Document:

CHINA
ADVANCED CONSTRUCTION MATERIALS GROUP, INC.

    2009 EQUITY INCENTIVE
PLAN

    

    1.           Purpose. The purpose
of the plan is to provide incentives to attract, retain and motivate eligible
persons whose present and potential contributions are important to the success
of CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC., a Delaware corporation
(the “Company”), and its Subsidiaries and Affiliates, by offering them an
opportunity to participate in the Company’s future performance through awards of
Options and Restricted Stock. Capitalized terms not defined in the text are
defined in Section 22.

    

    2.           Shares Subject to the Plan;
Per-Person Award Limitation.

    

    2.1           Number of Shares
Available. Subject to Sections 2.2 and 17, the total number of Shares
reserved and available for grant and issuance pursuant to the Plan shall be
One Million Four Hundred
Thousand (1,400,000) Shares. Subject to Sections 2.2 and 17, Shares shall
again be available for grant and issuance in connection with future Awards under
the Plan that: (a) are subject to issuance upon exercise of an Option but cease
to be subject to such Option for any reason other than exercise of such Option;
(b) are subject to an Award granted hereunder but are forfeited; or (c) are
subject to an Award that otherwise terminates without Shares being issued.
Subject to Sections 2.2 and 17, in no event shall the aggregate number of Shares
that may be issued pursuant to incentive stock options exceed One Million Four
Hundred Thousand (1,400,000) Shares.

    

    2.2           Adjustment of Shares.
In the event that the number of outstanding Shares is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision or
similar change in the capital structure of the Company without consideration,
then: (a) the number of Shares reserved for issuance under the Plan; (b) the
Exercise Prices of and number of Shares subject to outstanding Options; and (c)
the number of Shares subject to other outstanding Awards shall be
proportionately adjusted, subject to any required action by the Board or the
shareholders of the Company and in compliance with applicable securities
laws.

    

    2.3           Individual Award
Limitation. Notwithstanding any other provision in this Plan, and in
addition to any requirements of this Plan, the maximum number of Shares granted
hereunder to any one Participant may not exceed twenty percent (20%) of the
total Shares subject to the Plan (subject to adjustments as provided in Sections
2.2 and 17 hereof).

    

    3. Eligibility.

    

    3.1 General.
All  Awards set forth herein may be granted to employees, officers,
directors,  consultants and advisors of the Company or any Parent,
Subsidiary or Affiliate of the Company, provided such consultants and advisors
render bona fide services not in connection with the offer and sale of
securities in a capital-raising transaction. A person may be granted more than
one Award under the Plan.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4. Administration.

    

    4.1 Compensation
Committee. The Plan shall be administered by a committee ("Committee")
appointed by the Company's Board of Directors. The membership of the Committee
shall be constituted so as to comply at all times with the then applicable
requirements for “outside directors” of Rule 16b-3 promulgated under the
Exchange Act and Section 162(m) of the Code. Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time, and such determination shall be final and
binding on the Company and all persons having an interest in any Award under the
Plan.

    

    4.2 Committee Authority.
Subject to the general purposes, terms and conditions of the Board, the
Committee shall have full power to implement and carry out the Plan. The
Committee may delegate to one or more officers of the Company the authority to
make recommendations to grant an Award under the Plan to Participants who are
not Insiders of the Company. The Committee shall have the authority
to:

    

    
      	
               
      

            	
              (a)

            	
              construe
      and interpret the Plan, any Award Agreement and any other agreement or
      document executed pursuant to the
Plan;

            

    

    
      	
               
      

            	
              (b)

            	
              recommend
      to the Board amendments to the rules and regulations relating to the
      Plan;

            

    

    
      	
               
      

            	
              (c)

            	
              select
      the persons to receive Awards;

            

    

    
      	
               
      

            	
              (d)

            	
              determine
      the form and terms of Awards;

            

    

    
      	
               
      

            	
              (e)

            	
              determine
      the number of Shares or other consideration subject to
    Awards;

            

    

    
      	
               
      

            	
              (f)

            	
              determine
      whether Awards will be granted singly, in combination, in tandem with, in
      replacement of, or as alternatives to, other Awards under the Plan or any
      other incentive or compensation plan of the Company or any Parent,
      Subsidiary or Affiliate of the
Company;

            

    

    
      	
               
      

            	
              (g)

            	
              determine
      the granting of certain waivers of Plan or Award
    conditions;

            

    

    
      	
               
      

            	
              (h)

            	
              determine
      the conditions concerning the vesting, exercisability and payment of
      Awards;

            

    

    
      	
               
      

            	
              (i)

            	
              recommend
      to the Board such matters so as to correct any defect, supply any
      omission, or reconcile any inconsistency in the Plan, any Award or any
      Award Agreement;

            

    

    
      	
               
      

            	
              (j)

            	
              determine
      whether an Award has been earned;
and

            

    

    
      	
               
      

            	
              (k)

            	
              make
      all other determinations necessary or advisable for the administration of
      the Plan.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    4.3 Exchange Act
Requirements. If the Company is subject to the Exchange Act, the Company
will take appropriate steps to comply with the disinterested director
requirements of Section 16(b) of the Exchange Act, including but not limited to,
the appointment by the Board of a committee consisting of not less than two
persons (who are members of the Board), each of whom is a Disinterested
Person.

    

    4.4 Address of Committee.
The Committee’s address to which any correspondence or notifications may be sent
or given is:

    

    China
Advanced Construction Materials Group, Inc.

    Yingu
Plaza, 9 Beisihuanxi Road, Suite 1708 

    Haidian
District, Beijing 100080 PRC 

    Attn:  Chief
Executive Officer

    

    5. Options. The
Committee may grant Options to eligible persons and shall determine whether such
Options shall be Incentive Stock Options within the meaning of the Code (“ISO”)
or Nonqualified Stock Options (“NQSO”), the number of Shares subject to the
Option, the Exercise Price of the Option, the period during which the Option may
be exercised, and all other terms and conditions of the Option, subject to the
following:

    

    5.1 Form of Option Grant.
Each Option granted under the Plan shall be evidenced by an Award Agreement
which shall expressly identify the Option as an ISO or NQSO (“Stock Option
Agreement”), and be in such form and contain such provisions (which need not be
the same for each Participant) as the Committee shall from time to time approve,
and which shall comply with and be subject to the terms and conditions of the
Plan.

    

    5.2 Date of Grant. The
date of grant of an Option shall be the date on which the Committee makes the
determination to grant such Option, unless otherwise specified by the Committee.
The Stock Option Agreement and a copy of the Plan will be delivered to the
Participant within a reasonable time after the granting of the
Option.

    

    5.3 Exercise Period.
Options shall be exercisable within the times or upon the events determined by
the Committee as set forth in the Stock Option Agreement; provided, however,
that no Option shall be exercisable after the expiration of ten (10) years from
the date the Option is granted, and provided further that no Option granted to a
person who directly or by attribution owns more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any Parent
or Subsidiary of the Company (“Ten Percent Shareholder”) shall be exercisable
after the expiration of five (5) years from the date the Option is granted. The
Committee also may provide for the Options to become exercisable at one time or
from time to time, periodically or otherwise, in such number or percentage as
the Committee determines.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.4 Exercise Price. The
Exercise Price shall be determined by the Committee when the Option is granted
and may be not less than the par value of a Share on the date of grant provided
that: (i) the Exercise Price of an ISO shall be not less than one hundred
percent (100%) of the Fair Market Value of the Shares on the date of grant; (ii)
the Exercise Price of any ISO granted to a Ten Percent Shareholder shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the Shares
on the date of grant; and (iii) the Exercise Price of any option granted that
the Committee intends to qualify under Section 162(m) of the Code, shall not be
less than one hundred percent (100%) of the Fair Market Value of the Shares on
the date of grant. Payment for the Shares purchased may be made in accordance
with Section 7 of the Plan.

    

    5.5 Method of Exercise.
Options may be exercised only by delivery to the Company of a written stock
option exercise agreement (the “Exercise Agreement”) in a form approved by the
Committee (which need not be the same for each Participant), stating the number
of Shares being purchased, the restrictions imposed on the Shares, if any, and
such representations and agreements regarding Participant’s investment intent
and access to information and other matters, if any, as may be required or
desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.

    

    5.6 Termination. Unless
otherwise set forth in the Stock Option Agreement, the exercise of an Option
shall be subject to the following:

    

    (a) If
the Participant is Terminated for any reason except death or Disability, then
Participant may exercise such Participant’s Options only to the extent that such
Options would have been exercisable upon the Termination Date no later than
three (3) months after the Termination Date (or such shorter time period as may
be specified in the Stock Option Agreement), but in any event, no later than the
expiration date of the Options.

    

    (b) If
the Participant is terminated because of death or Disability (or the Participant
dies within three (3) months of such termination), then Participant’s Options
may be exercised only to the extent that such Options would have been
exercisable by Participant on the Termination Date and must be exercised by
Participant (or Participant’s legal representative or authorized assignee) no
later than twelve (12) months after the Termination Date (or such shorter time
period as may be specified in the Stock Option Agreement), but in any event no
later than the expiration date of the Options; provided, however, that in the
event of termination due to Disability other than as defined in Section 22(e)(3)
of the Code, any ISO that remains exercisable after ninety (90) days after the
date of termination shall be deemed a NQSO.

    

    5.7 Limitations on
Exercise. The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum
number will not prevent Participant from exercising the Option for the full
number of Shares for which it is then exercisable.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    5.8 Modification, Extension or
Renewal. The Committee may modify, extend or renew outstanding Options
and authorize the grant of new Options in substitution therefore, provided that
any such action may not without the written consent of Participant, impair any
of Participant’s rights under any Option previously granted. Any outstanding ISO
that is modified, extended, renewed or otherwise altered shall be treated in
accordance with Section 424(h) of the Code. The Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the Exercise Price
may not be reduced below the minimum Exercise Price that would be permitted
under Section 5.4 of the Plan for Options granted on the date the action is
taken to reduce the Exercise Price.

    

    5.9 No Disqualification.
Notwithstanding any other provision in the Plan, no term of the Plan relating to
ISOs shall be interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be exercised, so as to disqualify the Plan
under Section 422 of the Code or, without the consent of the Participant
affected, to disqualify any ISO under Section 422 of the Code.

    

    6. Restricted Stock. A
Restricted Stock Award is an offer by the Company to sell to an eligible person
Shares that are subject to restrictions. The Committee shall determine to whom
an offer will be made, the number of Shares the person may purchase, the price
to be paid (the “Purchase Price”), the restrictions to which the Shares shall be
subject, and all other terms and conditions of the Restricted Stock Award,
subject to the following:

    

    6.1 Form of Restricted Stock
Award. All purchases under a Restricted Stock Award made pursuant to the
Plan shall be evidenced by an Award Agreement (“Restricted Stock Purchase
Agreement”) that shall be in such form (which need not be the same for each
Participant) as the Committee, shall from time to time approve, and shall comply
with and be subject to the terms and conditions of the Plan. The offer of
Restricted Stock shall be accepted by the Participant’s execution and delivery
of the Restricted Stock Purchase Agreement and full payment for the shares to
the Company within thirty (30) days from the date the Restricted Stock Purchase
Agreement is delivered to the person. If such person does not execute and
deliver the Restricted Stock Purchase Agreement along with full payment for the
Shares to the Company within thirty (30) days, then the offer shall terminate,
unless otherwise determined by the Committee.

    

    6.2 Purchase Price. The
Purchase Price of Shares sold pursuant to a Restricted Stock Award shall be
determined by the Committee on the date the Restricted Stock Award is granted
but shall in no event less than the par value of the Shares. Payment of the
Purchase Price may be made in accordance with Section 7 of the
Plan.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.3 Restrictions.
Restricted Stock Awards shall be subject to such restrictions as the Committee
may impose. The Committee may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions, in whole or in part,
based on length of service, performance or such other factors or criteria as the
Committee may determine. Restricted Stock Awards that the Committee intends to
qualify under Code section 162(m) shall be subject to a performance-based goal.
Restrictions on such stock shall lapse based on one (1) or more of the following
performance goals: stock price, market share, sales increases, earning per
share, return on equity, cost reductions, or any other similar performance
measure established by the Committee. Such performance measures shall be
established by the Committee, in writing, no later than the earlier of: (a)
ninety (90) days after the commencement of the performance period with respect
to which the Restricted Stock award is made; and (b) the date as of which
twenty-five percent (25%) of such performance period has elapsed.

    

    7. Payment For Share
Purchases.

    

    7.1 Payment. Payment for
Shares purchased pursuant to the Plan may be made in cash (by check) or, where
expressly approved for the Participant by the Committee and where permitted by
law:

    

    
      
        	
                
                

              	
                (a)

              	
                by
      cancellation of indebtedness of the Company to the
      Participant;

              

      

    

    

    
      
        	
                
                

              	
                (b)

              	
                by
      transfer of Shares that either (1) have been owned by Participant for more
      than six (6) months and have been paid for within the meaning of SEC Rule
      144; or (2) were obtained by Participant in the public
    market;

              

      

    

    

    
      
        	
                
                

              	
                (c)

              	
                by
      waiver of compensation due or accrued to Participant for services
      rendered;

              

      

    

    

    
      
        	
                
                

              	
                (d)

              	
                by
      tender of property;

              

      

    

    

    
      
        	
                
                

              	
                (e)

              	
                with
      a promissory note in favor of the Company, which such note shall (1)
      provide for full recourse to the maker, (2) be collateralized by the
      pledge of the Shares that the Optionee purchases upon exercise of the
      Option, (3) bear interest at the prime rate of the Company’s principal
      lender, and (4) contain such other terms as the Committee in its sole
      discretion shall reasonably
require;

              

      

    

    

    
      
        	
                
                

              	
                (f)

              	
                by
      a “cashless exercise” in which Shares which would otherwise be delivered
      upon exercise of the Option may be used to satisfy the payment of the
      exercise price of the Option, in accordance with the following
      formula:

              

      

    

     

    X = Y (A-B)

    
        
A

    

    

    Where:

    X = the
number of Shares to be issued to Optionee.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Y = the
number of Shares purchasable under the amount of the Option being
exercised

    A = the
per Share Fair Market Value

    
      B = the
per Share Exercise Price of the Option

    

    

    
      
        	
                
                

              	
                (g)

              	
                with
      respect only to purchases upon exercise of an Option, and provided that a
      public market for the Company’s stock
exists:

              

      

    

    

    
      (1)
through a “same day sale” commitment from Participant and a broker-dealer that
is a member of the National Association of Securities Dealers (an “NASD Dealer”)
whereby the Participant irrevocably elects to exercise the Option and to sell a
portion of the Shares so purchased to pay for the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or

    

    

    
      (2)
through a “margin” commitment from Participant and an NASD Dealer whereby
Participant irrevocably elects to exercise the Option and to pledge the Shares
so purchased to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; or

    

    

    
      	
               
      

            	
              (h)

            	
              by
      any combination of the foregoing.

            

    

    

    If the
Exercise Price or purchase price is paid in whole or in part with Shares, or
through the withholding of Shares issuable upon exercise of the Option, the
value of the Shares surrendered or withheld shall be their Fair Market Value on
the date the Option is exercised.

    

    8. Withholding
Taxes.

    

    8.1 Withholding
Generally. Whenever Shares are to be issued in satisfaction of Awards
granted under the Plan, the Company may require the Participant to remit to the
Company an amount sufficient to satisfy federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
Shares. Whenever, under the Plan, payments in satisfaction of Awards are to be
made in cash, such payment shall be net of an amount sufficient to satisfy
federal, state, and local withholding tax requirements.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    8.2 Stock Withholding.
When, under applicable tax laws, a Participant incurs tax liability in
connection with the exercise or vesting of any Award that is subject to tax
withholding and the Participant is obligated to pay the Company the amount
required to be withheld, the Committee may allow the Participant to satisfy the
minimum withholding tax obligation by electing to have the Company withhold from
the Shares to be issued that number of Shares having a Fair Market Value equal
to the minimum amount required to be withheld, determined on the date that the
amount of tax to be withheld is to be determined (the “Tax Date”). All elections
by a Participant to have Shares withheld for this purpose shall be made in
writing in a form acceptable to the Committee and shall be subject to the
following restrictions:

    

    
      
        	
                
                

              	
                (a)

              	
                the
      election must be made on or prior to the applicable Tax
    Date;

              

      

    

    

    
      
        	
              	
                (b)

              	
                once
      made, then except as provided below, the election shall be irrevocable as
      to the particular Shares as to which the election is
  made;

              

      

    

    

    
      
        	
              	
                (c)

              	
                all
      elections shall be subject to the consent or disapproval of the
      Committee;

              

      

    

    

    
      
        	
              	
                (d)

              	
                if
      the Participant is an Insider and if the Company is subject to Section 1
      6(b) of the Exchange Act: (1) the election may not be made within six (6)
      months of the date of grant of the Award, except as otherwise permitted by
      SEC Rule 1 6b-3(e) under the Exchange Act, and (2) either (A) the election
      to use stock withholding must be irrevocably made at least six (6) months
      prior to the Tax Date (although such election may be revoked at any time
      at least six (6) months prior to the Tax Date) or (B) the exercise of the
      Option or election to use stock withholding must be made in the ten (10)
      day period beginning on the third day following the release of the
      Company’s quarterly or annual summary statement of sales or earnings;
      and

              

      

    

    

    
      
        	
              	
                (e)

              	
                in
      the event that the Tax Date is deferred until six (6) months after the
      delivery of Shares under Section 83(b) of the Code, the Participant shall
      receive the full number of Shares with respect to which the exercise
      occurs, but such Participant shall be unconditionally obligated to tender
      back to the Company the proper number of Shares on the Tax
      Date.

              

      

    

    

    9.           
Privileges of Stock
Ownership. No Participant shall have any of the rights of a shareholder
with respect to any Shares until the Shares are issued to the Participant. After
Shares are issued to the Participant, the Participant shall be a shareholder and
have all the rights of a shareholder with respect to such Shares, including the
right to vote and receive all dividends or other distributions made or paid with
respect to such Shares; provided, that if such Shares are Restricted Stock, then
any new, additional or different securities the Participant may become entitled
to receive with respect to such Shares by virtue of a stock dividend, stock
split or any other change in the corporate or capital structure of the Company
shall be subject to the same restrictions as the Restricted Stock.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.           Transferability.
Awards granted under the Plan, and any interest therein, shall not be
transferable or assignable by Participant, and may not be made subject to
execution, attachment or similar process, otherwise than by will or by the laws
of descent and distribution or as consistent with the specific Plan and Award
Agreement provisions relating thereto. During the lifetime of the Participant an
Award shall be exercisable only by the Participant, and any elections with
respect to an Award, may be made only by the Participant.

    

    11.           Restrictions on
Shares. At the discretion of the Committee, the Company may reserve to
itself and/or its assignee(s) in the Award Agreement a right of first refusal to
purchase all Shares that a Participant (or a subsequent transferee) may propose
to transfer to a third party.

    

    12.           Certificates. All
certificates for Shares or other securities delivered under the Plan shall be
subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed.

    

    13.           Escrow; Pledge of
Shares. To enforce any restrictions on a Participant’s Shares, the
Committee may require the Participant to deposit all certificates representing
Shares, together with stock powers or other instruments of transfer approved by
the Committee, appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such restrictions have lapsed
or terminated, and the Committee may cause a legend or legends referencing such
restrictions to be placed on the certificates.

    

    14.                          Exchange and Buy out of
Awards. The Committee, may, at any time or from time to time, authorize
the Company, with the consent of the respective Participants, to issue new
Awards in exchange for the surrender and cancellation of any or all outstanding
Awards. The Company may at any time buy from a Participant an Award previously
granted with payment in cash, Shares (including Restricted Stock) or other
consideration, based on such terms and conditions as the Company and the
Participant shall agree.

    

    15. Securities Law and Other
Regulatory Compliance. An Award shall not be effective unless such Award
is in compliance with all applicable federal and state securities laws, rules
and regulations of any governmental body, and the requirements of any stock
exchange or automated quotation system upon which the Shares may then be listed,
as they are in effect on the date of grant of the Award and also on the date of
exercise or other Issuance. Notwithstanding any other provision in the Plan, the
Company shall have no obligation to issue or deliver certificates for Shares
under the Plan prior to: (a) obtaining any approvals from governmental agencies
that the Company determines are necessary or advisable, and/or (b) completion of
any registration or other qualification of such shares under any state or
federal law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company shall be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company shall have no liability for any
inability or failure to do so.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    16. No Obligation to
Employ. Nothing in the Plan or any Award granted under the Plan shall
confer or be deemed to confer on any Participant any right to continue in the
employ of, or to continue any other relationship with, the Company or any
Parent, Subsidiary or Affiliate of the Company or limit in any way the right of
the Company or any Parent, Subsidiary or Affiliate of the Company to terminate
Participant’s employment or other relationship at any time, with or without
cause.

    

    17. Corporate
Transactions.

    

    17.1
Assumption or
Replacement of Awards by Successor. In the event of (a) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the shareholders of the company and the Awards granted
under the Plan are assumed or replaced by the successor corporation, which
assumption shall be binding on all Participants); (b) a dissolution or
liquidation of the Company; (c) the sale of substantially all of the assets of
the Company; or (d) any other transaction which qualifies as a “corporate
transaction” under Section 424(a) of the Code wherein the shareholders of the
Company give up all of their equity interest in the Company (except for the
acquisition, sale or transfer of all or substantially all of the outstanding
shares of the Company), all outstanding Awards may, to the extent permitted by
applicable law, be replaced by the successor corporation (if any) with Awards of
equivalent value, which replacement shall be binding on all Participants. In the
alternative, substantially similar consideration may be provided to Participants
as was provided to shareholders (after taking into account the existing
provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar
shares or other property subject to repurchase restrictions no less favorable to
the Participant.

    

    17.2
Other Treatment of
Awards. Subject to any greater rights granted to Participants under the
foregoing provisions of this Section 17, in the event of the occurrence of any
transaction described in Section 17.1, any outstanding Awards shall be treated
as provided in the applicable agreement or plan of merger, consolidation,
dissolution, liquidation, sale of assets or other “corporate
transaction.”

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    17.3
Assumption of Awards
by the Company. The Company, from time to time, also may grant Awards
identical to awards granted by another company, whether in connection with an
acquisition of such other company or otherwise, by granting an Award under the
Plan in replacement of such other company’s award. Such replacement shall be
permissible if the holder of the replaced award would have been eligible to be
granted an Award under the Plan if the other company had applied the rules of
the Plan to such grant. In the event the Company grants Awards identical to an
award granted by another company, the terms and conditions of such award shall
remain unchanged (except that the exercise price and the number and nature of
Shares issuable upon exercise of any such option will be adjusted approximately
pursuant to Section 424(a) of the Code).

    

    18.           Adoption and Shareholder
Approval. The Plan shall become effective on the date that it is adopted
by the Board (the “Effective Date”). The Plan shall be approved by the
shareholders of the Company (excluding Shares issued pursuant to this Plan),
consistent with applicable laws, within twelve months before or after the
Effective Date. Upon the Effective Date, the Committee may grant Awards pursuant
to the Plan; provided, however, that: (a) no Option may be exercised prior to
initial shareholder approval of the Plan; (b) no Option granted pursuant to an
increase in the number of Shares approved by the Board shall be exercised prior
to the time such increase has been approved by the shareholders of the Company;
and in the event that shareholder approval is not obtained within the time
period provided herein, all Awards granted hereunder shall be canceled, any
Shares issued pursuant to any Award shall be canceled and any purchase of Shares
hereunder shall be rescinded. After the Company becomes subject to Section 16(b)
of the Exchange Act, the Company will comply with the requirements of Rule 16b-3
(or its successor), as amended, with respect to shareholder
approval.

    

    19.           Term of Plan. The
Plan will terminate ten (10) years from the Effective Date or, if earlier, the
date of shareholder approval of the Plan.

    

    20.           Amendment or Termination of
Plan. The Board may at any time terminate or amend the Plan in any
respect, including without limitation amendment of any form of Award Agreement
or instrument to be executed pursuant to the Plan; provided, however, that: (a)
the Board shall not, without the approval of the shareholders of the Company,
amend the Plan in any manner that requires such shareholder approval pursuant to
the Code or the regulations promulgated thereunder as such provisions apply to
ISO plans or pursuant to the Exchange Act or Rule 16b-3 (or its successor), as
amended, thereunder; and (b) no outstanding Award shall be deemed effected by
such amendment without the advance written consent of the Participant(s) holding
such outstanding Award(s) at the time of the proposed termination or
amendment.

    

    21.           Nonexclusivity of the Plan.
Neither the adoption of the Plan by the Board, the submission of the Plan
to the shareholders of the Company for approval, nor any provision of the Plan
shall be construed as creating any limitations on the power of the Board to
adopt such additional compensation arrangements as it may deem desirable,
including, without limitation, the granting of stock options and bonuses
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    22. Definitions. As used
in the Plan, the following terms shall have the following meanings:

    

    “Affiliate”
means any corporation that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
another corporation, where “control” (including the terms “controlled by” and
“under common control with”) means the possession, direct or indirect, of the
power to cause the direction of the management and policies of the corporation,
whether through the ownership of voting securities, by contract or
otherwise.

    

    “Award”
means any award under the Plan, including any Option or Restricted
Stock.

    

    “Award Agreement” means, with respect
to each Award, the signed written agreement between the Company and the
Participant setting forth the terms and conditions of the Award.

    

    “Board” means the Board of Directors of
the Company.

    

    “Code” means the Internal Revenue Code
of 1986, as amended.

    

    “Committee” means a committee appointed
by the Company's Compensation Committee (said Compensation Committee itself
being first appointed by the Company's Board).

    

    “Company” means CHINA ADVANCED
CONSTRUCTION MATERIALS GROUP, INC., a Delaware corporation, or any successor
company.

    

    “Disability” means a disability,
whether temporary or permanent, partial or total, as determined by the
Committee.

    

    “Disinterested Person” means a director
who has not, during the period that person is a member of the Committee and for
one (1) year prior to service as a member of the Committee, been granted or
awarded equity securities pursuant to the Plan or any other plan of the Company
or any Parent, Subsidiary or Affiliate of the Company, except in accordance with
the requirements set forth in Rule 16b-3(c)(2)(I) (and any successor regulation
thereto) as promulgated by the SEC under Section 16(b) of the Exchange Act, as
such rule is amended from time to time and as interpreted by the
SEC.

    

    “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

    

    “Exercise Price” means the price at
which a holder of an Option may purchase the Shares issuable upon exercise of
the Option.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Fair Market Value” means, as of any
date, the value of a share of the Company’s Common Stock determined as
follows:

    

    
      
        	
              	
                (a)

              	
                if
      such Common Stock is then quoted on the Nasdaq market, its last reported
      sale price on the Nasdaq market or, if no such reported sale takes place
      on such date, the average of the closing bid and asked
    prices;

              

      

    

    

    
      
        	
              	
                (b)

              	
                if
      such Common Stock is publicly traded and is then listed on a national
      securities exchange, the last reported sale price or, if no such reported
      sale takes place on such date, the average of the closing bid and asked
      prices on the principal national securities exchange on which the Common
      Stock is listed or admitted to
trading;

              

      

    

    

    
      
        	
              	
                (c)

              	
                if
      such Common Stock is publicly traded but is not quoted on a Nasdaq market
      nor listed or admitted to trading on a national securities exchange, the
      average of the closing bid and asked prices on such date, as reported by
      The Wall Street Journal, for the over-the-counter market;
    or

              

      

    

    

    
      
        	
              	
                (d)

              	
                if
      none of the foregoing is applicable, by the Board of Directors of the
      Company in good faith.

              

      

    

    

    “Insider” means an officer or director
of the Company or any other person whose transactions in the Company’s Common
Stock are subject to Section 16 of the Exchange Act.

    

    “Option” means an award of an option to
purchase Shares pursuant to Section 5.

    

    “Parent” means any corporation (other
than the Company) in an unbroken chain of corporations ending with the Company,
if at the time of the granting of an Award under the Plan, each of such
corporations other than the Company owns stock possessing fifty percent (50%),
or more, of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

    

    “Participant” means a person who
receives an Award under the Plan.

    

    “Plan” means this China Advanced
Construction Materials Group, Inc. 2009 Equity Incentive Plan, as amended from
time to time.

    

    “Restricted
Stock Award” means an award of Shares pursuant to Section

    

    “SEC”
means the Securities and Exchange Commission.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Securities
Act” means the Securities Act of 1933, as amended.

    

    “Shares”
means shares of the Company’s Common Stock reserved for issuance under the Plan,
as adjusted pursuant to Sections 2 and 17, and any successor
security.

    

    “Subsidiary”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of granting of the
Award, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing fifty percent (50%), or more, of the total combined
voting power of all classes of stock in one of the other corporations in such
claim.

    

    “Termination”
or “Terminated” means, for purposes of the Plan with respect to a Participant,
that the Participant has ceased to provide services as an employee, director,
consultant or advisor, to the Company or a Parent, Subsidiary or Affiliate of
the Company, except in the case of sick leave, military leave, or any other
leave of absence approved by the Committee, provided, that such leave is for a
period of not more than ninety (90) days, or reinstatement upon the expiration
of such leave is guaranteed by contract or statute. The Committee shall have
sole discretion to determine whether a Participant has ceased to provide
services and the effective date on which the Participant ceased to provide
services (the “Termination Date”).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXERCISE
NOTICE

    

    China
Advanced Construction Materials Group, Inc.

    Yingu
Plaza, 9 Beisihuanxi Road, Suite 1708 

    Haidian
District, Beijing 100080 PRC 

    Attn:  Chief
Executive Officer

    

    Attention:
Stock Option Plan Administrator

    

    1.           Exercise of Option.
Effective as of today, ___________, ____, the undersigned ("Participant") hereby
elects to exercise Participant's option to purchase ________ shares of the
Common Stock (the "Shares") of China
Advanced Construction Materials Group, Inc. (the "Company") under and
pursuant to the China Advanced Construction Materials Group, Inc. 2009 Equity
Incentive Plan (the "Plan") and the Stock
Option Agreement dated ___________ (the "Option
Agreement").

    

    2.           Delivery of Payment.
Purchaser herewith delivers to the Company the full purchase price of the
Shares, as set forth in the Option Agreement.

    

    3.           Representations of
Participant. Participant acknowledges that Participant has received, read
and understood the Plan and the Option Agreement and agrees to abide by and be
bound by their terms and conditions.

    

    4.           Rights as
Shareholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Shares shall be issued to the Participant as
soon as practicable after the Option is exercised.

    

    5.           Tax Consultation.
Participant understands that Participant may suffer adverse tax consequences as
a result of Participant's purchase or disposition of the Shares. Participant
represents that Participant has consulted with any tax consultants Participant
deems advisable in connection with the purchase or disposition of the Shares and
that Participant is not relying on the Company for any tax advice.

    

    6.           Successors and
Assigns. The Company may assign any of its rights under this Exercise
Notice to single or multiple assignees, and this Exercise Notice shall inure to
the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Exercise Notice shall be binding
upon Participant and his or her heirs, executors, administrators, successors and
assigns.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.           Withholding Taxes.
There may be a regular federal income tax liability upon the exercise of this
Option. Participant will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If
Participant is an employee, the Company will be required to withhold from
Participant’s compensation or collect from Participant and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.

     

    8.           Governing Law. This
Exercise Notice is governed by the internal substantive laws of the state of
Delaware.

    

    9.           Entire Agreement. The
Plan and Option Agreement are incorporated herein by reference. This Exercise
Notice, the Plan, the Option Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Participant
with respect to the subject matter hereof, and may not be modified adversely to
the Participant's interest except by means of a writing signed by the Company
and Participant.

    

    
      
        
          
            
              
                
                  	
                          Submitted
      by:

                        	 
      	
                          Accepted
      by:

                        
	 
      	 
      	 
      
	
                          PARTICIPANT

                        	 
      	
                          CHINA
      ADVANCED CONSTRUCTION
MATERIALS GROUP, INC.

                        
	 
      	 
      	 
      
	 
      	 
      	
                          By:

                        	 
      
	
                          Signature

                        	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                          Title:

                        	 
      
	
                          Print
      NameUnassociated Document

    SECURITIES
PURCHASE AGREEMENT

     

    THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made
as of June 18, 2009, by and among Drinks Americas Holdings, Ltd., a Delaware
corporation (the “Company”), St. George
Investments, LLC, an Illinois limited liability company (the “Investor”), and J.
Patrick Kenny, Chairman and Chief Executive Officer of the Company, in his
individual capacity, and certain other affiliates of the Company signatory
hereto (the “Affiliates”).

     

    RECITALS

     

    WHEREAS, the Company has
authorized the sale and issuance of a non-interest bearing debenture with a
twenty-five percent (25%) original issue discount that matures forty-eight (48)
months from the date hereof in substantially the form attached hereto as Exhibit A (the “Drinks Debenture”), a
warrant to exercise a number of shares equal to the $375,000 cash paid at
Closing divided by the Market Price (as defined in the Debenture) and with an
initial exercise price of $0.35, subject to adjustment, and an expiration date
five (5) years from the date hereof in substantially the form attached hereto as
Exhibit B (the
“Warrant”), and
common stock issuable upon satisfaction of all or part of the Note or on
exercise of the warrant (collectively, the “Underlying Shares”)
(collectively, the Drink Debenture, the Warrant and the Underlying Shares shall
be referred to as the “Securities”) as
provided herein in exchange for a loan by the Investor to the Company of Four
Million Dollars ($4,000,000) (the “Loan
Amount”);

     

    WHEREAS, the Loan Amount shall
bear no interest but shall have an original issue discount of twenty-five
percent (25%);

     

    WHEREAS, the Investor has
agreed to deliver to the Company at Closing (as defined herein) the total of:
(i) $375,000 in cash; (ii) ten (10) secured notes in the amount of $250,000 each
bearing interest at the rate of 5% per annum in substantially the form attached
hereto as Exhibit
C-1 (each a “$250,000 Investor
Note” and collectively, the “$250,000 Investor
Notes”); and (iii) one (1) secured note in the amount of $125,000 bearing
interest at the rate of 5% per annum in substantially the form attached hereto
as Exhibit C-2
(the “$125,000
Investor Note”);

     

    WHEREAS, as an inducement to
enter into this Agreement and as collateral for the Drinks Debenture, the
Affiliates have agreed to pledge 12,000,000 shares of common stock of the
Company (the “Collateral Shares”),
of which 9,000,000 shares of the Collateral Shares shall have been issued by the
company more than (6) months prior to the date hereof;

     

    WHEREAS, as further inducement
to enter into this Agreement and as further security, J. Patrick Kenny has
agreed to provide a personal guaranty of a portion of the Loan Amount and
interest and penalties that may accrue thereon;

     

    WHEREAS, at the Closing, the
Company desires to sell, and the Investor desires to purchase, the Securities
upon the terms and conditions stated in this Agreement;

     

    WHEREAS, this Agreement, the
Drinks Debenture, the Warrant, the Pledge Agreement (as defined herein), the
Guaranty Agreement (as defined herein), the $250,000 Investor Notes, the
$125,000 Investor Note and the Escrow Agreement (as defined herein) are
sometimes collectively referred to herein as the "Transaction
Documents”.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual promises,
representations, warranties and covenants hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     

    ARTICLE
1

     

    AUTHORIZATION
AND SALE OF SECURITIES

     

    1.1  Authorization. The Company has
authorized the sale and issuance of the Drinks Debenture with a principal amount
of $4,000,000 and a maturity date forty-eight (48) months following the date
hereof, and the Warrant having an expiration date on the fifth (5th)
anniversary of the date hereof.

     

    1.2  Closing Date. The closing of
the purchase and sale of the Securities hereunder (the “Closing”) shall be
held at the offices of Anslow & Jaclin, LLP, at 10:00 a.m. New York time on
or before June 18, 2009 or at such other time and place upon which the Company
and the Investor shall agree. 

     

    1.3  Closing Deliverables of the Company,
Affiliates and the Investor.

     

    (a)  Closing Deliverables of the
Company.  At
the Closing, subject to the terms and conditions of this Agreement, the Company
agrees to issue and deliver to the Investor the instruments identified in (i)
through (vii) below:

     

    (i)  all
executed Transaction Documents that the Company is a party to; and

     

    (ii)  completed
Schedules to this Agreement; and

     

    (iii)  a
certificate from a duly authorized officer of the Company certifying that the
representations made by the Company in Article 2 are true and correct as of the
Closing; and

     

    (iv)  a
corporate resolution authorizing this financing transaction as contemplated in
the Transaction Documents and approving the entry into the Transaction
Documents.

     

    (b)  Closing Deliverables of the
Affiliate. In order to induce Investor to purchase the Drinks Debenture
and Warrant, at the Closing, the Affiliates shall execute and deliver to the
Investor the documents identified in (i) and (ii), below:

     

    (i)  a
pledge agreement between the Affiliates and the Investor whereby the Affiliates
shall pledge twelve million (12,000,000) shares (the “Pledge Shares”) to
the Company, of which nine million (9,000,000) shall have been issued by the
Company more than six (6) months prior to the date hereof (the "Pledge Agreement"),
in substantially the form attached hereto as Exhibit D;
and

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (ii)  a
guaranty agreement whereby J. Patrick Kenny shall guaranty the repayment of a
portion of the Loan Amount (the “Guaranty Agreement”),
in substantially the form attached hereto as Exhibit
E.

     

    (c)  Closing Deliverables of the
Investor. At
the Closing, subject to the terms and conditions of this Agreement, the Investor
agrees to issue and/or deliver to the Company, the following closing item
deliverables identified in (i), (ii) and (iii), below:

     

    (i)  $375,000
in cash (the “Purchase
Price”) pursuant to the wire instruction set forth in Exhibit F attached
hereto; and

     

    (ii)  Ten
(10) $250,000 Investor Notes, each in the principal amount of $250,000 bearing
interest at the rate of 5% per annum; and

     

    (iii)  one
(1) $125,000 Investor Note in the principal amount of $125,000 bearing interest
at the rate of 5% per annum.

     

    ARTICLE
2

     

    REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

     

    The
Company represents and warrants to the Investor, as of the date hereof, as
follows:

     

    2.1  Organization, Good Standing
and Power. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power to own, lease and operate its properties and
assets and to conduct its business as it is now being conducted. The Company is
not in violation of any of the provisions of its Certificate of Incorporation or
Bylaws.  Except as disclosed on Schedule 2.1, the
Company does not have any Subsidiaries (as defined below) or own securities of
any kind in any other entity. The Company is duly qualified to do business and
is in good standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except in
such jurisdictions in which the failure to so qualify would not have a material
adverse affect on the Company.  “Subsidiary” shall
mean any corporation or other entity of which at least a majority of the
securities or other ownership interest having ordinary voting power (absolutely
or contingently) for the election of directors or other persons performing
similar functions are at the time owned directly or indirectly by the Company
and/or any of its other Subsidiaries.

     

    2.2  Corporate Power;
Authorization. The Company has all requisite legal and corporate
power and has taken all requisite corporate action to execute and deliver this
Agreement and the other Transaction Documents, to sell and issue the Securities,
to issue the shares underlying the Warrant upon exercise of the Warrant in
accordance with the terms of such Warrant, and to carry out and perform all of
its obligations under this Agreement and the other Transaction Documents. This
Agreement and the other Transactional Documents constitute, and will constitute,
legal, valid and binding obligations of the Company, enforceable in accordance
with their respective terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization or similar laws relating to or affecting
the enforcement of creditors’ rights generally and (b) as limited by
equitable principles generally. The execution and delivery of the Transaction
Documents do not, and the performance of the Transaction Documents and the
compliance with the provisions hereof and thereof, including the issuance, sale
and delivery of the Securities by the Company will not, conflict with, or result
in a breach or violation of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any lien
pursuant to the terms of, the certificate of incorporations (the “Certificate”)
or by-laws (the “Bylaws”) of the Company, each as amended to date, or any
statute, law, rule or regulation or any state or federal order, judgment or
decree or any indenture, mortgage, lease or other agreement or instrument to
which the Company or any of its properties is subject, except for any conflict,
breach, violation, default or imposition of a lien (other than pursuant to the
terms of the Certificate or Bylaws) that would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
assets, liabilities, financial condition, business or operations of the
Company.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

    

    2.3  Issuance and Delivery of the
Securities. 
The Securities are duly authorized and, when issued at the Closing, will
be validly issued. The shares underlying the Warrant and which may be
delivered in full or partial satisfaction of the Drinks Debenture are duly
authorized and, upon exercise of the Warrant or such satisfaction the Drinks
Debenture in accordance with the terms thereof, will be validly issued, fully
paid and nonassessable.  The issuance and delivery of the Securities are
not subject to any right of first refusal, preemptive right, right of
participation, or any similar right existing in favor of any person or any liens
or encumbrances.  When issued in compliance with the provisions of this
Agreement and the Debenture and the Warrant as the case may be, the issuance of
the Securities does not require the approval of the Company’s stockholders under
the provisions of the Certificate or Delaware law, or, any stock exchange or
self-regulatory organization.

     

    2.4  No Conflicts. The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby do not and will not (i) violate any provision of the Company's
Certificate or Bylaws, each as amended to date, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Company is a party or by which the Company’s respective properties
or assets are bound, or (iii) result in a violation of any federal, state or
local statute, rule, regulation, order, judgment or decree (including federal
and state securities laws and regulations) applicable to the Company or by which
any property or asset of the Company is bound or affected.

     

    2.5  SEC Documents; Financial
Statements. Each report delivered to
the Investors is a true and complete copy of such document as filed by
the Company with the Securities and Exchange Commission (the “SEC”). The Company
has filed in a timely manner all documents that the Company was required to file
with the SEC, such documents, together with the exhibits thereto (the “SEC Documents”),
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) during
the twelve calendar months preceding the date hereof.  As of their
respective filing dates, all SEC Documents complied in all material respects
with the requirements of the Exchange Act.  None of the SEC Documents as of
their respective dates contained any untrue statement of material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.  The financial statements of the Company
included in the SEC Documents (the “Financial
Statements”) comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto.  The Financial Statements have been prepared in accordance
with generally accepted accounting principles consistently applied and fairly
present the consolidated financial position of the Company and its subsidiaries,
if any, at the dates thereof and the consolidated results of their operations
and consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal, recurring adjustments or to the extent that
such unaudited statements do not include footnotes).

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

       

    

    2.6  Governmental
Consents.  No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated
hereby except for compliance with the securities and blue sky laws in the states
in which the Drinks Debenture and Warrant are offered and/or sold, which offer
and sale will be effected in compliance with such laws.

     

    2.7  Capitalization.  The
authorized capital stock of the Company consists of 500,000,000 shares of common
stock, par value $0.001 per share (the “Common Stock”) and
1,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”). As
of the date hereof, 86,932,904 shares of Common Stock and 11,000 shares of
Preferred Stock are issued and outstanding.  Except as disclosed on
Schedule 2.7,
there are no outstanding warrants, options, convertible or exchangeable
securities or other rights, agreements or arrangements of any character under
which the Company is or may be obligated to issue any equity securities of any
kind.

     

    2.8  Litigation.  Except as
disclosed to the Investor in writing and except as disclosed in the SEC
Documents, there are no actions, suits, proceedings or investigations pending
or, to the best of the Company’s knowledge, threatened against the Company or
any of its properties before or by any court or arbitrator or any governmental
body, agency or official in which there is a reasonable likelihood (in the
reasonable judgment of the Company) of an adverse decision that (a) could
have a material adverse effect on the assets, liabilities, financial condition,
business or operations of the Company, or (b) could impair the ability of
the Company to perform in any material respect its obligations under this
Agreement, the Warrant, the Drinks Debenture, or any other Transaction
Document.

     

    2.9  Company not an “Investment
Company”.  The Company has been advised by competent counsel of
the rules and requirements under the Investment Company Act of 1940, as amended
(the “Investment Company Act”).  The Company is not, and immediately after
receipt of payment for the Securities will not be, an “investment company” or an
entity “controlled” by an “investment company” within the meaning of the
Investment Company Act and shall conduct its business in a manner so that it
will not become subject to the Investment Company Act.

     

    2.10  Compliance. The
Company’s Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and is quoted on the Over the Counter Bulleting Board (the
"OTCBB"), and the Company has taken no action designed for the purpose of, or
likely to have the effect of, terminating the registration of its Common Stock
under the Exchange Act or de-listing the Common Stock from the OTCBB, nor has
the Company received any notification that the SEC or the Financial Industry
Regulatory Authority (“FINRA”) is contemplating terminating such registration or
quoting. The Company is in material compliance with the listing and maintenance
requirements for continued quoting of the Common Stock.

     

    2.11  Use of
Proceeds.  The proceeds of the sale of the Securities shall be
used for working capital or general corporate purposes.

     

    2.12  Brokers and
Finders.  Except as disclosed on Schedule 2.12, no
person or entity will have, as a result of or in connection with the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or the Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding, written or
oral, entered into by or on behalf of the Company.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

       

    

    2.13  Intellectual
Property.

     

    (a)  “Intellectual
Property” shall mean patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes disclosed on Schedule
2.13(a).

     

    (b)  Except
as disclosed on Schedule 2.13(b), the
Company owns or has the valid right to use all of the Intellectual Property that
is necessary for the conduct of the Company’s business as currently conducted or
as currently proposed to be conducted free and clear of all material liens and
encumbrances.

     

    (c)  Except
as disclosed on Schedule 2.13(c), (i)
the conduct of the Company’s business as currently conducted does not infringe
or otherwise conflict with (collectively, “Infringe”) any
Intellectual Property rights of any third party or any confidentiality
obligation owed by the Company to a third party and the Company has not received
any written notice of any such Infringement, and (ii) to the knowledge of the
Company, the Intellectual Property and confidential information of the Company
are not being Infringed by any third party.

     

    2.14  Questionable
Payments.  Neither the Company nor, to the best knowledge of
the Company, any of its current or former stockholders, directors, officers,
employees, agents or other persons acting on behalf of the Company, has on
behalf of the Company or in connection with its business: (a) used any corporate
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (b) made any direct or indirect
unlawful payments to any governmental officials or employees from corporate
funds; (c) established or maintained any unlawful or unrecorded fund of
corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company; or (e) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment of any
nature.

     

    2.15  Transactions with
Affiliates.  Except as disclosed on Schedule 2.15, none
of the officers, directors or shareholders of the Company and, to the best
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or to a presently contemplated
transaction (other than for services as employees, officers and directors) that
would be required to be disclosed pursuant to Item 404 of Regulation S-K
promulgated under the Securities Act of 1933., as amended (the “Securities
Act”).

     

    2.16  Insurance.  The
Company maintains and will continue to maintain insurance with financially sound
and reputable insurers in such amounts and covering such risks and in such
amounts as are reasonably adequate, prudent and consistent with industry
practice for the conduct of its business and the value of its property, all of
which insurance is in full force and effect.  The Company has not
received notice from, and has no knowledge of any threat by, any insurer that
has issued any insurance policy to the Company that such insurer intends to deny
coverage under or cancel, discontinue or not renew any insurance policy in force
as of the date hereof.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

       

    

    2.17  No Additional
Agreements.  The Company does not have any agreement or
understanding with any Investor with respect to the transactions contemplated
hereby other than as specified in this Agreement.

     

    2.18  Absence of Undisclosed
Liabilities.  The Company has no material liabilities of any nature
(whether absolute, accrued, contingent or otherwise), except (i) as and to the
extent reflected in the Financial Statements, and (ii) for liabilities that have
been incurred in the ordinary course of business consistent with past practice
and that would not, individually and in the aggregate, reasonably be expected to
have a material adverse effect on the assets, financial condition, business or
operations of the Company.

     

    2.19  Governmental
Authorizations.  The Company has
all permits, licenses and other authorizations of governmental authorities that
are required for the conduct of its business and operations as currently
conducted or as currently proposed to be conducted, the lack of which could
materially and adversely affect the assets, financial condition, business or
operations of the Company.  The Company is, and at all times has been, in
compliance with the provisions of its material permits, licenses and other
governmental authorizations.

     

    2.20  No Material Adverse
Change. Except as disclosed on
Schedule 2.20,
since January 31, 2009, there have not been any changes in the assets,
liabilities, financial condition or operations of the Company that reflected in
the Financial Statements except changes in the ordinary course of business which
have not been, either individually or in the aggregate, materially
adverse.  The Company does not have pending before the SEC any request
for confidential treatment of information.

     

    2.21  Reservation.  The
Company has duly reserved for issuance such number of shares of Common Stock as
may be issuable from time to time upon exercise, exchange or conversion, as the
case may be, of the Securities.

     

    2.22  Internal Accounting
Controls.  The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.  The Company has established disclosure controls and
procedures (as defined in Exchange Rules 13a-15 and 15d-15) for the Company and
designed such disclosure controls and procedures to ensure that material
information relating to the Company is made known to the certifying officers by
others within those entities, particularly during the period in which the
Company’s Form 10-K or 10-Q, as the case may be, is being prepared.

     

    2.23  Title to
Assets.  Except as set forth on Schedule 2.23, the Company has
good and marketable title in fee simple to all real property owned by it that is
material to the business of the Company and good and marketable title in all
tangible personal property owned by it that is material to the business of the
Company in each case free and clear of all liens, except for liens as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
liens for the payment of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties.  Any real property and
facilities held under lease by the Company is held by it under valid, subsisting
and enforceable leases with which the Company is in material
compliance.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

       

    

    2.24  Registration
Rights. Except as disclosed on
Schedule 2.24,
the Company has not granted or agreed to grant to any person any rights
(including “piggy back” registration rights) to have any securities of the
Company registered with the SEC or any other governmental
authority.

     

    2.25  Material Non-Public
Information.  The Company confirms that it has not provided the
Investor or their agents or counsel with any information that constitutes or
might constitute material non-public information as of the
Closing.  The Company understands and confirms that the Investors
shall be relying on the foregoing representations in effecting transactions in
securities of the Company.

     

    2.26  Dilution. The Company
acknowledges and agrees that the issuance of the Securities will have a
potential dilutive effect on the equity holdings of other holders of the
Company’s equity or rights to receive equity of the Company. The Board of
Directors of the Company has concluded, in its good faith business judgment that
the issuance of the Securities is in the best interests of the
Company.  The Company specifically acknowledges that its obligation to
issue the Securities is absolute regardless of the dilution such issuance may
have on the ownership interests of other stockholders of the Company or parties
entitled to receive equity securities or equity-linked securities of the
Company.

     

    2.27  Disclosure. Neither
this Agreement nor any other documents, certificates or instruments furnished to
the Investor by or on behalf of the Company in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements made
herein or therein, in the light of the circumstances under which they were made
herein or therein, not misleading.

     

    2.28  Sarbanes-Oxley
Act.  The Company is in compliance with the applicable provisions of
the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”),
and the rules and regulations promulgated thereunder, that are effective and for
which compliance by the Company is required as of the date hereof.

     

    2.29  Transfer of
Assets.  The Company shall not transfer, convey or assign all
or substantially all of our assets of the Company, including but not limited to,
any of its subsidiaries or all or substantially all of its assets thereof, other
than at fair market value or with the prior written consent of the Investor,
except for a merger in which the Company is the surviving Corporation or in
which the surviving corporation assumes the Company’s obligations under the
Transaction Documents.  In the event that such transfer does occur,
this shall constitute a default of the Transaction Documents and a Trigger Event
(as defined in the Drinks Debenture).

     

    ARTICLE
3

     

    REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE INVESTOR

     

    The
Investor hereby severally represents and warrants to the Company:

     

    3.1  Authorization. The execution, delivery
and performance by the Investor of the Transaction Documents to which such
Investor is a party have been duly authorized and will each constitute the valid
and legally binding obligation of such Investor, enforceable against such
Investor in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights
generally.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

       

    

    3.2  Purchase Entirely for Own
Account. The Securities to be received by such Investor hereunder will be
acquired for such Investor’s own account, not as nominee or agent, and not with
a view to the resale or distribution of any part thereof in violation of the
1933 Act, and such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the 1933
Act without prejudice, however, to such Investor’s right at all times to sell or
otherwise dispose of all or any part of such Securities in compliance with
applicable federal and state securities laws. Nothing contained herein
shall be deemed a representation or warranty by such Investor to hold the
Securities for any period of time. Such Investor is not a broker-dealer
registered with the SEC under the 1934 Act or an entity engaged in a business
that would require it to be so registered.

     

    3.3  Investment
Experience. Such Investor acknowledges that it can bear the economic risk
and complete loss of its investment in the Securities and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment contemplated hereby.

     

    3.4  Accredited Investor.
The Investor is an “accredited investor” (as defined in Rule 501 of Regulation
D), and the Investor has such experience in business and financial matters that
it is capable of evaluating the merits and risks of an investment in the
Securities. The Investor is not required to be registered as a broker-dealer
under Section 15 of the Exchange Act and such Purchaser is not a broker-dealer.
The Investors acknowledges that an investment in the Securities is speculative
and involves a high degree of risk.

     

    3.5  Restricted
Securities. Such Investor understands that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the 1933 Act only in
certain limited circumstances.

     

    ARTICLE
4

    

    INDEMNIFICATION

     

    4.1  Indemnification.

     

    (a)  The
Company will indemnify and hold the Investor and their directors, officers,
shareholders, partners, employees and agents (each, an “Investor Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation (collectively, “Losses”) that the
Investor may suffer or incur as a result of or relating to any
misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the Company in any of the Transaction
Documents.  In addition to the indemnity contained herein, the Company
will reimburse each Investor for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred. In
the event of any litigation or dispute arising from this agreement, the parties
agree that the party who is awarded the most money shall be deemed the
prevailing party for all purposes and shall therefore be entitled to an
additional award of the full amount of the attorneys' fees and
expenses paid by said prevailing party in connection with the litigation
and/or dispute without reduction or apportionment based upon the individual
claims or defenses giving rise to the fees and expenses.  Nothing herein
shall restrict or impair a court's power to award fees and expenses for
frivolous or bad faith pleading.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

       

    

    (b)  Conduct of Indemnification
Proceedings.  Promptly
after receipt by any Person (the “Indemnified Person”)
of notice of any demand, claim or circumstances which would or might give rise
to a claim or the commencement of any action, proceeding or investigation in
respect of which indemnity may be sought, such Indemnified Person shall promptly
notify the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any
Indemnified Person so to notify the Company shall not relieve the Company of its
obligations hereunder except to the extent that the Company is materially
prejudiced by such failure to notify.  In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel; or (ii) in the reasonable judgment of counsel to
such Indemnified Person representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them.  The Company shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Company shall indemnify and hold harmless such
Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment.  Without the prior
written consent of the Indemnified Person, which consent shall not be
unreasonably withheld, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such
proceeding.

     

    ARTICLE
5

     

    COVENANTS
AND ADDITIONAL AGREEMENTS OF THE COMPANY

     

    5.1  Reservation of Common
Stock.  The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of providing for the exercise of the Warrant or the delivery of
shares in full or partial satisfaction of the Drinks Debenture, fifty million
(50,000,000) shares of Common Stock in the event the Investor exercises the
Warrant and/or requests the Drinks Debenture be satisfied by the issuance and
delivery of Common Stock.

     

    5.2  Reports.  If
the information is not already publicly disclosed in the Company’s public
filings available on the SEC’s website, the Company will furnish to the
Investors and/or their assignees such information relating to the Company and
its Subsidiaries as from time to time may reasonably be requested by the
Investors and/or their assignees; provided, however, that the Company shall not
disclose material nonpublic information to the Investors, or to advisors to or
representatives of the Investors, unless prior to disclosure of such information
the Company identifies such information as being material nonpublic information
and provides the Investors, such advisors and representatives with the
opportunity to accept or refuse to accept such material nonpublic information
for review and any Investor wishing to obtain such information enters into an
appropriate confidentiality agreement with the Company with respect
thereto.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

       

    

    5.3  No Conflicting
Agreements.  The Company will not take any action, enter into
any agreement or make any commitment that would conflict or interfere in any
material respect with the Company’s obligations to the Investors under the
Transaction Documents.

     

    5.4  Compliance with
Laws.  The Company will comply in all material respects with
all applicable laws, rules, regulations, orders and decrees of all governmental
authorities.

     

    5.5  Securities Laws Disclosure;
Publicity. The Company shall, by
8:30 a.m. Eastern time on the second business day following the date of this
Agreement, issue a press release or file a Current Report on Form 8-K, in each
case reasonably acceptable to the Investor, disclosing the transactions
contemplated hereby.  The Company and the Investor shall consult with
each other in issuing any press releases with respect to the transactions
contemplated hereby, and neither the Company nor the Investor shall issue any
such press release or otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of the Investor, or
without the prior consent of the Investor, with respect to any press release of
the Company, which consent shall not unreasonably be withheld, except if such
disclosure is required by law, in which case the disclosing party shall promptly
provide the other party with notice of such public statement or communication
and consult with each other with respect thereto prior to such public
disclosure.  Notwithstanding the foregoing, other than as set forth
above, the Company shall not publicly disclose the name of any Investor, or
include the name of any Investor in any filing with the SEC or any regulatory
agency or stock exchange, except to the extent such disclosure is required by
law or stock exchange regulation, in which case the Company shall provide the
Investor with prior notice of such disclosure.

     

    5.6  Listing of Common
Stock. The
Company hereby agrees to maintain the listing on the Bulletin Board of the
Common Stock sold hereunder or issuable upon exercise of the Warrant or exchange
of the Drinks Debenture.  The Company further agrees, if the Company
applies to have its Common Stock traded on any other stock exchange or quotation
system, it will include in such application the Common Stock issuable upon
exercise of the Warrants and the Common Stock issuable upon exchange of the
Drinks Debenture, and will take such other action as is necessary or desirable
in the opinion of the Investors to cause the Common Stock issuable upon exercise
of the Warrant and the Common Stock issuable upon exchange of the Drinks
Debenture to be listed on such other stock exchange or quotation system as
promptly as possible.

     

    5.7  Removal of
Legends.  Upon the earlier of: (i) registration for resale
pursuant to a registration statement; or (ii) Rule 144 becoming available, upon
written request of the Lender, the Company shall (A) deliver to the transfer
agent for the Common Stock irrevocable instructions that the Transfer Agent
shall issue a certificate representing shares of Common Stock without legends
upon receipt by such Transfer Agent of a notice of exercise of the Warrant,
exchange of the Drinks Debenture or transfer of the Collateral Shares, and (B)
cause its counsel to deliver to the Transfer Agent one or more blanket opinions
to the effect that the removal of such legends in such circumstances may be
effected under the 1933 Act.  From and after the earlier of such
dates, upon the Investor’s written request, the Company shall promptly cause
certificates evidencing the Securities to be replaced with certificates which do
not bear such restrictive legends.  When the Company is required to
cause unlegended certificates to replace previously issued legended
certificates, if unlegended certificates are not delivered to an Investor within
three (3) Business Days of submission by that Investor of legended
certificate(s) or the notice to issue shares of Common Stock without legend to
the Transfer Agent as provided above, the Company shall be liable to the
Investor for liquidated damages in an amount equal to 1.5% of the aggregate
purchase price of the Securities evidenced by such certificate(s) for each
thirty (30) day period (or portion thereof) beyond such three (3) Business Day
that the unlegended certificates have not been so delivered.  In the
event that the Company or its counsel fails to deliver the appropriate
instructions to the transfer agent to remove any restrictive legend from Common
Stock from either the exercise of the Warrant, the exchange of the Drink Shares
or transfer of the Collateral Shares, then the Company hereby acknowledges that
it authorizes the transfer agent to accept a legal opinion issued by an attorney
reasonably acceptable to the Investor, including but not limited to Anslow &
Jaclin, LLP or Brian Reiss, Esq.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

       

    

    ARTICLE
6

     

    MISCELLANEOUS

     

    6.1  Waivers and
Amendments. 
The terms of this Agreement may be waived or amended only upon the written
consent of the Company and the Investor.

     

    6.2  Governing Law.  This Agreement
shall be governed in all respects by and construed in accordance with the laws
of the State of Illinois without any regard to conflicts of laws
principles.

     

    6.3  Survival.  The
representations, warranties, covenants and agreements made in this Agreement
shall survive for a period of five (5) years and any investigation made by the
Company or the Investor and the Closing.

     

    6.4  Successors and
Assigns.  This Agreement and
any of the Transaction Documents can be freely assigned, pledged as collateral
or otherwise transferred by the Investor and any of its successors or
assigns.

     

    6.5  Entire
Agreement.  This Agreement and
the other Transaction Documents constitute the full and entire understanding and
agreement between the parties with regard to the subjects thereof.

     

    6.6  Notices, etc.  All notices and
other communications required or permitted under this Agreement shall be in
writing and may be delivered in person, by telecopy, overnight delivery service
or registered or certified United States mail, addressed to the Company or each
of the Investors, as the case may be, at their respective addresses set forth as
follows:

     

    If to the Company:

    

    Drinks Americas Holdings,
Ltd.

    Attn: J.
Patrick Kenny

    372 Danbury Road, Suite
163

    Wilton,
Connecticut 06897

    Phone:
(203) 762-7000

    Facsimile:
(203) 762-8992

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

       

    

    With a copy to (which shall not
constitute notice):

    

    Eaton
& Van Winkle LLP

    Attn:  Joseph
L. Cannella, Esq.

    3 Park
Avenue

    New York,
NY 10016

    Phone:
(212) 561-3633

    Facsimile:
(212) 779-9928

    

    If to the Investor:

    

    St. George Investments,
LLC

    Attn: John Fife

    303 East
Wacker Drive, Suite 311

    Chicago, Illinois 60601

    Phone: (312) 297-7000

    Facsimile: (312) 819-9701

    

    With a copy (which shall not constitute
a notice) to:

    

    Anslow & Jaclin, LLP

    Attn.:      Gregg
E. Jaclin, Esq.

    Eric M
Stein, Esq.

    Joy Hui, Esq.

    195 Route 9 South, Suite
204

    Manalapan, New Jersey
07726

    Phone: (732) 409-1212

    Facsimile: (732) 577-1188

    

    All
notices and other communications shall be effective upon the earlier of actual
receipt thereof by the person to whom notice is directed or (a) in the case
of notices and communications sent by personal delivery or telecopy, one
business day after such notice or communication arrives at the applicable
address or was successfully sent to the applicable telecopy number, (b) in
the case of notices and communications sent by overnight delivery service, at
noon (local time) on the second business day following the day such notice or
communication was sent, and (c) in the case of notices and communications
sent by United States mail, seven days after such notice or communication shall
have been deposited in the United States mail.

    

    6.7  Severability of this
Agreement.  If any provision
of this Agreement shall be judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

     

    6.8  Counterparts; Signatures by
Facsimile.  This Agreement may
be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.  This Agreement,
once executed by a party, may be delivered to the other parties hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

       

    

    6.9  Further
Assurances. 
Each party to this Agreement shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments and documents as the other
party hereto may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

     

    6.10  Expenses. Each party shall bear
their own expenses, except that the Company shall pay Investor’s legal fees in
the aggregate of $15,000 and any fees incurred with respect to such legal
services for closing this transaction.  The Company has already paid
$5,000 and the remainder shall be paid from the proceeds of the
financing.

     

    6.11  Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefore, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.  The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities.

    

    [REMAINDER
OF PAGE LEFT BLANK]

    

    
      
         

      

      
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    [SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]

     

    IN WITNESS WHEREOF, this
Agreement is hereby executed as of the date first above written.

     

    
      	
              INVESTOR:

               

              ST.
      GEORGE INVESTMENTS, LLC

               

              By:
      ____________________________

              Name:  John
      Fife

              Its:  Managing
      Member

              Dated:

               

              THE
      COMPANY:

               

              DRINKS
      AMERICAS HOLDINGS, LTD.

               

              By:  ____________________________

              Name:
      J. Patrick Kenny

              Its:
      Chairman and CEO

              Dated:

            	
              THE
      AFFILIATES:

               

              By:
      ____________________________

                           Kenny
      LLC 1

              Name:
      J. Patrick Kenny

              Dated:

               

              By:
      ____________________________

                           Lazo,
      LLC

              Name:
      Jason Lazo

              Dated:

               

              By:
      ____________________________

              Name:
      Marvin Traub

              Dated:

               

              By:
      ____________________________

              Name:
      Kenneth Close

              Dated:

               

              By:
      ____________________________

              Name:
      Bruce Klein

              Dated:

               

              By:
      ____________________________

              Name:
      Frederick Schulman

              Dated:

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