EXHIBIT 10.1

SHARE EXCHANGE AGREEMENT

 

by and among

H&H ARIZONA INC.,

NEXT GENERATION HOLDINGS TRUST

[THE SHAREHOLDER OF H&H ARIZONA INC.],

 DK SINOPHARMA, INC.

 AND

 

SHAWN ERICKSON

 

[THE CONTROLLING STOCKHOLDER OF DK SINOPHARMA, INC.]

 

 

dated as of May 20, 2013

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SHARE EXCHANGE AGREEMENT

 

SHARE EXCHANGE AGREEMENT, dated as of May 20, 2013 (this “Agreement”) by and
among H&H Arizona Inc., a Antigua and Barbuda corporation (“H&H Arizona”), the
entities/individuals listed on Exhibit A attached hereto (collectively, the “H&H
Arizona Shareholder”), DK Sinopharma, Inc., a Nevada Corporation (“DKSP”), and
Shawn Erickson (the “DKSP Controlling Stockholder”).

 

WHEREAS, the H&H Arizona Shareholder owns 100% of the issued and outstanding
capital stock of H&H Arizona, such capital stock being hereinafter referred to
as the “H&H Arizona Shares”; and

 

WHEREAS, (i) H&H Arizona and the H&H Arizona Shareholder believe it is in their
respective best interests for the H&H Arizona Shareholder to exchange all of the
H&H Arizona Shares for 50,000,000 newly-issued shares (the “DKSP Shares”) of
common stock, $.001 par value per share, of DKSP (“Common Stock”), and (ii) DKSP
believes it is in its best interest to acquire the H&H Arizona Shares in
exchange for the DKSP Shares, all upon the terms and subject to the conditions
set forth in this Agreement (the “Share Exchange”); and

 

WHEREAS, it is the intention of the parties that: (i) DKSP shall acquire 100% of
the H&H Arizona Shares in exchange solely for the number of DKSP Shares set
forth herein; (ii) the Share Exchange shall qualify as a tax-free reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the
“Code”); and (iii) the Share Exchange shall qualify as a transaction in
securities exempt from registration or qualification under the Securities Act of
1933, as amended and in effect on the date of this Agreement (the “Securities
Act”); and

 

WHEREAS, immediately prior to the Share Exchange, not more than 13,300,001
shares of Common Stock of DKSP shall be issued and outstanding; and

 

NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein, the parties hereto agree as follows:

 

ARTICLE I

 

     EXCHANGE OF H&H ARIZONA SHARES FOR DKSP SHARES

 

           Section 1.1                      Agreement to Exchange H&H Arizona
Shares for DKSP Shares.  On the Closing Date (as hereinafter defined) and upon
the terms and subject to the conditions set forth in this Agreement, the H&H
Arizona Shareholder shall assign, transfer, convey and deliver the H&H Arizona
Shares to DKSP, and in consideration and exchange therefor DKSP shall assign,
transfer, convey and deliver the DKSP Shares to the H&H Arizona Shareholder. At
the Closing, the DKSP Shares to be issued to the H&H Arizona Shareholder in
exchange for the H&H Arizona Shares shall be issued to the respective H&H
Arizona Shareholder in proportion to their respective ownership of the H&H
Arizona Shares as described in Exhibit A hereto.

 

Section 1.2                       Capitalization at the Closing.  On the Closing
Date, immediately before the consummation of the Share Exchange,  DKSP shall
have as authorized capital stock a total of 75,000,000 shares of Common Stock,
$.001 par value per share, of which not more than 13,300,001 shares of Common
Stock shall be issued and outstanding.

 

Section 1.3                        Closing and Actions at Closing.

 

          a.  The closing of the Share Exchange (the "Closing") shall take place
at 5:00 p.m. E.S.T. on the day the conditions to closing set forth in Articles V
and VI herein have been satisfied or waived, or at such other time and date as
the parties hereto shall agree in writing (the "Closing Date"), at the offices
of H&H Arizona Inc., Hodges Bay Road, Hodges Bay, St. Johns, Antigua and
Barbuda, West Indies.

 

          b.  At the Closing: (i) H&H Arizona Shareholder shall deliver to DKSP
the stock certificates representing one hundred percent (100%) of the H&H
Arizona Shares, duly endorsed in blank for transfer or accompanied by
appropriate stock powers duly executed in blank; (ii) in full consideration and
exchange for the H&H Arizona Shares, DKSP shall issue and deliver to the H&H
Arizona Shareholder stock certificates representing

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all of the DKSP Shares in proportion to their respective ownership of the DKSP
Shares as described in Exhibit A hereto. 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF DKSP AND THE DKSP CONTROLLING STOCKHOLDER

           Each of DKSP and the DKSP Controlling Stockholder (where specifically
included) hereby, severally and not jointly, represents, warrants and agrees
that all of the statements in the following subsections of this Section 2 are
true and complete as of the date hereof, and will, except as contemplated by
this Agreement, be true and complete as of the Closing Date as if first made on
such date:

 

Section 2.1                     Disclosure Schedules

The disclosure schedule attached hereto as Schedule 2.1 through 2.18 (the “DKSP
Disclosure Schedules”) are divided into sections that correspond to the sections
of this Section 2. The DKSP Disclosure Schedules comprise lists of all
exceptions to the truth and accuracy in all material respects of, and of all
disclosures or descriptions required by, the representations and warranties set
forth in the remaining sections of this Section 2. For purposes of this Section
2, any statement, facts, representations, or admissions contained in the public
filings made by DKSP with the United States Securities and Exchange Commission
(the “SEC”), are deemed to be included in the DKSP Disclosure Schedules and all
such information is deemed to be fully disclosed to H&H Arizona and the H&H
Arizona Shareholder.

Section 2.2                     Corporate Organization

                      a.           DKSP is a corporation duly organized, validly
existing and in good standing under the laws of Nevada, and has all requisite
corporate power and authority to own its properties and assets and to conduct
its business as now conducted and is duly qualified to do business and is in
good standing in each jurisdiction in which the nature of the business conducted
by DKSP or the ownership or leasing of its properties makes such qualification
and being in good standing necessary, except where the failure to be so
qualified and in good standing will not have a material adverse effect on the
business, operations, properties, assets, condition or results of operation of
DKSP;

                      b.           Copies of the Articles of Incorporation and
By-laws of DKSP  with all amendments thereto to the date hereof (the “DKSP
Charter Documents”), have been furnished to the H&H Arizona Shareholder and to
H&H Arizona , and such copies are accurate and complete as of the date
hereof.   The minute books of DKSP are current as required by law, contain the
minutes of all meetings of the Board of Directors and stockholders of DKSP from
its date of incorporation to the date of this Agreement, and adequately reflect
all material actions taken by the Board of Directors and stockholders of
DKSP.  DKSP is not in violation of any of the provisions of the DKSP Charter
Documents.

Section 2.3                     Capitalization of DKSP.

 

a.    On the Closing Date, immediately before the consummation of the Share
Exchange, the entire authorized capital stock of DKSP consisted of 75,000,000
shares of Common Stock, of which not more than 13,300,001 shares of Common Stock
shall be issued and outstanding.  Immediately following the Share Exchange, the
H&H Arizona Shareholder will own 79% of the total combined voting power of all
classes of DKSP stock entitled to vote on a fully diluted basis.

 

                    b.       The issuance of the DKSP Shares will be in
accordance with the provisions of this Agreement.  On the Closing Date all of
the issued and outstanding shares of Common Stock of DKSP Shares and all of the
DKSP Shares to be issued pursuant to this Agreement will have been duly
authorized and, when issued, will be validly issued, fully paid and
non-assessable, will have been issued in compliance with all applicable
securities laws, and will have been issued free of preemptive rights of any
security holder.   As of the date of this Agreement there are, and as of the
Closing Date there will be, no outstanding or authorized options, warrants,
agreements,

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commitments, conversion rights, preemptive rights or other rights to subscribe
for, purchase or otherwise acquire or receive any shares of DKSP’s capital
stock, nor are there or will there be any outstanding or authorized stock
appreciation, phantom stock, profit participation or similar rights with respect
to DKSP or any Common Stock, or any voting trusts, proxies or other agreements
or understandings with respect to the voting of DKSP’s capital stock as of the
Closing Date, except with respect to the securities to be issued pursuant to
this Agreement.  There are no registration rights, and there is no voting trust,
proxy, rights plan, anti-takeover plan or other agreement or understanding to
which DKSP is a party or by which it is bound with respect to any equity
security of any class of DKSP.

Section 2.4                    Subsidiaries and Equity Investments.  DKSP does
not directly or indirectly own any capital stock or other securities of, or any
beneficial ownership interest in, or hold any equity or similar interest, or
have any investment in any corporation, limited liability company, partnership,
limited partnership, joint venture or other company, person or other entity,
including without limitation any Subsidiary of DKSP.  For purposes of this
Agreement, a “Subsidiary” of a company means any entity in which, at the date of
this Agreement, such company or any of its subsidiaries directly or indirectly
owns any of the capital stock, equity or similar interests or voting power.

  

Section 2.5                    Authorization and Validity of Agreements.    Each
of DKSP and the DKSP Controlling Stockholder has all corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.  The execution
and delivery of this Agreement by DKSP and the DKSP Controlling Stockholder, and
the consummation by DKSP of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of DKSP and the DKSP Controlling
Stockholder, and no other corporate proceedings on the part of DKSP are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement constitutes the valid and legally binding
obligation of DKSP and the DKSP Controlling Stockholder, and is enforceable in
accordance with its terms.  DKSP does not need to give any notice to, make any
filings with, or obtain any authorization, consent or approval of any government
or governmental agency or other person in order for it  to consummate the
transactions contemplated by this Agreement, other than filings that may be
required or permitted under states securities laws, the Securities Act of 1933,
as amended (the “Securities Act”) and/or the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) resulting from the issuance of the DKSP Shares.

Section 2.6                     No Conflict or Violation.  Neither the execution
and delivery of this Agreement by DKSP, nor the consummation by DKSP of the
transactions contemplated hereby will: (i) violate any provision of the DKSP
Charter Documents; (ii) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency, court, administrative panel or other tribunal
to which DKSP is subject, (ii) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other arrangement to which
DKSP is a party or by which it is bound, or to which any of its assets is
subject; or (iii) result in or require the creation or imposition of any
encumbrance of any nature upon or with respect to any of DKSP’s assets,
including without limitation the DKSP Shares.

            Section 2.7                       Material Agreements.  Except as
set forth on Schedule 2.7 attached hereto, DKSP is not a party to or bound by
any contracts, including, but not limited to, any:

a.  

employment, advisory or consulting contract;

b.  

plan providing for employee benefits of any nature;

c.  

lease with respect to any property or equipment;

d.  

contract, agreement, understanding or commitment for any future expenditure in
excess of $5,000 in the aggregate;

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e.  

contract or commitment pursuant to which it has assumed, guaranteed, endorsed,
or otherwise become liable for any obligation of any other person, entity or
organization;

f.  

agreement with any person relating to the dividend, purchase or sale of
securities, that has not been settled by the delivery or payment of securities
when due, and which remains unsettled upon the date of this Agreement.

           Neither the DKSP Controlling Stockholder nor any of its affiliates is
a party to any side agreements relating to the Share Exchange.

 Section 2.8                   Litigation.  There is no action, suit, proceeding
or investigation (“Action”) pending or, to the best knowledge of DKSP or the
DKSP Controlling Stockholder, currently threatened against DKSP or any of its
Subsidiaries or any of their respective affiliates, that may affect the validity
of this Agreement or the right of DKSP to enter into this Agreement or to
consummate the transactions contemplated hereby or thereby.  There is no Action
pending or, to the best knowledge of DKSP or the DKSP Controlling Stockholder,
currently threatened against DKSP or any of its Subsidiaries or any of their
respective affiliates, before any court or by or before any governmental body or
any arbitration board or tribunal, nor is there any judgment, decree, injunction
or order of any court, governmental department, commission, agency,
instrumentality or arbitrator against DKSP or any of its Subsidiaries or any of
their respective affiliates.  Neither DKSP nor any of its Subsidiaries or any of
their respective affiliates is a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality.  There is no Action by DKSP or any of its Subsidiaries or any
of their respective affiliates relating to DKSP currently pending or which DKSP
or any of its Subsidiaries or any of their respective affiliates intends to
initiate.

Section 2.9                    Compliance with Laws.   DKSP, each of its
Subsidiaries, and each of their respective affiliates has been and is in
compliance with, and has not received any notice of any violation of any,
applicable law, ordinance, regulation or rule of any kind whatsoever, including
without limitation the Securities Act, the Exchange Act, the applicable rules
and regulations of the SEC, or the applicable securities laws and rules and
regulations of any state.  DKSP is not an “investment company” as such term is
defined by the Investment Company Act of 1940, as amended.

            Section 2.10                     Financial Statements; SEC Filings.
DKSP’s financial statements (the “Financial Statements”) contained in its
periodic reports filed with the SEC have been prepared in accordance with
generally accepted accounting principles applicable in the United States of
America (“U.S. GAAP”) applied on a consistent basis throughout the periods
indicated and with each other, except that those of the Financial Statements
that are not audited do not contain all footnotes required by U.S. GAAP. The
Financial Statements fairly present the financial condition and operating
results of DKSP as of the dates, and for the periods, indicated therein, subject
to normal year-end audit adjustments.  Except as set forth in the Financial
Statements or as disclosed in Schedule 2.10, DKSP has no material liabilities
(contingent or otherwise). DKSP is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.  DKSP maintains and will
continue to maintain until the Closing a standard system of accounting
established and administered in accordance with U.S. GAAP.

            Section 2.11                    Books and Financial Records.  All
the accounts, books, registers, ledgers, Board minutes and financial and other
material records of whatsoever kind of each of DKSP and any Subsidiary of DKSP
have been fully, properly and accurately kept and completed; there are no
material inaccuracies or discrepancies of any kind contained or reflected
therein; and they give and reflect a true and fair view of the financial,
contractual and legal position of DKSP and each such Subsidiary.

Section 2.12                  Employee Benefit Plans.  DKSP does not have any
“Employee Benefit Plan” as defined in the U.S. Employee Retirement Income
Security Act of 1974 or similar plans under any applicable laws.

Section 2.13                   Tax Returns, Payments and Elections.  Each of
DKSP and its Subsidiaries has timely filed all Tax (as defined below) returns,
statements, reports, declarations and other forms and documents (including,
without limitation, estimated tax returns and reports and material information
returns and reports) (“Tax Returns”) required pursuant to applicable law to be
filed with any Tax Authority (as defined below).  All such Tax

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Returns are accurate, complete and correct in all material respects, and each of
DKSP and its Subsidiaries has timely paid all Taxes due.  Each of DKSP and its
Subsidiaries has withheld or collected from each payment made to each of its
employees the amount of all Taxes (including, but not limited to, United States
income taxes and other foreign taxes) required to be withheld or collected
therefrom, and has paid the same to the proper Tax Authority.  For purposes of
this Agreement, the following terms have the following meanings:  “Tax” (and,
with correlative meaning, “Taxes” and “Taxable”) means any and all taxes
including, without limitation, (x) any net income, alternative or add-on minimum
tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, value added, net worth, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom, duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or any
penalty, addition to tax or additional amount imposed by any United States,
local or foreign governmental authority or regulatory body responsible for the
imposition of any such tax (domestic or foreign) (a “Tax Authority”), (y) any
liability for the payment of any amounts of the type described in (x) as a
result of being a member of an affiliated, consolidated, combined or unitary
group for any taxable period or as the result of being a transferee or successor
thereof, and (z) any liability for the payment of any amounts of the type
described in (x) or (y) as a result of any express or implied obligation to
indemnify any other person.

Section 2.14                  Absence of Undisclosed Liabilities.  As of the
Closing Date, DKSP will have no liabilities of any kind whatsoever.  DKSP is not
a guarantor of any indebtedness of any other person, entity or corporation.

 

Section 2.15                   No Broker Fees.  No brokers, finders or financial
advisory fees or commissions will be payable by or to DKSP or the DKSP
Controlling Stockholder of any of their affiliates with respect to the
transactions contemplated by this Agreement.

Section 2.16                  No Disagreements with Accountants and Lawyers.
There are no disagreements of any kind presently existing, or anticipated by
DKSP to arise, between DKSP and any accountants and/or lawyers formerly or
presently employed by DKSP.  DKSP is current with respect to fees owed to its
accountants and lawyers.

Section 2.17                  Disclosure.  This Agreement and any certificate
attached hereto or delivered in accordance with the terms hereby by or on behalf
of DKSP in connection with the transactions contemplated by this Agreement, when
taken together, do not contain any untrue statement of a material fact or omit
any material fact necessary in order to make the statements contained herein
and/or therein not misleading.

Section 2.18                   Survival.  Each of the representations and
warranties set forth in this Article II shall be deemed represented and made by
DKSP and the DKSP Controlling Stockholder at the Closing as if made at such time
and shall survive the Closing for a period terminating twenty-four months after
the date of the Closing.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF H&H ARIZONA AND THE H&H ARIZONA SHAREHOLDER

           H&H Arizona and the H&H Arizona Shareholder hereby represent, warrant
and agree that all of the statements in the following subsections of this
Section 3 are true and complete as of the date hereof, and will, except as
contemplated by this Agreement, be true and complete as of the Closing Date as
if first made on such date.  The disclosure schedule attached hereto as Schedule
3.1 through 3.25 (the “H&H Arizona Disclosure Schedules”) are divided into
sections that correspond to the sections of this Section 3.  The H&H Arizona
Disclosure Schedules comprise lists of all exceptions to the truth and accuracy
in all material respects of, and of all disclosures or descriptions required by,
the representations and warranties set forth in the remaining sections of this
Section 3.

 

Section 3.1                        Corporate Organization.    H&H Arizona is
organized as a Antigua and Barbuda corporation and is validly existing and in
good standing under the laws of Antigua and Barbuda; and has the requisite
corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being or currently planned
to be conducted.  H&H Arizona is in possession of all franchises,

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grants, authorizations, licenses, permits, easements, consents, certificates,
approvals and orders (“Approvals”) necessary to own, lease and operate the
properties it purports to own, operate or lease and to carry on its business as
it is now being conducted and to consummate the transactions contemplated under
this Agreement, except where the failure to have such Approvals could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, properties, assets, condition or
results of operation of H&H Arizona.  H&H Arizona has delivered to DKSP and the
DKSP Controlling Stockholder complete and correct copies of the following
documents (referred to herein as the "H&H Arizona Charter Documents"): (a) the
articles or certificate of incorporation and the by-laws or code of regulations
of a corporation; (b) any other document performing a similar function to the
documents specified in clauses (a) or (b) adopted or filed in connection with
the creation, formation or organization of a Person (as defined elsewhere in
this Agreement); and (c) any and all amendments to any of the foregoing.  H&H
Arizona is not in violation of any of the provisions of the H&H Arizona Charter
Documents.  The minute books or the equivalent of H&H Arizona contain true and
accurate records of all meetings and consents in lieu of meetings of its Board
of Directors and stockholders ("Corporate Records"), from the time of its
organization until the date hereof.  The stock ledgers and other ownership
records of the shares of all of H&H Arizona’s common stock (the “H&H Arizona
Share Records”) are true, complete and accurate records of the ownership of the
shares of such capital stock as of the date thereof and contain all issuances
and transfers of such shares since the time of organization of H&H Arizona.

            Section 3.2                      Capitalization of H&H Arizona;
Title to the H&H Arizona Shares.  On the Closing Date, immediately before the
transactions to be consummated pursuant to this Agreement, H&H Arizona shall
have authorized capital consisting of 1,000,000 shares of common stock, no par
value, 1,000 shares of which, constituting all of the H&H Arizona Shares, will
be issued and outstanding.  All of the H&H Arizona Shares are owned of record by
the H&H Arizona Shareholder.  The H&H Arizona Shares are the sole outstanding
shares of common stock of H&H Arizona and there are no outstanding options,
warrants, agreements, commitments, conversion rights, preemptive rights or other
rights to subscribe for, purchase or otherwise acquire any shares of common
stock or any un-issued or treasury shares of common stock of H&H Arizona.

 Section 3.3                   Subsidiaries and Equity Investments.

a. Each Subsidiary and affiliated company of H&H Arizona is set forth
on Schedule 3.3(a).

b.           Except as set forth on Schedule 3.3(a), H&H Arizona does not,
directly or indirectly, own any capital stock or other securities of, or have
any beneficial ownership interest in, or hold any equity or similar interest, or
have any investment in any corporation, limited liability company, partnership,
limited partnership, joint venture or other company, person or other entity. For
each entity listed thereon, Schedule 3.3(a) sets forth its jurisdiction of
organization and the percentage of the outstanding capital stock or other equity
interests of such entity that is held by H&H Arizona.  Each entity listed
on Schedule 3.3(a) is duly organized and validly existing and, except as set
forth on Schedule 3.3(a), is in good standing under the laws of the jurisdiction
of its formation; has the requisite corporate power and authority to own its
properties and to carry on its business as now being conducted; and, if
applicable, is duly qualified as a foreign entity to do business and, to the
extent legally applicable, is in good standing in every jurisdiction in which
its ownership of property or the nature of the business conducted by it makes
such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect.

 Section 3.4                  Authorization and Validity of Agreements.  H&H
Arizona has all corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.  Each of the H&H Arizona Shareholder has full
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby.  This Agreement constitutes the valid and legally binding obligation of
H&H Arizona and the H&H Arizona Shareholder and is enforceable in accordance
with its terms against each of them.  Neither H&H Arizona nor the H&H Arizona
Shareholder need give any notice to, make any filings with, or obtain any
authorization, consent or approval of any government or governmental agency or
other person in order for it to consummate the transactions contemplated by this
Agreement, other than filings that may be required or permitted under state
securities laws, the Securities Act and/or the Exchange Act resulting from the
transfer and exchange of the H&H Arizona Shares.  The execution and delivery of
this Agreement by H&H Arizona and the H&H Arizona Shareholder, and the
consummation by H&H Arizona and by the H&H Arizona Shareholder of the
transactions contemplated hereby,

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have been duly authorized by all necessary corporate action of H&H Arizona and
the H&H Arizona Shareholder, and no other corporate proceedings on the part of
H&H Arizona or other actions on the part of the H&H Arizona Shareholders are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby.

Section 3.5                     No Conflict or Violation.  Neither the execution
and delivery of this Agreement by H&H Arizona or the H&H Arizona Shareholder,
nor the consummation by H&H Arizona and/or the H&H Arizona Shareholder of the
transactions contemplated hereby will: (i) violate any provision of the H&H
Arizona Charter Documents, (ii) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge or other restriction
of any government, governmental agency, court, administrative panel or other
tribunal to which H&H Arizona and/or the H&H Arizona Shareholder are
subject,  (iii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other arrangement to which
H&H Arizona and/or the H&H Arizona Shareholder is/are a party or by which
it/they is/are bound, or to which any of its/their/his assets is subject; or
(iv) result in or require the creation or imposition of any encumbrance of any
nature upon or with respect to any of H&H Arizona’s or any of the H&H Arizona
Shareholder’ assets, including without limitation the H&H Arizona Shares.

           Section 3.6                      Compliance with Laws and Other
Instruments. Except as would not have a Material Adverse Effect on H&H Arizona,
the business and operations of H&H Arizona have been and are being conducted in
accordance with all applicable foreign, federal, state and local laws, rules and
regulations and all applicable orders, injunctions, decrees, writs, judgments,
determinations and awards of all courts and governmental agencies and
instrumentalities.  Except as would not have a Material Adverse Effect on H&H
Arizona, H&H Arizona is not, and is not alleged to be, in violation of, or (with
or without notice or lapse of time or both) in default under, or in breach of,
any term or provision of the H&H Arizona Charter Documents or of any indenture,
loan or credit agreement, note, deed of trust, mortgage, security agreement or
other material agreement, lease, license or other instrument, commitment,
obligation or arrangement to which H&H Arizona is a party or by which any of H&H
Arizona’s properties, assets or rights are bound or affected.  To the knowledge
of H&H Arizona, no other party to any material contract, agreement, lease,
license, commitment, instrument or other obligation to which H&H Arizona is a
party are (with or without notice or lapse of time or both) in default
thereunder or in breach of any term thereof.  H&H Arizona is not subject to any
obligation or restriction of any kind or character, nor are there, to the
knowledge of H&H Arizona, any event or circumstance relating to H&H Arizona that
materially and adversely affects in any way their business, properties, assets
or prospects or that would prevent or make burdensome their performance of or
compliance with all or any part of this Agreement or the consummation of the
transactions contemplated hereby or thereby.  “Material Adverse Effect” means,
when used with respect to H&H Arizona, any change, effect or circumstance which,
individually or in the aggregate, would reasonably be expected to (a) have a
material adverse effect on the business, assets, financial condition or results
of operations of H&H Arizona, in each case taken as a whole, or (b) materially
impair the ability of H&H Arizona to perform its obligations under this

Agreement, excluding any change, effect or circumstance resulting from (i) the
announcement, pendency or consummation of the transactions contemplated by this
Agreement, (ii) changes in the United States securities markets generally, or
(iii) changes in general economic, currency exchange rate, political or
regulatory conditions in industries in which H&H Arizona operates.

Section 3.7                      Brokers’ Fees. None of the H&H Arizona
Shareholder nor H&H Arizona has any liability to pay any fees or commissions or
other consideration to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement, other than to that listed
under Schedule 3.7.

           Section 3.8                      Investment Representations.

a.           The DKSP Shares will be acquired hereunder solely for the account
of H&H Arizona Shareholder for investment, and not with a view to the resale or
distribution thereof.  Each of the H&H Arizona Shareholder understands and is
able to bear any economic risks associated with acquiring the DKSP Shares. Each
of the H&H Arizona Shareholder have had full access to all the information it
considers necessary or appropriate to make an informed investment decision with
respect to the mutual DKSP Shares.

           b.           No offer to enter into this Agreement has been made by
DKSP to any of the H&H Arizona Shareholder in the United States.  None of the
H&H Arizona Shareholder or any of their respective affiliates or any

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person acting on their behalf or on behalf of any such affiliate, has engaged or
will engage in any activity undertaken for the purpose of, or that reasonably
could be expected to have the effect of, conditioning the markets in the United
States for the DKSP Shares, including, but not limited to, effecting any sale or
short sale of securities, prior to the expiration of any restricted period
contained in Regulation S promulgated under the Securities Act (any such
activity being defined herein as a “Directed Selling Effort”).  To the best
knowledge of each of the H&H Arizona Shareholder this Agreement and the
transactions contemplated herein are not part of a plan or scheme to evade the
registration provisions of the Securities Act, and the DKSP Shares are being
acquired for investment purposes by each of the H&H Arizona Shareholder.  Each
of the H&H Arizona Shareholder agree that all offers and sales of the DKSP
Shares from the date hereof and through the expiration of any restricted period
set forth in Rule 903 of Regulation S (as the same may be amended from time to
time hereafter) shall not be made to U.S. Persons (within the meaning of
Regulation S) or for the account or benefit of U.S. Persons and shall otherwise
be made in compliance with the provisions of Regulation S and any other
applicable provisions of the Securities Act.   None of the H&H Arizona
Shareholder or any of their representatives has conducted any Directed Selling
Effort as that term is used and defined in Rule 902 of Regulation S and neither
of them nor any of their respective representatives will engage in any such
Directed Selling Effort within the United States through the expiration of any
restricted period set forth in Rule 903 of Regulation S.

 

Section 3.9                    Ownership of Shares.  Each H&H Arizona
Shareholder is both the record and beneficial owner of the H&H Arizona Shares
set forth opposite such H&H Arizona Shareholder's name on Schedule 3.9 hereto.
Each H&H Arizona Shareholder is not the record or beneficial owner of any other
H&H Arizona Shares.  The information set forth on Schedule 3.9 with respect to
each H&H Arizona Shareholder is accurate and complete.   Each H&H Arizona
Shareholder has and shall transfer at the Closing, good and marketable title to
the H&H Arizona Shares shown as owned of record by such H&H Arizona Shareholder
on Schedule 3.9 to this Agreement, free and clear of all liens, claims, charges,
encumbrances, pledges, mortgages, security interests, options, rights to
acquire, proxies, voting trusts or similar agreements, restrictions on transfer
or adverse claims of any nature whatsoever (“Liens”).

           Section 3.10                  Pre-emptive Rights.  At Closing, no H&H
Arizona Shareholder has any pre-emptive rights or any other rights to acquire
any H&H Arizona Shares that have not been waived or exercised. 

Section 3.11                  Disclosure.  This Agreement, the schedules hereto
and any certificate attached hereto or delivered in accordance with the terms
hereof by or on behalf of H&H Arizona or any of the H&H Arizona Shareholder in
connection with the transactions contemplated by this Agreement, when taken
together, do not contain any untrue statement of a material fact or omit any
material fact necessary in order to make the statements contained herein and/or
therein not misleading.

 

Section 3.12                   Title to and Condition of Properties.  H&H
Arizona owns or holds under valid leases or other rights to use all real
property, plants, machinery and equipment necessary for the conduct of the
business of H&H Arizona as presently conducted, except where the failure to own
or hold such property, plants, machinery and equipment would not have a Material
Adverse Effect on H&H Arizona.  The material buildings, plants, machinery and
equipment necessary for the conduct of the business of H&H Arizona as presently
conducted are structurally sound, are in good operating condition and repair and
are adequate for the uses to which they are being put, in each case, taken as a
whole, and none of such buildings, plants, machinery or equipment are in need of
maintenance or repairs, except for ordinary, routine maintenance and repairs
that are not material in nature or cost.

 

Section 3.13                   Absence of Undisclosed Liabilities.  Except as
set forth on Schedule 3.13, H&H Arizona and the H&H Arizona Subsidiaries have no
debt, obligation or liability (whether accrued, absolute, contingent, liquidated
or otherwise, whether due or to become due, whether or not known to H&H Arizona)
arising out of any transaction entered into at or prior to the Closing Date or
any act or omission at or prior to the Closing Date, except to the extent set
forth on or reserved against on H&H Arizona’s unaudited consolidated financial
statements for the fiscal years ended June 30, 2011 and 2012.  All debts,
obligations or liabilities with respect to directors and officers of H&H Arizona
will be cancelled prior to the Closing.  H&H Arizona has not incurred any
liabilities or obligations under agreements entered into, except in the usual
and ordinary course of business since June 30, 2012.

Section 3.14               Changes.  H&H Arizona has not, since June 30, 2012:

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a. Ordinary Course of Business.  Conducted its business or entered into any
transaction other than in the usual and ordinary course of business, except for
this Agreement.

  

b. Adverse Changes.  Suffered or experienced any change in, or affecting, their
condition (financial or otherwise), properties, assets, liabilities, business,
operations, results of operations or prospects other than changes, events or
conditions in the usual and ordinary course of their business, none of which
would have a Material Adverse Effect;

 

c. Loans.  Made any loans or advances to any Person (for purposes of this
Agreement, “Person” means all natural persons, corporations, business trusts,
associations, companies, partnerships, limited liability companies, joint
ventures and other entities, governments, agencies and political subdivisions)
other than travel advances and reimbursement of expenses made to employees,
officers and directors in the ordinary course of business;

 

d. Liens.  Created or permitted to exist any Lien on any material property or
asset of H&H Arizona, other than (a) Liens for taxes not yet payable or in
respect of which the validity thereof is being contested in good faith by
appropriate proceedings and for the payment of which the relevant party has made
adequate reserves; (b) Liens in respect of pledges or deposits under workmen’s
compensation laws or similar legislation, carriers, warehousemen, mechanics,
laborers and materialmen and similar Liens, if the obligations secured by such
Liens are not then delinquent or are being contested in good faith by
appropriate proceedings conducted and for the payment of which the relevant
party has made adequate reserves; (c) statutory Liens incidental to the conduct
of the business of the relevant party which were not incurred in connection with
the borrowing of money or the obtaining of advances or credits and that do not
in the aggregate materially detract from the value of its property or materially
impair the use thereof in the operation of its business; and (d) Liens that
would not have a Material Adverse Effect (“Permitted Liens”);

 

e. Capital Stock.  Issued, sold, disposed of or encumbered, or authorized the
issuance, sale, disposition or encumbrance of, or granted or issued any option
to acquire any shares of their capital stock or any other of their securities or
any equity security of any class of H&H Arizona, or altered the term of any of
their outstanding securities or made any change in their outstanding shares of
capital stock or their capitalization, whether by reason of reclassification,
recapitalization, stock split, combination, exchange or readjustment of shares,
stock dividend or otherwise;

 

f. Dividends.  Declared, set aside, made or paid any dividend or other
distribution to any of their stockholders;

 

g. Material DK Contracts.  Terminated or modified any and all agreements,
contracts, arrangements, leases, commitments or otherwise, of H&H Arizona, of
the type and nature that is required to be filed with the SEC (each a “Material
DK Contract”), except for termination upon expiration in accordance with the
terms thereof or as set forth in Schedule 3.14(g);

 

h. Claims.  Released, waived or cancelled any claims or rights relating to or
affecting H&H Arizona in excess of US $10,000 in the aggregate or instituted or
settled any Action involving in excess of US $10,000 in the aggregate;

 

i. Discharged Liabilities.  Paid, discharged or satisfied any claim, obligation
or liability in excess of US $10,000 in the aggregate, except for liabilities
incurred prior to the date of this Agreement in the ordinary course of business;

 

j. Indebtedness.  Created, incurred, assumed or otherwise become liable for any
indebtedness in excess of US $10,000 in the aggregate, other than professional
fees;

 

k. Guarantees.  Guaranteed or endorsed in a material amount any obligation or
net worth of any Person;

 

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l. Acquisitions.  Acquired the capital stock or other securities or any
ownership interest in, or substantially all of the assets of, any other Person;

 

m. Accounting.  Changed their method of accounting or the accounting principles
or practices utilized in the preparation of their financial statements, other
than as required by U.S. GAAP;

 

n. Agreements.  Except as set forth on Schedule 3.14(n), entered into any
agreement, or otherwise obligated itself, to do any of the foregoing.

 

           Section 3.15                     Material DK Contracts.  H&H Arizona
has made available to DKSP and the DKSP Controlling Stockholder, prior to the
date of this Agreement, true, correct and complete copies of each written
Material DK Contract, including each amendment, supplement and modification
thereto.

 

a.           No Defaults.  Each Material DK Contract is a valid and binding
agreement of H&H Arizona and are in full force and effect.  Except as would not
have a Material Adverse Effect, H&H Arizona is not in breach or default of any
Material DK Contract to which they are a party and, to the knowledge of H&H
Arizona, no other party to any Material DK Contract is in breach or default
thereof.  Except as would not have a Material Adverse Effect, no event has
occurred or circumstance exists that (with or without notice or lapse of time)
would (a) contravene, conflict with or result in a violation or breach of, or
become a default or event of default under, any provision of any Material DK
Contract or (b) permit H&H Arizona or any other Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate or modify any Material DK Contract.  H&H
Arizona has not received notice of the pending or threatened cancellation,
revocation or termination of any Material DK Contract to which it is a
party.  There are no renegotiations of, or attempts to renegotiate, or
outstanding rights to renegotiate any material terms of any Material DK
Contract.

Section 3.16                    Material Assets.  The financial statements of
H&H Arizona reflect the material properties and assets (real and personal) owned
or leased by H&H Arizona.

 

Section 3.17                   Litigation; Orders.  There are no Actions
(whether U.S. or non-U.S. federal, state, local or foreign) pending or, to the
knowledge of H&H Arizona, threatened against or affecting any of H&H Arizona or
any  of H&H Arizona’s properties, assets, business or employees.  To the
knowledge of H&H Arizona, there are no facts that might result in or form the
basis for any such Action and H&H Arizona is not subject to any Orders.

 

Section 3.18                  Licenses.  Except as would not have a Material
Adverse Effect, H&H Arizona possesses from the appropriate Governmental
Authority all licenses, permits, authorizations, approvals, franchises and
rights that are necessary for any of H&H Arizona and the H&H Arizona
Subsidiaries to engage in their business as currently conducted and to permit
H&H Arizona to own and use their properties and assets in the manner in which
they currently own and use such properties and assets (collectively, “H&H
Arizona Permits”).  H&H Arizona has not received notice from any Governmental
Authority or other Person that there are lacking any license, permit,
authorization, approval, franchise or right necessary for H&H Arizona to engage
in its business as currently conducted and to permit H&H Arizona to own and use
its properties and assets in the manner in which it currently owns and uses such
properties and assets.  Except as would not have a Material Adverse Effect, H&H
Arizona Permits are valid and in full force and effect.  Except as would not
have a Material Adverse Effect, no event has occurred or circumstance exists
that may (with or without notice or lapse of time):  (a) constitute or result,
directly or indirectly, in a violation of or a failure to comply with any H&H
Arizona Permit; or (b) result, directly or indirectly, in the revocation,
withdrawal, suspension, cancellation or termination of, or any modification to,
any H&H Arizona Permit.  H&H Arizona has not received notice from any
Governmental Authority or any other Person regarding:  (a) any actual, alleged,
possible or potential contravention of any H&H Arizona Permit; or (b) any
actual, proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to, any H&H Arizona Permit.  All
applications required to have been filed for the renewal of such H&H Arizona
Permits have been duly filed on a timely basis with the appropriate Persons, and
all other filings required to have been made with respect to such H&H Arizona
Permits have been duly made on a timely basis with the appropriate Persons.  All
H&H Arizona Permits are renewable by their terms or in the ordinary course of
business without the need to comply with any special qualification procedures or
to pay any amounts other than routine fees or similar charges, all of which
have, to the extent due, been duly paid.

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Section 3.19                   Interested Party Transactions.  Except as
disclosed on Schedule 3.19, no officer, director or stockholder of any of H&H
Arizona or any affiliate or “associate” (as such term are defined in Rule 405 of
the SEC under the Securities Act) of any such Person, have or have had, either
directly or indirectly, (1) an interest in any Person which (a) furnishes or
sells services or products which are furnished or sold or are proposed to be
furnished or sold by H&H Arizona, or (b) purchases from or sells or furnishes
to, or proposes to purchase from, sell to or furnish H&H Arizona any goods or
services; or (2) a beneficial interest in any contract or agreement to which H&H
Arizona is a party or by which they may be bound or affected.

 

Section 3.20                  Governmental Inquiries.  H&H Arizona has provided
to DKSP a copy of each material written inspection report, questionnaire,
inquiry, demand or request for information received by H&H Arizona from any
Governmental Authority, and H&H Arizona’s response thereto, and each material
written statement, report or other document filed by H&H Arizona with any
Governmental Authority.

 

Section 3.21                   Intellectual Property.  Except as set forth
on Schedule 3.21 hereto, H&H Arizona does not own, use or license any
Intellectual Property in their business as presently conducted.  For purposes of
this Agreement, “Intellectual Property” means all industrial and intellectual
property, including, without limitation, all U.S. and non-U.S. patents, patent
applications, patent rights, trademarks, trademark applications, common law
trademarks, Internet domain names, trade names, service marks, service mark
applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or
unregistered, copyright applications, franchises, licenses, know-how, trade
secrets, technical data, designs, customer lists, confidential and proprietary
information, processes and formulae, all computer software programs or
applications, layouts, inventions, development tools and all documentation and
media constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world.

 

Section 3.22                   Stock Option Plans; Employee Benefits.

 

a. Except as set forth on Schedule 3.22(a) hereto, H&H Arizona has no stock
option plans providing for the grant by H&H Arizona of stock options to
directors, officers or employees.

  

b. Except as set forth on Schedule 3.22(b) hereto, H&H Arizona has no employee
benefit plans or arrangements covering their present and former employees or
providing benefits to such persons in respect of services provided H&H Arizona.

 

c. Neither the consummation of the transactions contemplated hereby alone, nor
in combination with another event, with respect to each director, officer,
employee and consultant of H&H Arizona, will result in (a) any payment
(including, without limitation, severance, unemployment compensation or bonus
payments) becoming due from H&H Arizona, (b) any increase in the amount of
compensation or benefits payable to any such individual or (c) any acceleration
of the vesting or timing of payment of compensation payable to any such
individual.  No agreement, arrangement or other contract of H&H Arizona provides
benefits or payments contingent upon, triggered by, or increased as a result of
a change in the ownership or effective control of H&H Arizona.

 

Section 3.23                   Environmental and Safety Matters.  Except as set
forth on Schedule 3.23 and except as would not have a Material Adverse Effect:

H&H Arizona has at all time been and are in compliance with all Environmental
Laws (as defined below) applicable to H&H Arizona.

 

d. There are no Actions pending or threatened against H&H Arizona alleging the
violation of any Environmental Law (as defined below) or Environmental Permit
applicable to H&H Arizona or alleging that H&H Arizona is a potentially
responsible party for any environmental site contamination.

 

e. Neither this Agreement nor the consummation of the transactions contemplated
by this Agreement shall impose any obligations to notify or obtain the consent
of any Governmental Authority or third

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Persons under any Law or other requirement relating to the environment, natural
resources, or public or employee health and safety (“Environmental Laws”)
applicable to H&H Arizona.

 

Section 3.24                  Board Recommendation.  The Board of Directors of
H&H Arizona, at a meeting duly called and held, has determined that this
Agreement and the transactions contemplated by this Agreement are advisable and
in the best interests of the H&H Arizona Shareholder and has duly authorized
this Agreement and the transactions contemplated by this Agreement.

Section 3.25                   Survival.  Each of the representations and
warranties set forth in this Article III shall be deemed represented and made by
H&H Arizona and the H&H Arizona Shareholder at the Closing as if made at such
time and shall survive the Closing for a period terminating twenty-four (24)
months after the date of the Closing.

ARTICLE IV

COVENANTS

Section 4.1                     Certain Changes and Conduct of Business.

                      a.           From and after the date of this Agreement and
until the Closing Date, DKSP shall conduct its business solely in the ordinary
course consistent with past practices and, in a manner consistent with all
representations, warranties or covenants of DKSP contained herein.

                       b.          From and after the date of this Agreement,
H&H Arizona and each of its Subsidiaries will:

i.  

continue to maintain, in all material respects, its properties in

accordance with present practices in a condition suitable for its

current use;

 

 

          ii.  

file, when due or required, federal, state, foreign and other tax

 

returns and other reports required to be filed and pay when due all taxes,
assessments, fees and other charges lawfully levied or assessed against it,
unless the validity thereof is contested in good faith and by appropriate
proceedings diligently conducted;

 

iii.     continue to conduct its business in the ordinary course consistent with
past practices;

 

iv.       keep its books of account, records and files in the ordinary course
and in accordance with existing practices; and

v.         continue to maintain existing business relationships with suppliers.

                        c.         From and after the date of this Agreement,
none of the H&H Arizona Shareholder  will sell, transfer, convey, assign or
otherwise dispose of, or contract or otherwise agree to sell, transfer, convey,
assign or otherwise dispose of any of the H&H Arizona Shares except as provided
by this Agreement.

Section 4.2                    Access to Properties and Records.  H&H Arizona
shall afford to DKSP’s accountants, counsel and authorized representatives, and
DKSP shall afford to H&H Arizona’ accountants, counsel and authorized
representatives, full access during normal business hours throughout the period
prior to the Closing Date (or the earlier termination of this Agreement) to all
of such parties’ properties, books, contracts, commitments and records and,
during such period, shall furnish promptly to the requesting party all other
information concerning the other party's business, properties and personnel as
the requesting party may reasonably request, provided that no investigation or
receipt of information pursuant to this Section 4.2 shall affect any
representation or warranty of or the conditions to the obligations of any party.

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Section 4.3                     Negotiations.  From and after the date hereof
until the earlier of the Closing or the termination of this Agreement, no party
to this Agreement, nor any of its officers or directors (subject to such
director's fiduciary duties), nor anyone acting on behalf of any party or other
persons shall, directly or indirectly, encourage, solicit, engage in discussions
or negotiations with, or provide any information to, any person, firm, or other
entity or group concerning any merger, sale of substantial assets, purchase or
sale of shares of capital stock or similar transaction involving any party.  A
party shall promptly communicate to any other party any inquiries or
communications concerning any such transaction which they may receive or of
which they may become aware.

Section 4.4                    Consents and Approvals.  The parties shall: (i)
use their reasonable commercial efforts to obtain all necessary consents,
waivers, authorizations and approvals of all governmental and regulatory
authorities, domestic and foreign, and of all other persons, firms or
corporations required in connection with the execution, delivery and performance
by them of this Agreement; and (ii) diligently assist and cooperate with each
party in preparing and filing all documents required to be submitted by a party
to any governmental or regulatory authority, domestic or foreign, in connection
with such transactions and in obtaining any governmental consents, waivers,
authorizations or approvals which may be required to be obtained connection in
with such transactions.

Section 4.5                     Public Announcement.  Unless otherwise required
by applicable law, the parties hereto shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to this Agreement and shall not issue any such press release or make any such
public statement prior to such consultation.

ARTICLE V

CONDITIONS TO OBLIGATIONS OF H&H ARIZONA AND THE H&H ARIZONA SHAREHOLDER

The obligations of H&H Arizona and the H&H Arizona Shareholder to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, at
or before the Closing Date, of the following conditions, any one or more of
which may be waived by H&H Arizona and the H&H Arizona Shareholder at their sole
discretion:

Section 5.1                     Representations and Warranties of DKSP and the
DKSP Controlling Stockholder.   All representations and warranties made by DKSP
and the DKSP Controlling Stockholder in this Agreement shall be true and correct
in all material respects on and as of the Closing Date as if again made by DKSP
and the DKSP Controlling Stockholder on and as of such date and insofar as any
inconsistency or inaccuracy does not or will not have a DKSP Material Adverse
Effect, except insofar as the representations and warranties relate expressly
and solely to a particular date or period, in which case, subject to the
limitations applicable to the particular date or period, they will be true and
correct in all material respects on and as of the Closing Date with respect to
such date or period.

Section 5.2                     Agreements and Covenants. Each of DKSP and the
DKSP Controlling Stockholder shall have performed and complied in all material
respects with all agreements and covenants required by this Agreement to be
performed or complied with by on or prior to the Closing Date.

Section 5.3                     Consents and Approvals.  All consents, waivers,
authorizations and approvals of any governmental or regulatory authority,
domestic or foreign, and of any other person, firm or corporation, required in
connection with the execution, delivery and performance of this Agreement shall
be in full force and effect on the Closing Date.

Section 5.4                    No Violation of Orders.  No preliminary or
permanent injunction or other order issued by any court or governmental or
regulatory authority, domestic or foreign, nor any statute, rule, regulation,
decree or executive order promulgated or enacted by any government or
governmental or regulatory authority, which declares this Agreement invalid in
any respect or prevents the consummation of the transactions contemplated
hereby, or which materially and adversely affects the assets, properties,
operations, prospects, net income or financial condition of DKSP shall be in
effect; and no action or proceeding before any court or governmental or
regulatory authority, domestic or foreign, shall have been instituted or
threatened by any government or

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governmental or regulatory authority, domestic or foreign, or by any other
person, or entity which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement.

Section 5.5                    Debt Cancellation.  On or prior to Closing, DKSP
shall deliver to H&H Arizona such pay-off letters and releases relating to
liabilities of DKSP as H&H Arizona shall request, in form and substance
satisfactory to H&H Arizona.

Section 5.6                    Certificate of Good Standing.  On or prior to
Closing, DKSP shall deliver a certificate of good standing of DKSP dated within
five (5) business days of Closing issued by the Secretary of State of Nevada.

Section 5.7                   Other Closing Documents.  Each of the H&H Arizona
Shareholder shall have received such certificates, instruments and documents in
confirmation of the representations and warranties of DKSP and the DKSP
Controlling Shareholder, DKSP’s and the DKSP Controlling Shareholder’s
performance of its obligations hereunder, and/or in furtherance of the
transactions contemplated by this Agreement as the H&H Arizona Shareholder
and/or their respective counsel may reasonably request.

Section 5.8                  Appointment of New Directors.  At the Closing, (i)
Shawn Erickson shall resign as sole director of DKSP, and (ii) Grant Johnson
shall be appointed director of DKSP and shall constitute the entire board
of DKSP.

ARTICLE VI 

  

CONDITIONS TO OBLIGATIONS OF DKSP

The obligations of DKSP to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or before the Closing Date, of the
following conditions, any one or more of which may be waived by DKSP in its sole
discretion:

Section 6.1                     Representations and Warranties of H&H Arizona
and the H&H Arizona Shareholder.  All representations and warranties made by H&H
Arizona and the H&H Arizona Shareholder in this Agreement shall be true and
correct on and as of the Closing Date as if again made by H&H Arizona and the
H&H Arizona Shareholder, as applicable, on and as of such date.

Section 6.2                     Agreements and Covenants.  Each of H&H Arizona
and the H&H Arizona Shareholder shall have performed and complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by each of them on or prior to the Closing
Date.

Section 6.3                     Consents and Approvals.  All consents, waivers,
authorizations and approvals of any governmental or regulatory authority,
domestic or foreign, and of any other person, firm or corporation, required in
connection with the execution, delivery and performance of this Agreement, shall
have been duly obtained and shall be in full force and effect on the Closing
Date.

Section 6.4                     No Violation of Orders.  No preliminary or
permanent injunction or other order issued by any court or other governmental or
regulatory authority, domestic or foreign, nor any statute, rule, regulation,
decree or executive order promulgated or enacted by any government or
governmental or regulatory authority, domestic or foreign, that declares this
Agreement invalid or unenforceable in any respect or which prevents the
consummation of the transactions contemplated hereby, or which materially and
adversely affects the assets, properties, operations, prospects, net income or
financial condition of H&H Arizona, taken as a whole, shall be in effect; and no
action or proceeding before any court or government or regulatory authority,
domestic or foreign, shall have been instituted or threatened by any government
or governmental or regulatory authority, domestic or foreign, or by any other
person, or entity which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement.

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Section 6.5                    Other Closing Documents.  DKSP shall have
received such certificates, instruments and documents in confirmation of the
representations and warranties of H&H Arizona and the H&H Arizona Shareholder,
the performance of H&H Arizona and the H&H Arizona Shareholder’ respective
obligations hereunder and/or in furtherance of the transactions contemplated by
this Agreement as DKSP or its counsel may reasonably request.

ARTICLE VII

POST-CLOSING AGREEMENTS

Section 7.1 

Consistency in Reporting.  Each party hereto agrees that if the characterization
of any transaction contemplated in this agreement or any ancillary or collateral
transaction is challenged, each party hereto will testify, affirm and ratify
that the characterization contemplated in such agreement was the
characterization intended by the party; provided, however, that nothing herein
shall be construed as giving rise to any obligation if the reporting position is
determined to be incorrect by final decision of a court of competent
jurisdiction.

Section 7.2                     Name Change.  DKSP will use its best
commercially reasonable efforts to effect a corporate name change after the
Closing.

ARTICLE VIII

TERMINATION AND ABANDONMENT

Section 8.1                     Methods of Termination.  This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any time
before the Closing:

a. By the mutual written consent of the H&H Arizona Shareholder and DKSP;

b. By DKSP, on a material breach on the part of H&H Arizona or the H&H Arizona
Shareholder of any representation, warranty, covenant or agreement set  forth in
this Agreement, or if any representation or warranty of H&H Arizona or any of
the H&H Arizona Shareholder shall become untrue, in either case such that any of
the conditions set forth in Article VII hereof would not be satisfied (a "H&H
Arizona Breach"), and such breach, if capable of cure, has not been cured within
ten (10) days after receipt by H&H Arizona and the H&H Arizona Shareholder of a
written notice from DKSP setting forth in detail the nature of such H&H Arizona
Breach;

c. By the H&H Arizona Shareholder, upon a material breach on the part of DKSP of
any representation, warranty, covenant or agreement set forth in this Agreement,
or, if any representation or warranty of DKSP shall become untrue, in either
case such that any of the conditions set forth in Article VI hereof would not be
satisfied (a "DKSP Breach"), and such breach, if capable of cure, has not been
cured within ten (10) days after receipt by DKSP of a written

 

d. notice from H&H Arizona Shareholder  setting forth in detail the nature of
such DKSP Breach;

e. By either DKSP or the H&H Arizona Shareholder, if the Closing shall not have
consummated before ninety (90) days after the date hereof; provided, however,
that this Agreement may be extended by written notice of either the H&H Arizona
Shareholder or DKSP if the Closing shall not have been consummated as a result
of H&H Arizona or DKSP having failed to receive all required regulatory
approvals or consents with respect to this transaction or as the result of the
entering of an order as described in this Agreement; and further provided,
however, that the right to terminate this Agreement under this Section 8.1(d)
shall not be available to any party whose failure to fulfill any obligations
under this Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before this date; or

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f. By either H&H Arizona Shareholder or DKSP if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other action (which
order, decree or ruling the parties hereto shall use its best efforts to lift),
which permanently restrains, enjoins or otherwise prohibits the transactions
contemplated by this Agreement.

Section 8.2                     Procedure Upon Termination.  In the event of
termination and abandonment of this Agreement pursuant to Section 8.1, written
notice thereof shall forthwith be given by the terminating parties to the other
parties and this Agreement shall terminate and the transactions contemplated
hereby shall be abandoned, without further action.  If this Agreement is
terminated as provided herein, no party to this Agreement shall have any
liability or further obligation to any other party to this Agreement; provided,
however, that no termination of this Agreement pursuant to this Article VIII
shall relieve any party of liability for a breach of any provision of this
Agreement occurring before such termination.

ARTICLE IX

MISCELLANEOUS PROVISIONS

            Section 9.1                      Survival of Provisions.  The
respective representations, warranties, covenants and agreements of each of the
parties to this Agreement (except covenants and agreements which are expressly
required to be performed and are performed in full on or before the Closing
Date) shall expire on the first day of the twenty-four (24) month anniversary of
the Closing Date (the “Survival Period”), subject to Sections 2.18 and 3.25.  In
the event of a breach of any of such representations, warranties or covenants,
the party to whom such representations, warranties or covenants have been made
shall have all rights and remedies for such breach available to it under the
provisions of this Agreement or otherwise, whether at law or in equity,
regardless of any disclosure to, or investigation made by or on behalf of such
party on or before the Closing Date.

           Section 9.2                       Indemnification.

a. Indemnification Obligations in favor of the Executive Officers, Directors,
Employees and Controlling Stockholders of DKSP.  Notwithstanding the limitation
set forth in Section 9.1 and subject to the limitation set forth in this Section
9.2, from and after the Closing Date until the expiration of the
twenty-four-month anniversary of the Closing Date, H&H Arizona and the H&H
Arizona Shareholder shall reimburse and hold harmless the DKSP’s executive
officers, directors, employees in office immediately prior to the Closing and
DKSP Controlling Stockholder (each such person and his heirs, executors,
administrators, agents, successors and assigns is referred to herein as a “DKSP
Indemnified Party”) against and in respect of any and all damages, losses,
settlement payments, in respect of deficiencies, liabilities, costs, expenses
and claims suffered, sustained, incurred or required to be paid by any DKSP
Indemnified Party, and any and all actions, suits, claims, or legal,
administrative, arbitration, governmental or other procedures or investigation
against any DKSP Indemnified Party, which arises or results from a third-party
claim brought against a DKSP Indemnified Party to the extent based on (i) a
breach of the representations and warranties with respect to the business,
operations or assets of H&H Arizona, (ii) the actions or omissions of any
officer, director, shareholder, employee, or agent of H&H Arizona after the
Closing, or (iii) any actions or omissions or any DKSP Indemnified Party taken
in furtherance of the transactions contemplated by this Agreement.

 

                      b.           Indemnification in favor of H&H Arizona and
the H&H Arizona Shareholder.  Notwithstanding the limitation set forth in
Section 9.1 and subject to the limitation set forth in this Section 9.2, from
and after the Closing Date until the expiration of the twenty-four-month
anniversary of the Closing Date, the DKSP Controlling Stockholder shall
reimburse and hold harmless H&H Arizona, the H&H Arizona Shareholder, and their
respective officers, directors, agents, attorneys and employees, and each
person, if any, who controls or may “control” (within the meaning  of the
Securities Act) any of the forgoing persons or entities (hereinafter referred to
individually as a “DK Indemnified Person”) from and against any and all losses,
costs, damages, liabilities and expenses arising from claims, demands, actions,
causes of action, including, without limitation, legal fees, (collectively,
“Damages”) arising out of any (i) any breach of representation or warranty made
by DKSP or the DKSP Controlling Stockholder in this Agreement, and in any
certificate delivered by DKSP or the DKSP Controlling Stockholder pursuant to
this Agreement, (ii) any breach by DKSP or the DKSP Controlling Stockholder of
any covenant, obligation or other agreement made by DKSP or the DKSP Controlling
Stockholder in

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this Agreement, and (iii) a third-party claim based on any acts or omissions by
DKSP or the DKSP Controlling Stockholder since the date of inception of DKSP
through and including the Closing Date.

Section 9.3                      Publicity.  No party shall cause the
publication of any press release or other announcement with respect to this
Agreement or the transactions contemplated hereby without the consent of the
other parties, unless a press release or announcement is required by law.  If
any such announcement or other disclosure is required by law, the disclosing
party agrees to give the non-disclosing parties prior notice and an opportunity
to comment on the proposed disclosure.

Section 9.4                      Successors and Assigns.  This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their
respective successors and assigns; provided, however, that no party shall assign
or delegate any of the obligations created under this Agreement without the
prior written consent of the other parties.

Section 9.5                      Fees and Expenses.  Except as otherwise
expressly provided in this Agreement, all legal and other fees, costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees, costs or
expenses.

Section 9.6                      Notices.  All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been given or made if in writing and delivered personally or sent by registered
or certified mail (postage prepaid, return receipt requested) to the parties at
the following addresses:

If to H&H Arizona, to:

H&H Arizona Inc.

Hodges Bay Drive, Hodges Bay

St. Johns, Antigua and Barbuda

West Indies

Fax No.: 1-268-460-8982

86-029-8221-4688

If to DKSP or the DKSP Controlling Stockholder, to:

  

DK Sinopharma, Inc.

112 North Curry Street

Carson City, Nevada 89703

Fax No.: 1-775-882-1013

with copies, which shall not constitute notice, to:

W.L. Macdonald Law Corporation

1210 - 777 Hornby Street

Vancouver, BC, Canada, V6Z 1S4

Attention: William L. Macdonald

Fax No.:  (604) 681-4760

or to such other persons or at such other addresses as shall be furnished by any
party by like notice to the others, and such notice or communication shall be
deemed to have been given or made as of the date so delivered or mailed. No
change in any of such addresses shall be effective insofar as notices under this
Section 9.6 are concerned unless such changed address is located in the United
States of America and notice of such change shall have been given to such other
party hereto as provided in this Section 9.6.

Section 9.7                     Entire Agreement.  This Agreement, together with
the exhibits hereto, represents the entire agreement and understanding of the
parties with reference to the transactions set forth herein and no
representations or warranties have been made in connection with this Agreement
other than those expressly set forth

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herein or in the exhibits, certificates and other documents delivered in
accordance herewith.  This Agreement supersedes all prior negotiations,
discussions, correspondence, communications, understandings and agreements
between the parties relating to the subject matter of this Agreement and all
prior drafts of this Agreement, all of which are merged into this Agreement.  No
prior drafts of this Agreement and no words or phrases from any such prior
drafts shall be admissible into evidence in any action or suit involving this
Agreement.

Section 9.8                     Severability.  This Agreement shall be deemed
severable, and the invalidity or unenforceability of any term or provision
hereof shall not affect the validity or enforceability of this Agreement or of
any other term or provision hereof.  Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be
added as a part of this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible so as to be valid and
enforceable.

Section 9.9                     Titles and Headings.  The Article and Section
headings contained in this Agreement are solely for convenience of reference and
shall not affect the meaning or interpretation of this Agreement or of any term
or provision hereof.

Section 9.10                  Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original and all of
which together shall be considered one and the same agreement.

Section 9.11                  Convenience of Forum; Consent to
Jurisdiction.  The parties to this Agreement, acting for themselves and for
their respective successors and assigns, without regard to domicile, citizenship
or residence, hereby expressly and irrevocably elect as the sole judicial forum
for the adjudication of any matters arising under or in connection with this
Agreement, and consent and subject themselves to the jurisdiction of, the courts
of the State of Nevada and/or the United States District Court for Nevada, in
respect of any matter arising under this Agreement. Service of process, notices
and demands of such courts may be made upon any party to this Agreement by
personal service at any place where it may be found or giving notice to such
party as provided in Section 9.5.

                Section 9.12                    Enforcement of the
Agreement.  The parties hereto agree that irreparable damage would occur if any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.  It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereto, this
being in addition to any other remedy to which they are entitled at law or in
equity.

Section 9.13                   Governing Law.  This Agreement shall be governed
by and interpreted and enforced in accordance with the laws of the State of
Nevada without giving effect to the choice of law provisions thereof.

               Section 9.14                     Amendments and Waivers.  Except
or otherwise provided herein, no amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by all of the
parties hereto. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

 

 

 

 

 

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             IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.

H&H Arizona Inc.

By:/s/ Grant Johnson

Grant Johnson, President

H&H Arizona Inc. Sole Shareholder Next Generation Holdings Trust

By:/s/ Grant Johnson

Grant Johnson, Trustee

DK Sinopharma, Inc.

By:/s/ Shawn Erickson

Shawn Erickson, President

DK Sinopharma, Inc. Controlling Shareholder Shawn Erickson

By:/s/ Shawn Erickson

Shawn Erickson

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EXHIBIT A

List of H&H Arizona Shareholders

Name

Number of H&H Arizona Shares Exchanged

Number of DKSP Shares Received

Next Generation Holdings Trust

1,000

50,000,000

Total

1,000

50,000,000

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