EXHIBIT 10.2



 





UNIVERSAL
MOVABLE HYPOTHEC AND GENERAL SECURITY AGREEMENT


 


This
Universal Movable Hypothec and General Security Agreement (the “Agreement”), dated as of July 1, 2016,
is entered into between Quest Solution Canada Inc., a Canadian corporation (“Quest Solution Canada”),
Quest Exchange Ltd., a Canadian Corporation (“Quest Exchange”), Quest Solution, Inc., a Delaware corporation
(“Quest Solution”), Bar Code Specialties, Inc., a California corporation (“Bar Code”),
and Quest Marketing, Inc., an Oregon corporation (“Quest Marketing”) (each, a “Debtor”
and collectively, the “Debtors”) in favor of ScanSource, Inc., a South Carolina Corporation (“Secured
Party”).


 


RECITALS:


 


Secured
Party and its subsidiaries and affiliates have and may in the future, from time to time, extend credit to one or more Debtors,
including the extension of credit in the form of sales of inventory, equipment and services on account. As a condition to the
extensions of such credit, Secured Party is requiring that the Debtors execute this Agreement.


 


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


 


1.Security
Interest and Hypothec. As general and continuing security for the payment and performance of all Obligations (as defined in
Section 3 below), each Debtor hereby grants to Secured Party a security interest in, and a hypothec on, all of the Debtor’s
present and after-acquired undertaking and property, both real and personal (movable), tangible (corporeal) and intangible (incorporeal)
(collectively called the “Collateral”), and, as further general and continuing security for the payment
and performance of the Obligations, the Debtor hereby also assigns the Collateral (other than trademarks) to Secured Party and
mortgages and charges the Collateral as and by way of a fixed and specific mortgage and charge to Secured Party. Without limiting
the generality of the foregoing, the Collateral includes all right, title and interest that each Debtor now has or may hereafter
have or acquire in any manner whatsoever (including by way of amalgamation) in all property of the following kinds:


 


		(a)	Receivables:
                                         all debts, accounts, claims and choses in action for monetary amounts (collectively,
                                         the “Receivables”);
	 	 	 
		(b)	Inventory:
                                         all inventory of whatever kind and wherever situated (collectively, the “Inventory”);
	 	 	 
		(c)	Equipment:
                                         all machinery, equipment, fixtures, furniture, plant, vehicles and other tangible personal
                                         property that are not Inventory (collectively, the “Equipment”);
	 	 	 
		(d)	Chattel
                                         Paper: all chattel paper;
	 	 	 
		(e)	Documents
                                         of Title: all warehouse receipts, bills of lading and other documents of title, whether
                                         negotiable or not;
	 	 	 
		(f)	Securities:
                                         all shares, bonds, debentures, and other securities (collectively, the “Securities”);
	 	 	 
		(g)	Intangibles:
                                         all intangibles not otherwise described in this Section including, but not limited to,
                                         all goodwill, patents, trademarks, copyrights and other intellectual property;



 




    			 



    	 	 	 



    



 


		(h)	Instruments
                                         and Money: all bills, notes, cheques and other instruments and all coins or bills
                                         or other medium of exchange adopted for use as part of the currency of Canada or of any
                                         foreign government;
	 	 	 
		(i)	Books,
                                         Records, Etc.: all books, invoices, documents and other records in any form evidencing
                                         or relating to the Collateral;
	 	 	 
		(j)	Real
                                         Property: all real and immovable property, both freehold and leasehold, together
                                         with all buildings and fixtures (collectively, the “Real Property”),
                                         and all rights under any lease or agreement relating to Real Property;
	 	 	 
		(k)	Substitutions,
                                         Etc.: all replacements of, substitutions for and increases, additions and accessions
                                         to any of the property described in this Section; and
	 	 	 
		(l)	Proceeds:
                                         all proceeds of any Collateral in any form derived directly or indirectly from any dealing
                                         with the Collateral or that indemnifies or compensates for the loss of or damage to the
                                         Collateral;



 


provided,
that the said grant of a security interest, hypothec, assignment, mortgage and charge will not render Secured Party liable to
observe or perform any term, covenant or condition of any agreement, document or instrument to which each Debtor is a party or
by which it is bound.


 


The
hypothec created by each Debtor hereunder is granted for the sum of Fifty Million and 00/100 Dollars ($50,000,000.00) in lawful
currency of Canada, with interest thereon at the rate of eighteen percent (18%) per annum from the date of this Agreement.


 


2.Attachment
of Security Interest. Each Debtor acknowledges that value has been given and agrees that the security interest granted hereby
attaches upon the execution of this Agreement by each Debtor (or, in the case of any after-acquired property, at the time of acquisition
by each Debtor of any rights therein).


 


3.Obligations
Secured. This Agreement secures the payment and performance of all indebtedness, liabilities and obligations of the Debtors
or any of their respective subsidiaries and affiliates (collectively with the Debtors, the “Obligors”)
to Secured Party, arising on or after the date hereof (but not any such indebtedness, obligations and liabilities existing or
arising prior to the date hereof), including but not limited to amounts arising from the sale of goods and services on or after
the date hereof by Secured Party to any Obligor, and all costs and expenses of Secured Party in collecting any such obligations
or enforcing its rights or remedies hereunder (collectively, the “Obligations”).


 


4.Nature
of Hypothec. The hypothec granted herein does not constitute and shall not constitute nor be construed as a floating hypothec
within the meaning of Article 2715 of the Civil Code of Quebec. The hypothec granted herein is continuing security and
will subsist notwithstanding any fluctuation or repayment of the obligations hereby secured. Each Debtor shall be deemed to obligate
itself again, as provided in Article 2797 of the Civil Code of Quebec, with respect to any future obligation hereby secured.


 


5.Exception
for Contractual Rights. The security interest granted hereby does not and will not extend to, and Collateral will not include
any agreement, right, franchise, licence or permit (the “contractual rights”) to which each Debtor is a party or of
which each Debtor has the benefit, to the extent that the creation of the security interest herein would constitute a breach of
the terms of or permit any person to terminate the contractual rights, but each Debtor must hold its interest therein in trust
for Secured Party and will assign such contractual rights to Secured Party forthwith upon obtaining the consent of the other party
thereto. Each Debtor agrees that it will, upon the request of Secured Party, use all commercially reasonable effort to obtain
any consent required to permit any contractual rights to be subjected to the security interest.


 




    			 



    	 	 	 



    


 


6.Real
Property. With respect to (and only to) Real Property, the security granted hereby is constituted by way of floating charge,
but will become a fixed charge upon the earlier of (i) the Obligations becoming immediately payable, or (ii) the occurrence of
any other event that by operation of law would result in such floating charge becoming a fixed charge. The assignment, mortgage
and charge granted hereby will not extend to the last day of the term of any lease or agreement relating to Real Property, but
each Debtor will hold such last day in trust for the Secured Party and, upon the enforcement by Secured Party of its security,
will assign such last day as directed by Secured Party.


 


7.Representations
and Warranties. Each Debtor hereby represents and warrants to Secured Party that:


 


	 	(a)	the
    chief executive office and the registered office of each Debtor, and the office where such Debtor keeps its books & records
    relating to Receivables, are located at the addresses specified in Exhibit “A”;
	 	 	 
	 	(b)	the
    Inventory, Equipment and Securities of each Debtor are located in the provinces or states specified in Exhibit “A”,
    except for goods in transit or on lease or consignment; and
	 	 	 
	 	(c)	the
    Collateral of each Debtor is the sole property of such Debtor free from any liens, charges, hypothecs, security interests
    or other encumbrances.


 


8.Change
of Name/Status and Notice of Changes. Without the prior written consent of Secured Party’s Vice President of Worldwide
Reseller Financial Services or Senior Vice President of Finance and Principal Accounting Officer (individually, “Authorized
Representative”), no Debtor shall change its name, change its corporate form, status, chief executive office, registered
office or domicile, use any trade name or engage in any business not reasonably related to its business as presently conducted.
Each Debtor shall provide an advance notice of at least five (5) business days to Secured Party’s Authorized Representative
of (i) any material change in the Collateral, (ii) the intent to change any Debtor’s name, trade name, corporate form, status,
chief executive office, registered office, domicile, residence or location, (iii) a material change in any material matter warranted
or represented by any Debtor in this Agreement, or in any of the loan documents furnished to Secured Party pursuant to or in connection
with this Agreement, (iv) the relocation of any Inventory, Equipment or Securities of such Debtor from the provinces specified
in Exhibit “A” with respect to such Debtor to provinces not mentioned in Exhibit “A” with respect to such
Debtor, and (v) the occurrence of an Event of Default (hereinafter defined). Each Debtor agrees that from time to time, at the
expense of Debtors, such Debtor will promptly execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured Party may request, in order to perfect and protect any security interest
and hypothec granted or purported to be granted hereby or to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral.


 


9.Creation/Formation
of New Entity. In the event that any of the Debtors creates or forms any new entity, whether a direct or indirect subsidiary,
such new entity shall execute a joinder to become party to this Agreement.


 


10.Filing
and Registration. Each Debtor authorizes Secured Party to prepare, file and register any financing statements, financing
change statements, registration applications, other amendments and renewals covering the Collateral and any other necessary documents,
whenever and wherever determined by Secured Party and each Debtor hereby ratifies any financing statement filed previously by
Secured Party. Each Debtor will deliver such instruments of future assignment or assurance, and such other agreements, as Secured
Party may from time to time request to carry out the intent of this Agreement, and will join with Secured Party in executing any
documents in form satisfactory to Secured Party, and hereby authorizes Secured Party to sign for such Debtor, or to file without
signature, any financing statements, amendments and other documents and instruments from time to time as Secured Party may deem
advisable, and pay any cost of filing the same, including all recordation, transfer, indebtedness and other taxes and fees, deemed
advisable by Secured Party.


 




    			 



    	 	 	 



    


 


11.Maintenance
and Insurance. Each Debtor shall maintain the Collateral in good condition and repair and shall pay and timely discharge all
taxes, levies, and other impositions levied thereon, and all rent due on premises where any of the Collateral may be located.
Each Debtor shall maintain insurance on all Collateral against any loss damage in amounts which are commercially reasonable. All
proceeds of such insurance shall be applied to reduce the Obligations secured hereunder. All insurance policies must name Secured
Party as an additional insured and loss payee thereof, as Secured Party’s interests may appear, and must provide that the
insurer will give Secured Party at least 15 days written notice of intended cancellation or non-renewal. At Secured Party’s
request, each Debtor must furnish Secured Party with evidence satisfactory to Secured Party that the required insurance coverage
is in effect.


 


12.Inspection
and Reports. Upon five (5) days advance written notice, and at any time after any default under this Agreement, each Debtor
shall allow Secured Party, by or through any of its agents, to examine and inspect the Collateral wherever located and all books,
records and documentation with respect thereto, and to make copies or extracts from such books, records and documentation as Secured
Party may deem to be advisable.


 


In
addition to the above:


 


	 	i.	Annual
    Financial Statements. Debtors shall deliver to Secured Party, within one hundred twenty (120) days after the end of each fiscal
    year, Certified Public Accountant prepared and audited financial statements reflecting its operations during such fiscal year,
    which shall include, without limitation, a balance sheet, profit and loss statement, and a statement of cash flow, with supporting
    schedules and management notes, all prepared on a consolidated and consolidating basis, in reasonable detail, and in conformity
    with Generally Accepted Accounting Principles (“GAAP”) and certified to its correctness by the Debtors’
    principal financial officer.
	 	 	 
	 	ii.	Annual
    Monthly Budgeted Financial Statements. Debtors shall deliver to Secured Party, within sixty (60) days after the end of each
    fiscal year, management prepared budgeted financial statements with respect to Debtors and their subsidiaries and/or affiliates
    reflecting their consolidated projected monthly operations for the current fiscal year, which shall include, without limitation,
    a balance sheet, profit and loss statement, and a statement of cash flow, with supporting schedules, all prepared on a consolidated
    and consolidating basis, in reasonable detail, and in conformity with GAAP.
	 	 	 
	 	iii.	Quarterly
    Financial Statements. Debtors shall deliver to Secured Party, within forty-five (45) days after the end of each fiscal quarter,
    management prepared and reviewed financial statements reflecting its operations during such fiscal quarter, which shall include,
    without limitation, a balance sheet, profit and loss statement, and a statement of cash flow, with supporting schedules, all
    prepared on a consolidated and consolidating basis, in reasonable detail, and in conformity with GAAP and certified to its
    correctness by the Debtors’ principal financial officer.
	 	 	 
	 	iv.	Monthly
    Financial Statements. Debtors shall deliver to Secured Party, within thirty (30) days after the end of each fiscal month,
    management prepared and unaudited financial statements reflecting its operations during such fiscal month, which shall include,
    without limitation, a balance sheet, profit and loss statement, and a statement of cash flow, with supporting schedules, all
    prepared on a consolidated and consolidating basis, in reasonable detail, and in conformity with GAAP and certified to its
    correctness by the Debtors’ principal financial officer.


 




    			 



    	 	 	 



    


 





	 	v.	Collateral
    Reports. Upon written request by Secured Party, Debtors shall submit to Secured Party an aged summary of its accounts receivable
    and inventory detail, certified by a principal financial officer of Debtors.
	 	 	 
	 	vi.	Collateral
    Base Certificate. Beginning October 1, 2016, Debtors shall submit to Secured Party, no later than the fifteenth (15th)
    day after the end of each fiscal month, and at such other times as requested by Secured Party, a certificate in the form of
    Exhibit “B” attached hereto, certified by a principal financial officer of Debtors.


 


13.Financial
Covenants. Until such time as the Obligations are paid in full:


 


	 	i.	Tangible
    Net Worth. At all times, Debtors shall maintain a Tangible Net Worth of not less than negative Thirty-Seven Million and 00/100
    Dollars ($37,000,000.00).
	 	 	 
	 	ii.	Total
    Liabilities. Debtors shall not create, incur, assume or suffer to exist or otherwise become liable in respect of any Liabilities
    in excess of Fifty-Six Million and 00/100 Dollars ($56,000,000.00) in the aggregate. As used herein, “Liabilities”
    means any and all obligations to pay an amount in money, goods, or services to any internal or external party, as reflected
    in the Debtors’ balance sheet, prepared on a consolidated and consolidating basis, in reasonable detail, including,
    without limitation, any and all liabilities (contingent or otherwise) and in conformity with GAAP.
	 	 	 
	 	iii.	Preservation
    of Existence. Each Debtor shall preserve its legal existence and shall not, in one transaction or a series of related transactions,
    merge into or consolidate with any other entity, or sell all or substantially all of its assets.
	 	 	 
	 	iv.	Collateral
    Base. Beginning October 1, 2016, if, at any time the amount of Credit Party Debt exceeds the Collateral Base, Debtor shall,
    on demand, repay the Credit Party Debt in an amount sufficient to reduce the Credit Party Debt by an amount equal to such
    excess.


 


For
purposes of this Section 13, Debtors’ rights and obligations in respect of Key Man life insurance policies shall be excluded
from such covenant and Collateral Base calculations.


 


For
purposes of this Section 13, the following terms are used with the meanings set forth below:


 


“Collateral
Base” means an amount equal to: (i) Eighty-Five percent (85%) of Eligible Accounts plus (ii) Fifty percent (50%)
of Eligible Inventory minus (iii) the aggregate amount of any indebtedness for borrowed money (including guarantees thereof)
owed to any senior secured creditor approved by Secured Party.


 




    			 



    	 	 	 



    


 


“Eligible
Accounts” means those accounts receivable of Debtors in which Secured Party, for the benefit of itself and the other
Credit Parties, has a first priority security interest under the terms of this Agreement and that Secured Party, in its reasonable
credit judgment, deems to be an Eligible Account. Without limiting the generality of the foregoing, no account receivable shall
be an Eligible Account unless (i) the account receivable arose in the ordinary course of a Debtor’s business, (ii) the right
to payment has been fully earned by completed performance and, if inventory is involved, such inventory has been shipped by a
Debtor (or if not shipped by a Debtor, is held by a Debtor under a “bill and hold” arrangement approved in writing
by Secured Party in its sole discretion), (iii) the account receivable includes only that portion which is not subject to any
offset, defense, counterclaim, credit, allowance or adjustment, (iv) a Debtor’s title to the account receivable is absolute
and is subject to no prior assignment, claim, lien or security interest, (v) the full amount reflected on a Debtor’s books
and on any invoice or statement delivered to Secured Party related to the account receivable is owing to a Debtor and no partial
payment has been made on the account receivable, (vi) the account receivable is due and payable not more than thirty (30) days
from invoice date and no more than ninety (90) days (or such other period as Secured Party may by written notice from an Authorized
Representative to a Debtor approve) have elapsed from invoice date, (vii) the account receivable did not arise out of a contract
or purchase order containing provisions prohibiting assignment thereof or the creation of a security interest therein, and no
Debtor has received a note, trade acceptance, draft or other instrument with respect to such receivable or in payment of such
account, (viii) no Debtor has received notice of the death of the account debtor or of the dissolution, termination of existence,
insolvency, bankruptcy, appointment of a receiver for any part of the property of, or assignment for the benefit of creditors
made by, the account debtor, (ix) the account receivable is not payable by any foreign person (provided that persons present in
possessions of the United States of America or Canada shall not be considered foreign persons), unless it is payable in the full
amount of its face value in United States dollars or Canadian dollars and is supported by an irrevocable letter of credit in form
and substance acceptable to Secured Party and issued by a bank satisfactory to Secured Party (and, if requested by Secured Party,
such letter of credit or the proceeds thereof, as Secured Party shall require, have been assigned to Secured Party), (x) the account
receivable is not payable by the United States of America or any political subdivision or agency thereof, unless Secured Party
and the applicable Debtor have complied with the Assignment of Claims Act with respect to the account receivable, (xi) the account
debtor is not located in the State of New Jersey unless the applicable Debtor has filed a Notice of Business Activities Report
with the New Jersey Division of Taxation for the then current year, (xii) the account receivable is not payable by any person
who is the account debtor for other accounts receivable and who is past due (as provided in (vi) above) with regard to fifty percent
(50%) or more of the aggregate amount of such other accounts receivable, (xiii) the account receivable is not, at the discretion
of Secured Party, deemed doubtful for collection for whatever reason, (xiv) the account receivable is not a contra account, (xv)
the account receivable is not an account in dispute for any reason, (xvi) the account receivable does not represent a commission
or expense receivable, (xvii) the account receivable does not represent a retainage associated with an account receivable, and
(xviii) the account receivable does not represent an amount due for which Secured Party or any other Credit Party has advanced
credit and which is subject to a joint purchase order or a lease.


 


“Eligible
Inventory” means the inventory of Debtors, consisting of new, used and refurbished products as reflected in the most
recent collateral report delivered to Secured Party pursuant to Section 12(v) hereof, that (i) is in a Debtor’s possession,
(ii) is in good, saleable and new condition, (iii) is subject to Secured Party’s duly perfected, first priority security
interest, and (iv) is deemed by Secured Party, in its reasonable credit judgment, to be Eligible Inventory.


 


“Credit
Party Debt” means, at any time, all outstanding indebtedness for borrowed money (including outstanding principal and
accrued but unpaid interest, and including all amounts constituting the deferred purchase price for the sale of goods) then owing
by the Debtors and their subsidiaries and affiliates to the Credit Parties, or any of them.


 


“Tangible
Net Worth” means the amount by which total assets, less goodwill and other intangible assets, exceed total liabilities
as determined in accordance with generally accepted accounting principles in the United States, as in effect from time to time,
applied on a consistent basis throughout the period involved.


 




    			 



    	 	 	 



    


 


14.Events
of Default. Each Debtor shall be in default under this agreement if: (a) any Debtor or any other Obligor shall fail to pay,
when due, any amount due from any Obligor to Secured Party; (b) there shall be any default under any covenant, term or condition
of this Agreement or of any other contract or agreement between any Debtor or any other Obligor and Secured Party, including without
limitation, the Notes; (c) any Debtor or any other Obligor breaches any representation or warranty in this Agreement or any other
such contract or agreement; (d) there is a substantial change in any fact warranted or represented in this Agreement; (e) there
is the filing of a petition either by or against any Debtor or any other Obligor under the Bankruptcy and Insolvency Act (Canada),
the United States Bankruptcy Code or any similar state or federal law or regulation relating to insolvency or debtor relief or
the application by or against any Debtor or any other Obligor for the appointment of a receiver, trustee or custodian for the
Collateral or any other of the such Debtor’s or Obligor’s assets; (f) there is the dissolution or other termination
of any Debtor’s or any other Obligor’s existence or business operations; (g) there is the merger or consolidation
of any Debtor or any other Obligor with another; (h) there is substantial loss, theft, destruction, sale, reduction in value,
encumbrance of, damage to, or change in the Collateral; (i) there is a material modification of, or breach of, any contract, the
rights to which are part of the Collateral; (j) there is a levy on, seizure, or attachment of the Collateral; (k) there is a judgment
against any Debtor or any other Obligor for the payment of money which is not covered by insurance or as to which the applicable
insurer disputes coverage; (l) there is the filing or registration of any authorized financing statement or security with regard
to the Collateral (other than in favor of Secured Party); (m) there is any seizure, vesting or intervention by or under authority
of a government by which the management of any Debtor or any other Obligor is displaced or its authority in the control of its
business is curtailed; (n) any Debtor or any other Obligor (or any of their subsidiaries or affiliates) defaults or otherwise
fails to comply (beyond any applicable notice or cure periods) with any of the payment or other provisions of any other agreement
under which any loan or other extension of credit is made by any other person or entity to such Debtor or other Obligor (or any
of its subsidiaries or affiliates); (o) it is Secured Party’s reasonable and documented belief that the prospect of payment
of any part of the Obligations balance or the performance of any part of this Agreement is impaired; or (p) (i) any subordination
or intercreditor agreement in favor of Secured Party with respect to any of the Obligations shall for any reason be revoked or
invalidated, or otherwise cease to be in full force and effect (other than in accordance with its terms), (ii) any Debtor or any
other Obligor shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or
obligation thereunder, (iii) the Collateral securing the Obligations, for any reason shall not have the priority contemplated
by any such subordination or intercreditor agreement, or (iv) any other party (other than Secured Party) to any subordination
or intercreditor agreement fails to perform or observe, in any material respect, any material term, covenant or agreement contained
therein. Nothing herein shall prevent Secured Party from canceling or suspending further extensions of credit to any Debtor or
any other Obligor pursuant to any contract, agreement or other arrangement in effect at any time between Secured Party, on one
hand, and any Debtor or any other Obligor, on the other hand, in the event of a default by any Debtor under this Agreement (each
such event being an “Event of Default”).


 


15.Remedies.
If an Event of Default shall have occurred and be continuing, the security interest and hypothec hereby granted shall become
immediately enforceable and Secured Party, without any other notice to or demand upon the Debtors (except as may be required by
applicable law), shall, in addition to all other rights and remedies, be entitled to exercise any and all hypothecary rights prescribed
by the Civil Code of Quebec, and any additional rights and remedies which may be provided to a secured party in any jurisdiction
in which Collateral is located, including, without limitation:


 


	 	(a)	Secured
    Party may take possession of the Collateral, and for that purpose Secured Party may, so far as any Debtor can give authority
    therefor, enter upon any premises on which the Collateral may be situated and remove the same therefrom. Secured Party may
    in its discretion require any Debtor to assemble all or any part of the Collateral at such location or locations within the
    jurisdiction(s) of such Debtor’s principal office(s) or at such other locations as Secured Party may reasonably designate;


 




    			 



    	 	 	 



    


 


	 	(b)	Secured
    Party may sell, lease or otherwise dispose of the Collateral at public auction, by private tender, by private sale or otherwise,
    upon such terms and conditions as Secured Party may determine. Unless the Collateral is perishable or threatens to decline
    speedily in value or is of a type customarily sold on a recognized market, Secured Party’s Authorized Representative
    shall give to any Debtor at least ten (10) days prior written notice of the time and place of any public sale of Collateral
    or of the time after which any private sale or any other intended disposition is to be made. Each Debtor hereby acknowledges
    that ten (10) days prior written notice of such sale or sales shall be reasonable notice; 
	 	 	 
	 	(c)	Secured
    Party may appoint by instrument in writing a receiver or receiver and manager (hereinafter referred to as the “Receiver”)
    of all or any part of the Collateral and remove or replace such Receiver from time to time or may institute proceedings in
    any court of competent jurisdiction for the appointment of such a Receiver. Where Secured Party is referred to in this agreement
    the term shall, where the context permits, include any Receiver so appointed and the officers, employees, servants or agents
    of such Receiver; 
	 	 	 
	 	(d)	Secured
    Party may carry on, or concur in the carrying on of, all or any part of the business of any Debtors and may take such steps
    as it considers desirable to maintain, preserve or protect the Collateral;


 


In
addition, each Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of
Secured Party’s rights and remedies hereunder, including, without limitation, its right following an Event of Default to
take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto. Each Debtor shall pay
all expenses, including solicitors’ and Receivers’ fees and disbursements incurred by Secured Party or its agents
(including any Receiver) in connection with the enforcement of this Agreement; all of which expenses shall be payable forthwith
upon demand and shall form part of the Obligations secured hereby.


 


Secured
Party may (a) grant extensions of time, (b) take and perfect or abstain from taking and perfecting security, (c) give up any security,
(d) accept compositions or compromises, (e) grant releases and discharges, and (f) otherwise waive rights against any Debtor,
debtors of the Debtors, guarantors and others and with respect to the Collateral and other security as Secured Party sees fit.
No such action or omission will reduce the Obligations or affect the Secured Party’s rights hereunder.


 


16.Deficiency
Claim. If the monies collected by or received by Secured Party in respect of any realization upon or sale of the Collateral
are not sufficient to satisfy all obligations and liability of any Debtor to Secured Party, each Debtor shall remain responsible
to the Secured Party for any deficiency, and Secured Party shall be entitled to claim such amount and all interest and costs associated
therewith from any Debtor.


 


17.Remedies
Cumulative. Secured Party shall not, by any act, delay, omission or otherwise, be deemed to have waived any of its rights
or remedies hereunder. No failure to exercise nor any delay in exercising on the part of Secured Party of any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or future exercise thereof or the exercise of any other right, power or privilege. Except to the
extent that Secured Party has specifically and expressly waived such remedies in writing, the rights and remedies of Secured Party
hereunder and under any other agreement, contract, document or instrument, are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law. Secured Party may resort to and realize on the Collateral simultaneously
with any acts or proceedings initiated by Secured Party in its sole and conclusive discretion to resort to or realize upon any
other sources of repayment of the Obligations, including, but not limited to, collateral granted by other security agreements
and the liability of the Debtor. Secured Party shall be entitled to apply the proceeds of any Collateral to such of the Obligations
and in such order as it may determine in their sole and absolute discretion.


 




    			 



    	 	 	 



    


 


18.Dealing
with the Collateral by Debtor. 


 


	 	(a)	Each
    Debtor may collect its Receivables forming part of the Collateral until Secured Party withdraws such authorization to do so
    following the occurrence of an Event of Default. Upon such withdrawal, Secured Party may collect such Receivables and shall
    be reimbursed its reasonable costs and expenses incurred in connection therewith which it may deduct from amounts collected.
	 	 	 
	 	(b)	Following
    the occurrence of an Event of Default, Secured Party may give notice of this Agreement and the security granted hereby to
    any account debtor of the Debtors or to any other person liable to the Debtors and may give notice to any such account debtors
    or other person to make all further payments to Secured Party. Any payment or other proceeds of Collateral received by the
    Debtors from account debtors or from any other person liable to the Debtors after the occurrence of such Event of Default
    and exercise of such rights and remedies will be held by the Debtors in trust for Secured Party and must be held separate
    and apart from other money of the Debtors and paid over to Secured Party on request.
	 	 	 
	 	(c)	Subject
    to compliance with each Debtor’s covenants contained herein, each Debtor in the ordinary course of its business may,
    until the occurrence of an Event of Default, sell any Inventory included in the Collateral so that the purchaser thereof takes
    title clear of the security interest and hypothec hereby created, but if such sale results in an account or other proceeds,
    such account or other proceeds are subject to the security interest and hypothec hereby created.


 


19.Expenses.
Each Debtor will upon demand pay to Secured Party the amount of any and all costs and expenses, including the reasonable fees
and expenses of its outside counsel and the reasonable fees and expenses of any experts and agents which Secured Party may incur
in connection with (i) any action, suit or other proceeding affecting the Collateral or any part thereof commenced, in which action,
suit or proceeding Secured Party is made a party or participates or in which the right to use the Collateral or any part thereof
is threatened, or in which it becomes necessary in the judgment of Secured Party to defend or uphold the lien hereof, (ii) the
collection of the Obligations, (iii) the enforcement and administration hereof, (iv) the custody or preservation of, or the sale
of, collection from, or other realization upon, any of the Collateral, (v) the exercise or enforcement of any of the rights of
Secured Party, or (vi) the failure by any Debtor to perform or observe any of the provisions hereof. All amounts expended by Secured
Party and payable by any Debtor under this Section 19 shall be due upon demand therefor and shall be part of the Obligations.
Each Debtor’s obligations under this Section 19 shall survive the termination hereof and the discharge of such Debtor’s
other obligations under this Agreement.


 


20.Waivers
and Indemnity. Except as prohibited by applicable law, each Debtor unconditionally and irrevocably waives (i) all claims,
damages and demands it may acquire against Secured Party arising out of the exercise by Secured Party or any Receiver of any rights
or remedies under this Agreement or at law, and (ii) all of the rights, benefits and protections given by any present or future
statute that imposes limitations on the rights, powers or remedies of a secured party or on the methods of, or procedures for,
realization of security, including any “seize or sue” or “anti-deficiency” statute or any similar provision
of any other statute. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the Debtors and an Authorized Representative of Secured Party.


 




    			 



    	 	 	 



    


 


21.Release
of Information. Each Debtor expressly authorizes Secured Party to provide any and all statements, copies and information as
may be requested by a creditor, a sheriff or a person with an interest in the Collateral.


 


22.Governing
Law. This Agreement shall be governed by and construed in accordance with the applicable laws of the Province of Quebec and
the applicable laws of Canada, provided that to the extent that the laws of any jurisdiction in which any Collateral is situated
govern the validity or perfection of the security constituted hereunder, the domestic laws of such jurisdiction will govern those
issues. The provisions of and the terms used in this Agreement will also be interpreted in order to give effect to the intent
of the parties that the security constituted hereunder be valid and enforceable in all jurisdictions where the Collateral may
be situated and in all other jurisdictions where the rights and remedies of Secured Party may have to be exercised and also that
the Secured Party shall be entitled to exercise all rights and remedies of a secured creditor under the laws of any such jurisdictions.


 


23.Successors
and Assigns. This Agreement will ensure to the benefit of, and be binding on, each Debtor and its successors and permitted
assigns, and will ensure to the benefit of, and be binding on, Secured Party and its successors and assigns. No Debtor shall assign
this Agreement, or any of its rights or obligations under this Agreement, without the prior written consent of Secured Party’s
Authorized Representative.


 


24.Acknowledgment/Waiver.
Each Debtor acknowledges receipt of an executed copy of this Agreement and, to the extent permitted by applicable law, waives
the right to receive a copy of any financing statement, financing change statement, registration application or verification statement
in respect of any registered financing statement, registration application or financing change statement prepared, registered
or issued in connection with this Agreement.


 


25.Counterparts.
Delivery by any party or other signatory of an executed counterpart of this Agreement by facsimile or electronic mail or in
PDF format shall be equally effective as delivery of an original executed counterpart of this Agreement.


 


26.Miscellaneous.
(a) Any notice or communication given or required to be given to Secured Party or any Debtor hereunder shall be in writing
and given to such Debtor and Secured Party at the address set forth below. Such written notices and communications shall be delivered
by hand or overnight courier service, or mailed by first class mail, postage prepaid, addressed to the parties hereto at the addresses
referred to herein or to such other addresses as either party may designate to the other party by a written notice given in accordance
with the provisions of this Agreement. (b) The captions of the paragraphs of this Agreement are for convenience only and shall
not be deemed to constitute a part hereof or used in construing the intent of the parties. (c) If any part of any provision of
this Agreement shall be invalid or unenforceable under applicable law, such part shall be ineffective to the extent of such invalidity
only, without in any way affecting the remaining parts of such provision or the remaining provisions of this Agreement.


 


27.Language.
The parties hereto confirm that they have requested this Movable Hypothec and all related documents be drafted in English.
Les parties aux présentes ont exigé que la présente hypothèque mobilière et tous les documents
connexes soient rédigés en anglais.


 


Executed
as of the day and year first above written.


 


[Signature
Page to Follow]


 




    			 



    	 	 	 



    


 


	SECURED PARTY: 	 	ScanSource, Inc. 	 	 	 	 
	 	 	 	 	 	 	 
	By:	 	/s/
    Cleveland McBeth, Jr.	 	 	 	 
	Name:	 	Cleveland
    McBeth, Jr.	 	 	 	 
	 	 	Vice
    President, Worldwide Reseller Financial Services	 	 	 	 
	 	 	 	 	 	 	 
	Address:	 	6
    Logue Court	 	 	 	 
	 	 	Greenville,
    SC 29615	 	 	 	 
	 	 	 	 	 	 	 
	DEBTOR:	 	Quest
    Solution, Inc.	 	DEBTOR:	 	Quest
    Marketing, Inc.
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	By:	 	/s/
    Gilles Normand Gaudreault	 	By:	 	/s/
    Gilles Normand Gaudreault
	Name:	 	Gilles
    Normand Gaudreault	 	Name:	 	Gilles
    Normand Gaudreault
	 	 	Chief
    Executive Officer	 	 	 	Chief
    Executive Officer
	 	 	 	 	 	 	 
	Address:	 	860
    Conger Street	 	Address:	 	860
    Conger Street
	 	 	Eugene,
    OR 97402	 	 	 	Eugene,
    OR 97402
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	DEBTOR:	 	Bar
    Code Specialties, Inc.	 	DEBTOR:	 	Quest
    Exchange Ltd.
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	By:	 	/s/
    Gilles Normand Gaudreault	 	By:	 	/s/
    Gilles Normand Gaudreault
	Name:	 	Gilles
    Normand Gaudreault	 	Name:	 	Gilles
    Normand Gaudreault
	 	 	Chief
    Executive Officer	 	 	 	Chief
    Executive Officer
	 	 	 	 	 	 	 
	Address:	 	860
    Conger Street	 	Address:	 	860
    Conger Street
	 	 	Eugene,
    OR 97402	 	 	 	Eugene,
    OR 97402
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	DEBTOR:	 	Quest
    Solution Canada Inc.	 	 	 	 
	 	 	 	 	 	 	 
	By:	 	/s/
    Gilles Normand Gaudreault	 	 	 	 
	Name:	 	Gilles
    Normand Gaudreault	 	 	 	 
	 	 	Chief
    Executive Officer	 	 	 	 
	 	 	 	 	 	 	 
	Address:	 	860
    Conger Street	 	 	 	 
	 	 	Eugene,
    OR 97402	 	 	 	 


 




    			 



    	 	 	 



    


 


EXHIBIT
“A”


 


Quest
Solution Canada Inc.


 


ADDRESS(ES)
OF PLACE(S) OF BUSINESS , LOCATION OF BOOKS AND RECORDS RELATING TO RECEIVABLES


 


	 	●	Chief
    executive office: 8102 TransCanada Hwy, St-Laurent, Quebec, Canada H4S 1M5
	 	 	 	 
	 	●	Registered/head
    office: 8102 TransCanada Hwy, St-Laurent, Quebec, Canada H4S 1M5
	 	 	 	 
	 	●	Other
    place(s) of business:
	 	 	 	 
	 	 	 	8102
    TransCanada Hwy, St-Laurent, Quebec, Canada H4S 1M5
	 	 	 	 
	 	 	 	651
    Avenue Harwood Nord, Unite 1, Ajax (Ontario), Canada, L1Z0K4
	 	 	 	 
	 	 	 	6
    Shields Court, Suite 205, Markham, Ontario, L3R 4S1
	 	 	 	 
	 	 	 	530
    Berry Street, Unit 530, Winnipeg, Manitoba, Canada, R3H OR9
	 	 	 	 
	 	 	 	101-1737
    3rd Avenue West, Vancouver, British Columbia, Canada, V6J 1K7
	 	 	 	 
	 	●	Books
    & records relating to Receivables:
	 	 	 
	 	 	 	8102
    TransCanada Hwy, St-Laurent, Quebec, Canada, H4S 1M5


 


PROVINCE
OR STATE OF INVENTORY, EQUIPMENT AND SECURITIES:


 


8102
TransCanada Hwy, St-Laurent, Quebec, Canada H4S 1M5


 


651
Avenue Harwood Nord, Unite 1, Ajax (Ontario), Canada L1Z0K4


 


6
Shields Court, Suite 205, Markham, Ontario, Canada, L3R 4S1


 


530
Berry Street, Unit 530, Winnipeg, Manitoba, Canada, R3H OR9


 


101-1737
3rd Avenue West, Vancouver, British Columbia, Canada V6J 1K7


 


Quest
Exchange Ltd.


 


ADDRESS(ES)
OF PLACE(S) OF BUSINESS , LOCATION OF BOOKS AND RECORDS RELATING TO RECEIVABLES


 


	 	●	Chief
    executive office: 8102 TransCanada Hwy, St-Laurent, Quebec, Canada H4S 1M5
	 	 	 
	 	●	Registered/head
    office: 8102 TransCanada Hwy, St-Laurent, Quebec, Canada H4S 1M5
	 	 	 
	 	●	Other
    place(s) of business: None
	 	 	 
	 	●	Books
    & records relating to Receivables:
	 	 	 
	 	 	8102
    TransCanada Hwy, St-Laurent, Quebec, Canada H4S 1M5


 


PROVINCE
OR STATE OF INVENTORY, EQUIPMENT AND SECURITIES:


 


None


 




    			 



    	 	 	 



    


 


Quest
Solution, Inc.


 


ADDRESS(ES)
OF PLACE(S) OF BUSINESS , LOCATION OF BOOKS AND RECORDS RELATING TO RECEIVABLES


 


	 	●	Chief
    executive office: 860 Conger Street, Eugene OR 97402
	 	 	 
	 	●	Registered/head
    office: 380 Delaware Ave, Wilmington, DE 19801
	 	 	 
	 	●	Other
    place(s) of business: None
	 	 	 
	 	●	Books
    & records relating to Receivables: 860 Conger Street, Eugene, OR 97402


 


PROVINCE
OR STATE OF INVENTORY, EQUIPMENT AND SECURITIES:


 


None


 


Bar
Code Specialties, Inc.


 


ADDRESS(ES)
OF PLACE(S) OF BUSINESS , LOCATION OF BOOKS AND RECORDS RELATING TO RECEIVABLES


 


	 	●	Chief
    executive office: 12272 Monarch Street, Garden Grove, CA 92841
	 	 	 
	 	●	Registered/head
    office: 12272 Monarch Street, Garden Grove, CA 92841
	 	 	 
	 	●	Other
    place(s) of business: None
	 	 	 
	 	●	Books
    & records relating to Receivables: 12272 Monarch Street, Garden Grove, CA 92841


 


PROVINCE
OR STATE OF INVENTORY, EQUIPMENT AND SECURITIES:


 


12272
Monarch Street, Garden Grove, CA 92841


 


Quest
Marketing, Inc.


 


ADDRESS(ES)
OF PLACE(S) OF BUSINESS , LOCATION OF BOOKS AND RECORDS RELATING TO RECEIVABLES


 


	 	●	Chief
    executive office: 860 Conger Street, Eugene, OR 97402
	 	 	 
	 	●	Registered/head
    office: 860 Conger Street, Eugene, OR 97402
	 	 	 
	 	●	Other
    place(s) of business: None


 


Books
& records relating to Receivables: 860 Conger Street, Eugene, OR 97402


 


PROVINCE
OR STATE OF INVENTORY, EQUIPMENT AND SECURITIES:


 


860
Conger Street, Eugene OR 97402


 




    			 



    	 	 	 



    


 


EXHIBIT
“B”


COLLATERAL
BASE CERTIFICATE


 


Month:_________________


 




	1.	Eligible Receivables (< 90 Days Old)	 



 


	 	CURRENT	 	30
    - 60	 	60
    - 90	 	TOTAL
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 


 


	2.	Percentage
    of Receivables Available for Collateral (85%)	85%
	 	 	 
	3.	Eligible
    Receivables Base for Collateral	 
	 	 	(Line
    1 X Line 2)
	 	 	 
	4.	Total
    Inventory	 
	 	 	 
	5.	Percentage
    of Inventory Available for Collateral (50%)	50%
	 	 	 
	6.	Eligible
    Inventory Base for Collateral	 
	 	 	(Line
    4 X Line 5)
	 	 	 
	7.	Total
    Collateral Base	 
	 	 	 
	8.	Balance
    on Bank Line of Credit / Senior debt	 
	 	 	 
	9.	Collateral
    Available to Secure Trade Credit Extension	 
	 	 	(Line
    7 - Line 8)


 


This
certificate is true, accurate and complete to the best of my knowledge.


 


	Company
    Name / signature of	 	 	 
	Officer/
    Date