Exhibit 4.2


 


RIGHTS AGREEMENT


 


This Rights Agreement (this “Agreement”)
is made as of July 15, 2014 between 1347 Capital Corp., a Delaware corporation, with offices at 150 Pierce Road, 6th Floor, Itasca,
IL 60143 (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, with offices
at 17 Battery Place, New York, New York 10004 (the “Right Agent”).


 


WHEREAS, the Company has received a firm
commitment from EarlyBirdCapital, Inc. (“EBC”) to purchase up to an aggregate of 4,600,000 units, each unit (“Unit”)
comprised of one share of the Company’s common stock, par value $.0001 per share (“Common Stock”), one right
to receive one-tenth of one share of Common Stock (a “Public Right”) upon the happening of the triggering event described
herein and one warrant to purchase one-half of one share of Common Stock (a “Warrant”), and in connection therewith,
will issue and deliver up to an aggregate of 4,600,000 Public Rights upon consummation of such public offering (“Public Offering”);


 


WHEREAS, simultaneously with the consummation
of the Public Offering, the Company will issue and deliver up to an aggregate of 198,000 rights underlying private units (the “Private
Rights”);


 


WHEREAS, in connection with the Public Offering,
the Company will issue and deliver up to 300,000 rights (underlying unit purchase options) to EBC or its designees (“EBC
Rights”);


 


WHEREAS, subsequent to the Public Offering,
the Company may issue and deliver up to 500,000 rights underlying units it may issue in satisfaction of certain working capital
loans (the “WCL Rights” and, together with the Public Rights, the Private Rights and the EBC Rights, the “Rights”);


 


WHEREAS, the Company has filed with the
Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-1, File No. 333-195695 (“Registration
Statement”), for the registration, under the Securities Act of 1933, as amended (“Act”) of, among other securities,
the Public Rights and the shares of Common Stock issuable to the holders of the Public Rights;


 


WHEREAS, the Company desires the Right Agent
to act on behalf of the Company, and the Right Agent is willing to so act, in connection with the issuance, registration, transfer
and exchange of the Rights;


 


WHEREAS, the Company desires to provide
for the form and provisions of the Rights, the terms upon which they shall be issued, and the respective rights, limitation of
rights, and immunities of the Company, the Right Agent, and the holders of the Rights; and


 


WHEREAS, all acts and things have been done
and performed which are necessary to make the Rights, when executed on behalf of the Company and countersigned by or on behalf
of the Right Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution
and delivery of this Agreement.


 


NOW, THEREFORE, in consideration of the
mutual agreements herein contained, the parties hereto agree as follows:


 


		1.	Appointment of Right Agent. The Company hereby appoints the Right Agent to act as agent for the Company for the Rights,
and the Right Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions
set forth in this Agreement.



 


		2.	Rights.



 


		2.1.	Form of Right. Each Right shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto,
the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the Chairman of the
Board or Chief Executive Officer and Treasurer, Secretary or Assistant Secretary of the Company and shall bear a facsimile of the
Company’s seal. In the event the person whose facsimile signature has been placed upon any Right shall have ceased to serve
in the capacity in which such person signed the Right before such Right is issued, it may be issued with the same effect as if
he or she had not ceased to be such at the date of issuance.



 




    	 



    	 



    

 





		2.2.	Effect of Countersignature. Unless and until countersigned by the Right Agent pursuant to this Agreement, a Right shall
be invalid and of no effect and may not be exchanged for shares of Common Stock.



 


		2.3.	Registration.



 


		2.3.1.	Right Register. The Right Agent shall maintain books (“Right Register”) for the registration of original
issuance and the registration of transfer of the Rights. Upon the initial issuance of the Rights, the Right Agent shall issue and
register the Rights in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions
delivered to the Right Agent by the Company.



 


		2.3.2.	Registered Holder. Prior to due presentment for registration of transfer of any Right, the Company and the Right Agent
may deem and treat the person in whose name such Right shall be registered upon the Right Register (“registered holder”)
as the absolute owner of such Right and of each Right represented thereby (notwithstanding any notation of ownership or other writing
on the Right Certificate made by anyone other than the Company or the Right Agent), for the purpose of the exchange thereof, and
for all other purposes, and neither the Company nor the Right Agent shall be affected by any notice to the contrary.



 


		2.4.	Detachability of Rights. The securities comprising the Units, including the Rights, will not be separately transferable
until the ninetieth (90th) day after the date hereof unless EBC informs the Company of its decision to allow earlier
separate trading, but in no event will separate trading of the securities comprising the Units begin until (i) the Company files
a Current Report on Form 8-K which includes an audited balance sheet reflecting the receipt by the Company of the gross proceeds
of the Public Offering including the proceeds received by the Company from the exercise of the over-allotment option, if the over-allotment
option is exercised on the date hereof, and (ii) the Company issues a press release and files a Current Report on Form 8-K announcing
when such separate trading shall begin.



 


		3.	Terms and Exchange of Rights.



 


		3.1.	Rights. Each Right shall entitle the holder thereof to receive one-tenth of one share of Common Stock upon the happening
of an Exchange Event (described below). No additional consideration shall be paid by a holder of Rights in order to receive his,
her or its shares of Common Stock upon an Exchange Event as the purchase price for such shares of Common Stock has been included
in the purchase price for the Units. In no event will the Company be required to net cash settle the Rights.



 


		3.2.	Exchange Event. An Exchange Event shall occur upon the Company’s consummation of an initial Business Combination
(as defined in the Company’s Amended and Restated Certificate of Incorporation).



 


		3.3.	Exchange of Rights.



 


		3.3.1.	Issuance of Certificates. As soon as practicable upon the occurrence of an Exchange Event, the Company shall direct
holders of the Rights to return their Rights Certificates to the Right Agent. Upon receipt of a valid Rights Certificate, the Company
shall issue to the registered holder of such Right(s) a certificate or certificates for the number of full shares of Common Stock
to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it.



 


Notwithstanding the foregoing, or any provision contained
in this Agreement to the contrary, in no event will the Company be required to net cash settle the Rights. The Company shall not
issue fractional shares upon exchange of Rights. At the time of an Exchange Event, the Company will either instruct the Right Agent
to round up to the nearest whole share of Common Stock or otherwise inform it how fractional shares will be addressed in accordance
with Section 155 of the Delaware General Corporation Law.


 







    	 



    	 



    

 


		3.3.2.	Valid Issuance. All shares of Common Stock issued upon an Exchange Event in conformity with this Agreement shall be
validly issued, fully paid and nonassessable.



 


		3.3.3.	Date of Issuance. Each person in whose name any such certificate for Common Stock is issued shall for all purposes be
deemed to have become the holder of record of such shares on the date of the Exchange Event, irrespective of the date of delivery
of such certificate.



 


		3.3.4.	Company Not Surviving Following Exchange Event. Upon an Exchange Event in which the Company does not continue as the
publicly held reporting entity, the definitive agreement will provide for the holders of Rights to receive the same per share consideration
the holders of the Common Stock will receive in such transaction, for the number of shares such holder is entitled to pursuant
to Section 3.1 above.



 


		3.4.	Duration of Rights. If an Exchange Event does not occur within 18 months from the closing of the Public Offering, or
24 months from the closing of the Public Offering if the Company has entered into a letter of intent or definitive agreement with
a target business for a Business Combination within 18 months from the closing of the Public Offering and such Business Combination
has not yet been consummated within such 18-month period, the Rights shall expire and shall be worthless.



 


		4.	Transfer and Exchange of Rights.



 


		4.1.	Registration of Transfer. The Right Agent shall register the transfer, from time to time, of any outstanding Right upon
the Right Register, upon surrender of such Right for transfer, properly endorsed with signatures properly guaranteed and accompanied
by appropriate instructions for transfer. Upon any such transfer, a new Right representing an equal aggregate number of Rights
shall be issued and the old Right shall be cancelled by the Right Agent. The Rights so cancelled shall be delivered by the Right
Agent to the Company from time to time upon request.



 


		4.2.	Procedure for Surrender of Rights. Rights may be surrendered to the Right Agent, together with a written request for
exchange or transfer, and thereupon the Right Agent shall issue in exchange therefor one or more new Rights as requested by the
registered holder of the Rights so surrendered, representing an equal aggregate number of Rights; provided, however, that in the
event that a Right surrendered for transfer bears a restrictive legend, the Right Agent shall not cancel such Right and issue new
Rights in exchange therefor until the Right Agent has received an opinion of counsel for the Company stating that such transfer
may be made and indicating whether the new Rights must also bear a restrictive legend.



 


		4.3.	Fractional Rights. The Right Agent shall not be required to effect any registration of transfer or exchange which will
result in the issuance of a Right Certificate for a fraction of a Right.



 


		4.4.	Service Charges. No service charge shall be made for any exchange or registration of transfer of Rights.



 


		4.5.	Right Execution and Countersignature. The Right Agent is hereby authorized to countersign and to deliver, in accordance
with the terms of this Agreement, the Rights required to be issued pursuant to the provisions of this Section 4, and the Company,
whenever required by the Right Agent, will supply the Right Agent with Rights duly executed on behalf of the Company for such purpose.



 


		5.	Other Provisions Relating to Rights of Holders of Rights.



 


		5.1.	No Rights as Shareholder. Until exchange of a Right for shares of Common Stock as provided for herein, a Right does
not entitle the registered holder thereof to any of the rights of a shareholder of the Company, including, without limitation,
the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice
as shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other matter.



  




    	 



    	 



    

 


		5.2.	Lost, Stolen, Mutilated, or Destroyed Rights. If any Right is lost, stolen, mutilated, or destroyed, the Company and
the Right Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case
of a mutilated Right, include the surrender thereof), issue a new Right of like denomination, tenor, and date as the Right so lost,
stolen, mutilated, or destroyed. Any such new Right shall constitute a substitute contractual obligation of the Company, whether
or not the allegedly lost, stolen, mutilated, or destroyed Right shall be at any time enforceable by anyone.



 


		5.3.	Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but
unissued shares of Common Stock that will be sufficient to permit the exchange of all outstanding Rights issued pursuant to this
Agreement.



 


		6.	Concerning the Right Agent and Other Matters.



 


		6.1.	Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the
Company or the Right Agent in respect of the issuance or delivery of shares of Common Stock upon the exchange of Rights, but the
Company shall not be obligated to pay any transfer taxes in respect of the Rights or such shares.



 


		6.2.	Resignation, Consolidation, or Merger of Right Agent.



 


		6.2.1.	Appointment of Successor Right Agent. The Right Agent, or any successor to it hereafter appointed, may resign its duties
and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the
Company. If the office of the Right Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint
in writing a successor Right Agent in place of the Right Agent. If the Company shall fail to make such appointment within a period
of 30 days after it has been notified in writing of such resignation or incapacity by the Right Agent or by the holder of the Right
(who shall, with such notice, submit his, her or its Right for inspection by the Company), then the holder of any Right may apply
to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Right Agent at the
Company’s cost. Any successor Right Agent, whether appointed by the Company or by such court, shall be a corporation organized
and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan,
City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination
by federal or state authority. After appointment, any successor Right Agent shall be vested with all the authority, powers, rights,
immunities, duties, and obligations of its predecessor Right Agent with like effect as if originally named as Right Agent hereunder,
without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Right Agent shall execute
and deliver, at the expense of the Company, an instrument transferring to such successor Right Agent all the authority, powers,
and rights of such predecessor Right Agent hereunder; and upon request of any successor Right Agent the Company shall make, execute,
acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor
Right Agent all such authority, powers, rights, immunities, duties, and obligations.



 


		6.2.2.	Notice of Successor Right Agent. In the event a successor Right Agent shall be appointed, the Company shall give notice
thereof to the predecessor Right Agent and the transfer agent for the Common Stock not later than the effective date of any such
appointment.



 


		6.2.3.	Merger or Consolidation of Right Agent. Any corporation into which the Right Agent may be merged or with which it may
be consolidated or any corporation resulting from any merger or consolidation to which the Right Agent shall be a party shall be
the successor Right Agent under this Agreement without any further act.






 




    	 



    	 



    

 


		6.3.	Fees and Expenses of Right Agent.



 


		6.3.1.	Remuneration. The Company agrees to pay the Right Agent reasonable remuneration for its services as such Right Agent
hereunder and will reimburse the Right Agent upon demand for all expenditures that the Right Agent may reasonably incur in the
execution of its duties hereunder.



 


		6.3.2.	Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed,
acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Right
Agent for the carrying out or performing of the provisions of this Agreement.



 


		6.4.	Liability of Right Agent.



 


		6.4.1.	Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Right Agent shall
deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed
to be conclusively proved and established by a statement signed by the Chief Executive Officer or Chief Financial Officer and delivered
to the Right Agent. The Right Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant
to the provisions of this Agreement.



 


		6.4.2.	Indemnity. The Right Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith.
The Company agrees to indemnify the Right Agent and save it harmless against any and all liabilities, including judgments, costs
and reasonable counsel fees, for anything done or omitted by the Right Agent in the execution of this Agreement except as a result
of the Right Agent’s gross negligence, willful misconduct, or bad faith.



 


		6.4.3.	Exclusions. The Right Agent shall have no responsibility with respect to the validity of this Agreement or with respect
to the validity or execution of any Right (except its countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in any Right; nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation of any Common Stock to be issued pursuant to this
Agreement or any Right or as to whether any Common Stock will, when issued, be valid and fully paid and nonassessable.



 


		6.5.	Acceptance of Agency. The Right Agent hereby accepts the agency established by this Agreement and agrees to perform
the same upon the terms and conditions herein set forth.



 


		6.6.	Waiver. The Right Agent hereby waives any right of set-off or any other right, title, interest or claim of any kind
(“Claim”) in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust
Agreement, dated as of the date hereof, by and between the Company and the Right Agent as trustee thereunder) and hereby agrees
not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.



 


		7.	Miscellaneous Provisions.



 


		7.1.	Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Right Agent
shall bind and inure to the benefit of their respective successors and assigns.



 


		7.2.	Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Right Agent or by the
holder of any Right to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent
by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another
address is filed in writing by the Company with the Right Agent), as follows:



 


1347 Capital Corp.


150 Pierce Road, 6th Floor


Itasca, IL 60143


  




    	 



    	 



    

 


Attn: Hassan R. Baqar


 


Any notice, statement or demand authorized by this
Agreement to be given or made by the holder of any Right or by the Company to or on the Right Agent shall be sufficiently given
when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after
deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Right Agent with the Company),
as follows:


 


Continental Stock Transfer & Trust Company


17 Battery Place


New York, New York 10004


Attn: Compliance Department


 


with a copy in each case to:


 


McDermott Will & Emery LLP


340 Madison Avenue


New York, New York 10173


Attn: Joel L. Rubinstein


 


and


 


Graubard Miller


The Chrysler Building


405 Lexington Avenue


New York, New York 10174


Attn: David Alan Miller, Esq.


 


and


 


EarlyBirdCapital, Inc.


275 Madison Avenue, 27th Floor


New York, New York 10016


Attn: Michael Powell, Managing Director


 


		7.3.	Applicable Law. The validity, interpretation, and performance of this Agreement and of the Rights shall be governed
in all respects 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. The Company hereby agrees that any action, proceeding or claim
against it arising out of or relating in any way to this Agreement shall 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, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in
Section 7.2 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action,
proceeding or claim.



 


		7.4.	Persons Having Rights under this Agreement. Nothing in this Agreement expressed and nothing that may be implied from
any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than
the parties hereto and the registered holders of the Rights and, for the purposes of Sections 3.1, 7.4 and 7.8 hereof, EBC, any
right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement
hereof. EBC shall be deemed to be a third-party beneficiary of this Agreement with respect to Sections 3.1, 7.4 and 7.8 hereof.
All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive
benefit of the parties hereto (and EBC with respect to Sections 3.1, 7.4 and 7.8 hereof) and their successors and assigns and of
the registered holders of the Rights.



 




    	 



    	 



    

 


		7.5.	Examination of this Agreement. A copy of this Agreement shall be available at all reasonable times at the office of
the Right Agent in the Borough of Manhattan, City and State of New York, for inspection by the registered holder of any Right.
The Right Agent may require any such holder to submit his, her or its Right for inspection by it.



 


		7.6.	Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.



 


		7.7.	Effect of Headings. The Section headings herein are for convenience only and are not part of this Agreement and shall
not affect the interpretation thereof.



 


		7.8.	Amendments. This Agreement may be amended by the parties hereto without the consent of any registered holder for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein or adding or
changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary
or desirable and that the parties deem shall not adversely affect the interest of the registered holders. All other modifications
or amendments shall require the written consent or vote of the registered holders of a majority of the then outstanding Rights.
The provisions of this Section 7.8 may not be modified, amended or deleted without the prior written consent of EBC.



 


		7.9.	Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision
hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.



 


[Signature Page Follows]





 




    	 



    	 



    

 


 


IN WITNESS WHEREOF, this Agreement has been
duly executed by the parties hereto as of the day and year first above written.


 





	 	
        1347 CAPITAL CORP. 

	 	 	 	 
	 	By: 	 /s/ Gordon G. Pratt	 
	 	 	Name: Gordon G. Pratt	 
	 	 	Title: President, Chief Executive Officer and Director	 


 


	 	
        CONTINENTAL STOCK TRANSFER & TRUST COMPANY 
	 
	 	 	 	 
	 	By: 	 /s/ Monty Harry	 
	 	 	
        Name: Monty Harry

        Title: Vice President
	 


 










[Signature page to Rights Agreement between
1347 Capital Corp. and Continental Stock Transfer & Trust Company]