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Unassociated Document

    AMENDMENT
      NO. 1 TO MAKE GOOD ESCROW AGREEMENT

     

    This
      Amendment No. 1 to Make Good Escrow Agreement (this “Amendment”)
      is
      dated September 18, 2008, by and among China Water and Drinks Inc., a Nevada
      corporation (the “Company”),
      The
      Pinnacle Fund, L.P., as agent (“Agent”),
      Mr.
      Xu Hong Bin, in his individual capacity (“Make
      Good Pledgor”),
      and
      Loeb & Loeb LLP, as escrow agent (“Escrow
      Agent”)
      and
      amends that certain Make Good Escrow Agreement (the “Escrow
      Agreement”)
      dated
      May 31, 2007, by and among the parties hereto.

    

    WHEREAS,
      Pursuant to Section 14 of the Escrow Agreement, the Escrow Agreement may be
      amended in writing provided such amendment is signed by the parties hereto;
      and

    

    WHEREAS,
      except as otherwise stated herein, capitalized terms not otherwise defined
      in
      this Amendment shall have the definition given to such terms in that certain
      Securities Purchase Agreement dated May 31, 2007, by and among the Company
      and
      the investors identified on the signature pages thereto;

    

    NOW,
      THEREFORE, IN CONSIDERATION of the foregoing and the mutual agreements contained
      in this Amendment, and for other good and valuable consideration the receipt
      and
      adequacy of which are hereby acknowledged, the parties hereto agree as
      follows:

    

    2. Amendment.
      Section
      4(a) of the Escrow Agreement is hereby amended and restated in its entirety
      to
      read as follows (with changes in italics):

    

    “(a)
      Fiscal
      Year Ended December 31, 2007.
      Make
      Good
      Pledgor agrees that if the After-Tax Net Income for the fiscal year ended
      December 31, 2007 reported in the Company’s Annual Report on Form 10-KSB for the
      fiscal year ending December 31, 2007, as filed with the Commission (the
“2007
      Annual Report”),
      after
      adding back any compensation expense relating to the Escrow Shares or the return
      of any Escrow Shares to the Make Good Pledgor due to the achievement of 2007
      Guaranteed ATNI,
      is less
      than $19,000,000 (the “2007
      Guaranteed ATNI”),
      Agent
      shall provide written instruction (with a copy to the Company) to the Escrow
      Agent to release to each Investor on a pro rata basis (based upon such
      Investor’s Investment Amount specified on Exhibit
      A
      attached
      hereto relative to the aggregate Investment Amounts of all Investors specified
      on Exhibit
      A
      attached
      hereto), for no additional consideration, 11,194,030 shares of Common Stock
      (as
      equitably adjusted for any stock splits, stock combinations, stock dividends
      or
      similar transactions) (the “2007
      Make Good Shares”)
      and
      shall instruct the Transfer Agent to transfer into the name of each Investor,
      the number of 2007 Make Good Shares released to such Investor. The Escrow Agent
      need only rely on the letter of instruction from Agent in this regard and will
      disregard any contrary instructions. The Escrow Agent shall be entitled to
      rely
      on the calculations provided by Agent with the letter of instruction in
      releasing the Escrow Shares for disbursement, with no further responsibility
      to
      calculate or confirm amounts. If the Company’s audited consolidated financial
      statements for the fiscal year ended December 31, 2007 specify that the 2007
      Guaranteed ATNI shall have been achieved, the Agent shall provide written
      instruction (with a copy to the Company) to the Escrow Agent to release all
      2007
      Make Good Shares deposited with the Escrow Agent to the Make Good Pledgor within
      10 Business Days after the date which the 2007 Annual Report is filed with
      the
      Commission, provided that Escrow Agent is given notice of the 2007 Annual
      Report’s filing and results. Any releases of 2007 Make Good Shares to Investors
      required under this Section shall be made to Investors within 10 Business Days
      after the date which the 2007 Annual Report is filed with the Commission,
      provided that Escrow Agent is given notice of the 2007 Annual Report’s filing
      and results.”  

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Additionally,
      Section 4(b) of the Escrow Agreement is hereby amended and restated in its
      entirety to read as follows (with changes in italics):

    

    “(b)
      Fiscal
      Year Ending December 31, 2008.
      Make
      Good Pledgor agrees that in the event that either (i) the After-Tax Net Income
      for the fiscal year ended December 31, 2008 reported in the Company’s Annual
      Report on Form 10-KSB for the fiscal year ending December 31, 2008, as filed
      with the Commission (the “2008
      Annual Report”)
      is
      less than $30,000,000 (the “2008
      Guaranteed ATNI”)
      or
      (ii) the earnings per share reported in the 2008 Annual Report is less than
      $0.300 on a fully diluted basis (as equitably adjusted for any stock splits,
      stock combinations, stock dividends or similar transactions) (the “2008
      Guaranteed EPS”),
      in
      each case after adding back any compensation expense relating to the Escrow
      Shares or the return of any Escrow Shares to the Make Good Pledgor due to the
      achievement of 2008 Guaranteed ATNI and 2008 Guaranteed EPS, or any expenses
      relating to the beneficial conversion feature attributable to the Company’s 5%
      convertible notes issued in January, 2008,
      Agent
      shall provide written instruction (with a copy to the Company) to the Escrow
      Agent to release to each Investor on a pro rata basis (based upon such
      Investor’s Investment Amount specified on Exhibit
      A
      attached
      hereto relative to the aggregate Investment Amounts of all Investors specified
      on Exhibit
      A
      attached
      hereto), for no additional consideration, 11,194,030 shares of Common Stock
      (as
      equitably adjusted for any stock splits, stock combinations, stock dividends
      or
      similar transactions) (the “2008
      Make Good Shares”)
      and
      shall instruct the Transfer Agent to transfer into the name of each Investor,
      the number of 2008 Make Good Shares released to such Investor. The Escrow Agent
      need only rely on the letter of instruction from Agent in this regard and will
      disregard any contrary instructions. The Escrow Agent shall be entitled to
      rely
      on the calculations provided by Agent with the letter of instruction in
      releasing the Escrow Shares for disbursement, with no further responsibility
      to
      calculate or confirm amounts. If the Company’s audited consolidated financial
      statements for the fiscal year ended December 31, 2008 specify that both (i)
      the
      2008 Guaranteed ATNI and (ii) 2008 Guaranteed EPS, in
      each case after adding back any compensation expense relating to the Escrow
      Shares or the return of any Escrow Shares to the Make Good Pledgor due to the
      achievement of 2008 Guaranteed ATNI and 2008 Guaranteed EPS, or any expenses
      relating to the beneficial conversion feature attributable to the Company’s 5%
      convertible notes issued in January, 2008, shall
      each have been achieved, the Agent shall provide written instruction (with
      a
      copy to the Company) to the Escrow Agent to release all 2008 Make Good Shares
      deposited with the Escrow Agent to the Make Good Pledgor within 10 Business
      Days
      after the date which the 2008 Annual Report is filed with the Commission,
      provided that Escrow Agent is given notice of the 2008 Annual Report’s filing
      and results. Any releases of 2008 Make Good Shares required to be made to
      Investors under this Section shall be made to Investors within 10 Business
      Days
      after the date which the 2008 Annual Report is filed with the Commission,
      provided that Escrow Agent is given notice of the 2008 Annual Report’s filing
      and results.”

    

    2. Effectiveness.
      This
      Amendment shall become effective upon execution. 

    

    3. Limited
      Nature of Amendment.
      Except
      as expressly amended hereby, the Escrow Agreement remains in full force and
      effect in accordance with its terms and this Amendment shall not by implication
      or otherwise alter, modify, amend or in any way affect any of the terms,
      conditions, obligations, covenants or agreements contained in the Escrow
      Agreement, all of which are ratified and affirmed in all respects and shall
      continue in full force and effect.

    

    4. Counterparts.
      This
      Amendment may be executed in several counterparts, each of which shall be deemed
      an original and all of which shall constitute one and the same instrument,
      and
      shall become effective when counterparts have been signed by each of the parties
      and delivered to the other parties; it being understood that all parties need
      not sign the same counterpart.

    

    [Remainder
      of page intentionally left blank - signature page follows]

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
      executed by their respective authorized signatories as of the date first
      indicated above.

    

    
      	 	 	 
	 	COMPANY:
	 	 
	 	CHINA WATER AND DRINKS
              INC.
	 
 	 
 	 
 
	 	By:	/s/
              Xu Hong
              Bin
	 	Name:	Xu Hong Bin 
	 	Title:	President

    

     

    
      	 	 	 	 	 
	 	AGENT:	 	 
	 	 	 	 
	 	THE PINNACLE FUND,
              L.P.
	 
 	 
 	 
 	 	 
	 	By:	Pinnacle
              Advisors,
              L.P., its General Partner
	 	 	 	 	 
	 	 	By:	Pinnacle Fund Management,
              LLC, its
              
              General
                Partner

            
	 	 	 	 	 
	 	 	 	By:	/s/
              Barry M. Kitt
	 	 	 	Name:	Barry M. Kitt
	 	 	 	Title:	Sole Member

    

     

    
      
        	 	 	 
	 	ESCROW
                AGENT:
	 	 
	 	LOEB & LOEB LLP
	 
 	 
 	 
 
	 	By:	/s/
                Mitchell
                Nussbaum
	 	Name:	Mitchell Nussbaum
	 	Title:	Partner
	 	 	 
	 	 	 
	 	MR. XU HONG
                BIN
	 	 	 
	 	/s/
                Xu Hong Bin
	 	Mr. Xu Hong
                BinExhibit 10.1

                                    AGREEMENT

     This AGREEMENT (the "Agreement") is made as of the 4th day of September,
2008, by and between:

          AARON BARD, a businessman having an address for notice and delivery
          located at 15 Zichron Ya'akov, Suite 23 Entrance B. Jerusalem 94421,
          Israel.
          (the "Seller" )

                                       and

          MARIA C. MAZ, a businessman having an address for notice and delivery
          located at 4801 Alhambra Circle, Coral Gables, Florida, 33146 (the
          "Purchaser").

                                R E C I T A L S:

     FIRST, Seller is the owner of an aggregate of 500,000 shares (the "Shares")
of common stock of Your Digital Memories, Inc., a Nevada corporation ("YDM", or
the "Company");

     SECOND, Seller desires to sell the Shares to Purchaser on the terms and
conditions provided for in this Agreement.

     THRID, Purchaser desires to purchase the Shares from the Seller on the
terms and conditions provided for in this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:

                             I. SALES OF THE SHARES.

     1.01 SHARES BEING SOLD. Subject to the terms and conditions of this
Agreement, the Seller is selling, assigning, and delivering the Shares to the
Purchaser at the closing provided for in Section 1.03 hereof (the "Closing"),
free and clear of all liens, charges, or encumbrances of whatsoever nature.

     1.02 CONSIDERATION. Seller acknowledges that Purchaser is purchasing the
Shares for consideration of US$100,000, which shall be delivered to Seller.

     1.03 CLOSING. The Closing of the transactions provided for in this
Agreement is taking place on or before September 14, 2008 and no sooner than
after the tenth day after the filing of a Schedule 14F with the SEC on EDGAR.
<PAGE>
                II. REPRESENTATIONS AND WARRANTIES BY THE SELLER.

     The Seller hereby represents and warrants to the Purchaser that to the best
of the Seller's knowledge, with the intent that the Purchaser will rely on these
representations and warranties in entering into this Agreement, and in
concluding the purchase and sale contemplated by this Agreement, that:

     2.01 ORGANIZATION, CAPITALIZATION, ETC.

          (a) The Company is a corporation duly organized, validly existing, and
     in good standing under the laws of the state of Nevada, and is qualified in
     no other state.

          (b) The authorized capital stock of the Company consists of
     100,000,000 shares of common stock with a par value of $0.0001 per share.
     As of the date of this Agreement, 9,022,600 common shares are validly
     issued and outstanding, fully paid and non-assessable. There are no
     outstanding options or other agreements of any nature whatsoever relating
     to the issuance by the Company of any shares of its capital stock.

          (c) The Company has the corporate power and authority to carry on its
     business as presently conducted.

     2.02 NO VIOLATION. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will constitute a
violation or default under any term or provision of the Certificate of
Incorporation or Bylaws of the Company, or of any contract, commitment,
indenture, other agreement or restriction of any kind or character to which the
Company or the Seller is a party or by which the Company or the Seller is bound.

     2.03 AUTHORITY. The Seller has the power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Seller and constitutes a valid and binding instrument,
enforceable in accordance with its terms.

     2.04 TITLE TO THE SHARES. The Seller is the sole legal and beneficial owner
of the Shares in YDM and has good and marketable title thereto. All of the
Shares owned by the Seller are owned free and clear of any liens, claims,
options, charges, or encumbrances of whatsoever nature. The Seller has the

                                       2
<PAGE>
unqualified right to sell, assign, and deliver the Shares, and, upon
consummation of the transactions contemplated by this Agreement, the Purchaser
will acquire good and valid title to the Shares, free and clear of all liens,
claims, options, charges, and encumbrances of whatsoever nature. The Purchaser
acknowledges that the Shares being acquired from the Seller are restricted
securities so that such Shares will have trading restrictions.

     2.05 CONTROL SHARES. The Certificates representing the Shares delivered
pursuant to this Agreement are owned by an affiliate of the Company and
accordingly are restricted securities as that term is defined in Rule 144 of the
Securities Act of 1933 (the "Act"). As such, upon transfer of the Shares to the
Purchaser, the Purchaser will begin a new holding period as set forth in Rule
144 and the Shares may not be resold without registration or pursuant to an
exemption from registration for the holding period set forth in Rule 144.
Accordingly, certificates issued to the Purchaser will contain an appropriate
restrictive legend.

     2.07 NO CLAIMS; INDEMNITY. There are currently no claims or lawsuits
threatened or pending against the Seller as the owner of its shares, and Seller
is unaware of any conditions or circumstances that would lead to or justify the
filing of any claim or lawsuit. If, after the consummation of this transaction
and the transfer of the Shares from the Seller to the Purchaser any claim or
lawsuit shall be filed against YDM or the Purchaser (as the owner of the
Shares), arising out of any circumstances whatsoever prior to transfer of the
shares, the Seller shall defend, indemnify and hold the Purchaser harmless from
and against any and all such claims or lawsuits or any awards or judgments
granted thereunder.

              III. REPRESENTATIONS AND WARRANTIES BY THE PURCHASER.

     The Purchaser hereby represents and warrants to the Seller that to the best
of the Purchaser's knowledge, with the intent that the Seller will rely on these
representations and warranties in entering into this Agreement, and in
concluding the purchase and sale contemplated by this Agreement, that:

     3.01 REPRESENTATIONS REGARDING THE ACQUISITION OF THE SHARES.

          (a) The undersigned Purchaser understands that the SHARES HAVE NOT
     BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE
     COMMISSION OR ANY STATE OR FOREIGN SECURITIES AGENCIES;

                                       3
<PAGE>
          (b) The Purchaser is not an underwriter and is acquiring the Seller's
     Shares solely for investment for the account of the Purchaser and not with
     a view to, or for, resale in connection with any distribution within the
     meaning of the federal securities act, the state securities acts or any
     other applicable laws;

          (c) The Purchaser understands the speculative nature and risks of
     investments associated with the Company and confirms that the Shares are
     suitable and consistent with his investment program and that his financial
     position enables him to bear the risks of this investment;

     3.02 AUTHORITY. The Purchaser has the power and authority to execute and
deliver this Agreement, to perform his obligations hereunder and to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Purchaser and constitutes a valid and binding instrument,
enforceable in accordance with its terms.

     3.03 NO VIOLATION. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will constitute a
violation or default under any term or provision of any contract, commitment,
indenture, other agreement or restriction of any kind or character to which the
Purchaser is a party or by which the Purchaser is bound.

     3.04 RULE 144 RESTRICTION. The Purchaser hereby agrees that such shares are
restricted pursuant to Rule 144 and therefore subject to Rule 144 resale
requirements.

                IV. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.

     4.01 SURVIVAL OF REPRESENTATIONS. All representations, warranties, and
agreements made by any party in this Agreement or pursuant hereto shall survive
the execution and delivery hereof for a period of one (1) year from and after
the Closing.

     4.02 INDEMNIFICATION. The Seller agrees to indemnify the Purchaser and hold
him harmless from and in respect of any assessment, loss, damage, liability,
cost, and expense (including, without limitation, interest, penalties, and
reasonable attorneys' fees) in excess of $10,000.00 in the aggregate, imposed
upon or incurred by the Purchaser resulting from a breach of any agreement,
representation, or warranty of the Seller. Assertion by a party to their right
to indemnification under this Section 5.02 shall not preclude the assertion by
the parties of any other rights or the seeking of any other remedies against the
opposing party.

                                       4
<PAGE>
                                V. MISCELLANEOUS.

     5.01 EXPENSES. All fees and expenses incurred by the Purchaser and Seller
in connection with the transactions contemplated by this Agreement shall be
borne by the respective parties hereto.

     5.02 FURTHER ASSURANCES. From time to time, at the Purchaser's request and
without further consideration, the Seller, at his expense, will execute and
transfer such documents and will take such action as the Purchaser may
reasonably request in order to effectively consummate the transactions herein
contemplated.

     5.03 ENTIRE AGREEMENT. This Agreement contains all of the terms agreed upon
by the parties with respect to the subject matter hereof. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to the subject matter hereof. This Agreement may be amended only by a
written instrument duly executed by the parties hereto or their respective
successors or assigns.

     5.04 NO ASSIGNMENTS. Neither party may assign nor delegate any of its
rights or obligations hereunder without first obtaining the written consent of
the other party.

     5.05 HEADINGS. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretations of this Agreement.

     5.06 SEVERABILITY. In the event that any term, covenant, condition or other
provision contained herein is held to be invalid, void or otherwise
unenforceable by any court of competent jurisdiction, the invalidity of any such
term, covenant, condition, provision or Agreement shall in no way affect any
other term, covenant, condition or provision or Agreement contained herein,
which shall remain in full force and effect.

     5.07 GOVERNING LAW. The situs of this Agreement is Florida, USA, and for
all purposes this Agreement will be governed exclusively by and construed and
enforced in accordance with the laws and Courts prevailing in the Province of
British Columbia, without regard to its conflict-of-laws rules.

     5.08 NOTICES. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or mailed (registered or certified mail, postage prepaid, return
receipt requested) as follows:

                                       5
<PAGE>
         If to the Seller:      Aaron Bard

                                Address:
                                Zichron Ya'akov, Suite 23 Entrance B. Jerusalem
                                94421, Israel.

         If to the Purchaser:   Maria C. Maz

                                Address:
                                4801 Alhambra Circle, Coral Gables, Florida,
                                33146

     5.09 EFFECT. In the event any portion of this Agreement is deemed to be
null and void under any state, provincial, or federal law, all other portions
and provisions not deemed void or voidable shall be given full force and effect.

     5.10 GENDER AND NUMBER. Words importing a particular gender mean and
include the other gender and words importing a singular number mean and include
the plural number and vice versa, unless the context clearly indicated to the
contrary.

     5.11 COUNTERPARTS. This Agreement may be executed simultaneously in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures are
acceptable and deemed original signatures.

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the Seller and the Purchaser, on the date first above written.

SELLER:

/s/ Aaron Bard
-----------------------------
Aaron Bard

PURCHASER:

/s/ Maria C. Maz
----------------------------
Maria C. Maz

                                       6

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