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 30th day of March, 2016 (the “Effective Date”) by and
between Blow & Drive Interlock Corporation, a Delaware corporation (the
“Company”), and Dr. Oren Azulay, an 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 non-convertible promissory note, in the form attached hereto as Exhibit B
(the “Note”), and Fifty Thousand (50,000) shares of the Company’s common stock,
restricted in accordance with Rule 144 (the “Shares”), in exchange for Fifty
Thousand Dollars ($50,000) (the “Purchase Price”). Together the Note and the
Shares 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 Securities (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, which shall serve as evidence of ownership of the Note
and the Shares, 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.

 

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.

 

Page 1 of 8

 

 

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.

 

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.

 

Page 2 of 8

 

 

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.

 

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.

 

Page 3 of 8

 

 

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

 

_____ 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, 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 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.

 

Page 4 of 8

 

 

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.

 

The Purchaser is an individual over 21 years of age.

 

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.

 

j) No Backup Withholding. The Social Security Number or taxpayer identification
shown in this Agreement (or provided to the Company separately) 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.

 

Page 5 of 8

 

 

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.

 

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 Purchaser’s
representations, warranties or agreements herein 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 under Section 5.(b) herein.

 

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.

 

Page 6 of 8

 

 

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 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, CEO     Facsimile (___) ________________         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: Dr. Oren Azulay     1110 Glenville #206     Los Angeles, CA 90035
    Facsimile (___) ________________         with a copy to: Email

 

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.

 

Page 7 of 8

 

 

In Witness Whereof, the Parties have executed this Securities Purchase Agreement
as of the date first written above.

 

“Company”   “Purchaser”       Blow & Drive Interlock Corporation,   Dr. Oren
Azulay a Delaware corporation   an individual             By:  Laurence Wainer  
Dr. Oren Azulay Its: President    

 

Page 8 of 8

 

 

Exhibit A

 

Investor Questionnaire

(to be completed by each Purchaser)

 

Name:     SSN or FEIN:  

 

Home Phone:     Email:             Work Phone:        

 

1. a. State of Residence:     b. For how long?  

  c. Do you maintain a residence in any other state?  

 

2.In which state(s) do you

 

  a. File state income tax returns:  

  b. Vote:  

  c. Hold current driver’s license:     d. Maintain a house or apartment:  

 

3. What is your present age? ___________.   What is your date of birth?
______________________

 

4. Is your net worth in excess of $1,000,000? (For purposes of this question,
you may include your spouse’s net worth and may include the fair market value of
your home furnishings and automobiles, but excluding from the calculation the
value of your 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 your net worth)).

 

Yes [  ] No [  ]

 

5. Was your individual gross income during each of the past two years in excess
of $200,000?

 

Yes [  ] No [  ]

 

6. If your answer to question 5 was yes, do you reasonably anticipate that your
gross income for the current year will be in excess of $200,000?

 

Yes [  ] No [  ]

 

A-1

 

 

7. Was your joint gross income with your spouse in excess of $300,000 in each of
the last two years?

 

Yes [  ] No [  ]

 

8. If your answer to question 7 was yes, do you reasonably anticipate that your
joint gross income with your spouse for the current year will be in excess of
$300,000?

 

Yes [  ] No [  ]

 

9. Does this investment exceed twenty percent (20%) of your net worth? (For
purposes of this question, you may include your spouse’s net worth and may
include the fair market value of your home furnishings and automobiles, but
excluding from the calculation the value of your 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 your net worth)).

 

Yes [  ] No [  ]

 

10. Does this investment exceed ten percent (10%) of your net worth? (For
purposes of this question, you may include your spouse’s net worth and may
include the fair market value of your home furnishings and automobiles, but
excluding from the calculation the value of your 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 your net worth))

 

Yes [  ] No [  ]

 

11. Your estimated gross income for 2016 is:   Less than $75,000       $75,000 -
$200,000       Over $200,000             12. Your gross income for 2015 was:  
Less than $75,000       $75,000 - $200,000       Over $200,000             13.
Your gross income for 2014 was:   Less than $75,000       $75,000 - $200,000    
  Over $200,000             14. Current estimated Net Worth (exclusive of home,
automobiles):   Less than $150,000       $150,000 - $250,000       Over $250,000
 

 

A-2

 

 

15. Investment Experience:

 

(A) Please indicate the frequency of your investment in securities that are
registered and transferred on one or more of the major United States securities
exchanges: Often _____ Occasionally _____ Seldom _____ Never _____.

 

(B) Please indicate the frequency of your investment in securities which are
purchased, sold or transferred in private transactions: Often _____ Occasionally
_____ Seldom _____ Never _____

 

(C) If your answer to (A) or (B) above was Seldom or Never, please provide your
qualifications in evaluating the merits and risks of this investment?

 

   

 

16. Describe below any business or personal relationship you have with any
affiliates of the officers or directors of the Company or any of its affiliates,
subsidiaries or business entities in conjunction with this purchase of
Securities in the Company, including a statement of the name of the
individual(s)and the length of time you have know such individual(s).

 

   

 

17. Have you participated in any prior investments or other business
transactions with the Company or its officers, directors, employees, agents or
any of its affiliates?

 

Yes [  ] No [  ] – If yes, please describe:

 

   

 

18. Do you currently have an equity interest in the Company?

 

Yes [  ] No [  ] – If yes, please describe:

 

   

 

A-3

 

 

Exhibit B

 

Note

 

B-4