EXECUTION
VERSION


 


SALE
OF ACCOUNTS AND SECURITY AGREEMENT


 


Dated
as of October 9, 2015


 


Quest
Marketing Inc., an Oregon corporation, with its principal offices and domicile at 2580 Anthem Village Drive, Henderson, NV 89052
(“Quest Marketing”) and Bar Code Specialties, Inc., a California corporation, with its principal offices and
domicile at 12272 Monarch Street, Garden Grove, CA 92841 (“Bar Code Specialties”, and together with Quest Marketing,
individually and collectively, as the context requires, “Seller”) and Faunus Group International, Inc., a Delaware
corporation (“FGI”), hereby agree, intending to be legally bound, to the terms and conditions set forth in
this Sale of Accounts and Security Agreement (“Agreement”).


 


Section
1.1 Definitions. For the purposes of this Agreement and unless defined otherwise herein, all terms used shall have the
meanings assigned to them in this Section 1.1:


 


“Acceptable
Account” means all Accounts of Seller that have been billed and invoiced to the applicable Account Debtor meeting all
of the following specifications: (i) the Account is lawfully and exclusively owned by Seller and subject to no lien (other than
liens granted under this Agreement) and Seller has the right of assignment thereof and the power to grant a security interest
therein; (ii) the Account is valid and enforceable representing the undisputed indebtedness of an Account Debtor not more than
90 days past the original invoice date and does not represent a rebilling; (iii) not more than 50% of the aggregate balance
of all Accounts owing from an Account Debtor obligated on the Account are outstanding more than 90 days past their original invoice
dates; (iv) the amount of the Account, when aggregated with all other Accounts of such Account Debtor, is less than 25% of the
face value of all Accounts of Seller then outstanding; (v) the Account is not subject to any defense, set-off, or counterclaim,
deduction, discount, credit, chargeback, freight claim, allowance or adjustment of any kind; (vi) the Account is net of any portion
thereof attributable to the sale of goods that have been returned, rejected, lost or damaged; (vii) if the Account arises from
the sale of goods by Seller, such sale was an absolute sale and not on consignment or on approval or on a sale-or-return basis
nor subject to any other repurchase or return agreement, and such goods have been shipped to the Account Debtor or its designee;
(viii) if the Account arises from the performance of services, such services have actually been performed; (ix) the Account arose
in the ordinary course of Seller’s business; (x) no notice of the bankruptcy, receivership, reorganization, liquidation,
dissolution, or insolvency of the Account Debtor has been received by FGI or Seller; (xi) the Account is an Account for which
FGI believes that the validity, enforceability or collection of the Account is not invalid or otherwise impaired; (xii) the Account
Debtor is not a subsidiary or Affiliate of Seller; (xiii) the sale does not represent a sale pursuant to a government contract
unless Seller has complied, for the benefit of FGI, with the Assignment of Claims Act; (xiv) the Account is not an Account of
an Account Debtor having its principal place of business or executive office outside the United States, unless the payment of
such Account is guaranteed by an irrevocable letter of credit satisfactory to FGI or by credit insurance satisfactory to FGI or
is otherwise acceptable to FGI in its sole discretion; (xv) the Account is not an Account on which the Account Debtor is obligated
to Seller under any Instrument; (xvi) the transaction which gave rise to the Account complies in all respects with all applicable
laws, rules and regulations of any governmental authority; and (xvii) the Account meets such other reasonable specifications and
requirements which may from time to time be established by FGI. Acceptable Accounts shall not include that portion of an Account
representing interest or finance charges for past due balances or debit memos.


 


“Account”
has the definition contained in the UCC and which shall include any and all claims and rights to payment of a monetary obligation,
whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned, or otherwise
disposed of or (ii) for services rendered or to be rendered.


 


“Account
Debtor” has the definition contained in the UCC and which includes any Person who is obligated on an Account, Chattel
Paper or General Intangible.


 


“Advance”
means an amount advanced by FGI to the Seller pursuant to Section 3(d).


 


“Affiliate”
of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common
control with such Person, or (b) any Person who is a director or officer (i) of such Person, (ii) of any subsidiary of such Person
or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the power,
direct or indirect, (x) to vote 30% or more of the securities having ordinary voting power for the election of directors of such
Person, or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.


 




    	 	 



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“Agreement”
means this Agreement, including the Exhibits and any Schedules hereto, and all amendments, modifications and supplements hereto
and thereto and restatements hereof and thereof.


 


“Applicable
Interest Rate” means the greater of (i) 5.50% per annum and (ii) 2.25% per annum above the prime rate which shall be
an annual rate, for any day, equal to (x) the prime rate for U.S. banks as published in the “Money Rates” section
of The Wall Street Journal, Interactive Edition or any successor edition or publication as selected by FGI or (y) if The
Wall Street Journal, ceases to publish a prime rate, the average of the prime rates announced by the three largest U.S. money
center commercial banks as determined by FGI (the “Prime Rate”).


 


“Application”
means each application made by Seller in connection with this Agreement.


 


“Avoidance
Claim” means any claim that any payment received by FGI from or for the account of an Account Debtor is avoidable or
subject to challenge under the Bankruptcy Code, any other debtor relief statute, whether domestic or foreign, or any law, statute
or legislation referred to in the definition herein of “Insolvency Proceeding”.


 


“Bankruptcy
Code” means Title 11 of the United States Code, as in effect from time to time.


 


“Canadian
SASA” means that certain Sale of Accounts and Security Agreement dated as of December 31, 2014, by and among Viascan
Inc., a Canadian corporation, Q.Data Inc., a Canadian corporation and FGI.


 


“Chattel
Paper” has the definition contained in the UCC and which includes any and all record or records instruments or similar
documents that evidence both a monetary obligation and a security interest or lien in specific goods, a security interest or lien
in specific goods and software used in the goods, a security interest or lien in specific goods and license of software used in
the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods.


 


“Closing
Date” means the date of this Agreement.


 


“Collateral”
means and includes all of the Seller’s right, title and interest in and to all of the Seller’s personal (movable)
property, incorporeal and corporeal, wherever located and whether now or hereafter existing or now owned or hereafter acquired
or arising, including the following: (a) all Accounts, (b) all Chattel Paper, (c) all Commercial Tort Claims, (d) all Deposit
Accounts, (e) all Documents, (f) all Equipment, (g) all General Intangibles, (h) all Goods (including all files, correspondence,
computer programs, tapes, disks and related data processing software which contain information identifying or pertaining to any
of the Collateral or any Account Debtor or showing the amounts thereof or payments thereon or otherwise necessary or helpful in
the realization thereon or the collection thereof), (i) all Instruments, (j) all Inventory, (k) all Investment Property, (l) all
letters of credit and Letter-of-Credit Rights, (m) all Supporting Obligations and (n) all cash and non-cash proceeds of the foregoing,
including insurance proceeds.


 


“Commercial
Tort Claim” has the definition contained in the UCC and which shall include any claim or rights of action against third
Persons.


 


“Credit
Parties” means, collectively, the Seller, Guarantors, and all other Affiliates of the Seller and Guarantors
from time to time, and “Credit Party” means any one of them.


 


“Date
of Collection” means the date the funds, resulting from a check, draft or other item representing payment on an invoice
deposited in the Seller’s account subject to a satisfactory blocked account agreement entered into between the Seller, FGI
and the account bank, have been transferred to FGI plus three (3) business days.


 


“Default”
means any of the events or circumstances specified in Section 10 of this Agreement that, with the passage of time or giving of
notice or both, would constitute an Event of Default.


 


“Deficiency
Assessment” means charges as set forth in Section 3(h) of this Agreement applied to the difference between the minimum
monthly net funds employed and the net funds employed for the month and shall be chargeable to the Reserve Account, or at FGI’s
option, payable by Seller on FGI’s demand.


 




    	 	 



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“Deposit
Account” has the definition contained in the UCC and which includes any demand, time, savings, passbook or like account
maintained with a bank, trust company, savings and loan association, credit union, other financial institution or like organization,
other than an account evidenced by a certificate of deposit.


 


“Dispute”
means any claim, whether or not provable or bona fide, and whether with or without support, made by an Account Debtor as a basis
for refusing to pay a Purchased Account, either in whole or in part, including, but not limited to, any contract dispute, charge
back, credit, compensation, right to return Goods, or other matter which diminishes or may diminish the dollar amount or timely
collection of such Account. 


 


“Document”
means a document of title or a receipt of the type described in UCC 7-201(2) and which includes all present and future documents
of title and any and all warehouse receipts, bills of lading, shipping documents, and similar documents, all whether negotiable
or not and all goods relating thereto and all cash and non-cash proceeds of the foregoing.


 


“Equipment”
has the definition contained in the UCC and which shall include all equipment now owned or hereafter acquired or leased by any
Person, wherever located and, in any event, including all such Person’s machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery, furniture, materials handling equipment, tools, attachments,
accessories, automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other equipment
of every kind and nature, trade fixtures and fixtures not forming a part of immovable (real) property, additions and accessions
thereto, replacements therefore, all parts therefore, and all manuals, drawings, instructions, warranties and rights with respect
thereto, and all products and proceeds thereof and condemnation awards and insurance proceeds with respect thereto.


 


“Event
of Default” means any of the events or circumstances specified as Events of Defaults in Section 10 of this Agreement.


 


“Executive
Order No. 13224” the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has
been, or shall hereafter be, renewed, extended, amended or replaced.


 


“Extended
Term” means a one year extension of the term of this Agreement effected in accordance with Section 13.


 


“Facility
Amount” means $15,000,000.


 


“FGI’s
Security” has the meaning assigned thereto in Section 6.


 


“Financing
Statement” means a financing statement, financing change statement, continuation statement, registration form, or similar
statement, instrument or document, or any amendment or renewal thereof, that is filed, registered or recorded under the PPSA of
any province or territory, or under the Uniform Commercial Code of any state or any other jurisdiction.


 


“Foreign
Currency” has the meaning assigned thereto in Section 26(a).


 


“Foreign
Exchange Loss” has the meaning assigned thereto in Section 26(b).


 


“GAAP”
means generally accepted accounting principles as in effect on the Closing Date applied in a manner consistent with the most recent
audited financial statements of Seller furnished to FGI and described herein.


 


“General
Intangible” has the definition contained in the UCC and which shall include any and all incorporeal movable property.


 


“Goods”
has the definition contained in the UCC and which shall include any and all corporeal movable property.


 


“Guarantors”
means, collectively, Quest Solution, Inc., a Delaware corporation, Viascan Group Inc., a Canadian corporation, Quest Exchange
Ltd., a Canadian corporation, Q.Data Inc., a Canadian corporation, Étiquettes Uno Inc., a Canadian corporation, and all
other Affiliates of the Seller and Viascan Group Inc. from time to time, and “Guarantor” means any one of them.


 




    	 	 



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“Guaranty
Agreements” means those certain guaranty agreements to be executed by each Guarantor in favor of FGI, in form and substance
satisfactory to FGI, on or prior to the Closing Date.


 


“Insolvency
Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under
any other state or federal bankruptcy or insolvency law, including, without limitation, any proceeding seeking to adjudicate a
Person an insolvent, seeking a receiving order against it under the Bankruptcy and Insolvency Act (Canada), or seeking liquidation,
dissolution, winding-up, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief or composition of
such Person or its debts or a stay of proceedings of such Person’s creditors generally (or any class of creditors) or any
other relief, under any federal, state, foreign or other law, now or hereafter in effect relating to bankruptcy, winding-up, insolvency,
reorganization, receivership, plans of arrangement or relief or protection of debtors (including the Bankruptcy Code and the Bankruptcy
and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and any similar legislation in
any jurisdiction) or at common law or in equity.


 


“Instrument”
has the definition contained in the UCC and which includes a negotiable instrument or any other writing that evidences a right
to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course
of business is transferred by delivery with any necessary endorsement or assignment.


 


“Inventory”
has the definition contained in the UCC and which shall include any and all present and future inventory, including all additions,
substitutions and replacements thereof, wherever located, together with all Goods and materials (in each case excluding Equipment)
used or usable in manufacturing, processing, reprocessing, packaging or shipping same in all stages of production from raw materials
through work-in-process to finished goods and all intellectual property pertaining to and to the extent necessary for the collection,
realization, processing, sale or recovery in respect of any of the foregoing, and proceeds thereof of whatever sort together with
any unpaid seller’s or lessor’s rights (including rescission, replevin, reclamation, repossession and stoppage in
transit relating to any of the foregoing or arising therefrom) to reclaim or repossess Goods. The Inventory held by third parties
pursuant to a lease agreement, a leasing contract, a franchise or licence agreement, or any other agreement entered into with
Seller or on its behalf, is also included as Collateral. Property having formed part of the Inventory which has been alienated
by Seller in favour of a third Person but in respect of which Seller has retained title pursuant to a reservation of ownership
provision, shall remain included as Collateral until title is transferred.


 


“Investment
Property” has the definition contained in the UCC and which shall include any and all securities, whether certificated
or uncertificated, security entitlement, securities account, commodity contract or commodity account.


 


“Letter-of-Credit
Right” has the definition contained in the UCC and which shall include a right to payment or performance under a letter
of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance (excluding
the right of a beneficiary to demand payment or performance under a letter of credit).


 


“Limited
Credit Party” means each of The Lem Family Trust, Jeff Lem, The 2010 Lem Family, Kurdi Trust, 3587967 Canada Inc., Danis
Kurdi, Gilles Gaudreault, L2G Consulting Services Inc. and Defreitas Trust and their respective successors and assigns.


 


“Misdirected
Payment Fee” means 15% of the amount of any payment on account of a Purchased Account or, after the occurrence and during
the continuance of a Default, any other Account, which has been received by Seller and not delivered in kind to FGI on the third
business day following the date of receipt by Seller.


 


“Net
Invoice Amount” means the invoice amount of a Purchased Account, less returns (whenever made), all selling discounts
(at FGI’s sole option, calculated on shortest terms), and credit or deductions of any kind allowed or granted to or taken
by the Account Debtor at any time.


 




    	 	 



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“Obligations”
means all present and future obligations owing by Seller to FGI whether or not for the payment of money, whether or not evidenced
by any note or other instrument, whether direct or indirect, absolute or contingent, due or to become due, joint or several, primary
or secondary, liquidated or unliquidated, secured or unsecured, original or renewed or extended, whether arising before, during
or after the commencement of any Insolvency Proceeding relating to Seller, and specifically including, but not limited to, (i)
interest accruing after the commencement of any such Insolvency Proceeding (whether or not a claim for such post-commencement
interest is allowed), (ii) the payment of all amounts advanced by FGI or any other subsidiary or Affiliate of FGI to preserve,
protect and enforce rights hereunder and in the Collateral and all expenses incurred by FGI or any other subsidiary or Affiliate
of FGI and (iii) any obligations arising pursuant to letters of credit, acceptance transactions or any other financial accommodations.


 


“Original
Term” means the initial three year term of this Agreement as reflected in Section 13.


 


“Person”
means an individual, corporation, partnership, limited liability company, unlimited liability company, association, trust, joint
venture, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.


 


“PPSA”
means, in respect of each province or territory in Canada (other than Quebec), the Personal Property Security Act as from time
to time in effect in such province or territory, and, in respect of Quebec, the Civil Code of Quebec as from time to time in effect
in such province.


 


“Prime
Rate” has the meaning assigned thereto in the definition herein of “Applicable Interest Rate”.


 


“Purchase
Price” has the meaning assigned thereto in Section 3.


 


“Purchased
Account(s)” means an Account which FGI purchases pursuant to this Agreement.


 


“Rate
of Exchange” has the meaning assigned thereto in Section 25.


 


“Related
Rights” means, with respect to an Account, all rights (but not obligations) of Seller with respect thereto, including
all right, title and interest of Seller in, to, under and with respect to (i) all contract rights, guarantees, letters of credit,
liens, security interests, liens, instruments, chattel paper and other documents, rights or interests arising out of or evidencing
such Account, (ii) all insurance and other agreements and arrangements of whatever character from time to time supporting or securing
payment of such Account, (iii) all Goods the sale of which gave rise to such Account, including Seller’s rights and remedies
with respect thereto under any present or future personal property security legislation, the Civil Code of Quebec, or under any
other applicable law, and all rights of stoppage in transit, replevin, reclamation, rescission and repossession and (iv) all cash
and non-cash proceeds of any of the foregoing, including insurance proceeds.


 


“Required
Reserve Amount” means the amount determined by FGI from time to time in accordance with Section 3(c) to be the Required
Reserve Amount and, until so determined, means an amount equal to the Reserve Percentage multiplied by the unpaid balance of all
Purchased Accounts.


 


“Reserve
Account” means (a) a bookkeeping account on the books of FGI and/or (b) an account of FGI in which FGI deposits funds
from time to time as contemplated by this Agreement.


 


“Reserve
Percentage” means the percentage determined by FGI from time to time in accordance with Section 3(c) to be the Reserve
Percentage and, until so determined, means 15%.


 


“Reserve
Shortfall” means the amount by which the balance in the Reserve Account is less than the Required Reserve Amount, provided
that, if the Reserve Account has a negative balance, the Reserve Shortfall shall be the sum of such balance and the Required Reserve
Amount.


 


“Schedule
of Accounts” means a schedule of Accounts in the form attached hereto as Schedule 1 or in such other form as required
by FGI or otherwise acceptable to FGI (including in an excel spreadsheet format acceptable to FGI) wherein Seller lists Accounts
that Seller offers to sell to FGI.


 


“Supporting
Obligation” has the definition contained in the UCC and which shall include a Letter-of-Credit Right or secondary obligation
that supports the payment or performance of an Account, Chattel Paper, a Document, a General Intangible, an instrument or Investment
Property.


 




    	 	 



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“Term”
means the term of this Agreement, as determined in accordance Section 13.


 


“Termination
Fee” means a fee payable to FGI pursuant to Section 13 in the event Seller terminates this Agreement prior to maturity
of the Original Term or of an Extended Term.


 


“Transaction
Documents” means, collectively, the Guaranty Agreements, and all agreements, instruments and documents executed and/or
delivered in connection therewith, all as may be supplemented, restated, superseded, amended or replaced from time to time.


 


“UCC”
means the Uniform Commercial Code as in effect from time to time in the State of New York.


 


“U.S.
Dollars” or “$” means the lawful currency of the United States of America.


 


Section
1.2 Other Referential Provisions.


 


(a)
Except as otherwise expressly provided herein, all accounting terms not specifically defined or specified herein shall have the
meanings generally attributed to such terms under GAAP.


 


(b)
All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural, and the plural shall include the singular.


 


(c)
The words “hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provisions of this Agreement.


 


(d)
Titles of Articles and Sections in this Agreement are for convenience only, do not constitute part of this Agreement and neither
limit nor amplify the provisions of this Agreement, and all references in this Agreement to Articles, Sections, Subsections, paragraphs,
clauses, sub clauses, Schedules or Exhibits shall refer to the corresponding Article, Section, Subsection, paragraph, clause or
sub clause of, or Schedule or Exhibit attached to, this Agreement, unless specific reference is made to the articles, sections
or other divisions or subdivisions of, or to schedules or exhibits to, another document or instrument.


 


(e)
Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented, restated
or otherwise modified (subject to any restrictions on such amendments, supplements, restatements or modifications set out herein),
(b) any reference herein to any statute or any section thereof shall, unless otherwise expressly stated, be deemed to be a reference
to such statute or section as amended, replaced or re-enacted from time to time and (c) any reference herein to any Person shall
be construed to include such Person’s successors and permitted assigns.


 


(f)
When used in this Agreement, the words “include”, “includes” and “including” shall be deemed
to be followed by the phrase “without limitation”.


 


(g)
Except as otherwise expressly provided in this Agreement, all dollar amounts referred to herein are stated in the lawful currency
of the United States of America. In addition, all calculations hereunder in respect of any amount that is denominated in a Foreign
Currency (such as the amount of an Account) shall for all purposes hereof be made in respect of the U.S. Dollar equivalent of
such amount determined by converting such amount that is denominated in a Foreign Currency to U.S. Dollars using the rate of exchange
at which FGI is able, on the date of determination, to purchase U.S. Dollars with such Foreign Currency in accordance with its
normal practice at its office in New York, New York.


 


(h)
For purposes of any assets, liabilities or entities located in the Province of Quebec and for all other purposes pursuant to which
the interpretation or construction of this Agreement may be subject to the laws of the Province of Quebec or a governmental authority
exercising jurisdiction in the Province of Quebec, (a) “personal property” shall include “movable property”,
(b) “tangible property” shall include “corporeal property”, (c) “intangible property” shall
include “incorporeal property”, (d) all references to “perfection” of or “perfected” liens
shall include a reference to an “opposable” or “set up” lien as against third parties, (e) an “agent”
shall include a “mandatary”, (f) “joint and several” shall include “solidary”; (g) “gross
negligence or wilful misconduct” shall be deemed to be “intentional or gross fault”; (h) “beneficial ownership”
or “beneficial interest” shall include “ownership or interest on behalf of another as mandatary”; and
(i) “priority” shall include “prior claim”. The parties hereto confirm that it is their wish that this
Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language
only and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the
English language only. Les parties aux présentes confirment que c’est leur volonté que cette convention
et les autres documents de crédit soient rédigés en langue anglaise seulement et que tous les documents,
y compris tous avis, envisagés par cette convention et les autres documents peuvent être rédigés en
langue anglaise seulement.


 




    	 	 



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Section
1.3 Exhibits and Schedules. All Exhibits and Schedules attached hereto are by reference made a part hereof.


 


Section
2. Purchase & Sale of Accounts.


 


(a)
Seller hereby offers to sell, assign, transfer, convey and deliver to FGI, as absolute owner, in accordance with the procedure
detailed herein, the universality of Seller’s right, title and interest in and to all present and future Seller’s
Accounts and their Related Rights; provided that the parties acknowledge their intention that, without affecting the validity
of any sale, assignment, transfer, conveyance or delivery of any Purchased Account, the aggregate outstanding amount of Purchased
Accounts Advanced on FGI’s books will not at any time exceed the Facility Amount.


 


(b)
All Accounts shall be submitted to FGI on a Schedule of Accounts listing each Account separately. The Schedule of Accounts shall,
at the request of FGI, be signed by a person acting or purporting to act on behalf of Seller. At the time a Schedule of Accounts
is presented, Seller shall also deliver to FGI one copy of the invoice and one copy, as applicable, of the sales contract or purchase
order, in each case for each Account of $5,000.00 or more listed on the Schedule of Accounts together with evidence of shipment,
furnishing and/or delivery of the applicable Goods or rendition of the applicable service(s); provided, however, that copies
of the invoices, sales contracts and purchase orders shall be delivered to FGI for all Accounts irrespective of their amounts
(i) if the aggregate of Accounts of less than $5,000.00 for the past twelve months represents more than 25% of the aggregate amount
of all Accounts for those past twelve months, or (ii) following an Event of Default so long as it is not cured or waived.


 


(c)
Any and all Purchased Accounts shall be purchased by FGI with full recourse to Seller, and Seller agrees to pay to FGI on demand
the unpaid amount of each Purchased Account specified by FGI. Seller agrees that any payments or credits applying to any Account
owing by an Account Debtor will be applied: first, to any Purchased Account of such Account Debtor; and, second,
to any other Accounts of such Account Debtor. This order of payment applies regardless of the respective dates the sales occurred
and regardless of any notations on payment items.


 


(d)
FGI reserves the right, in its sole and absolute discretion, to obtain credit insurance in its name, at Seller’s sole cost
and expense, with respect to each specific Purchased Account (in each case with such insurance companies, in such amounts and
with such coverage as determined by FGI in its sole and absolute discretion) with the proceeds of such insurance being the sole
and exclusive property of FGI. Payments on such credit insurance received by FGI with respect to such Purchased Account shall
either be applied to the Seller’s repurchase obligations with respect to such Purchased Account or otherwise applied to
the Reserve Account. Seller agrees to provide prompt written notice to FGI in the event that a Purchased Account would be subject
to a claim under such credit insurance and Seller agrees to fully cooperate with FGI in connection with each such claim (including,
without limitation, providing to FGI and the insurance company documentation and supporting information with respect to the applicable
Purchased Account). Seller agrees and acknowledges that (w) FGI has the sole discretion in determining whether to file claims
under such credit insurance, (x) FGI is entitled to file claims under such credit insurance without notice to or the consent of
Seller, (y) Seller remains fully liable to FGI pursuant to the terms of this Agreement with respect to any Purchased Account notwithstanding
the existence of such credit insurance or any claim filed with respect thereto and (z) FGI shall have no liability to Seller under
any circumstances in the event that an insurance company rejects any claim filed under such credit insurance.


 


(e)
FGI shall post all Account submitted by Seller to and accepted by it on its receivables processing system and shall mark such
Account as having been “activated”. Notwithstanding the sale, assignment and transfer by Seller to FGI of all present
and future Accounts of Seller pursuant to this Section 2, FGI shall not have any obligation to Seller to pay for or advance against
any such Account except to the extent that such Account are posted on FGI’s receivables processing system. Seller may, and
at FGI’s request from time to time with respect to any Purchased Account specified by FGI will, deliver to FGI a specific
assignment of an Account submitted by Seller to it (including a Purchased Account) in a form specified by FGI. The delivery by
or on behalf of Seller to FGI of any assignment of an Account shall not be necessary to effect a sale, assignment, transfer, conveyance
and delivery of any Account and its Related Rights.


 




    	 	 



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(f)
FGI shall have the right to charge back to Seller’s Reserve Account the amount of such Purchased Accounts at any time and
from time to time either before or after their maturity. Seller agrees to pay FGI upon demand the full amount thereof, together
with all expenses incurred by FGI up to the date of such payment, including reasonable attorney’s fees in attempting to
collect or enforce such payment or payment of such Account(s).


 


(g)
Notwithstanding any other provision of this Agreement, of any Schedule of Accounts or of any assignment that Seller may deliver
or cause to be delivered to FGI, FGI will at no time purchase, and Seller will not sell, assign, transfer, convey or deliver to
FGI, that portion of any Account that represents an obligation to pay taxes.


 


(h)
The sale, assignment and transfer of any Purchased Accounts and Related Rights to FGI pursuant to this Agreement shall not constitute
or result in the assumption by FGI of any obligation of Seller or any other Person in connection with the Purchased Accounts or
Related Rights, or under any agreement, instrument or other document relating thereto.


 


(i)
This Agreement shall not become effective until the date on which each of the following conditions precedent are satisfied:


 


	 	(i)	FGI
                                         shall have received this Agreement and each of the other Transaction Documents all properly
                                         executed;
	 	 	 
	 	(ii)	FGI
                                         shall have received Financing Statements and each of the other documents to be executed
                                         and/or delivered by Seller or any other Person pursuant to this Agreement;
	 	 	 
	 	(iii)	FGI
                                         shall have received payment by Seller of all fees which are due and payable on the Closing
                                         Date and expenses;
	 	 	 
	 	(iv)	FGI
                                         shall have received searches and certificates required under this Agreement;
	 	 	 
	 	(v)	FGI
                                         shall have received the Guaranty Agreements, in form and substance satisfactory to FGI,
                                         duly executed by the Guarantors;
	 	 	 
	 	(vi)	FGI
                                         shall have received security, in the form of a lien and general security interest, in
                                         form and substance satisfactory to FGI, duly executed by each of the Credit Parties and,
                                         where appropriate, registered and rendered opposable to third parties to preserve, protect,
                                         publish or perfect the security created thereunder;
	 	 	 
	 	(vii)	FGI
                                         shall have received from each of the Credit Parties an officer’s certificate (i)
                                         attaching a certified copy of its organizational documents, (ii) attaching a certified
                                         copy of all authorizing resolutions in connection with the documents to which it is party,
                                         (iii) attaching an incumbency certificate with respect to its officers and directors
                                         executing the documents and (iv) confirming that all representations and warranties in
                                         the documents to which it is a party shall be true and correct in all material respects
                                         on and as of such date; and
	 	 	 
	 	(viii)	FGI
                                         shall have received evidence that the blocked account with Wells Fargo Bank is opened
                                         and a blocked account agreement, in form and substance satisfactory to FGI, with such
                                         account bank has been entered into.



 




    	 	 



    	- 9 - 



    

 


Section
3. Purchase Price and Fees.


 


(a)
The purchase price for each Purchased Account posted on FGI’s receivables processing system and the Related Rights thereto
shall equal the Net Invoice Amount of such Purchased Account less (i) any portion thereof that represents an obligation to pay
any applicable taxes and (ii) FGI’s fees, as determined in accordance with Section 3(g). No discount, credit, compensation,
allowance or deduction with respect to any Purchased Account, unless shown on the face of the invoice delivered to FGI prior to
FGI’s purchase of such Account, shall be granted or approved by Seller to any Account Debtor without FGI’s prior written
consent which consent shall not be unreasonably withheld.


 


(b)
The Purchase Price for a Purchased Account posted on FGI’s receivables processing system and the Related Rights thereto
less (i) any Required Reserve Amount or credit balance that FGI, in FGI’s reasonable discretion, determines to hold, (ii)
the outstanding balance of all Advances in respect of such Account and of any other moneys remitted, paid, or otherwise advanced
by FGI to or on behalf of Seller (including any amounts which FGI reasonably determines that FGI may be obligated to pay in the
future), and (iii) any charge, fee, and other amount that Seller is required to pay to FGI pursuant to this Agreement, shall be
payable by FGI to Seller on the Date of Collection of such Account.


 


(c)
FGI shall be entitled, in its sole and absolute discretion, to withhold the Required Reserve Amount in an amount determined by
FGI in its sole discretion, and may determine, increase or decrease the Required Reserve Amount or Reserve Percentage at any time
and from time to time if FGI deems it necessary to do so in order to protect FGI’s interests. In no event shall Seller permit
a Reserve Shortfall to occur, and shall pay to FGI the amount thereof on demand. FGI may charge against the Reserve Account any
amount for which Seller may be obligated to FGI at any time, whether under the terms of this Agreement, or otherwise, including
but not limited to the repayment of any Advance, the amount of any Purchased Account constituting an Acceptable Account, any damages
suffered by FGI as a result of Seller’s breach of any representation or warranty herein or of any other provision hereof
(whether intentional or unintentional), any adjustments due and any attorneys’ fees, costs and disbursements due. Seller
recognizes that the Reserve Account may, in FGI’s sole discretion, represent bookkeeping entries only and not cash funds.
It is further agreed that, with respect to the balance in the Reserve Account, FGI is authorized to withhold, without giving prior
notice to Seller, any payments and credits otherwise due to Seller under the terms of this Agreement to protect FGI for reasonably
anticipated claims or to adequately satisfy reasonably anticipated obligations Seller may owe FGI. Upon the occurrence of an Event
of Default, or in the event Seller shall cease selling Accounts to FGI, FGI shall be under no obligation to pay the amount maintained
in the Reserve Account until all Purchased Accounts have been collected or FGI has determined, in its sole and absolute discretion,
that it will make no further efforts to collect any Purchased Accounts and all sums due FGI hereunder have been paid. Notwithstanding
anything set forth herein to the contrary, upon an Event of Default, Seller understands and agrees that the Termination Fee described
in Section 13 hereof shall be due and payable by Seller in the event that FGI terminates this Agreement following an Event of
Default.


 


(d)
In FGI’s sole and absolute discretion, FGI may from time to time advance to Seller against the Purchase Price of a Purchased
Account posted on FGI’s receivables processing system, sums up to 85% of the aggregate Purchase Price thereof outstanding
at the time any such Advance is made, less: (i) the amount of any such Purchased Account that is not an Acceptable Account; and
(ii) any fees, actual or estimated, that are payable to FGI hereunder. Each Advance shall be payable by Seller to FGI on demand
until the Date of Collection of the related Purchased Account and shall bear interest at the Applicable Interest Rate, before
and after default and judgement, with interest on overdue interest at the same rate, from the date such Advance is made until
the earlier of (i) the date the Advance is repaid in full or (ii) the date FGI would otherwise be obligated hereunder to pay the
Purchase Price of the Purchased Account against which such Advance was made.


 


(e)
Interest at the Applicable Interest Rate upon the daily total outstanding balance of each Advance shall be payable by Seller to
FGI on the last day of each month and may be charged by FGI to the Reserve Account. Any adjustment in the Applicable Interest
Rate, whether downward or upward, will become effective on the day on which the Applicable Interest Rate decreases or increases,
as the case may be. If, on any day in a month, the balance in the Reserve Account exceeds the unpaid balance of all Purchased
Accounts, then Seller agrees to credit the Reserve Account as of the last day of such month with interest on such excess at an
annual rate equal to the greater of 5.50% per annum and 2.25% above the rate of interest designated by FGI as its selected “Prime
Rate” or “Base Rate”, as the case may be (which as of the date hereof is based upon the Wall Street Journal,
Money Rates Section which is subject to change). All interest and fees payable hereunder shall be computed for the
actual number of days elapsed on the basis of a year consisting of three hundred sixty (360) days. Interest shall be payable monthly,
in arrears, on the first day of each calendar month, beginning on the first day of the first calendar month after the Closing
Date.


 




    	 	 



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(f)
Seller shall unconditionally pay and FGI shall be entitled to receive a facility fee in an amount equal to 1.00% of the Facility
Amount in immediately available funds. The initial facility fee shall be paid upon signing of this Agreement.


 


(g)
Seller shall unconditionally pay and FGI shall be entitled to receive a non-refundable monthly collateral management fee equal
to 0.37% of the total monthly amount of Purchased Accounts; with such fee charged monthly to Seller’s Reserve Account or
if funds are not available therein, payable by Seller on demand.


 


(h)
The minimum monthly net funds employed during each contract year hereof shall be no less than $4,000,000; any deficiency will
be subject to a Deficiency Assessment.


 


(i)
IT IS THE INTENTION OF THE PARTIES HERETO THAT, AS TO ALL PURCHASED ACCOUNTS, THE TRANSACTIONS CONTEMPLATED HEREBY SHALL CONSTITUTE
A TRUE PURCHASE AND SALE OF SUCH ACCOUNTS UNDER § 9-318 OF THE UCC AND AS SUCH, THE SELLER SHALL THEREFORE HAVE NO LEGAL
OR EQUITABLE INTEREST IN ANY PURCHASED ACCOUNTS. NEVERTHELESS, IN THE EVENT ALL OR ANY PORTION OF THIS TRANSACTION IS CHARACTERIZED
AS A LOAN, THE PARTIES HERETO INTEND TO CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT. IN
FURTHERANCE THEREOF SUCH PARTIES STIPULATE AND AGREE THAT NONE OF THE TERMS AND PROVISIONS CONTAINED IN THIS AGREEMENT SHALL EVER
BE CONSTRUED TO CREATE A CONTRACT TO PAY, FOR THE USE, FORBEARANCE OR DETENTION OF MONEY, INTEREST USED IN THIS PARAGRAPH AS DEFINED
BY ANY APPLICABLE LAW IN EXCESS OF THE MAXIMUM RATE (AS HEREINAFTER DEFINED) FROM TIME TO TIME IN EFFECT. NEITHER SELLER, ANY
PRESENT OR FUTURE GUARANTOR NOR ANY OTHER PERSON HEREAFTER BECOMING LIABLE FOR THE PAYMENT OF THE ADVANCES, OR ANY OTHER AMOUNTS
PAYABLE HEREUNDER, SHALL EVER BE LIABLE FOR ANY OBLIGATION THAT MAY BE CHARACTERIZED AS UNEARNED INTEREST THEREON, OR SHALL EVER
BE REQUIRED TO PAY ANY OBLIGATION THAT MAY BE CHARACTERIZED AS INTEREST THEREON, IN EITHER CASE THAT IS IN EXCESS OF THE MAXIMUM
AMOUNT THAT MAY BE LAWFULLY CHARGED UNDER APPLICABLE LAW FROM TIME TO TIME IN EFFECT, AND THE PROVISIONS OF THIS SECTION SHALL
CONTROL OVER ALL OTHER PROVISIONS OF THIS AGREEMENT WHICH MAY BE IN CONFLICT THEREWITH. IF ANY INDEBTEDNESS OR OBLIGATION OWED
BY SELLER HEREUNDER IS DETERMINED TO BE IN EXCESS OF THE LEGAL MAXIMUM, OR FGI SHALL OTHERWISE COLLECT MONEYS WHICH ARE DETERMINED
TO CONSTITUTE INTEREST WHICH WOULD OTHERWISE INCREASE THE INTEREST ON ALL OR ANY PART OF ANY INDEBTEDNESS OR OBLIGATIONS HEREUNDER
TO AN AMOUNT IN EXCESS OF THAT PERMITTED TO BE CHARGED BY APPLICABLE LAW THEN IN EFFECT, THEN ALL SUCH SUMS DETERMINED TO CONSTITUTE
INTEREST IN EXCESS OF SUCH LEGAL LIMIT SHALL, WITHOUT PENALTY, BE PROMPTLY APPLIED TO REDUCE THE THEN OUTSTANDING INDEBTEDNESS
OR OBLIGATIONS OF SELLER HEREUNDER OR, AT FGI’S OPTION, RETURNED TO SELLER OR THE OTHER PAYOR THEREOF UPON SUCH DETERMINATION.
IF AT ANY TIME THE RATE AT WHICH INTEREST IS PAYABLE HEREUNDER EXCEEDS THE MAXIMUM RATE, THE AMOUNT OUTSTANDING HEREUNDER SHALL
CEASE BEARING INTEREST UNTIL SUCH TIME AS THE TOTAL AMOUNT OF INTEREST ACCRUED HEREUNDER EQUALS (BUT DOES NOT EXCEED) INTEREST
CALCULATED AT THE MAXIMUM RATE. AS USED IN THIS SECTION, THE TERM “APPLICABLE LAW” MEANS THE LAWS OF THE STATE OF
NEW YORK OR, IF DIFFERENT, THE LAWS OF THE STATE, TERRITORY OR OTHER JURISDICTION IN WHICH SELLER RESIDES, WHICHEVER LAW ALLOWS
THE GREATER RATE OF INTEREST, AS SUCH LAWS NOW EXIST OR MAY BE CHANGED OR AMENDED OR COME INTO EFFECT IN THE FUTURE AND THE TERM
“MAXIMUM RATE” MEANS THE MAXIMUM NONUSURIOUS RATE OF INTEREST THAT FGI IS PERMITTED UNDER APPLICABLE LAW TO CONTRACT
FOR, TAKE, CHARGE OR RECEIVE WITH RESPECT TO THE ADVANCES OR ANY OTHER INDEBTEDNESS OR OBLIGATIONS HEREUNDER.


 




    	 	 



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(j)
Upon FGI’s acceptance of each Purchased Account in accordance herewith, FGI shall be the sole owner and holder of such Purchased
Account. Seller hereby sells, transfers, conveys and assigns to FGI all of its right, title and interest in and to each Purchased
Account effective at the time of acceptance thereof by FGI. Seller agrees to execute and deliver to each Account Debtor obligated
under an Account and/or a Purchased Account such written notice of sale of the Purchased Account as FGI may request in the form
attached hereto as Schedule 7 or in such form as required by FGI.


 


(k)
FGI shall provide Seller online access via a secured website to information on the Purchased Accounts and a reconciliation of
the relationship relating to billing, collection and account maintenance such as aging, posting, error resolution, interest and
fees payable hereunder, and mailing of statements in the ordinary course of FGI’s business. All of the foregoing shall be
in a format, and in such detail, as FGI, in its reasonable discretion, deems appropriate. Furthermore, FGI’s books and records
shall be admissible as evidence without objection as prima facie evidence of the status of the Purchased Accounts, non-purchased
Accounts and the Reserve Account between FGI and Seller. Each statement, report, or accounting rendered or issued by FGI to Seller,
if any, and all online information shall be deemed conclusively accurate and binding on Seller unless within thirty (30) days
after the date of issuance or posting Seller notifies FGI to the contrary by registered or certified mail, setting forth with
specificity the reasons why Seller believes such statement, report, or accounting is inaccurate, as well as what Seller believes
to be correct amount(s) therefor. If FGI’s online website is not available for any reason whatsoever, FGI shall deliver
copy of such statements to Seller. FGI’s failure to provide or Seller’s failure to receive such online access or statements
shall not relieve Seller of Seller’s obligations under this Agreement or the responsibility of Seller to request such statement
and Seller’s failure to do so shall nonetheless bind Seller to whatever FGI’s records would have reported.


 


(l)
To the extent any overadvance is extended by FGI in its sole and absolute discretion, such overadvance shall be subject to such
increases to the Applicable Interest Rate and additional terms and conditions set forth by FGI in its sole and absolute discretion.
Such overadvance fee shall be due and payable regardless of whether FGI has accelerated the Obligations. Seller agrees that any
overadvance fee payable to FGI is a reasonable estimate of FGI’s damages and is not a penalty.


 


Section
4. Seller’s Representations, Warranties and Covenants. Seller, as well as each of Seller’s principals and directors,
represents, warrants and covenants, jointly and severally, to FGI that:


 


(a)
Seller (i) is a corporation, duly incorporated and validly existing and in good standing under the laws of the state of incorporation
or organization, as applicable, designated in the first paragraph of this Agreement, (ii) has the requisite corporate power and
authority to operate its business and to own its property and (iii) is duly qualified, is validly existing and in good standing
and has lawful power and authority to engage in the business it conducts in each state where failure to so qualify would have
a material adverse effect on such Seller. As of the date hereof, the organizational structure of Seller is as set forth in Schedule
4(a) attached hereto and Seller has no Affiliates other than those identified therein.


 


(b)
The execution, delivery and performance by Seller of this Agreement does not and will not constitute a violation of any material
law applicable to Seller, or a violation of Seller’s articles of incorporation, bylaws, or other organizational documents
and does not and will not constitute any material breach of any other material document, agreement or instrument to which Seller
is a party or by which Seller is bound.


 


(c)
Seller has all requisite corporate power and authority to enter into and perform this Agreement and to incur the obligations herein
provided for, and has taken all proper and necessary action to authorize the execution, delivery and performance of this Agreement
and all other documents, instruments and agreements executed in connection herewith. This Agreement is a legal, valid and binding
obligation of Seller enforceable against it in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally
and by general equitable principles.


 


(d)
Immediately prior to the sale thereof, Seller will be the sole owner and holder of each of the Accounts described thereon and
its Related Rights. Upon FGI’s purchase of an Account and its Related Rights, FGI shall become the sole owner and holder
of such Purchased Account and Related Rights.


 




    	 	 



    	- 12 - 



    

 


(e)
At the time of sale to FGI hereunder, no Purchased Account or Related Rights shall have been previously sold or transferred or
be subject to any lien, encumbrance, security interest or other claim of any kind of nature. Seller will not factor, sell, transfer,
pledge or give a security interest or a lien in any of its Accounts or Related Rights to anyone other than FGI. There are and
will be no Financing Statements on file in any public office covering any Collateral, any Purchased Accounts or their Related
Rights except in favor of FGI or those statements now on file specifically listed on Schedule 4(e) attached hereto. Seller
will not execute any security agreement, lien or authorize the filing of any Financing Statement in respect of any Collateral,
any Purchased Accounts or their Related Rights in favor of any Person, except FGI, during the Term of this Agreement.


 


(f)
The amount of each Purchased Account will, immediately prior to its sale to FGI pursuant hereto, be due and owing to Seller and
represent a bona fide sale, delivery and acceptance of Goods or performance of services by Seller to or for an Account Debtor.
The information regarding an Account on each Schedule of Accounts will be accurate. The terms for payment of each Purchased Account
will be no greater than ninety (90) days from date of invoice and the payment of such Purchased Account will not be contingent
upon the fulfillment by Seller of any further performance of any nature whatsoever. Each Account Debtor which is the obligor in
respect of an Account that is listed on a Schedule of Accounts will, to the best of Seller’s knowledge, be solvent at the
time Seller provides such Schedule to FGI.


 


(g)
There are and shall be no set-offs, compensation, allowances, discounts, deductions, counterclaims, or disputes with respect to
any Purchased Account, either at the time it is accepted by FGI or FGI or prior to the date it is to be paid. Seller shall inform
FGI, in writing, immediately upon learning that there exists any Purchased Account which is subject to a Dispute. Seller shall
accept no returns and shall grant no allowance or credit to any Account Debtor unless Seller provides written notice to FGI within
two (2) business days after accepting such return or granting such allowance; provided, however, that in no event shall
such return or allowance exceed 5% of the face value of an invoice greater than $2,500, and so long as the aggregate amount of
returns accepted and allowances granted during the applicable week doesn’t exceed 10% of the aggregate amount of Accounts
invoiced during that week, without FGI’s prior written consent. On the second business day of each calendar week, Seller
shall provide to FGI, for each Account Debtor who is indebted on a Purchased Account, a weekly report in a form and substance
satisfactory to FGI itemizing all such returns and allowances made during the previous week with respect such Purchased Account
and at FGI’s option a check (or wire transfer) payable to FGI for the amount thereof or, in FGI’s sole and exclusive
discretion, FGI may accept the issuance of a credit memo and charge same to the Reserve Account.


 


(h)
Seller’s address, as set forth in any Application submitted to FGI, is and will be Seller’s mailing address, chief
executive office, domicile, head office or registered office, principal place of business and the office where all of the books
and records concerning the Purchased Accounts are and will be maintained, and which shall not be changed without giving thirty
(30) days prior written notice to FGI. Seller will not change its name without giving thirty (30) days prior written notice to
FGI.


 


(i)
Seller shall maintain its books and records in accordance with GAAP and shall reflect on its books the absolute sale of the Purchased
Accounts and their Related Rights to FGI. Seller shall furnish FGI, upon request, such information and statements as FGI shall
request from time to time and at any time regarding Seller’s business affairs, financial condition and results of its operations.
Without limiting the generality of the foregoing, Seller shall provide FGI, on or prior to the thirtieth (30th) day
of each month, unaudited financial statements with respect to the prior month and, within one hundred and twenty (120) days after
the end of each of Seller’s fiscal years, annual consolidated financial statements for it and its Affiliates that are consolidated
with it, and such certificates relating to the foregoing as FGI may request including, a monthly certificate from the president
of Seller stating that no Event of Default exists or if any Event of Default exists stating in detail the nature of each Event
of Default. Seller will furnish to FGI upon request a current listing of all open and unpaid accounts payable and Accounts, and
such other items of information that FGI may deem necessary or appropriate from time to time. Unless otherwise expressly provided
herein or unless FGI otherwise consents, all financial statements and reports furnished to FGI hereunder shall be prepared and
all financial computations and determinations pursuant hereto shall be made in accordance with GAAP, consistently applied.


 


(j)
Seller has filed and will file all material tax returns required to be filed in any jurisdiction where Seller conducts business
and Seller has paid and will pay all taxes and governmental charges (including taxes and charges imposed with respect to any sale
of Goods or provision of services) (unless contested in good faith) and furnish to FGI upon request satisfactory proof of payment
and compliance with all federal, provincial, foreign and local tax requirements.


 




    	 	 



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(k)
There are, and at any time that Seller provides a Schedule of Accounts to FGI pursuant hereto there will be, no lawsuits against
Seller involving amounts greater than $50,000 (or the equivalent thereof in any currency) except as disclosed in writing to FGI
before the date hereof or the date of providing such Schedule, and Seller will promptly notify FGI of (i) the filing of any lawsuit
against Seller involving amounts greater than $50,000 (or the equivalent thereof in any currency), and (ii) any attachment or
any other legal process levied against Seller.


 


(l)
The Application made or delivered by or on behalf of Seller in connection with this Agreement, and the statements made therein,
are true and correct at the time that this Agreement is executed. There is no fact which Seller has not disclosed to FGI in writing
which could reasonably be expected to materially adversely affect the properties, business, financial condition or prospects of
Seller, or any of the Accounts or other Collateral, or which is necessary to disclose in order to keep the foregoing representations
and warranties from being misleading.


 


(m)
In no event shall the funds paid to Seller hereunder be used directly or indirectly for personal, family, household or agricultural
purposes.


 


(n)
Seller does, and will do, business under no trade or assumed names other than specifically listed on Schedule 4(n) attached
hereto.


 


(o)
Any invoice or written communication that Seller will send to FGI by facsimile transmission or email will be a duplicate of the
original.


 


(p)
Any electronic communication of data, whether by e-mail, tape, disk, or otherwise, that Seller remits or causes to be remitted
to FGI shall be authentic and genuine.


 


(q)
Seller has obtained and will obtain all material licenses, permits, franchises or other governmental authorizations necessary
for the ownership of its property and for the conduct of its business.


 


(r)
After giving effect to the transactions contemplated under this Agreement, Seller is and will be solvent, is and will be able
to pay its debts as they become due, and has and will have capital sufficient to carry on its business and all businesses in which
it is or will be about to engage, and now owns and will own property having a value both at fair valuation and at fair salable
value greater than the amount required to pay Seller’s debts. Seller will not be rendered insolvent by the execution and
delivery of this Agreement or by the transactions contemplated hereunder.


 


(s)
Seller shall continue in the business presently operated by it using its reasonable best efforts to maintain its customers and
goodwill.


 


(t)
Seller shall deliver written notice to FGI promptly upon becoming aware of the existence of (i) any condition or event which constitutes
a Default or Event of Default, specifying the nature and period of existence thereof and what action Seller is taking (and proposes
to take) with respect thereto or (ii) any notice of default, oral or written, given to Seller by any creditor for indebtedness
for borrowed money in excess of $75,000 (or the equivalent thereof in any currency).


 


(u)
Seller shall permit any of FGI’s officers or other representatives to visit and inspect upon prior reasonable notice (absent
the existence of an Event of Default) during normal business hours any of the locations of Seller, to examine and audit all of
Seller’s books of account, records, reports and other papers, to make copies and extracts therefrom and to discuss its affairs,
finances and accounts with its officers, employees and independent accountants all at Seller’s expense at the standard rates
charged by FGI for such activities, plus FGI’s reasonable out-of-pocket expenses. All such expenses incurred shall be limited
to $25,000 in the course of a year (unless an Event of Default then exists and is continuing in which case Seller shall reimburse
FGI for reasonable out-of-pocket expenses for all visits).


 


(v)
Seller agrees that, promptly upon becoming aware of any development or other information outside the ordinary course of business,
excluding matters of a general economic, financial or political nature, which would reasonably be expected to have a material
adverse effect on the properties, business, financial condition or prospects of Seller, it shall give to FGI telephonic notice
specifying the nature of such development or information and such anticipated effect. In addition, such verbal communication shall
be confirmed by written notice thereof to FGI within 48 hours.


 




    	 	 



    	- 14 - 



    

 


(w)
Seller will promptly notify FGI in writing in the event that Seller becomes a party to or obtains any rights with respect to any
Commercial Tort Claim. Such notification shall include information sufficient to describe such Commercial Tort Claim, including,
but not limited to, the parties to the claim, the court in which the claim was commenced, the docket number assigned to such claim,
if any, and a detailed explanation of the events that gave rise to the claim. As of the date hereof, Seller has no right to any
Commercial Tort Claims. Seller shall execute and deliver to FGI all documents and/or agreements necessary to grant FGI a security
interest and lien in such Commercial Tort Claim to secure the Obligations. Seller authorizes FGI to file (without Seller’s
signature) Financing Statements as FGI deems necessary to perfect its security interest to third parties in any Commercial Tort
Claim.


 


(x)
Seller shall provide FGI with written notice of any letters of credit for which Seller is the beneficiary. Seller shall execute
and deliver (or cause to be executed or delivered) to FGI all documents and agreements as FGI may require in order to obtain and
perfect its security interest and its liens in the related Letter-of-Credit Rights.


 


(y)
Seller shall not engage in any transaction or series of related transactions pursuant to which (A) a Person or group of Persons
acquires (i) voting securities of Seller constituting greater than 50% of the issued and outstanding voting securities of Seller
and/or entitling such Person or group to elect a majority of Seller’s board of directors (whether by merger, amalgamation,
consolidation, recapitalization, division, conversion or otherwise) without the consent of FGI and which consent shall not be
unreasonably withheld or delayed or (ii) all or substantially all of Seller’s assets determined on a consolidated basis,
or (B) Seller is wound up, dissolved or liquidated or otherwise ceases to be in existence in the form as of the date hereof;


 


(z)
Excepting the endorsement in the ordinary course of business of negotiable instruments for deposit or collection, Seller shall
not become or be liable, directly or indirectly, primary or secondary, matured or contingent, in any manner, whether as guarantor,
surety, accommodation maker, or otherwise, for the existing or future indebtedness of any kind of any Person without the consent
of FGI and which consent shall not be unreasonably withheld or delayed.


 


(aa)
Seller shall not, and shall not permit any other Credit Party, without FGI’s prior written consent: (i) declare or pay or
make any forms of distribution or dividend to holders of Seller’s capital stock, membership interest or other equity interest
or to any Limited Credit Parties; (ii) declare or pay any bonus compensation to its officers if a Default or Event of Default
exists or would result from the payment thereof; or (iii) hereafter incur or become liable for any indebtedness.


 


(bb)
Seller shall not, and shall not permit any other Credit Party, without FGI’s prior written consent, make or have outstanding
loans, advances, extensions of credit or capital contributions to, or investments in, any Person other than any Affiliates (but
excluding a Limited Credit Party) with which it is consolidated for accounting purposes and other than those in existence as of
the date hereof.


 


(cc)
Seller shall not, and shall not permit any other Credit Party without FGI’s prior written consent, to sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in
any other similar transactions with, any of the Limited Credit Party or their affiliates.


 


(dd)
Seller shall not use FGI’s name in connection with any of its business operations other than in connection with references
to this Agreement. Nothing herein contained is intended to permit or authorize Seller to make any contract on behalf of FGI.


 


(ee)
Seller shall not become or be a party to any contract or agreement which at the time of becoming a party to such contract or agreement
materially impairs Seller’s ability to perform under this Agreement, or under any other instrument, agreement or document
to which Seller is a party or by which it is or may be bound.


 




    	 	 



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(ff)
Seller shall not amend any license agreements with respect to Inventory without the prior written consent of FGI and which consent
shall not be unreasonably withheld or delayed.


 


(gg)
Anti-Terrorism Law: Neither Seller nor any Affiliate of Seller is in violation of any Anti-Terrorism Law or engages in or conspires
to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of
the prohibitions set forth in any Anti-Terrorism Law. Neither Seller nor any Affiliate of Seller, or to Seller’s knowledge,
any of its respective agents acting or benefiting in any capacity in connection with this Agreement or other transactions hereunder,
is a Blocked Person.


 


(hh)
Perfection and Priority: This Agreement and the other Transaction Documents are effective to create in favor of FGI legal, valid
and enforceable liens in all right, title and interest of Seller in the Collateral, and when financing statements have been filed
in the offices of the applicable jurisdictions, Seller will have granted to FGI, and FGI will have perfected first priority liens
in the Collateral, superior in right to any and all other liens, existing or future.


 


Section
5. Notice and Acquiescence of Purchase.


 


(a)
Seller authorizes FGI to file, and Seller shall execute and deliver to FGI and/or file at such times and places as FGI may designate,
such Financing Statements as are necessary or desirable to give notice of, and to perfect and maintain the perfection and priority
of, FGI’s purchase of the Purchased Accounts and their Related Rights, including the notification of Account Debtors of
the assignment in accordance with Section 7(a) and FGI’s security interest and lien in the Collateral as provided herein.


 


(b)
Unless an Account Debtor is otherwise notified in accordance with Section 7(a), Seller shall include on all sales contract, purchase
order and invoice for each Account a clear statement, in form and substance satisfactory to FGI, to the effect that the Account
Debtor consents to and acquiesces in the assignment and transfer of the Account arising or evidenced thereunder by Seller to FGI.
FGI confirms that the following is acceptable, any other language will have to be accepted by FGI: “The [Customer/Client]
hereby acquiesce to the sale and assignment of this [contract/order/invoice] and all rights relating thereto to FGI”.


 


Section
6. Collateral.


 


(a)
In order to secure the payment of all indebtedness and obligations of Seller to FGI (including the Obligations), Seller hereby
grants to FGI a continuing mortgage, charge, assignment, pledge, security interest, and lien (collectively, “FGI’s
Security”) in and upon all of Seller’s right, title and interest in and to all of the Collateral. Seller agrees
to comply with all appropriate laws in order to perfect FGI’s security interest and its lien in and to the Collateral and
to execute such documents as FGI may, from time to time, require and to deliver to FGI a list of all locations of its Inventory,
Equipment and Goods. Seller shall provide written notice to FGI of any change in the locations at which it keeps its material
Inventory, Equipment and Goods at least thirty (30) days prior to any such change. The occurrence of any Event of Default shall
entitle FGI to all of the default rights and remedies (without limiting the other rights and remedies exercisable by FGI either
prior or subsequent to an Event of Default) as are available to a secured party under the UCC in effect in any applicable jurisdiction.


 


Section
7. Collection.


 


(a)
Seller shall notify all Account Debtors by a letter in the form of Schedule 7 attached hereto and take other necessary
or appropriate means to insure that all of Seller’s Account(s), whether or not purchased by FGI, shall be paid directly
to FGI at the remittance address or by the wire instructions set forth below. FGI shall have the right at any time, either before
or after the occurrence of an Event of Default and without notice to Seller, to notify any or all Account Debtors of the assignment
to FGI and to direct such Account Debtors to make payment of all amounts due or to become due to Seller directly to FGI. As to
any Account proceeds that do not represent Purchased Accounts, and so long as no Event of Default has occurred, FGI shall be deemed
to have received any such proceeds of Accounts as a pure pass-through for and on account of Seller; provided, however, FGI may
retain, in its sole and absolute discretion, any such amounts as additional reserves in the Reserve Account. Unless otherwise
required by FGI, all invoices of all of Seller’s Accounts shall plainly state on their face:


 




    	 	 



    	- 16 - 



    

 


 


All
amounts owing under this invoice have been assigned to Faunus Group International, Inc. d/b/a FGI Finance and all such amounts
payable hereunder are payable to Faunus Group International, Inc. d/b/a FGI Finance at the remittance address or by the wire instructions
set forth below (or to such other address or account as FGI may designate from time to time):


 


Wire
Instructions:


 


	 	Beneficiary:
    Bar Code Specialties	 
	 	Credit
    Account #: 4010299559	 
	 	SWIFT:
    CTZIUS33	 
	 	ABA:
    021313103	 
	 	Bank:
    Citizens Bank	 
	 	Bank
    Address: 1 Citizens Drive	 
	 	Riverside
    RI, 02915	 


 


	 	Beneficiary:
    Quest Marketing, Inc.	 
	 	Credit
    Account #: 4010299567	 
	 	SWIFT:
    CTZIUS33	 
	 	ABA:
    021313103	 
	 	Bank:
    Citizens Bank	 
	 	Bank
    Address: 1 Citizens Drive	 
	 	Riverside
    RI, 02915	 


 


(b)
FGI shall allow Seller to initiate the initial collection efforts and Seller shall do so diligently and using all commercial efforts.
If Seller’s collection efforts are unsuccessful or if FGI is unsatisfied with the collection procedures used by Seller or
its efforts or results, FGI, as the sole and absolute owner of the Purchased Accounts and their Related Rights, shall have the
sole and exclusive power and authority to collect such Purchased Accounts and Related Rights, through legal action or otherwise,
and FGI may, in its sole discretion, settle, compromise, or assign (in whole or in part) any of such Purchased Accounts and Related
Rights, or otherwise exercise, to the maximum extent permitted by applicable law, any other right now existing or hereafter arising
with respect to any of such Purchased Accounts and Related Rights.


 


(c)
The terms and conditions set out in this Section 7 shall not amend or otherwise modify the obligations of Seller under Section
5 hereof.


 


Section
8. Payments Received by Seller. Should Seller receive payment of all or any portion of any Purchased Account or, after
the occurrence and during the continuation of a Default, of any other Account, Seller shall immediately notify FGI in writing
of the receipt of the payment, hold said payment in trust or as mandatary for FGI separate and apart from Seller’s own property
and funds, and shall deliver said payment to FGI without delay in the identical form in which received with all necessary endorsements.
Should Seller receive any check or other payment instrument with respect to a Purchased Account or, after the occurrence and during
the continuation of a Default, with respect to any other Account, and fail to surrender and deliver to FGI said check or payment
instrument on the second business day following the date of receipt by Seller, FGI shall be entitled to charge Seller a Misdirected
Payment Fee to compensate FGI for the additional administrative expenses that the parties acknowledge is likely to be incurred
as a result of such breach. In the event any Goods, the sale of which gave rise to a Purchased Account, are returned to or repossessed
by Seller, such Goods shall be held by Seller in trust for FGI, separate and apart from Seller’s own property and subject
to FGI’s sole direction and control.


 


Section
9. Power of Attorney. Seller grants to FGI an irrevocable power of attorney authorizing and permitting FGI, at its option,
with or without notice to Seller to do any or all of the following in the Seller’s name or otherwise: (a) endorse the name
of Seller on any checks or other evidences of payment whatsoever that may come into the possession of FGI regarding Purchased
Accounts, their Related Rights or Collateral, including checks or other payment instruments received by FGI pursuant to Section
8 hereof; (b) upon the occurrence and during the continuance of an Event of Default, receive, open and dispose of any mail addressed
to Seller and put FGI’s address on any statements mailed to Account Debtors; (c) subject to Section 7(b) and upon providing
prior written notice to Seller, pay, settle, compromise, prosecute or defend any action, claim, conditional waiver and release,
or proceeding relating to Purchased Accounts, their Related Rights or Collateral; (d) upon the occurrence of an Event of Default,
notify in the name of the Seller, the U.S. Post Office and any other postal authorities to change the address for delivery of
mail addressed to Seller to such address as FGI may designate; provided, however, that FGI shall turn over to Seller all such
mail not relating to Purchased Accounts, their Related Rights or Collateral; (e) file any Financing Statements deemed necessary
or appropriate by FGI to protect FGI’s interest in and to the Purchased Accounts, their Related Rights or Collateral, or
under any provision of this Agreement; (f) upon the occurrence and during the continuance of an Event of Default, effect debits
to any demand deposit or other deposit account that Seller maintains at any bank, trust company, savings and loan association,
credit union, other financial institution or like organization for any sums due to or from the Seller under this Agreement; and
(g) and upon the occurrence and during the continuance of an Event of Default, to do all other things necessary and proper in
order to carry out this Agreement. The powers and authority granted to FGI herein are coupled with an interest and are irrevocable
until this Agreement is terminated and all Obligations are fully satisfied.


 




    	 	 



    	- 17
                                                                                                                                                                                                                     - 



    

 


Section
10. Default and Remedies. An Event of Default shall be deemed to have occurred hereunder and FGI may immediately exercise
its rights and remedies with respect to the Collateral under this Agreement, at law, in equity, under statute and otherwise, upon
the happening of one or more of the following: (a) Seller shall fail to pay as and when due any amount owed to FGI, unless such
failure is due to an administrative or technical error or banking system disruption affecting the transfer of funds, which error
is remedied within 3 business days; (b) (i) the commencement of any action for the dissolution, winding up or liquidation of Seller,
or the commencement of any proceeding to avoid any transaction entered into by Seller, or the commencement of any case or proceeding
for reorganization or liquidation of Seller or Seller’s debts under any federal, provincial, state or other bankruptcy or
insolvency legislation or any other legislation, now or hereafter enacted, for the relief of debtors, whether instituted by or
against Seller; provided, however, that Seller shall have thirty (30) days to obtain the dismissal or discharge of involuntary
proceedings filed against it, provided further that such grace period will cease to apply if (x) an order, decree or judgment
is granted or entered thereunder (whether or not entered or subject to appeal) against or with respect to Seller in the interim
or (y) Seller files an answer admitting the material allegations of a petition or other material filed against it in any such
proceeding, (ii) Seller makes or proposes in writing an assignment for the benefit of creditors generally, offers a composition
or extension to creditors, or makes or sends notice of an intended bulk sale of any business or assets now or hereafter owned
or conducted by Seller, (iii) the appointment of a receiver, receiver and manager, liquidator, custodian, trustee or similar official
or fiduciary for Seller or for Seller’s property, or (iv) any other Insolvency Proceeding is instituted by or against Seller;
provided, however, that Seller shall have thirty (30) days to obtain the dismissal or discharge of involuntary proceedings filed
against it, provided further that such grace period will cease to apply if (x) an order, decree or judgment is granted or entered
thereunder (whether or not entered or subject to appeal) against or with respect to Seller in the interim or (y) Seller files
an answer admitting the material allegations of a petition or other material filed against it in any such proceeding; (c) Seller
shall become insolvent in that its debts are greater than the fair value of its assets, or Seller is generally not paying its
debts as they become due; (d) any lien, garnishment, attachment or the like shall be issued against or shall attach to the Purchased
Accounts, their Related Rights, the Collateral or any portion thereof and the same is not released within ten (10) days; (e) Seller
suffers the entry against it for a final judgment for the payment of money in excess of $50,000 (or the equivalent thereof in
any currency), unless the same is discharged within thirty (30) days after the date of entry thereof or an appeal or appropriate
proceeding for review thereof is taken within such period and a stay of execution pending such appeal is obtained; (f) Seller
shall breach any covenant, other obligation, warranty or representation set forth herein and such breach continues for fifteen
(15) days or any such warranty or representation shall be untrue when made; (g) any report, certificate, schedule, financial statement,
profit and loss statement or other statement furnished by Seller, or by any other Person on behalf of Seller, to FGI is not true
and correct in any material respect when so furnished; (h) Seller shall have a federal, provincial, state or other tax lien filed
against any of its properties, or shall fail to pay any federal, provincial, state or other tax when due, or shall fail to file
any federal, provincial, state or other tax form as and when due; (i) an Event of Default or Default has occurred or is continuing
under the Canadian SASA; or (j) a material adverse change shall have occurred in Seller’s financial condition, business,
operations or prospects. Upon the occurrence of an Event of Default, all obligations owing to FGI (including the Obligations)
shall become immediately due and payable at the option of FGI (provided, that, upon the occurrence of an Event of Default under
clause (b) above, all such amounts shall become immediately due and payable without further notice or demand) and FGI shall be
entitled to all rights it has by law as a secured creditor, including as to any form of equitable relief that may be appropriately
obtained through legal process without having to establish any inadequate remedy at law or other grounds other than to establish
that its Collateral is subject to being improperly used, moved, dissipated or withheld from FGI. All post-judgment interest shall
bear interest at the greater of the contract rate and 18% per annum.


 


Section
11. Cumulative Rights; Waivers. All rights, remedies and powers granted to FGI in this Agreement, or in any other instrument
or agreement given by Seller to FGI or otherwise available to FGI in equity, at law, by statute or otherwise, are cumulative and
may be exercised singularly or concurrently with such other rights as FGI may have. These rights may be exercised from time to
time as to all or any part of the Purchased Accounts and their Related Rights or the Collateral as FGI in its sole and absolute
discretion may determine. FGI will not be held to have waived its rights and remedies unless the waiver is in writing and signed
by FGI. A waiver by FGI of a right, remedy or default under this Agreement on one occasion is not a waiver of any right, remedy
or default on any subsequent occasion. Any failure by FGI to exercise, or any delay by FGI in exercising, any right shall not
in any manner impair the subsequent exercise by FGI of any of its rights.


 




    	 	 



    	- 18
                                                                                                                                                                                                                     - 



    

 


Section
12. Notices. Any notice or communication with respect to this Agreement shall be given in writing, sent by (i) personal
delivery, or (ii) expedited delivery service with proof of delivery, or (iii) United States mail, postage prepaid, registered
or certified mail, or (iv) facsimile or email, addressed to each party hereto at its address set forth below or to such other
address or to the attention of such other person as hereafter shall be designated in writing by the applicable party sent in accordance
herewith. Any such notice or communication shall be deemed to have been given either at the time of personal delivery or, in the
case of delivery service or mail, as of the date of first attempted delivery at the address and in the manner provided herein,
or in the case of facsimile, upon receipt.


 


	Faunus
    Group International, Inc. 	Quest
    Marketing, Inc.
	80
    Broad Street	860
    Conger Street
	22nd
    Floor	Eugene,
    OR 97402
	New
    York, NY 10004	 
	Fax:
    (212) 248-3404	 
	 	Bar
    Code Specialties, Inc.
	 	860
    Conger Street
	 	Eugene,
    OR 97402


 


Section
13. Term. Subject to the last sentence of this Section 13, the Original Term of this Agreement shall be thirty-six (36)
months from the date of this Agreement, which shall thereafter be extended automatically for additional one (1) year terms after
the termination of the Original Term and each automatic extension unless written notice of termination is given by one party hereto
to the other party hereto at least forty-five (45) days, but not more than ninety (90) days, prior to the end of the Original
Term or any extension thereof. Any such notice of termination, however, and notwithstanding payment in full of all Obligations
by Seller, is conditioned on Seller’s delivery, to FGI, of a general release in a form reasonably satisfactory to FGI. Seller
understands that this provision constitutes a waiver of its rights under § 9-513 of the UCC. FGI shall not be required to
record any terminations or satisfactions of any of FGI’s liens on the Collateral unless and until Seller has executed and
delivered to FGI said general release and Seller shall have no authority to do so without FGI’s express written consent.
Upon (i) the termination of this Agreement, (ii) the payment in full of all Obligations by Seller and (iii) Seller’s delivery
to FGI of said general release, FGI shall cause any Purchased Accounts to be assigned back to Seller without representation or
warranty pursuant to documentation acceptable to FGI within a commercially reasonable period but not exceeding forty-five (45)
calendar days after a written request for reassignment of such Purchased Accounts has been delivered to FGI. In the event Seller
terminates this Agreement within the first 18 months following the commencement of this Agreement, Seller shall also pay to FGI
an early Termination Fee in the amount of 3.00% of the Facility Amount. In the event that Seller terminates this Agreement after
the first 18 months, but prior to the end of the Original Term or during the Extended Term, Seller shall pay to FGI an early Termination
Fee in the amount of 1.50% of the Facility Amount. Any termination of this Agreement shall not affect FGI’s security interest
and hypothec in the Collateral and FGI’s ownership of the Purchased Accounts, or other selected rights, and this Agreement
shall continue to be effective, until all transactions entered into and obligations incurred hereunder have been completed and
satisfied in full. Notwithstanding anything to the contrary, and assuming no default by Seller in which event FGI may terminate
without notice, FGI may terminate this Agreement at any time by giving not less than sixty (60) days’ notice, in which event
Seller shall not be obligated to pay any Termination Fee. No Termination Fee will be due if FGI, within its rights under this
Agreement, increases the Reserve Percentage to an amount greater than forty percent (40%) for a period of more than 30 consecutive
days and Seller notifies FGI of its intent to terminate this Agreement no later than 10 days after the end of such 30 day period.


 




    	 	 



    	- 19 - 



    

 


Section
14. Expenses. Upon execution of this Agreement, and from time to time thereafter, Seller will pay upon demand of FGI all
costs, fees and reasonable expenses of FGI in connection with (i) the analysis, negotiation, preparation, execution, administration,
delivery and termination of this Agreement and the documents and instruments referred to herein, and any amendment, amendment
and restatement, supplement, waiver or consent relating hereto or thereto, whether or not any such amendment, amendment and restatement,
supplement, waiver or consent is executed or becomes effective, including search and registration costs, the reasonable fees,
expenses and disbursements of counsel for FGI, reasonable charges of any expert or consultant to FGI and reimbursement for premiums
incurred by FGI to insure against nonpayment of the Accounts or other insurable losses to the Collateral, (ii) the enforcement
of FGI’s rights hereunder, or the collection of any payments owing from Seller under this Agreement or the protection, preservation
or defense of the rights of FGI hereunder or with respect to the Collateral, (iii) the enforcement of FGI’s rights with
respect to any of the Collateral, any Purchased Accounts or any of their Related Rights, including the collection of any payments
owing from any Account Debtors with respect to any Accounts (including the reasonable fees, expenses and disbursements of counsel
for FGI), and (iv) any refinancing or restructuring of the arrangements provided under this Agreement in the nature of a “work-out”
or of any Insolvency Proceedings, or otherwise (including the reasonable fees and disbursements of counsel for FGI). Seller hereby
authorizes FGI, at FGI’s sole discretion, to charge such fees, costs and expenses, and all other Obligations, to the Reserve
Account or Seller may make demand therefor.


 


Section
15. Indemnity. Seller releases and shall indemnify, defend and hold harmless FGI and its respective officers, shareholders,
employees and agents, of and from any claims, demands, liabilities, obligations, judgments, injuries, losses, damages and costs
and expenses (including, without limitation, reasonable legal fees) resulting from (i) acts or conduct of Seller under, pursuant
to or related to this Agreement, (ii) Seller’s breach or violation of any representation, warranty, covenant or agreement
contained in this Agreement, (iii) Seller’s failure to comply with any or all laws, statutes, ordinances, governmental rules,
regulations or standards, whether federal, provincial, state, local or other, or court or administrative orders or decrees, (iv)
any claim by any third party, including any other creditor of Seller, against FGI arising out of any transaction whether hereunder
or in any way related to this Agreement and (v) all costs, expenses, fines, penalties or other damages resulting from any of the
foregoing, except to the extent resulting solely from acts or conduct of FGI constituting willful misconduct or gross negligence.


 


Section
16. Severability. Each and every provision, condition, covenant and representation contained in this Agreement is, and
shall be construed to be, a separate and independent covenant and agreement. If any term or provision of this Agreement shall
to any extent be invalid or unenforceable, the remainder of the Agreement shall not be affected thereby.


 


Section
17. Parties in Interest. All grants, covenants and agreements contained in this Agreement shall bind and inure to the benefit
of the parties hereto and their respective successors and permitted assigns; provided, however, that Seller may not delegate or
assign any of its rights, duties or obligations under this Agreement without the prior written consent of FGI. FGI reserves the
right to assign its rights and obligations under this Agreement in whole or in part to any Person.


 


Section
18. Governing Law: Submission to Process and Venue. This Agreement shall be deemed a contract made under the laws of the
State of New York and shall be construed and enforced, along with all matters arising hereunder or related hereto, in accordance
with and governed by the internal laws of the State of New York, without reference to the rules thereof relating to conflicts
of law, except with respect to the lien created herein which shall be governed by the laws of the Province of Quebec and the federal
laws applicable therein. Seller hereby irrevocably submits itself to the non-exclusive jurisdiction of the state and federal courts
located in New York, and agrees and consents that service of process may be made upon it in any legal proceeding relating to this
Agreement, the purchase of Accounts or any other relationship between FGI and Seller by any means allowed under provincial, state
or federal law. Any legal proceeding arising out of or in any way related to this agreement, the purchase of Accounts or any other
relationship between FGI and Seller may be brought and litigated in any of the state or federal courts located in the State of
New York in any county in which FGI has a business location, the selection of which shall be in the exclusive discretion of FGI.
Seller hereby waives and agrees not to assert, by way of motion, as a defense or otherwise, that any such proceeding is brought
in any inconvenient forum or that the venue thereof is improper.


 




    	 	 



    	- 20
                                                                                                                                                                                                                     - 



    

 


Section
19. Complete Agreement. This Agreement, the written documents executed pursuant to this Agreement, if any, and any acknowledgment
delivered in connection herewith set forth the entire understanding and agreement of the parties hereto with respect to the transactions
contemplated herein and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.
No modification or amendment of or supplement to this Agreement shall be valid or effective unless the same is in writing and
signed by the party against whom it is sought to be enforced.


 


Section
20. Miscellaneous.


 


(a)
Seller acknowledges that there is no fiduciary relationship between FGI and Seller created by this Agreement, and Seller waives
any right to assert, now or in the future, the existence or creation of any fiduciary relationship between FGI and Seller with
respect to this Agreement in any action or proceeding (whether by way of claim, counterclaim, crossclaim or otherwise) for damages.


 


(b)
This Agreement shall be deemed to be one of financial accommodation and not assumable by any debtor, trustee or debtor-in-possession
in any Insolvency Proceeding without FGI’s express written consent and may be suspended in the event a petition in bankruptcy
is filed by or against Seller or Seller is subject to any other Insolvency Proceeding.


 


(c)
In the event Seller’s principals, officers or directors form a new entity, whether a corporation, partnership, limited liability
company or otherwise, similar to that of Seller during the Term of this Agreement and in connection with such action transfer
assets constituting Collateral from Seller to such entity, such entity shall be deemed to have expressly assumed the obligations
due FGI by Seller under this Agreement. Upon the formation of any such entity and the transfer of such assets constituting Collateral,
FGI shall be deemed to have been granted an irrevocable power of attorney with authority to execute, on behalf of the newly formed
successor business, a new Financing Statement and have it filed with the appropriate governmental office. FGI shall be held harmless
and be relieved of any liability as a result of the resulting perfection of a lien or security interest in any of the successor
entity’s assets. In addition, FGI shall have the right to notify the successor entity’s Account Debtors of FGI’s
lien and other rights, to collect all Accounts, and to notify any lender or other secured party who has sought to procure a competing
lien or security interest or lien of FGI’s rights in such successor entity’s assets.


 


(d)
Seller expressly authorizes FGI to access the systems of and/or communicate with any third party with respect to the status of
any Goods relating to a Purchased Account, including warehousemen, bailees, and shipping or trucking companies, in order to obtain
or verify tracking, shipment or delivery status of any Goods relating to a Purchased Account.


 


(e)
Seller acknowledges that the duty to accurately complete each Schedule of Accounts is critical to this Agreement and as such all
obligations with respect thereto must be fulfilled by an authorized representative of Seller.


 


(f)
Seller shall indemnify and save FGI harmless from any loss arising out of the assertion of any Avoidance Claim. Seller shall notify
FGI within two business days of it becoming aware of the assertion of an Avoidance Claim.


 


(g)
Seller agrees to execute any and all forms that FGI may reasonably require in order to enable FGI to obtain and receive tax information
maintained by the federal or any provincial government of Canada or any agency thereof, or to receive refund checks.


 


(h)
Seller will cooperate with FGI in obtaining a control agreement in form and substance satisfactory to FGI with respect to Collateral
consisting of Deposit Accounts, Investment Property, Letter-of-Credit Rights and /or electronic Chattel Paper.


 


(i)
Whenever Seller shall be required to make any payment, or perform any act, on a day which is not a business day, such payment
may be made, or such act may be performed, on the next succeeding business day. Time is of the essence as to Seller’s performance
under all provisions of this Agreement and all related agreements and documents.


 


(j)
All warranties, representations, agreements, and covenants made by Seller herein, or in any agreement referred to herein or on
any certificate, document or other instrument delivered by it or on its behalf under this Agreement, shall be considered to have
been relied upon by FGI regardless of any investigation made by FGI or on its behalf. All statements in any such certificate or
other instrument prepared and/or delivered for the benefit of FGI shall constitute warranties and representations by Seller hereunder.
Except as otherwise expressly provided herein, all covenants and agreements made by Seller hereunder or under any other agreement
or instrument shall be deemed continuing until all Obligations are satisfied in full. All indemnification obligations under this
Agreement shall survive the termination of this Agreement and payment of the Obligations.


 




    	 	 



    	- 21 - 



    

 


(k)
FGI, upon prior written consent of the Sellers, shall have the right to announce and publicize the arrangement established hereunder,
as it deems appropriate, by means and media selected by FGI. Such publication may include all pertinent information relating to
such arrangement. The form and content of the published information shall be in the sole discretion of FGI and shall be considered
the sole and exclusive property of FGI. All expenses related to publicizing such arrangement shall be the sole responsibility
of FGI.


 


Section
21. Waiver of Jury Trial, Punitive and Consequential Damages, Etc. Seller and FGI hereby irrevocably waive any right either
may have to a trial by jury in respect of any litigation directly or indirectly at any time arising out of, under or in connection
with this Agreement or any transaction contemplated hereby or associated herewith. Seller and FGI each irrevocably waives, to
the maximum extent not prohibited by law, any right it may have to claim or recover in any such litigation any special, exemplary,
punitive or consequential damages, or damages other than, or in addition to, actual damages and Seller hereby releases and exculpates
FGI, its officers, employees and designees, from any liability arising from any acts under this Agreement or in furtherance thereof
whether of omission or commission, and whether based upon any error of judgment or mistake of law or fact, except for gross negligence
or willful misconduct. Seller certifies that no party hereto nor any representative or agent or counsel for any party hereto has
represented, expressly or otherwise, or implied that such party would not, in the event of litigation, seek to enforce the foregoing
waivers. Seller acknowledges that FGI has been induced to enter into this Agreement and the transactions contemplated hereby,
in part, as a result of the waivers and certifications contained in this Section.


 


Section
22. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Seller may not transfer, assign or delegate any of its rights, duties or obligations
hereunder. Seller acknowledges and agrees that FGI may at any time, and from time to time, (a) sell participating interests in
FGI’s rights hereunder, and (b) otherwise sell, transfer, or assign FGI’s rights and obligations hereunder. No rights
are intended to be created hereunder, or under any related agreements or documents, for the benefit of any third party donee,
creditor or incidental beneficiary of Seller. Nothing contained in this Agreement shall be construed as a delegation to FGI of
Seller’s duty of performance, including, without limitation, Seller’s duties under any Account or contract with any
other Person.


 


Section
23. Delivery by Electronic Means. This Agreement, the agreements referred to herein, and each other agreement or instrument
entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the
extent signed and delivered by electronic means, including by means of unalterable files attached to e-mail communications or
by facsimile, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have
the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party
hereto or to any such agreement or instrument, each other party hereto or thereto shall reexecute original forms thereof and deliver
them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of electronic means to deliver
a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of electronic
means as a defense to the formation or enforceability of a contract and each such party forever waives any such defence.


 


Section
24. Taxes and Set-off. All payments to be made by Seller hereunder shall be made without set-off, compensation, deduction
or counterclaim and without deduction for any taxes, levies, duties, fees, deductions, withholdings, restrictions or conditions
of any nature whatsoever. If at any time any applicable law requires Seller to make any such deduction or withholding from any
such payment, the sum due from Seller with respect to such payment shall be increased to the extent necessary to ensure that,
after the making of such deduction or withholding, FGI receives a net sum equal to the sum which FGI would have received had no
deduction or withholding been required.


 




    	 	 



    	- 22
                                                                                                                                                                                                                     - 



    

 


Section
25. Foreign Currency. If, for the purposes of obtaining judgment in any court in any jurisdiction with respect to this
Agreement or any other agreement between Seller and FGI, it becomes necessary to convert into a particular currency (the “Judgment
Currency”) any amount due under this Agreement or such other agreement in any currency other than the Judgment Currency
(the “Currency Due”), then conversion shall be made at the rate of exchange prevailing on the business day
(in New York, New York) before the day on which judgment is given. In this Section 25, “rate of exchange” means the
rate at which FGI is able, on the relevant date, to purchase the Currency Due with the Judgment Currency in accordance with its
normal practice at its office in New York, New York. In the event that there is a change in the rate of exchange prevailing between
such business day and the date of receipt by FGI of the amount due, Seller will, on the date of receipt by FGI, pay FGI such additional
amount, if any, or be entitled to receive reimbursement of such amount, if any, as may be necessary to ensure that the amount
received by FGI on such date is the amount in the Judgment Currency which when converted at the rate of exchange prevailing on
the date of receipt by it is the amount then due under this Agreement or such other agreement in the Currency Due. If the amount
of the Currency Due which FGI is so able to purchase is less than the amount of the Currency Due originally due to it, Seller
shall indemnify and save FGI harmless from and against all loss or damage arising as a result of such deficiency. This indemnity
shall constitute an obligation separate and independent from the other obligations contained in this Agreement and any such other
agreement, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by
FGI from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in
respect of an amount due under this Agreement or any such other agreement or under any judgment or order.


 


Section
26. Currency Risk.


 


(a)
Seller acknowledges that, at Seller’s request, FGI may make Advances and other payments to Seller hereunder or in connection
herewith in one or more currencies other than U.S. Dollars (each such other currency, a “Foreign Currency”).
Seller hereby agrees to reimburse FGI, on demand, for all reasonable fees, charges and other expenses, including currency exchange
fees and charges, that FGI may pay or otherwise incur in connection with (i) the purchase of any such Foreign Currency with U.S.
Dollars or (ii) the purchase of U.S. Dollars with any amount FGI receives in a Foreign Currency from Seller or any other Person
under, pursuant to or in respect of this Agreement, any related agreement, any Purchased Account, any Related Rights or any Collateral.


 


(b)
Seller agrees that it will, on demand, indemnify and save FGI harmless in respect of any loss (a “Foreign Exchange Loss”)
that FGI may incur or suffer as a result of (i) FGI purchasing any amount in a Foreign Currency with U.S. Dollars in connection
with enabling FGI to advance or pay such amount to or for the credit of Seller as contemplated by this Agreement, (ii) FGI purchasing
any amount in U.S. Dollars with any Foreign Currency that FGI may receive in connection with this Agreement and (iii) there having
occurred any change in applicable rates of exchange in relation to U.S. Dollars and any Foreign Currency on or after the date
hereof (and whether before or after the end of the Term). In particular, but without in any way limiting the generality of the
preceding sentence, Seller agrees that, if (x) on any day (the “Purchase Date”) FGI purchases with U.S. Dollars
an amount in a Foreign Currency for the purpose of paying such amount in such Foreign Currency to or for the benefit of Seller
pursuant hereto, (y) FGI thereafter receives an amount in any Foreign Currency from Seller or any other Person under, pursuant
to or in respect of this Agreement, any related agreement, any Purchased Account, any Related Rights or any Collateral, and (z)
there has occurred a change in any applicable rate of exchange following the Purchase Date, Seller will, on demand, pay FGI such
additional amount (whether in U.S. Dollars or a Foreign Currency) as FGI, in its discretion, believes is desirable to help ensure
that the amounts so received by and paid to FGI, assuming that any such amount received or paid in a Foreign Currency is converted
into U.S. Dollars at the rate of exchange prevailing on the date so received by or paid to FGI, will be sufficient to ensure that
FGI will not suffer a Foreign Exchange Loss as a result of such matters or transactions. For the purpose of this Section 25, “rate
of exchange” means the rate at which FGI is able, on any particular relevant date, to purchase U.S. Dollars with a particular
Foreign Currency in accordance with its normal practice at its office in New York, New York.


 


(c)
A certificate of FGI setting forth the amount or amounts to be paid to FGI pursuant to this Section 26, together with a brief
calculation thereof, shall be sent to Seller and shall be conclusive absent manifest error. In preparing any such certificate,
FGI shall be entitled to use averages and make reasonable estimates, and shall not be required to match or isolate particular
transactions or payments. Seller shall pay FGI the amount shown as due by Seller on any such certificate within 10 days after
receipt thereof by Seller.


 


Section
27. Interpretation of Agreement. The parties hereto acknowledge and agree that this Agreement and the agreements or instruments
entered into in connection herewith have been negotiated at arm’s-length and among parties equally sophisticated and knowledgeable
in the matters dealt with in this Agreement or in such agreements or instruments. Accordingly, any rule of law or legal decision
that would require interpretation of any ambiguities in this Agreement or the agreements or instruments entered into in connection
herewith against the party that has drafted it is not applicable and is waived. The provisions of this Agreement and the agreements
and instruments entered into in connection herewith shall be interpreted in a reasonable manner to effect the intent of the parties
as set forth herein or therein.


 


Section
28. Joint and Several Obligations. Each Seller shall be jointly and severally liable for the Obligations.


 


SIGNATURES
ON FOLLOWING PAGE


 




    	 	 



    	- 23 - 



    

 


In
Witness Whereof, the parties have set their hands and seals on the
day and year first hereinabove written.


 


	 	FAUNUS
    GROUP INTERNATIONAL, INC.
	 	 	 
	 	By:	/s/ David DiPiero
	 	Name: 	David DiPiero
	 	Title: 	Chief Executive Officer
	 	 	 
	 	QUEST
    MARKETING INC.
	 	 	 
	 	By:	/s/ Tom Miller
	 	Name:	Tom Miller
	 	Title: 	Chief Executive Officer
	 	 	 
		BAR
    CODE SPECIALTIES, INC. 
	 	 	 
	 	By:	/s/ Tom Miller
	 	Name:	Tom Miller
	 	Title:	Chief Executive Officer


 




    	 	 



    	 



    

 


Schedule
of Accounts Sold/Bill of Sale


 


	Client’s
    Name: 	Schedule
    Number ___________


 


	Page
    ____ of _____	Date
    ______ 20__	 


 


	Invoice

    Date	 	Invoice

    Number	 	Name
    of Account Debtor	 	Location	 	Invoice

    Amount
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	  	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	  	 	 	 	 	 	 	 	 


 


ASSIGNMENT:


 


KNOW
ALL MEN BY THESE PRESENTS that the undersigned for value received has sold, transferred and assigned and does hereby sell, transfer
and assign to Faunus Group International, Inc. (the “Buyer”), its successors and assigns, in accordance with the provisions
of that certain Sale of Accounts and Security Agreement heretofore duly executed and delivered by the undersigned and duly accepted
by the Buyer, and any amendments thereto (the “Agreement”), all of the undersigned’s right, title and interest
in and to each account receivable (an “Account”) arising in connection with the goods or services whose sale gave
rise to the invoices listed hereon, and the Related Rights (as that term is defined in the Agreement) in respect of each Account,
including without limitation all of the undersigned’s right of stoppage in transit, replevin and reclamation as an unpaid
vendor. Each Account is made a part hereof as if attached or incorporated herein for the specific terms, conditions, provisions
and description thereof.


 


For
the purpose of inducing the Buyer to purchase the Accounts, the undersigned hereby reaffirms all representations and warranties
under the Agreement applicable to the Accounts and the related account debtors. In the event of any breach of any such representation
or warranty, the Buyer, its successors and assigns, shall have such rights, inter alia, as are provided in the Agreement.


 


The
undersigned warrants and represents that, with respect to each Account described above, since the last sale of Accounts by the
undersigned to the Buyer, no merchandise has been returned or rejected, and no defense, dispute, claim, offset, compensation or
counterclaim has developed or has been asserted, in any case with respect to any Account heretofore sold, transferred and assigned
by the undersigned to the Buyer, which has not been or is not contemporaneously being reported in writing by the undersigned to
the Buyer.


 


in
witness whereof, the undersigned has duly executed this Assignment
under the hand of its officer(s) duly authorised in that regard this __ day of _____________, 20___.


 


Quest
Solution Inc.


 


	By:	 	 	Print
    Name:	 	 	Title:	 
		(Signature)	 	 	 	 	 	 







 




    	 	 



    	 



    

 


Schedule
4(a)


 


Organizational
Structure


 


	●	Quest
    Solution, Inc. (DE C-corp), parent company
	 	 
	●	Quest
    Marketing, Inc. (OR, C-Corp), 100% owned subsidiary
	 	 
	●	Bar
    Code Specialties, Inc. (CA, C-Corp), 100% owned subsidiary


 




    	 	 



    	 



    

 


 


Schedule
4(e)


 


Financing
Statements


 


	●	UCC-1
    #14-7438889820 filed 12/03/2014 with Wells Fargo Bank, National Association as secured party. 


 




    	 	 



    	 



    

 


Schedule
4(n)


 


Trade
and Assumed Names


 


	●	Quest
    Marketing, Inc.
	 	 
	●	Quest
    Solution, Inc.
	 	 
	●	Bar
    Code Specialties, Inc.


 




    	 	 



    	 



    

 


Schedule
7


 


Form
of Notification Letter


 


[on
the letterhead paper of Quest Solution Inc.]


 


Ladies
and Gentlemen:


 


We
are pleased to advise that to enable us to better service our customers, we have assigned all of our invoices issued to you to
FGI Finance (“FGI”).


 


To
the extent that you are now indebted or may in the future become indebted to us on an account (i.e., invoices) or a general intangible,
payment thereof is to be delivered and made payable only to account listed below. Payment in any other way will not constitute
payment and will not discharge your obligation.


 


All
amounts have been assigned to FGI Finance and all such amounts payable hereunder are payable to the below:


 


For
Accounts in US Dollars:


 


Pay
through our corresponding bank:


 


This
letter may only be revoked by a writing signed by one of FGI’s officers whose signature may only be relied on if acknowledged
before a notary public.


 


Please
sign and fax a copy of this letter to FGI at +01 212 248 3405 or email us at notification@fgiww.com to verify your receipt
and acceptance.


 


Thank
you.


 


Very
truly yours,


 


	[Quest Solution Inc.] 	 	ASSIGNMENT CONFIRMED:
	 	 	 	 	 	 
	 	 	 	Company:	 
	 	 	 	 	 	 
	By:		 	 	Signature:	
	 	 	 	 	 	 
	Title:		 	 	Print Name:	
	 	 	 	 	 	 
	 	 	 	 	Title:	
	 	 	 	 	 	 
	 	 	 	 	Date: