PACKING AND DISTRIBUTION AGREEMENT

THIS AGREEMENT is made this 9th day of December 1997 between VERMONT PURE
SPRINGS, INC. with its principal place of business offices and manufacturing 
facility located on Route 66 in Randolph, Vermont 05060 ("VPS") and AKVA USA, 
INC. ("AKVA USA") a United States corporation that owns distribution rights to 
AKVAR and AKVA Hf.  ("AKVA Hf.") An Icelandic corporation.

                             RECITALS

WHEREAS,  the AKVA Hf desires to engage VPS to distribute on an exclusive  basis
worldwide, certain waters to be bottled and/or packaged by AKVA Hf to which AKVA
HF. and AKVA USA have a proprietary interest (hereinafter "Products"), and

WHEREAS,  VPS desires to accept such  engagement  upon the terms and subject to
the conditions set forth in this Agreement.

WHEREAS,  AKVA USA currently owns a certain number of cases of Product which VPS
desires to purchase, and

WHEREAS,  AKVA  USA and AKVA  Hf.  are  parties  to that  certain  International
Manufacturing and Distribution agreement dated June 4, 1994, the rights to which
AKVA USA  will  assign  to VPS  pursuant  to that  certain  Agreement  Regarding
Distribution Rights of even date herewith, and

NOW, THEREFORE, AKVA USA, AKVA Hf and VPS, intending to be legally bound, hereby
agree as follows:

     1.   Establishment of Distribution Agreement

         1.1 Packing AKVA hereby agrees to provide  water  natural  spring water
         (from source:  Hesjuvalla  Spring ),  blow-molding and packing services
         and to cause certain non- sparkling waters to be bottled, packaged, and
         made available for shipment under the AKVA trademark or private label.
         The products as identified in this Agreement  (hereinafter  "Products")
         shall be defined as mutually agreed to by VPS and AKVA

         1.2    Territory and Marketing

              1.2.1 Territory VPS shall have the exclusive right, subject to the
              provisions of this Agreement, to market sell and/or distribute the
              Product on a worldwide basis without Stations provided, however, 
              AKVA Hf. shall have the non-exclusive right to market, sell and 
              distribute private label product.

         1.2.2  Appointment  VPS hereby  accepts the  appointment  as  exclusive
         distributor  and importer  hereunder and agrees to use its best efforts
         to introduce, promote,


<PAGE>



         market,  and distribute the Product in the Territory.  In the course of
         its marketing,  distribution  and other  activities with respect to the
         Product,  VPS agrees to conduct  its  business  in a lawful and ethical
         manner. VPS shall use its best efforts to protect and foster AKVA Hf.'s
         reputation and the reputation of the Product in the Territory.

    1.3  Term  This  Agreement  shall  commence  on the  effective  date of this
    Agreement and continue until termination pursuant to the provisions hereof

    1.4    Price and Additional Terms

         1.4.1 Packing Price AKVA Hf. shall provide  natural spring water,  blow
         molding and packing  services  with  respect to AKVA or private  label
         product  ordered by Vermont Pure at a price of $1.75 per physical case.
         Such  services  shall be invoiced  when  ordered,  and shall be due and
         payable within thirty (30) days thereafter.  Payments after thirty days
         shall bear interest at the rate of the lesser of the highest rate legal
         in the applicable jurisdiction or 1 1/2 percent per month.

         1.4.2 Raw Materials AKVA Hf shall handle the receipt and storage of all
         raw  materials  used in the  packing  of the  AKVA and  private  label
         product. Cost of raw materials, shipping and insurance while in transit
         to or from AKVA Hf shall be paid directly to the  applicable  vendor by
         VPS.  Shipping of all raw  materials  hereunder  shall be to AKVA Hf.'s
         facilities  located in Akureyri  Iceland,  or at such other location in
         Akureyri as AKVA Hf shall specify. Except as otherwise provided herein,
         AKVA Hf.  shall  bear the risk of loss  for  product  or Raw  materials
         stored at its Facilities but not in transit to or from its facilities.

         1.4.3 Share of Profits  Commencing  in calendar year 1999 and ending at
         the  earlier to occur of (I) the end of the 2004  calendar year or (ii)
         the  distribution to each party of $500,000 of profits ("Profit Sharing
         Period"),  AKVA Hf. and VPS shall split operating profits earned on the
         sale of Products on a 50/50 basis. Profits will be distributed annually
         within a (60) days after the year end in which such profits are earned.
         For purposes of this  Agreement,  operating  profits  shall be equal to
         revenue from sales of Product (Less returns and  discounts),  less cost
         of goods sold, less  advertising and promotion of  approximately  $1.75
         per case (except  with regard to cases of 12 oz.  product in which case
         the advertising and promotion  costs shall be  approximately  $1.25 per
         case) and allocable SG&A of up to $1.50 per case.  Upon  termination of
         the Profit  Sharing  Period,  AKVA Hf. and VPS shall negotiate in good
         faith a new packing price providing AKVA Hf. an adequate return on such
         services. Should the parties be unable to reach an agreement as to such
         price, this agreement may be terminated by either party upon One 
         Hundred and Eighty (180) days prior written notice. During such One 
         Hundred and Eighty (180) day period, the profit sharing arrangement 
         described above shall continue to apply.  In the event that the 
         Agreement is terminated pursuant to this section, neither party, for a 
         period of three (3) years, shall market product under the AKVAR name, 
         nor shall bottle Product for any party for whom they had a co-packing 
         arrangement hereunder prior to the termination of
         this Agreement.

         1.4.4     Existing business/de minimus  Not withstanding anything to 
         the contrary herein,  AKVA Hf. shall be entitled to sell on its own 
         account, not subject the co-packing or profit sharing provisions set 
         forth in Section 1.4.3, up to 10,000 cases of AKVA product to
         accounts it
                                       2

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     is currently servicing directly.  AKVA Hf shall reimburse VPS its cost of 
     raw materials used
     in such sales.

     1.4.5  Sales  originated  by AKVA Hf. If AKVA Hf shall  originate  sales of
     AKVAR product, or sales of co-packed Product, AKVA Hf. shall be entitled to
     a  commission  equal to five  (5%)  percent  of sales  in  addition  to the
     compensation  provided in 1.4.3 hereof ("AKVA Hf. Sales"). In addition AKVA
     Hf.  sales  shall be subject to the profit  sharing  provisions  of section
     1.4.3 from the date of this Agreement.

     1.4.6  Cancellation The distribution and  manufacturing  arrangement can be
     canceled by VPS upon ninety (90) days prior written notice.

     1.4.7     Compliance with Laws VPS shall be responsible for compliance with
     all U.S. federal state and local laws regarding bottling, water quality, 
     labeling and like matters.  AKVA Hf. shall be responsible for all Icelandic
     bottling, water quality, and labeling matters.

     1.4.8 Purchase of existing  inventory VPS will purchase all AKVA USA's good
     inventory  at an  average  price of $5.77  per  case.  VPS will pay for the
     inventory  upon  shipment of the product to the  distributor.  VPS shall be
     responsible  for  all  storage  and  shipping  charges  after   Settlement.
     Notwithstanding  the  Foregoing  payment  terms,  payment  in full  for the
     inventory  shall be due upon  termination  by VPS of this  Agreement or One
     Hundred and Eighty Days (180) after the date hereof, whichever comes first.
     VPS shall  use its best  efforts  to sell the 1.5 and 1.0  liter  inventory
     having  "expiration' dates prior to August 1998 ('Dated  Inventory").  Such
     efforts shall include,  without limitation  offering such inventory at on a
     "buy one, get one free" basis at the current case prices. In the event that
     despite its best efforts VPS is unable to sell Dated  Inventory  because it
     expires, VPS shall be credited the purchase price of such inventory.

      1.4.9  Reporting  VPS shall  provide AKVA Hf. with  detailed  reports on a
      quarterly   basis  showing   overall   sales  by  product  line,   pricing
      information,   advertising  and  marketing  expenditures,   subdistributor
      relations,  adjustments to projected inventory  requirements and any other
      information  reasonably  requested  by  AKVA  Hf.  in  connection  with or
      affecting  the  manufacturing,  bottling  and  shipping  of Product in the
      Territory. AKVA Hf., or its representatives,  shall be entitled to inspect
      VPS accounting,  regulatory, marketing or other relevant records regarding
      Product upon request therefor.

     1.4.10 Facilities VPS, or its  sub-distributors,  as the case may be, shall
     maintain a suitable  place of business with adequate  facilities,  trucking
     equipment  and  staffing  necessary to comply with the  provisions  of this
     Agreement and to promote and maintain AKVA Hf.'s image and good  reputation
     in the Territory.  All such  facilities and trucks shall be clean,  dry and
     sanitary,  and shall be maintained in a manner to prevent  contamination of
     the Product.  AKVA Hf. shall have the right,  from time to time, to inspect
     such facilities and equipment to ensure  compliance with this Section,  and
     VPS shall  afford  AKVA Hf.  complete  access  thereto  for  purposes  such
     inspection.

                                       3

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     1.4.11  Non-agency  The  parties  acknowledge  that  VPS is an  independent
     distributor and neither the making of this Agreement nor the performance of
     any of the provisions  hereof shall be construed to constitute VPS an agent
     or legal  representative  of AKVA  Hf.  for any  purpose,  nor  shall  this
     Agreement  be deemed to  establish  a joint  venture or  partnership.  Each
     purchase  of the product by VPS from AKVA Hf.  pursuant to this  Agreement,
     each sale of the product made by VPS, and each agreement or commitment made
     by VPS to any person,  firm or  corporation  with respect  thereto shall be
     made by VPS for its own account

    2.     Delivery

         2.1 Delivery of Product AKVA Hf.'s  obligation to fill VPS Orders shall
         be limited  and subject in all events to (i) the  availability  to AKVA
         Hf. of sufficient quantities of raw materials: (ii) any Force Majeure
         or circumstance beyond AKVA Hf.'s reasonable control and (iii) timely 
         and adequate submissions of orders to AKVA Hf. according to the 
         provisions of the Agreement. AU Products shall be delivered to 
         AKVA Hf.'s plant.

          2.2  Shipping  AKVA Hf  will  arrange  for  shipment  of all  finished
          Product.  The cost of  shipping  shall be approved in advance and paid
          for by VPS.

    3.       AKVA Hf. and AKVA USA's representations and warranties



          3.1    AKVA Hf. AKVA Hf. represents and warrants to VPS that as of the
          date of this Agreement and as of the date of the Settlement, that:

          3.1.1 AKVA Hf. is a  "hlutafelag"  duly organized and existing in good
          standing  under the laws of the Republic of Iceland with the corporate
          power to own its  assets  and  carry on its  business  as is now being
          conducted.

          3.1.2 AK-VA Hf is in compliance with all applicable laws,  ordinances,
          rules,  regulations,  and requirements of all governmental authorities
          having jurisdiction thereof, and that AKVA has complied with all laws,
          municipal,,.   ordinances,   and   regulations  of  all   governmental
          authorities having  jurisdiction  thereof,  and that AKVA has complied
          with all laws,  municipal  ordinances,  and regulations  applicable to
          AKVA and in the  ownership  of the assets and the  business  hereunder
          where failure to do so would  interfere  with the  performance  of its
          obligations under this Agreement.

          3.1.3  There  are  no  actions,   suits,  or  proceedings  pending  or
         threatened against AKVA Hf., either at law or in equity, brought by any
         federal, state, or municipal or other
          governmental   agency,    department,    board,   bureau,   or   other
          instrumentality  that  would  interfere  with the  performance  of its
          obligations under this Agreement.

          3.1.4   All trademarks, trade names, copyrights and applications 
therefor are owned or used
                                       4

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          or  registered  in the name of or  licensed to AKVA Hf. are listed and
          briefly  described  on  Schedule  3.1.4.  Other than as  specified  on
          Schedule 3.1.4, no proceedings  have been instituted or are pending or
          threatened which challenge the validity of the ownership or use by the
          AKVA  Hf.  of  any  such  trademarks,   trade  names,   copyrights  or
          applications. AKVA Hf. has not licensed anyone, other than AKVA USA to
          use any of the  foregoing  or any other  technical  know-how  or other
          proprietary  rights of AKVA Hf. and AKVA Hf. has no  knowledge  of the
          infringing  use of any of  such  trademarks  and  trade  names  or the
          infringement  of any such copyrights by any person except as set forth
          on  Schedule  3.1.4.   The  Company  owns  or  validly   licenses  all
          trademarks,  trade names,  copyrights  set forth on Schedule 3.1.4 now
          used in the conduct of its business and has not received any notice of
          conflict  with the  asserted  rights of others  except as specified in
          Schedule 3.1.4.

          3.2 AKVA USA The AKVA USA  represents  and  warrants to VPS that as of
          the date of this Agreement and as of the date of the Settlement, that:

           3.2.1 AKVA USA 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.

         3.2.2 AKVA USA is in compliance with all applicable  laws,  ordinances,
            rules, regulations, and requirements of all governmental authorities
            having jurisdiction thereof, and that AKVA USA has complied with all
            laws,  municipal  ordinances,  and  regulations of all  governmental
            authorities  having  jurisdiction  thereof,  and  that  AKVA USA has
            complied  with  all  laws,  municipal  ordinances,  and  regulations
            applicable  to AKVA USA and in the  ownership  of the assets and the
            business  hereunder  where failure to do so would interfere with the
            performance of its obligations under this Agreement.

            3.2.3  There  are no  actions,  suits,  or  proceedings  pending  or
            threatened against AKVA USA, either at law or in equity,  brought by
            any  federal,  state,  or municipal  or other  governmental  agency,
            department,  board,  bureau,  or other  instrumentality  that  would
            interfere  with the  performance  of its  obligations  under  this
            Agreement.

            3.2.4 All  trademarks,  trade  names,  copyrights  and  applications
            therefor are owned or used or  registered in the name of or licensed
            to AKVA USA are listed and  briefly  described  on  Schedule  3.2.4.
            Other than as specified on Schedule 3.2.4, no proceedings  have been
            instituted or are pending or threatened which challenge the validity
            of the  ownership  or use by the AKVA  USA of any  such  trademarks,
            trade names,  copyrights or applications.  AKVA USA has not licensed
            anyone, other than AKVA USA to use any of the foregoing or any other
            technical  know-how or other proprietary rights of AKVA USA and AKVA
            USA has no knowledge of the infringing use of any of such trademarks
            and trade names or the  infringement  of any such  copyrights by any
            person except

                                       5
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            as set forth on Schedule 3.2.3. The Company owns or validly licenses
            all trademarks,  trade names, copyrights set forth on Schedule 3.2.3
            now used in the conduct of its  business  and has not  received  any
            notice of  conflict  with the  asserted  rights of others  except as
            specified in Schedule 3.2.3.

            3.3  Subsequent  Knowledge. If AKVA  Hf.  or AKVA  USA  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  above are not true and
            cannot  be made true by the party to which  such  representation  or
            warranty  applies,  by the time of Settlement,  or will no longer be
            true  as  of  the  date  of  Settlement,  the  party  to  whom  such
            representation  or warranty applies will promptly notify VPS of such
            change in circumstances.

4.      Trademark

            4.1 Ownership VPS recognizes that "AKVA" is a trademark of Kaupfelag
            Eyfiroinga  ("KEA") and  licensed to AKVA Hf for so long as AKVA Hf.
            is engaged in the business of bottling and distributing spring water
            and said trademark,  name, marks, names, symbols,  slogans, emblems,
            insignia,  or other designs of AKVA (Schedules  3.1.3 and 3.2.3)(the
            "AKVA  marks")  are owned or  licensed  to AKVA Hf.,  but such trade
            names  and  advertising  matter  or  copyrighted  materials  may  be
            utilized  by VPS in  conformity  with  the  Agreement,  and  must be
            approved by AKVA Hf. in advance of its use. VPS shall not act in any
            manner  which may  impair the  "AKVA"  trademark  or affect its good
            will. Trademark usage in any form shall be approved by AKVA Hf..

            4.2 Non registration VPS shall not, during the term of the Agreement
           or  thereafter,  gr represent that it is the owner of the AKVA Marks,
           whether or not the  Trademarks are  registered,  nor shall VPS at any
           time register or cause to be registered  any AKVA Marks,  in its name
           or in the name of  another,  except  on  behalf  of and with  written
           instructions from AKVA Hf. VPS shall not dispute the validity of AKVA
           Hf.'s Trademarks.

           4.3  Termination.  VPS will not,  after 60 days following the date of
           termination use in any manner whatsoever, any of the AKVA Marks.

     5.   Spoiled or Defective Products

           5.1    Product Warranty

              5.1.1  AKVA Hf. hereby warrants that the Product will be pure and 
              uncontaminated. AKVA Hf. shall replace, at its own reasonable 
              expense, Products which are verified to be spoiled and/or 
              defective as a result of contamination of the source, the improper
              bottling of the Product or contamination or spoilage of the 
              Product during bottling.

                                       6

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              5.1.2 VPS shall visually  inspect Product upon receipt thereof for
              external damage and overall condition.  VPS shall immediately file
              a notice of claim against the  carrier(s) in the event that any of
              the Product is  delivered  other than in  external  good order and
              condition. VPS shall also promptly notify AKVA Hf. of such fact.

              5.1.3 EXCEPT AS HEREINBEFORE SPECIFICALLY SET FORTH, AKVA Hf MAKES
              NO WARRANTY  WHATSOEVER  WITH RESPECT TO THE  PRODUCT.  OTHER THAN
              THAT SET FORTH ABOVE, ALL WARRANTIES, CONDITIONS, REPRESENTATIONS,
              INDEMNIFICATIONS  AND  GUARANTEES,  EXPRESS OR IMPLIED,  INCLUDING
              WARRANTIES  OF  MERCHANTABILITY  AND  FITNESS  FOR ANY  PARTICULAR
              PURPOSE,  WHETHER  ARISING UNDER ANY PRIOR AGREEMENT OR UNDER ORAL
              OR  WRITTEN   STATEMENT  MADE  BY  OR  ON  BEHALF  OF  COMPANY  IN
              NEGOTIATIONS   WITH  VPS  OR  ITS   REPRESENTATIVES,   ARE  HEREBY
              OVERRIDDEN AND EXCLUDED.

          5.2  Indemnification  by AKVA Hf.  AKVA agrees to  indemnify  and hold
          harmless VPS and its subsidiaries,  affiliates, successors and assigns
          from  and  against  any  and  all  (x)  liabilities,   losses,  costs,
          deficiencies  or damages  and any and all amounts  paid in  settlement
          ("Loss")  and (y)  reasonable  attorneys'  and  accountants'  fees and
          expenses,  court costs and all other reasonable out-of-pocket expenses
          ("Expense",),,.  net of any  insurance  received,  incurred by VPS, in
          investigating,   preparing  or  defending   against  any   litigation,
          commenced  or  threatened,  or any  claim  asserted  in good  faith in
          connection with or arising from the manufacturing,  marketing,  and/or
          sale of any Product  improperly bottled by AKVA or contaminated at the
          source or spoiled during bottling, pursuant to this Agreement.

          5.2  Indemnification By VPS, VPS agrees to indemnify and hold harmless
          AKVA Hf. and its subsidiaries, affiliates, successors and assigns from
          and against any and all (x) liabilities,  losses, costs,  deficiencies
          or damages and any and all amounts paid in settlement ("Loss") and (y)
          reasonable attorneys' and accountants' fees and expenses,  court costs
          and all other reasonable out-of-pocket expenses ("Expense") net of any
          insurance received, incurred by AKVA Hf., in investigating, preparing
          or defending against any litigation,  commenced or threatened,  or any
          claim  asserted in good faith in  connection  with or arising from the
          marketing,  and/or  sale of any  Product  other  than as a  result  of
          improper bottling by AKVA or contamination at the source or spoilage 
          during bottling, pursuant to this Agreement.

     6.   Insurance

          6.1 VPS Insurance  That VPS carries  comprehensive  general  liability
          insurance  covering  injuries or damages to  person(s)  or property as
          herein described.  Upon AKVA Hf.'s request,  VPS shall deliver to AKVA
          Hf. a certificate of insurance with the following  coverage  amount of
          $1,000,000.
                                       7

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          6.2  AKVA Hf.  Insurance The AKVA Hf. carries comprehensive general
          liability insurance covering, injuries or damages to persons or 
          property as described herein. AKVA Hf. shall deliver to VPS a 
          certificate of insurance with the following coverage amount of 
          $1,000,000.

     7.   Non-competition

          7.1 Scope In further  consideration for entering- into this Agreement,
          upon the consummation of the transactions contemplated herein and more
          effectively to transfer and protect the business of the Company,  AKVA
          Hf. agrees that for so long as this Agreement is in effect, and except
          as otherwise  provided herein,  neither it nor its current  affiliates
          and/or  shareholders  will (I) directly or indirectly  own,  manage or
          operate a bottled water business anywhere in the world;  provided that
          ownership  of not more  than  five  percent  (5 %) of the  issued  and
          outstanding  shares of a class of  securities  of a  corporation,  the
          securities of which are traded on a national securities exchange or in
          the  over-the-counter  market,  shall not be deemed  ownership  of the
          issuer of such  shares for the  purposes  of this  paragraph;  or (ii)
          induce or  attempt to  persuade  any  employee  or agent of the VPS to
          terminate  such  employment or agency  relationship  in order to enter
          into any such  relationship with AKVA Hf or any of its subsidiaries or
          affiliates or to enter into any such,-.  relationship on behalf of any
          other business organization in competition with VPS.

          7.2  Injunction  Without  limiting  the  right  of VPS and any of its
          successors or assigns to pursue all other legal and  equitable  rights
          available  to them for  violation of the covenant set forth in Section
          7.1 above by AKVA,  it is agreed  that  other  remedies  cannot  fully
          compensate VPS and its successors and assigns for such a violation and
          that  VPS  and  its  successors  and  assigns  shall  be  entitled  to
          injunctive relief to prevent violation or continuing violation hereof.
          It is the intent and  understanding  of each party  hereto that if, in
          any action  before any court or agency  legally  empowered  to enforce
          this covenant, any term, restriction,  covenant or promise is found to
          be  unreasonable  and for that reason  unenforceable,  then such term,
          restriction,  covenant  or  promise  shall be deemed  modified  to the
          extent necessary to make it enforceable by such court or agency.

     8.   Termination

          8.1 Parties'  Right to Terminate  Agreement  Each Party shall have the
          right to terminate this Agreement as follows:

               8.1.1  Except as  otherwise  provided in this  Agreement,  in the
               event either AKVA Hf. or VPS breach any  material  representation
               or warranty or fails to perform any obligation  contained in this
               Agreement and after having been finished with sixty (60)
               days  notice to cure by the other  Party  (except  when no Notice
               to Cure is required) such breach has not been remedied,  then the
               party not in breach may terminate this

                                       8
<PAGE>



              Agreement.

               8.1.2 AKVA Hf. may terminate  this  Agreement upon failure by VPS
               to make any payment  hereunder  when due,  and does not cure such
               payment  default  within  thirty  (30)  days  of  written  notice
               thereof.

               8.1.3  In the  event  AKVA Hf.  or VPS (i)  fails  to  vacate  an
               involuntary bankruptcy,  insolvency or reorganization petition or
               petition for an arrangement or composition  with creditors  filed
               against  AKVA Hf. or VPS with  thirty (30) days after the date of
               such filing,  or files such a petition on a voluntary  basis;  or
               (ii) AKVA Hf. of VPS makes an assignment or deed of trust for the
               benefit of creditors; or (iii) AKVA or VPS fails to vacate  the
               appointment  of a receiver  or trustee for AKVA Hf. or VPS of for
               any interest in the other  parties  business  within  thirty (30)
               days after such appointment;  or (iv) AKVA Hf. or VPS permits an
               attachment to be levied against and remain  outstanding on any of
               its equipment or plant for more that thirty (30) days; AKVA Hf or
               VPS may terminate this Agreement upon ten (10) days prior written
               notice to the other Party.

     9.   Notices
     Any notice,  request,  demand,  invoice or other communication  required or
permitted by this  Agreement  shall be deemed  properly  given (I) when actually
delivered;  (ii) when  dispatched  by  facsimile,  if  confirmed  in  writing by
sender's transmission device; or (iii) if sent certified mail receipt requested,
when the return receipt indicates delivery was made. Addressee for Notice are as
follows,  provided that either party may change its address for Notice by notice
to the other.

     For AKVA Hf. and AKVA USA:        AKVA Hf.
                                       Hafnarstraeti 91-95
                                       Akureyri, Iceland
                             Attn:     Thorarim Sveinsson
                         Telephone:    354-443-338
                         Facsimile:    354430-391


     With Copy To:                     Robert L. May, Jr., Esquire
                                       10 Railroad Place
                                       Saratoga Springs, NY 12866
                         Telephone:    (518) 581 - 8800
                         Facsimile:    (518) 581 - 8823

     For VPS:                           Vermont Pure Springs, Inc.  Route 66
                                        Randolph Center, VT 05061
                               Attn:    Timothy G. Fallon
                           Telephone:   (802) 728 - 3600
                           Facsimile:   (802) 728-4814

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<PAGE>



     With Copy to:                   Kevin F. Berry, Esquire
                                     Ledgewood Law Firm
                                     Philadelphia, PA 19102
                       Telephone:    (215) 731 - 9450
                       facsimile:    (215) 735 - 2513

10.     Integrated Agreement

    This Agreement  contains the entire agreement of the parties with respect to
    the  subject  matter  hereof  This  Agreement  may be  modified  only  by an
    agreement  of the  parties in  writing,  signed by the party to be  charged,
    which need by supplied by additional consideration.

    11.    No Assignment
    Neither  party  shall  assign its right or  delegate  its duties  under this
    Agreement to any other person or entity without the prior written consent of
    the  other  party.  A consent  required  by either  party  pursuant  to this
    paragraph shall not, once requested, be unreasonably withheld.

   12.     Severability
    If any  provision  of  this  Agreement  is  found  by a court  of  competent
    jurisdiction  to be void  or  unenforceable,  the  other  provision  of this
    Agreement shall remain in full force and effect.

    14.    Non-Waiver
    Failure  of either  party to  exercise  promptly  any right  granted by this
    Agreement or to require strict  performance of any obligation  undertaken by
    the other party pursuant to this  Agreement,  shall be deemed to be a waiver
    of such right or of the right to demand  subsequent  perfomance  of any and
    all such obligations undertaken by the other party.

     15.  Arbitration.
     All disputes  arising in  connection  with this  Agreement  which cannot be
     resolved by the parties  shall be finally  settled in  accordance  with the
     rules  with  respect  to  commercial  arbitration  then  in  effect  of the
     International Chamber of Commerce (ICC) arbitration in Geneva, Switzerland.
     The arbitrators shall be persons skilled in the legal and business  aspects
     of the bottled spring water business. Arbitrators are to be selected by the
     parties,  each side  choosing  one. In the event  that the two  arbitrators
     cannot agree, they shall select a third arbitrator (or, failing  agreement,
     such third arbitrator shall be selected by the ICC upon reference being 
     made to such body), and the decision of any two of the three arbitrators 
     shall be binding on the parties. Judgment upon any award rendered in 
     arbitration may be entered in a court of competent  jurisdiction  or 
     application may be made to such  court  for  judicial  acceptance  of such
     award and an order of enforcement,  as the case may be.  Each  party  shall
     bear its own costs of arbitration hereunder.

     16.  Choice of Law
     This Agreement is to be governed by the laws of the State of New York 
     without regard to its
                                       10

<PAGE>



      conflicts of laws.

     17.  Official Language
     The official language of this Agreement and notices is English.





IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year set forth hereinabove.



AKVA:                       AKVA USA, INC.


    Date:09/12/97           By:\S\Thorafim Sveinsson
                            Thorafim Sveinsson 
                            President
                                 
                            AKVA Hf.

                                   
     Date:09/12/97          By:\S\Maghus Gauti Gautason
                            Maghus Gauti Gautason
                            Chairman



VPS:                        VERMONT PURE SPRINGS, INC.


     Date:09/12/97          By:\S\Timothy G. Fallon
                            Timothy G. Faflon 
                            President & CEO








                                       11




<PAGE>











                         Schedule 3.1.4
                      AKVA Hf.  Trademarks

AKVA - Licensed to AKVA Hf. by KEA,
"The pure soul of Iceland" - not registered, no assurance that its  registrable.
Hesjuvalla  Springs  medallion  logo - not  registered, no assurance  that it is
registrable.








                                       12

























<PAGE>









                         Schedule 3,2.4
                       AKVA USA Trademarks

                              NONE













                                       13





















<PAGE>









             AGREEMENT REGARDING DISTRIBUTION RIGHTS


THIS AGREEMENT REGARDING  DISTRIBUTION RIGHTS (the  "Assiginment"),  dated as of
DECEMBER 9th 1997,  is by and between AKVA USA,  INC.,  a Delaware  corporation,
having its principal office at 12 Marshall Street,  Boston,  Massachusetts 02108
(the "Assignor') and Vermont Pure Springs, Inc., a Delaware corporation, having 
its principal  place of business at Route 66 in Randolph, Vermont 05060  (the
"Assignee").

                           WITNESSETH:

WHEREAS, Assignor is a party to that certain International Distribution and
Manufacturing Agreement dated as of June 6, 1994 (the "Distribution Agreement");
and WHEREAS, the Assignor wishes to assign its right under the Distribution 
Agreement to  distribute  AKVA  Spring Water in the United  States (the 
"Rights") to the Assignee in exchange for 25,000 shares of Assignee's parent
company, Vermont Pure Holdings, Ltd.; and 

WHEREAS, the Assignee is willing to accept an assignment of the rights in 
exchange for 25,000 shares;

     NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

SECTION 1. Assignor does hereby irrevocably and unconditionally assign,
transfer and set over to the Assignee or its designees all of the  Assignor's 
rights under the Distribution Agreement.

SECTION  2. In  exchange  for the  assignment  contained  in  Section  I hereof,
Assignee  shall cause 25,000  unregistered  shares of its class A common stock,
$.Ol par value (the "shares") to be issued in the name of of
the persons set forth in Exhibit A. Assignee shall issue such  certificates  for
the shares within five days of the date hereof.

SECTION 3. This  Assignment  may not be modified  orally or in any manner other
than by an agreement in writing signed by the parties hereto or their respective
successors, administrators and assigns.

SECTION 4. This Assignment shall be binding upon and inure to the benefit of the
successors, administrators and permitted assigns of the parties hereto.

SECTION 5. This Assignment  shall be governed by and construed under the laws of
the State of Massachusetts.

                                       A-1

<PAGE>




                              

IN WITNESS WHEREOF, the parties have duly executed this ASSIGNMENT OF 
RECEIVABLES as of the day and year first above written.


                        AKVA USA, INC.


                               By:\S\Thorarian Sveinsson
                            Title:President, 09/12/97



VERMONT PURE SPRINGS, INC.


                               By:\S\Timothy G. Fallon
                            Title:President and CEO, 09/12/97                   



                                      A-2

<PAGE>







                           

                            Exhibit A


      Akva Hf.                       20,000 Shares
      Hafnarstraeti 91-95.
      Akureyri, Iceland

      David T. Thibodeau             2,500 Shares
      133 Myrtle Street
      Boston, Ma. 02114

      Wilham S. Bennet          2,500 Shares
      12 Marshall Street
      Boston, Ma. 02108








                                       A-3