ASSET PURCHASE AGREEMENT



         THIS  ASSET  PURCHASE  AGREEMENT  is  entered  into on this 19th day of
February,  1997,  by and between  VERMONT PURE  SPRINGS,  INC.  (VPS) a Delaware
corporation with its principal place of business in Randolph,  Vermont ("BUYER")
and GREATWATER REFRESHMENT SERVICES, INC. (GRS), a Delaware corporation with its
principal  place of business in 3545 John Glenn  Boulevard,  Syracuse,  New York
13209 ("SELLER").
                                    RECITALS

         WHEREAS,  VPS is a company  engaged in the bottling and sale of natural
spring water with its manufacturing  facility and principal place of business in
Randolph Center, VT and

         WHEREAS,  GRS is a  company,  engaged in the sale and  distribution  of
bottled water and coffee, and the rental of cooler/dispenser  equipment for home
and office customers with its principal place of business in Syracuse, NY, and

         WHEREAS,  both  Parties  desire to enter into  agreements  by which VPS
shall (i) purchase the business of GRS related to bottled water,  certain coffee
accounts,  and the  rental of  cooler/dispenser  equipment  for home and  office
customers.

         NOW  THEREFORE,  in  consideration  of the  mutual  promises  contained
herein, the parties agree as follows:

                                    I. ASSETS

         A. Asset  Purchase and Sale.  Seller and Buyer  mutually  agree for the
Seller to sell,  convey,  transfer,  assign  and  deliver  to Buyer and Buyer to
purchase substantially all of the property of Seller, wherever located, tangible
and intangible,  consisting of the following assets: vehicles,  purchase orders,
telephone numbers, customer lists, and goodwill. (The assets being purchased and
sold  hereunder  are  sometimes  referred   collectively  as  "Assets"  and  are
identified in Exhibit "A").  Assets of Seller not on the list are being retained
by Seller.

         B.       Liabilities. Buyer agrees to assume only those certain
operating labilities as set forth in Schedule "B".

         C.  Bill of Sale.  Title to the  Assets  will be  conveyed  to Buyer by
Seller pursuant to a Bill of Sale, free and clear of all liens and  encumbrances
except  purchase money financing liens as described in Paragraph II. The form of
the Bill of Sale shall be approved by Buyer's  counsel prior to the closing Date
(as hereinafter defined).


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                               II. PURCHASE PRICE

Purchase Price $580,000, provided that:

                  (i) $15,000 cash deposit at the signing of this Asset Purchase
Agreement,  which deposit is  refundable in the event that (a) this  transaction
does not  close on or  before  March  10,  1997 or (b) due  diligence  reveals a
material adverse  variation in the projections,  profit and loss, and cash flow,
(material"  is defined to mean an adverse  variation  of at least 5% in the 1996
EBITDA and Cash Flow) or if the conditions precedent hereinafter defined are not
met prior to settlement;  provided  however,  if the transaction  does not close
because  Buyer does not obtain  financing,  after  using best  efforts to obtain
financing,  Buyer shall forfeit its $15,000 deposit. If the deposit is forfeited
to the SELLER  pursuant to the terms of this  paragraph  II(i) herein,  then the
remedies  of the  SELLER  are  limited  to the  forfeited  monies  and SELLER is
entitled  to no  further  payments  hereunder  or for the  failure  to close the
transaction contemplated herein.

                  (ii)     $305,000 of the Purchase Price to be paid in cash at
closing.

                  (iii) the assumption of liabilities in the amount of
$85,000 set forth in Exhibit "B";

                  (iv) the  issuance  of a Note by Buyer to Seller in the amount
of $75,000 and restricted stock in the amount of $100,000. If the gross revenues
of the Greatwater  Refreshment  Company  Division of Buyer (to be defined as the
business  acquired by this Asset  Purchase  Agreement) for the time period March
10,  1997  through  March 9, 1998 do not equal  $700,000,  then the Note for the
restricted stock will be reduced or increased proportionately in an amount equal
to the  minus/plus  difference  between  the gross  revenues  of the  Greatwater
Refreshment Company Division of Buyer for the time period March 10, 1997 through
March 9, 1998 and $700,000. The restricted securities shall be held in escrow by
Seller's attorney to facilitate the possible  downward  adjustment in the number
of  shares.  The Note shall be payable  one year after  Closing,  subject to the
aforementioned  adjustment  and  shall be in a form  mutually  agreeable  by the
parties  hereto and shall be secured by UCC filings and a security  agreement on
the assets listed on attached Exhibit "C".

                    III. EXCLUDED SECURITIES AND LIABILITIES

         It is agreed and understood  that this is a purchase and sale of assets
(with limited  assumption of certain operating  liabilities).  The securities of
the Seller are expressly  excluded from this  transaction.  All  liabilities not
enumerated  in  Schedule  B,  including  without  limitation,   Utility,  Taxing
Authority and Employment Claims are expressly excluded.

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                IV. CONDUCT OF BUSINESS AND CONDITION OF PREMISES
                               PENDING SETTLEMENT

Prior to the Settlement:

         A. The  business  of  Seller  will be  conducted  only in the  ordinary
course, in accordance with all laws and regulations of the township,  state, and
federal  governments,  and Seller  shall not violate  the terms of any  existing
leases or contracts.

         B.  Seller  will  continue  to  operate  the  business  in  the  manner
heretofore  operated by Seller.  Until Settlement date, a representative  of the
Buyer shall have the right,  during normal business hours, to visit the Seller's
place of  business  to examine  Seller's  books and  records  and to observe the
operation of the business.

         C.       Seller will keep all of the assets and the Premises fully
insured against any loss, either by fire, other casualty or theft.

         D. GRS will use their best efforts to preserve GRS's  organization.  to
keep  available the services of employees,  and to preserve  friendly  relations
with its customers and trade creditor.  Company shall make no  representation or
promises with employees about future employment but Buyer will consider existing
employees for resumption of duties as appropriate.

         E. In the event that prior to the date of Closing,  the Assets shall be
totally or  substantially  lost or damages  by fire or any other  casualty,  the
Buyer shall have the option to terminate  this agreement or waive the diminution
in value and close  under this  Agreement  buying  the Assets "as is",  in which
latter event it shall be entitled to treat the proceeds of any insurance paid to
Seller by reason of such loss or damage  (excepting  insurance for lost profits,
if any), as a payment on the purchase price or the Buyer shall have the right to
all insurance  proceeds to apply the funds to repair and/or to  reconstruct  the
Assets.

                                  V. SETTLEMENT

         A.       ("Settlement") shall take place on or before March 10,
1997 and on the date and time set forth by written notice from the
Buyer to the Seller at least ten (10) days in advance thereto.

         B.       Settlement shall be held in Syracuse, NY or such other
local place as Seller and Buyer shall agree.

         C.       Time shall be of the essence of this Agreement.

         D.       Any closing adjustments shall be apportioned pro rata as

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of the date of Settlement.

                               VI. BULK SALES ACT.

         A.       Buyer and Seller waive compliance with the applicable
Bulk Sales Act.  Seller and its majority shareholder shall
indemnify and hold Buyer harmless for any loss to Buyer arising out
of such non-compliance .  Mr. David Palmer will sign and deliver,
at c losing, an indemnification agreement in accordance with this
Paragraph.

                            VII. SELLER'S WARRANTIES.

         A.       The Seller represents and warrants to Buyer that as of
the date of this Agreement and as of the date of the Settlement,
that:

                  (i) The Seller is a corporation duly organized and existing in
good standing  under the laws of the State of Delaware with the corporate  power
to own its assets and carry on its business as is now being conducted.

                  (ii)  Seller  has good and  marketable  title and the right of
sole  possession  and  control of all the assets  being  sold  pursuant  to this
Agreement, and that such assets at the time of Settlement will not be subject to
any mortgages,  pledges,  liens,  encumbrances,  security interest,  or charges,
except as described in Paragraph II (iv).

         B.       The Seller represents that to the best of the Seller's
knowledge, information and belief:

                  (i) The  Seller is in  compliance  with all  applicable  laws,
ordinances, rules, regulations, and requirements of all governmental authorities
having  jurisdiction  thereof,  and that  Seller  has  complied  with all  laws,
municipal  ordinances,  and regulations of all governmental  authorities  having
jurisdiction  thereof,  and that Seller has  complied  with all laws,  municipal
ordinances,  and  regulations  applicable  to Seller and in the ownership of the
assets and the business hereunder.

                  (ii) There are no actions,  suits,  or proceedings  pending or
threatened against Sellers,  either at law or in equity, brought by any federal,
state, or municipal or other governmental agency, department,  board, bureau, or
other instrumentality.


                  (iii) All federal, state, and local tax returns required to be
filed have been  filed,  all  deficiencies  proposed  have  either  been paid or
settled or are  included  in an account  for  accrued  taxes;  all  withholding,
unemployment, social security, excise interest have been paid or will be paid by
Seller after

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Settlement from funds set aside at Settlement.

                  (iv)  All  financial  information  provided  to the  Buyer  is
accurate and in accordance with the books and records of the Company, and fairly
represents the financial condition, assets and liabilities of the Company.

                  (v)  Neither  Seller  nor any direct or  indirect  shareholder
thereof has made any  agreement  or taken any action which might cause anyone to
become entitled to a broker's fee or commission.

         C. If Seller  obtains any  knowledge  or  information  between the date
hereof and Settlement, making or indicating that any of the aforesaid warranties
or  representations   are  no  longer  true,  or  indication  that  any  of  the
representations and conditions set forth in this Section VII hereof are not true
and  cannot be made true by the  Seller  by the time of  Settlement,  or will no
longer be true as of the date of Settlement,  Seller will promptly  notify Buyer
of such change in circumstances.

                           VIII. CONDITIONS PRECEDENT

All  obligations of the Buyer under this  Agreement are subject to  fulfillment,
prior to or at Settlement, of each of the following conditions:

         A.       Due Diligence.  Buyer has been afforded the opportunity
to conduct due diligence on the business and operations of the
Seller and is satisfied, in its reasonable discretion, that the
business is as represented to VPS prior to entering into this Asset
Purchase Agreement.

         B.       Representation and Warranties.  The representations and
warranties of Seller contained in this Agreement being true at the
time of Settlement as though such representations and warranties
were made at such time.

         C.       Compliance with Agreement.  Seller shall have performed
and complied with all agreements and conditions required by this
Agreement to be performed or complied with by prior to or at
closing.

         D.       Opinion of counsel.  Seller shall have delivered to
Buyer, in form and content satisfactory to Buyer's counsel, an
opinion of its counsel issued to Buyer to the effect that:

                  (i)      Seller has been duly incorporated and is existing as
a corporation in good standing under the laws of the State of
Delaware.

                  (ii)     This transaction and its terms do not violate any

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provisions of Seller's Articles of Incorporation or Bylaws;

                  (iii) Seller has taken all shareholder, director and
other actions necessary to authorize the transactions contemplated
by the parties hereto;

                  (iv)     Seller has the authority to carry on the business
presently being conducted by Company;

                  (v)      Seller has full power and authority to sell, assign
and transfer the Assets sold pursuant to this Agreement.

         E.       Documentation.                 Negotiation and preparation of
definitive documents, including all collateral documents, governing
the transactions contemplated herein under terms and conditions
acceptable to Buyer's and Seller's counsel.

         F.       Financing.           Buyer obtains financing for the purchase
of assets herein described on terms acceptable to the Buyer.

         G.       Seller's Shareholder Approval.              Seller shall have
obtained the necessary Shareholder approval for this transaction.

         H.       Non-Compete Agreement.            Buyer and David Palmer shal
execute and deliver at Closing the Non-Compete Agreement attached
as Exhibit "D".

                  IX. NONDISCLOSURE OF CONFIDENTIAL INFORMATION

         A.  Seller  and its  directors,  shall  not,  during  the  term of this
Agreement  or at any time for a period of two years  following  closing,  unless
authorized to do so in writing by the Buyer,  directly or indirectly disclose or
permit to be known to, or used for the benefit of, any  person,  corporation  or
other entity (outside of the employ of the Company), or itself, any confidential
information.  For the  purposes  of  this  Section  IX,  the  term  confidential
information  shall include,  but not be limited to,  confidential or proprietary
knowledge or information  with respect to the conduct or details of the Seller's
business  including,  but not  limited  to,  lists of  customers  of the Buyer's
business,  pricing strategies,  or marketing methods.  Confidential  information
does not include matters which are generally known outside of the Buyer,  public
knowledge or in the public domain.

         B. All  confidential  information  described in Section IX (A) shall be
the  exclusive  property of the Buyer,  and Seller shall use its best efforts to
prevent any publication or disclosure thereof.

         C.        The provisions of this Section IX shall survive the
closing and shall continue for a period of two years.



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                             X.RESTRICTIVE COVENANT

                  In order to protect the Buyer in its full  beneficial  use and
enjoyment of the goodwill, assets, business relationships,  marketing techniques
and other know-how  acquired as a result of this Agreement,  for a period of two
(2) years after the closing of this  Agreement,  Seller,  including its officers
and  directors  will not,  within  the United  States of  America,  directly  or
indirectly  compete with the Buyer in the home/office  distribution of distilled
water,  spring or carbonated  water, or coffee/tea  products and will not either
(i)  solicit  any  persons or  entities  known to be  customers  of the Buyer to
purchase  any of the  aforementioned  products;  or (ii)  solicit  or induce any
employee of the Buyer to leave such employment to take a position with Seller or
with any  company  for which any  officer or  director  then  works.  During the
aforesaid  period,  Seller  shall not make any  statements  or  commit  any acts
(including  contacting  any of the  Buyer's  customers  that would in any way be
tortiously injurious or detrimental to the Company's image, business or customer
relations.  The provisions of this Section X shall survive the termination,  for
any  reason,  of this  Agreement  and  shall  continue  for the two year  period
contemplated by this Section X.

                                XI. GOVERNING LAW

                  This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of New York.

                              XII. TERMS SEVERABLE

                  In  the  event  that  any  term  or  provision  hereof  or the
application  thereof to persons or circumstances  shall to any extent be invalid
or  unenforceable,  then the remainder of this  Agreement  shall not be affected
thereby and each term or  provision  hereof  shall be valid and  enforced to the
fullest extent permitted by law.

                             XIII. SURVIVAL OF TERMS

                  The terms of this Agreement,  including but not limited to the
warranties,  representations  and covenants  made by the parties  hereto,  shall
survive for a period of one (1) year from the Closing  Date and the Seller shall
remain liable for any deficiency arising from any breach of the same.

                               XIV. FORCE MAJEURE

                  The  failure of or delay in  compliance  with any of the terms
and  conditions  of this  Agreement  by either  party  shall be  excused if said
failure or delay is due to an Act of God, fire,  flood,  strike,  labor dispute,
accident,  act of government or any similar cause beyond the reasonable  control
of said party.

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                              XV. ENTIRE AGREEMENT

                  This  Agreement,   including  the  Preambles,  and  any  other
document  or  exhibit  incorporated  herein by  reference  sets forth the entire
understanding of the parties. It shall not be changed or terminated orally. This
Agreement  may be  executed in one or more  counterparts  each of which shall be
deemed an original but all of which together  shall  constitute one and the same
document.

                                   XVI. NOTICE

                  Notices required under this Agreement shall be in writing sent
by  certified  mail and  facsimile  to the  representatives  of the  parties  as
follows:

                  Vermont Pure Springs, Inc.
                  Route 66
                  Randolph Center, VT 05061
                  Attn:  Timothy G. Fallon
                  Facsimile (802) 728-4814

With Copy to:
                  Kevin F. Berry, Esquire
                  Ledgewood Law Firm
                  1521 Locust Street
                  Philadelphia, PA 19102
                  Facsimile:  (215) 735-2513

To Seller:
                  Great Water Refreshment Services, Inc.
                  3545 John Glenn Boulevard
                  Syracuse, NY 13209
                  Att:  David G. Palmer
                  Facsimile: (315) 457-4504


With Copy to:

                  Lowell A. Seifter, Esquire
                  Green & Seifter
                  One Lincoln Center
                  Syracuse, NY 13202
                  Facsimile:  (315) 422-3549




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         IN WITNESS WHEREOF,  the parties hereto have executed this agreement as
of the day, month and year first written above.


WITNESS:                                             VERMONT PURE SPRINGS, INC.

______________________                         By:_____________________________

                        Name:___________________________

                        Title:__________________________


                             GREATWATER REFRESHMENT
                                 SERVICES, INC.

WITNESS:
_______________________                          By:___________________________

                         Name:_________________________

                         Title:________________________


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                                    Exhibit A




                                  See Attached




<PAGE>


                                    Exhibit B

                  A.       Assumption of existing debt to customers for bottle
and cooler deposits in the amount of $85,000.








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                                    Exhibit C

1.       1990 Ford Truck                             VIN #FDXR82AXLVA14418
2.       1993 Ford Van                               VIN #1FTFE24H7PHB81939
3.       1993 Ford Van                               VIN #1FTFE24H1PHB83279
4.       1994 International                          VIN #1HTSDPPN1RH566600
5.       1990 Isuzu                                  VIN #JALC5B1U6L300I523



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                                    Exhibit D

                              Non-Compete Agreement