UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

Current Report

 

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 24, 2015

 

BLOW & DRIVE INTERLOCK CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware   000-55053   46-3590850

(State or other

jurisdiction of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

137 South Robertson Boulevard, Suite 129

Beverly Hills, CA 90211

(Address of principal executive offices) (zip code)

 

(818) 299-0653

(Registrant’s telephone number, including area code)

 

 

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 
 

 

SECTION 3 – Securities and Trading Markets

 

Item 3.02 Unregistered Sales of Equity Securities

 

On November 24, 2015, we entered into an agreement with David Petlak, one of our existing non-affiliate shareholders, and issued a 10% interest bearing convertible debenture for $50,000 due on November 19, 2017. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading day prior to the conversion date, but may not be converted if such conversion would cause the holder to own more than 9.9% of our outstanding common stock after giving effect to the conversion (which limitation may be removed by the holder upon 61 days advanced notice to the company). In connection with the issuance of the promissory note, we issued Mr. Petlak a warrant to purchase 80,000 shares of our common stock at an exercise price of $0.80 per share. The warrant has an exercise period of two years from the date of issuance. The issuance of the promissory note and warrant was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933. The investor was sophisticated, familiar with our operations, and there was no solicitation.

 

SECTION 9 – Financial Statements and Exhibits

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

EXHIBIT NO.   DESCRIPTION
     
10.1   Securities Purchase Agreement entered into with David Petlak
     
10.2   Convertible Promissory Note issued to David Petlak
     
10.3   Common Stock Purchase Warrant issued to David Petlak

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: December 2, 2015 Blow & Drive Interlock Corporation
  a Delaware corporation

 

  By: /s/ Laurence Wainer
    Laurence Wainer
  Its: Chief Executive Officer and Chief Financial Officer

 

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BLOW & DRIVE INTERLOCK CORPORATION

 

 

 

SECURITIES PURCHASE AGREEMENT

 

 

 

 
     

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is made and entered into effective as of the 7th day of August, 2015 (the “Effective Date”) by and between Blow & Drive Interlock Corporation, a Delaware corporation (the “Company”), and David Stuart Petlak, a(n) Individual (the “Purchaser”). The Company and Purchaser shall each be referred to as a “Party” and collectively as the “Parties.”

 

AGREEMENT

 

1. PURCHASE OF SECURITIES : On the Closing Date (as hereinafter defined), subject to the terms and conditions set forth in this Agreement, the Purchaser hereby agrees to purchase, and the Company hereby agrees to sell, a $50,000 principal amount convertible promissory note, in the form attached hereto as Exhibit B (the “Note”), convertible into shares of the Company’s common stock for a total purchase price of fifty thousand dollars ($50,000) (the “Purchase Price”). In addition to the Note the Purchaser will be issued a warrant to purchase Eighty Thousand (80,000) shares of the Company’s common stock at an exercise price of $0.80 per share in the form attached hereto as Exhibit C (the “Warrant”). Together the Note and the Warrant, and the Company’s shares of common stock underlying the Note and the Warrant, will be referred herein as the “Securities.”

 

2. CLOSING AND DELIVERY :

 

a) Upon the terms and subject to the conditions set forth herein, the consummation of the purchase and sale of the Note (the “Closing”) shall be held simultaneous with the execution of this Agreement, or at such other time mutually agreed upon between the constituent Parties (the “Closing Date”). The Closing shall take place at the offices of counsel for the Company set forth in Section 6 hereof, or by the exchange of documents and instruments by mail, courier, facsimile and wire transfer to the extent mutually acceptable to the Parties hereto.

 

b) At the Closing:

 

(i) The Company and the Purchaser shall execute this Agreement, and the Company will execute the Note and the Warrant which shall serve as evidence of ownership of the Note and the Warrant, free from restrictions on transfer except as set forth in this Agreement and federal and state securities laws.

 

(ii) The Purchaser shall deliver to the Company the Purchase Price.

 

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3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY PURCHASER : The Purchaser hereby represents, warrants and agrees as follows:

 

a) Purchase for Own Account. Purchaser represents that he is acquiring the Securities solely for his own account and beneficial interest for investment and not for sale or with a view to distribution of the Securities or any part thereof, has no present intention of selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the same, and does not presently have reason to anticipate a change in such intention.

 

b) Ability to Bear Economic Risk. Purchaser acknowledges that an investment in the Securities involves a high degree of risk, and represents that he is able, without materially impairing his financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of his investment.

 

c) Access to Information. The Purchaser acknowledges that the Purchaser has been furnished with such financial and other information concerning the Company, the directors and officers of the Company, and the business and proposed business of the Company as the Purchaser considers necessary in connection with the Purchaser’s investment in the Securities, and is aware the Company makes quarterly filings with the Securities and Exchange Commission viewable on the EDGAR system. As a result, the Purchaser is thoroughly familiar with the proposed business, operations, properties and financial condition of the Company and has discussed with officers of the Company any questions the Purchaser may have had with respect thereto. The Purchaser understands:

 

(i) The risks involved in this investment, including the speculative nature of the investment;

 

(ii) The financial hazards involved in this investment, including the risk of losing the Purchaser’s entire investment;

 

(iii) The lack of liquidity and restrictions on transfers of the Securities; and

 

(iv) The tax consequences of this investment.

 

The Purchaser has consulted with the Purchaser’s own legal, accounting, tax, investment and other advisers with respect to the tax treatment of an investment by the Purchaser in the Securities and the merits and risks of an investment in the Securities.

 

d) Securities Part of Private Placement. The Purchaser has been advised that the Securities have not been registered under the Securities Act of 1933, as amended (the “Act”), or qualified under the securities law of any state, on the ground, among others, that no distribution or public offering of the Securities is to be effected and the Securities will be issued by the Company in connection with a transaction that does not involve any public offering within the meaning of section 4(a)(2) of the Act and/or Regulation D as promulgated by the Securities and Exchange Commission under the Act, and under any applicable state blue sky authority. The Purchaser understands that the Company is relying in part on the Purchaser’s representations as set forth herein for purposes of claiming such exemptions and that the basis for such exemptions may not be present if, notwithstanding the Purchaser’s representations , the Purchaser has in mind merely acquiring the Securities for resale on the occurrence or nonoccurrence of some predetermined event. The Purchaser has no such intention.

 

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e) Purchaser Not Affiliated with Company. The Purchaser, either alone or with the Purchaser’s professional advisers (i) are unaffiliated with, have no equity interest in, and are not compensated by, the Company or any affiliate or selling agent of the Company, directly or indirectly (other than as set forth in the Investor Questionnaire attached hereto as Exhibit A); (ii) has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of an investment in the Securities; and (iii) has the capacity to protect the Purchaser’s own interests in connection with the Purchaser’s proposed investment in the Securities.

 

f) Further Limitations on Disposition. Purchaser further acknowledges that the Securities are restricted securities under Rule 144 of the Act, and, therefore, if the Company, in its sole discretion, chooses to issue any certificates reflecting the ownership interest in the Securities, those certificates will contain a restrictive legend substantially similar to the following:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Without in any way limiting the representations set forth above, Purchaser further agrees not to make any disposition of all or any portion of the Securities unless and until:

 

(i) There is then in effect a Registration Statement under the Act covering such proposed disposition and such disposition is made in accordance with such Registration Statement; or

 

(ii) Purchaser shall have obtained the consent of the Company and notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, Purchaser shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration under the Act or any applicable state securities laws.

 

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Notwithstanding the provisions of subparagraphs (i) and (ii) above, no such registration statement or opinion of counsel shall be necessary for a transfer by such Purchaser to a partner (or retired partner) of Purchaser, or transfers by gift, will or intestate succession to any spouse or lineal descendants or ancestors, if all transferees agree in writing to be subject to the terms hereof to the same extent as if they were Purchasers hereunder as long as the consent of the Company is obtained.

 

g) Accredited Investor Status (Please check one). Purchaser

 

x   is

 

is not

 

an “accredited investor” as such term is defined in Rule 501 under the Act because Purchaser either:

 

(i) has a net worth of at least $1,000,000 (for purposes of this question, Purchaser may include spouse’s net worth and may include the fair market value of home furnishings and automobiles, but must exclude from the calculation the value of Purchaser’s primary residence and the related amount of any indebtedness on primary residence up to the fair market value of the primary residence (any indebtedness that exceeds the fair market value of the primary residence must be deducted from net worth calculation)), or

 

(ii) had an individual income of more than $200,000 in each of the two most recent calendar years, and reasonably expects to have an individual income in excess of $200,000 in the current calendar year; or along with Purchaser’s spouse had joint income in excess of $300,000 in each of the two most recent calendar years, and reasonably expects to have a joint income in excess of $300,000 in the current calendar year.

 

For purposes of this Agreement, “individual income” means “adjusted gross income” as reported for Federal income tax purposes, exclusive of any income attributable to a spouse or to property owned by a spouse: (i) the amount of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended, (the “Code”), (ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of form 1040), (iii) any deduction claimed for depletion under Section 611 et seq. of the Code and (iv) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Sections 1202 of the Internal Revenue Code as it was in effect prior to enactment of the Tax Reform Act of 1986.

 

For purposes of this Agreement, “joint income” means, “adjusted gross income,” as reported for Federal income tax purposes, including any income attributable to a spouse or to property owned by a spouse, and increased by the following amounts: (i) the amount of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of Form 1040), (iii) any deduction claimed for depletion under Section 611 et seq. of the Code and (iv) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue Code as it was in effect prior to enactment of the Tax Reform Act of 1986.

 

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For the purposes of this Agreement, “net worth” means (except as otherwise specifically defined) the excess of total assets at fair market value, including home and personal property , over total liabilities, including mortgages and income taxes on unrealized appreciation of assets.

 

h) Purchaser Qualifications.

 

(i) If the Purchaser is an individual, the Purchaser is over 21 years of age; and if the Purchaser is an unincorporated association, all of its members are of such age.

 

(ii) If the Purchaser is a corporation, partnership, employee benefit plan or IRA, the Purchaser was either:

 

(a) not formed for the purpose of investing in the Securities, has or will have other substantial business or investments, and is (please check one):

 

  ________   an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, provided that the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act, and the plan fiduciary is a bank, savings and loan association, insurance company or registered investment adviser; or
       
  ________   an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 that has total assets in excess of $5,000,000; or
       
  ________   each of its shareholders, partners, or beneficiaries is an Accredited Investor; or
       
  ________   the plan is a self-directed employee benefit plan and the investment decision is made solely by a person that is an Accredited Investor; or a corporation, a partnership, or a Massachusetts or similar business trust with total assets in excess of $5,000,000.

 

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(b) formed for the specific purpose of investing in the Securities, and is an Accredited Investor because each of its shareholders or beneficiaries is an Accredited Investor.

 

(iii) If the Purchaser is a Trust, the Purchaser was either:

 

(a) not formed for the specific purpose of investing in the Securities, and is an Accredited Investor because (please check one):

 

    ________   the trust has total assets in excess of $5,000,000 and the investment decision has been made by a “sophisticated person”; or
       
  ________     the trustee making the investment decision on its behalf is a bank (as defined in Section 3(a)(2) of the Act), a saving and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, acting in its fiduciary capacity; or
       
  ________     the undersigned trustee certifies that the trust is an Accredited Investor because the granter(s) of the trust may revoke the trust at any time and regain title to the trust assets and has (have) retained sole investment control over the assets of the trust and the (each) grantor(s) is an Accredited Investor; or
       
  ________     the undersigned trustee certifies that the trust is an Accredited Investor because all of the beneficial owners of the trust are Accredited Investors .

 

(b) formed for the specific purpose of investing in the Securities, and the undersigned trustee certifies that the trust is an Accredited Investor because the granter(s) of the trust may revoke the trust at any time and regain title to the trust assets and has (have) retained sole investment control over the assets of the trust and the (each) grantor(s) is an Accredited Investor.

 

i) Purchaser Authorization. The Purchaser, if not an individual, is empowered and duly authorized to enter into this Agreement under any governing document, partnership agreement, trust instrument, pension plan, charter, certificate of incorporation, bylaw provision or the like; this Agreement constitutes a valid and binding agreement of the Purchaser enforceable against the Purchaser in accordance with its terms; and the person signing this Agreement on behalf of the Purchaser is empowered and duly authorized to do so by the governing document or trust instrument, pension plan, charter, certificate of incorporation, bylaw provision, board of directors or stockholder resolution, or the like.

 

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j) No Backup Withholding. The Social Security Number or taxpayer identification shown in this Agreement is correct, and the Purchaser is not subject to backup withholding because (i) the Purchaser has not been notified that he or she is subject to backup withholding as a result of a failure to report all interest and dividends or (ii) the Internal Revenue Service has notified the Purchaser that he or she is no longer subject to backup withholding.

 

k) Investor Questionnaire. The Purchaser has accurately completed the Investor Questionnaire attached hereto as Exhibit A and incorporated by reference herein.

 

4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY COMPANY : The Company hereby represents, warrants and agrees as follows:

 

a) Authority of Company. The Company has all requisite authority to execute and deliver this Agreement and to carry out and perform its obligations under the terms of this Agreement.

 

b) Authorization. All actions on the part of the Company necessary for the authorization, execution, delivery and performance of this Agreement by the Company and the performance of the Company’s obligations hereunder has been taken or will be taken prior to the issuance of the Securities. This Agreement, when executed and delivered by the Company, shall constitute valid and binding obligations of the Company enforceable in accordance with their terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws. The issuance of the Securities will be validly issued, fully paid and nonassessable , will not violate any preemptive rights, rights of first refusal, or any other rights granted by the Company, and will be issued in compliance with all applicable federal and state securities laws, and will be free of any liens or encumbrances, other than any liens or encumbrances created by or imposed upon the Purchaser through no action of the Company; provided, however, that the Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time the transfer is proposed.

 

c) Governmental Consents. All consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or filings with, any governmental authority required on the part of the Company in connection with the valid execution and delivery of this Agreement, the offer, sale or issuance of the Securities, or the consummation of any other transaction contemplated hereby shall have been obtained, except for notices required or permitted to be filed with certain state and federal securities commissions, which notices will be filed on a timely basis.

 

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5. INDEMNIFICATION : The Purchaser hereby agrees to indemnify and defend the Company and its officers and directors and hold them harmless from and against any and all liability, damage, cost or expense incurred on account of or arising out of:

 

(a) Any breach of or inaccuracy in the Purchaser’s representations, warranties or agreements herein;

 

(b) Any disposition of any Securities contrary to any of the Purchaser’s representations, warranties or agreements herein;

 

(c) Any action, suit or proceeding based on (i) a claim that any of said representations, warranties or agreements were inaccurate or misleading or otherwise cause for obtaining damages or redress from the Company or any director or officer of the Company under the Act, or (ii) any disposition of any Securities.

 

6. MISCELLANEOUS :

 

a) Binding Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

b) Governing Law; Venue. This Agreement shall be governed by and construed under the laws of the State of California as applied to agreements among California residents, made and to be performed entirely within the State of California. The Parties agree that any action brought to enforce the terms of this Agreement will be brought in the appropriate federal or state court having jurisdiction over Los Angeles County, California, United States of America.

 

c) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

d) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

e) Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Party to be notified, (b) when sent by confirmed facsimile if sent during normal busfoess hours of the recipient, if not, then on the next business day, or (c) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent as follows:

 

  If to the Company: Blow & Drive Interlock Corporation

1080 La Cienega Boulevard

Suite 304

Los Angeles, California 90035

Attn. Laurence Wainer, CEO

Facsimile L_)___

 

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  with a copy to:

Law Offices of Craig V. Butler

300 Spectrum Center Drive, Suite 300

Irvine, CA 92618

Attn: Craig V. Butler, Esq.
Facsimile (949) 209-2545

 

  If to Purchaser: David Stuart Petlak

1152 Beverwil Dr

L.A. C.A. 90035
Facsimile (424)362-4990

 

or at such other address as the Company or Purchaser may designate by ten (10) days advance written notice to the other Party hereto.

 

f) Modification; Waiver. No modification or waiver of any provision of this Agreement or consent to departure therefrom shall be effective unless in writing and approved by the Company and the Purchaser.

 

g) Entire Agreement; Successors. This Agreement and the Exhibits hereto constitute the full and entire understanding and agreement between the Parties with regard to the subjects hereof and no Party shall be liable or bound to the other Party in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein. The representations, warranties and agreements contained in this Agreement shall be binding on the Purchaser’s successors, assigns, heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of the Company and its directors and officers.

 

h) Expenses. Each Party shall pay their own expenses in connection with this Agreement. In addition, should either Party commence any action, suit or proceeding to enforce this Agreement or any term or provision hereof, then in addition to any other damages or awards that may be granted to the prevailing Party, the prevailing Party shall be entitled to have and recover from the other Party such prevailing Party’s reasonable attorneys’ fees and costs incurred in connection therewith.

 

i) Currency. All currency is expressed in U.S. dollars.

 

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IN WITNESS WHEREOF, the Parties have executed this Securities Purchase Agreement as of the date first written above.

 

 

 

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THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

 

CONVERTIBLE PROMISSORY NOTE

 

$50,000 November 19, 2015
  Los Angeles, CA

 

For value received, Blow & Drive Interlock Corporation, a Delaware corporation (the “Company”), promises to pay to Stuart David Petlak an Individual, or its assigns (the “Holder”) the principal sum of Fifty-Thousand Dollars ($50,000). The principal hereof and any unpaid accrued interest thereon shall be due and payable on or before 5:00 p.m., Pacific Time, on November 19, 2017 (the “Maturity Date”) (unless such payment date is accelerated as provided in Section 4 hereof). Payment of all amounts due hereunder shall be made at the address of the Holder provided for in Section 6 hereof. Interest shall accrue on the outstanding principal amount beginning on August 7, 2015, at the rate of ten (10%) per annum, simple interest, and shall continue on the outstanding principal until paid in full. Interest due under this Note shall be paid by the Company quarterly, beginning with the quarter ended September 30, 2015 and shall continue until all principal and interest has been repaid under this Note.

 

1. HISTORY OF THE NOTE. This Note is being delivered to Holder pursuant to that certain Securities Purchase Agreement dated November 19, 2015.

 

2. PREPAYMENT . The Company may at any time, upon thirty (30) days written notice (each a “Prepayment Notice”), prepay all or any part of the principal balance of this Note, provided that concurrently with each such prepayment the Company shall pay accrued interest on the principal, if any, prepaid to the date of such prepayment. Any Prepayment Notice must contain the amount of principal and interest to be prepaid by the Company. The end of the thirty-day period following a Prepayment Notice shall be referred to as a “Prepayment Date.” In the event that the Company sends a Prepayment Notice to Holder, Holder may elect prior to the Prepayment Date to convert into common stock of the Company pursuant to Section 3 hereof, all or part of the amount of principal and interest to be repaid under the Prepayment Notice instead of receiving such prepayment.

 

3. CONVERSION. The Holder of this Note is entitled, at its option and subject to the other terms set forth herein, at any time beginning on the date hereof, and in whole or in part, to convert the outstanding principal amount of this Note, or any portion of the principal amount hereof, and any accrued interest, into shares of the common stock of the Company. Any amounts the Holder elects to convert will be converted into common stock at the Conversion Price. The “Conversion Price” shall mean 70% multiplied by the Market Price (as defined herein) (representing a discount rate of 30%). “Market Price” means the average of the closing prices (“Closing Price”) for the last five (5) trading days prior to the Conversion Date. If the Company’s common stock is quoted over-the-counter, then the Closing Price will be as reported on the Over-the-Counter Bulletin Board (the “OTCBB”), OTCQB or applicable trading market as reported by a reliable reporting service (“Reporting Service”). If the Company’s common stock is not quoted over-the-counter then the Closing Price will be closing price where such security is listed or traded or, if no closing price of such security is available in any of the foregoing manners, the average of the closing prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. Any conversion shall be effectuated by giving a written notice (‘‘Notice of Conversion”) to the Company on the date of conversion, stating therein the amount of principal and accrued interest due to Holder under this Note being converted.

 

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Notwithstanding the foregoing, the Holder may not convert any outstanding amounts due under this Note if at the time of such conversion the amount of common stock issued for the conversion, when added to other shares of Company common stock owned by the Holder or which can be acquired by Holder upon exercise or conversion of any other instrument, would cause the Holder to own more than nine and nine-tenths percent (9.9%) of the Company’s outstanding common stock. The restriction described in this paragraph may be revoked upon sixty-one (61) days prior notice from Holder to the Company.

 

4. DEFAULT. The occurrence of any one of the following events shall constitute an Event of Default:

 

(a) The non-payment, when due, of any principal or interest pursuant to this Note;

 

(b) The material breach of any representation or warranty in this Note. In the event the Holder becomes aware of a breach of this Section 4(b), then provided such breach is capable of being cured by Company, the Holder shall notify the Company in writing of such breach and the Company shall have thirty (30) business days after notice to cure such breach;

 

(c) The breach of any covenant or undertaking, not otherwise provided for in this Section 4;

 

(d) The commencement by the Company of any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, receivership, dissolution, or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or the adjudication of the Company as insolvent or bankrupt by a decree of a court of competent jurisdiction; or the petition or application by the Company for, acquiescence in, or consent by the Company to, the appointment of any receiver or trustee for the Company or for all or a substantial part of the property of the Company; or the assignment by the Company for the benefit of creditors; or the written admission of the Company of its inability to pay its debts as they mature; or

 

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(e) The commencement against the Company of any proceeding relating to the Company under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, receivership, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect, provided, however, that the commencement of such a proceeding shall not constitute an Event of Default unless the Company consents to the same or admits in writing the material allegations of same, or said proceeding shall remain undismissed for 20 days; or the issuance of any order, judgment or decree for the appointment of a receiver or trustee for the Company or for all or a substantial part of the property of the Company, which order, judgment or decree remains undismissed for 20 days; or a warrant of attachment, execution, or similar process shall be issued against any substantial part of the property of the Company.

 

Upon the occurrence of any Default or Event of Default, the Holder, may, by written notice to the Company, declare all or any portion of the unpaid principal amount due to Holder, together with all accrued interest thereon, immediately due and payable, in which event it shall immediately be and become due and payable, provided that upon the occurrence of an Event of Default as set forth in paragraph (d) or paragraph (e) hereof, all or any portion of the unpaid principal amount due to Holder, together with all accrued interest thereon, shall immediately become due and payable without any such notice.

 

5. TRANSFERABILITY. This Note shall not be transferred, pledged, hypothecated, or assigned by the Holder without the express written consent of the Company, which consent will not be unreasonably withheld.

 

6. NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day, or (c) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent as follows:

 

If to the Company: Blow & Drive Interlock Corporation 1080
  La Cienega Boulevard
  Suite 304
  Los Angeles, California 90035
  Attn. Laurence Wainer
  Facsimile LJ

 

with a copy to: Law Offices of Craig V. Butler
  300 Spectrum Center Dr., Suite 300
  Irvine, CA 92618
  Attn: Craig V. Butler, Esq.
  Facsimile No.: (949) 209-2545

 

3
 

 

 

If to Holder: David Stuart Petlak
  1152 Beverwil
  LA CA 90035
  Facsimile No (424) 362-4990

 

or at such other address as the Company or Holder may designate by ten (10) days advance written notice to the other Party hereto.

 

7. GOVERNING LAW; VENUE. The terms of this Note shall be construed in accordance with the laws of the State of California, as applied to contracts entered into by California residents within the State of California, and to be performed entirely within the State of California. The parties agree that any action brought to enforce the terms of this Note will be brought in the appropriate federal or state court having jurisdiction over Los Angeles County, California.

 

8. CONFORMITY WITH LAW. It is the intention of the Company and of the Holder to conform strictly to applicable usury and similar laws. Accordingly, notwithstanding anything to the contrary in this Note, it is agreed that the aggregate of all charges which constitute interest under applicable usury and similar laws that are contracted for, chargeable or receivable under or in respect of this Note, shall under no circumstances exceed the maximum amount of interest permitted by such laws, and any excess, whether occasioned by acceleration or maturity of this Note or otherwise, shall be canceled automatically, and if theretofore paid, shall be either refunded to the Company or credited on the principal amount of this Note.

 

9. MODIFICATION; WAIVER. No modification or waiver of any provision of this Note or consent to departure therefrom shall be effective unless in writing and approved by the Company and the Holder.

 

4
 

 

IN WITNESS WHEREOF, Company has executed this Convertible Promissory Note as of the date first written above.

 

  “Company”
   
  Blow & Drive Interlock Corporation,
  a Delaware corporation
   
   
  By: Laurence Wainer
  Its: Chief Executive Officer

 

Acknowledged:

 

“Holder”

 

   

 

5
 

 

 

 

THIS WARRANT AND THE SECURITIES THAT MAY BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR PLEDGED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND STATUTES UNLESS PRIOR TO ANY SALE, TRANSFER, OR PLEDGE, THE ISSUER RECEIVES AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO IT, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND THE STATUTES AND RULES PROMULGATED THEREUNDER.

 

Dated: 11/19/2015 Right to Purchase 80,000 Shares of Common Stock,

 

Warrant No. BD- 2

 

COMMON STOCK PURCHASE WARRANT

OF

BLOW & DRIVE INTERLOCK CORPORATION

 

This certifies that, for value received, David Stuart Petlak, an individual (the “Holder”), is entitled to subscribe for and purchase at the Exercise Price (defined below) from Blow & Drive Interlock Corporation, a Delaware corporation (the “Company”), shares of the Company’s Common Stock as set forth below and subject to adjustment provided therein.

 

This Warrant is being issued pursuant to the terms of that certain Securities Purchase Agreement dated November 19, 2015 (the “SPA”). Unless indicated otherwise, the number of shares of common stock that Holder may purchase by exercising this Warrant is Eighty Thousand (80,000) shares of the Company’s common stock.

 

1. DEFINITIONS. As used herein, the following terms shall have the following respective meanings:

 

(a) “Exercise Period” shall mean the period commencing with the date hereof and ending three (2) years after the date hereof.

 

(b) “Exercise Price” shall mean $0.80 per share.

 

(c) “Exercise Shares” shall mean the shares of the Company’s common stock issuable upon exercise of this Warrant.

 

2. EXERCISE OF WARRANT. The rights represented by this Warrant may be exercised in whole or in part at any time during the Exercise Period, by delivery of the following to the Company at its address as set forth in Section 10, below:

 

(a) An executed Notice of Exercise in the form attached hereto;

 

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(b) Payment of the Exercise Price in cash or by check; and

 

(c) This Warrant.

 

Upon the exercise of the rights represented by this Warrant, a certificate or certificates for the Exercise Shares so purchased, registered in the name of the Holder or persons affiliated with the Holder, if the Holder so designates, shall be issued and delivered to the Holder within a reasonable time after the rights represented by this Warrant shall have been so exercised.

 

The person in whose name any certificate or certificates for Exercise Shares are to be issued upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Exercise Price was made, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

3. ADJUSTMENT IN NUMBER OF SHARES.

 

In case at any time or from time to time after the issue date the holders of the common stock of the Company (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefore, other or additional stock or other securities or property (including cash) by way of stock split, stock dividend, spin-off, reclassification , combination of shares or similar corporate rearrangement, then and in each such case the Holder of this Warrant, upon the exercise hereof as provided in Section 3, shall be entitled to receive the amount of stock and other securities and property which such Holder would hold on the date of such exercise if on the issue date he had been the holder of record of the number of shares of common stock of the Company called for on the face of this Warrant and had thereafter, during the period from the issue date, to and including the date of such exercise, retained such shares and/or all other or additional stock and other securities and property receivable by him as aforesaid during such period, giving effect to all adjustments called for during such period. In the event of any such adjustment, the Exercise Price shall be adjusted to equal (A) the Exercise Price in effect multiplied by the number of shares of common stock into which this Warrant is exercisable immediately prior to the adjustment, divided by (B) the number of shares of common stock into which this Warrant is exercisable immediately after such adjustment. Nothing in this Section or this Warrant will entitle the Holder to receive more than the shares listed above, as adjusted by this Section. There is no provision for the Holder to receive any more shares of the Company’s common stock under this Warrant as a penalty or otherwise.

 

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4. COVENANTS OF THE COMPANY.

 

(a) Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period have authorized and reserved, free from preemptive rights, a sufficient number of shares of its common stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of the Company’s common stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of common stock to such number of shares as shall be sufficient for such purposes.

 

(b) No Impairment. Except and to the extent as waived or consented to by the Holder, the Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holder against impairment.

 

(c) Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters) or other distribution, the Company shall provide to the Holder, at least ten (10) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

 

5. REPRESENTATIONS OF HOLDER.

 

(a) Acquisition of Warrant for Personal Account. The Holder represents and warrants that it is acquiring the Warrant and the Exercise Shares solely for its account for investment and not with a view to or for sale or distribution of said Warrant or Exercise Shares or any part thereof. The Holder also represents that the entire legal and beneficial interests of the Warrant and Exercise Shares the Holder is acquiring is being acquired for its account only.

 

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detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, the Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, for the Holder to the effect that such disposition will not require registration of such Warrant or Exercise Shares under the Act or any applicable state securities laws.

 

(d) The Holder understands and agrees that all certificates evidencing the shares to be issued to the Holder may bear the following legend:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

6. FRACTIONAL SHARES. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current fair market value of an Exercise Share by such fraction.

 

7. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company.

 

8. TRANSFER OF WARRANT. This Warrant and all rights hereunder are not transferable by the Holder unless the Holder obtains the express written consent of the Company.

 

9. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

 

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10. WAIVER AND AMENDMENT. Any term of this Warrant may be amended or waived only with the written consent of the Holder.

 

11. NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day, or (c) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent as follows:

 

If to the Company: Blow & Drive Interlock Corporation
  1080 La Cienega Boulevard
  Suite 304
  Los Angeles, California 90035
  Attn. Laurence Wainer Facsimile L_)

 

with a copy to: Law Offices of Craig V. Butler
  300 Spectrum Center Dr., Suite 300
  Irvine, CA 92618
  Attn: Craig V. Butler, Esq.
  Facsimile No.: (949) 209-2545

 

If to Holder: David Stuart Petlak
  1152 Beverwil
  LA CA 90035
  Facsimile No.: (424) 362-4990

 

or at such other address as the Company or folder may designate by ten (10) days advance written notice to the other Party hereto.

 

12. GOVERNING LAW; VENUE. This Warrant and all rights, obligations and liabilities hereunder shall be governed by the laws of the State of California. The parties agree that any action brought to enforce the terms of this Warrant will be brought in the appropriate federal or state court having jurisdiction over Los Angeles County, California, United States of America.

 

13. ATTORNEYS’ FEES. Should either party commence any legal action or proceeding in order to enforce or interpret this Warrant or any term or provision hereof, then in addition to any damages or remedies that may be awarded or granted to the prevailing party therein, the prevailing party shall be entitled to have and recover from the losing party such prevailing party’s reasonable attorneys’ fees and costs incurred in connection therewith.

 

14. CURRENCY. All currency is expressed in U.S. dollars.

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer as of August 7, 2015.

 

Blow & Drive Interlock Corporation,

a Delaware corporation

 

   
By: Laurence Wainer
Its: Chief Executive Officer

 

Acknowledged:

 

   

 

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  Blow and Drive Interlock Corporation  
  1080 S. La Cienega Blvd Suite 304  
  Los Angeles, California 90035  
  (877) 238 -4492  
  www.blowanddrive.com  

 

November 25, 2015

 

Lee Cassidy, Esq.

Cassidy & Associates

Attorneys At Law

215 Apolen_a Ave

Newport Beach, CA 92662

 

Dear Lee:

 

In connection with our prospective supplement No. 1 (Form 424) anticipated to occur on or around December 1, 2015, please provide our auditors, JPDH & Company, 18662 MacArthur Blvd, Second Floor, Irvine California 92612, with an update to your legal confirmation response letter dated March 5, 2015 in relation to the audit of the financial statements as of, and for the period ended, December 31, 2014. Can you also please email a copy of the letter to John Poth at JohnP@JPDHcpa.com to expedite the receipt of your response.  

 

   
EO & CFO  

 

 
 

 

FINDERS AGREEMENT

Blow and Drive Interlock

 

This Memorandum of Understanding is entered into between Blow and Drive Interlock Corp, a corporation publicly traded as OTCBB:BDIC (“BDIC”) and Gnosiis International, LLC (“GI”) on this day of November 30, 2015. BDIC wishes to engage Gnosiis International as a finder business partner and representative on a success based compensation arrangement and the parties wish to be bound by the responsibilities that are in accordance with the terms and conditions set forth herein:

 

1) The term of this agreement shall be for three-weeks but shall renew for an additional three-weeks period in the event that BDIC and GI have ongoing business.
   
2) GI will identify an investor(s) for BDIC to commit no less than $50,000 in capital by means of a convertible note in accordance with the following general terms:

 

  a) 36 Month Note at 7.5% interest
     
  b) Warrants attached to the note with a 1:1 ratio - at $2.25 per share, executable for up to 3 years
     
  c) At the end of the 36 month term, the investor at their sole discretion, can either take the principle in cash or convert into BDIC at the $2.25 share price

 

3) Upon success, Gnosiis will be entitled to the following compensation:

 

  a) 1 share of BDIC restricted stock will be vested to Gnosiis for every $1 in financing raised by BDIC as a result of GI’s efforts
     
  b) A bonus of either 15,000 shares or $5,000 in cash to be mutually agreed upon by GI and BDIC.
     
  c) A seat on BDIC’s Board of Directors

 

4) BDIC agrees to refrain from circumventing GI with regard to contacts, opportunities, and efforts brought by the other party. All contacts with third parties will remain the exclusive privilege of GI and BDIC will at no time participate in business activities with those contacts without written consent of GI. In the event of a breach by BDIC; GI shall be entitled to any and all damages, legal fees, cost of recourse, related to the breach by the receiving party. This shall remain in force for a 24-month period.
   
5) GI hereby agrees and acknowledge that its role in implementing this Agreement shall be only to introduce to BDIC potential participants in the business transaction. GI shall not engage in any negotiations, advise or make recommendations concerning the transaction. GI shall have no right to represent or bind BDIC to third parities or act in BDIC’s name. GI’s relationship with BDIC is not exclusive; BDIC may engage other finders.
   
6) Entering into Transaction. Nothing in this Agreement shall obligate BDIC to engage in a business transaction with the parties introduced by GI. The decision to enter into the business transaction is totally within BDIC’s sole absolute discretion.

 

 
 

 

7) Electronic Signatures. This Agreement and any written notice, consent, agreement or document provided for in this Agreement shall be deemed signed if the person’s name is placed on the document whether by manual signature, electronic transmission or facsimile transmission by the person.
   
8) Other Provisions. This Agreement embodies the entire understanding between the parties with regard to its subject matter and replaces all prior agreements. This agreement may not be assigned or modified without the written consent of both parties. This agreement is governed by the law of the state of Delaware, without regard to its conflict of law principles. Any notice to either party may be sent by email, United States Mail or expedited delivery service.

 

     
Laurence Wainer   Abraham Summers
CEO, Blow and Drive Interlock Corp   Gnosiis International, LLC

 

 
 

 

NOTICE OF EXERCISE

 

TO: Blow & Drive Interlock Corporation

 

(1) The undersigned hereby elects to purchase 80,000 shares of the common stock of Blow & Drive Interlock Corporation, a Delaware corporation (the “Company”), pursuant to the terms of the attached Warrant and based on an exercise price of $0.80, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Please issue a certificate or certificates representing said shares of the Company’s common stock in the name of the undersigned or in such other name as is specified below:

 

(Name)

David Stuart Petlak

 

(Address)

1152 Beverwil LA CA 90035

 

November 19, 2015  
(Date) (Signature)
   
  (Print name)

 

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