Document:

Exhibit 4.1

 

DESCRIPTION OF THE REGISTRANT’S
SECURITIES REGISTERED 

PURSUANT TO SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934 

 

As of December 31, 2019, P&F Industries,
Inc. (the “Corporation”) had one class of securities registered under Section 12 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), which is our Class A Common Stock.

 

Description of Class A Common Stock

 

The following description of our Class
A Common Stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to
our Restated Certificate of Incorporation (the “Certificate of Incorporation”) and our Bylaws (as amended on September
19, 2016) (the “Bylaws”). The Certificate of Incorporation and Bylaws are incorporated by reference as an exhibit to
the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. We encourage you to read our Certificate of Incorporation,
our Bylaws and the applicable provisions of the Delaware General Corporation Law (“DGL”), for additional information.

 

Authorized Capital Shares 

 

Pursuant to our Certificate of Incorporation
our Board of Directors is authorized to issue 7,000,000 shares of Class A Common Stock, $1 par value per share (“Class A
Common Stock”) in addition to 2,000,000 shares of Class B Common Stock, $1 par value per share, and 2,000,000 shares of preferred
stock, par value $10 per share. As of March 20, 2020, there were 3,144,810 shares of our Class A Common Stock outstanding and no
other shares outstanding. The outstanding shares of our Class A Common Stock are fully paid and nonassessable.

 

Voting Rights

 

Except as otherwise provided by law or
by this Certificate of Incorporation, and subject to the rights of holders of outstanding shares of preferred stock that may be
issued in the future, the holders of Class A Common Stock shall have the sole right to vote at meetings of stockholders and shall
be entitled to one vote per share; however, in case there shall be presented for approval any proposal to: (a) effect a merger
or consolidation of the Corporation; (b) dissolve the Corporation; or (c) sell, lease or exchange all or substantially all of the
property and assets of the Corporation, then the holders of Class B Common Stock, if any, shall also have the right to vote on
such proposal, voting together with the holders of Class A Common Stock as a single class. Our Class A Common Stock does not have
cumulative voting rights. Elections of directors are determined by a plurality of the votes cast, and for all other matters, the
affirmative vote of a majority of the shares of stock present or represented at the meeting shall be the act of the stockholders.
Our Board of Directors is classified, consisting of three classes of directors serving staggered three-year terms.

 

Dividend Rights

 

Subject to the rights of holders of outstanding
shares of preferred stock that may be issued in the future, the holders of Class A Common Stock are entitled to receive dividends,
if any, as may be declared from time to time by the Board of Directors in its discretion out of funds legally available for the
payment of dividends. To the extent there are any shares of Class B Common Stock outstanding, the holders of Class B Common Stock
and the holders of Class A Common Stock shall be entitled to share equally, share for share, in such dividends.

 

Liquidation Rights

 

Subject to any preferential rights of
outstanding shares of preferred stock that may be issued in the future, holders of Class A Common Stock (together with holders
of Class B Common Stock, if any) will share ratably in all assets legally available for distribution to our stockholders in the
event of dissolution.

 

     

     

    

 

Other Rights and Preferences

 

Our Class A Common Stock has no sinking
fund or redemption provisions or preemptive, conversion or exchange rights.

 

Listing

 

The Class A Common Stock is traded on The
Nasdaq Stock Market LLC under the trading symbol “PFIN.”

 

Change of Control Provisions

 

Provisions of our Certificate of Incorporation
and Bylaws may delay or discourage transactions involving an actual or potential change in control of the Corporation or change
in the Corporation’s management, including transactions that stockholders might otherwise deem to be in their best interests.
In addition to provisions of the DGL, as well as the provisions described above, the Certificate of Incorporation and Bylaws include
the following provisions::

 

		(a)	vacancies on our Board of Directors, and any new director positions created by the expansion of our Board of Directors, may
be filled only by a majority of the directors then in office, subject to certain exceptions;

 

		(b)	our Bylaws establish an advance notice procedure for stockholders to submit proposed nominations of persons for election to
our Board of Directors and other proposals for business to be brought before an annual meeting of our Stockholders;

 

		(c)	our Board of Directors may issue shares of preferred stock, with designations, rights and preferences as may be determined
from time to time by our Board of Directors;

 

		(d)	our Bylaws may only be amended by our Board of Directors; and

 

		(e)	our Bylaws provide that special meetings of the stockholders may be called only by the chairperson
of our board, our President or our Board of Directors.Exhibit 10.14

 

DEBT
CONVERSION AND SERIES B PREFERRED STOCK

PURCHASE
AGREEMENT

 

This
Debt Conversion and Series B Preferred Stock Purchase Agreement (this “Agreement”) is made and entered into effective
as of the 6th day of September, 2019 (the “Effective Date”) by and between Blow & Drive Interlock Corporation,
a Delaware corporation (the “Company”), and The Doheny Group, LLC (the “Purchaser”). The Company and Purchaser
shall each be referred to as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS,
under a $1.365M promissory note issued to the Purchaser in August 2018, the Company owes the Purchaser $50,500 per month in interest
for the entire life of the promissory note (the “Note”);

 

WHEREAS,
the Company and the Purchaser desire to use two months (July 2019 and August 2019) of interest due under the Note, a total of
$101,000, converted to shares of the Company’s Series B Preferred Stock pursuant to the terms of this Agreement.

 

NOW,
THEREFORE, the Parties hereby agree as follows:

 

AGREEMENT

 

1. PURCHASE
OF SECURITIES:

 

a)
If not already created, then within sixty (60) days of the Closing Date (as defined herein), the Company hereby agrees to
create a new series of convertible preferred stock entitled “Series B Convertible Preferred Stock,” with Ten
Million (10,000,000) shares authorized and the following rights: (i) dividend rights equal to common stock; (ii) liquidation
preference over the Company’s common stock; (iii) conversion rights of ten (10) shares of common stock for each share
of Series B Convertible Preferred Stock; (iv) no redemption rights; (v) no call rights by the Company; (vi) each share of
Series B Convertible Preferred stock will have one thousand (1,000) votes on all matters validly brought to the
Company’s common stockholders, and (vii) standard protective provisions.

 

b)
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, Ten Million (10,000,000) shares of the Company’s
Series B Convertible Preferred Stock (the “Shares”) the forgiveness of $101,000 of interest due under the Note
for July 2019 and August 2019 (the “Purchase Price”). The Purchase Price will be paid by the Purchaser to the
Company through a Notice of Debt Satisfaction in the form attached hereto as Exhibit A, evidencing the satisfaction of
the debt in an amount equal to the Purchase Price as payment of the Purchase Price.

 

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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 Shares (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, which shall serve as evidence of ownership of the Shares, free
from restrictions on transfer except as set forth in this Agreement. Subsequent to the Closing, at a time chosen by the
Company in its sole discretion, the Company will issue a stock certificate to the Purchaser to evidence the Shares. The
Company and Purchaser shall execute the Lockup Agreement.

 

(ii)
The Purchaser shall deliver to the Company the Purchase Price through the delivery of the signed Notice of Accrued Debt
Satisfaction.

 

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

 

a) Purchase
for Own Account. Purchaser represents that it is acquiring the Shares solely for his own account and beneficial interest
for investment and not for sale or with a view to distribution of the Shares 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 Shares involves a high degree of risk, and
represents that he is able, without materially impairing his financial condition, to hold the Shares 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 Shares. 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;

 

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(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 Shares; 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 Shares and the merits and risks of an investment in the Shares.

 

d) Shares
Part of Private Placement. The Purchaser has been advised that the Shares 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 Shares is to be effected and the Shares 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 Shares for resale on
the occurrence or nonoccurrence of some predetermined event. The Purchaser has no such intention.

 

e) Further
Limitations on Disposition. Purchaser further acknowledges that the Shares 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 Shares, 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.

 

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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 Shares 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.

 

f) Sophisticated
Investor Status. The Purchaser is a sophisticated investor.

 

g) 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.

 

h) Certificate
of Designation. Purchaser has been provided with a copy of the Certificate of Designation for the Series B Convertible
Preferred Stock, a copy of which is attached hereto as Exhibit B (the “Certificate of Designation”), which
sets forth all of the rights, privileges, and preferences with respect to the Series B Preferred Stock. Purchaser has had an
opportunity to discuss any questions or concerns regarding the Certificate of Designation and the rights and preferences of
the Series B Preferred Stock with the Company’s management team and has received answers to all outstanding questions
and had any issues addressed to the satisfaction of Purchaser.

 

i) Organization
and Authority of Purchaser. Purchaser is a limited liability company organized under the laws of the State of Nevada and
is in good standing with such state of incorporation and all other states it does business. Purchaser has the corporate
authority to enter into this Agreement and comply with its terms. Purchaser is an entity controlled by David Haridim, the
Company’s sole officer and director.

 

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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 Shares. 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 Shares 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 Shares
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 Shares, 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 Shares 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 Shares.

 

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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 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
	 	 	1427
    S. Robertson Blvd. 
	 	 	Los
    Angeles, CA 90035
	 	 	Attn.
    Chief Executive Officer
	 	 	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

 

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	 	If
    to Purchaser:	David
    Haridim
	 	 	1427
    S. Robertson Blvd. 
	 	 	Los
    Angeles, CA 90035
	 	 	Facsimile
    (___) 

 

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
Debt Conversion and Series B Preferred Stock Purchase Agreement as of the date first written above.

 

	“Company”	 	“Purchaser”
	 	 	 	 	 
	Blow & Drive Interlock Corporation,	 	The Doheny Group, LLC,
	a Delaware corporation	 	a Nevada limited liability company
	 	 	 	 	 
	 		 	 	
	By:	David
    Haridim	 	By:	David
    Haridim
	Its:	Chief
    Executive Officer	 	Its:	Manager

 

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Exhibit
A

 

Notice
of Partial Debt Satisfaction

 

    	Exhibit A

     

    

 

Notice
of Partial Debt Satisfaction

 

Pursuant
to the terms of that certain Debt Conversion and Series B Convertible Preferred Stock Purchase Agreement (the “Agreement”)
by and between David Haridim, an individual (the “Purchaser”), and Blow & Drive Interlock Corporation, a Delaware
corporation (the “Company”) dated September 6, 2019, the Purchaser is irrevocably electing to convert $101,000 of
accrued interest owed to the Purchaser under that certain $1.365M promissory note issued in August 2018 (the “Purchase Price”),
into 10,000,000 shares of Series B Preferred Stock of the Company (the “Shares”) according to the conditions set forth
in the Agreement.

 

If
shares are to be issued in the name of a person other than the Purchaser, the Purchaser will pay all transfer and other taxes
and charges payable with respect thereto.

 

The
Purchaser acknowledges and agrees that upon receipt of the Shares the amount used by the Purchaser to pay the Purchase Price will
no longer be due and owing to the undersigned.

 

Date
of Conversion: _____________________________________________________________________

 

Applicable
Price per Share: $0.0101/share

 

David
Haridim

 

Signature:
_____________________________________________________________________________

[Print
Name of Holder and Title of Signer]

 

Address:
___________________________________________________________

 

___________________________________________________________

 

SSN
or EIN: ________________________________________________________

 

Shares
are to be registered in the following name:

 

Name:
________________________________________________________

Address:
______________________________________________________

Tel:
__________________________________________________________

Fax:__________________________________________________________

SSN
or EIN: ____________________________________________________

 

    	Exhibit A

     

    

 

Exhibit
B

 

Series
B Preferred Stock Certificate of Designation

 

    	Exhibit B

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