THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND HAS BEEN
ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR
AN OPINION OF COUNSEL SATISFACTORY TO THE MAKER THAT SUCH REGISTRATION IS NOT
REQUIRED.

 

JOHN KEELER & CO., INC.

 

4% Promissory Note

 

$500,000.00 November 26, 2019

 

The Note has been issued in accordance with exemptions from registration under
the Securities Act of 1933, as amended (the “Securities Act”) pursuant to a
Merger Agreement, dated the date hereof (the “Merger Agreement”), among John
Keeler & Co., Inc., d/b/a Blue Star Foods, a Florida corporation (the “Maker”),
the Holder (as defined below), and the other Sellers signatories thereto, and
Coastal Pride Company, Inc., a South Carolina corporation (“Coastal”) and
Coastal Pride Seafood, LLC, a Florida limited liability company and wholly-owned
subsidiary of the Maker. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Merger Agreement.

 

Section 1. Principal and Interest. FOR VALUE RECEIVED, the Maker promises to pay
to the order of Walter Lubkin, Jr., an individual (the “Holder”), the principal
sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) together with interest on any
outstanding unpaid principal at the rate of four percent (4%) per annum
(computed on the basis of a 365-day year and the actual days elapsed) on
November 26, 2024 or such earlier date as this Note is required or permitted to
be repaid as provided hereunder. The outstanding principal amount hereunder and
all accrued interest thereon shall be payable quarterly within thirty (30) days
of the last day of the quarter (the “Quarterly Payment”), commencing February
26, 2020. Each Quarterly Payment shall be an amount equal to the lesser of (i)
$25,000 and (ii) 25% of the Company’s quarterly earnings before interest, tax,
depreciation and amortization (“EBITDA”), as determined on the first day of each
quarter. The amount of EBITDA shall be adjusted for expenses reflected on
Coastal’s income statement after the Closing Date which expenses are for the
sole benefit of the Maker.

 

All payments due hereunder shall be made in lawful money of the United States.

 

Section 2. Paying Agent and Registrar. Initially, the Maker shall act as paying
agent and registrar. The Maker may change any paying agent or registrar by
giving the Holder not less than five (5) business days’ written notice of its
election to do so, specifying the name, address, telephone number and facsimile
number of the paying agent or registrar.

 

   

 

 

Section 3. Prepayment. The principal hereunder and any and all interest accrued
thereon may be prepaid by the Maker in whole or in part at any time without
premium or penalty.

 

Section 4. Offset. The principal amount due under this Note shall be reduced,
pro rata with the principal amounts due under the convertible notes issued by
the Maker pursuant to the Merger Agreement, dated even date herewith, by the
amount of Damages, if any, to the Purchaser Indemnified Parties under Sections
6.2 and 6.3 of the Merger Agreement.

 

Section 5. Events of Default. An Event of Default is defined as follows: (i)
failure by the Maker to pay interest and/or principal under the Note when due,
which failure shall continue unremedied for fifteen (15) or more business days
after notice of such failure has been given to the Maker; or (ii) if the Maker
files for relief under the United States Bankruptcy Code (the “Bankruptcy Code”)
or under any other state or federal bankruptcy or insolvency law, or files an
assignment for the benefit of creditors, or if an involuntary proceeding under
the Bankruptcy Code or under any other federal or state bankruptcy or insolvency
law is commenced against the Maker, and has not been resolved in a period of
thirty (30) days after such commencement.

 

Upon the occurrence of an Event of Default, the entire indebtedness with accrued
interest thereon due under this Note shall, at the option of the Holder, become
immediately due and payable.

 

Section 6. Representations of the Holder.

 

(a) The Holder is acquiring this Note for his own account as principal, not as a
nominee or agent, for investment purposes only, and not with a view to, or for,
resale, distribution or fractionalization thereof, in whole or in part, and no
other Person has a direct or indirect beneficial interest in this Note or any
portion thereof. The Holder does not have any contract, undertaking, agreement
or arrangement with any Person to sell, transfer or grant participation rights
to such Person or to any third party with respect to this Note.

 

(b) The Maker is under no obligation to register this Note under the Securities
Act.

 

Section 7. Notice. All notices or other communications required or permitted
hereunder shall be in writing. Any notice, request, demand, claim or other
communication hereunder shall be deemed duly given (a) if by personal delivery,
when so delivered, (b) if mailed, three (3) business days after having been sent
by registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below, or (c) if sent through
an overnight delivery service in circumstances to which such service guarantees
next day delivery, the day following being so sent:

 

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If to the Maker to: John Keeler & Co., Inc.  

3000 NW 109th Avenue

Miami, Florida 33172

Attn: Christopher Constable

Facsimile: (306)-836-6859

    With a copy to:

The Crone Law Group, P.C.

500 Fifth Ave, Suite 938

New York, NY 10110

Attention: Eric Mendelson, Esq.

Facsimile: (818) 688-3130

    If to the Holder:

Walter Lubkin Jr.

10 B March Harbor Drive

Beaufort, South Carolina 29907

Facsimile : ________________

 

Any party may change the address to which notices and other communications
hereunder are to be delivered by giving the other parties notice in the manner
herein set forth.

 

Section 8. Subordination. This Note and the indebtedness evidenced by this Note
is subordinate and subject to prior payment in full of all indebtedness and
other liabilities and obligations of the Maker under its loan and security
agreement with ACF Finco I LP, dated August 31, 2016, as amended, and related
revolving credit note and other associated documents.

 

Section 9 Governing Law. This Note shall be deemed to be made and governed,
construed and enforced in accordance with the laws of the State of Florida,
without giving effect to principles of conflicts of law. The Maker and the
Holder hereby consent to and irrevocably submit to personal jurisdiction over
each of them by the applicable State or Federal Courts of the State of Florida,
County of Dade, in any action or proceeding, irrevocably waive trial by jury and
personal service of any and all process and other documents and specifically
consent that in any such action or proceeding, any service of process may be
effectuated upon any of them by certified mail, return receipt requested, in
accordance with Section 7 above.

 

Section 10. Severability. The invalidity of any of the provisions of this Note
shall not invalidate or otherwise affect any of the other provisions of this
Note, which shall remain in full force and effect.

 

Section 11. Successors and Assigns. This Note may not be assigned or transferred
by the Holder without the prior written consent of the Maker. Subject to the
preceding sentence, the rights and obligations of the Maker and the Holder shall
be binding upon and benefit the successors, permitted assigns, heirs,
administrators and permitted transferees of the Holder.

 

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IN WITNESS WHEREOF, the Maker has executed this Note as of the date first
written above by its duly authorized officer.

 

  JOHN KEELER & CO., INC.         By: /s/ John Keeler   Name: John Keeler  
Title: Chief Executive Officer

 

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