Document:

Exhibit
4.9

 

DESCRIPTION
OF REGISTRANT’S SECURITIES

REGISTERED
PURSUANT TO SECTION 12 OF THE

SECURITIES
EXCHANGE ACT OF 1934

 

Set
forth below is the description of each class of securities of LifeMD, Inc. (the “Company”) outstanding as of December 31,
2021. The following description summarizes the most important terms of these securities. This summary does not purport to be complete
and is qualified in its entirety by the provisions of our Certificate of Incorporation and our Bylaws, copies of which have been previously
filed with the Securities and Exchange Commission. You should refer to our Certificate of Incorporation, Bylaws and the applicable provisions
of the Delaware General Corporation Law (the “DGCL”) for a complete description.

 

Common
Stock

 

Our
authorized common stock consists of 100,000,000 shares, par value $0.01 per share (the “Common Stock”) and is quoted on The
Nasdaq Global Market under the symbol “LFMD”.

 

Dividend
Rights. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of the Common Stock shall be
entitled to receive, when and as declared by the board of directors, out of funds legally available therefor, dividends payable in cash,
stock or otherwise. We have not paid and do not expect to declare or pay any cash dividends on our Common Stock in the foreseeable future.
We currently expect to retain all future earnings for use in the operation and expansion of our business. The declaration and payment
of any cash dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors,
including our earnings, capital requirements, overall financial condition and contractual restrictions, if any.

 

Voting
Rights. Each stockholder is entitled to one vote for each share of Common Stock held by such shareholder.

 

No
Preemptive or Similar Rights. Our Common Stock is not entitled to preemptive rights, and is not subject to conversion, redemption
or sinking fund provisions.

 

Right
to Receive Liquidation Distributions. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary,
the net assets of the Company shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights
and interest, subject to prior distribution rights of preferred stock, if any, then outstanding.

 

Anti-Takeover
Effects of Our Certificate of Incorporation and Bylaws. Our charter documents include provisions that may have the effect of
discouraging, delaying or preventing a change in control or an unsolicited acquisition proposal that a stockholder might consider favorable,
including a proposal that might result in the payment of a premium over the market price for the shares held by our stockholders. Certain
of these provisions are summarized in the following paragraphs.

 

	●	Effects
    of authorized but unissued Common Stock. One of the effects of the existence of authorized but unissued Common Stock may
    be to enable our board of directors to make more difficult or to discourage an attempt to obtain control of our Company by means
    of a merger, tender offer, proxy contest or otherwise, and thereby to protect the continuity of management. If, in the due exercise
    of its fiduciary obligations, the board of directors were to determine that a takeover proposal was not in our best interest, such
    shares could be issued by the board of directors without stockholder approval in one or more transactions that might prevent or render
    more difficult or costly the completion of the takeover transaction by diluting the voting or other rights of the proposed acquirer
    or insurgent stockholder group, by putting a substantial voting block in institutional or other hands that might undertake to support
    the position of the incumbent board of directors, by effecting an acquisition that might complicate or preclude the takeover, or
    otherwise.
	 	 
	●	Cumulative
    Voting. Our Certificate of Incorporation does not provide for cumulative voting in the election of directors, which would
    allow holders of less than a majority of the stock to elect some directors.

 

    	 

    	 

    

 

	●	Special
    Meeting of Stockholders and Stockholder Action by Written Consent. A special meeting of stockholders may only be called
    by our president, chief executive officer, chairman of the board of directors, board of directors or such officers or other persons
    as our board may designate at any time and for any purpose or purposes as shall be stated in the notice of the meeting. A special
    meeting of stockholders may also be called by the Chairman of the board of directors upon written notice of demand by the President
    of the Company or the holder(s) of at least 25% of the outstanding voting shares of the Company.
	 	 
	●	Indemnification
    of Officers and Directors. The Company shall indemnify its officers and directors under the circumstances and to the full extent
    permitted by law. A director of the Company shall not be personally liable to the Company or its stockholders for monetary damages
    for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the
    Company or its stockholders, (ii) for acts or omissions not in good faith or which involved intentional misconduct or a knowing violation
    of law, (iii) under Section 174 of the DGCL for unlawful payment of dividends or improper redemption of stock, or (iv) for any transaction
    from which the director derived an improper personal benefit. If the DGCL is hereafter amended to authorize the further elimination
    or limitation of the liability of directors, then the liability of a director of the Company, in addition to the limitation on personal
    liability provided herein, shall be limited to the fullest extent permitted by the DGCL, as amended. Any repeal or modification of
    this paragraph by the stockholders of the Company shall be prospective only, and shall not adversely affect any limitation on the
    personal liability of a director of the Company existing at the time of such repeal or modification.

 

Transfer
Agent and Registrar. The transfer agent and registrar for our Common Stock is Worldwide Stock Transfer, LLC, One University Plaza,
Suite 505, Hackensack, NJ 07601.

 

Preferred
Stock

 

Our
authorized preferred stock consists of 5,000,000 shares, $0.0001 par value, of which 1,610,000 are designated as Series A Cumulative
Perpetual Preferred Stock (the “Series A Preferred Stock”), 5,000 shares are designated as Series B Convertible Preferred
Stock (the “Series B Preferred Stock”), and 3,385,000 shares of preferred stock remain undesignated. The Series A Preferred
Stock is quoted on The Nasdaq Global Market under the symbol “LFMDP”.

 

Ranking.
The Series A Preferred Stock will rank, as to dividend rights and rights upon our liquidation, dissolution or winding up:

 

	 	1)	Senior
    to all classes or series of our Common Stock and to all other equity securities issued by us other than any equity securities issued
    with terms specifically providing that those equity securities rank on a parity with the Series A Preferred Stock;
	 	2)	Senior
    with respect to the payment of dividends and on parity with respect to the distribution of assets upon our liquidation, dissolution
    or winding up with our Series B Preferred Stock and on parity with any future class or series of our equity securities expressly
    designated as ranking on parity with the Series A Preferred Stock;
	 	3)	Junior
    to all equity securities issued by us with terms specifically providing that those equity securities rank senior to the Series A
    Preferred Stock with respect to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding
    up, none of which exists on the date hereof; and
	 	4)	Effectively
    junior to all our existing and future indebtedness (including indebtedness convertible into our Common Stock or preferred stock)
    and to the indebtedness and other liabilities of (as well as any preferred equity interests held by others in) our existing or future
    subsidiaries.

 

Dividends.
We will pay cumulative cash dividends on the Series A Preferred Stock, when and as declared by our board of directors, at the rate
of 8.875% of the $25.00 liquidation preference per share per year (equivalent to $2.21875 per year) out of funds legally available for
the payment of dividends. Dividends will be payable quarterly in arrears, on or about the 15th day of January, April, July and October,
beginning on or about January 15, 2022; provided that if any Dividend Payment Date is not a business day, then the dividend which would
otherwise have been payable on that dividend payment date may be paid on the next succeeding business day, and no interest, additional
dividends or other sums will accumulate. Dividends will accumulate and be cumulative from, and including, the date of original issuance.
Dividends on the Series A Preferred Stock will continue to accumulate whether or not (i) any of our agreements prohibit the current payment
of dividends, (ii) we have earnings or funds legally available to pay the dividends, or (iii) our board of directors does not declare
the payment of the dividends. Any dividend, including any dividend payable on the Series A Preferred Stock for any partial dividend period,
will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends are payable to holders of record of Series
A Preferred Stock as they appear in the transfer agent’s records at the close of business on the applicable record date, which
will be the date that our board of directors designates for the determination of such holders that is not more than 30 nor less than
10 days prior to the Dividend Payment Date, which we refer to as a “Dividend Payment Record Date.”

 

    	 

    	 

    

 

Dividends
will be payable quarterly in arrears, on or about the 15th day of January, April, July and October, beginning on or about January 15,
2022; provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on
that dividend payment date may be paid on the next succeeding business day, and no interest, additional dividends or other sums will
accumulate (the “Dividend Payment Date”). Dividends will accumulate and be cumulative from, and including, the date of original
issuance. Dividends on the Series A Preferred Stock will continue to accumulate whether or not (i) any of our agreements prohibit the
current payment of dividends, (ii) we have earnings or funds legally available to pay the dividends, or (iii) our board of directors
does not declare the payment of the dividends. Any dividend, including any dividend payable on the Series A Preferred Stock for any partial
dividend period, will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends are payable to holders
of record of Series A Preferred Stock as they appear in the transfer agent’s records at the close of business on the applicable
record date, which will be the date that our board of directors designates for the determination of such holders that is not more than
30 nor less than 10 days prior to the Dividend Payment Date, which we refer to as a Dividend Payment Record Date.

 

We
will not pay or declare and set apart for payment any dividends (other than a dividend paid in Common Stock or other stock ranking junior
to the Series A Preferred Stock with respect to dividend rights and rights upon our voluntary or involuntary liquidation, dissolution
or winding up) or declare or make any distribution of cash or other property on Common Stock or other stock that ranks junior to or on
parity with the Series A Preferred Stock with respect to dividend rights and rights upon our voluntary or involuntary liquidation, dissolution
or winding up or redeem or otherwise acquire Common Stock or other stock that ranks junior to or on parity with the Series A Preferred
Stock with respect to dividend rights and rights upon our voluntary or involuntary liquidation, dissolution or winding up (except (i)
by conversion into or exchange for Common Stock or other stock ranking junior to the Series A Preferred Stock with respect to dividend
rights and rights upon our voluntary or involuntary liquidation, dissolution or winding up, (ii) for the redemption of shares of our
stock pursuant to the provisions of our charter relating to the restrictions upon ownership and transfer of our stock and (iii) for a
purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred Stock and any other stock
that ranks on parity with the Series A Preferred Stock with respect to dividend rights and rights upon our voluntary or involuntary liquidation,
dissolution or winding up), unless we also have either paid or declared and set apart for payment full cumulative dividends on the Series
A Preferred Stock for all past dividend periods.

 

Notwithstanding
the foregoing, if we do not either pay or declare and set apart for payment full cumulative dividends on the Series A Preferred Stock
and all stock that ranks on parity with the Series A Preferred Stock with respect to dividends, the amount which we have declared will
be allocated pro rata to the holders of Series A Preferred Stock and to each equally ranked class or series of stock, so that the amount
declared for each share of Series A Preferred Stock and for each share of each equally ranked class or series of stock is proportionate
to the accrued and unpaid dividends on those shares. Any dividend payment made on the Series A Preferred Stock will first be credited
against the earliest accrued and unpaid dividend.

 

Regardless
of whether dividends are paid in full (or declared and a sum sufficient for such full payment is not so set apart) on the Series A Preferred
Stock or the shares of any other class or series of capital stock ranking, as to dividends, on parity with the Series A Preferred Stock
for any or all dividend periods, the Company shall not be prohibited or limited from (i) paying dividends on any shares of stock of the
Company in shares of Common Stock or in shares of any other class or series of capital stock ranking junior to the Series A Preferred
Stock as to payment of dividends and the distribution of assets upon the Company’s liquidation, dissolution and winding up, (ii)
converting or exchanging any shares of stock of the Company for shares of any other class or series of capital stock of the Company ranking
junior to the Series A Preferred Stock as to payment of dividends and the distribution of assets upon the Company’s liquidation,
dissolution and winding up, or (iii) purchasing or acquiring shares of Series A Preferred Stock pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding shares of Series A Preferred Stock.

 

    	 

    	 

    

 

Liquidation
Preference. The liquidation preference of each share of Series A Preferred Stock is $25.00. Upon liquidation, holders of Series A
Preferred Stock will be entitled to receive the liquidation preference with respect to their shares of Series A Preferred Stock plus
an amount equal to accumulated but unpaid dividends up to the date of payment (whether or not declared) with respect to such shares.

 

Optional
Redemption. On and after October 15, 2022 and prior to October 15, 2023, the shares of Series A Preferred Stock will be redeemable
at our option, in whole or in part, at a redemption price equal to $25.75 per Series A Preferred Share, plus any accrued and unpaid dividends
up to, but not including, the date of redemption. On and after October 15, 2023 and prior to October 15, 2024, the shares of Series A
Preferred Stock will be redeemable at our option, in whole or in part, at a redemption price equal to $25.50 per Series A Preferred Share,
plus any accrued and unpaid dividends up to, but not including, the date of redemption. On and after October 15, 2024 and prior to and
prior to October 15, 2025, the shares of Series A Preferred Stock will be redeemable at our option, in whole or in part, at a redemption
price equal to $25.25 per Series A Preferred Share, plus any accrued and unpaid dividends up to, but not including, the date of redemption.
On and after October 15, 2025, the shares of Series A Preferred Stock will be redeemable at our option, in whole or in part, at a redemption
price equal to $25.00 per Series A Preferred Share, plus any accrued and unpaid dividends up to, but not including, the date of redemption.
In addition, upon the occurrence of a Delisting Event or a Change of Control (each as defined herein), we may, subject to certain conditions,
at our option, redeem the Series A Preferred Stock, in whole or in part within 90 days after the first date on which such Delisting Event
occurred or within 120 days after the first date on which such Change of Control occurred, as applicable, by paying $25.00 per share,
plus any accumulated and unpaid dividends up to, but not including, the redemption date. We may not redeem the shares of Series A Preferred
Stock before the October 15, 2022, except as described under “Special Optional Redemption” below.

 

Special
Optional Redemption. Upon the occurrence of a Delisting Event (as defined below), we may, at our option, redeem the Series A preferred
stock, in whole or in part, within 90 days after the first date on which such Delisting Event occurred, for cash, at a redemption price
of $25.00 per share, plus any accrued and unpaid dividends up to, but not including, the date of redemption.

 

A
“Delisting Event” occurs when, after the original issuance of Series A Preferred Stock, both (i) the shares of Series A Preferred
Stock are no longer listed on Nasdaq, the New York Stock Exchange (the “NYSE”) or the NYSE American LLC (“NYSE AMER”),
or listed or quoted on an exchange or quotation system that is a successor to Nasdaq, the NYSE or the NYSE AMER, or (ii) we are not subject
to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), but any Series A Preferred
Stock is still outstanding.

 

Upon
the occurrence of a Change of Control (as defined below), we may, at our option, redeem the Series A Preferred Stock, in whole or in
part within 120 days after the first date on which such Change of Control occurred, for cash, at a redemption price of $25.00 per share,
plus any accrued and unpaid dividends up to, but not including, the date of redemption.

 

A
“Change of Control” occurs when, after the original issuance of the Series A Preferred Stock, the following have occurred
and are continuing:

 

	 	●	the
    acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange
    Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases,
    mergers or other acquisition transactions of shares of our company entitling that person to exercise more than 50% of the total voting
    power of all shares of our company entitled to vote generally in elections of directors (except that such person will be deemed to
    have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable
    or is exercisable only upon the occurrence of a subsequent condition); and
	 	●	following
    the closing of any transaction referred to in the bullet point above, neither we nor any acquiring or surviving entity (or if, in
    connection with such transaction shares of our Common Stock are converted into or exchanged for (in whole or in part) common equity
    securities of another entity), has a class of common securities (or ADRs representing such securities) listed on Nasdaq, the NYSE
    or the NYSE AMER, or listed or quoted on an exchange or quotation system that is a successor to Nasdaq, the NYSE or the NYSE AMER.

 

    	 

    	 

    

 

We
refer to redemption following a Delisting Event or Change of Control as a “special optional redemption.” If, prior to the
Delisting Event Conversion Date or the Change of Control Conversion Date, as applicable, we have provided or provide notice of exercise
of any of our redemption rights relating to the Series A Preferred Stock (whether our optional redemption right or our special optional
redemption right), the holders of the Series A Preferred Stock will not have the conversion right described below.

 

Conversion
Rights. Upon the occurrence of a Delisting Event or a Change of Control, as applicable, each holder of Series A Preferred Stock will
have the right (unless, prior to the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, we have provided
or provide notice of our election to redeem the Series A Preferred Stock) to convert some or all of the Series A Preferred Stock held
by such holder on the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable into a number of shares of
our Common Stock (or equivalent value of alternative consideration) per share of Series A Preferred Stock equal to the lesser of:

 

	 	●	the
    quotient obtained by dividing (1) the sum of the $25.00 per share liquidation preference plus the amount of any accumulated and unpaid
    dividends up to, but not including, the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable (unless
    the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable is after a record date for a Series A Preferred
    Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional
    amount for such accumulated and unpaid dividend will be included in this sum) by (2) the Common Stock Price (as defined herein);
    and
	 	●	7.29927
    (i.e., the “Share Cap”), subject to certain adjustments; and subject, in each case, to the conditions described herein,
    including, under specified circumstances, an aggregate cap on the total number of shares of our Common Stock issuable upon conversion
    and to provisions for the receipt of alternative consideration.

 

If,
prior to the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, we have provided or provide a redemption
notice, whether pursuant to our special optional redemption right or our optional redemption right, holders of Series A Preferred Stock
will not have any right to convert the Series A Preferred Stock, and any Series A Preferred Stock subsequently selected for redemption
that has been tendered for conversion will be redeemed on the related date of redemption instead of converted on the Delisting Event
Conversion Date or Change of Control Conversion Date, as applicable.

 

In
the event that the conversion would result in the issuance of fractional shares of Common Stock, we will pay the holder of Series A Preferred
Stock cash in lieu of such fractional shares.

 

Except
as provided above in connection with a Delisting Event or Change of Control, shares of the Series A Preferred Stock are not convertible
into or exchangeable for any other securities or property.

 

Debt
Incurrence. So long as any shares of Series A Preferred Stock are outstanding, we shall not, and shall not permit any of our subsidiaries
to, directly or indirectly, incur any indebtedness (other than a specified amount of trade payables and operating leases) in an amount
greater than $25,000,000, without consent of a majority of the Series A Preferred Stock holders (a “Debt Incurrence Event”).
Upon the occurrence of a Debt Incurrence Event at any time during a Dividend Period, the dividend rate of the Series A Preferred Stock
will increase to 10.875% on an annualized basis for such Dividend Period.

 

Limited
Voting Rights. Holders of Series A Preferred Stock generally will have no voting rights. However, if we do not pay dividends on any
outstanding shares of Series A Preferred Stock for six or more quarterly dividend periods (whether or not declared or consecutive), holders
of Series A Preferred Stock (voting separately as a class with all other outstanding series of preferred stock upon which like voting
rights have been conferred and are exercisable) will be entitled to elect two additional directors to our board of directors to serve
until all unpaid dividends have been fully paid or declared and set apart for payment. In addition, certain material and adverse changes
to the terms of the Series A Preferred Stock cannot be made without the affirmative vote of holders of at least 66 2/3% of the outstanding
shares of Series A Preferred Stock, voting as a separate class. In any matter in which the Series A Preferred Stock may vote, each share
of Series A Preferred Stock shall be entitled to one vote.

 

    	 

    	 

    

 

So
long as any shares of Series A Preferred Stock remain outstanding, the affirmative vote or consent of the holders of two-thirds of the
outstanding shares of Series A Preferred Stock and each other class or series of Parity Preferred with which the holders of Series A
Preferred Stock are entitled to vote together as a single class on such matter (voting together as a single class), given in person or
by proxy, either in writing or at a meeting, will be required to: (i) authorize, create or issue, or increase the number of authorized
or issued number of shares of, any class or series of capital stock ranking senior to the Series A Preferred Stock with respect to payment
of dividends or the distribution of assets upon liquidation, dissolution or winding up of the Company (collectively, “Senior Capital
Stock”) or reclassify any authorized shares of capital stock of the Company into Senior Capital Stock, or create, authorize or
issue any obligation or security convertible into or evidencing the right to purchase any Senior Capital Stock; or (ii) amend, alter
or repeal the provisions of the Certificate of Incorporation , including the terms of the Series A Preferred Stock, whether by merger,
consolidation, transfer or conveyance of all or substantially all of its assets or otherwise (an “Event”), so as to materially
and adversely affect any right, preference, privilege or voting power of the Series A Preferred Stock; provided however, with
respect to the occurrence of any Event, so long as the Series A Preferred Stock remains outstanding with the terms thereof materially
unchanged, taking into account that, upon the occurrence of such Event, the Company may not be the surviving entity and the surviving
entity may not be a corporation, the occurrence of such Event shall not be deemed to materially and adversely affect such rights, preferences,
privileges or voting power of Series A Preferred Stock, and in such case such holders shall not have any voting rights with respect to
the occurrence of any Event. In addition, if the holders of the Series A Preferred Stock receive the greater of the full trading price
of the Series A Preferred Stock on the date of an Event or the $25.00 liquidation preference per share of the Series A Preferred Stock
plus all accrued and unpaid dividends thereon pursuant to the occurrence of any Event, then such holders shall not have any voting rights
with respect to such Event. If any Event would materially and adversely affect the rights, preferences, privileges or voting powers of
the Series A Preferred Stock disproportionately relative to other classes or series of Parity Preferred with which the holders of Series
A Preferred Stock are entitled to vote together as a single class on such Event, the affirmative vote of the holders of at least two-thirds
of the outstanding shares of the Series A Preferred Stock, voting as a separate class, will also be required. Notwithstanding the foregoing,
holders of shares of Series A Preferred Stock shall not be entitled to vote with respect to (A) any increase in the total number of authorized
shares of Common Stock or Preferred Stock of the Company, (B) any increase in the number of authorized shares of Series A Preferred Stock
or the creation or issuance of any other class or series of capital stock or (C) any increase in the number of authorized shares of any
other class or series of capital stock; provided that, in each case referred to in clause (A), (B) or (C) above, such capital
stock ranks on parity with or junior to the Series A Preferred Stock with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up of the Company. Except as set forth herein, holders of the Series A Preferred Stock
shall not have any voting rights with respect to, and the consent of the holders of the Series A Preferred Stock shall not be required
for, the taking of any corporate action, including an Event, regardless of the effect that such corporate action or Event may have upon
the powers, preferences, voting power or other rights or privileges of the Series A Preferred Stock.

 

No
Maturity, Sinking Fund or Mandatory Redemption. The Series A Preferred Stock has no maturity date and we are not required to redeem
the Series A Preferred Stock at any time. Accordingly, the Series A Preferred Stock will remain outstanding indefinitely, unless we decide,
at our option, to exercise our redemption right or, under circumstances where the holders of Series A Preferred Stock have a conversion
right, such holders convert the Series A Preferred Stock into our Common Stock. The Series A Preferred Stock is not subject to any sinking
fund.

 

Transfer
Agent and Registrar. The transfer agent and registrar for our Series A Preferred Stock is Continental Stock Transfer and Trust, One
State Street, 30th Floor, New York, NY 10004EX-4.2

  EXHIBIT 4.2

  DESCRIPTION OF THE REGISTRANT’S SECURITIES

  REGISTERED PURSUANT TO SECTION 12

  OF THE SECURITIES EXCHANGE ACT OF 1934

    

  Our common stock is the only class of our securities that is registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The following description of our common stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) 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 4.2 is a part.

  General

  Our authorized common stock consists of 150,000,000 shares, $0.01 par value per share. As of December 31, 2021, there were 39,203,747 shares of our common stock issued and 37,713,903 shares of our common stock outstanding. The authorized but unissued shares of our common stock will be available for future issuance without stockholder approval, unless otherwise required by applicable law or the rules of any applicable securities exchange. All of our issued and outstanding shares of common stock are validly issued, fully paid and non-assessable.

  Subject to the rights and preferences granted to holders of our preferred stock then outstanding, and except with respect to voting rights, conversion rights and certain distributions of our capital stock, holders of our common stock rank equally with respect to distributions and have identical rights, preferences, privileges and restrictions, including the right to attend meetings and receive any information distributed by us with respect to such meetings.

  Dividends. Holders of our common stock are equally entitled to receive ratably such dividends as may be declared from time to time by our board of directors out of legally available funds. In no event will any stock dividends or stock splits or combinations of stock be declared or made on common stock unless the shares of common stock at the time outstanding are treated equally and identically, provided that, in the event of a dividend of common stock, shares of common stock shall only be entitled to receive shares of common stock. The ability of our board of directors to declare and pay dividends on our common stock is subject to the laws of the state of Delaware, applicable federal and state banking laws and regulations, and the terms of any senior securities (including preferred stock) we may then have outstanding. Our principal source of income is dividends that are declared and paid by Byline Bank on its capital stock. Therefore, our ability to pay dividends is dependent upon the receipt of dividends from Byline Bank. Our Series B preferred stock ranks senior to our common stock as to dividends and distributions upon the liquidation, dissolution or winding up of Byline.

  Voting rights. Each holder of our common stock is entitled to one vote for each share of record held on all matters submitted to a vote of stockholders, except as otherwise required by law and subject to the rights and preferences of the holders of any outstanding shares of our preferred stock. Holders of our common stock are not entitled to cumulative voting in the election of directors. Directors are elected by a plurality of the votes cast.

  Liquidation rights. In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in all of our assets remaining after payment of liabilities, including, but not limited to, the liquidation preference of any then outstanding preferred stock. Because we are a bank holding company, our rights and the rights of our creditors and stockholders to receive the assets of any subsidiary upon liquidation or recapitalization may be subject to prior claims of our subsidiary’s creditors, except to the extent that we may be a creditor with recognized claims against our

   

  

  EXHIBIT 4.2

  subsidiary. Our Series B preferred stock ranks senior to our common stock as to dividends and distributions upon the liquidation, dissolution or winding up of Byline.

  Preemptive and other rights. Holders of our common stock are not entitled to any preemptive, subscription or redemption rights, and no sinking fund will be applicable to our common stock.

  Authorized but Unissued Capital Stock

  The Delaware General Corporation Law (the “DGCL”) does not generally require stockholder approval for the issuance of authorized shares. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions. However, the listing requirements of the NYSE, which would apply so long as the common stock remains listed on the NYSE, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of common stock.

  One of the effects of the existence of unissued and unreserved common stock or preferred stock may be to enable our 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 us by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive our stockholders of opportunities they may believe are in their best interests or in which they may receive a premium for their common stock over the market price of the common stock.

  Anti-Takeover Provisions in our Certificate of Incorporation and Bylaws

  Business Combination Statute. We have elected to opt out of Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, subject to certain exceptions.

  Federal banking law. The ability of a third party to acquire our stock is also limited under applicable U.S. banking laws, including regulatory approval requirements. The BHC Act requires any “bank holding company” to obtain the approval of the Federal Reserve before acquiring, directly or indirectly, more than 5% of our outstanding common stock. Any “company” (as defined in the BHC Act) other than a bank holding company is required to obtain the approval of the Federal Reserve before acquiring “control” of us. “Control” generally means (i) the ownership or control of 25% or more of a class of voting securities, (ii) the ability to elect a majority of the directors or (iii) the ability otherwise to exercise a controlling influence over management and policies. A person, other than an individual or a qualified family partnership, that controls us for purposes of the BHC Act is subject to regulation and supervision as a bank holding company under the BHC Act. In addition, under the Change in Bank Control Act of 1978, as amended, and the Federal Reserve’s regulations thereunder, any person, either individually or acting through or in concert with one or more persons, is required to provide notice to the Federal Reserve prior to acquiring, directly or indirectly, 10% or more of our outstanding common stock (or any other class of our voting securities).

  Requirements for advance notification of stockholder nominations and proposals. Our Bylaws establish advance notice procedures with respect to stockholder proposals and nomination of candidates for election as directors. These procedures provide that notice of such stockholder proposal must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain certain information required to be provided by our Bylaws.

   

  

  EXHIBIT 4.2

  Limits on written consents. Our Certificate of Incorporation provides that any action to be taken by the stockholders that the stockholders are required or permitted to take must be effected at a duly called annual or special meeting of stockholders. Our stockholders are not permitted to take action by written consent.

  Limits on special meetings. Subject to the rights of the holders of any series of preferred stock, special meetings of the stockholders may be called only by (i) our board of directors, (ii) the Chairperson of the board of directors, (iii) our Chief Executive Officer, (iv) our President or (v) our Executive Vice President.

  Amending our Certificate of Incorporation and Bylaws

  Our Certificate of Incorporation may be amended or altered in any manner provided by the DGCL. Our Bylaws may be adopted, amended, altered or repealed by stockholders only upon the affirmative vote of holders of a majority of the shares of our common stock present in person or represented by proxy at the meeting and entitled to vote thereon. Additionally, our Certificate of Incorporation provides that our Bylaws may be amended, altered or repealed by our board of directors by a majority vote.

  Sole and Exclusive Forum

  Our Bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our Certificate of Incorporation or our Bylaws or (iv) any action asserting a claim that is governed by the internal affairs doctrine. Any person purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to this provision of our Bylaws. This choice of forum provision may have the effect of discouraging lawsuits against us and our directors, officers, employees and agents. However, the exclusive forum clause described above shall not apply to suits brought to enforce a duty or liability created by federal law, including the Exchange Act and the Securities Act, for which the federal courts have exclusive jurisdiction. To the extent the exclusive forum provision restricts the courts in which our stockholders may bring claims arising under the Securities Act, there is uncertainty as to whether a court would enforce such provision.  Our stockholders will not be deemed to have waived compliance with the federal securities laws and the rules and regulations thereunder.

  Indemnification and Limitation of Liability

  Our Bylaws provide generally that we will indemnify and hold harmless, to the full extent permitted by law, our directors, officers, employees and agents, as well as other persons who have served as our directors, officers, employees or agents and other persons who serve or have served at our request at another corporation, limited liability company, public limited company, partnership, joint venture, trust, employee benefit plan, fund or other enterprise in connection with any actual or threatened action, suit or proceeding, subject to limited exceptions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Finally, our ability to provide indemnification to our directors and officers is limited by federal banking laws and regulations.

  Our Certificate of Incorporation limits, to the full extent permitted by law, the personal liability of our directors in actions brought on our behalf or on behalf of our stockholders for monetary 

   

  

  EXHIBIT 4.2

  damages as a result of a director’s breach of fiduciary duty while acting in a capacity as a director. Our Certificate of Incorporation does not eliminate or limit our right or the right of our stockholders to seek injunctive or other equitable relief not involving monetary damages. 

  Listing

  Our common stock is listed on the NYSE under the symbol “BY”.

  Transfer Agent and Registrar

  The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.

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