Execution copy

THIS MEMORANDUM OF PARTIAL RELEASE is made the 31st day of March, 2008.

BETWEEN

Goldman Sachs International, an unlimited liability company organised under the
laws of England and Wales whose registered office is at Peterborough Court, 133
Fleet Street, London EC4A, 2BB, England (the “Collateral Agent”); and

Gain Dynasty Investments Limited, a company duly incorporated in the British
Virgin Islands whose registered office is at Sea Meadow House, Blackburne
Highway, (P.O. Box 116), Road Town, Tortola, British Virgin Islands (“Gain
Dynasty”).

WHEREAS :-

(1) By a Share Charge dated 29 January 2008 (the “Share Charge”) executed by
Gain Dynasty and Mr. Xu Hongbin in favour of the Collateral Agent, 10,000
ordinary shares of HK$1.00 each of Olympic Forward Trading Company Limited
(滔達貿易有限公司) (the “Company”), representing its entire issued share capital, were
charged to the Collateral Agent as security for the Liabilities (as defined in
the Share Charge).

   

(2) All those security documents listed in Schedule 1 hereto (the “Security
Documents”) were executed by relevant parties as security under the Share
Charge.

   

(3)
Gain Dynasty has requested the Collateral Agent to, and the Collateral Agent has
agreed to, discharge 3,500 ordinary shares of the Company registered in the name
of Gain Dynasty, representing 35% of the entire issued share capital of the
Company (the “Released Shares”) from the Share Charge.

NOW THIS DEED WITNESSETH that the Collateral Agent (for and on behalf of the
Secured Parties (as defined in the Share Charge)) hereby :

 
(i)
DISCHARGES the Released Shares; and/or (as the circumstances require);

 
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(ii)
ASSIGNS as chargee unto Gain Dynasty the Released Shares TO HOLD the same unto
Gain Dynasty absolutely; and/or (as the circumstances require); and

 
(iii)
RELEASES AND ASSIGNS as chargee unto Gain Dynasty all rights and benefits of and
relating to the Released Shares charged or assigned unto the Collateral Agent
under the Share Charge TO HOLD the same unto Gain Dynasty absolutely

freed and absolutely discharged of and from the Share Charge and from the charge
or mortgage created thereunder PROVIDED that and (for avoidance of doubt) it is
hereby declared that the Share Charge shall remain in full force and effect with
regard to the remaining shares of the Company which remain subject to the Share
Charge AND the Collateral Agent hereby confirms to Gain Dynasty that the
Collateral Agent has not done, omitted or knowingly suffered or been party or
privy to any act, deed, matter or thing whereby or by means whereof the shares
charged under the Share Charge or any part thereof are or is or may be
impeached, charged, affected or incumbered in title, estate or otherwise AND
PROVIDED further that this Memorandum of Partial Release shall not in any way
affect the obligations and liabilities of (a) China Water and Drinks, Inc.
(“China Water”) under the Securities Purchase Agreement dated 24 January 2008
entered into between China Water and the Buyers named therein (the “Securities
Purchase Agreement”), (b) China Water under the Notes (as defined in the
Securities Purchase Agreement) and (c) Gain Dynasty and Mr. Xu Hongbin under the
Share Charge.

AND Gain Dynasty hereby undertakes to procure the relevant parties to sign the
blank instrument of transfer, blank bought and sold notes and undated board
minutes of the Company in the form and substance as set out in Schedules 2, 3
and 4 respectively and the new share certificate 6 in the name of Gain Dynasty
in respect of 6,499 ordinary shares of the Company and deliver the same to the
Collateral Agent within 7 days from the date of this Memorandum of Partial
Release.
 
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Schedule 1

The Security Documents

(1) Blank Instrument of Transfer of 9,999 shares of the Company duly signed by
Gain Dynasty as transferor without the identity and signature of the transferee

   

(2)
Blank Bought and Sold Notes of 9,999 shares of the Company duly signed by Gain
Dynasty as transferor without the identity and signature of the transferee

(3)
Undated Board Minutes of the Company approving, inter alia, the transfer of
shares, changes in directors, changes in secretary duly signed by the directors
of the Company

(4)
Share Certificate No. 4 in the name of Gain Dynasty in respect of 9,999 shares
of the Company

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Schedule 2

INSTRUMENT OF TRANSFER
 
NAME OF COMPANY
Olympic Forward Trading Company Limited
(滔達貿易有限公司)
 
(the “Company”)

 
We, the Transferor
,
Gain Dynasty Investments Limited
of
:
Sea Meadow House, Blackburne Highway, (P.O. Box 116), Road Town, Tortola,
British Virgin Islands

 
in consideration of
:
 

 
paid to us by the Transferee
:
 
Occupation
:
 
of
:
             

(hereinafter called “the Transferee”) do hereby transfer to the Transferee the
- 6,499 -

shares standing in our name in the Register of the Company to hold unto the
Transferee, its/his/her executors, administrators or assigns, subject to the
several conditions upon which we hold the same at the time of execution hereof,
and I/we the Transferee do hereby agree to take the shares subject to the same
conditions.
 
Dated this
 
day of
   

Witness to the signature of Transferor

Name:
Chung, Kai Shun  
[ex10-3sig1.jpg]
Address:
8/F., Skyline Plaza Hotel,       644 Tong Fu Rd East, Guangzhou            
For and on behalf of
/s/ Chung, Kai Shun  
Gain Dynasty Investments Limited
Signature of Witness
 
Signature of Transferor

Witness to the signature of Transferee

Name:
     
Address:
                     
Signature of Transferee
Signature of Witness
   

 
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Schedule 3

BOUGHT AND SOLD NOTES

NAME OF COMPANY
Olympic Forward Trading Company Limited
(滔達貿易有限公司)
 
(the “Company”)

Transferor
:
Gain Dynasty Investments Limited
of
:
Sea Meadow House, Blackburne Highway, (P.O. Box 116), Road Town, Tortola,
British Virgin Islands

Transferee
:
 
of
:
             

Number of Shares Transferred
:
- 6,499 -

Par Value per Share
:
HK$1.00

Total Consideration
:
 

Dated this
 
day of
   

[ex10-3sig2.jpg]
     
For and on behalf of
Gain Dynasty Investments Limited
     
Signature of Transferor
   
Signature of Transferee
       

 
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Schedule 4

Olympic Forward Trading Company Limited (滔達貿易有限公司)
(the “Company”)

BOARD MINUTES OF THE BOARD OF DIRECTORS of the Company made pursuant to Article
of the Articles of Association of the Company

PRESENT  Ms. Leung Tung Ha       Mr. Ng Ho Kwan

CHAIRMAN

Ms. Leung Tung Ha was elected Chairman of the meeting.

QUORUM

It was noted that a quorum was present throughout the meeting.
 
TRANSFER OF SHARES

It was resolved that the transfer of the following shares be approved, subject
to the transfer documents being duly stamped and presented for registration in
accordance with the provisions of the Articles of Association of the Company :-

Transferors
Transferee
No. of Shares
Gain Dynasty Investments Limited
 
Xu Hongbin
 
6,499
 
 
1

 
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It was further resolved that share certificate(s) be issued under the common
seal of the Company and whose name(s) shall be entered on the Company's Register
of Members and Transfers accordingly.

CHANGES IN DIRECTORS

IT IS RESOLVED that the following be appointed additional Directors of the
Company with immediate effect:-

 
IT IS RESOLVED that the resignation of the following persons as Directors of the
Company be accepted with immediate effect:-
 

  Leung Tung Ha       Ng Ho Kwan

 
CHANGES IN SECRETARY

IT IS RESOLVED that the following be appointed Secretary of the Company with
immediate effect:-
 

IT IS RESOLVED that the resignation of the following person as Secretary of the
Company be accepted with immediate effect:-

Kingspeed Consultants Limited 
 
 
CHANGE OF REGISTERED OFFICE

It was resolved that with immediate effect the registered office of the Company
be changed to

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BANK ACCOUNT

It was resolved that all existing bank mandates be cancelled with immediate
effect.
 

CONCLUSION

There being no further business, the Chairman declared the meeting closed.

       

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Chairman

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IN WITNESS whereof this Memorandum of Partial Release has been duly executed the
day and year first above written.

EXECUTED as a deed ) /s/ Buck Ratchford                            By Name : )
Buck Ratchford For and on behalf of ) Managing Director Goldman Sachs
International )  

 

Witnessed
 

/s/ Thian Chew                        
Name: Thian Chew
Title: Executive Director

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