Document:

AMENDMENT
NO. 1 TO

LOAN
AND SECURITY AGREEMENT

 

This
Amendment No. 1 (“Amendment No. 1”) is dated this 3rd day of August, 2017, by and between Blow & Drive Interlock
Corporation, a Delaware corporation (“BDIC”), on the one hand; and The Doheny Group, LLC, a Nevada limited liability
company (the “Lender”), on the other hand, to document, in writing, an oral agreement between the parties on November
9, 2016 to amend the terms of that certain Loan and Security Agreement entered into by and between the parties dated September
30, 2016 (the “LSA”). BDIC and Lender shall be referred to herein as a “Party” and collectively as the
“Parties”. In the event the terms of the LSA and this Amendment No. 1 conflict, the terms of this Amendment No. 1
control. Any defined terms herein that are not defined herein have the meaning set forth in the LSA.

 

WHEREAS,
in the LSA and affiliated documents, Lender agreed to loan BDIC approximately $500,000 in several phases;

 

WHEREAS,
under Section 3.2 of the LSA, in addition to payments of principal and interest due under the LSA and any corresponding promissory
notes, BDIC agreed to pay the Lender variable royalty payments depending upon a variety of factors, including, but not limited
to, the number of Units BDIC is receiving cash or other consideration from a Client and whether the Units were Retail Units or
Wholesale Units, as detailed in the LSA (the “Royalty Payments”);

 

WHEREAS,
on November 9, 2016, the Parties agreed the calculation of the Royalty Payments under the LSA were too complex and difficult to
calculate and orally-agreed to that BDIC would pay the Lender a flat royalty of $1.30 per Unit that BDIC receives cash or other
consideration from or on behalf of a Client, beginning with the first Unit BDIC had on the road and regardless of whether a Unit
is a Retail Unit or a Wholesale Unit; and

 

WHEREAS,
the Parties desire to document in writing their previous oral agreement to amend the terms of the LSA as set forth herein.

 

AMENDMENT

 

1.
In consideration of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
agree to amend the LSA as follows:

 

I.
Section 3.2 of the LSA is hereby amended by deleting Section 3.2 in its entirety and replacing Section 3.2 with the following:

 

“3.2
Royalties.

 

(a)
In consideration of Lender agreeing to extend credit to Borrower in connection with the Loan, and in lieu of other fees and charges
associated with the Loan, concurrent with the execution and delivery of this Agreement and without further consideration, Borrower
shall promptly enter into and deliver to Lender that certain Royalty Agreement in favor of Lender, a copy of which is attached
hereto as Exhibit E (the “Royalty Agreement”), the terms and conditions of which are incorporated
herein and made a part hereof.

 

(b)
As more fully set forth in the Royalty Agreement, Borrower agrees to grant Lender the following per calendar month cumulative
royalties in perpetuity on Total Units: $1.30 per Unit without regard as to whether the Unit is a Retail Unit or a Wholesale Unit
or other Device.

 

    	 

    	 

    

 

(c)
Pursuant to the terms and conditions of the Royalty Agreement, the royalty payment obligation shall commence from and after the
Effective Date and will be payable on all Units on the road, beginning with the first Unit, as further detailed in this Section
(the “Royalty Commencement Date”). After the Effective Date, then beginning on the first calendar month thereafter,
and for every subsequent calendar month thereafter in perpetuity, Borrower will pay the applicable royalty payments per calendar
month for each of the Total Units in accordance with the above schedule based on each Total Unit for which Borrower received cash
or other consideration from or on behalf of the Client thereof (or for which Borrower voluntarily elected to waive any right to
payment or other consideration from the Client thereof). Such payments will be payable to Lender on the 15th of each
calendar month following the Royalty Commencement Date in perpetuity, even after all Obligations due under the Loan Documents
(other than the Royalty Agreement) have been indefeasibly paid in full (and not subject to disgorgement or recovery).

 

(d)
In connection with each royalty payment, Borrower shall provide a statement setting forth the calculation of the royalty amount,
along with such supporting documentation as reasonable and appropriate or as may be reasonably requested from time to time by
Lender. The parties expressly acknowledge and agree that (1) to the extent that Borrower elects to forgo, defer or waive any such
payment due from a Client with respect to a Device, or receive other consideration concerning said Device, such amount shall nonetheless
be included in the determination of royalties due thereunder, and (2) each will meet on no less than an annual basis to work in
good faith to “true up” the amount of royalties due under the Royalty Agreement, and in connection therewith, to the
extent that an adjustment is needed (either because too little or too much was paid in royalties in a given year (or other period),
either Borrower will promptly advance additional liquid funds to Lender, or Borrower will offset present or future royalties due
Lender under the Royalty Agreement, as the case may be.

 

(e)
By way of illustration and not of limitation, Borrower will only pay royalties to Lender for each of the Total Units from and
after the Royalty Commencement Date that it receives payment or other consideration from the Client of said Total Unit (or for
which Borrower voluntarily elected to waive any right to payment or other consideration from the Client thereof). Solely for the
avoidance of doubt, for purposes of determining the proper amount of royalties under the Royalty Agreement, (1) in the event that
Borrower receives an advance payment from a Client (for example, $1,200 for twelve monthly payments due from a Retail Unit Client
of $100 per month), then in such a situation, the amount of royalties due with respect to said Total Unit shall be $15.60, all
of which is payable on the 15th day of the calendar month immediately following receipt of said $1,200, (2) in the
event that Borrower does not receive payment from a client until after the Device has been provided to said Client (for example,
a Device representing a Retail Unit is given to a Client on January 1 for a 12 month period, the rental amount is $100/month,
and payment is not received by Borrower until December 20th of said year), then in such a situation, the amount of
royalties due with respect to said Total Unit shall be $15.60, all of which is payable on January 15 of the following year, and
(3) assuming the same facts as set forth in subsection 3.2(d)(1) above, except that the Client returns the Device within 6 months
and is permitted to recover the remaining 6 months of payments (representing a refund of $600 from Borrower to said Client), then
in such a situation, Lender and Borrower will “true up” the amount of royalties due, and in this situation, Borrower
will offset present or future royalties due Lender by the amount of $7.80, representing the 6 months advanced by said Client which
was refunded from amounts received by Borrower at the commencement of the lease of said Total Unit.

 

(f)
Pursuant to the terms and conditions of the Royalty Agreement, Borrower shall provide Lender with, among other things, (i) financial
statements and reports consistent with Section 7.1 below, and (ii) audit and inspection rights consistent with Section 7.2 below,
to permit Lender to ascertain Borrower’s compliance with the terms and conditions of the Royalty Agreement, which obligations
shall survive the expiration of the Term and the indefeasible payment in full of the Obligations hereunder.

 

    	 

    	 

    

 

(g)
Pursuant to the terms and conditions of the Royalty Agreement, in the event that Borrower enters into any transaction (regardless
of form) or upon the occurrence whereby (x) Borrower sells, conveys, transfers or assigns (in any manner, including, without limitation,
pursuant to a license, lease, assignment for the benefit of creditors, merger or other consolidation) all or substantially all
of the Devices and/or its assets, or (y) all or substantially all of the equity of Borrower is sold, conveyed, transferred, or
assigned, or (z) Borrower transfers, sells, assigns or conveys in any manner the Business and/or control of Borrower and/or the
Business, then, as an express condition of said transaction or occurrence, Borrower expressly acknowledges and agrees that it
shall cause the acquirer/surviving Person (the “Acquirer”) to include in any acquisition/merger/transfer document
a requirement that the royalty obligations of Borrower under the Royalty Agreement are expressly assumed by such Acquirer, who
shall be liable with respect to the royalties due under the Royalty Agreement as if an original party thereto. Without limiting
any of its rights or remedies whatsoever, to the extent that the Acquirer is not bound by and/or does not honor the terms and
conditions of the Royalty Agreement, then, Borrower shall pay to Lender as a “liquidated damage” resulting therefrom
in one lump sum an amount equal to the product of the last 12 calendar months of royalty payments pursuant to the Royalty Agreement,
multiplied by 100.”

 

II.
BDIC expressly represents and warrants that, as of the date of this Amendment No. 1, it has materially complied with all the terms
and conditions (including, without limitation, the representations, warranties, covenants and agreements) contained in the LSA
and the other Loan Documents, and that no Event of Default has occurred, except to the extent the LSA or other Loan Documents
have been modified by the Parties.

 

III.
BDIC expressly reaffirms all of its obligations under the LSA and other Loan Documents.

 

IV.
BDIC and Lender represent and warrant that they have due authority to enter into, deliver their signatures to, and perform the
terms as set forth in, Amendment No. 1, and that upon such delivery, this Amendment No. 1 will be a valid and binding agreement
enforceable against such Party in accordance with its terms and conditions.

 

V.
The parties acknowledge and agree that the LSA and the other Loan Documents are and remain valid and enforceable in accordance
with their terms except to the extent of the modification to Section 3.2 of the LSA as expressly set forth herein

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto, by their duly authorized officers or other authorized signatory, have executed this Amendment
No. 1 as of the date first above written. This Amendment No. 1 may be signed in counterparts and facsimile signatures are treated
as original signatures.

  

	“BDIC”	“Lender”
	 	 
	Blow
    & Drive Interlock Corporation	Doheny
    Group, LLC
	a
    Delaware corporation	a
    Nevada limited liability company

 

	By:	/s/
    Laurence Wainer	 	By:	/s/
    David Haridim
	 	Laurence
    Wainer	 	 	David
    Haridim
	Its:	Chief
    Executive Officer	 	Its:	ManagerAMENDMENT NO. 1 TO

ROYALTY AGREEMENT

 

This Amendment No. 1 (“Amendment
No. 1”) is dated this 3rd day of August, 2017, by and between Blow & Drive Interlock Corporation, a Delaware corporation
(“BDIC”), on the one hand; and The Doheny Group, LLC, a Nevada limited liability company (the “Lender”),
on the other hand, to document, in writing, an oral agreement between the parties on November 9, 2016 to amend the terms of that
certain Royalty Agreement entered into by and between the parties dated September 30, 2016 (the “ROYALTY AGREEMENT”).
BDIC and Lender shall be referred to herein as a “Party” and collectively as the “Parties”. In the event
the terms of the ROYALTY AGREEMENT and this Amendment No. 1 conflict, the terms of this Amendment No. 1 control. Any defined terms
herein that are not defined herein have the meaning set forth in the ROYALTY AGREEMENT.

 

WHEREAS, in the ROYALTY
AGREEMENT and affiliated documents, Lender agreed to loan BDIC approximately $500,000 in several phases;

 

WHEREAS, under Section
2.2 of the ROYALTY AGREEMENT, BDIC agreed to pay the Lender variable royalty payments depending upon a variety of factors, including,
but not limited to, the number of Units BDIC is receiving cash or other consideration from a Client and whether the Units were
Retail Units or Wholesale Units, as detailed in the ROYALTY AGREEMENT (the “Royalty Payments”);

 

WHEREAS, on November 9,
2016, the Parties agreed the calculation of the Royalty Payments under the ROYALTY AGREEMENT were too complex and difficult to
calculate and orally-agreed to that BDIC would pay the Lender a flat royalty of $1.30 per Unit that BDIC receives cash or other
consideration from or on behalf of a Client, beginning with the first Unit BDIC had on the road and regardless of whether a Unit
is a Retail Unit or a Wholesale Unit; and

 

WHEREAS, the Parties desire
to document in writing their previous oral agreement to amend the terms of the ROYALTY AGREEMENT as set forth herein.

 

AMENDMENT

 

1. In consideration of
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree to amend the ROYALTY
AGREEMENT as follows:

 

I. Section 2.2
of the ROYALTY AGREEMENT is hereby amended by deleting Section 2.2 in its entirety and replacing Section 2.2 with the following:

 

“2.2 Determination of
Royalty Amounts. The amount of Royalties due to TDG shall be determined as follows calendar month cumulative royalties
in perpetuity on Total Units: $1.30 per Unit without regard as to whether the Unit is a Retail Unit or a Wholesale Unit or other
Device.”

 

II. Section 2.3
of the ROYALTY AGREEMENT is hereby amended by deleting Section 2.3 in its entirety and replacing Section 2.3 with the following:

 

“2.3 Payment of Royalties.

 

(a) The Royalty payment obligation
shall commence from and after the Effective Date and will be payable on all Units on the road, beginning with the first Unit, as
further detailed in this Section (the “Royalty Commencement Date”). After the Effective Date, then beginning
on the first calendar month thereafter, and for every subsequent calendar month thereafter in perpetuity, Borrower will pay the
applicable royalty payments per calendar month for each of the Total Units in accordance with the above schedule based on each
Total Unit for which Borrower received cash or other consideration from or on behalf of the Client thereof (or for which Borrower
voluntarily elected to waive any right to payment or other consideration from the Client thereof). Such payments will be payable
to Lender on the 15th of each calendar month following the Royalty Commencement Date in perpetuity, even after all Obligations
due under the Loan Documents (other than the Royalty Agreement) have been indefeasibly paid in full (and not subject to disgorgement
or recovery).

 

    	 

    	 	 

    

 

(b) In connection with each
royalty payment, Borrower shall provide a statement setting forth the calculation of the royalty amount, along with such supporting
documentation as reasonable and appropriate or as may be reasonably requested from time to time by Lender. The parties expressly
acknowledge and agree that (1) to the extent that Borrower elects to forgo, defer or waive any such payment due from a Client with
respect to a Device, or receive other consideration concerning said Device, such amount shall nonetheless be included in the determination
of royalties due thereunder, and (2) each will meet on no less than an annual basis to work in good faith to “true up”
the amount of royalties due under the Royalty Agreement, and in connection therewith, to the extent that an adjustment is needed
(either because too little or too much was paid in royalties in a given year (or other period), either Borrower will promptly advance
additional liquid funds to Lender, or Borrower will offset present or future royalties due Lender under the Royalty Agreement,
as the case may be.

 

(c) By way of illustration
and not of limitation, Borrower will only pay royalties to Lender for each of the Total Units from and after the Royalty Commencement
Date that it receives payment or other consideration from the Client of said Total Unit (or for which Borrower voluntarily elected
to waive any right to payment or other consideration from the Client thereof). Solely for the avoidance of doubt, for purposes
of determining the proper amount of royalties under the Royalty Agreement, (1) in the event that Borrower receives an advance payment
from a Client (for example, $1,200 for twelve monthly payments due from a Retail Unit Client of $100 per month), then in such a
situation, the amount of royalties due with respect to said Total Unit shall be $15.60, all of which is payable on the 15th
day of the calendar month immediately following receipt of said $1,200, (2) in the event that Borrower does not receive payment
from a client until after the Device has been provided to said Client (for example, a Device representing a Retail Unit is given
to a Client on January 1 for a 12 month period, the rental amount is $100/month, and payment is not received by Borrower until
December 20th of said year), then in such a situation, the amount of royalties due with respect to said Total Unit shall
be $15.60, all of which is payable on January 15 of the following year, and (3) assuming the same facts as set forth in subsection
3.2(d)(1) above, except that the Client returns the Device within 6 months and is permitted to recover the remaining 6 months of
payments (representing a refund of $600 from Borrower to said Client), then in such a situation, Lender and Borrower will “true
up” the amount of royalties due, and in this situation, Borrower will offset present or future royalties due Lender by the
amount of $7.80, representing the 6 months advanced by said Client which was refunded from amounts received by Borrower at the
commencement of the lease of said Total Unit.

 

(d) All payments by BDI Group
hereunder shall be made in the lawful money of the United States of America in immediately available funds on the date specified
herein and shall be delivered to TDG or its designee as follows:

 

(i) If via wire transfer,
pursuant to wire instructions provided from time to time by TDG for deposit into an account designated from time to time by TDG
for TDG’s benefit;

 

(ii) If via check, to the
following address: THE DOHENY GROUP, LLC, ________________________, Los Angeles, CA 9____, Attention: David Haridim, Managing
Member, or to such other address or to the attention of such other person as specified by prior written notice to BDIC.

 

    	 

    	 	 

    

 

(e) Time is of the essence
in all obligations of BDI Group hereunder, including, without limitation, payment of the Royalties as expressly provided herein.”

 

III. BDIC expressly
represents and warrants that, as of the date of this Amendment No. 1, it has materially complied with all the terms and conditions
(including, without limitation, the representations, warranties, covenants and agreements) contained in the ROYALTY AGREEMENT and
the other Loan Documents, and that no Event of Default has occurred, except to the extent the ROYALTY AGREEMENT or other Loan Documents
have been modified by the Parties.

 

IV. BDIC expressly
reaffirms all of its obligations under the ROYALTY AGREEMENT and other Loan Documents.

 

V. BDIC and Lender
represent and warrant that they have due authority to enter into, deliver their signatures to, and perform the terms as set forth
in, Amendment No. 1, and that upon such delivery, this Amendment No. 1 will be a valid and binding agreement enforceable against
such Party in accordance with its terms and conditions.

 

VI. The parties
acknowledge and agree that the ROYALTY AGREEMENT and the other Loan Documents are and remain valid and enforceable in accordance
with their terms except to the extent of the modification to Sections 2.2 and 2.3 of the ROYALTY AGREEMENT as expressly set forth
herein

 

    	 

    	 	 

    

 

IN WITNESS WHEREOF, the
parties hereto, by their duly authorized officers or other authorized signatory, have executed this Amendment No. 1 as of the date
first above written. This Amendment No. 1 may be signed in counterparts and facsimile signatures are treated as original signatures.

 

	“BDIC”	 	“Lender”
	 	 	 
	Blow & Drive Interlock Corporation	 	Doheny Group, LLC
	a Delaware corporation	 	a Nevada limited liability company
	 	 	 	 	 
	By: 	/s/
    Laurence Wainer	 	By: 	/s/ David Haridim
	 	Laurence Wainer	 	 	David Haridim
	Its:	Chief Executive Officer	 	Its: 	Manager

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00274-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00274-of-00352.parquet"}]]