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Exhibit 10.1
 
SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of August 13,
2018, is entered into by and between I-ON COMMUNICATIONS CORP., a Delaware
corporation, (the “Company”) and PEAK ONE OPPORTUNITY FUND, L.P., a Delaware
limited partnership (the “Buyer”).

WITNESSETH:

WHEREAS, the Company and the Buyer are executing and delivering this Agreement
in accordance with and in reliance upon the exemption from securities
registration afforded, inter alia, by Rule 506 under Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the
“SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), and/or
Section 4(2) of the 1933 Act; and

WHEREAS, the Buyer wishes to purchase from the Company, and the Company wishes
to sell the Buyer, upon the terms and subject to the conditions of this
Agreement, securities consisting of the Company’s Convertible Debentures due
three years from the respective dates of issuance (the “Debentures”), each of
which are in the form of Exhibit A hereto, which will be convertible into shares
of the Company’s common stock, par value $0.001 per share (the “Common Stock”),
in the aggregate principal amount of up to Six Hundred Thousand and 00/100
Dollars ($600,000.00), for an aggregate Purchase Price of up to Five Hundred
Forty Thousand and 00/100 Dollars ($540,000.00), as well as that certain Warrant
(as defined herein), all upon the terms and subject to the conditions of this
Agreement, the Debentures, and other related documents;

NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.             DEFINITIONS; AGREEMENT TO PURCHASE.

a.            Certain Definitions. As used herein, each of the following terms
has the meaning set forth below, unless the context otherwise requires:

(i)            “Affiliate” means, with respect to a specific Person referred to
in the relevant provision, another Person who or which controls or is controlled
by or is under common control with such specified Person.

(ii)           “Certificates” means certificates representing the Conversion
Shares issuable hereunder, each duly executed on behalf of the Company and
issued hereunder.

(iii)          “Closing Date” means the date on which one of the three (3)
Closings are held, which are the Signing Closing Date, the Second Closing Date
and the Third Closing Date.

(iv)          [Reserved]
 

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(v)           “Commitment Fee” shall have the meaning ascribed to such term in
Section 12(a).

(vi)          “Common Stock” shall have the meaning ascribed to such term in the
Recitals.

(vii)         “Conversion Amount” shall mean the Conversion Amount as defined in
the Debentures, provided, however that for purposes of the foregoing
calculation, the full indebtedness under the Debentures shall be deemed
immediately convertible, notwithstanding the 4.99% limitation on ownership set
forth in the Debentures.

(viii)        “Conversion Price” means the Conversion Price as defined in the
Debentures.

(ix)           “Conversion Shares” means the shares of Common Stock issuable
upon conversion of the Debentures.

(x)           “DWAC Operational” means that the Common Stock is eligible for
clearing through the Depository Trust Company (“DTC”) via the DTC’s Deposit
Withdrawal Agent Commission or “DWAC” system and active and in good standing for
DWAC issuance by the Transfer Agent (as defined herein).

(xi)           “Dollars” or “$” means United States Dollars.

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

(xiii)         “Investments” means Peak One Investments, LLC, the general
partner of the Buyer.

(xiv)        “Irrevocable Resolutions” has the meaning set forth in Section
8(i).

(xv)         “Market Price of the Common Stock” means (x) the closing bid price
of the Common Stock for the period indicated in the relevant provision hereof
(unless a different relevant period is specified in the relevant provision), as
reported by Bloomberg, LP or, if not so reported, as reported on the OTCQB,
OTCQX or OTC Pink or (y) if the Common Stock is listed on a stock exchange, the
closing price on such exchange, as reported by Bloomberg LP.

(xvi)        “Material Adverse Effect” means a material adverse effect on the
business, operations or condition (financial or otherwise) or results of
operation of the Company and its Subsidiaries taken as a whole, in the
reasonable commercial discretion of the Buyer, irrespective of any finding of
fault, magnitude of liability (or lack of financial liability). Without limiting
the generality of the foregoing, the occurrence of any of the following, in the
reasonable commercial discretion of the Buyer, shall be considered a Material
Adverse Effect: (i) any final money, judgment, writ or warrant of attachment, or
similar process (including an arbitral determination) in excess of Fifty
Thousand Dollars ($50,000) shall be entered or filed against the Company or any
of its Subsidiaries (including, in any event, products liability claims against
the Company or its Subsidiaries), (ii) the suspension or withdrawal of any
governmental authority or permit pertaining to a material amount of the
Company’s or any Subsidiary’s products or services, (iii) the loss of any
material insurance coverage (including, in any case, comprehensive general
liability coverage, products liability coverage or directors and officers
coverage, in each case in effect at the time of execution and delivery of this
Agreement), (iv) an action by a regulatory agency or governmental body affecting
the Common Stock (including, without limitation, (1) the commencement of any
regulatory investigation of which the Company is aware, the suspension of
trading of the Common Stock by the Financial Industry Regulation Authority
(“FINRA”), the SEC, the OTC Bulletin Board (“OTCBB”) or the OTC Markets Group,
Inc., the failure of the Common Stock to be DTC eligible or the placing of the
Common Stock on the DTC “chill list” or (2) the engaging in any market
manipulation or other unlawful or improper trading or other activity by any
Affiliate), (v) the Company’s independent registered accountants shall resign
under circumstances where a disagreement exists between the Company and its
independent registered accountants, (vi) the Company shall fail to timely file
any disclosure document as required by applicable federal or state securities
laws and regulations or by the rules and regulations of any exchange, trading
market or quotation system to which the Company or the Common Stock is subject,
or (vii) the Chief Executive Officer of the Company or any other key full-time
officer or director of the Company, shall, for any reason (including, without
limitation, termination, resignation, retirement, death or disability) cease to
act on behalf of the Company in the same role and to the same extent as his or
her involvement as of the date of execution and delivery of this Agreement.
 
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(xvii)       “Person” means any living person or any entity, such as, but not
necessarily limited to, a corporation, partnership or trust.

(xviii)      “Purchase Price” means the price that the Buyer pays for the
Debentures at each respective Closing, which are the Signing Purchase Price, the
Second Purchase Price and the Third Closing Price, as the case may be.

(xix)         [Intentionally Omitted].

(xx)          “Registration Statement” shall mean a registration statement filed
or contemplated to be filed by the Company with the SEC under the Securities
Act.

(xxi)         “Restricted Stock” shall mean shares of Common Stock which are not
freely trading shares when issued.

(xxii)        “Securities” means the Debentures and the Shares.

(xxiii)       “Shares” means the Conversion Shares.

(xxiv)      “Second Closing Date” shall have the meaning ascribed to such term
in Section 6(b).
 
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(xxv)        “Second Debenture” means the second of the three (3) Debentures, in
the principal amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00),
which is issued by the Company to the Buyer on the Second Closing Date.

(xxvi)      “Second Purchase Price” shall be One Hundred Eighty Thousand and
00/100 Dollars ($180,000.00)

(xxvii)     “Signing Closing Date” shall have the meaning ascribed to such term
in Section 6(a).

(xxviii)    “Signing Debenture” means the first of the three (3) Debentures, in
the principal amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00),
to be issued by the Company to the Buyer on the Signing Closing Date.

(xxix)       “Signing Purchase Price” shall be One Hundred Eighty Thousand and
00/100 Dollars ($180,000.00).

(xxx)        “Subsidiary” shall have the meaning ascribed to such term in
Section 3(b).

(xxxi)       “Third Closing Date” shall have the meaning ascribed to such term
in Section 6(c).

(xxxii)      “Third Debenture” means the third of the three (3) Debentures, in
the principal amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00),
which is issued by the Company to the Buyer on the Third Closing Date.

(xxxiii)     “Third Purchase Price” shall be One Hundred Eighty Thousand and
00/100 Dollars ($180,000.00).

(xxxiv)     “Transaction Documents” means, collectively, this Agreement, the
Debentures, the Transfer Agent Instruction Letter, the Irrevocable Resolutions
and the other agreements, documents and instruments contemplated hereby or
thereby.

(xxxv)      “Transfer Agent” shall have the meaning ascribed to such term in
Section 4(a).

(xxxvi)     “Transfer Agent Instruction Letter” shall have the meaning ascribed
to such term in Section 5(a).

b.            Purchase and Sale of Debentures.

(i)            The Buyer agrees to purchase from the Company, and the Company
agrees to sell to the Buyer, the Debentures and Warrant on the terms and
conditions set forth below in this Agreement and the other Transaction
Documents. The Warrant shall be earned in full as an inducement fee as of the
Signing Closing Date.
 
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(ii)           Subject to the terms and conditions of this Agreement and the
other Transaction Documents, the Buyer will purchase the Debentures and Warrant
at certain closings (each, a “Closing”) to be held on certain respective Closing
Dates.

c.             [Reserved]

(i)            [Reserved]

(ii)           [Reserved]

2.            BUYER’S REPRESENTATIONS, WARRANTIES, ETC.

The Buyer represents and warrants to, and covenants and agrees with, the Company
as follows:

a.            Investment Purpose. Buyer is purchasing the Debentures, and will
be acquiring the Conversion Shares, for its own account for investment only and
not with a view towards the public sale or distribution thereof and not with a
view to or for sale in connection with any distribution thereof.

b.            Accredited Investor Status. Buyer is (i) an “accredited investor”
as that term is defined in Rule 501 of the General Rules and Regulations under
the 1933 Act by reason of Rule 501(a)(3), (ii) experienced in making investments
of the kind described in this Agreement and the related documents, (iii) able,
by reason of the business and financial experience of its officers (if an
entity) and professional advisors (who are not affiliated with or compensated in
any way by the Company or any of its affiliates or selling agents), to protect
its own interests in connection with the transactions described in this
Agreement, and the related documents, and (iv) able to afford the entire loss of
its investment in the Securities.

c.            Subsequent Offers and Sales. All subsequent offers and sales of
the Securities by the Buyer shall be made pursuant to registration of the Shares
under the 1933 Act or pursuant to an exemption from registration and compliance
with applicable states’ securities laws.

d.            Reliance on Exemptions. Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and the Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of the Buyer to acquire the
Securities.

e.            Information. Buyer and its advisors have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities which have been
requested by the Buyer. Buyer and its advisors have been afforded the
opportunity to ask questions of the Company and have received complete and
satisfactory answers to any such inquiries. Without limiting the generality of
the foregoing, Buyer has also had the opportunity to obtain and to review the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2017, and Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2018 (collectively, with all of the Company’s filings with the SEC the “SEC
Documents”).
 
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f.            Investment Risk. Buyer understands that its investment in the
securities constitutes high risk investment, its investment in the Securities
involves a high degree of risk, including the risk of loss of the Buyer’s entire
investment.

g.            Governmental Review. Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities.

h.            Organization; Authorization. Buyer is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. This Agreement and the other Transaction Documents have been duly
and validly authorized, executed and delivered on behalf of the Buyer and create
a valid and binding agreement of the Buyer enforceable in accordance with its
terms, subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors’ rights generally.

i.             Residency. The state in which any offer to sell Securities
hereunder was made to or accepted by the Buyer is the state shown as the Buyer’s
address contained herein, and Buyer is a resident of such state only.

3.            COMPANY REPRESENTATIONS AND WARRANTIES, ETC.
 
The Company represents and warrants to the Buyer that:

a.            Concerning the Debentures and the Shares. There are no preemptive
rights of any stockholder of the Company to acquire the Debentures or the
Shares.

b.            Organization; Subsidiaries; Reporting Company Status. Attached
hereto as Schedule 3(b) is an organizational chart describing all of the
Company’s wholly-owned and majority-owned subsidiaries (the “Subsidiaries”) and
other Affiliates, including the relationships among the Company and such
Subsidiaries, including as to each Subsidiary its jurisdiction of organization
and the percentage of ownership held by the Company, and the parent company of
the Subsidiary, including the percentage of ownership of the Company held by it.
The Company and each Subsidiary is a corporation or other form of businesses
entity duly organized, validly existing and in good standing under the laws its
respective jurisdiction of organization, and each of them has the requisite
corporate or other power to own its properties and to carry on its business as
now being conducted. The Company and each Subsidiary is duly qualified as a
foreign corporation or other entity to do business and is in good standing in
each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a Material Adverse Effect. The
Common Stock is listed and traded on the OTCM (as defined below) (trading
symbol: IONI). The Company has received no notice, either oral or written, from
FINRA, the SEC, or any other organization, with respect to the continued
eligibility of the Common Stock for such listing, and the Company has maintained
all requirements for the continuation of such listing. The Company is an
operating company in that, among other things (A) it primarily engages, wholly
or substantially, directly or indirectly through a majority owned Subsidiary or
Subsidiaries, in the production or sale, or the research or development, of a
product or service other than the investment of capital, (B) it is not an
individual or sole proprietorship, (C) it is not an entity with no specific
business plan or purpose and its business plan is not to engage in a merger or
acquisition with an unidentified company or companies or other entity or person,
and (D) it intends to use the proceeds from the sale of the Debentures solely
for the operation of the Company’s business and uses other than personal,
family, or household purposes.
 
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c.            Authorized Shares. Schedule 3(c) sets forth all capital stock and
derivative securities of the Company that are authorized for issuance and that
are issued and outstanding. All issued and outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. The Company has sufficient authorized and unissued shares of
Common Stock as may be necessary to effect the issuance of the Shares, assuming
the prior issuance and exercise, exchange or conversion, as the case may be, of
all derivative securities authorized, as indicated in Schedule 3(c). The Shares
have been duly authorized and, when issued upon conversion of, or as interest
on, the Debentures, the Shares will be duly and validly issued, fully paid and
non-assessable and will not subject the holder thereof to personal liability by
reason of being such holder. At all times, the Company shall keep available and
reserved for issuance to the holders of the Debentures shares of Common Stock
duly authorized for issuance against the Debentures.

d.            Authorization. This Agreement, the issuance of the Debentures
(including without limitation the incurrence of indebtedness thereunder), the
issuance of the Conversion Shares under the Debentures, and the other
transactions contemplated by the Transaction Documents, have been duly, validly
and irrevocably authorized by the Company, and this Agreement has been duly
executed and delivered by the Company. The Company’s board of directors, in the
exercise of its fiduciary duties, has irrevocably approved the entry into and
performance of the Transaction Documents, including, without limitation the sale
of the Debentures and the issuance of Conversion Shares, based upon a reasonable
inquiry concerning the Company’s financing objectives and financial situation.
Each of the Transaction Documents, when executed and delivered by the Company,
are and will be, valid, legal and binding agreements of the Company, enforceable
in accordance with their respective terms, subject as to enforceability to
general principles of equity and to bankruptcy, insolvency, moratorium, and
other similar laws affecting the enforcement of creditors’ rights generally.

e.           Non-contravention. The execution and delivery of the Transaction
Documents, the issuance of the Securities and the consummation by the Company of
the other transactions contemplated by this Agreement and the Debentures
(including without limitation the incurrence of indebtedness thereunder) do not
and will not conflict with or result in a breach by the Company of any of the
terms or provisions of, or constitute a default under (i) the articles of
incorporation or by-laws of the Company, each as currently in effect, (ii) any
indenture, mortgage, deed of trust, or other material agreement or instrument to
which the Company is a party or by which it or any of its properties or assets
are bound, including any listing agreement for the Common Stock, except as
herein set forth or an event which results in the creation of any lien, charge
or encumbrance upon any assets of the Company or the triggering of any
anti-dilution rights, rights of first refusal or first offer on the part of
holders of the Company’s securities, (iii) to its knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or order
of any court, United States federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over the Company or any
of its properties or assets, or (iv) the Company’s listing agreement for its
Common Stock (if applicable).
 
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f.             Approvals. No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the stockholders of the Company is required to be obtained
by the Company for the entering into and performing this Agreement and the other
Transaction Documents (including without limitation the issuance and sale of the
Securities to the Buyer as contemplated by this Agreement) except such
authorizations, approvals and consents that have been obtained, or such
authorizations, approvals and consents, the failure of which to obtain would not
have a Material Adverse Effect.

g.            SEC Filings; Rule 144 Status. None of the SEC Documents contained,
at the time they were filed, any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements made therein in light of the circumstances under which they were
made, not misleading. Except as set forth on Schedule 3(g), the Company timely
filed all requisite forms, reports and exhibits thereto with the SEC as
required. The Company is not aware of any event occurring on or prior to the
execution and delivery of this Agreement that would require the filing of, or
with respect to which the Company intends to file, a Form 8-K after such time.
The Company satisfies the requirements of Rule 144(i)(2), and the Company shall
continue to satisfy all applicable requirements of Rule 144 (or any successor
thereto) for so long as any Securities are outstanding and not registered
pursuant to an effective Registration Statement filed with the SEC.

h.            Absence of Certain Changes. Since March 31, 2018, when viewed from
the perspective of the Company and its Subsidiaries taken as a whole, there has
been no material adverse change and no material adverse development in the
business, properties, operations, condition (financial or otherwise), or results
of operations of the Company and its Subsidiaries (including, without
limitation, a change or development which constitutes, or with the passage of
time is reasonably likely to become, a Material Adverse Effect), except as
disclosed in the SEC Documents. Since March 31, 2018, except as provided in the
SEC Documents, the Company has not (i) incurred or become subject to any
material liabilities (absolute or contingent) except liabilities incurred in the
ordinary course of business consistent with past practices; (ii) discharged or
satisfied any material lien or encumbrance or paid any material obligation or
liability (absolute or contingent), other than current liabilities paid in the
ordinary course of business consistent with past practices; (iii) declared or
made any payment or distribution of cash or other property to stockholders with
respect to its capital stock, or purchased or redeemed, or made any agreements
to purchase or redeem, any shares of its capital stock; (iv) sold, assigned or
transferred any other tangible assets, or canceled any debts or claims, except
in the ordinary course of business consistent with past practices; (v) suffered
any substantial 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
existing business; (vi) made any changes in employee compensation, except in the
ordinary course of business consistent with past practices; or (vii) experienced
any material problems with labor or management in connection with the terms and
conditions of their employment.
 
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i.              Full Disclosure. There is no fact known to the Company (other
than general economic conditions known to the public generally or as disclosed
in the SEC Documents) that has not been disclosed in writing to the Buyer that
(i) would reasonably be expected to have a Material Adverse Effect, (ii) would
reasonably be expected to materially and adversely affect the ability of the
Company to perform its obligations pursuant to the Transaction Documents, or
(iii) would reasonably be expected to materially and adversely affect the value
of the rights granted to the Buyer in the Transaction Documents.

j.              Absence of Litigation. Except as described in the SEC Documents,
there is no action, suit, proceeding, inquiry or investigation before or by any
court, public board or body pending or, to the knowledge of the Company,
threatened against or affecting the Company, wherein an unfavorable decision,
ruling or finding would have a Material Adverse Effect or which would adversely
affect the validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, any of the Transaction Documents. The
Company is not a party to or subject to the provisions of, any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality which could reasonably be expected to have a Material Adverse
Effect.

k.            Absence of Liens. The Company’s assets are not encumbered by any
liens or mortgages except as described in the SEC Documents.

l.             Absence of Events of Default. No event of default (or its
equivalent term), as defined in the respective agreement, indenture, mortgage,
deed of trust or other instrument, to which the Company is a party, and no event
which, with the giving of notice or the passage of time or both, would become an
event of default (or its equivalent term) (as so defined in such document), has
occurred and is continuing, which would have a Material Adverse Effect.

m.           No Undisclosed Liabilities or Events. The Company has no
liabilities or obligations other than those disclosed in the SEC Documents or
those incurred in the ordinary course of the Company’s business since March 31,
2018, and which individually or in the aggregate, do not or would not have a
Material Adverse Effect. No event or circumstances has occurred or exists with
respect to the Company or its properties, business, condition (financial or
otherwise), or results of operations, which, under applicable law, rule or
regulation, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed. There
are no proposals currently under consideration or currently anticipated to be
under consideration by the Board of Directors or the executive officers of the
Company which proposal would (x) change the articles of incorporation, by-laws
or any other charter document of the Company, each as currently in effect, with
or without shareholder approval, which change would reduce or otherwise
adversely affect the rights and powers of the shareholders of the Common Stock
or (y) materially or substantially change the business, assets or capital of the
Company.
 
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n.            No Integrated Offering. Neither the Company nor any of its
affiliates nor any Person acting on its or their behalf has, directly or
indirectly, at any time during the six month period immediately prior to the
date of this Agreement made any offer or sales of any security or solicited any
offers to buy any security under circumstances that would eliminate the
availability of the exemption from registration under Rule 506 of Regulation D
in connection with the offer and sale of the Securities as contemplated hereby.

o.            Dilution. The number of Shares issuable upon conversion of the
Debentures may increase substantially in certain circumstances, including, but
not necessarily limited to, the circumstance wherein the Market Price of the
Common Stock declines prior to the conversion of the Debentures. The Company’s
executive officers and directors have studied and fully understand the nature of
the securities being sold hereby and recognize that they have a potential
dilutive effect and further that the conversion of the Debentures and/or sale of
the Conversion Shares may have an adverse effect on the Market Price of the
Common Stock. The Board of Directors of the Company has concluded, in its good
faith business judgment that such issuance is in the best interests of the
Company. The Company specifically acknowledges that its obligation to issue the
Conversion Shares upon conversion of the Debentures is binding upon the Company
and enforceable regardless of the dilution such issuance may have on the
ownership %s of other shareholders of the Company.

p.           Regulatory Permits. The Company has all such permits, easements,
consents, licenses, franchises and other governmental and regulatory
authorizations from all appropriate federal, state, local or other public
authorities (“Permits”) as are necessary to own and lease its properties and
conduct its businesses in all material respects in the manner described in the
SEC Documents and as currently being conducted. All such Permits are in full
force and effect and the Company has fulfilled and performed all of its material
obligations with respect to such Permits, and no event has occurred that allows,
or after notice or lapse of time would allow, revocation or termination thereof
or will result in any other material impairment of the rights of the holder of
any such Permit, subject in each case to such qualification as may be disclosed
in the SEC Documents. Such Permits contain no restrictions that would materially
impair the ability of the Company to conduct businesses in the manner consistent
with its past practices. The Company has not received notice or otherwise has
knowledge of any proceeding or action relating to the revocation or modification
of any such Permit.

q.            Residency. The state in which any offer to sell Securities
hereunder was made or accepted by the Seller is the state shown as the Seller’s
address contained herein, and Seller is a resident of such state only.

r.            Hazardous Materials. The Company is in compliance with all
applicable Environmental Laws in all respects except where the failure to comply
does not have and could not reasonably be expected to have a Material Adverse
Effect. For purposes of the foregoing:

“Environmental Laws” means, collectively, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Superfund
Amendments and Reauthorization Act of 1986, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, as amended, the Clean Air Act,
as amended, the Clean Water Act, as amended, any other “Superfund” or
“Superlien” law or any other applicable federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning, the environment or any
Hazardous Material.
 
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“Hazardous Material” means and includes any hazardous, toxic or dangerous waste,
substance or material, the generation, handling, storage, disposal, treatment or
emission of which is subject to any Environmental Law.

s.            Independent Public Accountants. The Company’s auditor is an
independent registered public accounting firm with respect to the Company, as
required by the 1933 Act, the Exchange Act and the rules and regulations
promulgated thereunder.

t.             Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(1) transactions are executed in accordance with management’s general or
specific authorization; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (3) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (4) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

u.            Brokers. No Person (other than the Buyer and its principals,
employees and agents) is entitled to receive any consideration from the Company
or the Buyer arising from any finder’s agreement, brokerage agreement or other
agreement to which the Company is a party.

v.            DWAC Operational; DRS. The Company shall apply to become and
thereafter remain DWAC Operational and eligible for DRS

4.            CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

a.            Transfer Restrictions. The parties acknowledge and agree that (1)
the Debentures have not been registered under the provisions of the 1933 Act and
the Shares have not been registered under the 1933 Act, and may not be
transferred unless (A) subsequently registered thereunder or (B) the Securities
to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration; (2) any sale of the Securities made in reliance on Rule
144 promulgated under the 1933 Act (“Rule 144”) may be made only in accordance
with the terms of Rule 144 and further, if Rule 144 is not applicable, any
resale of such Securities under circumstances in which the seller, or the Person
through whom the sale is made, may be deemed to be an underwriter, as that term
is used in the 1933 Act, may require compliance with some other exemption under
the 1933 Act or the rules and regulations of the SEC thereunder, (3) at the
request of the Buyer, the Company shall, from time to time, within two (2)
business days of such request, at the sole cost and expense of the Company,
either (i) deliver to its transfer agent and registrar for the Common Stock (the
“Transfer Agent”) a written letter instructing and authorizing the Transfer
Agent to process transfers of the Shares at such time as the Buyer has held the
Securities for the minimum holding period permitted under Rule 144, subject to
the Buyer’s providing to the Transfer Agent certain customary representations
contemporaneously with any requested transfer, or (ii) at the Buyer’s option or
if the Transfer Agent requires further confirmation of the availability of an
exemption from registration, furnish to the Buyer an opinion of the Company’s
counsel in favor of the Buyer (and, at the request of the Buyer, any agent of
the Buyer, including but not limited to the Buyer’s broker or clearing firm) and
the Transfer Agent, reasonably satisfactory in form, scope and substance to the
Buyer and the Transfer Agent, to the effect that a contemporaneously requested
transfer of shares does not require registration under the 1933 Act, pursuant to
the 1933 Act, Rule 144 or other regulations promulgated under the 1933 Act and
(4) neither the Company nor any other Person is under any obligation to register
the Securities (other than pursuant to this Agreement) under the 1933 Act or to
comply with the terms and conditions of any exemption thereunder.
 
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b.           Restrictive Legend. The Buyer acknowledges and agrees that the
Debentures, and, until such time as the Shares have been registered under the
1933 Act as contemplated hereby and sold in accordance with an effective
Registration Statement, certificates and other instruments representing any of
the Securities shall bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of any such
Securities):

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.

c.             [Intentionally Omitted].

d.            Securities Filings. The Company undertakes and agrees to make all
necessary filings (including, without limitation, a Form D) in connection with
the sale of the Securities to the Buyer required under any United States laws
and regulations applicable to the Company (including without limitation state
“blue sky” laws), or by any domestic securities exchange or trading market, and
to provide a copy thereof to the Buyer promptly after such filing.
 
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e.            Reporting Status; Public Trading Market; DTC Eligibility. So long
as the Buyer beneficially own any Securities, (i) the Company shall timely file,
prior to or on the date when due, all reports that would be required to be filed
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if the Company
had securities registered under Section 12(b) or 12(g) of the Exchange Act; (ii)
the Company shall not be operated as, or report, to the SEC or any other Person,
that the Company is a “shell company” or indicate to the contrary to the SEC or
any other Person; (iii) the Company shall take all other action under its
control necessary to ensure the availability of Rule 144 under the 1933 Act for
the sale of Shares by the Buyer at the earliest possible date; and (iv) the
Company shall at all times while any Securities are outstanding maintain its
engagement of an independent registered public accounting firm. Except as
otherwise set forth in Transaction Documents, the Company shall take all action
under its control necessary to obtain and to continue the listing and trading of
its Common Stock on the OTC Markets, Inc. (“OTCM”) on the OTC Pink (“OTCP”),
OTCQB (“OTCQB”), or OTCQX (“OTCQX”), and will comply in all material respects
with the Company’s reporting, filing and other obligations under the by-laws or
rules of the Financial Industry Regulatory Authority (“FINRA”). If, so long as
the Buyer beneficially own any of the Securities, the Company receives any
written notice from the OTCM, FINRA, or the SEC with respect to either any
alleged deficiency in the Company’s compliance with applicable rules and
regulations (including without limitation any comments from the SEC on any of
the Company’s documents filed (or the failure to have made any such filing)
under the 1933 Act or the Exchange Act) (each, a “Regulatory Notice”), then the
Company shall promptly, and in any event within two (2) business days, provide
copies of the Regulatory Notice to the Buyer, and shall promptly, and in any
event within five (5) business days of receipt of the Regulatory Notice (a
“Regulatory Response”), respond in writing to the OTCM, FIRNA and/or SEC (as the
case may be), setting forth the Company’s explanation and/or response to the
issues raised in the Regulatory Notice, with a view towards maintaining and/or
regaining full compliance with the applicable rules and regulations of the OTCM,
FIRNA and/or SEC and maintaining or regaining good standing of the Company with
the OTCM, FINRA and/or SEC, as the case may be, the intent being to ensure that
the Company maintain its reporting company status with the SEC and that its
Common Stock be and remain available for trading on the OTCP, OTCQB, or OTCQX.
Further, at all times while any Securities are outstanding, the Common Stock
shall be DWAC Operational, and the Common Stock shall not be subject to any DTC
“chill” designation or similar restriction on the clearing of the Common Stock
through DTC.

f.             Use of Proceeds. The Company shall use the proceeds from the sale
of the Debentures for working capital purposes only subject to customary
restrictions. Absent the prior written approval of a majority of the principal
amount of the Debentures then outstanding, the Company shall not use any portion
of the proceeds of the sale of the Debentures to (i) repay any indebtedness or
other obligation of the Company incurred prior to the date of this Agreement
outside the normal course of business, (ii) pay any dividends or redemption
amount on any of the Company’s equity or equity equivalents, (iii) pay any
amounts, whether on account of debt obligations of the Company or otherwise,
except for compensation, to any officer, director or other related party of the
Company or (iv) pay deferred compensation or any compensation to any of the
directors or officers of the Company in excess of the rate or amount paid or
accrued during the fiscal year ended December 31, 2017 (as base compensation and
excluding any discretionary amounts), other than modest increases consistent
with prior practice that are approved by the Company’s Board of Directors.
 
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g.            Available Shares. Commencing on the date of execution and delivery
of this Agreement, the Company shall have and maintain authorized and reserved
for issuance, free from preemptive rights, that number of shares equal to Seven
Hundred percent (700%) of the number of shares of Common Stock (1) issuable
based upon the conversion of the then-outstanding Debentures (including accrued
interest thereon) as may be required to satisfy the conversion rights of the
Buyer pursuant to the terms and conditions of the Debenture (for the avoidance
of doubt, this shall be calculated based on the applicable conversion price that
would result on or after the date that is 180 days after the issuance date of
the respective Debenture(s) regardless of the date of calculation) (without
giving effect to the 4.99% limitation on ownership as set forth in the
Debentures), provided, however that for purposes of the foregoing calculation,
the full indebtedness under the Debentures shall be deemed immediately
convertible and (2) issuable to the Buyer on future Closing Dates, based upon
the lowest closing bid price per share of the Common Stock on the date before
the most recent Closing Date (as reported by Bloomberg LP) (collectively in the
aggregate the “Required Reserve Amount”). The Company shall monitor its
compliance with the foregoing requirements on an ongoing basis. If at any time
the Company does not have available an amount of authorized and non-issued
Shares required to be reserved pursuant to this Section, then the Company shall,
without notice or demand by the Buyer, call within thirty (30) days of such
occurrence and hold within sixty (60) days of such occurrence a special meeting
of shareholders, for the sole purpose of increasing the number of shares
authorized. Management of the Company shall recommend to shareholders to vote in
favor of increasing the number of Common Stock authorized at the meeting.
Members of the Company’s management shall also vote all of their own shares in
favor of increasing the number of Common Stock authorized at the meeting. If the
increase in authorized shares is approved by the stockholders at the meeting,
the Company shall implement the increase in authorized shares within one (1)
business day following approval at such meeting. Alternatively, to the extent
permitted by applicable law, in lieu of calling and holding a meeting as
described above, the Company may, within thirty (30) days of the date when the
Company does not have available an amount of authorized and non-issued Shares
required to be reserved as described above, procure the written consent of
stockholders to increase the number of shares authorized, and provide the
stockholders with notice thereof as may be required under applicable law
(including without limitation Section 14(c) of the Exchange Act and Regulation
14C thereunder). Upon obtaining stockholder approval as aforesaid, the Company
shall cause the appropriate increase in its authorized shares of Common Stock
within one (1) business day (or as soon thereafter as permitted by applicable
law). Company’s failure to comply with these provisions will be an Event of
Default (as defined in the Debentures).

h.            Reimbursement. If (i) Buyer and/or Investments becomes a party
defendant in any capacity in any action or proceeding brought by any stockholder
of the Company, in connection with or as a result of the consummation of the
transactions contemplated by the Transaction Documents, or if the Buyer and/or
Investments is impleaded in any such action, proceeding or investigation by any
Person, or (ii) the Buyer and/or Investments, other than by reason of its own
gross negligence, willful misconduct or breach of law (as adjudicated by a court
of law having proper jurisdiction and such adjudication is not subject to
appeal), becomes a party defendant in any capacity in any action or proceeding
brought by the SEC against or involving the Company or in connection with or as
a result of the consummation of the transactions contemplated by the Transaction
Documents, or if the Buyer or Investments is impleaded in any such action,
proceeding or investigation by any Person, then in any such case, the Company
shall promptly reimburse the Buyer and/or Investments for its or their
reasonable legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith. The reimbursement obligations of
the Company under this paragraph shall be in addition to any liability which the
Company may otherwise have, shall extend upon the same terms and conditions to
any affiliates of the Buyer and/or Investments who are actually named in such
action, proceeding or investigation, and partners, directors, agents, employees
and controlling Persons (if any), as the case may be, of the Buyer, Investments
and any such Affiliate, and shall be binding upon and inure to the benefit of
any successors, assigns, heirs and personal representatives of the Company, the
Buyer, Investments and any such Affiliate and any such Person. Except as
otherwise set forth in the Transaction Documents, the Company also agrees that
neither any Buyer, Investments nor any such Affiliate, partners, directors,
agents, employees or controlling Persons shall have any liability to the Company
or any Person asserting claims on behalf of or in right of the Company in
connection with or as a result of the consummation of the Transaction Documents.
 
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i.            The Company shall provide the Transfer Agent and/or the Buyer,
Investments or their respective brokerage and/or clearing firm with all relevant
legal opinions and other documentation requested by the Buyer or Investments in
connection with the issuance of the Conversion Shares or the Restricted Stock,
or the sale thereof, to confirm the share issuance(s) such that the Conversion
Shares and/or Restricted Stock may be deposited with the applicable brokerage
and/or clearing firm.

j.            No Payments to Affiliates or Related Parties. So long as any of
the Debentures remain outstanding, if the Debentures are in default, the Company
shall not, absent the prior written consent of the holders of all Debentures
then outstanding, make any payments to any of the Company’s or the Subsidiaries’
respective affiliates or related parties, including without limitation payments
or prepayments of principal or interest accrued on any indebtedness or
obligation in favor of affiliates or related parties. Notwithstanding anything
to the contrary contained herein, the provisions of this Section 4(j) shall not
apply to payments to the Subsidiaries, or other businesses in which affiliates
have an interest, made in the ordinary course of business and consistent with
past practice as disclosed in the SEC Documents.

k.            Notice of Material Adverse Effect. The Company shall notify the
Buyer (and any subsequent holder of the Debentures), as soon as practicable and
in no event later than three (3) business days of the Company’s knowledge of any
Material Adverse Effect on the Company. For purposes of the foregoing,
“knowledge” means the earlier of the Company’s actual knowledge or the Company’s
constructive knowledge upon due inquiry.

l.             Public Disclosure. Except to the extent required by applicable
law, absent the Buyer’s prior written consent, the Company shall not reference
the name of the Buyer in any press release, securities disclosure, business
plan, marketing or funding proposal.
 
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m.           Nature of Transaction; Savings Clause. It is the parties’ express
understanding and agreement that the transactions contemplated by the
Transaction Documents constitute an investment and not a loan. If nonetheless
such transactions are deemed to be a loan (as adjudicated by a court of law
having proper jurisdiction and such adjudication is not subject to appeal), the
Company shall not be obligated or required to pay interest at a rate that could
subject Buyer to either civil or criminal liability as a result of such rate
exceeding the maximum rate that the Buyer is permitted to charge under
applicable law, and the Company’s obligations under the Transaction Documents
shall not be void or voidable on the basis of the Buyer’s lack of any license or
registration as a lender with any governmental authority. It is expressly
understood and agreed by the parties that neither the amounts payable pursuant
to Section 12, any redemption premium, remedy upon an Event of Default (as
defined in the Debentures) or any Acceleration Amount (as defined in the
Debentures), original issue discount nor any investment returns of the Buyer on
the sale of the Debentures or the sale of any Conversion Shares (whether
unrealized or realized) shall be construed as interest. If, by the terms of the
Debentures, any other Transaction Document or any other instrument, Buyer is at
any time required or obligated to pay interest at a rate exceeding such maximum
rate, interest payable under the Debenture and/or such other Transaction
Documents or other instrument shall be computed (or recomputed) at such maximum
rate, and the portion of all prior interest payments (if any) exceeding such
maximum shall be applied to payment of the outstanding principal of the
Debentures.

5.             TRANSFER AGENT INSTRUCTIONS.

a.            Transfer Agent Instruction Letter. On or before the Signing
Closing Date, the Company shall irrevocably instruct its Transfer Agent in
writing using the letter substantially in the form of Exhibit B annexed hereto,
with only such modifications as the Buyer agrees to, executed by the Company,
the Buyer and the Transfer Agent (the “Transfer Agent Instruction Letter”), to
(i) reserve that number of shares of Common Stock as is required under Section
4(g) hereof, and (ii) issue Common Stock from time to time upon conversion of
the Debentures in such amounts as specified from time to time by the Buyer to
the Transfer Agent in a Notice of Conversion, in such denominations to be
specified by the Buyer in connection with each conversion of the Debentures. The
Transfer Agent shall not be restricted from issuing shares from only the
allotment reserved hereunder for the Conversion Amount (as defined in the
Debentures), but instead may, to the extent necessary to satisfy the amount of
shares issuable upon conversion, issue shares above and beyond the amount
reserved on account of the Conversion Amount, without any additional
instructions or authorization from the Company, and the Company shall not
provide the Transfer Agent with any instructions or documentation contrary to
the foregoing. As of the date of this Agreement, the Transfer Agent is Globex
Transfer, LLC. The Company shall at all times while any Debentures are
outstanding engage a Transfer Agent which is a party to the Transfer Agent
Instruction Letter. If for any reason the Company’s Transfer Agent is not a
signatory of the Transfer Agent Instruction Letter while any Debentures or
Restricted Stock are outstanding and held by the Buyer, then such Transfer Agent
shall nonetheless be deemed bound by the Transfer Agent Instruction Letter, and
the Company shall neither (i) permit the Transfer Agent to disclaim, disregard
or refuse to abide by the Transfer Agent’s obligations, terms and agreements set
forth in the Transfer Agent Instruction Letter, nor (ii) issue any instructions
to the Transfer Agent contrary to the obligations, terms and agreements set
forth in the Transfer Agent Instruction Letter . The Company shall not terminate
the Transfer Agent or otherwise change Transfer Agents without at least fifteen
(15) days prior written notice to the Buyer and with the Buyer’s prior written
consent to such change, which the Buyer may grant or withhold in its sole
discretion. The Company shall continuously monitor its compliance with the share
reservation requirements and, if and to the extent necessary to increase the
number of reserved shares to remain and be at least the Required Reserve Amount
to account for any decrease in the Market Price of the Common Stock, the Company
shall immediately (and in any event within one (1) business day) notify the
Transfer Agent in writing of the reservation of such additional shares, provided
that in the event that the number of shares reserved for conversion of the
Debentures is less than the Required Reserve Amount, the Buyer may also directly
instruct the Transfer Agent to increase the reserved shares as necessary to
satisfy the minimum reserved share requirement, and the Transfer Agent shall act
accordingly, provided, further, that the Company shall within one (1) business
day provide any written confirmation, assent or documentation thereof as the
Transfer Agent may request to act upon a share increase instruction delivered by
the Buyer. The Company shall provide the Buyer with a copy of all written
instructions to the Company’s Transfer Agent with respect to the reservation of
shares simultaneously with the issuance of such instructions to the Transfer
Agent. The Company covenants that no instruction other than such instructions
referred to in this Section 5 and stop transfer instructions to give effect to
Section 4(a) hereof prior to registration and sale of the Conversion Shares
under the 1933 Act will be given by the Company to the Transfer Agent and that
the Conversion Shares shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this Agreement and
applicable law. If the Buyer provides the Company and/or the Transfer Agent with
an opinion of counsel reasonably satisfactory to the Company that registration
of a resale by the Buyer of any of the Securities in accordance with clause
(1)(B) of Section 4(a) of this Agreement is not required under the 1933 Act, the
Company shall (except as provided in clause (2) of Section 4(a) of this
Agreement) permit the de-legending or transfer of the Securities and, in the
case of the Conversion Shares, instruct the Company’s Transfer Agent to issue
one or more certificates for Common Stock without legend in such name and in
such denominations as specified by the Buyer.
 
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b.            Conversion. (i) The Company shall permit the Buyer to exercise the
right to convert the Debentures by faxing, emailing or delivering overnight an
executed and completed Notice of Conversion to the Company or the Transfer
Agent. If so requested by the Buyer or the Transfer Agent, the Company shall
within one (1) business day respond with its endorsement so as to confirm the
outstanding principal amount of any Debenture submitted for conversion or shall
reconcile any difference with the Buyer promptly after receiving such Notice of
Conversion.

(ii)           The term “Conversion Date” means, with respect to any conversion
elected by the holder of the Debentures, the date specified in the Notice of
Conversion, provided the copy of the Notice of Conversion is given either via
mail or facsimile to or otherwise delivered to the Transfer Agent and/or the
Company in accordance with the provisions hereof so that it is received by the
Transfer Agent and/or the Company on or before such specified date.

(iii)          The Company shall deliver (or will cause the Transfer Agent to
deliver) the Conversion Shares issuable upon conversion as follows: (1) if the
Company is then DWAC Operational, via DWAC, (2) if the Common Stock is then
eligible for the Depository Trust Company’s Direct Registration System (“DRS”),
if so requested by the Buyer, or (3) if the Company is not then DWAC Operational
or the Common Stock is not then eligible for DRS, in certificated form, to the
Buyer at the address specified in the Notice of Conversion (which may be the
Buyer’s address for notices as contemplated by Section 10 hereof or a different
address) via express courier, in each case within two (2) business days (the
“Delivery Date”) after (A) the business day on which the Company or the Transfer
Agent has received the Notice of Conversion (by facsimile, email or other
delivery) or (B) the date on which payment of interest and principal on the
Debentures, which the Company has elected to pay by the issuance of Common
Stock, as contemplated by the Debentures, was due, as the case may be.
 
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c.            Failure to Timely Issue Conversion Shares or De-Legended Shares.
The Company’s failure to issue and deliver Conversion Shares to the Buyer
(either by DWAC, DRS or in certificated form, as required by Section 5(b)) on or
before the Delivery Date shall be considered an Event of Default, which shall
entitle the Buyer to certain remedies set forth in the Debentures and provided
by applicable law. Similarly, the Company’s failure to issue and deliver Common
Stock in unrestricted form without a restrictive legend when required under the
Transaction Documents shall entitle the Buyer to damages for the diminution in
value (if any) of the relevant shares between the date delivery was due versus
the date ultimately delivered in unrestricted form. The Company acknowledges
that its failure to timely honor a Notice of Conversion (or the occurrence of
any other Event of Default) shall cause definable financial hardship on the
Buyer(s) and that the remedies set forth herein and in the Debentures are
reasonable and appropriate.

d.            Duties of Company; Authorization. The Company shall inform the
Transfer Agent of the reservation of shares contemplated by Section 4(g) and
this Section 5, and shall keep current in its payment obligations to the
Transfer Agent such that the Transfer Agent will continue to process share
transfers and the initial issuance of shares of Common Stock upon the conversion
of Debentures. The Company hereby authorizes and agrees to authorize the
Transfer Agent to correspond and otherwise communicate with the Buyer or their
representatives in connection with the foregoing and other matters related to
the Common Stock. Further, the Company hereby authorizes the Buyer or its
representative to provide instructions to the Transfer Agent that are consistent
with the foregoing and instructs the Transfer Agent to honor any such
instructions. Should the Company fail for any reason to keep current in its
payment obligations to the Transfer Agent, the Buyer and/or Investments may pay
such amounts as are necessary to compensate the Transfer Agent for performing
its duties with respect to share reservation, issuance of Conversion Shares
and/or de-legending certificates representing Restricted Stock, and all amounts
so paid shall be promptly reimbursed by the Company. If not so reimbursed within
thirty (30) days, such amounts shall, at the option of the Buyer and without
prior notice to or consent of the Company, be added to the principal amount due
under the Debenture(s) held by the Buyer, whereupon interest will begin to
accrue on such amounts at the rate specified in the Debentures.

e.            Effect of Bankruptcy. The Buyer shall be entitled to exercise its
conversion privilege with respect to the Debentures notwithstanding the
commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”).
In the event the Company is a debtor under the Bankruptcy Code, the Company
hereby waives, to the fullest extent permitted, any rights to relief it may have
under 11 U.S.C. §362 in respect of the Buyer’s conversion privilege. The Company
hereby waives, to the fullest extent permitted, any rights to relief it may have
under 11 U.S.C. §362 in respect of the conversion of the Debentures. The Company
agrees, without cost or expense to the Buyer, to take or to consent to any and
all action necessary to effectuate relief under 11 U.S.C. §362.
 
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6.            CLOSINGS.

a.            Signing Closing. Promptly upon the execution and delivery of this
Agreement, the Signing Debenture, Warrant, and all conditions in Sections 7 and
8 herein are met (the “Signing Closing Date”), (A) the Company shall deliver to
the Buyer the following: (i) the Signing Debenture and Warrant; (ii) the
Transfer Agent Instruction Letter; (iii) duly executed counterparts of the
Transaction Documents; and (iv) an officer’s certificate of the Company
confirming the accuracy of the Company’s representations and warranties
contained herein, and (B) the Buyer shall deliver to the Company the following:
(i) the Signing Purchase Price and (ii) duly executed counterparts of the
Transaction Documents (as applicable). The Company shall immediately pay the
fees due under Section 12 of this Agreement upon receipt of the Signing Purchase
Price if Buyer does not withhold such amounts from the Signing Purchase Price
pursuant to Section 12.

b.            Second Closing. At any time after forty-five (45) days following
the Signing Closing Date, subject to the mutual agreement of the Buyer and the
Company, for the “Second Closing Date” and subject to satisfaction of the
conditions set forth in Sections 7 and 8, (A) the Company may deliver to the
Buyer the following: (i) the Second Debenture; (ii) an amendment to the Transfer
Agent Instruction Letter instructing the Transfer Agent to reserve that number
of shares of Common Stock as is required under Section 4(g) hereof, if
necessary; and (iii) an officer’s certificate of the Company confirming, as of
the Second Closing Date, the accuracy of the Company’s representations and
warranties contained herein and updating Schedules 3(b), 3(c) and 3(k) as of the
Second Closing Date, and (B) the Buyer shall deliver to the Company the Second
Purchase Price.

c.            Third Closing. At any time after forty-five (45) days following
the Second Closing Date, subject to the mutual agreement of the Buyer and the
Company, for the “Third Closing Date” and subject to satisfaction of the
conditions set forth in Sections 7 and 8, (A) the Company may deliver to the
Buyer the following: (i) the Third Debenture; (ii) an amendment to the Transfer
Agent Instruction Letter instructing the Transfer Agent to reserve that number
of shares of Common Stock as is required under Section 4(g) hereof, if
necessary; and (iii) an officer’s certificate of the Company confirming, as of
the Third Closing Date, the accuracy of the Company’s representations and
warranties contained herein and updating Schedules 3(b), 3(c) and 3(k) as of the
Third Closing Date, and (B) the Buyer shall deliver to the Company the Third
Purchase Price.

d.            Location and Time of Closings. Each Closing shall be deemed to
occur on the related Closing Date at the office of the Buyer’s counsel and shall
take place no later than 5:00 P.M., east coast time, on such day or such other
time as is mutually agreed upon by the Company and the Buyer.
 
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7.            CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

The Company’s obligation to sell the Debentures to the Buyer pursuant to this
Agreement on each Closing Date is conditioned upon:

a.            Purchase Price. Delivery to the Company of good funds as payment
in full of the respective Purchase Price for the Debentures at each Closing in
accordance with this Agreement;

b.            Representations and Warranties; Covenants. The accuracy on the
Closing Date of the representations and warranties of the Buyer contained in
this Agreement, each as if made on such date, and the performance by the Buyer
on or before such date of all covenants and agreements of the Buyer required to
be performed on or before such date; and

c.            Laws and Regulations; Consents and Approvals. There shall not be
in effect any law, rule or regulation prohibiting or restricting the
transactions contemplated hereby, or requiring any consent or approval which
shall not have been obtained.

8.            CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.

The Buyer’s obligation to purchase the Debentures at each Closing is conditioned
upon:

a.            Transaction Documents. The execution and delivery of this
Agreement by the Company;

b.            Debenture(s). Delivery by the Company to the Buyer of the
Debentures to be purchased in accordance with this Agreement;

c.            Section 4(2) Exemption. The Debentures and the Conversion Shares
shall be exempt from registration under the Securities Act of 1933 (as amended),
pursuant to Section 4(2) thereof;

d.            DWAC Status. The Common Stock shall apply to be DWAC Operational;

e.            Representations and Warranties; Covenants. The accuracy in all
material respects on the Closing Date of the representations and warranties of
the Company contained in this Agreement, each as if made on such date, and the
performance by the Company on or before such date of all covenants and
agreements of the Company required to be performed on or before such date;

f.             Good-faith Opinion. It should be Buyer’s reasonable belief that
(i) no Event of Default under the terms of any outstanding indebtedness of the
Company shall have occurred or would likely occur with the passage of time and
(ii) no material adverse change in the financial condition or business
operations of the Company shall have occurred;
 
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g.            Legal Proceedings. There shall be no litigation, criminal or
civil, regulatory impairment or other legal and/or administrative proceedings
challenging or seeking to limit the Company’s ability to issue the Securities or
the Common Stock;

h.            [Reserved];

i.             Corporate Resolutions. Delivery by the Company to the Buyer a
copy of resolutions of the Company’s board of directors, approving and
authorizing the execution, delivery and performance of the Transaction Documents
and the transactions contemplated thereby in the form attached hereto as Exhibit
C (the “Irrevocable Resolutions”);

j.             Officer’s Certificate. Delivery by the Company to the Buyer of a
certificate of the Chief Executive Officer of the Company in the form attached
hereto as Exhibit D;

k.            Search Results. Delivery by the Company to the Buyer of copies of
UCC search reports, issued by the Secretary of State of the state of
incorporation of the Company and each Subsidiary, dated such a date as is
reasonably acceptable to Buyer, listing all effective financing statements which
name the Company or Subsidiary (as applicable), under its present name and any
previous names, as debtor, together with copies of such financing statements;

l.             Certificate of Good Standing. Delivery by the Company to the
Buyer of a copy of a certificate of good standing with respect to the Company,
issued by the Secretary of State of the state of incorporation of the Company,
dated such a date as is reasonably acceptable to Buyer, evidencing the good
standing thereof;

m.           Laws and Regulations; Consents and Approvals. There shall not be in
effect any law, rule or regulation prohibiting or restricting the transactions
contemplated hereby, or requiring any consent or approval which shall not have
been obtained; and

n.            Adverse Changes. From and after the date hereof to and including
each Closing Date, (i) the trading of the Common Stock shall not have been
suspended by the SEC, FINRA, or any other governmental or self-regulatory
organization, and trading in securities generally on OTCM shall not have been
suspended or limited, nor shall minimum prices been established for securities
traded on the OTCM; (ii) there shall not have occurred any outbreak or
escalation of hostilities involving the United States or any material adverse
change in any financial market that in either case in the reasonable judgment of
the Buyer makes it impracticable or inadvisable to purchase the Debentures.

9.            GOVERNING LAW; MISCELLANEOUS.

a.            MANDATORY FORUM SELECTION. ANY DISPUTE ARISING UNDER, RELATING TO,
OR IN CONNECTION WITH THE AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE
SUBJECT OF OR INCIDENTAL TO THE AGREEMENT (WHETHER OR NOT SUCH CLAIM IS BASED
UPON BREACH OF CONTRACT OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION
AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN MIAMI-DADE COUNTY,
FLORIDA. THIS PROVISION IS INTENDED TO BE A “MANDATORY” FORUM SELECTION CLAUSE
AND GOVERNED BY AND INTERPRETED CONSISTENTLY WITH NEVADA LAW.
 
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b.            Governing Law. Except in the case of the Mandatory Forum Selection
clause above, this Agreement shall be delivered and accepted in and shall be
deemed to be contracts made under and governed by the internal laws of the State
of Nevada, and for all purposes shall be construed in accordance with the laws
of the State of Nevada, without giving effect to the choice of law provisions.
To the extent determined by the applicable court described above, the Company
shall reimburse the Buyer for any reasonable legal fees and disbursements
incurred by the Buyer in enforcement of or protection of any of its rights under
any of the Transaction Documents.

c.            Waivers. Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.

d.            Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties hereto.

e.            Construction. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.

f.            Facsimiles; E-mails. A facsimile or email transmission of this
signed Agreement or a Notice of Conversion under the Debentures shall be legal
and binding on all parties hereto. Such electronic signatures shall be the
equivalent of original signatures.

g.            Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original.

h.            Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

i.            Enforceability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.

j.             Amendment. This Agreement may be amended only by the written
consent of a majority in interest of the holders of the Debentures and an
instrument in writing signed by the Company.

k.            Entire Agreement. This Agreement, together with the other
Transaction Documents, supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
 
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l.             No Strict Construction. This Agreement shall be construed as if
both Parties had equal say in its drafting, and thus shall not be construed
against the drafter.

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

10.           NOTICES.
 
Any notice required or permitted hereunder shall be given in writing (unless
otherwise specified herein) and shall be deemed effectively given on the
earliest of:

a.            the date delivered, if delivered by personal delivery as against
written receipt therefor or by confirmed facsimile or email transmission,

b.            the third (3rd) business day after deposit, postage prepaid, in
the United States Postal Service by registered or certified mail, or

c.            the first (1st) business day after deposit with a recognized
courier service (e.g. FedEx, UPS, DHL, US Postal Service) for delivery by
next-day express courier, with delivery costs and fees prepaid,

in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) days’ advance written notice similarly given to each of the other
parties hereto):

COMPANY:
I-On Communications Corp.

15, Tehran-ro 10-gil, Gangam-gu
Seoul, Korea 06234
Attention: Jae Cheol James Oh, Chief Executive Officer
Email: i@i-on.net

With copies to (which shall not constitute notice):

Kane Kessler, P.C.
666 Third Avenue, 23rd Floor
New York, New York 10017
Attention: Peter Campitiello, Esq.
Email: pcampitiello@kanekessler.com
 
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BUYER:
Peak One Opportunity Fund, L.P.

333 South Hibiscus Drive
Miami Beach, FL 33139
Attention: Jason Goldstein
Email: jgoldstein@peakoneinvestments.com

With copies to (which shall not constitute notice):

Legal & Compliance, LLC
330 Clematis Street, Suite 217
West Palm Beach, FL 33401
Attention: Chad Friend, Esq., LL.M.
Email: CFriend@LegalandCompliance.com

11.           SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company’s
representations and warranties herein shall survive for so long as any
Debentures are outstanding, and shall inure to the benefit of the Buyer, its
successors and assigns.

12.           FEES; EXPENSES.

a.             Commitment Fee. A non-accountable fee (the “Commitment Fee”) of
(i) Five Thousand and 00/100 Dollars ($5,000.00) on the Signing Closing Date
(with respect to the Signing Debenture), Five Thousand and 00/100 Dollars
($5,000.00) on the Second Closing Date (with respect to the Second Debenture),
as well as Five Thousand and 00/100 Dollars ($5,000.00) on the Third Closing
Date (with respect to the Third Debenture), shall be withheld from the purchase
price of the respective debenture to cover the Buyer’s accounting fees, legal
fees, and other transactional costs incurred in connection with the transactions
contemplated by this Agreement. The Commitment Fee shall be paid on the
respective closing dates if Buyer does not withhold such amounts from the
respective purchase price pursuant to Section 12(b). In addition, at the time of
Buyer’s funding of each Debenture, the Company shall issue to Investments as a
commitment fee, a common stock purchase warrant to purchase 50,000 shares of the
Company’s common stock pursuant to the terms of the Warrant (all common stock
purchase warrants issuable hereunder, including now and in the future, shall be
referred to, in the aggregate, as the “Warrant”). The Form of the Warrant
issuable upon the Signing Closing is attached hereto as Exhibit E and the Form
of the Warrant issuable upon the Second and Third Closing is attached hereto as
Exhibit F.

b.            Disbursements. In furtherance of the foregoing, the Company hereby
authorizes the Buyer to deduct the cash portion of the Commitment Fee from the
Signing Purchase Price and transmit same to the respective payee.

[Signature Page Follows]
 
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IN WITNESS WHEREOF, this Agreement has been duly executed by the Buyer and the
Company as of the date first set forth above.

 
COMPANY:
         
I-ON COMMUNICATIONS CORP.
         
By:
 
   
Name:
Jae Cheol James Oh
 
Title:
Chief Executive Officer
         
BUYER:
         
PEAK ONE OPPORTUNITY FUND, L.P.
         
By:
Peak One Investments, LLC,
   
General Partner
           
By:
 
   
Name:
Jason Goldstein
   
Title:
Managing Member

[Signature Page to Securities Purchase Agreement]
 

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SCHEDULE 3(b)

COMPANY ORGANIZATION CHART

Subsidiary / Affiliate
Name and Relationship
Jurisdiction of Incorporation
Percentage of Ownership
                                                                               
   

 

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SCHEDULE 3(c)

COMPANY CAPITALIZATION TABLE

COMMON STOCK AND COMMON STOCK EQUIVALENTS
ISSUED, OUTSTANDING AND RESERVED

DESCRIPTION
AMOUNT
Authorized Common Stock
 
Authorized Capital Stock
 
Authorized Common Stock
 
Issued Common Stock
 
Outstanding Common Stock
 
Treasury Stock
 
Authorized, but unissued
     
Authorized Preferred Stock
 
Issued Preferred Stock
     
Reserved for Equity Incentive Plans
 
Reserved for Convertible Debt
 
Reserved for Options and Warrants
 
Reserved for Other Purposes
     
TOTAL COMMON STOCK AND COMMON STOCK EQUIVALENTS OUTSTANDING
 

 

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SCHEDULE 3(c)

UNTIMELY SEC FILINGS

The Company made the following SEC filings on an untimely basis:

Annual Report on Form 10-K for the year ended December 31, 2017.

Quarterly Report on Form 10-Q for the period ended March 31, 2018.
 

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EXHIBITS

Exhibit A
FORM OF DEBENTURE

Exhibit B
FORM OF TRANSFER AGENT INSTRUCTION LETTER

Exhibit C
FORM OF RESOLUTIONS OF THE BOARD OF DIRECTORS

Exhibit D
FORM OF OFFICER’S CERTIFICATE

Exhibit E
FORM OF WARRANT FOR SIGNING CLOSING

Exhibit F
FORM OF WARRANT FOR SECOND AND THIRD CLOSINGS

 

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EXHIBIT A

FORM OF DEBENTURE

(see attached)
 

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EXHIBIT B

I-ON COMMUNICATIONS CORP.

IRREVOCABLE TRANSFER AGENT INSTRUCTION LETTER

(see attached)
 

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EXHIBIT C

 IRREVOCABLE CORPORATE RESOLUTIONS OF THE
BOARD OF DIRECTORS OF
I-ON COMMUNICATIONS CORP.

(see attached)
 

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EXHIBIT D

OFFICER'S CERTIFICATE

(see attached)
 

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EXHIBIT I

ARTICLES OF INCORPORATION

(see attached)
 

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EXHIBIT II

BYLAWS

(see attached)
 

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EXHIBIT III

RESOLUTIONS OF THE BOARD OF DIRECTORS

(see attached)
 
 

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