persons and entities designated as Purchasers on SCHEDULE 1.1(AA) hereto;

(ab) "PURCHASERS' DIRECTORS" has the meaning ascribed to it in Section 7.5;

(ac) "PURCHASERS' REPRESENTATIVE" means, initially, Thomas H. Lee Company;

(ad) "REGISTERED HOLDERS" means registered holders of Common Shares;

(ae)"REGISTRATION RIGHTS AGREEMENT" means the registration rights agreement between the Corporation and the Purchasers dated the Closing Date, as amended from time to time;

(af) "REQUIRED ACTION" has the meaning ascribed thereto in Section 4.5;

(ag) "SECURITIES ACT" means the Securities Act (Ontario);

(ah) "SECURITIES LAWS" means the Canadian Securities Laws and the U.S.
Securities Laws;

(ai) "SHARE PROVISIONS" means the share provisions applicable to the Preferred Shares as set out in SCHEDULE 1.1(AI);

(aj)"SHARE PURCHASE AGREEMENT" means the agreement dated as of June 12, 1998 between the Purchasers and the Family Members, as amended from time to time;

(ak)"SUBSIDIARIES" in relation to the Corporation means companies and other entities of which the voting securities sufficient to elect a majority of the Board of Directors are owned by the Corporation;

(al) "TIME OF CLOSING" means 11:00 a.m. on the Closing Date;

(am) "TRANSACTION DOCUMENTS" has the meaning ascribed to it in Section 4.5 hereof; and

(an)"U.S. SECURITIES LAWS" means the Securities Act of 1933, as amended, and the Securities and Exchange Act of 1934, as amended, and the regulations and rules promulgated under such acts.

1.2 CONSTRUCTION. In this Agreement:

(a) words denoting the singular include the plural and vice versa and words denoting any gender include all genders;

(b) the words "including", "include", and "includes" shall mean "including without limitation", "include, without limitation" and "includes, without limitation", respectively;

(c) any reference to a statute shall mean the statute in force as at the date hereof and any regulation in force thereunder, unless otherwise expressly provided;

(d) the use of headings is for convenience of reference only and shall not affect the construction of this Agreement;

(e) when calculating the period of time within which or following which any act is to be done or step taken, the date which is the reference day in calculating such period shall be excluded. If the last day of such period is not a Business Day, the period shall end on the next Business Day;

(f) all dollar amounts are expressed in lawful currency of the United States of America, unless otherwise expressly provided; and

(g) where a notice, waiver, permit, consent, direction, authorization or instruction is to be delivered or given by or to the Purchasers herein, such notice, waiver, permit, consent, direction, authorization or instruction may be provided by or to the Purchasers' Representative on behalf of and in the name of each of the Purchasers, and the Purchasers shall be deemed to have authorized and consented to, or to have received, as the case may be, such delivery. The Purchasers' Representative may resign at any time upon notice to the Corporation and the other Purchasers, in which case all actions must be taken by and all notices must be given to, the Purchasers directly unless and until Purchasers holding a majority in interest of the Preferred Shares then held by all Purchasers shall give notice to the Corporation of a successor Purchaser Representative, which notice shall be countersigned by the person so named for such authorization to be effective.

1.3 ACCOUNTING PRINCIPLES. Wherever in this Agreement reference is made to generally accepted accounting principles, such reference shall be deemed to be Canadian generally accepted accounting principles which include the principles approved from time to time by the Canadian Institute of Chartered Accountants, or any successor institute, applicable as at the date on which such calculation is made or required to be made in accordance with generally accepted accounting principles.

1.4 SCHEDULES. The following are the schedules annexed hereto and incorporated by reference herein and deemed to be part of this Agreement:

Schedule 1.1(aa)      -        Purchasers and Nominees
Schedule 1.1(o)       -        Family Members
Schedule 1.1(s)       -        Material Subsidiaries
Schedule 1.1(ai)      -        Share Provisions
Schedule 4.4          -        Absence of Certain Changes
Schedule 4.6          -        Breaches, Defaults, Required Consents and Filings
Schedule 4.7          -        Options, Warrants, Etc.
Schedule 4.8          -        Litigation
Schedule 4.10         -        Liabilities
Schedule 4.19         -        Intellectual Property
Schedule 12.5(a)      -        Notices to Purchasers

ARTICLE 2

AUTHORIZATION AND SALE OF PREFERRED SHARES

2.1 AUTHORIZATION. Subject to obtaining the Consents, the Corporation has heretofore authorized the issuance and sale to the Purchasers pursuant to this Agreement of an aggregate of 4,000,000 Preferred Shares.

2.2 ISSUANCE AND SALE OF PREFERRED SHARES. Subject to the terms and conditions of this Agreement, at the time of Closing, the Corporation will issue to the Purchasers and the Purchasers will subscribe for and purchase from the Corporation the Preferred Shares in the amounts set forth opposite each Purchaser's name on SCHEDULE 1.1(AA) hereto.

2.3 PURCHASE PRICE. The aggregate consideration to be paid by the Purchasers for the Preferred Shares shall be $40,000,0000 (the "Purchase Price"), representing consideration of $10.00 per Preferred Share.

ARTICLE 3

CLOSING

3.1 CLOSING DATE. The Closing shall take place on the Closing Date. The Closing shall be held at the Time of Closing at the offices of Goodman Phillips & Vineberg, Suite 2400, 250 Yonge Street, Toronto, Ontario, or at such other place and time as may be agreed upon by the Corporation and the Purchasers' Representative in writing.

3.2 DELIVERY OF CERTIFICATES. Delivery of the share certificates representing the Preferred Shares shall be made at the Closing by the Corporation delivering to the Purchasers' Representative, against payment of the purchase price therefor, certificates representing the Preferred Shares registered in the name of the Purchasers in the amounts set forth opposite each Purchaser's name on SCHEDULE 1.1(AA) hereto or such other person disclosed in SCHEDULE 1.1(AA) hereto which shall be an affiliate of a Purchaser or a nominee of a Purchaser or such affiliate as a Purchaser may have designated in writing to the Corporation at least one Business Day prior to the Closing Date; provided that any such nominee or affiliate shall agree in writing to assume the obligations of the Purchasers hereunder as if an original signatory hereto and further provided that the Purchasers shall continue to be responsible for all of the obligations of the Purchasers hereunder.

3.3 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid and satisfied by each Purchaser at the Time of Closing by delivery to the Corporation by wire transfer made payable to the Corporation in an aggregate amount equal to that portion of the Purchase Price set forth opposite each Purchaser's name on SCHEDULE 1.1(AA) hereto.

3.4 FURTHER ASSURANCES. From time to time following the Closing, upon the request of the Purchasers' Representative, the Corporation shall execute and

deliver, or cause to be executed and delivered, to the Purchasers such other instruments and take such other action as may be reasonably necessary to more effectively vest in the Purchasers and put the Purchasers in possession of the Preferred Shares and the Common Shares issuable upon conversion of the Preferred Shares purchased by the Purchasers hereunder. The Corporation and the Purchasers shall each use their reasonable commercial efforts to obtain as soon as practicable all Consents.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

As an inducement to the Purchasers to enter into this Agreement and to consummate the transactions contemplated hereby, the Corporation represents and warrants to the Purchasers as follows:

4.1 ORGANIZATION AND QUALIFICATION. Each of the Corporation and its Material Subsidiaries has been incorporated and organized, and is validly existing as a corporation, and has full corporate power and authority to own its assets and conduct its businesses as now owned and conducted. Each of the Corporation and its Material Subsidiaries is duly qualified to carry on business, and is in good standing, in each jurisdiction in which the character of its properties, owned or leased, or the nature of its activities makes such qualification necessary, except where the failure to be so qualified or in good standing could not or would not reasonably be expected to, have a Material Adverse Effect. Other than as disclosed in the Public Documents or in SCHEDULE 1.1(s), the Corporation owns all of the outstanding capital stock of each of its Material Subsidiaries free and clear of all liens, encumbrances and claims.

4.2 FILINGS. Documents or information filed by the Corporation under Applicable Laws, including, without limitation, the Corporation's:

(a) 1997 Annual Report to Shareholders;

(b) proxy circular (the "Proxy Circular") relating to the Corporation's 1997 Annual Meeting of Shareholders;

(c) 1997 Annual Information Form; and

(all such filings and documents are hereinafter referred to as the "Public Filings"). The Public Filings, together with (i) the quarterly unaudited consolidated balance sheet and related consolidated statement of earnings and consolidated statement of changes in financial position of the Corporation for the three months ended May 2, 1998 attached to a press release dated June 12, 1998; (ii) the Corporation's draft financial statements for the fiscal year ended 1998; (iii) the draft dated June 10, 1998 of the Corporation's 1998 Annual Information Form; and (iv) the draft dated

June 10, 1998 of the Corporation's Management Proxy Circular (collectively, the "Public Documents") are, as of their respective dates, other than financial statements, in compliance in all material respects with such Applicable Laws and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Corporation has timely filed all documents required to be filed under the Applicable Laws, except where the failure to do so would not have a Material Adverse Effect.

4.3 FINANCIAL STATEMENTS. (a) The audited consolidated balance sheet and related consolidated statements of earnings, retained earnings and changes in financial position of the Corporation, together with the Notes to the Consolidated Financial Statements for the fiscal year ended January 31, 1998, were prepared in accordance with generally accepted accounting principles consistently applied (except where otherwise indicated) and present fairly in all material respects the consolidated financial position of the Corporation at the respective dates indicated and the results of operations and changes in financial position of the Corporation for the periods covered thereby in accordance with generally accepted accounting principles; and (b) the unaudited interim financial statements of the Corporation contained in the Public Documents present fairly in all material respects the financial position of the Corporation for the periods covered thereby in accordance with generally accepted accounting principles (except for normal year-end adjustments and the omission of footnotes).

4.4 ABSENCE OF CERTAIN CHANGES. Except as otherwise disclosed on SCHEDULE 4.4 hereto, (a) since the date of the latest balance sheet presented in the audited financial statements as at and for the year ended January 31, 1998 there has been no change in the business, properties, operations or financial condition of the Corporation and its Subsidiaries, on a consolidated basis, which would or could reasonably be expected to have a Material Adverse Effect, provided that a decline in the trading price of the Common Shares shall not be deemed to be a Material Adverse Effect if such decline is not directly attributable to a material adverse change in the business, properties, operations or financial condition of the Corporation and its Subsidiaries, on a consolidated basis, and (b) neither the Corporation nor any of its Subsidiaries has incurred or undertaken any Liabilities or obligations, direct or contingent, except for (i) the transactions contemplated by this Agreement, or (ii) contractual liabilities, including trade liabilities, incurred in the ordinary course of business and (iii) Liabilities (other than borrowed money) that would not have a Material Adverse Effect.

4.5 AUTHORITY. Subject to the filing of articles of amendment to designate the terms of the Preferred Shares contained in SCHEDULE 1.1(ai) (the "Required Action"), the Corporation has all necessary corporate power and authority to enter into this Agreement and the other agreements, documents and instruments to be executed by the Corporation and the Purchasers in furtherance of the transactions contemplated hereby and thereby, including without limitation, the Registration

Rights Agreement (collectively, the "Transaction Documents"), and to consummate the transactions contemplated hereby and thereby.

4.6 NON-CONTRAVENTION. The execution, delivery, and performance of the Transaction Documents to which the Corporation is a party by the Corporation and the consummation of the transactions contemplated hereby and thereby by the Corporation do not and will not, after completion of all Required Action:

(a) result in a breach of any of the terms and provisions of, or constitute a default (or an event which with notice or lapse of time, or both, would constitute a default) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Corporation or any of its Subsidiaries pursuant to any material agreement, instrument, franchise, license or permit to which the Corporation or any of its Subsidiaries is a party or by which any of such corporations or their respective properties or assets may be bound, or

(b) violate any judgment, decree, order, statute, rule or regulation of any court or any public, governmental or regulatory agency or body applicable to the Corporation or any of its Subsidiaries or any of their respective properties or assets,

other than (i) such breaches, defaults or violations that would not or could not reasonably be expected to (A) impair the ability of the Corporation to consummate and perform the transactions contemplated by this Agreement or deprive the Purchaser of the benefits under this Agreement, or (B) have a Material Adverse Effect; or (ii) as set out in SCHEDULE 4.6. The execution, delivery and performance of the Transaction Documents by the Corporation and the consummation of the transactions contemplated hereby and thereby do not and will not violate or conflict with any provision of the articles of incorporation or by-laws of the Corporation or any of its Material Subsidiaries, as currently in effect. Except for the Required Action or as set out in SCHEDULE 4.6, no consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any court or any government agency or body applicable to the Corporation or any of its Material Subsidiaries or any of their respective properties or assets is required for the execution, delivery and performance of the Transaction Documents or the consummation of the transactions contemplated hereby and thereby, including the issuance, sale and delivery of the Preferred Shares to be issued, sold and delivered by the Corporation hereunder.

4.7 CAPITALIZATION. The authorized equity capital of the Corporation consists of an unlimited number of Common Shares and an unlimited number of First Preferred Shares and Second Preferred Shares. As of June 10, 1998, 64,203,428 Common Shares have been validly issued and are outstanding as fully paid and non-assessable and were issued in compliance with all applicable Securities Laws. No First Preferred or Second Preferred Shares are issued or outstanding. As of the date hereof, up to a maximum of 6,200,000 Common Shares

(vested and unvested) may be issued pursuant to outstanding stock options under the Cott Corporation Option Plan, and, other than pursuant to the Cott Corporation Option Plan, no Common Shares may be issued pursuant to incentive, service awards and profitability bonus plans of the Corporation. Except as described in the immediately preceding sentence, as disclosed in the Public Documents or as set out in SCHEDULE 4.7, there are no options, warrants, conversion privileges, calls or other rights, agreements, arrangements, commitments or obligations of the Corporation or its Subsidiaries to issue or sell any shares of any capital stock of the Corporation or of any of its Subsidiaries or securities or obligations of any kind convertible into or exchangeable for any shares of capital stock of the Corporation, any of its Subsidiaries or any other person, nor are there outstanding any stock appreciation rights or phantom equity agreements, arrangements or commitments based upon the book value, income or any other attribute of the Corporation or any of its Subsidiaries other than bonus agreements, bonus arrangements or bonus commitments with the Corporation's or its Subsidiaries' officers, employees or Consultants. The holders of outstanding Common Shares are not entitled to any preemptive or other similar rights.

4.8 ACTIONS. Except as disclosed in the Public Documents or described in SCHEDULE 4.8, there is no litigation or governmental proceeding to which the Corporation or any of its Subsidiaries is a party or to which any property of the Corporation or any of its Subsidiaries is subject or which is pending or, to the knowledge of the Corporation, threatened against the Corporation or any of its Subsidiaries which based upon information currently available to the Corporation acting reasonably and in good faith could be expected to have a Material Adverse Effect.

4.9 REGISTRATION AND QUALIFICATION. Assuming the accuracy of the representations and warranties made by the Purchaser and set forth in Article 5 hereof, it is not necessary in connection with the offer, sale and delivery of the Preferred Shares to the Purchaser in the manner contemplated by this Agreement to register or qualify the Preferred Shares or the Common Shares issuable upon conversion of the Preferred Shares, under the Securities Laws.

4.10 NO LIABILITIES. Neither the Corporation nor its Material Subsidiaries has any Liabilities, except (i) as reflected or reserved against in the balance sheet of the Corporation presented in the financial statements as at and for the year ended January 31, 1998 and not heretofore discharged, (ii) as recorded and/or disclosed in the Public Documents, (iii) as disclosed in SCHEDULE 4.10,
(iv) Liabilities incurred in the ordinary course of business since January 31, 1998, (v) contractual (including trade) liabilities incurred in the ordinary course of business, (vi) Liabilities (other than for borrowed money) that would not or could not reasonably be expected to have a Material Adverse Effect.

4.11 NO DEFAULTS. Except as disclosed on SCHEDULE 4.6 or in the Public Documents:

(i) neither the Corporation nor any of its Subsidiaries is in violation or default under any provision of its certificate of incorporation, by-laws or other organization documents, or is in breach of or default with respect to any provision of any agreement, judgment, decree, order, mortgage, deed of trust, lease, franchise, license, indenture, permit or other instrument to which it is a party or by which it or any of its properties are bound; and

(ii) there does not exist an event of default on the part of the Corporation or any such Subsidiary,

as defined in such documents which, with notice or lapse of time or both, would constitute a default, where such violation or default would or could reasonably be expected to have a Material Adverse Effect.

4.12 COMPLIANCE WITH LAW. The Corporation and each of its Subsidiaries is in compliance with all laws and regulations applicable to the operation of its respective businesses, including the Applicable Laws, except where failure so to comply would not or could not reasonably be expected to have a Material Adverse Effect and each of them has all licences, permits, orders or approvals of, and has made all required registrations with, any governmental or regulatory body that is material to the conduct of its business, except where failure so to comply would not or could not reasonably be expected to have a Material Adverse Effect, and except as disclosed in the Public Documents.

4.13 ENFORCEABILITY OF AGREEMENT. This Agreement has been, and the Transaction Documents to be executed and delivered by the Corporation pursuant hereto have been or will be, duly and validly authorized, executed and delivered by the Corporation and this Agreement is, and such Transaction Documents when so executed and delivered will be valid and binding obligations of the Corporation, enforceable against the Corporation in accordance with their terms subject to applicable bankruptcy, insolvency, winding-up, reorganization, arrangement, moratorium or other laws affecting creditors' rights generally.

4.14 THE PREFERRED SHARES. Subject to the Required Action, the Preferred Shares have been duly and validly authorized by the Corporation and the Preferred Shares, when issued, sold and delivered in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable. Subject to the Required Action, the Common Shares issuable upon conversion of the Preferred Shares have been reserved for issuance and, when issued in accordance with the terms of the Preferred Shares, will be duly and validly issued, fully paid and nonassessable, and no further approval or authority of the shareholders or the Board of Directors under the Applicable Laws will be required for such issuance of Common Shares following the Closing.

Other than pursuant to the Registration Rights Agreement, no security holder of the Corporation has any right which has not been satisfied or waived to require the

Corporation to register (or take similar action under Canadian Securities Laws) the sale of any securities owned by such security holder under the Securities Laws.

4.15 NO GENERAL SOLICITATION. None of the Corporation, its affiliates or any person acting on their behalf has solicited any offer to buy or offer to sell the Preferred Shares by means of any form or general solicitation or general advertising or in any manner involving a public offering within the meaning of the Securities Laws that would require the registration or qualification of the Preferred Shares under the Securities Laws.

4.16 PROPERTIES. The Corporation or the applicable Material Subsidiary holds its leased properties under valid and binding leases, with such exceptions as would not have a Material Adverse Effect. The Corporation owns or leases all such properties as are necessary to its operations as now conducted, other than with respect to such properties which are both (i) owned or leased by third parties and (ii) used by the Corporation for warehousing purposes.

4.17 TAXES. The Corporation and its Subsidiaries have on a timely basis filed all tax returns, information returns or designations covering any taxes in respect of the income, business or property of the Corporation and its Subsidiaries on a consolidated basis (including, without limitation, all federal, state, provincial or foreign taxes) and has paid all taxes shown as due on such tax returns, information returns or designations except where the failure to do so would result in a loss to the Corporation of not more than $2,000,000 after giving effect to all applicable reserves provided for in the Corporation's financial statements.

4.18 INSURANCE. The Corporation and its Material Subsidiaries maintain insurance of the types and in the amounts reasonably deemed by the Corporation to be adequate and reasonable for its business and that of its Material Subsidiaries against theft, damage, destruction, acts of vandalism and all other risks customarily insured against (other than product recalls), all of which insurance is in full force and effect.

4.19 INTELLECTUAL PROPERTY. Except as disclosed in SCHEDULE 4.19, the Corporation and its Subsidiaries, or to the best of the Corporation's knowledge, the Corporation's customers have sufficient, or have applied for registration of such, trademarks, trade names, patent rights, copyrights, licenses, approvals and governmental authorizations to enable the Corporation and its Subsidiaries conduct their business substantially as now conducted; and the Corporation has no knowledge of any infringement by it or its Subsidiaries of any trademark, trade name, patent, copyright, licenses, trade secret or other similar rights of others, and there is no claim being made against the Corporation or its Subsidiaries regarding trademark, trade name, patent, copyright, license, trade secret or other infringement, in any such case which could reasonably be expected to result in a loss to the Corporation of more than $2,000,000.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

As an inducement to the Corporation to enter into this Agreement and to consummate the transactions contemplated hereby, the Purchasers hereby severally represent and warrant to the Corporation as follows:

5.1 INVESTMENT. The Purchasers are acquiring the Preferred Shares and the Common Shares issuable upon conversion of the Preferred Shares for investment for their own respective account, and not with a view to any distribution thereof in violation of any applicable Securities Laws. The Purchasers understand that the Preferred Shares and such Common Shares have not been registered under the Securities Laws by reason of specific exemptions therefrom which depend upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser's representations as expressed herein. The Purchasers acknowledge that they are not residents in or of the Province of Ontario.

5.2 FINANCIAL POSITION. Each of the Purchasers' financial condition and investments are such that it is in a position to hold the Preferred Shares and the Common Shares issuable upon conversion of the Preferred Shares for an indefinite period, bear the economic risk of the investment and to withstand the complete loss of the investment. Each of the Purchasers has extensive knowledge and experience in financial and business matters and has the capability to evaluate the merits and risks of the Preferred Shares and the Common Shares issuable upon conversion of the Preferred Shares. Each of the Purchasers is an "accredited investor" within the meaning of Regulation D under the Securities Act of 1933, as amended. Except as to a breach of a representation and/or warranty of which there was Actual Knowledge, nothing contained in this Section 5.2 or due diligence or investigation that has been made by or on behalf of Purchasers shall diminish or modify any of the representations and warranties if made by the Corporation herein.

5.3 HOLD. The Purchasers acknowledge that the Preferred Shares and the Common Shares issuable upon conversion of the Preferred Shares must be held as required by the Securities Laws unless subsequently registered or otherwise qualified for sale under any applicable Securities Laws or unless exemptions from such registrations or qualification are available.

5.4 ORGANIZATION OF THE PURCHASERS. Each Purchaser which is not an individual is duly organized and validly existing under the laws of the jurisdiction of its organization. Each Purchaser is purchasing the Preferred Shares as principal at an aggregate acquisition cost to each Purchaser of not less than Cdn. $150,000. Each Purchaser that is not a corporation or an individual but is a syndicate, partnership, trust or other unincorporated organization, is purchasing as principal for its own account. None of the Purchasers is a corporation or syndicate, partnership or other form of unincorporated organization incorporated or created solely to permit the purchase of the Preferred Shares by groups of individuals whose

individual share of the aggregate acquisition cost for the Preferred Shares to be purchased is less than $150,000.

5.5 AUTHORITY OF THE PURCHASERS. Each of the Purchasers has all necessary power and authority (corporate and otherwise) to execute and deliver this Agreement and the Transaction Documents to which it is a party, to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. The execution, delivery and performance of this Agreement and the Transaction Documents by each of the Purchasers has been duly authorized and approved by each of the Purchasers and does not require any further authorization or consent of the Purchasers or their respective beneficial owners. This Agreement is the legal, valid and binding agreement of each of the Purchasers, enforceable against each of the Purchasers in accordance with its terms, subject to applicable bankruptcy, insolvency, winding-up, reorganization, moratorium or other laws affecting creditors' rights generally.

5.6 NON-CONTRAVENTION. The execution, delivery, and performance of the Transaction Documents by the Purchasers and the consummation of the transactions contemplated hereby and thereby by the Purchasers do not and will not:

(a) result in a breach of any of the terms and provisions of, or constitute a default (or an event which with notice or lapse of time, or both, would constitute a default) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Purchasers pursuant to any material agreement, instrument, franchise, license or permit to which the Purchasers or any of them is a party or by which such Purchaser may be bound, or

(b) violate any judgment, decree, order, statute, rule or regulation of any court or any public, governmental or regulatory agency or body applicable to any of the Purchasers or any of their respective properties or assets,

other than such breaches, defaults or violations that are not reasonably expected to impair the ability of the Purchasers to consummate and perform the transactions contemplated by this Agreement or deprive the Corporation of the benefits under this Agreement. With respect to those Purchasers who are not individuals, the execution, delivery and performance of the Transaction Documents by the Purchaser and the consummation of the transactions contemplated hereby or thereby do not and will not violate or conflict with any provision of the certificate of limited partnership agreement, partnership agreement or other similar governing agreements of such Purchaser, as currently in effect. Except for the filing under Rule 13-d of the Securities Act of 1933, no consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any court or any government agency or body applicable to the Purchasers or any of their properties or assets is required for the execution, delivery and performance of the Transaction

Documents or the consummation of the transactions contemplated hereby or thereby, including the purchase of the Preferred Shares hereunder.

ARTICLE 6

CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

A. OBLIGATIONS OF THE PURCHASER

6.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER. The obligation of the Purchasers to consummate the transactions contemplated herein shall be subject to and conditional upon the satisfaction of, or compliance with, as at the Time of Closing, each of the following conditions (which are inserted for the exclusive benefit of the Purchaser):

(a) the accuracy of the representations and warranties of the Corporation herein contained, as of the date hereof and as of the Closing Date, except where the consequence of any inaccuracy in such representations and warranties would not have a Material Adverse Effect (provided, however, that with respect to any representation or warranty of the Corporation contained in Article 4 which is already qualified with respect to a Material Adverse Effect, no further qualification, except as expressly stated below, is imposed hereby) and the Purchasers shall have received a certificate of an officer of the Corporation to such effect dated the Closing Date;

(b) the performance in all material respects by the Corporation of its obligations herein (including the covenants contained in Article 7 of this Agreement) and the Purchasers shall have received a certificate of an officer of the Corporation to such effect dated the Closing Date;

(c) the execution and delivery of the Registration Rights Agreement;

(d) receipt by the Purchasers of an opinion of counsel to the Corporation, in form and substance satisfactory to the Purchasers, acting reasonably;

(e) the filing of articles of amendment with respect to the creation of the Preferred Shares with the attributes contained in SCHEDULE 1.1(ag); and

(f) there being since the date hereof no fact or condition which would or could reasonably be expected to have a Material Adverse Effect, provided that a decline in the trading price of the Common Shares shall not be deemed to be such a Material Adverse Effect if such decline is not directly attributable to a Material Adverse Effect;

and provided further that for purposes of this Section 6.1, including, without limitation, subsection 6.1(a) hereof, Material Adverse Effect shall exclude the effect of any general economic, commodity pricing, capital markets or financial conditions.

B. OBLIGATIONS OF THE CORPORATION

6.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE CORPORATION. The obligation of the Corporation to issue and sell the Preferred Shares to the Purchasers in accordance herewith shall be subject to and conditional upon the satisfaction of, or compliance with, as at the Time of Closing, each of the following conditions (which are for the exclusive benefit of the Corporation):

(a) the accuracy of the representations and warranties of the Purchasers herein contained, as of the date hereof and as of the Closing Date, except to the extent any inaccuracies do not materially impair the ability of the Purchaser to consummate the transactions contemplated by this Agreement, and the Corporation shall have received a certificate of: (i) the Purchasers' Representative; or (ii) each Purchaser who is an individual or an officer of each of the Purchasers which are not individuals, to such effect dated the Closing Date;

(b) the performance in all material respects by the Purchasers of their obligations herein and the Corporation shall have received a certificate of: (i) the Purchasers' Representative; or (ii) each Purchaser who is an individual or an officer of each of the Purchasers which are not individuals, to such effect dated the Closing Date;

(c) receipt by the Corporation of an opinion of counsel to each of Purchasers in form and substance satisfactory to the Corporation, acting reasonably; and

(d) the absence of any event, actual or threatened, resulting from the announcement or contemplated completion of the transactions described herein which would or could reasonably be expected to have a Material Adverse Effect.

C. OBLIGATIONS OF EACH OF THE CORPORATION AND THE PURCHASER

6.3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE CORPORATION AND THE PURCHASER. The obligation of each of the Corporation and the Purchaser to consummate the transactions contemplated herein is subject to the satisfaction of, or compliance with, as at the Time of Closing, each of the following conditions (which are inserted for the benefit of each of the Purchaser and the Corporation):

(a) the transactions contemplated by the Share Purchase Agreement having been consummated;

(b) no action or proceeding, temporary restraining order, preliminary or permanent injunction or other order by any court of competent jurisdiction, governmental authority or agency or other person to prohibit or prevent consummation of the transactions contemplated herein shall be pending or threatened;

(c) the expiration, termination of the applicable waiting periods and the receipt of all Consents, approvals and waivers under the Applicable Laws; and

(d) the completion of all Required Action.

6.4 WAIVER BY PURCHASERS. If any of the conditions set forth in Sections 6.1 or 6.3 have not been fulfilled, performed or satisfied as at the Closing, the Purchasers may, by written notice to the Corporation terminate all of their obligations relating to the Closing and the Purchasers shall be released from such obligations under this Agreement. Any of such conditions may be waived in whole or in part by the Purchasers' Representative by instrument in writing given to the Corporation without prejudice to any of the Purchasers' rights of termination in the event of non-performance of any other condition, obligation or covenant in whole or in part, and without prejudice to its right to complete the transactions of purchase and sale contemplated by this Agreement and to claim for damages for breach of representation or warranty; provided that notwithstanding anything else contained herein, the Purchasers shall not be entitled to claim damages for any breach of representation or warranty where there was Actual Knowledge of such breach of representation or warranty on or prior to the date hereof.

6.5 WAIVER BY CORPORATION. If any of the conditions set forth in Sections 6.2 or 6.3 have not been fulfilled, performed or satisfied as at the Closing, the Corporation may, by written notice to the Purchaser, terminate all of its obligations relating to the Closing and the Corporation shall be released from all such obligations under this Agreement. Any of such conditions may be waived in whole or in part by the Corporation by instrument in writing to the Purchaser, without prejudice to any of the Corporations's rights of termination in the event of n on-performance of any other condition, obligation or covenant in whole or in part, and without prejudice to their right to complete the transactions of purchase and sale contemplated by this Agreement and claim damages for breach of representation, warranty or covenant.

ARTICLE 7

COVENANTS OF THE CORPORATION

As an inducement to the Purchaser to enter into this Agreement and to consummate the transactions contemplated hereby, the Corporation hereby covenants with the Purchaser as follows:

7.1 PAYMENT OF EXPENSES. Whether or not the transactions contemplated hereby are completed, the Corporation shall pay all costs and expenses incident to the performance of the obligations of the Corporation hereunder, including those in connection with (i) the issuance, transfer and delivery of the Preferred Shares or the Common Shares issuable upon conversion thereof to the Purchaser, including any transfer or similar taxes payable thereon, (ii) the cost of printing the certificates representing the Preferred Shares or the Common Shares issuable upon conversion thereof and (iii) the cost and charges of any transfer agent, registrar, trustee or fiscal paying agent. Upon closing of the transactions contemplated herein, the Corporation shall also promptly pay,
(x) all fees and expenses of PaineWebber Incorporated incurred in connection with the issuance of the Preferred Shares hereunder up to $1,000,000, and (y) all reasonable documented out-of-pocket costs and expenses, including attorneys', accountants' and consultants' fees incurred by the Purchasers in connection with the negotiation and consummation of this Agreement and the transactions contemplated hereby up to $400,000 in the aggregate for the Purchasers under this Section 7.1. The provisions of this Section 7.1 shall also apply to payment of the Purchasers expenses in the event that the Shareholder approval contemplated by Section 6.3 hereof is not obtained provided that the Purchasers are otherwise in compliance and not in breach of the terms hereof.

7.2 AVAILABILITY OF COMMON SHARES. The Corporation shall at all times reserve and keep available out of its authorized but unissued Common Shares, for the purpose of effecting the conversion of the Preferred Shares, the full number of Common Shares then issuable upon the conversion of the Preferred Shares.

7.3 TRANSACTION FEE. On the Closing Date, upon Closing, the Corporation shall pay to the Purchasers an aggregate fee equal to $900,000.

7.4 PROXY STATEMENTS; SHAREHOLDER APPROVALS. The Corporation, shall, in accordance with Applicable Laws:

(a) duly call, give notice of, convene and hold on or about July 21, 1998 a meeting of its Registered Holders for the purpose of, among other things, voting to approve the issuance of the Preferred Shares and the Common Shares issuable upon conversion thereof and shall use reasonable commercial efforts, except to the extent the Board of Directors determines in good faith, after consultation with outside counsel, that contrary action is required by the Board of Directors' fiduciary duties under Applicable Laws, to obtain shareholder approval; and

(b) except to the extent the Board of Directors determines in good faith, after consultation with outside counsel, that contrary action is required by the Board of Directors' fiduciary duties under Applicable Laws, recommend approval of the issuance of the Preferred Shares and the Common Shares issuable upon conversion thereof, and include in the proxy statement in respect of the meeting, such recommendation, and take all lawful action to solicit such approvals.

7.5 ELECTION TO BOARD OF DIRECTORS OF THE CORPORATION. The Corporation shall take all actions necessary to ensure that four representatives of the Purchasers are appointed to the Board of Directors (the "Purchasers' Directors") promptly after the consummation of the transactions contemplated herein; provided that such representatives are eligible to act on the Board of Directors pursuant to the requirements of the CBCA and are acceptable to the Board of Directors, acting reasonably (it being acknowledged and agreed that any officer or director of The Thomas H. Lee Company shall be acceptable to the Corporation). The Corporation shall not take any action to increase the size of the Board of Directors above eleven members without the written consent of the Purchasers and shall not solicit any proxies for the election of more than eleven members to the Board of Directors.

The Corporation shall also use its reasonable commercial efforts to cause the appropriate Number of Nominees to be renominated and reelected when the initial and any successive term of the Purchasers' Directors expires (subject to the Number of Nominees the Purchasers are entitled to nominate under the terms hereof, to the requirements of the CBCA and to such nominees continuing to be acceptable to the Board of Directors, acting reasonably). The Corporation shall also use its reasonable commercial efforts to cause the election to each committee of the Board of Directors that number of nominees from the Purchasers' Representatives that will result in the Purchasers having representation on each committee equivalent to the Purchasers pro rata percentage representation on the Board of Directors.

7.6 REPORTING. The Corporation will, so long as the Preferred Shares or the Common Shares issuable upon conversion thereof are outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, file reports and other information with the Securities and Exchange Commission under Section 13 or 15 (d) of the Exchange Act.

7.7 PUBLIC DOCUMENTS. Not later than June 30, 1998, the Corporation shall deliver to the Purchasers true and complete copies of the Corporation's:

(a) 1998 Annual Report to Shareholders;

(b) management proxy circular relating to the Corporation's 1998 Annual and Special Meeting of Shareholders; and

(c) 1998 Annual Information Form.

The Corporation represents and warrants that such documents shall be, as of their respective dates, in compliance in all material respects with such Applicable Laws and will not, as of their respective dates, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

7.8 BUY-BACK. Subject to the CBCA, the provisions of any applicable debt covenants and obtaining approval of the stock exchanges on which the Common Shares are listed, the Corporation will use the Purchase Price, as expressed in Canadian dollars as at the Closing Date, net of any and all expenses attributable to the transaction herein contemplated, to effect "normal-course" purchases of its Common Shares on the floor of the stock exchanges where such shares may be available, as soon as practicable, having regard to the volume and price limitations applicable to such purchases as imposed by such stock exchanges. In particular, the parties acknowledge and agree that the Corporation shall not be required to make the purchases which aggregate (i) more than 2% of the Common Shares outstanding in any 30 day period and (ii) more than the greater of (A) 10% of the public float and (B) 5% of the Common Shares outstanding during any 12 month period. The parties further acknowledge and agree that the Corporation shall not be required to make such purchases where the Board of Directors of the Corporation, acting reasonably, determines that to so purchase such shares at such prices would result in a breach of its fiduciary duties to the Corporation.

7.9 APPLICATION TO EXCHANGES. To the extent that the Share Provisions contain any requirement or restriction relating to the obtaining of a regulatory consent, the Corporation agrees that it will make all necessary applications to the stock exchanges on which the Common Shares are listed to obtain such regulatory consent and will make all commercially reasonable efforts, including, without limitation, the payment of any required listing fees, to obtain such consent.

ARTICLE 8

COVENANTS OF THE PURCHASER

8.1 CERTAIN RESTRICTIONS. The Purchasers covenant with the Corporation that, without the prior written consent of the Corporation (as evidenced by the approval of a majority of the members of the Board of Directors who are independent of the Purchasers and the Family Members), for a period commencing on the Closing Date and continuing through the earlier of (i) the fifth anniversary of the Closing Date (except as expressly set forth in clause 8.1(I)), or (ii) the date upon which the Corporation shall be in default of any monetary payment obligations under any instrument of indebtedness to which the Corporation or any Subsidiary is a party involving a principal obligation of at least $50,000,000 after the expiry of any periods to remedy or cure such default, the Purchasers, and their affiliates (including, without limitation, Thomas Lee and the Thomas H. Lee Company) over which they exercise management control, singly, or jointly or in concert with any other party or as part of a group, directly or indirectly, through one or more intermediates or otherwise, will not:

(A) for a period of twelve months following the Closing Date, sell any Common Shares received upon conversion of the Preferred Shares over any stock exchange pursuant to which the Corporation is effecting a

normal course issuer bid pursuant to the requirements of Section 7.8 hereof;

(B) purchase or acquire, or offer, propose or agree to purchase or acquire, directly or indirectly, any of the Common Shares (other than by conversion of any of the Preferred Shares or receipt of Common Shares as a result of any stock dividend, stock split, recapitalization, merger or other change in the corporate or capital structure of the Corporation or any other action taken solely by the Corporation), any option (other than the option to purchase 5,000,000 (as may be adjusted) Common Shares granted to the Purchasers pursuant to the Share Purchase Agreement), warrant or other right to acquire, directly or indirectly, any Common Shares or any securities which are convertible into or exchangeable or exercisable for Common Shares (other than the exercise of options under the Share Purchase Agreement or the receipt of dividends in kind); and provided that at any time when the percentage of the outstanding Common Shares owned by the Purchaser on a fully diluted basis is less than the percentage of the outstanding Common Shares owned by such Purchaser on a fully diluted basis on the Closing Date (the "Maximum Amount") the Purchaser may purchase additional Common Shares up to the Maximum Amount;

(C) solicit, or encourage any other person to solicit, proxies or become a participant or otherwise engage in any solicitation in opposition to a recommendation of a majority of the directors of the Corporation with respect to any matter; seek to advise or influence any person with respect to the voting of any securities of the Corporation (other than pursuant to the Voting Agreement between the Purchasers and the Family Members of even date entered into in connection with the Share Purchase Agreement); or execute any written consent in lieu of a meeting of holders of securities of the Corporation or any class thereof unless requested to do so by the Corporation;

(D) initiate, propose, vote in favour of, support or otherwise solicit shareholders for the approval of one or more shareholder proposals with respect to the Corporation;

(E) knowingly transfer or agree to transfer any securities to any group or party owning in excess of 5% of the outstanding Common Shares;

(F) propose or seek to effect any form of business combination transaction with the Corporation or any affiliate thereof or any restructuring, recapitalization or other similar transaction with respect to the Corporation;

(G) seek any additional representation on the Board of Directors of the Corporation;

(H) encourage any person, firm, corporation, group or other entity to engage in any of the actions covered by clauses (B) through (G) of this Section 8.1 or make any public announcement (or make other communication with or to the Corporation or otherwise which, in the opinion of counsel to the Corporation, would require public announcement) with respect to any matter set forth in clause (B) through (G) of this Section 8.1; provided, however, that actions taken by any Purchasers' Directors, acting in his or her capacity as such a director, shall not violate any provision of this Section 8.1; and

(I) transfer, effect a short sale of, grant any option for the purchase of, or loan any Preferred Shares or Common Shares for a period of 12 months from the date of issuance of the Preferred Shares except (a) to an affiliate, (b) to a trust, family partnership or other estate planning vehicle, (c) to a financial institution pursuant to a bona fide pledge (each a "Permitted Transferee"), or (d) in a transaction approved in advance by the Board of Directors where any Person (or Persons acting jointly or in concert) acquire, directly or indirectly, beneficial ownership or control or direction over more than 50% of the outstanding voting securities (on a fully-diluted basis) of the Corporation.

Notwithstanding the foregoing, the obligations of the Purchasers under this
Section 8.1 shall terminate if the number of Purchasers' nominees on the Board of Directors is less than the Number of Nominees, unless the failure to have the required Number of Nominees elected to or on the Board of Directors is due to the Purchasers' failure to nominate a nominee or nominees to the Board, vote the Preferred Shares or Common Shares owned by them in favour of such nominees or fill a vacancy created by one of its Directors with a person, who (i) meets the requirements of the CBCA, and (ii) who is acceptable to the Board of Directors, acting reasonably. The Purchasers acknowledge that they shall vote all Preferred Shares or Common Shares over which they have control for and in favour of the nominees proposed by them to the Board of Directors. The parties acknowledge and agree that the provisions of this Section 8.1 shall not bind or apply to any purchaser of Preferred Shares or Common Shares other than a purchaser under
Section 8.1(I)(a) or (b).

8.2 PAYMENT OF TAXES. The Purchasers shall be responsible for and shall pay any and all Canadian withholding taxes, as and when due and payable, and shall provide evidence satisfactory to the Corporation, acting reasonably, that such payment has been made within the prescribed time, resulting from or in respect of the Preferred Shares, including, without limitation, in respect of the issuance by the Corporation of Common Shares upon conversion of Preferred Shares, the payment by the Corporation of dividends in respect of the Preferred Shares and the

redemption by the Corporation of the Preferred Shares, it being acknowledged and agreed that withholding taxes payable in respect of, among other things, cash dividends on the Preferred Shares and any proceeds from the redemption of the Preferred Shares in accordance with their terms shall be withheld at source by the Corporation or its agent and remitted to the taxation authorities having jurisdiction, and the amount of such cash dividends or proceeds of redemption received by the Purchasers shall be net of such withheld amount, in each of the foregoing cases, only to the extent subject to withholding under applicable law or the interpretation or administration thereof. The Corporation acknowledges and agrees that it shall not withhold for withholding taxes unless, in the opinion of the management of the Corporation, acting reasonably, the Corporation is required to do so by law or by the interpretation or administration thereof. The Corporation agrees that in the absence of a law or the interpretation or administration thereof, which requires it to withhold tax in connection with the reduction of the Conversion Factor (as defined in the Share Provisions) it will not so withhold.

ARTICLE 9

RESTRICTIONS ON TRANSFERABILITY OF SECURITIES

9.1 RESTRICTIVE LEGEND. Each certificate representing the Preferred Shares and any other securities issued in respect of the Preferred Shares (other than the Common Shares issued upon conversion of any Preferred Shares) upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event (each of the foregoing securities being referred to herein as "Restricted Securities"), shall (unless otherwise permitted by the provisions of Section 9.2 below) be stamped or otherwise imprinted with a legend substantially in the following form (in addition to the legend required under any applicable state securities law):

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF COTT CORPORATION ("THE CORPORATION"), THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144, IF APPLICABLE, SUBJECT TO COMPLIANCE WITH ANY STATE SECURITIES LAWS, (C) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, AS APPLICABLE OR (D) IN A TRANSACTION THAT DOES NOT OTHERWISE REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, IN EACH CASE, PROVIDED AN OPINION OF COUNSEL OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE CORPORATION HAS BEEN PROVIDED TO THE CORPORATION TO THAT EFFECT."

The Corporation will promptly, upon request, remove any such legend when no longer required by the terms of this Agreement or by applicable law.

9.2 NOTICE OF PROPOSED TRANSFERS. Prior to any proposed transfer of any Restricted Securities, unless a prospectus has been filed under the Securities Laws covering the proposed transfer, the Purchaser proposing such a transfer shall give written notice to the Corporation of its intention to effect such transfer. Each such notice shall describe the manner and circumstances of the proposed transfer in sufficient detail, and shall be accompanied by either (a) a written opinion of legal counsel (who shall be reasonably satisfactory to the Corporation) addressed to the Corporation to the effect that the proposed transfer of the Restricted Securities may be effected without registration under the Securities Act or (b) a "no action" letter from the United States Securities and Exchange Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the United States Securities and Exchange Commission that action be taken with respect thereto, whereupon, in each case, such Purchaser shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered by such Purchaser to the Corporation. Unless a registration statement has been filed under the U.S. Securities Laws covering the proposed transfer, each certificate evidencing the Restricted Securities transferred as herein provided shall bear the appropriate restrictive legend set forth in Section 9.1 above except that such certificate shall not bear such restrictive legend if,
(i) in the opinion of counsel for such Purchaser, such legend is not required in order to establish compliance with any provisions of the Securities Act of 1933, or (ii) a period of at least two years has elapsed since the later of the date the Restricted Securities were acquired from the Corporation or from an affiliate of the Corporation, and such purchaser represents to the Corporation that it is not an affiliate of the Corporation and has not been an affiliate during the preceding three months and shall not become an affiliate of the Corporation without resubmitting the Restricted Securities for reimposition of the legend.

ARTICLE 10

TERMINATION

Notwithstanding anything contained herein to the contrary, this Agreement may be terminated at any time prior to the Closing Date:

(a) by the mutual written consent of the Purchasers and the Corporation; or

(b) by the Purchasers if the conditions contained in subsections 6.1 or 6.3 have not been complied with or waived as at the Closing or by the Corporation if the conditions contained in subsections 6.2 or 6.3 have not been complied with a waiver as at the Closing; provided, however, that the right to terminate this Agreement under this Section 10(b) shall not be available to any party whose

failure to fulfil any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date; or

(c) by the Purchasers or the Corporation if the Share Purchase Agreement is terminated in accordance with is terms; or

(d) by the Purchasers or the Corporation at any time after July 31, 1998 if the Closing has not occurred on or prior to such time.

In the event that this Agreement shall be terminated pursuant to this Article 10, all further obligations of the parties under this Agreement other than the obligations set forth in Article 11 and Sections 7.1 and 12.10 shall be terminated without further liability of any party to any other party, provided that nothing herein shall relieve any party from liability for its wilful breach of this Agreement.

ARTICLE 11

INDEMNIFICATION

11.1 INDEMNIFICATION BY THE CORPORATION. The Corporation hereby agrees, to the extent permitted by Applicable Laws, to indemnify, defend and hold harmless the Purchasers and, in the case of the Purchasers who are not individuals, their partners, directors and its officers, from and against all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, costs and expenses, including without limitation, interest, penalties and attorneys' fees and expenses (collectively, "Claims"), asserted against, resulting to, or imposed upon or incurred by the Purchaser, directly or indirectly, in connection with breach of a representation or warranty contained herein by the Corporation (other than any such breach of which there was Actual Knowledge) or any failure or omission to comply with its obligations or covenants hereunder, other than Claims arising from the misconduct of the Purchasers or their representatives, including the Purchasers' Representative.

11.2 INDEMNIFICATION BY THE PURCHASER. Each Purchaser, acting severally and not jointly, hereby agrees to indemnify, defend and hold harmless the Corporation, its directors and its officers from and against all Claims asserted against, resulting to or imposed upon or incurred by the Corporation, directly or indirectly, in connection with any breach of a representation or warranty contained herein by the Purchasers or any failure or omission to comply with its obligations or covenants hereunder including, without limitation, its obligations and covenants pursuant to Article 8, other than Claims arising from the misconduct of the Corporation or its representatives.

11.3 TERMS OF INDEMNIFICATION. The obligations and liabilities of the indemnifying party (the "Indemnifying Party") hereunder with respect to Claims by

third parties against the party to be indemnified (the "Indemnified Party") will be subject to the following terms and conditions:

(a) the indemnified party will give the indemnifying party prompt notice of any Claims asserted against, resulting to, imposed upon or incurred by the indemnified party, directly or indirectly, and the indemnifying party will undertake the defense thereof by representatives of their own choosing which are reasonably satisfactory to such indemnified party; provided that the failure of the indemnified party to give notice as provided in this Section 11.3 shall not relieve the indemnifying party of its obligations under this Article 11, except to the extent that such failure has materially and adversely affected the rights of the indemnifying party;

(b) if within a reasonable time after notice of any Claim, the indemnifying party fails to defend, the indemnified party will have the right to undertake the defense, compromise or settlement of such Claims on behalf of and for the account and at the risk of the indemnifying party, subject to the right of the indemnifying party to assume the defense of such Claim at any time prior to settlement, compromise or final determination thereof;

(c) if there is a reasonable probability that a Claim may materially and adversely affect the indemnified party other than as a result of money damages or other money payments, the indemnified party will have the right at its own expense to defend (provided that the indemnifying party shall continue to control the defense and the indemnified party shall have the right to participate in such defense), or co-defend, such Claim;

(d) the indemnifying party on one hand and the indemnified party on the other will not, without the prior written consent of the other, such consent not to be unreasonably withheld, settle or compromise any Claim or consent to entry of any judgment relating to any such Claim;

(e) with respect to any Claims asserted against the indemnified party, the indemnified party will have the right to employ one counsel of its choice in each applicable jurisdiction (if more than one jurisdiction is involved) to represent the indemnified party if, in the indemnified party's reasonable judgment, a conflict of interest between the indemnified party and the indemnifying party exists in respect of such Claims, and in that event the fees and expenses of such separate counsel shall be paid by such indemnifying party;

(f) the indemnifying party will provide the indemnified party reasonable access to all records and documents of the indemnifying party relating to any Claim, other than a Claim made by the indemnified party and/or its affiliates; and

(g) any Claim, in so far as it is related to any of the representations and warranties of the Corporation contained in this Agreement, must be made within the applicable survival period set forth in Section 12.2 below.

ARTICLE 12

MISCELLANEOUS

12.1 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein without reference to conflict of law provisions therein. All of the parties hereto hereby irrevocably attorn to the non-exclusive jurisdiction of the Courts of the Province of Ontario.

12.2 SURVIVAL. The representations and warranties contained in this Agreement shall survive for a period of two years from the Closing Date hereof; provided that the representations set forth in Sections 4.5 and 4.7 shall survive without limitation. The covenants of the parties contained in this Agreement which by their terms are intended to survive the Closing shall survive and continue in full force and effect, notwithstanding Closing, in accordance with their terms.

12.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the provisions hereof shall enure to the benefit of, and be binding upon, the successors and permitted assigns of the parties hereto. No assignment of this Agreement may be made by either party at any time, whether or not by operation of law, without the other party's prior written consent; except that the Purchasers may assign any of their rights hereunder to an affiliate of the Purchaser or any party indicated on SCHEDULE 1.1(AA) without the Corporation's consent provided that such affiliate or other party expressly assumes in writing all of the Purchaser's obligations hereunder as if an original signatory thereto, and provided that such assignment shall not relieve the Purchaser of its obligations hereunder.

12.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Transaction Documents constitute the full and entire understanding and agreement between the parties with regard to the subject hereof and thereof and supersede all prior agreements, understandings and arrangements between the parties with respect to the subject matter hereof; provided that, other than with respect to the standstill provisions contained therein, the provisions of the confidentiality agreement between the Purchaser and the Corporation dated November 13, 1997 shall remain in full force and effect. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought.

12.5 NOTICES, ETC. All notices, requests, demands and other communications hereunder shall be deemed to have been duly given and made, if in writing and if served by personal delivery upon the party for whom it is intended or delivered, by registered or certified mail, return receipt requested, or if sent by telecopier, upon receipt of confirmation that such transmission has been received, or if sent by telecopier after 4 p.m. on a Business Day or on a day which is not a Business Day, on the following Business Day, or

if sent by overnight courier on the following Business Day to the person at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such person:

(a) if to the Purchasers:

As set out in SCHEDULE 12.5(a) hereto

with a copy to:

Hutchins Wheeler & Dittmar, a Professional Corporation 101 Federal Street
Boston, MA 02110
U.S.A.

          Telecopier:       (619) 951-1295
          Attention:        James Westra

(b)  if to the Corporation:

          207 Queens Quay
          Suite 800
          Toronto, Ontario
          M5J 1A7

          Telecopier:       (416) 203-6207
          Attention:        Vice-Chairman

with a copy to:

Goodman Phillips & Vineberg 250 Yonge Street, Suite 2400 Toronto, Ontario M5B 2M6

Telecopier: 416-979-1234 Attention: Stephen H. Halperin

12.6 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to the Corporation or the Purchasers upon any breach or default of any party under this Agreement, shall impair any such right, power or remedy of the Corporation or the Purchasers nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or

default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Corporation or the Purchasers of any breach or default under this Agreement, or any waiver on the part of any such party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to the Corporation or the Purchasers, shall be cumulative and not alternative.

12.7 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which may be executed by only one of the parties hereto, each of which shall be enforceable against the party actually executing such counterpart, and all of which together shall constitute one instrument.

12.8 SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provisions; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

12.9 NO PUBLIC ANNOUNCEMENT. Neither the Corporation nor any of the Purchasers shall make any press release or other public announcement concerning the transactions contemplated by this Agreement except as and to the extent that any such party shall be obligated to make any such disclosure by law and then only after consultation with the other regarding the basis of such obligation and the content of such press release or other public announcement or as the parties shall mutually agree.

12.10 REASONABLE EFFORTS. The Corporation and the Purchasers shall use all commercially reasonable efforts to consummate the transactions contemplated by this Agreement.

IN WITNESS WHEREOF, each of the undersigned has caused the foregoing Agreement to be executed under seal by one of its duly authorized officers as of the date first above written.

COTT CORPORATION

Per: /s/  Fraser Latta
Name: Fraser Latta
Title:

THOMAS H. LEE EQUITY FUND IV, L.P.

By: THL EQUITY ADVISORS IV, LLC, ITS

GENERAL PARTNER

By: /s/ C. Hunter Boll
Name: C. Hunter Boll
Title:

THOMAS H. LEE FOREIGN FUND IV, L.P.

By: THL EQUITY ADVISORS IV, LLC, ITS GENERAL PARTNER

By: /s/ C. Hunter Boll
Name: C. Hunter Boll

Title:

Per: /s/ M. Halperin
   -----------------------

Per: /s/ C. Hunter Boll

     ---------------------------

CLAUSE        HEADING                                                                               PAGE NUMBER
------        -------                                                                               -----------
1.            DEFINITIONS AND INTERPRETATION..................................................................1
1.1           Definitions.....................................................................................1
1.2           Headings.......................................................................................19
1.3           Interpretation.................................................................................19
2.            FACILITIES.....................................................................................21
3.            PURPOSE........................................................................................21
3.1           Purpose of the Term Loan Facility..............................................................21
3.2           Purpose of the Revolving Credit Facility.......................................................21
3.3           Purpose of Ancillary Facility..................................................................22
3.4           Undertaking by the Borrower....................................................................22
3.5           No liability...................................................................................22
4.            CONDITIONS PRECEDENT...........................................................................22
4.1           Conditions precedent...........................................................................22
4.2           Confirmation of satisfaction...................................................................22
5.            TERM LOAN FACILITY AND REVOLVING CREDIT FACILITY...............................................22
5.1           Drawdown of Term Loan Facility.................................................................22
5.2           Utilisation of Revolving Credit Facility.......................................................22
5.3           Conditions to each Advance.....................................................................23
5.4           Drawdown Notice................................................................................24
6.            THE OPTIONAL OVERDRAFT FACILITY AND THE ANCILLARY FACILITY.....................................24
6.1           Nature of Facilities...........................................................................24
6.2           Utilisation of Optional Overdraft Facility.....................................................24
6.3           Utilisation of Ancillary Facility..............................................................25
6.4           FFE Contracts..................................................................................25
6.5           Guarantees.....................................................................................26
6.6           Counter indemnity from the Borrower............................................................26
6.7           Interest on payments...........................................................................26
7.            INTEREST.......................................................................................27
7.1           Interest rate..................................................................................27
7.2           Margin ratchet.................................................................................27
7.3           Interest Periods...............................................................................28
7.4           Default interest...............................................................................29
7.5           Interest, commission and fees under the Optional Overdraft Facility and Ancillary Facility.....29
7.6           Calculation and payment of interest............................................................30
8.            REPAYMENT AND PREPAYMENT.......................................................................30
8.1           Repayment of Term Loan.........................................................................30
8.2           Repayment of Revolving Advances................................................................31
8.3           Mandatory prepayment of Disposal Proceeds......................................................31
8.4           Mandatory Prepayment of Extraordinary Proceeds.................................................32
8.5           Mandatory prepayment on Change of Control, Sale or Listing.....................................32
8.6           Voluntary prepayment of Term Loan..............................................................33
8.7           No re-borrowing of Term Loan...................................................................33
8.8           Application of Prepayments.....................................................................33
9.            CANCELLATION OF REVOLVING CREDIT FACILITY AND ANCILLARY FACILITY...............................33
9.1           Cancellation of Revolving Credit Facility......................................................33
9.2           Cancellation of Ancillary Facility.............................................................34
9.3           Notice.........................................................................................34
9.4           Limitation.....................................................................................34

10.           CHANGES IN CIRCUMSTANCES.......................................................................34
10.1          Illegality.....................................................................................34
10.2          Increased Costs................................................................................35
10.3          Market disruption..............................................................................36
10.4          Mitigation.....................................................................................37
10.5          Certificates...................................................................................37
11.           PAYMENTS.......................................................................................37
11.1          Place and time.................................................................................37
11.2          Funds..........................................................................................38
11.3          Business Days..................................................................................38
11.4          Currency.......................................................................................38
11.5          Accounts as evidence...........................................................................38
11.6          Partial payments...............................................................................38
11.7          Set-off and counterclaim.......................................................................38
11.8          Grossing-up....................................................................................38
12.           SECURITY.......................................................................................40
12.1          Security Documents.............................................................................40
12.2          Interest Rate Protection Agreements............................................................40
12.3          Release of security on Disposals...............................................................40
12.4          Vendor Collateral Account......................................................................40
13.           REPRESENTATIONS AND WARRANTIES.................................................................41
13.1          Representations and warranties.................................................................41
13.2          Repetition.....................................................................................45
14.           UNDERTAKINGS...................................................................................45
14.1          Information undertakings.......................................................................45
14.2          Positive undertakings..........................................................................48
14.3          Negative undertakings..........................................................................51
14.4          Financial undertakings.........................................................................55
15.           DEFAULT........................................................................................59
15.1          Default........................................................................................59
15.2          Acceleration, etc..............................................................................62
16.           SET-OFF........................................................................................63
17.           FEES AND EXPENSES..............................................................................63
17.1          Expenses.......................................................................................63
17.2          Arrangement....................................................................................64
17.3          Commitment fees................................................................................64
17.4          Documentary Taxes indemnity....................................................................64
17.5          VAT............................................................................................65
17.6          Indemnity payments.............................................................................65
17.7          Debiting Authority.............................................................................65
18.           AMENDMENTS AND WAIVERS.........................................................................65
18.1          Writing........................................................................................65
18.2          No implied waivers; remedies cumulative........................................................65
19.           MISCELLANEOUS..................................................................................66
19.1          Severance......................................................................................66
19.2          Counterparts...................................................................................66
19.3          Publicity......................................................................................66
19.4          Euro...........................................................................................66
20.           NOTICES........................................................................................66
20.1          Method.........................................................................................66
20.2          Delivery.......................................................................................66
20.3          Addresses......................................................................................67
20.4          Deemed receipt.................................................................................67
21.           ASSIGNMENTS AND TRANSFERS......................................................................68

21.1          Benefit of Agreement...........................................................................68
21.2          Assignments and transfers by the Borrower......................................................68
21.3          Assignments by the Bank........................................................................68
21.4          Transfers by the Bank..........................................................................68
21.5          Grant of Participations........................................................................68
21.6          Disclosure.....................................................................................68
22.           INDEMNITIES....................................................................................69
22.1          Breakage costs indemnity.......................................................................69
22.2          Currency indemnity.............................................................................69
22.3          Transaction Indemnity..........................................................................69
22.4          General........................................................................................70
23.           LAW............................................................................................70

SCHEDULE 1    CONDITIONS PRECEDENT...........................................................................
SCHEDULE 2    DRAWDOWN NOTICE................................................................................
SCHEDULE 3    GROUP COMPANIES................................................................................
SCHEDULE 4    MANDATORY COST RATE............................................................................
SCHEDULE 5    PART I -- REPAYMENT OF TERM LOAN...............................................................
              PART II -- PERFORMANCE CRITERIA................................................................
SCHEDULE 6    FORM OF NET ASSETS LETTER......................................................................
SCHEDULE 7    THE PROPERTIES.................................................................................

1.3.2  For the purposes of Clause 7.2 (Margin Ratchet) and Clause 14.4
       (financial undertakings) and the related definitions, the
       (pound)10,000,000 paid by Cott to the Borrower on 30th December 1999
       shall be deemed to have been received by the Borrower on 10th January
       2000 or, if later, on the date the payment is applied by way of
       subscription for fully paid up ordinary share capital of the Borrower
       (but without prejudice to any Default which shall occur by virtue of
       Clause 15.1(u) (New Capital Injection)).

2.1.1  Subject to the terms of this Agreement the Bank agrees to make the
       following facilities available to the Borrower:

     (a)  a Sterling term loan facility in the maximum principal amount
          of(pound)49,000,000;

     (b)  a Sterling revolving loan facility in the maximum principal amount
          of(pound)13,000,000 incorporating an optional overdraft facility; and

     (c)  the Ancillary Facility in the maximum principal amount
          of(pound)7,500,000.

2.1.2  Notwithstanding any other term of this Agreement:

     (a)  the Term Loan shall not, at any time, exceed the Term Loan Commitment;
          and

     (b)  the aggregate of (i) all Revolving Advances and (ii) the Overdraft
          Outstandings shall not, at any time, exceed the Revolving Credit
          Commitment.

     (c)  the aggregate of all Ancillary Outstandings shall not, at any time,
          exceed the Ancillary Limit.


3.   PURPOSE

3.1  PURPOSE OF THE TERM LOAN FACILITY

     The proceeds of the Term Loan Facility shall only be used to pay amounts
     required to be paid by the Borrower in connection with the acquisition of
     the Target namely:

     (a)  the consideration payable to the Vendors by the Borrower for the
          Target Shares and the Target Debt purchased by it pursuant to the
          Share Purchase Agreement; and

     (b)  the Acquisition Costs.

3.2  PURPOSE OF THE REVOLVING CREDIT FACILITY

5.2.4  The Borrower shall ensure that for a period of at least 10 successive
       days in each of its Financial Years there are no Revolving Advances and
       no Overdraft Outstandings outstanding (on a net basis in relation to any
       net facilities).

5.2.5  Without prejudice to Clause 15, if the Bank gives notice to the Borrower
       at any time to cancel the Revolving Credit Facility pursuant to this
       Clause 5.2.5, the Revolving Credit Facility Limit shall (except to the
       extent the Bank specifies any smaller reductions and/or later dates in
       writing (in which case such smaller reductions and/or later dates shall
       apply)) be automatically reduced by the amount set out in Column 1 below
       at 11.00 a.m. on the date set out opposite such amount in Column 2
       below:-

          Column 1                                                Column 2
          --------                                                --------
   (Amount of Reduction)                                            (Date)
   ---------------------                                            ------
(pound)5,000,000                                      45th day after notice given to Borrower

(pound)5,000,000                                      90th day after notice given to Borrower

 Amount of the Revolving Credit Facility Limit        120th day after notice given to Borrower

5.3.1  Subject to Clause 5.3.2, the obligation of the Bank to make an Advance is
       subject to the conditions that on the date on which the relevant Drawdown
       Notice is given and on the relevant Drawdown Date:

       (a)    the representations and warranties in Clause 13 to be repeated on
              those dates are correct and will be correct immediately after the
              Advance is made; and

       (b)    no Default or Potential Default has occurred and is continuing or
              would occur on the making of the Advance.

5.3.2  In respect of a Revolving Advance to be made for the sole purpose of
       repaying an outstanding Revolving Advance (or an amount of Overdraft
       Outstanding) in a matching amount, the Revolving Advance shall be made,
       notwithstanding the occurrence and continuation of a Default or a
       Potential Default or any of the representations and warranties to be
       repeated not being correct, unless the Bank shall have served a Default
       Notice.

5.4    DRAWDOWN NOTICE

5.4.1  Whenever the Borrower wishes to draw down an Advance, it shall give a
       duly completed Drawdown Notice to the Bank to be received not later than
       11.00 a.m. on the first Business Day before that Drawdown Date.

5.4.2  A Drawdown Notice shall be irrevocable and the Borrower shall be obliged
       to borrow in accordance with its terms.


6.     THE OPTIONAL OVERDRAFT FACILITY AND THE ANCILLARY FACILITY

6.1    NATURE OF FACILITIES

6.1.1  The Optional Overdraft Facility forms part of the Revolving Credit
       Facility and, subject to the terms of this Agreement, shall be available
       for utilisation by the Borrower, provided that, without prejudice to the
       continued operation of the Revolving Credit Facility, the Optional
       Overdraft Facility may be terminated and cancelled by the Bank at any
       time.

6.1.2  The Optional Overdraft Facility shall be made available by the Bank in a
       maximum amount equal to the Optional Overdraft Limit. Prior to the
       Optional Overdraft Facility being terminated, the Bank shall not transfer
       or assign any of its Revolving Credit Commitment if the relevant transfer
       or assignment would result in it ceasing to have a Revolving Credit
       Commitment at least equal to the Optional Overdraft Limit.

6.1.3  The Ancillary Facility shall be subject to the terms of this Agreement
       and a separate facility letter agreed between the Borrower and the Bank
       which may be varied and amended from time to time.

6.1.4  The Ancillary Facility shall be made available by the Bank in a maximum
       amount equal to the Ancillary Limit.

6.1.5  Each of the Optional Overdraft Facility and the Ancillary Facility shall
       cease to be available on the Final Maturity Date for the Revolving Credit
       Facility or such earlier date on which it is cancelled in accordance with
       the terms of this Agreement.

6.1.6  The Borrower shall complete such mandate and other like documents in
       respect of the Optional Overdraft Facility and the Ancillary Facility as
       the Bank may reasonably require.

6.1.7  The Bank may specify sub-limits from time to time at its discretion on
       the different types of accommodation available under the Ancillary
       Facility.

6.2    UTILISATION OF OPTIONAL OVERDRAFT FACILITY

6.2.1  Subject to the terms of this Agreement, the Bank agrees to make the
       Optional Overdraft Facility available on a revolving basis to the
       Borrower to be utilised on any Business Day

                                       24

       by way of overdraft on usual banking terms including a term that amounts
       outstanding by way of overdraft are repayable on demand.

6.2.2  No utilisation of the Optional Overdraft Facility under Clause 6.2.1
       shall be made if it would result in:

       (a)    the aggregate of (i) all Revolving Advances and (ii) the Overdraft
              Outstandings exceeding the Revolving Credit Facility Limit;

       (b)    the Overdraft Outstandings exceeding the Optional Overdraft Limit;
              or

       (c)    the Gross Overdraft Outstandings exceeding the Gross Optional
              Overdraft Limit.

6.2.3  For the avoidance of doubt, the Bank may, without liability, return
       cheques unpaid if the payment of those cheques would result in a breach
       of Clause 6.2.2.

6.3    UTILISATION OF ANCILLARY FACILITY

6.3.1  Subject to the terms of this Agreement, the Bank agrees to make available
       the Ancillary Facility on a revolving basis to the Borrower to be
       utilised on any Business Day:

       (a)    by way of issue of Guarantees up to an aggregate maximum face
              amount of(pound)1,000,000;

              Bank and the Borrower may agree.

6.3.2  No utilisation of the Ancillary Facility under Clause 6.3.1 shall be made
       if it would result in the Ancillary Outstandings exceeding the Ancillary
       Limit.

6.3.3  For the avoidance of doubt, Interest Rate Protection Agreements shall not
       be and shall not be deemed to be part of the Ancillary Facilities.

6.4    FFE CONTRACTS

6.4.2  All obligations and liabilities owing to the Bank under or in respect of
       an FFE Contract shall be deemed to be obligations and liabilities owing
       to the Bank under this Agreement.

6.5.1  The Bank shall not be obliged to issue any Guarantee unless it has
       approved the form of the proposed Guarantee.

6.5.2  No Guarantee shall be issued under which a claim could be made at a time
       after the Final Maturity Date unless the Bank (in its sole discretion and
       upon such terms as it requires) agrees otherwise.

6.5.3  Each Guarantee shall be denominated in Sterling and shall state on its
       face the maximum amount payable under it and its expiry date.

6.5.4  A Guarantee shall only be issued by the Bank on a Business Day.

6.6    COUNTER INDEMNITY FROM THE BORROWER

6.6.1  The Borrower shall:

       (a)    indemnify the Bank and keep the Bank indemnified from and against
              all actions, suits, proceedings, claims, demands, liabilities,
              damages, costs, expenses, losses and charges in relation to or
              arising out of any Guarantee issued on its behalf; and

       (b)    pay to the Bank on demand the amount of all payments made (whether
              directly or by way of set-off, counterclaim or otherwise) and all
              losses, costs and expenses suffered or incurred by the Bank under
              or by reason of each such Guarantee.

6.6.2  The Bank is irrevocably authorised by the Borrower to comply with the
       terms of any demand served or purporting to be served on the Bank
       pursuant to any Guarantee without any reference to, or further authority
       from, the Borrower and without any enquiry into the justification for
       that demand or its validity. Any payment which the Bank shall make in
       accordance or purporting to be in accordance with such a demand shall be
       binding on the Borrower and be accepted by the Borrower as conclusive and
       binding evidence that the Bank was liable to comply with the terms of
       such demand and was liable to do so in the manner and for the amount in
       which the Bank effected such compliance.

6.6.3  The liability of the Borrower under this Clause 6.6 shall not be
       discharged, lessened or impaired by any time being given or by anything
       being done or other circumstance whatsoever which, but for this
       provision, would or might operate to exonerate or discharge the Borrower.

6.6.4  The indemnity contained in this Clause 6.6 shall constitute and be a
       continuing security to the Bank and shall extend to each Guarantee as it
       may be varied, modified, amended or extended.

6.7    INTEREST ON PAYMENTS

       The Borrower shall pay interest on the amount of each payment, loss, cost
       and expense made, suffered or incurred by the Bank under or by reason of
       any Guarantee issued on its behalf from and including the date upon which
       such payment, loss, cost or expense is made, suffered or incurred up to
       and including the date upon which payment or reimbursement of such amount
       is demanded from the Borrower. The amount of such

                                       26

       interest shall be calculated in accordance with Clause 7.4. For the
       avoidance of doubt, interest on sums demanded under Clause 6.6 shall also
       accrue in accordance with Clause 7.4.


7.     INTEREST

7.1    INTEREST RATE

       Interest shall accrue on each Advance from and including the relevant
       Drawdown Date to but excluding the date the Advance is repaid at the rate

7.2.1  In respect of each Quarter beginning after 31st December 1999, the Margin
       shall reduce or increase in accordance with the other provisions of this
       Clause 7.2, provided that the Margin shall at no time be greater than
       2.00 per cent. per annum or less than 1.25 per cent. per annum.

7.2.2  In this Clause 7.2, "RELEVANT FINANCIAL PERIOD" means, in relation to a
       Quarter, the 12 month period ending on the Quarter Date falling
       immediately before the beginning of that Quarter.

7.2.3  Subject to the other provisions of this Clause 7.2, in respect of a
       Quarter, the Margin shall be 1.75 per cent. per annum if the ratio of
       Debt: Post Restructuring PBIT for the Relevant Financial Period is less
       than 3.25:1.

7.2.4  Subject to the other provisions of this Clause 7.2, in respect of a
       Quarter, the Margin shall be 1.5 per cent. per annum if the ratio of
       Debt: Post Restructuring PBIT for the Relevant Financial Period is less
       than 2.75:1.

7.2.5  Subject to the other provisions of this Clause 7.2, in respect of a
       Quarter, the Margin shall be 1.25 per cent. per annum if the ratio of
       Debt: Post Restructuring PBIT for the Relevant Financial Period is less
       than 2.50:1.

7.2.6  In relation to a Quarter, for the purpose of this Clause 7.2, any
       reduction or increase in the Margin shall be determined on the day
       immediately following receipt by the Bank of the Management Accounts for
       the Accounting Period ending on or about the Quarter Date occurring at
       the end of that Quarter. Any reduction or increase shall, subject to
       Clause 7.2.8, take effect on the fifth Business Day following receipt by
       the Bank of those Management Accounts. If the Borrower does not deliver
       the relevant Management Accounts to the Bank in accordance with the terms
       of Clause 14.1(b), the Margin shall, as from the date immediately
       following the last date on which such Management Accounts should have
       been delivered to the Bank pursuant to Clause 14.1(b) (other than where
       such non-delivery is beyond the control of the Borrower) until the date
       once such Management Accounts have been so delivered, be reinstated to
       2.00 per cent. per annum.

7.2.7  Where in respect of any Quarter, the Margin has been adjusted on the
       basis of Management Accounts and the next Accounts delivered to the Bank
       show that such adjustment should not have been made, the said adjustment
       shall be cancelled on the next Interest Date to occur after delivery of
       those Accounts to the Bank and the Borrower and the Bank shall promptly
       make such payments as may be necessary to put themselves in the position
       they would have been in if the correct adjustment had originally been
       made as shown by reference to the Accounts.

7.2.8  Notwithstanding any other term of this Clause 7.2, if a Default has
       occurred and is continuing, the Margin shall be 2.00 per cent. per annum
       and any decrease which would otherwise have applied shall not take effect
       unless and until such Default ceases to be continuing or is waived in
       writing by the Bank.

7.2.9  Notwithstanding any other term of this Clause 7.2, the maximum reduction
       in the Margin from one Quarter to the next Quarter shall be 0.25 per
       cent. per annum.

7.3.1  Interest payable on each Advance shall be calculated by reference to
       Interest Periods of 1, 3 or 6 months duration (or such other Interest
       Period as the Bank, may allow) as selected by the Borrower in accordance
       with this Clause 7.3 provided that each Interest Period ending on or
       before 30th April 1998 shall be of one month's duration.

7.3.2  The Borrower shall select an Interest Period for a Revolving Advance in
       the relevant Drawdown Notice. The Borrower may select an Interest Period
       for a Term Advance in either the Drawdown Notice (in the case of the
       first Interest Period for that Advance) or (in the case of any subsequent
       Interest Period for that Advance) by notice received by the Bank no later
       than 3 Business Days before the commencement of that Interest Period.

7.3.3  In respect of Term Advances, interest shall be calculated by reference to
       successive Interest Periods. The first Interest Period for a Term Advance
       shall begin on the Drawdown Date of that Advance. Each succeeding
       Interest Period for that Advance shall begin on the Interest Date of the
       previous Interest Period.

7.3.4  The Borrower may, by notice to the Bank at least 3 Business Days before
       an Interest Date relating to a Term Advance, elect that that Term Advance
       be split into two or more Term Advances of at least (pound)1,000,000 each
       (and being multiples of (pound)500,000) or such lesser amount equal to
       the amount of the Instalment falling due on the next Instalment Repayment
       Date. Any such notice shall specify the Interest Periods applicable to
       those Term Advances and shall take effect in accordance with its terms
       from that Interest Date, provided that there shall not be more than 5
       Term Advances outstanding at any one time.

7.3.5  Subject to the other terms of this Agreement, if the Interest Periods for
       two or more Term Advances end on the same day those Term Advances shall
       be deemed to be a single Term Advance from that day.

7.3.6  If the Borrower fails to select an Interest Period for an Advance in
       accordance with Clause 7.3.2, that Interest Period shall, subject to the
       other provisions of this Clause 7, be 3 months.

7.3.7  If an Interest Period would otherwise end on a day which is not a
       Business Day, that Interest Period shall instead end on the next Business
       Day in the same calendar month (if there is one) or the preceding
       Business Day (if there is not).

7.3.8  If an Interest Period begins on the last Business Day in a calendar month
       or on a Business Day for which there is no numerically corresponding day
       in the calendar month in which that Interest Period is to end, it shall
       end on the last Business Day in that later calendar month.

7.3.9  In respect of Term Advances, the Borrower shall select such Interest
       Periods to ensure that, on each Instalment Repayment Date, there are Term
       Advances with an Interest Period ending on that Instalment Repayment Date
       which are, in aggregate, at least equal to the Instalment due on that
       Instalment Repayment Date.

7.4.1  If the Borrower fails to pay any amount payable under any Financing
       Document on the due date, it shall pay default interest on the overdue
       amount from the due date to the date of actual payment calculated by
       reference to successive Interest Periods (each of such duration as the
       Bank may select and the first beginning on the relevant due date) at the
       rate per annum being the aggregate of (a) 2 per cent. per annum, (b) the
       Margin, (c) LIBOR and (d) the Mandatory Cost Rate.

7.4.2  So long as the overdue amount remains unpaid, the default interest rate
       shall be recalculated in accordance with the provisions of this Clause
       7.4 on the last day of each such Interest Period and any unpaid interest
       shall be compounded at the end of each Interest Period.

7.5    INTEREST, COMMISSION AND FEES UNDER THE OPTIONAL OVERDRAFT FACILITY AND
       ANCILLARY FACILITY

7.5.1  Interest on all amounts outstanding by way of overdraft under the
       Optional Overdraft Facility shall accrue at the rate per annum which is

7.5.2  Interest under Clause 7.5.1 on amounts outstanding by way of overdraft
       shall be paid by the Borrower to the Bank on the Bank's usual quarterly
       charging days and the Final Maturity Date.

7.5.3  In respect of each Guarantee, the Borrower shall pay a commission to the
       Bank on the Guaranteed Amount of that Guarantee at a rate per annum equal
       to the Margin. Such commission shall be paid in advance in accordance
       with the Bank's usual practice.

7.5.4  In respect of each FFE Contract, the Borrower shall pay fees and
       commissions to the Bank in accordance with the Bank's usual charging
       scales as notified to the Borrower from time to time for entering into
       forward foreign exchange contracts.

                                       29

7.5.5  The Bank may debit all interest, fees and commissions payable by the
       Borrower under this Clause 7.5 to any account held by the Borrower with
       the Bank.

7.6    CALCULATION AND PAYMENT OF INTEREST

7.6.1  At the beginning of each Interest Period, the Bank shall notify the
       Borrower of the duration of the Interest Period and the rate and amount
       of interest payable for the Interest Period (but in the case of any
       default interest calculated under Clause 7.4, any such notification need
       not be made more frequently than weekly).

8.1.1  The Borrower shall repay the Term Loan by payment to the Bank on or up to
       45 days before each date set out in Column 1 of Part I of Schedule 5
       (each date being an "INSTALMENT REPAYMENT DATE") of the amount (each an
       "INSTALMENT") set out in Column 2 of Part I of Schedule 5 opposite the
       relevant Instalment Repayment Date (so that the Term Loan is repaid in
       full on or before the Final Maturity Date).

8.1.2  The Borrower shall make additional repayments ("PERFORMANCE REPAYMENTS")
       of the Term Loan on the dates and subject to the conditions specified in
       Part II of Schedule 5 provided that if the relevant date is not an
       Interest Date of the Term Loan the Borrower shall procure that:-

       (a)    the relevant Performance Repayment is made on the next Interest
              Date relating to the Term Loan and to the extent that the
              Performance Repayment exceeds (after repayment of any Instalment
              which is repayable on such Interest Date) the amount of the Term
              Advance(s) whose Interest Date(s) expire on that date, the next
              succeeding Interest Date(s)); and

       (b)    pending any such Performance Repayment, an amount equal to the
              required Performance Repayment is credited to a bank account
              ("Proceeds Account") held with the Bank.

8.1.3  Each Performance Repayment shall be applied against unpaid Instalments in
       inverse order to maturity and the Borrower authorises the Bank to apply
       relevant amounts standing to the

       credit of the Proceeds Account in fulfilment of the Borrower's
       obligations under Clause 8.1.2.

8.1.4  The Borrower shall on or before 31st May 1999 prepay all or part of one
       or more Term Advances, equal in aggregate to:

       (a)    in the event that the Required Disposal takes place on or before
              31st May 1999, the sum of (pound)3,500,000 minus the amount (if a
              lesser figure) of Disposal Proceeds in respect of the Required
              Disposal applied in prepayment (or credited to a Proceeds Account
              in accordance with Clause 8.3.1(b)) of the Term Loan pursuant to
              Clause 8.3.1 on or before 31st May 1999; or

       (b)    in the event that the Required Disposal does not take place on or
              before 31st May 1999, (pound)2,500,000,

       where "REQUIRED DISPOSAL" means a sale of the Property numbered 1 in
       Schedule 7.

8.1.5  The Borrower shall immediately on receipt pay 50% of the net proceeds of
       its legal claim relating to the benzene contamination which occurred in
       1998 to the Bank in prepayment of the Term Loan and the balance shall be
       paid into the Borrower's current account with the Bank.

8.1.6  Each prepayment pursuant to Clause 8.1.4 shall be applied against unpaid
       Instalments in inverse order to maturity and each prepayment pursuant to
       Clause 8.1.5 shall be applied against unpaid Instalments pro rata.

8.2    REPAYMENT OF REVOLVING ADVANCES

8.2.1  Subject to Clause 8.2.3, each Revolving Advance shall be repaid in full
       on the Interest Date of the Interest Period relating to that Revolving
       Advance.

8.2.2  Subject to the terms of this Agreement, any amounts repaid under Clause
       8.2.1 may be re-borrowed.

8.2.3  If all or part of an existing Revolving Advance made to the Borrower is
       to be repaid from the proceeds of all or part of a new Revolving Advance
       to be made to the Borrower, then, as between the Bank and the Borrower,
       the amount to be repaid by the Borrower shall be set off against the
       amount to be advanced by the Bank in relation to the new Revolving
       Advance and the party to whom the smaller amount is to be paid shall pay
       to the other party a sum equal to the difference between the two amounts.

8.2.4  Subject to Clauses 8, 10 and 11 the Borrower may not prepay any Revolving
       Advance before the end of its Interest Period.

8.3    MANDATORY PREPAYMENT OF DISPOSAL PROCEEDS

8.3.1  The Borrower shall procure that:

       (a)    the Disposal Proceeds of any Disposal (other than those set out in
              Clause 14.3(b)) made by a Group Company are applied in prepayment
              of the Term Loan on the next Interest Date relating to the Term
              Loan (and to the extent that the Disposal Proceeds exceed (after
              repayment of any Instalment which is

                                       31

              repayable on such Interest Date) the amount of the Term Advance(s)
              whose Interest Date(s) expire on that date, the next succeeding
              Interest Date(s)); and

       (b)    pending any such prepayment, the relevant Disposal Proceeds are
              credited to the Proceeds Account.

8.3.2  The Borrower authorises the Bank to apply relevant amounts standing to
       the credit of the Proceeds Account in fulfilment of the Borrower's
       obligations under Clause 8.3.1(a).

8.4    MANDATORY PREPAYMENT OF EXTRAORDINARY PROCEEDS

       The Borrower shall procure that:

       (a)    all Extraordinary Proceeds of Group Companies are applied in
              repayment of the Term Loan on each Interest Date for a Term
              Advance immediately following each date on which the relevant
              Extraordinary Proceeds are received by a Group Company (and to the
              extent that the Extraordinary Proceeds exceed (after repayment of
              any Instalment which is repayable on such Interest Date) the
              amount of the Term Advance(s) whose Interest Date(s) expire on
              that date, the next succeeding Interest Date(s)) provided that,
              for the purposes of this Clause 8.4 no account shall be taken,
              during any Financial Year of the Borrower, of Extraordinary
              Proceeds received by the Borrower in that Financial Year which do
              not exceed(pound)50,000; and

       (b)    pending any such prepayment, the relevant Extraordinary Proceeds
              are credited to a bank account (an "EXTRAORDINARY PROCEEDS
              ACCOUNT") held with the Bank.

8.5    MANDATORY PREPAYMENT ON CHANGE OF CONTROL, SALE OR LISTING

8.5.1  Notwithstanding Clauses 8.1 and 8.2, if so required by the Bank, on any
       date a Sale or a Listing occurs or the date falling 30 days after any

              and its Commitments shall be cancelled.

8.5.2  On a Prepayment Date, the Borrower shall in respect of each Guarantee
       issued on its behalf:

       (a)    use its reasonable endeavours to procure the release of the Bank
              from each such Guarantee; and

       (b)    without prejudice to paragraph (a) above, pay to the credit of
              such account as the Bank shall stipulate an amount equal to the
              Guaranteed Amount of that

                                       32

              Guarantee and charge such account in favour of the Bank in such
              manner and on such terms as the Bank may stipulate.

8.5.3  On a Prepayment Date, each outstanding FFE Contract shall, if the Bank so
       specifies, be terminated and closed out. Upon such termination and
       close-out, the Bank shall determine in good faith the applicable closing
       gain or loss payable by or to it for the outstanding FFE Contracts,
       calculated by reference to the netting of the respective amounts in each
       currency which the Bank is contracted to deliver and receive under all
       such FFE Contracts. Any amount payable to the Bank or to the Borrower in
       respect of the FFE Contracts pursuant to this Clause 8.5.3 shall, subject
       to all rights of set-off, be immediately due and payable upon such
       termination and close-out.

8.5.4  The Borrower shall give the Bank at least 30 days' prior notice of the
       date upon which a Sale or Listing is proposed to occur and shall notify
       the Bank as soon as the Borrower becomes aware that a Change of Control
       is proposed to occur.

8.5.5  Any prepayment shall be made together with accrued interest on the amount
       prepaid and any amounts payable under Clause 22.1.

8.6    VOLUNTARY PREPAYMENT OF TERM LOAN

8.6.1  The Borrower may, by giving the Bank not less than 5 Business Days' prior
       written notice, prepay the whole or part (but if in part, in a minimum
       amount of (pound)1,000,000 and an integral multiple of (pound)500,000) of
       any Term Advance at any time, but subject always to Clause 22.

8.6.2  Any notice of prepayment shall be irrevocable, shall specify the date on
       which the prepayment is to be made and the amount of the prepayment, and
       shall oblige the Borrower to make that prepayment.

8.6.3  Any prepayment shall be made together with accrued interest on the amount
       prepaid and any amounts payable under Clause 22.1.

8.7    NO RE-BORROWING OF TERM LOAN

       Any amount repaid or prepaid in relation to the Term Loan may not be
       re-borrowed and shall reduce rateably the Bank's Term Loan Commitment.

8.8    APPLICATION OF PREPAYMENTS

       Each prepayment of the Term Loan under this Clause 8 shall be applied
       against the unpaid Instalments pro rata (other than repayment of an
       Instalment made up to 45 days before the relevant Instalment Repayment
       Date).


9.     CANCELLATION OF REVOLVING CREDIT FACILITY AND ANCILLARY FACILITY

9.1    CANCELLATION OF REVOLVING CREDIT FACILITY

9.1.1  The Borrower may, by giving the Bank not less than 5 Business Days' prior
       written notice, cancel all or part of the Available Revolving Credit
       Facility, including any unutilised part

       of the Optional Overdraft Facility (but if in part, in a minimum amount
       of (pound)1,000,000 and an integral multiple of (pound)500,000).

9.1.2  The Borrower may not utilise any part of the Revolving Credit Facility
       which has been cancelled. Any cancellation of the Revolving Credit
       Facility shall reduce the Bank's Revolving Credit Commitment rateably and
       shall reduce the Revolving Credit Facility Limit by the aggregate amount
       so cancelled. Any cancellation of the Optional Overdraft Facility shall
       reduce the Optional Overdraft Limit by the aggregate amount so cancelled.
       Any amount cancelled may not be reinstated.

9.2    CANCELLATION OF ANCILLARY FACILITY

       The Borrower may, by giving the Bank not less than 5 Business Days' prior
       written notice, cancel all or part of the Available Ancillary Facility
       and the Ancillary Limit shall be reduced accordingly. Any amount
       cancelled may not be reinstated.

9.3    NOTICE

       Any notice of cancellation shall be irrevocable and shall specify the
       date on which the cancellation shall take effect and the amount of the
       cancellation.

9.4    LIMITATION

       The Borrower may not cancel all or part of the Revolving Credit Facility
       or the Ancillary Facility except as expressly provided in this Agreement.


10.    CHANGES IN CIRCUMSTANCES

10.1   ILLEGALITY

       qualify the rights of the Bank or the obligations of the Borrower under
       Clauses 10.1, 10.2, 10.3 and 11.8.

10.5   CERTIFICATES

       The certificate or notification of the Bank as to any of the matters
       referred to in this Clause 10 shall be in reasonable detail and shall be
       conclusive and binding on the Borrower except for any manifest error.


11.    PAYMENTS

11.1   PLACE AND TIME

       All payments to be made by the Borrower in relation to this Agreement
       shall be made to the Bank's account (number 0002727) at Treasury
       Division, Faryners House, PO Box 545, 25 Monument Street, London EC3R 3BP
       (sort code 30-15-57) quoting reference "Loans Admin re: Cott Beverages
       Ltd" or such other account at such office or bank in London as the Bank
       may notify the Borrower for this purpose, provided that all payments to
       be made by the Borrower to the Bank in relation to the Optional Overdraft
       Facility or the Ancillary Facility shall be made in accordance with usual
       procedures for the operation of the Optional Overdraft Facility or, as
       the case may be, the Ancillary Facility.

11.2   FUNDS

       All payments to the Bank under this Agreement shall be made for value on
       the due date in freely transferable and readily available funds.

11.3   BUSINESS DAYS

       If a payment under this Agreement is due on a day which is not a Business
       Day, the due date for that payment shall instead be the next Business Day
       in the same calendar month (if there is one) or the preceding Business
       Day (if there is not).

11.4   CURRENCY

       All payments relating to costs, losses, expenses or Taxes shall be made
       in the currency in which the relative costs, losses, expenses or Taxes
       were incurred. Any other amount payable under this Agreement shall,
       except as otherwise provided, be made in Sterling.

11.5   ACCOUNTS AS EVIDENCE

       The Bank shall maintain in accordance with its usual practice an account
       which shall, as between the Borrower and the Bank, be prima facie
       evidence of the amounts from time to time advanced by, owing to, paid and
       repaid to the Bank under this Agreement.

11.6   PARTIAL PAYMENTS

11.7   SET-OFF AND COUNTERCLAIM

       All payments by the Borrower under this Agreement shall be made without
       set-off or counterclaim.

11.8   GROSSING-UP

12.    SECURITY

12.1   SECURITY DOCUMENTS

       The obligations and liabilities of the Borrower to the Bank under the
       Financing Documents shall be secured by the interests and rights granted
       in favour of the Bank under the Security Documents.

12.2   INTEREST RATE PROTECTION AGREEMENTS

       All obligations and liabilities of the Borrower to the Bank under or in
       connection with any Interest Rate Protection Agreement shall be treated,
       for all purposes (other than Clause 11.7), as obligations and liabilities
       incurred under this Agreement and, for the avoidance of doubt, the
       Borrower's obligations and liabilities under any Interest Rate Protection
       Agreement shall be secured obligations and liabilities under the
       Debenture ranking pari passu with the obligations of the Borrower under
       this Agreement.

12.3   RELEASE OF SECURITY ON DISPOSALS

       In respect of any Disposal made by a Group Company which falls within
       paragraphs (i) to (v) of Clause 14.3(b) the Bank shall on the completion
       of that Disposal release, at the cost and expense of the Borrower, from
       the Security Documents, the assets which are the subject of that
       Disposal.

12.4   VENDOR COLLATERAL ACCOUNT

       The Bank shall on or before 31 January 2000 and provided that no Default
       or Potential Default has then occurred and is continuing release from the
       Vendor Collateral Account to the Borrower's current account with the Bank
       any amounts standing to the credit of the Vendor Collateral Account and
       such account shall thereupon be closed.

13.    REPRESENTATIONS AND WARRANTIES

13.1   REPRESENTATIONS AND WARRANTIES

       The Borrower represents and warrants to the Bank that:

       (a)    STATUS: each Group Company is a limited company duly incorporated
              under the laws of England and Wales, and it possesses the capacity
              to sue and be sued in its own name and has the power to carry on
              its business and to own its property and other assets;

       (b)    POWERS AND AUTHORITY: each Group Company has power to execute,
              deliver and perform its obligations under the Transaction
              Documents to which it is party and to carry out the transactions
              contemplated by those documents and all necessary corporate,
              shareholder and other action has been or will be taken to
              authorise the execution, delivery and performance of the same;

       (c)    BINDING OBLIGATIONS: subject to the Reservations, the obligations
              of each Group Company under the Transaction Documents to which it
              is party constitute its legal, valid, binding and enforceable
              obligations;

       (d)    CONTRAVENTIONS: the execution, delivery and performance by each
              Group Company of the Transaction Documents to which it is party
              does not:

              (i)    contravene any applicable law or regulation or any order of
                     any governmental or other official authority, body or
                     agency or any judgment, order or decree of any court having
                     jurisdiction over it;

              (ii)   conflict with, or result in any breach of any of the terms
                     of, or constitute a default under, (x) any agreement or
                     other instrument to which it is a party or any licence or
                     other authorisation to which it is subject or by which it
                     or any of its property is bound or (y) any Cott Notes
                     Document; or

              (iii)  contravene or conflict with the provisions of its
                     memorandum and articles of association;

       (e)    INSOLVENCY: no Group Company has taken any action nor have any
              steps been taken or legal proceedings been started or threatened
              against it for winding-up, dissolution or re-organisation, the
              enforcement of any Encumbrance over its assets or for the
              appointment of a receiver, administrative receiver, or
              administrator, trustee or similar officer of it or of any of its
              assets;

       (f)    NO DEFAULT: no Group Company is (nor would be with any of the
              giving of notice, the lapse of time, the determination of
              materiality, or the satisfaction of any other condition) in breach
              of or in default under any agreement to which it is a party or
              which is binding on it or any of its assets;

       (g)    LITIGATION: no action, litigation, arbitration or administrative
              proceeding has been commenced, or, to the best of the Borrower's
              information, knowledge and belief, is pending or threatened,
              against any Group Company which, if decided

                                       41

              adversely, would result in an award or judgment being made against
              the relevant Group Company for an amount in excess of
              (pound)250,000 nor is there subsisting any unsatisfied judgment or
              award given against any of them by any court, arbitrator or other
              body;

              Borrower of the (pound)4,000,000 was paid in full by Cott to the
              Borrower on or before 30th April 1999.

13.2   REPETITION

       The representations and warranties set out in Clause 13.1 shall survive
       the execution of this Agreement and shall be deemed to be repeated as
       follows:

       (a)    each of the said representations and warranties shall be deemed to
              be repeated on the first Drawdown Date; and

       (b)    each of the said representations and warranties (other than those
              made under Clauses 13.1(e), (f), (g), (j), (m), (q), (r), (s), and
              (v) inclusive) shall be repeated on each Drawdown Date (other than
              the first Drawdown Date) and each Interest Date,

       in each case, as if made with reference to the facts existing at the time
       of repetition.

14.    UNDERTAKINGS

14.1   INFORMATION UNDERTAKINGS

       The Borrower undertakes that during the Security Period it shall, unless
       the Bank otherwise agrees:

       (a)    ANNUAL ACCOUNTS: as soon as the same become available (and in any
              event within 120 days after the end of each of its Financial
              Years), deliver to the Bank the Accounts for each such Financial
              Year of each Group Company together with:

              (i)    the unconsolidated profit and loss account, balance sheet
                     and cashflow for the Borrower for each such Financial Year;
                     and

              (ii)   a copy of the management letter (if any) addressed by the
                     auditors to the directors of each such company in
                     connection with its auditing of the relevant Accounts as
                     soon as reasonably practicable after receipt of the letter
                     by such company;

14.2   POSITIVE UNDERTAKINGS

       The Borrower undertakes that during the Security Period it shall, and it
       shall procure that each Group Company shall, unless the Bank otherwise
       agrees:

       (a)    PAY TAXES: pay and discharge all Taxes and governmental charges
              payable by or assessed upon it prior to the date on which the same
              become overdue unless, and only to the extent that, such Taxes and
              charges shall be contested in good faith by appropriate
              proceedings, pending determination of which payment may lawfully
              be withheld, and there shall (if the Auditors so advise) be set
              aside adequate reserves with respect to any such Taxes or charges
              so contested in accordance with GAAP;

       (b)    INSURANCE: comply with all its obligations relating to insurances
              contained in the Security Documents;

       (c)    AUTHORISATIONS: obtain, maintain and comply with the terms of any
              authorisation, approval, licence, consent, exemption, clearance,
              filing or registration:

              (i)    which are material and are required for the conduct of its
                     business, trade and ordinary activities; and

              (ii)   required to enable it to perform its obligations under, or
                     for the validity, enforceability or admissibility in
                     evidence of, any Financing Document;

       (d)    ACCESS: upon reasonable notice being given to the Borrower by the
              Bank, permit the Bank and any person (being an accountant,
              auditor, solicitor, valuer or other professional adviser of the
              Bank) authorised by the Bank to have, at all reasonable times
              during normal business hours, access to the property, premises and
              accounting books and records of any Group Company and to the
              officers of any Group Company and the Management;

       (e)    FURTHER DOCUMENTS: at the request of the Bank, do or procure the
              doing of all such things and execute or procure the execution of
              all such documents as are, in the opinion of the Bank, necessary
              or desirable to ensure that the Bank (i) obtains all its rights
              and benefits under the Financing Documents and (ii) to ensure that
              the Borrower's obligations to the Bank under this Agreement are
              secured on all the Borrower's assets (including executing legal
              mortgages) and (iii) obtains a legal mortgage over the land and
              property numbered 3 and 4 in Schedule 7 to secure the Borrower's
              obligations in respect of the Term Loan Facility provided, for the
              avoidance of doubt, that the Borrower shall not be required to do
              anything which would constitute a breach of the Cott Notes
              Documents;

              1999 the computer systems and production equipment of each Group
              Company are compliant with Year 2000 Conformity (within the
              meaning of British Standards Institute document PD 2000-1:1998)
              save to the extent any failure to be so compliant could not
              reasonably be expected to have a Material Adverse Effect.

14.3   NEGATIVE UNDERTAKINGS

       The Borrower undertakes that during the Security Period it shall not, and
       it shall procure that no Group Company shall, unless the Bank otherwise
       agrees:

       (a)    NEGATIVE PLEDGE: create or permit to subsist any Encumbrance over
              any of its assets other than Permitted Encumbrances;

       (b)    DISPOSAL OF ASSETS: dispose of any of the Target Shares or make
              any other Disposal other than a disposal of an asset:

              (i)    in the ordinary course of its trading activities on arms'
                     length terms; or

COLUMN A                                                                       COLUMN B
 PERIOD                                                                         RATIO
--------                                                                       --------
 The four Quarterly Accounting Periods ending on or about 31.12.99              0.80:1

 The four Quarterly Accounting Periods ending on or about 31.3.00               0.825:1
 The four Quarterly Accounting Periods ending on or about 30.6.00               1.375:1
 The four Quarterly Accounting Periods ending on or about 30.9.00                1.85:1
 The four Quarterly Accounting Periods ending on or about 31.12.00               2.00:1

 The four Quarterly Accounting Periods ending on or about 31.3.01                2.25:1
 The four Quarterly Accounting Periods ending on or about 30.6.01                2.50:1
 The four Quarterly Accounting Periods ending on or about 30.9.01                2.75:1
 The four Quarterly Accounting Periods ending on or about 31.12.01               3.00:1

 The four Quarterly Accounting Periods ending on or about 31.3.02                3.00:1
 The four Quarterly Accounting Periods ending on or about 30.6.02                3.00:1
 The four Quarterly Accounting Periods ending on or about 30.9.02                3.00:1
 The four Quarterly Accounting Periods ending on or about 31.12.02               3.00:1

 The four Quarterly Accounting Periods ending on or about 31.3.03                3.00:1
 The four Quarterly Accounting Periods ending on or about 30.6.03                3.00:1
 The four Quarterly Accounting Periods ending on or about 30.9.03                3.00:1
 The four Quarterly Accounting Periods ending on or about 31.12.03               3.00:1

 The four Quarterly Accounting Periods ending on or about 31.3.04                3.00:1
 The four Quarterly Accounting Periods ending on or about 30.6.04                3.00:1
 The four Quarterly Accounting Periods ending on or about 30.9.04                3.00:1
 The four Quarterly Accounting Periods ending on or about 31.12.04               3.00:1

COLUMN A                                                                       COLUMN B
 PERIOD                                                                         RATIO
--------                                                                       --------
 The four Quarterly Accounting Periods ending on or about 31.12.99              0.70:1

 The four Quarterly Accounting Periods ending on or about 31.3.00               0.93:1
 The four Quarterly Accounting Periods ending on or about 30.6.00               0.83:1
 The four Quarterly Accounting Periods ending on or about 30.9.00               1.00:1
 The four Quarterly Accounting Periods ending on or about 31.12.00              1.00:1

 The four Quarterly Accounting Periods ending on or about 31.3.01               1.00:1
 The four Quarterly Accounting Periods ending on or about 30.6.01               1.00:1
 The four Quarterly Accounting Periods ending on or about 30.9.01               1.00:1
 The four Quarterly Accounting Periods ending on or about 31.12.01              1.00:1

 The four Quarterly Accounting Periods ending on or about 31.3.02               1.00:1
 The four Quarterly Accounting Periods ending on or about 30.6.02               1.00:1
 The four Quarterly Accounting Periods ending on or about 30.9.02               1.00:1
 The four Quarterly Accounting Periods ending on or about 31.12.02              1.00:1

 The four Quarterly Accounting Periods ending on or about 31.3.03               1.00:1
 The four Quarterly Accounting Periods ending on or about 30.6.03               1.00:1
 The four Quarterly Accounting Periods ending on or about 30.9.03               1.00:1
 The four Quarterly Accounting Periods ending on or about 31.12.03              1.00:1

 The four Quarterly Accounting Periods ending on or about 31.3.04               1.00:1
 The four Quarterly Accounting Periods ending on or about 30.6.04               1.00:1
 The four Quarterly Accounting Periods ending on or about 30.9.04               1.00:1
 The four Quarterly Accounting Periods ending on or about 31.12.04              1.00:1

COLUMN A                                                                       COLUMN B
 PERIOD                                                                         AMOUNT
--------                                                                       --------
                                                                             ((POUND)000)
 The Quarterly Accounting Period ending on or about 31.12.99                    27,000

 The Quarterly Accounting Period ending on or about 31.3.00                     36,500
 The Quarterly Accounting Period ending on or about 30.6.00                     38,500
 The Quarterly Accounting Period ending on or about 30.9.00                     39,250
 The Quarterly Accounting Period ending on or about 31.12.00                    39,750

COLUMN A                                                                       COLUMN B
 PERIOD                                                                         AMOUNT
--------                                                                       --------
                                                                             ((POUND)000)
 The Quarterly Accounting Period ending on or about 31.3.01                     39,750 + Y
 The Quarterly Accounting Period ending on or about 30.6.01                     39,750 + Y
 The Quarterly Accounting Period ending on or about 30.9.01                     39,750 + Y
 The Quarterly Accounting Period ending on or about 31.12.01                    39,750 + Y

 The Quarterly Accounting Period ending on or about 31.3.02                     39,750 + Y
 The Quarterly Accounting Period ending on or about 30.6.02                     39,750 + Y
 The Quarterly Accounting Period ending on or about 30.9.02                     39,750 + Y
 The Quarterly Accounting Period ending on or about 31.12.02                    39,750 + Y

 The Quarterly Accounting Period ending on or about 31.3.03                     39,750 + Y
 The Quarterly Accounting Period ending on or about 30.6.03                     39,750 + Y
 The Quarterly Accounting Period ending on or about 30.9.03                     39,750 + Y
 The Quarterly Accounting Period ending on or about 31.12.03                    39,750 + Y

 The Quarterly Accounting Period ending on or about 31.3.04                     39,750 + Y
 The Quarterly Accounting Period ending on or about 30.6.04                     39,750 + Y
 The Quarterly Accounting Period ending on or about 30.9.04                     39,750 + Y
 The Quarterly Accounting Period ending on or about 31.12.04                    39,750 + Y

COLUMN A                                          COLUMN B
 PERIOD                                       AMOUNT ((POUND)000)
 ------                                       -------------------
Closing to 31.1.99                                6,000

12 months to 31.1.00                              6,000

12 months to 31.1.01                              6,000

12 months to 31.1.02                              6,000

12 months to 31.1.03                              6,000

12 months to 31.1.04                              6,000

12 months to 31.1.05                              6,000

                     Notes shall be added to Tangible Net Worth during the
                     period of 60 days from Completion.

14.4.2 (a)    If the directors of any Group Company determine at any time during
              the Security Period that the accounting reference date of that
              Group Company has or should be changed or any of the accounting
              principles applied in the preparation of any of the Accounts and
              the Management Accounts shall be different from the Accounting
              Principles, or if as a result of the introduction or
              implementation of any SSAP or FRS or any change in any of them or
              in any applicable law such accounting principles are required to
              be changed, the Borrower shall promptly give notice to the Bank of
              that change, determination or requirement.

       (b)    If the Bank believes that the financial undertakings set out in
              this Clause 14.4 need to be amended as a result of any such
              change, determination or requirement or as a result of the
              Required Disposal (as defined in Clause 8.1.4), the Borrower shall
              negotiate with the Bank in good faith to amend the existing
              financial undertakings so as to provide the Bank with
              substantially the same protections as the financial undertakings
              set out in this Clause 14.4 (but which are not materially more
              onerous).

       (c)    If the Borrower and the Bank cannot agree such amended financial
              undertakings within 30 days of that notice, the Borrower and the
              Bank shall jointly nominate a firm of chartered accountants to
              settle the amended financial undertakings, or in default of such
              nomination the Bank shall request the President for the time being
              of the Institute of Chartered Accountants in England and Wales to
              nominate a firm of chartered accountants for that purpose. Such
              accountants shall act as experts and not arbitrators and their
              decision shall be final and binding on the Parties. The costs of
              such accountants shall be paid by the Borrower.

15.    DEFAULT

15.1   DEFAULT

       Each of the following shall be a Default:

       (a)    NON-PAYMENT: subject to Clause 15.2.5, the Borrower does not pay
              on the due date any amount payable by it under this Agreement at
              the place at and in the currency and funds in which it is
              expressed to be payable unless the failure to pay such amount is
              due solely to administrative or technical delays in the
              transmission of funds which are not the fault of that the Borrower
              and such amount is paid within 2 Business Days after its due date
              for payment; or

17.    FEES AND EXPENSES

17.1   EXPENSES

       The Borrower shall on demand (x) reimburse the Bank for its own account
       at such reasonable daily and/or hourly rates as the Bank shall from time
       to time reasonably determine for the cost of utilising its management
       time and/or other resources and (y) pay all expenses incurred by the Bank
       (including legal, valuation and accounting fees but, in

                                       63

       relation to paragraphs (a) and (c) below, only to the extent the same are
       reasonable in amount), and any VAT on those expenses in each case in
       connection with:

       (a)    the negotiation, preparation and execution of the Financing
              Documents and the other documents contemplated by the Financing
              Documents;

              to do) any of their rights, or in suing for or recovering any sum
              due from the Borrower or any other person under any Financing
              Document, or in investigating any possible Default.

17.2   ARRANGEMENT

       The Borrower shall pay to the Bank arrangement and agency fees in
       accordance with the terms of the Fees Letter. For the avoidance of doubt,
       all liabilities and obligations of the Borrower under the Fees Letter
       shall be deemed to be incurred under this Agreement and shall be secured
       by the Security Documents.

17.3   COMMITMENT FEES

       rate of 0.75 per cent. per annum (or, if lower at a rate equal to half
       the Margin from time to time) on the Revolving Credit Commitment less the
       aggregate of all Revolving Advances and the Overdraft Outstandings. The
       commitment fee shall be calculated on a day-to-day basis and a 365 day
       year in respect of the Revolving Credit Commitment Period and shall be
       payable in arrear on each Quarter Date and also on the last day of the
       Revolving Credit Commitment Period or on any earlier date on which the
       Revolving Credit Commitment equals zero.

17.4   DOCUMENTARY TAXES INDEMNITY

       All stamp, documentary, registration or other like duties or Taxes,
       including any penalties, additions, fines, surcharges or interest
       relating to those duties and Taxes, which are imposed or chargeable on or
       in connection with any Financing Document shall be paid by the Borrower.
       The Bank shall be entitled but not obliged to pay any such duties or
       Taxes (whether or not they are its primary responsibility). If the Bank
       does so the Borrower shall on demand indemnify the Bank against those
       duties and Taxes and against any costs and expenses incurred by the Bank
       in discharging them.

       by the Bank pursuant to or in connection with any Financing Document or
       any transaction or document contemplated in any Financing Document may be
       increased or added to by reference to (or as a result of any increase in
       the rate of) any VAT which shall be or may become chargeable in respect
       of any taxable supply.

17.6   INDEMNITY PAYMENTS

       Where in any Financing Document the Borrower has an obligation to
       indemnify or reimburse the Bank in respect of any loss or payment, the
       calculation of the amount payable by way of indemnity or reimbursement
       shall take account of the likely Tax treatment in the hands of the Bank
       (as determined by the relevant party's auditors) of the amount payable by
       way of indemnity or reimbursement and of the loss or payment in respect
       of which that amount is payable.

17.7   DEBITING AUTHORITY

       The Borrower authorises the Bank to debit from the Borrower's current
       account all fees and expenses arising from time to time under this
       Agreement.


18.    AMENDMENTS AND WAIVERS

18.1   WRITING

19.    MISCELLANEOUS

19.1   SEVERANCE

       If any provision of this Agreement is or becomes illegal, invalid or
       unenforceable in any jurisdiction, that shall not effect:

       (a)    the legality, validity or enforceability in that jurisdiction of
              any other provision of this Agreement; or

       (b)    the legality, validity or enforceability in any other jurisdiction
              of that or any other provision of this Agreement.

19.2   COUNTERPARTS

       This Agreement may be executed in any number of counterparts and this
       shall have the same effect as if the signatures on the counterparts were
       on a single copy of this Agreement.

19.3   PUBLICITY

       The Borrower shall not commission or authorise any press or media
       publicity in relation to this transaction and its financing without first
       consulting the Bank and if using the name of a Bank Party, such name
       shall only be used in such manner as the relevant Party may reasonably
       require. All costs of any agreed publicity shall be for the account of
       the Borrower.

19.4   EURO

       If Sterling is, or is to be replaced by the Euro, the Bank may notify the
       Borrower of any amendments to this Agreement, the other Financing
       Documents or any other document entered into pursuant to this Agreement
       it reasonably considers necessary in order to ensure (i) that the terms
       of this Agreement or any other such document reflect market practice at
       such time with regard to the introduction of monetary union within the
       European Community and/or to reflect market practice applicable to the
       Euro (including any rate applicable as LIBOR); and (ii) insofar as
       reasonably possible and without prejudice to market practice at such
       time, that the Parties shall be left in no worse position than they might
       otherwise have been in had the event mentioned in this Clause not
       occurred. Any such amendments shall take effect as and when specified by
       the Bank in such notice and shall thereupon be and become binding on all
       Parties.


20.    NOTICES

20.1   METHOD

       Each notice or other communication to be given under this Agreement shall
       be given in writing in English and, unless otherwise provided, shall be
       made by telex, fax or letter.

20.2   DELIVERY

       Any notice or other communication to be given by one Party to another
       under this Agreement shall (unless one Party has by 10 Business Days'
       notice to the other Party

       specified another address) be given to that other Party, at the
       respective addresses given in Clause 20.3.

20.3   ADDRESSES

       The address, telex number, answerback and fax number of the Borrower and
       the Bank are:

       (A)    the Borrower:

              Citrus Grove
              Side Ley
              Kegworth  DE74 2FJ

              Attention:       Capital Markets
              Fax:             0171 661 4677

20.4   DEEMED RECEIPT

21.    ASSIGNMENTS AND TRANSFERS

21.1   BENEFIT OF AGREEMENT

       This Agreement shall be binding upon and enure to the benefit of each
       Party and its successors and assigns.

21.2   ASSIGNMENTS AND TRANSFERS BY THE BORROWER

       The Borrower shall not be entitled to assign or transfer any of its
       rights or obligations under this Agreement.

21.3   ASSIGNMENTS BY THE BANK

       The Bank may assign any of its rights and benefits under the Financing
       Documents to a Qualifying Bank.

21.4   TRANSFERS BY THE BANK

       The Bank may transfer, in accordance with this Clause 21.4, any of its
       rights and obligations under the Financing Documents subject (unless the
       transfer is to an Affiliate of a Bank) to the prior consent of the
       Borrower, not to be unreasonably withheld or delayed.

21.5   GRANT OF PARTICIPATIONS

       It is intended that the Bank will grant participations in all or some of
       the Facilities to a number of banks and financial institutions. The
       Borrower agrees to co-operate with the Bank in granting those
       participations and to enter into the Participation Agreement (or such
       other documents as the Bank reasonably requires) to put the Borrower, the
       Bank and any Bank Participants in the same position they would have been
       in (as near as possible) had this Agreement been a syndicated facility,
       the Bank been the facility agent and the Bank Participants been banks or
       bank transferees under such a syndicated facility. It is intended to
       enable Bank Participants to transfer their participations in a manner
       similar to the transfer of commitments and participations under a
       syndicated facility.

21.6   DISCLOSURE

       The Bank (and any Bank Participant) may disclose information about the
       Borrower and this Facility to anyone to whom it intends to transfer or
       sub-participate its rights under this Facility.

22.    INDEMNITIES

22.1   BREAKAGE COSTS INDEMNITY

       The Borrower shall indemnify the Bank on demand against any loss or
       expense (including any loss of Margin or any other loss or expense on
       account of funds borrowed, contracted for or utilised to fund any amount
       payable under this Agreement, any amount repaid or prepaid under this
       Agreement or any Advance) which the Bank has sustained or incurred as a
       consequence of:

       (a)    an Advance not being made following the service of a Drawdown
              Notice (except as a result of the failure of the Bank to comply
              with its obligations under this Agreement);

       (b)    the failure of the Borrower to make payment on the due date of any
              sum due under this Agreement;

SIGNED by                                 )
BRIAN R MACKIE                            )            /s/ B R MACKIE
for and on behalf of                      )
COTT UK LIMITED                           )
(now called COTT BEVERAGES LIMITED)       )
                                          )

SIGNED by                                 )
PETER J CANNON                            )            /s/ P J CANNON
for and on behalf of                      )
LLOYDS BANK PLC                           )
(now called LLOYDS TSB BANK PLC)

Attest:                                 PREMIUM BEVERAGE PACKERS, INC.

/S/ Michele K. Hettinger                By: /S/ Jeffrey D. Hettinger
------------------------                    ------------------------
Title: Asst. Secretary                      Title: President

Witness:

/S/ Ernest Choquette                    /S/ Jeffrey D. Hettinger
--------------------                    ------------------------
                                        JEFFREY D. HETTINGER

Attest:                                 COTT BEVERAGES USA, INC.

/S/ Stephen Bloom                       By: /S/ P. Richardson  /S/ Mark Halperin
                                            ------------------------------------
Title:                                      Title: Exec VP.   SVP & Secy

Attest:                                 COTT CORPORATION

/S/ Mark Halperin                       By: /S/ P. Richardson
-----------------                           -----------------
Title:                                      Title: Exec VP

"`A' SHARES"                       means the twenty five thousand (25,000)
                                   issued "A" Ordinary Shares of 10 pence
                                   each in the capital of the Company fully
                                   paid or credited as fully paid.

"ADJUSTED NET ASSETS"              means the amount at the Completion Date
                                   by which the fixed and current assets of
                                   the Group Companies as shown in the
                                   Completion Balance Sheet exceeds the
                                   aggregate of the liabilities (being the
                                   actual, contingent and prospective
                                   liabilities so far as they can be
                                   quantified whether current or not, as
                                   shown therein but excluding the Existing
                                   Group Loan Stock) as agreed or
                                   determined pursuant to Clause 5 of this
                                   Agreement.

"APPROPRIATE MANNER"               means as agreed by the parties,
                                   negotiating in good faith either in
                                   person or through their nominated
                                   advisors or, in default of such
                                   agreement within 20 Business Days of
                                   commencement of such negotiations, as
                                   determined by an Expert nominated at any
                                   time thereafter on the request of the
                                   Vendors or the Purchaser (as the case
                                   may be) and in accordance with Clause
                                   16.

"ASSOCIATE"                        means in respect of any person ("the
                                   first person") any person which is a
                                   connected person (as defined in Section
                                   839 ICTA) of the first person, or which
                                   is an associated company of the first
                                   person within the meaning of Section 416
                                   ICTA but as if in sub-section (2) of
                                   that Section there was substituted for
                                   the words "the greater part" wherever
                                   they appear the words "twenty five per
                                   cent or more".

"`B' SHARES"                       means the two hundred and twenty one
                                   thousand, four hundred and sixty nine
                                   (221,469) issued "B" Ordinary Shares of
                                   10 pence each in the capital of the
                                   Company, fully paid or credited as fully
                                   paid.

"BUSINESS DAY"                     means any day other than Saturdays,
                                   Sundays and bank holidays during which
                                   clearing banks are open for business in
                                   the City of London.

"CA  1985"                         means the Companies Act 1985.

"CA  1989"                         means the Companies Act 1989.

"COMPANIES ACTS"                   means CA 1985 and CA 1989 and the former
                                   Companies Acts (within the meaning of
                                   Section 735(1) CA 1985).

"COMPANY"                          means Hero Drinks Group (UK) Limited
                                   brief details of which are set out in
                                   Part 1 of Schedule 2.

"COMPANY INTELLECTUAL
PROPERTY RIGHTS"                   means all Intellectual Property Rights
                                   (whether or not registered or
                                   registerable), which are used in the
                                   carrying on of the business of the
                                   Company in the manner in which it is
                                   carried on as at the date of this
                                   Agreement, other than the Registered
                                   Company Intellectual Property Rights and
                                   any intellectual property rights
                                   licensed to the Company by Hero or
                                   otherwise owned by Hero.

"COMPLETION"                       means completion of the sale and
                                   purchase of the Shares in accordance
                                   with Clause 7.

"COMPLETION BALANCE SHEET"         means the balance sheet of the Company
                                   as at the close of business on the
                                   Completion Date to be prepared in
                                   accordance with Clause 5.

"COMPLETION DATE"                  means the date hereof.

"`C' SHARES"                       means the seven hundred and fifty-three
                                   thousand, five hundred and thirty-one
                                   (753,531) issued "C" Ordinary Shares of
                                   10 pence each in the capital of the
                                   Company fully paid or credited as fully
                                   paid.

"CONSIDERATION"                    means the consideration payable by the
                                   Purchaser for the Shares representing
                                   the aggregate of the Initial
                                   Consideration and the Further
                                   Consideration (subject to any adjustment
                                   provided for in this Agreement).


"CRYSTAL DRINKS"                   means Crystal Drinks Limited (Company No
                                   2186825).

"DISCLOSURE LETTER"                means the letter of even date herewith
                                   in the Agreed Form from the Vendors to
                                   the Purchaser disclosing exceptions to
                                   the Warranties.

"DISCLOSED DOCUMENTS"              means the documents referred to in the
                                   list of documents in the Agreed Form
                                   annexed to the Disclosure Letter.

"EBIT"                             has the meaning provided in paragraph 5
                                   of Schedule 3.



"ENVIRONMENT" and "POLLUTION
OF THE ENVIRONMENT"                have the meanings attributed to them by
                                   s.1 of the Environmental Protection Act
                                   1990.


"ENVIRONMENTAL LAW"                means all laws, regulations, codes of
                                   practice, circulars, guidance notes
                                   (statutory or otherwise) and the like
                                   from time to time (whether in the United
                                   Kingdom or elsewhere) concerning the
                                   protection of human health or the
                                   environment or the conditions of the
                                   work place or the generation,
                                   transportation, storage, treatment or
                                   disposal of any hazardous material,
                                   including, for the avoidance of doubt,
                                   the Contaminated Land Regime under Part
                                   IIA Environmental Protection Act 1990
                                   and guidance pursuant thereto.


"EXISTING GROUP LOAN STOCK"        the Loan Stock in the nominal amount of
                                   (pound)29,600,000 owing from the Company
                                   to Renshaw Scott Limited, constituted by
                                   a loan stock instrument dated 19
                                   November 1997.


"EXPERT"                           means an independent firm of chartered
                                   accountants agreed upon by the Vendors
                                   and the Purchaser or, failing such
                                   agreement within 14 days of request by
                                   any party to this Agreement nominated by
                                   the Institute of Chartered Accountants
                                   in England and Wales.


"FA"                               means Finance Act.


"THE FINAL SALARY SCHEME"          means the Hero Drinks Group Retirement
                                   and Death Benefits Scheme established by
                                   a preliminary trust deed dated 24 March
                                   1972.


"FURTHER CONSIDERATION"            means the further consideration payable
                                   for the Shares as defined in paragraph 1
                                   of Schedule 3.

"GROUP COMPANIES"                  means the Company and the companies,
                                   brief details of which are set out in
                                   Schedule 2 and "Group Company" means any
                                   one of such companies.


"GROUP PERSONAL PENSION PLAN"      means each of the personal pension
                                   policies effected with National
                                   Provident to which the Company
                                   contributes in relation to employees of
                                   the Company collectively known as the
                                   Hero Drinks Group (UK) Limited Group
                                   Personal Pension Plan.


"HAZARDOUS MATERIAL"               means any natural or artificial
                                   substance (whether in solid or liquid
                                   form or in the form of a gas or vapour
                                   and whether alone or in combination with
                                   any other substance) capable of causing
                                   harm to man or any other living organism
                                   supported by the environment, or
                                   damaging the environment or public
                                   health or welfare including but not
                                   limited to any controlled, special,
                                   hazardous, toxic or dangerous waste.


"HERO"                             means Hero brief details of which are
                                   set out in Schedule 1.

"HOLDING COMPANY"                  means a holding company as defined in
                                   Section 736 CA 1985 (as supplemented by
                                   Section 736A CA 1985).


"ICTA"                             means the Income and Corporation Taxes
                                   Act 1988.


"INITIAL CONSIDERATION"            means the initial consideration amount
                                   to be paid to the Vendors or into the
                                   Retention Account on Completion by or on
                                   behalf of the Purchaser in respect of
                                   the purchase of the Shares (being a
                                   payment on account of the Consideration
                                   in the sum of (pound)17,400,000
                                   (seventeen million, four hundred
                                   thousand pounds)), such payment to be
                                   satisfied in the manner specified in
                                   Clause 4.2.

"3I LOAN"                          means loans totalling in aggregate
                                   (pound)1,494,000 formerly owed to 3i plc
                                   by the Company which loans have been
                                   repaid by the Company prior to the date
                                   of this Agreement.

"3I PENALTY"                       means the amount of any penalty imposed
                                   on the Company by 3i plc on account of
                                   the early repayment of the 3i loan.

"INTELLECTUAL PROPERTY RIGHTS"     means all patents, trade marks, service
                                   marks, registered designs, utility
                                   models, design rights, copyright
                                   (including copyright in computer
                                   software), semi-conductor topography
                                   rights, inventions, trade secrets and
                                   other confidential information,
                                   know-how, business or trade names and
                                   all other intellectual and industrial
                                   property and rights of a similar or
                                   corresponding nature in any part of the
                                   world, whether registered or not or
                                   capable of registration or not and
                                   including the right to apply for and all
                                   applications for any of the foregoing
                                   rights and the right to sue for past
                                   infringements of any of the foregoing
                                   rights.


"INTELLECTUAL PROPERTY LICENCE"    means the licence to be entered into at
                                   Completion between Hero (1) and the
                                   Purchaser (2) relating to the use of
                                   certain trade marks owned by Hero in the
                                   Agreed Form.


"LAST ACCOUNTS"                    means the audited balance sheet of the
                                   Company as at the Last Accounts Date and
                                   the audited profit and loss account of
                                   the Company made up to the Last Accounts
                                   Date and (in each case) the auditor's
                                   and the directors' reports and notes
                                   thereon.

"LAST ACCOUNTS DATE"               means 31 December 1996.


"MANAGEMENT ACCOUNTS"              means the unaudited balance sheet and
                                   profit and loss account of the Company
                                   for the 10 month period ended 31 October
                                   1997.


"NET ASSET THRESHOLD"              means the sum of (pound)37,896,000
                                   (thirty seven million eight hundred and
                                   ninety six thousand pounds) less the
                                   amount of the 3i Penalty.

"NEW COTT"                         the combined group of companies
                                   comprising (i) the Purchaser (ii)
                                   Crystal Drinks and (iii) the Group
                                   Companies together representing all the
                                   trading activities of the Purchaser's
                                   Group in the United Kingdom following
                                   Completion.

"PENSION SCHEMES"                  means the Final Salary Scheme and the
                                   Group Personal Pension Plan.


"PHI SCHEME"                       means the permanent health insurance
                                   scheme insured with Sun Life of Canada
                                   under policy number 74297-GPH.


"PLANNING ACTS"                    means the Town and Country Planning Act
                                   1990, the Planning (Listed Buildings and
                                   Conservation Areas) Act 1990, the
                                   Planning (Consequential Provisions) Act
                                   1990, the Planning (Hazardous
                                   Substances) Act 1990 and the Planning
                                   (Compensation) Act 1991, and any other
                                   statute or subordinate legislation
                                   relating to town and country planning.

"PRE-COMPLETION DIVIDEND"          means the dividend of (pound)4,800,000
                                   (four million eight hundred thousand
                                   pounds) paid by the Company prior to the
                                   date of this Agreement.


"PROPERTIES"                       means the Properties of the Group
                                   Companies briefly described in Part 1 of
                                   Schedule 6 (and for the purpose of the
                                   Warranties relating to environmental
                                   matters includes all plant, equipment,
                                   machinery, storage vessels, pipes,
                                   cables and associated apparatus present
                                   at, upon, in or underneath the
                                   Properties).


"PURCHASER'S ACCOUNTANTS"          means Coopers & Lybrand of 1 Embankment
                                   Place, London, WC2N 6NN.

"PURCHASER'S GROUP"                means the Purchaser, its holding
                                   companies and the subsidiaries and the
                                   subsidiary undertakings from time to
                                   time of such holding companies, all of
                                   them, and each of them as the context
                                   admits.


"PURCHASER'S SOLICITORS"           means Hammond Suddards, of 2 Park Lane,
                                   Leeds, West Yorkshire, LS3 1ES.

"REGISTERED COMPANY
INTELLECTUAL PROPERTY
RIGHTS"                            means those registered Intellectual
                                   Property Rights and applications for
                                   registered Intellectual Property Rights
                                   listed in Schedule 10.


"REORGANISATION"                   means the reorganisation of New Cott
                                   involving (a) the transfer of the export
                                   business of the Purchaser to Cott Europe
                                   Trading Limited (b) the transfer of the
                                   business, assets and liabilities of the
                                   Company to the Purchaser (c) the grant
                                   of a long lease of the fixed assets of
                                   Crystal Drinks to the Purchaser
                                   comprising its premises, plant and
                                   machinery and industrial property
                                   rights, together with an option in
                                   favour of the Purchaser to purchase
                                   certain of such assets, and (d) the
                                   transfer of the stock and work in
                                   progress of Crystal Drinks to the
                                   Purchaser.


"THE RETENTION"                    means the sum of (pound)1,900,000 (one
                                   million nine hundred thousand pounds) to
                                   be retained by the Purchaser out of the
                                   Initial Consideration and to be dealt
                                   with in accordance with Clause 4.4.


"THE RETENTION ACCOUNT"            means an interest bearing account in the
                                   joint names of the Purchaser's
                                   Solicitors and the Vendors' Solicitors
                                   with Lloyds Bank PLC of 6 Park Row,
                                   Leeds, West Yorkshire.


"THE RETENTION DATE"               means the date which is seven (7) days
                                   after the date of agreement or
                                   determination of the Adjusted Net Assets
                                   pursuant to the terms of this Agreement.

"SECURITY INTEREST"                means any mortgage, charge, assignment
                                   or assignation by way of security,
                                   guarantee, indemnity, debenture,
                                   hypothecation, pledge, declaration of
                                   trust, lien, right of set off or
                                   combination of accounts, or other
                                   interest in the nature of security
                                   whatsoever, howsoever created or
                                   arising.


"SPECIFIC DISCLOSED DOCUMENTS"     means the Disclosed Documents which are
                                   referred to in the text of the
                                   Disclosure Letter other than solely by
                                   operation of paragraphs 3.2, 3.3 or 3.5
                                   of the Disclosure Letter.

"THE SHARES"                       means the "A" Shares, the "B" Shares and
                                   the "C" Shares to be sold by the Vendors
                                   in the numbers set out opposite their
                                   respective names in column 2 of Schedule
                                   1.

"SUBSIDIARY"                       means a subsidiary as defined in Section
                                   736 CA 1985 (as supplemented by Section
                                   736A CA 1985).

"TARGET EARNINGS"                  has the meaning provided in paragraph 4
                                   of Schedule 3.

"TAXATION"                         has the meaning provided the Tax Deed
                                   and "Tax" shall be construed
                                   accordingly.

"TAXATION AUTHORITY"               has the meaning provided in the Tax
                                   Deed.

"TAX DEED"                         means the Deed in the form set out in
                                   Schedule 5.

"TAXATION STATUTES"                includes statutes (and all regulations
                                   and arrangements whatsoever made
                                   thereunder) whether of the United
                                   Kingdom or elsewhere, enacted before the
                                   date of this Agreement, providing for or
                                   imposing any Taxation.


"TAXATION WARRANTIES"              means the Warranties contained in
                                   paragraph 3 of Schedule 4.

"TCGA"                             means the Taxation of Chargeable Gains
                                   Act 1992.


"THE VENDORS' ACCOUNTANTS"         means Coopers & Lybrand of Cumberland
                                   House, 35 Park Row, Nottingham, NG1 6FY.


"VENDORS' GROUP"                   means the Vendors, any holding company
                                   of either of the Vendors and the
                                   subsidiaries and subsidiary undertakings
                                   (from time to time of such holding
                                   companies, all of them and each of them
                                   as the context admits), other than the
                                   Group Companies.


"THE VENDORS' SOLICITORS"          means Ashurst Morris Crisp of Broadwalk
                                   House, 5 Solicitors Appold Street,
                                   London, EC2A 2HA.


"THE WARRANTIES"                   means the warranties set out in Schedule
                                   4.

2.2.1    that each of the Vendors has the right to sell and transfer
         those Shares set out opposite its name in column 2 of Schedule
         1 in accordance with the terms of this Agreement;

2.2.2    that the Shares are sold free from any liens, charges and
         encumbrances (whether monetary or not and including any lien
         which the Vendors might otherwise have, whenever arising, for
         unpaid amounts of Consideration payable under this

4.2.1    as to the sum of (pound)17,400,000 (seventeen million, four
         hundred thousand pounds), less the amount of the Retention, by
         payment in cash by the Purchaser at Completion; and

4.2.2    as to the amount of the Retention, by payment in cash by the
         Purchaser at Completion into the Retention Account.

4.4      The provisions of this Clause 4.4 shall apply to the Retention:

         4.4.1    Subject to the provisions of Clause 4.4.2, in the event that
                  on the Retention Date the Adjusted Net Assets of the Group
                  Companies as agreed or determined pursuant to Clause 5 of this
                  Agreement shall be:

                  (a)      equal to or greater than the Net Asset Threshold,
                           there shall be paid on the Retention Date to the
                           Vendors' Solicitors the Retention;

                  (b)      less than the Net Asset Threshold, but the shortfall
                           is less than the Retention, the Purchaser shall be
                           entitled to be paid for its own use and benefit from
                           the Retention an amount equivalent to any such
                           shortfall below the Net Asset Threshold, and there
                           shall be paid on the Retention Date to the Vendors'
                           Solicitors any balance of the Retention; and

         (c)      less than the Net Asset Threshold, but the shortfall
                  is more than the amount of the Retention, the
                  Purchaser shall be entitled to be paid for its own
                  use the entire amount of the Retention in part
                  satisfaction of the obligations of the Vendors under
                  Clause 6.2, but without prejudice to the obligations
                  of the Vendors to indemnify the Purchaser for any
                  further shortfall in the amount of the Net Asset
                  Threshold pursuant to Clause 6.2.

4.4.2    All payments of capital to be made pursuant to Clause 4.4.1
         shall be made on the basis that a pro rata portion of all
         interest earned on such amount in the Retention Account shall
         also be made to the relevant payee. The Vendors and the
         Purchaser shall instruct the Vendors' Solicitors and the
         Purchaser's Solicitors to sign any withdrawal form or other
         document to give effect to the terms of this Clause 4.4

5.2      The Completion Balance Sheet shall be prepared:

         5.2.1    on the basis of the historical cost convention as modified by
                  the revaluation of certain fixed assets;

         5.2.2    using the specific accounting policies specified in Schedule
                  10 and (subject to the provisions of Schedule 10) generally
                  accepted United Kingdom accounting principles (including all
                  relevant Statements of Standard Accounting Practice issued by
                  the Accounting Standards Committee, Financial Reporting
                  Standards issued by the Accounting Standards Board, and any
                  applicable pronouncements of the Urgent Issues Task Force of
                  the Accounting Standard Board); and

         5.2.3    subject to the preceding provisions of this Clause 5.2, in a
                  manner consistent with the procedures and policies, bases and
                  methods of valuation adopted in the preparation of the Last
                  Accounts.

7.2      At Completion the Vendors shall deliver to the Purchaser's Solicitors:

         7.2.1    duly completed and executed transfers of the Shares in favour
                  of the Purchaser or as it directs together with a power of
                  attorney from each Vendor in the agreed form enabling the
                  Purchaser to vote the Shares pending its registration as
                  shareholder;

         7.2.2    the certificates for the Shares;

         7.2.3    duly completed and signed transfers in favour of the Purchaser
                  (or as it may direct) of all shares of the Group Companies
                  (other than the Company) not registered in the name of the
                  Company and/or any other Group Company together with the
                  relative share certificates;

7.2.4    the Tax Deed duly executed by the Vendors;

7.2.5    the resignations of each of the directors and the secretary of
         each Group Company from their respective offices in each Group
         Company, with a written acknowledgement under seal expressed
         to be subject to English Law from each of them in such form as
         the Purchaser requires that he has no claim against any Group
         Company on any grounds whatsoever in respect of their
         positions as directors and secretary;

7.2.6    a letter in the Agreed Form from the existing auditors of the
         Company confirming that had they resigned at Completion they
         would have had no outstanding claims of any kind against the
         Company and confirming that had they so resigned there would
         have been no circumstances connected with their ceasing to
         hold office which they consider should be brought to the
         attention of the members or creditors of the Company;

7.2.7    evidence satisfactory to the Purchaser that all charges,
         debentures and other Security Interests and all guarantees
         affecting each Group Company (including without limitation
         Security Interests in favour of 3i plc) have been discharged
         in full; and

7.2.8    a letter of release in Agreed Form duly executed by Hero and
         Renshaw Scott Limited for itself and as duly authorised agent
         for each of its Associates confirming that with effect from
         Completion no sums are owed by any Group Company to Hero or
         any of its Associates on any account whatsoever except in
         relation to monies owing to the Vendors or any of their
         Associates in relation to inter company trading in the
         ordinary course of business.

7.3.1    the Certificate of Incorporation (and, where relevant, on
         Change of Name) of each Group Company (other than copies of
         the Certificate of Incorporation of the Company in respect of
         which constructive delivery shall be given);

7.3.2    the minute books of each Group Company duly made up to
         Completion;

7.3.3    the register of members and other statutory registers of each
         Group Company duly made up to Completion;

7.3.4    the common seal of the Company and constructive delivery shall
         be given of the common seals of all other Group Companies;

7.3.5    all unissued share certificates of each Group Company;

7.3.6    the title deeds relating to each of the Properties together
         with the statutory declaration in relation to the property at
         Sawley;

7.3.7    constructive delivery of all books, accounts and documents of
         record and all other documents in the possession or control of
         any of the Vendors in connection with each Group Company all
         complete and up to date;

7.3.8    all bank statements of all bank accounts of each Group Company
         as at a date not more than three Business Days prior to
         Completion;

7.3.9    new bank mandates to be given by each Group Company;

7.3.10   constructive delivery of all the current cheque books, paying
         in books and unused cheques of each Group Company; and

7.3.11   a written special resolution of the Company in the Agreed Form
         (i) effecting changes to its memorandum of association so as
         to confer, inter alia, an express power to give financial
         assistance (ii) approving certain transactions for the purpose
         of Chapter VI CA 1985 and (iii) changing the name of the
         Company to exclude reference to the word "Hero".

7.7.1    the transfers referred to in Clauses 7.2.1 and 7.2.3 (as the
         case may be) shall (subject to stamping) be registered;

7.7.2    such persons as the Purchaser may nominate shall be appointed
         as additional directors and as the secretary of each Group
         Company and the resignations referred to in Clause 7.2.5 shall
         be submitted and accepted;

7.7.3    all authorities to the bankers of each Group Company relating
         to bank accounts shall be revoked and new authorities to such
         persons as the Purchaser may nominate shall be given to
         operate the same; and

7.7.4    the registered offices of each Group Company shall be changed
         to such address as the Purchaser shall stipulate.

7.8      Upon completion of the matters specified in Clauses 7.2 to 7.7:

         7.8.1    the Purchaser will by telegraphic transfer (1) pay the sum
                  referred to in Clause 4.5 to Renshaw Scott Limited and (ii)
                  pay the sum referred to in Clause 4.2.1 and the sum of
                  (pound)9013.70 to the Vendors' Solicitors (whose receipt shall
                  be an absolute discharge to the Purchaser); and

         7.8.2    the Purchaser will pay the amount of the Retention by
                  telegraphic transfer into the Retention Account.

8.6      None of the information supplied by or on behalf of any Group Company
         or of its professional advisers prior to the date of this Agreement to
         any of the Vendors or their directors, employees, agents,
         representatives or advisers in connection with the Warranties or the
         contents of the Disclosure Letter, or otherwise in relation to the
         business or affairs of any Group Company, shall be deemed a
         representation, warranty or guarantee of its accuracy by the relevant
         Group Company to the Vendors and shall not constitute a defence to any
         claim by the Purchaser under the Warranties or under the Tax Deed, and
         the Vendors waive any and all claims which they might otherwise have
         against any Group Company and their respective officers employees and
         advisers.

8.7      Notwithstanding any rule of law or equity to the contrary, any release,
         waiver or compromise or any other arrangement of any kind whatsoever to
         which the Purchaser may agree or effect in relation to one of the
         Vendors in connection with this Agreement or the Tax Deed, and in
         particular, but without limitation, in connection with any of the
         Warranties, shall not affect the rights and remedies of the Purchaser
         as regards any other of the Vendors.

8.8      Each of the Vendors undertakes, in relation to any Warranty which
         refers to the knowledge, information, belief or awareness of a Vendor
         or any similar expression, that such Vendor has made, due and careful
         enquiry into the subject matter of that Warranty (including where
         applicable, of David Monk, Robert Winterflood, Robert Lamb, William
         Taylor, John Wood or Paul Pallant but not otherwise of any officers or
         employees of the Company) and each of them acknowledges that the
         knowledge, information, belief or awareness of one of the Vendors shall
         be attributable to the others of them.

8.9      The provisions of Schedule 7 shall have effect to limit the liability
         of the Vendors under the Warranties.

8.10     The Purchaser acknowledges that the Vendors have entered into this
         Agreement in reliance upon the warranties contained in Schedule 12 Part
         1 to the extent that the Further Consideration is in part dependent
         upon the financial performance of New Cott and accordingly, warrants to
         each of the Vendors individually in the terms of Schedule 12 Part 1
         ("the Purchaser's Warranties").

8.11     Each of the Purchaser's Warranties is without prejudice to any of the
         other warranties in such Schedule and the Purchaser's Warranties shall
         not in any respect be extinguished or affected by Completion.

8.12     Subject to the provisions of Schedule 12 Part II, the rights and
         remedies of the Vendors in respect of any breach of the Purchaser's
         Warranties shall not be affected by any failure to exercise or delay in
         exercising any right or remedy.

9.       RESTRICTIONS ON THE VENDORS

"BUSINESS"                 means all and any trades or other commercial
                           activities of the Company which as at the
                           Completion Date the Company shall carry on
                           with a view to profit or which the Company
                           shall as at the Completion Date have
                           determined to carry on with a view to profit
                           in the immediate or foreseeable future;


"CONFIDENTIAL BUSINESS

"CUSTOMER"                 means any person who or which shall at the
                           date of Completion be in negotiation with
                           the Company for the provision of Restricted
                           Services or to whom the Company has provided
                           Restricted Services during the period of two
                           (2) years prior to the date of Completion;

"MATERIAL INTEREST"        means:

                           (i)      the holding of any position as
                                    director, officer, employee,
                                    consultant, partner, principal or
                                    agent;

                           (ii)     the direct or indirect control or
                                    ownership (whether jointly or
                                    alone) of any shares or debentures
                                    or any voting rights attached to
                                    them; or

                           the direct or indirect provision of any
                           financial assistance or support.

"PURCHASER'S GROUP"        means the Purchaser and each of its
                           Subsidiaries;

"RESTRICTED AREA"          means England, Wales, Scotland, Northern
                           Ireland, the Republic of Ireland, the
                           Channel Isles and the Isle of

                           Man;

"RESTRICTED SERVICES"      means the manufacture and/or distribution of
                           carbonated soft drinks; alcoholic soft
                           drinks and bottled or packaged flavoured
                           water; the operation of vending machines and
                           products for injection and blow moulding
                           equipment, and the manufacture and/or sale
                           of plastic moulded parts and containers;

9.2.1    it will not for a period of five (5) years after the date of
         Completion hold any Material Interest in any business (other
         than the Purchaser or the Company or any company which may
         acquire the Purchaser or the Company) which provides
         Restricted Services in competition with the Business in the
         Restricted Area;

9.2.2    it will not for a period of five (5) years after the date of
         Completion hold any Material Interest in any person, firm or
         company carrying on business in the Restricted Area which
         requires or might reasonably be expected by the Company or,
         following the Reorganisation, the Purchaser; to require it to
         disclose or make use of any Confidential Business Information
         in order properly to discharge its duties or to further the
         interest of such person, firm or company;

9.2.3    it will not at any time after the date of Completion disclose
         or permit there to be disclosed (save as authorised by the
         Purchaser or required by law), any Confidential Business
         Information, nor will it at any time after Completion
         otherwise make use of any Confidential Business Information
         for its own benefit, or for the benefit of others, or in any
         way to the detriment of the Company or, following the
         Reorganisation, the Purchaser;

9.2.4    it will not for a period of two (2) years after Completion
         solicit or entice away or seek to entice away any person who
         is, and was immediately prior to the date of Completion,
         employed by the Company in a senior capacity provided that
         this Clause 9.2.4 shall not apply to persons who leave the
         employment of the Company of their own volition, no such
         solicitation or enticement having taken place;

9.2.5    it will not for a period of five (5) years after the date of
         Completion within the Restricted Area and in respect of
         Restricted Services directly or indirectly:

         (a)      solicit the custom of, or orders from; or

         (b)      accept orders from;

         any person who at any time during the two (2) years
         immediately preceding Completion was a client or customer of
         the Company in respect of Restricted Services;

9.2.6    it will not for a period of five (5) years after the date of
         Completion interfere with or seek to interfere with the
         continuance of supplies to the Company (or the terms relating
         to such supplies) from any suppliers who have been supplying
         components, materials or services to the Company at any time
         during the two (2) years immediately preceding Completion; or

9.2.7    if it shall have obtained trade secrets or other confidential
         information belonging to any third party under an agreement
         which contained restrictions on disclosure, it will not at any
         time infringe such restrictions.

9.4.1    use all reasonable endeavours to dispose of that part of the
         Acquired Business which so competes within six months of the
         date of completion of such acquisition to an unconnected third
         party; and

9.4.2    shall in any event complete any such disposal within twelve
         months of the date of such acquisition to an unconnected third
         party.

         required to disclose the Confidential Business Information by any
         applicable law, government order, regulation or court.

9.7      Each Vendor shall procure that all companies and businesses directly or
         indirectly owned or controlled by such Vendor shall be bound by and
         observe the provisions of this Clause as if they were parties
         covenanting with the Purchaser.

9.8      Each Vendor acknowledges that the Purchaser is accepting the benefit of
         the covenants contained in this Clause both on its own behalf and on
         behalf of its Subsidiaries with the intention that the Purchaser may
         claim against any or all of the Vendors on behalf of any such
         Subsidiary for loss sustained by that Subsidiary as a result of any
         breach of the covenants contained in this Clause.

9.9      Nothing in this Clause 9 shall preclude any Vendor from being the owner
         for investment purposes only of not more than three (3) per cent of the
         equity share capital of any company listed on the Official Lists of the
         London Stock Exchange or the Irish Stock Exchange or the Alternative
         Investment Market of the London Stock Exchange or the Developing
         Companies Market of the Irish Stock Exchange.

9.10     The restrictions contained in this Clause 9 are considered reasonable
         by the Vendors in all respects but if any of those restrictions shall
         be held to be void in the circumstances where it would be valid if some
         part were deleted the parties agree that such restrictions shall apply
         with such deletion as may be necessary to make it valid and effective.

9.11     The provisions of Clauses 9.2.1 to 9.2.7 (inclusive) are separate and
         severable and shall be enforceable accordingly.

9.12     The parties acknowledge that pursuant to the Reorganisation the
         business, assets and liabilities of the Company will be transferred to
         the Purchaser immediately after Completion and the Vendors acknowledge
         that such transfer shall not operate to, nor shall be construed so as
         to prejudice the enforceability of the provisions of this Clause 9.

10.      POST COMPLETION PROVISIONS

         With effect from Completion, and save as otherwise agreed or provided

11.1     For the purposes of this Clause 11, the expression the "RESTRICTED
         PERIOD" shall mean (i) the period commencing on the Completion Date and
         ending on 31 January 2003 or (ii)

         the date upon which the obligations of the Purchaser in relation to
         payment of the Further Consideration are satisfied in full (whichever
         is the earlier).

11.2     The Parent acknowledges the interest of the Vendors in New Cott earning
         the profits which it is fairly able to do, calculated in accordance
         with the terms of Schedule 3 during the Restricted Period; and
         undertakes by exercise of its rights by virtue of its shareholding in,
         and by means of any representation on the board of directors of, the
         Purchaser and any other member of the Purchaser's Group to procure (so
         far as it is properly able to procure) that during the Restricted
         Period:

         11.2.1   each member of New Cott will act in the best interests of
                  their respective shareholders and will take all reasonable and
                  appropriate steps (consistent with the proper and prudent
                  management and operation of the business affairs of each
                  member of New Cott) to maintain and develop their respective
                  businesses and to further the reputation and commercial
                  interests of each member of New Cott;

         11.2.2   None of the members of New Cott shall, during the Restricted
                  Period, enter into any scheme, transaction, agreement or
                  arrangement (i) which has no proper commercial purpose and
                  which might reasonably be regarded as designed to prejudice,
                  manipulate or otherwise adversely affect the Vendors'
                  entitlement to any Further Consideration or (ii) which might
                  reasonably be regarded as (aa) calculated materially to damage
                  the reputation or best commercial interests of New Cott taken
                  as a whole and (bb) likely to adversely affect the payment of
                  the Further Consideration.

         11.2.3   There shall be no disposal by any direct or indirect holding
                  company of the Purchaser of all or a controlling interest in
                  (i) the share capital of any member of New Cott (a "Share
                  Sale") (but excluding for these purposes any disposal of any
                  share capital or any interest in any share capital in the
                  Parent) or (ii) the business or all or substantially all of
                  the assets of any member of New Cott (whether by a single
                  transaction or a series of connected transactions) (an "Asset
                  Sale") unless:

                  (a)      any such disposal is to another member of the
                           Purchaser's Group in which event the Parent shall
                           remain liable for the performance of its obligations
                           under this Clause 11; or

                  (b)      in the case of any proposed disposal to any person,
                           firm or company other than a member of the
                           Purchaser's Group (a "Third Party Disposal") the
                           Parent has satisfied itself (after due and careful
                           enquiry and mindful of the Vendors' interest in the
                           Further Consideration) that the ultimate holding
                           company (if any) of such acquirer, or the acquirer
                           (as the case may be) might reasonably be considered
                           to be capable of meeting the obligations to be
                           assumed by it pursuant to Clause 11.2.3(c) or
                           11.2.3(d) (as the case may require):

                  (c)      in the case of a Third Party Disposal, if such
                           disposal is a Share Sale, on completion of such Share
                           Sale the parties hereto and thereto shall enter

                  into a deed of novation pursuant to which (aa) the
                  ultimate holding company of such acquirer or the
                  acquirer, as the case may be, shall covenant to
                  perform the obligations on the part of the Parent
                  contained in Clauses 11.1 to 11.2.4 inclusive,
                  mutatis mutandis, (but not otherwise) and (bb) the
                  Parent shall with effect from the date of such deed
                  of novation be released from any obligation under
                  this Agreement (but not in respect of any antecedent
                  breach which may have arisen prior to the date of
                  such deed of novation); or

         (d)      in the case of a Third Party Disposal, if such
                  disposal is an Asset Sale, upon Completion of such
                  Asset Sale involving the assumption by the acquiring
                  party under the relevant Asset Sale agreement of the
                  obligations of the Purchaser in respect of the
                  Further Consideration, the parties hereto and thereto
                  shall enter into a deed of novation pursuant to which
                  (aa) the ultimate holding company of such acquirer or
                  the acquirer, as the case may be, shall covenant (i)
                  to perform the obligations on the part of the Parent
                  contained in Clauses 11.1 to 11.2.4 inclusive,
                  mutatis mutandis, (but not otherwise) and (ii) to
                  perform all the obligations on the part of the
                  Purchaser in relation to the Further Consideration
                  and in particular the terms of Schedule 3 and (bb)
                  the Parent shall with effect from the date of such
                  deed of novation be released from any obligation
                  under this Agreement (but not in respect of any
                  antecedent breach which may have arisen prior to the
                  date of such deed of novation).

11.2.4   Save where advice is received from a licensed insolvency
         practitioner that the directors of a member of New Cott are
         under a duty to cease trading, no petition for the winding up
         of any member of New Cott shall be presented by any such
         member, nor shall any resolution for the voluntary winding up
         of any member of New Cott be proposed, nor shall any member of
         New Cott request or procure the appointment of any receiver or
         administrative receiver over the whole or any part of the
         assets or undertaking of any member of New Cott Provided that
         no such consent shall be required for any such winding up as
         part of a solvent amalgamation or reconstruction of any member
         of New Cott involving the transfer of all or substantially all
         the assets of New Cott to another member of the Purchaser's
         Group together with the assumption of the obligations of the
         Purchaser in relation to the Further Consideration.

11.2.5   For as long as the relevant member of New Cott remains a
         member of the Purchaser's Group, all transactions between that
         member of New Cott and any other member of the Purchaser's
         Group shall be carried out on an arms length basis and on
         usual commercial terms and in particular (but without
         limitation) no management charge or other similar charge or
         expense shall be charged to that member of New Cott by any
         other member of the Purchaser's Group save for arm's length
         charges representing fair and proper value for goods or
         services actually provided or supplied by a member of the
         Purchaser's Group to the member of New Cott provided that
         nothing in this Clause 11.2.5 shall require any member of New
         Cott to purchase concentrates from BCB Beverages Limited or

                  any other member of the Purchaser's Group on terms which are
                  substantially different from the terms which from time to time
                  exist in relation to such purchase arrangements between
                  members of the Purchaser's Group, the parties hereto
                  acknowledging that concentrate is an unusual product for which
                  market comparisons are difficult to obtain.

11.3     In the event that a member of New Cott shall, in the course of carrying
         on its business, require goods or services of a type or kind which any
         member of the Purchaser's Group is able to supply or provide, then the
         Parent shall at the request of such member of New Cott and for so long
         as the relevant member of New Cott remains a member of the Purchaser's
         Group, use its reasonable endeavours to procure that such goods or
         services are supplied to such member of New Cott on terms and
         conditions which are not materially different from those offered by the
         relevant member of the Purchaser's Group to any of its customers who
         may contract for the same on a comparable basis provided that nothing
         in this Clause 11.3 shall require the Parent to procure that such
         member of New Cott purchases concentrates from BCB Beverages Limited or
         any other member of the Purchaser's Group on terms which are
         substantially different from the terms which exist from time to time in
         relation to such arrangements, the parties hereto acknowledging that
         concentrate is an unusual product for which market comparisons are
         difficult to obtain.

11.4     In the event that any member of New Cott shall, in the course of
         carrying on its business, require goods or services of a type or kind
         which is the same as or similar to goods or services which are at the
         relevant time supplied or provided to any member of the Purchaser's
         Group by any third party (other than a member of the Purchaser's
         Group), then the Parent for so long as the relevant member of New Cott
         remains a member of the Purchaser's Group, shall at the request of such
         member of New Cott use its reasonable endeavours to procure that such
         goods or services are supplied or provided to such member of New Cott
         on terms which are not materially different taken as whole from those
         on which such goods or services are supplied or provided to the
         relevant member of the Purchaser's Group.

11.5     In the event that any member of the Purchaser's Group shall, in the
         course of carrying on its business, require goods or services of a type
         or kind which any member of New Cott is able to supply or provide, then
         the Parent for so long as the relevant member of New Cott remains a
         member of the Purchaser's Group, shall use reasonable endeavours to
         procure that such member shall obtain such goods or services from such
         member of New Cott provided always that such member of New Cott is able
         to supply or provide such goods or services on terms which, taken as a
         whole, are not materially different from those on which such goods or
         services can be obtained by such member from a third party.

11.6     The Purchaser shall use its reasonable endeavours to procure that:

         11.6.1   there is prepared and delivered to each of the Vendors within
                  45 days of the end of each quarter, management accounts for
                  that quarter;

         11.6.2   there is delivered to each of the Vendors within three months
                  after the end of each financial period of New Cott, audited
                  financial statements of New Cott for the financial period then
                  ended;

         11.6.3   the Vendors are given such financial and other information and
                  documentation as they may reasonably and properly request in
                  order to enable the Vendors to monitor the performance of New
                  Cott.

11.7     Save as required by law or by the requirement of any recognised Stock
         Exchange or to the extent that the same comes into the public domain
         (other than through any act or omission of the Vendors or either of
         them) each of the Vendors shall keep confidential all such information
         as is supplied to it pursuant to Clause 11.6 and Schedule 3, shall not
         make use of the same save for the purpose of monitoring the performance
         of New Cott and in relation to the agreement or determination of the
         Further Consideration pursuant to Schedule 3, and shall not disclose
         the same to any other person, firm or company (including any
         professional adviser) except to the extent that such person, firm or
         company requires such information for the purposes set out in this
         Clause 11.7 and in such case only upon terms that such person, firm or
         company is bound by the terms of this Clause 11.7.

11.8     The parties agree that:

         11.8.1   the provisions of this Clause 11 shall not apply to the
                  Reorganisation;

         11.8.2   nothing in this Clause 11 shall prevent the Purchaser from
                  disposing of such of the business, assets and undertaking of
                  the Company as relate to the operation of the Company's
                  business from the premises at Sawley free from any obligation
                  under this Clause 11, but without prejudice to the provisions
                  of paragraph 4(c) of Schedule 3.

11.9     For the avoidance of doubt, nothing in this Agreement shall impose upon
         the Parent or any person to whom any obligations of the Parent are
         novated pursuant to this Clause 11, any obligation to provide any
         financial support (whether by way of guarantee, financial accommodation
         or investment) to any member of New Cott or otherwise.

11.10    Notwithstanding any other provision of this Agreement, the Purchaser
         shall be at liberty at any time during the Restricted Period to
         terminate any obligation in relation to the Further Consideration by
         payment to the Vendors of a sum representing the maximum amount of the
         Further Consideration which may become payable pursuant to Schedule 3
         namely (pound)20,500,000 (twenty million five hundred thousand pounds)
         together with any additional sums due under paragraph 10 of Schedule 3
         (less all payments of Further Consideration made up to the date of such
         payment) appropriately discounted for accelerated receipt and the
         amount of such discount shall be agreed or determined in the
         Appropriate Manner. Any such payment shall be made in full and final
         satisfaction of any obligation of the Purchaser under this Agreement in
         relation to the Further Consideration, and the Purchaser's Warranties
         and the provisions of Clause 11 (other than this Clause 11.10) shall
         cease to have effect.

11.11    Any breach of the terms of Clauses 11.2 to 11.5 of this Clause 11 shall
         be compensated for by means of an appropriate adjustment under
         paragraph 5.2(e) of Schedule 3.

12.      SPECIFIC INDEMNITIES

12.1     The Vendors jointly and severally undertake to indemnify and keep
         indemnified the Purchaser and each Group Company from and against all
         losses, liabilities, reasonable costs, claims and expenses suffered or
         incurred by the Purchaser and/or any Group Company and arising directly
         from any of the matters described in Schedule 8 less any amount
         relating thereto which is provided for in the Completion Balance Sheet
         ("Claims").

12.2     In the event that a Claim is made, the Purchaser shall:

                  (a)      as soon as reasonably possible and in any event
                           within 60 days of facts coming to the knowledge of
                           the Purchaser or the relevant Group Company which
                           might reasonably be regarded as confirming that
                           liability will arise in relation to the relevant
                           Group Company or the Purchaser give written notice
                           thereof to the Vendors together with such details of
                           the subject matter of the Claim as is then in the
                           possession of the Purchaser or the relevant Group
                           Company and shall thereafter as soon as reasonably
                           possible provide to the Vendors such further
                           information relating to the Claim as from time to
                           time comes to its attention;

                  (b)      not make any admission of liability to, or agreement
                           or compromise with a person or persons in relation to
                           such Claim without the prior written consent of the
                           Vendors such consent not to be unreasonably withheld
                           or delayed; and

                  (c)      if the Vendors shall indemnify and secure the
                           Purchaser's Group to its reasonable satisfaction
                           against all Claims, take such action as the Vendors
                           may reasonably request to avoid, dispute, defend,
                           appeal, compromise or settle such Claims.

12.3     For the avoidance of doubt:

         12.3.1   save as provided in Clause 12.3.2 below, none of the
                  provisions of this Agreement which limit the liability of the
                  Vendors (other than paragraph 2.6 of Schedule 7) shall operate
                  to limit the liability of the Vendors under the terms of
                  Clause 12.1;

         12.3.2   any failure by the Purchaser to comply with the provisions of
                  Clause 12.2 shall only release the Vendors from any
                  obligations under Clause 12.1 if and to the extent that such
                  failure has given rise to a liability to make a payment or has
                  increased the amount of any payment under Clause 12.1 which,
                  but for such failure, would otherwise have been avoided or
                  mitigated; and

         12.3.3   nothing in this Clause 12 shall oblige the Purchaser or the
                  Company to provide to the Vendors any paper, letter, record
                  note or document which is subject to legal privilege;

12.4     Any sum due to be paid under Clause 12 shall be paid within 7 (seven)
         days of settlement of a claim or its final determination by a court of
         competent jurisdiction and failing payment within such period the sum
         outstanding shall bear interest at the rate which represents 4 (four)
         per cent above the Base Rate of Lloyds Bank plc from the date of such
         settlement or final determination.

13.      GENERAL

13.1     Subject to Clause 13.2, this Agreement shall be binding upon and enure
         for the benefit of the successors in title of the parties but shall not
         be assignable by any party or its successors without the written
         consent of the other save that the Purchaser may without such consent
         assign all or any part of the benefit of this Agreement and of the Tax
         Deed to any other member of the Purchaser's Group provided that in the
         event that any such assignee ceases to be a member of the Purchaser's
         Group the Purchaser shall procure that any benefits so assigned shall
         be re-assigned back to the Purchaser forthwith.

13.2     Notwithstanding any other provisions in this Agreement or any of the
         other agreements entered into by the Vendors and the Purchaser under or
         in connection with this Agreement (all together the "Acquisition
         Agreements") the Purchaser:

                  (a)      may grant security over or assign by way of security
                           all or any of its rights under any of the Acquisition
                           Agreements (the "Rights") for the purposes of or in
                           connection with the financing (whether in whole or in
                           part) by the Purchaser of:

                           (i)      the acquisition contemplated by this
                                    Agreement; or

                           (ii)     any of its, or its Subsidiaries' working
                                    capital or other requirements; and

                  (b)      its liquidator or administrator, or any receiver or
                           other person or entity appointed to enforce of such
                           security may enter into any other assignments or
                           transfers of any of the Rights.

13.3     The Vendors shall execute and perform all such further acts, deeds or
         assurances as may be required for effectively vesting the Shares in the
         Purchaser. Each of the Vendors shall following Completion provide such
         information as to each Group Company, its business and its affairs as
         the Purchaser shall reasonably and by prior notice specify save that
         nothing in this Clause shall operate to enable the Purchaser to obtain
         access to any documents or information to which the Purchaser or the
         relevant Group Company would not otherwise be entitled to at law that
         would prejudice the defence by the Vendors of any

         claims made by the Purchaser under the Warranties, the Tax Deed or the
         indemnities set out in Clause 12.

13.4     Any sums due to the Vendors pursuant to this Agreement may be paid to
         the Vendors' Solicitors, by way of transfer into the client account of
         the Vendors' Solicitors, whose receipt shall constitute a full
         discharge of the Purchaser's obligations to make such payment and the
         Purchaser shall not be concerned with the application of any such
         amount between the Vendors.

13.5     The provisions of this Agreement insofar as the same shall not have
         been performed at Completion shall remain in full force and effect
         notwithstanding Completion.

13.6     No delay or omission by the Purchaser in exercising any right, power or
         remedy shall operate as a waiver thereof, and any single or partial
         exercise thereof shall not preclude any other or further exercise
         thereof or the exercise of any right, power or other remedy. The rights
         and remedies of the Purchaser hereunder are cumulative and not
         exclusive of any right or remedy provided by law.

13.7     No party shall disclose the making of this Agreement nor its terms nor
         any other agreement referred to in this Agreement (except those matters
         set out in the press release in the Agreed Form) and each of the
         Vendors and the Purchaser shall procure that no member of the Vendor's
         Group or the Purchaser's Group respectively shall make any such
         disclosure without the prior consent of the other party unless
         disclosure is:

                  (a)      to any Taxation Authority;

                  (b)      to its professional advisors, financiers or bankers;

                  (c)      to any director, officer or other employee of any
                           member of the Vendor's Group or the Purchaser's Group
                           to the extent that it is necessary to make such
                           disclosure for the proper performance of their
                           duties;

                  (d)      required by law or by the rules of the Toronto Stock
                           Exchange, the Montreal Exchange, NASDAQ, the Basle
                           Stock Exchange, the Zurich Stock Exchange, the
                           Securities Commission of Canada or any other
                           regulatory body;

                  Provided that this Clause 13.7 does not apply to
                  announcements, communications or circulars made or sent by the
                  Purchaser or by any Group Company after Completion to
                  customers, clients or suppliers of any Group Company to the
                  extent that it informs them of the Purchaser's acquisition of
                  the Group Companies or to any announcements containing only
                  information which has become generally available.

13.8     No provision of this Agreement or of any agreement or arrangement of
         which this Agreement forms part, by virtue of which this Agreement or
         the agreement or arrangement of which it forms part is subject to
         registration under the Restrictive Trade Practices Act 1976 shall take
         effect until the day after the day on which particulars of this

         Agreement, or the agreement or arrangement of which it forms part, (as
         the case may be) have been furnished to the Director General of Fair
         Trading pursuant to Section 24 of the said Act.

13.9     All expenses incurred by or on behalf of the parties, including all
         fees of agents, representatives, solicitors, accountants and actuaries
         employed by any of them in connection with the negotiation, preparation
         or execution of this Agreement shall be borne solely by the party who
         incurred the liability and there shall be no liability in respect of
         them upon any Group Company.

14.      RIGHTS OF SET-OFF

14.1     In the event that prior to the expiry of (i) the sixth anniversary of
         Completion in the case of the Tax Deed or the Tax Warranties or (ii)
         the second anniversary of Completion in the case of the Warranties
         (other than the Tax Warranties) ("the Set-Off Expiry Date") the
         Purchaser shall have given notice to the Vendors of a Claim or Claims
         under the Warranties, and/or the Tax Deed then the following provisions
         shall at the sole option of the Purchaser apply:

                  (a)      to the extent that any such Claim or Claims shall
                           have been settled (in accordance with Clause 14.2)
                           but shall not have been paid by or on behalf of the
                           Vendors prior to the Set-Off Expiry Date, the
                           Purchaser shall be entitled (but not obliged) to
                           treat its obligations hereunder to satisfy the
                           Further Consideration (if and to the extent not then
                           already satisfied) as being reduced pro tanto by the
                           amount to the extent settled of such Claim or Claims;

                  (b)      to the extent that any such Claim or Claims shall not
                           have been settled then on receipt by the Purchaser
                           prior to the Set-Off Expiry Date of an opinion of a
                           Queen's Counsel (instructed in accordance with Clause
                           14.4) to the effect that, on the balance of
                           probabilities, the Purchaser will recover in respect
                           of such Claim or Claims, and that the amount of any
                           such Claim or Claims is a reasonable estimate of the
                           amount which will be payable by the Vendors, the
                           Purchaser shall be entitled to set-off the amount
                           claimed by the Purchaser thereto against the Further
                           Consideration, provided that such amount is placed on
                           deposit in the joint names of the Purchaser and the
                           Vendors on the date on which, but for the exercise of
                           such right of set off, such amount would otherwise
                           have fallen due for payment to the Vendors, pending
                           settlement of the Claim. Following settlement of the
                           Claim if the amount upon deposit exceeds the amount
                           of the settlement, the excess together with the
                           interest accrued in the joint deposit account which
                           relates to such excess in respect of the period from
                           the Set-off Expiry Date down to the date of payment,
                           shall be released from the joint deposit account and
                           paid to the Vendors within seven days of such
                           settlement and the balance of any such interest shall
                           be released to the Purchaser.

14.2     A Claim shall be regarded as settled for the purposes of Clause 14.1 if
         either:

                  (a)      the Vendors and the Purchaser (or their respective
                           solicitors) shall so agree in writing; or

                  (b)      a Court has awarded judgment in respect of the Claim
                           and no right of appeal lies in respect of such
                           judgment or the parties are debarred whether by
                           passage of time or otherwise from exercising any such
                           right of appeal.

14.3     For the avoidance of doubt nothing contained in Clause 14.2 shall
         prejudice the right of the Purchaser to make any Claim against the
         Vendors under the Warranties or the Tax Deed, nor shall any amount
         placed on deposit in accordance with Clause 14.1(b) be taken as
         limiting the amount of any lawful claim under the Warranties or the Tax
         Deed.

14.4     The selection of the Queen's Counsel for the purposes of Clause 14.1(b)
         shall be made by the Purchaser after agreement with the Vendors and
         failing agreement within fourteen days of notification by the Purchaser
         of its selection on the application of either the Purchaser or the
         Vendors by the Chairman of the Bar Council. The Queen's Counsel shall
         be instructed by the Purchaser's Solicitors. The Purchaser shall supply
         to the Vendors a copy of such instructions to Counsel and the Vendor
         shall have the right to make written representations to Counsel.

14.5     If the opinion of the Queen's Counsel is required by the Purchaser and
         such Queen's Counsel decides that on the balance of probabilities the
         Purchaser will recover in respect of the Claim or Claims, the costs of
         such Queen's Counsel shall be borne equally by the Purchaser and the
         Vendors. If the Queen's Counsel decides that on the balance of
         probabilities the Purchaser will not so recover, the costs of such
         Queen's Counsel shall be borne by the Purchaser.

14.6     The Purchaser shall in addition be entitled to set off against the
         Further Consideration the amount of any sum agreed or determined to be
         payable pursuant to (i) Clause 6.2 of this Agreement or (ii) Clause 12
         of this Agreement to the extent that any such sum still remains unpaid.

14.7     Other than as provided in Clauses 14.1 to 14.6 inclusive, all amounts
         paid by the Purchaser to the Vendors under this Agreement shall be paid
         by the Purchaser on the due date without regard to any right of set-off
         to which it would, but for this Clause 14, be entitled and except as
         set out in this Clause 14, the Purchaser hereby irrevocably waives any
         such right of set-off. For the avoidance of doubt nothing in this
         Clause 14 shall be taken to prohibit the Purchaser from exercising any
         right of counterclaim.

15.      PENSION ARRANGEMENTS

         Upon transfer of the employment of the employees of the Company to the

17.1     Any notice to be given hereunder shall be in writing and delivered by
         hand or by first class recorded delivery post or by facsimile letter
         addressed and sent to the party to be served (in the case of the
         Vendors) at the address given herein and (in the case of the Purchaser)
         at its registered office for the time being. Any notice to be given to
         the Parent shall be addressed to the Corporate Secretary.

17.2     Notice delivered by hand shall be deemed to have been served at the
         time of actual delivery.

17.3     Notice sent by post shall be deemed to have been served at the expiry
         of 5 Business Days after posting.

17.4     Notices sent by facsimile shall be deemed to have been served on
         production of a transmission report from the machine which sent the
         facsimile indicating that the facsimile was sent in its entirety to the
         facsimile number of the recipient. Provided that in the event that such
         facsimile is received after 4pm (local time) on any Business Day it
         shall be deemed served on the Business Day following such date of
         transmission.

18.      PROPER LAW

18.1     This Agreement shall be governed by, and construed in accordance with,
         English Law.

18.2     All of the parties irrevocably agree for the benefit of the other
         parties that the Courts of England are to have jurisdiction to hear and
         determine any suit, action or proceeding arising out of or in
         connection with this Agreement and, for that purpose, irrevocably
         submit to the jurisdiction of such Courts.

18.3     All of the parties irrevocably waive any objection which they may at
         any time have to the nomination of the Courts of England as the forum
         to hear and determine any suit, action

         or proceedings arising out of or in connection with this Agreement and
         agrees that they shall not claim that any such Court is an inconvenient
         or inappropriate forum.

18.4     Each Vendor hereby irrevocably authorises and appoints the Vendors'
         Solicitors at their London office (or such other firm of solicitors at
         an office in England as it may by written notice to the Purchaser
         select) to accept service of all legal process arising out of or in
         connection with this Agreement and service on such person shall be
         deemed to be service on the relevant Vendor.

19.      ENTIRE AGREEMENT

19.1     The parties acknowledge and agree:

                  (a)      this Agreement together with any other documents
                           referred to in this Agreement (together the
                           "Transaction Documents") constitute the entire and
                           only agreement between the parties relating to the
                           subject matter of the Transaction Documents;

                  (b)      none of the parties have been induced to enter into
                           any Transaction Document in reliance upon, nor have
                           they been given, any warranty, representation,
                           statement, assurance, covenant, agreement,
                           undertaking, indemnity or commitment of any nature
                           whatsoever other than as are expressly set out in the
                           Transaction Documents and, to the extent that any
                           such party has been so induced such party
                           unconditionally and irrevocably waives any claims,
                           rights or remedies which any of them might otherwise
                           have had in relation thereto;

                  (c)      no party has any right to rescind or terminate any
                           Transaction Documents either for breach of contract
                           or for negligent or innocent misrepresentation or
                           otherwise;

                  (d)      (same as expressly provided herein) the rights and
                           remedies of each party shall be restricted to a claim
                           for damages or equitable remedies (other than
                           rescission).

         PROVIDED THAT the provisions of this Clause 19 shall not exclude any
         liability which any of the parties would otherwise have to any other
         party or any right which any of them may have to rescind this Agreement
         in respect of any statements made fraudulently by any of them prior to
         the execution of this Agreement or any rights which any of them may
         have in respect of fraudulent concealment or deliberate non disclosure.

19.2     This Agreement may be varied only by a document signed by each of the
         parties and expressly referring to this Agreement.

SIGNED by David Monk                        )          /s/  David Monk
AS ATTORNEY                                 )
AND ON BEHALF OF HERO                       )
in the presence of: )
Robert Ogilvy Watson
Solicitor                                              /s/  Robert Ogilvy Watson
5 Appard Street
London    EC2A 2HA


SIGNED by David Monk                        )          /s/  David Monk
AS ATTORNEY                                 )
AND ON BEHALF OF                            )
RENSHAW SCOTT                               )
LIMITED in the presence of:                 )
Robert Ogilvy Watson                        )
Solicitor                                   )          /s/  Robert Ogilvy Watson
5 Appard Street
London    EC2A 2HA

SIGNED by Brian Mackie for                  )          /s/  Brian Mackie
and on behalf of COTT UK                    )
LIMITED in presence of:                     )
Ian Greenfield
2 Park Lane                                            /s/  Ian Greenfield
Leeds, LS3 1ES


SIGNED by Simon Lester for                  )          /s/  Simon Lester
and on behalf of COTT UK                    )
LIMITED in presence of:                     )
Ian Greenfield
2 Park Lane                                            /s/  Ian Greenfield
Leeds, LS3 1ES

If to Wal-Mart, at:                       If to Cott, at:
-------------------                       ---------------


Wal-Mart Stores, Inc.                     Cott Beverages USA, Inc.
702 SW 8th Street                         1011 NW J Street, Suite D
Bentonville, Arkansas 72716-0139          Bentonville, Arkansas 72712



Attention: VP, Private Brands (Food)      Attention: VP/GM, Wal-Mart Team



                                          With a copy to:
                                          Cott - Legal Department
                                          800 - 207 Queen's Quay West
                                          Toronto, Ontario, Canada M5J 1A7

BY:  /s/ Frank E. Weise III
   -----------------------------
NAME:    Frank E. Weise, III
TITLE:   Chief Executive Officer
Authorized Signing Officer

BY: /s/ Robert A. Anderson          Date: 12/22/98
   -----------------------                --------
NAME: ROBERT A. ANDERSON
TITLE:VP Private Brands
Authorized Signing Officer

Carbonated Soft Drinks                   New Age Beverages
----------------------                   -----------------

Cola *                                   Black Cherry *
Diet Cola *                              White Grape *
CF Diet Cola *                           Kiwi Strawberry *
Dr Thunder *                             Peach *
Diet Dr Thunder *                        Raspberry *
Twist Up *                               Strawberry *
Diet Twist Up *                          Tropical *
Root Beer *                              Cranberry *
Mountain Lightning *                     Key Lime *
Grape *                                  Strawberry Banana *
Raspberry *                              Mango Peach *
Grapefruit *                             Blackberry Apple *
Orange *

By: /s/ John C. Carson
   -------------------------------------
    John C. Carson, President

BY: /s/ Fraser Latta
   -----------------------------
    Fraser Latta
    Vice Chairman & COO

BY: /s/ Ed Szczepanowski
   -----------------------------
    Ed Szczepanowski
    Vice President

                                       Per:     /s/ Fraser D. Latta

                                       I have authority to bind the Corporation

SIGNED, SEALED & DELIVERED  )
  in the presence of        )
                            )
Paul K. Henderson           )
                            )          /s/ Frank E. Weise
                                       FRANK E. WEISE III

/s/ Frank E. Weise, III


Printed or Typed Name

/s/ Frank E. Weise, III

Frank E. Weise, III
President and Chief Executive Officer

/s/   David Bluestein
------------------------            ----------------------
David Bluestein                     Date

                                Per: /s/ Fraser Latta
                                     ----------------
ACCEPTED AND AGREED TO THIS
27 day of October, 1997.


/s/ Mark Benadiba
---------------------------
Mark Benadiba

Per: /s/ Colin J. Adair
    ---------------------------------
Colin J. Adair
Chairman of the Human Resources,
Compensation and Corporate Governance
Committee

/s/ Mark Benadiba

Mark Benadiba
COO, North America

By: /s/ Fraser Latta
    Fraser Latta
    Vice Chairman

Per: /s/ Frank E. Weise, III
    -------------------------------
       Frank E. Weise, III
       President and CEO

/s/ Mark Benadiba
----------------------
Mark Benadiba

Per: /s/ Colin Walker
    ----------------------

ACCEPTED AND AGREED TO THIS 29TH DAY OF JUNE, 1999.


/s/  Mark Benadiba
-------------------------
Mark Benadiba

TO:                PAUL RICHARDSON

CC:

FROM:              COLIN D. WALKER

DATE:              AUGUST 23, 1999

SUBJECT:           EMPLOYMENT AGREEMENT

--------------------------------------------------------------------------------

Position:          Executive Vice President, Cott Corporate

                   Reporting to CEO Cott Corporate

Assignment:        Global Purchasing - Global Best Practices. COO. Asia & Israel
                   - Advisory Board UK - Innovation Initiatives - Wal*Mart
                   International - Project Assignment by CEO

Location:          Corporate Office (Toronto) / or Tampa US office. At Paul
                   Richardson's discretion and expense he may relocate to Tampa.

Term:              Year to Year

Compensation:      Shall not be less than that in effect on November 1, 1998.

Termination:       6 months of notice may be given at any time by either party.

Termination
Payment:           Within 30 days of notice being delivered by either party. The
                   aggregate of two times Paul Richardson's annual salary and
                   bonus paid or payable plus the cash value of all benefits and
                   perquisites and the average of any other remuneration during
                   the two years prior to the termination notice.

                   NB: For calendar 1998 the 11 month fiscal year shall be
                   grossed up to 12 months. Payment shall be made subject to
                   Paul Richardson signing the attached release and returning
                   all Cott owned property to Cott.

Stock Options:     Upon termination notice being delivered by either
                   party, all stock options granted to Paul Richardson shall
                   fully vest and shall be exercisable for a period of 12
                   months.

Future Option
Grants:            Eligibility, terms and quantity of options granted will be on
                   the same basis as the other members of the executive council.

Bonus:             Will be expressed as a percentage of salary and will be
                   determined on the same basis as that applicable to the other
                   members of the corporate executive group (other than the
                   CEO).

Any Other
Benefits:          On the same basis as other members of the corporate executive
                   group.

Death:             In the event of Paul Richardson's death, the termination
                   payment will be treated as per Plan C.S.O. and shall be
                   provided to his estate.

Outstanding Loan:  All mortgages and encumbrances placed on Paul
                   Richardson's property to secure the loan of Canadian $220,000
                   will be removed and replaced by 19,500 Cott shares, which
                   shall become the sole security and recourse for the loan.
                   Cott Corporation will hold the share certificates.

Confidentiality
Agreement:         Cott acknowledges that Paul Richardson has signed a
                   confidentiality agreement.

Legal Counsel
Fees:              If the corporation shall fail to comply with its obligation
                   in the agreement or call into question the legal validity of
                   this agreement, all reasonable legal counsel fees incurred by
                   Paul Richardson in the course of seeking to enforce this
                   agreement shall be on the account of and payable by Cott
                   Corporation, except to the extent that a court shall
                   determine that Paul Richardson's action in seeking to enforce
                   this agreement was frivolous.


                   /s/ Paul Richardson                 /s/  Colin D. Walker
                   --------------------------          -------------------------
                   Paul Richardson                     Colin D. Walker
                   Executive Vice President            Senior Vice President
                                                       Human Resources

/s/  Frank E. Weise, III

Frank E. Weise, III
President and Chief Executive Officer

/s/  Ray Silcock
---------------------------             ----------------------------
Silcock                                 Date

PER:  /S/ MARK HALPERIN
    ---------------------------------------------
      TITLE SVP, GENERAL COUNSEL & SECY

PER:  /S/ COLIN WALKER
    ---------------------------------------------
      TITLE  SENIOR VICE PRESIDENT

PER:  /S/ RAYMOND P. SILCOCK
    ---------------------------------------------
      TITLE  DIRECTOR

                                                       JANUARY 1,     January 2,      January 31,
(in millions of U.S. dollars,                             2000           1999             1998
except per share amounts)                              (52 WEEKS)     (48 weeks)       (53 weeks)
-------------------------                              ----------     ----------       ----------
Sales                                                  $    990.8     $    958.5      $   1,047.8
Gross margin                                                 14.5%          10.4%            13.9%
Operating income*                                            45.0            8.2             49.0
Net income (loss)                                            18.5         (109.5)            (4.7)
Operating cash flow, after capital expenditures              38.4          (46.4)           (27.8)
Working capital                                              62.7           77.2            171.3
Long-term debt                                              323.6          377.7            407.8
Per common share:
  Net income (loss) - basic                            $     0.31     $    (1.74)     $     (0.07)
  Net income (loss) - diluted                          $     0.28     $    (1.74)     $     (0.07)
                                                       ==========     ==========      ===========

'97             [ART WORK]             1,047.8
'98             [ART WORK]               958.5
'99             [ART WORK]               990.8

'97             [ART WORK]                87.8
'98             [ART WORK]                51.3
'99             [ART WORK]                82.5

'97             [ART WORK]               (0.43)
'98             [ART WORK]               (0.74)
'99             [ART WORK]                0.64

'97             [ART WORK]               555.5
'98             [ART WORK]               543.5
'99             [ART WORK]               578.2

Left to right  NEIL A. THOMPSON, MD, U.K.,
               RAYMOND P. SILCOCK, CFO,
               FRANK E. WEISE, CEO,
               MARK BENADIBA, PRESIDENT, CANADA,
               DAVID G. BLUESTEIN, PRESIDENT, U.S.


QUESTION       A LOT OF ATTENTION IS BEING PAID TO THE SUBJECT OF "INNOVATION."
               PLEASE DESCRIBE HOW INNOVATION IS BEING IMPLEMENTED COMPANY-WIDE.


ANSWER         FRANK E. WEISE Innovation is a key part of Cott's heritage and is
               one of our most important strategic thrusts. We strayed away from
               innovation with carbonated soft drinks over the past several
               years as the Company pursued a diversification strategy. Now that
               we have refocused the Company, innovation is right at the top of
               our priority list. We realize that we must increase Cott's pace
               of growth and a large part of this growth must come from
               increased innovation.

               Innovation means introducing new and improved products that are
               consumer-preferred and offer greater

QUESTION       HOW ARE YOU MOTIVATING EMPLOYEES TO PARTICIPATE IN THE INNOVATION
               PROCESS?


ANSWER         FRANK E. WEISE Primarily through sharing and communicating. As
               our employees increasingly rally around the "New" Cott and
               understand our vision, our mission and our values, they realize
               that innovation can come from anywhere. I believe the real
               "experts" in innovation are the people who do the work, whether
               it be on the production line, in our R&D lab, in the field or in
               our offices. They are the ones who know how to make things
               better. They are the ones who come up with great ideas that can
               improve customer service, extend product shelf life and improve
               the display readiness of our products. To heighten our commitment
               to innovation, we created the Gerald N. Pencer Award for
               Excellence in Innovation, honoring Cott's late former Chairman,
               President and CEO. In 1999, 357 men and women were nominated for
               their contributions. The Pencer Award includes a C$10,000 prize,
               half in Cott stock. We have made stock an important part of the
               prize because we believe there is no higher motivator to
               outstanding performance than ownership in our Company.



QUESTION       1999 WAS A YEAR OF GROWTH FOR COTT CANADA. HOW DID YOU ACHIEVE
               THIS?


ANSWER         MARK BENADIBA 1999 was a positive year for Cott Canada. We
               enjoyed good profitability and met our customer service and
               operational goals. The year was a ringing tribute to all the
               dedicated employees at Cott Canada. The victory was theirs.


[PHOTO]

FRANK E. WEISE
President & CEO

QUESTION       WHAT NEW PRODUCTS DID COTT CANADA INTRODUCE IN 1999?


ANSWER         MARK BENADIBA By far, our star new product was President's
               Choice(TM) Lemon Iced Tea, which received a coveted award from
               our largest customer -- Loblaws-- as being one of the best new
               product launches of 1999. That was recognition of the highest
               order and illustrates an important element of our success. We
               want to be at the forefront in developing new products for our
               customers. We need to keep supplying them with innovative
               products at the leading edge in beverage marketing that will keep
               their consumers coming back again and again.


               Much to the delight of Canadian children, Cott Canada also began
               marketing Chubby(TM), the country's first carbonated soft drink
               for kids.

               With its characteristic, small bottle, and its bright, cheery
               label, ChubbyTM was an instant hit when launched and was quickly
               rolled out across Canada.

               In the consolidated Canadian grocery soft drink business,
               opportunities continue to abound. Our challenge remains to
               deliver to our customers a new standard of products, service and
               efficiency.

QUESTION       SINCE ASSUMING RESPONSIBILITY FOR COTT U.K., WHAT STEPS HAVE YOU
               AND YOUR MANAGEMENT TEAM TAKEN TO REVITALIZE THE DIVISION?


ANSWER         NEIL A. THOMPSON When I joined Cott U.K. in 1999, it was a
               division that had lost its way. It was clear that if we were to
               survive we would have to take the division back to its roots and
               rebuild it. A year later, as I look back on how far we have come,
               I can say that, through hard work and dedication by all our
               employees, we have stabilized the business and sown the seeds for
               growth.

               We began the process by putting in place an experienced
               management team, dedicated to achieving our three key strategies
               of focusing on the core business, fixing the cost structure and
               strengthening the "New" Cott U.K. Then we rolled up our sleeves
               and got to work.

               We attacked costs. We reduced our customer accounts from 250 to
               45. We reduced SKUs from 1,000 to 650. We implemented a software
               program that helps us monitor operations and the supply chain. We
               sold the Featherstone Plant and related business in West
               Yorkshire and moved production to two other plants: Kegworth and
               Pontefract. We also reshaped our business processes leading to a
               30% reduction in salaried staff.

               The result of all this effort is that today Cott U.K. is a
               leaner, more efficient business, better able to respond to our
               customers' needs.

QUESTION       WHAT STEPS HAVE YOU TAKEN TO IMPROVE CUSTOMER SERVICE?

ANSWER         NEIL A. THOMPSON The U.K. has a highly concentrated grocery
               market and with continued consolidation, it has been estimated
               that in five years there may only be five major retail chains in
               the U.K. This can present a great opportunity for retail brand
               suppliers, and Cott U.K. in particular.

               Just as our customers market globally, so can Cott U.K. bring
               transatlantic expertise. Increasingly, Cott customers in the U.S.
               and Canada are finding their way to the U.K. and Continental
               Europe, just as U.K. and European firms are growing in North
               America. We intend to benefit from that trend.

QUESTION       WHAT NEW PRODUCTS HAVE YOU INTRODUCED?


ANSWER         NEIL A. THOMPSON In January 1999, there were no new products in
               the pipeline. By June, we had 40 in various stages of
               development. We are now launching several new products, including
               low-acid fruit drinks for kids, a range of organic fruit
               carbonated drinks, premium lemonades, and high energy adult
               drinks. That should illustrate the importance we are placing on
               new products. But it is not enough to meet the needs of our
               customers. We have to become more adept at anticipating their
               needs. That, too, is an important part of the success equation in
               U.K. soft drinks and explains our focus on innovation.


QUESTION       HOW DID COTT USA PERFORM IN 1999? PLEASE DESCRIBE THE HIGHLIGHTS.

ANSWER         DAVID G. BLUESTEIN 1999 was a year of significant turnaround for
               Cott USA. We turned in a solid financial performance. We launched
               a number of programs that propelled us to new levels of customer
               service--and we attacked superfluous costs aggressively. This has
               helped build a solid foundation for future growth.

QUESTION       PLEASE ELABORATE ON SOME OF THE PRODUCTIVITY-ENHANCING PROCESSES
               WHICH HELPED COTT USA ACHIEVE SUCH A SUCCESSFUL YEAR IN 1999?


ANSWER         DAVID G. BLUESTEIN During 1999 we committed ourselves to a number
               of new processes.


               One is Key Performance Indicators or KPIs. By measuring the same
               things, in the same way, in each of our plants throughout the
               U.S., we help align and measure performance against corporate
               strategic goals. For example, customers want consistent quality
               and they want their orders shipped on time. We want to achieve
               these two objectives at the best possible cost. KPIs tell us
               objectively how well we are doing in meeting quality and customer
               service standards and in accomplishing cost targets. In 1999,
               achieving our KPIs was critical to our ability to drive division
               performance.


               Six Sigma is a set of problem-solving tools based on statistical
               analysis, the purpose of which is to eliminate variation. To
               implement Six Sigma, a number of employees were selected to
               attend a five-week training program, from which they graduated as
               "Six Sigma Black Belts." These 12 Black Belt recipients have
               already improved product quality and customer performance and, in
               so doing, have helped deliver significant cost savings as well.

QUESTION       WHAT STEPS DID YOU TAKE IN 1999 TO IMPROVE THE FINANCIAL
               CONDITION OF THE COMPANY?


ANSWER         RAYMOND P. SILCOCK Two of Cott's three key strategies--focusing
               on core and fixing the cost structure--are aimed at improving the
               Company's financial condition.


               As part of focusing on core, we divested several non-strategic
               businesses, deploying the proceeds to debt reduction, thus
               lowering our interest expense and strengthening the balance
               sheet. Since the beginning of 1999 our net debt (total debt
               outstanding less cash on hand) is down from $375.8 million to
               $322.8 million at year-end.


               To fix our cost structure we reduced SKUs, improved operating
               efficiencies, and reduced administrative expenses. Reducing SKUs
               simplified plant operations and paved the way for added
               efficiency. In 1999, we increased our gross profit margin from
               10.4% to 14.5% as a result of actions taken by each of our
               businesses to improve operating efficiencies. We reduced selling,
               general and administrative expenses. Together, these actions
               helped strengthen the Company's financial condition. In addition,
               we improved financial discipline by standardizing accounting and
               reporting systems, to provide the kind of data we need to help
               improve operating performance.

QUESTION       WHAT WAS THE IMPACT ON THE COMPANY OF DIVESTING BUSINESSES DURING
               THE YEAR?


ANSWER         RAYMOND P. SILCOCK In 1999 we divested five businesses, all of
               which were outside our core. It was time to refocus. We applied
               the $39.1 million in proceeds from the sales to reducing our
               debt. Although this action reduced 1999 sales from the prior
               period by $45.6 million and operating income by $1.0 million, we
               believe the result will be a sharp increase in future sales and
               earnings as management is better able to concentrate on our core
               business: retailer brand carbonated soft drinks in our three core
               markets, Canada, the U.K. and the U.S.


QUESTION       WHAT STEPS HAVE YOU TAKEN TOWARD STANDARDIZING FINANCIAL
               PROCEDURES?

ANSWER         RAYMOND P. SILCOCK When the new management team assumed
               responsibility for Cott, one of our priorities was to improve the
               credibility of the numbers in today's data-driven business
               environment. We changed our fiscal year to calendar-year
               reporting, like most companies in our industry. And we switched
               our reporting from Canadian to U.S. dollars, recognizing that
               more than half of our sales are in the U.S. as are most of our
               shareowners. These steps are necessary if we are to be measured
               by the same standards that apply to other companies in our
               industry. At the end of 1999 more than 50% of our assets are also
               in the U.S. As a result, we will be filing a full U.S. reporting
               package, including a 10K, this year, in addition to fulfilling
               Canadian reporting requirements.


               Next we focused on measuring and reporting performance. We
               installed an enterprise resource planning system at Cott U.K.,
               and we intend to start introducing the system company-wide
               beginning this year. Not only will it help identify areas where
               waste can be eliminated and costs contained, it will serve as a
               valuable planning tool. Also, we are upgrading and standardizing
               all our information and accounting systems to bring consistency
               to reporting among and within our companies.


[ARTWORK]      These and other ongoing steps within our three core businesses
               give us a wealth of reliable, objective, standardized information
               that will help us drive our growth strategies.

OVERVIEW       In 1999, the Company took decisive steps to turn around its
               performance by implementing three key strategies: focus on core,
               fix the cost structure and build management strength.

(in millions)                2000       2001       2002        2003            2004      Thereafter      Total     Fair Value
-------------                ----       ----       ----        ----            ----      ----------      -----     ----------
DEBT
Fixed rate                 $   1.5     $  1.6     $  2.8     $    0.3       $     0.2    $  280.7      $  287.1     $  272.4
Weighted average
  interest rate               11.3%      10.6%       8.8%        12.2%           8.6%        9.0%            --           --
Variable rate                   --     $  9.0     $  9.1     $    9.0       $     9.2         --       $   36.3     $   36.3
Non-interest bearing       $   0.1     $  0.1         --           --              --         --       $    0.2     $    0.2
Weighted
  average interest rate         --        7.5%       7.5%         7.5%            7.5%        --             --           --
INTEREST RATE SWAPS
Variable to fixed          $   1.2     $ 31.9         --           --              --         --       $   33.1     $   (0.3)
Average pay rate               7.3%       7.3%        --           --              --         --            7.3%          --
Average receive rate           5.5%       5.5%        --           --              --         --            5.5%          --

Frank E. Weise III (Signed)          Raymond P. Silcock (Signed)
President and Chief                  Executive Vice President and
Executive Officer                    Chief Financial Officer

                                                          JANUARY 1,         January 2,       January 31,
                                                             2000               1999             1998
(in millions of U.S. dollars, except per share amounts)   (52 WEEKS)         (48 weeks)        (53 weeks)
                                                          ----------         ----------        ----------
SALES                                                    $     990.8       $       958.5      $     1,047.8
Cost of sales                                                  846.7               859.0              902.3
                                                         -----------       -------------      -------------
GROSS PROFIT                                                   144.1                99.5              145.5
Selling, general and administrative expenses                    99.1                91.3               96.5
Unusual items - note 2                                          (1.2)               77.2               21.7
                                                         -----------       -------------      -------------
OPERATING INCOME (LOSS)                                         46.2               (69.0)              27.3
Other expenses (income), net - note 3                           (5.1)               (1.0)               2.4
Interest expense, net - note 4                                  34.6                33.2               24.4
                                                         -----------       -------------      -------------
INCOME (LOSS) BEFORE INCOME TAXES, EQUITY
  INCOME (LOSS) AND MINORITY INTEREST                           16.7              (101.2)               0.5
Income taxes - note 5                                            3.8                 4.0               (0.2)
Equity income (loss)                                             0.9                 1.5               (0.1)
Minority interest                                                 --                (0.1)               0.2
                                                         -----------       -------------      -------------
INCOME (LOSS) FROM CONTINUING OPERATIONS                        21.4               (95.8)               0.4
Loss from discontinued operations - note 6                      (0.8)               (3.8)              (5.1)
Cumulative effect of changes in accounting
  principles, net of tax - note 7                               (2.1)               (9.9)                --
                                                         -----------       -------------      -------------
NET INCOME (LOSS) - note 23                              $      18.5       $      (109.5)     $        (4.7)
                                                         ===========       =============      =============
PER SHARE DATA - note 8
INCOME (LOSS) PER COMMON SHARE - BASIC
Income (loss) from continuing operations                 $      0.35       $       (1.53)     $        0.01
Discontinued operations                                  $     (0.01)      $       (0.05)     $       (0.08)
Cumulative effect of changes in accounting principles    $     (0.03)      $       (0.16)     $          --
Net income (loss)                                        $      0.31       $       (1.74)     $       (0.07)

INCOME (LOSS) PER COMMON SHARE - DILUTED
Income (loss) from continuing operations                 $      0.32       $       (1.53)     $        0.01
Discontinued operations                                  $     (0.01)      $       (0.05)     $       (0.08)
Cumulative effect of changes in accounting principles    $     (0.03)      $       (0.16)     $          --
Net income (loss)                                        $      0.28       $       (1.74)     $       (0.07)

                                                         JANUARY 1,    January 2,
(in millions of U.S. dollars)                              2000           1999
                                                          --------      --------
ASSETS
CURRENT ASSETS
Cash and cash equivalents                                 $    2.6      $   28.1
Accounts receivable - note 9                                  97.6         129.4
Inventories - note 10                                         67.3          77.3
Prepaid expenses                                               4.4           2.6
Discontinued operations - note 6                                --          12.0
                                                          --------      --------
                                                             171.9         249.4

Property, plant and equipment - note 11                      266.4         295.8
Goodwill - note 12                                           108.1         132.1
Investment and other assets - note 13                         43.2          21.9
                                                          --------      --------
                                                          $  589.6      $  699.2
                                                          ========      ========
LIABILITIES
CURRENT LIABILITIES
Short-term borrowings - note 14                           $    1.8      $   26.2
Current maturities of long-term debt - note 15                 1.6          12.5
Accounts payable and accrued liabilities - note 16           104.8         127.8
Discontinued operations - note 6                               1.0           5.7
                                                          --------      --------
                                                             109.2         172.2

Long-term debt - note 15                                     322.0         365.2
Other liabilities - note 17                                   16.1          39.8
                                                          --------      --------
                                                             447.3         577.2
                                                          --------      --------
SHAREOWNERS' EQUITY
Capital stock - note 18
Common shares - 59,837,392 shares issued                     189.0         189.0
Second preferred shares, Series 1 - 4,000,000 shares          40.0          40.0
  issued
Deficit                                                      (63.3)        (81.8)
Accumulated other comprehensive income                       (23.4)        (25.2)
                                                          --------      --------
                                                             142.3         122.0
                                                          --------      --------
                                                          $  589.6      $  699.2
                                                          ========      ========

                                       Number of                                         Accumulated
                                         Common                             Retained        Other
                                         Shares       Common    Preferred   Earnings    Comprehensive    Total
(in millions of U.S. dollars)        (in thousands)   Shares      Shares   (Deficit)       Income       Equity
                                     --------------  --------   --------   ---------   --------------  --------
Balance at January 25, 1997             62,142       $  191.1     $   --    $   55.8       $   (7.9)   $  239.0
Options exercised                        1,261            5.2         --          --             --         5.2
Issued in exchange for
  minority interest of Atlantic
  Refreshments Ltd. - note 20              800            6.1         --          --             --         6.1
Comprehensive income - note 23
  Currency translation adjustment           --             --         --          --           (11.2)     (11.2)
  Net loss                                  --             --         --        (4.7)             --       (4.7)
Dividends                                   --             --         --        (3.5)             --       (3.5)
                                        ------       --------     ------    --------        --------    -------
Balance at January 31, 1998             64,203          202.4         --        47.6           (19.1)     230.9
Options exercised                            3             --         --          --              --         --
Second preferred shares issued              --             --       40.0        (1.8)             --       38.2
Issued to executive officer                100            0.7         --          --              --        0.7
Shares purchased and cancelled          (4,469)         (14.1)        --       (15.9)             --      (30.0)
Comprehensive income - note 23
  Currency translation adjustment           --             --         --          --            (6.1)      (6.1)
  Net loss                                  --             --         --      (109.5)             --     (109.5)
Dividends                                   --             --         --        (2.2)             --       (2.2)
                                        ------       --------     ------    --------        --------    -------
BALANCE AT JANUARY 2, 1999              59,837          189.0       40.0       (81.8)          (25.2)     122.0
COMPREHENSIVE INCOME - NOTE 23
  CURRENCY TRANSLATION ADJUSTMENT           --             --         --          --             1.8        1.8
  NET INCOME                                --             --         --        18.5              --       18.5
                                        ------       --------     ------    --------        --------    -------
BALANCE AT JANUARY 1, 2000              59,837       $  189.0     $ 40.0    $  (63.3)       $  (23.4)   $ 142.3
                                        ======       ========     ======    ========        ========    =======

                                                           JANUARY 1,    January 2,    January 31,
                                                              2000          1999          1998
(in millions of U.S. dollars)                              (52 WEEKS)    (48 weeks)    (53 weeks)
                                                           ---------     ----------    ----------
OPERATING ACTIVITIES
Income (loss) from continuing operations                   $    21.4      $  (95.8)    $    0.4
Depreciation and amortization                                   39.1          43.7         39.6
Deferred income taxes                                           (6.1)         (6.9)        (5.1)
Equity (income) loss                                            (0.9)         (1.5)         0.1
Minority interest                                                 --           0.1         (0.2)
Non-cash unusual items                                           0.3          51.4           --
Gain on disposal of equity investment                           (5.9)           --           --
Loss (gain) on sales of property, plant and equipment            0.3          (0.3)          --
Other non-cash items                                             0.3           6.8          0.4
Net change in non-cash working capital
  from continuing operations - note 21                           8.4          (7.2)        18.8
                                                           ---------      --------     --------
Cash provided by (used in) operating activities                 56.9          (9.7)        54.0
                                                           ---------      --------     --------

INVESTING ACTIVITIES
Additions to property, plant and equipment                     (18.5)        (36.7)       (81.8)
Proceeds from disposal of businesses                            39.1            --           --
Proceeds from disposal of property, plant and equipment          1.4           3.9          4.9
Acquisitions, net of cash acquired - note 20                   (25.0)         (2.9)       (97.1)
Other                                                           (2.6)         (6.4)        (6.5)
                                                           ---------      --------     --------
Cash used in investing activities                               (5.6)        (42.1)      (180.5)
                                                           ---------      --------     --------

FINANCING ACTIVITIES
Payments of long-term debt                                    (52.0)         (31.2)       (22.4)
Issue of long-term debt                                          --             --        207.2
Short-term borrowings                                         (24.4)           5.2          0.7
Cost of issuing debt                                             --             --         (7.5)
Common shares purchased and cancelled                            --          (30.0)          --
Issue of common shares                                           --            0.7          5.2
Issue of preferred shares                                        --           40.0           --
Share issue costs                                                --           (1.8)          --
Dividends paid                                                   --           (2.2)        (3.5)
Other                                                            --             --         (0.5)
                                                           ---------      --------     --------
Cash (used in) provided by financing activities               (76.4)         (19.3)       179.2
                                                           ---------      --------     --------
Net cash used in discontinued operations                       (1.0)          (1.5)        (7.5)
Effect of exchange rate changes on cash and cash
  equivalents                                                   0.6           (2.9)        (5.5)
                                                           ---------      --------     --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS          (25.5)         (75.5)        39.7
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                 28.1          103.6         63.9
                                                           ---------      --------     --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                   $    2.6       $   28.1     $  103.6
                                                           =========      ========     ========

PRESENTATION   These consolidated financial statements have been prepared in
               accordance with United States ("U.S.") generally accepted
               accounting principles ("GAAP") and using the U.S. dollar as the
               reporting currency, as the majority of the Company's business and
               the majority of its shareowners are in the United States.
               Consolidated financial statements in accordance with Canadian
               GAAP, in U.S. dollars, are made available to all shareowners and
               filed with various regulatory authorities.

               In 1998, the Company changed its fiscal year-end to the Saturday
               closest to December 31st. Previously, the year-end was the last
               Saturday in January.

               Comparative amounts in prior years have been restated to conform
               to the financial statement presentation adopted in the current
               year.

CONSOLIDATION  The financial statements consolidate the accounts of the Company
               and its subsidiaries. All significant inter-company accounts and
               transactions are eliminated upon consolidation.


ESTIMATES      The preparation of these consolidated financial statements in
               conformity with GAAP requires management to make estimates and
               assumptions that affect the amounts reported in the consolidated
               financial statements and accompanying notes. Actual results could
               differ from those estimates.

EQUIVALENTS    Cash equivalents include highly liquid investments with original
               maturities of three months or less.


INVENTORIES    Inventories are stated at the lower of cost, determined on the
               first-in, first-out method, or net realizable value. Returnable
               bottles and plastic shells are valued at the lower of cost,
               deposit value or net realizable value. Finished goods and
               work-in-process include the cost of raw materials, direct labor
               and manufacturing overhead costs.

EQUIPMENT      Property, plant and equipment is stated at the lower of cost less
               accumulated depreciation or net recoverable amount. Depreciation
               is provided using the straight-line method over the estimated

Buildings                          20 to 40 years
Manufacturing equipment            10 to 15 years
Furniture and fixtures              3 to 10 years
Plates and films                          3 years

GOODWILL       Goodwill represents the excess purchase price of acquired
               businesses over the fair value of the net assets acquired.
               Goodwill is amortized using the straight-line method over its
               estimated period of benefit, not exceeding 40 years. The Company
               periodically compares the carrying value of goodwill to the
               estimated undiscounted future cash flows of the related
               businesses and recognizes in net income any impairment to net
               realizable value.

ASSETS         Issuance costs for credit facilities and long-term debt are
               deferred and amortized over the term of the credit agreement or
               related debt, respectively.

               Customer list represents the cost of acquisition for the right to
               sell to specific customers and is amortized over 15 years. The
               Company periodically compares the carrying value of the customer
               list to the estimated undiscounted future cash flows of the
               related businesses and recognizes in net income any impairment to
               net realizable value.

RECOGNITION    The Company recognizes sales upon shipment of goods to customers.


FOREIGN
CURRENCY
TRANSLATION    The assets and liabilities of foreign operations, all of which
               are self-sustaining, are translated at the exchange rates in
               effect at the balance sheet dates. Revenues and expenses are
               translated using average exchange rates prevailing during the
               period. The resulting gains or losses are accumulated in the
               other comprehensive income account in shareowners' equity.


TAXATION       The Company accounts for income taxes under the asset and
               liability method. Deferred tax assets and liabilities are
               recognized based on the differences between the accounting values
               of assets and liabilities and their related tax bases using
               current income tax rates.

INSTRUMENTS    The carrying amounts reflected in the consolidated balance sheets
               for cash, cash equivalents, receivables, payables, short-term
               borrowings, long-term debt and deferred consideration on
               acquisitions approximate their respective fair values, except as
               otherwise indicated. Fair values of long-term debt are based
               primarily on quoted prices for those or similar instruments.

INCOME         Comprehensive income is comprised of net income (loss) adjusted
               for changes in the cumulative foreign currency translation
               adjustment account.

STANDARDS      In June 1998, The Financial Accounting Standards Board issued
               SFAS No. 133, Accounting for Derivative Instruments and Hedging
               Activities, which the Company must adopt in 2001. The standard
               requires that all derivatives be recorded on the balance sheet at
               their fair values. Changes in the fair value of derivatives are
               recorded in earnings or other comprehensive income, based on
               whether the instrument is designated as a hedge. The Company does
               not expect the impact of adopting these pronouncements to be
               material.

                                                      Balance                Modification                BALANCE
                               Original              January 2,   Spending/   & Changes       1999      JANUARY 1,
(in millions of U.S. dollars)   Charge     Activity     1999      Realized   in Estimate    Provision     2000
                               --------    --------  ----------   --------   ------------   ---------   ----------
Restructuring costs            $ 25.8       $ (2.9)    $ 22.9     $  (16.8)    $  (2.0)      $  0.6       $  4.7
Property, plant and
  equipment and inventory
  impairment                     28.3         (23.8)      4.5         (1.4)       (3.1)          --           --
Writedowns of businesses
  held for sale                  17.8         (11.7)      6.1         (7.6)        1.5          1.8          1.8
                               ------       -------    ------     --------     -------       ------       ------
                               $ 71.9       $ (38.4)   $ 33.5     $  (25.8)    $  (3.6)      $  2.4       $  6.5
                               ======       =======    ======     ========     =======       ======       ======

                                                             January 2,   January 31,
(in millions of U.S. dollars)                                   1999         1998
                                                             ---------    --------
Restructuring costs (a)                                      $    25.8    $   19.6
Property, plant and equipment and inventory impairment (b)        28.3         0.3
Writedowns of businesses held for sale                            17.8          --
(Gain) loss from disposal of businesses (c)                        5.3        (0.1)
Other (d)                                                           --         1.9
                                                             ---------    --------
                                                             $    77.2    $   21.7
                                                             =========    ========

                                              JANUARY 1,    January 2,     January 31,
(in millions of U.S. dollars)                   2000          1999             1998
                                              ---------     ----------     -----------

Gain on disposal of equity investment in
  Menu Foods Limited                          $   (5.9)    $       --        $     --
Foreign exchange loss (gain)                       0.4           (0.8)            1.7
Other                                              0.4           (0.2)            0.7
                                              --------     ----------        --------
                                              $   (5.1)    $     (1.0)       $    2.4
                                              ========     ==========        ========

                                              JANUARY 1,    January 2,    January 31,
(in millions of U.S. dollars)                    2000          1999          1998
                                              ---------     ----------     -----------
Interest on long-term debt                    $    33.2     $    33.0     $    27.8
Other interest                                      2.6           2.1           1.1
Interest income                                    (1.2)         (1.9)         (4.5)
                                              ---------     ---------     ---------
                                              $    34.6     $    33.2     $    24.4
                                              =========     =========     =========

                                         JANUARY 1,    January 2,    January 31,
(in millions of U.S. dollars)              2000          1999           1998
                                         ---------     ----------    ----------
Canada                                   $     2.7      $   (61.4)     $  (19.7)
Outside Canada                                14.0          (39.8)         20.2
                                         ---------      ---------      --------
                                         $    16.7      $  (101.2)     $    0.5
                                         =========      =========      ========

                                        JANUARY 1,    January 2,    January 31,
(in millions of U.S. dollars)             2000          1999          1998
                                        ---------     ---------     ---------
CURRENT
Canada                                  $   (0.6)     $    (0.3)    $   (0.6)
Outside Canada                              (1.7)          (2.6)        (4.7)
                                        --------      ---------     --------
                                        $   (2.3)     $    (2.9)    $   (5.3)
                                        ========      =========     ========
DEFERRED
Canada                                  $   12.1      $     1.0     $    7.7
Outside Canada                              (6.0)           5.9         (2.6)
                                        --------      ---------     --------
                                        $    6.1      $     6.9     $    5.1
                                        ========      =========     ========

                                        JANUARY 1,    January 2,    January 31,
(in millions of U.S. dollars)             2000          1999          1998
                                        ---------     ---------     ---------
Income tax (provision) recovery
  based on
  Canadian statutory rates              $   (7.3)      $  44.1       $    (0.2)
Foreign tax rate differential                7.3         (14.4)             --
Manufacturing and processing
  deduction                                  0.7          (2.1)             --
Tax benefit on losses recognized
  (not recognized)                           9.5         (19.0)             --
Non-deductible items                        (6.4)         (4.6)             --
                                        --------       -------       ---------
Recovery of (provision for)
  income taxes                          $    3.8       $   4.0       $    (0.2)
                                        ========       =======       =========

                                               JANUARY 1,    January 2,
(in millions of U.S. dollars)                    2000           1999
                                               --------      --------
DEFERRED TAX ASSETS
Loss carryforwards                             $   54.2     $    50.5
Liabilities and reserves                            7.3          23.7
Other                                               1.0           2.1
                                               --------      --------
                                                   62.5          76.3
Valuation allowance                                (5.5)        (20.2)
                                               --------      --------
                                                   57.0          56.1
                                               --------      --------
DEFERRED TAX LIABILITIES
Property, plant and equipment                      21.2          24.6
Intangible assets                                  (1.5)          3.6
Other                                              31.6          30.5
                                               --------      --------
                                                   51.3          58.7
                                               --------      --------
NET DEFERRED TAX ASSET (LIABILITY)             $    5.7      $   (2.6)
                                               ========      ========

(in millions of U.S. dollars)
2001                                       $      0.3
2004                                             12.6
After 2004                                      104.1
No expiry                                        27.5
                                           ----------
                                           $    144.5
                                           ==========

                                                JANUARY 1,     January 2,    January 31,
(in millions of U.S. dollars)                      2000          1999          1998
                                                ----------     ---------     ---------
SALES                                           $     14.4     $    28.5     $    28.5
                                                ==========     =========     =========
Loss before income taxes                                --            --          (3.3)
Income taxes                                            --            --           1.3
                                                ----------     ---------     ---------
Net loss to measurement date                            --            --          (2.0)
Loss on disposal                                      (0.8)         (3.8)         (3.1)
                                                ----------     ---------     ---------
Loss from discontinued operations               $     (0.8)    $    (3.8)    $    (5.1)
                                                ==========     =========     =========

                                                        JANUARY 1,    January 2,    January 31,
(in thousands)                                            2000           1999          1998
                                                        ----------    ----------    -----------
Weighted average number of shares outstanding - basic       59,837        62,797         64,006
Dilutive effect of stock options                                82            --            939
Dilutive effect of second preferred shares                   6,286            --             --
                                                            ------        ------         ------
Adjusted weighted average number of shares
  outstanding - diluted                                     66,205        62,797         64,945
                                                            ======        ======         ======

                                             JANUARY 1,   January 2,
(in millions of U.S. dollars)                   2000        1999
                                            ----------   ----------
Trade receivables                           $   90.7     $   109.7
Allowance for doubtful accounts                 (8.7)         (7.5)
Other                                           15.6          27.2
                                            --------     ---------
                                            $   97.6     $   129.4
                                            ========     =========

                                             JANUARY 1,   January 2,
(in millions of U.S. dollars)                   2000        1999
                                            ----------   ----------
Raw materials                               $   29.4     $   45.5
Finished goods                                  29.4         27.0
Other                                            8.5          4.8
                                            --------     --------
                                            $   67.3     $   77.3
                                            ========     ========

                                       JANUARY 1, 2000                            January 2, 1999
(in millions of U.S.                    ACCUMULATED                                 Accumulated
dollars)                          COST  DEPRECIATION      NET              Cost     Depreciation     Net
                                  ----  ------------      ---              ----     ------------     ---
Land                          $   15.8      $    --     $   15.8        $    15.8     $    --      $  15.8
Building                          78.5         16.5         62.0             79.7        14.3         65.4
Machinery and equipment
  Owned                          306.7        137.9        168.8            311.0       130.1        180.9
  Leased                           7.2          3.6          3.6             17.7         6.2         11.5
Furniture and fixtures            45.2         30.9         14.3             46.1        28.1         18.0
Plates and film                   10.9          9.0          1.9             23.8        19.6          4.2
                              --------      -------     --------        ---------     -------      -------
                              $  464.3      $ 197.9     $  266.4        $   494.1     $ 198.3      $ 295.8
                              ========      =======     ========        =========     =======      =======

                                             JANUARY 1,     January 2,
(in millions of U.S. dollars)                   2000           1999
                                            ----------     ----------
Cost - note 20                              $    120.8     $    141.3
Accumulated amortization                         (12.7)          (9.2)
                                            ----------     ----------
                                            $    108.1     $    132.1
                                            ==========     ==========

                                            JANUARY 1, 2000                                    January 2, 1999
                                              ACCUMULATED                                        Accumulated
(in millions of u.s. dollars)     COST       AMORTIZATION         NET            Cost           Amortization            Net
                                --------     ------------      ---------       --------        ---------------       ---------
Customer list                   $  25.0       $    0.3         $    24.7        $     --           $    --             $    --
Financing costs                    13.2            4.3               8.9            12.1               2.8                 9.3
Investment in
  Menu Foods Corporation            1.7             --               1.7            12.4               0.8                11.6
Deferred income taxes
  - note 5                          5.7             --               5.7              --                --                  --
Other                               2.9            0.7               2.2             2.0               1.0                 1.0
                                -------       --------         ---------        --------           -------             -------
                                $  48.5       $    5.3         $    43.2        $   26.5           $   4.6             $  21.9
                                =======       ========         =========        ========           =======             =======

                                                       JANUARY 1,       January 2,
(in millions of U.S. dollars)                            2000            1999
                                                      -----------      ----------
Senior unsecured notes at 9.375% due 2005 (a)         $     155.7      $    160.0
Senior unsecured notes at 8.5% due 2007 (a)                 125.0           125.0
Term bank loan at LIBOR plus 2% with
  sinking fund payments and due 2004 (b)                     36.3            75.7
Capital leases due 2000 to 2002                               3.7             5.9
Mortgages at 5.75% to 7.125% due 2001 to 2002                 2.7             9.5
Other                                                         0.2             1.6
                                                      -----------      ----------
                                                            323.6           377.7
Less current maturities                                      (1.6)          (12.5)
                                                      -----------      ----------
                                                      $     322.0      $    365.2
                                                      ===========      ==========

(in millions of U.S. dollars)
2000                                       $       1.6
2001                                              10.7
2002                                              11.9
2003                                               9.3
2004                                               9.4
Thereafter                                       280.7
                                           -----------
                                           $     323.6
                                           ===========

                                              JANUARY 1,     January 2,
(in millions of U.S. dollars)                    2000           1999
                                              ----------    ----------
Trade payables                                $     46.4     $    57.3
Restructuring - note 2                               4.7          22.9
Accrued promotion and rebates                       14.6          15.4
Sales, payroll and other taxes                       5.7           8.0
Accrued compensation                                14.8           5.0
Other accrued liabilities                           18.6          19.2
                                              ----------    ----------
                                              $    104.8    $    127.8
                                              ==========    ==========

                                                     JANUARY 1,    January 2,
(in millions of U.S. dollars)                           2000         1999
                                                      --------     ---------
Deferred consideration on acquisitions - note 20      $   16.1     $    37.2
Deferred income taxes - note 5                              --           2.6
                                                      --------     ---------
                                                      $   16.1     $    39.8
                                                      ========     =========

(in millions of U.S. dollars, except per share           JANUARY 1,     January 2,    January 31,
amounts)                                                   2000            1999          1998
                                                        ----------     ----------    -----------
Net income (loss)
As reported                                             $     18.5     $   (109.5)   $      (4.7)
Pro forma                                                     15.9         (112.0)          (7.0)
Basic net income (loss) per share
As reported                                                   0.31          (1.74)         (0.07)
Pro forma                                                     0.27          (1.78)         (0.11)
Diluted net income (loss) per share
  As reported                                                 0.28          (1.74)         (0.07)
  Pro forma                                                   0.24          (1.78)         (0.11)

                                      JANUARY 1,           January 2,            January 31,
                                        2000                  1999                  1998
                                      ----------           ----------            -----------
Risk-free interest rate              4.8 - 6.2%            4.6 - 5.6%            4.9 - 5.2%
Average expected life (years)                4                 3 - 7                 3 - 7
Expected volatility                       45.0%                 47.5%                 52.5%
Expected dividend yield                     --                  0.50%                 0.55%

                                   JANUARY 1, 2000                 January 2, 1999               January 31, 1998
                                              WEIGHTED-                        Weighted-                       Weighted-
                                              AVERAGE                           Average                         Average
                                              EXERCISE                          Exercise                        Exercise
                              SHARES         PRICE (C$)          Shares        Price (C$)        Shares        Price (C$)
                             ---------       ----------         ---------      ----------       ---------      ----------
Balance - at beginning       6,444,008        $  11.24          6,202,850      $    15.59       5,328,190       $  14.61
  Granted                    1,162,500        $   5.80          2,462,400      $     9.42       2,965,532       $  12.90
  Exercised                         --              --             (3,080)     $     9.08      (1,261,132)      $   6.63
  Cancelled                 (2,403,448)       $  12.32         (2,218,162)     $    21.36        (829,740)      $  13.34
                            -----------                        -----------                     -----------
Balance - at end             5,203,060        $   9.55          6,444,008      $    11.24       6,202,850       $  15.59
                            ===========                        ===========                     ===========

                                  OPTIONS OUTSTANDING                    OPTIONS EXERCISABLE
                       -------------------------------------------     ----------------------------
                                                         Weighted-                       Weighted-
     Range of                          Remaining          Average                         Average
     Exercise             Number      Contractual        Exercise        Number           Exercise
    Prices (C$)        Outstanding       Life            Price (C$)    Exercisable        Price (C$)
------------------     -----------    -----------        ----------    -----------        ----------
$  3.30 - $  4.80         105,000        9.3             $   4.45              --               --
$  5.25 - $  9.90       3,680,800        8.6             $   8.41       1,245,716          $   9.22
$ 10.20 - $ 14.70       1,397,260        7.2             $  12.77         777,260          $  12.57
$ 15.05 - $ 30.88          20,000        6.5             $  21.49          11,000          $  26.61

2000           In November 1999, the Company's U.S. subsidiary modified its
               arrangements with Premium Beverage Packers, Inc. This business
               was originally purchased effective January 1997. The Company paid
               $25.0 million to settle its obligation to make annual payments
               relating to the January 1997 acquisition of the customer list.
               This amount has been capitalized to customer list in investment
               and other assets.

1999           In August 1998, the Company acquired the remaining 1% minority
               interest of a U.S. subsidiary from a former executive officer of
               the Company for $2.9 million (C$4.5 million) in cash which was
               allocated primarily to goodwill.

1998           In November 1997, the Company acquired through a wholly owned
               subsidiary in the United Kingdom, 100% of the outstanding shares
               of Hero Drinks Group (U.K.) Limited for $80.6 million
               ((pound)47.6 million) in cash including transaction costs.
               Included in the initial acquisition cost was deferred
               consideration of $34.7 million ((pound)20.5 million) which was
               expected to be payable without interest over the five years
               following the closing date. During the year ended January 1,
               2000, the amount of the deferred consideration and the
               corresponding goodwill was reduced by $17.4 million. The deferred
               consideration of $16.1 million ((pound)10.0 million) equals the
               present value of the minimum guaranteed payments under the
               agreement and is due at the latest in May 2003. This adjustment
               was recorded as it is unlikely that any payments in excess of the
               minimum amounts will be required.

               In addition, during the year the Company made several other
               acquisitions. The total purchase price of all acquisitions was
               allocated as follows based on the fair value of net assets

                                                            January 31,
(in millions of U.S. dollars)                                  1998
                                                           ----------
Current assets (net of cash acquired of $3.4)              $     30.8
Property, plant and equipment                                    72.1
Goodwill                                                         80.9
                                                           ----------
                                                                183.8
                                                           ----------

Current liabilities                                             (40.1)
Long-term debt                                                  (43.9)
Minority interest                                                 3.4
                                                           ----------
                                                                (80.6)
                                                           ----------
Purchase price paid (consisting of cash consideration of
$97.1 million and share consideration of $6.1 million)     $    103.2
                                                           ==========

                                                     JANUARY 1,     January 2,      January 31,
(in millions of U.S. dollars)                          2000            1999            1998
                                                     ----------      ---------      ----------
Decrease (increase) in accounts receivable           $     24.5      $     9.1      $    (20.8)
Decrease (increase) in inventories                          8.3           14.1            13.6
Decrease (increase) in prepaid expenses                    (1.9)           2.1            (1.3)
Decrease (increase) in income taxes recoverable             1.3            2.7              --
Increase (decrease) in accounts payable and
  accrued liabilities                                     (23.8)         (35.2)           27.3
                                                     ----------      ---------      ----------
                                                     $      8.4      $    (7.2)     $     18.8
                                                     ==========      =========      ==========

                                                     JANUARY 1,     January 2,      January 31,
(in millions of U.S. dollars)                          2000            1999            1998
                                                     ----------      ---------      ----------
Net income (loss)                                     $   18.5       $ (109.5)      $   (4.7)
Foreign currency translation
  (net of $2.4 impact of divestitures)                     1.8           (6.1)         (11.2)
                                                      --------       --------       --------
                                                      $   20.3       $ (115.6)      $  (15.9)
                                                      ========       ========       ========

(in millions of U.S. dollars)
2000                                           $    7.8
2001                                                7.0
2002                                                5.9
2003                                                4.3
2004                                                2.3
Thereafter                                          7.7
                                               --------
                                               $   35.0
                                               ========

(in millions of U.S. dollars)
YEAR ENDED JANUARY 1, 2000                     $    8.4
Period ended January 2, 1999                        9.0
Year ended January 31, 1998                         7.9

                                                                        UNITED       UNITED     CORPORATE
(in millions of U.S. dollars)                             CANADA        KINGDOM      STATES      & OTHER       TOTAL
                                                        ----------    ----------    --------     --------     ---------
External sales                                          $    169.2    $    186.1    $  596.8     $   38.7     $   990.8
Intersegment sales                                            19.5            --         5.6        (25.1)           --
Depreciation and amortization                                  8.5          10.2        18.6          1.8          39.1
Operating income (loss) before unusual items                  17.0           4.2        41.2        (17.4)         45.0
Unusual items                                                 (0.4)          3.7        (2.2)        (2.3)         (1.2)
Property, plant and equipment                                 55.1          78.4       127.7          5.2         266.4
Goodwill and other assets                                     22.1          52.8        78.1         (1.7)        151.3
Total assets                                                 137.0         173.4       332.1        (52.9)        589.6
Additions to property, plant and equipment                     3.0           5.9         9.5          0.1          18.5
Property, plant and equipment and goodwill acquired             --            --        25.0           --          25.0
                                                        ----------    ----------    --------     --------     ---------

                                                                       United        United      Corporate
(in millions of U.S. dollars)                             Canada       Kingdom        States      & Other        Total
                                                        ----------    ---------     ---------    --------      --------
External sales                                          $    161.1    $   209.5     $   513.1    $   74.8      $  958.5
Intersegment sales                                            21.8           --           6.9       (28.7)           --
Depreciation and amortization                                 10.8         10.4          18.9         3.6          43.7
Operating income (loss) before unusual items                  10.6          8.6          12.4       (23.4)          8.2
Unusual items                                                  5.9         13.5          25.5        32.3          77.2
Property, plant and equipment                                 56.3         90.2         138.8        10.5         295.8
Goodwill and other assets                                     22.5         77.6          38.3        15.6         154.0
Total assets                                                 221.9        237.2         296.6       (56.5)        699.2
Additions to property, plant and equipment                     8.5          3.9          23.1         1.2          36.7
Property, plant and equipment and goodwill acquired             --           --           2.9          --           2.9
                                                        ----------    ---------     ---------    --------      --------

                                                                       United        United      Corporate
(in millions of U.S. dollars)                             Canada       Kingdom        States      & Other       Total
                                                        ----------    ---------     ---------    --------      --------
External sales                                          $    192.6    $   148.5     $   603.4    $  103.3      $1,047.8
Intersegment sales                                            22.9         11.7          11.6       (46.2)           --
Depreciation and amortization                                 10.7          6.3          18.3         4.3          39.6
Operating income (loss) before unusual items                  22.2          7.2          37.2       (17.6)         49.0
Unusual items                                                  1.3          2.5          11.6         6.3          21.7
Property, plant and equipment                                 60.2         93.5         135.3        21.0         310.0
Goodwill and other assets                                     30.9         87.1          40.6        27.0         185.6
Total assets                                                 327.7        260.4         375.6      (102.2)        861.5
Additions to property, plant and equipment                    12.3          5.2          63.3         1.0          81.8
Property, plant and equipment and goodwill acquired            7.0        123.1          22.6         0.3         153.0
                                                        ----------    ---------     ---------    --------      --------

(Unaudited, in millions of U.S.           First     Second       Third       Fourth
  dollars)                               Quarter    Quarter     Quarter     Quarter(1)     Total
                                       ---------    --------   ---------    --------     --------
YEAR ENDED JANUARY 1, 2000
Sales                                  $   232.2    $  288.3   $   261.0    $  209.3     $  990.8
Cost of sales                              200.3       247.2       222.3       176.9        846.7
Selling, general and administrative         20.9        24.1        26.3        27.8         99.1
Unusual items                                 --          --          --        (1.2)        (1.2)
                                       ---------    --------   ---------    --------     --------
Operating income                            11.0        17.0        12.4         5.8         46.2
                                       ---------    --------   ---------    --------     --------
Income from
  continuing operations                      0.8         7.3         8.7         4.6         21.4
Discontinued operations                       --          --          --        (0.8)        (0.8)
Cumulative effect of
  change in accounting principle            (2.1)         --          --          --         (2.1)
                                       ---------    --------   ---------    --------     --------
Net income (loss)                      $    (1.3)   $    7.3   $     8.7    $    3.8     $   18.5
                                       =========    ========   =========    ========     ========
Per common share:
  Net income (loss) - basic            $   (0.02)   $   0.12   $    0.15    $   0.06     $   0.31
  Net income (loss) - diluted          $   (0.02)   $   0.11   $    0.13    $   0.06     $   0.28
                                       =========    ========   =========    ========     ========
PERIOD ENDED JANUARY 2, 1999
Sales                                  $   258.1    $  310.1   $   244.0    $  146.3     $  958.5
Cost of sales                              223.9       267.2       221.1       146.8        859.0
Selling, general and administrative         23.3        23.2        23.0        21.8         91.3
Unusual items                                 --          --        74.3         2.9         77.2
                                       ---------    --------   ---------    --------     --------
Operating income (loss)                     10.9        19.7       (74.4)      (25.2)       (69.0)
                                       ---------    --------   ---------    --------     --------
Income (loss) from
  continuing operations                      2.3         7.6       (60.9)      (44.8)       (95.8)
Discontinued operations                       --          --          --        (3.8)        (3.8)
Cumulative effect of
  change in accounting principle              --          --        (7.4)       (2.5)        (9.9)
                                       ---------    --------   ---------    --------     --------
Net income (loss)                      $     2.3    $    7.6   $   (68.3)   $  (51.1)    $ (109.5)
                                       =========    ========   =========    ========     ========
Per common share:
  Net income (loss) - basic            $    0.04    $   0.12   $   (1.10)   $  (0.85)    $  (1.74)
  Net income (loss) - diluted          $    0.04    $   0.12   $   (1.10)   $  (0.85)    $  (1.74)
                                       =========    ========   =========    ========     ========