<PAGE>

EXHIBIT 10.12

                AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

         This Agreement made as of the 30th day of December, 2004, by and among
VERMONT PURE HOLDINGS, LTD., a Delaware corporation with an office at 1050
Buckingham Street, Watertown, Connecticut 06795 ("HOLDINGS"), CRYSTAL ROCK LLC,
a Delaware limited liability company with an office at 1050 Buckingham Street,
Watertown, Connecticut 06795 ("CRYSTAL ROCK LLC", and collectively with
Holdings, the "OBLIGORS"), each of the lenders which is a signatory hereto
(individually, together with its successors and assigns, a "LENDER" and
collectively, the "LENDERS") and WEBSTER BANK, NATIONAL ASSOCIATION, a national
banking association with an office at 145 Bank Street, Waterbury, Connecticut
06702 (formerly known as Webster Bank), as agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, the
"AGENT").

         WHEREAS, Lenders, Agent, Holdings, Crystal Rock Spring Water Company
("CRYSTAL ROCK SPRING") and Vermont Pure Springs, Inc. ("VPS", and collectively
with Holdings and Crystal Rock Spring, the "ORIGINAL OBLIGORS") entered into a
Loan and Security Agreement dated as of March 5, 2003 in connection with a term
loan in the original principal amount of $28,500,000, an acquisition/capital
asset line of credit in an amount up to $15,000,000 and a revolving line of
credit loan in the original principal amount of $6,500,000, as amended by
Amendment No. 1 to Loan and Security Agreement dated as of December 17, 2003 and
by Amendment No. 2 to Loan and Security Agreement and Loan Documents dated as of
March 19, 2004 (as so amended, the "EXISTING AGREEMENT").

         WHEREAS, Crystal Rock Spring and VPS have each merged with and into
Holdings.

         WHEREAS, Holdings has formed Crystal Rock LLC as a wholly owned
subsidiary of Holdings.

         WHEREAS, Holdings has conveyed substantially all of its assets relating
to its business operations to Crystal Rock LLC.

         WHEREAS, Lenders, Agent and Obligors desire to amend the Existing
Agreement to reflect the merger of Crystal Rock Spring and VPS with and into
Holdings and to include Crystal Rock LLC as an Obligor hereunder.

         WHEREAS, the Lenders, Agent and Obligors are willing to make such
amendments on the terms and conditions contained herein.

         NOW, THEREFORE, in consideration of the promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

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SECTION 1. Definitions, Accounting Terms and Financial Covenants.

1.1      Definitions. For purposes of this Agreement, the following terms shall
         have the meanings specified below:

         a.       "Acquisition" means the acquisition of all the stock or other
                  ownership interests of, or all or substantially all of the
                  assets or a line of business of, any entity.

         b.       "Acquisition/Capital Asset Line of Credit" means the
                  $10,000,000 credit facility evidenced by the
                  Acquisition/Capital Asset Line of Credit Notes.

         c.       "Acquisition/Capital Asset Line of Credit Advance" shall mean
                  an Acquisition/Capital Asset Line of Credit Advance as defined
                  in Section 2.3(d).

         d.       "Acquisition/Capital Asset Line of Credit Notes" means the
                  amended and restated promissory notes of Obligors payable to
                  the order of the Lenders dated the date of this Agreement in
                  an aggregate original principal amount of up to $10,000,000,
                  as the same may be amended or amended and restated from time
                  to time.

         e.       "Additional Collateral" means (i) all General Intangibles,
                  including Payment Intangibles and Software and all Supporting
                  Obligations related thereto, (as such terms are defined in the
                  Uniform Commercial Code as in effect in Connecticut from time
                  to time) of every kind and description of the Obligors,
                  including without limitation federal, state and local tax
                  refund claims of all kinds, whether now existing or hereafter
                  arising; (ii) all of Obligors' Deposit Accounts, Letter of
                  Credit Rights and all Supporting Obligations related thereto
                  (as such terms are defined in the Uniform Commercial Code as
                  in effect in Connecticut from time to time), whether now owned
                  or hereafter created, wherever located, together with the
                  rights to withdraw from said Deposit Accounts and make
                  deposits to the same and the right to draw under Letters of
                  Credit; (iii) all monies, securities, instruments, cash and
                  other property of Obligors and the proceeds thereof, now or
                  hereafter held or received by, or in transit to, any Lender
                  from or for Obligors, whether for safekeeping, pledge,
                  custody, transmission, collection or otherwise, and all of
                  Obligors' deposits (general or special, balances, sums,
                  proceeds and credits of Obligors with any Lender at any time
                  existing); (iv) all interests in real property held or owned
                  by Obligors, including all leasehold interests; (v) all rights
                  under contracts and license agreements for water; (vi) all
                  books, records, customer lists, ledger cards, computer
                  programs, computer tapes, disks, printouts and records, and
                  other property and general intangibles at any time evidencing
                  or relating to any of the foregoing, whether now in

                                       2
<PAGE>

                  existence or hereafter created; (vii) all other personal
                  property and fixtures of the Obligors, whether now existing or
                  hereafter arising or created; and all proceeds of the
                  foregoing and all proceeds of any insurance on the foregoing.

         f.       "Additional Costs" shall mean Additional Costs as defined in
                  Section 2.8(e).

         g.       "Adirondack" means Adirondack Coffee Service, Inc., a New York
                  corporation.

         h.       "Affiliate" means (i) any person or entity directly or
                  indirectly controlling or controlled by or under direct or
                  indirect common control with any Obligor or any other obligor
                  of the Obligations, as the case may be (including, without
                  limitation, any respective director or executive officer of
                  any Obligor or any other obligor of the Obligations, as the
                  case may be), (ii) any spouse, immediate family member or
                  other relative who has the same principal residence of any
                  person described in clause (i) above, (iii) any trust in which
                  any such person or entity described in clauses (i) or (ii)
                  above has a beneficial interest and (iv) any corporation or
                  other organization of which any such persons or entities
                  described in clauses (i) or (ii) above collectively own more
                  than ten percent (10%) of the voting securities of such
                  entity.

         i.       "Agency Agreement" means the Agency Agreement among the
                  Lenders and the Agent dated the Date of Closing, as amended on
                  the date of this Agreement and as the same may be amended from
                  time to time.

         j.       "Amortization Date" means the date two years from the Date of
                  Closing.

         k.       "Applicable Law" shall mean the law in effect as of the date
                  hereof provided, however, that in the event there is a change
                  in the law which results in a higher permissible rate of
                  interest, then this Agreement and the Notes shall be governed
                  by such new law as of its effective date.

         l.       "Applicable Margin" means:

                  (i)      2.50% if the ratio of Senior Funded Debt to EBITDA is
                           greater than 2.5 to 1.0;

                  (ii)     2.25% if the ratio of Senior Funded Debt to EBITDA is
                           greater than 2.0 to 1.0 and less than or equal to 2.5
                           to 1.0;

                  (iii)    2.00% if the ratio of Senior Funded Debt to EBITDA is
                           greater than 1.5 to 1.0 and less than or equal to 2.0
                           to 1.0; and

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<PAGE>

                  (iv)     1.50% if the ratio of Senior Funded Debt to EBITDA is
                           less than or equal to 1.5 to 1.0.

                  The Applicable Margin on the date of this Agreement is 2.25%
                  and shall continue to be the Applicable Margin until a new
                  Applicable Margin is determined and goes into effect as
                  hereinafter set forth. A new Applicable Margin shall be
                  determined semiannually: (i) 120 days after the end of each
                  fiscal year of Holdings, commencing with the fiscal year
                  ending October 31, 2004, based upon the audited fiscal year
                  end financial statements for that fiscal year provided to
                  Agent within 90 days after the end of that fiscal year as
                  required in this Agreement, and (ii) 75 days after the end of
                  each second fiscal quarter of Holdings, based upon the
                  quarterly financial statements for that second fiscal quarter
                  provided to Agent within 45 days after the end of that fiscal
                  quarter as required in this Agreement. Such Applicable Margin
                  will automatically go into effect for each Interest Period
                  commencing after the date of determination and shall continue
                  in effect until a new Applicable Margin is determined and goes
                  into effect; provided, however, that if the audited fiscal
                  year end financial statements required in this Agreement are
                  not provided to Agent within 120 days after the end of any
                  fiscal year or the second quarter financial statements
                  required in this Agreement are not provided to Agent within 75
                  days after the end of any second fiscal quarter, as the case
                  may be, the Agent shall not be required to adjust the
                  Applicable Margin and the Applicable Margin that will go into
                  effect for each Interest Period commencing after that 120th
                  day or 75th day, as the case may be, shall be 2.50% until a
                  new Applicable Margin is determined and goes into effect
                  unless otherwise agreed to by the Lenders.

         m.       "Assignee" shall mean Assignee as defined in Section 9.3.

         n.       "Business Day" means any day other than a Saturday, Sunday or
                  day which shall be in the State of Connecticut a legal holiday
                  or day on which commercial banks in Hartford, Connecticut are
                  required or authorized by law to close.

         o.       "Capital Assets" means assets that, in accordance with GAAP,
                  are required or permitted to be depreciated or amortized on
                  Holdings' consolidated balance sheet.

         p.       "Capital Expenditures" mean expenditures for purchase,
                  acquisition or lease of Capital Assets.

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<PAGE>

         q.       "Capital Leases" means capital leases, conditional sales
                  contracts and other title retention agreements relating to the
                  purchase or acquisition of Capital Assets.

         r.       "Code" means the Internal Revenue Code of 1986, as amended, or
                  any successor federal tax code, and any reference to any
                  provision shall be deemed to include a reference to any
                  successor provision or provisions.

         s.       "Collateral" means Receivables, Inventory, Equipment, Patents,
                  Trademarks, Investment Property, Additional Collateral, but
                  excluding personal property subject to a purchase money lien
                  permitted by Section 6.1 hereof to the extent the terms of
                  such purchase money lien prohibit further liens or
                  encumbrances.

         t.       "Crystal-Waterville" means Crystal-Waterville, Inc., a
                  Connecticut corporation.

         u.       "Current Assets" means current assets determined in accordance
                  with GAAP.

         v.       "Current Liabilities" means current liabilities determined in
                  accordance with GAAP.

         w.       "Current Maturities of Long Term Debt" means the current
                  maturity of long term Indebtedness paid or payable during the
                  applicable period provided, however, that the prepayment of
                  the Term Loan in the amount of $5,000,000 from net proceeds of
                  the sale pursuant to the Micropack Purchase Agreement and the
                  payment of the Subordinated Debt in the amount of $5,000,000
                  from net proceeds of the sale pursuant to the Micropack
                  Purchase Agreement shall be excluded therefrom.

         x.       "Current Ratio" means the ratio of Current Assets to Current
                  Liabilities.

         y.       "Date of Closing" means March 5, 2003.

         z.       "Debt Service Coverage Ratio" means, for the relevant period,
                  the ratio of (i) (A) EBITDA, minus (B) Dividends, minus (C)
                  Capital Expenditures (other than Excluded Capital
                  Expenditures) to the extent such Capital Expenditures are not
                  financed and are not incurred as part of an Acquisition, plus
                  (or minus) (D) the net increase (or decrease) in customer
                  deposits, plus (E) proforma EBITDA agreed to in writing by the
                  Agent relating to new Acquisitions as set forth in Section
                  6.17 hereof, minus (F) cash taxes to (ii) (A) Current
                  Maturities of Long Term Debt, plus (B) the current portion of
                  Capital Lease payments, plus (C) interest expense on all

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<PAGE>

                  Indebtedness which is not Subordinated Debt plus (D) interest
                  expense paid on Subordinated Debt.

         aa.      "Dividends" means the payment of any dividend or other
                  distribution by Holdings in respect of its capital stock in
                  cash or other property (excepting distributions in the form of
                  such stock) or the redemption or acquisition of any such
                  stock.

         bb.      "Documentation Agent" means M&T Bank in such capacity,
                  together with its successors and assigns in such capacity.

         cc.      "EBITDA" means, for the relevant period, income from
                  continuing operations (excluding extraordinary items of income
                  and the write-down of closing costs associated with loans
                  refinanced by the Loans but including any extraordinary items
                  of loss) before deduction for interest and taxes, depreciation
                  and amortization.

         dd.      "Environmental Laws" means any and all applicable federal,
                  state and local environmental, health or safety statutes,
                  laws, regulations, rules, ordinances, guidances, policies and
                  rules or common law (whether now existing or hereafter enacted
                  or promulgated), of all governmental agencies, bureaus or
                  departments which may now or hereafter have jurisdiction over
                  any of the Obligors or any of the Obligors' property and all
                  applicable judicial and administrative and regulatory decrees,
                  judgments and orders, including common law rulings and
                  determinations, relating to injury to, or the protection of,
                  real or personal property or human health or the environment,
                  including, without limitation, all requirements pertaining to
                  reporting, licensing, permitting, investigation, remediation
                  and removal of emissions, discharges, releases or threatened
                  releases of Hazardous Materials, chemical substances,
                  pollutants or contaminants whether solid, liquid or gaseous in
                  nature, into the environment or relating to the manufacture,
                  processing, distribution, use, treatment, storage, disposal,
                  transport or handling of such Hazardous Materials, chemical
                  substances, pollutants or contaminants.

         ee.      "Equipment" means all Equipment, Farm Products and Fixtures
                  (as such terms are defined in the Uniform Commercial Code as
                  in effect in Connecticut on the date of this Agreement),
                  including all machinery, equipment, furniture, fixtures,
                  tools, parts, supplies and motor vehicles, now owned and
                  hereafter acquired, by Obligors of whatsoever name, nature,
                  kind or description, wherever located, and all additions and
                  accessions thereto and replacements or substitutions therefor,
                  and all proceeds thereof and all proceeds of any insurance
                  thereon.

                                       6
<PAGE>

         ff.      "ERISA" means the Employee Retirement Income Security Act of
                  1974 and all rules and regulations promulgated pursuant
                  thereto, as the same may from time to time be supplemented or
                  amended.

         gg.      "Event of Default" shall have the meaning assigned in Section
                  7 hereof.

         hh.      "Excelsior" means Excelsior Spring Water Company, Inc., a New
                  York corporation.

         ii.      "GAAP" means generally accepted accounting principles in the
                  United States of America, as from time to time in effect.

         jj.      [Intentionally omitted]

         kk.      [Intentionally omitted]

         ll.      "Hazardous Material" means any substance: (i) the presence of
                  which requires or may hereafter require notification,
                  investigation, monitoring or remediation under any
                  Environmental Law; (ii) which is or becomes defined as a
                  "hazardous waste", "hazardous material" or "hazardous
                  substance" or "toxic substance" or "pollutant" or
                  "contaminant" under any present or future Environmental Law or
                  amendments thereto including, without limitation, the
                  Comprehensive Environmental Response, Compensation and
                  Liability Act (42 U.S.C. Section 9601 et seq.) and any
                  applicable local statutes and the regulations promulgated
                  thereunder; (iii) which is toxic, explosive, corrosive,
                  reactive, ignitable, infectious, radioactive, carcinogenic,
                  mutagenic or otherwise hazardous and is or becomes regulated
                  by any governmental authority, agency, department, commission,
                  board, agency or instrumentality of any foreign country, the
                  United States, any state of the United States, or any
                  political subdivision thereof to the extent any of the
                  foregoing has or had jurisdiction over any Obligor or any
                  Obligor's property; or (iv) without limitation, which contains
                  gasoline, diesel fuel or other petroleum products, asbestos or
                  polychlorinated biphenyls.

         mm.      "Indebtedness" means (i) obligations for borrowed money, (ii)
                  obligations representing the deferred purchase price of
                  property other than accounts payable arising in the ordinary
                  course of Obligors' business on terms customary in the trade,
                  (iii) obligations, whether or not assumed, secured by a lien
                  on, or payable out of the proceeds or production from,
                  property now or hereafter owned or acquired by Obligors, (iv)
                  obligations which are evidenced by bonds, debentures, notes,
                  acceptances, or other instruments, (v) Capital Lease
                  obligations, (vi) guaranties of the obligations of other
                  parties, other than in connection with the endorsement of
                  negotiable

                                       7
<PAGE>

                  instruments in the ordinary course of business, and (vii)
                  obligations under letters of credit and reimbursement
                  agreements.

         nn.      "Indemnifiable Liabilities" shall mean Indemnifiable
                  Liabilities as defined in Section 9.1.

         oo.      "Indemnitees" shall mean Indemnitees as defined in Section
                  9.1.

         pp.      "Interest Period" means with respect to any amount bearing
                  interest at the LIBOR Rate, an available period of one (1)
                  month, provided that:

                  (i)      if any Interest Period would otherwise end on a day
                           that is not a Business Day, such Interest Period
                           shall end on the immediately following Business Day
                           unless such Business Day would be in the next month
                           in which case such Interest Period shall end on the
                           preceding Business Day; and

                  (ii)     any Interest Period that begins on the last Business
                           Day of a calendar month (or on a day for which there
                           is no numerically corresponding day in the calendar
                           month at the end of such Interest Period) shall end
                           on the last Business Day of a calendar month.

         qq.      "Inventory" means all Inventory and Goods and all Supporting
                  Obligations related thereto (as such terms are defined in the
                  Uniform Commercial Code as in effect in Connecticut from time
                  to time) of whatsoever name, nature, kind or description now
                  owned and hereafter acquired by Obligors, wherever located,
                  including without limitation all contract rights with respect
                  thereto and documents representing the same, all goods held
                  for sale or lease or to be furnished under contracts of
                  service, finished goods, raw materials, materials used or
                  consumed by Obligors, parts, supplies, and all wrapping,
                  packaging, advertising and shipping materials and any
                  documents relating thereto, and all labels and other devices,
                  names and marks affixed or to be affixed thereto for purposes
                  of selling or of identifying the same or the seller or
                  manufacturer thereof, and all right, title and interest of
                  Obligors therein and thereto, and all proceeds of the
                  foregoing and all proceeds of any insurance on the foregoing.

         rr.      "Investment Property" means all investment property (as such
                  term is defined in the Uniform Commercial Code as adopted in
                  Connecticut from time to time) of whatever type or nature now
                  owned or hereafter acquired by the Obligors, including without
                  limitation, all certificated securities, all uncertificated
                  securities, all security entitlements, all security accounts,
                  all commodity contracts, all commodity accounts and all
                  financial assets of every type and nature and all rights
                  thereto or therein, and all financial accounts of every type
                  and nature and all rights thereto or therein, and all

                                       8
<PAGE>

                  Supporting Obligations (as such term is defined in the Uniform
                  Commercial Code as adopted in Connecticut from time to time)
                  related thereto and all proceeds and products thereof,
                  including without limitation, all insurance proceeds and
                  fidelity bond proceeds related thereto.

         ss.      "IRS" means the United States Internal Revenue Service.

         tt.      "Lender's Commitment Percentage" shall mean for each Lender,
                  the percentage listed next to such Lender's name on Schedule
                  1.1tt.

         uu.      "LIBOR Rate" means, with respect to any LIBOR Rate Loan for
                  each applicable Interest Period, the rate per annum determined
                  by the Agent to be equal to the quotient of (a) the London
                  Interbank Offered Rate for such LIBOR Rate Loan for such
                  Interest Period, divided by (b) one (1) minus the Reserve
                  Percentage for such Interest Period, expressed as follows:

                  LIBOR Rate = London Interbank Offered Rate
                               -----------------------------
                                  1 - Reserve Percentage

         vv.      "LIBOR Rate Loan" means any Loan or portion thereof the
                  principal amount of which bears interest at a rate equal to
                  the LIBOR Rate plus the Applicable Margin.

         ww.      "Loan Account" shall mean Loan Account as defined in Section
                  2.2 (e)(1).

         xx.      "Loans" means the Term Loan, the Revolving Line of Credit and
                  the Acquisition/Capital Asset Line of Credit.

         yy.      "Loan Documents" means this Agreement, the Notes and all other
                  documents evidencing, securing, guarantying or relating to the
                  Loans.

         zz.      "London Interbank Offered Rate" means, with respect to any
                  applicable Interest Period, the rate per annum (rounded
                  upward, if necessary, to the nearest 1/32 of one percent) as
                  determined on the basis of the offered rates for deposits in
                  U.S. dollars, for a principal amount and having a borrowing
                  date and a maturity date comparable to such Interest Period
                  for such amount which appears on the Telerate page 3750 as of
                  approximately 11:00 a.m. London time on the day that is two
                  London Banking Days preceding the first day of such Interest
                  Period; provided, however, if the rate described above does
                  not appear on the Telerate System on any applicable interest
                  determination date, the London Interbank Offered Rate shall be
                  the rate (rounded upwards as described above, if necessary)
                  for deposits in U.S. dollars for a period and a principal
                  amount substantially equal to the interest period on the
                  Reuters Page "LIBO" (or such other page as may replace the
                  LIBO Page on that service for the purpose of

                                       9
<PAGE>

                  displaying such rates) for such a principal amount, as of
                  approximately 11:00 a.m. (London Time), on the day that is two
                  (2) London Banking Days prior to the beginning of such
                  Interest Period. "Banking Day" shall mean, in respect of any
                  city, any date on which commercial banks are open for business
                  in that city. If both the Telerate and Reuters system are
                  unavailable, then the rate for that date will be determined on
                  the basis of the offered rates for deposits in U.S. dollars
                  for a period of time and a principal amount comparable to such
                  Interest Period for such principal amount which are offered by
                  four major banks in the London interbank market selected by
                  the Agent at approximately 11:00 a.m. London time, on the day
                  that is two (2) London Banking Days preceding the first day of
                  such Interest Period. The principal London office of each of
                  the four major London banks will be requested to provide a
                  quotation of its U.S. dollar deposit offered rate. If at least
                  two such quotations are provided, the rate for that date will
                  be the arithmetic mean of the quotations. If fewer than two
                  quotations are provided as requested, the rate for that date
                  will be determined on the basis of the rates quoted for loans
                  in U.S. dollars to leading European banks for a period of time
                  and a principal amount comparable to such Interest Period and
                  such principal amount offered by major banks in New York City
                  at approximately 11:00 a.m. New York City time, on the day
                  that is two London Banking Days preceding the first day of
                  such Interest Period. In the event that Agent is unable to
                  obtain any such quotation as provided above, it will be deemed
                  that the LIBOR Rate pursuant to such Interest Period cannot be
                  determined.

         aaa.     "Managers" means Managers as defined in Section 6.7.

         bbb.     [Intentionally omitted]

         ccc.     "Net Income" means net income as determined in accordance with
                  GAAP.

         ddd.     "Net Loss" means net loss as determined in accordance with
                  GAAP.

         eee.     "Notice of Borrowing" shall mean Notice of Borrowing as
                  defined in Section 2.2 (e)(1).

         fff.     "Notes" means the Term Notes, the Revolving Line of Credit
                  Notes and the Acquisition/Capital Asset Line of Credit Notes.

         ggg.     "Obligations" means and includes all loans, advances,
                  interest, indebtedness, liabilities, obligations, guaranties,
                  covenants and duties at any time owing by Obligors to any
                  Lender or the Agent of every kind and description, whether or
                  not evidenced by any note or other instrument, whether or not
                  for the payment of money, whether direct or indirect, absolute
                  or contingent, due or to become due, now existing or hereafter

                                       10
<PAGE>

                  arising, including, but not limited to, the Loans and all
                  other indebtedness, liabilities and obligations arising under
                  this Agreement and the other Loan Documents, all swap
                  agreements and all costs, expenses, fees, charges and
                  attorneys', paralegals' and professional fees incurred in
                  connection with any of the foregoing, or in any way connected
                  with, involving or relating to the preservation, enforcement,
                  protection or defense of, or realization under this Agreement,
                  the Notes, any of the other Loan Documents, the Collateral and
                  the rights and remedies hereunder or thereunder, including
                  without limitation, all costs and expenses incurred in
                  inspecting or surveying any real property, or conducting
                  environmental studies or tests, and in connection with any
                  "workout" or default resolution negotiations involving legal
                  counsel or other professionals and any re-negotiation or
                  restructuring of any of the Obligations.

         hhh.     "Patents" means all of Obligors' right, title and interest,
                  present and future, in and to (a) all letters patent of the
                  United States or any other country, all right, title and
                  interest therein and thereto, and all registrations and
                  recordings thereof, including without limitation applications,
                  registrations and recordings in the United States Patent and
                  Trademark Office or in any similar office or agency of the
                  United States or any state thereof or any other country or any
                  political subdivision thereof, all whether now owned or
                  hereafter acquired by Obligors; and (b) all reissues,
                  continuations, continuations-in-part or extensions thereof and
                  all licenses thereof; and all proceeds of the foregoing and
                  all proceeds of any insurance on the foregoing.

         iii.     "PBGC" means the Pension Benefit Guaranty Corporation.

         jjj.     "Permitted Encumbrances" means the liens and encumbrances
                  listed on Schedule 4.5 and those permitted pursuant to Section
                  6.1 hereof; provided, however, that none of the Permitted
                  Encumbrances shall be amended or modified in any way adverse
                  to any Lender or the Agent without the prior written consent
                  of Agent.

         kkk.     "Plan" means any employee benefit plan or other plan
                  maintained for employees of any of the Obligors or any related
                  entity covered by Title I of ERISA.

         lll.     "Pledge Agreement" means the Pledge Agreement dated the date
                  of this Agreement from Holdings to Agent, as the same may be
                  amended or amended and restated from time to time.

         mmm.     "Prime Rate" means the variable per annum rate of interest so
                  designated from time to time by Agent as its prime rate. The
                  Prime Rate is a reference

                                       11
<PAGE>

                  rate and does not necessarily represent the lowest or best
                  rate being charged to any customer.

         nnn.     "Prime Rate Loan" means any Loan or portion thereof the
                  principal amount of which bears interest at a rate equal to
                  the Prime Rate. The interest rate on each Prime Rate Loan
                  shall change immediately, without notice or demand of any kind
                  to Obligors, each time that the Prime Rate changes so that the
                  rate of interest on a Prime Rate Loan is at all times equal to
                  the Prime Rate.

         ooo.     "Prior Encumbrances" means the mortgages, security interests,
                  pledges, liens, encumbrances or other charges listed in
                  Section A of Schedule 4.5.

         ppp.     "Property" means all property and assets of Obligors.

         qqq.     "Receivables" means (i) all of Obligors' now owned and
                  hereafter acquired, present and future, Accounts, Chattel
                  Paper, Documents, Instruments and Supporting Obligations
                  related thereto, (as such terms are defined in the Uniform
                  Commercial Code as in effect in Connecticut from time to time)
                  and contract rights, including without limitation all
                  obligations to Obligors for the payment of money, whether
                  arising out of Obligors' sale of goods or rendition of
                  services or otherwise (all hereinafter called "Accounts") and
                  all proceeds of the foregoing and all proceeds of any
                  insurance on the foregoing; (ii) all of Obligors' rights,
                  remedies, security and liens, in, to and in respect of the
                  Accounts, present and future, including without limitation,
                  rights of stoppage in transit, replevin, repossession and
                  reclamation and other rights and remedies of an unpaid vendor,
                  lienor or secured party, guaranties or other contracts of
                  suretyship with respect to the Accounts, deposits or other
                  security for the obligation of any debtor or obligor in any
                  way obligated on or in connection with any Accounts, and
                  credit and other insurance, and all proceeds of the foregoing
                  and all proceeds of any insurance on the foregoing; and (iii)
                  all of Obligors' right, title and interest, present and
                  future, in, to and in respect of all goods relating to, or
                  which by sale have resulted in, Accounts, including without
                  limitation all goods described in invoices or other documents
                  or instruments with respect to, or otherwise representing or
                  evidencing any Accounts, and all returned, reclaimed or
                  repossessed goods, and all proceeds of the foregoing and all
                  proceeds of any insurance on the foregoing.

         rrr.     "Reimbursement Agreement" shall mean Reimbursement Agreement
                  as defined in Section 2.4(b).

         sss.     "Request for Advance" shall mean Request for Advance as
                  defined in Section 2.3(e)(1).

                                       12
<PAGE>

         ttt.     "Reserve Percentage" means the maximum effective percentage in
                  effect on such day as prescribed by the Board of Governors of
                  the Federal Reserve System for determining the reserve
                  requirement (including all basic, supplemental, marginal and
                  other reserves) which is imposed on member banks of the
                  Federal Reserve System with respect to "Euro-currency
                  Liabilities" as defined in Regulation D. With respect to the
                  LIBOR Rate, any change in the interest rate because of a
                  change in the Reserve Percentage shall become effective,
                  without notice or demand of any kind, on the date on which
                  such change in the Reserve Percentage becomes effective.

         uuu.     "Revolving Line of Credit" means the $6,500,000 credit
                  facility evidenced by the Revolving Line of Credit Notes.

         vvv.     "Revolving Line of Credit Advance" shall mean the definition
                  assigned in Section 2.2(d).

         www.     "Revolving Line of Credit Notes" means the amended and
                  restated promissory notes of Obligors dated the date of this
                  Agreement payable to the order of the Lenders in an aggregate
                  original principal amount of up to $6,500,000, as the same may
                  be amended or amended and restated from time to time.

         xxx.     "Senior Funded Debt" means all Indebtedness of Obligors other
                  than Subordinated Debt and issued and outstanding Standby
                  Letters of Credit to the extent not yet drawn upon (and the
                  related obligations under reimbursement agreements in
                  connection therewith to the extent not yet due and payable),
                  including, without limitation, the average daily outstanding
                  principal amount of the Revolving Line of Credit (or the prior
                  line of credit) for the fiscal quarter then ended and the
                  immediately preceding three fiscal quarters.

         yyy.     "Standby Letter of Credit" means a standby letter of credit
                  issued by the Agent for the account of any Obligor in
                  accordance with the terms of this Agreement.

         zzz.     [Intentionally omitted]

         aaaa.    "Subordinated Debt" means debt of any of the Obligors which
                  has been subordinated in payment to the Obligations pursuant
                  to a subordination agreement which is satisfactory in form and
                  substance to the Agent.

                                       13
<PAGE>

         bbbb.    "Subordinated Encumbrances" means the mortgages, security
                  interests, pledges, liens, encumbrances or other charges
                  listed in Section B of Schedule 4.5.

         cccc.    "Subordinated Lenders" means (i) Henry E. Baker, (ii) Joan A.
                  Baker, (iii) John B. Baker, (iv) Peter K. Baker and (v) 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 (the
                  "Trustee").

         dddd.    "Subsidiary" means any corporation, limited liability company,
                  partnership or other entity, a majority of whose outstanding
                  stock, membership interests, partnership interests or other
                  ownership interests having voting power to elect the board of
                  directors or other governing body or person of such entity
                  shall at any time be owned or controlled by the Obligors.

         eeee.    "Term Loan" means the loan evidenced by the Term Notes in the
                  original principal amount on the Date of Closing of
                  $28,500,000.

         ffff.    "Term Notes" means the amended and restated promissory notes
                  of the Obligors payable to the order of the Lenders dated the
                  date of this Agreement in an aggregate original principal
                  amount of $18,324,997.00.

         gggg.    "Termination Date" means:

                  (i)      with respect to the Revolving Line of Credit or any
                           Revolving Line of Credit Note, April 1, 2005;

                  (ii)     with respect to the Acquisition/Capital Asset Line of
                           Credit or any Acquisition/Capital Asset Line of
                           Credit Note, February 29, 2008; and

                  (iii)    with respect to the Term Loan or any Term Note,
                           February 29, 2008.

         hhhh.    "Trademarks" means all of Obligors' right, title and interest,
                  present and future, in and to (i) all trademarks, trade names,
                  trade styles, service marks, prints and labels on which said
                  trademarks, trade names, trade styles and service marks have
                  appeared or appear, designs and general intangibles of like
                  nature, now existing or hereafter adopted or acquired, all
                  right, title and interest therein and thereto, and all
                  registrations and recordings thereof, including without
                  limitation applications, registrations and recordings in the
                  United States Patent and Trademark Office or in any similar
                  office or agency of the United States, any State thereof, or
                  any other country or any political subdivision thereof, all
                  whether now owned

                                       14
<PAGE>

                  or hereafter acquired by Obligors; (ii) all reissues,
                  extensions or renewals thereof and all licenses thereof; and
                  (iii) the goodwill of the business symbolized by each of the
                  Trademarks, and all customer lists and other records of
                  Obligors relating to the distribution of products bearing the
                  Trademarks; and all proceeds of the foregoing and all proceeds
                  of any insurance on the foregoing.

         iiii.    "Excluded Capital Expenditures" means the $150,000 expenditure
                  by VPS for a SMI stretchfilm packaging machine in November,
                  2003 and $150,000 of a $350,000 Capital Expenditure by Crystal
                  Rock for new five gallon bottling equipment but only to the
                  extent that Crystal Rock has received $150,000 in proceeds
                  from the sale of its existing five gallon bottling equipment.

         jjjj.    "Micropack Purchase Agreement" means the Purchase and Sale
                  Agreement among Holdings, VPS and Micropack Corporation dated
                  as of March 1, 2004.

         kkkk.    "Senior Debt Service Coverage Ratio" means, for the relevant
                  period, the ratio of (i) (A) EBITDA, minus (B) Dividends,
                  minus (C) Capital Expenditures (other than Excluded Capital
                  Expenditures) to the extent such Capital Expenditures are not
                  financed, plus (or minus) (D) the net increase (or decrease)
                  in customer deposits, plus (E) proforma EBITDA agreed to in
                  writing by the Agent relating to new Acquisitions as set forth
                  in Section 6.17 hereof, minus (F) cash taxes to (ii) (A)
                  Current Maturities of Long Term Debt which is not Subordinated
                  Debt, plus (B) the current portion of Capital Lease payments,
                  plus (C) interest expense on all Indebtedness which is not
                  Subordinated Debt.

1.2      Accounting Terms. Unless otherwise defined, all accounting terms shall
         be construed, and all computations or classifications of assets and
         liabilities and of income and expenses shall be made or determined in
         accordance with GAAP except as otherwise stated in Section 6.15.

1.3      Financial Covenants. All financial covenants in this Agreement shall
         apply with respect to, and shall be measured in accordance with, the
         consolidated financial statements of Holdings. All financial covenants
         in this Agreement shall be tested commencing October 31, 2004.

                                       15
<PAGE>

SECTION 2. The Loan Transactions.

2.1      The Term Loan.

         a.       Amount. Lenders loaned to the Original Obligors the sum of
                  TWENTY EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS
                  ($28,500,000).

         b.       Obligations to Repay. Obligors' obligations to repay the Term
                  Notes and the terms and conditions of the Term Loan are as
                  contained in this Agreement and the Term Notes, the form of
                  which is attached to this Agreement as EXHIBIT 2.1.

         c.       Use of Proceeds. The proceeds of the Term Loan were used to
                  refinance existing Webster Bank term loans.

         d.       Interest Rate. The principal amount outstanding under the Term
                  Loan shall bear interest, subject to and in accordance with
                  the terms of this Agreement and the Term Notes, at a per annum
                  rate equal to a fixed rate equal to the LIBOR Rate (as
                  determined for each Interest Period applicable thereto) for
                  available Interest Periods of one (1) month plus the
                  Applicable Margin, provided, however, that notwithstanding
                  anything else herein to the contrary, the initial Interest
                  Period end on January 5, 2005. All computations of interest on
                  the Term Notes shall be made on the basis of a three hundred
                  sixty (360) day year and the actual number of days elapsed.

         e.       Advances. The full amount of the Term Loan was advanced on the
                  Date of Closing by the Lenders in accordance with their
                  respective Lender's Commitment Percentages. Neither any Lender
                  nor Agent shall be responsible for advancing any amount of the
                  Term Loan made by any other Lender hereunder.

         f.       Continuation of Interest Periods. Any LIBOR Rate Loan under
                  the Term Notes shall be continued as such (less the amount of
                  principal that is due and payable at the end of such expiring
                  Interest Period) for an Interest Period of one (1) month at
                  the end of each Interest Period, provided that no LIBOR Rate
                  Loan may be continued as such: (i) at a time when any Event of
                  Default (or event or condition which would constitute an Event
                  of Default but for the giving of notice or passage of time or
                  both) has occurred and is continuing and (ii) after the date
                  that is one (1) month prior to the Termination Date, in which
                  event the principal amount under the Term Notes shall bear
                  interest as a Prime Rate Loan.

         g.       Payments of Interest. Monthly payments of interest on the Term
                  Notes shall be due and payable in arrears on the fifth day of
                  each month (or if

                                       16
<PAGE>

                  such day is not a Business Day, on the first Business Day
                  thereafter) until the entire principal amount of the Term Loan
                  is paid in full.

         h.       Payments of Principal. Obligors shall pay monthly installments
                  of principal on the Term Notes on the fifth day of each month
                  (or if such day is not a Business Day, on the first Business
                  Day thereafter), commencing January 5, 2005, in the amounts
                  of:

                  (1)      $291,667 for each month from January 2005 through
                           March 2005;

                  (2)      $325,000 for each month from April 2005 through March
                           2006;

                  (3)      $333,333 for each month from April 2006 through March
                           2007;

                  (4)      $354,167 for each month from April 2007 through
                           February 2008.

         If not sooner paid, the aggregate outstanding principal amount of the
         Term Notes, together with all accrued and unpaid interest thereon and
         any other fees or charges then due, shall be due and payable on the
         Termination Date.

         i.       Prepayments.

                  (1)      Obligors may prepay the principal amount of the Term
                           Loan, or any portion thereof, only upon at least
                           three (3) Business Days prior written notice to Agent
                           (which notice shall be irrevocable and shall state
                           the amount to be prepaid). If Obligors refinance the
                           Term Loan, or any part thereof, with any other
                           entity, Obligors shall pay to Agent a prepayment
                           premium equal to one percent (1%) of the amount
                           prepaid if the prepayment is made less than two years
                           from the Date of Closing.

                  (2)      If any prepayment of a LIBOR Rate Loan occurs on a
                           day other than the last day of the Interest Period,
                           Obligors shall pay to Agent, upon request of Agent,
                           such amount or amounts as shall be sufficient (in the
                           reasonable opinion of Agent) to compensate Lenders
                           for any loss, cost, or expense incurred as a result
                           of: (i) any payment on a date other than the last day
                           of the Interest Period; and (ii) any failure by any
                           Obligor to make a prepayment on the date for payment
                           specified in any Obligor's written notice.

                  (3)      In the event of any prepayments, the Obligors shall
                           pay all accrued interest on the principal amount
                           being paid to the date of the prepayment and, in the
                           case of prepayments in full, all fees, charges,
                           costs, expenses and other amounts then due hereunder.

                                       17
<PAGE>

                  (4)      Any partial prepayment shall be applied against
                           principal payments in the inverse order of maturity
                           and shall not reduce the monthly payments of
                           principal due under the Term Loan.

                  (5)      If by reason of an Event of Default, Agent elects to
                           declare the Notes to be immediately due and payable,
                           then any prepayment premiums and other amounts which
                           would have been due if a prepayment been made at that
                           time shall become due and payable in the same manner
                           as though the Obligors had exercised such right of
                           prepayment.

2.2      The Revolving Line of Credit.

         a.       Amount. Lenders may loan to any of the Obligors, and any
                  Obligor may borrow from Lenders, from time to time in
                  accordance with the terms of this Agreement, up to SIX MILLION
                  FIVE HUNDRED THOUSAND DOLLARS ($6,500,000) less (a) the
                  maximum amount available to be drawn under all issued and
                  outstanding Standby Letters of Credit (assuming all conditions
                  for drawing have been satisfied) at the time of such borrowing
                  under the Revolving Line of Credit, and (b) all amounts drawn
                  under issued Standby Letters of Credit for which the Lenders
                  has not been reimbursed by the Obligors at the time of such
                  borrowing under the Revolving Letter of Credit. Obligors may
                  repay and reborrow advances that are made under the Revolving
                  Line of Credit, subject, however, to the prepayment terms
                  contained below.

         b.       Obligations to Repay. Obligors' obligations to repay the
                  Revolving Line of Credit Notes and the terms and conditions of
                  the Revolving Line of Credit are as contained in this
                  Agreement and the Revolving Line of Credit Notes, the form of
                  which is attached to this Agreement as EXHIBIT 2.2.

         c.       Use of Proceeds. The proceeds of the Revolving Line of Credit
                  shall only be used for general short term working capital
                  purposes.

         d.       Interest Rate. Each advance under the Revolving Line of Credit
                  (each a "Revolving Line of Credit Advance") shall bear
                  interest, at Obligors' option subject to and in accordance
                  with the terms of this Agreement and the Revolving Line of
                  Credit Notes, at a per annum rate equal to either (a) a fixed
                  rate equal to the LIBOR Rate (as determined for each Interest
                  Period applicable thereto) for available Interest Periods of
                  one (1) month plus the Applicable Margin, or (b) a variable
                  rate equal to the Prime Rate plus one quarter of one percent
                  (0.25%). All computations of interest on the Revolving Line of
                  Credit Notes shall be made on the basis of a three hundred
                  sixty (360) day year and the actual number of days elapsed.

                                       18
<PAGE>

         e.       Requests for Advances.

                  (1)      Except as set forth below in section 2.2 e.(2) of
                           this Agreement, whenever an Obligor desires an
                           advance, such Obligor shall notify Agent (which
                           notice shall be irrevocable) by telephone, facsimile
                           or in writing, of the desired borrowing. Such notice
                           (the "Notice of Borrowing") shall specify the date of
                           the proposed borrowing, whether such borrowing is to
                           bear interest initially as a LIBOR Rate Loan or a
                           Prime Rate Loan and the amount requested, which
                           amount shall be in a minimum amount of $100,000. Each
                           Notice of Borrowing must be received by Agent no
                           later than 10:00 a.m., Hartford, Connecticut time (a)
                           at least three (3) Business Days' prior to the day
                           such borrowing is requested if such borrowing is to
                           be a LIBOR Rate Loan or (b) on the day of such
                           borrowing if such borrowing is to be a Prime Rate
                           Loan. Any Notice of Borrowing that is not in writing
                           shall be followed by a written confirmation by such
                           Obligor, provided that if such written confirmation
                           differs in any respect from the action taken by
                           Agent, the records of Agent shall control, absent
                           manifest error. Obligors shall not have more than
                           four (4) LIBOR Rate Loans under the Revolving Line of
                           Credit outstanding at any one time. Each Revolving
                           Line of Credit Advance shall be made by the Lenders
                           in accordance with their respective Lender's
                           Commitment Percentages up to the maximum principal
                           amount of their respective Revolving Line of Credit
                           Notes. Neither any Lender nor Agent shall be
                           responsible for advancing any amount of any Revolving
                           Line of Credit Advance to be made by any other Lender
                           hereunder. Agent shall enter each Revolving Line of
                           Credit Advance as a debit on a loan account
                           maintained by Obligors with Agent (the "Loan
                           Account"). Agent may also record in the Loan Account,
                           in accordance with customary banking procedures, all
                           fees, accrued and unpaid interest, late fees, usual
                           and customary bank charges for the maintenance and
                           administration of accounts maintained by Obligors and
                           other fees and charges which are properly chargeable
                           to Obligors in connection with the Revolving Line of
                           Credit Advances and all payments, subject to
                           collection, made by Obligors on account of or to
                           Agent.

                  (2)      In addition, Webster Bank will automatically make
                           advances under the Revolving Line of Credit without
                           any additional notice in order to honor checks drawn
                           upon the Loan Account by any of the Obligors up to an
                           aggregate amount outstanding at any one time of
                           $1,000,000; provided, however, that (A) all advances
                           under this Section 2.2e.(2) and all other advances
                           under the Revolving Line

                                       19
<PAGE>

                           of Credit shall not exceed the maximum amount of the
                           Revolving Line of Credit and (B) the sum, at the time
                           of such borrowing under the Revolving Line of Credit
                           pursuant to this Section 2.2e.(2), of (i) all
                           advances under this Section 2.2e.(2), plus (ii)
                           Webster Bank's Lender's Commitment Percentage of all
                           other advances under the Revolving Line of Credit
                           plus (iii) Webster Bank's Lender's Commitment
                           Percentage of (a) the maximum amount available to be
                           drawn under all issued and outstanding Standby
                           Letters of Credit (assuming all conditions for
                           drawing have been satisfied) at the time of such
                           borrowing under the Revolving Line of Credit, and (b)
                           all amounts drawn under issued Standby Letters of
                           Credit for which the Lenders have not been reimbursed
                           by the Obligors directly or by an advance on the
                           Revolving Line of Credit shall not exceed the maximum
                           amount of the Revolving Line of Credit Note payable
                           to Webster Bank. All such advances shall be Prime
                           Rate Loans and shall otherwise be subject to all the
                           terms and conditions of this Agreement and the
                           Revolving Line of Credit Note with Webster Bank.

                  (3)      Obligors' right to request advances under the
                           Revolving Line of Credit shall terminate on the
                           Termination Date unless sooner terminated by Agent in
                           accordance with the terms of this Agreement.

         f.       Conversion of Loans and Continuation of Interest Periods.
                  Unless an Obligor elects to convert any Revolving Line of
                  Credit Advance to a different type of loan by providing the
                  notice required below, any Prime Rate Loan shall be continued
                  as such and any LIBOR Rate Loan shall be continued as such for
                  an Interest Period of one (1) month upon the expiration of the
                  then current Interest Period, provided that no LIBOR Rate Loan
                  may be continued as such, no new LIBOR Rate Loan may be
                  selected by Obligors and no Prime Rate Loan shall be converted
                  to a LIBOR Rate Loan: (i) at a time when any Event of Default
                  (or event or condition which would constitute an Event of
                  Default but for the giving of notice or passage of time or
                  both) has occurred and is continuing and (ii) after the date
                  that is one (1) month prior to the Termination Date, in which
                  event the principal amount under the Revolving Line of Credit
                  shall bear interest as a Prime Rate Loan. Any Obligor may
                  elect from time to time to convert (a) a LIBOR Rate Loan under
                  the Revolving Line of Credit to a Prime Rate Loan and (b) a
                  Prime Rate Loan under the Revolving Line of Credit to a LIBOR
                  Rate Loan as provided in this section. An Obligor shall
                  exercise such election by giving the Agent not less than three
                  (3) Business Days prior irrevocable written notice of such
                  election; provided that any such conversion of a LIBOR Rate
                  Loan to a Prime Rate Loan shall only be made on the last
                  Business Day of the then current Interest Period with

                                       20
<PAGE>

                  respect thereto. Notwithstanding the foregoing, no Prime Rate
                  Loan made pursuant to an advance under Section 2.2e.(2) shall
                  be converted to a LIBOR Rate Loan.

         g.       Payments of Interest. Monthly payments of interest shall be
                  due and payable in arrears on the last day of each Interest
                  Period with respect to LIBOR Rate Loans and on the first day
                  of each month with respect to Prime Rate Loans until all Loans
                  are paid in full.

         h.       Payments of Principal. If not sooner paid, the aggregate
                  outstanding principal amount of the Revolving Line of Credit
                  Notes, together with all accrued and unpaid interest thereon
                  and any other fees or charges then due, shall be due and
                  payable on the Termination Date.

         i.       Prepayments.

                  (1)      Except as set forth in the following sentence,
                           Obligors may prepay the principal amount under the
                           Revolving Line of Credit, or any portion thereof,
                           only upon at least three (3) Business Days prior
                           written notice to Agent (which notice shall be
                           irrevocable and shall state the amount to be
                           prepaid). Any checks payable to the order of any of
                           the Obligors which are properly deposited with
                           Webster Bank in the Loan Account shall, upon becoming
                           immediately available funds, be automatically applied
                           as a prepayment of any outstanding Prime Rate Loan
                           made pursuant to Section 2.2.e.(2) of this Agreement
                           without the requirement of any notice. In the event
                           there is no Prime Rate Loan made pursuant to Section
                           2.2.e.(2) of this Agreement outstanding at such time,
                           such amount shall be deposited in the Loan Account
                           and invested in accordance with any applicable cash
                           management agreement among Obligors and Webster Bank.

                  (2)      If any prepayment of a LIBOR Rate Loan occurs on a
                           day other than the last day of the Interest Period,
                           Obligors shall pay to Agent, upon request of Agent,
                           such amount or amounts as shall be sufficient (in the
                           reasonable opinion of Agent) to compensate Lenders
                           for any loss, cost, or expense incurred as a result
                           of: (i) any payment on a date other than the last day
                           of the Interest Period; and (ii) any failure by any
                           Obligor to make a prepayment on the date for payment
                           specified in any Obligor's written notice.

                  (3)      In the event of any prepayments, the Obligors shall
                           pay all accrued interest on the principal amount
                           being paid to the date of the prepayment and, in the
                           case of prepayments in full, all fees, charges,
                           costs, expenses and other amounts then due hereunder.

                                       21
<PAGE>

                  (4)      If by reason of an Event of Default, Agent elects to
                           declare the Notes to be immediately due and payable,
                           then any prepayment premiums and other amounts which
                           would have been due if a prepayment been made at that
                           time shall become due and payable in the same manner
                           as though the Obligors had exercised such right of
                           prepayment.

2.3      The Acquisition/Capital Asset Line of Credit.

         a.       Amount. Lenders may loan to any of the Obligors, and any
                  Obligor may borrow from Lenders, from time to time in
                  accordance with the terms of this Agreement, up to TEN MILLION
                  DOLLARS ($10,000,000); provided, however, that any advances
                  under the Acquisition/Capital Asset Line of Credit shall
                  require the approval of all the Lenders, which may be given or
                  withheld in each Lender's sole and absolute discretion.
                  Obligors may not repay and reborrow advances that are made
                  under the Acquisition/Capital Asset Line of Credit.

         b.       Obligations to Repay. Obligors' obligations to repay the
                  Acquisition/Capital Asset Line of Credit Notes and the terms
                  and conditions of the Acquisition/Capital Asset Line of Credit
                  are as contained in this Agreement and the Acquisition/Capital
                  Asset Line of Credit Notes, the form of which is attached to
                  this Agreement as EXHIBIT 2.3.

         c.       Use of Proceeds. The proceeds of the Acquisition/Capital Asset
                  Line of Credit shall only be used to fund Acquisitions within
                  the home and office business segment of the food and beverage
                  industry and non-real estate Capital Expenditures in an
                  aggregate amount of up to ten million dollars ($10,000,000).

         d.       Interest Rate. Each advance under the Acquisition/Capital
                  Asset Line of Credit (each an "Acquisition/Capital Asset Line
                  of Credit Advance") shall bear interest, subject to and in
                  accordance with the terms of this Agreement and the
                  Acquisition/Capital Asset Line of Credit Notes, at a per annum
                  rate equal to a fixed rate equal to the LIBOR Rate (as
                  determined for each Interest Period applicable thereto) for
                  available Interest Periods of one (1) month plus the
                  Applicable Margin, provided, however, that notwithstanding
                  anything else herein to the contrary, all Interest Periods
                  which commence in March of 2005 shall end on March 31, 2005.
                  All computations of interest on the Acquisition/Capital Asset
                  Line of Credit Notes shall be made on the basis of a three
                  hundred sixty (360) day year and the actual number of days
                  elapsed.

         e.       Requests for Advances.

                                       22
<PAGE>

                  (1)      Whenever an Obligor desires an Acquisition/Capital
                           Asset Line of Credit Advance, such Obligor shall
                           notify Agent (which notice shall be irrevocable) in
                           writing of the desired borrowing. Such notice (the
                           "Request for Advance") shall specify the date of the
                           proposed borrowing, the proposed use of such
                           borrowing and the amount requested, which amount
                           shall be in a minimum amount of $100,000. The Agent
                           shall promptly notify the Lenders of such Request for
                           Advance and the contents thereof.

                  (2)      Each amount requested under the Acquisition/Capital
                           Asset Line of Credit to fund an Acquisition or a
                           Capital Expenditure shall not exceed 75% of the
                           purchase price of such Acquisition or such Capital
                           Expenditure and shall not exceed in the aggregate
                           with all other such requests $10,000,000. Each
                           Request for Advance in connection therewith must be
                           received by Agent no later than 10:00 a.m., Hartford,
                           Connecticut time at least five (5) Business Days'
                           prior to the day such borrowing is requested
                           (provided, however, that if such Acquisition or
                           Capital Expenditure requires the consent of the Agent
                           pursuant to Section 6.4 or 6.20 of this Agreement,
                           such consent has previously been obtained) and must
                           be accompanied by the following: (a) a copy of the
                           purchase agreement or purchase orders and invoices
                           relating to such Acquisition or Capital Expenditure,
                           (b) evidence satisfactory to the Agent that, at the
                           time of such Acquisition or Capital Expenditure, (i)
                           the Obligor will acquire good title to such entity or
                           assets, (ii) the Obligor will have physical
                           possession of any such assets, (iii) the Obligor will
                           obtain title to such entity or assets free and clear
                           of any pledge, lien, lease, encumbrance or charge of
                           any kind whatsoever, other than in favor of the
                           Agent, and (iv) the Agent will have a valid, duly
                           perfected, first priority lien in such entity or
                           assets, and (c) such other documents as the Agent may
                           reasonably require. At the time of funding such
                           Acquisition/Capital Asset Line of Credit Advance,
                           Obligor shall confirm, and provide such additional
                           documentation that the Agent may reasonably require,
                           that the statements in clauses (b)(i) through (b)(iv)
                           in the preceding sentence are true and accurate and
                           shall pay all reasonable costs and expenses incurred
                           by the Agent in connection with such
                           Acquisition/Capital Asset Line of Credit Advance.

                  (3)      [Intentionally omitted]

                  (4)      Obligors shall not have more than four (4) LIBOR Rate
                           Loans under the Acquisition/Capital Asset Line of
                           Credit outstanding at any one time. Each
                           Acquisition/Capital Asset Line of Credit

                                       23
<PAGE>

                           Advance shall be made by the Lenders in accordance
                           with their respective Lender's Commitment Percentages
                           up to the maximum principal amount of their
                           respective Acquisition/Capital Asset Line of Credit
                           Notes. Neither any Lender nor Agent shall be
                           responsible for advancing any amount of any
                           Acquisition/Capital Asset Line of Credit Advance to
                           be made by any other Lender hereunder. Agent shall
                           enter each Acquisition/Capital Asset Line of Credit
                           Advance as a debit on the Loan Account. Agent may
                           also record in the Loan Account, in accordance with
                           customary banking procedures, all fees, accrued and
                           unpaid interest, late fees, usual and customary bank
                           charges for the maintenance and administration of
                           accounts maintained by Obligors and other fees and
                           charges which are properly chargeable to Obligors in
                           connection with the Acquisition/Capital Asset Line of
                           Credit Advances and all payments, subject to
                           collection, made by Obligors on account of or to
                           Agent.

                  (5)      Obligors' right to request advances under the
                           Acquisition/Capital Asset Line of Credit shall
                           terminate on the Amortization Date unless sooner
                           terminated by Agent in accordance with the terms of
                           this Agreement.

         f.       Continuation of Interest Periods. Any LIBOR Rate Loan under
                  the Acquisition/Capital Asset Line of Credit Notes shall be
                  continued as such (less the amount of principal that is due
                  and payable at the end of such expiring Interest Period) for
                  an Interest Period of one (1) month at the end of each
                  Interest Period, provided that no LIBOR Rate Loan may be
                  continued as such: (i) at a time when any Event of Default (or
                  event or condition which would constitute an Event of Default
                  but for the giving of notice or passage of time or both) has
                  occurred and is continuing and (ii) after the date that is one
                  (1) month prior to the Termination Date, in which event the
                  principal amount under the Acquisition/Capital Asset Line of
                  Credit Notes shall bear interest as a Prime Rate Loan.

         g.       Payments of Interest. Prior to April 1, 2005, monthly payments
                  of interest on the Acquisition/Capital Asset Line of Credit
                  Notes shall be due and payable in arrears on the last day of
                  each Interest Period with respect to LIBOR Rate Loans and, in
                  the event LIBOR Rate Loans are no longer available in
                  accordance with the terms of this Agreement, on the first day
                  of each month with respect to Prime Rate Loans. Commencing on
                  April 1, 2005, monthly payments of interest on the
                  Acquisition/Capital Asset Line of Credit Notes shall be due
                  and payable in arrears on the first day of each month (or if
                  such day is not a Business Day, on the first Business Day
                  thereafter) until the entire principal amount of the
                  Acquisition/Capital Asset Line of Credit Loan is paid in full.

                                       24
<PAGE>

         h.       Payments of Principal. Obligors shall pay monthly installments
                  of principal under the Acquisition/Capital Asset Line of
                  Credit Notes on the first day of each month (or if such day is
                  not a Business Day, on the first Business Day thereafter),
                  commencing May 1, 2005, in the amounts of:

                  (1)      one twelfth of ten percent (10%) of the principal
                           amount outstanding under the Acquisition/Capital
                           Asset Line of Credit on the Amortization Date for
                           each month from May 2005 through April 2006;

                  (2)      one twelfth of fifteen percent (15%) of the principal
                           amount outstanding under the Acquisition/Capital
                           Asset Line of Credit on the Amortization Date for
                           each month from May 2006 through April 2007;

                  (3)      one twelfth of twenty percent (20%) of the principal
                           amount outstanding under the Acquisition/Capital
                           Asset Line of Credit on the Amortization Date for
                           each month from May 2007 through February 2008.

         If not sooner paid, the aggregate outstanding principal amount of the
         Acquisition/Capital Asset Line of Credit Notes, together with all
         accrued and unpaid interest thereon and any other fees or charges then
         due, shall be due and payable on the Termination Date.

         i.       Prepayments.

                  (1)      Obligors may prepay the principal amount of the
                           Acquisition/Capital Asset Line of Credit, or any
                           portion thereof, only upon at least three (3)
                           Business Days prior written notice to Agent (which
                           notice shall be irrevocable and shall state the
                           amount to be prepaid). If Obligors refinance the
                           Acquisition/Capital Asset Line of Credit, or any part
                           thereof, with any other entity, Obligors shall pay to
                           Agent a prepayment premium equal to one percent (1%)
                           of the amount prepaid if the prepayment is made less
                           than two years from the Date of Closing.

                  (2)      If any prepayment of a LIBOR Rate Loan occurs on a
                           day other than the last day of the Interest Period,
                           Obligors shall pay to Agent, upon request of Agent,
                           such amount or amounts as shall be sufficient (in the
                           reasonable opinion of Agent) to compensate Lenders
                           for any loss, cost, or expense incurred as a result
                           of: (i) any payment on a date other than the last day
                           of the Interest Period; and

                                       25
<PAGE>

                           (ii) any failure by any Obligor to make a prepayment
                           on the date for payment specified in any Obligor's
                           written notice.

                  (3)      In the event of any prepayments, the Obligors shall
                           pay all accrued interest on the principal amount
                           being paid to the date of the prepayment and, in the
                           case of prepayments in full, all fees, charges,
                           costs, expenses and other amounts then due hereunder.

                  (4)      Any partial prepayment shall be applied against
                           principal payments in the inverse order of maturity
                           and shall not reduce the monthly payments of
                           principal due under the Acquisition/Capital Asset
                           Line of Credit.

                  (5)      If by reason of an Event of Default, Agent elects to
                           declare the Notes to be immediately due and payable,
                           then any prepayment premiums and other amounts which
                           would have been due if a prepayment been made at that
                           time shall become due and payable in the same manner
                           as though the Obligors had exercised such right of
                           prepayment.

2.4      Standby Letters of Credit.

         a.       Amount. Subject to the terms and conditions contained in this
                  Agreement, Agent on behalf of the Lenders and in reliance upon
                  the agreement of the Lenders set forth in Section 2.4 h.
                  hereof agrees, in its individual capacity, to issue Standby
                  Letters of Credit for drawing in U.S. Dollars for the account
                  of Obligors, from time to time during the term of the
                  Revolving Line of Credit in an amount not to exceed the lesser
                  of (i) $6,500,000, less (a) the aggregate principal amount
                  outstanding under the Revolving Line of Credit Notes at the
                  time of issuance of the Standby Letter of Credit, (b) the
                  maximum amount available to be drawn under all previously
                  issued and outstanding Standby Letters of Credit (assuming all
                  conditions for drawing have been satisfied) at the time of
                  issuance of the Standby Letter of Credit, and (c) all amounts
                  drawn under previously issued Standby Letters of Credit for
                  which the Lender has not been reimbursed by the Obligors at
                  the time of issuance of the Standby Letter of Credit, or (ii)
                  $2,000,000.

         b.       Notices of Issuance. Requests for the issuance of Standby
                  Letters of Credit (or to amend, renew or extend an outstanding
                  Standby Letter of Credit) may be made only once per Business
                  Day and shall be made on notice, given not later than 11:00
                  a.m. (Hartford, Connecticut time) two (2) Business Days prior
                  to the date of the proposed issuance or amendment, renewal or
                  extension, by any Obligor to Agent. Each such notice (which
                  notice shall be irrevocable and binding on the Obligors) of

                                       26
<PAGE>

                  issuance, amendment, renewal or extension shall be by
                  telephone, confirmed immediately in writing, or by telex or
                  telecopier, specifying therein the (i) requested date of such
                  issuance, amendment, renewal or extension (which shall be a
                  Business Day), (ii) requested principal amount of such Standby
                  Letter of Credit in U.S. Dollars, (iii) requested expiration
                  date of such Standby Letter of Credit (which shall comply with
                  subsection (c) below), (iv) whether such Standby Letter of
                  Credit is renewable, and (v) names and addresses of the
                  intended account party and the beneficiary of such Standby
                  Letter of Credit, and shall be accompanied by a fully executed
                  application and agreement for letter of credit as Agent may
                  require of Obligors for use in connection with such requested
                  Standby Letter of Credit (each a "Reimbursement Agreement")
                  and such Obligor's payment of the Agent's then current Standby
                  Letter of Credit fee. If the requested form of such Standby
                  Letter of Credit is acceptable to Agent, Agent will make such
                  Standby Letter of Credit available to such Obligor at its
                  office referred to in the first paragraph of this Agreement or
                  as otherwise agreed with such Obligor in connection with such
                  issuance. In the event and to the extent that the provisions
                  of any Reimbursement Agreement shall conflict with this
                  Agreement, the provisions of this Agreement shall govern.

         c.       Form of Letter of Credit. Each Standby Letter of Credit shall,
                  among other things, (i) be in a form acceptable to Agent, and
                  (ii) be governed by, and shall be construed in accordance
                  with, the laws or rules designated in such Standby Letter of
                  Credit, or if no such laws or rules are designated, the
                  Uniform Customs and, as to matters not governed by the Uniform
                  Customs, the laws of the State of Connecticut (without regard
                  to its conflict of laws rules).

         d.       Expiry Dates. Each Standby Letter of Credit shall provide that
                  it expires no later than the close of business seven days
                  prior to the expiration date for the Revolving Line of Credit,
                  unless such Standby Letter of Credit expires by its terms on
                  an earlier date.

         e.       Payment for Standby Letter of Credit Draws. Agent shall have
                  the right (but not the obligation), in its sole and absolute
                  discretion, to effect reimbursement by Obligors to Agent of
                  any payment made by Agent in connection with a drawing made
                  under a Standby Letter of Credit which is not reimbursed to
                  Agent within the time specified for reimbursement in the
                  applicable Reimbursement Agreement by making an advance on the
                  Revolving Line of Credit for the account of the Obligors. Each
                  such advance shall bear interest at the Prime Rate. Agent
                  shall endeavor to give Obligors forty-eight (48) hours prior
                  notice before making such an advance pursuant to this Section
                  2.4 e. but failure to provide such notice shall not affect
                  Agent's right to make such an advance.

                                       27
<PAGE>

         f.       No Liability of Lender. Obligors assume all risks of the acts
                  or omissions of any beneficiary or transferee of any Standby
                  Letter of Credit with respect to the use of such Standby
                  Letter of Credit, and Obligors' obligations with respect to
                  payments made by Agent under any Standby Letter of Credit
                  shall be absolute, unconditional and irrevocable, irrespective
                  of: (i) any lack of validity or enforceability of any Standby
                  Letter of Credit, or any term or provision therein, alleged by
                  a party other than Agent; (ii) the existence of any dispute,
                  claim, setoff, defense or other right that Obligors or any
                  other person may have against the beneficiary under any
                  Standby Letter of Credit, Agent, any Lender or any other
                  person, whether in connection with this Agreement, any other
                  Loan Document or any other related or unrelated agreement or
                  transaction; (iii) any draft or other document presented under
                  a Standby Letter of Credit proving to be forged, fraudulent,
                  invalid or, subject to the provisions of the next paragraph,
                  insufficient in any respect or any statement therein being
                  untrue or inaccurate in any respect; or (iv) any error,
                  omission, interruption or delay in any transmission, dispatch
                  or delivery of any message or advice, however transmitted, in
                  connection with any Standby Letter of Credit.

                           Without limiting the generality of the foregoing, it
                  is expressly understood and agreed that the absolute and
                  unconditional obligation of Obligors hereunder to reimburse
                  Standby Letter of Credit drawings will not be excused by the
                  negligence of Agent or any Lender. However, the foregoing
                  shall not be construed to excuse Agent from liability to
                  Obligors to the extent of any direct damages (as opposed to
                  consequential damages, claims in respect of which are hereby
                  waived by Obligors to the fullest extent permitted by law)
                  suffered by Obligors that are caused by (x) Agent's willful
                  misconduct or gross negligence in determining whether
                  documents presented under any Standby Letter of Credit comply
                  with the terms of the Standby Letter of Credit, or (y) Agent's
                  willful failure to make lawful payment under a Standby Letter
                  of Credit after presentation to it of a draft or documents
                  strictly complying with the terms and conditions of such
                  Standby Letter of Credit. It is understood that Agent may,
                  subject to the standard of gross negligence or willful
                  misconduct, accept documents that appear on their face to be
                  in order, without responsibility for further investigation,
                  regardless of any notice or information to the contrary and,
                  in making any payment under any Standby Letter of Credit (1)
                  Agent's exclusive reliance on the documents presented to it
                  under such Standby Letter of Credit as to any and all matters
                  set forth therein, including reliance on the amount of any
                  draft presented under such Standby Letter of Credit, whether
                  or not the amount due to the beneficiary thereunder equals the
                  amount of such draft and whether or not any document presented
                  pursuant to such Standby Letter of Credit proves to be
                  insufficient in any respect, if such document on its face
                  appears to be in order, and whether or

                                       28
<PAGE>

                  not any other statement or any other document presented
                  pursuant to such Standby Letter of Credit proves to be forged
                  or invalid or any statement therein proves to be inaccurate or
                  untrue in any respect whatsoever, and (2) any noncompliance in
                  any immaterial respect of the documents presented under such
                  Standby Letter of Credit with the terms thereof shall, in each
                  case, be deemed not to constitute willful misconduct or gross
                  negligence of Agent.

         g.       Interim Interest. If Agent shall make any payment in respect
                  of a Standby Letter of Credit, then, unless Obligors shall
                  reimburse such payment in full on the date specified for
                  reimbursement in the applicable Reimbursement Agreement, the
                  unpaid amount thereof shall bear interest for each day from
                  and including the date of such payment to but excluding the
                  date of payment, at the Prime Rate.

         h.       Reimbursement Obligations of Lenders. Each Lender severally
                  agrees that it shall be absolutely liable, without regard to
                  the occurrence of any Event of Default, any event which with
                  the giving of notice, the passage of time, or both, would
                  become an Event of Default or any other condition precedent
                  whatsoever, to the extent of such Lender's Commitment
                  Percentage, to reimburse the Agent on demand for the amount of
                  each draft paid by the Agent under each Standby Letter of
                  Credit to the extent that such amount is not reimbursed by the
                  Obligors within the time specified for reimbursement in the
                  applicable Reimbursement Agreement, except to the extent that
                  honoring such draft constitutes gross negligence or willful
                  misconduct of Agent. No later than 3:00 p.m. (Boston time) on
                  the Business Day next following the receipt of such demand,
                  each Lender shall make available to the Agent, at the Agent's
                  office, in immediately available funds, such Lender's
                  Commitment Percentage of such unpaid draft, together with an
                  amount equal to the product of (a) the average, computed for
                  the period referred to in clause (c) below, of the weighted
                  average interest rate paid by the Agent for federal funds
                  acquired by the Agent during each day included in such period,
                  times (b) the amount equal to such Lender's Commitment
                  Percentage of such unpaid ----- draft, times (c) a fraction,
                  the numerator of which is the number of days that elapse from
                  and including the date the Agent paid the draft presented for
                  honor or otherwise made payment to the date on which such
                  Lender's Commitment Percentage of such unpaid draft shall
                  become immediately available to the Agent, and the denominator
                  of which is 360. Each such payment made by a Lender shall be
                  treated as the purchase by such Lender of a participating
                  interest in the Agent's right to reimbursement under the
                  applicable Reimbursement Agreement in an amount equal to such
                  payment. Each Lender shall share in accordance with its
                  participating interest in any interest which accrues pursuant
                  to Section 2.4 g. hereof and in any payments made by Obligors
                  in connection therewith. The responsibility of

                                       29
<PAGE>

                  the Agent to the Lenders shall be only to determine that the
                  documents (including each draft) delivered under each Standby
                  Letter of Credit in connection with such presentment shall be
                  in conformity in all material respects with such Standby
                  Letter of Credit. Agent shall pay to each Lender its Lender's
                  Commitment Percentage of any annual commission (but not any
                  fee or commission in connection with the issuance of such
                  Standby Letter of Credit) received by Agent from the Obligors
                  in connection with such Standby Letter of Credit promptly
                  after such receipt by Agent.

2.5      Payments to Agent. Obligors shall make all payments due under this
         Agreement and the Notes to Agent and Agent shall distribute such
         payments to the Lenders in accordance with the Agency Agreement.

2.6      Illegality. Notwithstanding any other provisions hereof, if any
         applicable law or governmental regulation, guideline, order or
         directive, or any change therein or in the interpretation or
         application thereof by any governmental authority charged with the
         interpretation or the administration thereof (whether or not having the
         force of law) shall make it unlawful for any Lender to make or maintain
         LIBOR Rate Loans as contemplated by this Agreement and the Notes: (i)
         the obligation of the Lenders to continue LIBOR Rate Loans shall
         forthwith be canceled, and (ii) such amounts then outstanding shall be
         automatically converted, without notice, to Prime Rate Loans on the
         last day of the then current Interest Period or within such earlier
         time as required by law. If any such conversion of LIBOR Rate Loans is
         made on a day that is not the last Business Day of the then current
         Interest Period applicable thereto, Obligors shall pay the Agent such
         amount or amounts required pursuant to Section 2.9 below.

2.7      Basis for Determining LIBOR Inadequate or Unfair. In the event that the
         Agent shall have determined (which determination, absent manifest
         error, shall be conclusive and binding upon Obligors) that (i) by
         reason of circumstances affecting the LIBOR market, adequate and
         reasonable means do not exist for determining the LIBOR Rate, or (ii)
         Dollar deposits in the relevant amount and for the relevant maturity
         are no longer available to the Lenders in the LIBOR market, or (iii)
         the continuation of LIBOR Rate Loans has been made impractical or
         unlawful by the occurrence of a contingency that materially and
         adversely affects the LIBOR market, or (iv) the LIBOR Rate will not
         adequately and fairly reflect the cost to the Lenders of maintaining
         LIBOR Rate Loans, or (v) the LIBOR Rate shall no longer represent the
         effective cost to the Lenders of U.S. Dollar deposits in the relevant
         market for deposits in which it regularly participates, the Agent shall
         give the Obligors notice of such determination as soon as practicable.
         If such notice is given all LIBOR Rate Loans shall be automatically
         converted, without notice, to Prime Rate Loans effective on the last
         Business Day of the then current Interest Period applicable thereto.
         Until such notice has been withdrawn, the LIBOR Rate shall not be
         continued.

                                       30
<PAGE>

2.8      Increased Costs. In the event that applicable law, treaty or regulation
         or directive from any government, governmental agency or regulatory
         authority, or any change therein or in the interpretation or
         application thereof, or compliance by any Lender or Agent with any
         request or directive (whether or not having the force of law) from any
         central bank or government, governmental agency or regulatory
         authority, shall:

         a.       subject any Lender or Agent to any tax of any kind whatsoever
                  (except taxes on the overall net income of such entity) with
                  respect to this Agreement, any Note or any of the loans made
                  by it, or change the basis of taxation of payments to any
                  Lender or Agent in respect thereof (except for changes in the
                  rate of tax on the overall net income of such entity);

         b.       impose, modify or hold applicable any reserve, special
                  deposit, compulsory loan or similar requirements against
                  assets held by, deposits or other liabilities in or for the
                  account of, advances, loans or other extensions of credit by,
                  or any other acquisition of funds by, any office of any Lender
                  or Agent, including (without limitation) pursuant to
                  Regulations of the Board of Governors of the Federal Reserve
                  System; or

         c.       in the opinion of any Lender or Agent, cause any Note or any
                  loan made under any Note or this Agreement to be included in
                  any calculations used in the computation of regulatory capital
                  standards; or

         d.       impose on any Lender or Agent any other condition;

         e.       and the result of any of the foregoing is to increase the cost
                  to any Lender or Agent, by an amount that such entity deems to
                  be material, of making, converting into, continuing and/or
                  maintaining the Loans and the Notes or to reduce the amount of
                  any payment (whether of principal, interest or otherwise) in
                  respect of any of such Loans, then, in any case, the Obligors
                  shall promptly pay such entity, upon its demand, such
                  additional amounts necessary to compensate such entity for
                  such additional costs or such reduction in payment, as the
                  case may be (collectively the "Additional Costs"). The Lender
                  or Agent affected thereby shall certify the amount of such
                  Additional Costs to the Obligors, and such certification,
                  absent manifest error, shall be deemed conclusive. In
                  determining such amount, the Lender or Agent affected thereby
                  shall use any reasonable averaging and attribution methods.

2.9      Indemnity. The Obligors agree to indemnify the Lenders and Agent and to
         hold the Lenders and Agent harmless from any loss (including any of the
         additional costs referred to above and any lost profits) or expense
         that it may sustain or incur as a consequence of (i) a default by any
         Obligor in the payment of the principal of

                                       31
<PAGE>

         or interest due on any Note, (ii) the making of a prepayment of any
         principal amount bearing interest based upon the LIBOR Rate on a day
         which is not the last day of the then current Interest Period
         applicable thereto or (iii) the failure by the Obligors to complete a
         borrowing of or conversion into a LIBOR Rate Loan after notice thereof
         has been given, including, but not limited to, in each case any such
         loss or expense arising from the reemployment of funds obtained by it
         or from fees, interest or other amounts payable to terminate the
         deposits from which such funds were obtained. The Agent shall prepare a
         certificate as to any additional amounts payable to it pursuant to this
         Section, which certificate shall be submitted by the Agent to the
         Obligors and shall, absent manifest error, be deemed conclusive.

2.10     Tax Indemnity. All payments made by the Obligors under this Agreement
         and the Notes shall be made free and clear of, and without deduction or
         withholding for or on account of, any present or future income, stamp
         or other taxes, levies, imposts, duties, charges, fees, deductions or
         withholdings, now or hereafter imposed, levied, collected, withheld or
         assessed by any Governmental Authority (as hereafter defined),
         excluding net income taxes and franchise taxes (imposed in lieu of net
         income taxes) imposed on any Lender as a result of a present or former
         connection between such Lender and the jurisdiction of the Governmental
         Authority imposing such tax or any political subdivision or taxing
         authority thereof or therein (other than any such connection arising
         solely from such Lender having executed, delivered or performed its
         obligations or received a payment under, or enforced, this Agreement or
         any Note). If any such non-excluded taxes, levies, imposts, duties,
         charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
         required to be withheld from any amounts payable to any Lender
         hereunder or under any Note, the amounts so payable to such Lender
         shall be increased to the extent necessary to yield to such Lender
         (after payment of all Non-Excluded Taxes) interest or any such other
         amounts payable hereunder at the rates or in the amounts specified in
         this Agreement. Whenever any Non-Excluded Taxes are payable by the
         Obligors, as promptly as possible thereafter the Obligors shall send to
         such Lender a certified copy of an original official receipt received
         by the Obligors showing payment thereof. If the Obligors fail to pay
         any Non-Excluded Taxes when due to the appropriate taxing authority or
         fail to remit to such Lender the required receipts or other required
         documentary evidence, the Obligors shall indemnify such Lender for any
         incremental taxes, interest or penalties that may become payable by
         such Lender as a result of any such failure. The agreements in this
         subsection shall survive the termination of this Agreement and the
         payment of the Loans and all other amounts payable hereunder. As used
         in this Section, "Governmental Authority" shall mean any nation or
         government, any state or other political subdivision thereof and any
         entity exercising executive, legislative, judicial, regulatory or
         administrative functions of or pertaining to government.

                                       32
<PAGE>

2.11     Lawful Interest. All agreements between Obligors and Lenders are hereby
         expressly limited so that in no event whatsoever, whether by reason of
         acceleration of maturity of the indebtedness evidenced hereby or
         otherwise, shall the amount paid or agreed to be paid to any Lender or
         Agent for the use or the forbearance of the indebtedness evidenced
         hereby exceed the maximum permissible under applicable law. As used
         herein, the term "applicable law" shall mean the law in effect as of
         the date hereof provided, however, that in the event there is a change
         in the law which results in a higher permissible rate of interest, then
         this Agreement and the Notes shall be governed by such new law as of
         its effective date. In this regard, it is expressly agreed that it is
         the intent of Obligors and Lenders in the execution, delivery and
         acceptance of each Note to contract in strict compliance with the laws
         of the State of Connecticut from time to time in effect. If, under or
         from any circumstances whatsoever, fulfillment of any provision hereof,
         of any Note or of any of the Loan Documents at the time of performance
         of such provision shall be due, shall involve transcending the limit of
         such validity prescribed by applicable law, then the obligation to be
         fulfilled shall automatically be reduced to the limits of such
         validity, and if under or from any circumstances whatsoever any Lender
         or the Agent should ever receive as interest an amount which would
         exceed the highest lawful rate, such amount which would be excessive
         interest shall be applied to the reduction of the principal balance
         evidenced hereby and not to the payment of interest. This provision
         shall control every other provision of all agreements between Obligors,
         the Lenders and the Agent.

2.12     Due Date; Late Charge. If any Note or any payment hereunder or under
         any Note becomes due on a day which is not a Business Day, the due date
         of such Note or payment shall be extended to the next succeeding
         Business Day and such extension of time shall be included in computing
         interest and fees in connection with such payment. Without limiting the
         Agent's and Lenders' rights and remedies with respect to the Event of
         Default that will have occurred, if the entire amount of any required
         principal and/or interest payment is not paid in full within fifteen
         (15) days after the same is due, Obligors shall pay to the Agent a late
         fee equal to the greater of five percent (5%) of the required payment
         or fifteen dollars ($15.00).

2.13     Direct Debit of Principal and Interest. Obligors agree that Agent may
         directly debit any Obligor's accounts held by Webster Bank for any
         principal or interest payment on any Obligation when such Obligation
         becomes due and payable.

2.14     Agency Fees. The Obligors shall pay to the Agent on the Date of Closing
         and on each anniversary thereof an annual agency fee in the amount of
         Twenty Thousand Dollars ($20,000).

2.15     Unused Fee. The Obligors shall pay to the Agent for the benefit of the
         Lenders by January 10, 2005 and April 10, 2005 a fee equal to one
         quarter of one percent

                                       33
<PAGE>

         (0.25%) of the difference obtained by subtracting from $10,000,000 the
         average daily principal amount outstanding on the Acquisition/Capital
         Asset Line of Credit (excluding any amount used to prepay Subordinated
         Debt) for the three full calendar months prior to such payment date.

2.16     Interest Rate Hedge. The Obligors must hedge their interest rate
         exposure on at least fifty percent (50%) of the principal balance at
         any time outstanding under the Term Loan and the Acquisition/Capital
         Asset Line of Credit by entering into an interest rate hedge agreement
         with Webster Bank or another counterparty acceptable to Agent. Any
         documentation relating to such hedge shall contain standard provisions,
         including make whole provisions, acceptable to Agent.

2.17     Several Obligations of Lenders. The obligations of the Lenders under
         the Notes, this Agreement and the other Loan Documents are the several
         obligations of each Lender in accordance with and to the extent of such
         Lender's Lender's Commitment Percentage and are not the joint
         obligations of the Lenders. The relation of the Lenders under this
         Agreement, the Agency Agreement and the other Loan Documents shall not
         create any joint venture or partnership among the Lenders.

2.18     Replacement of Lenders. If any Lender (an "Affected Lender") fails to
         make available to Agent its share of any advance for any Loan, the
         Obligors may, so long as no Event of Default or event which with the
         giving of notice or the passage of time would constitute an Event of
         Default has occurred and is then continuing, within ninety (90) days of
         such failure, by notice (a "Replacement Notice") in writing to the
         Agent and the Lenders (i) request the Affected Lender to cooperate with
         the Obligors in obtaining a replacement Lender satisfactory to
         non-Affected Lenders having an aggregate Lender's Commitment Percentage
         equal to or greater than fifty percent (50%), the Agent and the
         Obligors (the "Replacement Lender"); (ii) request the non-Affected
         Lenders to acquire and assume all of the Affected Lender's Loans as
         provided herein, but none of such Lenders shall be under an obligation
         to do so; or (iii) designate a Replacement Lender approved by
         non-Affected Lenders having an aggregate Lender's Commitment Percentage
         equal to or greater than fifty percent (50%) and the Agent, which
         consent shall not be unreasonably withheld or delayed. If any
         satisfactory Replacement Lender shall be obtained, and/or if any one or
         more of the non-Affected Lenders shall agree to acquire and assume all
         of the Affected Lender's Loans, then such Affected Lender shall sell to
         such Replacement Lender or non-Affected Lenders, as the case may be, at
         par value, such Affected Lender's Notes and its interests in the Loans,
         based upon the outstanding principal amounts thereof at the time of
         purchase, plus, to the extent actually paid by Obligors and collected
         by Agent, such Affected Lender's pro-rata share in accordance with its
         Lender's Commitment Percentage of interest, fees (excluding agency
         fees), late charges, costs and expenses and minus such Affected
         Lender's pro-rata share in accordance with its Lender's Commitment
         Percentage of costs and expenses owed to the

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<PAGE>

         Agent and not reimbursed by the Obligors. The Replacement Lender or
         non-Affected Lenders, as the case may be, shall also pay to the Agent
         at the time of purchase such Affected Lender's pro-rata share in
         accordance with its Lender's Commitment Percentage of costs and
         expenses owed to the Agent and not reimbursed by the Obligors. The
         Agent shall distribute to such Affected Lender the Affected Lender's
         Lender's Commitment Percentage of such unpaid interest, fees, late
         charges, costs and expenses and unreimbursed costs and expenses owed to
         the Agent if and when such amounts are collected by Agent from the
         Obligors. In the event of any purchase of an Affected Lender's Notes
         and interests in the Loans pursuant to this Section, notwithstanding
         any provisions of the Loan Documents, including the Notes, the Affected
         Lender shall not be entitled to any prepayment premium or fee in
         connection with such purchase. At the time of purchase, the Affected
         Lender shall deliver its Notes to the Agent with appropriate
         endorsements thereon and the Obligors, the Lenders and the Agent shall
         execute amendments to this Agreement, the Agency Agreement and any of
         the other Loan Documents which Agent deems appropriate to evidence the
         purchase of such Affected Lender's Notes and interests in the Loans and
         the Obligors shall issue replacement Notes to such Replacement Lender
         and/or non-Affected Lenders, as the case may be. Upon any such purchase
         and payment to the Affected Lender of the purchase price therefor, all
         rights and obligations of the Affected Lender under this Agreement, the
         Agency Agreement and the other Loan Documents, other than the right to
         receive payments from the Agent as set forth in this section if and
         when such amounts are collected by Agent from the Obligors and its
         rights and obligations relating to indemnification, shall terminate.

SECTION 3. Collateral.

3.1      As security for the payment and performance of all Obligations,
         Obligors hereby grant to Agent:

         a.       A first priority security interest in all of the Collateral,
                  subject only to the Prior Encumbrances.

         b.       A first priority security interest in all proceeds of any and
                  all insurance on the Collateral.

         c.       A first priority security interest in all proceeds and
                  products of any item or type of the Collateral, subject only
                  to Prior Encumbrances.

3.2      [Intentionally omitted].

3.3      Pledge of Membership Interests. Holdings shall pledge to Agent the
         membership interests it owns in Crystal Rock LLC pursuant to the Pledge
         Agreement.

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<PAGE>

3.4      Location of Collateral. All Collateral is and will be owned by
         Obligors, free of all liens and encumbrances other than Permitted
         Encumbrances and liens granted to the Agent and shall be kept by
         Obligors at the locations listed on Schedule 3.4. Obligors will not,
         without Agent's prior written approval, remove the Collateral
         therefrom, except for the purposes of sale in the ordinary course of
         business. All bottling facilities of the Obligors are identified as
         such on Schedule 3.4, the tenant for each leased location is as
         identified on Schedule 3.4 and the location of each public warehouse is
         identified as such on Schedule 3.4.

3.5      Defend Collateral. Obligors shall defend the Collateral against all
         claims and demands of all persons at any time claiming the same or any
         interest therein and, in the event the Agent's security interest in the
         Collateral, or any part thereof, would be impaired by an adverse
         decision, allow the Agent to contest or defend any such claim or demand
         in the Obligors' names and Obligors agree to pay, upon demand, the
         Agent's reasonable costs, charges and expenses, including, without
         limitation, attorney's fees, in connection therewith.

3.6      Financing Statements. From time to time, at the request of the Agent,
         Obligors shall execute, if necessary, deliver and file one or more
         financing statements on Form UCC-1 or other instruments, and do all
         other reasonable acts as the Agent deems necessary or desirable to
         perfect fully or to keep perfected its security interest in the
         Collateral and pay, upon demand, all reasonable expenses, including,
         without limitation, attorney's fees, incurred by the Agent in
         connection therewith. The Obligors hereby irrevocably appoint the Agent
         their attorney-in-fact to execute, if necessary, and file all such
         UCC-1 forms or other instruments, documents or agreements deemed
         necessary or desirable to fully perfect or keep perfected the Agent's
         security interest in the Collateral.

3.7      Further Assurances Re Inventory. Obligors shall perform any and all
         reasonable steps requested by Agent to perfect Agent's security
         interest in the Inventory, such as leasing warehouses to Agent or
         Agent's assignee, placing and maintaining signs, appointing custodians,
         executing and filing financing, amendment or continuation statements in
         form and substance satisfactory to Agent, maintaining stock records and
         transferring Inventory to warehouses. Upon the occurrence and during a
         continuance of an Event of Default, if any Inventory is in the
         possession or control of any of Obligors' agents or processors,
         Obligors shall notify such agents or processors of Agent's security
         interest therein, and, upon request, instruct them to hold all such
         Inventory for Agent's account and subject to Agent's instructions. A
         physical listing of all Inventory, wherever located, shall be taken by
         Obligors at least annually and whenever requested by Agent, and a copy
         of each such physical listing shall be provided to Agent. Agent may
         examine and inspect the Inventory upon reasonable notice during
         business hours.

3.8      Further Assurance Re Receivables. Obligors shall place notations upon
         Obligors' books of account to disclose the assignment of all
         Receivables to Agent or Agent's

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<PAGE>

         security interest therein and shall perform all other reasonable steps
         requested by Agent to create and maintain in Agent's favor a valid
         first priority security interest, assignment or lien in, of or on all
         Receivables and all other security held by or for Agent.

3.9      [Intentionally omitted]

3.10     Revised Article 9. In connection with the revised Article 9 of the
         Uniform Commercial Code substantially in the form approved in 1998 by
         the American Law Institute and the National Conference of Commissioners
         on Uniform State Law ("REVISED ARTICLE 9"), the Obligors hereby
         acknowledge and agree with the Agent as follows:

         a.       In applying the law of any jurisdiction in which Revised
                  Article 9 is in effect, the Collateral is all assets of the
                  Obligors, whether or not within the scope of Revised Article
                  9. The Collateral shall also include, without limitation, the
                  following categories of assets as defined in Revised Article
                  9: goods (including inventory, equipment and any accessions
                  thereto), instruments (including promissory notes), documents,
                  accounts (including health-care-insurance receivables),
                  chattel paper (whether tangible or electronic), deposit
                  accounts, letter-of-credit rights (whether or not the letter
                  of credit is evidenced by a writing), commercial tort claims,
                  securities and all other investment property, general
                  intangibles (including payment intangibles and software),
                  supporting obligations and any and all proceeds of any
                  thereof, wherever located, whether now owned and hereafter
                  acquired. If the Obligors (or any of them) shall at any time,
                  whether or not Revised Article 9 is in effect in any
                  particular jurisdiction, acquire a commercial tort claim, as
                  defined in Revised Article 9, the Obligors shall immediately
                  notify the Agent in a writing signed by the Obligors of the
                  brief details thereof and grant to the Agent in such writing a
                  security interest therein and in the proceeds thereof, all
                  upon the terms of this Agreement, with such writing to be in
                  form and substance satisfactory to the Agent. The Agent may at
                  any time and from time to time, pursuant to the provisions of
                  this Agreement, file financing statements, continuation
                  statements and amendments thereto that describe the Collateral
                  as "all assets of the Obligors" or words of similar effect and
                  which contain any other information required by Part 5 of
                  Revised Article 9 for the sufficiency or filing office
                  acceptance of any financing statement, continuation statement
                  or amendment, including whether each Obligor is an
                  organization, the type of organization and any organization
                  identification number issued to each of the Obligors. The
                  Obligors shall furnish any such information to the Agent
                  promptly upon request. Any such financing statements,
                  continuation statements or amendments may be signed by the
                  Agent on behalf of the Obligors (or any of them), as provided
                  in this Agreement, and may be filed at any time in any

                                       37
<PAGE>

                  jurisdiction whether or not Revised Article 9 is then in
                  effect in that jurisdiction.

         b.       The Obligors shall at any time and from time to time, whether
                  or not Revised Article 9 is in effect in any particular
                  jurisdiction, take such steps as the Agent may reasonably
                  request for the Agent (a) to obtain an acknowledgement, in
                  form and substance satisfactory to the Agent, of any bailee
                  having possession of any of the Collateral that the bailee
                  holds such Collateral for the Agent, (b) to obtain "control"
                  of any investment property, deposit accounts, letter-of-credit
                  rights or electronic chattel paper (as such terms are defined
                  in Revised Article 9 with corresponding provisions in Sections
                  9-104, 9-105, 9-106 and 9-107 relating to what constitutes
                  "control" for such items of Collateral), with any agreements
                  establishing control to be in form and substance satisfactory
                  to the Agent, and (c) otherwise to insure the continued
                  perfection and priority of the Agent's security interest in
                  any of the Collateral and of the preservation of its rights
                  therein, whether in anticipation and following the
                  effectiveness of Revised Article 9 in any jurisdiction.

         c.       Nothing contained herein shall be construed to narrow the
                  scope of the security interest granted hereby in any of the
                  Collateral or the perfection or priority thereof or to impair
                  or otherwise limit any of the rights, powers, privileges or
                  remedies of the Agent hereunder except as (and then only to
                  the extent) specifically mandated by Revised Article 9 to the
                  extent then applicable.

3.11     Security Interest and License re Intangibles. The Obligors hereby grant
         to the Agent a security interest in and following the occurrence and
         during the continuance of an Event of Default, a non-exclusive license
         and right to use any and all patents, copyrights, tradenames,
         trademarks and all applications therefor, and licenses to any patent,
         copyright, tradename or trademark that the Obligors now owns, has the
         right to use (to the extent permitted by the governing document) or may
         hereafter own or acquire the right to use (to the extent permitted by
         the governing document). The Agent's security interest and
         non-exclusive license, as set forth in this subparagraph, shall
         specifically include all rights of the Obligors which may be necessary
         in order for the Agent to exercise or get the full benefit and value
         from the security interest set forth in this Agreement.

3.12     Mortgages on Real Estate. At least thirty (30) days prior to any
         purchase of real estate by any of the Obligors, the Obligors shall
         deliver to Agent notice of such intended purchase and all documentation
         and information which the Agent shall request in connection with such
         real estate, which documentation and information may include, without
         limitation, environmental reports, engineering reports, title reports,
         zoning reports and surveys. If the Agent so requests, which it may do
         in

                                       38
<PAGE>

         its sole and absolute discretion, the Obligors will deliver to Agent at
         the time of purchase a mortgage on the real estate being purchased in
         form and content satisfactory to Agent together with, if the Agent so
         requests, a title insurance policy in form and content satisfactory to
         Agent insuring the lien of the mortgage as a valid first priority
         mortgage lien, an opinion letter relating to such real estate and
         mortgage in form and substance satisfactory to Agent and such other
         documentation as Agent may reasonably request.

3.13     Water Contracts and Licenses. At least ten (10) days prior to entering
         into any material contract or license agreement by any of the Obligors
         relating to the supply of water, the Obligors shall deliver to Agent
         notice of such intended action and a complete copy of such contract or
         license agreement. All such contracts and license agreements shall
         specifically state that they are assignable to the Agent as security
         for the Obligations and to any subsequent lenders and Obligors shall
         take all steps necessary to complete such assignment to Agent,
         including, without limitation, the execution and delivery to Agent of
         an assignment of such contract or license agreement in form and content
         satisfactory to Agent.

3.14     Acquisitions. At least ten (10) days prior to consummation of an
         Acquisition which does not require the consent of the Agent pursuant to
         Section 6.4 and for which the Obligors are not requesting an advance
         under the Acquisition/Capital Asset Line of Credit, the Obligors shall
         deliver to Agent notice of such intended Acquisition and such other
         information as Agent shall request in connection with such Acquisition.
         Without in any way waiving or limiting the other covenants and
         requirements contained in this Agreement and the other Loan Documents,
         the Obligors shall take all actions reasonably requested by Agent in
         connection with any Acquisition to perfect Agent's security interest in
         the stock or other ownership interests or assets acquired in such
         Acquisition.

3.15     Costs and Expenses. Obligors will pay upon demand all costs and
         expenses incurred by Agent, including, without limitation, reasonable
         counsel fees, in connection with any of the actions set forth in this
         Section 3.

SECTION 4. Representations, Warranties and General Covenants. On the date hereof
and in order to induce Lenders and Agent to enter into this Agreement, Obligors
represent, warrant and covenant the following:

4.1      Organization and Qualification. Holdings is and will continue to be a
         corporation duly organized, validly existing and in good standing under
         the laws of the state of its incorporation and is and will continue to
         be duly qualified and licensed to do business in each other state in
         which the nature of its business makes such qualification necessary.
         Crystal Rock LLC is and will continue to be a limited liability company
         duly organized, validly existing and in good standing under the laws of
         the state of its organization and is and will continue to be duly
         qualified and licensed to do business in each other state in which the
         nature of its business

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<PAGE>

         makes such qualification necessary. Each Obligor has all requisite
         material permits, authorizations and licenses, without unusual
         restrictions or limitations, to own, operate and lease its properties
         and to conduct the business in which it is presently engaged, all of
         which are in full force and effect.

4.2      Records. The Certificate of Incorporation and all amendments thereto of
         Holdings and the Certificate of Formation and Limited Liability Company
         Agreement of Crystal Rock LLC have been duly filed and are in proper
         order. All capital stock issued by Holdings and outstanding has been
         properly issued and is fully paid and non-assessable, all membership
         interests issued by Crystal Rock LLC and outstanding have been properly
         issued and all books and records of each Obligor, including but not
         limited to its minute books, bylaws, and books of account, are accurate
         and up to date in all material respects and will be so maintained.

4.3      Power and Authority. Each Obligor has the corporate or limited
         liability company power, as the case may be, to execute, deliver and
         carry out the terms of the Loan Documents and to incur the Obligations
         and has taken all necessary corporate or limited liability company
         action to authorize the execution, delivery and performance by it of
         the Loan Documents.

4.4      No Legal Bar. The execution and delivery of the Loan Documents and
         compliance by Obligors with the terms and provisions thereof do not, on
         the date hereof, violate any provision of any existing law or
         regulation or any writ or decree of any court or governmental
         instrumentality, or any agreement or instrument to which any of the
         Obligors is a party or which is binding upon any of them or their
         assets, and will not result in the creation or imposition of any lien,
         security interest, charge or encumbrance of any nature whatsoever upon
         or in any of their assets, except as contemplated by the Loan
         Documents; no consent of any other party, and, other than the filing of
         UCC-1 financing statements, no consent, license, approval or
         authorization of or registration or declaration with any governmental
         bureau or agency, is required in connection with the execution,
         delivery, performance, validity and enforceability of any of the Loan
         Documents; and the Loan Documents, upon the execution and delivery
         thereof and the execution or acceptance thereof by the Lenders and
         Agent, will be legal, valid, binding and enforceable obligations of the
         Obligors in accordance with their respective terms, except as limited
         by applicable bankruptcy, insolvency, reorganization, moratorium,
         fraudulent transfer or other laws of general application affecting
         enforcement of creditors' rights generally and the remedy of specific
         performance and injunctive and other forms of equitable relief may be
         subject to equitable defenses and the discretion of the court.

4.5      Title; No Liens. Except as set forth on Schedule 4.5, each of the
         Obligors has good and marketable title to all of its Property that it
         owns, subject to no mortgage, security interest, pledge, lien,
         encumbrance or other charge.

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<PAGE>

4.6      No Litigation. Except as set forth on Schedule 4.6, there is no
         litigation, administrative proceeding, hearing or to the knowledge of
         the Obligors, investigation of or before any governmental body
         presently pending or, to the knowledge of any of the Obligors,
         threatened against it or any of its Property and if all of the matters
         set forth on Schedule 4.6 were determined adversely to the Obligors,
         such adverse determinations, either individually or in the aggregate,
         would not have a material adverse effect on the Obligors, their
         businesses or their Property taken as a whole or on the Loan Documents
         or the rights and remedies granted therein.

4.7      No Default. None of the Obligors are, on the date hereof, in default
         with respect to the payment or performance of any of their Obligations
         or other Indebtedness or in the performance of any covenants or
         conditions to be performed by any of them pursuant to the terms and
         provisions of any Loan Documents or in any material respect, any other
         indenture, agreement or instrument to which any of them are a party or
         by which any of them are bound, and none of the Obligors has received a
         notice of default under any of the foregoing.

4.8      Compliance with Laws. Each Obligor has complied in all material
         respects with all applicable laws, ordinances, rules and regulations of
         the United States of America, and all states, counties, municipalities
         and agencies of any governmental authority thereof.

4.9      Taxes. Each Obligor has filed or caused to be filed or obtained
         extensions for the filing of, and will continue to file and cause to be
         filed, all federal, state and local tax returns required by law to be
         filed, and has paid and will continue to pay all taxes shown to be due
         and payable on such returns or on any assessment made against it,
         except if being contested in good faith, if adequate provision has been
         made therefor on its books of account and if requested by Agent, a
         reserve satisfactory to Agent has been set aside to pay such taxes,
         interest, penalties and costs associated therewith. No claims have been
         asserted with respect to such taxes which are not reflected in the
         financial statements which have been furnished by Obligors to Lenders.

4.10     Financial Condition. Holdings has submitted to Lenders various
         financial statements and information as of October 31, 2003 and
         subsequent Form 10-Qs through the date hereof, and represents that all
         of such financial information is true and correct; that such financial
         information fairly presents the consolidated financial condition and
         results of operations of Holdings and its Subsidiaries as of the dates
         thereof and for the periods indicated therein; that such financial
         statements have been prepared in accordance with GAAP and practices
         consistently maintained throughout the periods involved; and that, as
         of the date of such financial information, there were no material
         unrealized or anticipated losses from any unfavorable commitments of
         any of the Obligors and that there

                                       41
<PAGE>

         has been no material adverse change in the business or Property or in
         the condition, financial or otherwise, of any of the Obligors from that
         set forth in such financial statements other than as disclosed in
         subsequent financial statements which will have been previously
         delivered to each Lender.

4.11     Accuracy of Representations. To the best of the Obligors' knowledge,
         after due inquiry, no representation or warranty by any of the Obligors
         contained in any certificate or other document furnished or to be
         furnished by it pursuant to this Agreement or in connection with the
         transactions contemplated under this Agreement, contains, or at the
         time of delivery will contain, any untrue statement of material fact or
         omits or will omit to state a material fact necessary to make it not
         misleading in light of the circumstances under which it was made.

4.12     Trade Names and Chief Executive Offices. Each of the Obligors operates
         its business under the trade names set forth for it on Schedule 4.12
         and has not used within the last five years and does not currently use
         any other trade names. The chief executive office of Crystal Rock LLC
         and its principal place of business are at 1050 Buckingham Street,
         Watertown, CT 06795-1600. The chief executive office of Holdings and
         its principal place of business are at 45 Krupp Drive, Williston, VT
         05495.

4.13     Parents, Affiliates or Subsidiaries. Holdings has no parent corporation
         and none of the Obligors have any Affiliates or Subsidiaries other than
         each other and Computer Designed Systems, Inc. Adirondack and Excelsior
         were merged with and into VPS and Crystal-Waterville was merged with
         and into Crystal Rock Spring. VPS and Crystal Rock Spring were merged
         with and into Holdings with Holdings being the surviving entity.
         Crystal Rock LLC is a wholly owned Subsidiary of Holdings. Holdings
         owns approximately twenty-three and 36/100 percent (23.36%) of the
         outstanding stock of Computer Designed Systems, Inc.

4.14     Agreements Regarding Stock. None of the Obligors has any agreements
         pertaining to the issuance, purchase or sale of its capital stock,
         except as set forth on Schedule 4.14.

4.15     Collective Bargaining Agreements. None of the Obligors is a party to
         any collective bargaining agreements.

4.16     Subsequent Advances Under the Loans. Each request by any Obligor for an
         advance under the Revolving Line of Credit or the Acquisition/Capital
         Asset Line of Credit or for the issuance of a Standby Letter of Credit
         shall constitute a representation by such Obligor to Lenders and Agent
         that (a) either (i) all of the representations and warranties contained
         in this Agreement shall have continued to be true and accurate in all
         material respects to and including the date of such borrowing as though
         made on and as of such date or (ii) any changes in any material respect
         to such representations and warranties have been disclosed in

                                       42
<PAGE>

         writing to the Agent and individually or in the aggregate could not
         reasonably be foreseen to result in a material adverse change to the
         Collateral or in the business, properties, condition or operations,
         financial or otherwise, of any Obligor; (b) no event has occurred and
         is continuing (that has not been waived pursuant to this Agreement), or
         would exist as a result of the proposed borrowing, which constitutes an
         Event of Default hereunder or would constitute such an Event of Default
         but for the giving of notice or passage of time; (c) each Obligor has
         performed all of the agreements (that have not been waived pursuant to
         this Agreement) on its part contained in the Loan Documents and
         required to be performed by it on or prior to the date of such
         borrowing; and (d) the corporate resolutions authorizing the Loan
         Documents and the underlying transactions remain in full force and
         effect and have not been modified or amended in any respect.

4.17     Saleable Value of Assets. The fair saleable value of the assets of each
         Obligor, after giving effect to the transactions contemplated by the
         Loan Documents, will be in excess of its debts (including contingent,
         subordinated, unmatured and unliquidated liabilities).

4.18     Sufficient Cash Flow. Each Obligor has, and after giving effect to the
         transactions contemplated by the Loan Documents each Obligor will have,
         sufficient cash flow to continue to operate its business in the
         ordinary course as heretofore conducted, make the payments called for
         by the Loan Documents and pay all other debts, including but not
         limited to payments under the Notes, supplier payments, pension and
         other employee benefit plan liabilities, business expenses and taxes,
         as the same shall become due.

4.19     No Hindrance. None of the Obligors has any intent to hinder, delay or
         defraud any entity to which it is or will become indebted.

4.20     Capitalization. None of the Obligors, after giving effect to the
         transactions contemplated by the Loan Documents, will be engaged in any
         business or transaction or is about to engage in any business or
         transaction for which it has unreasonably small capital.

4.21     Ability to Pay Debts. None of the Obligors, after giving effect to the
         transactions contemplated by the Loan Documents, intends to incur nor
         does it believe that it will incur debts beyond its ability to pay as
         they become due.

4.22     Ownership of Property. None of the Obligors has in its possession any
         personal property of which it is not the actual owner, except as
         described on Schedule 4.22.

4.23     Benefit of Loans. Each Obligor shall receive material direct and
         indirect benefits from the making of any portion of the Loans to any of
         the Obligors and a

                                       43
<PAGE>

         satisfactory financial condition and successful business operations of
         each Obligor benefits, directly and indirectly, each of the other
         Obligors.

4.24     Crystal Rock LLC. Holdings has conveyed all of its assets which were
         used in, necessary for, or desirable for use in its business operations
         to Crystal Rock LLC. Holdings has assigned to Crystal Rock LLC and
         Crystal Rock LLC has assumed all contracts relating to, necessary for,
         or desirable for use in Holdings' business operations.

4.25     Compliance with Land Use Permits. The Obligors are in material
         compliance with all land use permits relating to any real property
         which it occupies.

4.26     Revised Article 9 Information. The type of organization of each
         Obligor, the state of organization of each Obligor, the organizational
         identification number of each Obligor for Revised Article 9 purposes in
         each such state of organization and the Federal Employer Identification
         number of each Obligor is set forth on Schedule 4.26.

4.27     Water Contracts and Licenses. All of Obligors' material contracts and
         license agreements relating to the supply of water to any of the
         Obligors are listed on Schedule 4.27, all such material contracts and
         license agreements are in full force and effect and have not been
         amended or modified in any respect, no Obligor and, to the knowledge of
         the Obligors, no other party thereto is in default with respect
         thereto, and true and complete copies of all such material contracts
         and license agreements have been provided to Agent.

4.28     Reorganization compliance. The consummation of the mergers described in
         Section 4.13 and the conveyance of assets and assignment of contracts
         described in Section 4.24 did not violate any provision of any existing
         law or regulation or any writ or decree of any court or governmental
         instrumentality applicable to any Obligor or Original Obligor, or any
         agreement or instrument to which any of the Obligors or Original
         Obligors was a party or which was binding upon any of them or their
         assets, and did not result in the creation or imposition of any lien,
         security interest, charge or encumbrance of any nature whatsoever upon
         or in any of their assets, except as contemplated by the Loan
         Documents. Except as described on Schedule 4.28, no consent of any
         other party, and no consent, license, approval or authorization of or
         registration or declaration with any governmental bureau or agency,
         other than the filing of the appropriate certificates of merger with
         the Secretaries of State of Delaware, New York and Connecticut which
         were duly filed, was required in connection with the consummation of
         the mergers described in Section 4.13 and the conveyance of assets and
         assignment of contracts described in Section 4.24.

                                       44
<PAGE>

SECTION 5. Affirmative Covenants. Obligors covenant and agree that, so long as
any of the Obligations shall remain outstanding, they will perform and observe
each and all of the covenants and agreements herein set forth, unless waived in
writing by Agent.

5.1      Payments Under this Agreement and the other Loan Documents. Each
         Obligor will make punctual payment of all monies and will faithfully
         and fully keep and perform all of the terms, conditions, covenants and
         agreements on its part to be paid, kept or performed hereunder, and
         will be bound in all respects as obligor under this Agreement and the
         other Loan Documents. All Obligations shall be direct and primary
         obligations of each Obligor and each Obligor shall be jointly and
         severally liable for all Obligations. Notwithstanding any term or
         provision of this Agreement, the Notes or the other Loan Documents to
         the contrary, the Obligations of each Obligor shall not exceed the
         maximum amount for which such Obligor can be liable without rendering
         the Obligations of such Obligor voidable under applicable law relating
         to fraudulent conveyance or fraudulent transfer or similar laws
         affecting the rights of creditors generally.

5.2      Information, Access to Books, and Inspection. Each Obligor will furnish
         to each Lender such information regarding the business affairs and
         financial condition of the Obligors as such Lender may reasonably
         request and give any representative of any Lender access during normal
         business hours to, and permit him/her to examine and copy, make
         extracts from, and audit any and all books, records and documents in
         the possession of Obligors relating to their affairs and to inspect any
         of the Property so long as each Lender and its representative agrees to
         maintain the confidentiality of such information.

5.3      Payment of Liabilities. Each Obligor will pay and discharge at or
         before their maturity all taxes, assessments, rents, claims, debts and
         charges, except where the same may be contested in good faith, will
         maintain, in accordance with GAAP, appropriate reserves for the accrual
         of any of the same and if requested by Agent, will set aside a reserve
         satisfactory to Agent to pay such contested amounts and all taxes,
         interest, penalties and costs associated therewith.

5.4      Corporate Existence, Properties. Each Obligor will continue to conduct
         its business as presently conducted; will do or cause to be done all
         things necessary to preserve and keep in full force and effect its
         corporate existence, rights and franchises, and will comply with all
         laws applicable thereto; will maintain all licenses, patents and other
         rights necessary for the operation of its business; will at all times
         maintain, preserve and protect all franchises, patents, trademarks,
         trade names and water rights and will preserve, to the extent deemed
         necessary or appropriate by Obligors in their reasonable business
         judgment, all of the remainder of its Property used or useful in the
         conduct of its business and will keep the same in good condition and
         repair (normal wear and tear and obsolescence excepted), and from time
         to time will reasonably make, or cause to be made, all needful and
         proper repairs, renewals, replacements, betterments and

                                       45
<PAGE>

         improvements thereto, and will pay or cause to be paid, except when the
         same may be contested in good faith, all rent due on premises where any
         Property is held or may be held, so that the business carried on in
         connection therewith may be continuously conducted.

5.5      Insurance. Each Obligor will have and maintain casualty insurance at
         all times with respect to all Property and all Collateral against risks
         of fire (including so-called extended coverage), theft and such risks
         as Agent may reasonably require, business interruption insurance as
         Agent may reasonably require, public liability insurance as Agent may
         reasonably require and flood insurance as Agent may reasonably require,
         containing such terms, in such form, in such amounts (including 100% of
         the full insurable value of buildings, improvements and personal
         property with respect to casualty insurance) and for such periods, and
         written by such companies as may reasonably be satisfactory to Agent,
         such insurance to be payable to Agent and Obligors as their interests
         may appear. Each policy of insurance shall have a mortgagee and loss
         payee endorsement providing:

         a.       That loss or damage, if any under the policy, shall be payable
                  to Agent, as secured party, as its interests may appear;

         b.       That the insurance as to the interest of Agent shall not be
                  invalidated by any act or neglect of the insured or owner of
                  the property described in said policy, nor by any foreclosure,
                  or other proceeding, nor by any change in the title of
                  ownership of said property, nor by the occupation of the
                  premises where the property is located for purposes more
                  hazardous than are permitted by said policy;

         c.       That, if the policy is canceled at any time by the insurance
                  carrier, in such case the policy shall continue in force for
                  the benefit of Agent for not less than thirty (30) days after
                  written notice of cancellation to Agent from the insurance
                  carrier; and

         d.       That the policy will not be reduced or canceled at the request
                  of the insured nor will said loss payee endorsement be amended
                  or deleted without thirty (30) days' prior written notice to
                  Agent from the insurance carrier.

         Upon the occurrence and during the continuance of any Event of Default,
         Agent may act as attorney for the Obligors in obtaining, adjusting,
         settling, and canceling such insurance and receiving and endorsing any
         drafts. Each Obligor hereby assigns to Agent any and all monies which
         may become due and payable under any policy insuring the Collateral
         covered by this Agreement, including return of unearned premiums, and
         hereby directs any insurance company issuing any such policy to make
         payment directly to Agent and authorizes Agent, at its option except to
         the extent that either of the next two sentences apply,: (i) to apply
         such

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<PAGE>

         monies in payment on account of any Obligation hereunder, whether or
         not due, and remit any surplus to Obligors; or (ii) to return said
         funds to Obligors for the purpose of replacement of the Collateral.
         Upon the damage, destruction or loss of any personal property which
         constitutes Collateral in an aggregate amount of $250,000 or less,
         Agent agrees that it will return said funds to Obligors for the purpose
         of replacement of the Collateral with new Collateral of the same value
         and utility if no event which constitutes or which with notice or lapse
         of time, or both, would constitute an Event of Default has occurred and
         the damage, destruction or loss has not materially impaired the
         business operations of any of the Obligors. If the damage, destruction
         or loss of any personal property which constitutes Collateral exceeds
         an aggregate amount of $250,000, Agent agrees that it will return said
         funds to Obligors for the purpose of replacement of the Collateral with
         new Collateral of the same value and utility but only on the following
         conditions: (i) no event which constitutes or which with notice or
         lapse of time, or both, would constitute an Event of Default has
         occurred, (ii) the damage, destruction or loss has not materially
         impaired the business operations of any of the Obligors, (iii) Agent
         has approved the plans and specifications for the replacement
         Collateral, (iv) funds are released to the Obligors as the replacement
         progresses in accordance with Agent's customary procedures for
         financings of property such as the replacement Collateral. Each Obligor
         will also at all times maintain necessary workers' compensation
         insurance and such other insurance as may be required by law or as may
         be reasonably required in writing by Agent.

         Obligors will furnish Agent with certificates or other evidence
         satisfactory to Agent of compliance with the foregoing insurance
         provisions on the Date of Closing and thirty (30) days prior to each
         anniversary of the Date of Closing.

5.6      Compliance with Laws. Each Obligor shall comply in all material
         respects with all laws, ordinances, rules or regulations, applicable to
         it, of all federal, state or municipal governmental authorities,
         instrumentalities or agencies including, without limitation, ERISA, the
         United States Occupational Safety and Health Act of 1970, as amended,
         and all federal, state, county and municipal laws, ordinances, rules
         and regulations relating to the environment or the employment of labor,
         as such may be amended.

5.7      Notices. Obligors will promptly give notice in writing to each Lender
         of: (a) the occurrence of any event which constitutes or which with
         notice or lapse of time, or both, would constitute an Event of Default
         under this Agreement or any of the other Loan Documents; (b) the
         occurrence of any material adverse change in the business, properties
         or the condition or operations, financial or otherwise, of any of the
         Obligors, or the occurrence of any event which is reasonably likely to
         result in such a material adverse change, in each case specifying such
         change or event; (c) any court or governmental orders, notices, claims,
         investigations, litigation and proceedings received by or involving any
         of the Obligors in which the aggregate amount involved is $100,000 or
         more and not covered by insurance; (d) any

                                       47
<PAGE>

         material dispute which may exist between any of the Obligors and any
         governmental regulatory body or any other party; and (e) any proposed
         or actual change in the names, identities or corporate structure of any
         of the Obligors.

5.8      Financial Statements. Obligors shall deliver or cause to be delivered
         to each Lender:

         a.       As soon as available and in any event within ninety (90) days
                  after the close of each fiscal year of Holdings, audited
                  consolidated and consolidating financial statements including
                  a balance sheet as of the close of such fiscal year and
                  statements of operations and changes in stockholders' equity
                  and changes in cash flows for the year then ended, all on a
                  comparative basis with corresponding statements for the
                  preceding fiscal year and prepared in conformity with GAAP,
                  applied on a basis consistent with that of the preceding year,
                  and accompanied by a report thereon, containing an opinion,
                  unqualified as to scope, of a firm of independent certified
                  public accountants selected by Holdings and reasonably
                  acceptable to Agent, stating that the financial statements
                  fairly present in all material respects the consolidated
                  financial condition and results of operation of Holdings and
                  its Subsidiaries as of the end of the fiscal year and for the
                  period then ended.

         b.       As soon as available and in any event within forty-five (45)
                  days after the end of each fiscal quarter in each fiscal year,
                  Holdings' Form 10Q as filed with the Securities Exchange
                  Commission and a consolidated balance sheet of Holdings and
                  its Subsidiaries as of the close of such fiscal quarter and
                  consolidating statements of operations and changes in cash
                  flows for that portion of the fiscal year-to-date then ended,
                  all on a comparative basis with the budget and prepared in
                  conformity with GAAP, applied on a basis consistent with that
                  of the preceding period, and which shall be certified by the
                  President, Chief Executive Officer or Chief Financial Officer
                  of Holdings as being accurate and fairly presenting the
                  financial condition of Holdings and its Subsidiaries.

         c.       Together with the statements and reports referred to in
                  sub-paragraphs a. and b. above, a written statement from the
                  President, Chief Executive Officer or Chief Financial Officer
                  of Holdings certifying compliance with all financial covenants
                  and reflecting all computations in connection therewith and
                  certifying that there exists no Event of Default, or any event
                  but for the giving of notice or the passage of time would
                  constitute an Event of Default.

         d.       As soon as available and in any event within ninety (90) days
                  after the close of each fiscal year of Holdings, detailed
                  budgets and projections for

                                       48
<PAGE>

                  the current fiscal year of Holdings and Crystal Rock LLC
                  approved by the Board of Directors of Holdings.

         e.       [Intentionally omitted]

         f.       From time to time, promptly upon any Lender's written request,
                  such other information about the financial condition and
                  operations of Obligors as such Lender may reasonably request,
                  in form and detail reasonably satisfactory to such Lender.

5.9      Operating Accounts. Obligors shall maintain their primary operating and
         disbursement accounts with Webster Bank and shall utilize the cash
         management services provided by Webster Bank or any other Lender,
         including, at Obligors' option, automated "sweep" and investment
         features. Each of the Obligors may retain a local depository
         relationship for collection and payroll purposes.

5.10     Pension Plans.

         a.       No event, including but not limited to any "reportable event",
                  as that term is defined in Section 4043 of ERISA, exists in
                  connection with any of its Plans and any entities related to
                  it under Section 414(b), (c), (m), (n) or (o) of the Code has
                  occurred which might constitute grounds for termination of any
                  such Plan by the PBGC, or for the appointment by the
                  appropriate United States District Court of a trustee to
                  administer any such Plan. A list of all of the Obligors' Plans
                  are attached hereto on Schedule 5.10;

         b.       No "prohibited transaction" within the meaning of Section 406
                  of ERISA or Section 4975 of the Code exists or will exist upon
                  the execution and delivery of this Agreement and the other
                  Loan Documents, or the performance by the parties hereto or
                  thereto of their respective duties and obligations hereunder
                  and thereunder;

         c.       Each Obligor shall do all acts, including, but not limited to,
                  making all contributions necessary to maintain compliance with
                  ERISA and the Code, and agrees not to terminate any Plan in a
                  manner or do or fail to do any act which could result in the
                  imposition of a lien on any of its properties pursuant to
                  Section 4068 of ERISA;

         d.       None of the Obligors sponsors or maintains, and has never
                  contributed to, and has not incurred any withdrawal liability
                  under a "multi employer plan" as defined in Section 3 of ERISA
                  and none has any written or verbal commitment of any kind to
                  establish, maintain or contribute to any "multi employer plan"
                  under the Multi Employer Pension Plan Amendments Act of 1980;

                                       49
<PAGE>

         e.       None of the Obligors has any unfunded liability in
                  contravention of ERISA and the Code;

         f.       Each of the Plans complies currently, and has complied in the
                  past, in all material respects, both as to form and operation,
                  with its terms and with the provisions of the Code and ERISA,
                  and all applicable regulations thereunder and all applicable
                  rules issued by the Internal Revenue Service, U.S. Department
                  of Labor and the PBGC and as such, is and remains a
                  "qualified" plan under the Code;

         g.       No actions, suits or claims are pending (other than routine
                  claims for benefits) against any Plan or the assets of any
                  Plan;

         h.       Each Obligor has performed in all material respects all
                  obligations required to be performed by it under any Plan set
                  forth in Schedule 5.10 and it is not in default or in
                  violation of any Plan, and has no knowledge of any such
                  default or violation by any other party to any such Plans;

         i.       No liability has been incurred by any Obligor to the PBGC or
                  to participants or beneficiaries on account of any termination
                  of a Plan subject to Title IV of ERISA, no notice of intent to
                  terminate a Plan has been filed by (or on behalf of) it
                  pursuant to Section 4041 of ERISA and no proceeding has been
                  commenced by the PBGC pursuant to Section 4042 of ERISA;

         j.       The reporting and disclosure provisions of the Securities Act
                  of 1933 and Securities Exchange Act of 1934 have been complied
                  with for all Plans, to the extent applicable.

5.11     Environmental Matters.

         a.       Each Obligor has obtained all permits, licenses and other
                  authorizations which are required under all Environmental
                  Laws. Each Obligor is in compliance with the terms and
                  conditions of all such permits, licenses and authorizations,
                  and is, to the best of its knowledge, also in compliance with
                  all other limitations, restrictions, conditions, standards,
                  prohibitions, requirements, obligations, schedules and
                  timetables contained in any applicable Environmental Law or in
                  any regulation, code, plan, order, decree, judgment,
                  injunction, notice or demand letter issued, entered,
                  promulgated or approved thereunder.

         b.       No notice, notification, demand, request for information,
                  citation, summons or order has been issued, no complaint has
                  been filed, no penalty has been assessed and, to the knowledge
                  of the Obligors, no investigation

                                       50
<PAGE>

                  or review is pending or threatened by any governmental or
                  other entity with respect to any alleged failure by any
                  Obligor to have any permit, license or authorization required
                  in connection with the conduct of its business or with respect
                  to any Environmental Laws, including without limitation,
                  Environmental Laws relating to the generation, treatment,
                  storage, recycling, transportation, disposal or release of any
                  Hazardous Materials.

         c.       No oral or written notification of a release of a Hazardous
                  Material has been filed by or against any Obligor and to the
                  best of each Obligor's knowledge, no property now or
                  previously owned, leased or used by it is listed or proposed
                  for listing on the Comprehensive Environmental Response,
                  Compensation and Liability Inventory of Sites or National
                  Priorities List under the Comprehensive Environmental
                  Response, Compensation and Liability Act of 1980, as amended,
                  or on any similar state or federal list of sites requiring
                  investigation or clean-up.

         d.       There are no liens or encumbrances arising under or pursuant
                  to any Environmental Laws on any of the property or properties
                  owned by any Obligor, and no governmental actions have been
                  taken or are in process which could subject any of such
                  properties to such liens or encumbrances or, as a result of
                  which any Obligor would be required to place any notice or
                  restriction relating to the presence of Hazardous Materials at
                  any property owned by it in any deed to such property.

         e.       Neither Obligors nor, to the best of their knowledge, any
                  previous owner, tenant, occupant or user of any property owned
                  by any Obligor, has (i) engaged in or permitted any operations
                  or activities upon or any use or occupancy of such property,
                  or any portion thereof, for the purpose of or in any way
                  involving the release, discharge, refining, dumping or
                  disposal (whether legal or illegal, accidental or intentional)
                  of any Hazardous Materials in an amount required to be
                  reported to any governmental agency or authority on, under, in
                  or about such property, or (ii) transported or had transported
                  any Hazardous Materials to such property except to the extent
                  such Hazardous Materials are commonly used in day-to-day
                  operations of such property and, in such case, in compliance
                  with, all applicable Environmental Laws; (iii) engaged in or
                  permitted any operations or activities which would allow the
                  facility to be considered a treatment, storage or disposal
                  facility as that term is defined in 40 CFR 264 and 265, (iv)
                  engaged in or permitted any operations or activities which
                  would cause any property now owned, leased or used by it to
                  become subject to any state transfer act, or (v) constructed,
                  stored or otherwise located Hazardous Materials on, under, in
                  or about any property now owned, leased or used by it except
                  to the extent commonly used in day-to-day operations of such
                  properties and, in such case, in compliance
                                       51
<PAGE>

                  with all applicable Environmental Laws. Further, to the best
                  of Obligors' knowledge, no Hazardous Materials have migrated
                  from other properties upon, about or beneath any property now
                  owned, leased or used by any of them.

SECTION 6. Negative Covenants. So long as any Obligations remain outstanding and
unpaid, Obligors covenant and agree that they will not without the express
written consent of Agent:

6.1      Limitation on Liens. Incur or permit to exist any lien, mortgage,
         security interest, pledge, charge or other encumbrance against the
         Property, whether now owned or hereafter acquired (including, without
         limitation, any lien or encumbrance relating to any response, removal
         or clean-up of any toxic substances or hazardous wastes), except: (a)
         liens, mortgages, security interests, charges or other encumbrances in
         favor of Agent or specifically permitted in writing by Agent; (b) liens
         or pledges incidental to the conduct of business or the ownership of
         properties and assets (including liens or pledges in connection with
         worker's compensation, unemployment insurance and other like laws,
         warehousemen's and attorneys' liens and statutory landlords' liens) and
         liens to secure the performance of bids, tenders or trade contracts, or
         to secure statutory obligations, surety or appeal bonds or other liens
         of like general nature incurred in the ordinary course of business and
         not in connection with the borrowing of money provided in each case,
         the obligation secured is not overdue; (c) tax liens which are being
         contested in good faith with the prior written consent of Agent and
         against which, if requested by Agent, Obligors shall maintain reserves
         in amounts and in form (book, cash, bond or otherwise) satisfactory to
         Agent; (d) the liens existing on the date of this Agreement which are
         listed on Schedule 4.5; and (e) purchase money security interests
         pursuant to which the amount financed and secured thereby does not
         exceed $250,000 in any one fiscal year.

6.2      Limitation on Other Borrowing. Incur, create, assume or permit to exist
         any Indebtedness other than (a) Indebtedness to the Lenders pursuant to
         this Agreement, (b) Indebtedness existing on the date of this Agreement
         which is listed on Schedule 6.2, (c) purchase money indebtedness
         pursuant to which the amount financed does not exceed $250,000 in any
         one fiscal year, and (d) advances made from any Obligor to any other
         Obligor.

6.3      Limitation on Contingent Liabilities. Become liable as guarantor,
         surety, endorser or otherwise for, or agree to purchase, repurchase or
         assume, any obligation of any person, firm or corporation, except for
         endorsement of commercial paper and negotiable instruments for deposit,
         collection, or discount in the ordinary course of business.

6.4      Limitation on Advances and Investments. Make or suffer to exist any
         advances or loans to, or any investments in (by transfers of property,
         contributions to capital, purchase of stock or securities or evidence
         of indebtedness, acquisition of assets

                                       52
<PAGE>

         or business or otherwise) any person, firm or corporation, including
         officers or employees of Obligors, other than (a) Capital Expenditures
         permitted by Section 6.20, (b) advances for employee business expenses
         in the ordinary course of business, (c) advances or loans to another
         Obligor, (d) investments in U. S. Treasury obligations, Certificates of
         Deposits issued by banks domiciled in the United States and securities
         pursuant to Agent's automatic sweep investment account, in each case in
         the ordinary course of business, (e) the existing investments in Mac
         Casualty Ltd. and Computer Designed Systems, Inc. as of the date of
         this Agreement and (f) Acquisitions of businesses within the home and
         office business segment of the food and beverage industry which derive
         seventy-five percent (75%) or more of their revenues from the home and
         office delivery of bottled water and refreshment products and for
         which, in any one transaction, the total purchase price does not exceed
         $4,000,000, the amount borrowed under the Acquisition/Capital Asset
         Line of Credit does not exceed $3,000,000 and the total amount of the
         purchase price funded by internally generated cash does not exceed
         $1,000,000 and after giving effect to which, as certified in a written
         statement from the President, Chief Executive Officer or Chief
         Financial Officer of Holdings delivered to Agent prior to such
         Acquisition demonstrating compliance with all financial covenants on a
         proforma basis after taking into account such Acquisition and
         reflecting all computations in connection therewith, no Event of
         Default, or event which with the giving of notice or the passage of
         time would constitute an Event of Default, shall have occurred and (g)
         the acceptance of a promissory note in the original principal amount of
         $500,000 from Micropack Corporation, a copy of which is attached hereto
         as Exhibit 6.4. None of the Obligors shall enter into any joint
         venture.

6.5      Limitation on Fundamental Changes. Merge or consolidate with or into
         any other firm or corporation; dissolve or liquidate; change
         substantially their lines of business; change their names; convey,
         sell, lease or otherwise dispose of all or substantially all of their
         property, assets or business.

6.6      Limitation on Affiliates and Subsidiaries. Acquire, form or dispose of
         any Subsidiary or Affiliate or acquire all, or substantially all or any
         material portion of the stock or assets of any other person, firm,
         corporation, corporate division or business entity other than (i)
         Acquisitions permitted by Section 6.4, provided, however, that Obligors
         have given prior written notice thereof to Agent and have taken, at
         Obligors' sole cost and expense, all steps reasonably required by Agent
         to perfect the Agent's security interest in the stock or assets
         acquired, and (ii) the disposition of Mac Casualty Ltd. or Computer
         Designed Systems, Inc. or any interest therein with written notice
         thereof to Agent.

6.7      Limitation on Changes in Management. Make or consent to a material
         change in the manner in which the business of the Obligors is conducted
         or make or consent to a change in management so that any of Timothy G.
         Fallon, Bruce S. MacDonald, John Baker or Peter Baker (the "MANAGERS")
         are no longer actively

                                       53
<PAGE>

         involved in the management of the Obligors; provided, however, the
         Agent will not unreasonably withhold its consent to a suitable
         replacement to any of the Managers approved by the Board of Directors
         of Holdings. Each Manager shall be a party to an employment contract
         that is satisfactory to Agent at the time of entering into or amending
         such contract.

6.8      Limitation on Disposition of Assets. Sell, exchange or otherwise
         dispose of any Property, other than finished goods and inventory in the
         ordinary course of business and obsolete equipment no longer used or
         useful in the conduct of business which is replaced by equipment of at
         least equivalent value which is subject to a valid perfected first
         priority security interest in the Agent; provided, however, that
         Obligors need not replace any such equipment if it is unnecessary to do
         so in the business judgment of the Obligors and the proceeds thereof
         are applied to the outstanding principal balance on the Term Loan.

6.9      Limitation on Dividends and Distributions. Declare or pay any Dividend
         (unless payable in capital stock of Holdings) or authorize or make any
         other distribution on or with respect to any shares of capital stock of
         Holdings, whether now or hereafter outstanding.

6.10     Limitation on Acquisition of Stock of Holdings. Purchase, acquire or
         redeem, or make any commitment to purchase, acquire or redeem, any of
         the capital stock of Holdings, whether now or hereafter outstanding.

6.11     Limitation on Officer Compensation. Pay direct or indirect compensation
         to any officer or director, whether bonus, commission, stock
         distribution, or otherwise (but specifically excluding salary), which
         would, after giving effect thereto, constitute an Event of Default
         hereunder.

6.12     Limitation on Transactions with Affiliates. Other than the Subordinated
         Debt with the Subordinated Lenders and the Subordinated Encumbrances
         related thereto, employment contracts, the grant of stock options, the
         existing arrangements with Mac Casualty Ltd. and Computer Designed
         Systems, Inc. and the lease of property in Watertown and Stamford,
         Connecticut, enter into, or be a party to, any transaction with any
         Affiliate (including, without limitation, transactions involving the
         purchase, sale or exchange of property, the rendering of services or
         the sale of stock) except in the ordinary course of business pursuant
         to the reasonable requirements of the Obligors and upon fair and
         reasonable terms no less favorable to the Obligors than Obligors would
         obtain in a comparable arm's-length transaction with a person other
         than an Affiliate.

6.13     Limitation on Change of Name or Location. Change their corporate names
         or conduct any of their business under any trade name or style other
         than as set forth on Schedule 4.12 or change their chief executive
         offices, principal places of business or other places of business or
         the locations of the Collateral or records

                                       54
<PAGE>

         relating to the Collateral from those locations set forth in Section
         3.4 and Section 4.12; provided, however, that Obligors may do any of
         the foregoing, other than change their chief executive offices or
         principal places of business, if Obligors give at least thirty (30)
         days prior written notice thereof to Agent and take, prior to any such
         change, at Obligors' sole cost and expense, all steps reasonably
         required by Agent to maintain Agent's perfection of its first priority
         security interest in the Collateral.

6.14     Mandatory Prepayment. Permit the aggregate outstanding principal amount
         of the Revolving Line of Credit Notes to exceed, at any time, six
         million five hundred thousand dollars ($6,500,000) less (a) the maximum
         amount available to be drawn under all issued and outstanding Standby
         Letters of Credit (assuming all conditions for drawing have been
         satisfied), and (b) all amounts drawn under issued Standby Letters of
         Credit for which the Agent has not been reimbursed by the Obligors and,
         in the event any advances are outstanding in excess of such amount,
         prepay on any day so much of the outstanding principal amount which is
         in excess thereof.

6.15     Limitation on Changes in Accounting Methods. Make or consent to a
         material change in their method of accounting unless such change is
         required by GAAP; provided, however, that if any such change would
         affect the calculation of any of the financial covenants contained in
         this Agreement, the Obligors shall continue to provide financial
         statements without such change for the purpose of calculating
         compliance with the financial covenants until such time as the
         financial covenants are adjusted by agreement of the Obligors and the
         Lenders to take into account such change required by GAAP.

6.16     Senior Funded Debt to EBITDA. Permit the ratio of Senior Funded Debt to
         EBITDA to be greater than 2.75 to 1.00 as of the end of any fiscal
         quarter. This ratio shall be tested as of the end of each fiscal
         quarter, commencing with the fiscal quarter ending October 31, 2004,
         for the fiscal quarter then ended and the immediately preceding three
         fiscal quarters. Projected EBITDA for each new Acquisition for the
         first year after such Acquisition as agreed upon by the Agent and the
         Obligors will also be included in this calculation. Such projected
         EBITDA will consist of 75% of the year one adjusted EBITDA (after cost
         eliminations). For every quarter of actual operations in the first year
         after such Acquisition, the projected EBITDA for those quarters will be
         replaced by the actual EBITDA.

6.17     Debt Service Coverage Ratio.

         a.       Permit its Debt Service Coverage Ratio to be less than 1.1 to
                  1.0. This ratio shall be tested as of the end of each fiscal
                  quarter, commencing with the fiscal quarter ending October 31,
                  2004, for the fiscal quarter then ended and the immediately
                  preceding three fiscal quarters. Projected

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                  EBITDA for each new Acquisition for the first year after such
                  Acquisition as agreed upon by the Agent and the Obligors will
                  also be included in this calculation. Such projected EBITDA
                  will consist of 75% of the year one adjusted EBITDA (after
                  cost eliminations). For every quarter of actual operations in
                  the first year after such Acquisition, the projected EBITDA
                  for those quarters will be replaced by the actual EBITDA.

         b.       Permit its Senior Debt Service Coverage Ratio to be less than
                  1.5 to 1.0. This ratio shall be tested as of the end of each
                  fiscal quarter, commencing with the fiscal quarter ending
                  October 31, 2004, for the fiscal quarter then ended and the
                  immediately preceding three fiscal quarters. Projected EBITDA
                  for each new Acquisition for the first year after such
                  Acquisition as agreed upon by the Agent and the Obligors will
                  also be included in this calculation. Such projected EBITDA
                  will consist of 75% of the year one adjusted EBITDA (after
                  cost eliminations). For every quarter of actual operations in
                  the first year after such Acquisition, the projected EBITDA
                  for those quarters will be replaced by the actual EBITDA.

6.18     Current Ratio. Permit at any time its Current Ratio to be less than 1.0
         to 1.0.

6.19     Net Losses. Permit any Net Loss. This covenant shall be tested as of
         the end of the second, third and fourth fiscal quarters, for the fiscal
         quarter then ended (not on a year to date basis), of each fiscal year.

6.20     Capital Expenditures. Permit Capital Expenditures in any fiscal year,
         on a non cumulative basis, to exceed the lesser of (i) $3,000,000 plus
         Net Income or (ii) $5,000,000; provided, however, that (A) expenditures
         incurred as part of an Acquisition and (B) the portions of expenditures
         for Capital Assets funded with advances under the Acquisition/Capital
         Asset Line of Credit and (C) the Excluded Capital Expenditures shall be
         excluded from such calculation. This covenant shall be tested as of the
         end of each fiscal year, commencing with the fiscal year ending October
         31, 2004.

6.21     Holdings. Permit Holdings to conduct any business operations other than
         business operations incidental to its owning the membership interests
         in Crystal Rock LLC.

SECTION 7. Default.

7.1      The occurrence of any of the following events will constitute an Event
         of Default under this Agreement:

         a.       The failure by Obligors to pay any installment of principal
                  and/or interest due under any of the Loans or any of the other
                  Obligations when due and payable.

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<PAGE>

         b.       The failure by Obligors to pay taxes, if any, due on any
                  indebtedness under the Loans or any tax or assessment upon any
                  collateral securing the Obligations, on or before the same
                  shall become due and payable.

         c.       The failure of Obligors (i) to observe or perform any
                  affirmative covenant contained in Section 5 of this Agreement
                  other than sections 5.5 and 5.7 and such failure continues for
                  a period of thirty (30) days, provided that Obligors at all
                  times diligently pursue the cure of such failure or (ii) to
                  observe or perform any other covenant contained in this
                  Agreement, including, without limitation, sections 5.5 and
                  5.7, or in any of the other Loan Documents.

         d.       The occurrence of an Event of Default as defined in or under
                  any of the other Loan Documents.

         e.       The filing by or against any Obligor of any petition,
                  arrangement, reorganization, or the like under any insolvency
                  or bankruptcy law, or the adjudication of any Obligor as a
                  bankrupt (and if such filing is involuntary, the failure to
                  have same dismissed within sixty (60) days from the date of
                  filing), or the making of an assignment for the benefit of
                  creditors, or the appointment of a receiver for any part of
                  Obligors' properties or the admission in writing by any
                  Obligor of its inability to pay debts as they become due.

         f.       The breach of any material warranty or the untruth or
                  inaccuracy of any material representation of any Obligor
                  contained in the Loan Documents.

         g.       The occurrence of a default beyond any applicable grace or
                  cure period under, or demand for the payment of, any other
                  note or obligation of any Obligor to any Lender.

         h.       The failure by any Obligor to make payment on any Indebtedness
                  with an outstanding principal balance in excess of $25,000 due
                  to any party other than any Lender, beyond any grace period
                  provided with respect thereto, or upon demand, or the failure
                  to perform any other term, condition, or covenant contained in
                  any agreement under which any such Indebtedness is created,
                  the effect of which failure is to cause or permit the holder
                  of such Indebtedness to cause such Indebtedness to become due
                  and payable prior to its date of maturity.

         i.       The dissolution, liquidation or termination of existence of
                  any Obligor.

         j.       The passage or enforcement of any federal, state, or local law
                  or the rendition of a final decision of any court (other than
                  a law or decision with

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                  respect to a tax upon the general revenues or income of any
                  Lender) in any way directly changing or affecting any of the
                  Loans or lessening the net income thereon in a fashion which
                  is not corrected or reimbursed by Obligors.

         k.       The passage or enforcement of any federal, state, or local law
                  or the rendition of a final decision of any court in any way
                  impairing any Lender's ability to charge and collect the
                  interest stated in the Notes, including without limitation,
                  the ability to vary the interest payable under the Notes in
                  accordance with their terms.

         l.       A judgment or judgments for the payment of money shall be
                  rendered against any Obligor, any such judgment or judgments
                  shall remain unsatisfied and in effect for a period of thirty
                  (30) consecutive days without a stay of execution and either
                  the amount of such judgment or judgments is in excess of
                  $25,000 or any attachment or execution occurs on any property
                  of any of the Obligors with respect to such judgment or
                  judgments.

         m.       The occurrence of a material adverse change to the Collateral
                  or in any business, properties, condition or operations,
                  financial or otherwise, of any Obligor.

         n.       The invalidity or asserted invalidity by any of the Obligors
                  of any of the Loan Documents.

7.2      No Further Advances. Upon the happening and during the continuance of
         any Event of Default specified above, notwithstanding any other
         provision herein to the contrary, Obligors shall not be entitled to any
         further advances under the Revolving Line of Credit or the
         Acquisition/Capital Asset Line of Credit or the issuance of any Standby
         Letters of Credit and, at the option of the Agent, the entire unpaid
         balance owed under the Loans, the Notes and the Loan Documents and
         under any other note or other documents evidencing the same, plus any
         other sums owed hereunder, shall become and shall thereafter be
         immediately due and payable without presentment, demand, protest,
         notice of protest, or other notice of dishonor of any kind, all of
         which are hereby expressly waived by Obligors. Notwithstanding the
         foregoing, upon an Event of Default pursuant to Section 7.1e., the
         entire unpaid balance owed under the Loans, the Notes and the Loan
         Documents and under any other note or other documents evidencing the
         same, plus any other sums owed hereunder, shall automatically become
         and shall thereafter be immediately due and payable and the commitments
         of the Lenders to make advances hereunder shall be terminated. Failure
         to exercise such option shall not constitute a waiver of the right to
         exercise the same in the event of any subsequent default. Upon the
         occurrence of any Event of Default, without in any way affecting any
         Lender's or Agent's other rights and remedies, or after maturity

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<PAGE>

         or judgment, the interest rate applicable to each of the Loans shall
         automatically change without notice to a rate per annum equal to four
         percentage points (4%) above the otherwise then applicable rate. The
         Agent shall endeavor to give the Obligors prompt notice of the
         acceleration of the unpaid balance owed under the Loans, the Notes and
         the Loan Documents but failure to give such notice shall not affect any
         action taken by Agent and Agent shall not incur any liability for any
         failure to deliver such notice.

7.3      Rights of Agent. In the event of the occurrence and during the
         continuance of an Event of Default (a) Agent will have the right to
         take possession of the Collateral and to maintain such possession on
         Obligors' premises or to remove the Collateral or any part thereof to
         such places as Agent may desire. If Agent exercises its right to take
         possession of the Collateral, Obligors will, upon Agent's demand,
         assemble the Collateral and make it available to Agent at a place
         reasonably convenient to both parties; (b) Agent shall have, in
         addition to all other rights provided herein, the rights and remedies
         of a secured party under the Uniform Commercial Code; (c) Agent may
         sell and deliver any or all Receivables and any or all other security
         and Collateral held by Agent or for Agent at public or private sale,
         for cash, upon credit or otherwise, at such prices and upon such terms
         as Agent deems advisable, at Agent's sole discretion; and (d) in
         addition to all other sums due Agent, Obligors will pay to Agent all
         costs and expenses incurred by Agent, including attorneys' fees, to
         obtain or enforce payment of Receivables or the Obligations, or in the
         prosecution or defense of any action or proceeding either against Agent
         or any Lender or against any Obligor concerning any matter arising out
         of or connected with this Agreement or the Collateral or the Loan
         Documents or otherwise due pursuant to the terms of this Agreement. Any
         requirement of reasonable notice shall be met if such notice is mailed
         postage prepaid to each Obligor at each Obligor's address as set forth
         herein at least ten (10) days before the time of sale or other
         disposition. Agent or any Lender may be the purchaser at any such sale,
         if it is public, and, in the event Agent or any Lender is the
         purchaser, Agent or such Lender shall have all the rights of a good
         faith, bona fide purchaser for value from a secured party after
         default. The proceeds of sale shall be applied first to all costs and
         expenses of sale, including attorneys' fees, and second to the payment
         (in whatever order Agent elects) of all Obligations, and any remaining
         proceeds shall be applied in accordance with the provisions of Article
         9 of the Uniform Commercial Code. Obligors shall remain liable to Agent
         and the Lenders for any deficiency. Failure by Agent or any Lender to
         exercise any right, remedy or option under this Agreement or any of the
         other Loan Documents or in any other agreement between any Obligor and
         Agent or any Lender, or delay by Agent or any Lender in exercising the
         same will not operate as a waiver by Agent or any Lender unless it is
         in writing and signed by such party and then only to the extent
         specifically stated. Neither Agent nor any Lender nor any party acting
         as Agent's or any Lender's attorney pursuant to this Agreement shall be
         liable for any error of judgment or mistake of fact or law. Agent's and
         Lenders' rights and remedies under this Agreement will be cumulative
         and not exclusive of any other

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<PAGE>

         right or remedy which Agent and Lenders may have. Nothing in this
         Agreement shall be construed to modify or limit the unconditional right
         of Agent or any Lender in its sole discretion to demand full or partial
         payment of the principal of, and interest on, any demand Obligation.
         The right to make demand on any such demand Obligation shall exist
         whether or not Obligors are in compliance with the covenants or
         conditions contained in this Agreement or in any other agreements
         between Obligors and Agent or any Lender.

7.4      Collection of Receivables. Upon the occurrence and during the
         continuance of an Event of Default, Agent or its designee may notify
         customers or account debtors of Obligors at any time, that Receivables
         have been assigned to Agent or of Agent's security interest therein and
         collect them directly and charge the collection costs and expenses to
         Obligors' account.

7.5      Power of Attorney. Obligors appoint Agent, or any other person whom
         Agent may designate as its attorney, with power following the
         occurrence and during the continuance of an Event of Default: to
         endorse Obligors' names on any checks, notes, acceptances, money
         orders, drafts or other forms of payment or security that may come into
         Agent's possession; to sign Obligors' names on any invoice or bill of
         lading relating to any Receivables, on notices of assignment, financing
         statements, and other public records, on verifications of accounts and
         on notices to customers; to notify the post office authorities to
         change the address for delivery of Obligors' mail to an address
         designated by Agent; to send requests for verification of Receivables
         to customers or account debtors; and to do all things necessary to
         carry out this Agreement. Obligors ratify and approve all lawful acts
         of the attorney. Neither Agent nor the attorney will be liable for any
         lawful acts or omissions nor for any error of judgment or mistake of
         fact or law. This power, being coupled with an interest, is irrevocable
         so long as any Receivables assigned to Agent or in which Agent has a
         security interest remain unpaid or until the Obligations have been
         fully satisfied. Agent may file one or more financing statements
         disclosing Agent's security interest without Obligors' signatures
         appearing thereon.

SECTION 8. Conditions Precedent. Notwithstanding any other provision of this
Agreement or any of the other Loan Documents, and without affecting in any
manner the rights of the Agent and Lenders under the other sections of this
Agreement, the Lenders shall not (i) be required to make any advances under the
Revolving Line of Credit or the Acquisition/Capital Asset Line of Credit or
issue any Standby Letters of Credit under this Agreement or (ii) waive any Event
of Default described in Section 9.26 unless and until each of the following
conditions has been and continues to be satisfied:

8.1      Documentation. Agent shall have received, in form and substance
         satisfactory to Agent and its counsel, a duly executed copy of this
         Agreement, the Notes and the Pledge Agreement, together with such
         additional documents, instruments, consents, waivers, resolutions and
         certificates as Agent and its counsel shall

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<PAGE>

         reasonably require in connection therewith, all in form and substance
         satisfactory to Agent and its counsel.

8.2      No Default. No Event of Default or event which with the giving of
         notice of the passage of time would constitute an Event of Default
         shall exist.

8.3      Other Loan Documents. Each of the conditions precedent set forth in the
         other Loan Documents shall have been satisfied.

8.4      No Litigation. No action, proceeding, investigation, regulation or
         legislation shall have been instituted, threatened or proposed before
         any court, governmental agency or legislative body to enjoin, restrain
         or prohibit, or to obtain damages in respect of, or which is related to
         or arises out of this Agreement or the consummation of the transactions
         contemplated hereby.

8.5      Opinion of Counsel. The Agent and Lenders shall have received an
         opinion of counsel to the Obligors in form and content satisfactory to
         the Agent and its counsel.

8.6      Compliance with Covenants. The Obligors shall have satisfied in all
         respects all covenants to be performed by the Obligors prior to the
         date of this Agreement.

8.7      Representations and Warranties True and Correct. The representations
         and warranties of the Obligors set forth in this Agreement shall be
         true and correct in all material respects as of the date of this
         Agreement.

8.8      No Material Adverse Change. There shall have been no material adverse
         change in the condition or operations, financial or otherwise, of the
         Obligors or the Collateral, between October 31, 2003 and the date of
         this Agreement.

8.9      Subordination Agreement. The Subordinated Lenders shall have executed
         and delivered to the Agent reaffirmations of their subordination
         agreements in form and content satisfactory to Agent in its sole
         discretion.

8.10     [Intentionally omitted]

8.11     Landlord Consents. The Obligors shall have delivered to the Agent
         landlord consents executed by the landlords of various business
         locations leased by the Obligors in form and content satisfactory to
         Agent in its sole discretion.

8.12     Reimbursement of Costs and Expenses. The Obligors shall have reimbursed
         the Agent for all costs and expenses incurred by the Agent in
         connection with this Agreement and the transactions contemplated
         hereby.

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<PAGE>

8.13     Certificate of Obligors. The Obligors shall have furnished a
         certificate to the Agent, dated as of the date of this Agreement,
         certifying that, assuming the items submitted which are required to be
         satisfactory to Agent are satisfactory to Agent, all conditions
         precedent set forth in this Section have been satisfied in all
         respects.

SECTION 9. Miscellaneous.

9.1      Indemnification. In consideration of each Lender's and Agent's
         execution and delivery of this Agreement and each Lender's making of
         the Loans hereunder and in addition to all other obligations of
         Obligors under this Agreement, each Obligor hereby agrees to defend,
         protect, indemnify and hold harmless each Lender and Agent, their
         successors, assigns, officers, directors, employees and agents
         (including, without limitation, those retained in connection with the
         transactions contemplated by this Agreement) (collectively, the
         "Indemnitees") from and against any and all actions, causes of action,
         suits, claims, losses, costs, penalties, fees, liabilities and damages
         and expenses in connection therewith (irrespective of whether any such
         Indemnitees are a party to any action for which indemnification
         hereunder is sought), and including reasonable attorneys' fees and
         disbursements (the "Indemnifiable Liabilities") incurred by the
         Indemnitees or any of them as a result of, or arising out of, or
         relating to (a) the execution, delivery, performance or enforcement of
         this Agreement and the other Loan Documents and any instrument,
         document or agreement executed pursuant hereto; (b) any Lender's status
         as lender to, or creditor of, any of the Obligors or the Agent's status
         as agent in connection herewith; or (c) the operation of Obligors'
         business from and after the date hereof, provided that Obligors shall
         not be required to indemnify any Indemnitee for any Indemnifiable
         Liabilities resulting from such Indemnitee's own gross negligence or
         willful misconduct. To the extent that the foregoing undertaking by
         Obligors may be unenforceable for any reason, each Obligor shall make
         the maximum contribution to the payment and satisfaction of each of the
         Indemnifiable Liabilities which is permissible under applicable law.

9.2      Setoff. All sums at any time standing to Obligors' credit on the books
         of any Lender or upon or in which any Lender has a lien or security
         interest shall be security for all of the Obligations. In addition to
         and not in limitation of the above, with respect to any deposits or
         Property of any Obligor in the possession or control of any Lender, now
         or in the future, such party shall have the right, if an event which
         constitutes or which with notice or lapse of time, or both, would
         constitute an Event of Default under this Agreement or any of the other
         Loan Documents has occurred and is continuing, to setoff all or any
         portion thereof, at any time, against any Obligations hereunder, even
         though unmatured, without prior notice or demand to any Obligor.

9.3      Sale or Participation of Interests. Subject to the terms of the Agency
         Agreement, each Lender shall have the unrestricted right at any time
         and from time to time, and without the consent of or notice to
         Obligors, to sell or to grant participating

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<PAGE>

         interests in all or a part of such Lender's Notes and its interests in
         the Loans to one or more banks or other financial institutions (each,
         an "ASSIGNEE"). In the event of any such grant by such Lender of a
         participating interest, whether or not upon notice to Obligors, such
         Lender shall remain responsible for the performance of its obligations
         hereunder and Obligors shall continue to deal solely and directly with
         such Lender in connection with such Lender's rights and obligations
         under this Agreement and the other Loan Documents. In the event of any
         such sale by such Lender of all or a part of such Lender's Notes and
         its interests in the Loans, such Assignee shall become responsible for
         the performance of such Lender's obligations hereunder to the extent of
         such sale and such Lender shall be released from its obligations
         hereunder to such extent. The parties hereto shall execute any
         amendments to this Agreement or any of the other Loan Documents and
         provide such other documentation, such as replacement Notes, requested
         by the Agent to reflect the transfer of interests pursuant to this
         Section. Any Lender may furnish any information concerning Obligors in
         its possession from time to time to prospective Assignees, providing
         that such Lender shall require any such prospective Assignee to agree
         in writing to maintain the confidentiality of such information.

9.4      No Waiver. No course of dealing between Obligors and Agent or any
         Lender and no failure to exercise or delay in exercising on the part of
         Agent or any Lender any right, power or privilege under the terms of
         this Agreement or the other Loan Documents shall operate as a waiver
         thereof; nor shall any single or partial exercise of any right, power
         or privilege hereunder or thereunder preclude any other or further
         exercise. Neither the Agent nor any Lender shall be deemed to have
         waived any of its rights upon or under Obligations or the Collateral
         unless such waiver be in writing and signed by such party. The rights
         and remedies provided herein or in any other agreement are cumulative
         and not exclusive or in derogation of any rights or remedies provided
         therein and thereof, by law or otherwise.

9.5      Cross-Collateralization. All collateral which Agent or any Lender may
         at any time acquire from Obligors or from any other source in
         connection with the Obligations arising under this Agreement and the
         other Loan Documents shall constitute collateral for each and every
         Obligation, without apportionment or designation as to particular
         Obligations and all Obligations, however and whenever incurred, shall
         be secured by all collateral however and whenever acquired, and Agent
         shall have the right, in its sole discretion, to determine the order in
         which Agent and Lenders' rights in or remedies against any collateral
         are to be exercised and which type of collateral or which portions of
         collateral are to be proceeded against and the order of application of
         proceeds of collateral as against particular Obligations.

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9.6      Cross-Default. Obligors acknowledge and agree that a default under any
         one of the Loan Documents shall constitute a default under each of the
         other Loan Documents.

9.7      Survival of Agreements. All agreements, representations and warranties
         made herein, in any agreement and in any statements, notices, invoices,
         certificates, schedules, documents or other instruments delivered to
         Agent or any Lender in connection with this Agreement or any other Loan
         Document shall survive the making of the Loans and advances hereunder.

9.8      Further Documents. Obligors agree that, at any time or from time to
         time upon written request of Agent, Obligors will execute and deliver
         such further documents and do such other acts and things as Agent may
         reasonably request in order to fully effect the purposes of this
         Agreement and the other Loan Documents and in order to reflect, to the
         extent deemed necessary by the Agent or the Lenders, the addition of
         any new lender hereunder, the removal of any Lender hereunder, any
         change in the Lender's Commitment Percentages or the replacement of the
         Agent with a new agent appointed by the Lenders in accordance with the
         Agency Agreement.

9.9      Entire Agreement; Governing Law. This Agreement and the documents
         referred to herein constitute the entire agreement of the parties and
         may not be amended orally and they shall be construed and interpreted
         in accordance with the laws of the State of Connecticut, including its
         conflict of laws principles.

9.10     Consent to Jurisdiction. Each Obligor hereby acknowledges that the
         underlying transactions to which this Agreement and the other Loan
         Documents relate concern the making, now or in the future, of loans and
         advances to the Obligors and that said obligations of the Obligors are
         primarily to be performed in the State of Connecticut. The Obligors
         agree that the execution of this Agreement and the other Loan Documents
         and the rights and obligations of the parties hereunder and thereunder
         shall be deemed to have a Connecticut situs and each Obligor shall be
         subject to the personal jurisdiction of the courts of the State of
         Connecticut with respect to any action the Agent, any Lender, or any of
         their successors or assigns, may commence hereunder. Accordingly, each
         Obligor hereby specifically and irrevocably consents to the
         jurisdiction of the courts of the State of Connecticut with respect to
         all matters concerning this Agreement, the other Loan Documents, the
         Notes or the enforcement of any of the foregoing.

9.11     Joint and Several Liability. All obligations, covenants and agreements
         of the Obligors pursuant to this Agreement or any of the other Loan
         Documents shall be the joint and several obligations, covenants and
         agreements of each of the Obligors.

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9.12     Successors. All rights of Agent and the Lenders hereunder shall inure
         to the benefit of their successors and assigns, and all Obligations of
         Obligors shall bind their successors and assigns.

9.13     Expenses. Obligors will pay all expenses arising out of the
         preparation, amendment, protection, collection and/or other enforcement
         of this Agreement, the other Loan Documents, the Collateral or security
         interest granted hereunder or thereunder and the Notes (including,
         without limitation, reasonable counsels' fees).

9.14     Payments. The acceptance of any check, draft or money order tendered in
         full or partial payment of any Obligation hereunder is conditioned upon
         and subject to the receipt of final payment in cash.

9.15     Exhibits and Schedules. All exhibits and schedules referred to herein
         and annexed hereto are hereby incorporated into this Agreement and made
         a part hereof.

9.16     Acknowledgment of Copy, Use of Proceeds. Obligors acknowledge receipt
         of copies of the Notes and attest, represent and warrant to Lenders and
         Agent that advances made under the Loans are to be used for general
         commercial purposes and that no part of such proceeds will be used, in
         whole or in part, directly or indirectly, for the purpose of purchasing
         or carrying any "margin security" or "margin stock" as such terms are
         defined in Regulation U of the Board of Governors of the Federal
         Reserve System.

9.17     Descriptive Headings. The descriptive headings of the several sections
         of this Agreement are inserted for convenience only and shall not be
         deemed to affect the meaning or construction of any of the provisions
         hereof.

9.18     Notices. Any written notice required or permitted by this Agreement may
         be delivered by depositing it in the U.S. mail, postage prepaid or with
         a nationally recognized overnight courier service or by facsimile
         addressed to the Obligors at 1050 Buckingham Street, Watertown, CT
         06795-1600 and to the Agent or the Lenders at the addresses set forth
         beneath their signatures at the end of this Agreement. If any notice is
         sent to any Lender (as opposed to the Agent) pursuant to this
         paragraph, a copy thereof should also be sent to the Agent and each
         other Lender. Any party may change the address for its notices
         hereunder by sending in accordance with this section a notice of such
         change of address to all the other parties hereto, which notice shall
         be effective upon receipt by the other parties.

9.19     Severability. If any provision of this Agreement or application thereof
         to any person or circumstance shall to any extent be invalid, the
         remainder of this Agreement or the application of such provision to
         persons, entities or circumstances other than those as to which it is
         held invalid, shall not be affected

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<PAGE>

         thereby and each provision of this Agreement shall be valid and
         enforceable to the fullest extent permitted by law.

9.20     Agency Agreement. The rights and obligations of the Lenders and the
         Agent vis-a-vis each other with respect to Loans and the Obligations
         are set forth in the Agency Agreement.

9.21     Termination. This Agreement shall terminate when all obligations to
         make advances or issue letters of credit hereunder have terminated and
         all Obligations relating in any way to the Loans or the Loan Documents
         have been indefeasibly paid in full.

9.22     WAIVER OF RIGHT TO PREJUDGMENT REMEDY NOTICE AND HEARING. OBLIGORS
         ACKNOWLEDGE THAT EACH LENDER AND AGENT MAY HAVE RIGHTS AGAINST THEM,
         NOW OR IN THE FUTURE, IN ITS CAPACITY AS CREDITOR OR IN ANY OTHER
         CAPACITY. SUCH RIGHTS MAY INCLUDE THE RIGHT TO DEPRIVE OBLIGORS OF OR
         AFFECT THE USE OF OR POSSESSION OR ENJOYMENT OF THEIR PROPERTY; AND IN
         THE EVENT ANY LENDER OR AGENT DEEMS IT NECESSARY TO EXERCISE ANY OF
         SUCH RIGHTS PRIOR TO THE RENDITION OF A FINAL JUDGMENT AGAINST ANY
         OBLIGOR, OR OTHERWISE, SUCH OBLIGOR MAY BE ENTITLED TO NOTICE AND/OR
         HEARING UNDER THE CONSTITUTION OF THE UNITED STATES AND/OR STATE OF
         CONNECTICUT, CONNECTICUT STATUTES (TO DETERMINE WHETHER OR NOT SUCH
         LENDER OR AGENT HAS PROBABLE CAUSE TO SUSTAIN THE VALIDITY OF SUCH
         PARTY'S CLAIM), OR THE RIGHT TO NOTICE AND/OR HEARING UNDER OTHER
         APPLICABLE STATE OR FEDERAL LAWS PERTAINING TO PREJUDGMENT REMEDIES,
         PRIOR TO THE EXERCISE BY SUCH LENDER OR AGENT OF ANY SUCH RIGHTS.
         OBLIGORS EXPRESSLY WAIVE ANY SUCH RIGHT TO PREJUDGMENT REMEDY NOTICE OR
         HEARING TO WHICH OBLIGORS MAY BE ENTITLED. THIS SHALL BE A CONTINUING
         WAIVER AND REMAIN IN FULL FORCE AND EFFECT SO LONG AS OBLIGORS ARE
         OBLIGATED TO ANY LENDER OR AGENT.

9.23     Waivers. Each Obligor hereby waives presentment, demand, notice,
         protest, notice of acceptance of this Agreement, notice of loans made,
         credit extended, collateral received or delivered or other action taken
         in reliance hereon and all other demands and notices of any
         description. With respect to this Agreement, the other Loan Documents,
         the Obligations and the Collateral, each Obligor assents to any
         extension or postponement of the time of payment or any other
         indulgence, to any substitution, exchange or release of the Collateral,
         to the addition or release of any party or person primarily or
         secondarily liable, to the acceptance of partial payments thereon and
         the settlement, compromising or adjusting of any thereof, all in such
         manner and at such time or times as the Agent and the Lenders may

                                       66
<PAGE>

         deem advisable. Neither the Agent nor any Lender shall have any duty as
         to the collection or protection of the Collateral or any income
         thereon, nor as to the preservation of rights against prior parties,
         nor as to the preservation of any rights pertaining thereto beyond the
         safe custody thereof. The Agent and the Lenders may exercise its rights
         with respect to the Collateral without resorting or regard to other
         collateral or sources of reimbursement for liability. Each Obligor
         waives all suretyship defenses with respect to the Notes, the Loans,
         the Obligations and all other matters arising from or relating to the
         Loans and the Loan Documents.

9.24     WAIVER OF RIGHT TO JURY TRIAL. EACH OBLIGOR, AGENT AND EACH LENDER
         HEREBY WAIVE TRIAL BY JURY AND THE RIGHT TO TRIAL BY JURY IN ALL
         ACTIONS OR PROCEEDINGS BETWEEN THEM IN ANY COURT ARISING OUT OF OR
         RELATING TO THIS AGREEMENT, ITS VALIDITY OR INTERPRETATION. THIS SHALL
         BE A CONTINUING WAIVER AND REMAIN IN FULL FORCE AND EFFECT SO LONG AS
         OBLIGORS ARE OBLIGATED TO ANY LENDER OR AGENT.

9.25     Counterparts. This Agreement may be executed and delivered in any
         number of counterparts each of which shall constitute an original, but
         all of which taken together shall constitute but one and the same
         agreement. Delivery of an executed signature page to this Agreement by
         facsimile transmission shall be effective as delivery of a manually
         signed counterpart of this Agreement.

9.26     Waiver of Default. The Lenders and Agent waive any Event of Default
         that may have arisen solely as a result of the mergers described in
         Section 4.13 and the conveyance of assets and assignment of contracts
         described in Section 4.24. Each of the Obligors hereby acknowledge and
         agree that this waiver is a one-time waiver and this waiver shall be
         effective only in this specific instance and does not allow any other
         or further departure from the terms of this Agreement or any other Loan
         Document, which terms shall continue in full force and effect. This
         waiver shall not, except as expressly provided herein, operate as a
         waiver of any right, power or remedy of the Agent or the Lenders under
         any of the Loan Documents, nor constitute or be construed or
         interpreted, directly or by implication, as a waiver of or an amendment
         or modification to any other obligation of any Obligor to the Agent or
         any Lender under any of the Loan Documents.

9.27     Valid Debt; No Claims. Each Obligor represents and warrants to Lenders
         and Agent that the debt evidenced by the Notes is a valid debt of the
         Obligor owed to the Lenders and no Obligor has any defense, setoff,
         counterclaim or independent action against any Lender or Agent of any
         kind whether relating to the Loan Documents or otherwise. Nothing in
         this Agreement shall operate to release Obligors from their liability
         to pay any and all sums they owe to the Lenders and Agent or to perform
         all of the terms, conditions, obligations, agreements and warranties
         contained in this Agreement and the other Loan Documents.

                                       67
<PAGE>

9.28     Amended and Restated Agreement. The Existing Agreement is hereby
         amended and restated, superseded and replaced in its entirety by this
         Agreement and shall have no further force and effect except to the
         extent necessary to preserve and maintain Agent's previously perfected
         first lien security interest in the Collateral, but the amendment,
         restatement, and replacement of the Existing Agreement and the Notes
         pursuant to this Agreement shall in no way be construed as a novation
         of the indebtedness of the Obligors to the Lenders and the Agent
         existing prior to the execution and delivery of this Agreement and the
         Notes dated the date of this Agreement. All references to the Existing
         Agreement in the Loan Documents shall be deemed to refer to this
         Agreement, as the same may be amended from time to time.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       68
<PAGE>

         In Witness Whereof, the parties have caused this Agreement to be duly
executed and delivered by the proper and duly authorized officers as of the date
and year first above written.

WITNESS:

__________________________               VERMONT PURE HOLDINGS, LTD.

__________________________               By: /s/ Timothy G. Fallon
                                            ----------------------------------
                                           Name: Timothy G. Fallon
                                           Title: Chief Executive Officer

__________________________               CRYSTAL ROCK LLC

__________________________               By: /s/ Timothy G. Fallon
                                            ----------------------------------
                                           Name: Timothy G. Fallon
                                           Title: Manager

__________________________               BANKNORTH, N.A.

__________________________               By: /s/ Robert E. Teittinen
                                            ----------------------------------
                                           Name: Robert E. Teittinen
                                           Title: Senior Vice President

                                         Address for notice:
                                         2461 Main Street
                                         Glastonbury, CT 06033

__________________________               MANUFACTURERS AND TRADERS TRUST COMPANY

__________________________               By: /s/ Michael Golderick
                                            ----------------------------------
                                           Name: Michael Goldrick
                                           Title: Vice President

                                         Address for notice:
                                         303 South Broadway, Suite 130
                                         Tarrytown, NY 10591

<PAGE>

                                         COOPERATIEVE CENTRALE RAIFFEISEN-
                                         BOERENLEENBANK B.A., "RABOBANK
                                         INTERNATIONAL", NEW YORK BRANCH, as
                                         Lender
__________________________

__________________________               By: /s/ Betty Mills
                                            ----------------------------------
                                           Name: Betty Mills
                                           Title: Executive Director

__________________________

__________________________               By: /s/ Rebecca O. Morrow
                                            ----------------------------------
                                            Name: Rebecca O. Morrow
                                            Title: Executive Director

                                         Address for notice:
                                         245 Park Ave.
                                         New York, New York 10167

                                         With a copy to:
                                         1201 West Peachtree St., Suite 3450
                                         Atlanta, Georgia 30309
                                         Attn: Elizabeth Mills, Executive
                                           Director

__________________________               WEBSTER BANK, NATIONAL ASSOCIATION,
                                         as Lender

__________________________               By: /s/ Richard A. O'Brien
                                            -----------------------------------
                                           Name: Richard A. O'Brien
                                           Title: Senior Vice President

                                         Address for notice:
                                         145 Bank Street
                                         Waterbury, Connecticut 06702

<PAGE>

__________________________               WEBSTER BANK, NATIONAL ASSOCIATION,
                                         as Agent

__________________________               By: /s/ Richard A. O'Brien
                                            -----------------------------------
                                           Name: Richard A. O'Brien
                                           Title: Senior Vice President

                                         Address for notice:
                                         145 Bank Street
                                         Waterbury, Connecticut 06702

<PAGE>

                                 SCHEDULE 1.1tt

<TABLE>
<CAPTION>
Lender                                              Commitment Percentage
------                                              ---------------------
<S>                                                 <C>
Banknorth, N.A.                                     20%

Manufacturers and Traders Trust Company             25%

Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A.,
"Rabobank International",
New York Branch                                     20%

Webster Bank, National Association                  35%
</TABLE>

<PAGE>

                                   EXHIBIT 2.1

                                Form of Term Note

<PAGE>

                                   EXHIBIT 2.2

                      Form of Revolving Line of Credit Note

<PAGE>

                                   EXHIBIT 2.3

              Form of Acquisition/Capital Asset Line of Credit Note

<PAGE>

                                   EXHIBIT 6.4

                             Copy of Micropack Note