Document:

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EXHIBIT 10.3

                       SUBORDINATION AND PLEDGE AGREEMENT

This SUBORDINATION AND PLEDGE AGREEMENT is made as of April 5, 2005, by and
among Ross S. Rapaport, not individually, but as Trustee of the Peter Baker Life
Insurance Trust u/t/a dated July 7, 1992, the John Baker Insurance Trust u/t/a
dated July 7, 1992 and the Joan Baker and Henry Baker Irrevocable Trust u/t/a
dated December 16, 1991, as agent (together with his successors and assigns in
such capacity, the "SUBORDINATE LENDER'S AGENT") for and on behalf of
_________________ (together with his successors and assigns, the "SUBORDINATE
LENDER") pursuant to certain of the Subordinated Loan Documents (defined below),
the Subordinate Lender, BANK OF AMERICA, N.A., a national banking association,
as administrative agent (in such capacity, together with its successors and
assigns in such capacity, the "AGENT" ) on behalf of the lenders from time to
time party to the Credit Agreement (defined below) (the "LENDERS"), and the
Lenders.

                                    RECITALS

WHEREAS, Vermont Pure Holdings, Ltd. a Delaware corporation (together with its
successors and assigns, "HOLDINGS") is indebted to the Subordinate Lender under
and pursuant to the terms of the Subordinated Loan Documents and may from time
to time hereafter become indebted to the Subordinate Lender in further amounts
as permitted by the terms of the Senior Loan Documents; and

WHEREAS, Holdings and Crystal Rock LLC, a Delaware limited liability company
(together with its successors and assigns, "CRYSTAL ROCK" and together with
Holdings, collectively, the "BORROWERS"), have requested, and may from time to
time hereafter request that the Lenders under the Credit Agreement make or agree
to make loans, extensions of credit or other financial accommodations to the
Borrowers (the "LOANS"); and

WHEREAS, the Lenders, as a condition to the making of the Loans, have required
that each of the Subordinate Creditors execute and deliver this Subordination
and Pledge Agreement (together with all schedules and any exhibits attached
hereto and amendments or modifications hereto in effect from time to time, this
"AGREEMENT").

NOW, THEREFORE, in order to induce the Lenders to make the Loans and in
consideration thereof, each of the Subordinate Creditors agrees as follows:

A. DEFINITIONS. As used herein, the following terms shall have the following
meanings:

      1.    AFFILIATE. The term "AFFILIATE" means, with respect to any Senior
            Creditor, any person or entity controlling, controlled by or under
            common control with, such Senior Creditor.

      2.    COLLATERAL. The term "COLLATERAL" means, collectively, the Senior
            Collateral and the Subordinate Lenders' Collateral.

      3.    CREDIT AGREEMENT. The term "CREDIT AGREEMENT" means that certain
            Credit Agreement among Holdings, Crystal Rock, the Lenders and Agent
            dated the date hereof, as amended, supplemented, renewed, replaced,
            extended or otherwise modified from time to time.

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      4.    EVENT OF DEFAULT. The term "EVENT OF DEFAULT" shall mean an "Event
            of Default" as defined under the Credit Agreement.

      5.    FINANCIAL COVENANT DEFAULT. The term "FINANCIAL COVENANT DEFAULT"
            shall mean an Event of Default which results solely from the
            violation of any now existing or hereafter arising financial
            covenant contained in the Credit Agreement, including, by way of
            illustration, those specific financial covenants set forth in
            Section 12 of the Credit Agreement and any supplement, addition,
            modification or amendment to those specific financial covenants.

      6.    INSOLVENCY PROCEEDING. The term "INSOLVENCY PROCEEDING" shall mean a
            proceeding of the type described in paragraph 5 hereof.

      7.    LIABILITIES. The term "LIABILITIES" means any and all obligations
            and indebtedness of every kind and description, now or hereafter
            existing, whether such debts or obligations are primary or
            secondary, direct or indirect, absolute or contingent, sole, joint
            or several, secured or unsecured, due or to become due, contractual
            or tortious, arising by operation of law, by overdraft, or
            otherwise, including, without limitation, principal, interest, fees,
            late fees, expenses and/or attorneys' fees and costs that have been
            or may hereafter be contracted or incurred.

      8.    OBLIGOR. The term "OBLIGOR" means, collectively, Holdings and each
            and every other maker (including, without limitation, Crystal Rock),
            endorser, guarantor, or surety of or for the Senior Liabilities.

      9.    PAYMENT IN FULL. The terms "PRIOR PAYMENT IN FULL," "PAYMENT IN
            FULL," "PAID IN FULL" and any other similar terms or phrases when
            used herein with respect to the Senior Liabilities shall mean the
            payment in full, in immediately available funds, of all of such
            obligations (including, without limitation, the cancellation or cash
            collateralization of all letters of credit or hedging arrangements)
            and the termination or expiration of any commitments to extend any
            financial accommodations to the Obligor under the documents
            evidencing Senior Liabilities.

      10.   PROHIBITED ACTION. The term "PROHIBITED ACTION" means to (i)
            exercise or enforce any rights or remedies or assert any claims
            against the Senior Collateral or Subordinate Lenders' Collateral;
            (ii) make any claim or commence or initiate any action, lawsuit,
            case or proceeding against the Obligor or join together or with any
            creditor other than, with its consent, the Agent in any action,
            lawsuit, case or proceeding against the Obligor (including, but not
            being limited to, proceedings under the United States Federal
            Bankruptcy Code); (iii) contact any account of the Obligor or attach
            or take possession of any Senior Collateral or Subordinate Lenders'
            Collateral or exercise any right of foreclosure or any right or
            remedy with respect to the Obligor or the Senior Collateral or
            Subordinate Lenders' Collateral; or (iv) take any other action
            prejudicial to or inconsistent with the Lenders' and Agent's rights
            and first priority secured position with respect to the Obligor or
            the Senior Collateral, including, without limitation, any action
            that will impede, interfere with, restrict, or restrain the exercise
            by the Agent or any of the Lenders of their rights and remedies
            under the Senior Loan Documents or contest or support any other
            person or entity in contesting in any manner the perfection,
            priority, validity or enforceability of any security interest lien
            held by the Agent in any of the Senior Collateral or any claims made
            by the Senior Creditors pursuant to the terms of the Senior Loan
            Documents.

      11.   SENIOR COLLATERAL. The term "SENIOR COLLATERAL" means the personal
            property of the Obligor described in SCHEDULE A and any other real
            or personal property of the Obligor in which the Agent, any Lender
            or an Affiliate may hereafter be granted a security interest,
            mortgage interest or other similar interest.

      12.   SENIOR CREDITORS. The term "SENIOR CREDITORS" shall mean,
            collectively, the Agent and the Lenders.

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      13.   SENIOR LIABILITIES. The term "SENIOR LIABILITIES" means all
            Liabilities of the Obligor to any of the Lenders, the Agent and/or
            to any of the Affiliates including, without limitation, any and all
            interest accruing on Senior Liabilities after the commencement of
            any proceedings referred to in paragraph B.5. hereof,
            notwithstanding any provision or rule of law which might restrict
            the rights of the Lenders or Agent, as against the Obligor and/or
            anyone else, to collect such interest. For purposes of this
            Agreement, Senior Liabilities shall include all Liabilities of the
            Obligor to the Lenders and the Agent, notwithstanding any right or
            power of the Obligor and/or anyone else to assert any claim or
            defense as to the invalidity or unenforceability of any such Senior
            Liabilities.

      14.   SENIOR LOAN DOCUMENTS. The term "SENIOR LOAN DOCUMENTS" means the
            Credit Agreement and all other credit accommodations, notes, loan
            agreements, and any other agreements and documents, now or hereafter
            existing, creating, evidencing, guarantying, securing or relating to
            any or all of the Senior Liabilities, together with all amendments,
            modifications, renewals, or extensions thereof.

      15.   SUBORDINATE CREDITORS. The term "SUBORDINATE CREDITORS" means,
            collectively, the Subordinate Lender and the Subordinate Lender's
            Agent.

      16.   SUBORDINATED LENDERS' COLLATERAL. The term "SUBORDINATED LENDERS'
            COLLATERAL" means the personal property of Holdings more fully
            described in SCHEDULE B attached hereto.

      17.   SUBORDINATED LENDING GROUP. The term "SUBORDINATED LENDING GROUP"
            means Henry E. Baker, Joan A. Baker, John B. Baker and Peter K.
            Baker, each as holder of a Second Amended and Restated Subordinated
            Promissory Note of Holdings dated the date hereof, as such
            Subordinated Promissory Notes may be amended, restated or replaced
            from time to time in accordance with the terms of this Agreement,
            and any successor holders of such Subordinated Promissory Notes
            permitted by the terms of this Agreement, and Ross S. Rapaport, not
            individually, but as Trustee of the Peter Baker Life Insurance Trust
            u/t/a dated July 7, 1992, the John Baker Insurance Trust u/t/a dated
            July 7, 1992 and the Joan Baker and Henry Baker Irrevocable Trust
            u/t/a dated December 16, 1991, as agent for such holders.

      18.   SUBORDINATED LIABILITIES. The term "SUBORDINATED LIABILITIES" means
            all Liabilities of the Obligor to the Subordinate Creditors,
            including, without limitation, all payments of principal and
            interest pursuant to that Second Amended and Restated Subordinated
            Promissory Note dated the date hereof from Holdings payable to the
            order of the Subordinate Lender in the original principal amount of
            _______________ (the "SUBORDINATED NOTE") and that Amended and
            Restated Security Agreement, dated as of the date hereof, by and
            among Holdings, the Subordinate Lender's Agent and each of the
            members of the Subordinated Lending Group (the "SUBORDINATED
            SECURITY AGREEMENT"), but specifically excluding therefrom
            compensation from Holdings to the Subordinate Lender presently
            contemplated pursuant to the existing employment agreement between
            Holdings and the Subordinate Lender for so long as such agreement
            remains in effect, as the compensation clauses thereof may be
            amended from time to time with the consent of the Agent, and the
            normal reimbursement of expenses in the ordinary course of business
            and indemnification of claims arising solely from the Subordinate
            Lender's actions as an officer or director (or person holding a
            similar position) of Holdings or Crystal Rock.

      19.   SUBORDINATED LOAN DOCUMENTS. The term "SUBORDINATED LOAN DOCUMENTS"
            means the Subordinated Note, the Subordinated Security Agreement and
            all other credit accommodations, notes, loan agreements and any
            other agreements and documents, now or hereafter existing, creating,
            evidencing, guarantying, securing or relating to any or all of the
            Subordinated Liabilities, together with all amendments,
            modifications, renewals or extensions thereof.

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B. SUBORDINATION AND PLEDGE.

      1.    SUBORDINATION TO SENIOR LIABILITIES.

            (a)   Except as hereinafter expressly set forth in this Agreement or
                  as the Agent and Lenders may hereafter otherwise expressly
                  consent in writing, the payment of all Subordinated
                  Liabilities shall be postponed and subordinated to the
                  indefeasible payment in full of all Senior Liabilities, and no
                  payments or other distributions whatsoever, including, without
                  limitation, payments of interest in respect of any
                  Subordinated Liabilities shall be made, nor shall any property
                  or assets of the Obligor be applied to the purchase or other
                  acquisition or retirement of any Subordinated Liabilities, nor
                  given as collateral security to secure repayment of same.

            (b)   Notwithstanding the provisions in paragraph B.1(a) above, and
                  subject to the other terms of this Agreement, the Subordinate
                  Lender's Agent may be granted a security interest in the
                  Subordinate Lenders' Collateral to secure the payments of
                  principal and interest and other amounts due pursuant to the
                  Subordinated Note.

            (c)   Notwithstanding the provisions of paragraph B.1(a) above, so
                  long as no Event of Default exists and is continuing, and so
                  long as no event exists and is continuing which, with the
                  giving of notice or the passage of time or both, would
                  constitute an Event of Default, Holdings may make regularly
                  scheduled quarterly payments of interest under the
                  Subordinated Note, at a rate not in excess of twelve per cent
                  (12%) per annum, and past due regularly scheduled quarterly
                  payments of interest under the Subordinated Note which were
                  not paid when scheduled to be paid because of the terms of
                  this Agreement, including interest at a rate not in excess of
                  twelve per cent (12%) per annum on such past due amounts, but
                  only to the extent that the making of such payments would not
                  result in a Financial Covenant Default.

            (d)   Notwithstanding the provisions in paragraph B.1(a) above, so
                  long as no Event of Default exists and is continuing or would
                  result therefrom, and so long as no event exists and is
                  continuing which, with the giving of notice or the passage of
                  time or both, would constitute an Event of Default or would
                  result therefrom, and provided that the terms of Section 11.8
                  of the Credit Agreement have been satisfied, at any time or
                  times after 18 months after the Closing Date (as defined in
                  the Credit Agreement) Holdings may make principal payments on
                  the Seller Subordinated Debt (as defined in the Credit
                  Agreement) to members of the Subordinated Lending Group which
                  principal payments in the aggregate do not exceed $3,000,000.

      2.    PLEDGE OF SUBORDINATED LOAN DOCUMENTS. In order to secure the due
            and punctual payment and performance of the Senior Liabilities, the
            Subordinate Creditors hereby pledge, transfer, assign, and grant to
            the Agent a continuing security interest in and lien upon the
            Subordinated Loan Documents, all income therefrom and proceeds
            thereof. The Subordinate Creditors have endorsed and delivered to
            the Agent physical possession of any of the Subordinated Loan
            Documents which are instruments, including the Subordinated Note and
            have executed Uniform Commercial Code financing statements and such
            other documents and/or instruments as may be necessary or convenient
            to perfect the security interests granted herein. Agent shall hold
            the Subordinated Note and any other Subordinated Loan Documents
            which are instruments delivered to the Agent as security for the due
            and punctual payment and performance of the Senior Liabilities and
            notwithstanding the possession of the Subordinated Note or such
            other Subordinated Loan Documents by the Agent, the Subordinate
            Lender shall be entitled to receive payments thereunder to the
            extent expressly permitted under paragraph B.1 above. Upon payment
            in full of the Senior Liabilities, the Agent will deliver to the
            Subordinate Lender the Subordinated Note and any other Subordinated
            Loan Documents in its possession.

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      3.    SUBORDINATION OF SECURITY INTEREST OF SUBORDINATED LIABILITIES. Any
            and every lien and security interest in the Collateral in favor of,
            granted to or held for the benefit of the Senior Creditors, whether
            now existing or hereafter arising have and shall have priority over
            and be senior to any lien or security interest that the Subordinate
            Lender's Agent or the Subordinate Lender now has or may hereafter
            acquire in the Collateral (in any Insolvency Proceeding or
            otherwise), whether by contract, operation or rule of law, court
            order or otherwise, notwithstanding any statement or provision
            contained in the Subordinated Loan Documents or otherwise to the
            contrary and irrespective of (i) the time, order, or manner,
            validity or effectiveness of the attachment or perfection of any
            security interest or lien on the Collateral, (ii) the time or order
            of filing or recording of financing statements, deeds of trust,
            mortgages or other notices of security interests, liens or
            assignments granted pursuant thereto, (iii) anything contained in
            any filing or agreement to which any party hereto or its respective
            successors and assigns may now or hereafter be a party, and (iv)
            ordinary rules for determining priorities under the Uniform
            Commercial Code of any jurisdiction or under any other law governing
            the relative priorities of secured creditors. For the purpose of the
            foregoing priorities, any claim of a right of setoff by either
            Subordinate Creditor shall be treated as a security interest or lien
            subordinated as described above and no claim to a right of setoff by
            such Subordinate Creditor shall be asserted to defeat or diminish
            the rights or priorities provided for herein in favor of the Senior
            Creditors. The Subordinate Creditors agree to execute and deliver to
            the Agent all instruments, including, without limitation, Uniform
            Commercial Code amendments, subordinations of lien, and
            subordinations of mortgage which, in the reasonable opinion of the
            Agent, are necessary or convenient to effectuate the purposes of
            this paragraph and this Agreement.

      4.    NO ADDITIONAL SUBORDINATED LIABILITIES; FURTHER ASSURANCES OF PLEDGE
            OF SUBORDINATED LIABILITIES. The Subordinate Creditors will (i) not
            create or permit to exist any principal amount of Subordinated
            Liabilities in excess of the amount outstanding on the date hereof;
            (ii) cause any Subordinated Liabilities which are not already
            evidenced by a promissory note or other instrument of the Obligor to
            be so evidenced; (iii) as collateral security for the Senior
            Liabilities, endorse, deliver and pledge to the Agent any and all
            promissory notes and/or other instruments evidencing Subordinated
            Liabilities, and otherwise assign and/or pledge to the Agent any or
            all Subordinated Liabilities and the Subordinated Loan Documents,
            all in a manner satisfactory to the Agent in its sole discretion,
            and (iv) promptly give the Agent written notice of any default by
            Holdings under the Subordinated Note or any agreement securing such
            Obligor's obligations under any of the other Subordinated Loan
            Documents.

            FURTHER ASSURANCES OF AGENT. Agent will endeavor to deliver to the
            Subordinate Lender prompt notice of any Event of Default or
            Financial Covenant Default under the Credit Agreement or any of the
            other Senior Loan Documents of which the Agent becomes aware but the
            failure of the Agent to promptly deliver any such notice will not
            affect any of the rights or obligations of the parties under this
            Agreement.

      5.    RIGHTS OF AGENT TO COLLECT SUBORDINATED LIABILITIES; RIGHTS IN
            BANKRUPTCY.

            (a)   In the event of any dissolution, winding up, liquidation,
                  reorganization or other similar proceedings relating to the
                  Obligor, or to any of their property (whether voluntary or
                  involuntary, partial or complete, and whether in bankruptcy,
                  insolvency or receivership, or upon an assignment for the
                  benefit of creditors, or any other marshalling of the assets
                  and liabilities of the Obligor, or any sale of all or
                  substantially all of the assets of the Obligor, or otherwise),
                  the Senior Liabilities shall first be paid in full before the
                  Subordinate Creditors shall be entitled to receive and/or to
                  retain any payment or distribution in respect of the
                  Subordinated Liabilities; provided that the Subordinate Lender
                  shall be entitled to receive and retain any securities issued
                  in connection with reorganization proceedings which are junior
                  in

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                  right of repayment to the Senior Liabilities to the extent set
                  forth herein, are treated as Subordinated Liabilities
                  hereunder and are subject to all the provisions of this
                  Agreement, and, in order to implement the foregoing (i) all
                  payments and distributions of any kind or character in respect
                  of the Subordinated Liabilities to which any of the
                  Subordinate Creditors would be entitled but for the provisions
                  of this Agreement (other than such junior securities) will be
                  made directly to the Agent; (ii) the Subordinate Creditors
                  shall promptly file a claim or claims, in the form required in
                  such proceedings, for the full outstanding amount of the
                  Subordinated Liabilities, and shall cause said claim or claims
                  to be approved and all payments and other distributions in
                  respect thereof (other than such junior securities) to be made
                  directly to the Agent; (iii) the Subordinate Creditors hereby
                  irrevocably agree that the Agent may, in its sole discretion,
                  and the Subordinate Creditors may not, without the prior
                  written consent of the Agent, in the name of the Subordinate
                  Creditors or otherwise, demand, sue for, collect and receive
                  any and all such payments or distributions, and file, prove,
                  and vote or consent in any such proceedings with respect to,
                  any and all claims of the Subordinate Creditors relating to
                  the Subordinated Liabilities; and (iv) the Subordinate
                  Creditors hereby ratify all of the foregoing acts or omissions
                  on the Agent's part or behalf and waive any claim,
                  counterclaim or defense of the Subordinate Creditors which may
                  be alleged to arise from such acts or omissions.

            (b)   Without impairing, abrogating or in any way affecting any
                  Senior Creditor's rights hereunder, including the relative
                  priorities established in paragraph B hereof, any Senior
                  Creditor may during any Insolvency Proceeding give or withhold
                  its consent to the Obligor's or any bankruptcy trustee's use
                  or consumption of any Senior Collateral (including cash
                  proceeds of Senior Collateral) or may provide financing or
                  otherwise extend credit to the Obligor or any of its
                  subsidiaries or any bankruptcy trustee secured by a senior
                  lien upon all of the Senior Collateral, whether created,
                  acquired or arising prior to or after the commencement of any
                  Insolvency Proceeding, and the Subordinate Creditors shall be
                  deemed to have consented to the Obligor's or any bankruptcy
                  trustee's use of Senior Collateral, if any, to the extent
                  consented to by the Senior Creditors and to all of the terms
                  of any financing proposed to be provided by any Senior
                  Creditor to the Obligor, any of its subsidiaries or any
                  bankruptcy trustee during the pendency of any such Insolvency
                  Proceeding.

            (c)   Without limiting the generality of the agreements set forth in
                  paragraph 5(a) above, if the Agent consents to the sale of any
                  or all of the Senior Collateral during any Insolvency
                  Proceeding (whether such sale is to be made pursuant to 11
                  U.S.C. Section 363, under a plan of reorganization or
                  otherwise), then the Subordinate Creditors shall be deemed to
                  have consented to any such sale and all of the terms
                  applicable thereto and shall, if requested to do so by the
                  Agent in connection with any such sale, promptly execute and
                  deliver to the Agent a release of the Subordinate Creditors'
                  liens and security interests with respect to the Senior
                  Collateral to be sold.

            (d)   If any Senior Creditor returns, refunds or repays to the
                  Obligor or any trustee or committee appointed in the
                  Insolvency Proceeding any payment with respect to the Senior
                  Liabilities or proceeds of any Senior Collateral in connection
                  with any action, suit or proceeding alleging that such Senior
                  Creditor's receipt of such payment or proceeds was a transfer
                  voidable under state or federal law, then such Senior Creditor
                  shall not be deemed to have ever received such payment or
                  proceeds for purposes of this Agreement in determining whether
                  the Senior Liabilities have been paid in full.

      6.    PROTECTION OF AGENT'S RIGHTS IN SUBORDINATED LIABILITIES. In the
            event that either Subordinate Creditor receives any payment or other
            distribution of any kind or character from the Obligor or any

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            other source whatsoever in respect of any of the Subordinated
            Liabilities, other than as expressly permitted by the terms of this
            Agreement, such payment or other distribution shall be received in
            trust for the Lenders and the Agent and promptly turned over by such
            Subordinate Creditor to the Agent. The Subordinate Creditors will
            mark their books and records, and cause the Obligor to mark its
            books and records, so as to clearly indicate that the Subordinated
            Liabilities are subordinated in accordance with the terms of this
            Agreement, and will cause to be clearly inserted in any promissory
            note or other instrument which at any time evidences any of the
            Subordinated Liabilities a statement to the effect that the payment
            thereof is subordinated in accordance with the terms of this
            Agreement. The Subordinate Creditors will execute such further
            documents and instruments and take such further action as the Agent
            may from time to time reasonably request to carry out the intent of
            this Agreement. Each of the Subordinate Creditors hereby irrevocably
            appoints the Agent its attorney in fact, said appointment being
            coupled with an interest, to execute such further documents and
            instruments and take such further action on behalf of the
            Subordinate Creditors as the Agent may from time to time deem
            reasonable to carry out the intent of this Agreement, including,
            without limitation, the actions set forth in paragraph B.4. and
            paragraph B.12 hereof.

      7.    TREATMENT OF PAYMENT OF SUBORDINATED LIABILITIES. All payments and
            distributions received by the Agent or any Lender in respect of the
            Subordinated Liabilities, to the extent received in or converted
            into cash, may be applied by the Agent and Lenders first to the
            payment of any and all fees, costs and expenses including, without
            limitation, attorneys' fees and disbursements paid or incurred by
            any Senior Creditor in enforcing this Agreement or in endeavoring to
            collect or realize upon any of the Subordinated Liabilities, and any
            balance thereof shall, solely as between the Subordinate Creditors
            and the Senior Creditors, be applied by the Agent, in such order of
            application as the Agent may from time to time select, toward the
            payment of any of the Senior Liabilities remaining unpaid. As
            between the Obligor and any of its creditors, no such payments or
            distributions of any kind or character shall be deemed to be
            payments or distributions in respect of the Senior Liabilities; and,
            notwithstanding any such payments or distributions received by the
            Agent or any Lender in respect of the Subordinated Liabilities and
            so applied by the Agent and Lenders toward the payment of the Senior
            Liabilities, the Subordinate Creditors shall be subrogated to the
            then existing rights of the Agent and Lenders, if any, in respect of
            the Senior Liabilities, only at such time as the Lenders and Agent
            shall have received indefeasible payment in full of the Senior
            Liabilities.

      8.    WAIVERS. Each of the Subordinate Creditors hereby waives (i) any and
            all notice of the receipt and acceptance by the Agent or any Lender
            of this Agreement; (ii) except as set forth in paragraph B.4, notice
            of the existence, incurrence, or non-payment of all or any of the
            Senior Liabilities; (iii) all diligence in collection or protection
            of or realization upon any of the Senior Liabilities or any security
            therefor; and (iv) any obligation with respect to the marshalling of
            assets by the Agent or any Lender.

      9.    PROHIBITION ON CHANGES IN SUBORDINATED LIABILITIES.

            (a)   Except as herein set forth in paragraph B.9(b), neither
                  Subordinate Creditor will, without the prior written consent
                  of the Agent, (i) cancel, waive, forgive, amend, extend,
                  renew, replace, refinance, modify, transfer or assign, or
                  attempt to enforce or collect, or subordinate to any
                  Liabilities other than the Senior Liabilities, any
                  Subordinated Liabilities, the Subordinated Loan Documents or
                  any rights in respect thereof; (ii) convert any Subordinated
                  Liabilities into stock or other securities in the Obligor
                  except as permitted by this Agreement; (iii) take any
                  Prohibited Action; (iv) commence, or join with any other
                  creditor in commencing, any Insolvency Proceedings with
                  respect to the Obligor, or (v) take any other action
                  prejudicial to or inconsistent with the Agent's and Lenders'
                  rights and first priority secured position with respect to the
                  Obligor, the Senior Collateral and collateral for the Senior
                  Liabilities.

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            (b)   Notwithstanding the provisions of paragraph B.9(a), if any
                  default has occurred under any of the Subordinated Loan
                  Documents and such default has continued in existence for a
                  period of one hundred eighty (180) consecutive days after the
                  Subordinate Creditors have provided written notice of the
                  existence of such default to the Agent (the "STANDSTILL
                  PERIOD"), the Subordinate Creditors may proceed to take legal
                  action against Holdings for the sole purpose of obtaining a
                  judgment against Holdings; provided, however, at no time
                  either before or after the expiration of the Standstill Period
                  may either Subordinate Creditor take any action or Prohibited
                  Action to commence any Insolvency Proceeding or to enforce a
                  security interest in, liquidate or otherwise receive payment
                  from any Collateral, unless and until the Senior Liabilities
                  have been indefeasibly paid in full.

      10.   CONTINUING AGREEMENT. This Agreement shall in all respects be a
            continuing agreement and shall remain in full force and effect
            notwithstanding, without limitation, the death, incompetency or
            dissolution of the Subordinate Creditors or that at any time or from
            time to time all Senior Liabilities may have been paid in full if
            any of the Senior Loan Documents have not been terminated.

      11.   PERMITTED CHANGES IN SENIOR LIABILITIES. The Agent or any Lender
            may, from time to time, whether before or after any discontinuance
            of this Agreement, at its sole discretion and without notice to the
            Subordinate Creditors, take any action permitted under applicable
            law with respect to the Senior Liabilities and the Senior Loan
            Documents, including, without limitation, any or all of the
            following actions: (i) retain or obtain a security interest in any
            property to secure any of the Senior Liabilities; (ii) retain or
            obtain the primary or secondary obligation of the Obligor with
            respect to any of the Senior Liabilities; (iii) extend, renew
            (whether or not longer than the original period), increase, alter or
            exchange any of the Senior Liabilities; (iv) release or compromise
            any obligation of any nature of the Obligor with respect to any of
            the Senior Liabilities; and (v) release its security interest or
            lien in, allow its security interest or lien to be unperfected,
            surrender, release or permit any substitution or exchange for, all
            or any part of any property securing any of the Senior Liabilities,
            or extend or renew for one or more periods (whether or not longer
            than the original period) or release, compromise, alter or exchange
            any obligations of any nature of the Obligor with respect to any
            such property.

      12.   DISPOSITION OF ASSETS.

            (a)   Notwithstanding anything to the contrary contained in any
                  Subordinated Loan Document or otherwise, prior to the payment
                  in full of the Senior Liabilities, only the Senior Creditors
                  shall have the right while an Event of Default exists and is
                  continuing to dispose of any of the assets of the Obligor
                  constituting the Senior Collateral (whether or not also
                  constituting the Subordinate Lenders' Collateral), and the
                  Senior Creditors shall have the right to do so in any manner,
                  on any terms and for any price deemed appropriate by the
                  Senior Creditors, in their sole discretion, whether in a
                  public or private sale, without obtaining the consent or
                  agreement of, or giving notice to the Subordinate Creditors
                  (and the Subordinate Creditors hereby waive all right to
                  require that their agreement or consent be obtained or that
                  they be given notice), and the Subordinate Creditors shall not
                  contest any such disposition of the Senior Collateral on the
                  basis that such disposition is not commercially reasonable or
                  otherwise. In the event that under applicable law, despite the
                  foregoing waiver of notice, the Senior Creditors shall be
                  required to give notice to the Subordinate Creditors in
                  connection with Senior Creditors' disposition of any of the
                  Senior Collateral while an Event of Default exists and is
                  continuing, the Subordinate Creditors agree that ten (10) days
                  prior notice by the Senior Creditors of the time and place of
                  any public sale, or of the time after which a private sale may
                  take place, is reasonable notification of such matters.
                  Without limitation of the foregoing, the Senior Creditors may
                  do any of the following while an Event of Default exists and
                  is continuing: enter into such compromises with and give such
                  releases and acquittances to account debtors or other obligors
                  with respect to the Obligor's receivables as they determine in
                  their sole

                                       8
<PAGE>

                  discretion, solicit bids from third parties to conduct the
                  liquidation of all or a material portion of the Senior
                  Collateral, engage or retain sales brokers, marketing agents,
                  investment bankers, accountants, appraisers, auctioneers or
                  other third parties for the purposes of valuing, marketing,
                  promoting and selling a material portion of the Senior
                  Collateral, commence any action to foreclose such liens and
                  security interests on all or any material portion of the
                  Senior Collateral, notify account debtors to make payments to
                  the Senior Creditors, to take possession of all or any
                  material portion of the Senior Collateral or commence any
                  legal proceedings or actions against or with respect to all or
                  any material portion of the Senior Collateral.

            (b)   The Subordinate Creditors agree, whether or not a default has
                  occurred in the payment of any indebtedness or the performance
                  of any other obligations to them, that any liens on and
                  security interests they have in the assets constituting the
                  Collateral or any portion thereof that they might have or
                  acquire shall automatically be fully released ipso facto if
                  and when the Agent releases its lien in and security interest
                  on such Collateral or any portion thereof. Provided that the
                  Senior Liabilities have not been paid in full, the Subordinate
                  Lender's Agent agrees to execute any Uniform Commercial Code
                  termination statements and/or partial releases, and any other
                  instruments or documents deemed necessary by the Agent in its
                  reasonable discretion to evidence the release of the
                  Subordinate Lender's Agent's lien on any assets constituting
                  Collateral in the event of any sale, transfer or other
                  disposition of the Collateral, whether such disposition is in
                  the ordinary course of business or is incidental to a
                  foreclosure proceeding or Insolvency Proceeding relating
                  thereto, and whether or not any proceeds therefrom will pay
                  any of the Subordinated Liabilities.

            (c)   If the Subordinate Lender's Agent shall fail or refuse to
                  execute, or delay in the execution of, any written release of
                  its liens or shall fail to provide such release in a form
                  reasonably acceptable to the Obligor or Agent, then the Agent
                  shall be deemed to be the agent and attorney-in-fact for the
                  Subordinate Lender's Agent for the purpose of executing and
                  recording any such release in accordance with the terms of
                  paragraph B.6.

      13.   PROVISIONS CONCERNING INSURANCE.

      Proceeds of the Collateral include insurance proceeds, and therefore the
      priorities set forth in this paragraph B govern the ultimate disposition
      of casualty insurance proceeds. The Agent shall have the sole and
      exclusive right, as against the Subordinate Creditors, to adjust
      settlement of insurance claims in the event of any covered loss, theft or
      destruction of the Collateral in accordance with the terms of the Credit
      Agreement. All proceeds of such insurance shall inure to the Agent, for
      the benefit of the Lenders, and the Subordinate Creditors shall cooperate
      in a reasonably manner in effecting the payment of insurance proceeds to
      the Agent. The Agent shall have the right (as between the parties hereto)
      to determine whether such proceeds will be applied to the Senior
      Liabilities or used to rebuild, replace or repair the affected Collateral.

C.    REPRESENTATIONS AND WARRANTIES. The Subordinate Creditors hereby represent
      and warrant that (i) each has the necessary power and capacity to make and
      perform this Agreement and such making and performance have been duly
      authorized by all necessary actions on the part of the Subordinate
      Creditors; (ii) the making and performance by the Subordinate Creditors of
      this Agreement does not and will not violate any provision of law or
      regulation or result in the breach of, or constitute a default or require
      any consent under, any indenture or other agreement or instrument to which
      it is a party or by which any of its properties may be bound; (iii) this
      Agreement is the legal, valid and binding obligation of each of the
      Subordinate Creditors, enforceable against such Subordinate Creditors in
      accordance with its terms and (iv) other than the Subordinated Note, the
      Subordinated Security Agreement and the Uniform Commercial

                                       9
<PAGE>

      Code financing statements executed in connection therewith, there are no
      other documents or instruments evidencing any indebtedness, obligations or
      liabilities of the Obligor to the Subordinate Creditors.

D.    REMEDIES. Upon the occurrence and during the continuance of any Event of
      Default, or upon the breach of any representation, covenant or agreement
      in this Agreement by the Obligor or either Subordinate Creditor, or in the
      event of the termination of this Agreement (other than as a result of
      payment in full of the Subordinate Lender's Subordinated Note as permitted
      by the Credit Agreement or with the consent of the Senior Creditors), all
      of the Senior Liabilities shall, in accordance with the terms of the
      Credit Agreement, become immediately due and payable at the option of the
      Agent and the Agent may immediately, without further notice, resort to all
      of its rights and remedies herein, in any document (including the Credit
      Agreement and any of the Senior Loan Documents) by and between the Agent
      or any Lender and the Obligor, or in any in any instrument evidencing any
      obligation under any such document, at law or in equity. The Agent agrees
      that it shall proceed, to the extent commercially reasonable, against all
      the assets of the Obligor before liquidating the Subordinated Note. If the
      Subordinate Creditors breach this Agreement (including, without
      limitation, by taking any Prohibited Action or otherwise violating
      paragraph B.9 hereof), the Senior Creditors shall be entitled, by virtue
      of this Agreement, to specific performance of this Agreement and/or
      injunctive relief, including an order restraining and enjoining the
      Subordinate Creditors from taking the actions constituting such breach,
      all without the necessity of joining any Senior Creditor, the Subordinate
      Lender or the Subordinate Lender's Agent as a party to any action, suit or
      other proceeding brought to enforce the provisions of this Agreement.

E.    MISCELLANEOUS.

      1.    REMEDIES CUMULATIVE; NO WAIVER. The rights, powers and remedies of
            the Senior Creditors provided in this Agreement and any of the
            Senior Loan Documents are cumulative and not exclusive of any right,
            power or remedy provided by law or equity. No failure or delay on
            the part of any Senior Creditor in the exercise of any right, power
            or remedy shall operate as a waiver thereof, nor shall any single or
            partial exercise preclude any other or further exercise thereof, or
            the exercise of any other right, power or remedy.

      2.    NOTICES. Notices and communications under this Agreement shall be in
            writing and shall be given by (i) hand-delivery, (ii) first class
            mail (postage prepaid), or (iii) reliable overnight commercial
            courier (charges prepaid) to the addresses listed in this Agreement.
            Notice by overnight courier shall be deemed to have been given and
            received on the date scheduled for delivery. Notice by mail shall be
            deemed to have been given and received three (3) calendar days after
            the date first deposited in the United States Mail. Notice by
            hand-delivery shall be deemed to have been given and received upon
            delivery. A party may change its address by giving written notice to
            the other party as specified herein.

      3.    COSTS AND EXPENSES. Whether or not the transactions contemplated by
            this Agreement or the Senior Loan Documents are fully consummated,
            the Obligor shall promptly pay (or reimburse, as the Agent may
            elect) all costs and expenses which the Agent has incurred or may
            hereafter incur in connection with the negotiation, preparation,
            reproduction, interpretation, perfection, protection of collateral,
            administration and enforcement of this Agreement and the other
            Senior Loan Documents, the collection of all amounts due under this
            Agreement and the other Senior Loan Documents, and all amendments,
            modifications, consents or waivers, if any, to the Senior Loan
            Documents. The Obligor's reimbursement obligations under this
            Paragraph shall survive any termination of this Agreement or any
            other Loan Document and are deemed part of the Senior Liabilities.

      4.    GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
            AND GOVERNED BY THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW
            YORK WITHOUT GIVING EFFECT TO ANY PROVISION THEREOF THAT WOULD

                                       10
<PAGE>

            PERMIT OR REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
            JURISDICTION.

      5.    INTEGRATION; AMENDMENT. This Agreement constitutes the sole
            agreement of the parties with respect to the subject matter hereof
            and supersedes all oral negotiations and prior writings with respect
            to the subject matter hereof. No amendment of this Agreement, and no
            waiver of any one or more of the provisions hereof shall be
            effective unless set forth in writing and signed by the parties
            hereto.

      6.    SUCCESSORS AND ASSIGNS. This Agreement (i) shall be binding upon the
            Subordinate Creditors, the Obligor executing this Agreement and the
            Senior Creditors and, where applicable, their respective heirs,
            executors, administrators, successors and assigns, and (ii) shall
            inure to the benefit of the Subordinate Creditors, the Obligor, and
            the Senior Creditors and, where applicable, their respective heirs,
            executors, administrators, successors and permitted assigns;
            provided, however, that the Subordinate Creditors and the Obligor
            may not assign their rights or obligations hereunder or any interest
            herein without the prior written consent of the Agent, and any such
            assignment or attempted assignment by the Subordinate Creditors
            and/or the Obligor shall be void and of no effect with respect to
            the Senior Creditors. The Lenders may from time to time sell or
            assign, in whole or in part, or grant participations in the Loans
            and/or the Credit Agreement and/or the obligations evidenced
            thereby. The Subordinate Creditors authorize the Senior Creditors to
            provide information concerning the Subordinate Creditors and the
            Obligor to any prospective purchaser, assignee or participant in the
            Loans.

      7.    SEVERABILITY AND CONSISTENCY. The illegality, unenforceability or
            inconsistency of any provision of this Agreement or any instrument
            or agreement required hereunder shall not in any way affect or
            impair the legality, enforceability or consistency of the remaining
            provisions of this Agreement or any instrument or agreement required
            hereunder. The Senior Loan Documents and this Agreement are intended
            to be consistent. However, in the event of any inconsistencies
            between and/or among this Agreement and any of the Senior Loan
            Documents, such inconsistency shall not affect the validity or
            enforceability of this Agreement or any of the Senior Loan
            Documents. In the event of any inconsistency or ambiguity in this
            Agreement or any of the Senior Loan Documents, this Agreement and
            the Senior Loan Documents shall not be construed against any one
            party but shall be interpreted consistent with the Agent's policies
            and procedures.

      8.    CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The Subordinate
            Creditors irrevocably appoint Ross Rapaport, c/o Pepe & Hazard, 30
            Jeliff Lane, Southport, CT 06490-1436 as their attorney upon whom
            may be served any notice, process or pleading in any action or
            proceeding against them arising out of or in connection with this
            Agreement. If service of process cannot be delivered to the
            Subordinate Creditors as specified by statute, the Subordinate
            Creditors agree that, with court approval, each may be served by
            regular or certified mail at the address set forth herein. The
            Subordinate Creditors hereby consent and agree that (i) any action
            or proceeding against it may be commenced and maintained in any
            state or federal court within the State of Connecticut by service of
            process on Ross Rapaport and (ii) such courts shall have
            jurisdiction with respect to the subject matter hereof and the
            persons of the Subordinate Creditors and the Subordinated
            Liabilities. The Subordinate Creditors agree that any action brought
            by the Subordinate Creditors on account of this Agreement shall be
            commenced and maintained only in a federal court in the State of
            Connecticut.

      9.    PREJUDGMENT REMEDIES. THE SUBORDINATE LENDER AND THE SUBORDINATE
            LENDER'S AGENT HEREBY REPRESENT, COVENANT AND AGREE THAT THE
            PROCEEDS OF THE SENIOR LIABILITIES AND SUBORDINATED LIABILITIES
            SHALL BE USED FOR GENERAL COMMERCIAL PURPOSES AND THAT THE
            TRANSACTIONS CONTEMPLATED HEREBY ARE PART OF A "COMMERCIAL
            TRANSACTION" AS

                                       11
<PAGE>

            DEFINED BY THE STATUTES OF THE STATE OF CONNECTICUT. SUBORDINATE
            LENDER AND SUBORDINATE LENDER'S AGENT HEREBY WAIVE ALL RIGHTS TO
            NOTICE AND PRIOR COURT HEARING OR COURT ORDER UNDER CONNECTICUT
            GENERAL STATUTES SECTIONS 52-278A ET. SEQ. AS AMENDED OR UNDER ANY
            OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT
            REMEDIES THE SENIOR CREDITORS MAY EMPLOY TO ENFORCE THEIR RIGHTS AND
            REMEDIES HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS. MORE
            SPECIFICALLY, THE SUBORDINATE LENDER AND THE SUBORDINATE LENDER'S
            AGENT ACKNOWLEDGE THAT THE AGENT'S ATTORNEY AND/OR ANY LENDER'S
            ATTORNEY MAY, PURSUANT TO CONNECTICUT GENERAL STATUES, SECTION
            52-278F, ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A
            COURT ORDER. THE SUBORDINATE LENDER AND THE SUBORDINATE LENDER'S
            AGENT ACKNOWLEDGE AND RESERVE THEIR RESPECTIVE RIGHTS TO NOTICE AND
            A HEARING SUBSEQUENT TO THE ISSUANCE OF A WRIT FOR PREJUDGMENT
            REMEDY AS AFORESAID AND THE AGENT ACKNOWLEDGES THE RIGHT OF THE
            SUBORDINATE LENDER AND THE SUBORDINATE LENDER'S AGENT TO SAID
            HEARING SUBSEQUENT TO THE ISSUANCE OF SAID WRIT. THE SUBORDINATE
            LENDER AND THE SUBORDINATE LENDER'S AGENT FURTHER WAIVE THEIR RIGHTS
            TO REQUEST THAT THE SENIOR CREDITORS POST A BOND, WITH OR WITHOUT
            SURETY, TO PROTECT THE SUBORDINATE LENDER AND THE SUBORDINATE
            LENDER'S AGENT AGAINST DAMAGES THAT MAY BE CAUSED BY ANY PREJUDGMENT
            REMEDY SOUGHT OR OBTAINED BY THE SENIOR CREDITORS.

      10.   PROVISIONS SOLELY FOR THE BENEFIT OF THE SENIOR CREDITORS. The
            provisions of this Agreement are solely to define the relative
            rights and obligations of the Senior Creditors and the Subordinate
            Creditors, and no other person or entity, including, without
            limitation, the Obligor, shall have any rights hereunder or as a
            result of the provisions hereof.

      11.   JUDICIAL PROCEEDINGS; WAIVERS. THE SUBORDINATE CREDITORS AND THE
            AGENT ACKNOWLEDGE AND AGREE THAT (i) ANY SUIT, ACTION OR PROCEEDING,
            WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR INSTITUTED BY THE AGENT,
            THE SUBORDINATE CREDITORS OR ANY SUCCESSOR OR ASSIGN OF THE AGENT OR
            THE SUBORDINATE CREDITORS, ON OR WITH RESPECT TO THIS AGREEMENT OR
            ANY OTHER LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT
            HERETO, OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY
            AND EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY; (ii) EACH WAIVES
            ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION
            OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
            DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
            DAMAGES; AND (iii) THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF
            THIS AGREEMENT AND THE LENDERS WOULD NOT EXTEND CREDIT IF THE
            WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.

      12.   COUNTERPARTS. This Agreement may be executed and delivered in any
            number of counterparts each of which shall constitute an original,
            but all of which taken together shall constitute but one and the
            same agreement. Delivery of an executed signature page to this
            Agreement by facsimile transmission shall be effective as delivery
            of a manually signed counterpart of this Agreement.

      [remainder of page intentionally blank; next page is signature page]

                                       12
<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the day and year first above written.

WITNESSED BY:

_______________________________                   ______________________________
_______________________________                   Subordinate Lender
                                                  Address:

STATE OF CONNECTICUT    )
                        ) ss: ________                        ____________, 2005
COUNTY OF ____________  )

Personally appeared ___________, signer and sealer of the foregoing instrument
and acknowledged the same to be his free act and deed, before me.

                                          ______________________________________
                                          Commissioner of the Superior Court
                                          Notary Public
                                          My Commission expires:________________

<PAGE>

/s/ Daisy Ane                                   By: /s/ Ross S. Rapaport
--------------------                                --------------------

/s/ Linda Rapaport                              Ross S. Rapaport, not
--------------------                            individually, but as Trustee of
                                                the Peter Baker Life Insurance
                                                Trust u/t/a dated July 7, 1992,
                                                the John Baker Insurance Trust
                                                u/t/a dated July 7, 1992 and the
                                                Joan Baker and Henry Baker
                                                Irrevocable Trust u/t/a dated
                                                December 16, 1991, as agent for
                                                the Subordinate Lender

                                                Address:  1050 Buckingham Street
                                                          Watertown, CT 06795

STATE OF FL            )
                       ) ss: Key Largo                         March 31, 2005
COUNTY OF  Monroe      )

Personally appeared Ross S. Rapaport, not individually, but as Trustee of the
Peter Baker Life Insurance Trust u/t/a dated July 7, 1992, the John Baker
Insurance Trust u/t/a dated July 7, 1992 and the Joan Baker and Henry Baker
Irrevocable Trust u/t/a dated December 16, 1991, as agent for the Subordinate
Lender, signer and sealer of the foregoing instrument and acknowledged the same
to be his free act and deed as Trustee and agent for the Subordinate Lender,
before me.

                                      /s/ Daisy Ane
                                      -------------------------------------
                                      Commissioner of the Superior Court
                                      Notary Public
                                      My Commission expires: September 22, 2008

<PAGE>

                                                BANK OF AMERICA, N.A.,
                                                as a Lender

/s/ David Jurasek                               By: /s/ Matthew S. Latham
-----------------                                   ---------------------
                                                    Name: Matthew S. Latham
                                                    Title: Senior Vice President
/s/ Michelle Walters Fournier                       Address: 777 Main Street
-----------------------------                       CT2-102-24-02
                                                    Hartford, CT 06115

STATE OF CONNECTICUT   )
                       ) ss: Hartford                             April 5, 2005
COUNTY OF HARTFORD     )

Personally appeared Matthew S. Latham, the Senior Vice President of Bank of
America, N.A., signer and sealer of the foregoing instrument and acknowledged
the same to be his free act and deed as such officer and the free act and deed
of Bank of America, N.A., before me.

                                      /s/ Michelle Walters Fournier
                                      -----------------------------------
                                      Commissioner of the Superior Court
                                      Notary Public
                                      My Commission expires: September 30, 2005

<PAGE>

                                                BANK OF AMERICA, N.A.,
                                                as Administrative Agent

/s/ David Jurasek                               By: /s/ Matthew S. Latham
-----------------                                   ----------------------------
                                                    Name: Matthew S. Latham
                                                    Title: Senior Vice President
/s/ Michelle Walters Fournier                       Address: 777 Main Street
-----------------------------                       CT2-102-24-02
                                                    Hartford, CT 06115

STATE OF CONNECTICUT  )
                      ) ss: Hartford                              April 5, 2005
COUNTY OF HARTFORD    )

Personally appeared Matthew S. Latham, the Senior Vice President of Bank of
America, N.A., signer and sealer of the foregoing instrument and acknowledged
the same to be his free act and deed as such officer and the free act and deed
of Bank of America, N.A. before me.

                                      /s/ Michelle Walters Fournier
                                      ------------------------------------
                                      Commissioner of the Superior Court
                                      Notary Public
                                      My Commission expires: September 30, 2005

<PAGE>

                                              WEBSTER BANK, NATIONAL
                                              ASSOCIATION

/s/ Maria Hrvatin                             By: /s/ Richard A. O'Brien
-----------------                                 ----------------------
                                                  Name:  Richard A. O'Brien
                                                  Title:  Senior Vice President
/s/ Michelle Walters Fournier                     Address:   145 Bank Street
-----------------------------                                Waterbury, CT 06702

STATE OF CONNECTICUT   )
                       ) ss: Waterbury                            April 5, 2005
COUNTY OF NEW HAVEN    )

Personally appeared Richard A. O'Brien, the Senior Vice President of Webster
Bank, National Association, signer and sealer of the foregoing instrument and
acknowledged the same to be his free act and deed as such officer and the free
act and deed of Webster Bank, National Association, before me.

                                      /s/ Michelle Walters Fournier
                                      ------------------------------------------
                                      Notary Public
                                      My Commission expires: September 30, 2005

<PAGE>

The Obligor signing below hereby acknowledges receipt of a copy of the foregoing
Agreement, waives notice of acceptance thereof by the Senior Creditors, and
agrees to be bound by the terms and provisions thereof. The Obligor signing
below further agrees to make no payments or distributions, or grant any security
interest, contrary to the terms and provisions of this Agreement and to do every
other act and thing necessary or appropriate to carry out such terms and
provisions. Upon the occurrence and during the continuance of any Event of
Default, or upon the breach of any representation, covenant or agreement in this
Agreement by the Obligor or either Subordinate Creditor, or in the event of the
termination of this Agreement (other than as a result of payment in full of the
Subordinate Lender's Subordinated Note as permitted by the Credit Agreement or
with the consent of the Senior Creditors), all of the Senior Liabilities shall,
in accordance with the terms of the Credit Agreement, become immediately due and
payable at the option of the Senior Creditors and the Senior Creditors may
immediately resort to all of its rights and remedies herein, in any document
(including the Credit Agreement and any of the Senior Loan Documents) by and
between the Senior Creditors and the Obligor, or in any in any instrument
evidencing any obligation under any such document, at law or in equity.

      [remainder of page intentionally blank; next page is signature page]

<PAGE>

Dated: As of the 5th day of April, 2005

                                             VERMONT PURE HOLDINGS, LTD.

                                             By: /s/ Timothy G. Fallon
                                                 ---------------------------
                                                 Name: Timothy G. Fallon
                                                 Title: Chief Executive Officer
                                                 Address: 45 Krupp Drive
                                                          Williston, VT 05495

STATE OF CONNECTICUT  )
                      ) ss. Hartford
COUNTY OF HARTFORD)

      On this the 5th day of April, 2005, before me, the undersigned officer,
personally appeared Timothy G. Fallon , who acknowledged himself to be the Chief
Executive Officer of Vermont Pure Holdings, Ltd., and that he as such Chief
Executive Officer, being authorized so to do, executed the foregoing instrument
for the purposes therein contained, by signing the name of said Vermont Pure
Holdings, Ltd. by himself as such Chief Executive Officer, and as his and its
free act and deed.

      In witness whereof I hereunto set my hand.

                                      /s/ Michelle Walters Fournier
                                      -----------------------------------------
                                      Commissioner of the Superior Court
                                      Notary Public
                                      My Commission Expires: September 30, 2005

<PAGE>

                                                CRYSTAL ROCK LLC

                                                By: /s/ Timothy G. Fallon
                                                    ---------------------------
                                                    Name: Timothy G. Fallon
                                                    Title: Manager
                                                    Address: 45 Krupp Drive
                                                             Williston, VT 05495

STATE OF CONNECTICUT   )
                       ) ss. Hartford
COUNTY OF HARTFORD)

      On this the 5th day of April, 2005, before me, the undersigned officer,
personally appeared Timothy G. Fallon , who acknowledged himself to be the
Manager of Crystal Rock LLC, and that he as such Manager, being authorized so to
do, executed the foregoing instrument for the purposes therein contained, by
signing the name of said Crystal Rock LLC by himself as such Manager; and as his
and its free act and deed.

      In witness whereof I hereunto set my hand.

                                      /s/ Michelle Walters Fournier
                                      -----------------------------------------
                                      Commissioner of the Superior Court
                                      Notary Public
                                      My Commission Expires: September 30, 2005

<PAGE>

                                   SCHEDULE A

                               SENIOR COLLATERAL

The following properties, assets and rights of Holdings and Crystal Rock,
wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof: all personal and fixture property of every kind
and nature including all goods (including inventory, equipment and any
accessions thereto), instruments (including promissory notes), documents
(including, if applicable, electronic documents), accounts (including
health-care-insurance receivables), chattel paper (whether tangible or
electronic), deposit accounts, letter-of-credit rights (whether or not the
letter of credit is evidenced by a writing), commercial tort claims, securities
and all other investment property, supporting obligations, any other contract
rights or rights to the payment of money, insurance claims and proceeds, and all
general intangibles (including all payment intangibles).

All terms defined in the Uniform Commercial Code of the State of New York and
used in this Schedule A shall have the same definitions herein as specified
therein. However, if a term is defined in Article 9 of the Uniform Commercial
Code of such State differently than in another Article of the Uniform Commercial
Code of such State, the term has the meaning specified in Article 9. The term
"electronic document" applies in the event that the 2003 revisions to Article 7,
with amendments to Article 9, of the Uniform Commercial Code of the State of New
York, in substantially the form approved by the American Law Institute and the
National Conference of Commissioners on Uniform State Laws, are now or hereafter
adopted and become effective in the State of New York or in any other relevant
jurisdiction.

<PAGE>

                                   SCHEDULE B

                        SUBORDINATE LENDERS' COLLATERAL

The following property, whether now existing or subsequently acquired, and all
additions, substitutions, accessions, replacements, proceeds, and products
thereof or thereto: all tangible and intangible assets and properties of
Holdings, including without limitation all furniture, fixtures, equipment, raw
materials, inventory, other goods, accounts, contract rights, rights to the
payment of money, insurance refund claims and all other insurance claims and
proceeds, tort claims, chattel paper, documents, instruments, securities and
other investment property, deposit accounts, rights to proceeds of letters of
credit and all general intangibles including, without limitation, all, tax
refund claims, license fees, patents, patent applications, trademarks, trademark
applications, trade names, copyrights, copyright applications, rights to sue and
recover for past infringement of patents, trademarks and copyrights, computer
programs, computer software, engineering drawings, service marks, customer
lists, goodwill, and all licenses, permits, agreements of any kind or nature
pursuant to which Holdings possesses, uses or has authority to possess or use
property (whether tangible or intangible) of others or others possess, use or
have authority to possess or use property (whether tangible or intangible) of
Holdings, and all recorded data of any kind or nature, regardless of the medium
of recording including, without limitation, all software, writings, plans,
specifications and schematics (each of which terms has the meaning ascribed to
it in the Uniform Commercial Code, as in effect in the State of Connecticut);
provided that notwithstanding the foregoing, such grant of security interest
shall not extend to any cash and cash equivalents at any time owned by Holdings.<PAGE>

EXHIBIT 10.4

      THIS INSTRUMENT IS SUBJECT TO THE SUBORDINATION AND PLEDGE AGREEMENT,
DATED AS OF APRIL 5, 2005, AMONG THE PAYEE HEREOF, THE AGENT FOR THE PAYEE AND
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT (TOGETHER WITH ITS SUCCESSORS AND
ASSIGNS) WHICH, AMONG OTHER THINGS, SUBORDINATES THE MAKER'S OBLIGATIONS TO THE
PAYEE TO THE MAKER'S OBLIGATIONS TO THE HOLDERS OF "SENIOR LIABILITIES", AS
DEFINED IN SUCH AGREEMENT AND SUBORDINATES THE LIENS OF THE AGENT FOR THE PAYEE
TO THE LIENS OF THE HOLDERS OF SUCH SENIOR LIABILITIES.

            SECOND AMENDED AND RESTATED SUBORDINATED PROMISSORY NOTE

US$_________________                                       Dated:  April 5, 2005

      This Note is one of four second amended and restated promissory notes (the
"BAKER NOTES") executed and delivered as of the date hereof by Vermont Pure
Holdings, Ltd. (the "MAKER"), a Delaware corporation, in favor of each of Henry
E. Baker, Joan A. Baker, John B. Baker and Peter K. Baker, respectively
(collectively, the "STOCKHOLDERS"). This Second Amended and Restated
Subordinated Promissory Note (the "NOTE") amends and restates in its entirety
the Amended and Restated Subordinated Promissory Note dated March 5, 2003 in the
original principal amount of ____________________ (the "AMENDED AND RESTATED
NOTE"), which Amended and Restated Note is hereby superceded and replaced in its
entirety.

      PAYMENT TERMS. The Maker hereby promises to pay to the order of
_______________ (including any subsequent holder of this Note, the "PAYEE"), the
principal sum of ____________________, with interest on the unpaid principal sum
from time to time outstanding hereunder at an annual rate equal to the lesser of
(i) with respect to overdue amounts (except to the extent not paid when due
because payment is then prohibited pursuant to the terms of the Subordination
Agreement, as defined below), from and after the time due, seventeen per cent
(17%), compounded quarterly on each February 20, May 20, August 20 and November
20, and with respect to all other amounts, twelve per cent (12%) simple
interest; and (ii) the maximum lawful rate of interest; in each case to be
applied on the basis of the actual number of days elapsed and a 365-day year.

      Subject to acceleration as provided herein, payments in respect of this
Note will be made on the following schedule:

            (i) Interest will be payable in arrears for the three-month periods
      ended on each January 31, April 30, July 31, and October 31, in each case
      not more than 20 days after the end of such three-month period (i.e.,
      February 20, May 20, August 20, and November 20). In addition to any other
      applicable rights or remedies of the Payee, any interest not paid when due
      will thereafter bear interest at the applicable rate stated above.

<PAGE>

            (ii) There are no scheduled principal payments required by this
      Note.

            (iii) The entire amount of indebtedness represented by this Note
      will be due and payable not later than October 5, 2012.

      Any amount owing hereunder that is not paid because prohibited pursuant to
the terms of the Subordination Agreement will be paid as soon as to do so is not
so prohibited.

      ACCELERATION. At the Payee's option, the entire amount of indebtedness
represented by this Note will become due and payable immediately upon written
notice of acceleration given by the Payee to the Maker following any: (i)
liquidation or dissolution of the Maker, or other termination or winding-up of
its existence or business; (ii) sale of all or substantially all of the assets
or capital stock of the Maker; or (iii) acceleration of the due date of the
Senior Liabilities, as defined in the Subordination Agreement, or any other
indebtedness of the Maker for borrowed money.

      In addition, the entire amount of indebtedness represented by this Note
will become due and payable, automatically and without any notice or other
action, immediately upon any: (i) appointment of a receiver for the Maker or its
assets; (ii) assignment by the Maker for the benefit of its creditors; or (iii)
institution by or against the Maker of any proceedings under bankruptcy,
insolvency, or similar laws, which in the case of any such institution against
the Maker, are not dismissed within 90 days.

      For purposes of the preceding two paragraphs, any event of the types
described therein involving one or more of the Maker's subsidiaries will be
deemed to have occurred with respect to the Maker if such subsidiary or
subsidiaries represent more than 50% (by either book value or fair market value)
of the consolidated assets of the Maker and all of its consolidated
subsidiaries.

      PREPAYMENT. The Maker will have the right to prepay the unpaid principal
amount of this Note in full at any time, or in part from time to time, on 30
days' prior written notice to the Payee and the other holders of the Baker
Notes; provided, that by written notice executed by all holders of the Baker
Notes given to the Maker within 20 days following any such notice, such holders
may require the Maker to allocate the aggregate amount proposed to be repaid to
all of them among such holders in such proportions as they may specify.

      Any prepayment of this Note will include all accrued and unpaid interest
on the principal amount prepaid.

      MAKER'S WAIVER OF PRESENTMENT, ETC. The Maker hereby waives presentment,
notice, protest, and all other demands and notices.

      NO WAIVER BY PAYEE. The failure of the Payee to exercise any of its
rights, remedies, powers, or privileges hereunder in any instance will not
constitute a waiver thereof in respect of that or any other instance.

                                       2
<PAGE>

      ENFORCEMENT COSTS. The Maker will pay on demand all costs of collection,
including all court costs and attorneys' reasonable fees, paid or incurred by
the Payee in enforcing this Note and its rights hereunder.

      PRO RATA PAYMENTS. Except to the extent provided above under the caption
"Prepayment" and except to the extent otherwise agreed in writing by all holders
of the Baker Notes, any payments by the Maker in respect of the Baker Notes will
be made pro rata in proportion to the respective amounts then owing by the Maker
in respect of each such note.

      SUBORDINATION. This Note is subject to a separate Subordination and Pledge
Agreement, dated as of the date hereof, by and among the Payee, Ross S.
Rapaport, not individually but as Trustee of the Peter Baker Life Insurance
Trust u/t/a dated July 7, 1992, the John Baker Insurance Trust u/t/a dated July
7, 1992 and the Joan Baker and Henry Baker Irrevocable Trust u/t/a dated
December 16, 1991, as agent for the Payee and certain other holders of
indebtedness of the Maker (in such capacity, the "Agent") and Bank of America,
N.A., as administrative agent (together with its successors and assigns, the
"Administrative Agent"), which, among other things, (a) subordinates the Maker's
obligations to the Payee to the Maker's obligations to the holders of Senior
Liabilities as defined in such agreement, (b) subordinates the liens of the
Agent on the assets of the Maker to the liens of the Administrative Agent on
such assets and (c) restricts the amount and payment of principal and interest
hereunder and the rights of the holder of the Note to enforce any provision
hereof or to access any collateral security for this Note. Neither this Note nor
any rights hereunder may be transferred (and any attempt to do so will be void)
unless the proposed transferee first becomes a party to the Subordination
Agreement.

      SECURITY. This Note is secured pursuant to the terms of the Amended and
Restated Security Agreement, dated as of the date hereof by and among the Maker,
the Payee, the original holders of the other Baker Notes, and the Agent.

      GOVERNING LAW. This Note will be governed by and interpreted and construed
in accordance with the internal laws of the State of Connecticut (without
reference to principles of conflicts or choice of law).

             [The remainder of this page intentionally left blank.]

                                       3
<PAGE>

      This Note is executed and delivered on and as of the date first above
written.

                                         VERMONT PURE HOLDINGS, LTD.

                                         By Timothy G. Fallon
                                            ------------------------------
                                            Name: Timothy G. Fallon
                                            Title: Chief Executive Officer

                                       4

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