SETTLEMENT
AGREEMENT


 


SETTLEMENT
AGREEMENT, made this 28th day of February 2018 and effective as of December 30, 2017 (the “Effective
Date”) (the “Agreement”), by and between Quest Solution Inc., a Delaware corporation (the “Company”)
and George Zicman, an individual residing at 14820 Parisian Ct, Reno, NV (“Zicman”). The Company and Zicman
collectively shall be referred to as the “Parties.”


 


WHEREAS,
the Company is indebted to Zicman in the aggregate amount of $1,304,198.55 (the “Owed Amount”) which includes accrued
interest earned but not paid;


 


WHEREAS;
the Company is willing to settle the Owed Amount by paying certain consideration to Zicman 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.	The
    Company will pay Zicman 60 monthly payments of $3,000 each (the “Settlement Payments”) commencing the earlier
    of (i) 8 months from the date hereof; or (ii) the date when the Company’s obligation under its promissory note with
    Scansource, Inc., currently in the amount of approximately $2,800,000 is satisfied and all amounts currently in default due
    under the credit agreement (currently approximately $6.0 million) with Scansource is reduced to $2.0 million.
	 	 	 
	 	b.	The
    Company hereby agrees to issue Zicman 100,000 shares of Common Stock within three (3) days of the execution of this Agreement
    (the “Common Shares”). 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, Zicman hereby agrees that he will not sell more than
    10%of the shares of Common stock beneficially owned by him in any 30-day period (the “Trading Restriction”). The
    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, Zicman agrees to execute the voting proxy agreement in favor of the Company’s
    CEO, Shai Lustgarten, attached hereto as Exhibit B.


 




    	 	 	 



     


    

 


	 	c.	The
    Company agrees to issue Zicman an aggregate of 600,000 shares of Series C Preferred Stock which rights will be governed by
    the terms set forth in the Certificate of Designation of Rights and Preferences (the “COD”)attached as Exhibit
    A hereto, except that no dividends will be payable or will accrue on the Preferred Shares until two years 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. In addition, Zicman hereby agrees that he will not sell more than 10%of the shares of Common
    stock beneficially owned by him in any 30-day period (the “Trading Restriction”). The 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, Zicman agrees to execute the voting proxy agreement in favor of the Company’s CEO, Shai Lustgarten,
    attached hereto as Exhibit B.


 


The
Settlement Payments and the issuance of the Preferred Shares shall constitute the total consideration for the Owed Amount (the
“Consideration”).


 


	 	3.	Forgiveness
    of the Obligation. Zicman agrees that upon the execution of this Agreement and the issuance of the Preferred Shares, Common
    Shares, the Owed Amount will be forgiven in its entirety and Zicman shall have no right to the Owed Amount as of the Effective
    Date although they retain the right to the Settlement Payments. Zicman 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 effect the economic terms of this Agreement. 
	 	 	 
	 	4.	Continuing
    Services. The Company and Zicman agree that any continuing series performed on behalf of the Company will be subject to
    a mutually agreeable consulting agreement between the Company and Zicman. 
	 	 	 
	 	5.	Release.
    In consideration of the foregoing and upon fulfillment of the conditions of this Agreement, Zicman 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, Zicman 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, Zicman does not waive any rights that he derives from this Agreement or any other
    agreement that he may enter into with the Company pursuant to Section 4 below. 


 




    	 	 	 



     


    

 





	 	 	Zicman
    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. Zicman hereby agrees
    to release any security interest that he may have against the Company’s assets. Zicman 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.
    Zicman agrees that in the event that a third party brings a claim against the Company alleging that Zicman transferred or
    otherwise pledged a portion of the Owed Amount, and/or the promissory note(s) reflecting the Owed Amount, Zicman 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 New York, excluding its conflict of laws rules.
	 	 	 
	 	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 Release 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/
    George Zicman
	 	George Zicman


 




    	 	 	 



     


    

 


EXHIBIT
A


 


Certificate
of Designation of Series C Preferred Stock


 




    	 	 	 



     


    

 


EXHIBIT
B


 


Voting
Agreement