Document:

Exhibit 10.17

 

SECOND AMENDMENT TO

SUBORDINATED SECURED CONVERTIBLE PROMISSORY NOTE

 

This Second Amendment to Subordinated Secured Convertible Promissory Note (the “Amendment”) is entered into as of March 30, 2016 by and between Lime Energy Co., a Delaware corporation (the “Company”), and Bison Capital Partners IV, L.P. (the “Holder”), and amends that certain Subordinated Secured Convertible Promissory Note, dated as of March 24, 2015, as amended by that certain Amendment to Subordinated Secured Convertible Promissory Note dated March 31, 2015 (the “First Amendment”), by the Company in favor of the Holder (as so amended, the “Note”).  The Note is subject to the provisions of that certain Note Purchase Agreement, dated as of March 24, 2015, by and among the Company and the Holder (the “Purchase Agreement”).  Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Note and the Purchase Agreement.

 

RECITAL

 

WHEREAS, Section 24 of the Note provides that the Note may be amended with the written consent of the Company and the Person holding a majority of the aggregate principal amount of the Notes outstanding.

 

WHEREAS, the Holder holds the Note representing the entire aggregate principal amount of the Notes outstanding.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged and agreed, the parties hereby agree to amend the Note, effective as of the date hereof, as follows:

 

1.             Amendment.

 

a.     With respect to Subsection 2(c) of the Note, the parties acknowledge that based on the consolidated financial statements prepared by the Company for the quarters listed in the table in Subsection 2(c), there was no Consolidated EBITDA Shortfall for any of such quarters and hence no Additional Interest Amount was required to be added to outstanding principal amount under the Note pursuant to Subsection 2(c).

 

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b.     Section 2 of the Note shall be amended to redesignate Subsections 2(d) and 2(e) as Subsections 2(f) and 2(g), respectively, and to include new Subsections (d) and (e), as follows:

 

“(d)         If Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on the last day of any one of the fiscal quarters listed in the table below is less than the corresponding amount listed in the table below (a “Primary Consolidated EBITDA Shortfall”), then an additional 2.1277 percent of the original principal amount of this Note (a “Primary Additional Interest Amount”) will accrue as additional Interest on the Note for that period, be added to the outstanding principal amount under this Note at the next Interest Payment Date following the applicable period end date for which the Primary Consolidated EBITDA Shortfall occurred, and, from and after the date added to the outstanding principal, accrue interest in the same manner as the outstanding principal under this Note.  Each Primary Additional Interest Amount will accrue in the same fashion for each Primary Consolidated EBITDA Shortfall.  For example, if Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on June 30, 2016 is less than $6,738,000, Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on September 30, 2016 is less than $7,416,000 and Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on December 31, 2016 is at least $8,000,000, then a Primary Additional Interest Amount equal to $250,000 (2.1277 percent times the $11,750,000 original principal amount of the Note) for the Q2 2016 Primary Consolidated EBITDA Shortfall would accrue and be added to principal at the first Interest Payment Date following June 30, 2016, and a second Primary Additional Interest Amount equal to $250,000 for the Q3 2016 Primary Consolidated EBITDA Shortfall would accrue and be added to principal at the first Interest Payment Date following September 30, 2016.

 

	
Fiscal Quarter
    	
 
    	
Minimum
   Primary Consolidated Adjusted EBITDA
   (Trailing 4Qs)
    	
 
    
	
Q1 2016
    	
 
    	
$
    	
6,276,000
    	
 
    
	
Q2 2016
    	
 
    	
$
    	
6,738,000
    	
 
    
	
Q3 2016
    	
 
    	
$
    	
7,416,000
    	
 
    
	
Q4 2016
    	
 
    	
$
    	
8,000,000
    	
 
    

 

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“(e)         In addition to and not in substitution of the Primary Additional Interest Amounts determined in subsection (d) above, if Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on the last day of any one of the fiscal quarters listed in the table below is less than the corresponding amount listed in the table below (a “Secondary Consolidated EBITDA Shortfall”), then an additional 2.1277 percent of the original principal amount of this Note (a “Secondary Additional Interest Amount”) will accrue as additional Interest on the Note for that period, be added to the outstanding principal amount under this Note at the next Interest Payment Date following the applicable period end date for which the Secondary Consolidated EBITDA Shortfall occurred, and, from and after the date added to the outstanding principal, accrue interest in the same manner as the outstanding principal under this Note.  Each Secondary Additional Interest Amount will accrue in the same fashion for each Secondary Consolidated EBITDA Shortfall.  For example, if Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on June 30, 2016 is less than $4,292,000, Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on September 30, 2016 is less than $4,998,000 and Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on December 31, 2016 is at least $8,000,000 then a Secondary Additional Interest Amount equal to $250,000 (2.1277 percent times the $11,750,000 original principal amount of the Note) for the Q2 2016 Secondary Consolidated EBITDA Shortfall would accrue and be added to principal at the first Interest Payment Date following June 30, 2016, and a second Secondary Additional Interest Amount equal to $250,000 for the Q3 2016 Secondary Consolidated EBITDA Shortfall would accrue and be added to principal at the first Interest Payment Date following September 30, 2016.

 

	
Fiscal Quarter
    	
 
    	
Minimum
   Consolidated Adjusted EBITDA
   (Trailing 4Qs)
    	
 
    
	
Q1 2016
    	
 
    	
$
    	
4,465,000
    	
 
    
	
Q2 2016
    	
 
    	
$
    	
4,292,000
    	
 
    
	
Q3 2016
    	
 
    	
$
    	
4,998,000
    	
 
    
	
Q4 2016
    	
 
    	
$
    	
8,000,000
    	
 
    

 

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For the avoidance of doubt, each fiscal quarter during 2016 may have zero, one or both of a Primary Additional Interest Amount and  a Secondary Additional Interest Amount added with respect to such quarter. Neither such Primary Additional Interest Amount or Secondary Additional Interest Amount will increase the Interest Rate (although each will increase the principal amount upon which such Interest Rate applies upon being added to the outstanding principal amount under the Note) and neither a Primary Consolidated EBITDA Shortfall or a Secondary Consolidated EBITDA Shortfall shall in any event be deemed an Event of Default under this Note.”

 

c.     Section 8(r) of the Note shall be amended and restated in full as follows:

 

“(r)          permit Consolidated Adjusted EBITDA for the four consecutive fiscal quarters ending on the last day of such fiscal quarter to fall below the levels set forth below:

 

	
Fiscal Quarter
    	
 
    	
Minimum
   Consolidated Adjusted EBITDA
   (Trailing 4Qs)
    	
 
    
	
Q1 2017
    	
 
    	
$
    	
8,276,000
    	
 
    
	
Q2 2017
    	
 
    	
$
    	
8,738,000
    	
 
    
	
Q3 2017
    	
 
    	
$
    	
9,416,000
    	
 
    
	
Q4 2017
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Q1 2018
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Q2 2018
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Q3 2018
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Q4 2018
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Q1 2019
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Q2 2019
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Q3 2019
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Q4 2019
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Q1 2020
    	
 
    	
$
    	
10,000,000
    	
 
    

 

d.     Subsection 4(a) of the Note shall be amended to change “Subsection 2(b) and Subsection 2(c)” to “Subsections 2(b), 2(c), 2(d) and 2(e)”.

 

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e.     Subsection 5(a)(2) of the Note shall be amended to change “Subsection 2(b) and Subsection 2(c)” to “Subsections 2(b), 2(c), 2(d) and 2(e)”.

 

f.     Subsection 1(j) of the Note shall be amended by adding the following sentence:

 

“For the avoidance of doubt, expense associated with accounts receivable written off related to TRC shall not be excluded from Consolidated Adjusted EBITDA.”

 

g.     Subsection 1(p) of the Note shall be amended by adding the following sentence:

 

“For the avoidance of doubt, state franchise taxes shall not be added to Consolidated Net Income when calculating EBITDA.”

 

2.             Terms of Note.  Except as expressly modified hereby, all terms, conditions and provisions of the Note shall continue in full force and effect.  In the event of any inconsistency or conflict between the Note and this Amendment, the terms, conditions and provisions of this Amendment shall govern and control.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of Delaware (without reference to the conflicts of law provisions thereof).

 

3.             Representations and Warranties of the Company. The Company makes the following representations and warranties to Holders as of the date hereof:

 

a.     Due Authorization; No Conflict.

 

i.      The execution, delivery, and performance by the Company of this Amendment has been duly authorized by all necessary action on the part of the Company.

 

ii.     The execution, delivery, and performance by the Company of this Amendment will not (1) violate any provision of federal, state, or local law or regulation applicable to the Company, except where such violation contemplated in this clause (1) would not reasonably be expected to have a material adverse effect on the Company, (2) violate the Governing Documents of the Company, or any order, judgment, or decree of any court or other Governmental Authority binding on the Company,  (3) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any other Contractual Obligation of the Company, except where such conflict, breach or default contemplated in this clause (3) would not reasonably be expected

 

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        to have a material adverse effect on the Company, (4) result in or require the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of the Company, (5) require any approval of the Company’s stockholders or any approval or consent of any Person under any other Contractual Obligation of the Company, except where the failure to obtain approval contemplated by this clause (5) would not reasonably be expected to have a material adverse effect on the Company.

 

iii.    The execution, delivery, and performance by the Company of this Amendment will not require any registration or filing with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority or other Person, except where the failure to obtain, perform or provide such registration, filing, consent, approval, notice or other action would not reasonably be expected to have a material adverse effect on the Company.

 

iv.    This Amendment, when executed and delivered by the Company, will be the legally valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

 

v.     Any Taxes, fees and other governmental charges in connection with the execution and delivery of this Amendment will be paid.

 

vi.    After giving effect to this Amendment, the security interests granted in favor of Holder pursuant to the Security Documents are validly created, perfected Liens and subject only to Permitted Liens.

 

b.     Fraudulent Transfer.

 

i.      The Company is, and after giving effect to the Amendment will be, solvent.

 

ii.     No transfer of Property is being made by the Company and no obligation is being incurred by the Company in connection with this Amendment with the intent to hinder, delay, or defraud either present or future creditors of the Company.

 

c.     Material Adverse Change.  Since December 31, 2014, there has been no development or event that has had or would reasonably be expected to result in a Material Adverse Change.

 

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4.                                      Representations and Warranties of the Holder. The Holder makes the following representations and warranties to the Company as of the date hereof:

 

a.              Authorization; No Contravention.  The execution, delivery and performance by it of this Amendment:  (i) is within its power and authority and has been duly authorized by all necessary action; (ii) does not contravene the terms of its Governing Documents; and (iii) will not violate, conflict with or result in any breach or contravention of any of its Contractual Obligations, or any order or decree relating to it except where such violation would not reasonably be expected to prohibit or place limitations on this Amendment.

 

b.              Binding Effect.  This Amendment has been duly executed and delivered by it and this Amendment constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

 

c.               Governmental Authorization; Third Party Consent.  No approval, consent, compliance, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required on the part of the Holder in connection with the execution, delivery or performance by it or enforcement against it of this Amendment.

 

5.                                      Fees and Expenses.  This Company shall promptly reimburse to Holder all Fees and Expenses incurred by the Holder in connection with this Amendment, up to $50,000.

 

6.                                      Entire Agreement.  This Amendment and the Transaction Documents constitute the entire and exclusive agreement between the parties with respect to this subject matter.  All previous discussions and agreements with respect to the subject matter of this Amendment are superseded by this Amendment.  This Amendment may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Subordinated Secured Convertible Promissory Note as of the date first above written.

 

	
 
    	
COMPANY:   
    
   LIME ENERGY CO.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Adam Procell
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Adam   Procell
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
President
    

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Subordinated Secured Convertible Promissory Note as of the date first above written.

 

	
 
    	
HOLDER:
    
   BISON CAPITAL PARTNERS IV, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
Bison   Capital Partners IV GP, L.P.
    
	
 
    	
Its: 
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
Bison   Capital Partners GP, LLC 
    
	
 
    	
 
    	
Its:   
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Andreas Hildebrand
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Andreas   Hildebrand
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Member
    
						

 

 

ACKNOWLEDGEMENT

 

By executing this Acknowledgment, each Guarantor hereby (i) consents to the execution, delivery and performance by Company of this Amendment, and to each of the transactions contemplated by the Amendment, (ii) agrees that nothing contained in the Amendment shall diminish, alter, amend, except to the extent expressly stated in the Amendment, or otherwise affect its respective obligations under the Guarantee Agreement to which it is party, (iii) ratifies and confirms that the Guarantee Agreement to which it is a party shall continue in full force and effect and agrees that it shall continue to be liable under such Guarantee Agreement in accordance with the terms thereof, (iv) represents and warrants that it has no defense, counterclaim or offset right whatsoever with respect to its obligations under the Guarantee Agreement to which it is a party, (v)  represents and warrants that its execution and delivery of this Acknowledgement has been duly authorized by all necessary action on the part of such Guarantor, and (vi) represents and warrants that its consents and agreements above are not necessary for the continued validity and enforceability of the Guarantee Agreement to which it is a party.

 

	
GUARANTORS:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Lime   Energy Services Co.
    	
 
    	
Landmark   Electrical and Mechanical Services, LLC
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Adam Procell 
    	
 
    	
By:   
    	
/s/   Adam Procell 
    
	
Name:   Adam Procell 
    	
 
    	
Name:   Adam Procell 
    
	
Title: President
    	
 
    	
Title:   President
    
	
 
    	
 
    	
 
    
	
ADVB   Acquisition Corp.
    	
 
    	
EnerPath   International Holding Company 
    
	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Adam Procell 
    	
 
    	
By:   
    	
/s/   Adam Procell 
    
	
Name:   Adam Procell 
    	
 
    	
Name:   Adam Procell 
    
	
Title:   President
    	
 
    	
Title:   President
    
	
 
    	
 
    	
 
    
	
Landmark   Services Company 
    	
 
    	
EnerPath   Services, Inc. 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Adam Procell 
    	
 
    	
By:
    	
/s/   Adam Procell 
    
	
Name:   Adam Procell 
    	
 
    	
Name:   Adam Procell 
    
	
Title:   President
    	
 
    	
Title:   President
    
	
 
    	
 
    	
 
    
	
Lime   Energy Asset Development, LLC 
    	
 
    	
EnerPath, Inc.   
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Adam Procell 
    	
 
    	
By:   
    	
/s/   Adam Procell
    
	
Name:   Adam Procell 
    	
 
    	
Name:   Adam Procell
    
	
Title:   President
    	
 
    	
Title:   President
    

 

 

	
Lime   Finance, Inc. 
    	
 
    	
Lime   International Ventures Limited 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Adam Procell 
    	
 
    	
By:   
    	
/s/   Adam Procell
    
	
Name:   Adam Procell 
    	
 
    	
Name:   Adam Procell
    
	
Title:   President
    	
 
    	
Title:   DirectorExhibit 10.2

SMARTFINANCIAL, INC.

2015 STOCK INCENTIVE PLAN

 

INCENTIVE STOCK OPTION AWARD AGREEMENT

 

  

Optionee:

 

Number
of shares optioned:

 

Option
price per share:        $

 

Date
of Grant:

 

Expiration
date:

 

		1.	Grant of Incentive Option. SmartFinancial, Inc. (the “Company”)
hereby grants to the Optionee named above (the “Optionee”), under its 2015 Stock Incentive Plan (the
“Plan”), an incentive stock option (the “Option”) to purchase, on the terms
and conditions set forth in this agreement (the “Option Agreement”), the number of shares set forth above
(the “Shares”) of its common stock (the “Common Stock”) of the par value of
$1.00 each, at the price per share set forth above. The grant of the Option is made in consideration of the services to be rendered
by the Optionee to the Company and is subject to the terms and conditions of the Plan. Capitalized terms used but not defined herein
will have the meaning ascribed to them in the Plan.

 

		2.	Exercise Period. This Option will expire at 5:00 p.m., Eastern Time on ___________, the
“Expiration Date”) unless sooner terminated in whole or in part as follows:

 

		(a)	In the event of the Optionee’s termination of employment (as defined in Section 6(h) of the
Plan), all Options vested at the date of such termination shall expire three months after the termination date.

		(b)	In the event of the Optionee’s termination of employment by reason of disability (as determined
under procedures described in Section 6(c)(iii) of the Plan) or death, all Options vested at the date of such termination shall
expire 12 months after the date of such termination.

		(c)	Notwithstanding any provisions of Section 3 below, upon the Optionee’s termination of employment
for any reason described in Section 13(a) of this Option Agreement all Options then unexercised, whether “vested” or
“unvested”, shall immediately terminate and have no further force or effect.

 

		3.	Vesting of Option. This Option may be exercised, as to the vested Options, by the Optionee
upon the terms and conditions hereof at any time, and from time to time, in whole or in part, in accordance with the following
vesting schedule:

 

		(a)	This option shall become vested and exercisable on the date two years following the Date of Grant
listed above, as to 30% of the number of Shares listed above; and,

		(b)	This Option shall become vested and exercisable on the date three years following the Date of Grant
listed above, as to 30% of the Shares listed above (total Shares vested equaling 60% of the Shares listed above); and,

 

     

     

    

 

		(c)	This Option shall become vested and exercisable on the date four years following the Date of Grant
listed above, as to the remaining 40% of the Shares listed above (total Shares vested equaling all of the Shares listed above);

 

Provided, however, that all unvested
portions of the Option shall expire immediately upon the Optionee’s termination of employment.

 

The entire exercise price shall
be payable in full at the time of exercise in the manner designated by the Administrator as authorized by the Plan. This Option
may be exercised at any time and without regard to any other Option to purchase stock of the Company held by the Optionee subject
to the terms and conditions of this Option Agreement and the Plan.

 

		4.	Incentive Stock Option. This Option is intended to be an “incentive stock option”
pursuant to, and with the effect provided in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”),
although the Company makes no representation or guarantee that the Option will qualify as an Incentive Stock Option. To the extent
that the aggregate fair market value (determined on the Date of Grant) of the shares of Common Stock with respect to which Options
are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and its affiliates)
exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall
be treated as non-qualified stock options. All provisions hereof are intended to have, and shall be construed to have, such meanings
as are set forth in applicable provisions of the Code and Treasury Regulations to allow this Option to qualify as an “incentive
stock option.”

 

		5.	Death of Optionee. In the event of the Optionee’s death, the personal or legal representatives
of the Optionee may exercise this Option to the extent not previously exercised and to the extent this Option could have been exercised
on the Optionee’s date of death. Such exercise must occur within 12 months after the date of death of the Optionee, and in
no event after the Expiration Date.

 

		6.	Limitation of Rights. The Optionee and his or her personal or legal representatives shall
have no voting or other rights as a shareholder with respect to the Shares covered by this Option until the Optionee or his or
her personal or legal representatives have paid for the Shares subject to this Option and become the holder of record of such Shares.
None of the Plan, the granting of this Option nor this Option Agreement shall impose any obligation on the Company or any subsidiary
to continue the employment of the Optionee.

 

		7.	Reservation of Stock. The Company shall at all times during the term of this Option Agreement
keep available a sufficient number of Shares for the issuance upon exercise of the Options granted by this Option Agreement.

 

		8.	Optionee’s Covenant. The Optionee hereby agrees to use his or her best efforts to
promote the Company’s interests and to perform his or her duties in a professional, prudent and competent manner.

 

		9.	Restrictions on Transfer and Pledge. This Option is not transferable except by will or by
the laws of descent and distribution. The Option may be exercised prior to the Expiration Date during the lifetime of the Optionee
only by the Optionee. Except as provided in Section 5 hereof, none of this Option Agreement, any rights and privileges hereunder,
or any interest herein shall be transferred, sold, assigned, pledged or hypothecated in any way, whether by operation of law or
otherwise, and shall not be subject to execution, attachment or similar process.

 

    	 	2	 

     

    

 

 

		10.	Restrictions on Issuance of Shares. The Optionee hereby agrees that if a registration statement
covering the shares issuable upon exercise of any option hereunder is not effective under the Securities Act of 1933, as amended
(the “Securities Act”) and applicable state securities and blue sky laws (the “State Acts”)
at the time of such exercise, or if such exemption from the registration provisions of the Securities Act or applicable State Acts
is not available, then all Shares of Common Stock then received or purchased upon such exercise shall be acquired for investment,
and that the notice of exercise delivered to the Company shall be accompanied by a written investment letter in a form satisfactory
to the Company and its counsel signed by the Optionee or his or her legal and personal representative, heirs or distributees, as
the case may be, to the effect that the Shares are being acquired in good faith for investment only, and not with a view to any
distribution thereof. Any shares so acquired may be deemed “restricted securities” under Rule 144 of the Securities
and Exchange Commission as promulgated under the Securities Act, as the same may be amended or replaced, and subject to restrictions
upon sale or other dispositions. Such shares shall also be restricted by applicable State Acts. The Optionee hereby agrees that
if at any time, the Company’s Board of Directors determines in its discretion, that listing, registration or qualification
of the Shares covered by the Option upon any securities exchange or under any state or federal law, or the consent or approval
of any governmental regulatory body, is necessary or desirable as a condition to the exercise of the Option, the Option may not
be exercised in whole or in part unless and until such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of Directors of the Company.

 

		11.	Plan to Control. The terms contained in the Plan are incorporated into and made a part of
this Option Agreement and this Option Agreement shall be governed by and construed in accordance with the Plan. In the event of
any actual or alleged conflict between the provisions of the Plan and the provisions of this Option Agreement, the provisions of
the Plan shall be controlling and determinative.

 

		12.	Successors. This Option Agreement shall be binding upon and inure to the benefit of, the
Company and its successors and assigns, and the Optionee’s personal and legal representatives, heirs and distributees.

 

		13.	Termination of Employment; Nondisclosure of Trade Secrets. In consideration of the grant
by the Company of this Option, the Optionee agrees as follows:

 

		(a)	That the Optionee will devote his or her full business time and efforts to the service of the Company
or one or more of its subsidiaries in keeping with his or her training, abilities, and responsibilities. Any termination of the
Optionee’s employment that is a result of (i) any regulatory agency with jurisdiction requiring the Company to terminate
the Optionee’s employment, (ii) any bonding or insurance company refusing to issue a fidelity bond on the Optionee which
is unrelated to such insurer or bonding company’s inability or refusal to insure or bond the Company or its employees generally,
(iii) any conviction under any bank or bank holding company statute or regulation which is a felony or which is punishable by a
fine of not less than $5,000.00 and one year in jail, (iv) any theft of the Company property; or (v) any voluntary termination
by the Optionee without the consent of the Company, shall be deemed to be a violation of this Option Agreement and any Option whether
vested or unvested, to the extent not previously exercised, shall terminate 30 days after the occurrence of such event.

 

		(b)	The Optionee recognizes and acknowledges that the Optionee will have access to certain trade secrets
and other valuable, proprietary and confidential information (individually and collectively (the “Trade Secrets”))
of the Company and its affiliates and that such information constitutes valuable, special and unique property of the Company and
such other entities. The Optionee will not disclose or directly or indirectly use, in any manner, such Trade Secrets for the benefit
of anyone other than the Company during the period from the Date of Grant of this Option through the date this Option has been
exercised in full or has expired, and for a period of two years after the later of such exercise of expiration or termination of
Optionee’s employment. To the extent any Trade Secrets are required to be disclosed under applicable law or to any governmental
authority, the Optionee shall use his or her best efforts to protect and preserve their confidentiality and prevent their further
disclosure or dissemination. In the event of a breach or threatened breach by the Optionee of the provisions of this paragraph,
the Company or the employing corporation shall be entitled to an injunction or temporary restraining order restraining the Optionee
from disclosing, in whole or in part, such Trade Secrets. Nothing herein is intended to or shall be construed as limiting or prohibiting
the Company or the employing affiliate corporation from pursuing any legal, equitable or other remedies available to it for such
breach or threatened breach, including, without limitation, the recovery of damages.

 

    	 	3	 

     

    

 

		14.	No Duty to Disclose Material Information. The Optionee understands that it would be onerous
to the Company and could impose restrictions applicable to those possessing “inside Information” on the Optionee, if
the Company were required to make special non-public disclosures of material information to the Optionee. Accordingly, the Company
and the Optionee agree that the Company and its affiliates and their respective directors, officers employees, agents, representatives
and controlling persons shall have no right to be advised of any material information regarding the Company and its subsidiaries,
at any time prior to, upon or in connection with any grant, holding, exercise or termination of options or any rights therein.

 

		15.	Disposition of Shares. The Optionee agrees to notify the Company promptly of any proposal
or actual disposition of any shares of Common Stock purchased pursuant to this Option which are disposed of within one year after
transfer of such shares to the Optionee, or within two years of the date of the grant of such Option. For purposes of such notification,
“disposition” shall have the meaning assigned to it in Section 424(c) of the Code.

 

		16.	Notices. All notices hereunder shall be in writing, and if to the Company, shall be delivered
personally to the Secretary or mailed to the Company’s principal executive offices at the address shown below, addressed
to the attention of the Secretary, and if to the Optionee, shall be delivered personally or mailed to the Optionee at the address
noted below. Such addresses may be changed at any time by notice from one party to the other.

 

		17.	Acknowledgment. The Optionee acknowledges receipt of a copy of the Plan, a copy of which
is annexed hereto, and represents and warrants that the Optionee is familiar with the terms and provisions thereof. The Optionee
hereby accepts the Option covered by this Option Agreement subject to all the terms and conditions of the Plan and this Option
Agreement. The Optionee acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition of the
underlying shares and that the Optionee should consult a tax advisor prior to such exercise or disposition.

 

		18.	Binding Effect and Governing Law, etc. This Option Agreement shall bind and inure to the
benefit of the parties hereto, the successors and assigns of the Company descent and distribution. This Option Agreement shall
be governed by, and construed in accordance with, the laws of the State of Tennessee. The headings and subheadings hereof are for
convenience of reference only, and shall not affect the construction or interpretation of the provisions thereof.

 

    	 	4	 

     

    

 

		19.	Acceleration of Vesting. If a Sale Event occurs and the Optionee ceases to be a Service
Provider within 12 months following the Sale Event, 100% of the shares subject to the Option shall become immediately vested and
exercisable.

 

		20.	Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement
shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the
Plan and this Agreement shall be severable and enforceable to the extent permitted by law.

 

		21.	Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or
terminated by the Company at any time, in its discretion. The grant of the Option in this Agreement does not create any contractual
right or other right to receive any Options or other Awards in the future. Future awards, if any, will be at the sole discretion
of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms
and conditions of the Optionee’s employment with the Company.

 

		22.	Amendment. The Administrator has the right to amend, alter, suspend, discontinue or cancel
the Option, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Optionee’s material
rights under this Agreement without the Optionee’s consent.

 

		23.	No Impact on Other Benefits. The value of the Optionee’s Option is not part of his
or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee
benefit.

 

		24.	Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed
an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement
transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means
intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery
of the paper document bearing an original signature.

 

[Signatures Appear on Following Page]

 

    	 	5	 

     

    

 

IN WITNESS WHEREOF, SmartFinancial, Inc.
acting by and through its duly authorized officers, has caused this Option Agreement to be executed, and the Optionee has executed
this Option Agreement, all as of the day and year first above written.

 

 

 

SMARTFINANCIAL, INC.

 

 

 

____________________________

By: ________________________

SmartFinancial, Inc.

5401 Kingston Pike, Suite 600

Knoxville, Tennessee 37919

 

OPTIONEE:

 

 

 

______________________________

 

Address: ___________________________

 

___________________________

 

____________________________

 

 

    	 	6

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