SHARE EXCHANGE AGREEMENT

 

This Share Exchange Agreement, dated as of July 31, 2017, (this “Agreement”) by
and among 12 Retech Corporation, Nevada corporation (“RETC”) and 12 Japan
Limited, a corporation formed under the laws of Japan (“12 Japan”), and the
Shareholders of 12 Japan (the “12 Japan Shareholders”). For purposes of this
Agreement RETC, 12 Japan, and the 12 Japan Shareholders are sometimes
collectively referred to as the “Parties” and individually as a “Party.”

 

RECITALS

 

WHEREAS, the 12 Japan Shareholders and 12 Japan believe it is in their
respective best interests for the 12 Japan Shareholders to exchange, One Hundred
One Thousand (101,000) shares of 12 Japan common stock, representing One Hundred
(100%) percent of the issued and outstanding shares of 12 Japan (the “12 Japan
Shares”) for RETC stock consisting of: (i) Five Million (5,000,000) shares of
RETC Common Stock; and, (ii) Five Hundred Thousand (500,000) shares of RETC
Series A Preferred Stock (such shares being hereinafter referred to as the “RETC
Shares”); and, RETC believes it is in its best interest and the best interest of
its stockholders to acquire the 12 Japan Shares in exchange for the RETC 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) 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 (ii) 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, it is the intention of the parties that upon the Closing (as
hereinafter defined) 12 Japan shall become a wholly owned subsidiary of RETC;
and,

 

WHEREAS, the Parities agree that the foregoing Recitals are true and correct and
are hereby incorporated into this Agreement by this reference; 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 12 JAPAN SHARES FOR RETC SHARES

 

Section 1.1 Agreements to Exchange 12 Japan Shares for RETC Shares. On the
Closing Date (as hereinafter defined) and upon the terms and subject to the
conditions set forth in this Agreement, the 12 Japan Shareholders shall assign,
transfer, convey and deliver the 12 Japan Shares to RETC in consideration and
exchange for the 12 Japan Shares, RETC shall issue, transfer, convey and deliver
the RETC Shares to the 12 Japan Shareholders. 

 

Section 1.2 Closing and Actions at Closing. The closing of the Share Exchange
(the “Closing”) shall take place remotely via the exchange of documents and
signatures at such time and date as the parties hereto shall agree orally or in
writing (the “Closing Date”). 

 

Section 1.3Share Exchange. After Closing and contingent upon the satisfaction of
the terms and conditions set forth in this Agreement, One Hundred One Thousand
(101,000) shares of 12 Japan common stock, representing One Hundred (100%)
percent of the 12 Japan Shares shall be exchanged and delivered to RETC and in
exchange RETC shall exchange and deliver RETC stock consisting of: (i) Five
Million (5,000,000) shares of RETC Common Stock; and, (ii) Five Hundred Thousand
(500,000) shares of RETC Series A Preferred Stock to the 12 Japan Shareholders.
 

 

Section 1.4Restrictions on RETC Shares Issued Pursuant to this Agreement. The
RETC shares to be issued by RETC pursuant to this Agreement have not been
registered and are being issued pursuant to a specific exemption under the
Securities Act, as well as under certain state securities laws for transactions
by an issuer not involving any public offering or in reliance on limited federal
preemption from such state securities registration laws, based on the
suitability and investment representations made by the 12 Japan Shareholders to
RETC. The RETC Shares of to be issued by RETC pursuant to this Agreement must be
held and may not be sold, transferred, or otherwise disposed of for value unless
such securities are subsequently registered under the Securities Act or an
exemption from such registration is available, and that the certificates
representing the Shares of RETC Common Stock issued in the Share Exchange will
bear a legend in substantially the following form so restricting the sale of
such securities: 

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The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the “Securities Act”), and are
“restricted securities” within the meaning of Rule 144 promulgated under the
Securities Act. The securities have been acquired for investment and may not be
sold or transferred without complying with Rule 144 in the absence of an
effective registration or other compliance under the Securities Act.

 

Section 1.5Share Exchange Procedure. The 12 Japan Shareholders may exchange
their certificates representing the 12 Japan Shares by delivering such
certificate(s) to RETC duly executed and endorsed in blank (or accompanied by
duly executed stock powers duly endorsed in blank), in each case in proper form
for transfer, with signatures guaranteed, and, if applicable, with all stock
transfer and any other required documentary stamps affixed thereto and with
appropriate instructions to allow the transfer agent to issue certificates for
the RETC Shares to the holder thereof. 

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF RETC

 

RETC represent, warrant and agree that all of the statements in the following
subsections of this Article II are true and complete as of the date hereof.

 

Section 2.1 Corporate Organization

 

A.12 Retech Corporation 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 governmental licenses,
authorizations, consents and approvals 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 its activities 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 activities,
business, operations, properties, assets, condition or results of operation of
RETC. “Material Adverse Effect” means, when used with respect to RETC, any
event, occurrence, fact, condition, change or effect, which, individually or in
the aggregate, would reasonably be expected to be materially adverse to the
business, operations, properties, assets, condition (financial or otherwise), or
operating results of RETC, or materially impair the ability of RETC 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; or (ii) changes in the U.S.
securities markets generally. 

 

B.Copies of the Articles of Incorporation and Bylaws of RETC with all amendments
thereto, as of the date hereof (the “RETC Charter Documents”), have been
furnished to 12 Japan, if so requested, and such copies are accurate and
complete as of the date hereof. The minute books of RETC are current as required
by law, contain the minutes of all meetings of the RETC Board and its
stockholders from its date of incorporation to the date of this Agreement, and
adequately reflect all material actions taken by the RETC Board and its
stockholders. RETC is not in violation of any of the provisions of the RETC
Charter Documents. 

 

Section 2.2 Capitalization of RETC.

 

A.The authorized capital stock of RETC consists of: (i) 100,000,000 shares of
common stock, par value $0.00001, of which 75,692,024 shares of common stock are
issued and outstanding immediately prior to the Share Exchange; (ii) 100,000,000
shares of preferred stock, par value $0.00001, of which 5,000,000 shares of
preferred stock are issued and outstanding immediately prior to the Share
Exchange.  

 

B.Concurrently with the Closing, RETC’s current management shall facilitate the
cancellation of Five Million (5,000,000) of RETC Common Stock currently
beneficially owned by the Company’s officers and directors and shall facilitate
the cancellation of Five Hundred Thousand (500,000) of RETC Series A Preferred
Stock currently beneficially owned by the Company’s officers and directors.
Collectively, such shares shall be cancelled and returned to the Company’s
treasury.  

 

C.All of the issued and outstanding shares of common stock of RETC immediately
prior to this Share Exchange are, and all shares of common stock of RETC when
issued in accordance with the terms hereof will be, duly authorized, validly
issued, fully paid and non-assessable, will have been issued in compliance with
all applicable U.S. federal and state securities laws and state corporate laws,
and will have been issued free of preemptive rights of any security holder. The
issuance of all of the shares of RETC described in this Section 2.2 have been,
or will be, as applicable, in compliance with U.S. federal and state securities
laws and state corporate laws and no stockholder of RETC has any right to
rescind or bring any other claim against RETC for failure to comply with the
Securities Act, or state securities laws. 

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Section 2.3Shell Status. As of the date of this Agreement, RETC represents that
is not a “shell company” as that term is defined in Rule 405 of the Securities
Act and Rule 12b-2 of the Exchange Act.  

 

Section 2.4Authorization, Validity and Enforceability of Agreements. RETC has
all corporate power and authority to execute and deliver this Agreement and all
agreements, instruments and other documents to be executed and delivered in
connection with the transactions contemplated by this Agreement (collectively
the “Agreements”) to perform its obligations hereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of the
Agreements by RETC and the consummation by RETC of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate action
of RETC, and no other corporate proceedings on the part of RETC are necessary to
authorize the Agreements or to consummate the transactions contemplated hereby
and thereby. The Agreements constitute the valid and legally binding obligation
of RETC and is enforceable in accordance with its terms, except as such
enforcement may be limited by general equitable principles, or by bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors rights
generally. RETC 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 party in order for it to consummate the transactions
contemplated by any of the Agreements, resulting from the issuance of the RETC
Shares in connection with the Share Exchange. 

 

Section 2.5No Conflict or Violation. Neither the execution and delivery of the
Agreements by RETC, nor the consummation by RETC of the transactions
contemplated thereby will: (i) contravene, conflict with, or violate any
provision of the RETC 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 RETC is subject; (iii) conflict with, result in a
breach of, constitute a default (or an event or condition which, with notice or
lapse of time or both, would 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 RETC is a party or by which it is
bound, or to which any of its assets or properties are subject; or (iv) result
in or require the creation or imposition of any encumbrance of any nature upon
or with respect to any RETC asset, including without limitation, the RETC
Shares. 

 

Section 2.6Litigation. There is no action, suit, proceeding or investigation
(“Action”) pending or, to the knowledge of RETC, currently threatened against
RETC or any of its affiliates, that may affect the validity of this Agreement or
the right of RETC to enter into this Agreement or to consummate the transactions
contemplated hereby or thereby. There is no Action pending or, to the knowledge
of RETC, currently threatened against RETC or any of its 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 or relating to RETC or any of its affiliates. Neither RETC nor any of
its 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 RETC or any of its affiliates currently
pending or which RETC or any of its affiliates intends to initiate. 

 

Section 2.7Compliance with Laws. RETC has been and is in compliance with, and
has not received any notice of any violation of any, applicable law, order,
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. 

 

Section 2.8Financial Statements. RETC’s financial statements (the “Financial
Statements”) 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, except that those 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 RETC as of the dates,
and for the periods, indicated therein, subject to normal year-end audit
adjustments. RETC has no material liabilities (contingent or otherwise). RETC is
not a guarantor or indemnitor of any indebtedness of any other person, entity or
organization. RETC maintains a standard system of accounting established and
administered in accordance with U.S. GAAP. 

 

Section 2.9Books, Financial Records and Internal Controls. All the accounts,
books, registers, ledgers, RETC Board minutes and financial and other records of
whatsoever kind of RETC 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 RETC. RETC maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate actions are taken with respect to any
differences. 

 

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Section 2.10No Disagreements with Accountants and Lawyers. There are no
disagreements of any kind presently existing, or anticipated by RETC to arise,
between RETC and any accountants and/or lawyers formerly or presently engaged by
RETC. RETC is current with respect to fees owed to its accountants and lawyers. 

 

 

Section 2.11Absence of Undisclosed Liabilities. Except as specifically disclosed
herein: (A) there has been no event, occurrence or development that has resulted
in or could result in a Material Adverse Effect; (B) RETC has not incurred any
liabilities, obligations, claims or losses, contingent or otherwise, including
debt obligations, other than professional fees to be paid prior to Closing; (C)
RETC has not declared or made any dividend or distribution of cash or property
to its shareholders, purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock, or issued any equity securities other
than with respect to transactions contemplated hereby; (D) RETC has not made any
loan, advance or capital contribution to or investment in any person or entity;
(E) RETC has not discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent), other than current liabilities
paid in the ordinary course of business; (F) RETC has not suffered any losses or
waived any rights of material value, whether or not in the ordinary course of
business, or suffered the loss of any material amount of prospective business;
and (G) except for the Share Exchange, RETC has not entered into any transaction
other than in the ordinary course of business, or entered into any other
material transaction, whether or not in the ordinary course of business. 

 

Section 2.12No Undisclosed Events or Circumstances. No event or circumstance has
occurred or exists with respect to RETC or its respective businesses,
properties, prospects, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by RETC but which has not been so publicly announced or disclosed. RETC has not
provided to 12 Japan, or the 12 Japan Shareholder, any material non-public
information or other information which, according to applicable law, rule or
regulation, was required to have been disclosed publicly by RETC but which has
not been so disclosed, other than with respect to the transactions contemplated
by this Agreement and/or the Share Exchange. 

 

Section 2.13Disclosure. This Agreement and any certificate attached hereto or
delivered in accordance with the terms hereof by or on behalf of RETC in
connection with the transactions contemplated by this Agreement, when taken
together, do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements contained
herein and/or therein not misleading. 

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF 12 JAPAN

 

12 Japan represents, warrants and agrees that all of the statements in the
following subsections of this Article III, pertaining to 12 Japan, are true and
complete as of the date hereof.

 

Section 3.1Corporate Organization 

 

A.12 Japan Limited is a corporation duly formed under the law of the country of
Japan, and has all requisite corporate power and authority to own its properties
and assets and governmental licenses, authorizations, consents and approvals 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 its activities
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 activities, business, operations, properties, assets, condition or
results of operation of 12 Japan. “Material Adverse Effect” means, when used
with respect to 12 Japan, any event, occurrence, fact, condition, change or
effect, which, individually or in the aggregate, would reasonably be expected to
be materially adverse to the business, operations, properties, assets, condition
(financial or otherwise), or operating results of 12 Japan, or materially impair
the ability of 12 Japan 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; or (ii) changes in the U.S. securities markets generally. 

 

B.Copies of the formation documents of 12 Japan, or their equivalent, with all
amendments thereto, as of the date hereof (the “12 Japan Charter Documents”),
have been furnished to RETC, if so requested, and such copies are accurate and
complete as of the date hereof. The minute books of 12 Japan are current as
required by law, contain the minutes of all meetings of the 12 Japan Board and
its stockholders from its date of formation to the date of this Agreement, and
adequately reflect all material actions taken by the 12 Japan Board and its
stockholders. 12 Japan is not in violation of any of the provisions of the 12
Japan Charter Documents. 

 

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Section 3.2 Capitalization of 12 Japan.  

 

A.12 Japan represents and warrants that it currently has, and shall continue to
have as of the date of Closing, One Hundred One Thousand (101,000) shares of
common stock issued and outstanding and NIL shares of Preferred Stock issued.  

 

B.All of the issued and outstanding shares of common stock of 12 Japan
immediately prior to this Share Exchange are, and all shares of common stock of
12 Japan when issued in accordance with the terms hereof will be, duly
authorized, validly issued, fully paid and non-assessable, will have been issued
in compliance with all applicable securities laws and corporate laws of Japan
and will have been issued free of preemptive rights of any security holder.  

 

Section 3.3Shareholders of 12 Japan’s Common Stock. 12 Japan has provided RETC a
true and complete list of the holders of all issued and outstanding shares of 12
Japan including number of RETC shares held as of the date of this Agreement. 

 

Section 3.4Directors and Officers of 12 Japan. The duly elected or appointed
directors and the duly appointed officers of 12 Japan are as set out in Schedule
3.4. 

 

Section 3.5Financial Statements. 12 Japan has kept all books and records since
inception and such financial statements have been prepared in accordance with
Generally Accepted Accounting Principles (“GAAP”) consistently applied
throughout the periods involved. The balance sheets are true and accurate and
present fairly as of their respective dates the financial condition of 12 Japan.
As of the date of such balance sheets, except as and to the extent reflected or
reserved against therein, including but not limited to any previous tax
liability 12 Japan had no liabilities or obligations (absolute or contingent)
which should be reflected in the balance sheets or the notes thereto prepared in
accordance with GAAP, and all assets reflected therein are properly reported and
present fairly the value of the assets of 12 Japan, in accordance with GAAP. The
statements of operations, stockholders’ equity and cash flows reflect fairly the
information required to be set forth therein by GAAP. 

 

The books and records, financial and otherwise, of 12 Japan are, in all material
aspects, complete and correct and have been maintained in accordance with good
business and accounting practices.

 

All of 12 Japan’s assets are reflected on its financial statements, and 12 Japan
has no material liabilities, direct or indirect, matured or unmatured,
contingent or otherwise which is not reflected on its financial statements.

 

Section 3.6Information. The information concerning 12 Japan set forth in this
Agreement is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. 

 

Section 3.7Personal Property. 12 Japan possesses, and has good and marketable
title of all property necessary for the continued operation of the business of
12 Japan as presently conducted and as represented to RETC. All such property is
used in the business of 12 Japan. All such property is in reasonably good
operating condition (normal wear and tear excepted), and is reasonably fit for
the purposes for which such property is presently used. All material equipment,
furniture, fixtures and other tangible personal property and assets owned or
leased by 12 Japan and its subsidiaries is owned by 12 Japan or its subsidiaries
free and clear of all liens, security interests, charges, encumbrances, and
other adverse claims. 

 

Section 3.8Intellectual Property. 12 Japan represents and warrants that all
trademarks and trademark applications, and all patents and patent applications,
as set forth in Schedule 3.8, and any trade secrets, and “know-how” held
relating to business of 12 Japan, and all other intangible assets, in 12 Japan’s
possession or that may be reasonably acquired by 12 Japan any other proprietary
information and trade secrets relating to the business of 12 Japan (collectively
the “Intellectual Property”) shall remain the intellectual property of 12 Japan
as of the date of Closing of this Agreement and that 12 Japan shall take any
steps reasonable to assign or otherwise transfer any Intellectual Property right
to RETC, as necessary to protect RETC’s rights to the same. Further, 12 Japan
owns, free and clear of any encumbrance, or has the valid right to sell all
Intellectual Property used by 12 Japan in its business, as currently conducted.
12 Japan represents that it has not received any written complaint, claim or
notice alleging any such infringement, violation or misappropriation.
Additionally, 12 Japan has taken reasonable precautions (i) to protect its
rights in its Intellectual Property and (ii) to maintain the confidentiality of
its trade secrets, know-how and other confidential Intellectual Property,
related to the business and to 12 Japan’s knowledge, there have been no acts or
omissions by the managers, members, employees and agents of 12 Japan, the result
of which would be to materially compromise the rights of 12 Japan to apply for
or enforce appropriate legal protection of 12 Japan’s Intellectual Property. 

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Section 3.9Material Contracts and Transactions. Schedule 3.9 attached hereto
lists each material contract, agreement, license, permit, arrangement,
commitment, instrument or contract to which 12 Japan or any of its subsidiaries
is a party (each, a “Contract”). Each Contract is in full force and effect, and
there exists no material breach or violation of or default by 12 Japan or any of
its subsidiaries under any Contract, or any event that with notice or the lapse
of time, or both, will create a material breach or violation thereof or default
under any Contract by 12 Japan or any of its subsidiaries. The continuation,
validity, and effectiveness each Contract will in no way be affected by the
consummation of the Transaction or any of the transactions contemplated in this
Agreement. There exists no actual or threatened termination, cancellation, or
limitation of, or any amendment, modification, or change to any Contract. 

 

Section 3.10Subsidiaries. Except as set forth on Schedule 3.10,12 Japan does not
have any subsidiaries or agreements of any nature to acquire any subsidiary or
to acquire or lease any other business operations. Each subsidiary of 12 Japan
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has the requisite corporate power
and authority to own, lease and to carry on its business as now being conducted.
Each subsidiary of 12 Japan is duly qualified to do business and is in good
standing as a corporation in each of the jurisdictions in which 12 Japan owns
property, leases property, does business, or is otherwise required to do so,
where the failure to be so qualified would have a material adverse effect on the
business of 12 Japan and its subsidiaries taken as a whole. 12 Japan owns all of
the shares of each subsidiary of 12 Japan and there are no outstanding options,
warrants, subscriptions, conversion rights, or other rights, agreements, or
commitments obligating any subsidiary of 12 Japan to issue any additional common
shares of such subsidiary, or any other securities convertible into,
exchangeable for, or evidencing the right to subscribe for or acquire from any
subsidiary of 12 Japan any shares of such subsidiary. 

 

Section 3.11Absence of Certain Changes or Events. As of the date of this
Agreement, (a) there has not been any material adverse change in the business,
operations, properties, assets, or condition (financial or otherwise) of 12
Japan; and (b) 12 Japan has not: (i) declared or made, or agreed to declare or
make, any payment of dividends or distributions of any assets of any kind
whatsoever to stockholders or purchased or redeemed, or agreed to purchase or
redeem, any of its shares; (ii) made any material change in its method of
management, operation or accounting; (iii) entered into any other material
transaction other than in the ordinary course of its business; or (iv) made any
increase in or adoption of any profit sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee benefit plan, payment, or
arrangement made to, for, or with its officers, directors, or employees. 

 

Section 3.12Litigation and Proceedings. There are no actions, suits,
proceedings, or investigations pending or, to the knowledge of 12 Japan after
reasonable investigation, threatened by or against 12 Japan or affecting 12
Japan or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. 12 Japan does not have any knowledge of any material
default on its part with respect to any judgment, order, injunction, decree,
award, rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality. 

 

Section 3.13Compliance with Laws and Regulations. To the best of its knowledge,
12 Japan has complied with all applicable statutes and regulations, except to
the extent that noncompliance would not materially and adversely affect the
business, operations, properties, assets, or condition of 12 Japan or except to
the extent that noncompliance would not result in the occurrence of any material
liability for 12 Japan. This compliance includes, but is not limited to, the
filing of all reports to date with relevant authorities. 

 

Section 3.14Approval of Agreement. The Board of Directors of 12 Japan has
authorized the execution and delivery of this Agreement by 12 Japan and has
approved this Agreement and the transactions contemplated hereby. 

 

Section 3.15Valid Obligation. This Agreement and all agreements and other
documents executed by 12 Japan in connection herewith constitute the valid and
binding obligation of 12 Japan, enforceable in accordance with its or their
terms, except as may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore may
be brought. 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF 12 JAPAN SHAREHOLDERS

 

The 12 Japan Shareholders hereby severally and not jointly represents and
warrants to RETC:

 

Section 4.1Authority. The 12 Japan Shareholders have the right, power, authority
and capacity to execute and deliver this Agreement to which such 12 Japan
Shareholders are a party, to consummate the transactions contemplated by this
Agreement, and to perform such 12 Japan Shareholder’s obligations under this
Agreement. This Agreement has been duly and validly authorized and approved,
executed and delivered by the 12 Japan Shareholders. Assuming this Agreement has
been duly and validly authorized, executed and delivered by the parties thereto
other than such 12 Japan Shareholders, this Agreement is duly authorized,
executed and delivered by the 12 Japan Shareholders and constitutes the legal,
valid and binding obligations of the 12 Japan Shareholders, enforceable against
the 12 Japan Shareholders in accordance with their respective terms, except as
such enforcement is limited by general equitable principles, or by bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors rights
generally. 

 

Section 4.2No Conflict. Neither the execution or delivery by the 12 Japan
Shareholders of this Agreement to which the 12 Japan Shareholders are a party
nor the consummation or performance by the 12 Japan Shareholders of the
transactions contemplated hereby or thereby will, directly or indirectly,
(a) contravene, conflict with, or result in a violation of any provision of the
organizational documents of the 12 Japan Shareholders; (b) contravene, conflict
with, constitute a default (or an event or condition which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
or acceleration of, any agreement or instrument to which any of the 12 Japan
Shareholders are a party or by which the properties or assets of the 12 Japan
Shareholders is bound; or (c) contravene, conflict with, or result in a
violation of, any law or order to which any of the 12 Japan Shareholders, or any
of the properties or assets of the 12 Japan Shareholders, may be subject. 

 

Section 4.3Litigation. There is no pending Action against the 12 Japan
Shareholders that involves the 12 Japan Shares or that challenges, or may have
the effect of preventing, delaying or making illegal, or otherwise interfering
with, any of the transactions contemplated by this Agreement or the business of
12 Japan and, to the knowledge of the 12 Japan Shareholders, no such Action has
been threatened, and no event or circumstance exists that is reasonably likely
to give rise to or serve as a basis for the commencement of any such Action. 

 

Section 4.4Ownership of Shares. The 12 Japan Shareholders are the record and
beneficial owners of the 12 Japan Shares. The 12 Japan Shareholder are not the
record or beneficial owners of any other shares of 12 Japan. The 12 Japan
Shareholders have and shall transfer at the Closing, good and marketable title
to the 12 Japan Shares, 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, excepting only restrictions on
future transfers imposed by applicable law. 

 

Section 4.5Pre-emptive Rights. The 12 Japan Shareholders have no pre-emptive
rights or any other rights to acquire any shares of 12 Japan that have not been
waived or exercised. 

 

ARTICLE V

 

CONDITIONS TO THE OBLIGATIONS OF 12 JAPAN AND THE 12 JAPAN SHAREHOLDERS

 

The obligations of 12 Japan 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 12 Japan or the
12 Japan Shareholders, as the case may be, in their sole discretion:

 

Section 5.1Representations and Warranties of RETC. All representations and
warranties made by RETC in this Agreement shall be true and correct in all
material respects on and as of the Closing Date. 

 

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

 

Section 5.3Consents 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. 

 

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Section 5.4No 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 RETC 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 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 5.5Obligations Prior to Closing. RETC must have caused the following to
occur prior to Closing:  

 

A.RETC shall, at Closing, have caused the cancellation of Five Million
(5,000,000) shares of RETC restricted Common Stock and shall facilitate the
cancellation of Five Hundred Thousand (500,000) shares of RETC Series A
Preferred Stock. Collectively, such shares shall be cancelled and returned to
authorized but unissued status; and,  

 

B.RETC shall deliver the following documents to 12 Japan: (i) share certificates
evidencing the RETC Shares registered in the name of the 12 Japan Shareholder;
(ii) this Agreement duly executed; (iii) such other documents as 12 Japan or the
12 Japan Shareholder may reasonably request for the purpose of evidencing the
accuracy of any of the representations and warranties of RETC, evidencing the
performance of, or compliance by RETC with any covenant or obligation required
to be performed or complied with by RETC, evidencing the satisfaction of any
condition referred to in this Article V, or otherwise facilitating the
consummation or performance of any of the transactions contemplated by this
Agreement.  

 

Section 5.6 No Material Adverse Effect. There shall not have been any event,
occurrence or development that has resulted in or could result in a Material
Adverse Effect on or with respect to RETC. 

 

Section 5.7Employment Agreements. RETC will have received from 12 Japan copies
of all agreements or arrangements that evidence the employment of all of the
hourly and salaried employees of 12 Japan as set forth on Schedule 5.7 attached
hereto, which constitute all of the employees reasonably necessary to operate
the business of 12 Japan substantially as presently operated. 

 

ARTICLE VI

 

CONDITIONS TO THE OBLIGATIONS OF RETC

 

The obligations of RETC 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 RETC in its sole
discretion:

 

Section 6.1Representations and Warranties of 12 Japan and the 12 Japan
Shareholder. All representations and warranties made by 12 Japan and the 12
Japan Shareholder on behalf of themselves individually in this Agreement shall
be true and correct on and as of the Closing Date. 

 

Section 6.2Approval by Majority Consent. The holders of at least a majority
(51%) of the outstanding shares of common stock of 12 Japan must approve this
Agreement by written consent prior to the Closing Date.  

 

Section 6.3Agreements and Covenants. 12 Japan and the 12 Japan 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 6.4Consents 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 6.5No 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
12 Japan 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. 

--------------------------------------------------------------------------------

Section 6.6Documents. 12 Japan and the 12 Japan Shareholder must deliver to RETC
at the Closing: 

 

A. share certificates evidencing the number of 12 Japan Shares, along with
executed share transfer forms transferring such 12 Japan Shares to RETC; 

 

B.this Agreement to which the 12 Japan and the 12 Japan Shareholder are each a
party, duly executed; and 

 

C. such other documents as RETC may reasonably request for the purpose of (i)
evidencing the accuracy of any of the representations and warranties of 12 Japan
and the 12 Japan Shareholder, (ii) evidencing the performance of, or compliance
by 12 Japan and the 12 Japan Shareholder with, any covenant or obligation
required to be performed or complied with by 12 Japan and the 12 Japan
Shareholder, as the case may be, (iii) evidencing the satisfaction of any
condition referred to in this Article VI, or (iv) otherwise facilitating the
consummation or performance of any of the transactions contemplated by this
Agreement. 

 

Section 6.7No Claim Regarding Stock Ownership or Consideration. There must not
have been made or threatened by any person, any claim asserting that such person
(a) is the holder of, or has the right to acquire or to obtain beneficial
ownership of the 12 Japan Shares, or any other stock, voting, equity, or
ownership interest in, 12 Japan, or (b) is entitled to all or any portion of the
RETC Shares. 

 

ARTICLE VII

 

SURVIVAL AND INDEMNIFICATION

 

Section 7.1Survival 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 three-year anniversary of the Closing Date (the “Survival Period”). The
right to indemnification, payment of damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement, with respect to the accuracy or inaccuracy of or
compliance with, any such representation, warranty, covenant, or obligation. The
waiver of any condition based on the accuracy of any representation or warranty,
or on the performance of or compliance with any covenant or obligation, will not
affect the right to indemnification, payment of damages, or other remedy based
on such representations, warranties, covenants, and obligations. 

 

Section 7.2Indemnification. 

 

A.Indemnification Obligations in favor of RETC. From and after the Closing Date
until the expiration of the Survival Period, 12 Japan shall reimburse and hold
harmless RETC and its shareholders (such person and their heirs, executors,
administrators, agents, successors and assigns is referred to herein as a “RETC
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 such RETC
Indemnified Party, and any and all actions, suits, claims, or legal,
administrative, arbitration, governmental or other procedures or investigation
against any RETC Indemnified Party, which arises or results from a third-party
claim brought against a RETC Indemnified Party to the extent based on a breach
of the representations and warranties with respect to the business, operations
or assets of 12 Japan. All claims of RETC pursuant to this Section 7.2 shall be
brought by RETC on behalf of RETC and those Persons who were stockholders of
RETC immediately prior to the Closing Date. In no event shall any such
indemnification payments exceed $50,000 in the aggregate from 12 Japan. No claim
for indemnification may be brought under this Section 7.2(A) unless all claims
for indemnification, in the aggregate, total more than $10,000. 

 

B.Indemnification Obligations in favor of 12 Japan and the 12 Japan Shareholder.
From and after the Closing Date until the expiration of the Survival Period,
RETC and the RETC shareholders shall indemnify and hold harmless 12 Japan, the
12 Japan Shareholder, and his 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 (each
a “12 Japan 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: (i) any breach of representation or warranty made by RETC in
this Agreement and in any certificate delivered by RETC pursuant to this
Agreement; (ii) any breach by RETC of any covenant, obligation or other
agreement made by RETC in this Agreement; and (iii) a third-party claim based on
any acts or omissions by RETC. In no event shall any such indemnification
payments exceed $50,000 in the aggregate from RETC. No claim for indemnification
may be brought under this Section 7.2(B) unless all claims for indemnification,
in the aggregate, total more than $10,000. 

--------------------------------------------------------------------------------

ARTICLE VIII

 

MISCELLANEOUS PROVISIONS

 

Section 8.1Successors and Assigns. This Agreement shall inure to the benefit of,
and be binding upon, the parties hereto and their respective successors and
assigns; provided 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 8.2Fees 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
each Party, as incurred respectively. 

 

Section 8.3Notices. 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 7 days after being sent by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
addresses set forth in the Preamble of this Agreement, 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 8.3 are
concerned unless notice of such change shall have been given to such other party
hereto as provided in this Section 8.3. 

 

Section 8.4Entire 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
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 8.5Severability. 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 8.6Titles 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 8.7Counterparts. 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. Fax and PDF copies
shall be considered originals for all purposes. 

 

Section 8.8Convenience 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 U.S. 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 8.3. 

 

Section 8.9Enforcement 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 8.10Governing 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 8.11Amendments and Waivers. Except as 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 such prior or
subsequent occurrence. 

--------------------------------------------------------------------------------

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

 

 

12 RETECH CORPORATION

 

 

Per: /s/ Angelo Ponzetta 

Name: Angelo Ponzetta 

Title: President and Chief Executive Officer

 

 

12 JAPAN LIMITED

 

 

Per: /s/Angelo Ponzetta 

Name: Angelo Ponzetta 

Title: Director

 

12 JAPAN LIMITED SHAREHOLDERS

 

 

Per: /s/ Angelo Ponzetta  

Name: Angelo Ponzetta 

 

 

Per: /s/ Daniele Monteverde 

Name: Daniele Monteverde 

 

 

Per: /s/ Micquel Robles 

Name: Santos Torres LLC by Miguel Robles 

--------------------------------------------------------------------------------

DISCLOSURE SCHEDULE

to the

SHARE EXCHANGE AGREEMENT

By and Among

12 RETECH CORPORATION,

12 JAPAN LIMITED,

AND

THE SHAREHOLDERS OF 12 JAPAN LIMITED

 

These Disclosure Schedules have been prepared pursuant to the Share Exchange
Agreement (the “Agreement”) by and among 12 RETECH CORPORATION, a Nevada
corporation (“RETC”), 12 JAPAN LIMITED (“12 Japan”), and the individual
shareholders of 12 Japan. Except as otherwise defined herein, capitalized terms
used herein will have the same meaning given to them in the Share Exchange
Agreement. Schedule and paragraph numbers herein correspond to the Section and
Subsection numbering in applicable Article of the Share Exchange Agreement.
Section and Subsection headings contained herein are included for purposes of
identifying the relevant disclosures and for the convenience of the reader and
are not intended to supplement or modify the meaning of the disclosures in any
way. 

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 3.4

DIRECTORS AND OFFICERS OF 12 JAPAN LIMITED

 

Angelo Ponzetta:Director 

Daniele Monteverde:Director  

--------------------------------------------------------------------------------

SCHEDULE 3.8

INTELLECTUAL PROPERTY

 

Country:

Application #:

Description:

Filing Date:

 

 

 

 

 

 

 

 

 

 

 

 

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SCHEDULE 3.9

MATERIAL CONTRACTS

 

 

With:

Dated:

Material Terms/Description:

1. 

TechFirm Inc. Japan

Nov 24, 2016

Joint Collaboration for the distribution of 12 USXS.

2. 

 

 

 

3. 

 

 

 

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SCHEDULE 3.10

SUBSIDIARIES OF 12 JAPAN

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SCHEDULE 5.7

12 JAPAN EMPLOYMENT AGREEMENTS AND ARRANGEMENTS

 

As of the date of this Agreement, the following hourly and salaried employees of
12 Japan are reasonably necessary to operate the business of 12 Japan as
substantially presently operated:

 

 

Name of Party

Date of Agreement

1. 

Mamoru Wakimoto

June 8, 2016

2. 

Shohei Murata

May 27, 2016