Exhibit 10.1

 

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

 

This Agreement and Plan of Merger and Reorganization (this “Agreement”) is
entered into as of December 8, 2017 by and among EVANS BREWING COMPANY, INC., a
publicly-owned Delaware corporation (the “Company”), I-ON ACQUISITION CORP., a
Delaware corporation (“Acquisition”), and I-ON COMMUNICATIONS, LTD., a company
organized under the laws of the Republic of South Korea (“I-ON”). The Company,
Acquisition and I-ON are sometimes hereinafter collectively referred to as the
“Parties” and individually as a “Party.”

 

WHEREAS, the Company is a Delaware corporation with 4,784,293 shares of common
stock, par value $0.0001, issued and outstanding (the “Common Stock”) and whose
shares are quoted on over-the-counter stock markets under the symbol “ALES.”

 

WHEREAS, Acquisition is a wholly-owned subsidiary of the Company with 1,000
shares of common stock, par value $0.00001 per share (the “Acquisition Stock”)
issued and outstanding.

 

WHEREAS, I-ON is a Korean Law Company with 2,808,214 shares of (the “I-ON
Shares”) issued and outstanding.

 

WHEREAS, the Board of Directors or Managers of each of the Company, Acquisition,
and I-ON have determined that it is fair to, and in the best interests of, their
respective companies and shareholders for Acquisition to be merged with and into
I-ON, with I-ON as the surviving entity (the “Merger”), upon the terms and
subject to the conditions set forth herein.

 

WHEREAS, the Board of Directors or Managers of each of the Company, Acquisition
and I-ON shall approve the Merger in accordance with the Delaware General
Corporation Law (“DGCL”) and the corporate laws of the Republic of South Korea
(“Korean Law”) and upon the terms and subject to the conditions set forth
herein, and in the Certificate of Merger attached as Exhibit A hereto (the
“Certificate of Merger”).

 

WHEREAS, the shareholders of I-ON (the “I-ON Shareholders”) have approved this
Agreement, the Certificate of Merger, and the transactions contemplated and
described hereby and thereby, including, without limitation, the Merger, and the
Company, as the sole stockholder of Acquisition, has approved this Agreement,
the Certificate of Merger, and the transactions contemplated and described
hereby and thereby.

 

WHEREAS, for federal income tax purposes, it is intended that the Merger shall
qualify to the extent possible as a tax-free reorganization within the meaning
of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
“Code”);

 

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

 

ARTICLE I

PLAN OF MERGER

 

1.1. Merger. Subject to the terms and conditions of this Agreement and the
Certificate of Merger, Acquisition shall be merged with and into I-ON in
accordance with the provisions of the DGCL and Korean Law. At the Effective Time
(as hereinafter defined), the separate legal existence of Acquisition shall
cease and I-ON shall be the surviving entity in the Merger (sometimes
hereinafter referred to as the “Surviving Company”) and shall continue its
existence under the laws of the Republic of South Korea.

 

   

 

 

1.2. Effective Time. The Merger shall become effective upon the filing of the
Certificate of Merger with the Secretary of State of the Delaware. The time at
which the Merger shall become effective as aforesaid is referred to hereinafter
as the “Effective Time.”

 

1.3. Closing. The closing of the Merger (the “Closing”) shall occur upon mutual
satisfaction by the Parties of the closing conditions set forth in Articles V
and VII hereof (the “Closing Date”). The Closing shall occur at the offices of
Kane Kessler, P.C., 666 Third Avenue, New York, New York 10017 or by the
exchange of signatures. At the Closing, all of the documents, certificates,
agreements, and instruments referenced in Section 1.10 will be executed and
delivered as described therein. At the Effective Time, all actions to be taken
at the Closing shall be deemed to be taken simultaneously.

 

1.4. Certificate of incorporation, Bylaws and Officers of the Surviving Company.

 

(a) The Certificate of Incorporation of I-ON, as in effect immediately prior to
the Effective Time, attached as Exhibit B hereto, shall be the Certificate of
Incorporation of the Surviving Company from and after the Effective Time until
amended in accordance with applicable law and such Certificate of Incorporation.

 

(b) The Bylaws of I-ON, as in effect immediately prior to the Effective Time in
the form attached as Exhibit C hereto, shall be the Bylaws of the Surviving
Company from and after the Effective Time until amended in accordance with
applicable law, the Certificate of Incorporation of the Surviving Company, and
such Operating Agreement.

 

(c) The officers listed in Exhibit D hereto shall comprise the officers of the
Surviving Company and each shall hold their respective office or offices from
and after the Effective Time until a successor shall have been elected and shall
have qualified in accordance with applicable law, or as otherwise provided in
the Certificate of Incorporation or Bylaws of the Surviving Company.

 

1.5. Assets and Liabilities. At the Effective Time, the Surviving Company shall
possess all the rights, privileges, powers and franchises of a public as well as
of a private nature, and be subject to all the restrictions, disabilities and
duties of each of Acquisition and I-ON (collectively, the “Constituent
Companies”); and all the rights, privileges, powers and franchises of each of
the Constituent Companies, and all property, real, personal and mixed, and all
debts due to any of the Constituent Companies on whatever account, as well as
all other things in action or belonging to each of the Constituent Companies,
shall be vested in the Surviving Company; and all property, rights, privileges,
powers and franchises, and all and every other interest shall be thereafter as
effectively the property of the Surviving Company as they were of the several
and respective Constituent Companies, and the title to any real estate vested by
deed or otherwise in either of such Constituent Companies shall not revert or be
in any way impaired by the Merger; but all rights of creditors and all liens
upon any property of any of the Constituent Companies shall be preserved
unimpaired, and all debts, liabilities and duties of the Constituent Companies
shall thenceforth attach to the Surviving Company, and may be enforced against
it to the same extent as if said debts, liabilities and duties had been incurred
or contracted by it.

 

 -2- 

 

 

1.6. Manner and Basis of Converting Equity. At the Effective Time:

 

(a) By virtue of the Merger and without any action on the part of the
shareholders of the Company all of the shares of Acquisition Stock, outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into the
right to receive such proportionate number of I-ON Shares, so that at the
Effective Time, the Company shall be the holder of all of the issued and
outstanding I-ON Shares; and

 

(b) all of the I-ON Shares issued and outstanding immediately prior to the
Effective time shall be converted into the right to receive: Twenty-Six Million
(26,000,000) newly-issued shares of Common Stock of the Company (the “Merger
Shares”).

 

(c) From and after the Effective Time, all such I-ON Shares shall no longer be
outstanding and shall automatically be cancelled and shall cease to exist, and
each holder of I-ON Shares shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration therefor upon the surrender
of such I-ON Shares in accordance with Section 2.2.

 

(d) Adjustment to Stock Consideration. The applicable Merger Shares shall be
adjusted appropriately to reflect the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into the Merger Shares), cash dividend, reorganization,
recapitalization, reclassification, combination, exchange of shares or other
like change with respect to Company Common Stock occurring on or after the date
hereof and prior to the Effective Time.

 

1.7. Surrender and Exchange of Certificates. Promptly after the Effective Time
and upon surrender of a certificate or certificates representing the I-ON Shares
that were outstanding immediately prior to the Effective Time or an affidavit
and indemnification in form reasonably acceptable to counsel for the Company
stating that such I-ON Shareholders have lost their certificate or an affidavit
or that such certificates have been destroyed, the Company shall issue to the
I-ON Shareholders surrendering such certificate(s) or affidavit, a certificate
or certificates registered in the name of such I-ON Shareholders representing
the number of shares of the Merger Shares and such proportionate share of cash
consideration that such I-ON Shareholders shall be entitled to receive as set
forth in Section 1.6(b). Until the certificate(s) is or are surrendered, each
certificate(s) that immediately prior to the Effective Time represented any
outstanding shares of I-ON Shares shall be deemed at and after the Effective
Time to represent only the right to receive upon surrender as aforesaid the
Merger consideration as specified in Section 1.6(b) for the holder thereof or to
perfect any rights of appraisal that such holder may have pursuant to the
applicable provisions of the NCBCA.

 

1.8. The Company Capital Stock. The Company agrees that it will cause the Merger
Shares at the Effective Time pursuant to Section 1.6(b) to be available for such
purposes. The Company further covenants that at the Closing, and including the
issuance of the Merger Shares, the shares of Common Stock sold in the “Offering”
and the retirement of the debt and conversion of the Preferred Stock in the
Reorganization (as those terms are defined herein) there will be approximately
40,000,000 shares of the Common Stock issued and outstanding, and that, no other
common or preferred stock or equity securities or any options, warrants, rights
or other agreements or instruments convertible, exchangeable or exercisable into
common or preferred stock or other equity securities shall be issued or
outstanding.

 

 -3- 

 

 

1.9. Offering. Simultaneously upon the closing of the Merger, the Company shall
have consummated an offering of its Securities from one or more investors (the
“Investors”) who shall purchase up to Eight Million (8,000,000) shares of the
Common Stock at the per share purchase price of $_________ for an aggregate
offering amount of _____________________ Dollars ($__________). The form of
Subscription Agreement between the Investors and the Company is attached hereto
as Exhibit E.

 

1.10. Operation of Surviving Company. I-ON acknowledges that upon the
effectiveness of the Merger, and the compliance by the Company and Acquisition
with their respective duties and obligations hereunder, the Company shall have
the absolute and unqualified right to deal with the assets and business of the
Surviving Company as its own property subject only to the limitations on the
disposition or use of such assets or the conduct of such business as existed
prior to the Merger.

 

1.11. Appointment of Officers and Directors. Simultaneously upon consummation of
the Closing, the persons set forth on Exhibit F shall be appointed to serve as
the Company’s officers and directors as set forth opposite each of their names
to serve until such time as provided in the Bylaws of the Company.

 

1.12. Closing Events. At the Closing, each of the respective parties shall
execute, acknowledge, and deliver (or shall cause to be executed, acknowledged,
and delivered) any and all officers’ certificates, opinions, financial
statements, agreements, resolutions, rulings, or other instruments required by
this Agreement to be so delivered at or prior to the Closing, and the documents
and certificates provided in Sections 5.2, 5.4, 6.2, 6.4 and 6.5, together with
such other items as may be reasonably requested by the parties and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby. If agreed to by the parties, the Closing may take place
through the exchange of documents (other than the exchange of stock
certificates) by fax, email and/or express courier.

 

1.13. Exemption From Registration. The Company and I-ON intend that the Merger
Shares to be issued pursuant to the Merger will be issued in a transaction
exempt from registration under the Securities Act of 1933, as amended
(“Securities Act”) and from the qualification and registration requirements of
any applicable state “Blue Sky” or securities laws.

 

ARTICLE II

REPRESENTATIONS, COVENANTS, AND
WARRANTIES OF I-ON

 

I-ON represents and warrants to the Company, to the knowledge of I-ON, that the
following representations and warranties in this Article II are true and
complete as of the date hereof and as of the Closing Date (or in the case of
representations and warranties that by their terms speak as of a specified date,
as of such specified date), subject to the exceptions disclosed in the
disclosure schedules attached hereto (the “Schedules”) (referencing the
appropriate section and subsection numbers of this Agreement; provided, however,
that the information set forth in one section or subsection of the Schedules
shall be deemed to apply to each other section or subsection thereof to which
its relevance is reasonably material to a Company on the face of such
disclosure), which exceptions shall be deemed to be part of, and qualifications
to, the representations and warranties contained in this Article II. For
purposes of this Article II, the phrase “to the knowledge of I-ON” or any phrase
of similar import shall be deemed to refer to the actual knowledge of the
executive officers of I-ON immediately before the Closing.

 

 -4- 

 

 

2.1. Organization. I-ON is a corporation duly organized, validly existing, and
in good standing under the laws of the Republic of South Korea. I-ON has the
power and is duly authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business in jurisdictions in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification except where the failure to be so qualified or in good standing,
individually or in the aggregate, has not had and would not reasonably be
expected to have an I-ON Material Adverse Effect (as hereinafter defined). The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not, violate any provision of I-ON’s organizational documents. I-ON has
taken all action required by laws, its organizational documents, certificate of
business registration, or otherwise to authorize the execution and delivery of
this Agreement. I-ON has full power, authority, and legal right and has taken or
will take all action required by law, its organizational, and otherwise to
consummate the transactions herein contemplated. For purposes of this Agreement,
“I-ON Material Adverse Effect” means a material adverse effect on the assets,
business, condition (financial or otherwise) or results of operations of I-ON or
its subsidiaries taken as a whole.

 

2.2. Capitalization. As of the date of this Agreement, I-ON’s authorized capital
stock of 100,000,000 shares, par value 500 Korean Won per share (the “I-ON
Shares”) of which 2,808,814 shares are issued and outstanding. All of the issued
and outstanding I-ON Shares are duly authorized, validly issued, fully paid,
nonassessable and free of all pre-emptive rights. There are no other classes of
equity, notes, or other indebtedness convertible into I-ON Common Stock,
outstanding or authorized options, warrants, rights, agreements or commitments
to which I-ON is a party or which are binding upon I-ON providing for the
issuance or redemption of any of its membership interests. Except as set forth
on Schedule 2.2 hereto, there are no agreements to which the I-ON is a party or
by which it is bound with respect to the voting (including without limitation
voting trusts or proxies), registration under the Securities Act, or sale or
transfer (including without limitation agreements relating to pre-emptive
rights, rights of first refusal, co-sale rights or “drag-along” rights) of any
securities of I-ON. To the knowledge of I-ON, there are no agreements among
other parties to which I-ON is a party and by which it is bound with respect to
the voting (including without limitation voting trusts or proxies) or sale or
transfer (including without limitation agreements relating to rights of first
refusal, co-sale rights or “drag-along” rights) of any securities of I-ON. All
of the issued and outstanding I-ON Shares were issued in compliance with
applicable federal and state securities laws.

 

2.3. Financial Statements.

 

(a) I-ON has filed all income tax returns required to be filed by it from its
inception to the date hereof. All such returns are complete and accurate in all
material respects.

 

(b) I-ON has no liabilities with respect to the payment of federal, county,
local, or other taxes (including any deficiencies, interest, or penalties),
except for taxes accrued but not yet due and payable, for which I-ON may be
liable in its own right or as a transferee of the assets of, or as a successor
to, any other corporation or entity.

 

(c) No deficiency for any taxes has been proposed, asserted or assessed against
I-ON. There has been no tax audit, nor has there been any notice to I-ON by any
taxing authority regarding any such tax audit, or, to the knowledge of I-ON, is
any such tax audit threatened with regard to any taxes or I-ON tax returns. I-ON
does not expect the assessment of any additional taxes of I-ON for any period
prior to the date hereof and has no knowledge of any unresolved questions
concerning the liability for taxes of I-ON.

 

 -5- 

 

 

(d) The books and records, financial and otherwise, of I-ON are in all material
respects complete and correct and have been maintained in accordance with good
business and accounting practices.

 

2.4.       Disclosure. No representation or warranty by I-ON contained in this
Agreement or in any of the agreements or other documents executed pursuant to
this Agreement, and no statement contained in any document, certificate or other
instrument delivered or to be delivered by or on behalf of I-ON pursuant to this
Agreement or therein, contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact necessary, in
light of the circumstances under which it was or will be made, in order to make
the statements herein or therein not misleading. I-ON has disclosed to the
Company all material information relating to the business of I-ON or the
transactions contemplated by this Agreement.

 

2.5.       Undisclosed Liabilities. I-ON has no material liability (whether
known, whether absolute or contingent, whether liquidated or unliquidated and
whether due or to become due), except for (a) liabilities which have arisen in
the Ordinary Course of Business (as hereinafter defined) and (b) contractual and
other liabilities incurred in the Ordinary Course of Business. As used in this
Article II, “Ordinary Course of Business” means the ordinary course of I-ON’s
business, consistent with past custom and practice (including with respect to
frequency and amount).

 

2.6. Absence of Certain Changes or Events. Except as set forth in this
Agreement, Schedule 2.6 hereto, since the date of the latest balance sheet
included in the I-ON Financial Statements:

 

(a) except in the Ordinary Course of Business, there has not been (i) any
material adverse change in the business, operations, properties, assets, or
condition of I-ON; or (ii) any damage, destruction, or loss to I-ON (whether or
not covered by insurance) materially and adversely affecting the business,
operations, properties, assets, or condition of I-ON; and

 

(b) I-ON has not (i) borrowed or agreed to borrow any funds or incurred, or
become subject to, any material obligation or liability (absolute or contingent)
not otherwise in the Ordinary Course of Business; (ii) paid any material
obligation or liability not otherwise in the Ordinary Course of Business
(absolute or contingent) other than current liabilities reflected in or shown on
the most recent I-ON balance sheet, and current liabilities incurred since that
date in the Ordinary Course of Business; (iii) sold or transferred, or agreed to
sell or transfer, any of its assets, properties, or rights not otherwise in the
Ordinary Course of Business; (iv) made or permitted any amendment or termination
of any contract, agreement, or license to which they are a party not otherwise
in the Ordinary Course of Business if such amendment or termination is material,
considering the business of I-ON; or (v) issued, delivered, or agreed to issue
or deliver any stock, bonds or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock).

 

2.7. Litigation and Proceedings. There are no actions, suits, proceedings, or
investigations pending or, to the knowledge of I-ON, threatened by or against
I-ON, or affecting I-ON, 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.

 

 -6- 

 

 

2.8. No Conflict With Other Instruments. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, or constitute an event of default
under, any material indenture, mortgage, deed of trust, or other material
contract, agreement, or instrument to which I-ON is a party or to which any of
its properties or operations are subject.

 

2.9. Contracts. I-ON has provided, or will provide the Company, copies of all
material contracts, agreements, franchises, license agreements, or other
commitments to which I-ON is a party or by which it or any of its assets,
products, technology, or properties are bound.

 

2.10. Compliance With Laws and Regulations. I-ON has complied with all
applicable statutes and regulations of any federal, state, county, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or condition of I-ON.

 

2.11. Approval of Agreement. The Board of Directors of I-ON (the “I-ON
Managers”) and the I-ON Shareholders will have authorized the execution and
delivery of this Agreement by I-ON and will have approved the transactions
contemplated hereby prior to the Closing. This Agreement has been duly and
validly executed and delivered by I-ON and constitutes a valid and binding
obligation of I-ON, enforceable against I-ON in accordance with its terms.

 

2.12. Title and Related Matters. I-ON has good and marketable title to all of
its properties, interest in properties, and assets, real and personal, free and
clear of all liens, pledges, charges, or encumbrances except statutory liens or
claims not yet delinquent, those arising in the Ordinary Course of Business, and
those disclosed in Schedule 2.12 hereto.

 

2.13. Governmental Authorizations. I-ON has all licenses, franchises, permits,
and other government authorizations, that are legally required to enable it to
conduct its business operations in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities or
corporation laws, as hereinafter provided, no authorization, approval, consent,
or order of, or registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and delivery by
I-ON of this Agreement and the consummation by I-ON of the transactions
contemplated hereby.

 

2.14. Continuity of Business Enterprises. I-ON has no commitment or present
intention to liquidate I-ON or sell or otherwise dispose of a material portion
of its business or assets following the consummation of the transactions
contemplated hereby.

 

2.15. I-ON Shareholders. The I-ON Shareholders have full right, power, and
authority to transfer, assign, convey, and deliver their respective I-ON Shares;
and delivery of such I-ON Shares at the Closing will convey to the Company good
and marketable title to such I-ON Shares free and clear of any claims, charges,
equities, liens, security interests, and encumbrances except for any such
claims, charges, equities, liens, security interests, and encumbrances arising
out of such I-ON Shares being held by the Company.

 

2.16. No Brokers. I-ON has not entered into any contract with any person, firm
or other entity that would obligate I-ON or the Company to pay any commission,
brokerage or finders’ fee in connection with the transactions contemplated
hereby.

 

2.17. Subsidiaries. Except as set forth as Schedule 2.17, I-ON has no
subsidiaries.

 

 -7- 

 

 

2.18. Intellectual Property. I-ON owns or has the right to use all Intellectual
Property (as hereinafter defined) necessary (a) to use, manufacture, market and
distribute the products manufactured, marketed, sold or licensed, and to provide
the services provided, by I-ON to other parties (together, the “Customer
Deliverables”) and (b) to operate the internal systems of I-ON that are material
to its business or operations, including, without limitation, computer hardware
systems, software applications and embedded systems (the “Internal Systems”).
The Intellectual Property owned by or licensed to I-ON and incorporated in or
underlying the Customer Deliverables or the Internal Systems is referred to
herein as the “I-ON Intellectual Property”). Each item of I-ON Intellectual
Property will be owned or available for use by the Company immediately following
the Closing on substantially identical terms and conditions as it was
immediately prior to the Closing. I-ON has taken all reasonable measures to
protect the proprietary nature of each item of I-ON Intellectual Property. To
the knowledge of I-ON, (i) no other person or entity has any rights to any of
I-ON Intellectual Property owned by I-ON except pursuant to agreements or
licenses entered into by I-ON and such person in the ordinary course, and (ii)
no other person or entity is infringing, violating or misappropriating any of
I-ON Intellectual Property. For purposes of this Agreement, “Intellectual
Property” means all patents and patent applications, copyrights and
registrations thereof, computer software, data and documentation, trade secrets
and confidential business information, whether patentable or unpatentable and
whether or not reduced to practice, know-how, manufacturing and production
processes and techniques, research and development information, copyrightable
works, financial, marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists and information,
trademarks, service marks, trade names, domain names and applications and
registrations therefor, and other proprietary rights relating to any of the
foregoing.

 

2.19. Certain Business Relationships With Affiliates. Except as set forth in
Schedule 2.19 hereto, or as contemplated by employment agreements, consulting
agreements and the agreements contemplated by the transactions contemplated by
this Agreement, no affiliate of I-ON (a) owns any property or right, tangible or
intangible, which is used in the business of I-ON, (b) has any claim or cause of
action against I-ON, or (c) owes any money to, or is owed any money by, I-ON.

 

ARTICLE III

REPRESENTATIONS, COVENANTS, AND

WARRANTIES OF THE COMPANY AND ACQUISITION

 

The Company and Acquisition represent and warrant to I-ON that the following
representations and warranties in this Article III are true and complete as of
the date hereof and as of the Closing Date (or in the case of representations
and warranties that by their terms speak as of a specified date, as of such
specified date), subject to the exceptions disclosed in the disclosure schedules
attached hereto (the “Schedules”) (referencing the appropriate section and
subsection numbers of this Agreement; provided, however, that the information
set forth in one section or subsection of the Schedules shall be deemed to apply
to each other section or subsection thereof to which its relevance is reasonably
Company on the face of such disclosure), which exceptions shall be deemed to be
part of, and qualifications to, the representations and warranties contained in
this Article III. For purposes of this Article III, the phrase “to the knowledge
of the Company,” “to the knowledge of Acquisition,” or any phrase of similar
import shall be deemed to refer to the actual knowledge of the executive
officers of the Company or Acquisition, as applicable, immediately before the
Closing.

 

 -8- 

 

 

3.1. Organization.

 

(a) The Company is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and has the corporate power
and is duly authorized, qualified, franchised, and licensed under all applicable
laws, regulations, ordinances, and orders of public authorities to own all of
its properties and assets and to carry on its business in all material respects
as it is now being conducted, and there is no jurisdiction in which it is not
qualified in which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualification. Included in the
Company Reports (as hereinafter defined) are complete and correct copies of the
Certificate of Incorporation and Bylaws of the Company, and all amendments
thereto, as in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of the Company’s Certificate of Incorporation or
Bylaws. The Company has taken all action required by law, its Certificate of
Incorporation, its Bylaws, or otherwise to authorize the execution and delivery
of this Agreement, and the Company has full power, authority, and legal right
and has taken all action required by law, its Certificate of Incorporation,
Bylaws, or otherwise to consummate the transactions contemplated hereby.

 

(b) Acquisition is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and has the corporate power
and is duly authorized, qualified, franchised, and licensed under all applicable
laws, regulations, ordinances, and orders of public authorities to own all of
its properties and assets and to carry on its business in all material respects
as it is now being conducted, and there is no jurisdiction in which it is not
qualified in which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualification. Attached hereto
as Exhibits I and J, respectively, are complete and correct copies of the
Certificate of Incorporation and Bylaws of Acquisition, and all amendments
thereto, as in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of Acquisition’s Certificate of Incorporation or
Bylaws. Acquisition has taken all action required by law, its Certificate of
Incorporation, its Bylaws, or otherwise to authorize the execution and delivery
of this Agreement, and Acquisition has full power, authority, and legal right
and has taken all action required by law, its Certificate of Incorporation,
Bylaws, or otherwise to consummate the transactions contemplated hereby.

 

3.2. Capitalization.

 

(a) The authorized capital stock of the Company consists of 110,000,000 shares
of which 100,000,000 shares are be designated Common Stock and 10,000,000 shares
will be designated blank check preferred stock, par value $0.0001 per share (the
“Preferred Stock”). Immediately before the Closing there will be 5,100,000
shares of the Common Stock issued and outstanding, 1,000,000 shares of Series A
Preferred Stock issued and outstanding. Immediately following the Closing,
assuming the full amount of 8,000,000 shares of Common Stock have been sold in
the offering, there shall be 40,100,000 shares of Common Stock issued and
outstanding, no shares of preferred stock issued and outstanding. All of the
issued and outstanding shares of the Common Stock and Preferred Stock are duly
authorized, validly issued, fully paid, nonassessable and free of all
pre-emptive rights. There are no outstanding or authorized options, warrants,
rights, agreements or commitments to which the Company is a party or which are
binding upon the Company providing for the issuance or redemption of any of its
capital stock. There are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to the Company. There are no
agreements to which the Company is a party or by which it is bound with respect
to the voting (including without limitation voting trusts or proxies),
registration under the Securities Act, or sale or transfer (including without
limitation agreements relating to pre-emptive rights, rights of first refusal,
co-sale rights or “drag-along” rights) of any securities of the Company. There
are no agreements among other parties to which the Company is a party and by
which it is bound, with respect to the voting (including without limitation
voting trusts or proxies) or sale or transfer (including without limitation
agreements relating to rights of first refusal, co-sale rights or “drag-along”
rights) of any securities of the Company. All of the issued and outstanding
shares of the Common Stock were issued in compliance with applicable federal and
state securities laws. The Merger Shares to be issued at the Closing pursuant
this Agreement, when issued and delivered in accordance with the terms hereof,
shall be duly and validly issued, fully paid and nonassessable and free of all
pre-emptive rights.

 

 -9- 

 

 

(b) The authorized capital stock of Acquisition consists of 2,000 shares of
common stock, par value $0.00001 per share, of which 1,000 shares will be issued
and outstanding. All of the issued and outstanding shares of common stock of
Acquisition are owned by the Company. All the issued and outstanding shares of
common stock of Acquisition are duly authorized, validly issued, fully paid,
nonassessable and free of all pre-emptive rights. There are no outstanding or
authorized options, warrants, rights, agreements or commitments to which
Acquisition is a party or which are binding upon Acquisition providing for the
issuance or redemption of any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock or similar rights with respect to
Acquisition. There are no agreements to which Acquisition is a party or by which
it is bound with respect to the voting (including without limitation voting
trusts or proxies), registration under the Securities Act, or sale or transfer
(including without limitation agreements relating to pre-emptive rights, rights
of first refusal, co-sale rights or “drag-along” rights) of any securities of
Acquisition.

 

(c) Acquisition is a wholly-owned subsidiary of the Company that was formed
specifically for the purpose of the Merger and that has not conducted any
business or acquired any property, and will not conduct any business or acquire
any property prior to the Closing Date.

 

3.3. Financial Statements. The audited financial statements and unaudited
interim financial statements of the Company included in the Company Reports
(collectively, the “Company Financial Statements”) (a) complied as to form in
all material respects with applicable accounting requirements and, as
appropriate, the published rules and regulations of the SEC with respect thereto
when filed, (b) were prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby (except as may be indicated therein
or in the notes thereto, and in the case of quarterly financial statements, as
permitted by Form 10-Q under the Exchange Act), (c) fairly present the
consolidated financial condition, results of operations and cash flows of the
Company as of the respective dates thereof and for the periods referred to
therein, and (d) are consistent with the books and records of the Company.

 

3.4. Securities Act and Exchange Act Filings. The Company has furnished or made
available to I-ON complete and accurate copies, as amended or supplemented, of
its (a) Annual Report on Form 10-K for the fiscal year ended December 31, 2016,
and (b) all other reports filed by the Company under Section 13 or 15(d) of the
Exchange Act and all proxy or information statements filed by the Company under
subsections (a) or (c) of Section 14 of the Exchange Act with the SEC since July
3, 2013 (such documents are collectively referred to herein as the “Company
Reports”). The Company Reports constitute all of the documents required to be
filed by the Company under Section 13 or subsections (a) or (c) of Section 14 of
the Exchange Act with the SEC from July 3, 2013 through the date of this
Agreement. The Company Reports complied in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder when
filed. Each the Company Report filed under the Exchange Act was filed on or
before its due date (if any) or within the applicable extension period provided
under the Exchange Act. As of their respective dates, the Company Reports did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.

 

 -10- 

 

 

3.5. Undisclosed Liabilities. Except as set forth in the Company Financial
Statements, neither the Company nor any Subsidiary has any material liability
(whether known or unknown, whether absolute or contingent, whether liquidated or
unliquidated and whether due or to become due), except for (a) liabilities shown
on the Company Reports, (d) liabilities which have arisen since the date of the
Company Reports in the Ordinary Course of Business (as hereinafter defined) and
(c) contractual and other liabilities incurred in the Ordinary Course of
Business which are not required by GAAP to be reflected on a balance sheet. As
used in this Article III, “Ordinary Course of Business” means the ordinary
course of the Company’s business, consistent with past custom and practice
(including with respect to frequency and amount).

 

3.6. Absence of Certain Changes or Events. Except as set forth in this
Agreement, Schedule 3.6 hereto, or in the Company Reports, since the date of the
latest balance sheet included in the Company Reports:

 

(a) there has not been any material adverse change, financial or otherwise, in
the business, operations, properties, assets, or condition of the Company or
Acquisition (whether or not covered by insurance) materially and adversely
affecting the business, operations, properties, assets, or condition of the
Company or Acquisition;

 

(b) neither the Company nor Acquisition has (i) amended its Certificate of
Incorporation or Bylaws; (ii) 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 capital stock; (iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of the Company or
Acquisition; (iv) made any material change in its method of management,
operation, or accounting; (v) entered into any other material transactions; (vi)
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or
former officer or employee; (vii) increased the rate of compensation payable or
to become payable by it to any of its officers or directors or any of its
employees; or (viii) made any increase in 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;

 

(c) neither the Company nor Acquisition has (i) granted or agreed to grant any
options, warrants, or other rights for its stocks, bonds, or other corporate
securities calling for the issuance thereof; (ii) borrowed or agreed to borrow
any funds or incurred, or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in the Ordinary
Course of Business; (iii) paid or agreed to pay any material obligation or
liability (absolute or contingent) other than current liabilities reflected in
or shown on the most recent the Company Reports and current liabilities incurred
since that date in the Ordinary Course of Business and professional and other
fees and expenses incurred in connection with the preparation of this Agreement
and the consummation of the transactions contemplated hereby; (iv) sold or
transferred, or agreed to sell or transfer, any of its assets, property, or
rights (except assets, property, or rights not used or useful in its business
which, in the aggregate have a value of less than $25,000), or canceled, or
agreed to cancel, any debts or claims (except debts or claims which in the
aggregate are of a value of less than $25,000); (v) made or permitted any
amendment or termination of any contract, agreement, or license to which it is a
party if such amendment or termination is material, considering the business of
the Company or Acquisition; or (vi) issued, delivered, or agreed to issue or
deliver any stock, bonds, or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock), except in
connection with this Agreement;

 

 -11- 

 

 

(d) to the knowledge of the Company, it has not become subject to any statute or
regulation which materially and adversely affects, or in the future may
adversely affect, the business, operations, properties, assets, or condition of
the Company; and

 

(e) to the knowledge of Acquisition, it has not become subject to any statute or
regulation which materially and adversely affects, or in the future may
adversely affect, the business, operations, properties, assets, or condition of
Acquisition.

 

3.7. Title and Related Matters. The Company has good and marketable title to all
of its properties, interest in properties, and assets, real and personal, which
are reflected in the Company Reports or acquired after that date (except
properties, interest in properties, and assets sold or otherwise disposed of
since such date in the Ordinary Course of Business), free and clear of all
liens, pledges, charges, or encumbrances except:

 

(a) statutory liens or claims not yet delinquent;

 

(b) such imperfections of title and easements as do not and will not materially
detract from or interfere with the present or proposed use of the properties
subject thereto or affected thereby or otherwise materially impair present
business operations on such properties; and

 

(c) as described in the Company Reports.

 

3.8. Litigation and Proceedings. There are no actions, suits, or proceedings
pending or, to the knowledge of the Company, threatened by or against or
affecting the Company, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind except as specifically disclosed in the Company Reports.

 

3.9. Contracts. The Company is not a party to any material contract, agreement,
or other commitment, except as specifically disclosed in the Company Reports.

 

3.10. No Conflict With Other Instruments. The execution of this Agreement and
the consummation of the transactions contemplated by this Agreement will not
result in the breach of any term or provision of, or constitute a default under,
any indenture, mortgage, deed of trust, or other material agreement or
instrument to which the Company is a party or to which it or any of its assets
or operations are subject.

 

3.11. Governmental Authorizations. Except as disclosed in the Company Reports,
the Company is not required to have any licenses, franchises, permits, and other
government authorizations, that are legally required to enable it to conduct its
business operations in all material respects as conducted on the date hereof.
Except for compliance with federal and state securities or corporation laws, as
hereinafter provided, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental body
is required in connection with the execution and delivery by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
hereby.

 

 -12- 

 

 

3.12. Compliance With Laws and Regulations. Except as disclosed in the Company
Reports, the Company:

 

(a) is in compliance with each applicable law (including rules and regulations
thereunder) of any federal, state, local or foreign government, or any
governmental entity, except for any violations or defaults that, individually or
in the aggregate, have not had and would not reasonably be expected to have a
Company Material Adverse Effect (as hereinafter defined);

 

(b) has complied with all federal and state securities laws and regulations,
including being current in all of its reporting obligations under such federal
and state securities laws and regulations;

 

(c) has not, and the past and present officers, directors and affiliates of the
Company have not, been the subject of, nor does any officer or director of the
Company have any reason to believe that the Company or any of its officers,
directors or affiliates will be the subject of, any civil or criminal proceeding
or investigation by any federal or state agency alleging a violation of
securities laws;

 

(d) has not been the subject of any voluntary or involuntary bankruptcy
proceeding, nor has it been a party to any material litigation;

 

(e) has not, and the past and present officers, directors and affiliates have
not, been the subject of, nor does any officer or director of the Company have
any reason to believe that the Company or any of its officers, directors or
affiliates will be the subject of, any civil, criminal or administrative
investigation or proceeding brought by any federal or state agency having
regulatory authority over such entity or person;

 

(f) does not and will not immediately prior to the Closing, have any
liabilities, contingent or otherwise and is not a party to any executory
agreements;

 

(g) is not a “blank check company” as such term is defined by Rule 419 adopted
under the Securities Act; and

 

(h) is not a “shell company” as such term is defined by Rule 12b-2 adopted under
the Exchange Act.

 

For purposes of this Agreement, a “Company Material Adverse Effect” means a
material adverse effect on the assets, business, condition (financial or
otherwise) or results of operations of the Company or its subsidiaries taken as
a whole.

 

3.13. Insurance. Schedule 3.13 sets forth a true and complete list of all
insurance policies providing insurance coverage of any nature to the Company.
Such policies provide adequate and customary coverage for the operation of the
Company’s business as currently operated and are sufficient for compliance by
the Company with all requirements of law and all material agreements to which
the Company is a party or by which any of the assets of Seller are bound. All of
such policies are in full force and effect and are valid and enforceable in
accordance with their terms, and Seller has complied with all terms and
conditions of such policies, including premium payments. None of the insurance
carriers has indicated to the Seller its intention to cancel, or alter the
coverage under such policies. All applications for such policies are accurate in
all material respects. The Company does not have any claim pending against any
of the insurance carriers under such policies and there has been no actual or
alleged occurrence of any kind which would give rise to any such claim and the
Company has not made any claims under any policy at any time, except for those
specified claims set forth on Schedule 3.13.

 

 -13- 

 

 

3.14. Approval of Agreement. At the Closing, the board of directors of the
Company (the “Company Board”) and the Shareholders of Acquisition shall have
authorized the execution and delivery of this Agreement by the Company and
Acquisition and have approved this Agreement and the transactions contemplated
hereby.

 

3.15. Material Transactions With Affiliates. Except as disclosed herein and in
the Company Reports, there exists no material contract, agreement, or
arrangement between the Company and any person who was at the time of such
contract, agreement, or arrangement an officer, director, or person owning of
record or known by the Company to own beneficially any common stock of the
Company and which is to be performed in whole or in part after the date hereof
or was entered into not more than three (3) years prior to the date hereof.

 

3.16. Employment Matters. No labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company, which
could reasonably be expected to result in a Company Material Adverse Effect.
None of the Company’s or any of its Subsidiaries’ employees is a member of a
union that relates to such employee’s relationship with the Company or such
Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the
Company, no executive officer of the Company or any Subsidiary, is, or is now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such
executive officer does not subject the Company or any of its Subsidiaries to any
liability with respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance could not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect.

 

3.17. No Brokers. The Company has not entered into any contract with any person,
firm or other entity that would obligate I-ON or the Company to pay any
commission, brokerage or finders’ fee in connection with the transactions
contemplated herein.

 

3.18. Subsidiaries. The Company’s subsidiaries are set forth on Schedule 3.18.

 

3.19. Disclosure. No representation or warranty by the Company contained in this
Agreement, and no statement contained in any document, certificate or other
instrument delivered or to be delivered by or on behalf of the Company pursuant
to this Agreement or therein, contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact necessary, in
light of the circumstances under which it was or will be made, in order to make
the statements herein or therein not misleading. the Company has disclosed to
I-ON all material information relating to the business of the Company or the
transactions contemplated by this Agreement.

  

 -14- 

 

 

ARTICLE IV

SPECIAL COVENANTS

 

4.1. Current Report. In connection with the Closing, the parties shall file a
current report on Form 8-K relating to this Agreement and the transactions
contemplated hereby (the “Current Report”). Each of I-ON and the Company shall
cause the Current Report to be filed with the SEC no later than four (4)
business days of the Closing and to otherwise comply with all requirements of
applicable federal and state securities laws.

 

4.2. Actions of Acquisition. Prior to the Closing, the Company shall cause and
demonstrate to I-ON the following actions have been taken by the written consent
of the Company, the holder of all of the outstanding shares of common stock of
Acquisition:

 

(a) the approval of this Agreement and the transactions contemplated hereby; and

 

(b) such other actions as I-ON may determine are necessary or appropriate.

 

4.3. Actions of I-ON. Prior to the Closing, I-ON shall cause and demonstrate to
the Company the following actions have been taken by the written consent of the
holders of the outstanding I-ON Shares:

 

(a) the approval of this Agreement and the transactions contemplated hereby; and

 

(b) such other actions as the Company may determine are necessary or
appropriate.

 

4.4. Access to Properties and Records. The Company and I-ON will each afford to
the officers and authorized representatives of the other reasonable access to
the properties, books, and records of the Company or I-ON in order that each may
have full opportunity to make such reasonable investigation as it shall desire
to make of the affairs of the other, and each will furnish the other with such
additional financial and operating data and other information as to the business
and properties of the Company or I-ON as the other shall from time to time
reasonably request.

 

4.5. Delivery of Books and Records. At the Closing, I-ON shall deliver to the
Company, I-ON’s minute books, books of account, contracts, records, and all
other books or documents.

 

4.6. Actions Prior to Closing by Both Parties.

 

(a) From and after the date of this Agreement until the Closing Date and except
as permitted or contemplated by this Agreement, the Company, I-ON and
Acquisition will each: (i) carry on its business in substantially the same
manner as it has heretofore; (ii) maintain and keep its properties in states of
good repair and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty; (iii) maintain in full force and
effect insurance comparable in amount and in scope of coverage to that now
maintained by it; (iv) perform in all material respects all of its obligation
under material contracts, leases, and instruments relating to or affecting its
assets, properties, and business; (v) use its best efforts to maintain and
preserve its business organization intact, to retain its key employees, and to
maintain its relationship with its material suppliers and customers; and (vi)
fully comply with and perform in all material respects all obligations and
duties imposed on it by all federal and state laws and all rules, regulations,
and orders imposed by federal or state governmental authorities.

 

 -15- 

 

 

(b) Except as set forth herein, from and after the date of this Agreement until
the Closing Date, none of the Company, I-ON, or Acquisition will: (i) make any
change in their organizational documents, charter documents or Bylaws; (ii) take
any action described in Section 2.6 in the case of I-ON, or in Section 3.6 in
the case of the Company or Acquisition (all except as permitted therein or as
disclosed in the applicable party’s schedules); (iii) enter into or amend any
contract, agreement, or other instrument of any of the types described in such
party’s schedules, except that a party may enter into or amend any contract,
agreement, or other instrument in the Ordinary Course of Business involving the
sale of goods or services, or (iv) make or change any material tax election,
settle or compromise any material tax liability or file any amended tax return.

 

4.7. Indemnification.

 

(a) Indemnification by I-ON. I-ON hereby agrees to defend and indemnify the
Company and Acquisition and each of the officers, agents and directors of the
Company and Acquisition as of the date of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in Article II. The indemnification
provided for in this Section 4.8(a) shall not survive the Closing and
consummation of the transactions contemplated hereby but shall survive the
termination of this Agreement pursuant to Section 7.1(b).

 

(b) Indemnification by the Company. The Company hereby agrees to defend and
indemnify I-ON and each of the officers or agents of I-ON as of the date of this
Agreement against any loss, liability, claim, damage, or expense (including, but
not limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever), to which it or they may become subject
arising out of or based on any inaccuracy appearing in or misrepresentation made
in Article III. The indemnification provided for in this Section 4.8(b) shall
survive the Closing and consummation of the transactions contemplated hereby and
shall survive the termination of this Agreement pursuant to Section 7.1(c). In
addition, for the sake of clarity, the representations listed in Section 3.12,
including Section 3.12(h), shall survive the Closing, and the Company shall be
liable for, and shall pay, any and all damages, costs, expenses, legal fees,
accounting fees, or other liabilities that occur based on a breach of the
representation made in Section 3.12(h), including the filing of any “super” Form
8-K to provide Form 10 Information.

 

ARTICLE V

CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE COMPANY AND ACQUISITION

 

The obligations of the Company and Acquisition under this Agreement are subject
to the satisfaction, at or before the Closing, of the following conditions:

 

5.1. Accuracy of Representations; Performance. The representations and
warranties made by I-ON in this Agreement were true when made and shall be true
at the Closing Date with the same force and effect as if such representations
and warranties were made at and as of the Closing Date (except for changes
therein permitted by this Agreement), and I-ON shall have performed or complied
with all covenants and conditions required by this Agreement to be performed or
complied with by I-ON prior to or at the Closing. The Company may request to be
furnished with a certificate, signed by a duly authorized officer of I-ON and
dated the Closing Date, to the foregoing effect.

 

 -16- 

 

 

5.2. Officer’s Certificates. The Company shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
I-ON to the effect that no litigation, proceeding, investigation, or inquiry is
pending or, to the best knowledge of I-ON threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated by
this Agreement, or, to the extent not disclosed in a disclosure schedule, by or
against I-ON which might result in any material adverse change in any of the
assets, properties, business, or operations of I-ON.

 

5.3. No Material Adverse Change. Prior to the Closing Date, there shall not have
occurred any material adverse change in the financial condition, business, or
operations of I-ON, nor shall any event have occurred which, with the lapse of
time or the giving of notice, may cause or create any material adverse change in
the financial condition, business, or operations of I-ON.

 

5.4. Other Items.

 

(a) The Company shall have received such further documents, certificates, or
instruments relating to the transactions contemplated hereby as the Company may
reasonably request.

 

(b) The Company shall have conducted a complete and satisfactory due diligence
review of I-ON.

 

(c) The transactions contemplated by this Agreement shall have been approved by
the I-ON Managers and the I-ON Shareholders.

 

(d) Any necessary third-party consents shall be obtained prior to Closing,
including but not limited to consents necessary from I-ON’s lenders, creditors,
vendors and lessors.

 

5.5. Delivery of Financial Statements. I-ON shall have delivered the I-ON
Financial Statements required in Section 2.3(d); unless waived by the Company,
but which shall be delivered not more than sixty (60) days following the
Closing.

 

5.6. Good Standing. The Company shall have received certificates of good
standing from the Republic of South Korea, dated as of a date within five (5)
days prior to the Closing Date certifying that I-ON is in good standing as
corporations in the Republic of South Korea and has filed all tax returns
required to have been filed by it to date and has paid all taxes reported as due
thereon.

 

 -17- 

 

 

ARTICLE VI

CONDITIONS PRECEDENT TO OBLIGATIONS OF I-ON

 

The obligations of I-ON under this Agreement are subject to the satisfaction, at
or before the Closing, of the following conditions:

 

6.1. Accuracy of Representations; Performance. The representations and
warranties made by the Company and Acquisition in this Agreement were true when
made and shall be true as of the Closing Date (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date, and the
Company and Acquisition shall have performed and complied with all covenants and
conditions required by this Agreement to be performed or complied with by the
Company and Acquisition prior to or at the Closing. I-ON shall have been
furnished with a certificate, signed by a duly authorized executive officer of
the Company and dated the Closing Date, to the foregoing effect.

 

6.2. Officer’s Certificate. I-ON shall have been furnished with a certificate
dated the Closing Date and signed by a duly authorized executive officer of the
Company to the effect that no litigation, proceeding, investigation, or inquiry
is pending or, to the best knowledge of the Company threatened, which might
result in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement.

 

6.3. No Material Adverse Change. Prior to the Closing Date, there shall not have
occurred any material adverse change in the financial condition, business, or
operations of the Company nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause or create any material adverse
change in the financial condition, business, or operations of the Company.

 

6.4. Good Standing. I-ON shall have received certificates of good standing from
the Secretary of State of Delaware, or other appropriate office, dated as of a
date within five (5) days prior to the Closing Date certifying that the Company
and Acquisition, respectively, are in good standing as corporation in the states
of Delaware and have filed all tax returns required to have been filed by it to
date and has paid all taxes reported as due thereon.

 

6.5. Other Items.

 

(a) I-ON shall have received such further documents, certificates, or
instruments relating to the transactions contemplated hereby as I-ON may
reasonably request.

 

(b) I-ON shall have conducted a complete and satisfactory due diligence review
of the Company.

 

(c) The transactions contemplated by this Agreement shall have been approved by
the Board of Directors of the Company and Acquisition.

 

(d) Any necessary third-party consents shall be obtained prior to Closing,
including but not limited to consents necessary from the Company’s lenders,
creditors, vendors and lessors.

 

(e) There shall have been no material adverse changes in the Company or
Acquisition, financial or otherwise.

 

(f) Except as set forth herein, there shall be no Common Stock Equivalents
outstanding as of immediately prior to the Closing. For purposes of the
foregoing, “Common Stock Equivalents” means any subscriptions, warrants, options
or other rights or commitments of any character to subscribe for or purchase
from the Company, or obligating the Company to issue, any shares of any class of
the capital stock of the Company or any securities convertible into or
exchangeable for such shares.

 

 -18- 

 

 

(g) The parties shall have prepared and agreed upon the content of Form 8-K to
be filed pursuant to Section 4.1 hereof.

 

(h) As soon as practicable following the Effective Time, the Certificate of
Incorporation of the Company shall be amended (the “Amendment”), in a manner
reasonably acceptable to I-ON, to: (i) change the name of the Company to “I-ON
Communications.”

 

6.6. Consummation of the Offering. The Co-aggregate offering amount of the
Offering as set forth in Section 1.9 shall have been raised.

 

6.7. Reorganization. The Company shall consummate the following transaction in
connection with the Closing:

 

(a) The Company shall enter into a Split-Off Agreement with its Chief Executive
Officer, Michael Rappaport, in the form annexed here to as Exhibit G (the
“Split-Off Agreement”) whereby the Company will transfer to Mr. Rapport all of
the Company’s assets and operations related to its brewery business in
consideration for Mr. Rappaport forgiving any, and all notes, debts, advances
and other obligations owed to him by the Company, excluding obligations in the
total amount of One Million Dollars ($1,000,000) (the “Remaining Indebtedness”).
The Split-Off shall be consummated as soon as practicable following the Closing,
but not prior to.

 

(b) The Company and Rappaport shall enter in to a Leak-out – Lock-Out Agreement
in the form attached hereto as Exhibit H.

 

ARTICLE VII
TERMINATION

 

7.1. Termination.

 

(a) This Agreement may be terminated by either the I-ON Managers or the Company
Board at any time prior to the Closing Date if: (i) there shall be any actual or
threatened action or proceeding before any court or any governmental body which
shall seek to restrain, prohibit, or invalidate the transactions contemplated by
this Agreement and which, in the judgment of such board of directors, made in
good faith and based on the advice of its legal counsel, makes it inadvisable to
proceed with the Merger contemplated by this Agreement; (ii) any of the
transactions contemplated hereby are disapproved by any regulatory authority
whose approval is required to consummate such transactions or in the judgment of
such board of directors, made in good faith and based on the advice of counsel,
there is substantial likelihood that any such approval will not be obtained or
will be obtained only on a condition or conditions which would be unduly
burdensome, making it inadvisable to proceed with the Merger; (iii) there shall
have been any change after the date of the latest balance sheets of I-ON or the
Company, respectively, in the assets, properties, business, or financial
condition of I-ON or the Company, which could have a materially adverse affect
on the value of the business of I-ON or the Company, respectively, as the case
may be, dated as of the date of execution of this Agreement; or (iv) the Closing
Date shall not have occurred by December 31, 2017. In the event of termination
pursuant to this Section 7.1(a), no obligation, right, or liability shall arise
hereunder, and each party shall bear all of the expenses incurred by it in
connection with the negotiation, drafting, and execution of this Agreement and
the transactions contemplated hereby.

 

 -19- 

 

 

(b) This Agreement may be terminated at any time prior to the Closing by action
of the Company or Acquisition if I-ON fails to comply in any material respect
with any of its covenants or agreements contained in this Agreement or if any of
the representations or warranties of I-ON contained herein shall be inaccurate
in any material respect, and, in either case if such failure is reasonably
subject to cure, it remains uncured for three (3) days after notice of such
failure is provided to I-ON. If this Agreement is terminated pursuant to this
Section 7.1(b), this Agreement shall be of no further force or effect, and no
obligation, right, or liability shall arise hereunder.

 

(c) This Agreement may be terminated at any time prior to the Closing by action
of the I-ON Managers if the Company or Acquisition fails to comply in any
material respect with any of its covenants or agreements contained in this
Agreement or if any of the representations or warranties of the Company or
Acquisition contained herein shall be inaccurate in any material respect, and,
in either case if such failure is reasonably subject to cure, it remains uncured
for three (3) days after notice of such failure is provided to the Company. If
this Agreement is terminated pursuant to this Section 7.1(c), this Agreement
shall be of no further force or effect, and no obligation, right, or liability
shall arise hereunder.

 

ARTICLE VIII
MISCELLANEOUS

 

8.1. Governing Law. This Agreement shall be governed by, enforced, and construed
under and in accordance with the laws of the United States of America and, with
respect to matters of state law, with the laws of Delaware. Any dispute arising
under or in any way related to this Agreement will be determined exclusively in
the Federal or State Courts, for the County of New York, State of New York.

 

8.2. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered to it or sent by
registered mail or certified mail, postage prepaid, or by prepaid telegram and
any such notice or communication shall be deemed to have been given as of the
date so delivered, mailed, or telegraphed.

 

8.3. Attorney’s Fees. In the event that any party institutes any action or suit
to enforce this Agreement or to secure relief from any default hereunder or
breach hereof, the breaching party or parties shall reimburse the non-breaching
party or parties for all costs, including reasonable attorneys’ fees, incurred
in connection therewith and in enforcing or collecting any judgment rendered
therein.

 

8.4. Confidentiality. The Company, on the one hand, and I-ON, on the other hand,
will keep confidential all information and materials regarding the other party
designated by such party as confidential. The provisions of this Section 8.4
shall not apply to any information which is or shall become part of the public
domain through no fault of the party subject to the obligation from a third
party with a right to disclose such information free of obligation of
confidentiality. The Company and I-ON agree that no public disclosure will be
made by either party of the existence of the transactions contemplated by this
Agreement or any of its terms without first advising the other party and
obtaining its prior written consent to the proposed disclosure, unless such
disclosure is required by law, regulation or stock exchange rule.

 

 -20- 

 

 

8.5. Expenses. Except as otherwise set forth herein, each party shall bear its
own costs and expenses associated with the transactions contemplated by this
Agreement.

 

8.6. Schedules; Knowledge. Each party is presumed to have full knowledge of all
information set forth in the other party’s schedules delivered pursuant to this
Agreement.

 

8.7. Third Party Beneficiaries. This contract is solely between the Company,
Acquisition and I-ON and, except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor, or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.

 

8.8. Entire Agreement. This Agreement represents the entire agreement between
the parties relating to the transaction. There are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.

 

8.9. Survival. The representations and warranties of the respective parties
shall survive the Closing and the consummation of the transactions contemplated
hereby.

 

8.10. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which taken together shall
be but a single instrument.

 

8.11. Amendment or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at law,
or in equity, and may be enforced concurrently herewith, and no waiver by any
party of the performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement may
be amended by a writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance hereof may be extended by a writing signed by
the party or parties for whose benefit the provision is intended.

 

8.12. Press Releases and Announcements. No party shall issue any press release
or public announcement relating to the subject matter of this Agreement without
the prior written approval of the other parties; provided, however, that any
party may make any public disclosure it believes in good faith is required by
applicable law, regulation or stock market rule (in which case the disclosing
party shall use reasonable efforts to advise the other parties and provide them
with a copy of the proposed disclosure prior to making the disclosure).

 

(Signature page to follow.)

 

 -21- 

 

 

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

 

I-ON COMMUNICATIONS, LTD       By: /s/ James Jaccheol Oh     Name: James
Jaccheol Oh     Title:   CEO         EVANS BREWING COMPANY, INC.       By: /s/
Michael J. Rapport     Name: Michael J. Rapport     Title:  CEO         I-ON
ACQUISITION CORP.   a Delaware corporation         By: /s/ Kenneth C. Wiedrich  
  Name: Kenneth C. Wiedrich     Title:   Incorporator