SETTLEMENT AGREEMENT

 

SETTLEMENT AGREEMENT, made this 7th day of June 2018 and effective as of May 31,
2018 (the “Effective Date”) (the “Agreement”), by and between Quest Solution
Inc., a Delaware corporation (the “Company”) and Jason Griffith, an individual
residing at 2505 Anthem Village Drive, #e-516, Henderson, Nevada 89052
(“Griffith”). The Company and Griffith collectively shall be referred to as the
“Parties.”

 

WHEREAS, the Company is indebted to Griffith in the aggregate amount of
approximately $1,400,000 which includes accrued interest of approximately
$125,000 (the “Accrued Interest”) earned but not paid which is represented by a
Convertible Note dated October 1, 2015 (the “Convertible Note”);

 

WHEREAS, Griffith owns an aggregate of 1,800,000 shares of Series C Preferred
Stock on which certain dividends in the aggregate amount of approximately
$215,000 have been accrued but not paid (the “Accrued Dividends”). The
$1,400,000 owed under the Note and the $215,000 of Accrued Dividends shall be
referred to as the “Owed Amount”;

 

WHEREAS; the Company is willing to settle the Owed Amount by issuing certain
consideration to Griffith as set forth in Section 2 below.

 

WHEREAS, each of the Parties desires to release each of the other Parties from
any and all claims in connection with the Owed Amount upon the fulfillment of
the conditions set forth in Section 2 below.

 

NOW THEREFORE, in consideration of the mutual covenants and other good and
valuable considerations hereinafter contained, the Parties agree as follows:

 

  1. Recitals. The above recitals are incorporated into this Agreement.        
2. Settlement. On the date hereof, or as otherwise set forth below, the Company
shall satisfy the Owed Amount in the manner set forth below:

 

  a. Griffith will convert the Owed Amount into an aggregate of 8,600,000 shares
of Common Stock (the “Common Shares”) and the Company will issue Griffith the
Common Shares within five (5) business days hereof. The 8,600,000 Common Shares
represents the approximate amount of Common Shares that Griffith would receive
under the current conversion terms of the Convertible Note.         b. Griffith
hereby agrees that upon the issuance of the Common Shares, the Company will have
no further obligation to Griffith on the Convertible Note and the Convertible
Note shall be deemed to be satisfied in full. The Common Shares will be subject
to restriction in accordance with the Securities Act of 1933, as amended and the
Securities Exchange Act of 1934, as amended (collectively “U.S. Securities
Laws”) and will bear the standard 1933 Act restrictive legend. In addition,
Griffith hereby agrees that he will not publicly sell more than 10% of the
shares of Common stock beneficially owned by him as of the date of this
agreement in any 30-day period (the “Public Trading Restriction”). The Public
Trading Restriction shall be null and void 180 days after the Company’s common
stock is listed on the NASDAQ Capital Market or another National Market. In
addition, Griffith agrees that the Voting Agreement dated September 8, 2017 by
and between Griffith and Shai Lustgarten shall remain in force for all shares
that possess voting rights which are owned by Griffith after this Agreement.
Nothing herein shall be construed to preclude Griffith from private sales of the
Common Shares but the recipient must agree to be bound by the same resale
restrictions.

 

 

 

 

  c. The Company and Griffith hereby agree that Griffith shall retain ownership
of his 1,800,000 shares of Series C Preferred Stock but that Griffith agrees
that all Accrued Dividends are hereby deemed satisfied and that no dividends
will be payable or will accrue on the Preferred Shares until one year from the
date of issuance; and the Preferred Shares will be convertible into Common Stock
at $1.00 per share at the holder’s option and will be automatically convertible
into common stock if the Company’s common stock has a closing price of $1.50 per
share for 20 consecutive trading days.

 

The consideration set forth above shall constitute the total consideration for
the Owed Amount (the “Consideration”).

 

  3. Forgiveness of the Obligation. Griffith agrees that upon the execution of
this Agreement and the issuance of the Common Shares and the Owed Amount will be
forgiven in its entirety and Griffith shall have no right to the Owed Amount as
of the Effective Date, although Griffith shall retain the right to the
Consideration. Griffith agrees to sign any document deemed necessary by the
Company’s auditors to reflect such forgiveness after review by his counsel;
provided, that any such letter or agreement will not affect the economic terms
of this Agreement.         5. Release. In consideration of the foregoing and
upon fulfillment of the conditions of this Agreement, Griffith hereby releases
and discharges the Company, the Company’s officers, directors, principals,
control persons, past and present employees, agents, insurers, successors, and
assigns (“Company Parties”) from all actions, cause of action, suits, debts,
dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, claims, and demands whatsoever, in law,
admiralty or equity, Griffith ever had, now has or hereafter can, shall or may,
have for, upon, or by reason of any matter, cause or thing whatsoever, whether
or not known or unknown, in connection with the Owed Amount, from the beginning
of the world to the day of the date of this Release. Notwithstanding anything in
this paragraph, Griffith does not waive any rights that he derives from this
Agreement or any other agreement that he may have with the Company or any
Company Parties.

 

 

 

 

    Griffith hereby confirms that, upon receipt of the items set forth in
Section 2 hereof, the Company shall have no obligation to pay any other fees,
expenses, accrued but unpaid interest or dividends or any other payment or
reimbursements that comprise the Owed Amount, except for payments and rights set
forth in the COD as modified in Section 2(b) hereof. Griffith hereby agrees to
release any security interest that he may have against the Company’s assets.
Griffith represents and warrants that no other person or entity has any interest
in the Owed Amount and that he has not pledged, and that it has not assigned or
transferred, or purported to assign or transfer, to any person or entity all or
any portion of the Owed Amount.         6. Indemnification. Griffith agrees that
in the event that a third party brings a claim against the Company alleging that
Griffith transferred or otherwise pledged a portion of the Owed Amount, and/or
the promissory note(s) reflecting the Owed Amount, Griffith shall be responsible
for any damages arising against the Company relating thereto including
reasonable expenses in defending such third party action.         7. Mutual
Non-Disparagement. All Parties agree not to disparage or otherwise make
unfavorable remarks regarding any other party to this Agreement.         8.
Merger and Amendment. This Agreement and its Exhibits contain the entire
agreement and understanding concerning the Owed Amounts and supersedes and
replaces all prior negotiations, proposed agreement and agreements, written or
oral. Each of the parties hereto acknowledges that none of the parties hereto,
agents or counsel of any party, has made any promise, representation or warranty
whatsoever, express or implied, not contained herein concerning the subject
hereto, to induce it to execute this Agreement and acknowledges and warrants
that it is not executing this Agreement in reliance on any promise,
representation or warranty not contained herein. This Agreement may not be
modified or amended in any manner except by an instrument in writing
specifically stating that it is a supplement, modification or amendment to the
Agreement and signed by each of the Parties hereto against whom such
modification or amendment shall be claimed to be effective.         9. Duplicate
Originals; Counterparts. This Agreement may be executed in any number of
duplicate originals and each duplicate original shall be deemed to be an
original. This Agreement may be executed in several counterparts, each of which
counterparts shall be deemed an original instrument and all of which together
shall constitute a single agreement.         10. Severability. Each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited or invalid under applicable law, such provision will be ineffective
only to the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.         11. Governing Law. This Agreement shall be
interpreted and the rights and liabilities of the Parties determined in
accordance with the laws of the State of Nevada, excluding its conflict of laws
rules. Each party consents to the exclusive jurisdiction of any State Court or
Federal Court in Clark County, Nevada with respect to any claim or action
arising out of or related to this Agreement.         12. Representation by
Counsel. Each party hereto represents and agrees with each other that it has
been represented by or had the opportunity to be represented by, independent
counsel of its own choosing, and that it has had the full right and opportunity
to consult with its respective attorney(s), that to the extent, if any, that it
desired, it availed itself of this right and opportunity, that it or its
authorized officers (as the case may be) have carefully read and fully
understand this Agreement in its entirety and have had it fully explained to
them by such party’s respective counsel, that each is fully aware of the
contents thereof and its meaning, intent and legal effect, and that it or its
authorized officer (as the case may be) is competent to execute this Agreement
and has executed this Agreement free from coercion, duress or undue influence.

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Settlement Agreement
as of the day and year first written above.

 

  QUEST SOLUTION INC.         By: /s/ Shai Lustgarten   Name: Shai Lustgarten  
Title: Chief Executive Officer            /s/ Jason Griffith     Jason Griffith