20-F

                        UNITED STATES
             SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C.
                            20549
                              
                          FORM 20-F
                              
[  ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
           OF THE SECURITIES EXCHANGE ACT OF 1934
                              
                             OR
                              
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934
                              
        For the fiscal year ended  December 31, 1997

                             OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934
                              
         For the transition period from           to

                   Commission file number
                              
                              
            SPARKLING SPRING WATER GROUP LIMITED
   (Exact name of Registrant as specified in its charter)
                              
               Province of Nova Scotia, Canada
       (Jurisdiction of incorporation or organization)
                              
                     One Landmark Square
                     Stamford, CT  06901
                       (203) 325-0077
          (Address of principal executive offices)
                              
For information regarding Additional Registrants, see "Table
                 of Additional Registrants."
                              
Securities  registered  or  to  be  registered  pursuant  to
Section 12(b) of the Act.

                            None

                              
Securities  registered  or  to  be  registered  pursuant  to
Section 12(g) of the Act.
                              
                            None
                              
                              
Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act.
                              
        11.5% Senior Subordinated Notes due 2007 and Guarantees
        of 11.5% Senior Subordinated Notes due 2007
                      (Title of Class)
                              
Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close
of the period covered by the annual report.
                              
                             N/A
                              
                              
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
                Yes               No  X
                    -----           -----
                              
Indicate by check mark which financial statement item the
registrant has elected to follow.
                              
              Item 17           Item 18  X
                     -----             -----


                    TABLE OF ADDITIONAL REGISTRANTS

                                                           Primary
                                         State or other    Standard
                                         jurisdiction of   Industrial
Exact name of registrant as specified    incorporation of  Classifi-
in its charter                           organization      cation Code
                                                           Number
                                                           
Sparkling Spring Water Limited           Nova Scotia         5149
Spring Water, Inc.                       Delaware            5149
Cullyspring Water Co., Inc.              Washington          5149
Crystal Springs of Seattle, Inc.         Delaware            5149
Crystal Springs Drinking Water, Inc.     Washington          5149
Crystal Springs Acquisition, Inc.        Delaware            5149
Mountain Fresh Acquisition Corp.         Delaware            5149
Water Jug Enterprises Limited            Nova Scotia         5149
Withey's Water Softening &               Nova Scotia         5149
  Purification Ltd.
Aqua Care Water Softening &              Nova Scotia         5149
  Purification Inc.
High Valley Water Limited                Nova Scotia         5149
3003969 Nova Scotia Limited              Nova Scotia         5149
Coastal Mountain Water Corp.             British Columbia    5149
Canadian Springs Water Company Limited   Nova Scotia         5149
Sparkling Spring Water UK Limited        UK                  5149
Aquaporte (UK) Limited                   UK                  5149
Marlborough Employment Limited           Scotland            5149
Water at Work Limited                    Scotland            5149
Natural Water Limited                    Scotland            5149
                                                           

     The address, including zip code and telephone number,
including area code, of the principal executive offices of
each of the Additional Registrants is the same as for
Sparkling Spring Water Group Limited, as set forth on the
facing page of this Report.

Exchange Rate Data
     
     The following table sets forth for both Canadian
dollars and British pounds sterling for the periods
indicated, the high and low exchange rates (i.e., the
highest and lowest exchange rate at which each currency was
sold), the average exchange rate (i.e., the average of each
exchange rate on the last business day of each month during
the applicable period) and the period end exchange rate of
each currency in exchange for the U.S. dollar, as calculated
from the inverse of the exchange rates reported by the
Federal Reserve Bank of New York for cable transfers payable
in Canadian dollars and British pounds sterling for customs
purposes.
   
                                  Year ended December 31,
                                                                    
                          1993         1994     1995      1996         1997
                                                               
Canadian Dollar                                                
                                                               
High for period           0.807       0.764     0.753     0.753        0.749
                                                               
Low for period            0.742       0.710     0.710     0.721        0.695
                                                               
End of period             0.757       0.713     0.733     0.730        0.700
                                                               
Average for period        0.775       0.732     0.728     0.733        0.722
                                                               
British Pound Sterling
                                                               
High for period           1.593       1.643     1.641     1.711        1.7115
                                                               
Low for period            1.418       1.460     1.527     1.497        1.5797
                                                               
End of period             1.480       1.564     1.552     1.705        1.642
                                                               
Average for period        1.501       1.531     1.578     1.560        1.638




            SPARKLING SPRING WATER GROUP LIMITED
                              
                      TABLE OF CONTENTS
                                                              Page
PART I
                                                             
ITEM 1.     DESCRIPTION OF BUSINESS                             2

ITEM 2.     DESCRIPTION OF PROPERTY                            17

ITEM 3.     LEGAL PROCEEDINGS                                  18

ITEM 4.     CONTROL OF REGISTRANT                              18

ITEM 5.     NATURE OF TRADING MARKET                           19

ITEM 6.     EXCHANGE CONTROLS AND OTHER                        20
            LIMITATIONS AFFECTING SECURITY HOLDERS

ITEM 7.     TAXATION                                           20

ITEM 8.     SELECTED FINANCIAL DATA                            21

ITEM 9.     MANAGEMENT'S DISCUSSION AND ANALYSIS               23
            OF FINANCIAL CONDITION AND RESULTS OF
            OPERATIONS

ITEM 9A.    QUANTITATIVE AND QUALITATIVE                       30
            DISCLOSURES ABOUT MARKET RISK

ITEM 10.    DIRECTORS AND OFFICERS OF REGISTRANT               31

ITEM 11.    COMPENSATION OF DIRECTORS AND OFFICERS             34

ITEM 12.    OPTIONS TO PURCHASE SECURITIES FROM                34
            REGISTRANT OR SUBSIDIARIES

ITEM 13.    INTEREST OF MANAGEMENT IN CERTAIN                  35
            TRANSACTIONS

PART II                                                      

ITEM 14.    DESCRIPTION OF SECURITIES TO BE                   N/A
            REGISTERED (INTENTIONALLY OMITTED)

PART III                                                        

ITEM 15.    DEFAULTS UPON SENIOR SECURITIES                    38

ITEM 16.    CHANGES IN SECURITIES, CHANGES IN                  38
            SECURITY FOR REGISTERED SECURITIES AND
            USE OF PROCEEDS

PART IV                                                      

ITEM 17.    FINANCIAL STATEMENTS                              N/A
            (INTENTIONALLY OMITTED)

ITEM 18.    FINANCIAL STATEMENTS                               39
                                                             
ITEM 19.    FINANCIAL STATEMENTS AND EXHIBITS                  39
                                                             
            (a)  Financial Statements                          39
                                                             
            (b)  Exhibits                                      39
       
       
                                PART I

     
     Unless indicated otherwise, all references in this Report to the
Company refer collectively to Sparkling Spring Water Group Limited and
its direct and indirect subsidiaries.
     
     For purposes of this Annual Report, all references to dollar
amounts are expressed in United States dollars unless otherwise
specified.  All references in this Report to "EBITDA" mean operating
profit plus depreciation and amortization and references to "CAGR"
mean compound annual growth rate. Unless otherwise indicated, all
statistical data and information contained in this Report is as of
December 31, 1997.
     
     Statements included in this Report that do not relate to present
or historical conditions are "forward-looking statements" within the
meaning of the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "1995 Reform Act").  Additional
oral or written forward-looking statements may be made by the Company
from time to time and such statements may be included in documents
other than this Report that are filed with the SEC. Such forward-
looking statements involve risks and uncertainties that could cause
results or outcomes to differ materially from those expressed in such
forward-looking statements. Forward-looking statements in this Report
and elsewhere may include, without limitation, statements relating to
the Company's plans, strategies, objectives, expectations, intentions
and adequacy of resources and are intended to be made pursuant to the
Safe Harbor provisions of the 1995 Reform Act irrespective of whether
the 1995 Reform Act is applicable to the Company as a "foreign private
issuer."  See Item 9 - Management's Discussion and Analysis of
Financial Condition and Results of Operations.

Introduction
     
     Sparkling Spring Water Group Limited ("Sparkling Spring" and
together with the Additional Registrants named herein, the "Company")
is incorporated under the laws of the Province of Nova Scotia, Canada
and provides containered water and rental water coolers to home and
office markets in British Columbia and the Maritime Provinces of
Canada, England, Scotland and the Pacific Northwestern United States.
     
     On December 23, 1997, Sparkling Spring filed a Registration
Statement on Form F-4 (Registration No. 333-43061) (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC")
with respect to the registration of its 11.5% Senior Subordinated
Notes due 2007 (the "Notes") and the registration of the Guarantees
("Guarantees") on a subordinated basis by Sparkling Springs' existing
and future subsidiaries (the "Subsidiary Guarantors").   The
Registration Statement was declared effective on April 1, 1998.  The
Company is a "foreign private issuer" within the meaning of Rule 405
under the Securities Act of 1933, as amended (the "Securities Act").



ITEM 1.   DESCRIPTION OF BUSINESS

Background
     
     Sparkling Spring Water Limited ("SSWL"), a wholly-owned
subsidiary of Sparkling Spring, was founded in 1971 in Halifax, Nova
Scotia to operate in the bottled water industry. In 1988, a
controlling interest in the Company was acquired by Maritime Beverages
Limited ("MBL"), a Pepsi-Cola bottler, which was managed by G. John
Krediet, Kent Dillon Schickli, and Stephen L. Larson, principals of
C.F. Capital Corporation ("CFCC"), an investment and management
company.  When MBL sold its soft drink bottling holdings to Pepsi-Cola
Canada Limited in 1992, Messrs. Krediet and Larson retained their
ownership of SSWL.  Mr. Schickli left CFCC in 1992 and rejoined the
Company as Chief Financial Officer on April 3, 1998.
     
     Sparkling Spring is one of the world's largest providers of
bottled water delivered directly to residential and commercial
markets. The Company's primary focus is on the bottling and delivery
of high quality drinking water in five-gallon and six-gallon bottles
to homes and offices, and the rental of water coolers. The Company's
strategy has been to achieve significant market positions in a number
of markets and thereby realize the operating leverage that can be
obtained once a distribution system is established. Based upon its own
internal estimates, the Company believes it has approximately 52%
market share in British Columbia, 70% in the Maritime Provinces, 22%
in the United Kingdom, 65% in Scotland, 44% in Oregon and 20% in
Washington. The Company believes it is the market share leader in each
of these markets, except in Washington where it believes it is the
second largest provider. By virtue of its leadership position in its
markets, the Company benefits from several competitive advantages over
smaller operators, including more efficient distribution operations,
purchasing synergies, quality customer service and well-established
infrastructure. Management believes the Company's leadership in each
of its served markets creates a significant barrier to entry for
prospective competitors.
     
     Company sales by geographic market for each of the past three
fiscal years are as follows:
     
  
  
                                1995           1996          1997
                                                            
Canada                      $ 5,061,581    $15,363,998    $19,416,108
United Kingdom               10,287,533     11,962,351     17,658,190
United States                    --             --          4,999,586

                            $15,349,114    $27,326,349    $42,073,884
     
     The Company delivers bottled water to a base of approximately
115,000 water coolers in its served markets consisting of
approximately 91,900 customers who rent water coolers from the Company
and 23,100 customers who own their coolers.  Rental customers
typically sign a one-year contract, providing the Company with a
stream of relatively stable revenue from both a monthly cooler rental
charge and the sale of bottled water.  Water only customers generate
revenue through the sale of bottled water and ancillary services such
as cooler repairs.  The Company believes that direct delivery water
cooler companies enjoy several advantages over retailers of bottled
water. Customers suffer inconvenience and potentially incremental cost
if they choose to switch from one water cooler company to another. In
addition, direct delivery water cooler operators such as the Company
have made significant capital investments in inventories of water
coolers and bottles, a truck fleet and bottling facilities. Management
believes the capital intensity of the water cooler business and the
complexity of direct delivery provide a second significant barrier to
entry.
     
     The Company has a history of completing and integrating
acquisitions, having made fifteen acquisitions since 1993. These
acquisitions have enabled the Company to rapidly expand into
attractive markets and increase production capacity. In addition to
completing the acquisitions of fast-growing bottled water companies,
management has improved the operations and profitability of each
acquired company. For four acquired companies for which the Company
has comparable full-year pre-acquisition and post-acquisition data,
revenue and EBITDA increased, on average, by 18.5% and 64.0%,
respectively, in the first year after the acquisition. Management
believes its reputation as an experienced and well-capitalized
industry consolidator facilitates its access to additional acquisition
candidates and generates unsolicited offers from prospective sellers.
Since January 1, 1997, the Company has completed ten acquisitions
through which it entered the attractive U.S. bottled water market and
expanded its leadership positions in Canada and the United Kingdom.
     
     The results of both significant internal growth and the execution
of the Company's acquisition strategy are evidenced by the growth in
the Company's revenue and EBITDA over the past five years. Revenue
increased at a CAGR of 61.6% from $3.8 million in 1992 to $42.1
million in 1997. Over the same period, EBITDA increased at a CAGR of
83.1% from $0.5 million to $11.2 million, with EBITDA margins
increasing from 14.3% to 26.7%.  See Item 9 - Management's Discussion
and Analysis of Financial Condition and Results of Operations.
     
     The Company is led by an experienced senior management team whose
members average more than 13 years in the beverage industry. A trust
for the benefit of G. John Krediet, the Chairman of Sparkling Spring,
and his children, owns 50.9% of the common stock ("Common Stock") of
Sparkling Spring after giving effect to the Reorganization as
described later in this Report.  Mr. Krediet successfully executed a
consolidation of Canadian Pepsi-Cola bottlers and, together with other
senior management, identified the bottled water consolidation
opportunity. Mr. Schickli assisted Mr. Krediet in the Canadian Pepsi-
Cola consolidation in the late 1980's and early 1990's and has
significant experience in the acquisition of beverage businesses and
as chief financial officer of mid size beverage operations. Stewart E.
Allen, President of SSWL since 1992, has managed the operations of the
business focusing on profitably increasing the penetration levels in
each of its markets. Mr. Allen previously served as Vice President of
Sales and Marketing for Maritime Beverages Limited, the Pepsi-Cola
business, prior to assuming the Presidency of SSWL.  See Item 10 -
Directors and Officers of Registrant.

Industry Overview
     
     Bottled water continues to be one of the fastest growing segments
of the U.S. beverage industry for the past ten years, generating $3.6
billion of sales in 1996. According to Beverage Marketing Corporation,
the U.S. bottled water market experienced a CAGR of 8.5% from 1986 to
1996, and is projected to grow at a slightly lower CAGR of 7.3%
between 1996 and 2001. Bottled water volume in the U.S. increased from
629.7 million gallons in 1980 to 3.1 billion gallons in 1996, and is
projected to reach 4.4 billion gallons in 2001. Furthermore, per
capita bottled water consumption quadrupled from 1980 to 1996 with
annual consumption in the U.S. increasing from 2.8 gallons per capita
in 1980 to 11.7 gallons per capita in 1996. The projected per capita
consumption is expected to reach 15.8 gallons in the U.S. by the year
2001. The water cooler segment generated approximately $1.2 billion of
sales in 1996 or 1.2 billion gallons, representing 38.5% of the total
U.S. bottled water market. The U.S. water cooler market experienced a
CAGR of 3.9% between 1990 and 1996, and is projected to grow at an
annual rate of 6.5% from 1996 to 2001, reaching 1.6 billion gallons by
2001.
     
     According to Zenith International Ltd., the bottled water market
in the U.K. generated (pound)400.0 million of sales in 1996, experienced a
CAGR of 11.6% from 1990 to 1996, and is projected to grow at an annual
rate of 9.0% between 1996 and 2000. Bottled water volume has increased
from 111.0 million gallons in 1990 to approximately 214.0 million
gallons in 1996 and is projected to reach 302.0 million gallons by the
year 2000. Annual consumption of bottled water in the U.K. has
increased from 1.9 gallons per capita in 1990 to 3.6 gallons per
capita in 1996 and is projected to grow to 5.1 gallons per capita by
2000. The water cooler segment generated approximately (pound)65.0 million
or 25.1 million gallons, representing 11.7% of the total U.K. bottled
water market in 1996, increasing from 3.5% in 1990. In addition, the
U.K. water cooler market experienced a CAGR of 36.8% between 1990 and
1996, and is projected to grow at a CAGR of 13.9% from 1996 to 2000,
reaching 42.3 million gallons by the year 2000.
     
     In Canada, industry figures compiled by the Canadian Bottled
Water Association indicate that bottled water consumption totaled 643
million litres in 1997.  According to Hidell-Eyster Technical Services
Inc., the estimated growth in the Canadian bottled water market was
10% in 1997, with the home and office delivery business growing at 5%.
It is estimated that there are 500,000 coolers in Canada or 1.6
coolers for every 100 people.  Consumption of bottled water in 1997
was estimated to be 21.2 litres per capita.
     
     Management believes the strong industry growth has been and will
continue to be driven by: (i) concerns related to the quality of tap
water sources, (ii) consumer preferences for healthy products,
(iii) taste preferences over tap water and other refreshment beverages
and (iv) favorable demographics.
     
     Tap Water Concerns.  The aging of the tap water supply
infrastructure and the high cost of adequately maintaining or
replacing existing water delivery systems have resulted in an increase
of tap water contamination incidences in recent years. Consequently,
there has been a decrease in consumers' confidence in the quality of
tap water, accompanied by an increase in consumption of bottled water.
Management believes that this trend will continue.
     
     Healthy Products.  There is a movement toward a healthier
lifestyle and the consumption of healthy products. Within the "healthy
products" segment, clear or natural colored products are experiencing
significant growth. Bottled water is perceived as a product with
strong health and fitness appeal.
     
     Taste Preferences.  The taste of tap water is affected by
cleaning substances used to filter water. The products used to
sterilize tap water, such as chlorine, are safe but often produce an
undesirable after-taste and, consequently, many people prefer to drink
bottled water.
     
     Favorable Demographics.  Consumption of bottled water is much
more prevalent among younger consumers. According to Beverage
Marketing Corporation, adults between the ages of 25 and 34 comprise
the demographic group most likely to consume bottled water. The
Company believes that, as younger consumers age and their purchasing
power increases, sales of bottled water will continue to grow.
     
     The bottled water industry is highly fragmented in North America.
The bottled water market is comprised of approximately 2,500 companies
generating approximately $4.0 billion of sales. Of these companies,
the five largest companies account for approximately 55% of the total
market, with the remainder comprised of hundreds of small regional
companies. Management believes that the industry will continue to
consolidate as (i) operating leverage of the larger companies makes
the smaller companies uncompetitive, (ii) succession issues at many
smaller, family owned companies lead a number of independent companies
to exit the industry, and (iii) pressure to meet improving water
quality standards eliminates low quality producers.
     
     The Company believes that the competitive structure of the water
cooler segment favors a larger operator with a successful
consolidation track record. As a market leader in the majority of its
geographic markets, the Company believes that it is well-positioned to
benefit from the growth and consolidation trends in the industry.

Business and Products
     
     The Company generated approximately 79.2% of its 1997 revenue
from the sale of bottled water products for water coolers and the
rental of water coolers, 6.0% of its revenue from the sale of bottled
water is smaller retailed sized packages and 14.8% of its revenue from
related activities including the sale of paper cups, coffee, water
filtration devices, water through vending machines and cooler
sanitation services.
     
     Bottled Water.  The Company generated approximately 54.6% of its
1997 revenue from the sale of bottled water used in water coolers.
Bottled water for water coolers is primarily sold in two sizes: a
five-gallon (18 litre) bottle and a six-gallon (22 litre) bottle. In
each market, a smaller package (3 gallon or 11 litre) exists for
residential customers who may not be capable of lifting the five or
six-gallon product or who may have storage constraints. The Company
offers water bottles in plastic packaging that facilitates storage,
and has non-spill caps. While its pricing varies from market to market
and the Company frequently offers promotional discounts in certain
markets, the Company charges on average approximately $7 for a
five-gallon bottle of water.
     
     The Company also sells water in smaller retail sized containers
such as one gallon, 1.5 litre and 500 ml sizes.  In 1997, the Company
generated approximately 6.0% of its total revenue from these smaller
sized packages.
     
     The Company primarily markets four types of water: spring,
premium drinking, steam-distilled, and fluoridated. The sale of
steam-distilled water and fluoridated water accounted for less than
1.0% of the Company's revenue in 1997. Descriptions of each type of
water follow:
     
     Spring Water.  Water, which has been naturally filtered by its
passage through various geological layers, is drawn from a protected
underground reservoir called an aquifer. It can then be either bottled
at the source or transported in stainless steel tankers to a more
strategically located bottling facility.
     
     Before bottling, spring water is passed through a micron filter
which removes sediment while retaining the natural mineral content of
the water. The water is then purified through an industry standard
purification process known as ozonation. This sterilization process is
over 400 times more effective than chlorination and does not leave a
residual taste.
     
     Premium Drinking Water.  This water is drawn from local municipal
sources. It is passed through a series of carbon and sand filters,
processed by either reverse osmosis or deionization, ozonated and then
bottled. Premium drinking water has 99.9% of all impurities removed
from it, including its natural mineral content.
     
     Steam-Distilled Water.  This water can be obtained from either a
spring or municipal source. The water is then converted to steam. Once
the steam condenses it is then ozonated and bottled. Steam-distilled
water is similar to premium drinking water since it has 99.9% of all
impurities removed.
     
     Fluoridated Water.  Fluoridated water is premium drinking water
that has one part per million of fluoride added. It is a niche market
product that appeals to families with young children.

     The following table summarizes the Company's operations in its
existing markets:

                                             
  Region                Principal Products         Brand Names
                                             
British Columbia      Premium Drinking Water     Canadian Springs
                      Spring Water               
                      Steam-Distilled            
                                             
Maritime Provinces    Spring Water               Sparkling Springs
                      Distilled Water            
                                             
United Kingdom        Spring Water               Nature Springs
                      Spring Water               Water At Work
                                             
United States         Premium Drinking Water     Crystal Springs
                      Fluoridated Drinking Water
                      Spring Water               
                      Premium Drinking Water     Cullyspring
                      Steam-Distilled            
     
     Water Coolers.  The Company generated approximately 24.6% of its
revenue in 1997 from the rental of water coolers. The Company has a
base of approximately 115,000 water coolers in its served markets
consisting of approximately 91,900 customers who rent coolers from the
Company and 23,100 customers who own their coolers.  Rental customers
typically sign a one-year contract, providing the Company with a
stream of relatively stable revenue from both a monthly cooler rental
charge and the sale of bottled water.  The Company's large installed
customer base creates operating efficiencies by supporting a level of
infrastructure that can be leveraged to support incremental cooler
installations at an attractive marginal profitability rate. While its
pricing varies from market to market and depends on the water cooler
selected by the customer, the Company's current average monthly rental
charge for its coolers is approximately $12.
     
     The following table presents management estimates of certain
information relating to the Company's cooler base as of December 31,
1997:



                           British    Maritime     United      United
                           Columbia   Provinces    Kingdom     States
                                                                      
Number of Installed         53,241      13,850      25,336      22,610
  Coolers
% Residential Customers       65%         52%          2%         35%
% Commercial Customers        35%         48%         98%         65%
     
     The Company purchases its water coolers from one of three
preferred suppliers and maintains a stock of spare parts at delivery
depots. The Company strips down, cleans, and redeploys returned water
coolers prior to all new installations. The Company's average cost per
water cooler is approximately $150, and the Company estimates that the
average life of a water cooler is ten years. The typical pay back
period on a water cooler investment (assuming only rental revenue) is
approximately 13 months. In the event of termination of the rental
agreement, water coolers can be readily redeployed at a relatively low
cost to the Company. In addition, in certain markets the Company
charges a water cooler collection fee when a customer opts to
discontinue purchasing water.
     
     Other.  The remaining 14.8% of the Company's 1997 revenue was
generated through the sale of paper cups, cooler sanitation services,
coffee delivery, the sale of water filtration devices and the sale of
water through vending machines.

Business Strategy
     
     Bottled water continues to be the fastest growing segment of the
beverage industry, growing at a CAGR of 10.5% since 1980 according to
Beverage Marketing Corporation. Management believes this growth stems
primarily from two sources: (i) consumer dissatisfaction with tap
water and (ii) increased consumer health consciousness resulting in
the substitution of water for other less-healthy beverages. The
Company expects to benefit from the growing demand for quality
drinking water by increasing its installed base of water coolers,
increasing the water and related products offered through its
established distribution system, and continuing to be a leader in the
consolidation of the highly fragmented bottled water industry. In
particular, the Company expects to continue to pursue the following
business strategies:
     
     Focus on the Water Cooler Segment Within the Growing "Alternative
to Tap Water" Market.  Management believes that the overall growth of
the bottled water industry and the relatively low level of water
cooler penetration in Canada and the U.K., in particular, provide the
Company with significant growth opportunities. The Company believes
that health concerns and problems with the taste and odor of tap water
have generated consumer demand for an "alternative to tap water,"
driving consumers to increasingly rely on bottled water and filtration
systems in order to satisfy their drinking water needs. The Company
intends to take advantage of this growth in demand by offering a
premium product through multiple channels (i.e., direct delivery,
retail and filtration systems), with a specific focus on the "direct
delivery" water cooler segment.
     
     Management believes that the water cooler business enjoys higher
margins, less competition and greater operating leverage than either
the retail bottled water or the water filter businesses. Sales in this
segment are generally less price sensitive than retail sales of
bottled water because the customer is generally more concerned with
service and convenience. In addition, there are inconvenience factors
and potentially increased costs associated with switching suppliers.
Furthermore, water cooler companies generally have lower advertising
costs than companies pursuing retail sales of bottled water because
consumers generally do not select a water cooler provider on the basis
of brand name. The water cooler business is also generally less
competitive than other segments of the bottled water industry due to
the relative capital intensity of the operations and direct delivery
distribution requirements for its business. Finally, the significant
growth potential in the water cooler market and the low levels of
water cooler penetration allow industry participants to focus on
attracting new customers rather than on capturing market share from
competitors.
     
     Leverage Existing Infrastructure.  Due to the significantly fixed
distribution system associated with the direct delivery of bottled
water in a geographic area, additional operating leverage can be
achieved by increasing route density through incremental market
penetration. In addition to increasing the overall customer base, the
Company expects to continue to benefit as per capita consumption
continues to climb with each existing customer consuming more water.
Finally, the Company utilizes its route systems to offer products
which are complementary to bottled water, including cups, cooler
sanitation services, coffee and related products.
     
     In addition to benefiting from internal growth in its markets,
the Company leverages its infrastructure with each acquisition in
adjacent or overlapping territories. Specific operating initiatives
employed by the Company typically include: (i) maximizing distribution
route efficiencies, (ii) consolidating bottling facilities,
(iii) eliminating duplicative administrative costs and (iv) utilizing
favorable purchasing opportunities. The Company's existing
infrastructure and scale of operations provide an attractive
opportunity to continue to add incremental customers at a higher
marginal profitability rate. The Company has achieved significant cost
savings in its existing operations as reflected in the increase in its
EBITDA margin from 14.3% in 1993 to 25.2% in 1996 and 26.7% in 1997.
     
     Pursue Strategic Acquisitions.  The Company has pursued a
disciplined acquisition strategy to create value by taking advantage
of the consolidation of the highly fragmented bottled water industry.
The Company has developed and implemented a "hub and spoke" approach
to acquiring companies in new markets by identifying one of the
largest bottled water companies as a platform acquisition, and
complementing it with smaller fill-in acquisitions in neighboring or
overlapping geographic territories. The Company is generally unwilling
to enter a market through an acquisition unless the company being
acquired is both one of the market share leaders and provides the
critical mass and local management talent necessary to act as a
platform in that market. While the purchase price paid for a platform
company is typically higher than that for a fill-in acquisition (as
measured using multiples of first year  EBITDA), the Company is able
to reduce its average acquisition multiple by opportunistically
acquiring "spoke" distribution routes.  These spoke acquisitions can
be acquired at more attractive prices due to the limited strategic
options available to these smaller operators and synergies to be
gained by Sparkling Spring from consolidating these companies into the
'platform' business.  The Company's recent acquisitions of Cullyspring
Water Co., Inc. ("Cullyspring") and Crystal Springs Drinking Water,
Inc. ("CSD") demonstrate its plan to continue to expand in the U.S.
     
     Provide Outstanding Customer Service.  The Company believes
quality of service and reliability of delivery are the primary
competitive factors in the water cooler business. The quality of
service is measured by the Company's ability to: (i) reliably deliver
bottled water on schedule, (ii) meet customer shortages with the quick
delivery of refills, (iii) provide regular maintenance and sanitation
of water coolers and (iv) effectively address any other needs of a
customer. Management monitors on a monthly basis the Company's
customer "churn" rate (its non-renewal rate with respect to its water
cooler rental agreements) in an effort to continually enhance customer
service. The Company's average churn rate was approximately 2.0% per
month in 1997 which management believes is significantly lower than
the industry average churn rate.
     
     Summary of Business Strategy.  All four of the above business
strategies are presently being pursued by the Company and will
continue to be pursued for the foreseeable future.  The Company
believes that all four business strategies are important to its
success, but that leveraging its existing infrastructure and focusing
on the "Alternative to Tap Water" market are of the most significance.

Acquisitions
     
     The Company has expanded its operations through a number of
acquisitions designed to consolidate existing markets or enter new
markets. The Company has been successful in integrating acquired
companies into its existing operations and increasing the
profitability of acquired companies through the elimination of
duplicative overhead functions, realization of operating and
purchasing efficiencies and implementation of the Company's management
systems. As a result of these acquisitions, the Company has expanded
its leadership position in Canada, entered the attractive U.S. water
cooler market and further bolstered its leading presence in the U.K.
     
     On April 14, 1993, the Company acquired Crystal Springs Limited
("CSL"). CSL served the Cape Breton, Nova Scotia bottled water and
cooler rental market. CSL was subsequently merged into SSWL.
     
     On June 8, 1994, the Company acquired the water cooler division
of Buxton Mineral Water Company Limited through Sparkling Spring Water
UK Limited ("SSWUK"), a wholly-owned subsidiary of SSWL. The water
cooler industry in the U.K. was identified as being much less
developed than the North American market and, thus, having a
significant growth potential.
     
     On April 26, 1995, the Company acquired Aquaporte (UK) Limited
("Aquaporte UK"). Aquaporte UK had a predominantly London-based
customer list and a depot close to central London. The operation was
merged with SSWUK and the combined businesses became the largest water
cooler company serving the commercial market in the U.K.
     
     On January 18, 1996, the Company acquired Canadian Springs Water
Company Ltd. ("Canadian Springs"). Canadian Springs is the leading
home and office water cooler company in British Columbia, with
operations in Vancouver, Victoria, Kelowna and Nanaimo. The
acquisition served to consolidate the Company's position in Canada
while providing it with access to the fastest growing bottled water
market in Canada.
     
     On May 19, 1996, the Company acquired Water Jug Enterprises
Limited ("Water Jug"). Water Jug, which serves the Kamloops area in
British Columbia, has further solidified the Company's market position
in British Columbia.
     
     On January 2, 1997, the Company acquired D & D and Company, Inc.,
doing business as Mountain Fresh Bottled Water Co. ("Mountain Fresh").
Mountain Fresh is headquartered in Portland, Oregon, and holds the
number three position in the Oregon market.
     
     On January 28, 1997, the Company acquired Withey's Water
Softening & Purification Limited ("Withey's Water"). Withey's Water is
headquartered in Prince George, British Columbia, and is the dominant
supplier of bottled water and filtration systems in the rural market
of upper British Columbia. Withey's Water represents a fill-in
acquisition, strengthening the Company's already leading presence in
the home and office water cooler market in British Columbia.
     
     On January 30, 1997, the Company acquired High Valley Water
Limited ("High Valley"). High Valley is headquartered in Kelowna,
British Columbia and is comprised of four bottled water distributors.
     
     On February 5, 1997, the Company acquired Marlborough Employment
Agency Limited doing business as "Water At Work".  Water at Work is
headquartered in Glasgow, Scotland, and is Scotland's largest water
cooler company and the fourth largest in the U.K., serving both the
Glasgow and Edinburgh markets. The acquisition of Water At Work
further bolstered the Company's leadership position in the U.K. market
and established its leading presence in the attractive Scottish
market.
     
     On June 4, 1997, the Company acquired the water cooler operations
of Soja Enterprises, Inc. ("Soja"). Soja serves the commercial
community of Portland, Oregon.
     
     On June 23, 1997, the Company acquired Crystal Springs Bottled
Water Co., Inc. ("Crystal Springs"). Crystal Springs is the second
largest five-gallon distributor serving Oregon and is based in
Portland. This acquisition provided the Company with greater route
density in its established Portland market.
     
     On October 23, 1997, the Company acquired Cullyspring Water Co.,
Inc. Cullyspring is a Seattle, Washington based bottled water company
focusing on the direct delivery of five-gallon containers to homes and
offices and the rental of water coolers.
     
     On December 17, 1997, the Company purchased all of the
outstanding capital stock of Crystal Springs Drinking Water, Inc.
("CSD").  CSD is a Seattle-based bottled water company focusing on the
direct delivery of five-gallon containers to homes and offices and the
rental of water coolers.
     
     On February 24, 1998, the Company purchased all of the
outstanding capital stock of Coastal Mountain Water Corp. ("Coastal").
Coastal is based in Vancouver, British Columbia and focuses on the
direct delivery of eighteen litre containers of water to residential
and commercial customers and the rental of water coolers.
     
     On May 16, 1998 the Company purchased all of the outstanding
capital stock of Krystal Fountain Water Co. Ltd. ("Krystal Fountain").
Krystal Fountain operates primarily in the  M25 area in London,
England.

The Bottling Process
     
     The Company draws its spring water from local sources. The spring
water is bottled at the source, in the case of the Maritime Provinces,
or transported to a Company bottling facility by stainless steel
tanker in other locations. Prior to final bottling, the spring water
is filtered and ozonated. Ozonation is a process whereby impurities
not removed through ordinary filtration are removed through the
injection of oxygen. The process involves a special form of oxygen,
ozone, which is the strongest disinfectant and oxidizing agent
available for water treatment. The added oxygen quickly dissipates and
results in tasteless and odorless purification as compared to
chlorination. This process is designed to prevent bacteria and other
contaminants from being transferred from the spring or the tanker to
the finished product.
     
     In addition to spring water, the Company also produces premium
drinking water. The Company accesses local, publicly-available water
supplies and processes and purifies the product through reverse
osmosis to remove chlorine and other chemicals frequently found in tap
water. The product then goes through the ozonation process prior to
bottling as premium drinking water.
     
     The Company has nine bottling facilities located throughout
British Columbia, the Maritime Provinces of Canada, England, Scotland
and the Pacific Northwestern United States.
     
     British Columbia.  The Company operates four bottling facilities
located in Vancouver, Victoria, Kamloops and Prince George, British
Columbia. The Vancouver and Prince George facilities produce both
premium drinking water and spring water. The Company transports the
spring water from sources located in the Coastal Mountains pursuant to
a non-exclusive contract without a fixed term. The bottling line in
Victoria is capable of producing both spring water and premium
drinking water but currently only produces premium drinking water.
     
     Maritime Provinces.  The Company's bottling line is located in
Valley, Nova Scotia, which is also the site of a spring owned by the
Company. Water is bottled at the source, processed and distributed to
the Company's four depots and distributors in Nova Scotia, New
Brunswick and Prince Edward Island.
     
     England.  The Company operates its bottling operations in a
newly-constructed production facility, adjacent to its largest
distribution depot, in Buckinghamshire, England. Completed in January
1997, the cost of construction of the new production operation was
$1.3 million. The new high speed bottling line installed at the
facility is expected to generate significant cost savings in the
future. Spring water is purchased from various sources and transported
to the bottling line for processing.
     
     Scotland.  The Company operates a bottling line which processes
water drawn from a 100-year old well in Dumfries, Scotland. The water
is processed and bottled in a bottling line operated by Natural Water
Limited, a wholly-owned subsidiary of Sparkling Spring.
     
     United States.  From its Portland, Oregon facilities, the Company
processes premium drinking water, as well as spring water shipped from
a source in the Cascade Mountains pursuant to a non-exclusive contract
without a fixed term. From its Seattle, Washington facility, the
Company processes premium drinking water.

     The following table provides certain information regarding the
Company's bottling facilities:

    Location               Type of Water       Bottling Capacity
                                              
Vancouver, British        Premium Drinking    490 bottles per hour
  Columbia                Spring              
                          Steam Distilled     
                                              
Victoria, British         Premium Drinking    225 bottles per hour
  Columbia
                                              
Kamloops, British         Premium Drinking    300 bottles per hour
  Columbia
                                              
Prince George, British    Premium Drinking    125 bottles per hour
  Columbia                Spring              
                                              
Valley, Nova Scotia       Spring              485 bottles per hour
                          Distilled           
                                              
Buckinghamshire, England  Spring              1,200 bottles per hour
                                              
Glasgow, Scotland         Spring              200 bottles per hour
                                              
Portland, Oregon          Premium Drinking    600 bottles per hour
                          Fluoridated Drinking
                          Spring              
                                              
Seattle, Washington       Premium Drinking    425 bottles per hour
                          Steam Distilled     

Sales and Marketing
     
     The Company markets its products principally through telephone
directory yellow page advertisements, newspaper advertisements, mall
shows, coupons, product sponsorship programs, direct mail, radio
commercials and various referral programs which are supported by the
efforts of approximately 113 salaried sales and marketing personnel.
Almost half of the Company's new customers are derived from incoming
telephone calls resulting from yellow page advertisements, the key
advertising vehicle for the Company. To supplement this effort, the
Company's marketing team solicits potential new customers in specific
geographical areas in which the Company desires to increase the
density of existing routes or in which it desires to establish new
routes. A potential new customer may be offered various introductory
promotions including a free trial offer. The Company's marketing
activity emphasizes the benefits of bottled water, the convenience of
a water cooler as well as the associated regular delivery of bottled
water and, to a lesser extent, the creation of brand awareness.
     
     An important part of the Company's sales, marketing and customer
service strategy is its focus on retaining customers. The Company
experienced a relatively low average churn rate of its water cooler
rental agreements of 2.0% per month in 1997, which management believes
is significantly lower than the industry average. The Company has also
generally lowered the churn rate of the businesses it has acquired.
Its primary strategy for minimizing its churn rate is a focus on
outstanding customer service. In addition, the Company employs certain
strategies to retain customers who indicate they wish to discontinue
receiving bottled water. Customer service representatives are
compensated for the customers they help to retain.

Distribution
     
     As of December 31, 1997, the Company owned or leased
approximately 150 trucks and employed 215 people in its distribution
operations. The average cost per new truck is approximately $55,000,
and the Company generally delivers to neighborhoods within a ninety
minute drive from its distribution centers. Each truck has a useful
life of 7 to 12 years and can hold 120 to 300 five- or six-gallon
bottles. The Company's drivers are generally paid on a
per-delivered-bottle basis, promoting efficiency and higher
utilization of the delivery trucks. On average, a truck driver
services approximately 1,000 customers. The average customer typically
receives delivery once every two weeks. In addition, the Company's
drivers actively generate sales and are compensated for each new
customer contract they originate.
     
     Management believes that one of the most important success
factors in the delivered bottled water business is delivery route
efficiency. Route efficiency is the critical cost factor in the water
cooler business, as the average cost of local delivery per bottle is
over four times the cost of preparing one bottle for distribution.
However, the marginal distribution cost of an additional bottle on an
existing route is relatively low.

Competition
     
     The Company competes in the "alternative to tap water" market in
two areas. First, it competes directly with other home and office
delivery bottled water companies in its geographic markets. This
segment is highly fragmented with the vast majority of the companies
being operated as small entrepreneurial and family-owned businesses.
The Company believes it has a leading market share position in England
and Scotland in the U.K., British Columbia and the Maritime Provinces
of Canada, and Oregon in the U.S. Furthermore, management believes it
has a second market share position in the state of Washington.
Management believes that its access to capital, professional
management, and sophisticated reporting and accounting systems are
equal to or greater than those of its local competitors in these
markets. The Company believes quality of service and reliability of
delivery are the primary competitive factors in the water cooler
business. Additionally, the Company believes that the capital
intensity of its operations creates significant barriers to entry.
     
     The Company also competes indirectly with companies that
distribute water through retail stores and vending machines.
Management believes that the competitive advantage of water coolers
over these alternative distribution channels is primarily based on the
convenience of home or office delivery and, to a lesser extent, price.
Similarly, the Company competes with providers of on-premises water
filtration systems, including systems distributed through retail
outlets, which the Company believes are aimed at less affluent
consumers. In certain markets the Company itself markets and provides
on-premises water filtration systems.
     
     The "alternative to tap water" industry also includes a number of
well-established, well-capitalized companies, most of which do not
currently compete directly in the Company's markets. These include
Nestle S.A., which owns Perrier and the Perrier Group of America.
Perrier Group of America operates the Arrowhead, Poland Spring,
Zephyrills, Ozarka, Oasis and Great Bear brands. Suntory owns Belmont
Springs, Hinkley & Schmitt, Crystal, Kentwood, and Polar. BSN Group
owns the Evian and Dannon brands and also operates the Crystal Spring
(Toronto), Spring Valley, and Laurentian businesses. McKesson
Corporation operates the Sparkletts business. Ionics Incorporated
operates the Aquacool businesses. In addition, United States Filter
Corp. and Culligan Water Technologies Inc. compete in the water
filtration segment.

Customers
     
     The Company has grown from a base of approximately 8,000 water
coolers in 1991 to a base of approximately 91,900 rental and 115,000
total customers as of December 31, 1997.  No customer accounted for
more than 1.0% of the Company's revenue in 1997. Approximately 65% of
the Company's revenue in 1997 was derived from sales to commercial
establishments, with the balance attributable to residential
customers. Substantially all of the Company's U.K. customers are
commercial establishments. The Company's commercial customers include
not only large established businesses, but also smaller regional and
local shops, offices, warehouses and production facilities. The
Company's customers include British Rail, British Telecom, the Bank of
Scotland, Heathrow Airport, National Westminster Bank, Nike, Toronto
Dominion Bank and the Canadian Pacific Railway. Management believes
that the diversity of its customer base protects the Company from
reliance on any one customer or a particular industry segment. In
addition, the Company has a number of short term bottling contracts
with independent beverage companies, including Sobey's and Pepsi-Cola,
as well as with supermarkets such as Fred Meyer, Inc. and Safeway,
Inc.

Employees
     
     As of December 31, 1997, the Company had approximately 523 full-
time employees, of which 113 were in sales and services, 215 in
distribution, 114 in production and warehouse and 81 in
administration. The workforce is non-unionized and temporary workers
are used during peak demand periods. The Company believes that it
enjoys generally good relations with its employees.

Seasonality
     
     Bottled water sales are subject to seasonal variations with
decreased sales during cold weather months and increased sales during
warm weather months. Water cooler rentals are typically paid monthly
and mitigate the seasonal effect of water sales.

Foreign Operations
     
     For the year ended December 31, 1997, 46.2% of the Company's
revenue was generated in Canada in Canadian dollars, 42.0% of the
Company's revenue was generated in the U.K. in pounds sterling and
11.8% of the Company's revenue was generated in the U.S. in U.S.
dollars.  In addition, a substantial portion of the expenses incurred
by the Company during that period were denominated in currencies other
than U.S. dollars.  Foreign operations are subject to a number of
special risks, including, but not limited to, risks with respect to
fluctuations in currency exchange rates, regional and national
economic conditions, economic and political destabilization, other
disruptions of markets, restrictive actions by foreign governments
(such as restrictions on transfer of funds and unexpected changes in
regulatory environments), changes in foreign laws regarding trade and
investment and foreign tax laws.
     
     The Company does not engage in transactions in the ordinary
course of its business to hedge itself against exposure to currency
risks.  However, on December 2, 1997, the Company entered into cross
currency swap transactions in Canadian dollars ($28 million) and
British pounds sterling ($30 million) for the purpose of protecting
itself from future foreign currency fluctuations.  To date, the
Company has entered into no other foreign currency swap transactions.

Regulation
     
     The Company's operations are subject to various federal, state
and local laws and regulations, which require the Company, among other
things, to obtain licenses for its business and equipment, to pay
annual license and inspection fees, to comply with certain detailed
design and quality standards regarding the Company's bottling plant
and equipment, and to continuously control the quality and quantity of
the water dispensed. Several jurisdictions have regulations that
require the Company to obtain certification for its bottled water. The
Company believes that it is currently in substantial compliance with
these laws and regulations and has passed all regulatory inspections.
In addition, the Company does not believe that the cost of compliance
with applicable government laws and regulations is material to its
business. However, any failure by the Company to comply with existing
and future laws and regulations could subject it to significant
penalties.  Further, governmental laws and regulations are subject to
change and there can be no assurance that such laws or regulations
will not be modified in a manner that imposes additional costs on the
Company or otherwise has a material adverse effect on the Company's
financial position or results of operations.
     
     Each of the Company's operating subsidiaries employs a Quality
Control Manager and follows internal, industry and government testing
requirements. In addition, all water is ozonated to ensure purity of
the Company's product. Ozonation is the government and industry
standard for the treatment of water prior to bottling.
     
     Canada.  In Canada, bottled water is considered a food product
and, as such, is governed by the Federal Department of Health and
Welfare--Health Protection Branch under the Food and Drug Act. The
Company's production site is audited annually according to the Good
Manufacturing Practices governing such plants. This inspection is
performed by the National Sanitation Foundation ("NSF") and the Health
Protection Branch.
     
     The Company is in good standing with the International Bottled
Water Association (the "IBWA") and the Canadian Bottled Water
Association (the "CBWA"). The IBWA mandates compliance with strict
quality control standards on a global basis. The CBWA is the Canadian
chapter of the IBWA.
     
     United Kingdom.  In the U.K., bottled water is governed by the
European Union's Mineral Water Directive and Drinking Water in
Containers Regulations. In addition, the Company is a member of the
Bottled Water Cooler Association (the "BWCA") and the IBWA, both of
which play a major role in setting industry standards. The BWCA
requires its members to adhere to a Code of Practice and pass an
annual quality inspection conducted by an independent third-party
organization. The current BWCA plant inspection program is
administered by the NSF. The Company believes that it is in good
standing with the BWCA.
     
     United States.  In the U.S., bottled water is regulated by the
Federal Food and Drug Administration (the "FDA") and follows the
Quality Standards, Standards of Identity and Current Good
Manufacturing Practices guidelines under the Code of Federal
Regulations. As in the case of Canada and the U.K., inspections of the
Company's production sites in the U.S. are conducted annually by the
NSF.

Environmental Matters
     
     The Company's operations and properties are subject to a wide
variety of federal, state, local and international laws and
regulations, including those governing the use, storage, handling,
generation, treatment, emission, release, discharge and disposal of
certain materials, substances and wastes and the health and safety of
employees (collectively, "Environmental Laws"). Such laws, including
but not limited to, those under the Comprehensive Environmental
Response, Compensation & Liability Act may impose joint and several
liability and may apply to conditions at properties presently or
formerly owned or operated by an entity or its predecessor as well as
to conditions of properties at which wastes or other contamination
attributable to an entity or its predecessor have been sent or
otherwise come to be located. Based upon its experience to date, the
Company believes that it is in substantial compliance with existing
Environmental Laws and that any liability for known environmental
claims pursuant to such Environmental Laws will not have a material
adverse effect on the Company's financial position or results of
operations and cash flows. However, future events, such as new
information, changes in existing Environmental Laws or their
interpretation, and more vigorous enforcement policies of regulatory
agencies, may give rise to additional expenditures or liabilities.

Recent Developments
     
     On February 24, 1998, the Company purchased all of the
outstanding capital stock of Coastal Mountain Water Corp. ("Coastal")
for approximately $4.2 million. Coastal is based in Vancouver, British
Columbia and focuses on the direct delivery of eighteen litre
containers of water to residential and commercial customers and the
rental of water coolers.
     
     Effective April 3, 1998, Stephen L. Larson, resigned from his
positions as Vice Chairman of the Board of Directors and Chief
Financial Officer of Sparkling Spring and as an officer and director
of each of its subsidiaries to pursue other business interests.
Mr. Larson will continue to serve as a director of Sparkling Spring.
Kent Dillon Schickli replaced Mr. Larson as Chief Financial Officer of
Sparkling Spring effective April 3, 1998. See Item 10 - Directors and
Officers of Registrant.
     
     On May 16, 1998 the Company purchased all of the outstanding
capital stock of Krystal Fountain Water Co. Ltd. ("Krystal Fountain").
Krystal Fountain operates primarily in the  M25 area in London,
England.
     
     On May 26, 1998, the Company closed a $40 million Senior Credit
Facility with The Toronto-Dominion Bank, Toronto Dominion (Texas), 
Inc. and The Toronto-Dominion Bank, London Branch (collectively,
"Toronto-Dominion").  The Senior Credit Facility is for general 
corporate purposes including working capital, acquisitions and 
capital expenditure financing.  See Item 9 - Management's Discussion 
and Analysis of Financial Condition and Results of Operations - Senior
Credit Facility.

ITEM 2.   DESCRIPTION OF PROPERTY
     
     The Company maintains corporate headquarters in Dartmouth, Nova
Scotia and Stamford, Connecticut. The following table sets forth
certain information relating to each of the Company's facilities:

                          Size                          Owned/    Lease
Location                 sq. ft.  Purpose               Leased  Expiration

Canada:
                                                                  
Dartmouth, Nova Scotia   14,000   Corporate             Leased   June 2002
                                  Headquarters,                  
                                  Distribution
                                                                  
Valley, Nova Scotia      14,500   Bottling,             Owned        N/A
                                  Distribution
                                                                  
Sydney, Nova Scotia       4,500   Offices,              Leased    May 1999
                                  Distribution                   
                                                                  
Moncton, New Brunswick    3,700   Office, Distribution  Leased    June 2001
                                                                  
Saint John, New           4,300   Offices,              Leased    May 2003
  Brunswick                       Distribution                   
                                                                  
Vancouver, British       19,600   Offices, Bottling,    Leased    Oct. 1999
  Columbia                        Distribution                  
                                                                  
Victoria, British         7,250   Offices, Bottling,    Leased    Feb. 2003
  Columbia                        Distribution                   
                                                                  
Nanaimo, British          1,300   Distribution          Leased    Monthly
  Columbia                                                          
                                                                  
Kamloops, British        10,000   Offices, Bottling,    Leased    Feb. 2003
  Columbia                        Distribution                   

                          2,500   Surplus               Leased    May 1999
                                                                  
Prince George, British    7,800   Bottling,             Leased    June 2002
 Columbia                         Distribution                   

                          2,500   Surplus               Leased    Aug. 1998
                                                                  
United Kingdom:                                                   
                                                                  
Tewkesbury, England       8,600   Offices,              Leased    Apr. 2008
                                  Distribution                   
                                                                  
High Wycombe, England    18,000   Offices,              Leased    Dec. 2006
                                  Distribution                   
                                                                  
High Wycombe, England    18,000   Bottling              Leased    Dec. 2006
                                                                  
Warrington, England       4,000   Offices,              Leased    Dec. 2002
                                  Distribution                   
                                                                  
Arklo Road, England       8,000   Offices,              Leased    Oct. 2006
                                  Distribution                   
                                                                  
Glasgow, Scotland         4,000   Offices,              Leased    June 2004
                                  Distribution                   
                                                                  
Dumfries, Scotland        4,000   Bottling              Leased    June 2009
                                                                  
Dundee, Scotland          2,000   Offices,              Leased    Feb. 2000
                                  Distribution                   
                                                                  
United States:                                                    
                                                                  
Stamford, Connecticut       675   Offices               Leased    Dec. 1998
                                                                  
Portland, Oregon         30,000   Bottling,             Leased    Oct. 2007
                                  Distribution,                  
                                  Offices
                                                                  
Portland, Oregon         10,000   Distribution          Leased    June 2000

                          7,000   Bottling, Offices     Leased    June 2002
                                                                  
Seattle, Washington      25,000   Bottling,             Leased    Oct. 2002
                                  Distribution,                  
                                  Offices
     
     All of the Company's bottling and distribution facilities, in the
opinion of the Company's management, have been adequately maintained,
are in good operating condition and generally have sufficient capacity
to handle all present sales volume and all sales volume contemplated
in the foreseeable future.

ITEM 3.   LEGAL PROCEEDINGS
     
     The Company is not a party to any litigation other than routine
legal proceedings incidental to its business. Management does not
expect that these proceedings will have a material adverse effect on
the Company.

ITEM 4.   CONTROL OF REGISTRANT
     
     Gaspar Limited ("Gaspar"), a Barbados corporation wholly-owned by
a trust for the benefit of Mr. Krediet and his children, owns 50.9% of
the outstanding Common Stock of Sparkling Spring. Clairvest Group,
Inc., a Canadian corporation, is the holder of 30.4% of the
outstanding Common Stock of Sparkling Spring.  As far as known to the
Company, the Company is not directly or indirectly owned or controlled
by any foreign government.
    
    Sparkling Spring, Gaspar, Clairvest, Stephen L. Larson, Lucy
Stitzer, Stewart E. Allen and certain other shareholders of the
Company are parties to a Shareholder Agreement, dated as of October
22, 1997 (the "Shareholder Agreement") which sets forth various
arrangements, the operation of which could at a subsequent date,
result in a change of control of the Company.  For a more detailed
discussion of the provisions of the Shareholder Agreement, see Item 13
- - - Interest of Management in Certain Transactions - Shareholder
Agreement.

Security Ownership Of Certain Beneficial Owners And Management
     
     The following table sets forth as at December 31, 1997 certain
information regarding the ownership of Common Stock of Sparkling
Spring after giving effect to the Reorganization and the issuance of
non-voting shares to key managers, with respect to (i) each person
known by the Company to own beneficially more than 5.0% of the
outstanding shares of Common Stock, (ii) each of Sparkling Spring's
directors, (iii) each person named in the Summary Compensation Table
and (iv) all directors and officers as a group. Except as otherwise
indicated, each of the shareholders has sole voting and investment
power with respect to the shares of Common Stock beneficially owned.
Unless otherwise indicated, the address for each shareholder is in
care of the Company, 19 Fielding Avenue, Dartmouth Nova Scotia, Canada
B3B-1C9.
     
     After giving effect to the Reorganization and the issuance of non-
voting shares to key managers, there were outstanding an aggregate of
1,392,688 shares of Common Stock and an aggregate of 252,197 options
and warrants to purchase shares of Common Stock. All shares of Common
Stock issuable upon exercise of options and warrants are not entitled
to vote on matters submitted to a vote of the shareholders of
Sparkling Spring.

                                   
                                   
                       Beneficial Ownership (1)

                                Shares of            
Name of Beneficial Owner       Common Stock         Percent
                                                   
Gaspar Limited                  713,300(2)           50.9%
Bridgetown, Barbados                               
                                                   
Clairvest Group Inc.                               
Toronto, Ontario                423,190              30.4%
                                                   
G. John Krediet                   8,250(3)           *
                                                   
Stephen L. Larson               172,996(4)           12.0%
                                                   
Stewart E. Allen                110,378(5)           7.4%
                                                   
Lucy M. Stitzer                  94,010              6.8%
                                                   
Michael Bregman                 --(6)                --
                                                   
Kenneth B. Rotman               --(7)                --
                                                   
C. Sean Day                       8,994              *
                                                   
All Directors and Executive   1,099,678             70.5%
  Officers as a Group (8
  persons)

__________________________
* Less than one percent

(1)Shares of Common Stock which an individual or group has a right to
   acquire at any time pursuant to the exercise of options or
   warrants, whether or not currently vested or exercisable, are
   deemed to be outstanding for the purpose of computing the
   percentage ownership of that individual or group, but are not
   deemed to be outstanding for the purpose of computing the
   percentage ownership of any other person shown in the table.
   Information in this Report regarding the ownership of the Common
   Stock of Sparkling Spring is calculated in accordance with the
   foregoing methodology.

(2)Gaspar Limited is a Barbados corporation wholly-owned by a trust
   organized for the benefit of G. John Krediet and his children.
   Includes 8,250 shares of Common Stock issuable upon exercise of
   options held by Mr. Krediet.

(3)Includes 8,250 shares of Common Stock issuable upon exercise of
   options. Does not include shares owned by Gaspar Limited.

(4)Includes 53,787 shares of Common Stock issuable upon exercise of
   options.

(5)Includes 104,706 shares of Common Stock issuable upon exercise of
   options.

(6)Excludes 423,190 shares held by Clairvest Group Inc., of which
   Mr. Bregman, a Director of Sparkling Spring, is the Vice Chairman
   and a Director, and with respect to which Mr. Bregman disclaims
   beneficial ownership.

(7)Excludes 423,190 shares held by Clairvest Group Inc., of which
   Mr. Rotman, a Director of Sparkling Spring, is a Managing
   Director, and with respect to which Mr. Rotman disclaims
   beneficial ownership.

ITEM 5.   NATURE OF TRADING MARKET
     
     As of the date of this Report, there is no principal non-United
States or United States trading market for the Notes.  As at May 31,
1998, approximately $100.0 million principal amount of the Notes were 
held by approximately 13 recordholders in the United States.

ITEM 6.   EXCHANGE CONTROLS AND OTHER LIMITATIONS
          AFFECTING SECURITY HOLDERS
     
     As at the date of this Report, there are no governmental laws,
decrees or regulations in Canada that restrict the remittance of
interest or other payments to non-resident holders of the Notes.

ITEM 7.   TAXATION
     
     The following summary describes the principal Canadian federal
income tax consequences generally applicable to a holder of a Note who
for purposes of the Income Tax Act (Canada) (the "Canadian Tax Act"),
and at all relevant times, is a non-resident of Canada, deals at arm's
length with the Company, and does not use or hold and is not deemed to
use or hold the Note in the course of carrying on a business in Canada
and is not an insurer that carries on an insurance business in Canada
and elsewhere.
     
     This summary is based on the current provisions of the Canadian
Tax Act and the regulations thereunder (the "Regulations") in force on
the date hereof, the Company's understanding of the current published
administrative and assessing practices and policies of Revenue Canada,
and all specific proposals to amend the Canadian Tax Act and the
Regulations publicly announced by the Minister of Finance (Canada)
prior to the date of this Report (the "Proposed Amendments").  This
summary is not exhaustive of all possible Canadian federal tax
consequences and, except for the Proposed Amendments, does not take
into account or anticipate changes in the law or the administrative or
assessing practices of Revenue Canada, whether by judicial,
governmental or legislative action or interpretation, nor does it take
into account provincial, territorial or foreign tax legislation or
considerations.
     
     The payment by Sparkling Spring of interest, principal or
premium, if any, on the Notes (and payments under the Guarantees by a
Guarantor that is a resident of Canada for purposes of the Canadian
Tax Act) will be exempt from withholding tax under the Canadian Tax
Act.
     
     No other tax on income (including taxable capital gains) will be
payable under the Canadian Tax Act in respect of the holding, sale,
redemption or other disposition of the Notes or the receipt of
interest, principal or premium, if any, thereon.
     
     THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO
BE, AND SHOULD NOT BE INTERPRETED AS, LEGAL OR TAX ADVICE TO ANY
PARTICULAR HOLDER OF A NOTE.  ACCORDINGLY, HOLDERS OF THE NOTES ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR
PARTICULAR CIRCUMSTANCES.

ITEM 8.   SELECTED FINANCIAL DATA
     
     The following selected historical consolidated financial data of
the Company for the five years ended December 31, 1997 has been
derived from the consolidated financial statements of the Company
which have been audited by Ernst &  Young, independent public
accountants.  The information set forth below should be read in
conjunction with Item 9 -Management's Discussion and Analysis of
Financial Condition and Results of Operations, and the Consolidated
Financial Statements of the Company including the notes thereto,
included in Item 18 of this Report.

(dollars in thousands)
                                           Year Ended December 31,
                            1993        1994         1995       1996      1997
Income Statement Data:                                                  
  Revenue                  $3,867      $8,725      $15,349    $27,326   $42,074
  Cost of sales             1,139       1,755        2,863      4,676     7,140
  Operating expenses        2,175       5,356        9,041     15,756    23,722
  Depreciation and            438       1,095        1,465      3,842     5,692
    amortization
  Interest expense            228         625        1,294      2,481     5,018
  Net income (loss) before                                              
    extraordinary items       (63)        (94)         411        166    (4,525)
  Net (loss) income          (260)       (238)          19       (307)   (5,358)
                                                                        
Other Data:                                                             
  EBITDA (1)              $   553     $ 1,614      $ 3,445    $ 6,894   $11,212
  EBITDA margin              14.3%       18.5%        22.4%      25.2%     26.7%
  Ratio of EBITDA to net                                                
    cash interest expense    2.43        2.58         2.66       2.78      2.21
  Cash provided by (used                                                
    in) operating 
    activities                237       1,029        1,491      3,216      (804)
  Cash used in investing    1,476       7,579        4,219     24,168    33,899
    activities 
  Cash provided by          1,957       5,926        3,551     22,669    60,005
    financing activities
  Net capital expenditures  1,043       1,257        2,287      6,736     6,038
  Water cooler base        11,181      23,838       30,344     68,614   115,037
                                                                        
Balance Sheet Data:                                                     
  Cash and cash           $   731     $    67      $   860    $ 2,231  $ 27,507
    equivalents
  Total assets              5,398      13,835       18,521     44,409   106,999
  Long-term debt (2)        3,227       7,623       11,309     30,474   104,799
  Common shareholders'        755       2,331        2,207      6,772    (8,960)
    equity (deficit)
___________________

(1)    "EBITDA" means operating profit plus depreciation and
  amortization.  EBITDA is presented because it is a widely accepted
  financial indicator of a company's ability to service and/or to
  incur indebtedness. However, EBITDA should not be considered as an
  alternative to net income as a measure of operating results or to
  cash flow from operations as a measure of liquidity in accordance
  with generally accepted accounting principles.

(2)    Includes amounts due under capital lease obligations and loans
  payable including current maturities and the Notes.
     
     The above financial information includes the results of
operations of the following companies from their dates of acquisition
as follows: Crystal Springs Limited: April 14, 1993; Water Cooler
Division of Buxton Mineral Water Company Limited: June 8, 1994;
Aquarporte (UK) Ltd.: April 26, 1995; Canadian Springs Water Company
Limited: January 18, 1996; Water Jug Enterprises Limited: May 19,
1996; D&D and Company, Inc.: January 2, 1997; Withey's Water Softening
& Purification Limited: January 28, 1997; High Valley Water Limited:
January 30,1997; Marlborough Employment Agency Limited: February 5,
1997; Soja Enterprises, Inc. June 4, 1997; Crystal Springs Bottled
Water Co., Inc.: June 23, 1997; Cullyspring Water Co., Inc.: October
23, 1997; and Crystal Springs Drinking Water Inc.: December 17, 1997.

Exchange Rate Data
     
     The following table sets forth for both Canadian dollars and
British pounds sterling for the periods indicated, the high and low
exchange rates (i.e., the highest and lowest exchange rate at which
each currency was sold), the average exchange rate (i.e., the average
of each exchange rate on the last business day of each month during
the applicable period) and the period end exchange rate of each
currency in exchange for the U.S. dollar, as calculated from the
inverse of the exchange rates reported by the Federal Reserve Bank of
New York for cable transfers payable in Canadian dollars and British
pounds sterling for customs purposes.
   
                                Year ended December 31,
                         1993    1994     1995     1996    1997
                                                           
Canadian Dollar                                            
High for period          0.807   0.764    0.753    0.753   0.749
Low for period           0.742   0.710    0.710    0.721   0.695
End of period            0.757   0.713    0.733    0.730   0.700
Average for period       0.775   0.732    0.728    0.733   0.722
                                                           
British Pound Sterling                                     
High for period          1.593   1.643    1.641    1.711   1.7115
Low for period           1.418   1.460    1.527    1.497   1.5797
End of period            1.480   1.564    1.552    1.705   1.642
Average for period       1.501   1.531    1.578    1.560   1.638

ITEM 9.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     
     The following discussion and analysis of the results of
operations of the Company should be read in conjunction with Item 8 -
Selected Financial Data and the Consolidated Financial Statements of
the Company, and the notes thereto, included elsewhere in this Report.

General
     
     The Company is one of the world's largest providers of bottled
water delivered directly to commercial and residential customers in
Canada, the United Kingdom and the United States. The Company's
revenue is primarily generated from two relatively stable and
recurring sources: bottled water sales and the rental and service of
water coolers. Additionally, the Company engages in certain related
activities. The Company's revenue growth in recent years is primarily
attributable to increased water cooler penetration, strategic
acquisitions in existing and new geographic territories and higher
sales of ancillary products sold through the Company's established
distribution channels.
     
     In 1997, the Company generated approximately 24.6% of its total
revenue from the rental of water coolers. The Company typically
charges its customers a monthly water cooler rental charge. Total
rental revenue is a function of the size of the Company's water cooler
base and the monthly cooler rental charge. From December 31, 1995 to
December 31, 1997, the Company's water cooler base increased by 279.1%
from 30,344 to 115,037. The Company's average monthly cooler rental
charge remained relatively stable during this period.
     
     Revenue from the sale of bottled water to commercial and
residential markets, which accounted for 60.6% of the Company's total
revenue in 1997, is driven by a number of factors, including the water
cooler base, consumption of bottled water per customer and the price
charged per bottle of water.
     
     The remaining 14.8% of the Company's total revenue in 1997 was
generated from related activities, including the sale of paper cups,
cooler sanitation services, coffee, water filtration devices and water
through vending machines. The Company plans to continue these
ancillary activities to maximize the profitability of its established
distribution system.
     
     Since 1994, the Company has substantially improved its sales and
profitability by increasing its base of water coolers through internal
growth and acquisitions. The Company's operations are characterized by
relatively high fixed costs due to the significant investment required
to establish a bottling and distribution infrastructure. As the
Company grows its revenue base by acquiring and consolidating new
routes within its existing route structure, operating costs decline as
a percentage of revenue. This operating leverage is driven by the
following factors: (i) improved route efficiency; (ii) consolidation
of production and distribution facilities; (iii) realization of
savings from greater purchasing volume; (iv) elimination of
duplicative administrative costs; (v) improved management control
through centralized accounting and reporting systems; and
(vi) enhanced marketing efficiency. As a result, positive changes in
revenue tend to have a larger corresponding impact on EBITDA and
operating income. The continued consolidation of production and
distribution capabilities is a key component of the Company's business
strategy both within its current markets and in any new markets it may
enter. Consequently, the Company expects operating expenses to grow at
a rate less than that of anticipated revenue growth.
     
     For certain financial information relating to each of the
geographic regions in which the Company operates, see Note 19 to the
Notes to Consolidated Financial Statements of Sparkling Spring Water
Group Limited included in Item 18 of this Report.

Results of Operations
     
     The following table sets forth, for the periods indicated,
certain statement of operations and other data of the Company.
     
                                Year Ended December 31
                               1995       1996      1997
                                                             
Revenue                       100%       100%      100%
                                                    
Cost of sales                  18.7       17.1      17.0
                                                    
Operating expenses             58.9       57.7      56.4
                                                    
EBITDA                         22.4       25.2      26.7
                                                    
Depreciation and amortization   9.5       14.1      13.5
                                                    
Interest expense                8.4        9.1      11.9
                                                    
Net income (loss) before                            
  extraordinary items           2.7        0.6     (10.8)
                                                    
                                                    
Net income (loss)               0.1       (1.1)    (12.7)


Year Ended December 31, 1997 to Year Ended December 31, 1996
     
     Revenue.  Revenue increased $14.8 million, or 54.0%, to $42.1
million in 1997 compared to $27.3 million in 1996.  The water cooler
base increased by 46,423 or 67.7% to 115,037 compared to 68,614 in
1996.  Acquisitions completed in fiscal 1997 provided an increase in
the water cooler base of 34,375 and accounted for approximately $11.6
million or 78.7% of the total increase in revenue. The remaining
increase in water coolers of 12,048 and revenue of $3.2 million was
primarily the result of additional water cooler rentals and bottled
water sales in the Company's existing territories and a full year of
revenue being recognized in 1997 for the 1996 acquisitions.
     
     Cost of Sales.  Cost of sales increased $2.4 million, or 52.7%,
to $7.1 million in 1997 compared to $4.7 million in 1996 largely as a
result of the acquisitions completed in 1996 and 1997. Cost of sales
as a percentage of revenue decreased slightly to 17.0% in 1997 from
17.1% in 1996.
     
     Operating Expenses.  Operating expenses increased $7.9 million or
50.6% to $23.7 million in 1997 compared to $15.8 million in 1996 as a
result of the acquisitions completed in 1996 and 1997. Operating
expenses as a percentage of revenue decreased to 56.3% in 1997 from
57.7% in 1996. This decrease as a percentage of revenue was the result
of incremental sales volumes being applied to relatively fixed
distribution costs; specifically, more efficient utilization of the
existing route fleet through increased route density.
     
     EBITDA. For the reasons stated above, EBITDA in 1997 increased by
$4.3 million, or 62.6%, to $11.2 million from $6.9 million in 1996. As
a percentage of revenue, EBITDA in 1997 increased to 26.7% from 25.2%
in 1996.
     
     Depreciation and Amortization.  Depreciation and amortization
expense increased to $5.7 million in 1997 from $3.8 million in 1996.
This increase was due to significant increases in fixed assets as a
result of the acquisitions consummated in the period, the higher
depreciation expense associated with the increased water cooler base,
and the standard levels of capital expenditures for existing
operations.
     
     Interest Expense.  Interest expense increased $2.5 million or
102.2% to $5.0 million in 1997 from $2.5 million in 1996. This
increase was a result of increased borrowings made to fund
acquisitions and the issuance of $100 million of Senior Subordinated
Notes bearing interest at a rate of 11.5%.

Year Ended December 31, 1996 to Year Ended December 31, 1995
     
     Revenue.  Revenue increased $12.0 million, or 78.0%, to $27.3
million in 1996 compared to $15.3 million in 1995. This increase
resulted from the inclusion of approximately $9.9 million of revenue
from the following acquisitions completed in 1996: (i) Water Jug,
acquired in May 1996, contributed $0.8 million in revenue and 4,200
water cooler customers and (ii) Canadian Springs, acquired in January
1996, contributed $9.1 million in revenue and 29,000 water cooler
customers. The remaining $2.1 million, or 17.5%, was primarily the
result of 5,070 additional water coolers installed in the Company's
existing territories.
     
     Cost of Sales.  Cost of sales increased $1.8 million, or 63.3%,
to $4.7 million in 1996 compared to $2.9 million in 1995, largely as a
result of the acquisitions completed in 1995 and 1996. Cost of sales
as a percentage of revenue decreased to 17.1% in 1996 from 18.7% in
1995 based on the elimination of duplicate expenses in connection with
the Company's acquisitions and economies of scale realized from an
increase in volume.
     
     Operating Expenses.  Operating expenses increased $6.8 million,
or 74.3%, to $15.8 million in 1996 compared to $9.0 million in 1995 as
a result of acquisitions completed in 1995 and 1996. Operating costs
as a percentage of revenue decreased to 57.7% in 1996 from 58.9% in
1995. This decrease as a percentage of revenue was the result of
incremental sales volume being applied to relatively fixed
distribution costs; specifically, the Company achieved more efficient
utilization of its existing route fleet through increased route
density.
     
     EBITDA. For the reasons stated above, EBITDA in 1996 increased by
$3.5 million, or 100.1%, to $6.9 million from $3.4 million in 1995. As
a percentage of revenue, EBITDA increased to 25.2% in 1996 from 22.4%
in 1995.
     
     Depreciation and Amortization.  Depreciation and amortization
expense increased $2.3 million to $3.8 million in 1996 from $1.5
million in 1995. This increase was due to significant increases in the
fixed assets as a result of the acquisitions consummated in such
period and the standard levels of capital expenditures for existing
operations.
     
     Interest Expense.  Interest expense increased $1.2 million, or
91.7%, to $2.5 million in 1996 from $1.3 million in 1995. This
increase was a result of increased borrowings made to fund
acquisitions, capital expenditures and working capital requirements.

Liquidity and Capital Resources
     
     Historically, the Company has funded its capital and operating
requirements with a combination of cash flow from operations,
borrowings under bank credit facilities and equity investments from
shareholders. The Company has utilized these sources of funds to make
acquisitions, to fund significant capital expenditures at its
properties, to fund operations and to service debt. The Company
presently expects to fund its future capital and operating
requirements at its existing operations through a combination of cash
generated from operations, excess cash proceeds from the issuance of
the Notes and borrowings under the Senior Credit Facility (see below).
     
     Excluding funds of approximately $4.6 million used to repurchase
options to acquire common shares of the Company, net cash provided by
operating activities was $3.8  million for the year ended December 31,
1997 and $3.2 million for the year ended December 31, 1996. Net cash
used in investment activities was $33.9 million for the year ended
December 31, 1997 and $24.2 million for the year ended December 31,
1996. These amounts relate primarily to eight acquisitions completed
in the year ended December 31, 1997 for $27.9 million and three
acquisitions completed in 1996 for $17.4 million. Capital expenditures
include expenditures related to the addition of bottling lines at
existing facilities, construction of new bottling facilities, and the
purchase of water bottles, water coolers and delivery trucks. The
Company made net capital expenditures of $6.0 million in the year
ended December 31, 1997 and $6.7 million in 1996. Based on the
Company's existing operations, management expects that the Company's
capital expenditures will total approximately $7.5 million in 1998.
     
     The Company believes that the net proceeds from the sale of the
Senior Subordinated Notes together with available cash, cash generated
from operations and available borrowings under the Senior Credit
Facility will be sufficient to finance the Company's working capital
and capital expenditure requirements for 1998 as well as some
acquisitions. However, there can be no assurance that such resources
will be sufficient to meet the Company's anticipated requirements or
that the Company will not require additional financing within this
time frame.

The Notes
     
     Pursuant to a Purchase Agreement dated November 14, 1997,
Sparkling Spring sold unregistered 11.5% Senior Subordinated Notes due
2007 (the "Private Notes") in an aggregate principal amount of $100.0
million to BT Alex. Brown Incorporated and NatWest Capital Markets
Limited (the "Initial Purchasers") in a transaction not registered
under the Securities Act in reliance upon the private offering
exemption under Section 4(2) of the Securities Act.  The Initial
Purchasers subsequently placed the Private Notes with qualified
institutional buyers in reliance upon Rule 144A under the Securities
Act and with a limited number of accredited investors (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act).  The net
proceeds to Sparkling Spring from the sale of the Private Notes, after
deduction of discounts and offering expenses, were approximately $96.3
million.  Sparkling Spring used approximately $56.5 million of the net
proceeds to repay the entire principal amount and accrued interest
owing under its existing credit facility and approximately $13.9
million was used in connection with the Reorganization (as defined).
The remaining proceeds of the sale of the Private Notes of
approximately $25.9 million, was and will be used for general
corporate purposes including repayment of some of the Company's
outstanding indebtedness and for potential acquisitions.
     
     Pursuant to a Prospectus dated April 1, 1998, under a
Registration Statement declared effective on that date under the
Securities Act, Sparkling Spring commenced an offer (the "Exchange
Offer") to exchange $1,000 principal amount of its registered 11.5%
senior subordinated notes due 2007 (the "Exchange Notes") for each
$1,000 principal amount of the Private Notes. The form and terms of
the Exchange Notes are identical in all material respects to those of
the Private Notes, except for certain transfer restrictions and
registration rights relating to the Private Notes and except for
certain interest provisions relating to such registration rights.  The
Exchange Notes also have the same redemption terms as the Private
Notes.  The Exchange Notes evidence the same indebtedness as the
Private Notes and were and will be issued pursuant to, and entitled to
the benefits of, an Indenture, dated as of November 19, 1997 governing
the Private Notes and the Exchange Notes (the "Indenture").
     
     The Notes are redeemable at Sparkling Spring's option, in whole
or in part, on and after November 15, 2002 at specified redemption
prices, plus accrued and unpaid interest to the date of redemption. In
addition, at any time on or prior to November 15, 2000, Sparkling
Spring, at its option, may redeem up to $30.0 million of the aggregate
principal amount of the Notes originally issued with the net cash
proceeds of one or more Public Equity Offerings, at a redemption price
equal to 111.50% of the principal amount thereof, plus accrued and
unpaid interest to the date of redemption, provided that at least
$70.0 million of the aggregate principal amount of the Notes
originally issued remains outstanding immediately following any such
redemption.
     
     Upon a Change of Control (as defined in the Indenture), each
holder of the Notes will have the right to require Sparkling Spring to
repurchase such holder's Notes at a price equal to 101% of the
principal amount thereof plus accrued and unpaid interest to the date
of repurchase.
     
     The Notes are general unsecured obligations of Sparkling Spring
and are subordinated in right of payment to all existing and future
Senior Indebtedness (as defined in the Indenture). The Notes rank pari
passu in right of payment with any future senior subordinated
indebtedness of Sparkling Spring and will rank senior in right of
payment to all other subordinated obligations of Sparkling Spring.
Under the Indenture, Sparkling Spring has the ability to incur
additional indebtedness and in May 1998, the Company entered into a
Senior Credit Agreement (the "Senior Credit Facility") with  Toronto-
Dominion  that provides up to $40.0 million of secured senior debt. 
See - Senior Credit Facility (below).
     
     The Notes are fully and unconditionally guaranteed on a senior
subordinated basis by the Subsidiary Guarantors. The Guarantees are
general unsecured obligations of the Subsidiary Guarantors and are
subordinated in right of payment to all existing and future Guarantor
Senior Indebtedness (as defined in the Indenture). The Guarantees rank
pari passu with any future senior subordinated indebtedness of the
Subsidiary Guarantors and rank senior in right of payment to any other
subordinated obligations of the Subsidiary Guarantors.
     
     The Indenture contains certain covenants with respect to
Sparkling Spring and its subsidiaries that restrict, among other
things, (a) the incurrence of additional indebtedness, (b) the payment
of dividends and other restricted payments, (c) the creation of liens,
(d) the sale or other transfer of assets and subsidiary stock, (e) the
existence of limitations on distributions from subsidiaries,
(f) transactions with affiliates and (g) the issuance of preferred
stock by subsidiaries. The Indenture also restricts the ability of
Sparkling Spring and the Subsidiary Guarantors to consolidate or merge
with or into, or to transfer all or substantially all of its assets
to, another person. In addition, under certain circumstances,
Sparkling Spring will be required to offer to purchase Notes, in whole
or in part, at a purchase price equal to 100% of the principal amount
thereof plus accrued interest to the date of repurchase, with the
proceeds of certain Asset Sales (as defined in the Indenture).

Senior Credit Facility
     
     On May 26, 1998, the Company closed a $40 million Senior Credit
Facility (the "Credit Facility") with Toronto-Dominion.  The
Credit Facility will be used for general corporate purposes including
working capital, acquisitions and capital expenditure financing.
     
     The Credit Facility is structured as a multi-currency revolving
facility having a term of approximately six and one half years. The
Company's payment obligation under the Credit Facility is secured by a
first priority security interest over substantially all of the assets
of the Company; obligations under the Credit Facility will rank senior
to the payment of the Notes.
     
     Amounts outstanding under the Credit Facility will bear interest
at specified rates based on the Canadian prime rate in the case of
advances made in Canadian dollars, at specified rates based on the
London inter-bank market in the case of advances made in British
pounds sterling or U.S. dollars, and at specified rates based on the
U.S. prime rate in the event of advances made in U.S. dollars.
     
     The Credit Facility contains covenants, customary for
transactions of this type, including, without limitation, (i)
restrictions on the incurrence of indebtedness, leases, liens and
contingent obligations, other than indebtedness represented by the
Notes, indebtedness under the Credit Facility and liens incurred in
the normal course of business, (ii) restrictions on mergers,
acquisitions, sales of assets, investments and transactions with
affiliates, (iii) restrictions on dividends and other payments with
respect to shares of the Company's capital stock and (iv) restrictions
on capital expenditures.  Additionally, the Credit Facility contains
the following financial covenants and coverage tests: (i) the ratio of
senior debt (consisting of amounts outstanding under the Credit
Facility, vendor debt, capital leases and permitted encumbrances) to
EBITDA (on a rolling four quarter basis) shall not exceed 2.5:1.0;
(ii) EBITDA (on a rolling four quarter basis) shall not be less than
135% of total interest expense less amortization of non-cash interest
amounts and (iii) EBITDA (on a rolling four quarter basis) less
capital expenditures less income taxes paid shall not be less than
120% of the amount of interest due under the Credit Facility plus
payments of principal under the Credit Facility and permitted
encumbrances.
     
     Events of default under the Credit Facility include, among
others, (i) failure of the Company to repay principal on advances or
interest thereon or other amounts owing under the Credit Facility
within two business days after the due date, (ii) the breach (not
cured within applicable grace or notice periods, if any) by the
Company or any of its subsidiaries of any covenants, representations
or warranties contained in the Credit Facility, (iii) any failure to
pay amounts due under other indebtedness or contingent obligations of
the Company or any of its subsidiaries or defaults that result in or
permit the acceleration of such indebtedness or contingent
obligations, if the aggregate amount of such indebtedness or
contingent obligation exceeds a specified amount, (iv) certain events
of bankruptcy, insolvency or dissolution of the Company or any of its
subsidiaries, (v) certain changes of control of the Company, (vi) a
material adverse change in the financial condition, business condition
or prospects of the Company or any of its subsidiaries and (vii) any
material judgment or award against the Company or any of its
subsidiaries.  If an event of default was to occur and remain
outstanding in excess of any applicable cure period, it is expected
that all amounts outstanding under the Credit Facility would
immediately become due and payable.

Year 2000
     
     The Year 2000 issue arises due to computer programs using two
digits rather than four to define an applicable year.  Computer
programs may recognize a date using "00" as the year 1900 rather than
the year 2000.  This could result in system failures or
miscalculations leading to disruptions in the Company's operations.
If the Company or its significant customers or suppliers fail to
adequately address the Year 2000 issue, such failure could have an
adverse impact on the Company's ability to operate its business.
     
     Sparkling Spring has taken action to address and complete the
work associated with the Year 2000.  Each of the Company's business
locations has established a team to identify and correct Year 2000
issues.  The Company's principal financial and operational computer
systems utilize software developed and supported by an outside
computer software supplier.  It is the Company's understanding that
this supplier has completed an analysis of the changes required to
accommodate the Year 2000 and that software upgrades will be completed
and tested by early 1999.  In addition, the impact of Year 2000 on
manufacturing plants and building facilities is also being addressed.
The Company is also investigating the Year 2000 capabilities of
suppliers, customers and other external entities, and developing
contingency plans where necessary.
     
     Sparkling Spring does not expect the costs associated with Year
2000 to be material to the Company's consolidated financial position,
results of operations or cash flows.  This expectation is based on the
assumption that the Company has contemplated all significant actions
required and that significant costs related to Year 2000 will not be
incurred on behalf of the Company's customers or suppliers.

Impact of Inflation
     
     The Company does not believe that inflation has had a material
impact on its revenue or results of operations.

Safe Harbor Statement Under the Private Securities Litigation Reform
Act of 1995
     
     Statements included in this Report that do not relate to present
or historical conditions are "forward looking statements" within the
meaning of the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "1995 Reform Act").  Additional
oral or written forward-looking statements may be made by the Company
from time to time, and such statements may be included in documents
other than this Report that are filed with the SEC. Such forward-
looking statements involve risks and uncertainties that could cause
results or outcomes to differ materially from those expressed in such
forward-looking statements. Forward-looking statements in this Report
and elsewhere may include without limitation, statements relating to
the Company's plans, strategies, objectives, expectations, intentions
and adequacy of resources and are intended to be made pursuant to the
safe harbor provisions of the 1995 Reform Act. Words such as
"believes," "forecasts," "intends," "possible," "expects,"
"estimates," "anticipates," or "plans" and similar expressions are
intended to identify forward-looking statements.  Investors are
cautioned that such forward-looking statements involve risks and
uncertainties including without limitation the following:  (i) the
Company's plans, strategies, objectives, expectations and intentions
are subject to change at any time at the discretion of the Company;
(ii) the Company's ability to expand by acquisitions is dependent
upon, and may be limited by, the availability of suitable acquisition
candidates and the availability of financing therefor on suitable
terms; (iii) the Company's ability to obtain financing will be
affected by restrictions contained in the Indenture and the Company's
other existing and future financing arrangements; (iv) the Company's
proposed expansion strategy will be substantially dependent upon the
Company's ability to hire and retain skilled management, financial,
marketing and other personnel; (v) the Company's plans and results of
operations will be affected by the Company's ability to successfully
manage growth (including monitoring operations, controlling costs and
maintaining effective quality and inventory controls; (vi) the market
for attractive acquisitions in the bottled water industry is becoming
increasingly competitive, which could make the Company's acquisition
strategy more difficult to achieve; (vii) the Company's operations are
subject to the jurisdiction of various governmental and regulatory
agencies which regulate the quality of drinking water and other
products and any failure by the Company to comply with existing and
future laws and regulations could subject the Company to significant
penalties or impose additional costs on the Company or otherwise have
a material adverse affect on its financial position or results of
operations; (viii) any interruption in the availability of water to
the Company from municipal sources and local natural springs could
have a material adverse affect on the Company's operations until
suitable replacement sources are located; and (ix) other risks and
uncertainties indicated from time to time in the Company's filings
with the SEC.

ITEM 9A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     
     The Company does not engage in transactions in the ordinary
course of its business to hedge itself against exposure to currency
risks.  However, on December 2, 1997, the Company entered into cross
currency swap transactions in Canadian dollars ($28 million) and
British pounds sterling ($30 million) for the purpose of protecting
itself from future foreign currency fluctuations.  To date, the
Company has entered into no other foreign currency swap transactions.

ITEM 10.  DIRECTORS AND OFFICERS OF REGISTRANT
     
     The following table sets forth certain information as of May 31,
1998 with respect to each of the directors, executive officers and key
management personnel of Sparkling Spring.

Name                       Age       Position with Sparkling Spring
                                     
G. John Krediet            47        Chairman of the Board of Directors 
                                     and Chief Executive Officer
                                     
Stewart E. Allen           39        President and Director
                                     
Kent Dillon Schickli       45        Chief Financial Officer
                                     
Stephen L. Larson          39        Director
                                     
Michael Bregman            43        Director
                                     
C. Sean Day                49        Director
                                     
Kenneth B. Rotman          31        Director
                                     
Lucy M. Stitzer            37        Director
     
     Effective April 3, 1998, Stephen L. Larson, resigned from his
positions as Vice Chairman of the Board of Directors and Chief
Financial Officer of Sparkling Spring and as an officer and director
of each of its subsidiaries to pursue other business interests.
Mr. Larson will continue to serve as a director of Sparkling Spring.
Kent Dillon Schickli replaced Mr. Larson as Chief Financial Officer
effective April 3, 1998.
     
     G. John Krediet has been Chairman of the Board of Directors and
Chief Executive Officer of SSWL since January 1991. From 1988 until
1992 he served as Chairman of the Board of MBL, the Pepsi-Cola
franchisee and former parent company of SSWL. From September 1988
through November 1990 he also served as Chairman of the Board of
Eastern Beverages Ltd., the Pepsi-Cola franchise for the territory in
and around Ottawa, Ontario, Canada. Mr. Krediet initiated and managed
the consolidation of the eastern Canadian Pepsi-Cola bottling business
and arranged its sale to Pepsi-Cola Corporation in 1992. Mr. Krediet
was the founder of CFCC in 1987 and, together with Mr. Larson,
obtained direct control of SSWL in 1992 to use it as an acquisition
vehicle for consolidating the bottled water industry.
     
     Prior to 1987 Mr. Krediet was employed by General Electric Credit
Corporation, AMRO Bank and Citibank, NA. He is a citizen of the
Netherlands and received his graduate degree in economics from Erasmus
University in Rotterdam.
     
     Kent Dillon Schickli replaced Stephen L. Larson as Chief
Financial Officer of Sparkling Spring effective April 3, 1998.
Mr. Schickli will also serve as President of CFCC and previously
served as President of CFCC from 1987 to 1992. Mr. Schickli is 45
years old and has over 12 years of beverage industry experience
including serving as a member of the board of directors and of the
executive committee of MBL from 1987 to 1992. From 1979 to 1981
Mr. Schickli worked for the Pepsi-Cola Company as a manager in the
franchise acquisition department and from 1981 through 1986 was Chief
Financial Officer of a Pepsi-Cola franchise bottling company with
annual revenues in excess of $200 million. Mr. Schickli left CFCC in
1993 to become Chief Operating Officer and a member of the board of
directors of Affinity Group, Inc., a leading database marketing and
membership management company. At Affinity Group, Inc. Mr. Schickli
lead the refinancing of that company, including the issuance of
publicly registered debt securities. In late 1995 Mr. Schickli left
Affinity Group, Inc. to pursue investments in various privately held
companies. In 1996 Mr. Schickli invested in, and served as President
and a member of the board of directors of, Ivid Communications, Inc.,
a leading multimedia training company. From 1997 to 1998 Mr. Schickli
was Chief Executive Officer and co-owner of Affinity Development
Group, Inc., a consulting firm. Mr. Schickli earned an M.B.A. in
Accounting from the University of Chicago, a B.A. from Carleton
College and received a C.P.A. from the State of Illinois.
     
     Stephen L. Larson, prior to his resignation, had been Vice
Chairman of the Board of Directors and Chief Financial Officer of SSWL
since 1992 and had served as a managing director of CFCC since 1990.
He had been with CFCC since 1987. Mr. Larson, in conjunction with
Mr. Krediet, developed the consolidation strategy for the bottled
water industry. Mr. Larson was responsible for qualifying and
selecting acquisition candidates generated by the Company and outside
sources. Mr. Larson was also responsible for negotiating the
acquisition terms and related financing.  At CFCC, Mr. Larson acted as
an intermediary arranging financing for corporations primarily
involved in the area of bottling, publishing, outdoor advertising and
other media. Mr. Larson was principally involved in the negotiations
leading to the acquisition of nine Pepsi-Cola franchisees, the related
consolidation and the ultimate sale to Pepsi-Cola Corporation.
     
     Mr. Larson worked as a Senior Associate at Claremont Group
Limited, a management buyout firm, from 1986 to 1987. He began his
career at Arthur Andersen & Co. Mr. Larson earned an M.B.A. in Finance
from the University of Chicago and a Bachelor of Science in Accounting
from the University of Illinois.  Mr. Larson is a C.P.A. and a member
of both the American Institutes of Certified Public Accountants and
the Accounting Research Association.

     Stewart E. Allen has been President of SSWL since 1992. Mr. Allen
has been responsible for overseeing the daily operations of the
Company, including integrating acquired companies and corporate
strategic planning. Mr. Allen is the President of the Canadian Bottled
Water Association and a member of the International Bottled Water
Association's International Council.

     Mr. Allen has over 20 years of experience in the beverage
industry. He served as Vice President of Sales and Marketing for MBL,
the Pepsi-Cola franchisee and former parent of the Company, from 1988
to 1992. Mr. Allen was primarily responsible for consolidating two
other bottlers into MBL and for major cost management initiatives,
including a reduction in salaried employees, closure of four
warehouses and three wage freezes with unionized employees. Prior to
joining MBL, Mr. Allen spent three years with Crush Canada and
Pepsi-Cola Canada. Prior to this, Mr. Allen held several operational
positions in Pepsi-Cola owned bottler operations in Toronto and
Oshawa, Ontario.
     
     Michael Bregman has served as a member of the Board of Directors
of SSWL since October 1997. Mr. Bregman is Vice Chairman of the Board
of Directors of Clairvest, a Toronto-based, publicly traded merchant
bank with a portfolio in excess of $180 million, where his primary
responsibilities include assessing investment transactions, with an
emphasis on the retail food and beverage industries. Mr. Bregman is
the Chairman and Chief Executive Officer and a major shareholder of
The Second Cup Ltd., a coffee retailer in North America. Mr. Bregman
is also a member of the board of directors of Signature Security
Group, Inc. and Vincor International Inc. In addition, Mr. Bregman was
the founder of the now-divested Mmmuffins Inc., a specialty baking
company in Canada. Mr. Bregman received his M.B.A. degree in 1977 from
Harvard Business School and earned a B.S. in Economics from The
Wharton School at the University of Pennsylvania.
     
     C. Sean Day has served as a member of the Board of Directors of
SSWL since March, 1997. Mr. Day is President and Chief Executive
Officer of Navios Corporation, a company engaged in the worldwide
operation of ocean going bulkships. Mr. Day has a wide range of
experience in the shipping, finance and industrial sectors. Prior to
joining Navios Corporation, Mr. Day's prior experience included
positions with Citicorp Venture Capital Ltd. in New York, Fednav Ltd.
in Montreal and Jardine, Matheson & Co., Ltd. in Hong Kong and Taiwan.
Mr. Day is also a member of the board of directors of Kirby
Corporation. Mr. Day is a graduate of University of Cape Town and
Oxford University.
     
     Kenneth B. Rotman has served as a member of the Board of
Directors of SSWL since January 1996. Mr. Rotman is a Managing
Director of Clairvest, a Toronto-based, publicly traded merchant bank
with a portfolio in excess of $180 million. Mr. Rotman's role with
Clairvest involves the sourcing and execution of transactions and
working closely with the management of companies in which Clairvest
has invested. Mr. Rotman also serves on the board of directors of
Consoltex Group Inc., NRI Industries and Signature Security Group Inc.
Mr. Rotman is a volunteer director of The Power Plant art gallery of
Toronto and the Empire Club of Canada. Prior to joining Clairvest in
October, 1993, Mr. Rotman worked in the Venture Banking Division of
E.M. Warburg, Pincus & Co. in New York. Mr. Rotman received a B.A. in
Economics from Tufts University, an M.Sc. from the London School of
Economics, and an M.B.A. from New York University's Stern School of
Business.

     Lucy M. Stitzer has served as a member of the Board of Directors
of SSWL since January 1994. Ms. Stitzer has also served on the board
of directors of Cargill Inc. since 1992. From 1990 to 1992,
Ms. Stitzer was employed as an associate at Sandler O'Neill and
Partners, an investment bank. From 1983 to 1990, Ms. Stitzer was
employed by the Consumer Banking Division of Citibank, N.A., where she
attained the position of Assistant Vice President.


ITEM 11.  COMPENSATION OF DIRECTORS AND OFFICERS

Directors and Executive Compensation
     
     The following table sets forth a summary of the compensation of
each executive officer of Sparkling Spring who earned in excess of
$100,000 in annual salary and bonus during Sparkling Spring's year
ended December 31, 1997. The Summary Compensation Table reflects all
compensation paid by Sparkling Spring to its executive officers.
Directors of Sparkling Spring receive no compensation for their
services as Directors. Messrs. Krediet, Larson and effective April 3,
1998, Mr. Schickli, are compensated for their services as executive
officers of Sparkling Spring directly by CFCC. See Item 13 - Interest
of Management in Certain Transactions - Management Agreement.
Sparkling Spring provides a defined contribution pension plan for all
of its employees, including its executive officers but no other
pension, retirement or similar benefits to its executive officers or
Directors.

Summary Compensation Table


                                                        Long-Term         
                                                      Compensation
                                                          Awards
 Name and                                               Securities   
 Principal         Annual Compensation   Other Annual   Underlying    All Other
 Position        Year   Salary    Bonus  Compensation  Options/SARs Compensation

Stewart E. Allen,
 President       1997  $141,744  $36,117  $18,599(1)        --        $18,051(2)

(1)  Includes $17,336 representing a housing allowance.

(2)  Consists of a contribution of $17,109 to a defined contribution
pension plan and annual premiums of $942 in connection with a group
life insurance policy for Mr. Allen.

Employment Agreements
     
     Stewart E. Allen, the President of Sparkling Spring, has an
employment agreement, effective January 1, 1998, with the Company
pursuant to which he is paid a base salary of $210,000. In addition,
his employment agreement provides for a bonus payment to Mr. Allen at
the end of each fiscal year based primarily upon the Company achieving
certain levels of EBITDA. The employment agreement is for a term of
three years.

ITEM 12.  OPTIONS TO PURCHASE SECURITIES  FROM REGISTRANT OR
          SUBSIDIARIES
     
     No options to purchase the Notes are outstanding.  Options to
purchase shares of Common Stock of Sparkling Spring are outstanding.
See Item 4 - Control of Registrant - Security Ownership of Certain
Beneficial Owners and Management, and Item 13 - Interest of Management
in Certain Transactions - Reorganization.

ITEM 13.  INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

Management Agreement
     
     Pursuant to the Management Agreement dated December 16, 1993, as
amended and restated (the "Management Agreement"), between SSWL, CFCC,
G. John Krediet and Stephen L. Larson, CFCC has agreed to perform
certain management services for the Company through December 31, 2002.
These services include managing the operations of the Company and
negotiating contracts, financial agreements and other arrangements.
The Management Agreement provides that CFCC shall not take any action
with respect to certain extraordinary transactions without the
approval of the Board of Directors of Sparkling Spring, including
material acquisitions and capital expenditures, issuances of
securities, sale or disposition of a material portion of the business
of the Company, compensation of CFCC, merger of the Company,
liquidation and declaration of dividends.
     
     The Management Agreement provides that CFCC shall receive annual
compensation for its services in the form of a base fee of $400,000
during the fiscal year ended December 31, 1996, and in each successive
year a base fee equal to the prior year's base fee plus an amount
equal to the prior year's base fee multiplied by the percentage
increase or decrease, as the case may be, of the Company's total
annual revenue from the prior year, but the base fee may not exceed
$750,000 in any given year. An annual bonus of up to 75% of the base
fee is due to CFCC each year in the event that the Company achieves
certain targeted levels of per share earnings before depreciation and
amortization. In the event such targets are not met, lesser amounts
may be paid. The Company has also agreed to pay CFCC a fee in respect
of its investment banking advisory services rendered to the Company in
connection with successful acquisitions. The total amounts paid to
CFCC pursuant to the Management Agreement for the years 1995, 1996 and
1997 were $521,000, $769,000 and $1,548,000 respectively. The Company
may also pay to Mr. Krediet and Mr. Schickli non-cash options,
incentives or other remuneration, consistent with industry standards.
The Company is also responsible for reasonable disbursements and
office expenses incurred by CFCC.
     
     In the opinion of management of the Company, the terms and
conditions of the Management Agreement are no less favorable to the
Company than those which could be obtained in the open market in an
arm's length transaction.

Shareholder Agreement
     
     Sparkling Spring, Clairvest Group, Inc. ("Clairvest"), a holder
of 30.4% of the outstanding Common Stock of Sparkling Spring after
giving effect to the Reorganization, Gaspar Limited ("Gaspar"), a
Barbados corporation wholly-owned by a trust organized for the benefit
of G. John Krediet and his children, Stephen L. Larson, Lucy Stitzer,
Stewart E. Allen and certain other shareholders of the Company are
parties to a shareholder agreement, dated as of October 22, 1997 (the
"Shareholder Agreement"), which provides, among other things, for
preemptive rights in favor of the shareholders under certain
circumstances if Sparkling Spring issues additional securities and for
certain registration rights. The Shareholder Agreement also provides
restrictions on the transfer of the Company's capital stock, for
rights of first refusal and for rights of certain shareholders to
require all other shareholders to join with them in their sale of the
Company's capital stock. The Shareholder Agreement fixes the number of
directors comprising Sparkling Spring's Board of Directors at seven,
and provides that Gaspar Limited shall be entitled to nominate four
directors, Clairvest shall be entitled to nominate two directors and
Lucy Stitzer and her affiliates shall be entitled to nominate one
director. Certain actions by the Company require the approval of at
least one of the Clairvest nominees (which approval shall not be
unreasonably withheld). These actions include, among other things, any
acquisition by the Company in excess of Cdn $5.0 million, the making
of certain capital expenditures, the issuance by the Company of debt
or equity securities, the disposition by the Company of a material
part of its business, any change in management compensation, the
declaration of dividends by the Company and the approval of the
Company's annual budget. In addition, under the Shareholder Agreement,
if no liquid public market (as defined in the Shareholder Agreement)
then exists, Clairvest may, any time after March 31, 2003, offer all
of its shares of capital stock of Sparkling Spring for sale to
Sparkling Spring. If Sparkling Spring does not then repurchase those
shares, Clairvest may, under certain circumstances, require the other
parties to the Shareholder Agreement to join with Clairvest in selling
to a third party all of their shares of Common Stock of Sparkling
Spring, which could cause a change of control.

Reorganization
     
     The shareholders of Sparkling Spring and SSWL approved a
reorganization (the "Reorganization") on November 19, 1997 which was
completed in January 1998.  As part of the Reorganization, Gaspar,
Clairvest, John Krediet, Stephen Larson, Stewart Allen, Lucy M.
Stitzer (and her spouse Mark Stitzer), C. Sean Day, principal
shareholders and directors and/or executive officers of the Company,
reduced their interest in Sparkling Spring by exchanging shares and
options to acquire shares of common stock of SSWL for a combination of
shares and options to acquire shares of Common Stock of Sparkling
Spring plus cash based on a per share price of $28 as follows:
          
      Sparkling Spring Water Limited      Sparkling Spring Water Group Limited
                                                                    
                  Shares      Options       Shares      Options         Cash
   Shareholder   Exchanged   Exchanged     Received    Received       Received
                                                                    
Gaspar            833,840          --       705,050          --    $ 3,606,120
Clairvest         588,168          --       423,190          --      4,619,384
John Krediet           --     154,319            --       8,250      3,328,727
Stephen Larson    118,209      53,787       118,209      53,787             --
Stewart Allen       5,672     145,787         5,672     104,706      1,097,038
Lucy and Mark     130,659          --        94,010          --      1,026,172
  Stitzer
C. Sean Day        12,500          --         8,994          --         98,168
Other              39,198      89,100        28,203      85,454        394,175
                1,728,246     442,993     1,383,328     252,197    $14,169,784
     
     Subsequent to the Reorganization, Sparkling Springs owns 100% of
the issued and outstanding shares of SSWL.
     
     In conjunction with the Reorganization certain key managers of
the Company, subscribed for an aggregate of 9,360 non-voting shares of
Common Stock of Sparkling Spring at $28.00 per share, the same
purchase price per share used for the purpose of the Reorganization.
These managers granted an option to Sparkling Spring enabling
Sparkling Spring to repurchase those shares of Common Stock at any
time at an agreed-upon formula price. The formula price is intended to
approximate the fair market value of the shares of Common Stock at the
time of repurchase. Similarly, Sparkling Spring is obligated, under
certain circumstances, to purchase those shares for the same formula
price at the option of the key managers.  The shares were issued in
January 1998.

Other Transactions
     
     Each shareholder of Sparkling Spring pledged all of his, hers  or
its outstanding shares of Common Stock as collateral in favor of the
lenders under the Company's previously outstanding credit facility. A
portion of the gross proceeds from the issuance of the Senior
Subordinated Notes was used by Sparkling Spring to repay the entire
principal amount and accrued interest outstanding on this facility.
Upon the repayment of this credit facility, the pledges were
terminated.
     
     In connection with the purchase of shares of common stock of the
Company, promissory notes of $122,000 and $108,000 were received from
Stephen L. Larson and Stewart E. Allen respectively.  The promissory
notes bore interest at a rate of 7% and were scheduled to mature on
January 31, 1998 with principal and interest due on that date.  The
promissory notes were cancelled by the Company and replaced with
promissory notes to Mr. Larson and Mr. Allen of $131,600 and $116,300
respectively which bear interest at a rate of 6% and mature on January
31, 1999 with principal and interest due on that date.  The common
shares purchased by the officers are pledged as security for the
promissory notes.
     
     On June 6, 1994, trusts formed for the benefit of Lucy M.
Stitzer, a Director of Sparkling Spring, and her sister, Alexandra M.
Daitch, together with their father, W. Duncan MacMillan, loaned SSWL
an aggregate of $1,300,000. In return for the loan, SSWL issued
unsecured redeemable subordinated notes, bearing interest at a rate of
8% per annum, and warrants to purchase an aggregate of 60,099 shares
of common stock of SSWL. On January 18, 1996, the Company redeemed the
unsecured redeemable subordinated notes and the attached warrants for
cash consideration of $1,816,041.


                                PART II

ITEM 14.  DESCRIPTION OF SECURITIES TO BE REGISTERED (INTENTIONALLY
          OMITTED)
                                   
                               PART III

ITEM 15.  DEFAULTS UPON SENIOR SECURITIES
    
    None.

ITEM 16.  CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED
          SECURITIES AND USE OF PROCEEDS
     
     There have been no modifications to the Exchange Notes or in the
Guarantees securing the Exchange Notes.
     
     Sparkling Spring did not receive any cash proceeds from issuing
the Exchange Notes.  In consideration for issuing the Exchange Notes
as contemplated in its Prospectus, Sparkling Spring has received in
exchange, Private Notes in like principal amounts.

Use of Proceeds
     
     The effective date of the Registration Statement in which the
Prospectus was included was April 1, 1998 and the SEC File number
assigned to that Registration Statements is 333-43061.  All of the
Exchange notes covered by the Registration Statement have been issued
and the offering thereunder has been terminated.
     
     Sparkling Spring did not engage an underwriter or other third
party in connection with the issuance and distribution of the Exchange
Notes and as a result did not incur directly any underwriting
discounts or commissions, finders fees or other similar expenses.
However, Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offer and sold by such broker-dealers
to purchasers or to or through other broker-dealers who received
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes were or
could have been deemed to be "underwriters" within the meaning of the
Securities Act and any profit on any such resale of Exchange Notes and
any commissions or concessions received by any such person were or
could have been deemed to be underwriting compensation under the
Securities Act.
     
     In connection with the issuance of the Exchange Notes, Sparkling
Spring incurred accounting, legal, printing and related expenses,
which taken together were not material.  No payments were made to any
directors or officers of Sparkling Spring or their associates or to
any persons owning 10% or more of any class of equity securities of
Sparkling Spring or to any other affiliates of Sparkling Spring.  None
of the expenses represents material changes in the information set
forth in the Prospectus.


                                PART IV
                                   
                                   
ITEM 17.  FINANCIAL STATEMENTS (INTENTIONALLY OMITTED)
       
       
ITEM 18.  FINANCIAL STATEMENTS
     
     The financial statements required by Item 18 are listed in the
Index to Consolidated Financial Statements appearing on Page F-1.


ITEM 19.  FINANCIAL STATEMENTS AND EXHIBITS
     
     a)   Financial Statements
     
     See Index to Financial Statements on page F-1 hereof.
     
     b)   Exhibits
     
     Exhibit No.
       
     2.(ii) Senior Credit Agreement, dated May 26, 1998 among
            Sparkling Spring Water Group Limited and the Guarantors
            named therein, as borrowers, and The Toronto-Dominion Bank,
            Toronto Dominion (Texas), Inc. and The Toronto-Dominion 
            Bank, London Branch, as lenders.




                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     SPARKLING SPRING WATER GROUP LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     SPARKLING SPRING WATER LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     SPRING WATER, INC.


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     CULLYSPRING WATER CO., INC.


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by 
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     MOUNTAIN FRESH ACQUISITION CORP.


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     CRYSTAL SPRINGS ACQUISITION, INC.


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     WATER JUG ENTERPRISES LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     WITHEY'S WATER SOFTENING &
                                     PURIFICATION LTD.


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     AQUA CARE WATER SOFTENING &
                                     PURIFICATION, INC.


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                          Kent Dillon Schickli
                                          Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     HIGH VALLEY WATER LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     3003969 NOVA SCOTIA LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     CANADIAN SPRINGS WATER COMPANY LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     SPARKLING SPRING WATER (UK) LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     AQUAPORTE (UK) LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     MARLBOROUGH EMPLOYMENT LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     WATER AT WORK LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     NATURAL WATER LIMITED


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     CRYSTAL SPRINGS OF SEATTLE, INC.


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     CRYSTAL SPRINGS DRINKING WATER, INC.


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day of June, 1998.


                                     COASTAL MOUNTAIN WATER CORP.


                                     By:  /s/ Kent Dillon Schickli
                                        -----------------------------------
                                           Kent Dillon Schickli
                                           Chief Financial Officer



                                   
               SPARKLING SPRING WATER GROUP LIMITED
            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                   
                                                       Page
     
                                                        
Independent Auditors' Report                            F-2
                                                        
Consolidated Balance Sheets as at December 31, 1997     F-3
and 1996
                                                        
Consolidated Statements of Operations for the years     F-4
ended December 31, 1997, 1996 and 1995
                                                        
Consolidated Statements of Shareholders Equity          F-5
(Deficit) for the years ended December 31, 1997, 
1996 and 1995
                                                        
Consolidated Statements of Cash Flows for the years     F-6
ended December 31, 1997, 1996 and 1995
                                                        
Notes to Consolidated Financial Statements              F-7
     
     



                        AUDITORS' REPORT





To the Shareholders of
Sparkling Spring Water Group Limited

     We have audited the consolidated balance sheets of Sparkling
Spring  Water Group Limited as at December 31, 1997 and 1996  and
the  consolidated statements of operations, shareholders'  equity
(deficit) and cash flows for each of the years in the three  year
period  ended December 31, 1997.  These financial statements  are
the    responsibility   of   the   Company's   management.    Our
responsibility  is  to  express an  opinion  on  these  financial
statements based on our audits.

      We  conducted  our  audits  in  accordance  with  generally
accepted  auditing standards.  Those standards  require  that  we
plan  and perform an audit to obtain reasonable assurance whether
the  financial statements are free of material misstatement.   An
audit  includes  examining, on a test basis, evidence  supporting
the  amounts  and  disclosures in the financial  statements.   An
audit also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating
the overall financial statement presentation.

      In  our  opinion,  these consolidated financial  statements
present  fairly, in all material respects, the financial position
of  the  Company as at December 31, 1997 and 1996 and the results
of  its operations and the changes in its financial position  for
each  of  the  years in the three year period ended December  31,
1997  in accordance with accounting principles generally accepted
in the United States.



Halifax, Canada                             Ernst & Young
April 1, 1998                               Chartered Accountants




                 SPARKLING SPRING WATER GROUP LIMITED
                                   
                      CONSOLIDATED BALANCE SHEETS


                                              As at December 31
                                           1996              1997

ASSETS [note 12]

Current                                                
Cash and cash equivalents              $ 2,230,735       $ 27,507,257
Accounts receivable (net of                            
  allowance for doubtful
  accounts of $387,247;                   
  1996-$210,058 [note 5])                4,799,080          8,267,315
Inventories [note 6]                       866,061          1,751,562
Prepaid expenses                         1,352,989          1,536,755
Current portion of deferred taxes           95,681                 --
      Total current assets               9,344,546         39,062,889
Deferred taxes                             440,856          1,379,736
Fixed assets [note 7]                   15,823,231         23,307,315
Goodwill and deferred charges
  [note 8]                              18,800,535         43,248,972
      Total assets                     $44,409,168       $106,998,912
                                                       
LIABILITIES AND SHAREHOLDERS' EQUITY                   
  (DEFICIT)
                                                       
Current                                                
Accounts payable and accrued           $ 4,303,850       $  6,645,552
  liabilities
Income tax payable                          76,890          1,042,567
Unearned revenue                           161,790             75,488
Customer deposits                        2,620,495          3,396,466
Debt due within one year [note 9]        1,581,036          1,189,868
      Total current liabilities          8,744,061         12,349,941
Obligations under capital leases         1,926,325          2,485,204
  [note 10]
Loans payable [note 11]                 26,966,493          1,123,617
Subordinated notes payable [note 12]            --        100,000,000
      Total long-term liabilities       28,892,818        103,608,821
Shareholders' equity (deficit)                         
  [Notes 2 and 13]
Capital Stock                                          
Authorized                                             
11,383,328 Class D Voting Common                       
  Shares, without nominal or
  par value
10,000,000 Class E Non-Voting                          
  Common Shares, without nominal or                    
  par value 
10,000,000 Special Preferred                           
  Shares, par value Cdn $1.00,                         
  issuable in series
Issued and outstanding:                                
Common shares 1,383,328                                
  (1996-1,720,746; 1995-1,216,308)      8,295,170          6,269,204
Less: Subscriptions receivable           (230,003)          (230,003)
                                        8,065,167          6,039,201
Cumulative translation adjustment        (362,935)          (770,729)
Deficit                                  (929,943)       (14,228,322)
      Total shareholders' equity        6,772,289         (8,959,850)
        (deficit)
      Total liabilities and           $44,409,168       $106,998,912
        shareholders' equity
        (deficit)

Commitments [notes 10 and 16]

                        See accompanying notes



                 SPARKLING SPRING WATER GROUP LIMITED
                                   
                 CONSOLIDATED STATEMENTS OF OPERATIONS

                                              Year ended December 31

                                        1995           1996            1997

Revenue:
Water                               $ 9,640,919    $16,809,749     $25,506,684
Rental                                4,135,650      7,347,386      10,346,344
Other                                 1,572,545      3,169,214       6,220,856
     Total revenue                   15,349,114     27,326,349      42,073,884
Cost of sales:                                                  
Water                                 2,118,880      3,400,298       4,080,686
Other                                   743,867      1,275,321       3,059,061
     Total cost of sales              2,862,747      4,675,619       7,139,747
Gross profit                         12,486,367     22,650,730      34,934,137
Expenses:                                                       
Selling, delivery and                                           
  administrative [note 18]            9,040,529     15,756,452      23,721,678
Depreciation and amortization         1,464,668      3,841,614       5,691,609
Operating profit                      1,981,170      3,052,664       5,520,850
Interest expense                      1,294,371      2,481,005       5,017,631
Redemption of common stock                   --             --       4,588,502
  options [note 13]
(Loss) income before the                686,799        571,659      (4,085,283)
  following
Provision for income taxes              299,107        398,325         439,377
  [note 17]
Net (loss) income before                                        
  non-controlling interest
  and extraordinary item                387,692        173,334      (4,524,660)
Non-controlling interest                 22,996         (6,894)             --
  [note 4]
Net (loss) income before                410,688        166,440      (4,524,660)
  extraordinary item
Extraordinary item [note 14]           (391,626)      (473,436)       (833,706)
Net (loss) income                    $   19,062    $  (306,996)    $(5,358,366)
                                                                
Basic (loss) earnings per share                                 
  before extraordinary item          $    0.338    $     0.113     $    (2.685)
                                                                
Diluted (loss) earnings per share
  before extraordinary item          $    0.291    $     0.095     $    (2.685)
                                                                
Basic (loss) earnings per share      $    0.016    $    (0.209)    $    (3.180)
                                                                
Diluted (loss) earnings per          $    0.014    $    (0.209)    $    (3.180)
  share



                          See accompanying notes



                   SPARKLING SPRING WATER GROUP LIMITED
                                     
         CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)




                                           For the years ended December 31, 1997, 1996  and 1995

                                                             Common Share            Cumulative
                                      Common Stock         Purchase Warrants         Translation      Amended
                                  Shares       Amount     Warrants      Amount       Adjustment       Deficit
                                                                                                        
                                                                                

Balance December 31, 1994       1,216,308    $1,628,793    165,767    $1,135,149     $ 209,624      $ (642,009)
  as restated [note 3]                                                                                  
Net income                                                                                              19,062
Foreign currency translation                    (21,575)                   1,581      (123,760)              
Balance December 31, 1995       1,216,308     1,607,218    165,767     1,136,730        85,864        (622,947)
Net loss                                                                                              (306,996)
Redemption of common                                                                                    
  share purchase warrants                                                                               
  [note 13]                                    (345,878)  (165,767)   (1,136,730)                          
Shares issued for cash            504,438     7,077,716                                                  
Subscriptions receivable                       (230,003)                                                  
Foreign currency translation                    (43,886)                              (448,799)              
Balance December 31, 1996       1,720,746     8,065,167         --            --      (362,935)       (929,943)
Net Loss                                                                                            (5,358,366)
Redemption of common shares      (344,918)   (1,717,691)                                            (7,940,013)
Shares issued for cash              7,500        32,445                                                     
Foreign currency translation                   (340,720)                              (407,794)
Balance December 31, 1997       1,383,328    $6,039,201         --    $       --    $ (770,729)   $(14,228,322)
                                                                                                        




                          See accompanying notes





                   SPARKLING SPRING WATER GROUP LIMITED
                                     
                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                                            Year ended December 31,

                                      1995           1996              1997

OPERATING ACTIVITIES
Net (loss) income                $    19,062    $  (306,996)       $(5,358,366)
Items not requiring cash                                        
  Depreciation and
    amortization                   1,464,668      3,841,614          5,691,609
  Deferred taxes                      85,673       (293,390)          (843,199)
  Non-controlling interest           (22,996)         6,894                 --
  Amortization of deferred           460,951             --             54,789
    financing costs
  Amortization of subordinated                                            
    notes payable discount           130,824             --                 --
                                   2,138,182      3,248,122           (455,167)
                                                                  
Net change in non-cash working                                           
  capital balances [note 15]        (647,671)       (32,178)          (349,135)
Cash (used in) provided by                                              
  operating activities             1,490,511      3,215,944           (804,302)
                                                                     
INVESTING ACTIVITIES                                                    
Purchase of fixed assets          (2,741,204)    (7,272,814)        (6,769,301)
Sale of fixed assets, net            453,927        536,627            730,898
Acquisitions [note 4]             (1,932,057)   (17,432,167)       (27,860,306)
Cash used in investing
  activities                      (4,219,334)   (24,168,354)       (33,898,709)
                                                                        
FINANCING ACTIVITIES                                                    
Increase in long-term debt         4,456,924     20,893,151         30,593,657
Repayment of long-term debt         (868,466)    (1,239,400)       (57,053,075)
Issuance of common shares                 --      6,847,713             32,445
Redemption of common shares               --             --         (9,657,704)
Issuance of subordinated notes
  payable                                 --             --        100,000,000
Redemption of common share warrants       --     (1,482,608)                --
Redemption of subordinated notes
  payable                                 --     (2,159,777)                --
Increase in deferred charges         (36,980)      (190,462)        (3,909,827)
Cash provided by financing
  activities                       3,551,478     22,668,617         60,005,496
                                                                        
Effect of foreign currency
  translation on cash                (29,606)      (345,770)           (25,963)
Increase in cash and                                                    
  cash equivalents during the year   793,049      1,370,437         25,276,522
Cash and cash equivalents,
  beginning of year                   67,249        860,298          2,230,735
Cash and cash equivalents, end
  of year                        $   860,298    $ 2,230,735        $27,507,257
                                                                        
                                                                        
SUPPLEMENTAL CASH FLOW DISCLOSURE                                       
                                                                   
Interest paid                    $ 1,138,106    $ 2,553,882        $ 3,597,458
                                                                       
Income taxes paid                $        --    $    32,046        $   227,191





                          See accompanying notes



              SPARKLING SPRING WATER GROUP LIMITED
                                
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                        December 31, 1997

1.  Description of Business

       Sparkling Spring Water Group Limited  ("Sparkling Spring")
is incorporated  under  the  laws  of  the   Province   of   Nova
Scotia, Canada   and  provides  containered  water  to  home  and
office   markets  in    British   Columbia   and   the   Maritime
provinces   of    Canada,  England,  Scotland  and  the   Pacific
Northwestern United States.

2.  Significant Accounting Policies

       These   financial  statements  have  been  prepared  on  a
historic cost basis by management in accordance  with  accounting
principles generally accepted in the United States ("US   GAAP"),
the more significant of which are as follows:

Basis of Presentation

       As  a   result  of  significant  foreign  acquisitions and
growth   in   the   Company's  operations,  the  shareholders  of
Sparkling  Spring and Sparkling  Spring  Water  Limited  ("SSWL")
approved a reorganization on November 19, 1997 whereby the former
shareholders  of  SSWL   exchanged  their  shares   of  SSWL  for
shares  of  Sparkling  Spring.  This  reorganization  facilitated
effective income tax planning regarding  corporate  distributions
as  described   below   and   further  facilitated  credit   risk
management.   In    order   to    minimize    tax   on  corporate
distributions   Sparkling Spring   was  created  to  acquire  the
shares  of  SSWL  and  to  acquire new  debt  as   described   in
note  12.  It is  anticipated  that Sparkling   Spring  will  not
be  involved in  carrying  on  any   actual business   operations
and that  in  the  future  the  Company's various operations will
be   isolated  in  separate   corporate   vehicles   to   achieve
certain  creditor  protection  for  the  holders   of   the   new
debt.  As a part of  this  reorganization,  certain  shareholders
of SSWL, including   certain   principal  shareholders, directors
and executive   officers  of  the  Company,  reduced,  at   their
discretion, their interest  in  Sparkling  Spring  by  exchanging
their  shares of common  stock  and  options  to  acquire  shares
of  common   stock   of SSWL  for  a  combination  of  shares  of
common stock and options to acquire   shares   of   common  stock
of  Sparkling  Spring  plus   cash.  The  exchange was  completed
as a method  of  providing  cash  to  the previous   shareholders
of   SSWL.   The   shareholders    of    SSWL exchanged,   on  an
aggregate   basis,  1,728,246   shares   of   common  stock   and
442,993  options  to  acquire  shares  of  common  stock  of SSWL
for  1,383,328   shares  of  common  stock  and  252,197  options
to acquire shares   of  common   stock   of   Sparkling    Spring
plus $14,169,784  in  cash.  Those  shareholders  reducing  their
interest in  Sparkling  Spring  received cash of  $28  per  share
for each share by  which  their  holdings  of  shares  of  common
stock  were  reduced.  Those  shareholders  surrendering  options
to  acquire  shares  of common   stock  received  $28,  less  the
option's  exercise  price, for each   option   surrendered.   The
amount  of  $28  per  share  was  the Company's  estimate  of the
fair value of  its  shares  at  the  time  of the  reorganization
as   negotiated   by   all   shareholders.    Subsequent  to  the
reorganization,  Sparkling  Spring  owns   100%  of  the   issued
and outstanding shares of SSWL.

       As   part  of  the  reorganization  certain  key  managers
of the Company  have  subscribed  for  an  aggregate   of   9,360
shares of Common  Stock  of  Sparkling  Spring.  The shares  will
be  recorded  at their  estimated   fair   value,  as  determined
by   an   agreed   upon formula,  and  reflected   as   temporary
equity  in  the  Company's financial  statements  upon  issuance.
These managers  have  granted an  option  to   Sparkling   Spring
enabling   Sparkling   Spring  to  repurchase  these   shares  of
Common  Stock  at  any  time  at  their estimated   fair   market
value  determined  in   accordance   with  the same  agreed  upon
formula  price.   Sparkling  Spring  is  obligated  to repurchase
these  shares  at  the  option   of  the  key  managers  for  the
same   formula  price  during  a  one  month  period  each  year,
subject to any financial covenants  and  financing   requirements
affecting the Company. If shares are purchased  by  the  Company,
the  excess or deficiency  of  the  cost  to  redeem  the  shares
over  the  carrying value   of   the   shares   will  be  charged
or  credited   to   retained earnings.

        Control of  the  Company  did  not  change    with    the
reorganization.   Accordingly,  the   reorganization   has   been
accounted for using the  reorganization  under  common    control
method  of  accounting  whereby   the   consolidated    financial
statements reflect the  consolidated  historical  carrying  value
of the assets,  liabilities   and   shareholders'   equity,   and
the consolidated historical operating results of  SSWL  for  each
of the periods presented.  Sparkling   Spring  was   incorporated
on October 22, 1997 and, accordingly, had no assets,  liabilities
or shareholders' equity or historical  operating  results   prior
to this date.

Basis of Consolidation

       These  consolidated   financial   statements  include  the
accounts of    Sparkling     Spring    and    its    wholly-owned
subsidiaries, principally  SSWL,   Sparkling  Spring  Water  U.K.
Limited   ("SSWUK"),   Canadian   Springs   Water   Company  Ltd.
("Canadian  Springs"), Water Jug  Enterprises   Limited   ("Water
Jug"),   and   the    subsidiaries  referred   to   in   note   4
(collectively referred to as the "Company").

Reporting Currency

       The   Company   uses  the  United  States  dollar  as  its
reporting currency and the Canadian  dollar  as  its   functional
currency.  Assets  and  liabilities  are translated  into  United
States dollars at the exchange rates in  effect  at  the  balance
sheet  date.  The revenues  and  expenses  have  been  translated
into   United   States  dollars   at   average   exchange   rates
prevailing   during   the   year.   The   gains   and  losses  on
translation   are   included    in   a   separate  component   of
shareholders' equity titled "cumulative  translation adjustment".

        Foreign  currency  denominated  assets  and   liabilities
of Canadian operations are  translated  into   Canadian   dollars
at exchange  rates  prevailing at  the  balance  sheet  date  for
monetary  items   and   at   exchange  rates  prevailing  at  the
transaction date for  non-monetary  items.    Gains   or   losses
on   translation   are recognized in the statement of operations.

       Balance sheet accounts denominated in  foreign  currencies
and translated at year-end exchange rates have  been   translated
to U.S. dollars at the following rates:

                               1995        1996        1997
                                                      
Canadian Dollars              $0.733      $0.730      $0.700
U.K. Pounds Sterling          $1.552      $1.705      $1.642
                                                      
Cash Equivalents

      The Company considers all highly-liquid investments with  a
maturity  of  three  months or less when  purchased  to  be  cash
equivalents.

Inventories

     Inventories are valued at the lower of cost, determined on a
first-in, first-out basis, and net realizable value.

Fixed Assets

      Fixed  assets are recorded at cost less related  government
grants  and investment tax credits.  Depreciation is provided  on
the declining balance basis at the following annual rates:

Well and buildings                                           5%
Machinery, equipment and coolers                         10-20%
Motor vehicles                                              30%
Roadways                                                     8%
Returnable bottles                                          20%

      Leasehold  improvements are amortized  on  a  straight-line
basis over the term of the related lease.

Acquisitions, Goodwill

     On the acquisition of businesses, the excess of the purchase
price  over  the  fair value of the underlying  net  identifiable
assets acquired is recognized as goodwill.  Goodwill is amortized
on  a  straight-line  basis over 40 years.  The  method  used  to
assess  if there has been a permanent impairment in the value  of
goodwill is based on projected and discounted cash flows.

Deferred Financing Costs

      Deferred  financing costs represent professional  fees  and
other  related costs incurred in relation to long-term  financing
agreements.   These costs are amortized on a straight-line  basis
over  the  term of the related financing and charged to  interest
expense.

Unearned Revenue

      Unearned revenue represents the prepayment of bottled water
charges.   These amounts are recognized as revenue in the  period
the product is provided.

Advertising

     Advertising expenditures are expensed as incurred.

Financial Instruments

      The Company's primary financial instruments consist of cash
and  cash  equivalents,  accounts receivable,  accounts  payable,
customer deposits and long-term debt.  The difference between the
carrying  values  and  the  fair market  values  of  the  primary
financial  instruments  are not material due  to  the  short-term
maturities and, or the credit terms of those instruments.

      The  Company  has at any one time a significant  number  of
commitments to extend credit.  The accounts receivable  are  owed
from  a  large  number of customers on normal  credit  terms  and
therefore  there  is  minimal customer concentration  and  credit
risk.

Cross Currency Swaps

      The  Company enters into cross currency swaps to hedge  net
assets  and  expected future cash flows of operations denominated
in  currencies  other than the US dollar.  To  the  extent  cross
currency swaps hedge net assets in currencies other than  the  US
dollar,  unrealized  gains  or losses  arising  from  changes  in
forward  foreign exchange rates are recorded as an adjustment  to
the   cumulative   translation   adjustment   account   with    a
corresponding   entry  to  other  assets   or   liabilities,   as
appropriate.

     To the extent cross currency swaps are entered into to hedge
future  expected cash flows of subsidiaries operating outside  of
the  US,  unrealized gains or losses resulting  from  changes  in
forward  foreign  exchange  rates are recognized  in  income  and
offset  with  a corresponding entry to assets or liabilities,  as
appropriate.   The  initial premium or discount  associated  with
cross currency swaps of this nature is recorded as an other asset
or  liability, as appropriate, and amortized to income  over  the
life of the swap.

Earnings Per Share

     Basic and diluted earnings per share is calculated using the
weighted  average number of common shares outstanding during  the
period adjusted for the effect of the exercise of all outstanding
options   and  warrants  in  accordance  with  SFAS  128  applied
retroactively.  The weighted average shares calculated under this
method  for  basic and diluted earnings per share  are  1,685,131
(1996  -  1,468,527,  1995 - 1,216,308)  and  1,685,131  (1996  -
1,758,022, 1995 - 1,410,728), respectively.

Leases

      Leases  are  classified  as capital  or  operating  leases.
Assets  are  recorded  as  capital leases  when  the  substantial
benefits  and  risks  of ownership have been transferred  to  the
Company.   Obligations recorded under capital leases are  reduced
by lease payments, net of imputed interest.

Use of Estimates

      The  preparation of financial statements in conformity with
generally  accepted accounting principles requires management  to
make  estimates and assumptions that affect the reported  amounts
of assets and liabilities and disclosure of contingent assets and
liabilities  at  the  date of the financial  statements  and  the
reported  amounts  of revenue and expenses during  the  reporting
period.  Actual results could differ from these estimates.

Income Taxes

      Income taxes are accounted for in accordance with SFAS 109,
"Accounting  for Income Taxes".  Under SFAS 109,  an  assets  and
liability  approach is required including a valuation  allowance.
Such  approach results in the recognition of deferred tax  assets
and  liabilities  for  the expected future  tax  consequences  of
temporary differences between the book carrying amounts  and  the
tax basis of assets and liabilities.

      The  Company  and  its subsidiaries file separate  federal,
state,  and foreign income tax returns and, accordingly,  provide
for such income taxes on a separate company basis.

3.  Change in Accounting Policy

      As  a  result of increased business activity in the  United
States,  the  Company retroactively changed its reporting  policy
from  Canadian dollars and Canadian generally accepted accounting
principles  to United States dollars and United States  generally
accepted accounting principles, effective January 1, 1997.

      In  order  to  comply with accounting principles  generally
accepted  in the United States the following accounting  policies
have also been changed:

Export Development Costs

     Costs to develop export markets were previously deferred and
amortized   over  five  years.   The  Company  has  changed   its
accounting policy to expense these items in the period  in  which
the expenditures were incurred.

Foreign Currency

      The  Company  previously deferred and amortized  unrealized
foreign  exchange  gains and losses on long-term  monetary  items
over the remaining term of the item.  These gains and losses  are
now charged to income during the period of the unrealized gain or
loss.

Income Taxes

      The  Company now follows SFAS 109 for accounting for income
taxes  which requires an assets and liabilities approach, subject
to  a  valuation allowance for deferred tax assets.  The  Company
previously followed the deferral method.

      The effect of the changes to these accounting policies  had
the   following   impact  on  net  assets,   net   income   after
extraordinary items and cumulative translation adjustment:

                                             1995            1996

Goodwill and deferred charges            $ (76,442)      $ (217,280)
Deferred taxes, asset                      243,147          147,530
Net assets (decrease) increase           $ 166,705       $  (69,750)
                                                         
Operating expenses                       $  42,952       $ (406,361)
Depreciation and amortization               24,410           61,186
Provision for income taxes                (299,107)        (529,301)
Extraordinary item                        (391,626)        (473,436)
Unusual items                              596,541        1,111,049
Net income decrease                      $ (26,830)      $ (236,863)
                                                         
Cumulative translation adjustment        $   4,755       $      408
  increase
                                                         
     Unusual items include previously deferred financing costs of
$907,674  and  $596,541 in the years 1996 and 1995  respectively,
which were expensed as a result of repayment of the then existing
financing  facility and have been reclassified  as  extraordinary
items  (net of applicable income taxes) as a result of the change
in  accounting policy from Canadian generally accepted accounting
principles   to  United  States  generally  accepted   accounting
principles.  Unusual items in 1996 also includes $203,375 related
to an employee buyout package.

      The  retroactive application of the changes  in  accounting
policies  described  above also had the effect  of  reducing  the
deficit at January 1, 1995 from $830,789 to $642,009.

4.  Acquisitions

1997
       During  the  year  the  Company  completed  the  following
acquisitions:


                                                                      
D&D and Company, Inc.         Portland, Oregon         January, 1997     100%     $ 3,972
High Valley Water Limited     Kelowna,                 January, 1997     100%       2,329
                              British Columbia
Withey's Water Softening and  Prince George,                                             
  Purification Limited        British Columbia         January, 1997     100%       1,568
Marlborough Employment        Glasgow, Scotland        February, 1997    100%       6,878
  Limited
Soja Enterprises, Inc.        Portland, Oregon         June, 1997        100%         252
Crystal Spring Bottled Water  Portland, Oregon         June, 1997        100%       4,403
  Co., Inc.
Cullyspring Water Co., Inc.   Seattle, Washington      October, 1997     100%       7,039
Crystal Springs Drinking      Seattle, Washington      December, 1997    100%       1,419
  Water Inc.
                                                                                  $27,860


     The following summarizes the transactions (in thousands):

Net working capital                              $   196
Fixed assets                                       6,919
Assumption of debt obligations                    (1,160)
Goodwill                                          21,905
Total cash consideration                         $27,860

      The acquisitions have been accounted for under the purchase
method  of  accounting and accordingly the results of  operations
since  the  dates  of  acquisition  have  been  included  in  the
consolidated statement of operations.

1996
     On January 18, 1996, the Company acquired 100% of the shares
of Canadian Springs and on May 19, 1996 the Company acquired 100%
of  the  shares  of  Water  Jug,  companies  located  in  British
Columbia, Canada.  The acquisitions have been accounted for under
the purchase method of accounting and accordingly the results  of
operations  since the dates of acquisition have been included  in
the consolidated statement of operations.

     The following summarizes the transactions (in thousands):

                               Canadian Springs    Water Jug

Net working capital                 $   319         $  (57)
Fixed assets                          2,996            341
Assumption of debt obligations         (694)          (155)
Goodwill                             12,993            972
Total cash consideration            $15,614         $1,101


      During  1996, the Company also acquired the non-controlling
interest  in  SSWUK  from  the  minority  shareholder  for   cash
consideration of $717,135, including goodwill of $391,024.

1995
      On  April  26, 1995, SSWUK acquired 100% of the  shares  of
Aquaporte  (UK)  Limited ("Aquaporte"), a company  registered  in
England and Wales.  The acquisition has been accounted for  under
the purchase method of accounting and accordingly the results  of
operations  since the date of acquisition have been  included  in
the consolidated statement of operations.

     The following summarizes the transaction (in thousands):

Net working capital                            $ (441)
Fixed assets                                      663
Goodwill                                        1,710
Total cash consideration                       $1,932

      The  following unaudited pro forma information  presents  a
summary  of  consolidated  results  of  operations  as   if   the
acquisitions of D&D and Company, Inc., High Valley Water Limited,
Withey's  Water  Softening and Purification Limited,  Marlborough
Employment Limited, Soja Enterprises Inc., Crystal Spring Bottled
Water  Co., Inc., Cullyspring Water Co., Inc. and Crystal Springs
Drinking  Water Inc. had occurred at January 1, 1997 and  January
1, 1996 and as if the acquisitions of Canadian Springs, Water Jug
and  the  non-controlling  interest  in  SSWUK  had  occurred  at
January 1, 1996.


                               For the Year Ended December 31,

                                    1996             1997


Total revenue                   $45,973,741      $48,749,884
Net (loss) income                   819,236       (4,439,478)
Extraordinary item                 (473,436)        (833,706)
Basic (loss) earnings per             0.558           (2.635)
share

5.  Allowance for Doubtful Accounts

Balance January 1, 1995                             $316,115
Additions                                            175,924
Write-offs                                           (20,215)
Balance December 31, 1995                            471,824
                                                    
Additions                                            116,444
Write-offs                                          (378,210)
Balance December 31, 1996                            210,058
                                                    
Additions                                            267,684
Write-offs                                           (90,495)
Balance December 31, 1997                           $387,247


6.  Inventories
                                     1996             1997

Packaging materials                $480,537       $  973,583
Goods for resale                    215,306          502,608
Cooler parts                         77,897          151,208
Other                                92,321          124,163
                                   $866,061       $1,751,562

7.  Fixed Assets
                                    1996                         1997

                                      Accumulated                   Accumulated
                             Cost     Depreciation       Cost       Depreciation


Land and well             $   489,670  $    42,349   $   312,120   $     4,292
Buildings and roadways        745,695      142,193       792,444       198,274
Coolers                    10,931,290    4,631,002    15,967,041     7,813,592
Machinery and equipment     4,395,170    1,598,854    10,947,082     4,548,844
Equipment and computer                                                   
  hardware under capital    1,525,163      836,621     1,447,572       830,435
  lease
Motor vehicles                911,010      705,555     1,658,382     1,057,127
Motor vehicles under        2,906,758      746,227     4,633,516     1,887,790
capital lease
Leasehold improvements        646,211      220,794     1,285,553       458,309
Returnable bottles          2,852,141      656,282     4,636,423     1,574,155
                           25,403,108   $9,579,877    41,680,133   $18,372,818
Accumulated depreciation    9,579,877                 18,372,818     
Net book value            $15,823,231                $23,307,315    


8.  Goodwill and Deferred Charges

                                    1996                        1997

                                       Accumulated                 Accumulated
                               Cost    Depreciation       Cost     Depreciation

Goodwill                   $19,588,100    $945,502    $40,727,367    $1,487,449
Deferred financing costs       116,201      41,693      3,911,380        54,789
Other                           83,429          --        161,273         8,810
                            19,787,730    $987,195     44,800,020    $1,551,048
Accumulated amortization       987,195                  1,551,048     
Net book value             $18,800,535                $43,248,972    


9.  Debt Due Within One Year

                                                          1996           1997

Current portion of obligations                                           
  under capital leases [note 10]                       $1,104,315     $  967,467
Current portion of loans payable [note 11]                476,721        222,401
                                                       $1,581,036     $1,189,868


10.  Obligations Under Capital Leases

     The obligations under capital leases are recorded net of the
related  imputed interest calculated at an average rate  of  10%.
Total minimum annual lease commitments are as follows:

1998                                 $1,364,998
1999                                  1,092,905
2000                                    854,888
2001                                    630,774
2002                                    395,408
Thereafter in aggregate                 335,934
                                      4,674,907
Less imputed interest                 1,222,236
                                      3,452,671
Less current portion                    967,467
                                     $2,485,204
                                     
11.  Loans Payable

                                                          1996           1997

                                                                   
Term loans ($17,747,328 Cdn. and (pound)8,204,760)     $26,866,624    $       --
  bearing interest at prime plus 1 1/4%.
                                                                   
Term loans bearing interest at 11 3/8% repayable in        112,812        96,018
  monthly installments of principal and interest of
  $2,868 maturing in varying amounts to 2001.
                                                                   
Unsecured loan ((pound)273,400) bearing interest at 7%,    463,778            --
  interest and principal repayable upon maturity
  on June 8, 1997.
                                                                   
Term loan bearing interest at 9%, repayable in five             --     1,250,000
  equal installments of principal and interest of
  $321,000, maturing 2002.
                                                        27,443,214     1,346,018
Less portion due within one year                           476,721       222,401
                                                       $26,966,493    $1,123,617

      On  January 28, 1997, the Company replaced its $27  million
term  loans  with  a revolving credit facility of  $51.1  million
available  in  multiple currencies at Libor plus  2.75%  and,  or
prime  rate  plus  1.25%.  In addition to  refinancing  the  term
loans,  funds  were  used  to finance  acquisitions.   The  total
amounts   outstanding  under  the  credit  facility   and   other
borrowings  totaling $54.7 million as at November 19,  1997  were
repaid  as  a  result of the issuance of $100 million  of  Senior
Subordinated Notes Payable described in note 12.

      The  following repayment schedule represents  the  required
annual principal repayments of long-term debt.

1998                                   $222,401
1999                                    242,832
2000                                    265,152
2001                                    285,645
2002                                    305,840
Thereafter in aggregate                  24,148


12.  Subordinated Notes Payable

                                                   1996             1997
Senior subordinated notes payable maturing
  November 2007, bearing interest at 11.5%,
  interest payable semi-annually, principal
  due at maturity                                   $--         $100,000,000

      On  November 19, 1997, the Company completed a $100,000,000
private placement of 11 1/2% Senior Subordinated  Notes  due 2007
(the "Private Notes").  The  Company  used a  portion  of the net
proceeds of this  offering to repay $54.7 million of its existing
credit  facility  and  to  pay  $14.2  million to certain Company
shareholders (see note 2).

      The  Company  offered  to  each  holder  of  Private  Notes
equivalent  exchange notes (the "Exchange Notes").  The  Exchange
Notes  are  identical  in form and terms to  the  Private  Notes,
except  that  upon the effectiveness of a registration  statement
filed  with  the United States Securities and Exchange Commission
covering  the Exchange Notes, the holders of Exchange  Notes  may
offer the notes for sale to the general public [see note 21 (c)].

      Each  of the Company's subsidiary guarantors has fully  and
unconditionally  guaranteed,  on  a  senior  subordinated  basis,
jointly  and  severally, to each holder  of  the  notes  and  the
trustee  under  the indenture pursuant to which  the  notes  were
issued,   the  full  and  prompt  performance  of  the  Company's
obligations  under  the indenture and the  notes,  including  the
payment  of  principal and interest on the notes.  The guarantees
are subordinated to guarantor senior indebtedness (as defined  in
the   indenture).   As  of  December  31,  1997,  the  subsidiary
guarantors  had  approximately $4.8 million of  guarantor  senior
indebtedness outstanding.

     The obligations of each subsidiary guarantor will be limited
to  the  maximum amount which, after giving effect to  all  other
contingent and fixed liabilities of such subsidiary guarantor and
after  giving effect to any collections from or payments made  by
or  on behalf of any other subsidiary guarantor in respect of the
obligations  of  such  other  subsidiary  guarantor   under   its
guarantee  or pursuant to its contribution obligations under  the
indenture  pursuant  to which the notes are to  be  issued,  will
result in the obligations of such subsidiary guarantor under  its
guarantee  not constituting a fraudulent conveyance or fraudulent
transfer  under  federal,  state or  other  applicable  law.   In
addition,  the obligations of each subsidiary guarantor organized
outside  the United States will be limited to the maximum  amount
permitted under applicable Canadian, English, Scottish  or  other
foreign law.

      Separate  audited  financial statements  of  the  guarantor
subsidiaries  have not been provided as Sparkling Spring  has  no
subsidiaries  which are nonguarantor subsidiaries  and  does  not
believe  that this information would be meaningful to  investors.
Sparkling  Spring is a holding company and has no  operations  or
assets independent of its investment in its subsidiaries.  All of
Sparkling Spring's subsidiaries are wholly-owned.  There  are  no
restrictions as to the payment of dividends or loans by Sparkling
Spring's  subsidiaries to Sparkling Spring or as to the  granting
of   any   upstream  guarantees  not  constituting  a  fraudulent
conveyance or fraudulent transfer under applicable law.

      The  Company  has entered into two cross currency  interest
rate swaps to more closely match the interest requirements of the
above  notes with the cash flows earned by the Company's Canadian
and UK subsidiaries.  Under the terms of the first swap, maturing
November  15,  2002,  the  Company will  receive  11.5%,  payable
semiannually,  on  a  $28 million US dollar  notional  amount  in
return  for  paying 10.83%, payable semiannually,  on  a  $39.872
million  Canadian  notional amount.  The terms of  the  agreement
also  call for the Company to receive $28 million US in  exchange
for $39.872 million Canadian on November 15, 2002.

      Under  the terms of the second swap, maturing November  15,
2003, the Company will receive 11.5%, payable semiannually, on  a
$30  million  US  dollar notional amount  in  return  for  paying
12.61%,  payable semiannually, on a 17.857 million Great  Britain
pounds notional amount.  The terms of the agreement also call for
the  Company  to  receive $30 million US in exchange  for  17.857
million Great Britain pounds on November 15, 2003.

     Both of the above noted swaps have been transacted with a US
bank  with  a  counter party credit rating  of  "A"  (Standard  &
Poors).  At December 31, 1997 the aggregate fair value of the two
swaps  was $423,359 US dollars in favor of the Company  of  which
$114,556  has  been recorded as a reduction in  interest  expense
with the remaining balance of $308,803 recorded as a decrease  in
the cumulative translation adjustment.


13.  Capital Stock

      During  1994,  the  Company  issued  165,767  common  share
purchase  warrants to the holders of subordinated notes  payable.
The  warrants were exercisable at $0.01 per share upon  repayment
of  the  notes  or  in the event of default of interest  payments
required  on these notes.  The warrants were assigned a value  of
$1,135,149 representing the estimated fair value of the  warrants
at the date of issuance.  During 1996 the subordinated notes were
redeemed together with the related common share purchase warrants
for  cash consideration of $4.7 million representing a $1,253,552
excess over the book value of the debt and warrants.  The present
value  of  interest  payments  foregone  by  the  noteholders  of
$907,674  was  expensed in 1996 as described  in  note  14.   The
remaining  excess of $345,878 was allocated to the  warrants  and
has been reflected as a reduction of paid in capital.

       As   described  in  note  2,  the  Company   completed   a
reorganization   in  1997  whereby  the  shareholders   of   SSWL
exchanged,  on  an  aggregate basis, 1,728,246 shares  of  common
stock  and 442,993 options to acquire shares of common  stock  of
SSWL for 1,383,328 shares of common stock and 252,197 options  to
acquire   shares  of  common  stock  of  Sparkling  Spring   plus
$14,169,784 in cash.  A total of $4,512,080 has been expensed  in
these  financial statements representing cash used to  repurchase
options  to  acquire shares of common stock.  The remaining  cash
paid  to  shareholders of $9,657,704 has been  charged  to  share
capital  and retained earnings based on the number of  shares  of
SSWL  redeemed  using the average carrying  value  per  share.  A
further  $76,422 has been expensed in these financial  statements
related  to  the  repurchase  of  stock  options  from  a  former
employee.

     The Company maintains a stock option plan for management and
directors  where  options to acquire Class E  common  shares  are
issued  with strike prices approximating the estimated  value  of
the shares at the date of issuance.

      The  Company accounts for stock options in accordance  with
APB  Opinion No. 25 and accordingly, no compensation  costs  have
been  recognized.   Had the Company determined compensation  cost
based  on the fair value at the grant date for its stock  options
under  SFAS No. 123, the Company's net income and net income  per
share  would  have  been  reduced to the  pro  forma  amounts  as
follows:

                                          1995         1996           1997
                                          $            $              $
Net (loss) income, as reported           19,062      (306,996)     (5,358,366)
Net (loss), pro forma                   (95,014)     (415,332)     (5,358,366)
Net (loss) income per share, as           0.016        (0.209)         (3.180)
  reported
Net (loss) per share, pro forma          (0.078)       (0.283)         (3.180)

      There  were no stock options granted during 1997.  The  per
share  weighted  average fair value of stock options  granted  in
1996  and  1995 was $4.77 and $1.15 respectively at the  date  of
grant, using the minimum value approach as permitted by SFAS  123
for  non-public companies, and an assumed risk free interest rate
of 5%.

      The following summarizes the status of the option plan.  To
the  extent  that  options are exercisable in  Canadian  dollars,
exercise prices have been translated at the exchange rate  as  of
December 31, 1997:


                                      Number of      Range of         Average
                                       Options    Exercise Price  Exercise Price


Outstanding at December 31, 1994       301,298      $1.27 - 4.326       $3.33
                                                                              
Granted                                 64,595      $3.85 - 4.326       $4.30
                                                                              
Outstanding at December 31, 1995       365,893      $1.27 - 4.326       $3.53
                                                                              
Granted                                 53,500     $10.27 - 20.00      $18.53
Cancelled                              (20,000)            $4.326      $4.326
                                                                              
Outstanding at December 31, 1996       399,393      $1.27 - 20.00       $5.50
                                                                              
Exercised                               (7,500)            $4.326      $4.326
Repurchased                           (190,796)     $1.27 - 20.00      $4.351
                                                                              
Outstanding at December 31, 1997       201,097      $1.27 - 20.00       $6.61
                                                                              
Exercisable at December 31, 1997       168,263      $1.27 - 20.00       $4.59

       Information  with  respect  to  options  outstanding   and
exercisable at December 31, 1997 is as follows:

Options outstanding
                                                          Remaining
                                           Number        Contractual
                   Exercise Price       Outstanding          Life
                        $1.27              55,111         3.8 years
                        $3.85               5,000         3.8 years
                       $4.326              95,736         3.8 years
                       $10.27               5,000         5.0 years
                       $14.00               5,000         5.6 years
                       $20.00              35,250         3.8 years
                                          201,097        
                                                              
Options Exercisable                                           
                        $1.27              55,111         3.8 years
                        $3.85               5,000         3.8 years
                       $4.326              93,236         3.8 years
                       $10.27               1,250         5.0 years
                       $14.00               1,000         5.6 years
                       $20.00              12,666         3.8 years
                                          168,263        
                                                              
      At  December  31,  1995  and 1996  the  number  of  options
exercisable  were  138,084  and 235,390,  respectively,  and  the
weighted   average   exercise  prices  were   $3.38   and   $3.58
respectively.

      Warrants  for  51,100  shares have  been  granted  and  are
outstanding.   The  warrants  are  exercisable  for  total   cash
consideration of $1.


14.  Extraordinary Item

       The   Company  restructured  and  replaced  its  long-term
financing  agreements  in each of the last  three  years.   Costs
incurred  related  to new loan financing arrangements  have  been
deferred  in accordance with the Company's accounting policy  for
deferred financing costs.  Costs, in the amount of $833,706 (1996-
$473,436;  1995-$391,626) related to debt that  was  restructured
have  been  expensed  in the year, net of applicable  income  tax
recoveries of $398,724 (1996-$434,238; 1995-$204,915).


15.  Statement of Cash Flow

                                         1995          1996            1997

(Increase) decrease in                                                 
  Accounts receivable               $  (875,321)   $(1,672,299)    $(3,468,235)
    Inventories                        (173,756)      (313,116)       (885,501)
    Prepaid expenses                   (198,454)      (759,560)       (183,766)
                                     (1,247,531)    (2,744,975)     (4,537,502)
                                                                       
Increase (decrease) in                                                 
    Accounts payable and accrued        317,510      1,867,327       2,341,702
      liabilities
    Unearned revenue                    316,146       (223,376)        (86,302)
    Customer deposits                   380,735        742,951         775,971
    Income taxes payable                     --         76,890         965,677
                                      1,014,391      2,463,792       3,997,048
Net change in non-cash working                                         
  capital balances                     (233,140)      (281,183)       (540,454)
Less net working capital acquired                                      
  on acquisitions [note 4]             (441,446)       262,344         195,908
Effect of translation                    26,915        (13,339)         (4,589)
                                     $ (647,671)    $  (32,178)     $ (349,135)

      Net  working  capital  acquired on  acquisitions  has  been
excluded  from cash flows from operations as it has been included
in investing activities in acquisitions.


16.  Lease Commitments

      The  Company is committed under operating leases  extending
for  various periods to 2008.  Future minimum lease payments  are
as follows:

1998                                     $1,436,760
1999                                      1,281,658
2000                                      1,070,543
2001                                        860,170
2002                                        817,844
Thereafter in aggregate                   3,205,197
                                         $8,672,172

      Lease costs of $1,291,043(1996 - $896,000; 1995 - $695,000)
have been expensed during the year.


17.  Income Taxes

      A reconciliation of the provision for income taxes based on
the combined federal and provincial income tax rates of 45% is as
follows:

                                             1995        1996           1997
                                                                      
Provision for (recovery of) income taxes   $319,408    $254,144     $(1,832,754)
  at statutory rates
Non deductible amortization                      --     132,910         302,059
Redemption of common stock options               --          --       2,030,436
Difference in foreign tax rates              (5,640)     14,414         (62,980)
Other                                       (14,661)     (3,143)          2,616
                                           $299,107    $398,325     $   439,377


The provision for income
  taxes includes:

                                             1995         1996          1997

Current income taxes--Canada               $     --    $ 90,000      $  804,385
                    --Foreign                    --          --         315,877
                                                 --      90,000       1,120,262
                                                                      
Deferred income taxes-Canada                269,107     357,325        (550,968)
                     --Foreign               30,000     (49,000)       (129,917)
                                            299,107     308,325        (680,885)
                                           $299,107    $398,325      $  439,377

      The deferred tax asset is comprised of the following timing
differences:

                                             1995         1996          1997

Excess accounting expenses over tax       $106,792     $561,774      $  345,168
Non capital loss carryforwards             169,341      185,657       1,214,849
Excess of tax over book depreciation       (42,743)    (204,149)       (177,533)
Other differences                            9,757       (6,745)         (2,748)
                                          $243,147     $536,537      $1,379,736

The  Company  has  non capital losses available for  carryforward
that expire as follows:

                 2004                   $1,451,040
                 2012                    1,140,072
                 No expiry                 563,224


18.  Selling, Delivery and Administrative


(a)  Related Party Transactions

      During  the year the Company paid approximately  $1,029,779
(1996-$529,400; 1995-$386,000) to CF Capital Corporation  (CFCC),
a  company  affiliated by common significant  shareholdings,  for
management and related services.

      The  Company also paid CFCC $518,700 (1996-$239,600;  1995-
$135,000)  for investment banking advisory services  rendered  in
connection with acquisitions completed during the year which were
capitalized as part of the related acquisition costs.

      The  Company  has entered into a Management Agreement  with
CFCC and two of CFCC's shareholders who are also shareholders  of
the  Company.  Under the terms of the Agreement, CFCC manages the
operations  of  the  Company and negotiates contracts,  financial
agreements  and  other  arrangements.  The  Management  Agreement
provides  that  CFCC shall receive a base fee which  is  adjusted
yearly  based  on  annual  Company revenues.   An  annual  bonus,
calculated as a percentage of the base fee, is due to CFCC in the
event  the Company achieves certain targeted levels of per  share
earnings  before  depreciation, amortization  and  income  taxes.
CFCC  also receives fees for investment banking advisory  service
rendered   to   the   Company  in  connection   with   successful
acquisitions.

All  shareholders  of  the Company are  party  to  a  Shareholder
Agreement  which  provides, among other  things,  for  preemptive
rights  in  favor of the shareholders under certain circumstances
if  Sparkling Spring issues additional securities and for certain
registration  rights.   The Shareholder Agreement  also  provides
restrictions on the transfer of the Company's capital stock,  for
rights of first refusal and for rights of certain shareholders to
require all other shareholders to join with them in their sale of
the Company's capital stock.

     In  connection with the purchase of shares of common stock of
the Company, promissory notes totaling $230,003 have been received
from certain  officers of the Company.  The promissory notes  bore
interest  at a rate of 7% and were scheduled to mature on  January
31,  1998  with  principal  and interest due on  that  date.   The
promissory notes were  cancelled by the Company and replaced  with
promissory  notes which  bear interest at a rate of 6% and  mature
on January 31, 1999 with  principal and interest due on that date.
The  common  shares  purchased  by the  officers  are  pledged  as
security for the promissory notes.

(b)  Advertising and Promotional Expenses

       Selling,  delivery  and  administration  expenses  include
advertising   and  promotional  expenses  of  $1,238,000   (1996-
$1,206,000; 1995-$656,000).


19.  Summary of Business Segments

                                          1995           1996           1997
Revenue                                                               
Canada                                $ 5,061,581    $15,363,998    $19,416,108
United Kingdom                         10,287,533     11,962,351     17,658,190
United States                                  --             --      4,999,586
                                      $15,349,114    $27,326,349    $42,073,884
                                                                      
                                                                      
                                                                      
Net income (loss) before income 
  taxes, non-controlling interest 
  and extraordinary item
Canada                                   $622,549     $  726,937    $(4,391,401)
United Kingdom                             64,250       (155,278)       451,400
United States                                  --             --       (145,282)
                                         $686,799     $  571,659    $(4,085,283)
                                                                      
Identifiable assets                                                   
Canada                                $ 5,664,794    $27,177,107   $ 31,345,420
United Kingdom                         12,856,161     17,232,061     25,866,401
United States                                  --             --     49,787,091
                                      $18,520,955    $44,409,168   $106,998,912


20.  Comparative Figures

     Certain of the comparative figures have been reclassified to
conform with the presentation adopted in the current year.


21.  Subsequent Events

(a)   On  February  24, 1998, the Company purchased  all  of  the
outstanding  capital stock of Coastal Mountain  Water  Corp.  for
$4,241,000.  Coastal Mountain Water Corp. is based in  Vancouver,
British  Columbia and focuses on the direct delivery of  eighteen
litre containers of water to residential and commercial customers
and the rental of water coolers.

(b)   In  January, 1998 the Company issued 9,360  shares  to  key
managers of the Company for aggregate proceeds of $262,080  (note
2).

(c)  The Registration Statement filed by the Company covering the
Exchange  Notes  (note 12) was declared effective by  the  United
States Securities and Exchange Commission on April 1, 1998.

(d)   In  March 1998, the Company received a loan commitment  for
purposes of financing future capital investments, working capital
and general corporate purposes.  The loan commitment provides for
borrowing availability of initially $40.0 million and matures  in
2007.  The documentation for the loan is expected to be finalized
and  the  loan  closed  by  early  May.   The  Company's  payment
obligations  under  the credit agreement  will  have  pledged  as
collateral a first priority security interest granted in favor of
the  lenders over substantially all of the assets of the Company.
The  Company's obligations under the credit agreement  will  rank
senior to the payment of the Exchange Notes.




                             EXHIBIT INDEX

Exhibit                                                              Sequential
Number      Description                                              Page Number
- - -------     -----------                                              -----------

2.(ii)      Senior Credit Agreement, dated May 26, 1998 among             87
            Sparkling Spring Water Group Limited and the Guarantors
            named therein, as borrowers, and The Toronto-Dominion
            Bank, Toronto Dominion (Texas), Inc. and The Toronto-
            Dominion Bank, London Branch, as lenders.

EX-2.(II)

                                                     DATE:  MAY 11/98

                          CREDIT AGREEMENT

                              between

                SPARKLING SPRING WATER GROUP LIMITED
                   SPARKLING SPRING WATER LIMITED
                 SPARKLING SPRING WATER UK LIMITED
                                and
                         SPRING WATER, INC.

                            as Borrowers


                                and

                     THE TORONTO-DOMINION BANK,
                   TORONTO DOMINION (TEXAS), INC.
                                and
              THE TORONTO-DOMINION BANK, LONDON BRANCH

                             as Lenders




                     Dated as of April 30, 1998





                       TABLE OF CONTENTS


     ARTICLE 1
                        INTERPRETATION
     1.01  Defined Terms                                       2
     1.02  Computation of Time Periods                        20
     1.03  Accounting Terms                                   20
     1.04  Incorporation of Appendices and Schedules          20
     1.05  Singular, Plural, etc.                             20
     
     ARTICLE 2
                        CREDIT FACILITY
     2.01  Credit Facility                                    21
     2.02  Availability                                       21
     2.03  Termination of Availability                        21
     2.04  Revolving Nature of Credit Facility                21
     2.05  Borrowing Options                                  21
     2.06  Repayment of Credit Facility                       21
     2.07  Annual Renewal of Credit Facility                  22
     2.08  Reduction in Commitment upon Asset Sales           23
     2.09  Optional Repayment                                 23
     2.10  Optional Reduction of Commitment                   24
     2.11  Repayment of Outstandings to Reflect Commitment    24
     2.12  General Interest Provisions                        24
     2.13  Business Day Payments                              25
     2.14  Interest on Overdue Amounts                        25
     2.15  Breakage Costs                                     25
     2.16  Application of Payments                            26
     2.17  Conditions Solely for the Benefit of the Lenders   26
     2.18  No Waiver                                          26
     2.19  Authorized Debit                                   27
     2.20  Commitment Fee                                     27
     2.21  Arrangement Fee                                    27
     2.22  Adjustments to Interest Rates and Fees             27

     ARTICLE 3
                   LOANS AND LETTERS OF CREDIT
     3.01  Advances                                           28
     3.02  Minimum Advances                                   28
     3.03  Notice Requirements for Advances                   28
     3.04  Notices Irrevocable                                28
     3.05  Election of Interest Rates and Currencies          28
     3.06  Circumstances Requiring Canadian Prime or 
           U.S. Prime Rate Pricing                            29
     3.07  Interest Periods                                   31
     3.08  Interest on Advances                               31
     3.09  Interest Payment Dates                             31
     3.10  Payments                                           32
     3.11  Letters of Credit                                  32

     ARTICLE 4
                       BANKERS' ACCEPTANCES
     4.01  Creation of Bankers' Acceptance                    32
     4.02  Drawings                                           32
     4.03  Power of Attorney                                  33
     4.04  Completion and Delivery of Drafts                  33
     4.05  Stamping Fees                                      33
     4.06  Netting                                            34
     4.07  Payment on Maturity                                34
     4.08  Custody of Drafts                                  34
     4.09  Renewal or other Payment of Bankers' Acceptance    35
     4.10  Prepayments of Bankers' Acceptances                35
     4.11  No Days of Grace                                   35
     4.12  Suspension of Bankers' Acceptance Option           35

     ARTICLE 5
                       CLOSING CONDITIONS
     5.01  Closing Conditions                                 35
     5.02  Conditions Precedent for Acquisition of 
           Target Company                                     37
     5.03  Conditions Precedent to Subsequent Borrowings      40
     
     ARTICLE 6
                  REPRESENTATIONS AND WARRANTIES
     6.01  Representations and Warranties by the Borrowers    40
     
     ARTICLE 7
               FINANCIAL STATEMENTS AND INFORMATION
     7.01  Provision of Information                           44

     ARTICLE 8
                       POSITIVE COVENANTS
     8.01  General Affirmative Covenants                      47

     ARTICLE 9
                       NEGATIVE COVENANTS
     9.01  General Negative Covenants                         50

     ARTICLE 10
                       BORROWER GUARANTEE
     10.01 Guarantees                                         54
     10.02 Guarantee Absolute and Unconditional               54
     10.03 Demand                                             56
     10.04 Remedies                                           56
     10.05 Set-Off                                            56
     10.06 Amount of Guaranteed Obligations                   56
     10.07 Payment Free and Clear of Taxes                    57
     10.08 Subrogation and Repayment                          57
     10.09 Postponement and Assignment                        58
     10.10 Rights on Subrogation                              58
     10.11 Continuing Guarantee                               58
     10.12 Third Party Beneficiaries                          58
     10.13 No Modification                                    58
     10.14 Additional Guarantee                               58
     10.15 Remedies Cumulative                                59
     10.16 No Waivers, Remedies                               59
     10.17 Time of Essence                                    59
     
     ARTICLE 11
                           SECURITY
     11.01 Security                                           59
     11.02 Continued Perfection of Security                   59
     11.03 Set-Off                                            59
     11.04 Conflict                                           60
     
     ARTICLE 12
                       EVENTS OF DEFAULT
     12.01 Events of Default                                  60
     12.02 Cancellation and Acceleration                      63
     12.03 Remedies Cumulative                                63
     12.04 Waivers                                            63
     
     ARTICLE 13
                         MISCELLANEOUS
     13.01 Records                                            63
     13.02 Amendments                                         63
     13.03 Notices                                            64
     13.04 No Waiver; Remedies                                66
     13.05 Expenses                                           66
     13.06 Maintenance of Accounts                            66
     13.07 Taxes                                              66
     13.08 Increased Costs                                    67
     13.09 Environmental Indemnity                            68
     13.10 Judgment Currency                                  69
     13.11 Governing Law                                      69
     13.12 Consent to Jurisdiction                            69
     13.13 Successors and Assigns                             70
     13.14 Conflict                                           70
     13.15 Severability                                       70
     13.16 Prior Understandings                               70
     13.17 Time of Essence                                    70
     13.18 Counterparts                                       70



     Appendix 1  -  Mandatory Liquid Asset Cost
     Appendix 2  -  Interest Rates and Fees

     Schedule 1  -  Borrowing Notice - Canadian Prime
                    Rate Advances and Bankers' Acceptances
     Schedule 2  -  Borrowing Notice - U.S. Prime Rate
                    Advances and U.S. Libor Advances
     Schedule 3  -  Borrowing Notice - Sterling Libor Advances
     Schedule 4  -  List of Wholly-Owned Subsidiaries
     Schedule 5  -  Bankers' Acceptance Power of Attorney
     Schedule 6  -  Quarterly Financial Certificate




                        CREDIT AGREEMENT

          THIS CREDIT AGREEMENT dated as of the 30th day of April, 1998

BETWEEN:

          SPARKLING  SPRING WATER GROUP LIMITED, a corporation
          incorporated under the laws of the Province of  Nova
          Scotia

                                                OF THE FIRST PART

AND:

          SPARKLING SPRING WATER LIMITED, a corporation
          incorporated under the laws of the Province of Nova Scotia

                                               OF THE SECOND PART

AND:

          SPARKLING   SPRING  WATER  UK  LIMITED,  a   company
          incorporated under the laws of England and Wales

                                                OF THE THIRD PART

AND:

          SPRING WATER, INC., a corporation incorporated under
          the laws of the State of Delaware

                                               OF THE FOURTH PART

AND:

          THE  TORONTO-DOMINION  BANK,  a  chartered  bank  of
          Canada

                                                OF THE FIFTH PART

AND:

          TORONTO DOMINION (TEXAS), INC., a corporation
          incorporated under the laws of the State of Delaware

                                                OF THE SIXTH PART

AND:

          THE TORONTO-DOMINION BANK, London Branch

                                              OF THE SEVENTH PART

     THIS  AGREEMENT  WITNESSES  that in  consideration  of  the  mutual
covenants  and agreements contained herein, it is agreed by and  between
the parties hereto as follows:


                           ARTICLE 1
                         INTERPRETATION

1.1  Defined Terms.  As used in this Agreement, the following terms have
the following meanings:

     (a)  "Accommodation" means the making of any Advance by the Lenders
          (including  any  renewal  of  an  outstanding  Advance),   the
          creation  of a Bankers' Acceptance by TD Bank and the issuance
          of a Letter of Credit or Guarantee Letter by TD Bank;

     (b)  "Acquired  Company" means a company which  is,  or  assets  of
          which  are,  acquired by a Group Entity during any  particular
          period,  including  without limitation  any  Target  Companies
          acquired during such period;

     (c)  "Acquired Company EBITDA" means, for any particular period, an
          amount   determined   for  any  Acquired   Company   and   its
          Subsidiaries  in  the  same manner  as  the  determination  of
          Adjusted  Consolidated EBITDA for SSWG  and  its  Subsidiaries
          pursuant to this Agreement;

     (d)  "Actual  Capital  Expenditures" means,  for  any  period,  the
          actual  aggregate capital expenditures of all  Group  Entities
          for that period;

     (e)  "Adjusted  Consolidated  EBITDA"  means,  for  any  particular
          period, an amount determined as follows:

               (i)    the  Consolidated  Net  Income  of  SSWG  and  its
               Subsidiaries for that period;

          plus

               (ii)  Total Interest for that period, to the extent  such
               Total  Interest was deducted in determining  Consolidated
               Net Income of SSWG and its Subsidiaries for that period;

          plus

               (iii)      income   taxes  recorded  by  SSWG   and   its
               Subsidiaries for that period, to the extent  such  income
               taxes  were  included  in  determining  Consolidated  Net
               Income of SSWG and its Subsidiaries for that period;

          plus

               (iv) the amount of depreciation and amortization recorded
               by  SSWG  and  its Subsidiaries for that period,  to  the
               extent  the  amount of such depreciation and amortization
               was  deducted in determining the Consolidated Net  Income
               of SSWG and its Subsidiaries for that period;

          plus

               (v)   Acquired  Company EBITDA for that  period  for  any
               Acquired Company acquired during that period;

          in   each  case  adjusted  for  reasonable  operating  expense
          efficiencies, as approved by the Lenders;

     (f)  "Advances"  means  advances  made by  the  Lenders  hereunder,
          including any renewal of outstanding Advances; Advances may be
          denominated in Canadian Dollars (a "Canadian Dollar Advance"),
          in  U.S.  Dollars (a "U.S. Dollar Advance") or in Sterling  (a
          "Sterling  Advance");  a  Canadian  Dollar  Advance  shall  be
          designated  as a "Canadian Prime Rate Advance", a U.S.  Dollar
          Advance  may from time to time, by election of the  Borrowers,
          be  designated as a "U.S. Prime Rate Advance" or a "U.S. Libor
          Advance",  and  a  Sterling Advance shall be designated  as  a
          "Sterling  Libor  Advance"; each  of  a  Canadian  Prime  Rate
          Advance, a U.S. Prime Rate Advance, a U.S. Libor Advance and a
          Sterling Libor Advance is a "Type" of Advance;

     (g)  "Affiliate"  of any designated person means any  other  person
          that, directly or indirectly, controls or is controlled by  or
          is  under common control with such designated person; provided
          that  in  any event any person that beneficially owns directly
          or  indirectly  securities having 50% or more  of  the  voting
          power for the election of directors or other governing body or
          50% or more of the partnership or other ownership interests of
          any other person will be deemed to control such corporation or
          other  person; for the purposes of this definition,  "control"
          (including,  with correlative meanings, the terms  "controlled
          by" and "under common control with"), as used with respect  to
          any  person, means the possession, directly or indirectly,  of
          the  power  to direct or cause the direction of the management
          and policies of such person, whether through the ownership  of
          voting securities or by contract or otherwise;

     (h)  "Alternate Sterling Rate" means the rate of interest per annum
          (based on a 365 day year) as determined by TDUK as the rate it
          may  make  available for a period equal to one month  Sterling
          obtained  by  TDUK  in the London interbank market,  plus  the
          applicable Mandatory Liquid Asset Cost;

     (i)  "Alternate  Sterling Rate Advances" means Advances  deemed  to
          have  been  made to a Borrower pursuant to Section 3.05(e)  or
          Section 3.06(a)(viii);

     (j)  "Authorized  Officer" means, with respect to a  Borrower,  the
          chairman,  the  president, the chief  executive  officer,  the
          chief  financial  officer, the secretary or  the  chief  legal
          officer of such Borrower;

     (k)  "Bankers'  Acceptance" means a bankers' acceptance created  by
          acceptance  of  a Draft in accordance with the  provisions  of
          this Agreement;

     (l)  "Beneficiary"  means, in respect of any Letter  of  Credit  or
          Guarantee  Letter, the beneficiary specified  therein  or  any
          other  person  to  whom payments may be required  to  be  made
          pursuant to such Letter of Credit or Guarantee Letter;

     (m)  "Borrowers" means, collectively, SSWG, SSW, SSUK and SWUS  and
          their  respective successors, and "Borrower" means any one  of
          them;

     (n)  "Borrowing"  means a utilization by a Borrower of  the  Credit
          Facility  by way of Canadian Prime Rate Advances,  U.S.  Prime
          Rate  Advances, U.S. Libor Advances, Sterling Libor  Advances,
          Bankers'  Acceptances, Letters of Credit or Guarantee Letters,
          and "Borrowings" means the aggregate of such utilizations;

     (o)  "Borrowing  Notice"  means  a notice  by  a  Borrower  to  the
          Lenders:

               (i)   substantially in the form attached  as  Schedule  1
               hereto:

                       (1)   requesting a Canadian Dollar Advance; or

                       (2)     requesting  the  creation  of  Bankers'
                       Acceptances;

               (ii)  substantially in the form attached  as  Schedule  2
               hereto:

                       (1)   requesting a U.S. Dollar Advance; or

                       (2)    requesting  the continuation  of  a  U.S.
                       Libor Advance for an additional Interest Period;
                       or

               (iii)    substantially in the form attached as Schedule 3
               hereto:

                       (1)   requesting a Sterling Libor Advance; or

                       (2)    requesting the continuation of a Sterling
                       Libor Advance for an additional Interest Period;

     (p)  "Business  Day"  means  any day of  the  year,  other  than  a
          Saturday, Sunday or other day on which:

               (i)   banks  are  required  or  authorized  to  close  in
               Vancouver;

               (ii)  where  used  in the context of a  U.S.  Prime  Rate
               Advance, banks are required or authorized to close in New
               York City or Houston, Texas;

               (iii)     where  used  in the context  of  a  U.S.  Libor
               Advance, banks are required or authorized to close in New
               York  City or Houston, Texas and dealings are not carried
               on in the London interbank market; or

               (iv)  where  used  in  the context of  a  Sterling  Libor
               Advance,  banks are required or authorized  to  close  in
               London  and  dealings are not carried on  in  the  London
               interbank market;

     (q)  "Business  Plan"  means  a  business  plan  prepared  by   the
          Borrowers   in  respect  of  the  consolidated  business   and
          financial  activities of the Group Entities  for  the  ensuing
          year, containing financial forecasts, an operating budget, and
          other matters typically included in an annual business plan;

     (r)  "Canadian  Dollars"  and "Cdn.$" each  mean  lawful  money  of
          Canada;

     (s)  "Canadian Prime Rate" on any day means the greater of:

               (i)  the rate of interest per annum then in effect (based
               on  a  year  of  365  days or, in leap years,  366  days)
               established and reported by TD Bank to the Bank of Canada
               from  time to time as the reference rate of interest  for
               the  determination of interest rates that TD Bank charges
               to  customers  of varying degrees of creditworthiness  in
               Canada for Canadian Dollar loans made by it in Canada and
               designated by it as its "prime rate"; and

               (ii)  the annual rate of interest equal to the CDOR  Rate
               plus 0.75% per annum;

          provided that each change in the Canadian Prime Rate shall  be
          effective  from  and including the date such  change  is  made
          without any requirement of notification to any Borrower or any
          other person;

     (t)  "Canadian  Prime  Rate  Advances"  means  Advances  on   which
          interest is determined by reference to the Canadian Prime Rate
          in effect from time to time;

     (u)  "Capex" means, for any particular period, the greater of:

               (i)   the  actual aggregate capital expenditures  of  all
               Group  Entities  for that period, as  determined  by  the
               Borrowers,  for  the purposes of the maintenance  of  the
               existing business of the Group Entities;

          and

               (ii)  3%  of  the  consolidated  revenue  for  all  Group
               Entities for that period;

     (v)  "Capital  Expenditure  Plan" means a detailed  financial  plan
          prepared  by  the Borrowers for the next ensuing fiscal  year,
          which plan shall be prepared on a consolidated basis covering,
          inter    alia,   planned   capital   expenditures,   including
          maintenance capital expenditures, for the ensuing fiscal year,
          together  with  proposed  sources for financing  such  capital
          expenditures  and such additional details as the  Lenders  may
          reasonably request;

     (w)  "Capital  Lease  Obligations"  means,  for  any  person,   all
          obligations of such person to pay rent or other amounts  under
          a  lease  of (or other agreement conveying the right  to  use)
          property,  to the extent such obligations are required  to  be
          classified  and accounted for as capital lease obligations  or
          finance lease obligations on a balance sheet of such person in
          accordance with GAAP;

     (x)  "Cash  Flow"  means,  for  any particular  period,  an  amount
          determined as follows:

               (i)  Adjusted Consolidated EBITDA for that period;

          less

               (ii) Capex for that period;

          less

               (iii)     current income taxes actually paid by SSWG  and
               its Subsidiaries during that period;

     (y)  "Cash  Sweep"  means, for any fiscal year of SSWG,  an  amount
          determined as 50% of the following:

               (i)  Consolidated Net Income for that period;

          plus

               (ii) the amount of depreciation and amortization recorded
               by  SSWG  and  its Subsidiaries for that period,  to  the
               extent  the  amount of such depreciation and amortization
               was  deducted in determining the Consolidated Net  Income
               of SSWG and its Subsidiaries for that period;

          plus

               (iii)     the  proceeds  from the  disposition  of  fixed
               assets for that period;

          less

               (iv) Actual Capital Expenditures for that period;

          less

               (v)   scheduled  principal payments by the  Borrowers  in
               respect of the Credit Facility for that period;

     (z)  "CDOR  Rate" means the annual rate equal to the average "BA  1
          Month"  rates  for  bankers' acceptances in  Canadian  Dollars
          displayed  and identified as such on the "Reuters Screen  CDOR
          Page"   (as   defined   in  the  International   Swap   Dealer
          Association,  Inc. definitions, as modified and  amended  from
          time  to  time)  as  of  10:00 a.m. (Vancouver  time)  on  any
          particular day or, if such day is not a Business Day, then  on
          the immediately preceding Business Day (as adjusted by TD Bank
          after  10:00 a.m. (Vancouver time) to reflect any error  in  a
          posted  rate  or in the posted average annual rate);  provided
          that  if  such  rates are not available on the Reuters  Screen
          CDOR  Page on any particular day, then the CDOR Rate  on  that
          day  shall be calculated as the arithmetic mean of the 30  day
          rates  applicable to bankers' acceptances in Canadian  Dollars
          quoted  by  three  major Canadian Schedule I  chartered  banks
          selected  by the Lenders as of 10:00 a.m. (Vancouver time)  on
          such  day, or if such day is not a Business Day, then  on  the
          immediately preceding Business Day;

     (aa) "Change of Control" means:

               (i)  any person or group other than John Kredeit, Stephen
               Larson,  Clairvest  Group  Inc.  or  the  management  and
               directors  of the Group Entities becoming the  beneficial
               owner of more than 50% of the Voting Stock of SSWG; or

               (ii)  the  transfer of all or substantially  all  of  the
               assets of SSWG or its Subsidiaries, taken as a whole,  to
               any person or group other than another Group Entity;

          but shall not include the proposed reorganization of the Group
          Entities  pursuant  to which SSWG will become  a  wholly-owned
          subsidiary  of Sparkling Spring Water Holdings Limited,  which
          in  turn will be owned by the shareholders of SSWG as  of  the
          date of this Agreement;

     (ab) "Closing  Conditions"  means the various conditions  precedent
          set out in Section 5.01 hereof;

     (ac) "Closing  Date"  means  such date as  the  Borrowers  and  the
          Lenders may agree upon;

     (ad) "Commitment"  means U.S.$40,000,000, subject to any  reduction
          under any provision of this Agreement;

     (ae) "Commitment  Fee" has the meaning ascribed  to  that  term  in
          Section 2.20;

     (af) "Consolidated  Net  Income" means, for any particular  period,
          the  consolidated net income of SSWG and its Subsidiaries  for
          such  period determined in accordance with GAAP; provided that
          Consolidated Net Income shall not include:

               (i)  any loss, writedown, gain or other amount classified
               as an extraordinary item in accordance with GAAP;

               (ii)  any portion of the net income or loss of any person
               that  is  not a Subsidiary of SSWG, except to the  extent
               cash dividends received by SSWG or any Subsidiary of SSWG
               in  any period are included in consolidated net income of
               SSWG for that period in accordance with GAAP;

               (iii)     any  gain or loss on the disposition  of  fixed
               assets or any income or loss attributable to discontinued
               operations; or

               (iv)  any charges related to the acquisition in  1997  by
               SSWG of the shares of SSW and the related acquisition  of
               stock  options  by  SSW, or any other  charges  permitted
               under this Agreement;

     (ag) "corporation"  includes a corporation incorporated  under  the
          Canada  Business  Corporations Act and any  other  corporation
          wherever or however incorporated;

     (ah) "Credit  Facility"  means  the  credit  facility  to  be  made
          available  to  the Borrowers hereunder as set out  in  Section
          2.01;

     (ai) "Credit   Facility  Documents"  means  this   Agreement,   the
          Subsidiary  Guarantees, the Security Documents and  all  other
          documents to be executed and delivered to the Lenders  by  the
          Group Entities or any of them pursuant to this Agreement;

     (aj) "Debenture/Security   Agreements"   means   debenture/security
          agreements  in  the principal amount of U.S.$60,000,000  each,
          executed  by each of the Group Entities in a form satisfactory
          to  the Lenders, acting reasonably, granting to the Lenders  a
          first  financial charge on all real property of  each  of  the
          Group  Entities  and  a  security  interest  in  all  personal
          property of each of the Group Entities ranking in priority  to
          any  other  security interest (other than Permitted Liens)  in
          such personal property;

     (ak) "Debt" means, at any particular time, all Indebtedness of SSWG
          and its Subsidiaries on a consolidated basis;

     (al) "Debt  Service"  means, for any particular period,  an  amount
          determined as follows:

               (i)  Senior Interest for that period;

          plus

               (ii)  scheduled  principal payments by the  Borrowers  in
               respect of the Credit Facility for that period;

          plus

               (iii)     without  duplication,  interest  and  scheduled
               principal  payments payable by SSWG and its  Subsidiaries
               in  respect  of  other  Debt for that  period,  including
               without limitation the Senior Subordinated Notes and  any
               Vendor  Debt,  provided  that, for  each  of  the  fiscal
               quarters  ended December 31, 1997, March 31,  1998,  June
               30,  1998  and September 30, 1998, no scheduled principal
               payments  in respect of other Debt shall be included  for
               the period prior to January 1, 1998;

     (am) "Default"  means an event which, with the giving of notice  or
          passage  of  time,  or  both, would  constitute  an  Event  of
          Default;

     (an) "Dispositions"  has  the  meaning ascribed  to  that  term  in
          Section 9.01(f);

     (ao) "Draft" means, at any time, a blank bill of exchange drawn  by
          a  Borrower  on TD Bank in Canadian Dollars and  bearing  such
          distinguishing  letters and numbers as TD Bank may  determine,
          but which has not been completed or accepted by TD Bank;

     (ap) "Drawing"  means  the creation of Bankers' Acceptances  by  TD
          Bank in accordance with the provisions of this Agreement;

     (aq) "Drawing Date" means any Business Day fixed in accordance with
          the provisions of this Agreement for a Drawing;

     (ar) "Environmental Laws" means any Laws relating, in whole  or  in
          part,  to  the  protection and enhancement of the environment,
          public health, or transportation of dangerous goods;

     (as) "Equivalent Amount" means, on any particular date, the  amount
          of  U.S.  Dollars into which an amount of Canadian Dollars  or
          Sterling may be converted, the amount of Canadian Dollars into
          which  an amount of U.S. Dollars or Sterling may be converted,
          or  the  amount of Sterling into which an amount  of  Canadian
          Dollars  or  U.S.  Dollars  may be  converted,  in  each  case
          determined on the basis of the applicable Spot Buying Rates on
          the  date  of  determination; provided that  if  the  date  of
          determination  is  not  a Business Day,  the  applicable  Spot
          Buying  Rates  shall be the Spot Buying Rates quoted  for  the
          immediately preceding Business Day;

     (at) "Event  of  Default"  means any of  the  events  specified  in
          Section 12.01;

     (au) "Face Amount" means, in respect of:

               (i)   a  Bankers' Acceptance, the amount payable  to  the
               holder thereof on its maturity; and

               (ii)  a Letter of Credit or Guarantee Letter, the maximum
               amount payable to the Beneficiary;

     (av) "Federal  Funds  Effective  Rate"  means,  for  any  day,  the
          weighted  average  of  the  rates on overnight  federal  funds
          transactions  with  members  of  the  Federal  Reserve  System
          arranged  by federal funds brokers, as published on  the  next
          succeeding  Business Day by the Federal Reserve  Bank  of  New
          York,  or, if such rate is not so published for any day  which
          is  a Business Day, the average of the quotations for the  day
          of  such  transactions  received by  the  Lenders  from  three
          federal funds brokers of recognized standing selected by them;

     (aw) "GAAP"  means,  in  relation  to  any  person  at  any   time,
          accounting principles generally accepted in the United  States
          of  America as set forth in the opinions and pronouncements of
          the  Accounting Principles Board of the American Institute  of
          Certified   Public   Accountants  and   the   statements   and
          pronouncements of the Financial Accounting Standards Board, or
          in  such  other statements by such other entities  as  may  be
          approved by a significant segment of the accounting profession
          in the United States of America, applied on a basis consistent
          with  the  most  recent audited financial statements  of  such
          person  and its consolidated Subsidiaries (except for  changes
          accepted without qualification in an auditor's report by  such
          person's independent auditors and shown in such statements);

     (au) "General  Assignments of Book Debts" means general assignments
          of  book  debts, or other similar security agreements  in  any
          jurisdiction other than Canada, executed by each of the  Group
          Entities  in favour of the Lenders, in a form satisfactory  to
          the  Lenders,  acting reasonably, ranking in priority  to  any
          other  security  interest in book debts or  accounts  of  such
          Group Entity;

     (ax) "Governmental  Body" means any government  (including  without
          limitation any federal, provincial, state, municipal or  local
          government) or political subdivision or any agency, authority,
          bureau,   central   bank,   monetary  authority,   commission,
          department  or  instrumentality  thereof,  or  any  court   or
          tribunal, whether foreign or domestic;

     (ay) "Group Entities" means, collectively, the Borrowers, Water Jug
          Enterprises  Limited, Withey's Water Softening &  Purification
          Limited,  3003969 Nova Scotia Limited, Canadian Springs  Water
          Company  Limited,  Aqua  Care Water Softening  &  Purification
          Inc.,  High  Valley  Water  Limited,  Coastal  Mountain  Water
          Company   Limited,   Aquaporte   (UK)   Limited,   Marlborough
          Employment  Limited,  Water  at Work  Limited,  Natural  Water
          Limited,  Crystal  Springs of Seattle, Inc.,  Crystal  Springs
          Drinking  Water,  Inc.,  Crystal  Spring  Acquisition,   Inc.,
          Mountain  Fresh Acquisition Corp. and Cullyspring  Water  Co.,
          Inc. and any additional Wholly-Owned Subsidiaries acquired  by
          the  Borrowers  after the date of this Agreement,  and  "Group
          Entity" means any one of them;

     (az) "guarantee"  or  "guaranteed", as applied  to  an  obligation,
          include:

               (i)  a guarantee (other than by endorsement of negotiable
               instruments  for  collection in the  ordinary  course  of
               business), direct or indirect, in any manner, of any part
               or all of such obligation; and

               (ii)  an  agreement,  direct or indirect,  contingent  or
               otherwise, the practical effect of which is to assure  in
               any way the payment or performance (or payment of damages
               in  the  event of non-performance) of any part or all  of
               such obligation;

     (ba) "Guarantee  Letters" means letters of guarantee issued  by  TD
          Bank pursuant to Section 3.11;

     (bb) "Guaranteeing Borrower" has the meaning ascribed to that  term
          in Article 10;

     (bc) "Hazardous  Materials"  means any  substance  declared  to  be
          hazardous  or toxic under any Law now or hereafter enacted  or
          promulgated by any Governmental Body having jurisdiction  over
          the Group Entities or their properties or assets;

     (bd) "Indebtedness"  of any person means, without  duplication  and
          without  regard to any interest component with respect thereto
          (whether actual or imputed) that is not due and payable:

               (i)   all  overdrafts  in accounts with  banks  or  other
               similar  institutions and all obligations represented  by
               notes payable and drafts accepted representing extensions
               of credit, including in respect of such obligation issued
               at  a discount from par, as at any date of determination,
               any  amount reasonably regarded as the amortized discount
               or  accrued interest for any such obligation for  the  12
               month period ended on such date of determination;

               (ii)  all obligations of such person (whether or not  for
               borrowed  money) that are evidenced by bonds, debentures,
               notes  or  other similar instruments or that, whether  or
               not  so  evidenced, would be considered  indebtedness  in
               respect  of  borrowed  money  in  accordance  with  GAAP,
               including in respect of any such obligation issued  at  a
               discount  from par, as at any date of determination,  any
               amount  reasonably regarded as the amortized discount  or
               accrued interest for any such obligation for the 12 month
               period ended on such date of determination;

               (iii)    all Capital Lease Obligations of such person;

               (iv) all obligations in respect of which interest charges
               are customarily paid by such person;

               (v)   all  obligations of such person for borrowed  money
               which  are  convertible into shares  of  stock  or  other
               equity interests of such person (whether at the option of
               such  person or of the holder), until any such conversion
               is actually made;

               (vi)  all  shares of stock or other equity  interests  of
               such   person  that  are  required  to  be  redeemed   or
               repurchased  by such person at the option of  the  holder
               thereof,  whether  upon the happening  of  any  event  or
               contingency or otherwise;

               (vii)     all obligations of such person for the deferred
               purchase price of property or services acquired  by  such
               person;

               (viii)    all  obligations for borrowed money secured  by
               any  Lien  upon or in any property owned by  such  person
               whether  or not such person has assumed or become  liable
               for the payment of such obligations for borrowed money;

               (ix) all obligations of such person in respect of letters
               of credit; and

               (x)   all  obligations of the type described  in  any  of
               clauses  (i)  through  (ix) above  that  are  guaranteed,
               directly  or indirectly, or endorsed (otherwise than  for
               collection or deposit in the ordinary course of business)
               or discounted with recourse by such person;

          provided that in determining Indebtedness of each Group Entity
          the following items shall be excluded:

               (xi) trade accounts payable;

               (xii)    accrued liabilities which would be classified as
               current  liabilities in accordance with GAAP (other  than
               indebtedness  for  borrowed money) and  which  have  been
               incurred in the ordinary course of business;

               (xiii)   unearned revenues;

               (xiv)    current and deferred income taxes;

               (xv)     accruals for pension obligations;

               (xvi)    minority interests; and

               (xvii)   indebtedness of any Group Entity to  any  other
               Group Entity;

     (be) "Interest Period" means, for each U.S. Libor Advance and  each
          Sterling Libor Advance, a period commencing:

               (i)   in the case of the initial Interest Period for such
               Advance, on the date of such Advance; and

               (ii)  in  the case of any subsequent Interest Period  for
               such   Advance,  on  the  last  day  of  the  immediately
               preceding Interest Period;

          and  ending, in either case, on the last day of the period  as
          selected by a Borrower pursuant to this Agreement;

     (bf) "Investment" means any investment (in cash or by  delivery  of
          other   property)  by  any  Group  Entity  made  directly   or
          indirectly:

               (i)   in  any  other  person by stock  purchase,  capital
               contribution,  loan or advance or other credit  extension
               or by purchase of property from such person subject to an
               understanding to resell such property to such  person  or
               otherwise;

               (ii)  in  any  property purchased, leased pursuant  to  a
               lease  which would constitute a capital lease under GAAP,
               or otherwise acquired by any Group Entity;

          excluding in any case routine purchases of property to be used
          or consumed in the ordinary course of business;

     (bg) "Judgment  Currency" means the currency in which  a  court  of
          competent jurisdiction may render judgment in connection  with
          any litigation relating to the repayment of Outstandings under
          this Agreement;

     (bh) "Law"  means  any  law  (including  common  law  and  equity),
          constitution, statute, order, treaty, regulation  or  rule  of
          any Governmental Body;

     (bi) "Lenders"  means,  collectively, TD Bank, TDUS  and  TDUK  and
          their  respective successors and assigns, and  "Lender"  means
          any one of them;

     (bj) "Letters of Credit" means letters of credit issued by TD  Bank
          pursuant to Section 3.11;

     (bk) "Lien" means, with respect to any person, any mortgage,  lien,
          pledge,  adverse  claim, charge, security  interest  or  other
          encumbrance,  or any interest or title of any vendor,  lessor,
          lender  or other secured party to or of such person under  any
          conditional sale or other title retention agreement or capital
          lease,  upon or with respect to any property or asset of  such
          person, or the signing or filing of a financing statement that
          names  such  person as debtor, or the signing of any  security
          agreement authorizing any other person as the secured party to
          file any financing statement;

     (bl) "Mandatory  Liquid Asset Cost" means the applicable percentage
          (if  any)  calculated  in accordance with  Appendix  1  to  be
          included in Sterling Libor;

     (bm) "Margin" means the applicable percentage (if any) set  out  in
          Appendix  2 to be added to the Canadian Prime Rate,  the  U.S.
          Prime  Rate,  U.S.  Libor, Sterling  Libor  or  the  Alternate
          Sterling  Rate  to  determine the  interest  rate  payable  on
          Canadian  Prime Rate Advances, U.S. Prime Rate Advances,  U.S.
          Libor  Advances, Sterling Libor Advances or Alternate Sterling
          Rate Advances, respectively;

          (bn) "Material Adverse Effect" means:

               (i)    a   material  adverse  effect  on  the   financial
               condition,  business or prospects of the  Group  Entities
               taken as a whole;

               (ii)  any  effect  on  the ability of  the  Borrowers  to
               perform   their   respective   obligations   under   this
               Agreement; or

               (iii)    any effect on the validity or enforceability  of
               this  Agreement, any Subsidiary Guarantee or any  of  the
               Security Documents;

     (bo) "Maturity  Date"  means  December 31,  2005,  subject  to  any
          extension under any provision of this Agreement;

     (bp) "Non-Renewal  Date" has the meaning ascribed to that  term  in
          Section 2.07(d);

     (bq) "Non-Resident  of  Canada" has the  meaning  assigned  to  the
          expression "non-resident" in the Income Tax Act (Canada);

     (br) "Original Currency" means the currency in respect of which any
          Outstandings  are  owed by the Borrowers  to  the  Lenders  in
          accordance with the provisions of this Agreement;

     (bs) "Outstandings" means, on any day, an amount equal to:

               (i)  the aggregate principal amount of all Advances under
               the Credit Facility;

               (ii)   the  aggregate  Face  Amount  of  all  outstanding
               Bankers' Acceptances under the Credit Facility; and

               (iii)     the aggregate Face Amount of all issued Letters
               of   Credit  and  Guarantee  Letters  under  the   Credit
               Facility;

     (bt) "Permitted Capital Expenditures" means, for any fiscal year of
          SSWG, an amount determined as follows:

               (i)  U.S.$7,000,000;

          plus

               (ii)  4%  of the aggregate purchase price of all Acquired
               Companies acquired by all Group Entities after January 1,
               1998;

          plus

               (iii)    the lesser of:

                        (1)    U.S.$2,000,000; and

                        (2)    the amount by which the Permitted Capital
                    Expenditures  for the previous fiscal year  exceeded
                    the  Actual  Capital Expenditures for such  previous
                    fiscal year;

     (bu) "Permitted Liens" means with respect to any Group Entity:

               (i)   carriers', warehousemen's, builders' and mechanics'
               and  other  like Liens arising in the ordinary course  of
               business  by  operation of law and other Liens  resulting
               from  judgments  or  awards the time for  the  appeal  or
               petition  for re-hearing of which shall not have  expired
               or  in  respect of which such Group Entity shall in  good
               faith  be prosecuting an appeal or proceeding for  review
               and  in respect of which a stay of execution pending such
               appeal or proceeding for review shall have been obtained;

               (ii)  Liens  or trusts for taxes, assessments  and  other
               governmental charges either not yet due and  payable  or,
               to  the  extent nonpayment thereof shall be permitted  by
               Section   8.01(d),   in  respect  of  which   enforcement
               proceedings shall have been effectively stayed;

               (iii)      pledges   or  deposits  made  under   workers'
               compensation  laws or similar legislation or  good  faith
               deposits  or bonds or similar instruments to  secure  the
               performance  of  bids, tenders, leases, contracts  (other
               than  for  the  payment of Indebtedness) or expropriation
               proceedings,  or  deposits to secure  surety  and  appeal
               bonds  or  deposits  as security for contested  taxes  or
               export or import duties, levies, charges or surcharges;

               (iv)  the right reserved to or vested in any Governmental
               Body  by  the  terms  of  any lease,  franchise,  tenure,
               contract, grant or permit acquired by the Group Entities,
               or  by  any statutory provisions, to terminate  any  such
               lease,  license,  franchise, tenure, contract,  grant  or
               permit  (provided  that  such right  is  not  then  being
               exercised),  or  to  require  annual  or  other  periodic
               payments  or the performance of obligations or imposition
               of conditions, as a condition of the continuance thereof;

               (v)   security  given  to  a public  utility  or  to  any
               Governmental Body when required by such public utility or
               Governmental  Body in connection with operations  in  the
               ordinary course of business of any of the Group Entities;

               (vi)   the   reservations,  limitations,   provisos   and
               conditions,  if  any, expressed in any  grants  from  the
               Crown  in  the  right of Canada or in the  right  of  any
               Province or Territory thereof;

               (vii)     minor  survey  exceptions, minor  encumbrances,
               leases,  rights  or options to repurchase,  restrictions,
               easements  or  reservations of or rights  of  others  for
               rights  of  way,  sewers, electric lines,  telegraph  and
               telephone lines and other similar purposes, title defects
               or  irregularities or zoning or other restrictions as  to
               the  use  of real properties or Liens incidental  to  the
               conduct of business or the ownership of properties  which
               were  not  incurred in connection with the incurrence  of
               Indebtedness or other extensions of credit and  which  do
               not in the aggregate materially detract from the value of
               such  properties or materially impair their  use  in  the
               operation of the business of the Group Entities;

               (viii)    Liens constituted by capital leases or  finance
               leases which create Capital Lease Obligations;

               (ix) Liens on vehicles or office or computer equipment in
               existence  on  December  31, 1997  as  reflected  in  the
               audited financial statements of SSWG;

               (x)   any Lien renewing, extending or refunding any  Lien
               permitted by paragraphs (i) through (ix); provided that

                         (1)    the  principal  amount  of  Indebtedness
                    secured  by  such  Lien immediately  prior  to  such
                    extension, renewal or refunding is not increased  or
                    the maturity thereof reduced;

                        (2)    such  Lien is not extended to  any  other
                    property; and

                        (3)    immediately after such extension, renewal
                    or  refunding  no Default or Event of Default  would
                    exist;

               (xi)  Liens  created  by  or contained  in  the  Security
               Documents;

     (bv) "person"  includes  an  individual, partnership,  corporation,
          trust,  unincorporated  association, joint  venture  or  other
          entity, or a foreign state or political subdivision thereof or
          any agency of such state or subdivision;

     (bw) "Power  of Attorney" has the meaning ascribed to that term  in
          Section 4.03;

     (bx) "Purchase Money Mortgage" means:

               (i)   a  Lien existing upon assets at the time  of  their
               acquisition by SSWG or any of its Subsidiaries, or at the
               time of acquisition by SSWG or any of its Subsidiaries of
               any  business entity then owning such assets, whether  or
               not  such  existing Lien was given to secure the purchase
               price of the assets which are subject to such Lien; and

               (ii) a Lien created by SSWG or any of its Subsidiaries to
               secure  all or any part of the unpaid purchase price,  or
               to secure Indebtedness incurred solely for the purpose of
               financing all or any part of the purchase price  or  cost
               of  construction,  of  property  or  any  improvement  to
               property  acquired  or  constructed  by  SSWG   or   such
               Subsidiary;

     (by) "Quarterly Financial Certificate" means the certificate of the
          chief  financial  officer or vice-president, finance  of  SSWG
          required to be delivered to the Lenders following each  fiscal
          quarter    of   SSWG   pursuant   to   Section   7.01(a)(vii),
          substantially in the form attached as Schedule 6;

     (bz) "Responsible  Officer"  means with  respect  to  each  of  the
          Borrowers, any Authorized Officer of such Borrower,  any  vice
          president, treasurer or controller of such Borrower,  and  any
          other  officer  of  such Borrower responsible  for  monitoring
          compliance with, or otherwise administering, this Agreement;

     (ca) "Security     Documents"     means,     collectively,      the
          Debenture/Security Agreements and the General  Assignments  of
          Book Debts;

     (cb) "Senior Debt" means, at any particular time:

               (i)    all  outstanding  Indebtedness  under  the  Credit
               Facility;

               (ii)  all outstanding Capital Lease Obligations;

               (iii)    all outstanding secured Vendor Debt; and

               (iv)   without   duplication,   all   other   outstanding
               Indebtedness secured by Permitted Liens;

          but, for greater certainty, excludes Purchase Money Mortgages;

     (cc) "Senior Debt to Adjusted Consolidated EBITDA Ratio" means  the
          ratio of Senior Debt as at each fiscal quarter end to Adjusted
          Consolidated EBITDA for the four fiscal quarters then ended;

     (cd) "Senior Interest" means all interest, Stamping Fees and  other
          fees  payable  by  the Borrowers with respect  to  the  Credit
          Facility pursuant to this Agreement other than the arrangement
          fee payable pursuant to Section 2.21;

     (ce) "Senior Subordinated Notes" means all notes of SSWG now or  at
          any  time hereafter issued under the Senior Subordinated  Note
          Indenture;

     (cf) "Senior  Subordinated Note Indenture" means the note indenture
          dated  November  19,  1997  among SSWG,  certain  other  Group
          Entities  as guarantors, and Bankers Trust Company as trustee,
          providing for the issuance of unsecured subordinated notes  of
          SSWG;

     (cg) "Spot  Buying Rates" means the Bank of Canada noon spot  rates
          for  Canadian Dollars against U.S. Dollars and Sterling,  U.S.
          Dollars against Canadian Dollars and Sterling against Canadian
          Dollars (as quoted or published from time to time by the  Bank
          of Canada), or any combination thereof, as the case may be, on
          the relevant date of determination;

     (ch) "SSUK"  means  Sparkling Spring Water UK  Limited,  a  company
          incorporated  under  the  laws  of  England  and  Wales   with
          registered number 2899075;

     (ci) "SSW"  means  Sparkling  Spring Water Limited,  a  corporation
          incorporated under the laws of the Province of Nova Scotia;

     (cj) "SSWG"   means  Sparkling  Spring  Water  Group   Limited,   a
          corporation  incorporated under the laws of  the  Province  of
          Nova Scotia;

     (ck) "Stamping  Fee"  has the meaning ascribed  to  that  term  in
          Section 4.05;

     (cl) "Sterling"  and "U.K.(pound)" each mean lawful money of  the  United
          Kingdom;

     (cm) "Sterling  Libor"  means, with respect to any  Sterling  Libor
          Advance  for  any  Interest Period, the rate of  interest  per
          annum as determined by TDUK to be the arithmetic mean (rounded
          upwards, if necessary, to the nearest four decimal places)  of
          the offered quotations in Sterling and for the Interest Period
          which  appear on the display designated as page "LIBP" on  the
          Reuter  Monitor  Money Rates Service (or such other  displays,
          pages  or  service  as may replace those  displays,  pages  or
          service, as the case may be, or such system for the purpose of
          displaying London interbank offered rates of leading banks  as
          there may be from time to time) as at 11:00 a.m. (London time)
          two  Business  Days  before the first  day  of  such  Interest
          Period, plus the applicable Mandatory Liquid Asset Cost;

     (cn) "Sterling Libor Advances" means Advances on which interest  is
          determined by reference to Sterling Libor;

     (co) "Subsidiary" means, with respect to any corporation, any other
          corporation  of which or in which such corporation  (alone  or
          with  its Subsidiaries) owns directly or indirectly more  than
          50%  of  the  combined voting power of all classes  of  Voting
          Stock;

     (cp) "Subsidiary Guarantee" means a guarantee of each of the Wholly-
          Owned  Subsidiaries  other  than  the  Borrowers  in  a   form
          satisfactory to the Lenders, acting reasonably;

     (cq) "SWUS"  means  Spring Water, Inc., a corporation  incorporated
          under the laws of the State of Delaware;

     (cr) "Target Company" means a company which, or assets of which,  a
          Borrower proposes to acquire by means of, in whole or in part,
          a Borrowing under the Credit Facility;

     (cs) "Taxes"  means any and all present or future taxes  (including
          without  limitation all stamp, documentary, excise or property
          taxes),  levies, imposts, deductions, charges or  withholdings
          and liabilities with respect thereto;

     (ct) "TD  Bank" means The Toronto-Dominion Bank, its successors and
          assigns;

     (cu) "TDUK" means the London Branch of the TD Bank;

     (cv) "TDUS"  means  Toronto Dominion (Texas), Inc., its  successors
          and assigns;

     (cw) "this Agreement", "herein", "hereof", "hereto" and "hereunder"
          and  similar  expressions mean and refer to this Agreement  as
          supplemented  or  amended and not to any  particular  Article,
          Section, Schedule or other portion hereof, and the expressions
          "Article", "Section" and "Schedule" followed by a number  mean
          and  refer  to the specified Article, Section or  Schedule  of
          this Agreement;

     (cx) "Total  Interest" means for any particular period, all amounts
          payable  by  SSWG and its Subsidiaries as interest,  fees  and
          commissions  in  respect of Indebtedness for  such  period  in
          accordance  with GAAP, net of interest income earned  on  cash
          balances during the period, including without limitation:

               (i)   interest,  fees  and  commissions  payable  by  the
               Borrowers with respect to the Credit Facility pursuant to
               this Agreement, but excluding the arrangement fee payable
               pursuant   to   Section  2.21  and  amortized   interest,
               arrangement fees, costs and expenses incurred under  this
               Agreement;

               (ii)  interest, fees and commissions payable by  SSWG  in
               respect of the Senior Subordinated Notes pursuant to  the
               Senior   Subordinated  Note  Indenture,   but   excluding
               amortized  interest,  fees, costs and  expenses  incurred
               under the Senior Subordinated Note Indenture; and

               (iii)     imputed  interest in respect of  Capital  Lease
               Obligations of SSWG and its Subsidiaries;

     (cy) "Treasury Contracts" means any agreement entered into  by  the
          Borrowers  to  control,  fix  or  regulate  currency  exchange
          fluctuations  or  the  rate or rates of  interest  payable  on
          indebtedness, and includes interest rate swaps, interest  rate
          agreements,  caps, collars, futures or hedging agreements  and
          other like money market facilities;

     (cz) "Treasury Contract Breakage Costs" means the aggregate of  all
          costs  and liabilities incurred by the Lenders as a result  of
          the  termination or cancellation of any Treasury  Contract  or
          Treasury Contracts;

     (da) "U.S.  Dollars"  and  "U.S.$" each mean lawful  money  of  the
          United States of America;

     (db) "U.S. Libor" means, with respect to any U.S. Libor Advance for
          any Interest Period, the rate for deposits in U.S. Dollars for
          a period comparable to such Interest Period which is quoted on
          the  British  Bankers Association Libor Rates  Telerate  (Page
          3750) (or such other displays, pages or service as may replace
          those displays, pages or service, as the case may be, or  such
          system  for the purpose of displaying London interbank offered
          rates  of leading banks as there may be from time to time)  as
          at 11:00 a.m. (London time) two Business Days before the first
          day of such Interest Period;

     (dc) "U.S.  Libor  Advances" means Advances on  which  interest  is
          determined by reference to U.S. Libor;

     (dd) "U.S. Prime Rate" on any day means the greater of:

               (i)   the  rate  of  interest per annum  then  in  effect
               established and declared by TDUS to the New York  Federal
               Reserve as its New York prime rate on U.S. Dollar  loans;
               and

               (ii)  the Federal Funds Effective Rate in effect on  that
               day, plus 0.50% per annum;

          provided  that  each change in the U.S. Prime  Rate  shall  be
          effective  from  and including the date such  change  is  made
          without any requirement of notification to any Borrower or any
          other person;

     (de) "U.S. Prime Rate Advances" means Advances on which interest is
          determined by reference to the U.S. Prime Rate in effect  from
          time to time;

     (df) "Vendor   Debt"  means  all  Indebtedness  of  SSWG  and   its
          Subsidiaries  to  any person from whom any  Group  Entity  has
          acquired,  prior to, on, or after the date of this  Agreement,
          an Acquired Company;

     (dg) "Voting Stock" of any designated corporation means any and all
          shares  of capital stock of such corporation of any class  the
          shareholders of which have the right (not depending  upon  the
          happening of a contingency) to elect the members of the  board
          of directors of such corporation; and

     (dh) "Wholly-Owned Subsidiary" means any Subsidiary of any Borrower
          which  is  wholly-owned,  directly  or  indirectly,  by   such
          Borrower.

1.2   Computation of Time Periods.  Where, in this Agreement,  a  notice
must  be given a number of days prior to a specified action, the day  on
which  such  notice  is  given shall be included  and  the  day  of  the
specified action shall be excluded.

1.3   Accounting  Terms.  All accounting terms not specifically  defined
herein shall be construed in accordance with GAAP.

1.4    Incorporation  of  Appendices  and  Schedules.    The   following
Appendices  and  Schedules to this Agreement  shall,  for  all  purposes
hereof, form an integral part of this Agreement:

     Appendix 1  -  Mandatory Liquid Asset Cost
     Appendix 2  -  Interest Rates and Fees

     Schedule 1     -   Borrowing Notice - Canadian Prime Rate Advances
                        and Bankers' Acceptances
     Schedule 2     -   Borrowing Notice - U.S. Prime Rate Advances and
                        U.S. Libor Advances
     Schedule 3     -   Borrowing Notice - Sterling Libor Advances
     Schedule 4     -   List of Wholly-Owned Subsidiaries
     Schedule 5     -   Bankers' Acceptance Power of Attorney
     Schedule 6     -   Quarterly Financial Certificate

1.5   Singular, Plural, etc.  As used herein, each gender shall  include
all  genders, and the singular shall include the plural and  the  plural
the singular as the context shall require.


                           ARTICLE 2
                        CREDIT FACILITY

2.1   Credit Facility.  The Credit Facility to be made available to  the
Borrowers  hereunder  is a extendable revolving  term  facility  in  the
maximum principal amount of U.S.$40,000,000 (or the Equivalent Amount in
Canadian Dollars or Sterling), to be made available to the Borrowers for
the  acquisition  of one or more Target Companies, capital  expenditures
and for general corporate purposes.

2.2   Availability.   Subject  to Section 2.03  and  the  provisions  of
Article   5,  the  Credit  Facility  shall  be  available  for  drawdown
commencing on the Closing Date and terminating on the day prior  to  the
Maturity Date.

2.3  Termination of Availability.  If the Closing Date does not occur on
or  before  June  30,  1998,  the Credit Facility  shall  no  longer  be
available and, subject to the obligations of the Borrowers under Section
13.05 (which shall continue), this Agreement shall terminate.

2.4   Revolving  Nature of Credit Facility.  The Credit  Facility  shall
revolve  and any amounts borrowed thereunder and repaid may be  borrowed
again, provided that any such reborrowing would not result in the amount
of  the  Outstandings  under  the Credit  Facility  exceeding  the  then
applicable Commitment.

2.5   Borrowing  Options.  Subject to the provisions of this  Agreement,
the  Borrowers may, at their option, utilize the Credit Facility by  way
of:

     (a)  Canadian Prime Rate Advances pursuant to Article 3 hereof,  to
          be made available by TD Bank to SSW and SSWG in Canada;

     (b)  Letters  of Credit or Guarantee Letters issued by TD  Bank  in
          Canadian  Dollars, U.S. Dollars or Sterling, as  requested  by
          SSW or SSWG pursuant to Section 3.11 hereof.

     (c)  U.S.  Prime  Rate Advances or U.S. Libor Advances pursuant  to
          Article 3 hereof, to be made available by TDUS to SWUS in  the
          United States of America;

     (d)  Sterling  Libor Advances pursuant to Article 3 hereof,  to  be
          made available by TDUK to SSUK in the United Kingdom; and

     (e)  Bankers' Acceptances for terms of one month to six months (or,
          subject  to availability, shorter or longer terms) created  by
          TD  Bank  in  Canadian Dollars as requested by  SSW  and  SSWG
          pursuant to Article 4 hereof.

2.6   Repayment of Credit Facility.  All Outstandings under  the  Credit
Facility shall be repaid in full on the Maturity Date.

2.7  Annual Renewal of Credit Facility.

     (a)  The  Credit Facility shall be subject to renewal annually,  in
          the  absolute discretion of the Lenders, on April 30  of  each
          year commencing in 1999 and ending on or prior to the Maturity
          Date.

     (b)  If  the Lenders do not renew the Credit Facility on April  30,
          1999, the Commitment shall be permanently reduced on the dates
          set  out  below  to the following amounts, to the  extent  the
          Commitment is greater than any such amount on any such date:
                                      
                          Date            Commitment (U.S.$)
                                      
                   December 31, 1999          $38,000,000
                   December 31, 2000          $35,250,000
                   December 31, 2001          $31,750,000
                   December 31, 2002          $26,250,000
                   December 31, 2003          $18,250,000
                   December 31, 2004           $9,250,000
                   December 31, 2005                   $0
                                      

          and  the  Borrowers shall on such dates permanently repay  the
          Outstandings under the Credit Facility to the extent necessary
          to  reduce  the Outstandings to an amount that is not  greater
          than  the  Commitment (as reduced pursuant to  this  paragraph
          (b)).

     (c)  If  the Lenders renew the Credit Facility on April 30, 1999 or
          on  April 30 of any subsequent year pursuant to paragraph (a),
          the  Maturity  Date  shall be extended to such  date  and  the
          schedule for the permanent reduction of the Commitment as  set
          out  in  paragraph  (b)  shall  be  adjusted  accordingly,  as
          determined  by  the Lenders in their absolute discretion,  and
          the  Outstandings permanently repaid by the Borrowers  to  the
          extent necessary to reduce the Outstandings to an amount  that
          is  not  greater than the Commitment (as modified pursuant  to
          this paragraph (c)).

     (d)  If the Lenders do not renew the Credit Facility on April 30 of
          any  year from 1999 to 2005, inclusive (the date of such  non-
          renewal being herein called the "Non-Renewal Date"), then:

          (i) the  Commitment   shall  on  the   Non-Renewal   Date   be
             permanently  reduced by the Cash Sweep for the fiscal  year
             ending  immediately prior to the Non-Renewal  Date,  unless
             the  Non-Renewal Date is April 30, 1999 (in which case  the
             Commitment  shall  not be reduced by  the  Cash  Sweep  for
             fiscal year 1998);

          (ii) on April 30 of each year after the year in which the Non-
             Renewal  Date  occurs, the Commitment shall be  permanently
             reduced  by  the  Cash  Sweep for the  fiscal  year  ending
             immediately prior to such April 30; and

          (iii)      the Borrowers shall on the Non-Renewal Date and  on
             each   subsequent   April   30   permanently   repay    the
             Outstandings  under  the  Credit  Facility  to  the  extent
             necessary to reduce the Outstandings to an amount  that  is
             not  greater  than the Commitment (as reduced  pursuant  to
             this paragraph (d)).

2.8   Reduction in Commitment upon Asset Sales.  In the event  that  the
aggregate net proceeds from Dispositions effected by the Group  Entities
exceeds U.S.$1,000,000 (or the equivalent thereof in any other currency)
in any fiscal year of SSWG:

     (a)  the  Commitment shall be permanently reduced on the date  (the
          "Reduction Date") which is 180 days following the date of  the
          Disposition  resulting  in  the net  proceeds  exceeding  such
          amount (the "Threshold Date"), by the difference between:

               (i)   the  aggregate amount by which the net proceeds  of
               all Dispositions by the Group Entities during such fiscal
               year  up to and including the Threshold Date exceed  U.S.
               $1,000,000; and

               (ii) the aggregate amount of the net proceeds of all such
               Dispositions  which were used by the  Group  Entities  to
               acquire,  on  or before the Reduction Date, assets  of  a
               similar  nature  to  be  used in a  business  then  being
               carried on by the Group Entities;

     (b)  the  Commitment shall be permanently reduced on the date  (the
          "Subsequent  Reduction Date") which is 180 days following  the
          date  of  any  subsequent  Disposition  occurring  after   the
          Threshold Date but on or before the end of the current  fiscal
          year, by the difference between:

               (i)   the amount of the net proceeds of such Disposition;
               and

               (ii)  the  amount of the net proceeds of such Disposition
               which  were used by the Group Entities to acquire, on  or
               before the Subsequent Reduction Date, assets of a similar
               nature to be used in a business then being carried on  by
               the Group Entities;

and  the  Borrowers  shall  on  the Reduction  Date  or  the  Subsequent
Reduction  Date, as the case may be, permanently repay the  Outstandings
under  the  Credit  Facility  to  the extent  necessary  to  reduce  the
Outstandings  to an amount that is not greater than the  Commitment  (as
reduced pursuant to this Section 2.08).

2.9  Optional Repayment.  The Borrowers may at any time repay all or any
part  of the amount outstanding under the Credit Facility together  with
interest thereon.  Subject to Section 2.15, no repayment may be made  in
respect  of a U.S. Libor Advance or a Sterling Libor Advance  on  a  day
other  than the last day of an Interest Period applicable to  such  U.S.
Libor Advance or Sterling Libor Advance, and no repayment may be made in
respect of a Bankers' Acceptance on a date other than the maturity  date
of such Bankers' Acceptance.

2.10 Optional Reduction of Commitment.  The Borrowers may at any time on
30  days'  notice  to the Lenders permanently reduce the  Commitment  in
whole  or  in  part,  and  upon such reduction  of  the  Commitment  the
Borrowers  shall  permanently  repay  the  Outstandings  to  the  extent
necessary  to reduce the Outstandings to an amount that is  not  greater
than the Commitment (as reduced pursuant to this Section 2.10).

2.11  Repayment of Outstandings to Reflect Commitment.  If on  any  date
the  Outstandings under the Credit Facility exceed the  then  prevailing
Commitment, the Borrowers shall forthwith permanently repay such  amount
as  will result in the Outstandings under the Credit Facility being less
than or equal to the Commitment.

2.12  General Interest Provisions.  The following provisions shall apply
in respect of interest payable under this Agreement:

     (a)  in  the  event  of  any dispute, disagreement or  adjudication
          involving or pertaining to the determination of Canadian Prime
          Rate,  U.S. Prime Rate, U.S. Libor or Sterling Libor in effect
          at  any time, the certificate of the Lenders or any of them as
          to such rate shall be accepted, in the absence of demonstrable
          error,  as  prima facie evidence thereof for all  purposes  of
          this Agreement;

     (b)  each  determination by the Lenders of the amount of  interest,
          Stamping   Fees  or  other  amounts  due  from  the  Borrowers
          hereunder shall, in the absence of demonstrable error or other
          error  of which the Borrowers shall give notice to the Lenders
          within  a  period  of 60 days from the date of  entry  of  the
          relevant  information, be prima facie evidence of the accuracy
          of such determination;

     (c)  all interest and other amounts payable shall accrue daily,  be
          computed  as described herein, and be payable both before  and
          after demand, maturity, default and judgment;

     (d)  to  the  maximum extent permitted by law, the covenant of  the
          Borrowers  to pay interest at rates provided herein shall  not
          merge  in  any  judgment  relating to any  obligation  of  the
          Borrowers to the Lenders;

     (e)  in  no event shall any interest, fees or other amounts payable
          hereunder  exceed the maximum permitted by law; in  the  event
          any  such  interest  or fee exceeds such  maximum  rate,  such
          interest  or  fee  shall  be  reduced  to  the  maximum   rate
          recoverable under law and the Lenders and the Borrowers  shall
          be deemed to have agreed to such amount by contract;

     (f)  for the purposes of the Interest Act (Canada):

               (i)   the annual rate of interest which is equivalent  to
               the  interest rate determined by reference to U.S.  Libor
               or  the  U.S.  Prime  Rate shall be the  determined  rate
               multiplied by a fraction, the numerator of which  is  the
               total number of days in such year and the denominator  of
               which is 360;

               (ii)  the annual rate of interest which is equivalent  to
               the  interest  rate determined by reference  to  Sterling
               Libor  shall  be  the  determined rate  multiplied  by  a
               fraction,  the numerator of which is the total number  of
               days in such year and the denominator of which is 365;

               (iii)     unless otherwise stated, the rates of  interest
               specified in this Agreement are to be calculated  on  the
               basis  of  a  year  of 365 days and the  annual  rate  of
               interest  which  is  equivalent  to  the  interest   rate
               determined by reference to such 365 day period  hereunder
               shall  be  the determined rate multiplied by a  fraction,
               the  numerator of which is the total number  of  days  in
               such year and the denominator of which is 365;

               (iv)  the  principle of deemed reinvestment  of  interest
               shall  not  apply to any interest calculation under  this
               Agreement; and

               (v)   the  rates of interest specified in this  Agreement
               are intended to be nominal rates and not effective rates.

2.13 Business Day Payments.  Except as otherwise provided herein in  the
case  of a U.S. Libor Advance or a Sterling Libor Advance, whenever  any
payment  hereunder  shall be stated to be due on  a  day  other  than  a
Business Day, such payment shall be made on the next succeeding Business
Day,  and such extension of time shall in such case be included  in  the
computation of interest or fees, as the case may be.

2.14  Interest on Overdue Amounts.  If all or a portion of the principal
amount  of any Advance, any interest payable thereon, any Stamping  Fee,
Commitment Fee or other fee or any other amount payable by the Borrowers
hereunder  shall  not be paid when due (whether at stated  maturity,  by
acceleration or otherwise), such overdue amount shall bear interest at a
rate  per annum equal to the Canadian Prime Rate plus 2.25% in the  case
of  any  overdue  amount in Canadian Dollars, the U.S. Prime  Rate  plus
2.25%  in  the  case  of  any overdue amount in U.S.  Dollars,  and  the
Alternate Sterling Rate plus 3.25% in the case of any overdue amount  in
Sterling.   Interest on any such overdue amount shall be  computed  from
and  including  the date the Lenders or any of them give notice  to  the
Borrowers that such amount is overdue to the date such amount  is  paid,
and  shall  be compounded monthly and be paid on demand both before  and
after maturity, default and judgment.

2.15  Breakage Costs.  The Borrowers shall promptly pay to  the  Lenders
any  amounts  required to compensate the Lenders for any loss,  cost  of
redeploying funds or other cost or expense suffered or incurred  by  the
Lenders as a result of:

     (a)  any  payment being made by the Borrowers in respect of a  U.S.
          Libor Advance, Sterling Libor Advance or a Bankers' Acceptance
          (due  to acceleration of the maturity of the Advance hereunder
          or  a mandatory or optional prepayment of principal or for any
          other  reason) on a day other than the last day of an Interest
          Period or a maturity date applicable thereto, respectively;

     (b)  the Borrowers' failure to give notice in the manner and at the
          times required hereunder;

     (c)  the  failure of the Borrowers to accept an Advance or  make  a
          Drawing after delivery of a Borrowing Notice in the manner and
          at the time specified in such Borrowing Notice; or

     (d)  the failure of the Borrowers to make a payment or a prepayment
          to  the Lenders in the manner and at the time specified  in  a
          notice given to the Lenders.

A  certificate of the Lenders or any of them as to the amount  necessary
so  to  compensate  the  Lenders shall be prima facie  evidence,  absent
demonstrable error, of the amount due from the Borrowers to the Lenders.

2.16  Application  of  Payments.  So long as no  Event  of  Default  has
occurred and is continuing, all amounts received by the Lenders from  or
on  behalf of the Borrowers and not previously applied in another manner
in  accordance  with this Agreement shall be applied by the  Lenders  as
follows:

     (a)  first, to fulfil the Borrowers' obligation to pay accrued  and
          unpaid  interest  due  and owing on the  principal  amount  of
          Advances  or  unpaid  Stamping Fees  in  respect  of  Bankers'
          Acceptances;

     (b)  second,  to fulfil the Borrowers' obligation to pay any  other
          fees which are due and owing, and any accrued and unpaid costs
          and  expenses  of the Lenders in connection with  any  of  the
          Credit Facility Documents;

     (c)  third,  to fulfil the Borrowers' obligation to pay any amounts
          due  and  owing on account of the unpaid principal  amount  of
          Borrowings  and  the Borrowers' reimbursement  obligations  in
          respect of Bankers' Acceptances;

     (d)  fourth, to fulfil any other obligation of the Borrowers  under
          this Agreement; and

     (e)  fifth,  to the Borrowers or as the Borrowers or any  court  of
          competent jurisdiction may otherwise direct.

After  the  occurrence  of an Event of Default,  unless  such  Event  of
Default  is  cured or waived by the Lenders, payments  received  by  the
Lenders  shall be applied to the Borrowers' obligations as  the  Lenders
see fit.

2.17  Conditions Solely for the Benefit of the Lenders.  All  conditions
to  the  obligations of the Lenders to make any Accommodation under  the
Credit Facility are solely for the benefit of the Lenders, and no  other
person shall have standing to require satisfaction of any condition  and
no  other  person  shall  be  deemed to be a  beneficiary  of  any  such
condition, any and all of which may be freely waived in whole or in part
by the Lenders at any time.

2.18  No  Waiver.  The making of an Accommodation without fulfilment  of
one  or  more  of the conditions set forth in this Agreement  shall  not
constitute  a  waiver  by  the Lenders of any such  condition,  and  the
Lenders  reserve the right to require the fulfilment of  each  condition
prior to the making of any subsequent Accommodation.

2.19 Authorized Debit.  The Borrowers authorize the Lenders to debit the
Borrowers'   accounts  with  the  amounts  required  to  pay  principal,
interest,  Stamping Fees, Commitment Fees and other amounts required  to
be paid by the Borrowers under this Agreement.

2.20  Commitment  Fee.  SSW shall pay to TD Bank a fee (the  "Commitment
Fee")  at  the rate of 0.50% per annum calculated on the amount  of  the
Commitment not utilized by the Borrowers.  In determining the amount  of
the Commitment not utilized by the Borrowers, Accommodations in Canadian
Dollars and Sterling shall be deemed to be the Equivalent Amount thereof
in  U.S.  Dollars.   The Commitment Fee shall be paid  in  U.S.  Dollars
calculated on a daily basis on the difference between the Commitment and
the Outstandings on such date, and shall be payable quarterly in arrears
to  TD  Bank at the address set out in Section 13.03(b)(i) on the  first
Business Day following the notification by TD Bank to SSW of the  amount
of such Commitment Fee payable for the preceding fiscal quarter.

2.21  Arrangement Fee.  On the Closing Date, the Borrowers shall pay  to
the  Lenders a non-refundable arrangement fee in respect of  the  Credit
Facility  in  an  amount separately agreed upon by the Lenders  and  the
Borrowers.

2.22  Adjustments to Interest Rates and Fees.  Any increase or  decrease
in  the Margin to be added to the Canadian Prime Rate, U.S. Prime  Rate,
U.S.  Libor,  Sterling Libor or Alternate Sterling Rate  in  respect  of
Canadian  Prime  Rate  Advances, U.S. Prime Rate  Advances,  U.S.  Libor
Advances,  Sterling Libor Advances or Alternate Sterling Rate  Advances,
respectively, and any increase or decrease in the rate of Stamping Fees,
in  each case as determined in accordance with Appendix 2, shall  become
effective on or after the date (the "Adjustment Date") which is 46  days
after  the  end of each quarterly fiscal period in each fiscal  year  of
SSWG  in  which  there  is  a  change in the  Senior  Debt  to  Adjusted
Consolidated EBITDA Ratio giving rise to an adjustment in the applicable
Margin or the Stamping Fee, as follows:

     (a)  for Canadian Prime Rate Advances, U.S. Prime Rate Advances and
          Alternate Sterling Rate Advances, the adjustment to the Margin
          shall become effective on the Adjustment Date;

     (b)  for  any  U.S.  Libor  Advances  or  Sterling  Libor  Advances
          requested on or before the Adjustment Date, the adjustment  to
          the  Margin  shall become effective on the first  day  of  the
          first Interest Period in respect of such U.S. Libor Advance or
          Sterling  Libor  Advance, as the case may be, which  commences
          after the Adjustment Date;

     (c)  for  any  other U.S. Libor Advance or Sterling Libor  Advance,
          the  adjustment  to the Margin shall become effective  on  the
          Adjustment Date; and

     (d)  for  Bankers' Acceptances, the adjustment to the Stamping  Fee
          shall  become  effective in respect  of  any  Draft  which  is
          accepted  by TD Bank after the Adjustment Date, and shall  not
          apply  to any Draft which is accepted by TD Bank on or  before
          the Adjustment Date.


                           ARTICLE 3
                  LOANS AND LETTERS OF CREDIT

3.1    Advances.   The  Lenders  agree,  on  the  terms  and  conditions
hereinafter  set  forth, from time to time to make Canadian  Prime  Rate
Advances,  U.S.  Prime Rate Advances, U.S. Libor Advances  and  Sterling
Libor Advances (or any combination thereof) under the Credit Facility on
any Business Day prior to the Maturity Date.

3.2  Minimum Advances.  Each Canadian Prime Rate Advance shall be in  an
aggregate  amount of not less than Cdn.$100,000.  Each U.S.  Prime  Rate
Advance  shall  be in an aggregate amount of not less than U.S.$100,000.
Each U.S. Libor Advance shall be in an aggregate amount of not less than
U.S.$1,000,000  and  in  an  integral multiple  of  U.S.$100,000.   Each
Sterling Libor Advance shall be in an aggregate amount of not less  than
U.K.(pound)1,000,000 and in an integral multiple of U.K.(pound)100,000.

3.3  Notice Requirements for Advances.  Each Advance shall be made:

     (a)  on  at  least two Business Days' prior written notice, in  the
          case  of  Canadian  Prime Rate Advances and  U.S.  Prime  Rate
          Advances  for  the  purpose of the  acquisition  of  a  Target
          Company;

     (b)  on  at  least one Business Day's prior written notice, in  the
          case  of all other Canadian Prime Rate Advances and U.S. Prime
          Rate Advances;

     (c)  on  at least three Business Days' prior written notice, in the
          case of a U.S. Libor Advance; and

     (d)  on  at least four Business Days' prior written notice, in  the
          case of a Sterling Libor Advance.

Notice shall be given not later than 12:00 noon (Vancouver time) by  the
Borrowers by way of a Borrowing Notice.

3.4   Notices  Irrevocable.  Each Borrowing Notice shall be  irrevocable
and binding on the Borrowers.  The Borrowers shall indemnify the Lenders
against  any  loss  or  expense  (excluding  loss  of  profit  or  other
consequential losses) incurred by the Lenders in reliance on a Borrowing
Notice  as a result of any failure by the Borrowers to fulfil or  honour
the  provisions  of this Agreement if the Advance, as a result  of  such
failure, is not made on the date specified in any Borrowing Notice.

3.5  Election of Interest Rates and Currencies.

     (a)  Each  Advance  shall be the Type of Advance specified  in  the
          applicable  Borrowing Notice and shall bear  interest  at  the
          rate  applicable  to  such  Type  of  Advance,  determined  in
          accordance with the provisions of this Agreement, until:

               (i)   in  the  case of a U.S. Libor Advance  or  Sterling
               Libor  Advance,  the end of the initial  Interest  Period
               applicable   thereto  as  specified  in  the   applicable
               Borrowing Notice; or

               (ii) in the case of a Canadian Prime Rate Advance or U.S.
               Prime  Rate  Advance, the date on which such  Advance  is
               repaid in full.

     (b)  The Borrowers may from time to time, by delivering a Borrowing
          Notice,  elect  to continue a U.S. Libor Advance  or  Sterling
          Libor  Advance for an additional Interest Period in each  case
          beginning on the last day of the then current Interest  Period
          applicable  to  such  U.S.  Libor Advance  or  Sterling  Libor
          Advance;

     (c)  Each election under paragraph (b) shall be made:

               (i)   on  at  least  three Business Days'  prior  written
               notice, in the case of a U.S. Libor Advance; and

               (ii)  on  at  least  four Business  Days'  prior  written
               notice, in the case of a Sterling Libor Advance;

          given not later than 12:00 p.m. (Vancouver time).

     (d)  Each  Borrowing  Notice delivered pursuant  to  paragraph  (b)
          above  shall  specify the duration of the additional  Interest
          Period and the date on which such Interest Period is to begin.

     (e)  Each  Borrowing  Notice delivered pursuant  to  paragraph  (b)
          above shall be irrevocable and binding upon the Borrowers.  If
          the Borrowers fail, in the manner required herein, to give  to
          the  Lenders  in respect of all or any part of  a  U.S.  Libor
          Advance or a Sterling Libor Advance:

               (i)   a Borrowing Notice pursuant to paragraph (b) above;
               or

               (ii) a notice of repayment;

          then  any  such  U.S.  Libor Advance, or part  thereof,  shall
          become a U.S. Prime Rate Advance, and any such Sterling  Libor
          Advance,  or part thereof, shall become an Alternate  Sterling
          Rate Advance on the last day of the Interest Period applicable
          thereto,  and  shall  bear  interest  at  the  rate  otherwise
          applicable  to  such  U.S. Prime Rate  Advances  or  Alternate
          Sterling  Rate  Advances, respectively.  The  Borrowers  shall
          also  promptly  pay  to the Lenders any  amounts  required  to
          compensate the Lenders for any loss, cost or expense  suffered
          or  incurred  by  the Lenders as a result  of  the  Borrowers'
          failure to give to the Lenders any of the notices described in
          this paragraph (e).

3.6  Circumstances Requiring Canadian Prime or U.S. Prime Rate Pricing.

     (a)  If the Lenders determine in good faith that:

               (i)   by  reason  of  circumstances  affecting  financial
               markets  inside  or  outside  Canada,  deposits  of  U.S.
               Dollars and/or Sterling are unavailable to the Lenders;

               (ii)   adequate   and  fair  means  do  not   exist   for
               ascertaining  the applicable interest rate on  the  basis
               provided  in the definition of U.S. Libor and/or Sterling
               Libor;

               (iii)     the  making or continuation of any  U.S.  Libor
               Advance  and/or  Sterling Libor  Advance  has  been  made
               impracticable by:

                        (1)    the  occurrence  of a  contingency  which
                    materially and adversely affects the funding of  the
                    Credit  Facility  at any interest rate  computed  on
                    the basis of U.S. Libor and/or Sterling Libor;

                         (2)     the  introduction  or  change  in   the
                    interpretation  of any Law since the  date  of  this
                    Agreement;

                         (3)    compliance  by  the  Lenders  with   any
                    guideline,  official directive or request  from  any
                    central  bank or Governmental Body (whether  or  not
                    having the force of Law); or

                        (4)    a change since the date of this Agreement
                    in  any  relevant financial market which results  in
                    U.S.   Libor   and/or  Sterling  Libor   no   longer
                    representing  the effective cost to the  Lenders  of
                    deposits  in  such  market for a  relevant  Interest
                    Period or other applicable period; or

               (iv) any introduction or change in the interpretation  of
               any  Law  since  the  date  of  this  Agreement,  or  any
               compliance  by  the Lenders with any guideline,  official
               direction   or   request  from  any   central   bank   or
               Governmental  Body (whether or not having  the  force  of
               Law)  has  made it unlawful for the Lenders  to  make  or
               maintain  or  to  give  effect to  their  obligations  in
               respect  of  U.S.  Libor Advances and/or  Sterling  Libor
               Advances as contemplated hereby;

          then:

               (v)   the  right of the Borrowers to select a U.S.  Libor
               Advance  and/or Sterling Libor Advance, as the  case  may
               be, shall be suspended;

               (vi) if any affected U.S. Libor Advance or Sterling Libor
               Advance  is not yet outstanding, any applicable Borrowing
               Notice  shall be cancelled and the U.S. Libor Advance  or
               Sterling  Libor Advance requested therein  shall  not  be
               made  in  that form, without affecting the right  of  the
               Borrowers to request another Type of Advance (without any
               additional  notice  period if  the  Borrowers  request  a
               Canadian  Prime  Rate  Advance  or  a  U.S.  Prime   Rate
               Advance);

               (vii)    if any U.S. Libor Advance is already outstanding
               at  any time when the right of the Borrowers to select  a
               U.S.  Libor  Advance is suspended, it and all other  U.S.
               Libor  Advances  shall,  upon ten  days'  notice  to  the
               Borrowers  and subject to the Borrowers having the  right
               to select Canadian Prime Rate Advances or U.S. Prime Rate
               Advances at such time, become U.S. Prime Rate Advances on
               the   last  day  of  the  then  current  Interest  Period
               applicable  thereto (or on such earlier date  as  may  be
               required to comply with applicable Law); and

               (viii)     if  any  Sterling  Libor  Advance  is  already
               outstanding  at any time when the right of the  Borrowers
               to  select a Sterling Libor Advance is suspended, it  and
               all  other Sterling Libor Advances shall, upon ten  days'
               notice  to  the  Borrowers, become an Alternate  Sterling
               Rate Advance on the last day of the then current Interest
               Period applicable thereto (or on such earlier date as may
               be  required  to comply with applicable Law),  and  shall
               forthwith be repaid by the Borrowers and redrawn, at  the
               election  of  the Borrowers, as another Type  of  Advance
               permitted under this Agreement.

     (b)  The  Lenders  shall  promptly  notify  the  Borrowers  of  the
          suspension  of  the  Borrowers' right  to  select  U.S.  Libor
          Advances and/or Sterling Libor Advances and of the termination
          of any such suspension.

3.7   Interest  Periods.  Interest Periods for U.S. Libor  Advances  and
Sterling  Libor  Advances  shall be the  period,  as  requested  by  the
Borrowers,  from one to six months or such other period as  the  Lenders
may  allow,  provided that the Lenders may at their discretion  restrict
the availability of any Interest Period, acting reasonably.  No Interest
Period  may be selected under the Credit Facility which would end  on  a
day  after  the  Maturity  Date or, in the  reasonable  opinion  of  the
Lenders,  conflict with the repayment schedule for the  Credit  Facility
set  out in this Agreement.  Whenever the last day of an Interest Period
would  otherwise occur on a day other than a Business Day, the last  day
of  such  Interest  Period  shall  be extended  to  occur  on  the  next
succeeding Business Day.

3.8   Interest  on  Advances.  The Borrowers shall pay interest  on  the
daily  unpaid  principal amount of each Advance from the  date  of  such
Advance  until  such principal amount shall be repaid in  full,  at  the
annual  rate  applicable to each of such days which corresponds  to  the
Canadian Prime Rate, U.S. Prime Rate, U.S. Libor, Sterling Libor or  the
Alternate Sterling Rate, as the case may be, at the close of business on
each of such days, plus the applicable Margin.

3.9   Interest  Payment  Dates.  Interest on  U.S.  Libor  Advances  and
Sterling  Libor Advances shall be calculated and payable at the  end  of
the  applicable Interest Period except where the Interest Period exceeds
three  months  in  duration,  in  which  case  such  interest  shall  be
calculated and payable at the end of each successive three month portion
thereof  (determined with reference to the commencement of the  Interest
Period)  and, finally, at the end of such Interest Period.  Interest  on
Canadian  Prime  Rate  Advances and U.S. Prime Rate  Advances  shall  be
calculated on the daily balance up to and including the last day of each
month, and shall be payable by the Borrowers monthly in arrears.

3.10 Payments.

     (a)  SSWG  and SSW shall make each payment to be made hereunder  in
          respect  of  Canadian Prime Rate Advances to TD  Bank  at  the
          address set out in Section 13.03(b)(i);

     (b)  SWUS  shall make each payment to be made hereunder in  respect
          of U.S. Prime Rate Advances and U.S. Libor Advances to TDUS at
          the  address  set  out  in  Section 13.03(b)(ii)  or  by  wire
          transfer according to the following instructions:

               Bank of America National Trust and Savings Assoc
               ABA#026009593 (BOFAUS3N)
               Acct No:  6550-6-52270
               Acct Name:  Toronto Dominion (Texas), Inc.
               Ref:  Sparkling Water, Inc.;

     (c)  SSUK  shall make each payment to be made hereunder in  respect
          of  Sterling Libor Advances to TDUK at the address set out  in
          Section 13.03(b)(iii);

in  each  case not later than 1:00 p.m. (local time at place of payment)
on the day when due, in same day funds.

3.11  Letters  of  Credit.  As part of the credit  available  under  the
Credit Facility, each of SSW and SSWG may request that TD Bank issue one
or more Letters of Credit or Guarantee Letters, subject to the execution
by  SSW or SSWG, as the case may be, of TD Bank's standard documentation
then  currently  used  in  connection with such  Letters  of  Credit  or
Guarantee Letters.  TD Bank shall have the right to restrict the  expiry
date  of any Letter of Credit or Guarantee Letter to the then applicable
Maturity  Date or such other date as TD Bank may approve.  SSW or  SSWG,
as  the  case may be, shall pay letter of credit fees in respect of  any
such  Letters  of  Credit or Guarantee Letters at  the  applicable  rate
(based  on  the  Face  Amount of such Letters  of  Credit  or  Guarantee
Letters) set out in Appendix 2 and upon other terms and conditions to be
negotiated between SSW or SSWG, as the case may be, and TD Bank.


                           ARTICLE 4
                      BANKERS' ACCEPTANCES

4.1   Creation of Bankers' Acceptance.  TD Bank agrees, on the terms and
subject   to  the  conditions  herein  set  forth,  to  create  Bankers'
Acceptances  under the Credit Facility by accepting Drafts  in  Canadian
Dollars  in  accordance with the provisions of this Agreement,  provided
that  the only Borrowers that may present Drafts for acceptance are  SSW
and SSWG.

4.2  Drawings.

     (a)  Each Draft presented by the Borrowers for acceptance shall  be
          in  an integral multiple of Cdn.$100,000 and shall mature  and
          be  payable on a Business Day which occurs from one  month  to
          six  months (or such other period as TD Bank may agree)  after
          the  date thereof, provided that TD Bank may at its discretion
          restrict the availability of the term or maturity date of  any
          Bankers'  Acceptance, acting reasonably.  All Drafts presented
          by the Borrowers to TD Bank for acceptance on a particular day
          shall aggregate at least Cdn.$1,000,000.

     (b)  Each  Drawing  shall  be made on three  Business  Days'  prior
          written  notice  given  not later than 12:00  noon  (Vancouver
          time)  by the Borrowers to TD Bank at the address set  out  in
          Section 13.03(b)(i) by way of a Borrowing Notice.

     (c)  The  Borrowers  shall  not request in  a  Borrowing  Notice  a
          maturity  date  for  a  Bankers'  Acceptance  which  would  be
          subsequent to the Maturity Date or, in the reasonable  opinion
          of TD Bank, would conflict with the repayment schedule for the
          Credit Facility set out in this Agreement.

     (d)  Each Borrowing Notice shall be irrevocable and binding on  the
          Borrowers.  The Borrowers shall indemnify TD Bank against  any
          loss   or   expense  (excluding  loss  of  profits  or   other
          consequential  losses) incurred by TD Bank in  reliance  on  a
          Borrowing  Notice as a result of any failure by the  Borrowers
          to  fulfil  or honour the provisions of this Agreement  before
          the date specified for any Drawing if the Drawing, as a result
          of such failure, is not made on such date.

4.3  Power of Attorney.  Each of the Borrowers shall deliver to TD Bank,
on  or  prior to the Closing Date, a Power of Attorney substantially  in
the form of Schedule 5 (the "Power of Attorney") authorizing TD Bank  to
draw  Drafts on TD Bank on behalf of such Borrower and to complete  such
Drafts in accordance with Borrowing Notices submitted from time to  time
pursuant to Section 4.02.

4.4   Completion  and  Delivery of Drafts.  Not  later  than  1:00  p.m.
(Vancouver  time)  on  an  applicable Drawing Date,  TD  Bank  will,  in
accordance with the applicable Borrowing Notice:

     (a)  sign  each  Draft  on behalf of the Borrower  requesting  such
          Draft pursuant to the Power of Attorney;

     (b)  complete  the date, amount and maturity of each  Draft  to  be
          accepted;

     (c)  accept such Drafts; and

     (d)  upon  such  acceptance  deliver  the  stamped  Draft  to   the
          applicable  Borrower  or, in accordance with  such  Borrower's
          instructions,  to  a  person designated  in  writing  by  such
          Borrower.

TD  Bank  shall  not be obligated to purchase or discount  any  Bankers'
Acceptances  and  the Borrowers shall be responsible for  arranging  the
purchase  or  discounting of any such Bankers' Acceptances  by  a  money
market dealer.

4.5   Stamping Fees.  The Borrowers shall pay to TD Bank at the time  of
each acceptance of a Draft a Stamping Fee in each case calculated on the
basis of the number of days from and including the date of acceptance to
and including the date immediately preceding the date of maturity of the
applicable Bankers' Acceptance, and on the basis of a year of  365  days
or,  in  leap  years,  366  days,  determined  in  accordance  with  the
applicable percentage set out in Appendix 2.

4.6   Netting.   The  Borrowers authorize TD Bank to retain  the  amount
received by TD Bank (the "Acceptance Purchase Price") from any purchaser
of a Bankers' Acceptance created by TD Bank (including proceeds received
by  TD  Bank  from  any  person to whom a Bankers' Acceptance  has  been
delivered  pursuant  to  instructions of  the  Borrowers  under  Section
4.04(d)) and to apply the Acceptance Purchase Price to the reimbursement
obligations  of  the  Borrowers in respect of  any  Bankers'  Acceptance
created by TD Bank which matures on the date of creation of the Bankers'
Acceptance  in  respect  of  which  the  Acceptance  Purchase  Price  is
received.  If the Acceptance Purchase Price received by TD Bank is  less
than  the  undiscounted  Face  Amount  of  the  then  maturing  Bankers'
Acceptance, the Borrowers shall pay the amount of such deficiency to  TD
Bank pursuant to Section 4.07.

4.7   Payment on Maturity.  The Borrowers shall provide payment for  any
Bankers' Acceptances issued by any of them by payment to TD Bank of  the
Face  Amount thereof (or alternatively any deficiency in the  Acceptance
Purchase  Price  retained by TD Bank pursuant to Section  4.06)  at  the
address set out in Section 13.03(b)(i) by 1:00 p.m. (Vancouver time)  on
the maturity date of the Bankers' Acceptance.  If the Borrowers fail  to
provide  payment to TD Bank of an amount equal to the Face Amount  of  a
Bankers'  Acceptance on its maturity, the unpaid amount due and  payable
in  respect thereof shall be converted as of such date, and without  any
necessity  for  the Borrowers to give a Borrowing Notice  in  accordance
with  this  Agreement to, and thereafter be outstanding as,  a  Canadian
Prime Rate Advance made by, and due and payable on such date to, TD Bank
and  shall bear interest for the three day period following the maturity
of  such  Bankers'  Acceptance at a rate equal to  115%  of  the  Margin
applicable to Canadian Prime Rate Advances, and thereafter at  the  rate
applicable  to Canadian Prime Rate Advances.  The Borrowers  shall  also
promptly  pay to TD Bank any amounts required to compensate TD Bank  for
any loss, cost or expense suffered or incurred by TD Bank as a result of
any Borrower's failure to pay any Bankers' Acceptance when due.

4.8   Custody of Drafts.  If requested by TD Bank, each of the Borrowers
shall execute and deliver to TD Bank a supply of Drafts executed by such
Borrower.  TD Bank shall not be responsible or liable for its failure to
accept a Draft as required hereunder if the cause of the failure is,  in
whole  or  in part, due to the failure of the Borrowers to provide  such
Drafts to TD Bank on a timely basis, nor shall TD Bank be liable for any
damage,  loss or other claim arising by reason of any loss  or  improper
use  of  such Drafts except a loss or improper use arising by reason  of
the negligence or wilful act of TD Bank.  TD Bank agrees to use its best
efforts  to  advise the Borrowers in a timely manner  when  it  requires
additional  executed Drafts.  In case any authorized  signatory  of  any
Borrower  whose signatures shall appear on the pre-signed  Drafts  shall
cease  to  have  such  authority  before  the  creation  of  a  Bankers'
Acceptance with respect to such Draft, such signature shall nevertheless
be  valid  and  sufficient for all purposes as  if  such  authority  had
remained in force at the time of such creation.  Drafts held by TD  Bank
need only be held in safekeeping with the same degree of care as if they
were  TD  Bank's  property.   If  executed  but  incomplete  Drafts  are
delivered  to  TD Bank, TD Bank may complete the same on behalf  of  the
applicable Borrower and in accordance with its instructions following  a
request  from  such  Borrower to accept a Draft.   All  Drafts  will  be
cancelled by TD Bank upon payment thereof.

4.9   Renewal or other Payment of Bankers' Acceptance.  Not  later  than
12:00 noon (Vancouver time) three Business Days prior to the maturity of
a Bankers' Acceptance, the Borrowers shall:

     (a)  request, by way of a Borrowing Notice, the issuance of further
          Bankers' Acceptances in an amount sufficient, upon receipt  of
          the  Acceptance  Purchase Price by TD Bank, to  pay  the  Face
          Amount of the maturing Bankers' Acceptance; or

     (b)  give written notice to TD Bank that they will pay the maturing
          Bankers' Acceptance.

If  the  Borrowers fail to give any of the notices required  under  this
Section,  the  amount  due  and  payable in  respect  of  such  Bankers'
Acceptances on the maturity date thereof shall be converted as  of  such
date,  and  thereafter be outstanding as, a Canadian Prime Rate  Advance
made  by and due and payable on such date to the Lenders, and shall bear
interest  for  the  three  day period following  the  maturity  of  such
Bankers' Acceptance at a rate equal to 115% of the Margin applicable  to
Canadian  Prime Rate Advances, and thereafter at the rate applicable  to
Canadian Prime Rate Advances.

4.10  Prepayments  of Bankers' Acceptances.  If for  whatever  reason  a
Bankers' Acceptance becomes due and payable on a date which is  not  its
maturity  date, such Bankers' Acceptance shall be paid by the  Borrowers
paying  the face amount of the maturing Bankers' Acceptance to TD  Bank,
which  amount  shall be held in an interest bearing  trust  account  for
future  set-off  against  such maturing Bankers'  Acceptance.   Interest
accrued on the amount so held shall be for the account of the Borrowers.

4.11  No Days of Grace.  The Borrowers shall not claim any days of grace
from TD Bank for the payment at maturity of any Bankers' Acceptances.

4.12  Suspension of Bankers' Acceptance Option.  If at any time or  from
time  to  time there no longer exists a market for Bankers' Acceptances,
or  if  as  a  result  of a change in any law, regulation  or  guideline
(whether or not having the force of law) it is not practical or  becomes
more  expensive  for  TD  Bank to create or commit  to  create  Bankers'
Acceptances, TD Bank shall so advise the Borrowers.  After such  notice,
TD Bank shall not be obliged to accept Drafts of the Borrowers presented
to  TD  Bank pursuant to the provisions of this Agreement and the option
of  the Borrowers to request the creation of Bankers' Acceptances  shall
be  suspended  until  such  time  as TD Bank  has  determined  that  the
circumstances giving rise to such suspension no longer exist.


                           ARTICLE 5
                       CLOSING CONDITIONS

5.1   Closing  Conditions.  The Borrowers shall only be entitled  to  an
initial Borrowing under the Credit Facility if, on the Closing Date, the
following  Closing  Conditions have been  fulfilled  to  the  reasonable
satisfaction of the Lenders:

     (a)  the  Credit  Facility Documents shall have been  executed  and
          delivered  to  the  Lenders by the  Group  Entities,  and  all
          registrations, filings and recordings necessary  or  desirable
          to  preserve,  protect  or perfect the enforceability  of  the
          security  created by the Security Documents  shall  have  been
          completed;

     (b)  all  of  the  representations and warranties of the  Borrowers
          contained  in this Agreement are true and correct  as  of  the
          Closing  Date as though made on and as of such date,  and  the
          Borrowers  shall have delivered to the Lenders  a  certificate
          executed by an Authorized Officer of each of the Borrowers  to
          that effect;

     (c)  no  event  has occurred and is continuing which constitutes  a
          Default  or an Event of Default, and the Borrowers shall  have
          delivered  to  the  Lenders  a  certificate  executed  by   an
          Authorized Officer of each of the Borrowers to that effect;

     (d)  the  Lenders  shall  have  received copies  certified  by  the
          Secretary  or  an  Assistant Secretary of each  of  the  Group
          Entities  of  the  charter documents  of  such  Group  Entity,
          resolutions  of  the board of directors of such  Group  Entity
          approving the Credit Facility Documents to which it is a party
          and  all  documents  evidencing any other necessary  corporate
          action  of  such  Group  Entity with  respect  to  the  Credit
          Facility Documents;

     (e)  the Lenders shall have received a certificate of the Secretary
          or  an  Assistant  Secretary of each  of  the  Group  Entities
          certifying  the  names  and true signatures  of  its  officers
          authorized to sign the Credit Facility Documents to  which  it
          is  a  party  and  any other documents to be delivered  by  it
          hereunder;

     (f)  the  Lenders  shall have received a recently-dated certificate
          of  good  standing or like certificate for each of  the  Group
          Entities  issued  by appropriate government officials  of  the
          jurisdiction of formation of such Group Entity;

     (g)  since  the  date  of  the  most recent consolidated  financial
          statements prepared by SSWG and received by the Lenders, there
          shall  have occurred no Material Adverse Effect, as determined
          by the Lenders acting reasonably;

     (h)  the  Lenders  shall have received a certificate of  the  chief
          financial   officer  or  vice-president,   finance   of   SSWG
          calculating  and  setting  forth the  ratios  referred  to  in
          Sections  8.01(l), (m), (n) and (o) hereof as  at  the  fiscal
          quarter of SSWG ended December 31, 1997;

     (i)  the  Lenders shall have received satisfactory certificates  of
          insurance  issued  by the relevant insurer  or  its  agent  in
          respect  of  all  insurance maintained by the Group  Entities,
          showing,  in  the case of property insurance, the  Lenders  as
          first loss payees with a mortgage endorsement satisfactory  to
          the  Lenders, acting reasonably, and, in the case of liability
          insurance, the Lenders as additional named insureds;

     (j)  the  Lenders shall have received an opinion of the counsel for
          the  Borrowers, addressed to the Lenders and counsel  for  the
          Lenders, in a form satisfactory to counsel for the Lenders;

     (k)  all  fees  required  to be paid by the Borrowers  pursuant  to
          Sections  2.20,  2.21 or 13.05 on or before the  Closing  Date
          shall have been paid;

     (l)  the   Lenders  shall  have  received  a  certificate  of   the
          Borrowers,  executed by an Authorized Officer of each  of  the
          Borrowers,  confirming that all conditions  precedent  to  the
          making of an initial Advance to the Borrowers under the Credit
          Facility have been satisfied, including, in the event that the
          initial  Advance  is for the purpose of the acquisition  of  a
          Target  Company, all conditions precedent set out  in  Section
          5.02; and

     (m)  the  Lenders  shall have received such other certificates  and
          documentation as the Lenders may reasonably request.

If all of the Closing Conditions set forth above have not been satisfied
by the Borrowers or waived by the Lenders on or before the Closing Date,
the  obligations  of  the  Lenders to make  any  Advance  or  any  other
Accommodation and all other obligations of the Lenders hereunder  shall,
at  the option of the Lenders, terminate without prejudice to any rights
or remedies available to the Lenders under this Agreement or otherwise.

5.2   Conditions  Precedent  for Acquisition  of  Target  Company.   The
Borrowers  shall  only  be  entitled to a  Borrowing  under  the  Credit
Facility  in  accordance with the provisions of this Agreement  for  the
purpose  of  the  acquisition  of  a Target  Company  if  the  following
conditions  have  been fulfilled to the reasonable satisfaction  of  the
Lenders:

     (a)  the  principal  business of the Target Company  shall  be  the
          delivery,  distribution, rental or provision of  water  cooler
          and water delivery services in Canada, the United Kingdom, the
          United States of America or Europe;

     (b)  the  Lenders  shall  have  received copies  certified  by  the
          Secretary or an Assistant Secretary of each Borrower acquiring
          an  interest in the Target Company of resolutions of the board
          of directors of such Borrower approving the acquisition of the
          Target   Company  and  all  documents  evidencing  any   other
          necessary  corporate action of such Borrower with  respect  to
          the acquisition of the Target Company;

     (c)  the Lenders shall have received a certificate of the Secretary
          or  an  Assistant  Secretary  of each  Borrower  acquiring  an
          interest  in the Target Company certifying the names and  true
          signatures of its officers authorized to sign the documents to
          be delivered by it hereunder;

     (d)  the  Lenders  shall have received a recently-dated certificate
          of  good  standing or like certificate for the Target  Company
          and  a  certified copy of the charter documents of the  Target
          Company,  each issued by appropriate government  officials  of
          the jurisdiction of formation of the Target Company;

     (e)  the   Lenders  shall  have  received  detailed  financial  and
          business  projections  for the Target Company,  and  shall  be
          satisfied, acting reasonably, with such projections;

     (f)  the  Lenders  shall have received a certificate of  the  chief
          financial  officer or vice-president, finance of the  Borrower
          requesting  the  Advance calculating  and  setting  forth  the
          Acquired  Company EBITDA for the Target Company's most  recent
          fiscal year or preceding four quarters, which Acquired Company
          EBITDA shall be greater than U.S.$1;

     (g)  the  Lenders  shall have received a certificate of  the  chief
          financial  officer or vice-president, finance of SSWG  setting
          forth  computations  in  reasonable detail  showing  that  the
          Borrowers are prior to the Advance, and will be following  the
          Advance  and  after  giving effect to the acquisition  of  the
          Target Company, in full compliance with Sections 8.01(l), (m),
          (n), (o) and (p) hereof;

     (h)  the   Lenders  shall  have  received  an  undertaking  of  the
          Borrowers  to  provide to the Lenders within 30  days  of  the
          making  of  the Advance satisfactory certificates of insurance
          issued by the relevant insurer or its agent in respect of  all
          insurance  maintained by the Target Company, showing,  in  the
          case  of property insurance, the Lenders as first loss  payees
          with  a  mortgage  endorsement satisfactory  to  the  Lenders,
          acting  reasonably,  and, in the case of liability  insurance,
          the Lenders as additional named insureds;

     (i)  in  the  event the acquisition is an acquisition of assets  of
          the  Target Company (the "Acquired Assets"), then prior to the
          completion of the acquisition:

               (i)   all registrations, filings and recordings necessary
               or   desirable  to  preserve,  protect  or  perfect   the
               enforceability of the security interest over the Acquired
               Assets constituted by the Security Documents executed  by
               the  acquiring Borrower shall have been completed in  all
               necessary jurisdictions; and

               (ii)  the  Lenders  shall  have received  an  opinion  of
               counsel   for   the   Borrowers  in  form   and   content
               satisfactory to the Lenders (including without limitation
               an opinion that all registrations, filings and recordings
               in  respect  of  the security interest in favour  of  the
               Lenders  over  the  Acquired  Assets,  as  described   in
               subparagraph  (i) above, have been completed)  on  escrow
               conditions  satisfactory to the  Lenders,  providing  for
               delivery  of the opinion to the Lenders immediately  upon
               the  completion of the acquisition of the Acquired Assets
               by the acquiring Borrower;

     (j)  in  the  event the acquisition is an acquisition of shares  of
          the Target Company (the "Acquired Shares"):

               (i)   the  Lenders shall prior to the completion  of  the
               acquisition  of  the Acquired Shares have  been  provided
               with:

                        (A)    a pledge of the Acquired Shares, in  form
                    satisfactory  to  the  Lenders,  executed   by   the
                    acquiring Borrower;

                        (B)    an undertaking by the acquiring Borrower,
                    in  form satisfactory to the Lenders, to deliver  to
                    the  Lenders immediately after the completion of the
                    acquisition    of   the   Acquired   Shares    share
                    certificates representing the Acquired  Shares  duly
                    endorsed  for transfer in blank or, if requested  by
                    the Lenders, registered in the name of a nominee  of
                    the Lenders; and

                        (C)   an opinion of counsel for the Borrowers in
                    form  and content satisfactory to the Lenders as  to
                    the  due  authorization, execution and  delivery  of
                    the    pledge   of   the   Acquired   Shares,    the
                    registration, filing or recording of the  pledge  of
                    the  Acquired  Shares  in all  places  necessary  to
                    preserve,  protect or perfect the security  interest
                    of  the  Lenders in the Acquired Shares, and  as  to
                    such  other  matters as the Lenders  may  reasonably
                    require,  on escrow conditions satisfactory  to  the
                    Lenders  providing for delivery of  the  opinion  to
                    the  Lenders immediately upon the completion of  the
                    acquisition of the Acquired Shares;

               (ii)  the  Lenders  shall  prior  to  completion  of  the
               acquisition  of  the Acquired Shares have  been  provided
               with:

                        (A)    satisfactory  evidence  that  the  Target
                    Company has no Indebtedness for borrowed money, or

                        (B)    a  plan  by the Borrowers  to  cause  the
                    Target  Company  to  repay such Indebtedness  at  or
                    within   a   reasonably   short   period   following
                    completion  of  the  acquisition  of  the   Acquired
                    Shares,   either  by  means  of  advances   by   the
                    Borrowers  to the Target Company or by  other  means
                    satisfactory to the Lenders;

               and if repayment of Indebtedness of the Target Company is
               to   be  funded  by  advances  from  the  Borrowers,  the
               Borrowers  shall  if  requested by  the  Lenders  require
               security  for such advances to be granted by  the  Target
               Company and shall assign such security to the Lenders;

               (iii)    the Lenders shall prior to the completion of the
               acquisition  of  the Acquired Shares have  been  provided
               with:

                        (A)    an undertaking by the Borrowers to  cause
                    the  Target  Company to execute and deliver  to  the
                    Lenders, within 30 days after the completion of  the
                    acquisition,      a      Subsidiary       Guarantee,
                    Debenture/Security Agreement and General  Assignment
                    of  Book  Debts together with an opinion of  counsel
                    for  the  Lenders  in all material respects  in  the
                    form provided pursuant to clause (B) below; and

                        (B)    the  form of opinion of counsel  for  the
                    Borrowers  to be delivered pursuant to  clause  (A),
                    such  form to be satisfactory to the Lenders and  to
                    include,  without  limitation, an opinion  that  the
                    Subsidiary  Guarantee, Debenture/Security  Agreement
                    and  General  Assignment of Book Debts  executed  by
                    the  Target  Company are legal, valid,  binding  and
                    enforceable against the Target Company and that  all
                    registrations, filings and recordings  necessary  or
                    desirable  to  preserve,  protect  or  perfect   the
                    enforceability of the security thereby created  have
                    been completed;

     (k)  the   Lenders  shall  have  received  a  certificate  of   the
          Borrowers,  executed by an Authorized Officer of each  of  the
          Borrowers  confirming  that all conditions  precedent  to  the
          making  of  an  Advance  to  the Borrowers  under  the  Credit
          Facility have been satisfied, other than the completion of the
          acquisition of the Target Company;

     (l)  the  Lenders  shall have received such other certificates  and
          documentation as the Lenders may reasonably request; and

     (m)  the  acquisition  of  the Target Company  shall  be  completed
          concurrently  with the making of the Advance to such  Borrower
          under this Agreement.

5.3   Conditions  Precedent to Subsequent Borrowings.   It  shall  be  a
condition  of  each  Borrowing that the representations  and  warranties
contained  in Article 6 hereof shall be true on and as of  the  date  of
each  Borrowing and that no Default or Event of Default shall  exist  on
the  date  of  the  Borrowing  or be created  by  such  Borrowing.   The
Borrowers will, at the request of the Lenders, deliver to the Lenders  a
certificate  or  certificates of a Responsible Officer of  each  of  the
Borrowers  to  that effect and confirming whether the  purpose  of  such
Borrowing is the acquisition of a Target Company.


                           ARTICLE 6
                 REPRESENTATIONS AND WARRANTIES

6.1   Representations  and Warranties by the Borrowers.   The  Borrowers
represent  and warrant to the Lenders (and acknowledge that the  Lenders
are  relying thereon without independent inquiry in entering  into  this
Agreement and providing Accommodations from time to time) as follows:

     (a)  Organization and Qualification.  Each of the Group Entities is
          a  corporation  duly  incorporated and organized,  is  validly
          subsisting  and  is in good standing under  the  laws  of  its
          jurisdiction of incorporation.

     (b)  Corporate  Power.   Each  of  the  Group  Entities  has   full
          corporate right, power and authority to enter into and perform
          its obligations under each of the Credit Facility Documents to
          which  it  is or will be a party and has full corporate  power
          and  authority to own and operate its properties and to  carry
          on its business as now conducted or as herein contemplated.

     (c)  Wholly-Owned Subsidiaries.  Attached hereto as Schedule 4 is a
          complete  list,  as  at the date hereof, of  all  Wholly-Owned
          Subsidiaries, setting out in respect of each such Wholly-Owned
          Subsidiary:

               (i)  its jurisdiction of incorporation;

               (ii)  the  number  of  shares of each  class  issued  and
               outstanding,  and  the registered  holders  of  all  such
               shares; and

               (iii)     each  jurisdiction in which  such  Wholly-Owned
               Subsidiary carries on business or owns or leases property
               or assets.

     (d)  Conflict  with Other Instruments.  The execution and  delivery
          by  each  of the Group Entities of each of the Credit Facility
          Documents and the performance by each of the Group Entities of
          its obligations thereunder, do not and will not:

               (i)   conflict with or result in a breach of any  of  the
               terms, conditions or provisions of:

                         (1)    the  charter  documents  of  such  Group
                    Entity;

                         (2)   any Law applicable to such Group Entity;

                         (3)   any contractual restriction binding on or
                    affecting such Group Entity or its properties; or

                         (4)      any    writ,   judgment,   injunction,
                    determination  or  award which is  binding  on  such
                    Group Entity; or

               (ii) result in, require or permit:

                        (1)    the imposition of any Lien other than  as
                    provided for herein; or

                        (2)    the acceleration of the maturity  of  any
                    Indebtedness   of  such  Group  Entity   under   any
                    contractual  provision binding on or affecting  such
                    Group Entity.

     (e)  Authorization  and Governmental Approvals.  The execution  and
          delivery  of  each  of the Credit Facility Documents  and  the
          performance  by each of the Group Entities of its  obligations
          thereunder   have  been  duly  authorized  by  all   necessary
          corporate action on the part of each of the Group Entities and
          no  permit, licence or approval under any applicable Law,  and
          no  registration, qualification, designation,  declaration  or
          filing with any Governmental Body having jurisdiction over the
          Group  Entities, is or was necessary therefor or  to  preserve
          the benefit thereof to the Lenders.

     (f)  Execution  and  Binding Obligation.  This Agreement  has  been
          duly executed and delivered by each of the Borrowers, and this
          Agreement  constitutes,  and  the  remaining  Credit  Facility
          Documents when duly executed by the Group Entities pursuant to
          and  in  accordance  with this Agreement  and  delivered  will
          constitute, legal, valid and binding obligations of the  Group
          Entities  enforceable  against them in accordance  with  their
          respective  terms,  subject to Laws  relating  to  bankruptcy,
          insolvency and the enforcement of creditors' rights  generally
          and  to  the qualification that equitable remedies are in  the
          discretion of a court.

     (g)  Permits.   All  permits,  licences  and  approvals  which  are
          necessary  in  connection  with the  business,  properties  or
          assets of the Group Entities have been issued and are in  full
          force  and  effect except where the failure so to possess  any
          such  permit,  licence or approval would not in the  aggregate
          have  a  Material  Adverse Effect, and  there  is  no  default
          thereunder or any failure to observe or perform any  condition
          thereof  which  would  have or result in  a  Material  Adverse
          Effect.   No  action is pending or, to the  knowledge  of  the
          Borrowers,  threatened which has as its object the  revocation
          or  amendment  of any such permit, licence or  approval  which
          would have or result in a Material Adverse Effect.

     (h)  Material  Disclosure.   The  Borrowers  have  not  failed   to
          disclose to the Lenders in writing any fact (other than  facts
          which are a matter of public knowledge or record) of which the
          Borrowers  are  aware which will result in a Material  Adverse
          Effect, or so far as it can now reasonably foresee may  result
          in  a  Material  Adverse Effect.  None of the Credit  Facility
          Documents contained at the time furnished any untrue statement
          of a material fact.

     (i)  Title  to Assets.  The Group Entities have good and marketable
          title  to or the right to use all of the assets necessary  for
          the operation of their businesses, free and clear of any Liens
          other than Permitted Liens, and no person has any agreement or
          right  to  acquire any of such properties out of the  ordinary
          course of business.

     (j)  No Defaults.  None of the Group Entities is in breach of or in
          default under:

               (i)  its charter documents;

               (ii) any applicable Law;

               (iii)      any  contract  or  agreement  binding  on   or
               affecting  it or its assets (including without limitation
               the Credit Facility Documents); or

               (iv)  any  writ,  judgment, injunction, determination  or
               award binding on or affecting it;

          which  breach or default would, either alone or in  aggregate,
          have a Material Adverse Effect.

     (k)  Financial  Statements.  SSWG has delivered to  the  Lenders  a
          copy  of the audited consolidated balance sheet of SSWG as  of
          December  31, 1997 and the related consolidated statements  of
          earnings  and  retained  earnings  and  changes  in  financial
          position of SSWG for the fiscal year then ended.  Each of  the
          other  Group Entities has delivered to the Lenders  copies  of
          the  unaudited  unconsolidated balance  sheet  of  such  Group
          Entity  as  of  the fiscal year most recently ended,  and  the
          related  unconsolidated statements of  earnings  and  retained
          earnings  and  changes  in financial position  of  such  Group
          Entity  for  the  fiscal year so ended, and  the  most  recent
          unaudited  interim unconsolidated balance sheet of such  Group
          Entity  and  the related statements of earnings  and  retained
          earnings and changes in financial position.

          Such  financial statements (including in each case any related
          schedules  and  notes) have been prepared in  accordance  with
          GAAP  consistently  applied throughout the  periods  involved,
          except  as set forth in any notes thereto, and fairly  present
          the  consolidated  financial position of  each  of  the  Group
          Entities as of the respective dates of such balance sheets and
          the   consolidated  results  of  their  operations   for   the
          respective periods covered by such statements of earnings  and
          retained earnings and changes in financial position.

          There are no material liabilities, contingent or otherwise, of
          any  Group Entity as of December 31, 1997 not reflected in the
          consolidated  balance sheet of SSWG as of  such  date.   Since
          December  31,  1997,  there  have  been  no  changes  in   the
          consolidated assets, liabilities or financial position of  any
          Group  Entity from that set forth in the consolidated  balance
          sheet  of  SSWG  as of that date, except such changes  in  the
          ordinary  course of business that have not, in the  aggregate,
          had a Material Adverse Effect.

     (l)  Litigation.   There  are  no  actions,  suits  or  proceedings
          (including counterclaims) pending or, to the knowledge of  the
          Borrowers,  threatened against or affecting any of  the  Group
          Entities or any property of any of the Group Entities  in  any
          court or before any arbitrator of any kind or before or by any
          Governmental  Body which, if adversely determined,  would,  in
          the  aggregate,  have a Material Adverse Effect  (taking  into
          account  applicable insurance coverage and related deductibles
          with respect to such matters).

     (m)  Taxes.   Each of the Group Entities has filed all tax  returns
          which  are  required to have been filed in  any  jurisdiction,
          except for tax returns the failure of which to file would not,
          in the aggregate, have a Material Adverse Effect.  Each of the
          Group  Entities has paid all taxes shown to be due and payable
          on  any  tax  return  filed  by it and  all  other  taxes  and
          assessments payable by it, to the extent the same have  become
          due and payable and before they have become delinquent, except
          for any taxes or assessments the failure of which to pay would
          not,  in  the  aggregate, have a Material Adverse Effect,  and
          except for any taxes or assessments:

               (i)   the  amount, applicability or validity of which  is
               currently  being contested in good faith  by  appropriate
               proceedings,

               (ii)  the execution of any judgment with respect  thereto
               has been stayed, and

               (iii)    with respect to which such Group Entity has  set
               aside  on  its books reserves (segregated to  the  extent
               required by GAAP) deemed by it to be adequate.

          The  Borrowers  are  not  aware of any proposed  material  tax
          assessment  against  any  of  the  Group  Entities  except  as
          disclosed in writing by the Borrowers to the Lenders,  and  in
          the opinion of the Borrowers all tax liabilities likely to  be
          due  and  payable  in the current fiscal year  are  adequately
          provided  for on the books of the Group Entities in accordance
          with GAAP.

     (n)  Indebtedness of Wholly-Owned Subsidiaries.  None of the Wholly-
          Owned   Subsidiaries   has   any  Indebtedness,   other   than
          Indebtedness permitted under Section 9.01(c).

     (o)  Compliance  with  Environmental  Laws.   Each  of  the   Group
          Entities   is  in  compliance  with  all  Environmental   Laws
          applicable to its respective businesses and operations in  all
          jurisdictions in which it is presently doing business,  except
          for  any  failure  to  so  comply  which  would  not,  in  the
          aggregate, have a Material Adverse Effect.  Each of the  Group
          Entities  makes all reasonable efforts to manage its  business
          so  that  it will not incur or be subject to any liability  or
          penalty under such Environmental Laws.

     (p)  Representations    of    Wholly-Owned    Subsidiaries.     The
          representations and warranties of each Wholly-Owned Subsidiary
          contained  in  the  Subsidiary Guarantee of such  Wholly-Owned
          Subsidiary are true and correct.

     (q)  Solvency.   The  Borrowers represent and  warrant  to  and  in
          favour  of  the  Lenders  that  the  Group  Entities,  in  the
          aggregate,  are  not  and,  after  entering  into  the  Credit
          Facility  Documents  or  performing any  of  their  respective
          obligations  thereunder, would not be unable  to  pay  any  of
          their  respective  liabilities as they  become  due,  and  the
          realizable  value of all assets of the Group  Entities,  after
          entering into the Credit Facility Documents or performing  any
          of  their respective obligations thereunder, would not be less
          than  the  aggregate  of the Group Entities'  liabilities  and
          stated capital of all classes.


                           ARTICLE 7
              FINANCIAL STATEMENTS AND INFORMATION

7.1   Provision of Information.  The Borrowers covenant and agree to and
with the Lenders that so long as an Advance, Bankers' Acceptance or  any
other obligation of the Borrowers under this Agreement is outstanding or
the Commitment has not been wholly terminated:

     (a)  Financial  Statements and Information.   The  Borrowers  shall
          furnish to the Lenders:

               (i)   within  five  Business Days after approval  by  the
               Board  of  Directors of SSWG and in any event within  120
               days after the end of each fiscal year of SSWG, copies of
               the  comparative financial statements of SSWG as  of  the
               end  of  such  fiscal year, prepared in  accordance  with
               GAAP,  accompanied  by  a report thereon  of  independent
               chartered accountants or certified public accountants  of
               recognized  national  standing in Canada  or  the  United
               States  to  the  effect that the consolidated  statements
               present   fairly,   in   all   material   respects,   the
               consolidated financial position of SSWG as of the end  of
               such  fiscal  year and the consolidated  results  of  the
               operations  and  changes in financial position  for  such
               year in conformity with GAAP;

               (ii)  if differences between GAAP as at the date  of  the
               financial statements referred to in subparagraph (i)  and
               GAAP as at December 31, 1997 result in the calculation of
               any  amount or financial ratio under this Agreement being
               different than if calculated using GAAP as at the date of
               such  financial  statements,  a  reconciliation  of   the
               differing  calculations of such amounts and a  report  on
               such   reconciliation  by  the  independent   accountants
               reporting on the financial statements;

               (iii)    within five Business Days after approval by  the
               Board  of Directors of each Group Entity other than  SSWG
               and  in  any event within 120 days after the end of  each
               fiscal year of such Group Entity, copies of the unaudited
               unconsolidated financial statements of such Group  Entity
               as of the end of such fiscal year;

               (iv) as soon as available and in any event within 45 days
               after the end of each of the first three quarterly fiscal
               periods  in  each  fiscal year of  SSWG,  copies  of  the
               comparative consolidated financial statements of SSWG  as
               of  the  end  of such period, all prepared in  accordance
               with GAAP, and certified by a senior financial officer of
               SSWG to the effect that the statements present fairly, in
               all   material   respects,  the  consolidated   financial
               position  of  SSWG as of the end of such period  and  the
               related consolidated results of operations and changes in
               financial  position  for such period in  accordance  with
               GAAP consistently applied;

               (v)   if  differences between GAAP as at the date of  the
               financial statements referred to in subparagraph (iv) and
               GAAP as at December 31, 1997 result in the calculation of
               any  amount or financial ratio under this Agreement being
               different than if calculated using GAAP as at the date of
               such  financial  statements,  a  reconciliation  of   the
               differing  calculations of such amounts and a  report  on
               such  reconciliation  by a senior  financial  officer  of
               SSWG;

               (vi) as soon as available and in any event within 45 days
               after the end of each of the first three quarterly fiscal
               periods  in  each fiscal year of each Group Entity  other
               than   SSWG,   copies  of  the  unaudited  unconsolidated
               financial statements of such Group Entity as of  the  end
               of such period;

               (vii)      concurrently  with  the  financial  statements
               furnished pursuant to subparagraphs (i), (iii), (iv)  and
               (vi)   above,  a  Quarterly  Financial  Certificate  duly
               executed   by  the  chief  financial  officer  or   vice-
               president, finance of SSWG:

                        (1)    stating that, based upon such examination
                    or  investigation and review of this Agreement as in
                    the  opinion  of the signer is necessary  to  enable
                    the  signer  to  express  an informed  opinion  with
                    respect thereto, no Default or Event of Default  has
                    occurred  during such period or as at  the  date  of
                    such  certificate  or, if any Default  or  Event  of
                    Default  shall  have occurred, specifying  all  such
                    Defaults  and  Events  of Default,  the  nature  and
                    period  of  existence thereof and  what  action  the
                    Borrowers have taken, are taking or propose to  take
                    with respect thereto; and

                        (2)    setting forth computations in  reasonable
                    detail  showing as of the end of the period  covered
                    by  such  financial statements whether the Borrowers
                    were  in compliance with Sections 8.01(l), (m),  (n)
                    and  (o) and reporting any transaction under Section
                    9.01(f);

               (viii)    not less than 45 days prior to the commencement
               of  each fiscal year of SSWG, a preliminary Business Plan
               and Capital Expenditure Plan for the ensuing fiscal year;

               (ix) not less than 30 days after the commencement of each
               fiscal  year of SSWG, the final Business Plan and Capital
               Expenditure Plan for such fiscal year;

               (x)   promptly after the Borrowers become aware  thereof,
               written  notice  of any material change to  any  Business
               Plan  or Capital Expenditure Plan previously provided  to
               the  Lenders,  and as soon as reasonably  practicable  an
               updated Business Plan or Capital Expenditure Plan, as the
               case may be;

               (xi)  promptly and in any event within four Business Days
               after  a  Responsible  Officer of any  of  the  Borrowers
               becomes  aware of the existence of a Default or Event  of
               Default,  a  certificate duly executed by  an  Authorized
               Officer of such Borrower specifying the nature and period
               of  existence thereof and what action the Borrowers  have
               taken,  are  taking  or  propose  to  take  with  respect
               thereto;

               (xii)    with reasonable promptness:

                        (A)    written notice specifying any  change  in
                    the   maximum  amount  available  to   or   in   the
                    outstanding  amount  borrowed by  any  Group  Entity
                    under  any  other agreement or arrangement  relating
                    to  borrowed  money  (excluding regularly  scheduled
                    payments  of  principal and interest in  respect  of
                    Indebtedness),  or  of  any demand  for  payment  or
                    other  action  taken  by the  holder  of  any  other
                    Indebtedness  of  any Group Entity to  recover  such
                    Indebtedness;

                        (B)    written notice of any actual or  probable
                    material   litigation  or  other  legal  proceedings
                    affecting  any of the Group Entities (including  any
                    proceeding   before  an  arbitrator,  quasi-judicial
                    tribunal  or  other Governmental Body)  involving  a
                    potential liability of more than U.S.$1,000,000  (or
                    the  equivalent  thereof  in  any  other  currency),
                    including copies of relevant legal documentation;

                        (C)    written  notice of  any  taxes  or  other
                    amounts  the  validity of which is disputed  by  any
                    Group  Entity  pursuant to Section  8.01(d)  or  any
                    other  claim or matter in respect of which  a  Group
                    Entity  would  be required to reserve an  amount  in
                    accordance with GAAP;

                         (D)     written   notice  of  any   occurrence,
                    including  without limitation any third party  claim
                    or  liability,  of which any Borrower becomes  aware
                    which  may prevent such Borrower or any of the other
                    Group   Entities   from  performing   any   of   its
                    obligations  under  this Agreement  or  any  of  the
                    other Credit Facility Documents; and

                         (E)     such   other   information,   including
                    financial  statements and computations, relating  to
                    the  performance of the provisions of this Agreement
                    and  the  affairs  of  the  Group  Entities  as  the
                    Lenders may from time to time reasonably request.

     (b)  Inspection  of Properties and Books.  The Lenders  shall  have
          the  right to visit and inspect any of the properties  of  the
          Group Entities, to examine the books of account and records of
          the  Group  Entities, to make or be provided with  copies  and
          extracts  therefrom,  to  discuss the  affairs,  finances  and
          accounts of the Group Entities with, and to be advised  as  to
          the   same   by,  the  officers,  employees  and   independent
          accountants  of the Group Entities (and by this provision  the
          Borrowers authorize such accountants to discuss such  affairs,
          finances and accounts, whether or not a representative of  any
          Borrower is present), all upon reasonable notice and  at  such
          reasonable  times and intervals and to such reasonable  extent
          as the Lenders may desire.  The Borrowers agree to pay all out
          -of-pocket expenses incurred by the Lenders in connection with
          the  exercise of rights pursuant to this paragraph (b) at  any
          time  when a Default or Event of Default has occurred  and  is
          continuing.


                           ARTICLE 8
                       POSITIVE COVENANTS

8.1  General Affirmative Covenants.  The Borrowers covenant and agree to
and with the Lenders that so long as an Advance, Bankers' Acceptance  or
other obligation of the Borrowers under this Agreement is outstanding or
the Commitment of the Lenders has not been wholly terminated:

     (a)  Payment when Due.  The Borrowers will duly and punctually  pay
          or cause to be paid all amounts required to be paid by them to
          the  Lenders  pursuant to this Agreement or any of  the  other
          Credit  Facility Documents or any Treasury Contract, including
          principal,  interest, Stamping Fees, other fees  and  expenses
          and any other amounts, at the times, in the currencies and  in
          the manner set forth herein or therein.

     (b)  Observance  of  Covenants.   The Borrowers  will  observe  and
          perform all of the covenants, agreements, terms and conditions
          to  be  observed and performed by them in this  Agreement  and
          other Credit Facility Documents.

     (c)  Conduct  of  Business.  The Group Entities  will  continue  to
          carry on the business of the delivery, distribution and rental
          of  water  coolers and water delivery services in Canada,  the
          United Kingdom, the United States of America and Europe,  will
          keep  all  of  their assets in a good state of repair  and  in
          proper  working condition, and will keep or cause to  be  kept
          proper books of account and set aside appropriate reserves  in
          accordance with GAAP.

     (d)  Payment  of Taxes.  Each of the Group Entities will from  time
          to  time  pay  or  cause to be paid all rents,  taxes,  rates,
          levies   or   assessments,  ordinary  or  extraordinary,   and
          governmental fees or dues levied, assessed or imposed upon any
          of  the  Group Entities or their assets capable of  forming  a
          Lien  on any of the assets of the Group Entities, as and  when
          the  same  become  due and payable, unless their  validity  is
          disputed  in  good faith by such Group Entity and the  Lenders
          are  provided security acceptable to them, acting  reasonably,
          for the payment of the same.

     (e)  Maintenance  of Corporate Existence.  The Group Entities  will
          maintain  their  corporate existence and all registrations  in
          those  jurisdictions in which they carry on business, provided
          that  a  Group  Entity  may  make such  changes  in  corporate
          existence  and registrations as may be required in  connection
          with  an  arrangement or reorganization of the Group  Entities
          and   any  holding  companies  thereof  permitted  under  this
          Agreement.

     (f)  Maintenance of Licences and Permits.  The Group Entities  will
          maintain  all licences and permits required to carry on  their
          respective  businesses  and will not  transfer,  surrender  or
          otherwise  dispose  of any such licences  or  permits,  except
          pursuant to a Disposition permitted under Section 9.01(f).

     (g)  Compliance with Laws.  The Group Entities will comply with all
          Laws (including Environmental Laws), non-compliance with which
          could have a Material Adverse Effect.

     (h)  Maintenance  of Property Insurance.  The Group  Entities  will
          cause  all the property and assets of the Group Entities which
          are of a character usually insured by companies operating like
          businesses  to  be insured and kept insured  against  loss  or
          damage  from  any  cause which is customarily insured  against
          (including  business  interruption) by companies  carrying  on
          like businesses, in such amounts and with such deductibles  as
          are  in  accordance  with  good  business  practice  and  with
          financially sound and reputable insurers.  The Group  Entities
          will  pay all premiums necessary for such purpose as the  same
          shall  become  due and will provide particulars  of  all  such
          policies and all renewals thereof to the Lenders upon request;
          and,  at  the request of the Lenders, will add the Lenders  as
          first  loss payees to such policies, together with a  mortgage
          endorsement  on  terms  satisfactory to  the  Lenders,  acting
          reasonably.

     (i)  Maintenance  of Liability Insurance.  The Group Entities  will
          maintain  public  liability and other liability  insurance  in
          such  amounts as are in accordance with good business practice
          and  with  financially sound and reputable insurers, will  pay
          all  premiums  necessary for such purpose as  the  same  shall
          become  due and will provide particulars of all such  policies
          and all renewals thereof to the Lenders.

     (j)  Use of Proceeds.  All Borrowings by the Borrowers will be used
          for  the  purposes described in Section 2.01 and for no  other
          purposes.  Without limiting the foregoing, the Borrowers  will
          not borrow any amount by way of an Advance for the purpose  of
          investing  such  amount  directly or  indirectly  in  bankers'
          acceptances  (whether  or not such bankers'  acceptances  have
          been issued or accepted by the Lenders).

     (k)  Operating  Accounts.  The Borrowers shall maintain, and  shall
          cause the Wholly-Owned Subsidiaries to maintain, with TD  Bank
          the  operating accounts of all Group Entities incorporated  in
          Canada.

     (l)  Ratio of Adjusted Consolidated EBITDA to Senior Interest.  The
          Borrowers  shall  maintain the ratio of Adjusted  Consolidated
          EBITDA  to Senior Interest for the four fiscal quarters ending
          at each fiscal quarter end at no less than 3.0 to 1.

     (m)  Ratio of Adjusted Consolidated EBITDA to Total Interest.   The
          Borrowers  shall  maintain the ratio of Adjusted  Consolidated
          EBITDA  to Total Interest for the four fiscal quarters  ending
          at each fiscal quarter end at no less than:

               (i)   1.35  to  1 for each fiscal quarter  ending  on  or
               before September 30, 1999;

               (ii)  1.5  to  1  for  each fiscal quarter  ending  after
               September 30, 1999 and on or before September 30, 2000;

               (iii)     1.75 to 1 for each fiscal quarter ending  after
               September  30, 2000 and on or before September 30,  2001;
               and

               (iv)  2.0  to  1  for  each fiscal quarter  ending  after
               September 30, 2001 and on or before the Maturity Date.

     (n)  Senior  Debt  to  Adjusted  Consolidated  EBITDA  Ratio.   The
          Borrowers   shall  maintain  the  Senior  Debt   to   Adjusted
          Consolidated EBITDA Ratio as at each fiscal quarter end at  no
          more than 2.5 to 1.

     (o)  Ratio  of  Cash  Flow  to Debt Service.  The  Borrowers  shall
          maintain  the ratio of Cash Flow for the four quarters  ending
          at  each  fiscal  quarter end to Debt Service  for  such  four
          quarters at no less than 1.2 to 1.

     (p)  Capital  Expenditures.   The Actual Capital  Expenditures  for
          each fiscal year of SSWG, not including the value of property,
          plant  and  equipment owned by an Acquired Company as  at  the
          date  of  the  Acquired Company's acquisition by  a  Borrower,
          shall   be  less  than  or  equal  to  the  Permitted  Capital
          Expenditures for such fiscal year.


                           ARTICLE 9
                       NEGATIVE COVENANTS

9.1   General Negative Covenants.  The Borrowers covenant and  agree  to
and  with  the Lenders that, unless the Lenders consent in  writing,  so
long  as  an  Advance, Bankers' Acceptance or other  obligation  of  the
Borrowers is outstanding or the Commitment of the Lenders has  not  been
wholly terminated:

     (a)  Restriction  on Liens.  The Borrowers will not grant,  create,
          assume   or  permit  to  exist,  or  permit  any  Wholly-Owned
          Subsidiary  to grant, create, assume or permit to  exist,  any
          Lien upon any of the properties or assets of any Group Entity,
          other  than the security constituted by the Security Documents
          and Permitted Liens.

     (b)  Restriction on Indebtedness.  The Borrowers will not  have  or
          incur any Indebtedness, except:

               (i)  Indebtedness under this Agreement;

               (ii)  Indebtedness in existence as at the  date  of  this
               Agreement,  as  reflected  in  the  audited  consolidated
               financial statements of SSWG dated December 31, 1997;

               (iii)    Indebtedness under the Senior Subordinated  Note
               Indenture;

               (iv)  Indebtedness of SSWG under the Cross Currency  Swap
               Transaction  dated  December 2, 1997 with  Bankers  Trust
               Company;

               (v)  Vendor Debt permitted under this Agreement; and

               (vi)  other  Indebtedness which  has  the  benefit  of  a
               Permitted Lien securing the payment thereof (but only  to
               the extent of such Permitted Lien).

     (c)  Restriction   on  Subsidiary  Indebtedness.   No  Wholly-Owned
          Subsidiary will have or incur, and the Borrowers shall  ensure
          that   no   Wholly-Owned  Subsidiary  has   or   incurs,   any
          Indebtedness other than:

               (i)  Indebtedness under this Agreement;

               (ii)  Indebtedness in existence as at the  date  of  this
               Agreement,  as  reflected  in  the  audited  consolidated
               financial statements of SSWG dated December 31, 1997;

               (iii)    Indebtedness to any other Group Entity;

               (iv) Indebtedness constituted by a Subsidiary Guarantee;

               (v)  Vendor Debt permitted under this Agreement; and

               (vi)  other  Indebtedness which  has  the  benefit  of  a
               Permitted Lien securing the payment thereof (but only  to
               the extent of such Permitted Lien).

     (d)  Restriction  on Guarantees.  None of the Group Entities  shall
          enter  into  any Guarantee of, or any indemnity or  suretyship
          arrangement relating to, or any other transaction intended  to
          assure  the repayment or satisfaction of, any Indebtedness  or
          other  liabilities or obligations of any other  person,  other
          than  the  Guarantees  of  the  Borrowers  contained  in  this
          Agreement,  the Subsidiary Guarantees executed by the  Wholly-
          Owned  Subsidiaries pursuant to this Agreement, the Guarantees
          of  the  Group Entities in respect of the obligations of  SSWG
          under  the  Senior Subordinated Note Indenture, or indemnities
          contained  in  any operating lease or other agreement  entered
          into  by  any Group Entity in the ordinary course of  business
          (excluding any agreement relating to Indebtedness for borrowed
          money).

     (e)  Restriction on Amalgamations and Reorganizations.  Without the
          Lenders'  prior written consent, the Borrowers will  not,  and
          will  not  permit any Wholly-Owned Subsidiary to, directly  or
          indirectly,  consolidate, amalgamate or merge with,  or  sell,
          lease or otherwise dispose of all or substantially all of  its
          respective  assets, or alter its capital structure,  or  enter
          into  any  arrangement  or  reorganization  having  a  similar
          effect,  other than with one or more other Group  Entities  or
          holding companies thereof.

     (f)  Restriction on Dispositions.  The Borrowers will not, and will
          not  permit  any  Wholly-Owned  Subsidiary  to,  directly   or
          indirectly, sell, lease, assign, transfer, abandon, convey  or
          otherwise  dispose of (any such action being herein  called  a
          "Disposition") any of its assets (including any capital  stock
          of  any Subsidiary or other corporation and any Investment  by
          any  Group  Entity, other than an Investment  permitted  under
          paragraphs (g) or (h) below), except as follows:

               (i)   any  Group  Entity may, in the ordinary  course  of
               business,  sell  any inventory or other assets  that  are
               customarily  sold  by such Group Entity  on  an  on-going
               basis  as  part of the normal operation of its respective
               business;

               (ii)  any  Group  Entity may, in the ordinary  course  of
               business, sell equipment, fixtures, materials or supplies
               that are no longer required in the business of such Group
               Entity or that are worn-out or obsolete;

               (iii)    any Group Entity may effect a Disposition of its
               assets  on arms' length terms and for the lower  of  fair
               market  value and book value if, after giving  effect  to
               such  Disposition,  the aggregate  net  proceeds  of  all
               assets disposed of by all Group Entities pursuant to this
               subparagraph  (iii)  in  any one fiscal  year  would  not
               exceed  U.S.$500,000 (or the equivalent  thereof  in  any
               other currency);

               (iv)  provided  that no Default or Event of  Default  has
               occurred  and  is  continuing as  at  the  date  of  such
               Disposition, any Group Entity may effect a Disposition of
               all  or  any  portion of its assets to  any  other  Group
               Entity; and

               (v)   any  Group Entity may effect a Disposition  of  its
               assets  on  arms' length terms and for fair market  value
               not  otherwise permitted under subparagraphs (i) to  (iv)
               above,   provided  that,  after  giving  effect  to   the
               Disposition:

                         (A)     the  aggregate  net  proceeds  of   all
                    Dispositions  in  the current fiscal  year  is  less
                    than  U.S.$1,000,000 (or the equivalent  thereof  in
                    any other currency); or

                         (B)     the  aggregate  net  proceeds  of   all
                    Dispositions in the current fiscal year  is  greater
                    than  or  equal to U.S.$1,000,000 (or the equivalent
                    thereof  in  any other currency) and the amount,  if
                    any,  of  the excess of such aggregate net  proceeds
                    over  U.S.$1,000,000  (or the equivalent  amount  in
                    any  other  currency) either is used  by  the  Group
                    Entities  to acquire assets of a similar  nature  to
                    be  used in a business then being carried on by  the
                    Group Entities within 180 days of the completion  of
                    the  Disposition, or is repaid by the  Borrowers  to
                    the  Lenders in accordance with Section  2.08  as  a
                    permanent  reduction of the Outstandings  under  the
                    Credit Facility.

     (g)  Restriction on Distributions.  Other than the proposed payment
          or  Investment  of  up to U.S.$1,500,000 to  or  in  Sparkling
          Spring  Water  Holdings Limited for the acquisition  of  share
          options in connection with the proposed reorganization of  the
          Group  Entities pursuant to which SSWG will become  a  wholly-
          owned  subsidiary of Sparkling Spring Water Holdings  Limited,
          which in turn will be owned by the shareholders of SSWG as  of
          the  date of this Agreement, the Borrowers will not, and  will
          not  permit  any Wholly-Owned Subsidiary to, pay dividends  on
          any  capital  stock,  or  pay any amount  to  redeem,  reduce,
          purchase or retire in any manner any capital stock:

               (i)  in an aggregate amount of more than U.S.$500,000 (or
               the  equivalent thereof in any other currency)  over  the
               term of this Agreement; and

               (ii)  in  an  aggregate amount of less than or  equal  to
               U.S.$500,000  (or  the equivalent thereof  in  any  other
               currency)  over the term of this Agreement,  without  the
               Lenders' prior written consent and unless:

                        (A)    the Borrowers shall be in compliance with
                    all  terms  and  conditions of this  Agreement  both
                    before  and  after  any such payment,  including  in
                    particular  the  financial  covenants  set  out   in
                    Sections 8.01(l), (m), (n), (o) and (p); and

                         (B)    no  Default  or  Event  of  Default  has
                    occurred and is continuing or would result from  any
                    such payment.

     (h)  Restriction  on Loans.  The Borrowers will not, and  will  not
          permit any Wholly-Owned Subsidiary to, make any loans or grant
          any  credit  to or for the benefit of any other person  except
          for:

               (i)  amounts of credit allowed by any Group Entity in the
               normal  course  of the trading activities of  such  Group
               Entity;

               (ii)  loans  made  by one Group Entity to  another  Group
               Entity;

               (iii)     a  loan made to Sparkling Spring Water Holdings
               Limited  in  an  amount not to exceed U.S. $1,500,000  as
               described in paragraph (g) above; and

               (iv)  loans made by a Group Entity to employees  of  such
               Group  Entity,  provided that the  aggregate  outstanding
               amount  of  such  loans made by Group Entities  does  not
               exceed  U.S.$1,500,000,  and  provided  that  the   Group
               Entities  shall  be  in compliance  with  all  terms  and
               conditions  of  this  Agreement  and  the  other   Credit
               Facility  Documents both before and after the  making  of
               such loans.

     (i)  Restriction on Acquisition of Wholly-Owned Subsidiaries.   The
          Borrowers  will  not  incorporate or  acquire  any  additional
          Wholly-Owned Subsidiaries unless such Wholly-Owned  Subsidiary
          executes  a Subsidiary Guarantee in favour of the Lenders  and
          provides  such  Security  Documents,  certificates  and  legal
          opinions as may be requested by the Lenders.

     (j)  Restriction  on Partially-Owned Subsidiaries.   The  Borrowers
          will  not  create or acquire any Subsidiary  which  is  not  a
          Wholly-Owned Subsidiary, or permit any Wholly-Owned Subsidiary
          to  issue shares with the result that it would cease to  be  a
          Wholly-Owned Subsidiary, without the prior written approval of
          the   Lenders,   which  approval  shall  not  be  unreasonably
          withheld.

     (k)  Restriction on Other Activities.  The Borrowers will not carry
          on in any fiscal year any activities materially different from
          those  activities anticipated and described  in  the  Business
          Plan for such fiscal year.

     (l)  Payment  of Fees and Commissions.  The Borrowers will not  pay
          any  fees  or  commissions to any person other  than  on  open
          market terms and for the purpose of and in the ordinary course
          of business of the business carried on by the Group Entities.

     (m)  Payment of Management Charge.  The Borrowers will not pay  any
          management  charge to C.F. Capital Corporation other  than  in
          accordance  with  the terms of the Management Agreement  dated
          December  16, 1993 made between SSW, C.F. Capital Corporation,
          John  Kredeit and Stephen Larson, as amended and  restated  on
          January 12, 1996 and on October 27, 1997.

     (n)  Change  in Fiscal Year.  SSWG will not change its fiscal  year
          without the prior written consent of the Bank.


                           ARTICLE 10
                      BORROWER GUARANTEES

10.1  Guarantees.   Each of the Borrowers (each called  a  "Guaranteeing
Borrower"  in  this  Article 10) hereby absolutely, unconditionally  and
irrevocably  guarantees to the Lenders the due and punctual performance,
satisfaction,  payment and discharge of the following  (the  "Guaranteed
Obligations"):

     (a)  all  payment  obligations  (whether  at  stated  maturity,  by
          acceleration  or  otherwise) of each of  the  other  Borrowers
          hereunder   (each  an  "Other  Borrower")  under  the   Credit
          Facility,  whether  for principal, interest,  fees,  expenses,
          indemnity or otherwise;

     (b)  all covenants and other obligations of each Other Borrower  on
          its part to be performed or observed under this Agreement; and

     (c)  all  obligations of each Other Borrower to the  Lenders  under
          Treasury Contracts.

10.2  Guarantee  Absolute and Unconditional.  The  obligations  of  each
Guaranteeing  Borrower  under  this  Guarantee  shall  be  absolute  and
unconditional,  shall  not  be  subject to  any  counterclaim,  set-off,
deduction or defence based upon any claim such Guaranteeing Borrower may
have  against  either  Other Borrower or any other  person,  whether  in
connection  with  this  Guarantee or any other  transaction,  and  shall
remain  in  full force and effect without regard to, and  shall  not  be
released,  discharged  or  in  any  way  affected  or  impaired  by  any
occurrence, matter, circumstance or condition whatsoever (whether or not
such  Guaranteeing Borrower has any knowledge or notice thereof  or  has
consented  thereto),  other  than  the  complete  performance   of   the
Guaranteed Obligations, including without limitation:

     (a)  any  amendment  or  modification  of  any  provision  of  this
          Agreement,  any  of the other Credit Facility  Documents,  the
          Security Documents or any of the Guaranteed Obligations or any
          assignment  or transfer thereof, including without  limitation
          any  extension  of the time for payment of or compliance  with
          any of the Guaranteed Obligations;

     (b)  any waiver, consent, extension, granting of time, forbearance,
          indulgence,  renewal or other action or inaction under  or  in
          respect   of   this  Agreement,  the  other  Credit   Facility
          Documents,  the  Security Documents or any of  the  Guaranteed
          Obligations,  or  any exercise or nonexercise  of  any  right,
          remedy or power in respect thereof;

     (c)  any  dealings with any security or other guarantee  which  the
          Lenders  hold  or  may  hold pursuant  to  this  Agreement  or
          otherwise,  including the taking and giving up of security  or
          any  other  guarantee, the accepting of compositions  and  the
          granting of releases and discharges;

     (d)  any   bankruptcy,  receivership,  insolvency,  reorganization,
          amalgamation,    arrangement,    readjustment,    composition,
          liquidation  or  similar  proceedings  with  respect  to   any
          Borrower or any other person or the properties or creditors of
          any of them;

     (e)  any    informality   in,   omission   from,   invalidity    or
          unenforceability of, or any misrepresentation, irregularity or
          other  defect  in, this Agreement, the other  Credit  Facility
          Documents,  the  Security Documents,  any  of  the  Guaranteed
          Obligations or any other agreement or instrument;

     (f)  any lack or limitation of capacity, status, power or authority
          of   any  Borrower  or  any  of  their  respective  directors,
          officers,  employees, partners or agents acting or  purporting
          to  act  on  their behalf, and any defect or  any  failure  to
          comply  with  a formal legal requirement in the  execution  or
          delivery of any document;

     (g)  any  transfer  of  any assets to or from any Borrower  to  any
          Other  Borrower, any consolidation, amalgamation or merger  of
          any  of  the Borrowers with or into any person, or any  change
          whatsoever in the name, objects, capital structure,  corporate
          existence,  membership,  constitution  or  business   of   any
          Borrower;

     (h)  any  failure  on the part of any Other Borrower or  any  other
          person  to  perform or comply with any term of this Agreement,
          the  other  Credit Facility Documents, the Security Documents,
          any  of  the Guaranteed Obligations or any other agreement  or
          instrument;

     (i)  any action or other proceeding brought by any beneficiaries or
          creditors  of, or by, any Other Borrower or any  other  person
          for  any  reason whatsoever, including without limitation  any
          action  or  proceeding in any way attacking or  involving  any
          issue  in respect of this Agreement, the other Credit Facility
          Documents,  the  Security Documents,  any  of  the  Guaranteed
          Obligations or any other agreement or instrument;

     (j)  any  lack  or  limitation of status or of power of  any  Other
          Borrower  or  any  incapacity  or  disability  of  any   Other
          Borrower; or

     (k)  the  assignment  of all or any part of the  benefits  of  this
          Guarantee in accordance with the terms of this Agreement,  any
          other  agreement in respect of the Guaranteed Obligations,  or
          any other agreement or instrument.

10.3  Demand.  If any Other Borrower shall fail to pay or  cause  to  be
paid  all  or any portion of the Guaranteed Obligations as and when  the
same  shall  become  due  and  payable pursuant  to  this  Agreement  or
otherwise,  then  the  Lenders  shall  be  entitled,  by  notice  to   a
Guaranteeing Borrower, to make a demand upon such Guaranteeing  Borrower
for  the  payment of the Guaranteed Obligations or that portion  thereof
which  any Other Borrower has failed to pay.  The Guaranteed Obligations
or  any portion thereof in respect of which demand shall have been  made
pursuant  hereto  shall  become immediately  due  and  payable  by  such
Guaranteeing Borrower under this Guarantee upon such demand for  payment
being made, and shall bear interest from the date of such demand at  the
rate or rates provided in this Agreement or otherwise in respect of  the
Guaranteed Obligations or that portion thereof which the Other  Borrower
has failed to pay.

10.4  Remedies.  The Lenders may, at their option, proceed  against  any
Guaranteeing  Borrower  under  this Guarantee  to  enforce  any  of  the
Guaranteed  Obligations  when due without first proceeding  against  any
Other  Borrower or any other person and without first resorting  to  any
direct  or  indirect  security, any Subsidiary Guarantee  or  any  other
remedy.   Each  Guaranteeing  Borrower  hereby  unconditionally   waives
diligence,  presentment,  demand for payment, protest  and  all  notices
whatsoever,  renounces  the  benefit of  division  and  discussion,  and
unconditionally  waives  any requirement that the  Lenders  exhaust  any
right,  power or remedy against any Other Borrower under this Agreement,
the   other  Credit  Facility  Documents,  any  Security  Document,  any
Subsidiary  Guarantee,  any other Guaranteed Obligations  or  any  other
agreement  or instrument referred to herein or therein, or  against  any
other  person under any other guarantee of, or security for, any of  the
Guaranteed  Obligations,  before proceeding  against  such  Guaranteeing
Borrower under this Guarantee.  Each Guaranteeing Borrower hereby waives
any  duty  on  the  part  of the Lenders to disclose  to  such  Borrower
anything  which  the  Lenders may now or hereafter know  concerning  any
Other Borrower, any other person or any other matter whatsoever, even if
the  Lenders  have  reason  to believe any such  information  materially
increases the risk beyond that which such Guaranteeing Borrower  intends
to assume hereunder.

10.5 Set-Off.  The Lenders may at any time setoff and apply any deposits
(general  or  special, time or demand, provisional or  final)  or  other
indebtedness  owing  by  any  Lender  to  or  for  the  credit  of   any
Guaranteeing Borrower against that portion of the Guaranteed Obligations
comprising principal, interest or fees, or, following the occurrence  of
an  Event of Default, any and all of the Guaranteed Obligations, and the
Lenders shall promptly notify such Guaranteeing Borrower of any such set-
off  or application, provided that the failure to do so shall not affect
the  validity  thereof.  The rights of the Lenders  under  this  Section
10.05  are  in addition to any other rights and remedies, including  any
other rights of set-off, that they may have.

10.6 Amount of Guaranteed Obligations.  Any account settled or stated by
or  between  the Lenders and any Other Borrower or, if any such  account
has  not been so settled or stated immediately before demand for payment
under  this  Guarantee,  any account thereafter stated  by  the  Lenders
shall,  in  the  absence  of demonstrable error,  fraud,  dishonesty  or
improper  conduct,  be accepted by each Guaranteeing Borrower  as  prima
facie evidence of the amount of the Guaranteed Obligations which at  the
date  of  the account so settled or stated is due by such Other Borrower
to the Lenders or remains unpaid by such Other Borrower to the Lenders.

10.7  Payment  Free and Clear of Taxes.  Any and all  payments  by  each
Guaranteeing Borrower under this Guarantee shall be made free and  clear
of  and without deduction or withholding for Taxes unless such Taxes are
required  by  applicable  Law  to  be  deducted  or  withheld.    If   a
Guaranteeing Borrower shall be required by applicable Law to  deduct  or
withhold  any  Taxes  from or in respect of any sum payable  under  this
Guarantee:

     (a)  the sum payable shall be increased as may be necessary so that
          after   making   all  required  deductions   or   withholdings
          (including deductions or withholdings applicable to additional
          amounts paid under this Section 10.07) the Lenders receive  an
          amount  equal  to  the  sum they would  have  received  if  no
          deduction or withholding had been made;

     (b)  such  Guaranteeing  Borrower shall  make  such  deductions  or
          withholdings; and

     (c)  such  Guaranteeing Borrower shall pay the full amount deducted
          or  withheld  to the relevant taxation or other  authority  in
          accordance with applicable Law.

Each Guaranteeing Borrower shall indemnify and save harmless the Lenders
for  the full amount of Taxes levied by any jurisdiction in Canada,  the
United  States of America or the United Kingdom on, or in  relation  to,
any  amount payable by such Guaranteeing Borrower hereunder (other  than
Taxes  imposed on the income or capital of the Lenders).  Payment  under
this  indemnity shall be made within 30 days from the date  the  Lenders
make  written demand therefor.  A certificate as to the amount  of  such
Taxes  submitted to such Guaranteeing Borrower by the Lenders or any  of
them  shall be prima facie evidence, absent demonstrable error,  of  the
amount due from such Borrower to the Lenders.  The Lenders shall provide
each Guaranteeing Borrower the benefit of any tax credit received by the
Lenders  as  a  result  of such Guaranteeing Borrower  indemnifying  the
Lenders  for  Taxes levied on or in relation to any amount  received  or
receivable by the Lenders under this Guarantee, or as a result  of  such
Guaranteeing  Borrower withholding any amount for  Taxes  in  accordance
with applicable law and increasing the amount payable to the Lenders  in
accordance  with paragraph (a) above, provided that the amount  of  such
credit is reasonably possible to calculate and that a certificate of the
Lenders  or  any  of them as to the amount of any such credit  shall  be
prima facie evidence of such amount.

Notwithstanding  the  foregoing,  no  Guaranteeing  Borrower  shall   be
required  to pay any Taxes or indemnify the Lenders in respect of  Taxes
payable  to any Governmental Body in Canada which are levied,  withheld,
deducted  or paid on payments to the Lenders by reason of the fact  that
any Lender is a Non-Resident of Canada.

10.8  Subrogation  and Repayment.  Upon receipt by the  Lenders  of  any
payments by any Guaranteeing Borrower on account of its liability  under
this  Guarantee,  such Guaranteeing Borrower shall not  be  entitled  to
claim  repayment  of  such amount against any Other Borrower  until  the
Guaranteed  Obligations and all other amounts due to the  Lenders  under
this  Agreement have been paid or repaid in full.  In the  case  of  the
liquidation,  winding-up  or bankruptcy of any Other  Borrower  (whether
voluntary  or compulsory) or in the event that any Other Borrower  shall
make  a bulk sale of any of its assets within the provisions of any bulk
sales  legislation  or  any  composition with  creditors  or  scheme  of
arrangement,  the Lenders shall have the right to rank  in  priority  to
each Guaranteeing Borrower for the full claims of the Lenders in respect
of  the  Guaranteed  Obligations  and receive  all  dividends  or  other
payments  in respect thereof until the Guaranteed Obligations have  been
paid in full, and the Guaranteeing Borrowers shall continue to be liable
for  any balance of the Guaranteed Obligations which may be owing to the
Lenders  by  any  Other Borrower.  If any amount shall be  paid  to  any
Guaranteeing Borrower on account of any subrogation rights at  any  time
when  all  the Guaranteed Obligations have not been paid in  full,  such
amount  shall be held in trust for the benefit of the Lenders and  shall
forthwith be paid to the Lenders to be credited and applied against  the
Guaranteed Obligations, whether matured or unmatured.

10.9  Postponement and Assignment.  As security for the  performance  of
its  obligations hereunder, each Guaranteeing Borrower  assigns  to  the
Lenders  all  claims  of such Guaranteeing Borrower  against  any  Other
Borrower  and  any other guarantors, and, except as otherwise  expressly
permitted  under this Agreement, subordinates and postpones the  payment
of  all such claims to the payment of the Guaranteed Obligations.   Each
Guaranteeing  Borrower shall hold all of its claims against  each  Other
Borrower  and any other guarantors as agent and trustee of  the  Lenders
and  shall collect, enforce and prove all such claims in accordance with
this  Agreement  and  this  Guarantee.   Any  monies  received  by   any
Guaranteeing  Borrower in respect thereof shall, upon the occurrence  of
any  Event  of Default, be paid over to the Lenders.  Without the  prior
written  consent of the Lenders, no Guaranteeing Borrower shall  release
or  discharge any of its claims against any Other Borrower or any  other
guarantor,  permit the prescription of any such claims pursuant  to  any
Law, assign any such claims to any person other than the Lenders, or ask
for or obtain any security or negotiable paper for or other evidence  of
any  such  claims except for the purpose of delivering the same  to  the
Lenders.

10.10      Rights on Subrogation.  If any Guaranteeing Borrower acquires
any  right  of subrogation by reason of a payment under or  pursuant  to
this Guarantee, such Guaranteeing Borrower shall not be entitled to vote
as  a  Lender under the provisions of this Agreement or otherwise  until
the  Guaranteed  Obligations and all other amounts due  to  the  Lenders
under this Agreement have been paid or repaid in full to the Lenders.

10.11      Continuing  Guarantee.  The obligations of each  Guaranteeing
Borrower  under  this  Guarantee constitute a continuing  guarantee  and
shall  remain in full force and effect until payment in full of  all  of
the   Guaranteed  Obligations.   The  obligations  of  any  Guaranteeing
Borrower  shall be reinstated if at any time any payment of any  of  the
Guaranteed Obligations is rescinded or must otherwise be returned by the
Lenders  upon the insolvency, bankruptcy or reorganization of any  Other
Borrower or otherwise, all as though such payment had not been made.

10.12     Third Party Beneficiaries.  Except as otherwise expressly  set
forth  in  this  Guarantee,  nothing herein  is  intended  or  shall  be
construed  to confer upon or to give any person other than  the  Lenders
any  right, remedy or claim under or by reason of the obligations of the
Guaranteeing Borrowers under this Guarantee.

10.13      No Modification.  No amendment or other modification of  this
Guarantee shall be effective unless in writing and signed by the Lenders
in accordance with the provisions of this Agreement.

10.14      Additional  Guarantee.  This Guarantee  is  in  addition  and
supplemental  to,  and  not in substitution for, all  other  guarantees,
assignments and postponement agreements, whether or not in the same form
as this Guarantee, now or hereafter held by the Lenders.

10.15      Remedies Cumulative.  The rights, remedies and  recourses  of
the Lenders under this Guarantee and any other Credit Facility Documents
are  cumulative  and  do  not  exclude any other  rights,  remedies  and
recourses that they may have.

10.16      No Waivers, Remedies.  No failure on the part of the  Lenders
to  exercise, and no delay in exercising, any right under this Guarantee
shall  operate  as  a waiver thereof, nor shall any  single  or  partial
exercise of any right under this Guarantee preclude any other or further
exercise  thereof  or  the exercise of any other right,  nor  shall  any
waiver  of  one provision be deemed to constitute a waiver of any  other
provision  (whether or not similar).  No waiver of any of the provisions
of  this  Guarantee  shall be effective unless it  is  in  writing  duly
executed  by  the  waiving  party.  The  remedies  herein  provided  are
cumulative and not exclusive of any other remedies provided by law.

10.17      Time  of  Essence.   Time shall be of  the  essence  of  this
Guarantee.


                           ARTICLE 11
                            SECURITY

11.1 Security.  As continuing collateral security for the performance of
all obligations of the Borrowers to the Lenders under this Agreement and
the  payment when due of all Outstandings under the Credit Facility  and
all  other  amounts  from  time to time owing  to  the  Lenders  by  the
Borrowers,  including interest, interest on overdue  interest,  Stamping
Fees and other fees and expenses, as continuing collateral security  for
the  obligations  of  the Guaranteeing Borrowers to  the  Lenders  under
Article 10, and as continuing collateral security for the performance of
all obligations of the Borrowers to the Lenders under Treasury Contracts
(including  Treasury Contract Breakage Costs), the Group Entities  shall
execute and deliver to the Lenders the following documents:

     (a)  the Security Documents; and

     (b)  such     other    agreements,    assignments,    certificates,
          undertakings,  declarations and other supporting documentation
          (including   consents  of  third  parties  to  any   hypothec,
          assignment,  mortgage,  charge or security  interest)  as  the
          Lenders may reasonably require in furtherance of the above.

11.2  Continued Perfection of Security.  The Group Entities  shall  take
such  action  and  execute and deliver to the Lenders  such  agreements,
conveyances,  deeds and other documents and instruments as  the  Lenders
may  reasonably  request  for the purpose of  establishing,  perfecting,
preserving and protecting the Security Documents, in each case forthwith
upon  request  by the Lenders and in form and substance satisfactory  to
the Lenders, acting reasonably.

11.3  Set-Off.   In  addition to any rights now or  hereafter  available
under  applicable Law and not by way of limitation of any  such  rights,
the  Lenders  are authorized at any time or from time to  time  after  a
declaration of acceleration under Section 12.02, without notice  to  the
Borrowers,  to set-off, compensate and to appropriate and to  apply  any
and  all money deposits, matured or unmatured, general or special,  held
for  or  in  the  name  of  any Borrower and any other  indebtedness  or
liability  at  any time owing or payable by any Lender  to  or  for  the
credit  of or the account of any Borrower against and on account of  the
obligations  and  liabilities of the Borrowers due and  payable  to  the
Lenders  under this Agreement, irrespective of currency and  whether  or
not obligations, liabilities or claims of any Borrower are contingent or
unmatured.

11.4  Conflict.   In the event of a conflict between the  provisions  of
this  Agreement  and  the  provisions  of  any  Security  Document,  the
provisions of this Agreement shall prevail.


                           ARTICLE 12
                       EVENTS OF DEFAULT

12.1 Events of Default.  An Event of Default shall have occurred and  be
continuing (whatever the reason for such Event of Default and whether it
shall  be  voluntary or involuntary or by operation of law or otherwise)
if:

     (a)  Payment of Principal.  The Borrowers shall fail to pay all  or
          any part of any Borrowing under this Agreement as and when the
          same shall become due and payable, whether at stated maturity,
          by  acceleration  or  otherwise, and such default  shall  have
          continued  for  a period of five Business Days  after  written
          notice  from  the  Lenders  or any  of  them  specifying  such
          default;

     (b)  Payment  of  Interest and Other Amounts.  The Borrowers  shall
          fail to pay any interest, Stamping Fee or any other amount due
          under  this  Agreement  (other than a Borrowing  described  in
          paragraph  (a))  as  and when the same shall  become  due  and
          payable, and such default shall have continued for a period of
          five  Business Days after written notice from the  Lenders  or
          any of them specifying such default;

     (c)  Failure  to Observe Financial Covenants.  The Borrowers  shall
          fail  to  perform  or  observe any  of  their  obligations  or
          undertakings contained in Sections 8.01(l), (m), (n), (o)  and
          (p) hereof;

     (d)  Failure to Observe other Covenants.  Any of the Group Entities
          shall  fail to perform or observe any of its other obligations
          or  undertakings  under this Agreement or  any  of  the  other
          Credit   Facility  Documents  and  such  default  shall   have
          continued for a period of at least 30 days after a Responsible
          Officer  of  a  Borrower knows or should have  known  of  such
          default;

     (e)  Incorrect  Representation or Warranty.  Any representation  or
          warranty  made by any of the Group Entities in this  Agreement
          or  in any certificate or other instrument delivered hereunder
          or  pursuant hereto or in connection with any provision hereof
          shall  prove to be false or incorrect in any material  respect
          on the date as of which made;

     (f)  Cross-Default.  A default or event of default occurs under any
          agreement,  indenture or other instrument  relating  to  other
          Indebtedness   of   any  of  the  Group   Entities   exceeding
          U.S.$500,000 (or the equivalent thereof in any other currency)
          or  under any foreign exchange, currency or interest rate swap
          agreement   having  a  notional  principal  amount   exceeding
          U.S.$500,000 (or the equivalent thereof in any other currency)
          beyond any applicable grace period contained in the agreement,
          indenture or other instrument relating to such Indebtedness;

     (g)  Dissolution  Proceedings.  Proceedings are commenced  for  the
          dissolution,  liquidation or winding-up of any  of  the  Group
          Entities,  other than a dissolution, liquidation or winding-up
          required  in  connection with an arrangement or reorganization
          of  the Group Entities and holding companies thereof permitted
          under  this  Agreement,  unless  such  proceedings  are  being
          actively and diligently contested in good faith by such  Group
          Entity and such proceedings are stayed within 30 days of being
          commenced;

     (h)  Bankruptcy  or  Insolvency.  Any  of  the  Group  Entities  is
          adjudged or declared bankrupt or becomes insolvent or makes an
          assignment for the benefit of creditors, or admits in  writing
          its  inability to pay its debts generally as they become  due,
          or petitions or applies to any tribunal for the appointment of
          a  receiver or trustee for it or for any substantial  part  of
          its  property,  or commences any proceedings  relating  to  it
          under  any reorganization, arrangement, readjustment of  debt,
          dissolution  or liquidation law or statute of any jurisdiction
          whether  now  or hereafter in effect, or by any act  indicates
          its  consent  to, approval of, or acquiescence  in,  any  such
          proceeding for it or for any substantial part of its property;

     (i)  Appointment  of Receiver.  A receiver, receiver  and  manager,
          receiver-manager,  custodian, liquidator or  trustee  (or  any
          person  with like powers) shall be appointed for  all  or  any
          substantial part of the property of any of the Group Entities,
          provided  that such appointment shall not constitute an  Event
          of Default if and for so long as:

               (i)   such Group Entity obtains within two Business  Days
               of  such  appointment an order of a  court  of  competent
               jurisdiction staying such appointment and such order  (or
               a  replacement thereof to similar effect) remains in full
               force and effect; or

               (ii)  such Group Entity forthwith bona fide disputes  and
               continues  to  dispute such appointment and  provides  or
               causes to be provided to the Lenders such security as the
               Lenders shall reasonably require, and such appointment is
               stayed or vacated within 30 days;

     (j)  Issuance  of  Execution.  A writ, execution or  attachment  or
          similar  process  is  issued  or  levied  against  all  or   a
          substantial  portion  of the property  of  any  of  the  Group
          Entities  in connection with any judgment against  such  Group
          Entity  in  an  amount  in  excess of U.S.$1,000,000  (or  the
          equivalent  thereof  in  any  other  currency),  unless  being
          actively and diligently contested by such Group Entity in good
          faith and such Group Entity has provided such security to  the
          Lenders  as the Lenders may reasonably require and such  writ,
          execution, attachment or similar process is released,  bonded,
          satisfied, discharged, vacated or stayed within 60 days  after
          its entry, commencement or levy;

     (k)  Action  by  Encumbrancer.   An encumbrancer  or  lienor  takes
          possession of any substantial part of the properties or assets
          of  any  Group  Entity, unless such Group Entity disputes  and
          continues  to  dispute  such  possession  in  good  faith  and
          provides to the Lenders such security for the payment of  such
          encumbrance or lien as the Lenders shall reasonably require;

     (l)  Expropriation.  An order is made or legislation enacted by any
          competent   body   having  authority  for  the  expropriation,
          confiscation,   forfeiture,  escheating,   other   taking   or
          compulsory  divestiture, whether or not with compensation,  of
          all or a significant portion of the consolidated assets of the
          Group Entities and such order or legislation remains in effect
          and  has  not been stayed by a court of competent jurisdiction
          for  a  period  of  more  than  30  days  from  the  date   of
          pronouncement of the order or enactment of the legislation, as
          the case may be;

     (m)  Unsatisfied Judgments or Tax Assessments.  Judgment in  excess
          of  U.S.$1,000,000  (or the equivalent thereof  in  any  other
          currency)  is  rendered against a Group Entity in  respect  of
          which  such  Group Entity does not have insurance coverage  or
          any  income  tax reassessment in excess of U.S.$1,000,000  (or
          the  equivalent thereof in any other currency) is made against
          a  Group  Entity,  and any such judgment or  tax  reassessment
          remains undischarged or unsatisfied after the time for  appeal
          has  expired  without  such Group Entity having  appealed  the
          judgment  or reassessment and obtained a stay of execution  of
          the  judgment,  provided  that such judgment  or  reassessment
          shall  not constitute an Event of Default if such Group Entity
          provides or causes to be provided to the Lenders such security
          as  the Lenders shall require for the payment of such judgment
          or reassessment;

     (n)  Unenforceable  Obligation.  Any material obligation  or  other
          provision of any Group Entity in this Agreement or in  any  of
          the other Credit Facility Documents terminates or ceases to be
          or  is declared by a court of competent jurisdiction not to be
          a  legally  binding or enforceable obligation  of  such  Group
          Entity;

     (o)  Suspension   of   Business.   Any  voluntary  or   involuntary
          suspension  of  the  business of  any  Group  Entity,  or  any
          substantial  part thereof, shall occur, other  than  temporary
          weather-related suspensions;

     (p)  Repayment  of Senior Subordinated Notes.  SSWG repays  all  or
          any   portion  of  the  Senior  Subordinated  Notes  and  such
          repayment  is  not offset in its entirety by the  issuance  of
          equity  or  other  subordinated Debt  by  SSWG  on  terms  and
          conditions satisfactory to the Lenders, acting reasonably;

     (q)  Change having Material Adverse Effect.  There shall occur,  in
          the  determination of the Lenders, acting reasonably, a change
          having a Material Adverse Effect, written notice of which  has
          been given by the Lenders or any of them to the Borrower; or

     (r)  Change of Control.  There shall occur a Change of Control.

12.2 Cancellation and Acceleration.  Upon the occurrence of an Event  of
Default  and  for so long as such Event of Default shall  continue,  the
Lenders may, by notice to the Borrowers:

     (a)  cancel  the  Credit Facility and terminate the obligations  of
          the Lenders to make any further Accommodations;

     (b)  declare the principal amount of all outstanding Accommodations
          made  to  the  Borrowers  and all interest  and  fees  accrued
          thereon and all other amounts payable under this Agreement and
          the other Credit Facility Documents (including liabilities for
          Bankers'  Acceptances  which  have  not  yet  matured)  to  be
          forthwith  due  and  payable,  without  presentment,   demand,
          protest or further notice of any kind, all of which are hereby
          expressly waived by the Borrowers; and

     (c)  enforce  all  rights  and remedies provided  in  the  Security
          Documents.

12.3  Remedies  Cumulative.   For greater  certainty,  it  is  expressly
understood  and  agreed that the respective rights and remedies  of  the
Lenders under this Agreement are cumulative and are in addition  to  and
not  in  substitution for any rights or remedies provided by law  or  by
equity;  and any single or partial exercise by the Lenders of any  right
or  remedy  for a default or breach of any term, covenant, condition  or
agreement contained in this Agreement shall not be deemed to be a waiver
of  or  to alter, affect or prejudice any other right or remedy to which
the Lenders may be lawfully entitled for such default or breach.

12.4  Waivers.  The Lenders may, by written instrument, at any time  and
from  time  to  time waive any breach by the Borrowers  of  any  of  the
covenants or Events of Default herein.  No course of dealing between the
Borrowers  and the Lenders nor any delay in exercising any rights  under
this  Agreement,  the  Security Documents or any  of  the  other  Credit
Facility  Documents  shall operate as a waiver  of  any  rights  of  the
Lenders.


                           ARTICLE 13
                         MISCELLANEOUS

13.1  Records.  The  unpaid principal amount of the Accommodations,  the
unpaid  interest accrued thereon, the interest rate or rates  applicable
to any unpaid principal amounts, the duration of such applicability, the
date  of  any Advance or repayment, the date of issue, Face  Amount  and
maturity  of  all Bankers' Acceptances and the Commitment shall  at  all
times  be  ascertained from the records of the Lenders, which  shall  be
prima  facie  evidence, absent demonstrable error, fraud, dishonesty  or
improper conduct, and a certificate of any officer of any of the Lenders
as to such records shall be prima facie evidence of such records.

13.2  Amendments.   Any  amendment or waiver of any  provision  of  this
Agreement or of any of the other Credit Facility Documents, any  consent
to any departure by the Borrowers therefrom, and any consent or approval
contemplated to be given by the Lenders under this Agreement,  shall  be
effective  and binding on the Lenders only if in writing and  signed  by
the Lenders.

13.3  Notices.   All  notices  and  other  communications  provided  for
hereunder  or  under  any  Credit Facility  Document  shall,  except  as
otherwise permitted hereunder, be in writing personally delivered:

     (a)  if to the Borrowers:

          (i)  if to SSWG or SSW at the following address:

               Sparkling Spring Water Group Limited
               Sparkling Spring Water Limited
               19 Fielding Avenue
               Dartmouth, Nova Scotia
               B3B 1C9

               Fax no.:       (902) 468-2751
               Attention:     President

          (ii) if to SSUK at the following address:

               Sparkling Spring Water UK Limited
               Unit 5, Alexandra Way
               Ashchurch Business Centre
               Tewkesbury, Gloucestershire
               UK  GL20 8NB

               Fax no.:       011-44-1684-290378
               Attention:     Vice-Chairman

         (iii) if to SWUS at the following address:

               Spring Water, Inc.
               c/o Mountain Fresh Bottled Water
               9065 South East Jansen
               P.O. Box 2590
               Clackamas, Oregon
               U.S.A.  97015

               Fax no.:       (503) 657-0527
               Attention:     President

          with a copy to:

          CF Capital Corporation
          One Landmark Square, 11th Floor
          Stamford, Connecticut
          U.S.A.  06901

          Fax no.:      (203) 325-1057
          Attention:    Managing Director

          and with an additional copy to:

          Stewart McKelvey Stirling Scales
          Purdy's Wharf Tower One
          1959 Upper Water Street, P.O. Box 997
          Halifax, Nova Scotia
          B3J 2X2

          Fax no.:  (902) 420-1417
          Attention:    L.J. Stordy

     (b)  if to the Lenders:

          (i)  if to TD Bank at the following address:

               The Toronto-Dominion Bank
               Toronto Dominion Tower Branch
               700 West Georgia Street, Pacific Centre
               P.O. Box 10001
               Vancouver, British Columbia
               V7Y 1A2

               Fax no.:       (604) 654-3489
               Attention:     Vice President

          (ii) if to TDUS at the following address:

               Toronto Dominion (Texas), Inc.
               Suite 1700, 909 Fannin Street
               Houston, Texas
               U.S.A. 77010

               Fax no.:       (713) 951-9921
               Attention:     Jimmy Simien

         (iii) if to TDUK at the following address:

               The Toronto-Dominion Bank, London Branch
               Triton Court, 14/18 Finsbury Square
               London, England
               EC2A 1DB

               Fax no.:       011-44-171-638-0006
               Attention:     Denise Payne

or   sent  by  facsimile  transmission  or  similar  means  of  recorded
communication to the applicable address or to such other  address  as  a
party hereto may from time to time designate to the other parties hereto
in  such  manner.   All  such  notices and  communications  shall,  when
required  or  permitted  to  be  delivered  or  confirmed  hereunder  by
facsimile transmission, be effective when so delivered or confirmed.

13.4  No Waiver; Remedies. No failure on the part of the Lenders or  the
Borrowers  to exercise, and no delay in exercising, any right under  any
of  the Credit Facility Documents shall operate as a waiver thereof; nor
shall  any  single  or partial exercise of any right under  any  of  the
Credit Facility Documents preclude any other or further exercise thereof
or  the  exercise of any other right. The remedies herein  provided  are
cumulative and not exclusive of any remedies provided by Law.

13.5  Expenses.  The Borrowers shall promptly pay all costs and expenses
of  the  Lenders,  including, without limitation,  all  reasonable  out-
of-pocket  expenses, disbursements and the fees and expenses of  counsel
for the Lenders, incurred in connection with:

     (a)  the  preparation,  negotiation,  execution,  registration  and
          administration of this Agreement, the Security Documents,  the
          other Credit Facility Documents or any agreement or instrument
          contemplated hereby or thereby;

     (b)  the   enforcement  or  preservation  of  rights   under   this
          Agreement,  the Security Documents, the other Credit  Facility
          Documents  or any agreement or instrument contemplated  hereby
          or thereby;

     (c)  any  requested  amendments, waivers  or  consents  or  matters
          initiated  by the Borrowers pursuant to or in respect  of  the
          provisions hereof; and

     (d)  the  collection  of  Advances or Bankers' Acceptances  or  any
          litigation, proceeding or dispute in any way relating  to  the
          Advances or Bankers' Acceptances.

The  Borrowers shall pay interest on any amount due under  this  Section
13.05  that remains unpaid more than two Business Days after the Lenders
or  any  of them notify the Borrowers of such amount, at the U.S.  Prime
Rate plus 2.25% per annum until such amount is paid.

13.6  Maintenance of Accounts.  The Borrowers will maintain all of their
operating  accounts with branches of the Lenders, and the Lenders  shall
have  the  right  to  provide  all of the ancillary  non-credit  banking
services,  such as cash management and payroll services, to  the  extent
the  Borrowers  require such services from a third party,  provided  the
fees  payable  for,  and  the quality and scope of,  such  services  are
competitive.

13.7  Taxes.  Any and all payments by the Borrowers under this Agreement
and the other Credit Facility Documents shall be made free and clear  of
and  without  deduction or withholding for Taxes unless such  Taxes  are
required  by  Law  to  be deducted or withheld.  If  the  Borrowers  are
required  by Law to deduct or withhold any Taxes from or in  respect  of
any  sum  payable  under  this Agreement or the  other  Credit  Facility
Documents:

     (a)  the sum payable shall be increased as may be necessary so that
          after   making   all  required  deductions   or   withholdings
          (including deductions or withholdings applicable to additional
          amounts paid under this Section) the Lenders receive an amount
          equal  to the sum they would have received if no deduction  or
          withholding had been made;

     (b)  the Borrowers shall make such deductions or withholdings; and

     (c)  the  Borrowers shall pay the full amount deducted or  withheld
          to the relevant taxation or other authority in accordance with
          applicable Law.

The Borrowers shall indemnify and save harmless the Lenders for the full
amount  of Taxes levied by any jurisdiction in Canada, the United States
of America or the United Kingdom on, or in relation to, any sum received
or  receivable hereunder by the Lenders (other than taxes imposed on the
income  or  capital of the Lenders). Payment under this  indemnification
shall  be made within 30 days from the date the Lenders or any  of  them
make  written  demand therefor. A certificate as to the amount  of  such
Taxes submitted to the Borrowers by the Lenders or any of them shall  be
prima facie evidence, absent demonstrable error, of the amount due  from
the  Borrowers to the Lenders.  Any such certificate shall refer to  the
provision of Law under which such Taxes are levied and shall contain  an
explanation  relating to and a calculation of the amount  due  from  the
Borrowers.   The Lenders shall provide to the Borrowers the  benefit  of
any  tax  credit  received by the Lenders as a result of  the  Borrowers
indemnifying  the  Lenders for Taxes levied on or  in  relation  to  any
amount  received or receivable by the Lenders hereunder, or as a  result
of  the  Borrowers withholding any amount for Taxes in  accordance  with
applicable  law  and increasing the amount payable  to  the  Lenders  in
accordance  with paragraph (a) above, provided that the amount  of  such
credit is reasonably possible to calculate and that a certificate of the
Lenders  or  any  of them as to the amount of any such credit  shall  be
prima facie evidence of such amount.

Notwithstanding the foregoing, no Borrower shall be required to pay  any
Taxes  or  indemnify  the Lenders in respect of  Taxes  payable  to  any
Governmental Body in Canada which are levied, withheld, deducted or paid
on  payments to the Lenders by reason of the fact that any Lender  is  a
Non-Resident of Canada.

The  obligations of the Borrowers under this Section 13.07 shall survive
the payment in full of the Outstandings and interest thereon.

13.8  Increased Costs.  If the introduction of or any change in any Law,
regulation, treaty, official directive or regulatory requirement now  or
hereafter in effect (whether or not having the force of law) on  in  the
interpretation or application thereof by any court or by  any  judicial,
governmental or administrative authority charged with the interpretation
or  administration  thereof, or if compliance by the  Lenders  with  any
request  from  the Bank of Canada or any other central bank  or  fiscal,
monetary or other authority (whether or not having the force of law):

     (a)  subjects  any  of  the  Lenders to  any  tax,  or  causes  the
          withdrawal  or  termination of a previously granted  exemption
          with  respect to any tax, or changes the basis of taxation  of
          payments  due to any of the Lenders, or increases any existing
          tax  on  payments  of  principal, interest  or  other  amounts
          payable  by  the  Borrowers to any of the Lenders  under  this
          Agreement  (other  than taxes of application  to  the  general
          income of the Lenders and taxes on capital);

     (b)  imposes,  modifies  or deems applicable any  reserve,  special
          deposit, regulatory or similar requirement against assets held
          by,  or deposits in or for the account of, or loans by, or any
          other  acquisition  of funds for loans  made  by  any  of  the
          Lenders or Bankers' Acceptances created by the Lenders;

     (c)  imposes  on  any  of  the  Lenders  or  expects  there  to  be
          maintained  by  any  of the Lenders any  capital  adequacy  or
          additional  capital requirement (including,  without  limiting
          the  generality of the foregoing, a requirement which  affects
          any  of  the Lenders' allocation of capital resources  to  its
          obligations)  in  respect of the obligations  of  any  of  the
          Lenders hereunder or, without limiting the generality  of  the
          foregoing,  imposes  any other condition or  requirement  with
          respect to this Agreement or to the maintenance by any of  the
          Lenders  of  a contingent liability with respect  to  Bankers'
          Acceptances created by the Lenders pursuant to this Agreement.

and  the result of such occurrence is, in the sole determination of  any
Lender,  acting reasonably, to increase the cost to such  Lender  or  to
reduce  the income received by such Lender in respect of any portion  of
the  Advances or Bankers' Acceptances, the Borrowers shall pay  to  such
Lender that amount which such Lender, acting reasonably, estimates  will
compensate  it  for  such additional cost or reduction  in  income  (the
"Compensation").  Upon such Lender having determined that it is entitled
to  Compensation, and provided that such Lender has made or proposes  to
make  similar  requests of other borrowers in the same  situation,  such
Lender  shall  promptly  notify  the Borrowers  and  shall  provide  the
Borrowers with a certificate of such Lender setting forth the amount  of
the  Compensation  and the basis for it.  In preparing such  certificate
the  Lender  shall  not  be required to "match"  or  isolate  particular
transactions or credit facilities and shall be entitled to use estimates
and averages.  Absent demonstrable error such certificate shall be prima
facie evidence of the amount of the Compensation and shall be binding on
the Borrowers, and if the amount of Compensation set forth therein shall
not  be paid by the Borrowers to such Lender within seven Business  Days
after  notice  thereof, such amount shall be deemed to be a  U.S.  Prime
Rate  Advance and shall bear interest calculated and payable as provided
in this Agreement.  If, as a result of events (other than the receipt of
Compensation) occurring subsequent to the receipt by such Lender of  any
Compensation,  the additional cost or the reduction in  income  was  not
suffered  by  such  Lender, such Lender will  forthwith  refund  to  the
Borrowers the Compensation and any interest paid thereon.

13.9 Environmental Indemnity.  The Borrowers will protect, indemnify and
hold  the  Lenders and all directors, officers, employees and agents  of
each  of  the  Lenders harmless from and against any and all  actual  or
potential   claims,   liabilities,  damages   (including   consequential
damages), losses, fines, penalties, sanctions, judgments, awards,  costs
and  expenses  whatsoever  (including,  without  limitation,  costs  and
expenses of investigating, denying or defending any of the foregoing and
costs  and expenses for preparing any necessary environmental assessment
report  or other such reports) which arise out of or relate in  any  way
to:

     (a)  the   presence,  use,  handling,  production,  transportation,
          storage,  release,  deposit,  discharge  or  disposal  of  any
          Hazardous  Materials, contaminants, wastes or other substances
          in,  on  or about any properties or assets owned, operated  or
          occupied  by SSWG and its Subsidiaries, whether by  SSWG,  its
          Subsidiaries or any other person;

     (b)  any  remedial  action taken by the Lenders in connection  with
          any  matter  referred to in paragraph (a),  including  without
          limitation any repair, clean-up, remediation or detoxification
          of any of such properties or assets and the preparation of any
          closure or other required plans; and

     (c)  any  breach  by  SSWG  or  any of its Subsidiaries  under  any
          Environmental Law.

If  any  Hazardous Materials are caused to be removed by SSWG or any  of
its  Subsidiaries, the Lenders or any other indemnified party, then such
Hazardous  Materials will be and remain the property  of  SSWG  or  such
Subsidiary,  as the case may be, and the Borrowers will assume  any  and
all  liability  for  such  removed Hazardous Materials.   The  Borrowers
understand  that their liability to the indemnified parties  under  this
Section  will survive the full payment and satisfaction of  all  amounts
owing  under  this  Agreement  as if this indemnity  were  separate  and
distinct from this Agreement.

13.10     Judgment Currency.  If, for the purposes of obtaining judgment
in  any  court,  it is necessary to convert a sum due hereunder  to  any
Lender  from  the  Original  Currency into the  Judgment  Currency,  the
parties hereto agree, to the fullest extent that they may effectively do
so,  that the rate of exchange used shall be that at which in accordance
with  normal banking procedures such Lender could purchase the  Original
Currency  with the Judgment Currency on the Business Day preceding  that
on  which final judgment is paid or satisfied.  The obligations  of  the
Borrowers in respect of any sum due in the Original Currency to a Lender
under  any  of the Credit Facility Documents shall, notwithstanding  any
judgment in any Judgment Currency, be discharged only to the extent that
on the Business Day following receipt by such Lender of any sum adjudged
to  be  so  due in such Judgment Currency, such Lender may in accordance
with  normal banking procedures purchase the Original Currency with such
Judgment  Currency. If the amount of the Original Currency so  purchased
is  less  than  the sum originally due to such Lender  in  the  Original
Currency,   the   Borrowers   agree,  as  a  separate   obligation   and
notwithstanding any such judgment, to indemnify such Lender against such
loss,  and  if the amount of the Original Currency so purchased  exceeds
the  sum  originally  due to such Lender in the Original  Currency  such
Lender agrees to remit such excess to the Borrowers.

     If  any  Group  Entity  that is resident in the  United  States  is
required  to  pay  an amount to any Lender that is not resident  in  the
United  States  (whether  pursuant to this Agreement  or  any  guarantee
executed  by  such  Group Entity), the Lender shall  provide  the  Group
Entity  with  such  forms or other documents as  the  Group  Entity  may
reasonably request to reduce or eliminate withholding tax in the  United
States otherwise applicable to such payment.

13.11       Governing  Law.  This  Agreement  and  the  Credit  Facility
Documents  shall be governed by, and construed in accordance  with,  the
laws  of  the  Province  of British Columbia and  of  Canada  applicable
therein  and  shall  be  treated  in all respects  as  British  Columbia
contracts.

13.12     Consent to Jurisdiction.  The Borrowers and the Lenders hereby
irrevocably  submit  to the jurisdiction of any British  Columbia  court
sitting  in  Vancouver, British Columbia, in any  action  or  proceeding
arising  out  of  or  relating to this Agreement  or  any  other  Credit
Facility  Document, and each of them hereby irrevocably agrees that  all
claims  in  respect of any such action or proceeding may  be  heard  and
determined  in  such  British  Columbia  court.  Each  of  them   hereby
irrevocably  waives, to the fullest extent each may effectively  do  so,
the  defence of an inconvenient forum to the maintenance of such  action
or  proceeding.  Nothing in this Section shall affect the right  of  the
Lenders to serve legal process in any other manner permitted by  Law  or
affect  the  right  of  the Lenders to bring any  action  or  proceeding
against  the  Borrowers  or  their  property  in  the  courts  of  other
jurisdictions.

13.13     Successors and Assigns.  This Agreement shall become effective
when  it  has  been  executed  by  the Borrowers  and  the  Lenders  and
thereafter  shall  be  binding upon and enure  to  the  benefit  of  the
Borrowers,  the  Lenders and their respective successors  and  permitted
assigns.  The Borrowers shall not have the right to assign their  rights
or  obligations  hereunder  or any interest  herein  without  the  prior
consent of the Lenders.  The Lenders may assign all or any part  of  the
Commitment and the Outstandings under this Agreement upon notice to  the
Borrowers, provided that:

     (a)  TD Bank shall not assign its interest in this Agreement to any
          person that is a Non-Resident of Canada;

     (b)  TDUS  shall not assign its interest in this Agreement  to  any
          person that is not a resident of the United States; and

     (c)  TDUK  shall not assign its interest in this Agreement  to  any
          person that is not:

               (i)  a "bank" within the meaning of section 840(a) Income
               and Corporations Taxes Act 1998; and

               (ii) within the charge to United Kingdom corporation tax;

          and  the Borrowers shall not be responsible for any stamp duty
          payable on an assignment by TDUK.

13.14     Conflict. In the event of a conflict between the provisions of
this Agreement and the provisions of any other Credit Facility Document,
the provisions of this Agreement shall prevail.

13.15     Severability. The provisions of this Agreement are intended to
be  severable. If any provision of this Agreement shall be held  invalid
or unenforceable in whole or in part in any jurisdiction, such provision
shall,  as  to such jurisdiction, be ineffective to the extent  of  such
invalidity  or  unenforceability without in  any  manner  affecting  the
validity  or  enforceability thereof in any other  jurisdiction  or  the
remaining provisions hereof in any jurisdiction.

13.16      Prior  Understandings. This Agreement  supersedes  all  prior
understandings  and  agreements, whether  written  or  oral,  among  the
parties hereto relating to the transactions provided for herein.

13.17      Time of Essence. Time shall be of the essence hereof.

13.18      Counterparts. This Agreement may be executed in counterparts,
each  of  which  shall be deemed an original and which, taken  together,
shall   constitute  one  and  the  same  instrument,  and  any  executed
counterpart may be delivered by facsimile.


     IN  WITNESS WHEREOF, the parties hereto have caused this  Agreement
to  be executed by their respective authorized officers, as of the  date
first above written.


SPARKLING SPRING WATER GROUP LIMITED

Per: ______________________________
     Authorized Signatory



SPARKLING SPRING WATER LIMITED

Per: ______________________________
     Authorized Signatory



SPARKLING SPRING WATER UK LIMITED

Per: ______________________________
     Authorized Signatory



SPRING WATER, INC.

Per: ______________________________
     Authorized Signatory



THE TORONTO-DOMINION BANK

Per: ______________________________
     Authorized Signatory


TORONTO DOMINION (TEXAS), INC.

Per: ______________________________
     Authorized Signatory


THE TORONTO-DOMINION BANK, LONDON BRANCH

Per: ______________________________
     Authorized Signatory




                           APPENDIX 1

                  MANDATORY LIQUID ASSET COST

1.    The  Mandatory Liquid Asset Cost to be included in Sterling  Libor
with  respect  to  a  Sterling  Libor  Advance  shall,  subject  to  the
following, be the percentage per annum calculated in accordance with the
following formula:

                      BY + L(Y-X) + S(Y-Z)

                         100 - (B + S)

where, as of the day of the calculation:

B   =    The  percentage  of  TDUK's  eligible  liabilities   which  the
         Bank  of  England then requires TDUK to hold on a  non-interest
         bearing  deposit  account in accordance  with  its  cash  ratio
         requirements.

Y   =    The   rate  at   which   Sterling   deposits   in   an   amount
         comparable  with  such Sterling Libor Advance  are  offered  by
         TDUK  to  leading banks in the London interbank  market  at  or
         about  11:00  a.m. (London time) on such day for  the  relevant
         period.

L   =    The  percentage  of  eligible  liabilities  which  (as a result
         of  the requirements of the Bank of England) TDUK maintains  as
         secured  money  with  members  of the  London  Discount  Market
         Association  or  in  certain marketable or callable  securities
         approved  by  the Bank of England, which percentage  shall  (in
         the  absence  of evidence that any other figure is appropriate)
         be conclusively presumed to be 5%.

X   =    The  rate  at  which  secured  Sterling  deposits in an  amount
         comparable  to  such Sterling Libor Advance may  be  placed  by
         TDUK with members of the London Discount Market Association  at
         or  about  11:00  a.m.  (London time)  on  such  date  for  the
         relevant  period  or, if greater, the rate  at  which  Sterling
         bills  of  exchange (of an amount comparable to  such  Sterling
         Libor  Advance  and  of a tenor equal to the  relevant  period)
         eligible  for  rediscounting at the  Bank  of  England  can  be
         discounted  in  the London Discount Market at  or  about  11:00
         a.m. (London time) on that date.

S   =    The   percentage   of  TDUK's  eligible liabilities  which  the
         Bank of England required TDUK to place as a special deposit.

Z   =    The  percentage  interest  rate  per  annum allowed by the Bank
         of England on special deposits.

2.   For the purposes of this Appendix 1:

     (a) "eligible  liabilities" and "special deposits" shall  bear  the
         meanings  ascribed to such terms from time to time by the  Bank
         of England;

     (b) "relevant period" in relation to each Interest Period means:

         (i)  if it is three months or less, that Interest Period; or

         (ii) if it is more than three months, three months;

3.    In the application of the above formula, B, Y, L, X, S and Z  will
be included in this formula as figures and not as percentages, e.g. if B
=  0.5% and Y = 15%, BY will be calculated as 0.5 x 15 and not as 0.5% x
15%.

4.    The  additional  rate  computed by TDUK in  accordance  with  this
Appendix  1 shall, if not so already, be rounded upward to four  decimal
places.

5.   In the event of a change in circumstances (including the imposition
of  alternative or additional official requirements) which  renders  the
above  formula  inapplicable, TDUK shall notify  the  Borrowers  of  the
manner  in  which  the additional rate shall thereafter  be  determined,
which  shall reflect the additional costs following such change incurred
by TDUK at such time and from time to time.




                           APPENDIX 2

                    INTEREST RATES AND FEES


     The  Margin applicable to Canadian Prime Rate Advances, U.S.  Prime
Rate  Advances, U.S. Libor Advances, Sterling Libor Advances,  Alternate
Sterling  Rate  Advances,  the  Stamping  Fees  applicable  to  Bankers'
Acceptances  and  the  fees payable on Letters of Credit  and  Guarantee
Letters  shall  be  determined  based on the  Senior  Debt  to  Adjusted
Consolidated EBITDA Ratio as at each fiscal quarter end of the  Borrower
as follows:


1.   If the Senior Debt to Adjusted Consolidated EBITDA Ratio is greater
     than or equal to 2.0 to 1:

        Margin for Canadian Prime Rate       1.25% per annum
          Advances
        Margin for U.S. Prime Rate           1.25% per annum
          Advances
        Margin for U.S. Libor Advances       2.25% per annum
        Margin for Sterling Libor Advances   2.25% per annum
        Margin for Alternate Sterling Rate   2.25% per annum
          Advances
        Stamping Fee                         2.25% per annum
        Letter of Credit/Guarantee Letter    1.25% per annum
          Fee


2.   If  the  Senior Debt to Adjusted Consolidated EBITDA Ratio is  less
     than 2.0 to 1:


        Margin for Canadian Prime Rate       1.00% per annum
          Advances
        Margin for U.S. Prime Rate           1.00% per annum
          Advances
        Margin for U.S. Libor Advances       2.00% per annum
        Margin for Sterling Libor Advances   2.00% per annum
        Margin for Alternate Sterling Rate   2.00% per annum
          Advances
        Stamping Fee                         2.00% per annum
        Letter of Credit/Guarantee Letter    1.00% per annum
          Fee