SUBSCRIPTION AGREEMENT

 

This Subscription Agreement (this “Agreement”) has been executed by the
purchaser set forth on the signature page hereof (the “Purchaser”) in connection
with the private placement offering (the “Offering”) by Blue Star Foods Corp., a
Delaware corporation (the “Company”), of a minimum of $1,000,000 (the “Minimum
Offering”) and a maximum of $3,000,000 of Units (as defined below) of the
Company’s securities, at a purchase price of $1,000 per Unit (the “Purchase
Price”). Each “Unit” shall consist of (i) one share (each, a “Share” and,
collectively, the “Shares”) of the Company’s Series A convertible preferred
stock, par value $0.0001 per share (the “Series A Preferred Stock”), initially
convertible into shares of the Company’s common stock, par value $0.0001 per
share (the “Common Stock”), at a conversion rate of 500-for-1 (a total of 500
shares of Common Stock per Unit) (the “Conversion Rate”), and (ii) a warrant,
substantially in the form of Exhibit A hereto (each, a “Warrant” and,
collectively, the “Warrants”), representing the right to purchase one-half (½)
of one share of the Company’s Common Stock for every share of Common Stock that
would be received upon conversion of a Share of Series A Preferred Stock (a
total of 250 Warrants per Unit), exercisable from issuance until three (3) years
after the applicable Closing Date (as defined below), at an exercise price equal
of$2.40 per each whole share.

 

This subscription is being submitted to you in accordance with and subject to
the terms and conditions described in this Agreement.

 

The minimum subscription is $25,000 (25 Units). The Company may accept
subscriptions for less than $25,000 in its sole discretion.

 

The form of the Certificate of Designations setting forth the voting powers,
designations, preferences and rights, and qualifications, limitations or
restrictions thereof, of the Series A Preferred Stock is attached hereto as
Exhibit B (the “Certificate of Designations”).

 

The Units, the Shares of Series A Preferred Stock, the shares of Common Stock
issuable upon conversion of the Shares of Series A Preferred Stock (each, a
“Conversion Share” and, collectively, the “Conversion Shares”), the Warrants and
the shares of Common Stock issuable upon exercise of the Warrants (each, a
“Warrant Share” and, collectively, the “Warrant Shares”) (the Units, the Shares
of Series A Preferred Stock, the Conversion Shares, the Warrants and the Warrant
Shares are sometimes herein referred to as the “Securities”) being subscribed
for pursuant to this Agreement have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”). The Offering is being
made on a reasonable best efforts basis to “accredited investors,” as defined in
Regulation D under the Securities Act, in reliance upon the exemption from
securities registration afforded by Section 4(a)(2) of the Securities Act and
Rule 506 of Regulation D.

 

The Units are being offered and sold in connection with a merger (the “Merger”)
between the Company’s newly-formed, wholly-owned subsidiary (“Merger Sub”) and
John Keeler & Co., Inc. d/b/a Blue Star Foods, a Florida corporation (the “Blue
Star”), pursuant to which Merger Sub will merge with and into Blue Star, with
Blue Star being the surviving entity. As a result of the Merger, Blue Star will
become a wholly-owned subsidiary of the Company. Pursuant to the Merger, all of
the outstanding capital stock of Blue Star will be exchanged for shares of the
Company’s Common Stock (the “Merger Shares”). The Units issued in this Offering
will be issued following completion of the Merger.

 

 

 

 

Each of the parties’ obligation to complete the Merger will be conditioned upon
the completion of the audits referred to below, the accuracy of representations
and warranties, normal and customary for a transaction of this type, in the
definitive agreement (which will not survive the closing for any purposes) made
by each party, and absence of material adverse changes to, or material
additional liabilities of the Company or Blue Star, and such other closing
conditions as are usual and customary for transactions of this type as the
parties shall agree.

 

The undersigned acknowledges receipt of a copy of the Registration Rights
Agreement, substantially in the form attached as Exhibit C hereto (the
“Registration Rights Agreement”), pursuant to which, among other things, the
Company agrees to register under the Securities Act for resale the Conversion
Shares issuable upon conversion of the Shares of Series A Preferred Stock and
the Warrant Shares issuable upon exercise of the Warrants purchased in the
Offering.

 

Each closing of the Offering (a “Closing,” and the date on which such Closing
occurs hereinafter referred to as the “Closing Date”) shall take place at the
offices of Crone Law Group, P.C., at 830 Third Avenue, 5th Floor, New York, New
York 10022 (or such other place as is mutually agreed to by the Company and Blue
Star).

 

The first Closing will not occur unless:

 

  a. funds deposited in escrow as described in Section 2b below are equal to at
least the Minimum Offering, and corresponding documentation with respect to such
amounts, have been delivered by the Purchaser and other Purchasers under
Subscription Agreements of like tenor with this Agreement (collectively, the
“Purchasers”) as described in Section 2a below;         b. the Merger has been
effected; and         c. the other conditions set forth in Sections 7 and 8
shall have been satisfied.

 

Thereafter, the Company may conduct one or more additional Closings for the sale
of the Units until the termination of the Offering. The Company anticipates
consummating an initial closing of the Offering (the “Initial Closing”) on or
before August 31, 2018 (the “Target Closing Date”). The Units will be offered
through October 31, 2018 (the “Initial Offering Period”), which period may be
extended by the Company in its sole discretion, without notice to any Purchaser
or prospective Purchaser, to a date not later than (or if the Minimum Offering
has closed within the Initial Offering Period will automatically be extended to)
sixty (60) days after the Target Closing Date (any such additional period and
the Initial Offering Period are referred to as the “Offering Period”). The final
day of the Offering Period shall be referred to as the “Termination Date.”

 

All funds received from prospective qualified Purchasers will be held in escrow
in a non-interest-bearing account by Crone Law Group, P.C., as escrow agent (the
“Escrow Agent”) at 830 Third Avenue, 5th Floor, New York, New York 10022,
pending release, as the case may be, on the initial Closing Date, a subsequent
Closing Date, or the Termination Date, pursuant to the terms of an Escrow
Agreement between the Company, the Escrow Agent and the Subscribers,
substantially in the form attached as Exhibit D hereto (the “Escrow Agreement”).

 

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If at least the Minimum Offering has not been completed or if the Offering is
otherwise unable to close by the Termination Date, none of the shares of Common
Stock will be sold, and all funds of prospective Purchasers will be returned in
full and without offset or interest thereon.

 

“Affiliate” means, with respect to any person, any other person that, directly
or indirectly through one or more intermediaries, controls, is controlled by or
is under common control with such person, as such terms are used in and
construed under Rule 144 under the Securities Act (“Rule 144”). With respect to
a Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser will be
deemed to be an Affiliate of such Purchaser.

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

 

  1. Subscription. The undersigned Purchaser hereby subscribes to purchase the
number of Units set forth on the Omnibus Signature Page attached hereto, for the
aggregate Purchase Price as set forth on such Omnibus Signature Page, subject to
the terms and conditions of this Agreement, the Registration Rights Agreement,
and the Escrow Agreement, and on the basis of the representations, warranties,
covenants and agreements contained herein.         2. Subscription Procedure. To
complete a subscription for the Units, the Purchaser must fully comply with the
subscription procedure provided in paragraphs a. through c. of this Section on
or before the Closing Date.

 

  a. Subscription Documents. On or before the Closing Date, the Purchaser shall
review, complete and execute the Omnibus Signature Page to this Agreement, the
Registration Rights Agreement, and the Escrow Agreement, along with the Investor
Profile, Anti-Money Laundering Form and Investor Certification, each attached
hereto following the Omnibus Signature Page (collectively, the “Subscription
Documents”), and deliver the Subscription Documents to the address set forth
under the caption “How to subscribe for Shares in the private offering of Blues
Star Foods Corp.” below. Executed documents may be delivered by facsimile or
.pdf sent by electronic mail (e-mail), if the Purchaser delivers the original
copies of the documents as soon as practicable thereafter.         b. Purchase
Price. Simultaneously with the delivery of the Subscription Documents as
provided herein, and in any event on or prior to the Closing Date, the Purchaser
shall deliver to the Escrow Agent, under the Escrow Agreement, the full Purchase
Price by certified or other bank check or by wire transfer of immediately
available funds, pursuant to the instructions set forth under the caption “How
to subscribe for Shares in the private offering of Blue Star Foods Corp.” below.
Such funds will be held for the Purchaser’s benefit in the escrow account
established for the Offering (the “Escrow Account”) and will be returned
promptly, without interest or offset, if this Agreement is not accepted by the
Company or the Offering is terminated pursuant to its terms prior to the
Closing.         c. Company Discretion. The Purchaser understands and agrees
that the Company in its sole discretion reserves the right to accept or reject
this or any other subscription for Units, in whole or in part, notwithstanding
prior receipt by the Purchaser of notice of acceptance of this subscription. The
Company shall have no obligation hereunder until the Company shall execute and
deliver to the Purchaser an executed copy of this Agreement. If this
subscription is rejected in whole, or the Offering is terminated, all funds
received from the Purchaser will be returned without interest or offset, and
this Agreement shall thereafter be of no further force or effect. If this
subscription is rejected in part, the funds for the rejected portion of this
subscription will be returned without interest or offset, and this Agreement
will continue in full force and effect to the extent this subscription was
accepted.

 

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  3. [Reserved]         4. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchaser, as of the date hereof
and on each Closing Date, the following:

 

  a. Organization and Qualification. The Company and each of its subsidiaries
(the “Subsidiaries”) is a corporation or other business entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation, and has the requisite corporate power to own its properties and to
carry on its business as now being conducted. The Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a material
adverse effect on the assets, business, financial condition, results of
operations or future prospects of the Company or its Subsidiaries (a “Material
Adverse Effect”).         b. Authorization, Enforcement, Compliance with Other
Instruments. (i) The Company has the requisite corporate power and authority to
enter into and perform its obligations under this Agreement, the Registration
Rights Agreement, the Escrow Agreement and each of the other agreements and
documents that are exhibits hereto or thereto or are contemplated hereby or
thereby or necessary or desirable to effect the transactions contemplated hereby
or thereby (the “Transaction Documents”) and to issue the Securities in
accordance with the terms hereof and thereof; (ii) the execution and delivery by
the Company of each of the Transaction Documents and the consummation by it of
the transactions contemplated hereby and thereby, including, without limitation,
the issuance of the Securities have been, or will be at the time of execution of
such Transaction Document, duly authorized by the Company’s board of directors
(the “Board of Directors”), and no further consent or authorization is, or will
be at the time of execution of such Transaction Documents, required by the
Company, its respective Board of Directors or its stockholders; (iii) each of
the Transaction Documents will be duly executed and delivered by the Company;
and (iv) the Transaction Documents when executed will constitute the valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors’ rights and remedies and, with respect to any rights to
indemnity or contribution contained in the Registration Rights Agreement, as
such rights may be limited by state or federal laws or public policy underlying
such laws.

 

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  c. Capitalization. The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock and 5,000,000 shares of “blank check”
preferred stock. Immediately before the Initial Closing of the Offering, the
Company will have 10,000,000 shares of Common Stock and no preferred stock
issued and outstanding. All of the outstanding shares of Common Stock have been
duly authorized, validly issued and are fully paid and nonassessable. At the
time of the Initial Closing, no shares of capital stock of the Company will be
subject to preemptive rights or any other similar rights or any liens or
encumbrances (other than as contemplated by Section 7f hereof) suffered or
permitted by the Company. Prior to the Initial Closing and consummation of the
Merger, there are no outstanding options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever created by the Company
relating to, or securities or rights created by the Company convertible into,
any shares of capital stock of the Company, and there are no contracts,
commitments, understandings or arrangements by which the Company to issue
additional shares of capital stock of the Company. At the time of the Initial
Closing, any outstanding debt securities will be either cancelled or converted
into shares of Common Stock upon completion of the Merger. Other than the
Registration Rights Agreement being entered into in conjunction with this
Agreement, there are no agreements or arrangements pursuant to which the Company
is obligated to register the sale of any of its securities under the Securities
Act. There is no outstanding registration statement of the Company with respect
to its securities. There are no securities or instruments of the Company
containing anti-dilution or similar provisions, including the right to adjust
the exercise, exchange or reset price under such securities, that will be
triggered by the issuance of the Shares as described in this Agreement. No
co-sale right, right of first refusal or other similar right will exist with
respect to the Shares or the issuance and sale thereof. Upon request, the
Company will make available to the Purchaser true and correct copies of the
Company’s Articles of Incorporation and Bylaws, as will be in effect as of the
Closing Date.         d. Issuance of Shares. The Units, Shares and Warrants are
duly authorized and, when issued and paid for in accordance with the terms
hereof, shall be duly issued, fully paid and nonassessable, and are free and
clear of all taxes, liens and charges with respect to the issue thereof. The
Conversion Shares have been duly authorized and reserved for issuance, and upon
conversion of the Shares in accordance with their terms, will be validly issued,
fully paid and nonassessable, and are free and clear from all taxes, liens and
charges with respect to the issue thereof. The Warrant Shares have been duly
authorized and reserved for issuance, and upon exercise of the Warrants in
accordance with their terms, including payment of the exercise price therefor,
will be validly issued, fully paid and nonassessable, and are free and clear
from all taxes, liens and charges with respect to the issue thereof.

 

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  e. No Conflicts. The execution, delivery and performance of each of the
Transaction Documents by the Company, and the consummation by the Company of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the Articles of Incorporation or the By-laws of the Company, as such
documents will be in effect as of the Initial Closing, or (ii) violate or
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company is a party, except for those which would not reasonably be expected
to have a Material Adverse Effect, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including U.S. federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected, except for those which
would not reasonably be expected to have a Material Adverse Effect. The Company
is not in violation of any term of or in default under its articles of
incorporation, as amended to date, and bylaws or any other constitutive
documents. Except for those violations or defaults which would not reasonably be
expected to have a Material Adverse Effect, the Company is not in violation of
any term of or in default under any material contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company. The business of the Company is not
being conducted in violation of any law, ordinance, or regulation of any
governmental entity, except for any violation which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
Except as specifically contemplated by this Agreement and as required under the
Securities Act and any applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under or contemplated by this
Agreement or the other Transaction Documents in accordance with the terms hereof
or thereof. Neither the execution and delivery by the Company of the Transaction
Documents, nor the consummation by the Company of the transactions contemplated
hereby or thereby, will require any notice, consent or waiver under any contract
or instrument to which the Company is a party or by which the Company is bound
or to which any of its assets is subject, except for any notice, consent or
waiver the absence of which would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect. All consents, authorizations,
orders, filings and registrations which the Company is required to obtain
pursuant to the preceding two sentences have been or will be obtained or
effected on or prior to the Closing.         f. Absence of Litigation. There is
no action, suit, claim, inquiry, notice of violation, proceeding (including any
partial proceeding such as a deposition) or investigation before or by any
court, public board, governmental or administrative agency, self-regulatory
organization, arbitrator, regulatory authority, stock market, stock exchange or
trading facility (an “Action”) now pending or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its officers or
directors, which would be reasonably likely to (i) adversely affect the validity
or enforceability of, or the authority or ability of the Company to perform its
obligations under, this Agreement or any of the other Transaction Documents, or
(ii) have a Material Adverse Effect. For the purpose of this Agreement, the
knowledge of the Company means the actual knowledge of the officers of the
Company.         g. Acknowledgment Regarding Purchaser’s Purchase of the Units.
The Company acknowledges and agrees that each Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby. The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchaser’s purchase of the Units.

 

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  h. No General Solicitation. Neither the Company, nor any of its Affiliates,
nor, to the knowledge of the Company, any person acting on their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Units.    
    i. No Integrated Offering. Neither the Company, nor any of its Affiliates,
nor to the knowledge of the Company, any person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of the Units, Shares, Warrants, Conversion Units or Warrant Shares
under the Securities Act or cause this Offering to be integrated with prior
offerings by the Company for purposes of the Securities Act.         j. Employee
Relations. The Company is not involved in any labor dispute nor, to the
knowledge of the Company, is any such dispute threatened. The Company is not
party to any collective bargaining agreement. The Company’s employees are not
members of any union, and the Company believes that its relationship with its
employees is good.         k. Authorizations; Regulatory Compliance. The Company
holds, and is operating in compliance with, all authorizations, licenses,
permits, approvals, clearances, registrations, exemptions, consents,
certificates and orders of any governmental authority and supplements and
amendments thereto (collectively, “Authorizations”) required for the conduct of
its business, and all such Authorizations are valid and in full force and effect
and the Company is not in material violation of any terms of any such
Authorizations, except, in each case, such as would not reasonably be expected
to have a Material Adverse Effect; and the Company has not received written
notice of any revocation or modification of any such Authorization, except to
the extent that any such revocation or modification would not be reasonably
expected to have a Material Adverse Effect. The Company is in compliance with
all applicable federal, state, local and foreign laws, regulations, orders and
decrees, including such laws and regulations applicable to import and export,
except as would not reasonably be expected to have a Material Adverse Effect.  
      n. Title. The Company does not own any real property. The Company has good
and marketable title to all of its personal property and assets, free and clear
of any restriction, mortgage, deed of trust, pledge, lien, security interest or
other charge, claim or encumbrance which would have a Material Adverse Effect.  
      o. Tax Status. The Company has made and filed (taking into account any
valid extensions) all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject
(except in any case in which the failure to so file would not have a Material
Adverse Effect) and (unless and only to the extent that the Company has set
aside on its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply
or as would not have a Material Adverse Effect. To the knowledge of the Company,
there are no unpaid taxes in any material amount claimed to be due from the
Company by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

 

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  p. Certain Transactions. Except for arm’s-length transactions pursuant to
which the Company makes payments in the ordinary course of business upon terms
no less favorable than it could obtain from third parties, none of the officers,
directors or employees of the Company is a party to any transaction with the
Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.         q. Financial Statements. The financial statements of the
Company, comply in all material respects with applicable accounting requirements
and relevant rules and regulations with respect thereto as in effect at the time
of the initial Closing. Such financial statements have been prepared in
accordance with generally accepted accounting principles of the United States
(“GAAP”) applied on a consistent basis during the periods involved, except as
may be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries taken as a whole as of
and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments.         v. Undisclosed Liabilities. The Company has
no material liabilities (contingent or otherwise) other than (i) trade payables,
accrued expenses and other liabilities incurred in the ordinary course of
business consistent with past practice and (ii) liabilities not required to be
reflected in financial statements if they were to be prepared as of the date of
this Agreement or the Closing Date pursuant to GAAP.         w. Dividends. The
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock.         x. Foreign Corrupt
Practices. Neither the Company, nor to the Company’s knowledge, any agent or
other person acting on behalf of the Company, has: (i) directly or indirectly,
used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made
any unlawful payment to foreign or domestic government officials or employees or
to any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company (or made by
any person acting on its behalf of which the Company is aware) which is in
violation of law or (iv) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended.

 

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  y. Brokers’ Fees. The Company has no liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.         z. Investment Company. The Company is
not required to be registered as, and is not an Affiliate of, and immediately
following the Closing will not be required to register as, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.  
      aa. Reliance. The Company acknowledges that the Purchaser is relying on
the representations and warranties made by the Company hereunder and that such
representations and warranties are a material inducement to the Purchaser
purchasing the Shares. The Company further acknowledges that without such
representations and warranties of the Company made hereunder, the Purchaser
would not enter into this Agreement.         bb. Use of Proceeds. The Company
intends to use the net proceeds from the Offering for general working capital
purposes.

 

  5. Representations, Warranties and Agreements of the Purchaser. The Purchaser,
severally and not jointly with any other Purchaser, represents and warrants to,
and agrees with, the Company the following:

 

  a. The Purchaser has the knowledge and experience in financial and business
matters necessary to evaluate the merits and risks of its prospective investment
in the Company, and has carefully reviewed and understands the risks of, and
other considerations relating to, the purchase of Shares and the tax
consequences of the investment, and has the ability to bear the economic risks
of the investment. The Purchaser can afford the loss of his/her/its entire
investment.         b. The Purchaser is acquiring the Securities for investment
for his/her/its own account and not with the view to, or for resale in
connection with, any distribution thereof. The Purchaser understands and
acknowledges that the Offering and sale of the Securities have not been
registered under the Securities Act or any state securities laws, by reason of a
specific exemption from the registration provisions of the Securities Act and
applicable state securities laws, which depends upon, among other things, the
bona fide nature of the investment intent as expressed herein. The Purchaser
further represents that he/she/it does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to any third person with respect to any of the Securities. The
Purchaser understands and acknowledges that the Offering of the Securities will
not be registered under the Securities Act nor under the state securities laws
on the ground that the sale of the Securities to the Purchaser as provided for
in this Agreement and the issuance of Shares hereunder is exempt from the
registration requirements of the Securities Act and any applicable state
securities laws. The Purchaser is an “accredited investor” as defined in Rule
501 of Regulation D as promulgated by the Securities and Exchange Commission
(the “SEC”) under the Securities Act, for the reason(s) specified on the
Accredited Investor Certification attached hereto, as completed by Purchaser,
and Purchaser shall submit to the Company such further assurances of such status
as may be reasonably requested by the Company. The Purchaser resides in the
jurisdiction set forth on the Purchaser’s Omnibus Signature Page affixed hereto.
The Purchaser has not taken any of the actions set forth in, and is not subject
to, the disqualification provisions of Rule 506(d)(1) of the Securities Act.

 

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  c. The Purchaser acknowledges that the Securities purchased hereunder will not
be registered under the Securities Act until the Company files a registration
statement on Form S-1 (the “Registration Statement”) with the SEC, completes SEC
review and comment, and the SEC declares the Registration Statement effective.
The Registration Statement filing and effectiveness requirements are set forth
in more detail in the Registration Rights Agreement, which will be entered into
between the Company and the Purchaser in conjunction with this Agreement.      
  d. The Purchaser (i) if a natural person, represents that he or she is the
greater of (A) 21 years of age or (B) the age of legal majority in his or her
jurisdiction of residence, and has full power and authority to execute and
deliver this Agreement and all other related agreements or certificates and to
carry out the provisions hereof and thereof; (ii) if a corporation, partnership,
limited liability company, association, joint stock company, trust,
unincorporated organization or other entity, represents that such entity was not
formed for the specific purpose of acquiring the Units, such entity is duly
organized, validly existing and in good standing under the laws of the state or
jurisdiction of its organization, the consummation of the transactions
contemplated hereby is authorized by, and will not result in a violation of
state law or its charter or other organizational documents, such entity has full
power and authority to execute and deliver this Agreement and all other related
agreements or certificates and to carry out the provisions hereof and thereof
and to purchase and hold the Securities, the execution and delivery of this
Agreement has been duly authorized by all necessary action, this Agreement has
been duly executed and delivered on behalf of such entity and is a legal, valid
and binding obligation of such entity; or (iii) if executing this Agreement in a
representative or fiduciary capacity, represents that it has full power and
authority to execute and deliver this Agreement in such capacity and on behalf
of the subscribing individual, ward, partnership, trust, estate, corporation, or
limited liability company or partnership, or other entity for whom the Purchaser
is executing this Agreement, and such individual, partnership, ward, trust,
estate, corporation, or limited liability company or partnership, or other
entity has full right and power to perform pursuant to this Agreement and make
an investment in the Company, and represents that this Agreement constitutes a
legal, valid and binding obligation of such entity. The execution and delivery
of this Agreement will not violate or be in conflict with any order, judgment,
injunction, agreement or controlling document to which the Purchaser is a party
or by which it is bound.         e. The Purchaser understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
such Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire such securities. The Purchaser further acknowledges and
understands that the Company is relying on the representations and warranties
made by the Purchaser hereunder and that such representations and warranties are
a material inducement to the Company to sell the Securities to the Purchaser.
The Purchaser further acknowledges that without such representations and
warranties of the Purchaser made hereunder, the Company would not enter into
this Agreement with the Purchaser.

 

10

 

 

  f. The Purchaser understands that no public market exists for the Series A
Preferred Stock or Common Stock and that there can be no assurance that any
public market for the Series A Preferred Stock or Common Stock will exist or
continue to exist. The Company’s Common Stock is not approved for quotation on
the OTC Markets or any other quotation system or listed on any exchange. The
Company intends to file the Registration Statement with the SEC as soon as
practicable following the final Closing of the Offering and, upon the SEC
declaring the Registration Statement effective, cause the Common Stock to be
quoted on OTC Markets QB or QX tier as soon as practicable thereafter, in
accordance with the terms of the Registration Rights Agreement; provided,
however, that the Company makes no representation, warranty or covenant with
respect to the initiation of or continued quotation of the Common Stock on the
OTC Markets or the listing of the Common Stock on any other market or exchange.
        g. The Purchaser has received, reviewed and understood such information
about the Company and Blue Star as the Purchaser has requested, and has had an
opportunity to discuss the Company’s business, management and financial affairs,
and the business, management and financial affairs of Blue Star, with the
Company’s and Blue Star’s management. The Purchaser understands that such
discussions were intended to describe the aspects of the Company’s business and
prospects and the Offering which the Company believes to be material, but were
not necessarily a thorough or exhaustive description, and except as expressly
set forth in this Agreement, the Company makes no representation or warranty
with respect to the completeness of such information and makes no representation
or warranty of any kind with respect to any information provided by any entity
other than the Company. Some of such information may include projections as to
the future performance of the Company, which projections may not be realized,
may be based on assumptions which may not be correct and may be subject to
numerous factors beyond the Company’s control. Additionally, the Purchaser
understands and represents that it is purchasing the Securities notwithstanding
the fact that the Company may disclose in the future certain material
information the Purchaser has not received, including (without limitation)
financial statements of the Company for the current or prior or subsequent
fiscal periods, that it is not relying on any such information in connection
with its purchase of the Securities and that it waives any right of action with
respect to the nondisclosure to it prior to its purchase of the Securities of
any such information. Each Purchaser has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Securities.         h. The Purchaser
acknowledges that the Company nor Blue Star is acting as a financial advisor or
fiduciary of the Purchaser (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby, and
no investment advice has been given by the Company, Blue Star, or any of their
respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby. The Purchaser
further represents to the Company that the Purchaser’s decision to enter into
the Transaction Documents has been based solely on the independent evaluation by
the Purchaser and its representatives.

 

11

 

 

  i. As of each Closing, all actions on the part of Purchaser, and its officers,
directors and partners, if applicable, necessary for the authorization,
execution and delivery of this Agreement, the Registration Rights Agreement and
the Escrow Agreement, and the performance of all obligations of the Purchaser
hereunder and thereunder shall have been taken, and this Agreement, the
Registration Rights Agreement and the Escrow Agreement, assuming due execution
by the parties hereto and thereto, constitute valid and legally binding
obligations of the Purchaser, enforceable in accordance with their respective
terms, subject to: (i) judicial principles limiting the availability of specific
performance, injunctive relief, and other equitable remedies and (ii)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect generally relating to or affecting creditors’ rights.      
  j. The Purchaser represents that neither it nor, to its knowledge, any person
or entity controlling, controlled by or under common control with it, nor any
person having a beneficial interest in it, nor any person on whose behalf the
Purchaser is acting: (i) is a person listed in the Annex to Executive Order No.
13224 (2001) issued by the President of the United States (Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit, or Support Terrorism); (ii) is named on the List of Specially
Designated Nationals and Blocked Persons maintained by the U.S. Office of
Foreign Assets Control; (iii) is a non-U.S. shell bank or is providing banking
services indirectly to a non-U.S. shell bank; (iv) is a senior non-U.S.
political figure or an immediate family member or close associate of such
figure; or (v) is otherwise prohibited from investing in the Company pursuant to
applicable U.S. anti-money laundering, anti-terrorist and asset control laws,
regulations, rules or orders (categories (i) through (v), each a “Prohibited
Purchaser”). The Purchaser agrees to provide the Company, promptly upon request,
all information that the Company reasonably deems necessary or appropriate to
comply with applicable U.S. anti-money laundering, anti-terrorist and asset
control laws, regulations, rules and orders. The Purchaser consents to the
disclosure to U.S. regulators and law enforcement authorities by the Company and
its Affiliates and agents of such information about the Purchaser as the Company
reasonably deems necessary or appropriate to comply with applicable U.S.
anti-money laundering, anti-terrorist and asset control laws, regulations, rules
and orders. If the Purchaser is a financial institution that is subject to the
USA Patriot Act, the Purchaser represents that it has met all of its obligations
under the USA Patriot Act. The Purchaser acknowledges that if, following its
investment in the Company, the Company reasonably believes that the Purchaser is
a Prohibited Purchaser or is otherwise engaged in suspicious activity or refuses
to promptly provide information that the Company requests, the Company has the
right or may be obligated to prohibit additional investments, segregate the
assets constituting the investment in accordance with applicable regulations or
immediately require the Purchaser to transfer the Securities. The Purchaser
further acknowledges that the Purchaser will have no claim against the Company
or any of its Affiliates or agents for any form of damages as a result of any of
the foregoing actions.

 

12

 

 

    If the Purchaser is Affiliated with a non-U.S. banking institution (a
“Foreign Bank”), or if the Purchaser receives deposits from, makes payments on
behalf of, or handles other financial transactions related to a Foreign Bank,
the Purchaser represents and warrants to the Company that: (1) the Foreign Bank
has a fixed address, other than solely an electronic address, in a country in
which the Foreign Bank is authorized to conduct banking activities; (2) the
Foreign Bank maintains operating records related to its banking activities; (3)
the Foreign Bank is subject to inspection by the banking authority that licensed
the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does
not provide banking services to any other Foreign Bank that does not have a
physical presence in any country and that is not a regulated Affiliate.        
k. The Purchaser or its duly authorized representative realizes that because of
the inherently speculative nature of businesses of the kind conducted and
contemplated by the Company, the Company’s financial results may be expected to
fluctuate from month to month and from period to period and will, generally,
involve a high degree of financial and market risk that could result in
substantial or, at times, even total losses for investors in securities of the
Company. The Purchaser has carefully considered such risks, and has carefully
reviewed the risk factors disclosed in the Offering Memorandum, before deciding
to invest in the Units.         l. The Purchaser has adequate means of providing
for its current and anticipated financial needs and contingencies, is able to
bear the economic risk for an indefinite period of time and has no need for
liquidity of the investment in the Units and could afford complete loss of such
investment.         m. The Purchaser is not subscribing for Units as a result of
or subsequent to any advertisement, article, notice or other communication,
published in any newspaper, magazine or similar media or broadcast over
television, radio, or the internet, or presented at any seminar or meeting, or
any solicitation of a subscription by a person not previously known to the
Purchaser in connection with investments in securities generally.         n. The
Purchaser acknowledges that no U.S. federal or state agency or any other
government or governmental agency has passed upon the Units, Shares, Warrants,
Conversion Shares, or Warrant Shares or made any finding or determination as to
the fairness, suitability or wisdom of any investments therein.         o. The
Purchaser agrees to be bound by all of the terms and conditions of the
Registration Rights Agreement and to perform all obligations thereby imposed
upon it.         p. The Purchaser is aware that the anti-manipulation rules of
Regulation M under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), may apply to sales of the Shares and other activities with
respect to the Shares by the Purchaser.         q. All of the information
concerning the Purchaser set forth herein, and any other information furnished
by the Purchaser in writing to the Company for use in connection with the
transactions contemplated by this Agreement, is true, correct and complete in
all material respects as of the date of this Agreement, and, if there should be
any material change in such information prior to the admission of the
undersigned to the Company, the Purchaser will promptly furnish revised or
corrected information to the Company.

 

13

 

 

  r. (For ERISA plans only) The fiduciary of the Employee Retirement Income
Security Act of 1974 (“ERISA”) plan (the “Plan”) represents that such fiduciary
has been informed of and understands the Company’s investment objectives,
policies and strategies, and that the decision to invest “plan assets” (as such
term is defined in ERISA) in the Company is consistent with the provisions of
ERISA that require diversification of plan assets and impose other fiduciary
responsibilities. The Purchaser fiduciary or Plan (a) is responsible for the
decision to invest in the Company; (b) is independent of the Company or any of
its Affiliates; (c) is qualified to make such investment decision; and (d) in
making such decision, the Purchaser fiduciary or Plan has not relied primarily
on any advice or recommendation of the Company or any of its Affiliates.

 

  6. Transfer Restrictions. The Purchaser acknowledges and agrees as follows:

 

  a. The Securities have not been registered for sale under the Securities Act,
in reliance on the private offering exemption in Section 4(a)(2) thereof and
Rule 506 thereunder; other than as expressly provided in the Registration Rights
Agreement and as discussed in paragraph d. below, the Company does not currently
intend to register the Units, Shares, Warrants, Conversion Shares, or Warrant
Shares, under the Securities Act at any time in the future; and the undersigned
will not immediately be entitled to the benefits of Rule 144 with respect to the
Securities.         b. The Purchaser understands that there are substantial
restrictions on the transferability of the Units, Shares, Warrants, Conversion
Shares, or Warrant Shares, and that the certificates representing the Securities
shall bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such certificates or other
instruments):           THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR
(2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN
OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT.

 

14

 

 

    In addition, if any Purchaser is an Affiliate of the Company, certificates
evidencing the Securities issued to such Purchaser may bear a customary
“Affiliates” legend.           The legend set forth above shall be removed and
the Company shall issue a certificate without such legend to the holder of the
Securities upon which it is stamped, if (a) such Securities are sold pursuant to
a registration statement under the Securities Act, or (b) such holder delivers
to the Company an opinion of counsel, reasonably acceptable to the Company, that
a disposition of the Securities is being made pursuant to an exemption from such
registration and that the Securities, after such transfer, shall no longer be
“restricted securities” within the meaning of Rule 144.         c. Subject to
the Company’s right to request an opinion of counsel as set forth in Section 6b,
the legend set forth in Section 6b above shall be removable and the Company
shall issue or cause to be issued a certificate without such legend or any other
legend (except for any “Affiliates” legend as set forth in Section 6(b)) to the
holder of the applicable Securities upon which it is stamped as provided in this
Section 6c, if (i) such Securities are registered for resale under the
Securities Act (provided that, if the Purchaser is selling pursuant to an
effective registration statement registering the Securities for resale, the
Purchaser agrees to only sell such Securities during such time that such
registration statement is effective and not withdrawn or suspended, and only as
permitted by such registration statement), or (ii) such Securities are sold or
transferred in compliance with Rule 144, including without limitation in
compliance with the current public information requirements and volume and
manner-of-sale restrictions of Rule 144, if applicable at the time of such sale
or transfer, and the holder and its broker have delivered customary documents
reasonably requested by the Company’s transfer agent and/or Company counsel in
connection with such sale or transfer. All costs and expenses related to the
removal of the legends and the reissuance of any Securities, including but not
limited to costs and expenses with respect to the transfer agent, Company
counsel or otherwise, shall be borne by the Company. Following the date on which
the Registration Statement (as defined in the Registration Rights Agreement) is
first declared effective by the SEC, or at such other time as a legend is no
longer required for certain Securities, the Company will no later than three (3)
Trading Days (as defined below) following the delivery by a Purchaser to the
Company or the transfer agent (with concurrent notice and delivery of copies to
the Company) of a legended certificate representing such Securities (endorsed or
with stock powers attached, signatures guaranteed, and otherwise in form
necessary to affect the reissuance and/or transfer, and together with such other
customary documents as the transfer agent and/or Company counsel shall
reasonably request), deliver or cause to be delivered to the transferee of such
Purchaser or such Purchaser, as applicable, a book entry position or a
certificate representing such Securities that is free from all restrictive and
other legends. The Company may not make any notation on its records or give
instructions to the transfer agent that enlarge the restrictions on transfer set
forth in this Section 6. Certificates for Securities subject to legend removal
hereunder shall be transmitted by the transfer agent to the Purchaser by
crediting the account of the Purchaser’s prime broker with DTC. “Trading Day”
means (i) a day on which the Common Stock is listed or quoted and traded on its
principal trading market (unless the principal trading market is the OTC
Bulletin Board or the OTC Pink tier of the OTC Markets Group, Inc.), or (ii) if
the Common Stock is not listed on a trading market (other than the OTC Bulletin
Board or the OTC QB, OTC QX or OTC Pink tier of the OTC Markets Group, Inc.), a
day on which the Common Stock is traded in the over-the-counter market, as
reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted
on any trading market (other than the OTC QB, OTC QX or OTC Pink tier of the OTC
Markets Group, Inc.), a day on which the Common Stock is quoted in the
over-the-counter market as reported by the OTC QB, OTC QX or OTC Pink tier of
the OTC Markets Group, Inc. (or any similar organization or agency succeeding to
its functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.

 

15

 

 

  d. The Company covenants and agrees that it will grant to the Purchasers, with
respect to the Securities, the same rights to registration under the Securities
Act, if any, as the Company agrees with investors in its next offering of equity
securities (or securities convertible into equity securities of the Company) for
purposes of raising capital, if any.

 

  7. Conditions to Company’s Obligations at Closing. The Company’s obligation to
complete the sale and issuance of the Units and deliver the Shares and Warrants
to each Purchaser, individually, at each Closing shall be subject to the
following conditions to the extent not waived by the Company:

 

  a. Receipt of Payment. The Company shall have received payment, by wire
transfer of immediately available funds, in the full amount of the purchase
price for the number of Units being purchased by such Purchaser at such Closing.
        b. Representations and Warranties. The representations and warranties
made by the Purchaser in Section 5 hereof shall be true and correct in all
material respects when made, and shall be true and correct in all material
respects on such Closing Date with the same force and effect as if they had been
made on and as of said date (except in each case to the extent any such
representation and warranty is qualified by materiality, in which case, such
representation and warranty shall be true and correct in all respects as so
qualified). The Purchaser shall have performed in all material respects all
obligations and covenants herein required to be performed by it on or prior to
such Closing Date.         c. Receipt of Executed Documents. Such Purchaser
shall have executed and delivered to the Company the Omnibus Signature Page to
this Agreement, the Registration Rights Agreement and the Escrow Agreement, as
well as the Accredited Investor Certification, the Investor Profile and the
Anti-Money Laundering Information Form, in the forms following the Omnibus
Signature Page of this Agreement.         d. Minimum Offering. The Initial
Closing shall be at least for the number of Units in the Minimum Offering at the
Purchase Price.         e. Effectiveness of the Merger. The Merger shall have
been effected (or is simultaneously effected, in the case of the Initial
Closing).

 

16

 

 

  8. Conditions to Purchasers’ Obligations at Closing. Each Purchaser’s
obligation to accept delivery of the Units and to pay for the Units shall be
subject to the following conditions to the extent not waived by the Purchaser:

 

  a. Representations and Warranties Correct. The representations and warranties
made by the Company in Section 4 hereof shall be true and correct in all
material respects (except to the extent any such representation and warranty is
qualified by materiality or reference to Material Adverse Effect, in which case,
such representation and warranty shall be true and correct in all respects as so
qualified) as of, and as if made on, the date of this Agreement and as of such
Closing Date, except to the extent any such representation or warranty expressly
speaks as of an earlier date, in which case such representation or warranty
shall be true and correct in all material respects correct as of such earlier
date (except in each case to the extent any such representation and warranty is
qualified by materiality or reference to Material Adverse Effect, in which case,
such representation and warranty shall be true and correct in all respects as so
qualified). The Company shall have performed in all material respects all
obligations and covenants herein required to be performed by it on or prior to
such Closing Date.         b. Receipt of Agreements. The Company shall have
executed and delivered counterparts of this Agreement, the Registration Rights
Agreement and of the Escrow Agreement.         c. Minimum Offering. The Initial
Closing shall be at least for the number of shares of Units in the Minimum
Offering at the Purchase Price.         d. Certificate of Designations. The
Certificate of Designations shall have been filed with the Secretary of State of
the State of Delaware.         e. Certificate. The Chief Executive Officer of
the Company shall execute and deliver to the Purchasers a certificate addressed
to the Purchasers to the effect that the representations and warranties of the
Company in Section 4 hereof are true and correct in all material respects
(except to the extent any such representation and warranty is qualified by
materiality or reference to Material Adverse Effect, in which case, such
representation and warranty shall be true and correct in all respects as so
qualified) as of, and as if made on, the date of this Agreement and as of such
Closing Date and that the Company has satisfied in all material respects all of
the conditions set forth in this Section 8.         f. Judgments. No judgment,
writ, order, injunction, award or decree of or by any court, or judge, justice
or magistrate, including any bankruptcy court or judge, or any order of or by
any governmental authority, shall have been issued, and no action or proceeding
shall have been instituted by any governmental authority, enjoining or
preventing the consummation of the transactions contemplated hereby.

 

17

 

 

  9. Indemnification.

 

  a. The Purchaser agrees to indemnify and hold harmless the Company, Blue Star
and any other broker, agent or finder engaged by the Company for the Offering,
and their respective directors, officers, shareholders, members, partners,
employees and agents (and any other persons with a functionally equivalent role
of a person holding such titles notwithstanding a lack of such title or any
other title), each person who controls such indemnified person (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, shareholders, agents, members, partners or
employees (and any other persons with a functionally equivalent role of a person
holding such titles notwithstanding a lack of such title or any other title) of
such controlling person, from and against all losses, liabilities, claims,
damages, costs, fees and expenses whatsoever (including, but not limited to, any
and all expenses incurred in investigating, preparing or defending against any
litigation commenced or threatened) based upon or arising out of the Purchaser’s
actual or alleged false acknowledgment, representation or warranty, or
misrepresentation or omission to state a material fact, or breach by the
Purchaser of any covenant or agreement made by the Purchaser, contained herein
or in any other document delivered by the Purchaser in connection with this
Agreement. The liability of the Purchaser under this paragraph shall not exceed
the aggregate Purchase Price paid by the Purchaser for Units hereunder.        
b. The Company agrees to indemnify and hold harmless the Purchaser, and its
directors, officers, shareholders, members, partners, employees and agents (and
any other persons with a functionally equivalent role of a person holding such
titles notwithstanding a lack of such title or any other title), each person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other persons with a
functionally equivalent role of a person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person, from and
against all losses, liabilities, claims, damages, costs, fees and expenses
whatsoever (including, but not limited to, any and all expenses incurred in
investigating, preparing or defending against any litigation commenced or
threatened) based upon or arising out of the Company’s actual or alleged false
acknowledgment, representation or warranty, or misrepresentation or omission to
state a material fact, or breach by the Company of any covenant or agreement
made by the Company contained herein; provided, however, that the Company will
not be liable in any such case to the extent and only to the extent that any
such loss, liability, claim, damage, cost, fee or expense arises out of or is
based upon the inaccuracy of any representations made by such indemnified party
in this Agreement, or the failure of such indemnified party to comply with the
covenants and agreements contained herein. The liability of the Company under
this paragraph shall not exceed the total Purchase Price paid by the Purchaser
hereunder, except in the case of fraud.

 

18

 

 

  c. Promptly after receipt by an indemnified party under this Section 9 of
notice of the commencement of any Action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 9. In case any such Action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, if the defendants in any such Action include both the indemnified party
and the indemnifying party and either (i) the indemnifying party or parties and
the indemnified party or parties mutually agree or (ii) representation of both
the indemnifying party or parties and the indemnified party or parties by the
same counsel is inappropriate under applicable standards of professional conduct
due to actual or potential differing interests between them, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such Action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such Action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any reasonable legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed counsel in connection with the assumption
of legal defenses in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel in such circumstance), (ii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the Action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened Action in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such Action) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such Action, or (ii) be
liable for any settlement of any such Action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment of the plaintiff in any such
Action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.

 

  10. Participation in Future Financing.

 

  a. Each Purchaser shall have the right to participate in any subsequent
offering by the Company of equity securities or securities convertible into or
exercisable for equity securities (a “Subsequent Financing”) in up to an amount
of the Subsequent Financing equal to 100% of the Subsequent Financing amount
(the “Participation Maximum”) on the same terms, conditions and price provided
for in the Subsequent Financing, for a period of twenty-four (24) months
following the date of the Initial Closing.         b. At least fourteen (14)
calendar days prior to the closing of the Subsequent Financing, the Company
shall deliver to each Purchaser a written notice of its intention to effect a
Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser
if it wants to review the details of such financing (such additional notice, a
“Subsequent Financing Notice”). Upon the request of a Purchaser, and only upon a
request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than two (2) Business Days after such request, deliver a
Subsequent Financing Notice to such Purchaser. The Subsequent Financing Notice
shall describe in reasonable detail the proposed terms of such Subsequent
Financing, the amount of proceeds intended to be raised thereunder, and the
person or persons through or with whom such Subsequent Financing is proposed to
be effected, and shall include a term sheet or similar document relating thereto
as an attachment,

 

19

 

 

  c. Any Purchaser desiring to participate in such Subsequent Financing must
provide written notice to the Company by not later than 5:30 p.m. (New York City
time) on the fourth (4th) Business day after all of the Purchasers have received
the Pre-Notice that such Purchaser is willing to participate in the Subsequent
Financing, the amount of such Purchaser’s participation, and representing and
warranting that such Purchaser has such funds ready, willing, and available for
investment on the terms set forth in the Subsequent Financing Notice. If the
Company receives no such notice from a Purchaser as of such fourth (4th)
Business Day, such Purchaser shall be deemed to have notified the Company that
it does not elect to participate.         d. If by 5:30 p.m. (New York City
time) on the fourth (4th) Business Day after all of the Purchasers have received
the Pre-Notice, notifications by the Purchasers of their willingness to
participate in the Subsequent Financing (or to cause their designees to
participate) is, in the aggregate, less than the total amount of the Subsequent
Financing, then the Company may effect the remaining portion of such Subsequent
Financing on the terms and with the persons set forth in the Subsequent
Financing Notice.         e. If by 5:30 p.m. (New York City time) on the fourth
(4th) Business Day after all of the Purchasers have received the Pre-Notice, the
Company receives responses to a Subsequent Financing Notice from Purchasers
seeking to purchase more than the aggregate amount of the Participation Maximum,
each such Purchaser shall have the right to purchase its Pro Rata Portion (as
defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio
of (x) the subscription amount of securities of the Company purchased by a
Purchaser participating under this Section and (y) the sum of the aggregate
subscription amounts of securities purchased on the by all Purchasers
participating under this Section.

 

  11. Revocability; Binding Effect. The subscription hereunder may be revoked
prior to the Closing thereon, provided that written notice of revocation is sent
and is received by the Company at least three (3) Business Days prior to the
Closing on such subscription. The Purchaser hereby acknowledges and agrees that
this Agreement shall survive the death or disability of the Purchaser and shall
be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and permitted
assigns. If the Purchaser is more than one person, the obligations of the
Purchaser hereunder shall be joint and several and the agreements,
representations, warranties and acknowledgments herein shall be deemed to be
made by and be binding upon each such person and such person’s heirs, executors,
administrators, successors, legal representatives and permitted assigns.
Notwithstanding the foregoing revocation provisions, in no case may a Purchaser
revoke its purchase of Shares after the Purchaser’s funds have been closed upon.
        12. Modification. This Agreement shall not be amended, modified or
waived except by an instrument in writing signed by the Company and the holders
of at least a majority of the then held Units. Any amendment, modification or
waiver effected in accordance with this Section 11 shall be binding upon the
Company and all Purchasers and each transferee of the Shares, Warrants,
Conversion Shares or Warrant Shares.

 

20

 

 

  13. Immaterial Modifications to the Certificate of Designations or
Registration Rights Agreement. The Company may, at any time prior to the Initial
Closing, amend the Certificate of Designations or the Registration Rights
Agreement, if necessary, in its reasonable judgment, to clarify any provision
therein, but not inconsistent with the terms of this Agreement or the intent of
such documents, without first providing notice or obtaining prior consent of the
Purchaser.         14. Third-Party Beneficiary. The Placement Agent shall be an
express third-party beneficiary of the representations and warranties included
in this Agreement. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person,
except as otherwise set forth in Section 9 and this Section.         15.
Notices. Any notice, consents, waivers or other communication required or
permitted to be given hereunder shall be in writing and will be deemed to have
been delivered: (i) upon receipt, when personally delivered; (ii) upon receipt
when sent by certified mail, return receipt requested, postage prepaid; (iii)
upon receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
(iv) when sent, if by e-mail (provided that such sent e-mail is kept on file
(whether electronically or otherwise) by the sending party and the sending party
does not receive an automatically generated message from the recipient’s e-mail
server that such e-mail could not be delivered to such recipient); or (v) one
(1) Business Day after deposit with an overnight courier service with next day
delivery specified, in each case, properly addressed to the party to receive the
same. The addresses, facsimile numbers and email addresses for such
communications shall be:

 

  (a) if to the Company or Blue Star, at

 

Blue Star Foods Corp.

c/o Blue Star Foods

3000 NW 109th Ave.

Miami, Florida 33172

Attention: Carlos Faria, CEO

Telephone: (305) 836-6858

Facsimile: (305) 836-6859

Email: cfaria@bluestarfoods.com

 

with copies (which shall not constitute notice) to:

 

Crone Law Group, P.C.

830 Third Avenue, 5th Floor

New York, New York 10022

Attention: Eric C. Mendelson, Esq.

Telephone: (646) 278-0886

Facsimile: (212) 840-8560

Email: emendelson@cronelawgroup.com

 

21

 

 

  (b) if to the Purchaser, at the address set forth on the Omnibus Signature
Page hereof

 

    (or, in either case, to such other address as the party shall have furnished
in writing in accordance with the provisions of this Section). Any notice or
other communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party’s address which
shall be deemed given at the time of receipt thereof.         16. Assignability.
This Agreement and the rights, interests and obligations hereunder are not
transferable or assignable by the Purchaser or the Company.         17.
Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without reference to the principles
thereof relating to the conflict of laws. Any judicial proceeding brought
against either of the parties to this Agreement or any dispute arising out of
this Agreement or any matter related hereto shall be brought in the state or
federal courts located in the County of New York in the State of New York and,
by its execution and delivery of this Agreement, each party to this Agreement
accepts the jurisdiction of such courts. The foregoing consent to jurisdiction
shall not be deemed to confer rights on any person other than the parties to
this Agreement.         18. Arbitration. The parties agree to submit all
controversies to arbitration in accordance with the provisions set forth below
and understand that:

 

  a. Arbitration shall be final and binding on the parties.         b. The
parties are waiving their right to seek remedies in court, including the right
to a jury trial.         c. Pre-arbitration discovery is generally more limited
and different from court proceedings.         d. The arbitrator’s award is not
required to include factual findings or legal reasoning and any party’s right to
appeal or to seek modification of rulings by arbitrators is strictly limited.  
      e. The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.         f.
All controversies which may arise between the parties concerning this Agreement
shall be determined by arbitration pursuant to the rules then pertaining to the
Financial Industry Regulatory Authority in New York, New York. Judgment on any
award of any such arbitration may be entered in the Supreme Court of the State
of New York or in any other court having jurisdiction of the person or persons
against whom such award is rendered. Any notice of such arbitration or for the
confirmation of any award in any arbitration shall be sufficient if given in
accordance with the provisions of this Agreement. The parties agree that the
determination of the arbitrators shall be binding and conclusive upon them. The
prevailing party, as determined by such arbitrators, in a legal proceeding shall
be entitled to collect any costs, disbursements and reasonable attorney’s fees
from the other party. Prior to filing an arbitration, the parties hereby agree
that they will attempt to resolve their differences first by submitting the
matter for resolution to a mediator, acceptable to all parties, and whose
expenses will be borne equally by all parties. The mediation will be held in the
County of New York, State of New York, on an expedited basis. If the parties
cannot successfully resolve their differences through mediation within sixty
(60) days from the receipt of the written notice of a matter from the notifying
party, the matter will be resolved by arbitration. The arbitration shall take
place in the County of New York, State of New York, on an expedited basis.

 

22

 

 

  19. Form D; Blue Sky Qualification. The Company agrees to timely file a Form D
with respect to the Shares and Warrants and to provide a copy thereof, promptly
upon request of any Purchaser. The Company shall take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or
to qualify the Shares and Warrants for sale to the Purchaser at such Closing
under applicable securities or “Blue Sky” laws of the states of the United
States, and shall provide evidence of such actions promptly upon request of any
Purchaser.         20. Use of Pronouns. All pronouns and any variations thereof
used herein shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons referred to may
require.         21. Miscellaneous.

 

  a. This Agreement, together with any confidentiality agreement between the
Purchaser and the Company, constitute the entire agreement between the Purchaser
and the Company with respect to the Offering and supersede all prior oral or
written agreements and understandings, if any, relating to the subject matter
hereof.         b. If the Securities are certificated and any certificate or
instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company and, if applicable, the Company’s transfer agent of
such loss, theft or destruction and the execution by the holder thereof of a
customary lost certificate affidavit of that fact and an agreement to indemnify
and hold harmless the Company and, if applicable, the Company’s transfer agent
for any losses in connection therewith or, if required by the transfer agent, a
bond in such form and amount as is required by the transfer agent. The
applicants for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs associated with the issuance of such
replacement Securities. If a replacement certificate or instrument evidencing
any Securities is requested due to a mutilation thereof, the Company may require
delivery of such mutilated certificate or instrument as a condition precedent to
any issuance of a replacement.         c. Each of the parties hereto shall pay
its own fees and expenses (including the fees of any attorneys, accountants,
appraisers or others engaged by such party) in connection with this Agreement,
the Registration Rights Agreement, and the transactions contemplated hereby,
whether or not the transactions contemplated hereby are consummated.         d.
This Agreement may be executed in one or more original or facsimile or by an
e-mail which contains a portable document format (.pdf) file of an executed
signature page counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same instrument and which shall
be enforceable against the parties actually executing such counterparts. The
exchange of copies of this Agreement and of signature pages by facsimile
transmission or in .pdf format shall constitute effective execution and delivery
of this Agreement as to the parties and may be used in lieu of the original
Agreement for all purposes. Signatures of the parties transmitted by facsimile
or by e-mail of a document in pdf format shall be deemed to be their original
signatures for all purposes.

 

23

 

 

  e. Each provision of this Agreement shall be considered separable and, if for
any reason any provision or provisions hereof are determined to be invalid or
contrary to applicable law, such invalidity or illegality shall not impair the
operation of or affect the remaining portions of this Agreement.         f.
Paragraph titles are for descriptive purposes only and shall not control or
alter the meaning of this Agreement as set forth in the text.         g. The
Purchaser understands and acknowledges that there may be multiple Closings for
the Offering.         h. The Purchaser hereby agrees to furnish the Company such
other information as the Company may request prior to the Closing with respect
to its subscription hereunder.         i. The representations and warranties of
the Company and the Purchaser made in this Agreement shall survive the execution
and delivery hereof and the delivery of the Shares.

 

  22. Public Disclosure. Neither the Purchaser nor any officer, manager,
director, member, partner, stockholder, employee, Affiliate, Affiliated person
or entity of the Purchaser shall make or issue any press releases or otherwise
make any public statements or make any disclosures to any third person or entity
with respect to the transactions contemplated herein and will not make or issue
any press releases or otherwise make any public statements of any nature
whatsoever with respect to the Offering or the Company without the Company’s
express prior written approval (which may be withheld in the Company’s sole
discretion), except to the extent such disclosure is required by law or
applicable governmental or principal trading market regulation.         23.
Potential Conflicts. Legal counsel to the Company and its Affiliates,
principals, representatives or employees may now or hereafter own shares of the
Company.         24. Independent Nature of Each Purchaser’s Obligations and
Rights. For avoidance of doubt, the obligations of the Purchaser under this
Agreement are several and not joint with the obligations of any other Purchaser,
and the Purchaser shall not be responsible in any way for the performance of the
obligations of any other Purchaser under any other Subscription Agreement.
Nothing contained herein and no action taken by the Purchaser shall be deemed to
constitute the Purchaser as a partnership, an association, a joint venture, or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement and any other Subscription
Agreements. The Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.

 

[Signature page follows.]

 

24

 

 

IN WITNESS WHEREOF, the Company has duly executed this Agreement as of the 8th
day of November, 2018.

 

  BLUE STAR FOODS CORP.         By: [ex10-1_001.jpg]   Name: John Keeler  
Title: Executive Chairman

 

[Signature Page to Subscription Agreement]

 

 

 

 

How to subscribe for Units in the private offering of Blue Star Foods Corp.

 

1. Complete, Sign and Date the Omnibus Signature Page for the Securities
Purchase Agreement, the Registration Rights Agreement and the Escrow Agreement.
    2. Initial the Accredited Investor Certification in the appropriate place or
places.     3. Complete and sign the Investor Profile.     4. Complete and sign
the Anti-Money Laundering Information Form.     5. Email all completed forms to
Eric C. Mendelson at emendelson@cronelawgroup.com, copied to Courtney Truesdell
at ctruesdell@cronelawgroup.com, and then send all signed original documents to:

 

Crone Law Group, P.C.

830 Third Avenue, 5th Floor

New York, NY 10022

Attention: Eric C. Mendelson

Telephone: (646) 278-0886

Facsimile: (212) 840-8560

 

6. If you are paying the Purchase Price by check, a certified or other bank
check for the exact dollar amount of the Purchase Price for the number of Units
you are purchasing should be made payable to the order of “Crone Law Group,
P.C., as Escrow Agent for Blue Star Foods Corp., Acct. # 157802262 ” and should
be sent directly to Crone Law Group, P.C., 830 Third Avenue, 5th Floor, New
York, NY 10022, Attn: Eric C. Mendelson, Ref.: Acquisition Group II, Inc. (to be
renamed Blue Star Foods Corp.) [INSERT PURCHASER’S NAME].       Checks take up
to 5 business days to clear. A check must be received by the Escrow Agent at
least 6 business days before the closing date.     7. If you are paying the
Purchase Price by wire transfer, you should send a wire transfer for the exact
dollar amount of the Purchase Price for the number of Units you are purchasing
according to the following instructions:

 

Bank: JPMorgan Chase Bank, N.A
1333 4th Street, Santa Monica CA 90401 ABA Routing #: 322271627 SWIFT CODE:
CHASUS33 Account Name: Crone Law Group, P. C. IOLTA Trust Account Account #:
157802262 Reference: “Ref.: Blue Star Foods Corp. - [INSERT PURCHASER’S NAME]”
Escrow Account Contact: Eric C. Mendelson – (646) 278-0886

 

Thank you for your interest.

 

 

 

 

Blue Star Foods Corp.

OMNIBUS SIGNATURE PAGE TO

SUBSCRIPTION AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND ESCROW AGREEMENT

 

The undersigned, desiring to: (i) enter into the Subscription Agreement, dated
as of ____________ ___,[1] 2018 (the “Subscription Agreement”), between the
undersigned, Blue Star Foods Corp., a Delaware corporation (the “Company”), and
the other parties thereto, in or substantially in the form furnished to the
undersigned, (ii) enter into the Registration Rights Agreement (the
“Registration Rights Agreement”), among the undersigned, the Company and the
other parties thereto, in or substantially in the form furnished to the
undersigned, (iii) enter into the Escrow Agreement (the “Escrow Agreement”),
among the undersigned, the Company and the other parties thereto, in or
substantially in the form furnished to the undersigned, and (iii) purchase the
Securities of the Company as set forth in the Subscription Agreement set forth
below, hereby agrees to purchase such Securities from the Company and further
agrees to join the Subscription Agreement, the Registration Rights Agreement and
the Escrow Agreement as a party thereto, with all the rights and privileges
appertaining thereto, and to be bound in all respects by the terms and
conditions thereof. The undersigned specifically acknowledges having read the
representations section in the Subscription Agreement entitled “Representations
and Warranties of the Purchaser” and hereby represents that the statements
contained therein are complete and accurate with respect to the undersigned as a
Purchaser.

 

IN WITNESS WHEREOF, the Purchaser hereby executes this Agreement.

 

Dated: __________, 2018

 

  X $1,000 = $ Number of Units   Purchase Price per Unit   Total Purchase Price

 

PURCHASER (individual)     PURCHASER (entity)         Signature   Name of Entity
    By:    Print Name     Signature             Print Name: Signature (if Joint
Tenants or Tenants in Common)   Title:         Address of Principal Residence:  
Address of Executive Offices:                       Social Security Number(s):  
IRS Tax Identification Number:             Telephone Number:   Telephone Number:
              Facsimile Number:   Facsimile Number:               E-mail
Address:   E-mail Address:      

 

1 Will reflect the Closing Date. Not to be completed by Purchaser.

 

 

 

 

Blue Star Foods Corp.

 

ACCREDITED INVESTOR CERTIFICATION

 

For Individual Investors Only

(all Individual Investors must INITIAL where appropriate):

 

Initial _______ I have a net worth of at least US$1 million either individually
or through aggregating my individual holdings and those in which I have a joint,
community property or other similar shared ownership interest with my spouse.
(For purposes of calculating your net worth under this paragraph, (a) your
primary residence shall not be included as an asset; (b) indebtedness secured by
your primary residence, up to the estimated fair market value of your primary
residence at the time of your purchase of the Securities, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at
the time of your purchase of the Securities exceeds the amount outstanding sixty
(60) days before such time, other than as a result of the acquisition of your
primary residence, the amount of such excess shall be included as a liability);
and (c) indebtedness that is secured by your primary residence in excess of the
estimated fair market value of your primary residence at the time of your
purchase of the Securities shall be included as a liability.)     Initial
_______ I have had an annual gross income for the past two (2) years of at least
US$200,000 (or US$300,000 jointly with my spouse) and expect my income (or joint
income, as appropriate) to reach the same level in the current year.     Initial
_______ I am a member, director or executive officer of Blue Star Foods Corp.

 

For Non-Individual Investors (Entities)

(all Non-Individual Investors must INITIAL where appropriate):

 

Initial _______ The investor certifies that it is a partnership, corporation,
limited liability company or business trust that is 100% owned by persons who
meet at least one of the criteria for Individual Investors set forth above (in
which case each such person must complete the Accreditor Investor Certification
for Individuals above as well the remainder of this questionnaire).     Initial
_______ The investor certifies that it is a partnership, corporation, limited
liability company or business trust that has total assets of at least
US$5,000,000 and was not formed for the purpose of investing the Company.    
Initial _______ The investor certifies that it is an employee benefit plan whose
investment decision is made by a plan fiduciary (as defined in Section 3(21) of
the Employee Retirement Income Security Act of 1974) that is a bank, savings and
loan association, insurance company or registered investment advisor.    
Initial _______ The investor certifies that it is an employee benefit plan whose
total assets exceed US$5,000,000 as of the date of this Agreement.     Initial
_______ The undersigned certifies that it is a self-directed employee benefit
plan whose investment decisions are made solely by persons who meet at least one
of the criteria for Individual Investors.     Initial _______ The investor
certifies that it is a U.S. bank as defined in Section 3(a)(2) of the Securities
Act, or any U.S. savings and loan association or other similar U.S. institution
as defined in Section 3(a)(5) of the Securities Act acting in its individual or
fiduciary capacity.     Initial _______ The undersigned certifies that it is a
broker-dealer registered pursuant to Section 15 of the Securities Exchange Act
of 1934.     Initial _______ The investor certifies that it is an organization
described in Section 501(c)(3) of the Internal Revenue Code with total assets
exceeding US$5,000,000 and not formed for the specific purpose of investing in
the Company.     Initial _______ The investor certifies that it is a trust with
total assets of at least US$5,000,000, not formed for the specific purpose of
investing in the Company, and whose purchase is directed by a person with such
knowledge and experience in financial and business matters that such person is
capable of evaluating the merits and risks of the prospective investment.    
Initial _______ The investor certifies that it is a plan established and
maintained by a state or its political subdivisions, or any agency or
instrumentality thereof, for the benefit of its employees, and which has total
assets in excess of US$5,000,000.     Initial _______ The investor certifies
that it is an insurance company as defined in Section 2(13) of the Securities
Act of 1933.     Initial _______ The investor certifies that it is an investment
company registered under the Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act.     Initial
_______ The investor certifies that it is a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958.     Initial _______ The investor
certifies that it is a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940.

 

 

 

 

Blue Star Foods Corp.

 

Investor Profile
(Must be completed by Investor)

 

Section A - Personal Investor Information

 

Investor Name(s):
_____________________________________________________________________________

 

Individual executing Profile or Trustee:
_____________________________________________________________

 

Social Security Numbers / Federal I.D. Number:
_______________________________________________________

 

Date of Birth: __________________________   Marital Status:
___________________________________ Joint Party Date of Birth: _________________
  Investment Experience (Years): _______________________ Annual Income:
________________________   Liquid Net Worth: __________________________________

 

Net Worth*: ________________________

 

Tax Bracket: _____ 15% or below _____ 25% - 27.5% _____ Over 27.5%

 

Home Street Address:
__________________________________________________________________________

Home City, State & Zip Code:
____________________________________________________________________

Home Phone: _______________   Home Fax: _____________   Home Email:
________________

Employer:
____________________________________________________________________________________

Employer Street Address:
________________________________________________________________________

Employer City, State & Zip Code:
__________________________________________________________________

Bus. Phone: _______________   Bus. Fax: _____________   Bus. Email:
_________________

Type of Business:
______________________________________________________________________________

Outside Broker/Dealer:
__________________________________________________________________________

 

Section B – Certificate Delivery Instructions

 

____ Please deliver certificate to the Employer Address listed in Section A.

____ Please deliver certificate to the Home Address listed in Section A.

____ Please deliver certificate to the following address:
_________________________________________________

 

Section C – Form of Payment – Check or Wire Transfer

 

____ Check payable to Crone Law Group, P.C., as Escrow Agent for Blue Star Foods
Corp., ACCT# 157802262

____ Wire funds from my outside account according to Section 2(b) of the
Subscription Agreement.

____ The funds for this investment are rolled over, tax deferred from __________
within the allowed 60-day window.

Please check if you are a FINRA member or Affiliate of a FINRA member firm: ____

 

      Investor Signature   Date

 

* For purposes of calculating your net worth in this form, (a) your primary
residence shall not be included as an asset; (b) indebtedness secured by your
primary residence, up to the estimated fair market value of your primary
residence at the time of your purchase of the Securities, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at
the time of your purchase of the Securities exceeds the amount outstanding sixty
(60) days before such time, other than as a result of the acquisition of your
primary residence, the amount of such excess shall be included as a liability);
and (c) indebtedness that is secured by your primary residence in excess of the
estimated fair market value of your primary residence at the time of your
purchase of the Securities shall be included as a liability.

 

 

 

 

ANTI MONEY LAUNDERING REQUIREMENTS

 

The USA PATRIOT Act

 

The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the
United States and abroad. The Act imposes new anti-money laundering requirements
on brokerage firms and financial institutions. Since April 24, 2002, all
brokerage firms have been required to have new, comprehensive anti-money
laundering programs.

 

To help you understand these efforts, we want to provide you with some
information about money laundering and our steps to implement the USA PATRIOT
Act.

 

What is money laundering?

 

Money laundering is the process of disguising illegally obtained money so that
the funds appear to come from legitimate sources or activities. Money laundering
occurs in connection with a wide variety of crimes, including illegal arms
sales, drug trafficking, robbery, fraud, racketeering, and terrorism.

 

How big is the problem and why is it important?

 

The use of the U.S. financial system by criminals to facilitate terrorism or
other crimes could well taint our financial markets. According to the U.S. State
Department, one recent estimate puts the amount of worldwide money laundering
activity at $1 trillion a year.

 

What are we required to do to eliminate money laundering?

 

Under rules required by the USA PATRIOT Act, our anti-money laundering program
must designate a special compliance officer, set up employee training, conduct
independent audits, and establish policies and procedures to detect and report
suspicious transaction and ensure compliance with such laws. As part of our
required program, we may ask you to provide various identification documents or
other information. Until you provide the information or documents we need, we
may not be able to effect any transactions for you.

 

 

 

 

ANTI-MONEY LAUNDERING INFORMATION FORM

The following is required in accordance with the AML provision of the USA
PATRIOT ACT.

(Please fill out and return with requested documentation.)

 

INVESTOR NAME:
______________________________________________________________________________

 

LEGAL ADDRESS:
______________________________________________________________________________

 

_____________________________________________________________________________

 

SSN# or TAX ID#

OF INVESTOR:
________________________________________________________________________________

 

YEARLY INCOME:
_____________________________________________________________________________

 

NET WORTH:
_________________________________________________________________________________*

 

* For purposes of calculating your net worth in this form, (a) your primary
residence shall not be included as an asset; (b) indebtedness secured by your
primary residence, up to the estimated fair market value of your primary
residence at the time of your purchase of the Securities, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at
the time of your purchase of the Securities exceeds the amount outstanding sixty
(60) days before such time, other than as a result of the acquisition of your
primary residence, the amount of such excess shall be included as a liability);
and (c) indebtedness that is secured by your primary residence in excess of the
estimated fair market value of your primary residence at the time of your
purchase of the Securities shall be included as a liability.

 

INVESTMENT OBJECTIVE(S) (FOR ALL INVESTORS):
_________________________________________________

 

ADDRESS OF BUSINESS OR OF EMPLOYER:
________________________________________________________

 

FOR INVESTORS WHO ARE INDIVIDUALS: AGE:
_____________________________________________________

 

FOR INVESTORS WHO ARE INDIVIDUALS: OCCUPATION:
_____________________________________________

 

FOR INVESTORS WHO ARE ENTITIES: NATURE OF BUSINESS:
__________________________________________

 

IDENTIFICATION & DOCUMENTATION AND SOURCE OF FUNDS:

 

1. Please submit a copy of non-expired identification for the authorized
signatory(ies) on the investment documents, showing name, date of birth, address
and signature. The address shown on the identification document MUST match the
Investor’s address shown on the Investor Signature Page.

 

Current Driver’s License or Valid Passport or Identity Card

(Circle one or more)

 

2. If the Investor is a corporation, limited liability company, trust or other
type of entity, please submit the following requisite documents: (i) Articles of
Incorporation, By-Laws, Certificate of Formation, Operating Agreement, Trust or
other similar documents for the type of entity; and (ii) Corporate Resolution or
power of attorney or other similar document granting authority to signatory(ies)
and designating that they are permitted to make the proposed investment. 3.
Please advise where the funds were derived from to make the proposed investment:

 

Investments Savings Proceeds of Sale Other ____________

(Circle one or more)

 

Signature: _______________________________________

 

Print Name: _____________________________________

 

Title (if applicable): _______________________________

 

Date: _________________________________________