Document:

Exhibit
10.2

 

SECOND
AMENDED AND RESTATED ADVISORY AGREEMENT

BETWEEN

GREENBACKER RENEWABLE ENERGY COMPANY LLC

GREENBACKER RENEWABLE ENERGY CORPORATION

AND

GREENBACKER CAPITAL MANAGEMENT LLC

 

THIS
SECOND AMENDED AND RESTATED ADVISORY AGREEMENT (the “Agreement”) made as of the 6th day of March,
2020, by and between GREENBACKER RENEWABLE ENERGY COMPANY LLC, a Delaware limited liability company (the “Company”),
GREENBACKER RENEWABLE ENERGY CORPORATION, a Maryland corporation (the “Operating Corp.”), and GREENBACKER
CAPITAL MANAGEMENT LLC, a Delaware limited liability company (the “Advisor”).

 

WHEREAS,
the Company is an externally managed energy company that intends to acquire and manage income-generating renewable energy and
energy efficiency and sustainable development projects and other energy-related businesses (collectively, the “Target
Assets”) as well as finance the construction and/or operation of the Target Assets; and

 

WHEREAS,
the Advisor is a renewable energy, energy efficiency and sustainability related project acquisition, consulting and development
company that intends to register as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers
Act”); and

 

WHEREAS,
the Company and the Advisor entered into the Advisory Agreement, dated August 7, 2013 (the “Advisory Agreement”)
to retain the Advisor to furnish advisory and management services to the Company and its subsidiaries on the terms and conditions
therein and the Company and the Advisor entered into the Amended and Restate Advisory Agreement, dated October 9, 2013 (the “Amended
and Restated Advisory Agreement”); and

 

WHEREAS,
the Company and the Advisor wish to amend and restate the Amended and Restated Advisory Agreement in its entirety by entering
into this Second Amended and Restated Advisory Agreement.

 

NOW,
THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as
follows:

 

1.
 Duties of the Advisor.

 

(a) Retention
of Advisor. The Company hereby employs the Advisor to act as the advisor to the Company and its subsidiaries and to manage
the day-to-day operations of the Company and its subsidiaries, subject at all times to the supervision of the Board of Directors
of the Company (the “Board”), for the period and upon the terms herein set forth:

 

(i) in
accordance with the investment objectives, policies and restrictions that are set forth in the Company’s Registration Statement
on Form S-1 (File No. 333-178786-01) filed with the Securities and Exchange Commission (the “SEC”), as amended
from time to time (the “Registration Statement”); and

 

(ii) during
the term of this Agreement in accordance with all other applicable federal and state laws, rules and regulations, and the Company’s
certificate of formation and limited liability company agreement (the “LLC Agreement”), in each case as amended
from time to time.

 

(b) Responsibilities
of Advisor. Without limiting the generality of the foregoing, the Advisor shall, during the term and subject to the provisions
of this Agreement:

 

(i) determine
the composition of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such
changes;

 

(ii) identify,
evaluate and negotiate the structure of the investments made by the Company;

 

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(iii) close
and monitor the Company’s investments;

 

(iv) perform
due diligence on prospective projects; and

 

(v) assist
in the preparation of reports to members.

 

(c)
 Power and Authority. To facilitate the Advisor’s performance of these undertakings,
but subject to the restrictions contained herein, the Company and its subsidiaries hereby delegate to the Advisor, and the Advisor
hereby accepts, the power and authority on behalf of the Company and its subsidiaries to effectuate its investment decisions for
the Company, including the execution and delivery of all documents relating to the Company’s investments. In the event that
the Company determines to acquire debt financing, the Advisor shall arrange for such financing on the Company’s behalf,
subject to the oversight and approval of the Board.

 

(d)
 Acceptance of Employment. The Advisor hereby accepts such employment and agrees
during the term hereof to render the services described herein for the compensation provided herein, subject to the limitations
contained herein.

 

(e)
 Subadvisors. The Advisor is hereby authorized to enter into one or more subadvisory
agreements with other advisors with expertise in the Target Assets (each, a “Subadvisor”) pursuant to which
the Advisor may obtain the services of the Subadvisor(s) to assist the Advisor in fulfilling its responsibilities hereunder. Specifically,
the Advisor may retain a Subadvisor to recommend specific Target Assets or other investments based upon the Company’s investment
objectives, policies and restrictions, and work, along with the Advisor, in sourcing, structuring, negotiating, arranging or effecting
the acquisition or disposition of such Target Assets and investments and monitoring investments on behalf of the Company, subject
to the oversight of the Advisor and the Company.

 

(i) The
Advisor shall monitor any Subadvisor to ensure that material information discussed by management of any such Subadvisor is communicated
to the Board, as appropriate.

 

(ii) compensation
payable to any Subadvisor.

 

(iii) Any
Subadvisor shall be subject to the same fiduciary duties imposed on the Advisor pursuant to this Agreement and the Advisers Act,
as well as other applicable federal and state law.

 

(f) Independent
Contractor Status. The Advisor shall, for all purposes herein provided, be deemed to be an independent contractor and, except
as expressly provided or authorized herein, shall have no authority to act for or represent the Company in any way or otherwise
be deemed an agent of the Company.

 

(g) Record
Retention. Subject to review by and the overall control of the Board, the Advisor shall maintain all books and records with
respect to the Company’s transactions and shall render to the Board such periodic and special reports as the Board may reasonably
request or as may be required under applicable federal and state law, and shall make such records available for inspection by
the Board and its authorized agents, at any time and from time to time during normal business hours. The Advisor agrees that all
records that it maintains for the Company are the property of the Company and shall surrender promptly to the Company any such
records upon the Company’s request and upon termination of this Agreement pursuant to Section 9, provided that the
Advisor may retain a copy of such records.

 

The
following provisions in this Section 1 shall apply for only so long as the Shares (as defined herein) of the Company are not listed
on a national securities exchange.

 

(h) Administrator.
The Advisor shall, upon request by an official or agency administering the securities laws of a state, province, or commonwealth
(a “State Administrator”), submit to such State Administrator the reports and statements required to be distributed
to members of the Company pursuant to this Agreement, the Registration Statement and applicable federal and state law.

 

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(i) Fiduciary
Duty. It is acknowledged that the Advisor shall have a fiduciary responsibility for the safekeeping and use of all funds and
assets of the Company, whether or not in the Advisor’s immediate possession or control. The Advisor shall not employ, or
permit another to employ, such funds or assets in any manner except for the exclusive benefit of the Company. The Advisor shall
not, by entry into an agreement with any member of the Company or otherwise, contract away the fiduciary obligation owed to the
Company and the members of the Company under common law.

 

2. Company’s
Responsibilities and Expenses Payable by the Company.

 

(a) Costs.
Subject to the limitations on reimbursement of the Advisor as set forth in Section 2(b) below, the Company, either directly or
through reimbursement to the Advisor, shall bear all other costs and expenses of its operations and transactions, including (without
limitation) fees and expenses relating to: expenses deemed to be “organization and offering expenses” of the Company
for purposes of Conduct Rule 2310(a)(12) of the Financial Industry Regulatory Authority (for purposes of this Agreement, such
expenses, exclusive of commissions, the dealer manager fee, the distribution fee and any discounts, are hereinafter referred to
as “Organization  and Offering Expenses”); the investigation and
monitoring of the Company’s investments; any cost incurred in connection with the Advisor’s valuation methodologies;
effecting sales and repurchases of the Company’s limited liability company interests (“Shares”) and other
securities; the Base Management Fee (as defined in Section 3(a) hereof) and any incentive allocation and distribution payable
pursuant to the LLC Agreement; administration fees payable under the administration agreement (the “Administration Agreement”)
between the Company and Greenbacker Administration, LLC (the “Administrator”), the Company’s administrator;
fees payable to third parties relating to, or associated with, making investments and valuing investments (including third-party
valuation firms, and fees and expenses associated with performing due diligence reviews of prospective investments), transfer
agent and custodial fees, fees and expenses associated with marketing efforts (including attendance at investment conferences
and similar events); federal and state registration fees; any exchange listing fees; federal, state and local taxes; independent
directors’ fees and expenses; brokerage commissions for the Company’s investments; costs of proxy statements, members’
reports and notices; fees and expenses associated with independent audits and outside legal costs, including compliance with the
Sarbanes-Oxley Act of 2002; costs associated with the Company’s reporting and compliance obligations under applicable federal
and state securities law; fidelity bond, directors and officers/errors and omissions liability insurance and other insurance premiums;
direct costs such as printing, mailing, long distance telephone, and staff; all other expenses incurred by the Advisor in performing
its obligations subject to the limitations included in this Agreement; and all other expenses incurred by either the Administrator
or the Company in connection with administering the Company’s business, including payments for the administrative services
provided under the Administration Agreement based upon the Company’s allocable portion (subject to the review and approval
of the Board) of the Administrator’s overhead in performing its obligations under the Administration Agreement.

 

Notwithstanding
the foregoing, the Company shall reimburse the Advisor for Organization and Offering Expenses it may incur on the Company’s
behalf but only to the extent that the reimbursement would not cause the selling commissions, the dealer manager fees, the distribution
fees and the Organization and Offering Expenses borne by the Company to exceed 15.0% of gross proceeds from the Company’s
offering of Shares (the “Offering”) pursuant to the Registration Statement as of the date of the reimbursement.

 

The
following provisions in this Section 2(b) shall apply for only so long as the Shares of the Company are not listed on a national
securities exchange.

 

(b) Limitations
on Reimbursement of Expenses. In addition to the compensation paid to the Advisor pursuant to Section 3, the Company shall
reimburse the Advisor for all expenses of the Company incurred by the Advisor as well as the actual cost of goods and services
used for or by the Company and obtained from entities not affiliated with the Advisor. No reimbursement shall be permitted for
services for which the Advisor is entitled to compensation by way of a separate fee. Excluded from the allowable reimbursement
shall be:

 

(i)
rent or depreciation, utilities, capital equipment, and other administrative items of the Advisor; and

 

(ii) salaries,
fringe benefits and other administrative items incurred or allocated to any executive officer or board member of the Advisor (or
any individual performing such services) or a holder of 10% or greater equity interest in the Advisor (or any person having the
power to direct or cause the direction of the Advisor, whether by ownership of voting securities, by contract or otherwise).

 

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(c) Periodic
Reimbursement. Expenses incurred by the Advisor on behalf of the Company and payable pursuant to this Section 2 shall be reimbursed
no less than monthly to the Advisor. The Advisor shall prepare a statement documenting the expenses of the Company and the calculation
of the reimbursement and shall deliver such statement to the Company prior to full reimbursement. The Advisor may elect, in its
sole discretion, to defer or waive all or a portion of such reimbursement. Any portion of such deferred reimbursement not taken
as to any period shall be deferred without interest and may be taken by the Advisor in any other period prior to the occurrence
of a Liquidity Event (as such term is defined in the LLC Agreement) as the Advisor may determine in its sole discretion.

 

3. Compensation
of the Advisor. During the Initial Term and any Renewal Term (each as defined in Section 9(a) hereof), the Company shall pay
or cause to be paid a base management fee (“Base Management Fee”) as hereinafter set forth. The Advisor may
elect, in its sole discretion, to defer or waive all or a portion of the Base Management Fee. Any portion of a deferred Base Management
Fee not taken as to any period shall be deferred without interest and may be taken by the Advisor in any other period prior to
the occurrence of a Liquidity Event (as such term is defined in the LLC Agreement) as the Advisor may determine in its sole discretion.

 

(a) Base
Management Fee. The Base Management Fee shall be calculated at an annual rate 2.00% of the Company’s average gross assets.
The Base Management Fee shall be payable periodically in arrears; provided, that the Base Management Fee shall be payable
at least monthly but not more frequently than weekly. The Base Management Fee for a period shall be calculated based on the average
value of the Company’s gross assets at the end of each day during such period. The Base Management Fee for any partial month
shall be appropriately pro-rated based upon the number of days services are performed under this contract.

 

4. Covenants
of the Advisor.

 

(a) Advisor
Status. The Advisor covenants that it will register as an investment adviser under the Advisers Act no later than it is required
to do so pursuant to the Advisers Act and will maintain such registration. The Advisor agrees that its activities will at all
times be in compliance in all material respects with all applicable federal and state laws governing its operations and investments.

 

(b) Reports
to State Administrators. The Advisor shall, upon written request of any State Administrator, submit any of the reports and
statements to be prepared and distributed by it pursuant to this Section 4 to such State Administrator.

 

(c) Reserves.
In performing its duties hereunder, the Advisor shall cause the Company to provide for adequate reserves for normal replacements
and contingencies (but not for payment of fees payable to the Advisor hereunder) by causing the Company to retain a reasonable
percentage of proceeds from offerings and revenues.

 

(d) Recommendations
Regarding Reviews. From time to time and not less than quarterly, the Advisor must review the Company’s accounts to
determine whether cash distributions are appropriate.

 

(e) Temporary
Investments. The Advisor shall, in its sole discretion, temporarily place proceeds from offerings by the Company into short
term, highly liquid investments which may include obligations of, or obligations guaranteed by, the U.S. government or bank money-market
accounts or certificates of deposit of national or state banks that have deposits insured by the Federal Deposit Insurance Corporation
(including certificates of deposit of any bank acting as a depository or custodian for any such funds) that can be readily sold,
with appropriate safety of principal.

 

5. Limitations
on Front End Fees.

 

The
following provisions in this Section 5 shall apply for only so long as the shares of the Company are not listed on a national
securities exchange.

 

(a) Limitations
on Front End Fees. Notwithstanding anything herein to the contrary:

 

(i) All
fees and expenses paid by any party for any services rendered to organize the Company and to acquire assets for the Company (“Front
End Fees”) shall be reasonable and shall not exceed 18% of the gross offering proceeds, regardless of the source of
payment. Any reimbursement to the Advisor or any other person for deferred organizational and offering expenses, including any
interest thereon, if any, will be included within this 18% limitation.

 

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(ii) The
Advisor shall commit at least eighty-two percent (82%) of the gross offering proceeds towards the investment or reinvestment of
assets and reserves as set forth in Section 4(c) above on behalf of the Company. The remaining proceeds may be used to pay Front
End Fees.

 

6. Other
Activities of the Advisor. The services of the Advisor to the Company are not exclusive, and, subject to the Code of Business
Conduct and Ethics of the Company, including the conflicts of interest policy included therein, the Advisor may engage in any
other business or render the same, similar or different services to others including, without limitation, businesses that may
directly or indirectly compete with us, so long as its services to the Company hereunder are not impaired thereby, and, subject
to the Code of Business Conduct and Ethics of the Company, including the conflicts of interest policy included therein, nothing
in this Agreement shall limit or restrict the right of any manager, partner, member (including its members and the owners of its
members), officer or employee of the Advisor to engage in any other business or to devote his or her time and attention in part
to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith
(including fees for serving as a director of, or providing consulting services to, one or more of the Company’s portfolio
companies, subject to applicable law); provided, however, that the Advisor shall notify the Company prior to being engaged to
serve as an advisor to a fund or another company that has a similar investment strategy to the Company’s investment strategy.
The Advisor assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood
that directors, officers, employees and members of the Company are or may become interested in the Advisor and its affiliates,
as directors, officers, employees, partners, members, managers or otherwise, and that the Advisor and its directors, officers,
employees, partners, stockholders, members and managers, and the Advisor’s affiliates are or may become similarly interested
in the Company and/or its subsidiaries as members or otherwise.

 

7. Responsibility
of Dual Directors, Officers and/or Employees. If any person who is a manager, partner, member, officer or employee of the
Advisor is or becomes a director, officer and/or employee of the Company and/or its subsidiaries and acts as such in any business
of the Company and/or its subsidiaries, then such manager, partner, member, officer and/or employee of the Advisor shall be deemed
to be acting in such capacity solely for the Company and/or its subsidiaries, and not as a manager, partner, member, officer or
employee of the Advisor or under the control or direction of the Advisor, even if paid by the Advisor.

 

8. Indemnification.

 

(a) Indemnification.
The Advisor (and its officers, managers, partners, members, agents, employees, controlling persons and any other person or entity
affiliated with the Advisor, including without limitation the Administrator, and any person providing subadvisory services to
the Advisor) shall not be liable to the Company or any of its subsidiaries, to the Board, or the Company’s or any subsidiary’s
members, stockholders or partners for any action taken or omitted to be taken by the Advisor in connection with the performance
of any of its duties or obligations under this Agreement or otherwise as an investment adviser of the Company, concerning loss
resulting from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt
of compensation for services, and the Company and its subsidiaries shall indemnify, defend and protect the Advisor (and its officers,
managers, partners, members, agents, employees, controlling persons and any other person or entity affiliated with the Advisor,
including without limitation the Administrator, and any person providing subadvisory services to the Advisor, each of whom shall
be deemed a third party beneficiary hereof) (collectively, the “Indemnified Parties”) and hold them harmless
from and against all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably
paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit,
investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising
out of or otherwise based upon the performance of any of the Advisor’s duties or obligations under this Agreement or otherwise
as an investment adviser of the Company. Notwithstanding the preceding sentence of this paragraph to the contrary, nothing contained
herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified
Parties to indemnification in respect of, any liability to the Company or any of its subsidiaries, to the Board, or the Company’s
or any subsidiary’s members, stockholders or partners to which the Indemnified Parties would otherwise be subject by reason
of willful misfeasance, bad faith or negligence in the performance of the Advisor’s duties or by reason of the reckless
disregard of the Advisor’s duties and obligations under this Agreement.

 

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The
following provisions in this Section 8 shall apply for only so long as the Shares of the Company are not listed on a national
securities exchange.

 

(b) Limitations
on Indemnification. Notwithstanding Section 8(a) to the contrary, the Company and its subsidiaries shall not provide for indemnification
of the Indemnified Parties for any liability or loss suffered by the Indemnified Parties, nor shall the Company or its subsidiaries
provide that any of the Indemnified Parties be held harmless for any loss or liability suffered by the Company and its subsidiaries,
unless all of the following conditions are met:

 

(i) the
Indemnified Party has determined, in good faith, that the course of conduct which caused the loss or liability was in the best
interests of the Company and its subsidiaries;

 

(ii)
the Indemnified Party was acting on behalf of or performing services for the Company and its subsidiaries;

 

(iii) such
liability or loss was not the result of negligence or misconduct by the Indemnified Party; and

 

(iv) such
indemnification or agreement to hold harmless is recoverable only out of the Company’s net assets and not from members.

 

Furthermore,
the Indemnified Party shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation
of federal or state securities laws unless one or more of the following conditions are met:

 

(i) there
has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular
indemnitee;

 

(ii) such
claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee;
or

 

(iii) a
court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification
of the settlement and related costs should be made, and the court of law considering the request for indemnification has been
advised of the position of the SEC and the published position of any state securities regulatory authority in which securities
of the Company were offered or sold as to indemnification for violations of securities laws.

 

(c) Advancement
of Funds. The Company shall be permitted to advance funds to the Indemnified Party for legal expenses and other costs incurred
as a result of any legal action for which indemnification is being sought only if all of the following conditions are met:

 

(i)
The legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company;
and

 

(ii)
The Indemnified Party undertakes to repay the advanced funds to the Company, together with the applicable legal rate of
interest thereon, in cases in which the Indemnified Party is not found to be entitled to indemnification.

 

9. Effectiveness,
Duration and Termination of Agreement.

 

(a) Term
and Effectiveness. This Agreement shall become effective as of the date that the Company meets the minimum offering requirement,
as such term is defined in the prospectus contained in the Registration Statement as declared effective by the SEC, and shall
remain in effect for one year (the “Initial Term”), and thereafter shall continue automatically for successive
annual periods (a “Renewal Term”), provided that such continuance is specifically approved at least
annually by the vote of a majority of the Company’s independent directors.

 

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(b) Termination.
This Agreement may be terminated at any time, without the payment of any penalty, (a) by the Company upon 60 days’ written
notice to the Advisor, by the vote of the Company’s independent directors, or (b) by the Advisor upon 120 days’ written
notice to the Company. This Agreement shall not be assigned by the Advisor without the consent of the Company, which consent shall
be approved by a majority of the Company’s independent directors, provided that (a) the Advisor may assign any rights to
receive fees or other payments under this Agreement without obtaining the approval of the Company, and (b) the Advisor may assign
or delegate any or all of its other rights or obligations to any subsidiary of the Advisor or any affiliate of Greenbacker Group
LLC, without obtaining the approval of the Company, if such assignment or delegation does not constitute an “assignment”
within the meaning of the Advisers Act. This Agreement shall not be assigned by the Company without the prior written consent
of the Advisor except in the case of assignment by the Company to an organization which is a successor (by merger, consolidation,
purchase of assets, or similar transaction) to the Company, in which case such successor organization shall be bound under this
Agreement and by the terms of such assignment in the same manner as the Company is bound under this Agreement. The provisions
of Section 9 of this Agreement shall remain in full force and effect, and the Advisor shall remain entitled to the benefits thereof,
notwithstanding any termination of this Agreement.

 

(c) Payments
to and Duties of Advisor Upon Termination.

 

(i) After
the termination of this Agreement, the Advisor shall not be entitled to compensation for further services provided hereunder except
that it shall be entitled to receive from the Company within 30 days after the effective date of such termination all unpaid reimbursements
and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement. If the Company and the Advisor cannot
agree on the amount of such reimbursements and fees, the parties will submit to binding arbitration.

 

(ii) The
Advisor shall promptly upon termination:

 

(A) Deliver
to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by
it, covering the period following the date of the last accounting furnished to the Board;

 

(B) Deliver
to the Board all assets and documents of the Company then in custody of the Advisor; and

 

(C)
Cooperate with the Company’s reasonable request to provide an orderly management transition.

 

10. Notices.
Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party
at its principal office.

 

11. Amendments.
This Agreement may be amended by mutual consent.

 

12. Entire
Agreement; Governing Law. This Agreement contains the entire agreement of the parties and supersedes all prior agreements,
understandings and arrangements with respect to the subject matter hereof. Notwithstanding the place where this Agreement may
be executed by any of the parties hereto, this Agreement shall be construed in accordance with the laws of the State of New York.

 

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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date above written.

 

	 	GREENBACKER
    RENEWABLE ENERGY COMPANY LLC
	 	 
	 	By:	/s/
    Richard C. Butt                                          
	 	Name: 	Richard C.
    Butt
	 	Title:	Chief Financial
    Officer
	 	 	 
	 	GREENBACKER
    CAPITAL MANAGEMENT LLC
	 	 
	 	By:	/s/
    David Sher
	 	Name	David Sher
	 	Title	President
	 	 
	 	GREENBACKER
    RENEWABLE ENERGY CORPORATION
	 	 
	 	By: 	/s/
    Richard C. Butt
	 	Name:	Richard C.
    Butt
	 	Title:	Chief Financial
    Officer

 

 

8Document

Exhibit 4.2

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

The following summary of the capital stock of Franklin Financial Network, Inc. does not purport to be complete and is qualified in its entirety by reference to our Charter, as amended, our Amended and Restated Bylaws, each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit is a part, and certain provisions of Tennessee law. Unless the context requires otherwise, all references to “we,” “us,” “our” and “FFN” in this Exhibit refer solely to Franklin Financial Network, Inc. and not to our subsidiaries. 

General
FFN is authorized by its Charter to issue a maximum of 30,000,000 shares of common stock, no par value, and 1,000,000 shares of preferred stock, having no designated par value per share. As of December 31, 2019, there were 14,848,017 shares of common stock issued and 14,821,594 shares of common stock outstanding. As of December 31, 2019, there were no shares of preferred stock issued and outstanding. The outstanding shares of common stock are fully paid and nonassessable.
Common Stock
Dividend Rights and Limitations on Payment of Dividends
Except as described below, the holders of FFN common stock are entitled to receive, pro rata, such dividends and other distributions as and when declared by FFN’s board of directors out of the assets and funds legally available therefor. FFN’s ability to pay dividends is dependent upon the ability of FFN to earn income and is especially dependent upon the ability of Franklin Synergy Bank, FFN’s bank subsidiary (“FSB”) to earn income and pay dividends. FSB may declare dividends only so long as its minimum regulatory capital requirements will not be impaired. In addition, the board of directors of FSB under state banking law may not declare dividends in any calendar year that exceed the total of its net income of that year combined with its retained net income of the preceding two years without the approval of the Tennessee Commissioner of Financial Institutions. 
Voting Rights
The holders of FFN common stock are entitled to one vote per share on all matters presented for a shareholder vote. There is no provision for cumulative voting. 
Board of Directors
The business of FFN is controlled by a board of directors, which is elected by a plurality vote of the shareholders. Shareholders are required to state nominations for directors in writing and file such nominations with the secretary of FFN. To be timely, nominations for directors must be mailed and received at the principal office of FFN not less than 120 days prior to the meeting at which directors are to be elected. The directors will hold office for one (1) year terms. Any vacancies in the board of directors and any newly created directorships may be filled only by a majority vote of the directors then in office. 
Liquidation Rights
Upon the voluntary or involuntary dissolution, liquidation, or winding up of the affairs of FFN, after the payment in full of its debts and other liabilities, and the payment of any accrued but unpaid dividends and any liquidation preference on outstanding shares of preferred stock, the remainder of its assets, if any, is to be distributed pro rata among the holders of shares of common stock. Subject to any required regulatory approvals, the board of directors of FFN, at its discretion, may authorize and issue shares of preferred stock and debt obligations, whether or not subordinated, without prior approval of FFN’s shareholders, thereby further depleting the liquidation value of the shares of common stock.

1

Preemptive Rights
Owners of shares of common stock of FFN will not have the preemptive right to purchase additional shares offered by FFN in the future. That is, FFN may sell additional shares to particular shareholders or to non-shareholders without first offering each then current shareholder the right to purchase the same percentage of such newly offered shares as is the shareholder’s percentage of the then outstanding shares of FFN.
Redemption
The shares of common stock of FFN may not be redeemed except upon consent of both the shareholder and FFN, as well as the Federal Reserve Bank.
Conversion Rights
The holders of shares of FFN common stock have no conversion rights.
Liability to Further Calls or to Assessments by FFN
The shares of common stock of FFN are not subject to liability for further calls or to assessments by FFN.
Preferred Stock
FFN’s charter authorizes its board of directors, without further action by shareholders, to issue from time to time the undesignated preferred stock in one or more series and to fix the designations, powers, preferences, limitations and relative rights of any series of preferred stock that FFN chooses to issue, including dividend rates, conversion rights, voting rights, terms of redemption and liquidation preferences and the number of shares constituting each such series. Unless the amendment to FFN’s charter to designate the stock and terms of a series of preferred stock provides otherwise, the preferred stock designated thereby, when issued, will not have, or be subject to, any preemptive or similar rights.
The issuance of shares of preferred stock could serve to dilute the voting rights or ownership percentage of holders of shares of FFN’s common stock (or any other shares). The issuance of shares of preferred stock might also serve to deter or block any attempt to obtain control of FFN or to facilitate any such attempt.

Anti-Takeover Effects of Various Provisions of Tennessee Law and Our Charter and Bylaws
The Tennessee Business Combination Act generally prohibits a “business combination” by FFN or a subsidiary with an “interested shareholder” within five years after the shareholder becomes an interested shareholder. FFN or a subsidiary can, however, enter into a business combination within that period if, before the interested shareholder became such, FFN’s board of directors approved the business combination or the transaction in which the interested shareholder became an interested shareholder. After that five-year moratorium, the business combination with the interested shareholder can be consummated only if it satisfies certain fair price criteria or is approved by 2/3 of the other shareholders. For purposes of the Tennessee Business Combination Act, a “business combination” includes mergers, share exchanges, sales and leases of assets, issuances of securities, and similar transactions. An “interested shareholder” is generally any person or entity that beneficially owns 10% or more of the voting power of any outstanding class or series of FFN stock.

FFN’s charter does not have special requirements for transactions with interested parties; however, to the extent that the Tennessee Business Combination Act applies to FFN, all business combinations, as defined above, must be approved by two thirds (2/3) of the directors and a majority of the shares entitled to vote or a majority of the directors and two thirds (2/3) of the shares entitled to vote.

Under Tennessee law and under FFN’s charter and bylaws, shareholders have the right to submit proposals to the board of directors and to submit nominations for directors. FFN’s charter and bylaws require advance notice and certain information for shareholder nominations.

Limitations on Liability and Indemnification of Officers and Directors 
FFN’s charter and bylaws provide that, to the fullest extent permitted by the Tennessee Business Corporation Act (the “TBCA”), a director of FFN shall not be liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director.
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The FFN charter and bylaws provide that FFN shall have the power to indemnify any director or officer of the corporation to the fullest extent permitted by the TBCA, as amended. FFN may also indemnify and advance expenses to any employee or agent of FFN who is not a director or officer to the same extent as to a director or officer if the board of directors determines that to do so is in the best interests of FFN. The TBCA provides that a corporation may not indemnify a director for liability (1) for any breach of the director’s duty of loyalty to the corporation or its shareholders; (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or (3) under Sec. 48-18-302 of the TBCA (with respect to the unlawful distributions), as the same exists or hereafter may be amended.
Transfer Agent
The transfer agent and registrar for our common stock is Computershare Inc.
Listing
FFN’s common stock is listed on the NYSE under the symbol “FSB.”
 
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