Document:

EX 10.189

     

     

    EXHIBIT
      10.189

     

    NEITHER
      THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY. 

     

    CALYPTE
      BIOMEDICAL CORPORATION

     

    WARRANT

     

    Warrant
      No. ______

    Original
      Issue Date: August __, 2008

     

    Calypte
      Biomedical Corporation,
      a
      Delaware corporation (the “Company”),
      hereby
      certifies that, for value received, Tinja Limited, a company registered in
      Mauritius, or its registered assigns (the “Holder”),
      is
      entitled to purchase from the Company up to a total of 1,000,000 shares of
      Common Stock (each such share, a “Warrant
      Share”
      and all
      such shares, the “Warrant
      Shares”),
      at any
      time and from time to time from through and including August __, 2010 (the
      “Expiration
      Date”),
      and
      subject to the following terms and conditions:

     

    1.    Definitions.
      As used
      in this Warrant, the following terms shall have the respective definitions
      set
      forth in this Section 1. Capitalized terms that are used and not defined in
      this
      Warrant that are defined in the Subscription Agreement (as defined below) shall
      have the respective definitions set forth in the Subscription
      Agreement.

     

    “Business
      Day”
      means
      any day except Saturday, Sunday and any day that is a federal legal holiday
      in
      the United States or a day on which banking institutions in the State of New
      York are authorized or required by law or other government action to
      close.

     

    “Common
      Stock”
      means
      the common stock of the Company, par value $.03 per share, and any securities
      into which such common stock may hereafter be reclassified. 

     

    “Exercise
      Price” means
      $0.08, subject to adjustment in accordance with Section 8.

     

    “Fundamental
      Transaction”
      means
      any of the following: (1) the Company effects any merger or consolidation of
      the
      Company with or into another Person, (2) the Company effects

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    any
      sale
      of all or substantially all of its assets in one or a series of related
      transactions, (3) any tender offer or exchange offer (whether by the Company
      or
      another Person) is completed pursuant to which holders of Common Stock are
      permitted to tender or exchange their shares for other securities, cash or
      property, or (4) the Company effects any reclassification of the Common Stock
      or
      any compulsory share exchange pursuant to which the Common Stock is effectively
      converted into or exchanged for other securities, cash or property.

     

    “Original
      Issue Date”
      means
      the Original Issue Date (“OID”) first set forth on the first page of this
      Warrant.

     

    “Portland
      Courts”
      means
      the state and federal courts sitting in Portland, Oregon.

     

    “Subscription
      Agreement”
      means
      the Subscription Agreement, dated August __, 2008, to which the Company and
      the
      original Holder are parties.

     

    “Trading
      Day”
      means
      (i) a day on which the Common Stock is traded on a Trading Market (other than
      the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading
      Market (other than the OTC Bulletin Board), a day on which the Common Stock
      is
      traded in the over-the-counter market, as reported by the OTC Bulletin Board,
      or
      (iii) if the Common Stock is not quoted on any Trading Market, a day on which
      the Common Stock is quoted in the over-the-counter market as reported by the
      National Quotation Bureau Incorporated (or any similar organization or agency
      succeeding to its functions of reporting prices); provided, that in the event
      that the Common Stock is not listed or quoted as set forth in (i), (ii) and
      (iii) hereof, then Trading Day shall mean a Business Day.

     

    2.    Registration
      of Transfers.
      The
      Company shall register the transfer of any portion of this Warrant in the
      Company’s warrant register, upon surrender of this Warrant, with the Form of
      Assignment attached hereto duly completed and signed, to the Company at its
      address specified herein. Upon any such registration or transfer, a new Warrant
      to purchase Common Stock, in substantially the form of this Warrant (any such
      new Warrant, a “New
      Warrant”),
      evidencing the portion of this Warrant so transferred shall be issued to the
      transferee and a New Warrant evidencing the remaining portion of this Warrant
      not so transferred, if any, shall be issued to the transferring Holder. The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance by such transferee of all of the rights and obligations of a holder
      of a Warrant. 

     

    3.    Exercise
      and Duration of Warrants.
      This
      Warrant shall be exercisable by the registered Holder at any time and from
      time
      to time from and after the Original Issue Date and through and including the
      Expiration Date. At 5:00 p.m. Pacific time on the Expiration Date, the portion
      of this Warrant not exercised prior thereto shall be and become void and of
      no
      value. 

     

    4.    Delivery
      of Warrant Shares.

     

    To
      effect
      exercises hereunder, the Holder shall not be required to physically surrender
      this Warrant unless the aggregate Warrant Shares represented by this Warrant
      is
      being exercised. Upon delivery of the Exercise Notice (in the form attached
      hereto) to the Company (with the attached Warrant Shares Exercise Log) at its
      address for notice set forth herein and upon payment of the Exercise Price
      multiplied by the number of Warrant Shares that the Holder

    
      
        
        

      

      
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    intends
      to purchase hereunder, the Company shall promptly (but in no event later than
      five Trading Days after the Date of Exercise (as defined herein) issue and
      deliver to the Holder, the Warrant Shares issuable upon such exercise, which,
      as
      required by the Subscription Agreement, shall bear the following legend, unless
      the Shares shall have been included in an effective registration statement
      under
      the 1933 Act:

    

    "THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
      SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT UNDER SUCH SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO CALYPTE BIOMEDICAL CORPORATION THAT SUCH REGISTRATION IS NOT
      REQUIRED.”

     

    (a)    A
      “Date
      of Exercise”
      means
      the date on which the Holder shall have delivered to the Company: (i) the
      Exercise Notice (and Warrant if the aggregate Warrant Shares are being
      exercised), with the Warrant Exercise Log attached to it, appropriately
      completed and duly signed and (ii) payment of the Exercise Price for the number
      of Warrant Shares so indicated by the Holder to be purchased. 

     

    (b)    If
      by the
      fifth Trading Day after a Date of Exercise the Company fails to deliver the
      required number of Warrant Shares in the manner required pursuant to Section
      4,
      then the Holder will have the right to rescind such exercise.

     

    (c)    The
      Company's obligations to issue and deliver Warrant Shares in accordance with
      the
      terms hereof are absolute and unconditional, irrespective of any action or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof. Nothing herein shall limit a Holder's right to pursue
      any other remedies available to it hereunder, at law or in equity including,
      without limitation, a decree of specific performance and/or injunctive relief
      with respect to the Company's failure to timely deliver certificates
      representing Warrant Shares upon exercise of the Warrant as required pursuant
      to
      the terms hereof.

     

    5.    Charges,
      Taxes and Expenses.
      Issuance and delivery of Warrant Shares upon exercise of this Warrant shall
      be
      made without charge to the Holder for any transfer agent fee or other incidental
      expense in respect of the issuance of such certificates, all of which expenses
      shall be paid by the Company; provided, however, that the Company shall not
      be
      required to pay any tax which may be payable in respect of any issuance,
      delivery or transfer of Warrant Shares. The Holder shall be responsible for
      all
      tax liability that may arise as a result of holding or transferring this Warrant
      or receiving Warrant Shares upon exercise hereof.

     

    6.    Replacement
      of Warrant.
      If this
      Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
      cause to be issued in exchange and substitution for and upon cancellation
      hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
      only
      upon

     

    
      
        
        

      

      
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    receipt
      of evidence reasonably satisfactory to the Company of such loss, theft or
      destruction and customary and reasonable indemnity (which shall not include
      a
      surety bond), if requested. Applicants for a New Warrant under such
      circumstances shall also comply with such other reasonable regulations and
      procedures and pay such other reasonable third-party costs as the Company may
      prescribe. If a New Warrant is requested as a result of a mutilation of this
      Warrant, then the Holder shall deliver such mutilated Warrant to the Company
      as
      a condition precedent to the Company’s obligation to issue the New
      Warrant.

     

    7.    Reservation
      of Warrant Shares.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      the aggregate of its authorized but unissued and otherwise unreserved Common
      Stock, solely for the purpose of enabling it to issue Warrant Shares upon
      exercise of this Warrant as herein provided, the number of Warrant Shares which
      are then issuable and deliverable upon the exercise of this entire Warrant,
      free
      from preemptive rights or any other contingent purchase rights of Persons other
      than the Holder (taking into account the adjustments and restrictions of Section
      8). The Company covenants that all Warrant Shares so issuable and deliverable
      shall, upon issuance and the payment of the applicable Exercise Price in
      accordance with the terms hereof, be duly and validly authorized, issued and
      fully paid and nonassessable.

     

    8.    Certain
      Adjustments.
      The
      Exercise Price of Warrant Shares issuable upon exercise of this Warrant is
      subject to adjustment from time to time as set forth in this Section
      8.

     

    (a)    Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding, (i) pays a stock
      dividend on its Common Stock or otherwise makes a distribution on any class
      of
      capital stock that is payable in shares of Common Stock, (ii) subdivides
      outstanding shares of Common Stock into a larger number of shares, or (iii)
      combines outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination.

     

    (b)    Fundamental
      Transactions.
      If, at
      any time while this Warrant is outstanding there is a Fundamental Transaction,
      then the Holder shall have the right thereafter to receive, upon exercise of
      this Warrant, the same amount and kind of securities, cash or property as it
      would have been entitled to receive upon the occurrence of such Fundamental
      Transaction if it had been, immediately prior to such Fundamental Transaction,
      the holder of the number of Warrant Shares then issuable upon exercise in full
      of this Warrant (the “Alternate
      Consideration”).
      For
      purposes of any such exercise, the determination of the Exercise Price shall
      be
      appropriately adjusted to apply to such Alternate Consideration based on the
      amount of Alternate Consideration issuable in respect of one share of Common
      Stock in such Fundamental Transaction, and the Company shall apportion the
      Exercise Price among the Alternate Consideration in a reasonable manner
      reflecting the relative value of any different components of the Alternate
      Consideration. If holders of Common Stock are given any choice as to
      the

     

    
      
        
        

      

      
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    securities,
      cash or property to be received in a Fundamental Transaction, then the Holder
      shall be given the same choice as to the Alternate Consideration it receives
      upon any exercise of this Warrant following such Fundamental Transaction. Any
      successor to the Company or surviving entity in such Fundamental Transaction
      shall, issue to the Holder a new warrant substantially in the form of this
      Warrant and consistent with the foregoing provisions and evidencing the Holder's
      right to purchase the Alternate Consideration for the aggregate Exercise Price
      upon exercise thereof. The terms of any agreement pursuant to which a
      Fundamental Transaction is effected shall include terms requiring any such
      successor or surviving entity to comply with the provisions of this paragraph
      (b). 

     

    9.    Payment
      of Exercise Price.
      The
      Holder shall pay the Exercise Price in cash by delivering to the Company
      immediately available funds.

     

    10.    No
      Fractional Shares.
      No
      fractional shares of Warrant Shares will be issued in connection with any
      exercise of this Warrant. In lieu of any fractional shares which would,
      otherwise be issuable, the Company shall pay cash equal to the product of such
      fraction multiplied by the closing price of one Warrant Share as reported by
      the
      applicable Trading Market on the date of exercise.

     

    11.    Notices.
      Any and
      all notices or other communications or deliveries hereunder (including, without
      limitation, any Exercise Notice) shall be in writing and shall be deemed given
      and effective on the earliest of (i) the date of transmission, if such notice
      or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii)
      the
      next Trading Day after the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      on
      a day that is not a Trading Day or later than 6:30 p.m. (New York City time)
      on
      any Trading Day, (iii) the Trading Day following the date of mailing, if sent
      by
      nationally recognized overnight courier service, or (iv) upon actual receipt
      by
      the party to whom such notice is required to be given. The addresses for such
      communications shall be: (i) if to the Company, to Calypte Biomedical
      Corporation, Attn: President, or to Facsimile No.: 503-601-6299 (or such other
      address as the Company shall indicate in writing in accordance with this
      Section), or (ii) if to the Holder, to the address or facsimile number appearing
      on the warrant register or such other address or facsimile number as the Holder
      may provide to the Company in accordance with this Section.

     

    12.    Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon 10 days' notice
      to
      the Holder, the Company may appoint a new warrant agent. Any corporation into
      which the Company or any new warrant agent may be merged or any corporation
      resulting from any consolidation to which the Company or any new warrant agent
      shall be a party or any corporation to which the Company or any new warrant
      agent transfers substantially all of its corporate trust or shareholders
      services business shall be a successor warrant agent under this Warrant without
      any further act. 

     

    13.    Miscellaneous.

     

    (a)    This
      Warrant shall be binding on and inure to the benefit of the parties hereto
      and
      their respective successors and assigns. Subject to the preceding sentence,
      nothing in

     

    
      
        
        

      

      
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    this
      Warrant shall be construed to give to any Person other than the Company and
      the
      Holder any legal or equitable right, remedy or cause of action under this
      Warrant. This Warrant may be amended only in writing signed by the Company
      and
      the Holder and their successors and assigns.

     

    (b)    All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be governed by and construed and enforced in accordance
      with the internal laws of the State of Delaware, without regard to the
      principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of this
      Warrant and the transactions herein contemplated (“Proceedings”)
      (whether brought against a party hereto or its respective Affiliates, employees
      or agents) shall be commenced exclusively in the Portland Courts. Each party
      hereto hereby irrevocably submits to the exclusive jurisdiction of the Portland
      Courts for the adjudication of any dispute hereunder or in connection herewith
      or with any transaction contemplated hereby or discussed herein, and hereby
      irrevocably waives, and agrees not to assert in any Proceeding, any claim that
      it is not personally subject to the jurisdiction of any Portland Court, or
      that
      such Proceeding has been commenced in an improper or inconvenient forum. Each
      party hereto hereby irrevocably waives personal service of process and consents
      to process being served in any such Proceeding by mailing a copy thereof via
      registered or certified mail or overnight delivery (with evidence of delivery)
      to such party at the address in effect for notices to it under this Warrant
      and
      agrees that such service shall constitute good and sufficient service of process
      and notice thereof. Nothing contained herein shall be deemed to limit in any
      way
      any right to serve process in any manner permitted by law. Each party hereto
      hereby irrevocably waives, to the fullest extent permitted by applicable law,
      any and all right to trial by jury in any legal proceeding arising out of or
      relating to this Warrant or the transactions contemplated hereby. If either
      party shall commence a Proceeding to enforce any provisions of this Warrant,
      then the prevailing party in such Proceeding shall be reimbursed by the other
      party for its attorney’s fees and other costs and expenses incurred with the
      investigation, preparation and prosecution of such Proceeding.

     

    (c)    The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    (d)    In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

     

    (e)    Prior
      to
      exercise of this Warrant, the Holder hereof shall not, by reason of being a
      Holder, be entitled to any rights of a stockholder with respect to the Warrant
      Shares.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
      its
      authorized officer as of the date first indicated above.

     

    CALYPTE
      BIOMEDICAL CORPORATION

     

     

    By: 
      
      
        

      

    

    Name: 
      Jerrold Dotson

    Title:   
      Vice President Finance

     

     

    
      
        
        

      

      
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    EXERCISE
      NOTICE

    CALYPTE
      BIOMEDICAL CORPORATION

    WARRANT
      NO. _______ DATED AUGUST __, 2008

     

    The
      undersigned Holder hereby irrevocably elects to purchase _____________ shares
      of
      Common Stock pursuant to the above referenced Warrant. Capitalized terms used
      herein and not otherwise defined have the respective meanings set forth in
      the
      Warrant.

     

    (1) The
      undersigned Holder hereby exercises its right to purchase _________________
      Warrant Shares pursuant to the Warrant.

     

    (2) The
      holder shall pay the sum of $____________ to the Company in accordance with
      the
      terms of the Warrant.

     

    (3) Pursuant
      to this Exercise Notice, the Company shall deliver to the holder _______________
      Warrant Shares in accordance with the terms of the Warrant.

     

    

    
      	 	 	 
	 	 	 
	
              Dated: 
                __________,
                __

            	 	
              Name
                of Holder/name on certificate:

            
	 	 	 
	 	 	
              (Print)  
                 ________________________________________

            
	 	 	 
	
              Mailing
                address for certificate:

            	 	
              By: 
                ___________________________________________

            
	 	 	
              Name: 
                _________________________________________

            
	 	 	
              Title: 
                __________________________________________

            
	 	 	 
	 	 	
              (Signature
                must conform in all respects to name of holder

              as
                specified on the face of the
                Warrant)

            

    

    

     

    
      
        
        

      

      
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    Warrant
      Shares Exercise Log

     

    
      	
              Date

            	
              Number
                of Warrant Shares

              Available
                to be Exercised

            	
              Number
                of Warrant

              Shares
                Exercised

            	
              Number
                of Warrant Shares Remaining to be Exercised

            
	
               

               

               

                   

               

               

               

               

               

               

               

            	   
	   
	   

    

    

     

    
      
        
        

      

      
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    CALYPTE
      BIOMEDICAL CORPORATION 

    WARRANT
      ORIGINALLY ISSUED AUGUST __, 2008

    WARRANT
      NO. _____

     

    FORM
      OF
      ASSIGNMENT

     

    [To
      be
      completed and signed only upon transfer of Warrant]

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      ________________________________ the right represented by the above-captioned
      Warrant to purchase ____________ shares of Common Stock to which such Warrant
      relates and appoints ________________ attorney to transfer said right on the
      books of the Company with full power of substitution in the
      premises.

     

    Dated: _______________,
      ____

     

    _______________________________________

    (Signature
      must conform in all respects to name

    of
      holder
      as specified on the face of the Warrant)

     

     

    _______________________________________

    Address
      of Transferee

     

     

    _______________________________________

     

    _______________________________________

     

    In
      the
      presence of:

     

    __________________________

     

     

    -
      10
      -AIMS WORLDWIDE, INC

HUTTON HOLDINGS CORPORATION

CERTIFICATE OF DESIGNATIONS OF PREFERENCES, 

RIGHTS AND LIMITATIONS

OF

SERIES A PREFERRED STOCK

The undersigned, Lau Hing Bun, does hereby certify that:

                1.  He is the President and Secretary, respectively, of HUTTON HOLDINGS CORPORATION, a Nevada corporation (the “Corporation”).

                2.     The Corporation is authorized to issue 10,000,000 shares of preferred stock, none of which has been previously issued.

                3.         The following resolutions were duly adopted by the Board of Directors:

WHEREAS, the Certificate of Incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, comprised of 10,000,000 shares, $0.001 par value per share, issuable from time to time in one or more series;

WHEREAS, the Board of Directors of the Corporation is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; 

WHEREAS, the Board of Directors filed with the Secretary of State of Nevada on August 29, 2007, a Certificate of Designation for Series A Preferred Stock designating

5,000,000

 shares of Series A Preferred Stock, none of which has been previously issued.

WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of the preferred stock the Corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to the Series A Preferred Stock as follows:

1

TERMS OF SERIES A PREFERRED STOCK

Section 1. 

Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement (as defined below) shall have the meanings given such terms in the Purchase Agreement. For the purposes hereof, the following terms shall have the following meanings:

“Bankruptcy Event” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined in Rule 1.02(s) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Corporation or any Significant Subsidiary thereof; (b) there is commenced against the Corporation or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Corporation or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custod

ian or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Corporation or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Corporation or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 “Closing Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Investor’s obligations to pay the Subscription Amount and (ii) the Corporation’s obligations to deliver the Preferred Stock and Warrants have been satisfied or waived, including the satisfaction of all provisions of the Escrow Agreement entered into pursuant to the terms of the Purchase Agreement.

 “Commission” means the Securities and Exchange Commission.

 “Common Stock" means the Corporation's common stock, par value $0.001 per share, and stock of any other class into which such shares may hereafter have been reclassified or changed.

“Common Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Conversion Date” shall have the meaning set forth in Section 6(a).

“Conversion Ratio” shall have the meaning set forth in Section 6(a).

2

 “Conversion Shares” means, collectively, the shares of Common Stock into which the shares of Preferred Stock are convertible in accordance with the terms hereof.

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

“Holder” shall have the meaning given such term in Section 2 hereof.

“Junior Securities” means the Common Stock and all other equity or equity equivalent securities of the Corporation other than those securities that are explicitly senior in rights or liquidation preference to the Preferred Stock.

“Original Issue Date” shall mean the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.

“Person” means a corporation, an association, a partnership, a limited liability company, a business association, an individual, a government or political subdivision thereof or a governmental agency.

“Preferred Stock” shall have the meaning set forth in Section 2.

“Purchase Agreements” means the Share Exchange Agreement, dated as August 27, 2007 to which the Corporation and the original Holders are parties and the Stock Purchase Agreement, dated as August 28, 2007, to which the original Holders and China Water & Drinks, Inc. are parties, as amended, modified or supplemented from time to time in accordance with its terms, copies of which is on file at the principal offices of the Corporation.

 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Subsidiary” shall mean a corporation, limited liability company, partnership, joint venture or other  business entity of which the Corporation owns beneficially or of record more than 19% of the equity interest.

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

“Transaction Documents” shall have the meaning set forth in the Purchase Agreements.

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           Section 2.     Designation, Amount and Par Value. The series of preferred stock shall be designated as the Corporation’s Series A Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be up to 5,000,000 (which shall not be subject to increase without the consent of all of the holders of the Preferred Stock (each a “Holder” and collectively, the “Holders”).  Each share of Preferred Stock shall have a par value of $0.001 per share.  Capitalized terms not otherwise defined herein shall have the meaning given such terms in Section 1 hereof. 

Section 3. 

Dividends and Other Distributions.  No dividends shall be payable with respect to the Preferred Stock.  No dividends shall be payable with respect to the Common Stock while the Preferred Stock is outstanding.  The Common Stock shall not be redeemed while the Preferred Stock is outstanding.

Section 4. 

Voting Rights and Holder Approvals. The Preferred Stock shall have voting rights equal in all aspects to the number of Common Stock represented by such Preferred Stock on an as converted basis and shall be entitled to vote on any and all matters brought to a vote of shareholders of Common Stock and all matters brought to a vote of shareholders of Preferred Stock. Furthermore, so long as any shares of Preferred Stock are outstanding:

a)       The Corporation shall not, without the affirmative approval of the Holders of the shares of the Preferred Stock then outstanding, (A) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (B) authorize or create any class of stock ranking as to dividends or distribution of assets upon a Liquidation (as defined in Section 5) senior to or otherwise pari passu with the Preferred Stock, or any of preferred stock possessing greater voting rights or the right to convert at a more favorable price than the Preferred Stock, (C) amend its certificate or articles of incorporation or other charter documents in breach of any of the provisions hereof, (D) increase the authorized number of shares of Preferred Stock, or (E) enter into any agreement with respect to the foregoing; 

Section 5. 

Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to receive out of the assets of the Corporation, whether such assets are capital or surplus, for each share of Preferred Stock an amount equal to the par value of the shares (the “Liquidation Value”) before any distribution or payment shall be made to the holders of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders shall be distributed among the Holders ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.  A Fundamental Transaction or Change of Control Transaction shall not be treated as a Liquidation

.. The Corporation shall mail written notice of any such Liquidation, not less than 70 days prior to the payment date stated therein, to each record Holder.

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Section 6. 

Conversion.

a)

Conversions at Option of Holder. Each share of Preferred Stock shall be initially convertible (subject to the limitations set forth in Section 6(b)), into five (5) shares of Common Stock (as adjusted as provided below, the “Conversion Ratio”) at the option of the Holders, subject to the availability of Common Shares, at any time and from time to time from and after the Original Issue Date.  Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”) as fully and originally executed by the Holder, together with the delivery by the Holder to the Corporation of the stock certificate(s) representing the number of shares of Preferred Stock so converted, with such stock certificates being duly endorsed in full for transfer to the Corporation or with an applicable sto

ck power duly executed by the Holder in the manner and form as deemed reasonable by the transfer agent of the Common Stock. Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue, the stock certificate number and the shares of Preferred Stock represented thereby which are accompanying the Notice of Conversion, and the date on which such conversion is to be effected, which date may not be prior to the date the Holder delivers such Notice of Conversion and the applicable stock certificates to the Corporation by overnight delivery service (the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the Trading Day immediately following the date that such Notice of Conversion and applicable stock certificates are received by the Cor

poration. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error.  Shares of Preferred Stock converted into Common Stock in accordance with the terms hereof shall be canceled and may not be reissued.  The initial value of the Preferred Stock, on an as converted to Common Stock basis (calculated utilizing the Conversion Ratio), on the Conversion Date shall be equal to the par value.  If the initial Conversion Value is adjusted pursuant to Section 7 or as otherwise provided herein, the Conversion Ratio shall likewise be adjusted and the new Conversion Ratio shall equal the Liquidation Value divided by the new Conversion Value.  Thereafter, subject to any further adjustments in the Conversion Value, each share of Preferred Stock shall be convertible into that number of shares of Common Stock equal to the new Conversion Ratio.  

b)

Reserved.

 

c)

Mechanics of Conversion

(i)

Delivery of Certificate Upon Conversion. Except as otherwise set forth herein, as soon as practicable after each Conversion Date (the “Share Delivery Date”), the Corporation shall deliver to the Holder (A) a certificate or certificates with 144 restrictions representing the number of shares of Common Stock being acquired upon the conversion of shares of Preferred Stock or a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those required by the Purchase Agreements) representing the number of shares of Common Stock being acquired upon the conversion of shares of Preferred Stock, and (B) a bank check in the 

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amount of accrued and unpaid dividends (if the Corporation has elected or is required to pay accrued dividends in cash). 

 

i.

Obligation Absolute; Partial Liquidated Damages.  The Corporation’s obligations to issue and deliver the Conversion Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to the Holder in connection with the issuance of such Conversion Shares.  In the event a Holder shall elect

 to convert any or all of its Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or any one associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless, an injunction from a court, on notice, restraining and or enjoining conversion of all or part of this Preferred Stock shall have been sought and obtained and shall remain in effect until the completion of arbitration/litigation of the dispute and the Corporation shall pay any proceeds to such Holder to the extent it obtains judgment.  In the absence of an injunction precluding the same, the Corporation shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. Nothing herein shall limit a Holder’s right to pursue actual damages for the Corporation’s failure to deliver certificates representing shares of Common Stock upon conversion within the period specified herein and such Holder shall have the right to

 pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

ii.

Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will, as soon as practicable following the execution of the Purchase Agreements, and at all times thereafter, reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of the Preferred Stock, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holders, not less than such number of shares of the Common Stock as shall (subject to any additional requirements of the Corporation as to reservation of such shares set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of all outstanding shares of Preferred Stock.  The Corporation covenants that all shares of Common Stock that shall be

 so issuable shall, upon issue, be duly and validly authorized, issued and fully paid, nonassessable and, if the Conversion Shares Registration Statement is then effective under the Securities Act, registered for public sale in accordance with such Conversion Shares Registration Statement.

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iii.

Fractional Shares. Upon a conversion hereunder, the Corporation shall not be required to issue stock certificates representing fractions of shares of the Common Stock.

iv.

Transfer Taxes.  The issuance of certificates for shares of the Common Stock on conversion of the Preferred Stock shall be made without charge to the Holders thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of such shares of Preferred Stock so converted and the Corporation shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

Section 7. 

Certain Adjustments.

a)

Stock Dividends and Stock Splits.  If the Corporation, at any time while the Preferred Stock is outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation pursuant to this Preferred Stock), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of the Corporation, then the Conversion Value shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if

 any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event.  Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.                                                                                              

b)

Calculations.  All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.  The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Corporation, and the description of any such shares of Common Stock shall be considered on issue or sale of Common Stock.  For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) actually issued and outstanding.

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c)

Notice to Holders.

i.

Adjustment to Conversion Price.  Whenever the Conversion Value is adjusted pursuant to any of this Section 7, the Corporation shall promptly mail to each Holder a notice setting forth the Conversion Value after such adjustment and setting forth a brief statement of the facts requiring such adjustment. 

 

Notice to Allow Conversion by Holder.  If (A) the Corporation shall declare a dividend (or any other distribution) on the Common Stock; (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Corporation shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquida

tion or winding up of the affairs of the Corporation; then in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of the Preferred Stock, and shall cause to be mailed to the Holders at their last addresses as they shall appear upon the  stock books of the Corporation, at least 70 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitle

d to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  Any and all Conversion Shares issued or issuable upon conversion shall be entitled to share in such transaction notwithstanding the record date of such transaction so long as the Holders of the Preferred Stock elect to convert their shares of Preferred Stock into Conversion Shares prior to the expiration of such 70-day notice period. 

Section 8.  

Miscellaneous. 

a)

Notices.  Any and all notices or other communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Corporation, at the 

8

address provided in the Purchase Agreement. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Corporation, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder.  Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered

via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

  

b)

Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay the liquidated damages (if any) on, the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.  

 

c)

Lost or Mutilated Preferred Stock Certificate.  If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership thereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.

d)

Next Business Day.  Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

e)

Headings.  The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof.

RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file a Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Nevada law.

[Remainder of page intentionally left blank; signature page to follow.]

9

        IN WITNESS WHEREOF, the undersigned have executed this Certificate this 29th day of August, 2007.

		
	

/s/ Lau Hing Bun

Name: Lau Hing Bun.

Title:  President

	

/s/ Lau Hing Bun

Name: Lau Hing Bun

Title:  Secretary

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ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of Preferred Stock indicated below, into shares of common stock, par value $0.001 per share (the "Common Stock"), of HUTTON HOLDINGS CORPORATION, a Nevada corporation (the "Corporation"), according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Corporation in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.

Conversion calculations:

		
	Date to Effect Conversion: _____________________________________________

	Number of shares of Common Stock owned prior to Conversion: _______________

	Number of shares of Preferred Stock to be Converted: ________________________

	Value of shares of Preferred Stock to be Converted: ____________________

	Number of shares of Common Stock to be Issued: ___________________________

	Certificate Number of Preferred Stock attached hereto:________________________

	Number of Shares of Preferred Stock represented by attached certificate:__________

	 

	 

	Number of shares of Preferred Stock subsequent to Conversion: ________________

	 
	

By:___________________________________

     Name:

     Title:

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ANNEX B

IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to ___________________________ _________ shares of the preferred stock of Hutton Holdings Corporation represented by certificate number _______ inclusive, standing in the name of the undersigned on the books of the company.  

The undersigned does hereby irrevocably constitute and appoint Interwest Transfer Company, Inc. to transfer the said stock on the books of said company, with full power of substitution in the premises.

Dated this __________________________

__________________________________

By: _______________________________

Name: _____________________________

Title:______________________________

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