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Exhibit 10.11

                               SEVERANCE AGREEMENT

     THIS SEVERANCE AGREEMENT ("Agreement") is dated as of December 5, 2005 and
is by and between Vermont Pure Holdings, Ltd., a Delaware corporation having an
office located at 1050 Buckingham Street, Watertown, Connecticut 06795
("Company"), and Timothy G. Fallon, an individual, with an address at 411 Sarles
Street, Mt. Kisco, New York 10549 ("Fallon").

                                    RECITALS

     Effective November 1, 2005, Fallon voluntarily resigned from the Company
after serving for many years as its Chief Executive Officer, among other
positions. In recognition of his significant contributions to the Company, and
in return for his promises and agreements in this Agreement, the Company desires
to compensate Fallon as set forth below. In return for such compensation, Fallon
desires to carry out such promises and agreements.

     ACCORDINGLY, in consideration of the foregoing and of the mutual agreements
and undertakings set forth herein, the Company and Fallon agree as follows:

SECTION 1. SEVERANCE.

1.1. Provided that Fallon is not in breach of this Agreement, the Company shall
pay to Fallon the following severance payments: (i) a payment of $50,000.00 on
May 1, 2006, (ii) seventeen (17) monthly payments of $8,333.33 commencing June
1, 2006 and ending October 1, 2007, and (ii) a final payment of $8,333.39 on
November 1, 2007, for a total of $200,000.00.

SECTION 2. CONSULTING AND LITIGATION SERVICES.

2.1. "Consulting Services" shall mean such advice, consultation and other
assistance and services respecting the general business of the Company as the
Company may reasonably request from Fallon from time to time.

2.2.1. "Litigation Services" shall mean such assistance with respect to the
prosecution and defense of the litigation known as Vermont Pure Holdings, Ltd.
v. Nestle Waters North America, Inc., United States District Court (D. Mass.),
Civil Action No. 03-11465-DPW (the "Nestle Litigation"), as further provided in
Section 4 of this Agreement, as the Company and/or its counsel may reasonably
request from Fallon from time to time.

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SECTION 3. ENGAGEMENT TO PROVIDE CONSULTING SERVICES.

3.1. The Company hereby retains Fallon to render Consulting Services to it, and
Fallon hereby agrees to render Consulting Services to the Company, for a period
of two years, all in accordance with and subject to the terms and provisions of
this Agreement. Fallon agrees to use commercially reasonable efforts to complete
and achieve all such services, in a time and manner consistent with the need for
those services. Nothing in this Agreement shall prevent, limit or restrict
Fallon from entering into employment or consulting agreements with, or otherwise
providing services as an employee or providing consulting services to, any other
person or entity; provided, however, that Fallon shall not provide services as
an employee or consulting services, in any form, to a third party in violation
of Section 4.4 of the Employment Agreement dated as of January 1, 2005 by and
between the Company and Fallon (the "Fallon Employment Agreement"), as amended
by Section 8 of this Agreement or as may be further amended from time to time.

3.2. Fallon shall render Consulting Services at such times and places as the
Company may reasonably request. Recognizing that Fallon intends to be engaged in
full-time employment with another company, Company personnel will endeavor to
utilize telephone, e-mail and internet services to communicate with Fallon when
that is practicable.

SECTION 4. ENGAGEMENT TO PROVIDE LITIGATION SERVICES.

4.1. The Company hereby retains Fallon to render Litigation Services to it, and
Fallon agrees to render Litigation Services to the Company, until the Litigation
Termination Date (as hereinafter defined), all in accordance with and subject to
the terms and provisions of this Agreement. Until the entry of a final,
non-appealable order or judgment in the Nestle Litigation (including any court
proceedings related to the Nestle Litigation that may be filed subsequently)
(the "Litigation Termination Date"), Fallon will cooperate fully with the
Company and/or its counsel in the prosecution or defense of the Nestle
Litigation and in any such related court proceedings. Fallon's full cooperation
in connection with such matters will include, but not be limited to, meeting and
consulting with counsel to assist with the development of the case and to
prepare for discovery or trial, and acting as a witness on behalf of the
Company. Until the Litigation Termination Date, Fallon will also cooperate fully
with the Company and/or its counsel in connection with any investigation or
review of any federal, state or local regulatory authority respecting the Nestle
Litigation.

4.2. Fallon shall render Litigation Services at such times and places as the
Company may reasonably request. Recognizing that Fallon intends to be engaged in
full-time employment with another company, Company personnel and counsel will
endeavor to utilize telephone, e-mail and internet services to communicate with
Fallon when that is practicable. Fallon understands and agrees that his
compensation under this Agreement is the only payment he will receive for time
(but not out-of-pocket expenses, which will be reimbursed to him as provided in
this Agreement) he may spend in connection with the activities referred to in
Section 4.1, regardless of the duration of the Nestle Litigation.

SECTION 5. CONFIDENTIAL INFORMATION; RETURN OF PROPERTY; ENFORCEMENT.

5.1 Fallon acknowledges that:

     (a) Fallon has obtained, and during his services as provided in this
Agreement will obtain, secret and confidential information concerning the
business of the Company and its affiliates,

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including, without limitation, customer lists and sources of supply, their needs
and requirements, the nature and extent of contracts with them, and related
cost, price and sales information.

     (b) The Company and its affiliates will suffer substantial and irreparable
damage which will be difficult to compute if, during his services as provided
herein or thereafter, Fallon should divulge secret and confidential information
relating to the business of the Company and its affiliates heretofore or
hereafter acquired by him.

     (c) The provisions of this Agreement are reasonable and necessary for the
protection of the business of the Company and its affiliates.

5.2 Fallon agrees that he will not at any time, either during his services
hereunder or at any time thereafter, divulge to any person, firm or corporation
any information obtained or learned by him during the course of providing
services to the Company, with regard to the operational, financial, business or
other affairs of the Company and its affiliates, and their respective officers
and directors, including, without limitation, trade secrets, customer lists,
sources of supply, pricing policies, operational methods or technical processes,
except (i) with the express written consent of the Company; (ii) to the extent
that any such information is lawfully in the public domain other than as a
result of Fallon's breach of any of his obligations hereunder; or (iii) where
required to be disclosed by court order, subpoena or other government process.
In the event that Fallon shall be required to make any disclosure pursuant to
the provisions of clause (iii) of the preceding sentence, Fallon promptly, but
in no event more than 48 hours after learning of such subpoena, court order, or
other government process, shall notify the Company, by personal delivery or by
fax, confirmed by mail, to the Company and, if the Company so elects and at the
Company's expense, Fallon shall (x) take all reasonably necessary steps
requested by the Company to defend against the enforcement of such subpoena,
court order or other government process, and (y) permit the Company to intervene
and participate with counsel of its choice in any proceeding relating to the
enforcement thereof.

5.3 At any time the Company may so request, Fallon will promptly deliver to the
Company all memoranda, notes, records, reports, manuals, drawings, blueprints
and other documents (and all copies thereof) relating to the business of the
Company and its affiliates and all property associated therewith, which he may
then possess or have under this control.

5.4 If Fallon commits a breach, or threatens to commit a breach, of any of the
provisions of this Section 5, the Company shall have the right and remedy to
have the provisions of this Agreement specifically enforced by any court having
jurisdiction over the matter, it being acknowledged and agreed by Fallon that
the services being rendered hereunder to the Company are of a special, unique
and extraordinary character and that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company. Such right and remedy shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
under law or equity.

5.5 If any provision of this Section 5 is held to be unenforceable because of
the scope, duration or area of its applicability, the tribunal making such
determination shall have the power to modify such scope, duration or area, or
all of them, and such provision or provisions shall then be applicable in such
modified form.

SECTION 6. COMPENSATION AND REIMBURSEMENT.

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6.1. As full compensation for providing Consulting Services and Litigation
Services to the Company, provided that Fallon is not in breach of this
Agreement, the Company shall pay Fallon a total of $50,000.00 on May 1, 2006.

6.2. The Company shall reimburse Fallon for his reasonable out-of-pocket
expenses for travel, lodging and meals, approved in advance by the Company and
incurred by Fallon incident to his providing Consulting Services and Litigation
Services hereunder. Within ten (10) days following the date on which he incurs
any reimbursable expense in accordance with this Section, Fallon will furnish
the Company with a written statement and all receipts and vouchers documenting
such expenses incurred, in a form, and accompanied by such documentation, as may
be reasonably satisfactory to the Company. The Company shall promptly reimburse
Fallon after receipt of any such statement of expenses.

6.3 Anything in this Agreement to the contrary notwithstanding, if the Company
requests Consulting Services prior to the second anniversary of this Agreement
or Litigation Services prior to the Litigation Termination Date, and Fallon
willfully or intentionally fails or refuses to provide such Consulting or
Litigation Services, then (i) Fallon shall be liable to the Company for the
return of all amounts paid to Fallon under Section 6.1 of this Agreement and
(ii) Fallon shall have no right to any amounts that are not yet due and payable
to him under Section 1.1 of this Agreement at the time of such failure or
refusal, which unpaid amounts shall be forfeited. The parties agree that the
remedy in the first sentence of this Section 6.3 shall constitute liquidated
damages to the Company for the failure or refusal described in that sentence and
shall not constitute a penalty. The recovery of such amounts by the Company
shall not affect the liability of Fallon to legal process in connection with the
Nestle Litigation or otherwise, nor shall it affect any other claim the Company
may have against Fallon for breach of this Agreement or any other agreement.

SECTION 7. INDEPENDENT CONTRACTOR; NO CONFLICTS.

7.1 Fallon shall be deemed to be, and function as, an independent contractor,
and not an employee of the Company, under this Agreement. The Company will not
provide Fallon with any employee benefits or make any unemployment contributions
on his behalf, nor will Fallon be entitled to any unemployment benefits or
workers compensation insurance coverage. Fallon shall have no authority to act
on the Company's behalf or to commit the Company to any course of conduct, and
shall make no representation to the contrary to any person or entity not a party
hereto.

7.2 Fallon represents and warrants to the Company that he is not a party to any
agreement or understanding, oral or written, effective on the date first written
above or applicable during the term of this Agreement, restricting or limiting
his ability to observe and perform the terms and provisions hereof on his part
to be observed and performed; and he will not become a party to any such
agreement or understanding during while this Agreement is in effect without the
Company's prior written consent.

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SECTION 8. CONFIRMATION OF CERTAIN UNDERSTANDINGS REGARDING THE FALLON
EMPLOYMENT AGREEMENT.

8.1 The Company and Fallon hereby confirm the following understandings and
agreements regarding the Fallon Employment Agreement:

     (a) The determination of Fallon's bonus for fiscal year 2005, as provided
in Section 3.2.2(i) of the Fallon Employment Agreement, is based upon the ratio
of actual earnings before interest, taxes, depreciation and amortization
("EBITDA") to target annual EBITDA approved in the budget for fiscal year 2005
by the Company's Board of Directors. In determining EBITDA, the Company will
determine "earnings" as "net income," in accordance with United States generally
accepted accounting principles, consistently applied, without adjustments. For
the avoidance of doubt, the Company intends to expense in fiscal year 2005 the
aggregate amounts payable under Sections 1.1 and 6.1 of this Agreement. The
bonus payable to Fallon pursuant to Section 3.2.2(i) of the Fallon Employment
Agreement will not be less than $110,000.00. Fallon has earned the bonus set
forth in Section 3.2.2(ii) of the Fallon Employment Agreement (which deals with
compliance by the Company with the financial covenants set forth in its loan
agreement with its principal lender), and the unpaid amount of such bonus will
be paid in accordance with the Company's customary practices.

     (b) The terms of the restricted stock award described in Section 3.3 of the
Fallon Employment Agreement are set forth in that certain Restricted Stock Award
Agreement - 2004 Stock Incentive Plan (the "Award Agreement") between the
Company and Fallon which relates to a grant of 75,000 restricted shares (the
"Award Shares") of the Company's Common Stock. Pursuant to Sections 3(c) and
3(f) of the Award Agreement, all of the Award Shares failed to vest and are
forfeited to the Company at no cost. In furtherance of the foregoing, Fallon
irrevocably appoints either of Bruce MacDonald or American Stock Transfer &
Trust Company, each acting singly and each with full power of substitution in
the premises, as attorney to effect the transfer of the Award Shares to the
treasury of the Company, and agrees to execute such other documents (including
without limitation signature guarantees) in connection with the aforesaid
transfer as either of them shall request.

     (c) The provisions and obligations set forth in Section 4.4 of the Fallon
Employment Agreement, dealing with non-competition, survive Fallon's
resignation. Said Section 4.4 is hereby amended to extend the period of
non-competition from 12 months to 24 months and, as so amended, shall read in
its entirety as follows:

          4.4 Non-Competition. During the Employment Term and for a period of 24
     months thereafter, the Executive shall not, without the prior written
     permission of the Company, in the United States, its territories and
     possessions, directly or indirectly, (i) enter into the employ of or render
     any services to any person, firm or corporation engaged in any Competitive
     Business (as defined below); (ii) engage in any Competitive Business for
     his own account; (iii) become associated with or interested in any
     Competitive Business as an individual, partner, shareholder, creditor,
     director, officer, principal, agent, employee, trustee, consultant, advisor
     or in any other relationship or capacity; (iv) employ or retain, or have or
     cause any other person or entity to employ or retain, any person who was
     employed or retained by the Company or its affiliates while the Executive
     was employed by the Company; or (v) solicit, interfere with, or endeavor to
     entice away from the Company or its affiliates any of their customers or
     sources of supply. However, nothing in this Agreement shall preclude the
     Executive from investing his personal assets

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     in the securities of any Competitive Business if such securities are traded
     on a national stock exchange or in the over-the-counter market and if such
     investment does not result in his beneficially owning, at any time, more
     than 4.9% of the publicly-traded equity securities of such competitor.
     "Competitive Business" shall mean any business or enterprise which (a)
     designs, sells, manufactures, markets and/or distributes spring or purified
     water products or still spring or purified water beverages in the home and
     office market, or (b) engages in any other business in which Company or its
     affiliates is involved at any time during the 12-month period immediately
     prior to the termination of the Executive's employment.

SECTION 9. RELEASE OF CLAIMS.

9.1 Reference is made to the voluntary termination by Fallon of his employment
with the Company, effective at the close of business on November 1, 2005. In
connection with such termination, and as a condition to the Company's obligation
to pay or provide severance and other payments or benefits under this Agreement,
Fallon irrevocably and unconditionally releases, acquits and forever discharges
the Company, its affiliated and related corporations and entities, and each of
their predecessors and successors, and each of their agents, directors,
officers, trustees, attorneys, present and former employees, representatives,
and related entities (collectively referred to as the "Released Entities") from
any and all charges, complaints, claims, liabilities, obligations, promises,
agreements, controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, damages and expenses (including attorneys' fees and
costs actually incurred) arising out of or in connection with his employment
with or termination of employment from the Company, which Fallon now has, owns
or holds, or claims to have, own or hold, or which at any time heretofore, had
owned or held, or claimed to have owned or held, or which Fallon at any time
hereafter may have, own or hold, or claim to have owned or held against the
Released Entities, based upon, arising out of or in connection with his
employment with or termination of employment from the Company up to the date of
this Release, including but not limited to, claims or rights under any federal,
state, or local statutory and/or common law in any way regulating or affecting
the employment relationship, including but not limited to Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination
in Employment Act and any other federal, state, local statutory and/or common
law regulating or affecting the employment relationship. Fallon acknowledges and
understands that he is waiving all of his possible claims arising out of or in
connection with his employment with or termination of employment from the
Company.

9.2 Fallon acknowledges that he has been provided at least twenty-one (21) days
to consider whether to sign this Release, that he has been advised to consult
with an attorney of his choosing concerning this Release, and that he has
executed and delivered this release and waived any claims knowingly and
willingly. Fallon may revoke this Release within seven (7) days after it is
signed, and it shall not become effective or enforceable until such seven (7)
day revocation period has expired. Such revocation shall not affect the
enforceability by the Company against Fallon of any other provision of this
Agreement.

SECTION 10. TERM.

10.1 Unless sooner terminated, the obligations of Fallon to provide Consulting
Services shall terminate on the second anniversary of the date of this
Agreement; the obligations of Fallon to provide Litigation Services shall
terminate on the Litigation Termination Date; and the obligations of Fallon
under Section 5 shall terminate on the later of (i) the fifth anniversary of the

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date of this Agreement or (ii) two years after the Litigation Termination Date.
This Agreement shall terminate at the option of the Company if, pursuant to
Section 9.2, Fallon revokes the Release set forth in Section 9.

SECTION 11. CONSTRUCTION OF AGREEMENT.

11.1. No waiver of any breach or default hereunder will be valid unless in a
writing signed by the waiving party. No failure or other delay by any party
exercising any right, power, or privilege hereunder will be or operate as a
waiver thereof, nor will any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. No amendment or modification of this Agreement will be valid or
binding unless in a writing signed by both Fallon and the Company.

11.2. All of Fallon's representations and warranties made in this Agreement and
all terms and provisions hereof which by their terms are expressly required to
be observed and performed by the Company or Fallon after the termination of this
Agreement shall continue thereafter in full force and effect.

11.3. All notices provided for in this Agreement shall be in writing and shall
be deemed to be given when delivered personally to the party to receive the
same, when transmitted by electronic means or when mailed first class, postage
prepaid by certified mail, return receipt requested, addressed to the party to
receive the same at the applicable addresses set forth below or such other
address as the party to receive the same shall have specified by written notice
give in the manner provided for in this Section. All notices shall be deemed to
have been given as of the date of personal delivery, transmittal or mailing
thereof.

     (a) If to Fallon: Mr. Timothy Fallon, 411 Sarles Street, Mount Kisco, New
York 10549.

     (b) If to the Company: Vermont Pure Holdings, Ltd., 1050 Buckingham Street,
Watertown, Connecticut 06795, Attention: CEO, with a copy to: Dean F. Hanley,
Esq., Foley Hoag LLP, 155 Seaport Boulevard, Boston, Massachusetts 02210.

11.4. This Agreement shall be binding upon and inure to the benefit of the
Company's successors and assigns. If, prior to November 1, 2007, there is a
transaction in which a majority of the voting stock of the Company, or all or
substantially all of the Company's assets, are transferred to a third party that
is not an affiliate of the Company, then all amounts payable to Fallon pursuant
to Sections 1.1 and 6.1 of this Agreement ($250,000.00 in the aggregate) that
have not been paid to Fallon shall be and become due and payable to him by the
Company upon the closing of such transaction; provided, however, that in case
such closing would occur prior to May 1, 2006, then, prior to such closing, the
Company and Fallon will establish an escrow or similar arrangement pursuant to
which Fallon will be paid the amounts due to him by reason of this Section 11.4
on or after May 1, 2006. The acceleration of such payments shall not affect
Fallon's agreements hereunder. For the avoidance of doubt, severance payments
accelerated as provided in this Section shall no longer be subject to Section
6.3(ii).

11.5. This Agreement is to be construed pursuant to the laws of the State of
Delaware, without regard to the laws affecting choice of law.

11.6. Should any provision of this Agreement become legally unenforceable, no
other provision

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of this Agreement shall be affected, and this Agreement shall continue as if the
Agreement had been executed absent the unenforceable provision.

11.7. This Agreement represents the full agreement between the Company and
Fallon with respect to the subject matter hereof and the Company and Fallon have
made no agreements, representations or warranties relating to the subject matter
of this Agreement that are not set forth herein except for provisions of the
Fallon Employment Agreement that survive the termination of Fallon's employment
with the Company. Except for provisions of the Fallon Employment Agreement that
survive the termination of Fallon's employment with the Company, this Agreement
supersedes any and all other agreements, oral or written, that may define the
relationship between Fallon and the Company or any affiliate of the Company, and
all of such other agreements are hereby terminated, without liability to any
party thereto. Nothing in this Agreement confers any rights or remedies on any
person or entity or than the parties hereto.

11.8. This Agreement may be executed by the parties in separate counterparts,
each of which when so executed and delivered will be an original, but all of
which together will constitute one and the same agreement. In pleading or
proving this Agreement, it will not be necessary to produce or account for more
than one such counterpart.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and Fallon has set his hand both as of the date and
year first above mentioned.

                                        VERMONT PURE HOLDINGS, LTD.


                                        BY: /s/ PETER K. BAKER
                                            ------------------------------------
                                            PETER BAKER


                                            /s/ TIMOTHY G. FALLON
                                            ------------------------------------
                                            TIMOTHY G. FALLON