THIS SEVERANCE AGREEMENT ("Agreement") is dated as of December 5, 2005 and is by and between
Vermont Pure Holdings, Ltd., a Delaware corporation having an office located at 1050 Buckingham Street,
Watertown, Connecticut 06795 ("Company"), and Timothy G. Fallon, an individual, with an address at 411
Sarles Street, Mt. Kisco, New York 10549 ("Fallon").
Effective November 1, 2005, Fallon voluntarily resigned from the Company after serving for many years as its
Chief Executive Officer, among other positions. In recognition of his significant contributions to the Company, and
in return for his promises and agreements in this Agreement, the Company desires to compensate Fallon as set
forth below. In return for such compensation, Fallon desires to carry out such promises and agreements.
ACCORDINGLY, in consideration of the foregoing and of the mutual agreements and undertakings set forth
herein, the Company and Fallon agree as follows:
SECTION 1. SEVERANCE.
1.1. Provided that Fallon is not in breach of this Agreement, the Company shall pay to Fallon the following
severance payments: (i) a payment of $50,000.00 on May 1, 2006, (ii) seventeen (17) monthly payments of
$8,333.33 commencing June 1, 2006 and ending October 1, 2007, and (ii) a final payment of $8,333.39 on
November 1, 2007, for a total of $200,000.00.
SECTION 2. CONSULTING AND LITIGATION SERVICES.
2.1. "Consulting Services" shall mean such advice, consultation and other assistance and services respecting the
general business of the Company as the Company may reasonably request from Fallon from time to time.
2.2.1. "Litigation Services" shall mean such assistance with respect to the prosecution and defense of the litigation
known as Vermont Pure Holdings, Ltd.
v. Nestle Waters North America, Inc., United States District Court (D. Mass.), Civil Action No. 03-11465-
DPW (the "Nestle Litigation"), as further provided in
Section 4 of this Agreement, as the Company and/or its counsel may