Document:

LOAN PURCHASE AGREEMENT

        This Loan  Purchase  Agreement  ("Agreement'  is by and  between  MARCON
CAPITAL  CORPORATION,  a Connecticut  corporation and Small Business  Investment
Company  licensed  under the Small  Business  Investment Act of 1958, as amended
("Marcon")  and VERMONT  PURE  HOLDINGS,  LTD., a Delaware  corporation  with an
address of 70 West Red Oak Lane, White Plains, New York 106043602 (-VP').

                                   BACKGROUND

        1. Marcon has extended financing to Amsource, UC (the "Borrower). in the
principal amount of Seven Hundred Thousand Dollars  ($700,000.00)  (the "Loan").
'Me Loan has taken the form of the purchase by Marcon of a convertible debenture
issued by the Borrower in the  original  principal  amount of Six Hundred  Fifty
Thousand  Dollars  ($650,000-00)  (the  'Debenture),  pursuant  to  a  Debenture
Purchase  Agreement  dated as of December  29,  1998 by and among the  Borrower,
Marcon,  Pristine  Mountain  Springs  of Vermont  Inc.  and  certain  individual
guarantors  identified therein (the "Debenture Purchase  Agreement"),  an Option
Purchase  Agreement by and between Marcon and the Borrower dated as of March 31,
1999  (the  "Option  Purchase  Agreement),  and  a  promissory  note  issued  in
connection  therewith  dated as of March 31, 1999 (the "Option Note) dated as of
@h 31,  1999.  The  proceeds  of the Loan  were to be used by the  Borrower  for
,working capital and retirement of certain liabilities. Repayment of the Loan is
secured by various types of collateral.

        2. VP has  agreed to  purchase  the Loan from  Marcon  pursuant  to this
Agreement. Unless otherwise defined herein, all capitalized terms shall have the
meanings provided them in the Debenture  Purchase Agreement For purposes of this
Agreemen4 the term Loan Documents  shall  specifically  include all  agreements,
documents,  certificates  and  instruments  executed and delivered in connection
with the Option Purchase Agreement and the Option Note.

                                                 NOW, THEREFORE,

        In consideration of the premises and the mutual covenants and agreements
herein  set  forth,  and in  reliance  on  the  representations  and  warranties
contained herein, the parties hereby agree as follows:

        SECTION 1.  PURCHASE OF  THE-INTEREST.  At the Closing,  as that term is
defined in Section 3 below,  Marcon  agrees to sell,  transfer and convey all of
its right, title and interest in and to the Loan, free and clear from all liens,
claims and  encumbrances  whatsoever,  to VP by  execution  and  delivery of the
Assignment in the form annexed hereto as Schedule "A" (the "Assignment'). Marcon
agrees to execute  and deliver  such  further  documents  and to take such other
actions as are necessary to confirm the sale of the Loan to VP.

        SECTION 2. PURCHASE PRICE AND PAYMENT.  At closing, VP shall execute and
deliver a convertible  debenture in the principal amount of Nine Hundred Seventy
Five Thousand Dollars ($975,000.00) (the "VP Debenture'@ to Marcon as payment in
full for the Loan.  Payment and performance of the VP Debenture shall be secured
by a first  priority  security  interest in the Loan,  as set forth in Section 4
below.

SECTION 3. !CLOSING.  The closing of the transaction  shall take place effective
as of  September  ' )O,  1999 at the  offices  of Gravel and Shea,  76 St.  Paul
Street, 7th Floor, Corporate Plaza, Burlington,  Vermont 05401, or at such other
time and place as may be mutually  agreed upon by the  parties.  At the closing,
Marcon and VP shall execute and deliver all documents,  agreements,  instruments
and certificates as may

be necessary to consummate the transaction as described herein, including the
Assignment and the VP Debenture.

        SECTION 4. SECURITY INTEREST.  VP hereby grants to Marcon a first
priority security interest and lien in

<PAGE>

the Loan and the Loan  Documents to secure the payment and  performance by VP of
its obligations  under the VP Debenture,  and this Agreement  pursuant to and in
accordance  with the  provisions  of the Uniform  Commercial  Code. VP agrees to
execute and deliver such UCC-1  financing  statements,  and other  documents and
instrument as are  necessary to perfect and confirm such  security  interest and
lien.  Marcon  shall be entitled to all rights and  remedies of a secured  party
under the Uniform Commercial Code. VP will not create,  incur, assume, or suffer
to exis4 or permit any subsidiary to create, incur, assume or suffer

to exist, any lien, mortgage, pledge, encumbrance, security interest, attachment
or change of any kind upon the Loan without the prior written consent of Marcon.

         SECTION 5. REPRESENTATIONS AND WARRANTIES,

                (a) Marcon hereby represents and warrants that it

                has good and marketable  title to the Loan,  free and clear from
                any lien, claim or encumbrance whatsoever.

               (b) Marcon hereby represents and warrants that the

                agreements, documents, certificates, and

                instruments  'set forth in Schedule 'B' attached  constitute all
                material agreements,  documents,  certificates,  and instruments
                with respect to the Loan, the Debenture Purchase Agreement,  and
                the Loan  Documents,  and that Marcon has not  entered  into any
                agreement to modify the terms and  conditions of the  Debenture,
                the Debenture  Purchase Agreement or any Loan Document except as
                set forth on Schedule "B" attached.

                (C) Marcon hereby represents and wan-ants that it

                has provided an acceleration notice with

                respect to the Loan,  as set forth in its letter  dated July 28,
                1999, and that neither the Borrower nor any  Guarantor,  nor any
                of their  representatives  has made any written  assertion  that
                Marcon has breached any of its obligations  under the Debenture,
                the Purchase  Agreement,  or any Loan  Document.  Marcon further
                represents  and warrant that on September 10, 1999, the Borrower
                reaffirmed  its  intention  to  retire  the Loan in full and has
                represented  to Marcon  that it is  actively  seeking  financing
                sufficient  to do so,  and  that  the  Borro,6ver  has  made  no
                payments to Marcon since the date of the acceleration notice.

                (d) Marcon hereby represents and warrants that an

                Event of  Default  has  occurred  and is  continuing  under  the
                Debenture Purchase Agreement.

               (e) Marcon hereby represents and wan-ants that, as

                of September 30, 1999, its claims against

                the Borrower are as set forth on Schedule 'C" attached, and
               include the following:

                      (I) principal and interest under the

                         Debenture,  including  default  interest,  which  as of
                         September 30, 1999 total S724,110.04.

                  (I I) principal and interest under the Optio

                       Note, which as of September 30 1999 total $53,519.43.

              (iii) any residual value of the option rights retaine

                by Marcon under the Option Purchase Agreement.
<PAGE>

                   (iv) any late fees, prepayment premiums, or

                forbearance fees due from the Borrower under the

                Debenture  or  the  Debenture  Purchase  Agreement  which  as of
                September 30, 1999 total $80,900.1 1.

               (v) any consulting and monitoring- fees to be paid

                by the Borrower to Marcon, pursuant to the

                Debenture  Purchase   Agreement  or  the  Monitoring   Agreement
                executed and  delivered in  connection  therewith  which,  as of
                September 30, 1999 total $9,500.00.

                (vi) any reimbursements of Marcon's out-of-pocket

               expenses, including but not limited to legal fees and

               expenses,  due from the  Borrower  under the  Debenture  Purchase
               Agreement which as of September 30, 1999 total $36,949.75.

(f) VP hereby represents and warrants in favor of Marcon as

        follows:

                 (I) VP has the corporate power and authority to

               execute, deliver and perform this Agreement, to issue

               the VP Debenture, and to and to issue, sell and deliver shares of
               its Common Stock  issuable  upon  conversion  of the VP Debenture
               (the 'Conversion Shares).

               (ii) 'ne Conversion Shares have been duly reserved

               for issuance upon conversion of the VP Debenture,

               and, when so issued,  will be duly  authorized,  validly  issued,
               full  paid and  nonassessable  shares  of  Common  Stock  with no
               personal liability attaching to the ownership thereof and will be
               free and clear of all liens,  charges,  restrictions,  claims and
               encumbrances imposed by or through VP.

(g) Except as set forth above in this Section 5, and in

        Section 19 below, neither Marcon nor VP has made to

        the other any warranty or  representation,  expressed  or implied,  with
        respect to the loan transaction,  the Loan, the Debenture, the Debenture
        Purchase Agreement,  the adequacy of security,  the existing,  or future
        solvency or financial worth of the Borrower, the ability of the Borrower
        to repay the Loan,  the  Debenture,  or any other document or instrument
        received by it in connection  with the Loan. It is  acknowledged  by the
        parties  hereto that the Loan carries a high degree of risk, and that it
        is possible that the Borrower may default on its  obligations  under the
        Loan,  which may result in a bankruptcy case and/or  foreclosure  action
        and/or a  deterioration  of the  collateral  for the Loan. It may not be
        possible to collect  the full  principal  loan  balance  and/or  accrued
        interest,  and/or  other  amounts  due with  respect  to the  Loan.  All
        information,  data- projections and other materials  heretofore supplied
        to or by VP has been extrapolated from material supplied by the Borrower
        or due  diligence.  VP  acknowledges  and agrees that Marcon has not and
        makes no representation or warranty as to the nature and quality of such
        information.  VP acknowledges  and agrees that it has had an opportunity
        to make and have made such  investigations  as it has  deemed  necessary
        under the circumstances.

SECTION 6.        COVENANTS.

                                                       3 -

             (a) VP covenants and agrees to utilize all commercially

        reasonable efforts to maintain the listing of the shares

        of its common  stock into which the VP  Debenture  is  convertible  (the
        "Common  Stock")  on the  American  Stock  Exchange,  the New York Stock
        Exchange,  the National  Association  of  Securities  Dealers  Automatic
        Quotation  System,  or  another  nationally  recognized  stock  exchange
        reasonably satisfactory to Marcon.

(b) VP shall at all times reserve and keep available out of

        its authorized but unissued shares of Common Stock,

        for the purpose of effecting the  conversion  of the VP Debenture,  such
        number  of its  duly  authorized  shares  of  Common  Stock  as shall be
        sufficient to effect the conversion of the VP Debenture.  If at any time
        the number of authorized  but unissued  shares of Common Stock shall not
        be  sufficient to effect the  conversion  of the VP  Debenture,  VP will
        forthwith take such corporate action as may be necessary to increase its
        authorized but unissued  shares of Common Stock to such number of shares
        as shall be sufficient for such

<PAGE>

        purposes.

SECTION 7. REGISTRATION AND SALE RIGHTS.

              (A) OPPORTUNITY REGISTER AND SELL. If at any time VP

        determines to register any shares of its Common Stock

        by filing a  registration  statement in compliance  with the  Securities
        Act,  Marcon  will be given 60 days  prior  notice  thereof  and will be
        afforded the opportunity to include in the same registration and to sell
        as part of any related  offering of such  shares,  a  percentage  of the
        shares  issuable upon  conversion of the Debenture  equal to the highest
        percentage of shares owned by any then current shareholder (or holder of
        rights to acquire or convert into shams) which such  shareholder had the
        right to include  in such  registration  and sale,  subject to usual and
        customary  cutbacks and  limitations  which may be imposed by VP and its
        underwaters;  provided,  however,  that  in any  case  Marcon  shall  be
        permitted  to register and sell at least the same  percentage  of shares
        (including  in such  calculation  all  rights  to  acquire  shares or to
        convert into shares) that are actually  registered and sold by any other
        shareholder.  Such right  shall apply to each  registration  and sale of
        shares effected by VP for as long as the Debenture is outstanding (other
        than those effected  pursuant to a Registration  Statement filed on Form
        S-4, or on Form S-8).

           (B) INDEMNIFICATION. No shares to be issued on conversion o

        Debentures shall be included in any registration unless Marcon furnishes
        to VP and the  underwriter or selling agent all  reasonable  information
        requested  by them and  agree to  indemnify  VP and the  underwriter  or
        selling agent against liability arising out of information  furnished by
        Marcon for inclusion in the registration statement (at which time Marcon
        will  receive  a  similar   cross   indemnification   from  VP  and  the
        underwriter).

            (C) NO REQUIREMENT TO FILE OR PROSECUTE REGISTRATION. VP

        shall not be required at any time to file a registration statement or to
        prosecute  a filing to  effectiveness,  may  determine  not to file even
        though notice has been given  pursuant to Section 6(a) or may withdraw a
        registration after it has been filed.

(D) RULE 144 INFORMATION. VP will make timely all filings

         required under the Securities  Exchange Act of 1934 so as to enable the
         holders  of shares  into which the  Debentures  may be or may have been
         converted to sell such shares under Securities and Exchange

                Commission Rule 144 to the extent that the benefits of that rule
are otherwise available to them.

               (E) UNDERWRITER'S COMMISSIONS. If shares into whic

                the Debenture is  convertible  are included in any  underwriting
                hereunder,   Marcon   shall  pay  its  pro  rata  share  of  the
                underwriter's   commissions  or  discounts,  but  shall  not  be
                responsible  for legal fees,  printing  costs and other fees and
                expenses except to the extent the same demonstrably  increase by
                reason of inclusion of such shares in the underwriting.

                (F) TERMINATION OF REGISTRATION AND SALE RIGHTS.

                    The  registration  and  sale  rights  provided  for in  this
                    Section 7 shall expire and terminate on September 30, 2009.

                    SECTION 8. EVENTS OF DEFAULT Each of the

                    Following events shall constitute an 'Event of Default,

<PAGE>

hereunder

                  (a) VP shall default in making any payment of

                principal or interest when the same shall become due

                under the VP Debenture or any of the Loan  Documents,  and which
                default  shall  continue  for ten (10)  days  after the due date
                therefor.

(b) VP shall fail to comply with any term, covenant

                or agreement of this Agreement, which default

          shall continue for ten (10) days from the date of notice from Marcon.

               (C) Any Event of Default or other default under, or

                a  failure  to  comply  with  any  term or  provision  of the VP
                Debenture.

               (d) Commencement of proceedings under any bankruptc

                or insolvency law by or against VP or an
 inability of VP to pay its obligations when due.

                  (e) Commencement of any levy or sale upon or

                execution  or  other  proceedings  of  any  nature  against  VP,
                including a foreclosure  of a subordinate  lien on the assets of
                the Loan  whereby VP shall or may be  deprived of title or right
                of possession to either property or any part thereof.

         (f)      The dissolution or termination of existence of VP.
        SECTION 9. REMEDIES  UPON  DEFAULT.  If an Event of Default shall occur,
Marcon may declare the entire indebtedness  evidenced by the VP Debenture and to
be immediately due and payable,  without presentment,  protest, demand or notice
of any kind, all of which,  are hereby expressly waived by VP and may pursue any
and all remedies  provided for hereunder and in the VP Debenture or at law or in
equity, including, without limitation, the following:

               (a) Exercise all rights of a secured party under th

                Uniform Commercial Code, or otherwise, with respect to the Loan;
               (b) If in the event of the sale or other dispositio

                of the Loan, the proceeds  thereof are  insufficient  to pay all
                amounts to which Marcon is legally entitled,  VP shall be liable
                for the  deficiency  and the  reasonable  fees of any  attorneys
                employed by Marcon to collect such deficiency. VP agrees that if
                any notification of intended disposition of any of the Loan

                is required by law, such notification shall be deemed reasonably
                and properly given if deposited in the mails first class postage
                prepaid,  addressed  as provided in this  Agreement at least ten
                (10) days before such intended disposition;

                (C) Set off and apply against any indebtedness or

                liability  of VP to Marcon any  indebtedness  owing-  from VP to
                Marcon at any time and from time to time either  before or after
                maturity and without demand upon or notice to anyone; and

No remedy  conferred  upon or  reserved  to  Marcon  herein  is  intended  to be
exclusive of any other  available  remedy or  remedies,  but each and every such
remedy shall be  cumulative  and- shall be in addition to any other remedy given
hereunder  or in the VP  Debenture  or now or  hereafter  existing  at law or in
equity or by statute and the exercise of any remedy or remedies  shall not be an
election of the  remedies.  The  remedies  and rights of Marcon may be exercised
concurrently,  alone or in any  combination.  The  foregoing  recitation  of the
rights and remedies available to Marcon is not intended to constitute an express
or implied guarantee or warranty as to the repayment of any amounts due from the
Borrower,  or any guarantors of the Borrower's  obligations under the Debenture,
the Debenture Purchase Agreement, or the Loan Documents.

<PAGE>

        Section  10.  Cooperation.   VP  agrees  to  cooperate  with  Marcon  in
effectuating the purposes hereof notwithstanding any unanticipated  inability of
VP to pay  the VP  Debenture  or  otherwise  perform  the  obligations  of  this
Agreement or the VP Debenture.  Marcon agrees to cooperate with VP in confirming
VP's right,  title and interest in the Loan, by taking such further  actions and
executing and delivering such further  agreements,  DOCUMENTS,  CERTIFICATES AND
INSTRUMENTS  AS MAY BE REASONABLY  NECESSARY TO DO SO. MARCON  FURTHER AGREES to
assist VP in providing  supplemental  information  and  otherwise in  collecting
amounts due under the Loan, provided that Marcon shall be entitled to reasonable
compensation  for its  efforts in this  regard,  in an amount to be  mutually a-
 .,reed upon,  and to  reimbursement  of all of its costs and  expenses  which it
incurs in doing so.

     SECTION  I 1.  NOTICES.  Any  notice  or  other  communication  to be given
hereunder shall be in writing and shall be mailed or telescoped to such party at
the address or number set forth below:

                If to VP: Vermont Pure Holdings, Ltd. 70 West Re

                                Oak Lane White Plains, New York-
                       10604-3602 Attn: President

              with a copy to:Michael J. Marks, Esq. Tarrant, Marks

                                & Gillies 44 E State Street
                                P.O. Box 1440

     Montpelier, VT 05601-1440 Telephone No.: (802) 223-1112 Telecopier No.:
                                (802) 223-6225

                                                       6 -

              If to Marcon: Marcon Capital Corporation 1470 Barnum

                                  Avenue Suite 301 Bridgepor4

        CT 06610 Telephone No.: (203) 337@ Telecopier No.: (203) 3374449

                       with a copy to: Peter S. Erly, Esq.

                                  Gravel & Shea

     76 St. Paul Street, 7th Floor Burlington, VT 05401 Telephone No.: (802)
                                  658-0220 Telecopier No.: (802) 658-1456

or to such. other person, address or number as the party entitled to such notice
or  communication  shall have  specified  by notice to the other  party given in
accordance  with  the  provisions  of this  Section.  Any such  notice  or other
communication  shall be deemed given: (I) if mailed, when deposited in the mail,
property addressed and with postage prepaid;  or (ii) if sent by telecopy,  when
transmitted.

        SECTION 12. COST OF SUIT OR ENFORCEMENT,  If any Participant  resorts to
suit or other legal  proceedings to enforce any right or remedy  hereunder,  the
non-prevailing  party  agrees to pay the  prevailing  party's  costs of suit and
enforcement, including reasonable attorneys' fees.

     SECTION 13.  GOVERning Law. This Agreement shall be construed in accordance
with and governed by laws of the State of Connecticut, excepting- its principles
of the law of conflict of la%vs.

        SECTION 14-  COUNTERPART.  This Agreement may be executed in two or more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together shall constitute one and the same instrument.

<PAGE>

        SECTION 15. SUCCESSOR AND ASSIGNS. This Agreement shall be binding. upon
and inure to the benefit of the  parties,  their  respective  successors,  le-al
representatives,  and assigns. VP may not encumber, pledge or sell or assign the
Loan  (in fee,  as  collateral  or  otherwise),  except  to an  entity  owned or
controlled by it, without the prior written consent of Marcon.

         Section 16.    Arbitration

                 (a) Subject to the provisions of Section 16(b)

                below, the parties agree that any dispute under

                this   Agreement   shall  be   resolved  by  final  and  binding
                arbitration in Burlington,  Vermont under the  then-existing and
                applicable  Rules of the American  Arbitration  Association (the
                "Rules').  Notwithstanding any contrary provisions of the Rules,
                the parties  reserve,,the  right to designate an  arbitrator  by
                written   agreement   prior  to  the   inception   of  any  such
                proceeding-.  Without  intending to limit the power or authority
                of the arbitrator(s) in any such proceeding,  the parties hereby
                consent and agree that such  arbitrator(s)  shall be vested with
                the full power and authority to order such  equitable  relief as
                die  arbitrator(s)  may deem proper- The parties  consent to the
                jurisdiction  of any  court of  competent  jurisdiction  for all
                purposes with respect to such arbitration, including enforcement
                of this  Agreement to  arbitrate  and the entry of a judgment on
                any  arbitration  award,  and further  consent that any process,
                notice or motion may be served either personally or by certified
                mail, return receipt  requested,  provided a reasonable time for
                appearance is allowed. The prevailing

                                                       7 -

7

                party in any such arbitration proceeding shall be entitled to an
                award  of  reasonable  attorneys'  fees,  as  determined  by the
                arbitrator(s).  The fees and expenses of the arbitrator(s) shall
                be done  equally  by the  parties.  The  parties  shall  use all
                reasonable  efforts to ensure that the  arbitration is completed
                as promptly as reasonably possible,  and IN ANY EVENT within not
                more than  ninety  (90) days after  either  party's  request for
                arbitration hereunder.

               (b) Notwithstanding the provisions of Section 16(a)

                above, either of the parties may, at its

                option, bring an action in any court of competent jurisdiction '
                with  respect  to  exigent  facts  and  circumstances  which may
                warrant immediate injunctive or other equitable relief. Upon the
                completion  of the  adjudication  of any request  for  immediate
                injunctive  or other  equitable  relief any @er  proceedings  in
                respect  thereof shall be referred for arbitration in ACCORDANCE
                WITH Section 16(a) above.

        SECTION 17. GENDER,  Whenever the context so requires,  the singular and
plural  shall be  interpreted  TO INCLUDE  THE OTHER,  AND THE  neutral and male
genders shall be interpreted to reflect the applicable genders.

<PAGE>

     SECTION 18. ENTIRE AGREEMENT.  This Agreement embodies the entire agreement
and  understanding  BETWEEN THE PARTIES AND SUPERSEDES ALL prior  agreements and
understandings relating to the subject matter hereof.

     SECTION 19. AUTHORIZATION. Each of the parties warrants and represents that
it is duly  authorized to execute this Agreement and comply with its obligations
hereunder.

         ACKNOWLEDGMENT OE ARBITRATION. THIS AGREEMENT CONTAINS AN AGREEMENT TO

         ARBITRATE. AFTER SIGNING THIS DOCUMENT, I UNDERSTAND THAT I WILL NOT BE
         ABLE TO BRING A LAWSUIT  CONCERNING ANY DISPUTE THAT MAY ARISE WHICH IS
         COVERED BY THE ARBITRATION AGREEMENT,  UNLESS IT INVOLVES A QUESTION OF
         CONSTITUTIONAL  OR CIVIL  RIGHTS.  INSTEAD,  I AGREE TO SUBMIT ANY SUCH
         DISPUTE TO AN IMPARTIAL ARBITRATOR.

        IN WITNESS WHEREOF,  each of the parties have executed this Agreement by
their duly authorized agents, as of the 30th day of September, 1999.

IN PRESENCE OF:                                    VERMONT PURE HOLDINGS, LTD.

                                                       By:

Witness                                             Duly Authorized Agent

                                               Marcon CAPITAL CORPORATION

Witness                                            Todd M. Enright
                                       Vice President and Duly Authorized Agent

STATE OF VERMONT

                                                       Ss:

COUNTY OF CHITTENDEN )

         At Burlington,  in said County and State,  this ___ day of October 1999
personally  appearing the Duty Authorized  Agent of VERMONT PURE HOLDINGS,  LTD,
and he acknowledged this instrument,  by him signed, to be his free act and deed
and the free act and deed of VERMONT PURE HOLDINGS, LTD.

                                                   Before me,
                                                  Notary Public

                                                  Notary commission issued in
<PAGE>

                                                  My commission expires:

STATE OF VERMONT

                                                       Ss:

COUNTY OF CHITTENDEN

      At  Burlington,  in said  County  and  State,  this  ___ day of ___,  1999
personally   appeared  ____  and  Duly   Authorized   Agent  of  MARCON  CAPITAL
CORPORATION,  and he acknowledged this instrument, by him signed, to be his free
act and deed and the free act and deed of MARCON CAPITAL CORPORATION.

                                                   Before me,.
                                                     Notary
           Notary commission issued in               County
                       My commission expires:

                                                       9 -

                                  SCHEDULE "A"

                               ASSIGNMENT OF LOAN

     KNOW ALL PERSONS BY THESE  PRESENTS,  that MARCON  CAPITAL  CORPORATION,  a
Connecticut  corporation  with a business address at 1401 Barnum Ave., Suite 3 0
1,  Bridgeport  Connecticut 066 10 (the Sellee  inconsideration  of Ten and More
Dollars paid to its full satisfaction by (the 'Buyee),  does hereby sell, grant,
assign,  convey and transfer to VERMONT PURER HOLDINGS,  LTD. with an address of
70 West Red Oak Lane,  White Plains,  -New York-  10604-3602  all. of its right,
tile and interest in and to a certain loan transaction  with Amsource,  LLC (the
"Borrower")  effected as of December  29, 1998 (the  "Loan),  together  with its
right,  title  and  interest  in  and  to  all  various  documents,  agreements,
certificate rights, and instruments and executed or to be executed in connection
with the Loan, all as more  completely set forth Schedule "A-1" attached  hereto
(the "Loan Documents).

        TO HAVE AND TO HOLD the same unto the Buyer  and its  heirs,  successors
and assigns forever.

IN WITNESS  WHEREOF,  the Scller has executed this  Assignment of Loan as of the
'30th day of September, 1999.

                   IN PRESENCE OF: MARCON CAPITAL CORPORATION

<PAGE>

                                       By:

                              Duly Authorized Agent

                STATE OF

                COUNTY OF                         Ss.

                  At Burlington in said County and State, this

                                     1st day of October, 1999, personally

                APPEARED Duly Authorized Agent of MARCON CAPITAL

                                     CORPORATION,

            to me known, and he acknowledged this instrument, by him

                signed, to be her free act and deed and die free

act and deed of MARCON CAPITAL CORPORATION.

                                                  Before me,

                                  Notary Public

                                                  Notary commission issued in
     My commission expires:

                                                  SCHEDULE "B"

                                       AMSOURCE LOAN DOCUMENTS

            1. Debenture Purchase Agreement by and among Marcon, the

        Borrower, Pristine Mountain Springs

               of Vermont, Inc. ("PMSV"),  Lincoln Craighead,  Ronald Colton and
               Barton Lord dated as of December 29, 1998.

2. Debenture made by the ]Borrower and payable to the order

        of Marcon in the original principal
        amount of $650,000 dated December 29, 1998.

3. Guaranty of PMSV dated as of December 29, 1998.

4. Guaranty of Ronald Colton dated as of December 29, 1998.

5. Guaranty of Barton Lord dated December 29, 1998.

6. Guaranty of Lincoln -Craighead dated December 29, 1998.

7. Security Agreement by and between the Borrower and Marco

               and all UCC- I financing  statements FILED in any jurisdiction to
               secure the security interest created thereby,

8. Mortgage Deed made by PMSV in favor of Marcon dated as o

        December 29, 1998 with respect to certain real property located on Route
        100 in Stockbridge,  Vermont more completely described therein, together
        with any title insurance and certificates of title issued or obtained by
        Marcon in connection therewith.

9. Mortgage Deed made by the Borrower in favor of Marcon

        dated December 29, 1998 with respect to certain real property located on
        Maple Avenue in Claremont,  New Hampshire and more completely  described
        therein,  together with any title  insurance and  certificates  of title
        issued or

<PAGE>

        obtained by Marcon in connection therewith.

            10. Member Subordination Agreement by and between Ronald

        Colton and Marcon dated as of December 29, 1998.

            11. Member Subordination Agreement by and between Lincoln

        Craighead and @con dated as of December 29, 1998.

          12. Member Subordination Agreement by and between Barton Lor

        and Marcon dated December 29,  1998.

13. Legal opinion of Salmon and Nostrand dated as of December 29, 1998.

          14. Legal opinion of Melvin B. Neisner, Jr. dated as of
December 31, 1998.

            15. Collateral Assignment of Spring Water Licensed Supply Agreement.

16. Legal opinion of Buckley and Zopf dated as of April 27, 1999.

              17. Life Insurance Assignments dated March 12, 1999.

18. Option Purchase Agreement dated March 31, 1999.

19. Promissory Note dated March 31, 1999.

            20. Forbearance and Standstill Agreement dated March 31,  1999.

            21. Pledge and Security Agreement by Ronald Colton, Baron

        Lord and Lincoln Craighead dated December 29, 1998.

                    22. Employment Agreement of Barton Lord.

                 23. Employment Agreement of Lincoln Craighead.

24. Monitoring Agreement dated December 29, 19998.

                          25. Debenture Draw Requests.

           26. Amended and Restated Water Supply Agreement dated March 31, 1999.

           27. Membership Interest Purchase Option dated December 29,1998.

28. Affidavit of Borrower dated December 29, 1998.

             29. Pristine Mountain Springs of Vermont, Inc- Security

        Agreement  dated  December 29, 1998  together  with all UCC-1  Financing
        Statements.

<PAGE>

SCHEDULE "C"

                             BORROWER: AMSOURCE, LLC

PAYOFF DATE:                 9/30/99

               PRINCIPAL BALANCE:                   $700,000.00

               ACCRUED INTEREST BALANCE:

                                Debenture (through 9130/99):      $74,110.04

                                Note (through 9120/99)             S3,519.43

               LATE PAYMENT FEES:                                 45-900 11

               PREPAYMENT PENALTY:                          32,500.00

               FORBEARANCE FEES:                               2,500.00

OTHER ADVANCES AND REIMBURSEMENTS:

                                  -Monitoring & Consulting            $9,500.00
                                    Audit Fee (incl. Travel)           $3,08.24

                                     FedEx charges & Wire Fees          $104.50

                                    Travel expenses       .$4,151.46   17,594.20

               LEGAL FEES:

                                    AMOUNT DUE                      $904,979433

PER DIEM:     $389.58

                                                         ASSIGNMENT OF LOAN

         KNOW ALL PERSONS By THESE PRESENTS, that MARCON CAPITAL

CORPORATION,  a Connecticut  corporation  with a business address at 1401 Barnum
Ave., Suite 301, Bridgeport,  Connecticut 06610 (the "Seller),  in consideration
of Ten and More  Dollars paid to its full  satisfaction  by (the  "Buyer),  does
hereby sell, grant assign, convey and transfer to VERMONT PURE HOLDINGS LTD with
an address of 70 West Red Oak Lane, White Plains, New York 10604-3602 all of its
right, tile and interest in and to a certain loan transaction with AMSOURCE, LLC
(the  "Borrower")  effected as of December 29, 1998 (the 'Loan"),  together with
its right,  title and  interest  in and to all  various  documents,  agreements,
certificate rights, and instruments and executed or to be executed in connection
with the Loan, all as more  completely set forth Schedule 'A-1" attached  hereto
(the "Loan Documents').

<PAGE>

        TO HAVE AND TO HOLD the same unto the Buyer  and its  heirs,  successors
and assigns forever.

        IN WITNESS  WHEREOF,  the Seller has executed this Assignment of Loan as
of the 30th day of September, 1999.

                   IN PRESENCE OF: MARCON CAPITAL CORPORATION

                          Witness Duly Authorized Agent

                                STATE OF VERMONT
                                  COUNTY OF SS.

         At       in said County and State, this l day of October, 1999,

personally appeared  Authorized Agent of MARCON CAPITAL

                                              -              0
CORPORATION, to me known, and he acknowledged this instrument, by him signed, to
be her free act and deed and the free act and deed of MACON CAPITAL CORPORATION.

                                                  Before me,

                                  Notary Public

                        Notary commission issued in                County
                                                  My commission expires:

                                                 SCHEDULE "A-1"

                                             AMSOURCE LOAN DOCUMENTS

             1. Debenture Purchase Agreement by and among Marcon the

        Borrower, Pristine Mountain Springs of

               Vermont,  Inc.  ("PMSV"),  Lincoln  Craighead,  Ronald Colton and
               Barton Lord dated as of December 29, 1998.

2. Debenture made by the Borrower and payable to the order

        of Marcon in the original principal .-amount of
        $650,000 dated December 29, 1998.

3. Guaranty of PMSV dated as of December 29, 1998,

4. Guaranty of Ronald Colton dated as of December 29, 1998.

               S. Guaranty of Barton Lord dated December 29, 1998.

6. Guaranty of Lincoln Craihead dated December 29, 1998.

7. Security Agreement by and between the Borrower and Marco

        and all UCC- I financing  statements filed in any jurisdiction to secure
        the security interest created thereby.

<PAGE>

8. Mortgage Deed made by PMSV in favor of Marcon dated as o

        December 29, 1998 with respect to certain real property located on Route
        100 in Stockbridge, Vermont. more completely described therein, together
        with any title insurance and certificates of title issued or obtained by
        Marcon in connection therewith.

9. Mortgage Deed made by the Borrower in favor of Marcon

         dated  December 29, 1998 with respect to certain real property  located
         on Maple  Avenue  in  Claremont,  New  Hampshire  and  more  completely
         described  therein,  together with any title insurance and certificates
         of title issued or obtained by Marcon in connection therewith.

             10. Member Subordination Agreement b and between Ronald

        Colton and Marcon dated as of December 29, 1998.

            11. Member Subordination Agreement by and between Lincoln

        Craighead and Marcon dated as of December 29, 1998.

          12. Member Subordination Agreement by and between Barton Lor
        and Marcon dated December 29, 1998.

13. Legal opinion of Salmon and Nostrand dated as of December
        29, 1998.

             14. Legal opinion of Melvin B. Neisner, Jr. dated as of
        December 31, 1998.

            15. Collateral Assignment of Spring Water Licensed Supply
        Agreement.

16. Legal opinion of Buckley and Zopf dated as of April 27, 1999.

              17. Life Insurance Assignments dated March 12, 1999.

18. Option Purchase Agreement Dated March 31, 1999.

19. Promissory Note Dated March 31, 1999.

            20. Forbearance and Standstill Agreement Dated March 31,   1999.

          21. Collateral Assignment of Spring Water License and Supply

        Agreement Dated April 13, 1999.
        Employment Agreement of Barton Lord.

                 23. Employment Agreement of Lincoln Craighead.

24. Monitoring Agreement dated December 29, 19998.

                          25. Debenture Draw Requests.

           26. Amended and Restated Water Supply Agreement dated March 31, 1999.

27.     Membership Interest Purchase Option dated December 29, 1998.

28. Affidavit of Borrower dated December 29, 1998.

             29. Pristine Mountain Springs of Vermont, Inc. Security
        Agreement  dated  December 29, 1998  together  with all UCC-1  Financing
        Statements.VERMONT PURE HOLDINGS, LTD.
                         Convertible Debenture Due 2001

$975,000.00                                            As of September 30, 1999

     VERMONT PURE  HOLDINGS,  LTD., a  corporation  duly  organized and existing
under the laws of the State of Delaware ( herin called the  "Company") for value
recived herby promises to pay to the order of MARCOM CAPITAL  CORPORATION or any
other holder of this  Debenture ( the  "Holder"),  in lawful money of the United
States of America,  the  principal  sum of Nine Hundred  Seventy  Five  Thousand
Dollars  ($975,0.00).  The  principal  sum  hereof  shall be due and  payable on
September 30, 2001 (the "Maturity Date").

     This Debenture is issued  pursuant to and in accordance with the terms of a
Loan Purchase Ageement between the Compamy and the Holder, dated as of even date
herwith (the "Purchase Agreement").  In the event of the failure of the Borrower
to maintain the listing of the shares of common stock into which this  Debenture
is convertible on the American Stock Exchange,  the New York Stock Exchange,  of
on the National  Association of Securities Dealers Automatic Quotation System or
another  nationally  recoginized stock exchange  reasonabaly  stisfactory to the
Holder,  this Debenture shall be deemed to be in default and shall be in default
and shall be immediately due and payable in full.

     This Debenture may not be prepaid,  redeemed or  repurchassed  whithout the
prior writen consent of the Holder which may be withheld in its sole discretion.

     All payments on this Debenture shall be made in immediately available funds
at 1470 Barnum Avenue,  Suite 301, in Bridgeport,  Connecticut  06610 or at such
other address as the Holder may provide by written notice to the Company.

     The Compamy and all endorsers of this Debenture  hereby waive  presentment,
demand,  notice protest and all other demands and notices in connection with the
delivery, acceptance, permormance or enforcement of this Debenture.

     This Debenture  shall be  convertible in accordance  with the provisions of
Exhibit "A" attached and by this reference made a part hereof.

     IN WITNESS  WHEREOF,  the  Company has caused  this  instrument  to be duly
executed under its corporate seal as of the date first above written.

                                                      VERMONT PURE HOLDINGS,LTD.

                                                       By

<PAGE>
                                  Exhibit "A"

                            Conversion of Debenture

     Section 1.  CONVERSION  PRIVILEGE.  The Holder of this Debenture shall have
the  right at its  option  at any  time to  conver,  subject  to the  terms  and
provisions  hereof,  the principal  and any accured buy unpaid  interest of such
Debenture  or any portion of the  principal  amount  thereof  into shares of the
Company's  common stock,  $.001 per value,  as listed for trading on one or more
nationally  recognized securities exchanges (the "Common Stock") at a conversion
price  equal to eighty  five  percent  (85%) of the  Average  Closing  Prices as
defined below.  For purposes of this Debenture,  the Average Closing Price shall
mean the average  closing price of shares of the  Company's  Common Stock on the
American  Stock  Exchange  during  the twenty  (20)  busivess  days  immediately
preceding  the  Conversion  Date, as defined below or if such stock is no longer
listed for trading thereon, the primary nationally  recognized stock exchange on
which such shares of Common Stock are regularly traded,  provided however,  that
if such  successor bid prices at the close of trading on each such business day.
The price,  determined  in  accordance  with the  foregoing  provisions  of this
Section is hereinafter referred to as the "Conversion Price".

     Section 2 EXERCISE OF CONVERSION PRIVILEGE.  The Conversion Privilege shall
be  exercised,  if at all, by surrender  of the  Debenture to the Company at its
principal  office,  together  with  written  notice of election  executed by the
holder of such  Debenture,  which may be in the form which is included with this
Debenture  (hereinafter  referred to as the "Conversion Notice") to convert such
Deenture or a specified  portion thereof.  Each Conversion  Notice shall require
the  conversion  of a minimum  amount of  principal  and  interest due under the
Debenture of Fifty Thousand Dollars  ($50,000) into Common Stock. The Conversion
Notice  shall  specify  the name or names in which the  shares  of Common  Stock
deliverable upon such conversion shall be registered,  with the addresses of the
persons (and taxpayer  indentification numbers, if applicable) so named, and, if
so required by the Company,  accompanied by a written  tnstrument or instruments
of transfer in form  satisfactory  to the Company duly executed by the holder or
his attorney duly authorized in writing. Execise of the Conversion Privilege may
be made  effective as of a later date,  subject to the occurrence of one or more
conditions  precedent,  which shall be stated in the Conversion  Notice.  In the
event  that one or more of such  conditions  precedent  do no occur,  the holder
shall not be deemed to have exercised the Conversion Privilege.

     As  promptly  as  practicable  after  surrender  as herein  provided of any
Debenture  for  conversion  and the  recipt of the  Conversion  Notice  relating
thereto,  subject to the occurrence of any conditions  precedent as described in
the Conversion  Notice, the Company shall deliver or cause to be delivered to or
upon the written order of the Holder, a certificate or certificates representing
the number of fully  paid and  nonassessable  shares of Common  Stock into which
such  Debenture is to be converted in  accordance  with the  provisions  hereof,
registered  in such name or names as are  specified  in the  Conversion  Notice,
together  with any cash  payable in respect of a  fractional  share,  and a cash
payment in the amount of the accused and umpaid  interest on the  Debenture,  of
such portion thereof as has been converted,  to the conversion date. In case any
Debenture shall be surrendered for partial conversion, the Company shall execute
and deliver to or upon the written  order of the Holder,  without  charg to such
holder, a new Debenture or Debentures in authorized denominations inan aggregate
principal amount equal to the unconverted portion of the surrendered  Debenture.
Except  as  otherwise  provided  in the  immediately  following  sentence,  such
conversions  shall be deemed to have been  effected  at the close of business on
the date when such Debenture shall have been surrendered for conversion together
with the  Conversion  Notice,  so that the rights of the  recieve  the shares of
Common Stock upon conversion of such Debenture shall be treated for all purposes
as having  become the record holder or holders of such shares of Common Stock at
such time, and such  Conversion  shall be at the  Conversion  Price in effect at
such  time.  The Holder  shall  have the right to  condition  any  surrender  of
Debentures for conversion during the 60-day period between the date of notice of
a  call  for  redemption  from  the  Company  based  on a  proposed  acquisition
transaction,  upon the successful  completion of such transaction,  such that if
the transaction is not completed, the Conversion Notice shall be disregarded and
the Company shall  execute and deliver to the holder  thereof a new Debenture or
Debentures in the same aggregate amount as those surrendered for conversion.

     Section 3. FRACTIONAL  SHARES. No fractional  shares or scrip  representing
fractional  shares shall be issued upon the conversion of any Debenture.  If any
fractional  interest in a share of Common Stock would,  execpt for the provision
of this Section be delivered upon the  conversion of any Debenture,  the Company
shall,  in lieu of  delivering  a  fractinal  share  therefor  pay the holder of
surrendered   Debenture  an  amount  in  cash  determined  by  multiplying  such
fractional interest by the per share Conversion Price.

     Section 4. REORGANIZATION,  RECLASSIFICATION, CONSOLIATION, MERGER OR SALE.
If any capital  reorganization or  reclassification  of the capital stock of the
Company or any consolidation or merger of the Company with another  corporation,
or the sale of all or substantially all its assets to another  corporation shall
be  effected  in such a way that  holders of Common  Stock  shall be entitled to
receive  stock,  securities  or assets with  respect to or in exchange for Commn
Stock,   then  as  a  condition   of  such   reorganization,   reclassification,
consolidation,  merger or sale,  lawful and  adequate  provisions  shall be made
whereby each holder of the Debentures shall thereafter have the right to recieve
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common  Stock of the Company  immediately  theretofore  receivable
upon the conversion of the Debenture,  such shares of stock, securities or asets
(including  cash) as may be issued or payable with respect to or in exchange for
a number of outstanding  shares of Common Stock equal to the number of shares of
such  stock  immediately  theretofor  so  recievable  had  such  reorganization,
reclassification, consolidation, merger or sale not taken place, and in any such
case  appropriate  provision  shall  be made  with  respect  to the  rights  and
interests  of such  holder to athe end that the  provisions  hereof  (including,
without  limitation,  provisions for adjustments of the Conversion  Price) shall
thereafter  be  applicable,  as nearly as may be, in  relation  to any shares of
stock,  securities or assets thereafter  deliverable upon the conversion of such
Debentures )including and immediate adjustment,  by reason of such consolidation
or merger,  of the Conversion  Price to the value for the Common Stock reflected
by the terms of such  consolidation  or merger if the value so reflected is less
than the Conversion Price in effect  immediately prior to such  consolidation or
merger). In the event of a merger or consolidation of the Company as a result of
which a greater  or lesser  number  of shares of common  stock of the  surviving
corporation  are issuable to holders of CommonStock  of the Company  outstanding
immediately  prior to such  merger or  consolidation,  the  Conversion  Price in
effect  immediately  prior to such merger or consolidation  shall be adjusted in
the same  manner  as though  there  were a  subdivision  or  combination  of the
outstanding Common Stock into which the outstanding shares of Common Stock shall
have  been  subdivided  or  combined.  The  Company  will  not  effect  any such
consolidation,  merger or sale,  unless  prior to the  consummation  thereof the
successor   corporation  (if  other  than  the  Company)   resulting  from  such
consolidation or merger or the corporation  purchasing such assets shall assume,
by written  instrument  executed  and mailed or  delivered  to the  Holder,  the
obligation  to deliver to the Holder such shares of stock  securities  or assets
as, in accordance with the foregoing  provisions,  the Holder may be entitled to
receive upon conversion of the Debenture.

     Section 5. NOTICE OF ADJUSTMENTS. Whenever the Conversion Price is adjusted
as herin provided,  the Company shall forthwith cause to be mailed to the Holder
a notice stating that the  Conversion  Price has been adjusted and setting forth
the adjusted Conversion Price.

     Section 6. COMPANY TO RESERVE COMMON STOCK: LISTING. The Company convenants
that it will at all times  reserve  and keep  available,  free  from  preemptive
rights,  out og the aggregate of its authorized but unissued Common Stock or its
issued Common Stock held in its treasury,  or both, for the purpose of effecting
conversions  of the  Debenture,  the full number of shares of Common  Stock then
deliverable upon the conversion of the Debenture not theretofore converted;  and
if at any time the number of  authorized  but  unissued  shares of Common  Stock
shall not be sufficient to effect the conversion of the  Debenture,  the Company
will  take  such  corporate  action  as may in the  opinion  of its  counsel  be
necessary to increase its authorized but unissued Common Stock to such number of
shares as shall be sufficient for that purpose.

     Section  7.  TAXES  ON  CONVERSION.  The  Company  will  pay  any  and  all
documentary,  stamp or similar issue or transfer taxes payable in respect of the
issue or  delivery  of shares of Common  Stock on  conversion  of the  Debenture
pursuant hereto;  provided,  however,  that the Company shall not be required to
pay any tax which may be  payable in respect  of any  registration  of  transfer
involved in the issue or  delivery of Common  Stock in a name other than that of
the holder of the Debenture to be converted,  and nosuch issue or delivery shall
be made  unless  and  until the  person  requesting  such  issue has paid to the
Company  the amount of any such tax or has  established  to the  stisfaction  of
theCompany that such tax has been paid.

     Section 8. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of the shares of Common Stock issued or issuable upon
the  conversion of the Debenture in any manner which  interferes  with the timly
conversion of the Debenture.

     Section 9.  MANDATORY  CONVERSION.  Provided that the Common Stock shall be
then  listed for  trading on the  American  Stock  Exchange,  the New York Stock
Exchange,  the National  Association of Securities  Dealers Automatic  Quotation
System, or another nationally  recognized stock exchange resonably  satisfactory
to the  Holder,  and the Common  Stock shall be  regularly  traded  tereon,  the
Debenture  shall be  automatically  converted into shares of the Common Stock on
the  Maturity  Date,  in the same  manner and on the same terms as if the Holder
shall have  delivered a  Conversion  Notice to the Company in  accordance  swith
Section 2 hereof on such date. Upon such  conversion,  the Company shall have no
further obligations to the Holder under the Debenture.

                                CONVERSION NOTICE

To:  Vermont Pure Holdings, Inc.

     The  undersigned  owner of this  Debenture  hereby  exercises the option to
convert this debenture or portion hereof below  designated into shares of Common
Stock of Vermont Pure Holdings, Inc. all in accordance with, and subject to, the
terms of the  Debenture,  and directs that the shares  issuable and  deliverable
upon the conversion,  together with any check in payment for fractional  shares,
be issued in the name of and delivered to the  undersigned  or, if so specified,
to the person or entity named below. If shares are to be issued in the name of a
person other than the  undersigned,  the undersigned will pay any transfer taxes
payable with respect thereto.

Dated:____________________-

If shares are to be issued other than the holder:

_____________________
_____________________         __________________________
Name                          Signature
_____________________
Address
_____________________

Please Furnish Taxpayer Identification Number:_____________________

Portion to be converted:  $________________

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