$65,000.00                                                      January 6, 1998
                                    TERM NOTE

                  For value received and intending to be legally bound,  VERMONT
PURE  SPRINGS,  INC.,  a  Delaware  corporation  having a  business  address  in
Randolph,  Vermont  ("Maker"),  hereby  promises  to pay to the order of SAGAMON
SPRING WATER OF VERMONT,  INC, P.O. Box 907, Rutland, VT 05701 ("Payee"),  after
date, the principal sum of Sixty Five Thousand  Dollars  ($65,000.00),  together
with interest thereon upon the terms and conditions hereinafter set forth.

                           Term and Interest Rate.  This Note shall be for a 
term of five (5) years or until January 5, 2003, shall be fully  amortizing, 
and interest shall accrue on the outstanding  principal balance hereof at a per 
annum rate equal to the prime rate as established  from time to time by Chase 
Manhattan  Bank,  N.A.  Interest shall be  calculated on a three hundred sixty 
five (365) day year for the actual number of days elapsed in each calendar year.

                           Payments.

                                    Interest.  Interest that accrues on the 
outstanding principal balance hereof at the rate set forth  above  shall be due 
and  payable  in equal  montly installments commencing on February 5, 1998.

                                    Principal Balance.  The principal balance of
this Note shall be payable  (I)  in  equal and consecutive monthly based on a 
five  (5) year amortization of principal installments commencing on January 5, 
1998 and one final payment,  on January 5, 2003, of the entire outstanding 
principal balance hereof and all accrued interest and all other sums due and 
owing hereunder.

                           Prepayment.  Maker shall have the right to prepay, 
without premium or penalty,  the principal sum hereof,  in whole or in part, at
any time,  provided that such repayment is accompanied by the payment of all 
interest  accrued hereunder  to the  date of  prepayment  and  all  other  fees 
and  charges  due hereunder.

                           Place of Payment.  Principal and interest hereunder 
shall be payable to Fred Beauchamp and Jim Creed c/o Sagamon Spring Water of
Vermont, Inc, P.O. Box 907, Rutland, VT 05701.

                           Default; Acceleration; Remedies.  Should there occur
an event of default hereunder, and if such default is not cured by Maker within
thirty (30) business days after receipt by Maker of written  notice from Payee,
detail such default, then Payee,  at option,  may declare in writing immediately
due and payable the entire unpaid  balance of principal  and all other sums due 
by Maker  hereunder, together with interest  accrued thereon at the applicable 
rate specified herein to the date of default and thereafter at the Default Rate.
Upon  such a declaration of all such sums becoming due and payable by reason of 
such event of default, payment thereof may be enforced


<PAGE>



and  recovered  in whole  or in part at any time by one or more of the  remedies
provided to Payee in this Note.

                           Severability.  If any provision of this Note is held 
to be invalid or enforceable by a court of competent  jurisdiction,  the other 
provisions of this Note remain in full force and effect and shall be  liberally 
construed in favor of Payee in order to effect the provisions of this Note.

                           Limitation of Interest to Maximum Lawful Rate.  In no
event shall the rate of interest payable  hereunder exceed the maximum rate of 
interest  permitted to be  charged  by  applicable  law  (including  the  choice
of law  rules) and any interest paid in excess of the permitted  rate shall be 
refunded to Maker.  Such refund shall be made by  application  of the  excessive
amount of interest paid against  any sums  outstanding  and shall be  applied in
such order as Payee may determine.   If  the  excessive   amount  of  interest 
paid  exceeds  the  sums outstanding,  the portion  exceeding the said sums 
outstanding shall be refunded in cash to Maker by Payee.  Any such crediting or
refund shall not cure or waive any default by Maker hereunder.

                           Applicable Law.  This instrument shall be governed by
and construed according to the laws of the State of Vermont.

                           Captions.  The option or headings of the paragraphs 
in this Note are for convenience  only and shall not control or affect the
meaning or construction of any of the terms or provisions of this Note.

                           Construction.  Whenever used, the singular number
shall include the plural, the plural the  singular and the use of any gender 
shall be  applicable  to all genders. The words "Payee" and "Maker" shall be 
deemed to include the respective heirs, personal representatives, successors and
assigns of Payee and Maker.




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                  IN WITNESS  WHEREOF,  Maker,  intending  to be  legally  bound
hereby,  has caused this Note to be duly  executed  the day and year first above
written.

                                                     VERMONT PURE SPRINGS, INC.


                                                By:___________________________

                                                Title:________________________


ATTEST:

By:_________________________

Title:______________________


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