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EXHIBIT 4.3
[LETTERHEAD OF COTT CORPORATION]
November 3, 1999
Thomas H. Lee Company
75 State Street
Boston, MA 02109
Dear Sirs:
RE: LIMITED WAIVER OF STANDSTILL PROVISIONS
Pursuant to an agreement made June 12, 1998 between Cott Corporation
("Cott") and various investors ("Purchasers") represented by Thomas H. Lee
Company (collectively "THL"), THL agreed to certain limitations (the "Standstill
Provisions") on its ability to purchase additional shares in the capital stock
of Cott without the prior consent of the Cott board of directors.
THL has sought the consent of the Cott board of directors to purchase
up to an additional 3,272,092 shares of Cott (the "Additional Shares") in open
market ordinary course purchases.
This letter confirms that the Cott board of directors has consented to
the acquisition of the Additional Shares by THL, upon and subject to the
following terms and conditions and in consideration of THL's agreements
hereinafter set forth:
1. THL will give to Cott advance written notice of any acquisition of
Additional Shares pursuant to the consent herein contained.
2. If and to the extent that THL acquires Additional Shares, THL will
relinquish and forego any and all voting rights attaching to an equal
number of shares owned by entities controlled by members of the Pencer
Family (the "Pencers") in respect of which THL currently holds voting
rights, but not an option to purchase the shares to which such voting
rights attach, pursuant to a "Voting Agreement" and "Option to Purchase
Common Shares of Cott Corporation" both made as of July 7, 1998 between
THL and the Pencers.
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3. THL agrees to release Cott from any of its unsatisfied obligations
under the Subscription Agreement to use the proceeds of THL's
subscription for preferred shares in the capital of Cott to repurchase
common shares in the capital of Cott.
4. THL will grant to the Chairman of the Board of Cott (or such other
person as may from time to time be designated by the directors of Cott
who are unaffiliated with THL) a proxy to vote that number of voting
shares of Cott which ensure that THL will not at any time have voting
rights in respect of more than 35% of the outstanding voting shares of
Cott, calculated on a fully diluted basis. The proxy herein
contemplated will be revocable upon 90 days advance notice to the
proxyholder and to Cott, provided that THL covenants that it will not
revoke the proxy if, after giving effect to such revocation, THL would
beneficially own voting rights in respect of more than 35% of the
outstanding Voting Stock of Cott, calculated on a fully diluted basis.
THL will instruct the proxyholder (which instruction shall be
irrevocable unless and until the proxy shall have been revoked) to vote
the shares covered by the proxy in the same manner and percentage as
those shares held by all shareholders of Cott other than THL and its
affiliates. For purposes of this agreement, "fully diluted basis" at
any time shall be calculated assuming that all convertible preferred
shares of Cott shall have been converted into, and all vested,
"in-the-money" options shall have been exercised for, the underlying
common shares of Cott, and that no other potentially dilutive
conversions or exercises shall have occurred. Notwithstanding the
foregoing, such proxy may be revoked in connection with a change of
control transaction which has been approved by the board of directors
of Cott.
5. THL covenants with and in favour of Cott that it will not exercise its
option (the "Pencer Options") to acquire additional common shares of
Cott from the Pencers if and to the extent that after giving effect to
such exercise, THL would have the power to vote or dispose of more than
35% of the outstanding voting shares of Cott calculated on a fully
diluted basis. The covenant contemplated in this paragraph would not
(a) affect THL's right to exercise the Pencer Option to acquire cash
rather than shares of Cott; or (b) prohibit the exercise of the Pencer
Option in the context of a change of control transaction approved by
Cott's board of directors.
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6. THL agrees that Cott shall be entitled to the benefit of, and to
enforce against THL, the provisions of the Voting Agreement between THL
and the Pencers which provide for a reduction of THL's voting rights if
and to the extent that THL's right to vote exceeds 35% of the
outstanding Cott voting shares.
We and (by your acceptance hereof) you agree to settle and execute all
documentation necessary or desirable to give effect to the intention of the
parties set forth herein.
Except as expressly contemplated herein, the Standstill Provisions will
remain in full force and effect.
If the foregoing is acceptable to you, kindly so signify by executing
and returning to the undersigned the duplicate original of this letter,
whereupon this letter will constitute a legal and binding agreement between us.
Yours very truly,
COTT CORPORATION
Per: /s/ M. Halperin
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ACCEPTED THIS 3rd day of November, 2000.
THOMAS H. LEE COMPANY
(on behalf of the Purchasers under the Subscription Agreement)
Per: /s/ C. Hunter Boll
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