Document:

<PAGE>

EXHIBIT 10.7

                              EMPLOYMENT AGREEMENT

      This EMPLOYMENT AGREEMENT (this "Agreement") dated as of March 24, 2005
(the "Effective Date"), is by and between VERMONT PURE HOLDINGS, LTD., a
Delaware corporation (together with any subsidiaries, the "Company"), and BRUCE
S. MACDONALD (the "Executive").

      The Company and the Executive agree as follows:

1.    EMPLOYMENT.

      1.1 General. The Company shall employ the Executive, and the Executive
accepts employment, as Vice President of Finance, Chief Financial Officer and
Treasurer of the Company, upon the terms and conditions described herein. The
Executive's employment hereunder will commence on the Effective Date and will
continue for the Employment Term (as defined in Section 2.1 hereof) unless
terminated sooner as herein provided. During the Employment Term, the Executive
shall devote all of his business time, attention and skills to the business and
affairs of the Company, and will not undertake any commitments that would
interfere with or impair his performance of his duties and responsibilities.

      1.2 Duties. The Executive shall at all times render his services at the
direction of the Board of Directors (the "Board of Directors") and its Chief
Executive Officer, and his duties generally will include those required for the
day to day and long term financial reporting and management, planning,
development, operation and advancement of the business of the Company and its
affiliates. The Company may assign to the Executive such other executive and
financial administrative duties for the Company or any affiliate of the Company
as may be determined by the Board of Directors, consistent with the Executive's
status as Vice President of Finance, Chief Financial Officer and Treasurer. The
Executive agrees to diligently use his best efforts to promote and further the
reputation and good name of the Company and perform his services well and
faithfully.

2.    TERM AND TERMINATION.

      2.1 Term. The term of employment by the Company of the Executive pursuant
to this Agreement shall commence on the Effective Date and terminate at 11:59
p.m., East Coast time, on December 31, 2007 (the "Employment Term"), subject to
the provisions of Section 2.2.

      2.2 Early Termination. Notwithstanding anything to the contrary contained
in this Agreement, the Executive's employment may be terminated prior to the end
of the Employment Term only as set forth in this Section.

            2.2.1 Termination Upon Resignation or Death of Executive. The
Executive's employment shall terminate upon the resignation or death of the
Executive.

<PAGE>

                                      -2-

In case of termination pursuant to this Section 2.2.1, the Company shall pay to
the Executive (or, in case of his death, to his estate or his beneficiary
designated in writing), the base salary earned by the Executive pursuant to
Section 3, prorated through the date of resignation or death.

            2.2.2 Termination Upon Disability of Executive. The Executive's
employment shall terminate by reason of the disability of the Executive. For
this purpose, "disability" shall mean the Executive's inability, by reason of
accident, illness or other physical or mental disability (determined in good
faith by the Board of Directors with the advice of a qualified and independent
physician), to perform satisfactorily the duties required by his employment
hereunder for any consecutive period of 120 calendar days. In case of
termination pursuant to this Section 2.2.2, the Executive shall continue to
receive his base salary prorated through the time of such termination, less any
amount the Executive receives during such period from any Company-sponsored or
Company-paid source of insurance, disability compensation or government program.

            2.2.3 Termination Upon Mutual Consent. The Executive's employment
may be terminated by the mutual consent of the Company and the Executive on such
terms as they may agree.

            2.2.4 Termination For Cause. The Executive's employment shall
terminate immediately on notice to the Executive upon a good faith finding of
the Board of Directors that the Executive has (i) willfully or repeatedly failed
in any material respect to perform his duties in accordance with the provisions
of this Agreement following 30 days' prior written notice to the Executive and
failure of the Executive to cure such deficiency, (ii) committed a breach of any
provision of Section 4 hereof, (iii) misappropriated assets or perpetrated fraud
against the Company, (iv) been convicted of a crime which constitutes a felony,
or (v) been engaged in the illegal use of controlled or habit forming
substances. The preceding clauses (i) - (v) shall constitute "Cause" for
termination of the Executive hereunder. In the event of termination for Cause
pursuant to this Section 2.2.4, the Company shall pay the Executive his base
salary prorated through the date of termination.

            Notwithstanding any other provision of this Agreement, the Executive
shall not be terminated for Cause unless and until the Executive has had an
opportunity to appear before the Board of Directors to hear and respond to the
allegations of Cause for his termination.

            2.2.5 Termination by Company Without Cause. The Company may
terminate the Executive's employment at any time and for any reason, without
Cause, upon written notice to the Executive. If the Company so elects, it may
give notice during the period beginning November 1, 2006 and ending December 31,
2006 that the Executive's employment shall terminate without Cause on December
31, 2007 (a "Notice of Planned Termination").

<PAGE>

                                      -3-

            In the event of termination pursuant to this Section 2.2.5, other
than pursuant to a Notice of Planned Termination, the Company shall, subject to
Section 2.2.6, pay or provide to the Executive the following termination
benefits: (i) an amount (the "Payout Amount") equal to the sum of (x) two times
the Executive's annual base salary as of the termination date, plus (y) $75,000,
payable as follows: 4.166666% of the Payout Amount each month for 24 months in
equal regular monthly installments, less income taxes and other applicable
withholdings, and (ii) the Executive's Fringe Benefits (as defined below) for 24
months.

            In the event of termination pursuant to this Section 2.2.5 pursuant
to a Notice of Planned Termination, the Company shall, subject to Section 2.2.6,
pay or provide to the Executive the following termination benefits: (i) an
amount (the "Planned Termination Payout Amount") equal to the sum of (x) the
Executive's annual base salary as of the termination date, i.e., as of December
31, 2007, plus (y) $75,000, payable as follows: 8.333333% of the Planned
Termination Payout Amount each month for 12 months in equal regular monthly
installments, less income taxes and other applicable withholdings, and (ii) the
Executive's Fringe Benefits (as defined below) for 12 months.

            The obligation of the Company to provide "Fringe Benefits" following
any termination that is or is deemed to be without Cause shall mean that the
Executive's participation (including dependent coverage) in the life,
disability, and health insurance plans of the Company in effect immediately
prior to the termination shall be continued, or substantially equivalent
benefits provided, by the Company, at a cost to the Executive no greater than
his cost at the date of such termination, for the period in which the Company
shall be obligated to pay the Payout Amount (but not more than 24 months) or, if
applicable, the Planned Termination Payout Amount (but not more than 12 months).
Notwithstanding the foregoing, if the Company shall be unable to provide for the
continuation of an insurance benefit (such as life insurance) because such
benefit was provided pursuant to an insurance policy that does not provide for
the extension of such insurance benefit following termination of the employment
of the Executive, then the Executive may purchase insurance providing such
insurance benefit and, whether or not the Executive so elects to purchase
insurance, the Company's only obligation with respect to such insurance benefit
shall be to reimburse the Executive for his premium costs, up to a maximum
aggregate amount for all policies of insurance purchased by the Executive
pursuant to this sentence of $12,000 per annum, prorated for partial years. If
the Company is obligated pursuant to the so-called "COBRA" law to offer the
Executive the opportunity for a temporary extension of health coverage
("continuation coverage"), then the Executive shall elect continuation coverage,
and the premium cost of such coverage shall be borne by the Company and the
Executive as provided in the first sentence of this paragraph. Continuation
coverage provided pursuant to COBRA shall terminate in accordance with COBRA. To
the extent that any benefit required to be provided to the Executive by the
Company by reason of an actual or deemed termination for Cause shall be provided
to the Executive by any successor employer, the Company's obligation to provide
that benefit to the Executive shall be correspondingly offset or shall cease, as
the case may be. Except as expressly required by COBRA, in no event shall the
Company have any obligation to provide Fringe Benefits after the expiration of
the 24-

<PAGE>

                                      -4-

month or 12-month period, as the case may be, provided in this Section 2.2.5.
The Executive shall not be entitled to any expense allowance, automobile
allowance or relocation allowance following the termination of his employment
for any reason.

            2.2.6 Effect of the American Jobs Creation Act of 2004. Reference is
made to Section 409A of the Internal Revenue Code (the "Code"), as added to the
Code by the American Jobs Creation Act of 2004. If, following the issuance of
U.S. Treasury Department guidance and/or regulations under Section 409A, the
Company in good faith determines that amounts that are or may become payable to
the Executive upon termination of his employment hereunder are required to be
suspended or delayed for six months in order to satisfy the requirements of
Section 409A, then the Company will so advise the Executive, and any such
payments shall be suspended and accrued for six months, whereupon they shall be
paid to the Executive in a lump sum and regular monthly payments initiated or
resumed.

            2.2.7 Effect of Failure to Give Notice of Planned Termination. If
(i) the Company does not give the Executive a Notice of Planned Termination as
provided in Section 2.2.5, and (ii) the Executive continues in the employment of
the Company for the entire Employment Term, then the provisions of Section 2.2.5
with respect to termination of the Executive's employment by the Company without
Cause (and other than pursuant to a Notice of Planned Termination) shall survive
the expiration of this Agreement.

            2.2.8 Termination in Connection with Change of Control. If the
employment of the Executive terminates for any reason, including termination by
the Executive, within 30 days following the occurrence of a "Change of Control"
(as defined in this Section 2.2.8), then the Company shall, subject to Section
2.2.6, pay or provide to the Executive the following termination benefits: (i)
an amount (the "COC Payout Amount") equal to the sum of (x) two times the
Executive's annual base salary as of the termination date, plus (y) $150,000,
payable as follows: 4.166666% of the COC Payout Amount each month for 24 months
in equal regular monthly installments, less income taxes and other applicable
withholdings, and (ii) the Executive's Fringe Benefits (as defined below) for 24
months. A "Change of Control" shall mean a change in control of the Company (and
not any person or entity that hereafter becomes a successor to all or
substantially all of the business or assets of the Company by reason of a Change
of Control) and shall be deemed to have taken place if: (i) a third person,
including a "group" as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, becomes the beneficial owner of shares of the capital stock of the
Company having more than 50% of the total number of votes that may be cast for
the election of directors of the Company, (ii) the sale or other disposition
(excluding mortgage or pledge) of all or substantially all of the assets of the
Company, or (iii) the merger or other business combination of the Company with
or into another corporation or entity pursuant to which the Company will not
survive or will survive only as a subsidiary of another corporation or entity,
in either case with the stockholders of the Company prior to the merger or other
business combination holding less than 50% of the voting shares of the merged or
combined companies or entities after such merger or other business combination.
Notwithstanding the foregoing, the following shall not be deemed to be a Change
of Control for purposes

<PAGE>

                                      -5-

hereof: (i) any transaction in which either (x) the Executive, any
"Stockholder," as defined in the Agreement and Plan of Merger and Contribution
dated as of May 5, 2000 by and among the Company, Crystal Rock Spring Water
Company, a Connecticut corporation, and the other parties listed therein, or any
affiliate of any such Stockholder, is or becomes, either alone or as a member of
a "group" as defined in this Section, or (y) the Stockholders, together with
their affiliates and considered in the aggregate as a single entity, are or
become, the beneficial owner or owners of shares of the capital stock of the
Company having more than 50% of the total number of votes that may be cast for
the election of directors of the Company, or (ii) any transaction described in
SEC Rule 13e-3(a)(3)(i) in which the Executive participates as an "affiliate" of
the Company within the meaning of that Rule, without regard to whether the test
in Rule 13e-3(a)(3)(ii) would be satisfied in the transaction. The rights and
obligations created by this Agreement with respect to a Change of Control shall
apply only with respect to the first Change of Control after the date of
execution of this Agreement, and not with respect to any subsequent transaction.

            2.2.9 No Other Termination Benefits; Release. The Executive
understands and agrees that the termination payments and benefits described in
Section 2.2 constitute all of the payments and benefits to which he (or his
estate or beneficiary) will be or become entitled to receive in case of
termination of his employment, and that such payments and benefits are in lieu
of any and all other payments and benefits of every kind or description to which
he may be entitled, including, without limitation, the right to receive a bonus
payment or any portion thereof. Any accrued but unpaid vacation compensation
shall be payable upon termination of employment. In addition, the Executive
understands and agrees that the Company's obligation to pay or provide the
termination payments and benefits described herein is conditioned upon and
subject to the execution and non-revocation by the Executive of a form of
release of claims against the Company, the principal terms and conditions of
which shall be as set forth in Exhibit A to this Agreement.

            2.2.10 No Duty to Mitigate; Termination of Benefits. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 2 hereof, whether by seeking other employment or otherwise,
nor shall any compensation earned by the Executive during the period of
continuance of any payments under Section 2 hereof reduce the amount of
compensation payable under Section 2.

3. COMPENSATION. During the Employment Term, the Company shall pay, in full
payment for all of the Executive's services rendered hereunder, the following
compensation:

      3.1 Base Salary. The Company shall pay the Executive an annual base
salary, less income taxes and other applicable withholdings, of $135,000 in
accordance with the Company's standard payroll installments. The Compensation
Committee of the Board of Directors will review the annual base salary amount as
soon as practicable after the end of each fiscal year of Company to consider
whether or not it should be increased. Such determination shall be in the sole
discretion of the Committee using such criteria as they

<PAGE>

                                      -6-

deem relevant, including, but not limited to, the performance of the Company and
the Executive.

      3.2 Bonuses.

            3.2.1 Bonuses for Achievement of Goals. While the Executive is
employed by the Company, the Executive will be eligible to receive the bonuses
described in this Section 3.2. With respect to any bonus that is based on
performance during a fiscal period, the Executive must be employed by the
Company on the last day of that fiscal period to qualify for such bonus. The
incentive goals set forth in this Section shall be based upon or derived from
the Company's audited consolidated financial statements prepared in accordance
with generally accepted accounting principles as reported on by the Company's
independent accountants.

            3.2.2 Fiscal Year 2005, 2006 and 2007 Budgeted EBITDA and Business
Goals Bonuses. With respect to the Company's fiscal years ending October 2005,
October 2006 and October 2007:

            (i) if the Company has actual annual earnings before interest,
taxes, depreciation and amortization ("EBITDA") which, expressed as a percentage
of target annual EBITDA approved in the budget for that fiscal year by the Board
of Directors, are at least 90% of such target annual EBITDA, then the Company
shall pay the Executive an annual bonus as set forth in the following table.

<TABLE>
<CAPTION>
Actual EBITDA Divided by Target EBITDA                 Bonus
--------------------------------------                 -----
<S>                                                    <C>
less than 90% of target                     -          $   -0-
at least 90% but less than 91% of target    -          30,000
at least 91% but less than 92% of target    -          33,000
at least 92% but less than 93% of target    -          36,000
at least 93% but less than 94% of target    -          39,000
at least 94% but less than 95% of target    -          42,000
at least 95% but less than 96% of target    -          45,000
at least 96% but less than 97% of target    -          48,000
at least 97% but less than 98% of target    -          51,000
at least 98% but less than 99% of target    -          54,000
at least 99% but less than 100% of target   -          57,000
at least 100% but less than 102% of target  -          60,000
at least 102% but less than 104% of target  -          61,200
at least 104% but less than 106% of target  -          62,400
at least 106% but less than 108% of target  -          63,600
at least 108% but less than 110% of target  -          64,800
at least 110% but less than 112% of target  -          66,000
at least 112% but less than 114% of target  -          67,200
at least 114% but less than 116% of target  -          68,400
at least 116% but less than 118% of target  -          69,600
</TABLE>

<PAGE>

                                      -7-

<TABLE>
<S>                                                    <C>
at least 118% but less than 120% of target  -          70,800
at least 120% of target or greater          -          72,000
</TABLE>

            (ii) if the Executive attains specified business goals established
by the Board of Directors with respect to a fiscal year or fiscal quarter, then
the Executive shall be eligible for an additional bonus of up to $15,000 for
achievement of such business goals, the amount of such bonus, if any, to be
determined by the Compensation Committee of the Board of Directors. With respect
to the Company's fiscal year ending October 2005, the business goal under this
clause (ii) is the achievement by the Company of compliance with the financial
covenants set forth in the Company's loan agreement with its principal lender.
For each fiscal quarter in which such compliance is achieved, the Company shall
pay the Executive a bonus of $3,750. At the time it approves a budget for the
Company's fiscal years ending October 2006 and October 2007, the Board of
Directors shall advise the Executive of the business goals required to be
attained under this clause (ii) with respect to those fiscal years.

            3.2.3 Time of Bonus Payments. Each bonus required to be paid to the
Executive under this Section 3.2 shall be paid within 75 days after the fiscal
period in which it shall have been earned; provided, however, that before
payment, the Chief Financial Officer of the Company shall have certified in
writing to the Compensation Committee that the conditions to such bonus in
Section 3.2 have been satisfied.

      3.3 Stock Options and Restricted Stock. The Executive shall be eligible to
receive stock options and awards of restricted stock from time to time, as
determined by the Compensation Committee of the Board of the Directors of the
Company.

      3.4 Vacation. The Executive shall be entitled to four (4) weeks of
vacation in each 12-month period during the Employment Term, without carryover
of unused vacation time. No more than two (2) weeks may be taken consecutively.

      3.5 Executive Benefit Plans. The Executive shall be entitled to
participate in all plans or programs sponsored by the Company for employees in
general, including without limitation, participation in any group health,
medical reimbursement, or life insurance plans.

      3.6 Expense Allowance. The Company shall reimburse the Executive for all
reasonable and necessary expenses incurred by him from time to time in the
performance of his duties hereunder, against receipts therefor in accordance
with the then effective policies and requirements of the Company.

      3.7 Disability and Other Insurance; Automobile Allowance. The Company
shall have no obligation to provide disability insurance to the Executive. The
Company agrees to provide an allowance of up to $15,000 per year, in the
aggregate, to reimburse the Executive for (i) the actual cost of premiums
incurred by the Executive for disability insurance obtained by the Executive;
(ii) the actual cost of premiums incurred by the Executive for any other
insurance which would not be available to the Executive under the Company's
customary benefit plans; and (iii) the actual cost of leasing and operating

<PAGE>

                                      -8-

an automobile for use by the Executive during the Executive's employment with
the Company. The Executive may determine in his reasonable judgment how to
allocate the allowance between disability insurance premiums, other insurance
premiums and automobile leasing expense.

4.    PROTECTION OF CONFIDENTIAL INFORMATION; NON-COMPETE.

      4.1   Acknowledgements. The Executive acknowledges that:

      (a) The Executive has obtained and, during his employment by the Company,
will obtain secret and confidential information concerning the business of the
Company and its affiliates, including, without limitation, customer lists and
sources of supply, their needs and requirements, the nature and extent of
contracts with them, and related cost, price and sales information.

      (b) The Company and its affiliates will suffer substantial and irreparable
damage which will be difficult to compute if, during the period of his
employment with the Company or thereafter, the Executive should enter a
competitive business or should divulge secret and confidential information
relating to the business of the Company and its affiliates heretofore or
hereafter acquired by him in the course of his employment with the Company.

      (c) The provisions of this Agreement are reasonable and necessary for the
protection of the business of the Company and its affiliates.

      4.2 Confidentiality. The Executive agrees that he will not at any time,
either during the Employment Term or thereafter, divulge to any person, firm or
corporation any information obtained or learned by him during the course of his
employment with the Company, with regard to the operational, financial, business
or other affairs of the Company and its affiliates, and their respective
officers and directors, including, without limitation, trade secrets, customer
lists, sources of supply, pricing policies, operational methods or technical
processes, except (i) in the course of performing his authorized duties
hereunder, (ii) with the Company's express written consent; (iii) to the extent
that any such information is lawfully in the public domain other than as a
result of the Executive's breach of any of his obligations hereunder; or (iv)
where required to be disclosed by court order, subpoena or other government
process. In the event that the Executive shall be required to make any
disclosure pursuant to the provisions of clause (iv) of the preceding sentence,
the Executive promptly, but in no event more than 48 hours after learning of
such subpoena, court order, or other government process, shall notify the
Company, by personal delivery or by fax, confirmed by mail, to the Company and,
if the Company so elects and at the Company's expense, the Executive shall: (a)
take all reasonably necessary steps requested by the Company to defend against
the enforcement of such subpoena, court order or other government process, and
(b) permit the Company to intervene and participate with counsel of its choice
in any proceeding relating to the enforcement thereof.

<PAGE>

                                      -9-

      4.3 Return of Property. Upon termination of his employment with the
Company, or at any time the Company may so request, the Executive will promptly
deliver to Company all memoranda, notes, records, reports, manuals, drawings,
blueprints and other documents (and all copies thereof) relating to the business
of the Company and its affiliates and all property associated therewith, which
he may then possess or have under this control.

      4.4 Non-Competition. During the Employment Term and for a period equal to
the time during which Executive receives severance payments for benefits
pursuant to Section 2 of this Agreement or for a period of 12 months in the
event the Executive is terminated without entitlement to severance benefits
herein, the Executive shall not, without the prior written permission of the
Company, in the United States, its territories and possessions, directly or
indirectly, (i) enter into the employ of or render any services to any person,
firm or corporation engaged in any Competitive Business (as defined below); (ii)
engage in any Competitive Business for his own account; (iii) become associated
with or interested in any Competitive Business as an individual, partner,
shareholder, creditor, director, officer, principal, agent, employee, trustee,
consultant, advisor or in any other relationship or capacity; (iv) employ or
retain, or have or cause any other person or entity to employ or retain, any
person who was employed or retained by the Company or its affiliates while the
Executive was employed by the Company; or (v) solicit, interfere with, or
endeavor to entice away from the Company or its affiliates any of their
customers or sources of supply. However, nothing in this Agreement shall
preclude the Executive from investing his personal assets in the securities of
any Competitive Business if such securities are traded on a national stock
exchange or in the over-the-counter market and if such investment does not
result in his beneficially owning, at any time, more than 4.9% of the
publicly-traded equity securities of such competitor. "Competitive Business"
shall mean any business or enterprise which (a) designs, sells, manufactures,
markets and/or distributes spring or purified water products or still spring or
purified water beverages in the home and office market, or (b) engages in any
other business in which Company or its affiliates is involved at any time during
the 12-month period immediately prior to the termination of the Executive's
employment.

      4.5 Enforcement. If the Executive commits a breach, or threatens to commit
a breach, of any of the provisions of Section 4, the Company shall have the
right and remedy to have the provisions of this Agreement specifically enforced
by any court having jurisdiction over the matter, it being acknowledged and
agreed by the Executive that the services being rendered hereunder to the
Company are of a special, unique and extraordinary character and that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company. Such
right and remedy shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company under law or equity.

      4.6 Blue Penciling. If any provision of Section 4 is held to be
unenforceable because of the scope, duration or area of its applicability, the
tribunal making such determination shall have the power to modify such scope,
duration or area, or all of them, and such provision or provisions shall then be
applicable in such modified form.

<PAGE>

                                      -10-

5. REPRESENTATIONS OF EXECUTIVE. The Executive represents and warrants to the
Company that the Executive is not a party to or bound by any agreement,
understanding or restriction that would or may be breached by the Executive's
execution and full performance of this Agreement. The Executive expressly
undertakes and agrees that none of his acts or duties hereunder that will
violate any obligations he may have to any prior employer (or will impose on the
Company any liability to any prior employer) and that he has complied with all
requirements of notice applicable to the termination of any prior employment
before he commenced his employment with the Company. The Executive further
represents and warrants that he has delivered to the Company complete copies of
all employment agreements, understanding and restrictions to which he has been
subject at any time during the last five years.

6.    CONSTRUCTION OF THIS AGREEMENT.

      6.1 Choice of Law. This Agreement is to be construed pursuant to the laws
of the State of Delaware, without regard to the laws affecting choice of law.

      6.2 Invalid Agreement Provisions. Should any provision of this Agreement
become legally unenforceable, no other provision of this Agreement shall be
affected, and this Agreement shall continue as if the Agreement had been
executed absent the unenforceable provision.

      6.3 No Other Agreements. This Agreement represents the full agreement
between the Company and the Executive with respect to the subject matter hereof
and the Company and the Executive have made no agreements, representations or
warranties relating to the subject matter of this Agreement that are not set
forth herein. This Agreement supersedes any and all other agreements, oral or
written, that may define the employment relationship between the Executive and
the Company or any affiliate of the Company, and all of such other agreements
are hereby terminated, without liability to any party thereto. Nothing in this
Agreement confers any rights or remedies on any person or entity or than the
parties hereto.

      6.4 Notices. All notices provided for in this Agreement shall be in
writing and shall be deemed to be given when delivered personally to the party
to receive the same, when transmitted by electronic means or when mailed first
class, postage prepaid by certified mail, return receipt requested, addressed to
the party to receive the same at the applicable addresses set forth below or
such other address as the party to receive the same shall have specified by
written notice give in the manner provided for in this Section. All notices
shall be deemed to have been given as of the date of personal delivery,
transmittal or mailing thereof.

            If to the Executive: Mr. Bruce S. MacDonald, 1709 Roxbury Mountain
Road, Warren, Vermont 05674.

            If to the Company: Vermont Pure Holdings, Ltd., 45 Krupp Drive, P.O.
Box 536, Williston, Vermont 05495, Attention: Chairman of the Board, with a copy
to:

<PAGE>

                                      -11-

Dean Hanley, Esq., Foley Hoag LLP, 155 Seaport Boulevard, Boston, Massachusetts
02210.

      6.5 Assignment. This Agreement shall be binding upon and inure to the
benefit of the Company's successors and assigns.

      6.6 Disputes and Controversies. The parties hereto agree that in case of
any dispute, controversy or claim arising out of or relating to this Agreement,
other than pursuant to Sections 4 and 6 hereof, the dispute, controversy or
claim shall be determined by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The place of the
arbitration shall be Boston, Massachusetts. Any arbitration award shall be based
upon and accompanied by a written opinion containing findings of fact and
conclusions of law. The determination of the arbitrator(s) shall be conclusive
and binding on the parties hereto, and any judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction.

      6.7 Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.

      6.8 Waivers; Amendments. No waiver of any breach or default hereunder will
be valid unless in a writing signed by the waiving party. No failure or other
delay by any party exercising any right, power, or privilege hereunder will be
or operate as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege. No amendment or modification of this Agreement will
be valid or binding unless in a writing signed by both the Executive and the
Company.

<PAGE>

                                      -12-

      IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first written above.

                           COMPANY: VERMONT PURE HOLDINGS, LTD.

                                    By: /s/ Timothy G. Fallon
                                        -----------------------------
                                            Name: Timothy G. Fallon
                                            Title: CEO

                           EXECUTIVE: /s/ Bruce S. MacDonald
                                      -------------------------
                                      BRUCE S. MACDONALD

<PAGE>

                                      -13-

                                    EXHIBIT A

                                Terms of Release

      As a condition to the Company's obligation to pay or provide termination
payments or benefits, the Executive irrevocably and unconditionally releases,
acquits and forever discharges the Company, its affiliated and related
corporations and entities, and each of their predecessors and successors, and
each of their agents, directors, officers, trustees, attorneys, present and
former employees, representatives, and related entities (collectively referred
to as the "Released Entities") from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, damages and expenses
(including attorneys' fees and costs actually incurred) arising out of or in
connection with his employment with or termination from the Company, which the
Executive now has, owns or holds, or claims to have, own or hold, or which at
any time heretofore, had owned or held, or claimed to have owned or held, or
which the Executive at any time hereafter may have, own or hold, or claim to
have owned or held against the Released Entities, based upon, arising out of or
in connection with his employment with or termination from the Company up to the
date of this Release, including but not limited to, claims or rights under any
federal, state, or local statutory and/or common law in any way regulating or
affecting the employment relationship, including but not limited to Title VII of
the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age
Discrimination in Employment Act and any other federal, state, local statutory
and/or common law regulating or affecting the employment relationship. The
Executive acknowledges and understands that the termination payment or benefits
to be provided to the Executive constitute a full, fair and complete payment for
the release and waiver of all of the Executive's possible claims arising out of
or in connection with his employment with or termination from the Company.

      The Executive acknowledges that he has been provided at least twenty-one
(21) days to consider whether to sign this Release, that he has been advised to
consult with an attorney of his choosing concerning this Release, and that he
has executed and delivered this Release and waived any claims knowingly and
willingly. The Executive may revoke this Release within seven (7) days after it
is signed, and it shall not become effective or enforceable until such seven (7)
day revocation period has expired.Exhibit 10.1

                          INVESTMENT MANAGER AGREEMENT

                                 by and between

                     RENAISSANCE UNDERWRITING MANAGERS, LTD.

                                       and

                      BLACKROCK FINANCIAL MANAGEMENT, INC.

                                  July 1, 2005

                          INVESTMENT MANAGER AGREEMENT

         THIS AGREEMENT, made as of the 1st day of July, 2005, by and between
Renaissance Underwriting Managers Ltd., a Bermudian company (hereinafter called
the "Company"), and BlackRock Financial Management, Inc., a Delaware corporation
(hereinafter called the "Manager").

                                   WITNESSETH:

         WHEREAS, the Company has all requisite authority to appoint one or more
sub-investment managers to supervise and direct the investment and reinvestment
of a portion of all of the assets of Renaissance Investment Holdings Ltd., a
Bermudian company ("RIHL");

         THEREFORE, for and in consideration of the premises and of the mutual
covenants herein contained, the parties hereby agree as follows:

1. Appointment and Status as Investment Manager. The Company hereby appoints the
Manager as an "Investment Manager" with respect to the assets of RIHL. The
Manager does hereby accept said appointment and by its execution of this
Agreement the Manager represents and warrants that it is registered as an
investment adviser under the Investment Advisers Act of 1940 (the "Advisers
Act"). The Manager does also acknowledge that it is a fiduciary with respect to
the assets under management and assumes the duties, responsibilities and
obligations of a fiduciary with respect to the services described in Sections 3
through 5 below.

2. Representations by Company. The Company represents and warrants that (a) it
has all requisite authority to appoint the Manager hereunder, (b) the terms of
the Agreement do not conflict with any obligation by which the Company or RIHL
is bound, whether arising by contract, operation of law or otherwise and (c)
this Agreement has been duly authorized by appropriate limited liability company
action.

3. Management Services. The Manager shall be responsible for the investment and
reinvestment of those assets of RIHL designated by the Company as subject to the
Manager's management (which assets, together with all additions, substitutions
and alterations thereto are hereinafter called the "Account"). The Account may
include all securities and instruments described in Exhibit A to effect the
strategies described therein. The Company does hereby delegate to the Manager
all of its powers, duties and responsibilities with regard to such investment
and reinvestment and hereby appoints the Manager as its agent in fact with full
authority to buy, sell or otherwise effect investment transactions involving the
assets in its name and for the Account. Said powers, duties and responsibilities
shall be exercised exclusively by the Manager pursuant to and in accordance with
its fiduciary responsibilities and the provisions of this Agreement. In deciding
on a proper investment of the Account, the Manager shall consider the following
factors as communicated in writing to the Manager by the Company from time to
time: a) the investment purposes of RIHL, b) RIHL's financial needs such as
liquidity, c) applicable laws, d) RIHL's investment policies and guidelines, and
e) the Account's Investment Guidelines attached as Exhibit A. In addition, in
accordance with the Manager's guidelines in effect from time to time, the
Manager or its agent is authorized, but shall not be required, to vote, tender
or convert any securities in the Account; to execute waivers, consents and other
instruments with respect to such

securities; to endorse, transfer or deliver such securities or to consent to any
class action, plan of reorganization, merger, combination, consolidation,
liquidation or similar plan with reference to such securities; and the Manager
shall not incur any liability to the Company or RIHL or any shareholder of RIHL
by reason of any exercise of, or failure to exercise, any such discretion in the
absence of gross negligence or bad faith; provided that, if the Manager does not
take any such action, the Manager shall promptly inform the Company of same and
forward to the Company materials related to any of the foregoing at least three
(3) business days prior to the time limit, if any, with respect to the taking of
such action.

4. Accounting and Reports. At such intervals as shall be mutually agreed upon
between the parties (but no less frequently than monthly), the Manager shall
furnish the Company with appraisals of the Account, performance tabulations, a
summary of purchases and sales and such other reports as shall be agreed upon
from time to time. The Manager shall also reconcile transaction and
asset-summary data with custodian reports at times that are mutually agreeable
to the Manager and the Company (but no less frequently than monthly). The asset
and price reconciliations shall, with BlackRock's best efforts, occur on the 1st
business day following the last day of the calendar month. In addition, the
Manager shall communicate and coordinate the resolution of any significant
discrepancies with the custodian and the Company and forward a copy of the
reconciliation reflecting the Manager's final Net Asset Value to the Company
within 3rd business day following the last day of the calendar month.

         The parties recognize that successful delivery of the reports will
require mutual cooperation, communication, feedback, and interaction, as well as
the assumed proper workings and performance of markets, exchanges,
counterparties, data feeds, communication and utility systems, computer hardware
and software and the like, and including action required hereunder or reasonably
requested by the other party to enable it to accomplish its obligations and
responsibilities hereunder. Both parties agree to perform the foregoing
responsibilities in good faith and in a professional manner.

5. Other Services. The Manager shall, on invitation, attend meetings with
representatives of the Company to discuss the position of the Account and the
immediate investment outlook, or shall submit its views in writing as the
Company shall suggest from time to time.

6. Additional Investment Services; Considerations and Acknowledgments. As agreed
between the parties from time to time, the Manager may provide certain
operating, analytical, and reporting support ("Additional Investment Services")
for those portfolios of RIHL and of the Company managed by the Manager and by
other parties. The Additional Investment Services may include, but are not
limited to the following: (i) establishing appropriate investment mandates and
strategies, (ii) drafting investment policies and guidelines, (iii) supporting
the Company's operations, including custodial assistance, (iv) creating a
consolidated risk reporting platform for the Company, (v) providing
asset-liability reporting, (vi) providing income projections, and (vii) broad
and general consulting on accounting, operational, regulatory, and other
strategic issues.

         The Company understands and acknowledges that (a) all Additional
Investment Services require the Manager to exercise good-faith judgments that
may ultimately prove to be erroneous,

                                       2

(b) in connection with providing the Additional Investment Services, the Manager
will make certain assumptions about the movements of interest rates, volatility
of interest rates, movements of spreads, and the relationship of mortgage
prepayments to interest rates, (c) the Manager's assumptions will not
necessarily capture all the characteristics and risks inherent in the Company's
portfolios, and (d) the Manager's assumptions are based upon information
provided to the Manager by the Company or RIHL or certain of their respective
third-party vendors that is assumed to be reliable and accurate, but the Manager
does not represent or warrant that it is accurate or complete, and will not be
responsible for verifying the accuracy of any such information.

7. Compensation. For its investment management services rendered hereunder, the
Manager shall be compensated by the Company and not RIHL in accordance with
Exhibit B, attached hereto. If the management of the Account commences or ends
at any time other than the beginning or end of a calendar quarter, the quarterly
fee shall be prorated based on the portion of such calendar quarter during which
this Agreement was in force.

8. Custodian. The securities in the Account shall be held by a custodian duly
appointed by the RIHL and the Manager is authorized to give instructions to the
custodian with respect to all investment decisions regarding the Account.
Nothing contained herein shall be deemed to authorize the Manager to take or
receive physical possession of any of the assets for the Account, it being
intended that sole responsibility for safekeeping thereof (in such investments
as the Manager may direct) and the consummation of all purchases, sales,
deliveries and investments made pursuant to the Manager's direction shall rest
upon the custodian.

9. Brokerage. The Company hereby delegates to the Manager sole and exclusive
authority to designate the brokers or dealers through whom all purchases and
sales on behalf of the Account will be made. The Manager will determine the rate
or rates, if any, to be paid for brokerage services provided to the Account. The
Manager agrees that securities are to be purchased through such brokers as, in
the Manager's best judgment, shall offer the best combination of price and
execution. The Manager, in seeking to obtain best execution of portfolio
transactions for the Account, may consider the quality and reliability of
brokerage services, as well as research and investment information and other
services provided by brokers or dealers. Accordingly, the Manager's selection of
a broker or dealer for transactions for the Account may take into account such
relevant factors as (i) price, (ii) the broker's or dealer's facilities,
reliability and financial responsibility, (iii) when relevant, the ability of
the broker to effect securities transactions, particularly with regard to such
aspects as timing, order size and execution of the order, (iv) the broker's or
dealer's recordkeeping capabilities and (v) the research and other services
provided by such broker or dealer to the Manager which are expected to enhance
its general portfolio management capabilities (collectively, "Research"),
notwithstanding that the Account may not be the exclusive beneficiary of such
Research.

10. Confidential Information. All information regarding operations and
investments of the Company and RIHL shall be regarded as confidential by the
Manager.

11. Directions to the Manager. All directions by or on behalf of the Company to
the Manager shall be in writing signed by:

                                       3

              NAME                           TITLE

              Todd Fonner                    Treasurer
              John Lummis                    Chief Financial Officer
              Martin J. Merritt              Senior Vice President
              Sean Moore                     Vice President

         The Manager shall be fully protected in relying upon any direction in
accordance with the previous paragraph with respect to any instruction,
direction or approval of the Company, and shall be so protected also in relying
upon a certification duly executed on behalf of the Company as to the names of
persons authorized to act for it and in continuing to rely upon such
certification until notified by the Company to the contrary.

         The Manager shall be fully protected in acting upon any instrument,
certificate or paper believed by it to be genuine and to be signed or presented
by the proper persons or to any statement contained in any such writing and may
accept the same as conclusive evidence of the truth and accuracy of the
statements therein contained.

12. Liabilities of the Manager and the Company. The Company acting in good faith
shall not be liable for any act or omission of the Manager in connection with
the Manager's discharge of its duties; provided, however, this limitation shall
not act to relieve the Company from any responsibility or liability for any
fiduciary responsibility, obligation or duty. The Manager shall exercise its
best judgment in rendering services under this Agreement. The Manager, its
officers, directors and employees, acting in good faith shall not be liable, and
shall be indemnified by the Company against any and all losses, damages, costs,
expenses (including reasonable attorneys' fees), liabilities, claims and demands
(collectively, "Losses"), for any action, omission, information or
recommendation in connection with this Agreement, except in the case of the
Manager's or such officer's, director's or employee's actual misconduct, gross
negligence, willful violation of any applicable statute or reckless disregard
for its duties and except as further limited in the paragraph immediately below;
provided, however, this limitation shall not act to relieve the Manager, its
officers, directors and employees from any responsibility or liability for any
responsibility, obligation or duty which the Manager or such officer, director
or employee may have under any federal securities act; and provided, further,
however, that to the extent any limitations or restrictions contained in the
Investment Guidelines are not adhered to as a result of changes in market value,
additions to or withdrawals from the Account, portfolio rebalancing or other
non-volitional acts of the Manager, the Manager shall not be liable to the
Company or RIHL or any shareholder of RIHL.

         The Company understands that in connection with the Additional
Investment Services provided by the Manager that (i) the Manager is not serving
in an investment advisory capacity, or making any recommendations or soliciting
any action based upon its analyses with respect to those portfolios of RIHL and
of the Company not managed by the Manager and (ii) the Company will be solely
responsible for any judgments as to valuation and the purchase and sale of its
portfolio securities (other than in the case of the Account). Accordingly, the
Manager will not be

                                       4

responsible, and have no liability, for any conclusions drawn by the Company
with respect to its or RIHL's portfolio securities, notwithstanding that such
conclusions may, in part, be based upon information provided by the Manager in
connection with the Additional Investment Services.

13. Non-Exclusive Management. The Company understands that the Manager will
continue to furnish investment management and advisory services to others, and
that the Manager shall be at all times free, in its discretion, to make
recommendations to others which may be the same as, or may be different from
those made to the Account. The Company further understands that the Manager, its
affiliates, and any officer, director, stockholder, employee or any member of
their families may or may not have an interest in the securities whose purchase
and sale the Manager may recommend. Actions with respect to securities of the
same kind may be the same as or different from the action which the Manager, or
any of its affiliates, or any officer, director, stockholder, employee or any
member of their families, or other investors may take with respect thereto.

14. Aggregation and Allocation of Orders. The Company acknowledges that
circumstances may arise under which the Manager determines that, while it would
be both desirable and suitable that a particular security or other investment be
purchased or sold for the account of more than one of the Manager's clients'
accounts, there is a limited supply or demand for the security or other
investment. Under such circumstances, the Company acknowledges that, while the
Manager will seek to allocate the opportunity to purchase or sell that security
or other investment among those accounts on an equitable basis, the Manager
shall not be required to assure equality of treatment among all of its clients
(including that the opportunity to purchase or sell that security or other
investment will be proportionally allocated among those clients according to any
particular or predetermined standards or criteria). Where, because of prevailing
market conditions, it is not possible to obtain the same price or time of
execution for all of the securities or other investments purchased or sold for
the Account, the Manager may average the various prices and charge or credit the
Account with the average price.

15. Conflict of Interest. The Company agrees that the Manager may refrain from
rendering any advice or services concerning securities of companies of which any
of the Manager's, or affiliates of the Manager's officers, directors, or
employees are directors or officers, or companies as to which the Manager or any
of the Manager's affiliates or the officers, directors and employees of any of
them has any substantial economic interest or possesses material non-public
information, unless the Manager either determines in good faith that it may
appropriately do so without disclosing such conflict to the Company or discloses
such conflict to the Company prior to rendering such advice or services with
respect to the Account.

         From time to time, when determined by the Manager in its capacity of a
fiduciary to be in the best interest of the Company, the Account may purchase
securities from or sell securities to another account managed by the Manager at
prevailing market levels in accordance with the procedures under Rule 17a-7(b)
of the Investment Company Act of 1940 and other applicable law, provided that
the Company is promptly given notice of any such cross trade following execution
thereof.

                                       5

16. Effective Period of Agreement and Amendments. This Agreement shall become
effective on the date hereof. Any amendment to this Agreement shall be written
and signed by both parties to the Agreement. No such amendment shall be
effective to permit the use of the Account or any part thereof for any purpose
not authorized by RIHL's charter.

17. Resignation or Removal of the Manager. The Manager may be removed by the
Company or may resign upon 30 days' notice in writing. Upon the receipt by the
Manager of a notice of termination from the Company, the Manager, if requested
by the Company, shall cease to invest and reinvest assets in the Account except
that any trade executed before receipt of the notice may be completed. On the
effective date of the removal or resignation of the Manager or as close to such
date as is reasonably possible, the Manager shall provide the Company with a
final report containing the same information as paragraph 4 above.

18. Assignment. No assignment (as that term is defined in the Advisers Act) of
this Agreement by the Manager may be made without the consent of the Company,
and any such assignment made without such consent shall be null and void for all
purposes. Subject to the foregoing, this Agreement shall inure to the benefit of
and be binding upon the parties hereto, their successors and permitted assigns.

19. Severable. Any term or provision of this Agreement which is invalid or
unenforceable in any applicable jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of the
Agreement in any jurisdiction.

20. Applicable Law. To the extent not inconsistent with applicable federal law,
this Agreement shall be construed pursuant to, and shall be governed by, the
laws of the state of New York without regard to its principles of conflicts of
law. Any dispute arising out of or in connection with this Agreement that is not
resolved by mutual agreement shall be settled by binding arbitration, which
shall be conducted on an expedited basis in New York, New York pursuant to the
applicable rules of the American Arbitration Association relating to commercial
disputes. Each party shall promptly appoint one arbitrator. The party-appointed
arbitrators shall appoint a third arbitrator. If such third arbitrator shall not
have been selected within thirty (30) days after the selection of the latter of
the party-appointed arbitrators, the third arbitrator shall be appointed
pursuant to the rules of the American Arbitration Association relating to
commercial disputes. The arbitration shall be conducted in the English language.

21. Investment Manager Brochure. The Company hereby acknowledges that it has
received from the Manager a copy of the Manager's Form ADV, Part II, at least
forty-eight hours prior to entering into this Agreement.

22. Web-site. The Manager, at the Company's request, will provide access to its
account information electronically, via the world wide web, based upon the
Company's use of a BlackRock issued user id and password. The Company
acknowledges and agrees the world wide web is a continually growing medium and
the Manager does not make any warranty regarding the security related to the
world wide web. The Company must be aware there is no absolute guaranteed system
or technique to fully secure information made available over the web. The
Company agrees that it

                                       6

will not share its user id, password and access to information provided
electronically with any third party except its affiliates and authorized agents.

23. Notices. All notices required or permitted to be sent under this Agreement
shall be sent, if to the Manager:

                              BlackRock Financial Management, Inc.
                              40 East 52nd Street, 2nd Floor
                              New York, NY 10022
                              Attention: Robert Connolly, General Counsel
                              or by facsimile to (212) 810-3744

         if to the Company:   Renaissance Underwriting Managers Ltd.
                              Renaissance House
                              8-12 East Broadway
                              Hamilton HM 19, Bermuda
                              PO Box HM 2527
                              Hamilton HM GX, Bermuda
                              Attention: Todd Fonner, Treasurer
                              or by facsimile to: (441) 296-5037

or such other name or address as may be given in writing to the other party. All
notices hereunder shall be sufficient if delivered by facsimile or overnight
mail. Any notices shall be deemed given only upon actual receipt.

24. Counterparts. This Agreement may be executed in counterparts, each of which
shall be an original but all of which together shall constitute one agreement.

25. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supercedes all prior agreements and
understandings relating to the subject matter hereof.

                                       7

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

RENAISSANCE UNDERWRITING MANAGERS LTD.

By:  /s/ Todd R. Fonner
   ----------------------------------

Name:   Todd R. Fonner
      -------------------------------

Title:  Vice President, Treasurer and Assistant Secretary
      ---------------------------------------------------

BLACKROCK FINANCIAL MANAGEMENT, INC.

By:  /s/ Ralph Schlosstein
   ----------------------------------

Name:    Ralph Schlosstein
      -------------------------------

Title:   President
      -------------------------------

                                       8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}]]