EXHIBIT
4.12


 


DESCRIPTION
OF SECURITIES REGISTERED 


PURSUANT
TO SECTION 12 OF 


THE
SECURITIES EXCHANGE ACT OF 1934


 


As
of March 29, 2021, FAT Brands Inc. (“we”, “us”, “our” or the “Company”) registered under
Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), its common stock, par value $0.0001 per
share (“Common Stock”), Series B Cumulative Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”),
and Warrants to purchase Common Stock issued on July 16, 2020 (“Warrants”).


 


The
following description of our Common Stock, Series B Preferred Stock and Warrants is a summary and does not purport to be complete.
The description is subject to and qualified in its entirety by reference to our (i) Amended and Restated Certificate of Incorporation
(the “Certificate of Incorporation”), (ii) Certificates of Designation that designate various series of preferred
stock, including the Amended and Restated Certificate of Designation establishing the Series B Preferred Stock, (iii) Warrant
Agency Agreement establishing the terms of the Warrants, and (iv) Amended and Restated Bylaws (the “Bylaws”), each
of which is filed or incorporated by reference as exhibits to our Annual Report on Form 10-K of which this Exhibit 4.12
is a part.


 


Description
of Common Stock


 


Voting
Rights. Holders of our Common Stock are entitled to cast one vote per share. Holders of our Common Stock are not entitled to cumulate
their votes in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in
the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented
by proxy, voting together as a single class. Except as otherwise provided by law, amendments to the Certificate of Incorporation must
be approved by a majority or, in some cases, a super-majority of the combined voting power of all shares entitled to vote, voting together
as a single class.


 


Dividend
Rights. Holders of Common Stock share ratably (based on the number of shares of Common Stock held) if and when any dividend is declared
by the board of directors out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment
of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.


 


Liquidation
Rights. On our liquidation, dissolution or winding up, each holder of Common Stock will be entitled to a pro rata distribution of
any assets available for distribution to common stockholders.


 


Other
Matters. No shares of Common Stock are subject to redemption or have preemptive rights to purchase additional shares of Common Stock.
Holders of shares of our Common Stock do not have subscription, redemption or conversion rights. There are no redemption or sinking fund
provisions applicable to the Common Stock.


 


Authorized
Shares. Our Certificate of Incorporation authorizes the issuance of up to 25,000,000 shares of Common Stock, and up to 5,000,000
shares of preferred stock, par value $0.0001 per share.


 


Listing.
The Common Stock is listed for trading on The NASDAQ Stock Market LLC (“NASDAQ”).


 


Transfer
Agent. VStock Transfer, LLC acts as the transfer agent and registrar of our Common Stock.


 


Description
of Series B Cumulative Preferred Stock


 


Authorization.
We have authorized a total of 850,000 shares of Series B Preferred Stock.


 


Dividends.
Holders of the Series B Preferred Stock are entitled to receive, when, as and if declared by our Board of Directors, cumulative cash
dividends payable monthly in an amount per share of Series B Preferred Stock equal to $2.0625 per share each year, which is equivalent
to 8.25% per annum of the $25.00 liquidation preference per share. Dividends on the Series B Preferred Stock are payable monthly in arrears,
beginning with the month ending July 31, 2020. To the extent declared by our Board of Directors, dividends are payable not later than
twenty (20) days after the end of each calendar month. Dividends on the Series B Preferred Stock accumulate whether or not we have earnings,
whether or not there are funds legally available for the payment of such dividends and whether or not such dividends are declared by
our Board of Directors.


 




    	 



     


    

 


If
the Company fails to make a cash dividend payment with respect to twelve (12) or more consecutive or non-consecutive monthly dividends,
the dividend rate on the Series B Preferred Stock will increase to $2.50 per share each year, which is equivalent to 10% of the $25.00
liquidation preference per share.


 


Right
to Elect Two Directors Upon Nonpayment. If the Company fails to make a cash dividend payment with respect to eighteen (18) or more
consecutive or non-consecutive monthly dividends (a “Dividend Nonpayment”), the holders of the Series B Preferred
Stock, voting as a separate class, are entitled to vote for the election of two additional directors to serve on our Board of Directors
until all dividends that are owed have been paid. Under these provisions, the authorized number of directors on our Board of Directors
shall, at the next annual meeting of stockholders or at a special meeting of stockholders as provided below, automatically be increased
by two and holders of shares of Series B Preferred Stock, voting together as a single class, shall be entitled, at our next annual meeting
of stockholders or at a special meeting of stockholders, to vote for the election of a total of two additional members of the Board of
Directors (the “Preferred Stock Directors”); provided that the election of any such Preferred Stock Directors
will not cause the Company to violate the corporate governance requirements of NASDAQ (or any other exchange or automated quotation system
on which our securities may be listed or quoted) that requires listed or quoted companies to have a majority of independent directors;
and provided further that such Preferred Stock Directors may not be subject to any “Bad Actor” disqualifications described
in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualifying Event”), except for a Disqualifying Event
covered by Rule 506(d)(2) or (d)(3). In the event of a Dividend Nonpayment, the holders of at least 25% of the shares of Series B Preferred
Stock may request that a special meeting of stockholders be called to elect such Preferred Stock Directors; provided, however,
to the extent permitted by our bylaws, if the next annual or a special meeting of stockholders is scheduled to be held within 90 days
of the receipt of such request, the election of such Preferred Stock Directors shall be included in the agenda for, and shall be held
at, such scheduled annual or special meeting of stockholders. The Preferred Stock Directors shall stand for reelection annually, at each
subsequent annual meeting of the stockholders, so long as the holders continue to have such voting rights. At any meeting at which the
holders are entitled to elect Preferred Stock Directors, the holders of record of at least one-third of the then outstanding shares of
Series B Preferred Stock, present in person or represented by proxy, shall constitute a quorum and the vote of the holders of record
of a majority of such shares of Series B Preferred Stock so present or represented by proxy at any such meeting at which there shall
be a quorum shall be sufficient to elect the Preferred Stock Directors. If and when all accumulated and unpaid dividends on Series B
Preferred Stock have been paid in full (a “Nonpayment Remedy”), the holders shall immediately and, without any further
action by us, be divested of the voting rights described in this section, subject to the revesting of such rights in the event of each
subsequent Dividend Nonpayment. If such voting rights for the holders shall have terminated, the term of office of each Preferred Stock
Director so elected shall terminate at such time and the authorized number of directors on the Board of Directors shall automatically
decrease by two. Any Preferred Stock Director may be removed at any time, with or without cause, by the holders of a majority in voting
power of the outstanding shares of Series B Preferred Stock then outstanding when they have the voting rights described in this section.
In the event that a Dividend Nonpayment shall have occurred and there shall not have been a Nonpayment Remedy, any vacancy in the office
of a Preferred Stock Director (other than prior to the initial election of Preferred Stock Directors after a Dividend Nonpayment) may
be filled by the written consent of the Preferred Stock Director remaining in office, except in the event that such vacancy is created
as a result of such Preferred Stock Director being removed or if no Preferred Stock Director remains in office, such vacancy may be filled
by a vote of the holders of a majority in voting power of the outstanding shares of Series B Preferred Stock then outstanding when they
have the voting rights described above; provided that the election of any such Preferred Stock Directors to fill such vacancy
will not cause the Company to violate the corporate governance requirements of NASDAQ (or any other exchange or automated quotation system
on which our securities may be listed or quoted) that requires listed or quoted companies to have a majority of independent directors.
The Preferred Stock Directors shall each be entitled to one vote per director on any matter that shall come before the Board of Directors
for a vote.


 


Voting
Rights. In addition to the voting rights discussed above, so long as any shares of Series B Preferred Stock are outstanding and remain
unredeemed, the Company may not, without the vote or consent of the holders of a majority of the Series B Preferred Stock: (i) engage
in a merger, consolidation or share exchange that materially and adversely affects the rights, preferences or voting power of the Series
B Preferred Stock, unless shares of Series B Preferred Stock are converted into or exchanged for (A) cash equal to or greater than the
applicable redemption price per share or (B) preferred shares of the surviving entity having rights, preferences and privileges that
are materially the same as those of the Series B Preferred Stock; (ii) amend our Certificate of Incorporation or the Amended and Restated
Certificate of Designation establishing the Series B Preferred Stock to materially and adversely affect the rights, preferences or voting
power of Series B Preferred Stock; or (iii) declare or pay any junior dividends or repurchase any junior securities during any time that
all dividends on the Series B Preferred Stock have not been paid in full in cash.


 




    	 



     


    

 


Call
Feature. We may, at our option, redeem the Series B Preferred Stock, in whole or in part, by paying $25.00 per share, plus any accrued
and unpaid dividends to the date of redemption and a redemption premium. The redemption premium will initially be set at 10% of the $25.00
liquidation preference per share, and will decrease by two percentage points per year on each anniversary of the initial issuance date
until it terminates on the five-year anniversary of the initial issuance date (July 16, 2025).


 


Liquidation
Preference of Series B Preferred Stock. If we liquidate, dissolve or wind up, or undergo a “change of control” (as defined
below), holders of the Series B Preferred Stock will have the right to receive $25.00 per share, plus all accumulated, accrued and unpaid
dividends (whether or not earned or declared) to and including the date of payment, before any payments are made to the holders of our
Common Stock or to the holders of equity securities the terms of which provide that such equity securities will rank junior to the Series
B Preferred Stock. The rights of holders of Series B Preferred Stock to receive their liquidation preference also are subject to the
proportionate rights of our Series A Fixed Rate Cumulative Preferred Stock and any other class or series of our capital stock ranking
in parity with the Series B Preferred Stock as to liquidation. For purposes of these provisions, a “change of control” shall
mean: (i) any sale, lease, or transfer, exclusive license or other dispositions (or series of sales, leases, transfers, exclusive licenses
or other dispositions) of all or substantially all of the assets of the Company and its subsidiaries; (ii) any sale, transfer or issuance
(or series of sales, transfers or issuances) of capital stock by the Company or the holders of Common Stock (or other voting stock of
the Company) that results in the inability of the beneficial holders of Common Stock (or other voting stock of the Company) immediately
prior to such sale, transfer or issuance to designate or elect a majority of the Board of Directors (or its equivalent) of the Company;
or (iii) any merger, consolidation, recapitalization or reorganization of the Company with or into another Person (whether or not the
Company is the surviving corporation) that results in the inability of the beneficial holders of Common Stock (or other voting stock
of the Company) immediately prior to such merger, consolidation, recapitalization or reorganization to designate or elect a majority
of the Board of Directors (or its equivalent) of the resulting entity or its parent company; provided, that a “change of
control” shall not include a change in the beneficial or record holders of Common Stock or voting rights in the Company resulting
or arising from one or more transactions by which the owners of any entity that is a stockholder of the Company directly receive or are
issued Common Stock of the Company in lieu of their ownership in such entity, whether upon dissolution, liquidation or reorganization
of such entity, or by merger, acquisition or other business combination transaction involving such entity and the Company or any of its
subsidiaries.


 


Ranking.
The Series B Preferred Stock, with respect to dividend rights and rights upon our voluntary or involuntary liquidation, dissolution
or winding up, ranks:


 


	 	●	senior
    to our Common Stock and any other class of equity securities the terms of which provide that such equity securities will rank junior
    to the Series B Preferred Stock;
	 	●	junior
    to our Series A Preferred Stock and any equity securities the terms of which provide that such equity securities will rank senior
    to the Series B Preferred Stock, and to all of our existing and future debt, including, prior to conversion of such debt, any debt
    convertible into our equity securities; and
	 	●	on
    a parity with our Series A-1 Preferred Stock and any other equity securities the terms of which provide that such equity securities
    will rank without preference or priority over the other.


 


Exchange
Listing. The Series B Preferred Stock is listed for trading on NASDAQ under the symbol “FATBP.”


 


Information
Rights. During any period in which we are not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and
any shares of our Series B Preferred Stock are outstanding, we will (i) transmit by mail to all holders of the Series B Preferred Stock,
copies of the annual reports and quarterly reports that we would have been required to file with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act if we were subject to those sections (other than any exhibits that would have been required) and (ii) promptly upon
written request, make available copies of such reports to any prospective holder of Series B Preferred Stock. We will mail the reports
to the holders of Series B Preferred Stock within 15 days after the respective dates by which we would have been required to file the
reports with the SEC if we were subject to Section 13 or 15(d) of the Exchange Act.


 




    	 



     


    

 


Transfer
and Dividend Paying Agent. VStock Transfer, LLC acts as the transfer and dividend payment agent and registrar in respect of the Series
B Preferred Stock.


 


Description
of Warrants


 


Form.
The Warrants were issued under a Warrant Agency Agreement between the Company and VStock Transfer, LLC, as warrant agent (the “Warrant
Agent”). The material terms and provisions of the Warrants are summarized below, but the following description is subject to, and
qualified in its entirety by, the Warrant Agency Agreement and form of Warrant.


 


Exercisability.
The Warrants are currently exercisable and may be exercised at any time up to five (5) years from the date of original issuance, at the
option of each holder, in whole or in part by delivering to us a duly executed exercise notice accompanied by payment in full for the
number of shares of Common Stock purchased upon such exercise (except in the case of a cashless exercise as discussed below). No fractional
shares of Common Stock will be issued in connection with the exercise of a Warrant. In lieu of fractional shares, we will, at our option,
either (i) pay the holder an amount in cash equal to the fractional amount multiplied by the market value of a share of Common Stock
or (ii) round up to the next whole share. The holder will not have the right to exercise any portion of the Warrant if the holder (together
with its affiliates) would beneficially own in excess of 4.99% or 9.99% of the number of shares of our Common Stock outstanding immediately
after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants.


 


Cashless
Exercise. If, at any time during the term of the Warrants, the issuance of shares of our Common Stock upon exercise of the Warrants
is not covered by an effective registration statement, the holder is permitted to effect a cashless exercise of the Warrants (in whole
or in part) by having the holder deliver to us a duly executed exercise notice, canceling a portion of the Warrant in payment of the
purchase price payable in respect of the number of shares of our Common Stock purchased upon such exercise.


 


Failure
to Timely Deliver Shares. If we fail to deliver to the investor a certificate representing shares issuable upon exercise of a Warrant
by the third trading day after the exercise date as required by the Warrant, and if the investor purchases the shares of our Common Stock
after that third trading day to deliver in satisfaction of a sale by the investor of the underlying Warrant shares that the investor
anticipated receiving from us, then, within three trading days of receipt of the investor’s request, we, at the investor’s
option, will either (i) pay cash to the investor in an amount equal to the investor’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock purchased less the exercise price (as described below), or the buy-in price, at which
point our obligation to deliver the Warrant (and to issue the underlying Common Stock) will terminate, (ii) reinstate the portion of
the Warrant and equivalent number of Warrant shares for which such exercise was not honored (in which case such exercise shall be deemed
rescinded) or (iii) promptly honor our obligation to deliver to the investor a certificate or certificates representing the underlying
Common Stock and pay cash to the investor in an amount equal to the excess (if any) of the buy-in price over the product of (A) the number
of shares of Common Stock, times (B) the per share closing price of our Common Stock on the date of the event giving rise to our obligation
to deliver the certificate.


 


Exercise
Price. Each Warrant represents the right to purchase one share of Common Stock at an exercise price of $5.00 per share, subject to
adjustment as described below. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our Common Stock, and upon any distributions of assets,
including cash, stock or other property to our stockholders, in each case occurring after the date of issuance of the Warrants.


 


Exchange
Listing. The Warrants are listed for trading on NASDAQ under the symbol “FATBW.” The shares of Common Stock underlying
the Warrants are listed for trading on NASDAQ under the symbol “FAT.”


 


Rights
as a Stockholder. Except as otherwise provided in the Warrants or by virtue of such holder’s ownership of shares of our Common
Stock, the holder of a Warrant does not have the rights or privileges of a holder of our Common Stock, including any voting rights, until
the holder exercises the Warrant.


 


Governing
Law and Jurisdiction. The Warrant Agency Agreement provides that the validity, interpretation, and performance of the Warrants and
the Warrant Agency Agreement will be governed by the laws of the State of New York, without giving effect to conflicts of law principles
that would result in the application of the substantive laws of another jurisdiction. In addition, the Warrant Agency Agreement provides
that any action, proceeding or claim against the Company arising out of or relating to the Warrants or the Warrant Agency Agreement must
be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York.
However, we do not intend that the foregoing provisions would apply to actions arising under the Securities Act of 1933, as amended,
or the Exchange Act.


 


Warrant
Agent. VStock Transfer, LLC acts as our Warrant Agent and transfer agent for the Warrants.