Document:

rpay-ex44_140.htm

Exhibit 4.4

 

Description of the Registrant’s Securities Registered

Under Section 12 of the Securities Exchange Act of 1934

 

DESCRIPTION OF CAPITAL STOCK

 

The following summary of the material terms of the capital stock of Repay Holdings Corporation (“Repay” or the “Company”) is not intended to be a complete summary of the rights and preferences of such capital stock, and is qualified by reference to the Company’s Certificate of Incorporation (the “Certificate of Incorporation”) and Bylaws (the “Bylaws”), each of which is incorporated herein by reference and attached as an exhibit to our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”). For a more complete understanding of our capital stock, the Company encourages you to read carefully each of the Certificate of Incorporation and the Bylaws in their entirety, each as may be amended, and the applicable provisions of the laws of the state of Delaware.

 

Background

 

Repay Holdings Corporation was originally known as Thunder Bridge Acquisition, Ltd. (“Thunder Bridge”), a special purpose acquisition company incorporated as a Cayman Islands exempted company, which consummated its initial public offering in June 2018. On July 11, 2019, Thunder Bridge domesticated into a Delaware corporation (the “Domestication”) and consummated the merger (the “Merger”) of a wholly-owned subsidiary of Thunder Bridge with and into Hawk Parent Holdings LLC (“Hawk Parent”), pursuant to a Second Amended and Restated Agreement and Plan of Merger effective as of January 21, 2019 (as amended or supplemented from time to time, the “Merger Agreement”) among Thunder Bridge, Hawk Parent and certain other parties thereto (such Domestication, Merger and other transactions contemplated by the Merger Agreement, collectively, the “Business Combination”). In connection with the closing (the “Closing”) of the Business Combination, Thunder Bridge changed its name to Repay Holdings Corporation.

 

Pursuant to the Business Combination, Thunder Bridge’s then issued and outstanding Class A ordinary shares and Class B ordinary shares automatically converted, on a one-for-one basis, into shares of the Company’s Class A common stock, par value $0.0001 per share (“Class A common stock”). In addition, pre-Business Combination equityholders of Hawk Parent received as consideration for their existing limited liability company interests of Hawk Parent an amount of cash and a number of units representing limited liability company interests of Hawk Parent as the surviving company (“Post-Merger Repay Units” and holders of such Post-Merger Repay Units, collectively, the “Repay Unitholders”). In connection with the issuance of such Post-Merger Repay Units, the Company issued to Hawk Parent, as the surviving company following the Merger, 100 shares of Class V common stock of the Company, and Hawk Parent distributed one share of Class V common stock to each holder of Post-Merger Repay Units. 

 

Authorized and Outstanding Stock

 

The Certificate of Incorporation authorizes the issuance of 2,200,001,000 shares, consisting of (i) 200,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred 

 

 

Stock”), (ii) 2,000,000,000 shares of Class A common stock and (iii) 1,000 shares of Class V common stock, par value $0.0001 per share.

 

Class A Common Stock

 

Holders of Class A common stock have all the rights, powers and privileges provided for in the Company’s Certificate of Incorporation.  All shares of Class A common stock are fully paid and non-assessable.

 

Voting rights. Each holder of Class A common stock is entitled to one vote for each share of Class A common stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of Class A common stock do not have cumulative voting rights 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. Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class A common stock, as such, have no voting power with respect to, and are not be entitled to vote on, any amendment to the Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the Delaware General Corporation law (“DGCL”).

 

Dividend Rights. Subject to applicable law and preferences that may be applicable to any outstanding Preferred Stock, the holders of shares of Class A common stock are entitled to receive such dividends, if any, as may be declared from time to time by the Company’s board of directors out of funds legally available therefor.

 

Rights upon liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs, the holders of Class A common stock are entitled to share ratably in all assets remaining after payment of the Company’s debts and other liabilities, subject to prior distribution rights of Preferred Stock or any class or series of stock having a preference over the Class A common stock, then outstanding, if any.

 

Other rights. The holders of Class A common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class A common stock. The rights, preferences and privileges of holders of the Class A common stock will be subject to those of the holders of any shares of the Preferred Stock the Company may issue in the future.

 

Class V Common Stock

 

 

 

Holders of Class V common stock have all the rights, powers and privileges provided for in the Company’s Certificate of Incorporation. All shares of Class V common stock are fully paid and non-assessable.

 

Voting rights. Each holder of Class V common stock is entitled, without regard to the number of shares of Class V common stock (or fraction thereof) held by it, to a number of votes that is equal to the product of (x) the total number of Post-Merger Repay Units held by such holder as set forth in the books and records of Hawk Parent multiplied by (y) an exchange rate defined in that certain Exchange Agreement (the “Exchange Agreement”), dated July 11, 2019, among the Company, Hawk Parent and other Repay Unitholders, on all matters on which stockholders generally or holders of Class V common stock as a separate class are entitled to vote (whether voting separately as a class or together with one or more classes of the Company’s capital stock). The holders of shares of Class V common stock do not have cumulative voting rights in the election of directors. Holders of shares of Class V common stock will vote together with holders of the Class A common stock as a single class on all matters presented to the Company’s stockholders for their vote or approval. 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. Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class V common stock, as such, will have no voting power with respect to, and will not be entitled to vote on, any amendment to the Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.

 

Dividend rights. The holders of the Class V common stock do not participate in any dividends declared by the Company’s board of directors.

 

Rights upon liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs, the holders of Class V common stock are not entitled to receive any assets of the Company.

 

Other rights. The holders of shares of Class V common stock do not have preemptive, subscription, redemption or conversion rights. There are no redemption or sinking fund provisions applicable to the Class V common stock.

 

Issuance and Retirement of Class V common stock. In the event that any outstanding share of Class V common stock ceases to be held directly or indirectly by a holder of a Post-Merger Repay Unit as set forth in the books and records of Hawk Parent, such share will automatically be transferred to the Company for no consideration and thereupon will be retired. The Company will not issue additional shares of Class V common stock after the adoption of the Certificate of Incorporation other than in connection with the valid issuance or transfer of Post-Merger Repay Units in accordance with the governing documents of Hawk Parent.

 

 

 

Preferred Stock

 

No shares of Preferred Stock are currently issued or outstanding. The Certificate of Incorporation authorizes the Company’s board of directors to establish one or more series of Preferred Stock. Unless required by law or any stock exchange, the authorized shares of Preferred Stock will be available for issuance without further action by the holders of the Class A common stock. The Company’s board of directors has the discretion to determine the powers, preferences and relative, participating, optional and other special rights, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of Preferred Stock.

 

The issuance of Preferred Stock may have the effect of delaying, deferring or preventing a change in control of the Company without further action by the stockholders. Additionally, the issuance of Preferred Stock may adversely affect the holders of the Class A common stock by restricting dividends on the Class A common stock, diluting the voting power of the Class A common stock and the Class V common stock or subordinating the liquidation rights of the Class A common stock. As a result of these or other factors, the issuance of Preferred Stock could have an adverse impact on the market price of the Class A common stock. 

 

Dividends

 

Upon completion of the Business Combination, the Company became a holding company with no material assets other than its interest in Hawk Parent. The Company intends to cause Hawk Parent to make distributions to Repay Unitholders in amounts sufficient to cover applicable taxes and other obligations under the Tax Receivable Agreement between the Company and other Repay Unitholders as well as any cash dividends declared by us. The Amended and Restated Operating Agreement of Hawk Parent provides that pro rata cash distributions be made to Repay Unitholders (including us) at certain assumed tax rates.

 

The Company has not paid any cash dividends on its Class A common stock to date.  The payment of cash dividends is dependent upon the Company’s revenues and earnings, if any, capital requirements and general financial condition subject to funds legally available therefore. The payment of any cash dividends is within the discretion of the Company’s board of directors. Further, the Company’s ability to declare dividends may be limited by restrictive covenants contained in the agreements governing the indebtedness of its subsidiaries.

 

Anti-Takeover Effects of the Certificate of Incorporation, the Bylaws and Certain Provisions of Delaware Law

 

The Certificate of Incorporation, the Bylaws and the DGCL contain provisions, which are summarized in the following paragraphs, which are intended to enhance the likelihood of continuity and stability in the composition of the Company’s board of directors and to discourage certain types of transactions that may involve an actual or threatened acquisition of the Company. These provisions are intended to avoid costly takeover battles, reduce the Company’s vulnerability to a hostile change of control or other unsolicited acquisition proposal, and enhance the ability of the Company’s board of directors to maximize stockholder value in connection 

 

 

with any unsolicited offer to acquire the Company. However, these provisions may have the effect of delaying, deterring or preventing a merger or acquisition of the Company by means of a tender offer, a proxy contest or other takeover attempt that a stockholder might consider in its best interest, including attempts that might result in a premium over the prevailing market price for the shares of Class A common stock. The Certificate of Incorporation provides that any action required or permitted to be taken by the Company’s stockholders must be effected at a duly called annual or shareholders meeting of such stockholders and may not be effected by any consent in writing by such holders unless such action is recommended by all directors of the Company’s board of directors then in office, except that holders of Class V common stock or one or more series of Preferred Stock, if such series are expressly permitted to do so by the certificate of designation relating to such series, may take any action by written consent if such action permitted to be taken by such holders and the written consent is signed by the holders of outstanding shares of the relevant class or series having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting.

 

Authorized but Unissued Capital Stock

 

Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of The Nasdaq Capital Market (“Nasdaq”), which would apply if and so long as the Class A common stock remains listed on Nasdaq, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of Class A common stock. Additional shares that may be issued in the future may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.

 

One of the effects of the existence of unissued and unreserved common stock may be to enable the Company’s board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of the Company by means of a merger, tender offer, proxy contest or otherwise and thereby protect the continuity of management and possibly deprive stockholders of opportunities to sell their shares of Class A common stock at prices higher than prevailing market prices.

 

Election of Directors and Vacancies

 

The Certificate of Incorporation provides that the Company’s board of directors will determine the number of directors who will serve on the board, provided that no more than fifteen directors may serve on the Company’s board of directors at any time. The exact number of directors will be fixed from time to time by a majority of the Company’s board of directors. The Company’s board of directors is divided into three classes designated as Class I, Class II and Class III. Class I directors will initially serve for a term expiring at the first annual meeting of stockholders following the Closing of the Business Combination. Class II and Class III directors will initially serve for a term expiring at the second and third annual meeting of stockholders following the Closing of the Business Combination, respectively. At each succeeding annual meeting of stockholders, directors will be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting of the stockholders. There is no limit on the number of terms a director may serve on the Company’s board of directors.

 

 

 

In addition, the Certificate of Incorporation provides that any vacancy on the Company’s board of directors, including a vacancy that results from an increase in the number of directors or a vacancy that results from the removal of a director with cause, may be filled only by the affirmative vote of a majority of the directors then in office, subject to the provisions of the Stockholder Agreements entered into in connection with the Business Combination and any rights of the holders of Preferred Stock.

 

Notwithstanding the foregoing provisions of this section, each director will serve until his successor is duly elected and qualified or until his earlier death, resignation or removal. No decrease in the number of directors constituting the Company’s board of directors will shorten the term of any incumbent director.

 

Business Combinations

 

The Company has elected not to be governed by Section 203 of the DGCL. Notwithstanding the foregoing, the Certificate of Incorporation provides that the Company will not engage in any “business combinations” (as defined in the Certificate of Incorporation), at any point in time at which the Company’s Class A common stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any “interested stockholder” (as defined in the Certificate of Incorporation) for a three-year period after the time that such person became an interested stockholder unless:

	
 
	
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prior to such time, the Company’s board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

	
 
	
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upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the Company outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

	
 
	
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at or subsequent to such time, the business combination is approved by the Company’s board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock of the Company which is not owned by the interested stockholder.

 

Under the Certificate of Incorporation, a “business combination” is defined to generally include a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock. The Certificate of 

 

 

Incorporation expressly excludes certain of the Company’s stockholders with whom the Company will enter into stockholders agreements, certain of their respective transferees and their respective successors and affiliates from the definition of “interested stockholder” irrespective of the percentage ownership of the total voting power beneficially owned by them. Under certain circumstances, such provisions in the Certificate of Incorporation make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with a corporation for a three-year period. Accordingly, such provisions in the Certificate of Incorporation could have an anti-takeover effect with respect to certain transactions which the Company’s board of directors does not approve in advance. Such provisions may encourage companies interested in acquiring the Company to negotiate in advance with the Company’s board of directors because the stockholder approval requirement would be avoided if the Company’s board of directors approves either the business combination or the transaction that results in the stockholder becoming an interested stockholder. However, such provisions also could discourage attempts that might result in a premium over the market price for the shares held by stockholders. These provisions also may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

 

Quorum

 

The Bylaws provide that at any meeting of the Company’s board of directors, a majority of the total number of directors then in office constitutes a quorum for all purposes.

 

No Cumulative Voting

 

Under Delaware law, the right to vote cumulatively does not exist unless the certificate of incorporation expressly authorizes cumulative voting. The Certificate of Incorporation does not authorize cumulative voting.

 

General Stockholder Meetings

 

The Certificate of Incorporation provides that special meetings of stockholders may be called only by or at the direction of the Company’s board of directors, the Chairman of the Board or the Chief Executive Officer.

 

Requirements for Advance Notification of Stockholder Meetings, Nominations and Proposals

 

The Bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the Company’s board of directors or a committee of the Company’s board of directors. For any matter to be “properly brought” before a meeting, a stockholder must comply with advance notice requirements and provide the Company with certain information. Generally, to be timely, a stockholder’s notice must be received at the Company’s principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the immediately preceding annual meeting of stockholders (for the purposes of the first annual meeting of the stockholders of the Company following the adoption of the Bylaws, the date of 

 

 

the preceding annual meeting will be deemed to be May 31 of the preceding calendar year). The Bylaws also specify requirements as to the form and content of a stockholder’s notice. These provisions will not apply to the Stockholder Parties (as defined in the Bylaws) so long as their respective stockholders agreements remains in effect. The Bylaws allow the presiding officer at a meeting of the stockholders to adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not followed. These provisions may also defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of the Company.

 

Supermajority Provisions

 

The Certificate of Incorporation and the Bylaws provide that the Company’s board of directors is expressly authorized to make, alter, amend, change, add to, rescind or repeal, in whole or in part, the Bylaws without a stockholder vote in any matter not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation. Any amendment, alteration, rescission or repeal of the Bylaws by the Company’s stockholders requires the affirmative vote of the holders of at least 80% in voting power of all the then outstanding shares of stock entitled to vote thereon, voting together as a single class.

 

The DGCL provides generally that the affirmative vote of a majority of the outstanding shares entitled to vote thereon, voting together as a single class, is required to amend a corporation’s certificate of incorporation, unless the certificate of incorporation requires a greater percentage. The Certificate of Incorporation provides that the following provisions therein may be amended, altered, repealed or rescinded only by the affirmative vote of the holders of at least 66 2/3% in voting power of the then outstanding shares of the Company’s stock entitled to vote thereon, voting together as a single class:

	
 
	
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the provision requiring an 80% supermajority vote for stockholders to amend the Bylaws;

	
 
	
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the provisions providing for a classified board of directors (the election and term of directors);

	
 
	
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the provisions regarding filling vacancies on the Company’s board of directors and newly created directorships;

	
 
	
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the provisions regarding resignation and removal of directors;

	
 
	
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the provisions regarding calling special meetings of stockholders;

	
 
	
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the provisions regarding stockholder action by written consent;

	
 
	
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the provisions eliminating monetary damages for breaches of fiduciary duty by a director;

	
 
	
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the provisions regarding the election not to be governed by Section 203 of the DGCL;

	
 
	
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the provisions regarding competition and corporate opportunities; and

 

 

	
 
	
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the amendment provision requiring that the above provisions be amended only with an 66 2/3% supermajority vote.

 

These provisions may have the effect of deterring hostile takeovers or delaying or preventing changes in control of the Company or its management, such as a merger, reorganization or tender offer. These provisions are intended to enhance the likelihood of continued stability in the composition of the Company’s board of directors and its policies and to discourage certain types of transactions that may involve an actual or threatened acquisition of the Company. These provisions are designed to reduce the Company’s vulnerability to an unsolicited acquisition proposal. The provisions are also intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for the Company’s shares and, as a consequence, may inhibit fluctuations in the market price of the Company’s shares that could result from actual or rumored takeover attempts. Such provisions may also have the effect of preventing changes in management.

 

Exclusive Forum

 

The Certificate of Incorporation provides that, unless the Company consents to the selection of an alternative forum, any (i) derivative action or proceeding brought on behalf of the Company, (ii) action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to the Company or the Company’s stockholders, (iii) action asserting a claim against the Company or any director or officer of the Company (a) arising pursuant to any provision of the DGCL or the Certificate of Incorporation or the Bylaws or (b) as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) action asserting a claim against the Company or any director or officer of the Company governed by the internal affairs doctrine will, to the fullest extent permitted by law, be solely and exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Company will be deemed to have notice of and consented to the forum provisions in the Certificate of Incorporation. However, it is possible that a court could find the Company’s forum selection provisions to be inapplicable or unenforceable. Although the Company believes this provision benefits it by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against Company’s directors and officers.

 

Conflicts of Interest

 

Delaware law permits corporations to adopt provisions renouncing any interest or expectancy in certain opportunities that are presented to the corporation or its officers, directors or stockholders. The Certificate of Incorporation, to the maximum extent permitted from time to time by Delaware law, renounces any interest or expectancy that the Company has in, or right to be offered an opportunity to participate in, specified business opportunities that are from time to time presented to the Company’s officers, directors or stockholders or their respective affiliates, 

 

 

other than those officers, directors, stockholders or affiliates who are employees of the Company or its subsidiaries. The Certificate of Incorporation provides that, to the fullest extent permitted by law, none of the non-employee directors or his or her affiliates will have any duty to refrain from (i) engaging in a corporate opportunity in the same or similar lines of business in which the Company or its affiliates now engage or propose to engage or (ii) otherwise competing with the Company or its affiliates. In addition, to the fullest extent permitted by law, in the event that any non-employee director or any of his or her affiliates acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for itself or himself or herself or its or his or her affiliates or for the Company or its affiliates, such person will have no duty to communicate or offer such transaction or business opportunity to the Company or any of its affiliates and they may take any such opportunity for themselves or offer it to another person or entity. The Certificate of Incorporation does not renounce the Company’s interest in any business opportunity that is expressly offered to a non-employee director solely in his or her capacity as a director or officer of the Company. To the fullest extent permitted by law, no business opportunity will be deemed to be a potential corporate opportunity for the Company unless (x) it would be permitted to undertake the opportunity, financially, legally and contractually, (y) the opportunity would be in line with the Company’s business and (z) the opportunity is one in which the Company has interest or reasonable expectancy.

 

Limitations on Liability and Indemnification of Officers and Directors

 

The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties, subject to certain exceptions. The Certificate of Incorporation includes a provision that eliminates the personal liability of directors for monetary damages for any breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL. The effect of these provisions is to eliminate the rights of the Company and its stockholders, through stockholders’ derivative suits on the Company’s behalf, to recover monetary damages from a director for breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior. However, exculpation does not apply to any director if the director has acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper benefit from his or her actions as a director.

 

The Bylaws provide that the Company must indemnify and advance expenses to directors and officers to the fullest extent authorized by the DGCL. The Company is also expressly authorized to carry directors’ and officers’ liability insurance providing indemnification for directors, officers and certain employees for some liabilities. The Company believes that these indemnification and advancement provisions and insurance are useful to attract and retain qualified directors and executive officers.

 

The limitation of liability, indemnification and advancement provisions in the Certificate of Incorporation and the Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit the Company and its stockholders. In addition, your 

 

 

investment may be adversely affected to the extent the Company pays the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. The Company believes that these provisions, liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced directors and officers.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”), may be permitted to the Company’s directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities Exchange Commission (“SEC”) such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

There is currently no pending material litigation or proceeding involving any of the Company’s directors, officers or employees for which indemnification is sought.

 

Stockholders Agreements

 

Pursuant to certain stockholders agreements (each, a “Stockholders Agreement,” and collectively the “Stockholders Agreements”) that the Company entered into with CC Payment Holdings, L.L.C. (“Corsair”), Thunder Bridge Acquisition, LLC (the “Sponsor”), John Morris (“Morris”) and Shaler Alias (“Alias” and, together with Morris, the “Repay Founders”) at the Closing in connection with the Merger, the Company agreed to nominate Corsair’s designees and Paul R. Garcia (or, if Mr. Garcia no longer desires to serve on the Company’s board of directors or does not meet the requirements of the designee under the Sponsor’s Stockholders Agreement, a person designated by Peter J. Kight (or in the event of his death or incapacity, Robert H. Hartheimer)) to serve on the Company’s board of directors for so long as each of them and their respective affiliates beneficially own certain specified percentages of the Company’s Class A common stock. In addition, Morris, who serves as Chief Executive Officer of the Company, and Alias, who serves as President of the Company, will have the right to be designated or nominated as directors of the Company’s board of directors so long as they serve the Company in those respective positions pursuant to their Stockholders Agreement, and will have the right to designate one separate director (subject to Corsair approval) if they do not continue to serve, as long as they together beneficially own a certain specified percentage of the Company’s common stock (including Post-Merger Repay Units exchangeable for shares of the Company’s Class A common stock pursuant to the Exchange Agreement). 

 

Stockholder Registration Rights

 

The Company, the Sponsor and certain other holders named therein are parties to registration rights agreement dated as of June 18, 2018 and amended as of July 11, 2019 (the “Founder Registration Rights Agreement”), pursuant to which the Sponsor has certain registration rights in respect of its Class A common stock. Upon the completion of the Business Combination, the Company entered into a Registration Rights Agreement with Corsair and the other Repay Unitholders (the “Repay Unitholders Registration Rights Agreement”) pursuant to which such parties have specified rights to require the Company to register all or a portion of their securities under the Securities Act. 

 

 

 

Rule 144

 

Pursuant to Rule 144, a person who has beneficially owned restricted shares of the Company’s common stock or warrants for at least six months would be entitled to sell their securities, provided that (i) such person is not deemed to have been one of the Company’s affiliates at the time of, or at any time during the three months preceding, a sale and (ii) the Company is subject to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as the Company was required to file reports) preceding the sale.

 

Persons who have beneficially owned restricted shares of the Company’s common stock or warrants for at least six months but who are the Company’s affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

	
 
	
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one percent (1%) of the total number of shares of common stock then outstanding; or

	
 
	
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the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

 

Sales by the Company’s affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

 

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company, such as us. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

	
 
	
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the issuer of the securities that was formerly a shell company has ceased to be a shell company;

	
 
	
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the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

	
 
	
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the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and

	
 
	
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at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

 

 

 

Upon the Closing of the Business Combination, the Company ceased to be a shell company.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for the Company’s Class A common stock is Continental Stock Transfer & Trust Company.

 

Listing of Securities

 

The Company’s Class A common stock is listed on Nasdaq under the symbol “RPAY”.EXHIBIT
4.2

 

DESCRIPTION
OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

 

As
of March 13, 2020, Atlas Technical Consultants, Inc. has two classes of securities registered under Section 12 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”): (1) Class A common stock and (2) warrants.

 

The
following description of the Class A common stock and warrants is a summary and does not purport to be complete. It is subject
to and qualified in its entirety by reference to our second amended and restated certificate of incorporation (the “Charter”)
and our amended and restated bylaws (the “Bylaws”), each of which are incorporated by reference as an
exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part. We encourage you to read our Charter, our
Bylaws and the applicable provisions of Delaware General Corporations Law (Title 8, Chapter 1 of the Delaware Code).

 

Terms
not otherwise defined herein shall have the meaning assigned to them in the Annual Report on Form 10-K of which this Exhibit
4.5 is a part.

 

Description
of Class A Common Stock

 

Pursuant
to our Charter, the total number of shares of capital stock that we are authorized to issue is 501,000,000 shares, consisting
of two classes as follows: (i) 500,000,000 shares of common stock, par value $0.0001 per share (the “common stock”),
including two series as follows: (A) 400,000,000 shares of Class A common stock and (B) 100,000,000 shares of Class B common stock,
and (ii) 1,000,000 shares of preferred stock, par value $0.0001 per share.

 

Stockholders
of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Unless specified in our
Charter or our Bylaws, or as required by the applicable provisions of the DGCL or applicable stock exchange rules, the affirmative
vote of a majority of our outstanding shares of common stock that are voted is required to approve any such matter voted on by
our stockholders. Our board of directors is divided into three classes, each of which generally serves for a term of three years
with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors,
with the result that the holders of more than 50% of the shares voted in the election of directors can elect all of the directors.
Our stockholders are entitled to receive ratable dividends when, as and if declared by our board of directors out of funds legally
available therefor.

 

In
the event of a liquidation, dissolution or our winding up after a business combination, our stockholders are entitled to share
ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for
each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription
rights. There are no sinking fund provisions applicable to the common stock.

 

Description
of Warrants

 

		1.	Public
                                         Stockholders’ Warrants

 

Each
warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to
adjustment as discussed below, at any time commencing 30 days after the completion of the business combination. The warrants will
expire five years after the date on which they first became exercisable, at 5:00 p.m., New York City time, or earlier upon redemption
or liquidation.

 

     

     

    

 

We
are not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and have no obligation
to settle such warrant exercise unless we have declared effective a registration statement under the Securities Act of 1933, as
amended (the “Securities Act”), covering the shares of Class A common stock issuable upon exercise of
the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration
under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants
on a cashless basis under the circumstances specified in the warrant agreement), subject to us satisfying our obligations described
below with respect to registration. In the event that the conditions in the immediately preceding sentence are not satisfied with
respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value
and expire worthless. In the event that a registration statement is not effective for the exercised warrants, the purchaser of
a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock
underlying such unit.

 

We
are obligated to file as soon as practicable with the SEC, but in no event later than 15 business days after the Closing, and
have declared effective a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants
and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed,
as specified in the warrant agreement. We filed a Registration Statement on Form S-3 on February 14, 2020. Notwithstanding the
above, if the shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities
exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act,
we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis”
in accordance with Section 3(a)(9) of the Securities Act and, in the event that we so elect, we will not be required to file or
maintain in effect a registration statement, but will use our best efforts to qualify the shares under applicable blue sky laws
to the extent an exemption is not available.

 

Once
the warrants become exercisable, we may call the warrants for redemption:

 

		●	at
a price of $0.01 per warrant;

 

		●	upon
a minimum of 30 days’ prior written notice of redemption;

 

		●	if,
and only if, the last reported closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock
splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day
period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders;
and

 

		●	if,
and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants
at the time of redemption and a current prospectus relating to those shares of Class A common stock is available throughout the
30-day trading period referred to above.

 

We
will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of Class
A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class
A common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis
and such cashless exercise is exempt from registration under the Securities Act.

 

We
have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time
of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice
of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled
redemption date. However, the price of the common stock may fall below the $18.00 redemption trigger price (as adjusted for stock
splits, stock dividends, reorganizations, recapitalizations and the like) as well as the $11.50 warrant exercise price after the
redemption notice is issued.

 

    2

     

    

 

If
we call the warrants for redemption as described above, our management will have the option to require any holder that wishes
to exercise his, her or its warrant to do so on a “cashless basis.” In determining whether to require all holders
to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position,
the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares
issuable upon the exercise of our warrants. If our management takes advantage of this option, all holders of warrants would pay
the exercise price by surrendering their warrants for that number of shares of common stock equal to the quotient obtained by
dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between
the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair
market value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the
third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. If our management takes
advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of
common stock to be received upon exercise of the warrants, including the “fair market value” in such case. Requiring
a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant
redemption. If we call the warrants for redemption and our management does not take advantage of this option, the holders of the
private placement warrants and their permitted transferees would still be entitled to exercise their private placement warrants
for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to
use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.

 

A
holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have
the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s
affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.9% (or such other amount as
specified by the holder) of the shares of common stock outstanding immediately after giving effect to such exercise.

 

If
the number of outstanding shares of common stock is increased by a share dividend payable in common stock, or by a split-up of
common stock or other similar event, then, on the effective date of such share dividend, split-up or similar event, the number
of shares of common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding
shares of common stock. A rights offering to holders of common stock entitling holders to purchase shares of common stock at a
price less than the fair market value will be deemed a share dividend of a number of shares of common stock equal to the product
of (i) the number of shares of common stock actually sold in such rights offering (or issuable under any other equity securities
sold in such rights offering that are convertible into or exercisable for shares of common stock) multiplied by (ii) one

 

(1)
minus the quotient of (a) the price per share of common stock paid in such rights offering divided by (b) the fair market value.
For these purposes (i) if the rights offering is for securities convertible into or exercisable for shares of common stock, in
determining the price payable for shares of common stock, there will be taken into account any consideration received for such
rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted
average price of shares of common stock as reported during the ten (10) trading day period ending on the trading day prior to
the first date on which the shares of common stock trade on the applicable exchange or in the applicable market, regular way,
without the right to receive such rights.

 

In
addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash,
securities or other assets to the holders of common stock on account of such common stock (or other securities into which the
warrants are convertible), other than (i) as described above, (ii) certain ordinary cash dividends, then the warrant exercise
price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market
value of any securities or other assets paid on each share of Class A common stock in respect of such event.

 

    3

     

    

 

However,
if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable
upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become
exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation
or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by
such holders under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with
members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together
with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any
such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange
Act) more than 50% of the outstanding shares of Class A common stock, the holder of a warrant will be entitled to receive the
highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if
such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and
all of the shares of Class A common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject
to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments
provided for in the warrant agreement.

 

Additionally,
if the number of outstanding shares of common stock is decreased by a consolidation, combination, reverse share split or reclassification
of the shares of common stock or other similar event, then, on the effective date of such consolidation, combination, reverse
share split, reclassification or similar event, the number of shares of common stock issuable on exercise of each warrant will
be decreased in proportion to such decrease in outstanding shares of common stock.

 

Whenever
the number of shares of common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant
exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x)
the numerator of which will be the number of shares of common stock purchasable upon the exercise of the warrants immediately
prior to such adjustment, and (y) the denominator of which will be the number of shares of common stock so purchasable immediately
thereafter.

 

In
case of any reclassification or reorganization of the outstanding shares of common stock (other than those described above or
that solely affects the par value of such shares), or in the case of any merger or consolidation of us with or into another corporation
(other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification
or reorganization of our outstanding shares of common stock), or in the case of any sale or conveyance to another corporation
or entity of our assets or other property as an entirety or substantially as an entirety in connection with which we are dissolved,
the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions
specified in the warrants and in lieu of the shares of common stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, the kind and amount of shares of common stock or other securities or property (including
cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such
sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately
prior to such event. If less than 70% of the consideration receivable by the holders of common stock in such a transaction is
payable in the form of shares of common stock in the successor entity that is listed for trading on a national securities exchange
or is quoted in an established over- the-counter market, or is to be so listed for trading or quoted immediately following such
event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure
of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes
value (as defined in the warrant agreement) of the warrant.

 

The
warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. You should review a copy of the warrant agreement, which is filed as Exhibit 4.1 to the Current Report on Form
10-K filed by us on March 13, 2020 with the SEC (File No. 001- 38745) of which this Description of Securities is a part, for a
complete description of the terms and conditions applicable to the warrants.

 

    4

     

    

 

The
warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity
or correct any defective provision, but requires the approval by the holders of at least 50% of the then-outstanding public warrants
to make any change that adversely affects the interests of the registered holders of public warrants.

 

The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant
agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied
by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable us,
for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock
and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common
stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to
be voted on by stockholders.

 

		2.	Private
                                         Placement Warrants

 

The
private placement warrants (including the shares of common stock issuable upon exercise of the private placement warrants) will
not be transferable, assignable or salable until 30 days after the completion of the business combination, subject to certain
exceptions, and we will not redeem them so long as they are held by our sponsor or its permitted transferees. Our sponsor, or
its permitted transferees, has the option to exercise the private placement warrants on a cashless basis. Except as described
below, the private placement warrants have terms and provisions that are identical to those of the public warrants. If the private
placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will
be redeemable by the us and exercisable by the holders on the same basis as the public warrants.

 

If
holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering
his, her or its warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product
of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the
warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value”
shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior
to the date on which the notice of warrant exercise is sent to the warrant agent.

 

 

5

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