THIS  INSTRUMENT  IS  SUBJECT  TO  THE  SUBORDINATION  AND  PLEDGE
     AGREEMENT,  DATED AS OF OCTOBER __, 2000,  AMONG THE INITIAL PAYEE
     HEREOF,  THE  MAKER  HEREOF,  PLATINUM  ACQUISITION  CORP.  (F/K/A
     VERMONT PURE HOLDINGS,  LTD.), VERMONT PURE SPRINGS, INC., WEBSTER
     BANK,  AND THE "AGENT"  REFERRED TO  THEREIN,  WHICH,  AMONG OTHER
     THINGS,  SUBORDINATES THE MAKER'S  OBLIGATIONS TO THE PAYEE TO THE
     MAKER'S  OBLIGATIONS  TO THE  HOLDERS  OF SENIOR  LIABILITIES,  AS
     DEFINED IN SUCH AGREEMENT.

                          SUBORDINATED PROMISSORY NOTE

US$5,200,000.00                                                October ___, 2000


     THis note is one of five promissory  notes (the "BAKER NOTES") executed and
delivered as of the date hereof by Vermont Pure Holdings,  LTD. (the "MAKER"), a
Delaware  corporation  formerly  named "VP Merger  Parent,  Inc.,"  pursuant  to
Section 2.5.2 of the Agreement and Plan of Merger and  Contribution  dated as of
May 5, 2000, as amended,  by and among (i) the Maker; (ii) Platinum  Acquisition
Corp., a Delaware  corporation  formerly  named  "Vermont Pure Holdings,  Ltd.";
(iii) VP  Acquisition  Corp., a Delaware  corporation;  (iv) Crystal Rock Spring
Water Company, a Connecticut corporation; and (v) Henry E. Baker, Joan A. Baker,
John B. Baker, Peter K. Baker, Ross S. Rapaport, not individually but as Trustee
of the Peter K. Baker Life Insurance  Trust,  the John B. Baker Insurance Trust,
and U/T/A dated  December  16, 1991 F/B/O Joan Baker et al.,  respectively  (the
persons  listed  in  this  clause  (v),   collectively,   the   "STOCKHOLDERS").


         The  maker  hereby  promises  to pay to the  order of  Peter  K.  Baker
(including any subsequent  holder of this note, the "PAYEE"),  the principal sum
of Five Million Two Hundred  Thousand  United States Dollars  (US$5,200,000.00),
with  interest  on the  unpaid  principal  sum  from  time to  time  outstanding
hereunder  at an annual rate equal to the lesser of (i) with  respect to overdue
amounts  (except  to the  extent  not paid  when  due  because  payment  is then
prohibited  pursuant  to the terms of the  Subordination  Agreement,  as defined
below,  from and  after  the time  due,  seventeen  per cent  (17%),  compounded
quarterly  on each  February  20, May 20,  August 20, and  November 20, and with
respect to all other amounts,  twelve per cent (12%) simple  interest;  and (ii)
the maximum lawful rate of interest;  in each case to be applied on the basis of
the actual number of days elapsed and a 365-day year.

         Subject to acceleration as provided herein, payments in respect of this
Note will be made on the following schedule:

                  (i)  Interest  will be payable in arrears for the  three-month
         periods ended on each January 31, April 30, July 31, AND OCTOBER 31, IN
         EACH  CASE  NOT MORE  THAN 20 DAYS  AFTER  THE END OF SUCH  THREE-MONTH
         PERIOD  (I.E.,  February 20, May 20,  August 20, and  November  20). In
         addition to any other  applicable  rights or remedies of the Payee, any
         interest  not paid  when  due  will  thereafter  bear  interest  at the
         applicable rate stated above.

                  (ii)  Commencing on the third  anniversary of the date of this
         Note,  principal  will be repayable  quarterly on each February 20, May
         20, August 20, and November 20 (in each case, together with all accrued
         interest  payable  on  such  date)  in  accordance  with  the  attached
         amortization schedule.

                  (iii) The entire amount of  indebtedness  represented  by this
         Note will be due and payable not later than the seventh  anniversary of
         the date of this Note.

         Any amount owing hereunder that is not paid because prohibited pursuant
to the terms of the  Subordination  Agreement,  as in effect on the date hereof,
will be paid as soon as to do so is not so prohibited.

         ACCELERATION.  At the Payee's option, the entire amount of indebtedness
represented  by this Note will become due and payable  immediately  upon written
notice  of  acceleration  given by the  Payee to the Maker  following  any:  (i)
liquidation or dissolution of the Maker,  or other  termination or winding-up of
its existence or business;  (ii) sale of all or substantially  all of the assets
or capital  stock of the  Maker;  or (iii)  acceleration  of the due date of the
Senior  Liabilities,  as defined in the  Subordination  Agreement,  or any other
indebtedness of the Maker for borrowed money.

         In addition, the entire amount of indebtedness represented by this Note
will  become due and  payable,  automatically  and  without  any notice or other
action, immediately upon any: (i) appointment of a receiver for the Maker or its
assets; (ii) assignment by the Maker for the benefit of its creditors;  or (iii)
institution  by or  against  the  Maker  of any  proceedings  under  bankruptcy,
insolvency,  or similar laws, which in the case of any such institution  against
the Maker, are not dismissed within 90 days.

         For purposes of the  preceding two  paragraphs,  any event of the types
described  therein  involving  one or more of the Maker's  subsidiaries  will be
deemed to have  occurred  with  respect to the Maker if such  subsidiary  (-ies)
represent  more than 50% (by  either  book  value or fair  market  value) of the
consolidated assets of the Maker and all of its consolidated subsidiaries.

         PREPAYMENT.  The  Maker  will  have the  right  to  prepay  the  unpaid
principal amount of this Note in full at any time, or in part from time to time,
on 30 day's prior written notice to the payee and the other holders of the Baker
Notes;  provided,  that by written  notice  executed by all holders of the Baker
Notes given to the Maker within 20 days following any such notice,  such holders
may require the Maker to allocate the aggregate  amount proposed to be repaid to
all of them among such holders in such proportions as they may specify.

         Any  prepayment  of this Note  will  include  all  accrued  and  unpaid
interest on the principal amount prepaid.

         If any prepayment of this Note is made before the third  anniversary of
the date of this  Note,  the  Maker  will  pay the  Payee a  premium  equal to a
percentage of the principal  amount prepaid,  which percentage will be (i) three
per cent (3%) with  respect to payments  made during the first year this Note is
outstanding,  (ii) two per cent (2%) with  respect to  payments  made during the
second year this Note is  outstanding,  and (iii) one per cent (1%) with respect
to payments made during the third year this Note is outstanding.

         MAKER'S WAIVER OF PRESENTMENT,ETC. The Maker hereby waives presentment,
notice, protest, and all other demands and notices.

         NO WAIVER BY PAYEE.  The  failure of the Payee to  exercise  any of its
rights,  remedies,  powers,  or  privileges  hereunder in any instance  will not
constitute a waiver thereof in respect of that or any other instance.

         ENFORCEMENT   COSTS.  The  Maker  will  pay  on  demand  all  costs  of
collection,  including all court costs and attorneys'  reasonable  fees, paid or
incurred by the Payee in enforcing this Note and its rights hereunder.

         PRO RATA  PAYMENTS.  Except  to the  extent  provided  above  under the
caption  "Prepayment,"  and except to the extent  otherwise agreed in writing by
all  holders of the Baker Notes,  ANY  PAYMENTS  BY THE MAKER IN RESPECT OF THE
BAKER NOTES WILL BE MADE PRO RATA in proportion to the  respective  amounts then
owing by the Maker in respect of each such note.

         SUBORDINATION.  This Note is subject to a  Separate  Subordination  and
Pledge Agreement (the "SUBORDINATION  AGREEMENT") dated as of October ___, 2000,
among the Payee, Ross S. Rapaport,  not individually but as Trustee of the Peter
K. Baker Life Insurance Trust, The John B. Baker Insurance Trust and u/t/a dated
December  16, 1991 f/b/o Joan Baker  et.al.,  as agent for the Payee and certain
other holders of indebtedness of the Maker (in such capacity,  the "Agent"), the
Maker,  Platinum Acquisition Corp. (f/k/a Vermont Pure Holdings,  Ltd.), Vermont
Pure  Springs,   Inc.,  and  Webster  Bank,  which,   among  other  things,  (a)
subordinates the Maker's  obligations to the Payee to the Maker's obligations to
the  holders  of Senior  Liabilities,  as  defined  in such  agreement,  and (b)
restricts  the amount and payment of principal  and interest  hereunder  and the
rights of the holder of the Note to enforce  any  provision  hereof or to access
any  collateral  security  for this  Note.  Neither  this  Note  nor any  rights
hereunder may be transferred  (and any attempt to do so will be void) unless the
proposed transferee first becomes a party to the Subordination Agreement.

         SECURITY.  This Note is secured  pursuant to the terms of the  Security
Agreement,  dated as of October __,  2000, among the Maker, Platinum Acquisition
Corp., Vermont Pure Springs, Inc.,  the Payee, the original holders of the Baker
Notes, and the Agent.

         GOVERNING  LAW.  This  Note will be  governed  by and  interpreted  and
construed  in  accordance  with the  internal  laws of the State of  Connecticut
(without reference to principles of conflicts or choice of law).

              [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]


<PAGE>

         Executed and delivered on and as of the date first above written.

                                                  VERMONT PURE HOLDINGS, LTD.
                                                  (f/k/a VP Merger Parent, Inc.)

                                                  By----------------------------
                                                    Name:
                                                    Title:



<PAGE>

                              AMORTIZATION SCHEDULE

                                 PETER K. BAKER

Loan Analysis Subordinated Debt                             Fixed Principal
7 Year Increasing Principal                       Year 1                       -

                                                  Year 2                       -

Beginning Principal     $5,200,000.00             Year 3                       -

Interest Rate                   12.00%            Year 4              460,176.99

Date of Note                10/5/2000             Year 5              690,265.49

                                                  Year 6              920,353.98

                                                  Year 7            1,610,619.47

                                                  Balloon           1,518,584.07
                                                                  --------------
                                                                    5,200,000.00
                                                                  ==============
                                         PAYMENT       PAYMENT
PAYMENT #   DATE         AMOUNT          INTEREST      PRINCIPAL        BALANCE
--------- ---------     ----------      ---------   -------------  -------------

 1       11/20/2000      43,333.33       43,333.33              -   5,200,000.00
 2        2/20/2001     156,000.00      156,000.00              -   5,200,000.00
 3        5/20/2001     156,000.00      156,000.00              -   5,200,000.00
 4        8/20/2001     156,000.00      156,000.00              -   5,200,000.00
 5       11/20/2001     156,000.00      156,000.00              -   5,200,000.00
 6        2/20/2002     156,000.00      156,000.00              -   5,200,000.00
 7        5/20/2002     156,000.00      156,000.00              -   5,200,000.00
 8        8/20/2002     156,000.00      156,000.00              -   5,200,000.00
 9       11/20/2002     156,000.00      156,000.00              -   5,200,000.00
10        2/20/2003     156,000.00      156,000.00              -   5,200,000.00
11        5/20/2003     156,000.00      156,000.00              -   5,200,000.00
12        8/20/2003     156,000.00      156,000.00              -   5,200,000.00
13       11/20/2003     271,044.25      156,000.00     115,044.25   5,084,955.75
14        2/20/2004     267,592.92      152,548.67     115,044.25   4,969,911.50
15        5/20/2004     264,141.60      149,097.35     115,044.25   4,854,867.25
16        8/20/2004     260,690.26      145,646.02     115,044.24   4,739,823.01
17       11/20/2004     314,761.06      142,194.69     172,566.37   4,567,256.64
18        2/20/2005     309,584.07      137,017.70     172,566.37   4,394,690.27
19        5/20/2005     304,407.08      131,840.71     172,566.37   4,222,123.90
20        8/20/2005     299,230.10      126,663.72     172,566.38   4,049,557.52
21       11/20/2005     351,575.23      121,486.73     230,088.50   3,819,469.02
22        2/20/2006     344,672.57      114,584.07     230,088.50   3,589,380.52
23        5/20/2006     337,769.92      107,681.42     230,088.50   3,359,292.02
24        8/20/2006     330,867.24      100,778.76     230,088.48   3,129,203.54
25       11/20/2006     496,530.97       93,876.11     402,654.86   2,726,548.68
26        2/20/2007     484,451.33       81,796.46     402,654.87   2,323,893.81
27        5/20/2007     472,371.68       69,716.81     402,654.87   1,921,238.94
28        8/20/2007     460,292.04       57,637.17     402,654.87   1,518,584.07
29        10/6/2007   1,564,141.59       45,557.52   1,518,584.07              -