Exhibit 4.2


 



RIGHTS AGREEMENT


 


This Rights Agreement (this “Agreement”)
is made as of December 9, 2021, by and between Financial Strategies Acquisition Corp., a Delaware corporation (the “Company”),
and Continental Stock Transfer & Trust Company, a New York corporation (the “Rights Agent”).


 


WHEREAS, the Company is engaged in a public offering
(the “Public Offering”) of 8,700,000 units (the “Public Units”) of the Company (and up to 1,305,000
additional Public Units if the underwriters’ over-allotment option is exercised in full), each Public Unit consisting of one share
of Class A common stock, par value $0.0001 per share (the “Common Stock”), one right to receive one-tenth of one
share of Common Stock upon the happening of the triggering event described herein (the “Public Right”), and one warrant
to purchase one share of Common Stock (the “Public Warrant”);


 


WHEREAS,
simultaneously with the Public Offering, FSC Sponsor LLC, Celtic Sponsor VII LLC, Sea Otter Securities Group LLC, Sixth Borough Capital
Fund LP (and certain members of its general partner), Eagle Point Credit Management LLC, Greentree Financial Group Inc. and I-Bankers
Securities, Inc. (collectively, the “Subscribers”) will be purchasing up to 459,275 private units (“Private
Units”) at $10.00 per Private Unit (for a total purchase price of $4,592,750), with each Private Unit consisting of one share
of Common Stock, one right to receive one-tenth of one share of Common Stock upon the happening of the triggering event described herein
(the “Private Right”), and one warrant to purchase one share of Common Stock (the “Private Warrant”);
the Subscribers have also agreed that if the over-allotment option is exercised by the underwriters, they will purchase up to a maximum
of an additional 45,675 Private Units at a price of $10.00 per Private Unit (for a total additional purchase price of $456,750);


 


WHEREAS,
in order to finance the Company’s transaction costs in connection with an intended initial Business Combination (as defined
in the Company’s Amended and Restated Certificate of Incorporation), FSC
Sponsor LLC, Celtic Sponsor VII LLC, an affiliate of FSC Sponsor LLC or Celtic Sponsor VII LLC or certain of the Company’s officers
and directors may loan to the Company funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into
units (the “Working Capital Units,” and collectively with the Public Units and the Private Units, the “Units”),
each consisting of one share of Common Stock, one warrant exercisable for one share of Common Stock (the “Working Capital
Warrants”) and one right to receive one-tenth (1/10) of one share of Common Stock upon an initial business combination (the
 “Working Capital Rights,” and collectively with the Public Rights and the Private Rights, the “Rights”),
at a price of $10.00 per Working Capital Unit;


 


WHEREAS, the Company has filed with the Securities
and Exchange Commission (the “SEC”) a Registration Statement on Form S-1, File No. 333-260434 (the “Registration
Statement”), and related Prospectus (the “Prospectus”) for the registration, under the Securities Act of
1933, as amended (the “Act”), of, among other securities, the Rights and the shares of Common Stock issuable to the
holders of the Rights;


 


WHEREAS, the Company desires the Rights Agent
to act on behalf of the Company, and the Rights 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 Rights 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 Rights
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 Rights Agent. The
Company hereby appoints the Rights Agent to act as agent for the Company for the Rights, and the Rights 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, the Chief Executive
Officer or the Chief Financial Officer of the Company. 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 Rights 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 Rights
Agent shall maintain books (the “Right Register”) for the registration of original issuance and the registration of
transfer of the Rights. Upon the initial issuance of the Rights, the Rights 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 Rights Agent by the
Company.


 


2.3.2. Registered Holder. Prior to
due presentment for registration of transfer of any Right, the Company and the Rights Agent may deem and treat the person in whose name
such Right shall be registered upon the Right Register (the “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 Rights Agent), for the purpose of the exchange thereof, and for all other purposes, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary.


 


2.4. Detachability of Rights. Each
of the securities comprising the Units will begin to trade separately on (i) the 52nd day after the effectiveness of the Registration
Statement, or (ii) such earlier date as I-Bankers Securities, Inc., as representative of the underwriters, shall determine is
acceptable (such date, the “Detachment Date”). In no event will separate trading of the securities comprising the Units
commence until the Company (i) files a Current Report on Form 8-K with the SEC including an audited balance sheet reflecting
the Company’s receipt of the gross proceeds of the Public Offering and (ii) issues a press release announcing when such separate
trading will begin. Upon the Detachment Date, holders of Units will have the option to continue to hold Units or separate their Units
into the component pieces.


 


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 (defined 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 or issue fractional shares of Common Stock.


 


3.2. Exchange Event. An “Exchange
Event” shall occur upon the Company’s consummation of an initial Business Combination.


 






    	 		 



     


    

 


3.3. Exchange of Rights.


 


3.3.1. Issuance of Shares of Common Stock.
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 Rights Agent. Upon receipt of a valid Rights Certificate, the Company shall issue to the registered holder of such
Right(s) 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 and issue to such registered holder(s) a certificate or book-entry position for such shares. 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. In the event that any holder would otherwise be entitled
to any fractional share upon exchange of Rights, at the time of an Exchange Event, the Company will instruct the Rights Agent how any
such entitlement will be addressed. To the fullest extent permitted by the Company’s Amended and Restated Certificate of Incorporation
the Company reserves the right to deal with any such fractional entitlement at the relevant time in any manner permitted by the Act and
the Amended and Restated Certificate of Incorporation, which would include the rounding down of any entitlement to receive shares of Common
Stock to the nearest whole share (and in effect extinguishing any fractional entitlement), or the holder being entitled to hold any remaining
fractional entitlement (without any share being issued) and to aggregate the same with any future fractional entitlement to receive shares
in the Company until the holder is entitled to receive a whole number. Any rounding down and extinguishment may be done with or without
any in lieu cash payment or other compensation being made to the holder of the relevant Rights, such that value received on exchange of
the Rights may be considered less than the value that the holder would otherwise expect to receive.


 


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 or book-entry position for shares of 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
or entry of position.


 


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 shares of Common Stock
will receive in such transaction, for the number of shares such holder is entitled to pursuant to Section 3.3.1 above. If the Company
does not continue as the publicly held reporting entity upon an Exchange Event, each holder of a Right will be required to affirmatively
convert his/her or its rights in order to receive the one-tenth of one share underlying each right (without paying any additional consideration)
upon consummation of the Exchange Event. In such a case, each holder of a Right will be required to indicate his, her or its election
to convert the Rights into underlying shares of Common Stock as well as to return the original certificates evidencing the Rights to the
Company.


 


3.5 Duration of Rights. If an Exchange
Event does not occur within the time period set forth in the Company’s Amended and Restated Certificate of Incorporation, as the
same may be amended from time to time, the Rights shall expire and shall be worthless.


 


4. Transfer and Exchange of Rights.


 


4.1. Registration of Transfer. The
Rights 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 Rights Agent. The Rights so cancelled shall be delivered by the Rights Agent to the Company from time to time upon request.


 


4.2. Procedure for Surrender of Rights.
Rights may be surrendered to the Rights Agent, together with a written request for exchange or transfer, and thereupon the Rights 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
and the new Rights to be issued will not bear a restrictive legend, the Rights Agent shall not cancel such Right and issue new Rights
in exchange therefor until the Rights Agent has received an opinion of counsel for the Company stating that such transfer may be made
and indicating no restrictive legend is required.


 


4.3. Fractional Rights. The Rights
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. Adjustments to Conversion Ratios.
The number of shares of Common Stock that the holders of Rights are entitled to receive as a result of the occurrence of an Exchange Event
shall be equitably adjusted to reflect appropriately the effect of any share split, reverse share split, share dividend, reorganization,
recapitalization, reclassification, combination, exchange of shares or other like change with respect to the shares of Common Stock occurring
on or after the date hereof and prior to the Exchange Event.


 


4.6. Right Execution and Countersignature.
The Rights 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 Rights Agent, will supply the
Rights 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 Stockholder. Until
the 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 stockholder 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 stockholders in respect of the meetings of stockholders 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 Rights 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 Shares 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 Rights 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 Rights 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 of Common Stock.


 


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


 


6.2.1. Appointment of Successor Rights
Agent. The Rights 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 Rights Agent becomes
vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Rights Agent in place of the
Rights 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 Rights 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 Rights Agent at the Company’s cost. Any successor Rights 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 Rights Agent shall
be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Rights Agent with like effect
as if originally named as Rights Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate,
the predecessor Rights Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Rights
Agent all the authority, powers, and rights of such predecessor Rights Agent hereunder; and upon request of any successor Rights 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 Rights Agent all such authority, powers, rights, immunities, duties, and obligations.


 






    	 		 



     


    

 


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


 


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


 


6.3. Fees and Expenses of Rights Agent.


 


6.3.1. Remuneration. The Company agrees
to pay the Rights Agent reasonable remuneration for its services as such Rights Agent hereunder and will reimburse the Rights Agent upon
demand for all expenditures that the Rights 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 Rights Agent for the carrying out or performing of the
provisions of this Agreement.


 


6.4. Liability of Rights Agent.


 


6.4.1. Reliance on Company Statement.
Whenever in the performance of its duties under this Agreement, the Rights 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 Rights Agent. The Rights 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 Rights Agent
shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. Subject to Section 6.6 below, the Company
agrees to indemnify the Rights Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel
fees, for anything done or omitted by the Rights Agent in the execution of this Agreement except as a result of the Rights Agent’s
gross negligence, willful misconduct, or bad faith.


 


6.4.3. Exclusions. The Rights 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 shares of Common Stock to be issued pursuant to this Agreement or any Right or as to whether any shares of Common
Stock will when issued be valid and fully paid and nonassessable.


 


6.5. Acceptance of Agency. The Rights
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 Rights 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 Rights 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 Rights 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 Rights 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
Rights Agent), as follows:


 


Financial Strategies Acquisition Corp.


2626 Cole Avenue, Suite 300


Dallas, Texas 75204


 


with a copy (which shall not constitute notice)
to:


 


Haynes and Boone, LLP


2323 Victory Ave, Suite 700


Dallas, Texas 75219


Attn: Matthew L. Fry, Esq.


 


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 Rights 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 Rights Agent with the Company), as follows:


 


Continental Stock Transfer & Trust Company


 


One State Street, 30th Floor


New York, New York 10004


Attn: Compliance Department


 


7.3. Applicable Law and Exclusive Forum.
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 conflict of laws. Subject to applicable law, the Company and the Rights Agent hereby agree
that any action, proceeding or claim against either of them 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 forum for any such action, proceeding or claim. The Company and the
Rights Agent hereby waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding
the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability or duty created by the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), any other claim for which the federal district courts of the
United States of America are the sole and exclusive forum, or any complaint asserting a cause of action arising under the Act against
us or any of our directors, officers, other employees or agents. Section 27 of the Exchange Act creates exclusive federal jurisdiction
over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.


 


Any person or entity purchasing or otherwise acquiring
any interest in the Rights shall be deemed to have notice of and to have consented to the forum provisions in this Section 7.3. If
any action, the subject matter of which is within the scope the forum provisions above, is filed in a court other than a court located
within the State of New York or the United States District Court for the Southern District of New York (a “foreign action”)
in the name of any Rights holder, such Rights holder shall be deemed to have consented to: (x) the personal jurisdiction of the state
and federal courts located within the State of New York or the United States District Court for the Southern District of New York in connection
with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having
service of process made upon such Rights holder in any such enforcement action by service upon such Rights holder’s counsel in the
foreign action as agent for such Rights holder.


 






    	 		 



     


    

 


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 any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement
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 their successors and assigns and of the registered holders of the Rights.


  


7.5. Examination of the Right Agreement.
A copy of this Agreement shall be available at all reasonable times at the office of the Rights Agent in the Borough of Manhattan, City
and State of New York, for inspection by the registered holder of any Right. The Rights 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.


 


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.


 


	 	FINANCIAL STRATEGIES ACQUISITION CORP.
	 	 	 
	 	By:	/s/ Jamie Khurshid 
	 	Name:	Jamie Khurshid
	 	Title:	Chief Executive Officer


 


	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY
	 	 	 
	 	By:	/s/ Douglas Reed 
	 	Name:	Douglas Reed 
	 	Title:	Vice President


 


[Signature Page to Rights Agreement]