**EXHIBIT 2.1**

 

EXECUTION COPY

 

 

 

**AGREEMENT AND PLAN OF MERGER**

 

by and between

** **

**GREENE COUNTY BANCSHARES, INC.**

 

and

** **

**INDEPENDENT BANKSHARES CORPORATION**

 

Dated as of June 17, 2003

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I

DEFINITIONS

 
| Section 1.01.                                      | Defined Terms                                           |
|----------------------------------------------------|---------------------------------------------------------|
| Section 1.02.                                      | Other Definitional  Provisions                          |
|                                               |                                                    |
| ARTICLE II                                         |
| THE MERGER                                         |
| Section 2.01.                                      | The Merger                                              |
| Section 2.02.                                      | Effective Time                                          |
| Section 2.03.                                      | Effects of the Merger                                   |
| Section 2.04.                                      | Closing of the Merger                                   |
| Section 2.05.                                      | Conversion of  Independent Capital Stock                |
| Section 2.06.                                      | Election and  Allocation Procedures                     |
| Section 2.07.                                      | No Fractional Shares                                    |
| Section 2.08.                                      | Greene County Common  Stock                             |
| Section 2.09.                                      | Treatment of Stock  Options; Deferred Compensation Plan |
| Section 2.10.                                      | Charter                                                 |
| Section 2.11.                                      | Bylaws                                                  |
| Section 2.12.                                      | Board of Directors                                      |
| Section 2.13.                                      | Tax Consequences                                        |
| Section 2.14.                                      | Reservation of Right  To Revise Structure               |
|                                               |                                                    |
| ARTICLE III                                        |
| EXCHANGE  OF CERTIFICATES FOR MERGER CONSIDERATION |
| Section 3.01.                                      | Greene County To  Make Merger Consideration Available   |
| Section 3.02.                                      | Exchange of Shares                                      |
|                                               |                                                    |
| ARTICLE IV                                         |
| REPRESENTATIONS  AND WARRANTIES OF INDEPENDENT     |
| Section 4.01.                                      | Corporate Organization                                  |
| Section 4.02.                                      | Capitalization                                          |
| Section 4.03.                                      | Authority; No  Violation                                |
| Section 4.04.                                      | Consents and Approvals                                  |
| Section 4.05.                                      | Reports                                                 |
| Section 4.06.                                      | Financial Statements                                    |
| Section 4.07.                                      | Broker’s Fees                                      |
| Section 4.08.                                      | Absence of Certain  Changes or Events                   |
| Section 4.09.                                      | Legal Proceedings                                       |
| Section 4.10.                                      | Taxes                                                   |
| Section 4.11.                                      | Employees; Employee  Benefit Plans                      |
| Section 4.12.                                      | Compliance With  Applicable Law                         |
| Section 4.13.                                      | Certain Contracts                                       |
| Section 4.14.                                      | Agreements With Regulatory  Agencies                    |
| Section 4.15.                                      | Undisclosed Liabilities                                 |
| Section 4.16.                                      | Anti-Takeover Provisions                                |
| Section 4.17.                                      | Independent  Information                                |
| Section 4.18.                                      | Title to Property                                       |
| Section 4.19.                                      | Insurance                                               |
| Section 4.20.                                      | Environmental Liability                                 |
| Section 4.21.                                      | Opinion of Financial  Advisor                           |
| Section 4.22.                                      | Loan Matters                                            |
| Section 4.23.                                      | Labor and Employment  Matters                           |
| Section 4.24.                                      | CRA Agreements                                          |
| Section 4.25.                                      | Community Reinvestment  Compliance                      |

 

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| Section 4.26.                                    | Certain Business  Practices                                       |
|--------------------------------------------------|-------------------------------------------------------------------|
| Section 4.27.                                    | Intellectual Property                                             |
| Section 4.28.                                    | Repurchase Agreements;  Derivatives                               |
|                                             |                                                              |
| ARTICLE V                                        |
| REPRESENTATIONS  AND WARRANTIES OF GREENE COUNTY |
| Section 5.01.                                    | Corporate Organization                                            |
| Section 5.02.                                    | Capitalization                                                    |
| Section 5.03.                                    | Authority; No  Violation                                          |
| Section 5.04.                                    | Consents and Approvals                                            |
| Section 5.05.                                    | Reports                                                           |
| Section 5.06.                                    | Financial Statements                                              |
| Section 5.07.                                    | Broker’s Fees                                                |
| Section 5.08.                                    | Absence of Certain  Changes or Events                             |
| Section 5.09.                                    | Legal Proceedings                                                 |
| Section 5.10.                                    | SEC Reports                                                       |
| Section 5.11.                                    | Compliance With  Applicable Law                                   |
| Section 5.12.                                    | Agreements With  Regulatory Agencies                              |
| Section 5.13.                                    | Undisclosed  Liabilities                                          |
| Section 5.14.                                    | Greene County Information                                         |
|                                             |                                                              |
| ARTICLE VI                                       |
| COVENANTS RELATING  TO CONDUCT OF BUSINESS       |
| Section 6.01.                                    | Conduct of Business  Prior to the Effective Time                  |
| Section 6.02.                                    | Independent Forbearances                                          |
| Section 6.03.                                    | No Fundamental Greene  County Changes                             |
| Section 6.04.                                    | Dividends                                                         |
|                                             |                                                              |
| ARTICLE VII                                      |
| ADDITIONAL  AGREEMENTS                           |
| Section 7.01.                                    | Regulatory Matters                                                |
| Section 7.02.                                    | Access to Information                                             |
| Section 7.03.                                    | Shareholder Approval                                              |
| Section 7.04.                                    | Legal Conditions to  Merger                                       |
| Section 7.05.                                    | Affiliates                                                        |
| Section 7.06.                                    | Nasdaq Listing                                                    |
| Section 7.07.                                    | Employees; Employee  Benefit Plans                                |
| Section 7.08.                                    | Directors’ and Officers’  Insurance; Indemnification    |
| Section 7.09.                                    | Advice of Changes; Other  Matters                                 |
| Section 7.10.                                    | Subsequent Interim and  Annual Financial Statements               |
| Section 7.11.                                    | Reorganization                                                    |
| Section 7.12.                                    | Board of Directors                                                |
| Section 7.13.                                    | Insider Loan Disclosure                                           |
| Section 7.14.                                    | Insurance Disclosure                                              |
| Section  7.15.                                   | Management  Consultation Meetings and Distribution of Information |
|                                             |                                                              |
| ARTICLE VIII                                     |
| CONDITIONS  PRECEDENT                            |
| Section 8.01.                                    | Conditions to Each  Party’s Obligation To Effect the Merger  |
| Section 8.02.                                    | Conditions to  Obligations of Greene County                       |
| Section 8.03.                                    | Conditions to Obligations  of Independent                         |
|                                             |                                                              |
| ARTICLE IX                                       |
| TERMINATION AND AMENDMENT                        |
| Section 9.01.                                    | Termination                                                       |
| Section 9.02.                                    | Effect of Termination                                             |
| Section 9.03.                                    | Amendment                                                         |

 

ii

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| Section 9.04.                          | Extension; Waiver                                          |
|----------------------------------------|------------------------------------------------------------|
|                                   |                                                       |
| ARTICLE X                              |
| GENERAL PROVISIONS                     |
| Section 10.01.                         | Nonsurvival of Representations,  Warranties and Agreements |
| Section 10.02.                         | Expenses                                                   |
| Section 10.03.                         | Notices                                                    |
| Section 10.04.                         | Interpretation                                             |
| Section 10.05.                         | Counterparts                                               |
| Section 10.06.                         | Entire Agreement                                           |
| Section 10.07.                         | Governing Law                                              |
| Section 10.08.                         | Severability                                               |
| Section 10.09.                         | Publicity                                                  |
| Section 10.10.                         | Assignment;  Third-party Beneficiaries                     |
| Section 10.11.                         | Dispute Resolution                                         |
| Section 10.12.                         | Headings                                                   |
| Section 10.13.                         | Construction                                               |
| Section 10.14.                         | Amendments and Waivers                                     |
|                                   |                                                       |
| EXHIBIT  A  VOTING AGREEMENT      |
| EXHIBIT  B  NON-COMPETE AGREEMENT |

 

iii

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**AGREEMENT AND PLAN OF MERGER**

** **

**THIS AGREEMENT AND PLAN OF MERGER**, dated asof June 17, 2003 (as amended, supplemented or otherwise modified from timeto time, this “Agreement”), is entered into by and between **GREENE COUNTY BANCSHARES, INC.**,a Tennessee corporation (“Greene County”), and **INDEPENDENT BANKSHARES CORPORATION**,a Tennessee corporation (“Independent”).

 

The respective Boards ofDirectors of each of Greene County and Independent have determined that it isin the best interests of their respective companies and shareholders toconsummate the business combination transaction provided for herein.  It is the intention of the parties to thisAgreement that the business combination contemplated hereby be treated as areorganization within the meaning of Section 368(a) of the InternalRevenue Code of 1986, as amended (the “Code”).

 

Simultaneously with theexecution of this Agreement, Greene County is entering into an agreement withthe persons named therein (“Locked Insiders”) in the form of Exhibit Ahereto (the “Voting Agreement”) pursuant to which they have agreed, among otherthings, to vote their shares of Independent Common Stock in favor of theadoption of this Agreement, on the terms set forth therein.

 

THEREFORE, inconsideration of the mutual covenants, representations, warranties andagreements contained herein, and intending to be legally bound hereby, theparties agree as follows:

** **

1

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**ARTICLE I**

**DEFINITIONS**

 

**Section1.01****.  DefinedTerms**.  The following termsshall have the meanings defined for such terms in the Sections set forth below:

 
| **Term**                              |   | **Section** |   |
|---------------------------------------|--------|-------------|--------|
|                                  |   |        |   |
| AAA                                   |   | 10.11       |   |
| Acquisition  Proposal                 |   | 6.02(f      | )      |
| Agreement                             |   | Preamble    |   |
| Average  Closing Price                |   | 9.01(h      | )      |
| Articles of  Merger                   |   | 2.02        |   |
| Bank Holding  Company Act             |   | 4.01(a      | )      |
| Business Day                          |   | 2.04        |   |
| Cash Amount  of Merger Consideration  |   | 2.09(f      | )      |
| Cash  Designee Shares                 |   | 2.06(b      | )      |
| Cash  Election Amount                 |   | 2.06(a      | )      |
| Cash  Election Shares                 |   | 2.06(a      | )      |
| Certificate                           |   | 3.02        |   |
| Change in  Independent Recommendation |   | 7.03(a      | )      |
| Closing                               |   | 2.04        |   |
| Closing Date                          |   | 2.04        |   |
| Code                                  |   | Preamble    |   |
| Controlled  Entity                    |   | 4.02(b      | )      |
| Covered  Employees                    |   | 7.07(a      | )      |
| CRA                                   |   | 4.12        |   |
| Deferred  Compensation Plan           |   | 2.09(d      | )      |
| Derivative  Transactions              |   | 4.28(b      | )      |
| Dissenting  Shareholder               |   | 2.05(d      | )      |
| Dissenting  Shares                    |   | 2.05(d      | )      |
| Effective  Time                       |   | 2.02        |   |
| Election  Deadline                    |   | 2.06(a      | )      |
| Election  Form                        |   | 2.06(a      | )      |
| Environmental  Laws                   |   | 4.20        |   |
| ERISA                                 |   | 4.11(a      | )      |
| ERISA  Affiliate                      |   | 4.11(a      | )      |
| Exchange Act                          |   | 4.17        |   |
| Exchange  Agent                       |   | 2.06        |   |
| Exchange  Fund                        |   | 3.01        |   |
| Exchange  Ratio                       |   | 2.05(b      | )      |
| Extension  Notice                     |   | 2.04        |   |
| FDIC                                  |   | 4.01(c      | )      |
| Federal  Reserve Board                |   | 4.04        |   |
| First  Independent Bank               |   | 4.01(c      | )      |
| 401(k) Plans                          |   | 7.07(b      | )      |
| Freddie Mac                           |   | 4.22(b      | )      |
| GAAP                                  |   | 4.01(a      | )      |
| Ginnie Mae                            |   | 4.22(b      | )      |
| Governmental  Entity                  |   | 4.04        |   |
| Greene  County                        |   | Preamble    |   |
| Greene  County Common Stock           |   | 2.05(a      | )      |
| Greene  County Options                |   | 2.09(a      | )      |
| Greene  County Regulatory Agreement   |   | 5.12        |   |
| Greene  County Reports                |   | 5.10        |   |

 

2

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| **Term**                                        |   | **Section** |   |
|-------------------------------------------------|--------|-------------|--------|
|                                            |   |        |   |
| Greene  County Stock Option Plan                |   | 2.09(a      | )      |
| HUD                                             |   | 4.22(b      | )      |
| Independent                                     |   | Preamble    |   |
| Independent  Common Stock                       |   | 2.05(a      | )      |
| Independent  Common Stock Outstanding           |   | 2.09(f      | )      |
| Independent  Contract                           |   | 4.13(a      | )      |
| Independent  Incentive Stock Option             |   | 2.09(a      | )      |
| Independent  Incentive Stock Option Account     |   | 2.09(b      | )      |
| Independent  Non-Qualified Stock Option         |   | 2.09(c      | )      |
| Independent  Non-Qualified Stock Option Account |   | 2.09(d      | )      |
| Independent  Shareholders Meeting               |   | 7.03        |   |
| Independent  Stock Option Plan                  |   | 2.09(a      | )      |
| Index                                           |   | 9.01(h      | )      |
| Injunction                                      |   | 8.01(e      | )      |
| Insurance  Amount                               |   | 7.08(b      | )      |
| Intellectual  Property                          |   | 4.27(a      | )      |
| Liens                                           |   | 4.02(b      | )      |
| Loans                                           |   | 7.14        |   |
| Locked  Insiders                                |   | Preamble    |   |
| Mailing Date                                    |   | 2.06(a)(i   | )      |
| Material  Adverse Effect                        |   | 4.01(a      | )      |
| Measurement  Date                               |   | 9.01(h      | )      |
| Merger                                          |   | 2.01        |   |
| Merger  Consideration                           |   | 2.05(b      | )      |
| Modified  Cash Amount of Merger Consideration   |   | 2.09(f      | )      |
| Modified  Fixed Exchange Ratio                  |   | 2.09(f      | )      |
| Modified Per  Share Cash Consideration          |   | 2.09(f      | )      |
| Nasdaq                                          |   | 4.04        |   |
| No Election  Shares                             |   | 2.06(a)(ii  | )      |
| Option  Conversion Ratio                        |   | 2.09(a      | )      |
| PBGC                                            |   | 4.11(c      | )      |
| Per Share  Cash Consideration                   |   | 2.05(b      | )      |
| Per Share  Stock Consideration                  |   | 2.05(b      | )      |
| Plans                                           |   | 4.11(a      | )      |
| Proxy  Statement/Prospectus                     |   | 4.04        |   |
| Regulatory  Agreement                           |   | 4.14        |   |
| Representatives                                 |   | 6.02(f      | )      |
| Requisite  Regulatory Approvals                 |   | 8.01(c      | )      |
| Rutherford  Bank and Trust                      |   | 4.01(c      | )      |
| S-4                                             |   | 4.17        |   |
| SEC                                             |   | 4.04        |   |
| Second  Merger                                  |   | 7.01(b      | )      |
| Securities  Act                                 |   | 5.14        |   |
| Software                                        |   | 4.27(a      | )      |
| Starting  Share Price                           |   | 9.01(h      | )      |
| Stock  Designee Shares                          |   | 2.06(b      | )      |
| Stock  Election Shares                          |   | 2.06(a)(i   | )      |
| Subsidiary                                      |   | 4.01(a      | )      |
| Superior  Proposal                              |   | 6.02(f      | )      |
| Surviving  Company                              |   | 2.01        |   |
| Taxes                                           |   | 4.10(j      | )      |
| Tax Return                                      |   | 4.10(k      | )      |
| TBCA                                            |   | 2.01        |   |
| Tennessee  Secretary                            |   | 2.02        |   |
| Termination  Fee                                |   | 9.02(b      | )      |

 

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| **Term**                          |   | **Section** |   |
|-----------------------------------|--------|-------------|--------|
|                              |   |        |   |
| Total Stock  Merger Consideration |   | 2.05(c      | )      |
| Total Cash  Merger Consideration  |   | 2.05(c      | )      |
| VA                                |   | 4.24(b      | )      |
| Voting  Agreement                 |   | Preamble    |   |

 

**Section1.02****.  OtherDefinitional Provisions**.  Themeanings given to terms defined herein shall be equally applicable to both thesingular and plural forms of such terms.

 

**ARTICLE II**

** **

**THE MERGER**

 

**Section2.01****.  The Merger**.  Subject to the terms and conditions of thisAgreement, in accordance with the Tennessee Business Corporation Act (the“TBCA”) at the Effective Time (as defined in Section 2.02 hereof),Independent shall merge (the “Merger”) with and into Greene County.  Greene County shall be the survivingcorporation (hereinafter sometimes called the “Surviving Company”) in theMerger and shall continue its corporate existence under the laws of the Stateof Tennessee.  The name of the SurvivingCompany shall be Greene County Bancshares, Inc.  Upon consummation of the merger, the separate corporate existenceof Independent shall terminate.

** **

**Section2.02****.  EffectiveTime**.  The Merger shallbecome effective as set forth in the articles of merger (the “Articles ofMerger”) which shall be filed with the Secretary of State of the State ofTennessee (the “Tennessee Secretary”) on the Closing Date (as defined inSection 2.04 hereof).  The term“Effective Time” shall mean the time on the Closing Date when the Mergerbecomes effective, as set forth in the Articles of Merger.

** **

**Section2.03****.  Effects ofthe Merger**.  At and after theEffective Time, the Merger shall have the effects set forth in the TBCA.

** **

**Section2.04****.  Closing ofthe Merger**.  Subject to theterms and conditions of this Agreement, except as provided in the followingparagraph, the closing of the Merger (the “Closing”) will take place at theoffices of Kutak Rock LLP at 1101 Connecticut Avenue, NW, Washington, DC at9:00 a.m., Eastern Time, on the first Friday which is a Business Dayoccurring at least two Business Days after the satisfaction or waiver (subjectto applicable law) of the latest to occur of the conditions set forth inArticle VIII hereof, other than conditions which by their terms are to besatisfied at Closing, or such other date or time as the parties may mutuallyagree (the “Closing Date”).  Forpurposes of this Agreement, a “Business Day” shall mean any day that is not aSaturday, a Sunday or other day on which the office of the Tennessee Secretaryis closed.

** **

**Section2.05****.  Conversionof Independent Capital Stock**. At the Effective Time, without any action on the part of Greene County,Independent or the holder of any of the shares of common stock of Independent,the Merger shall be effected in accordance with the following terms:

 

(a)   All shares of common stock, par value $4.00per share, of Independent (the “Independent Common Stock”) owned directly byIndependent (including treasury shares) or Greene County (other than shares intrust accounts, managed accounts and the like or shares held in satisfaction ofa debt previously contracted) shall be cancelled and retired and shall notrepresent capital stock of the Surviving Company and shall not be exchanged forshares of common stock, par value $2.00 per share, of Greene County (“GreeneCounty Common Stock”), cash or other consideration.

 

(b)   Subject to the allocation provisions ofSection 2.06, at the Effective Time, the holders of Independent CommonStock outstanding at the Effective Time (excluding shares held by anyIndependent or Greene County or any of their respective Subsidiaries, in eachcase other than in a fiduciary capacity or as a result of debts previouslycontracted, and excluding shares held by shareholders who perfect theirstatutory dissenters’ rights as provided in this Section) shall be entitled toreceive, and Greene County shall

 

4

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pay or issue and deliver, in the aggregate, (i) anumber of shares of Greene County Common Stock for each share of IndependentCommon Stock based on the Exchange Ratio of 1.7878 (the “Per Share StockConsideration”) unless such ratio is decreased pursuant to Section 2.09(f) orrevised upon the application of Section 9.01(h), or (ii) an amountequal to $45.00 in cash for each such share of Independent Common Stock (the“Per Share Cash Consideration”) unless such amount is decreased pursuant toSection 2.09(f). The foregoing consideration, collectively and in theaggregate, shall be referred to herein as the “Merger Consideration.”

 

(c)   Subject to the allocation provisions ofSection 2.06 below, each holder of a share of Independent Common Stock mayelect to receive the Per Share Stock Consideration or the Per Share CashConsideration for each such share of Independent Common Stock; provided,however, that the aggregate number of shares of Greene County Common Stock withrespect to which the Per Share Stock Consideration shall be paid as the MergerConsideration shall be 836,310 shares of Greene County Common Stock; providedfurther, however, that the aggregate amount of cash consideration with respectto which the Per Share Cash Consideration shall be paid as the MergerConsideration shall be $9,055,879 unless such cash consideration shall beincreased pursuant to Section 2.09 or pursuant toSection 9.01(h).  Such amount ofthe Greene County Common Stock paid as Merger Consideration shall be referredto in this Agreement as the “Total Stock Merger Consideration,” and such amountof cash paid as Merger Consideration shall be referred to as the “Total CashMerger Consideration.”

 

(d)   Each outstanding share of Independent CommonStock the holder of which has perfected his right to dissent under applicablelaw and has not effectively withdrawn or lost such right as of the EffectiveTime (the “Dissenting Shares”) shall not be converted into or represent a rightto receive shares of Greene County Common Stock or cash hereunder, and theholder thereof shall be entitled only to such rights as are granted byapplicable law.  Independent shall giveGreene County prompt notice upon receipt by Independent of any such demands forpayment of the fair value of such shares of Independent Common Stock and ofwithdrawals of such notice and any other instruments provided pursuant toapplicable law (any shareholder duly making such demand being hereinaftercalled a “Dissenting Shareholder”), and Greene County shall have the right toparticipate in all negotiations and proceedings with respect to any suchdemands.  Independent shall not, exceptwith the prior written consent of Greene County, voluntarily make any paymentwith respect to, or settle or offer to settle any such demand for payment orwaive any failure to timely deliver a written demand for appraisal or thetaking of any other action by such Dissenting Shareholder as may be necessaryto perfect appraisal rights under the TBCA. Any payments made in respect of Dissenting Shares shall be made by theSurviving Company.

 

(e)   If any Dissenting Shareholder shalleffectively withdraw or lose (through failure to perfect or otherwise) hisright to such payment at or prior to the Effective Time, such holder’s sharesof Independent Common Stock shall be converted into a right to receive cash orGreene County Common Stock in accordance with the applicable provisions of thisAgreement.  If such holder shalleffectively withdraw or lose (through failure to perfect or otherwise) hisright to such payment after the Effective Time, each share of IndependentCommon Stock of such holder shall be converted on a share-by-share basis intoeither the right to receive the Cash Election Price or Greene County CommonStock as Greene County shall determine in its sole discretion.

 

(f)    The Exchange Ratio set forth above shall besubject to appropriate adjustments in the event that, subsequent to the date ofthis Agreement but prior to the Effective Time, the outstanding Greene CountyCommon Stock shall have been increased, decreased, changed into or exchangedfor a different number or kind of shares or securities through reorganization,recapitalization, reclassification, stock dividend, stock split, reverse stock splitor other like changes in Greene County’s capitalization.

** **

**Section2.06****.  Election andAllocation Procedures**.

 

(a)   ***Election Procedures***.

 

(i)            An election form (“Election Form”),together with the other transmittal materials described in Section 3.02, shallbe mailed as soon as reasonably practicable after the

 

5

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Effective Time (provided that it need not be sentuntil the Requisite Regulatory Approvals (as defined in Section 8.01(c))have been obtained) to each holder of Independent Common Stock of record at theEffective Time.  Such date of mailingshall be referred to hereinafter as the “Mailing Date.”  Each Election Form shall permit a holder (orthe beneficial owner through appropriate and customary documentation andinstruction) of Independent Common Stock to elect to receive the Per Share CashConsideration with respect to all or any of such holder’s Independent CommonStock (shares as to which the election is made, “Cash Election Shares”).  The “Cash Election Amount” shall be equal tothe Per Share Cash Consideration multiplied by the total number of CashElection Shares.  All shares ofIndependent Common Stock other than the Cash Election Shares and the No ElectionShares (as defined below) shall be referred to herein as the “Stock ElectionShares.”

 

(ii)           Any share of Independent Common Stockwith respect to which the holder (or the beneficial owner, as the case may be)shall not have submitted to the Exchange Agent an effective, properly completedElection Form on or before a date after the Closing Date to be agreed upon bythe parties hereto (which date will be set forth on the Election Form), but inany event not earlier than 15 days after the Mailing Date (such deadline,the “Election Deadline”), shall be converted either into the Per Share StockConsideration or the Per Share Cash Consideration as set forth inSection 2.06(b) (such shares, the “No Election Shares”), with theexception that No Election Shares held by a holder of less than 100 shares ofIndependent Common Stock shall be deemed to be Cash Election Shares.

 

(iii)          Any such election shall have beenproperly made only if the Exchange Agent shall have actually received aproperly completed Election Form by the Election Deadline.  An Election Form shall be deemed properlycompleted only if accompanied by one or more certificates (or customaryaffidavits and indemnification regarding the loss or destruction of suchcertificates or the guaranteed delivery of such certificates) representing all IndependentCommon Stock covered by such Election Form, together with duly executedtransmittal materials included with the Election Form.  Any Election Form may be revoked or changedby the person submitting such Election Form (or the beneficial owner of theshares covered by such Election Form through appropriate and customarydocumentation and instruction) at or prior to the Election Deadline.  In the event an Election Form is revokedprior to the Election Deadline and no other valid election is made, the sharesof Independent Common Stock represented by such Election Form shall be NoElection Shares.  Subject to the termsof this Agreement and of the Election Form, the Exchange Agent shall havereasonable discretion to determine whether any election, revocation or changehas been properly or timely made and to disregard immaterial defects in theElection Forms, and any good faith decisions of the Exchange Agent regardingsuch matters shall be binding and conclusive. Neither Greene County nor the Exchange Agent shall be under anyobligation to notify any person of any defect in an Election Form.

 

(b)   ***Allocation Procedures***. As soon as reasonably practicable after the Effective Time, GreeneCounty shall cause the Exchange Agent to allocate the Total Cash MergerConsideration and Total Stock Merger Consideration among the holders ofIndependent Common Stock, which shall be effected by the Exchange Agent asfollows:

 

(i)            If the Total Cash MergerConsideration is greater than the Cash Election Amount, then:

 

(A)  each Cash Election Share shall be convertedinto the right to receive an amount of cash equal to the Per Share CashConsideration;

 

(B)   the Exchange Agent will select, on a pro ratabasis, first from among the holders of No Election Shares and then, if necessary,from among the holders of Stock Election Shares, a sufficient number of suchshares (“Cash Designee Shares”) such that the sum of Cash Designee Shares andCash Election Shares multiplied by the Per Share Cash Consideration equals asclosely as practicable the Total Cash Merger Consideration.

 

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Each Cash Designee Share shall be converted into theright to receive the Per Share Cash Consideration; and

 

(C)   each remaining unconverted share of IndependentCommon Stock (after application of subsections (A) and (B) above) shall beconverted into the right to receive the Per Share Stock Consideration.

 

(ii)           If the Total Cash MergerConsideration is less than the Cash Election Amount then:

 

(A)  each Stock Election Share and each No ElectionShare (other than any No Election Shares held by holders of less than100 shares of Independent Common Stock, which shares are automaticallydeemed Cash Election Shares) shall be converted into the right to receive the PerShare Stock Consideration;

 

(B)   the Exchange Agent will select, on a pro ratabasis from among the holders of Cash Election Shares (other than holders of NoElection Shares holding less than 100 shares of Independent Common Stock),a sufficient number of such shares (“Stock Designee Shares”) such that thenumber of such Stock Designee Shares multiplied by the Per Share CashConsideration equals as closely as practicable the difference between the CashElection Amount and the Total Cash Merger Consideration.  The Stock Designee Shares shall be convertedinto the right to receive the Per Share Stock Consideration; and

 

(C)   each remaining unconverted share ofIndependent Common Stock (after application of subsections (A) and (B)above) shall be converted into the right to receive an amount of cash equal tothe Per Share Cash Consideration.

 

(iii)          In the event that the Exchange Agentis required pursuant to this Section 2.06 to designate from among allStock Election Shares the Cash Designee Shares to receive the Per Share CashConsideration, each holder of Stock Election Shares shall be allocated a prorata portion of the total Cash Designee Shares.  Such pro ration shall reflect the proportion that the number ofStock Election Shares of each holder of Stock Election Shares bears to thetotal number of Stock Election Shares.

 

(iv)          In the event the Exchange Agent isrequired pursuant to this Section 2.06 to designate from among all holdersof Cash Election Shares the Stock Designee Shares to receive the Per ShareStock Consideration, each holder of Cash Election Shares (other than holders ofNo Election Shares holding less than 100 shares of Independent CommonStock) shall be allocated a pro rata portion of the total Stock DesigneeShares. Such pro ration shall reflect the proportion that the number of CashElection Shares of each holder of Cash Election Shares bears to the totalnumber of Cash Election Shares.

** **

**Section2.07****.  NoFractional Shares**. Notwithstanding any other provision of this Agreement, neither certificatesnor scrip for fractional shares of Greene County Common Stock shall be issuedin the Merger.  Each holder whootherwise would have been entitled to a fraction of a share of Greene CountyCommon Stock shall receive in lieu thereof cash (without interest) in an amountdetermined by multiplying the fractional share interest to which such holderwould otherwise be entitled (after taking into account all shares ofIndependent Common Stock owned by such holder at the Effective Time) by $25.20.  No such holder shall be entitled todividends, voting rights or any other rights in respect of any fractionalshare.

** **

**Section2.08****.  GreeneCounty Common Stock**.  At andafter the Effective Time, each share of Greene County Common Stock issued andoutstanding immediately prior to the Effective Time shall remain an issued andoutstanding share of common stock of Greene County and shall not be affected bythe Merger.

 

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**Section2.09****.  Treatment ofStock Options; Deferred Compensation Plan**.

 

(a)   At the Effective Time, each incentive stockoption granted or heretofore assumed by Independent to purchase shares ofIndependent Common Stock (each an “Independent Incentive Stock Option”)pursuant to the Independent Bankshares Corporation, First Independent Bank, andRutherford Bank and Trust Incentive Stock Option and Directors’ Non-QualifiedStock Option Plan of 1998 (the “Independent Stock Option Plan”) which isoutstanding and unexercised (whether or not exercisable) immediately priorthereto shall cease to represent a right to acquire shares of IndependentCommon Stock and shall be converted automatically into an option to purchaseshares of Greene County Common Stock (“Greene County Options”) in an amount andat an exercise price determined as provided below (and shall be subject to theIncentive Stock Option Plan of Greene County Bancshares, Inc. and Subsidiariesof 1995 (the “Greene County Stock Option Plan”)):

 

(i)            the number of shares of GreeneCounty Common Stock to be subject to the converted option shall be equal to theproduct of (A) the number of shares of Independent Common Stock subject tothe Independent Incentive Stock Options and (B) the Exchange Ratio (the“Option Conversion Ratio”), *provided that* any fractional shares ofGreene County Common Stock resulting from such multiplication shall be roundedup to the nearest whole share; and

 

(ii)           subject to this Section 2.09(a),the exercise price per share of Greene County Common Stock under the convertedoption shall be equal to the exercise price per share of Independent CommonStock under the Independent Incentive Stock Option divided by the OptionConversion Ratio, *provided that* such exercise price shall be rounded down tothe nearest cent.

 

The Independent IncentiveStock Options converted pursuant to this Section 2.09(a) are “incentivestock options” (as defined in Section 422 of the Code), and the exerciseprice, the number of shares purchasable pursuant to such options and the termsand conditions of exercise of such options shall also be determined in order tocomply with Section 424(a) of the Code and to avoid a “modification” ofany such option under Code Section 424(h).  Except as otherwise provided in this Section 2.09, theduration and other terms of each converted option shall be the same as theapplicable Independent Incentive Stock Option, except that all references toIndependent shall be deemed to be references to Greene County.

 

(b)   If any Independent Incentive Stock Optionsshall have been exercised on or after the date of this Agreement and prior tothe Effective Time:

 

(i)            Independent shall deposit the totalamount of cash consideration received by it in connection with the exercise ofany such Independent Incentive Stock Options into one separate, segregatedaccount (the “Independent Incentive Stock Option Account”) in First IndependentBank (as defined below); provided that, Independent shall not remove such fundsfrom the Independent Incentive Stock Option Account without the prior writtenconsent of Greene County; and

 

(ii)           Greene County shall increase theTotal Cash Merger Consideration in Section 2.05(c) by the “in the money” amountof any such exercised Independent Incentive Stock Options; provided that, the“in the money” amount of an Independent Incentive Stock Option shall be theexcess of the Per Share Cash Consideration over the exercise price of suchoption.

 

(c)   At the Effective Time, each non-qualifiedstock option not covered by Section 2.09(a) above granted or heretoforeassumed by Independent (each an “Independent Non-Qualified Stock Option”) topurchase shares of Independent Common Stock pursuant to the Independent StockOption Plan which is outstanding and unexercised (whether or not exercisable)immediately prior thereto shall be exchanged for an amount of cashconsideration equal to the “in the money” amount of such IndependentNon-Qualified Stock Option; provided that, the “in the money” amount of anIndependent Non-Qualified Stock Option shall be the excess of the Per ShareCash Consideration over the exercise price of such option.

 

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(d)   If any Independent Non-Qualified StockOptions shall have been exercised on or after the date of this Agreement andprior to the Effective Time:

 

(i)            Independent shall deposit the totalamount of cash consideration received by it in connection with the exercise ofany such Independent Non-Qualified Stock Options into one separate, segregatedaccount (the “Independent Non-Qualified Stock Option Account”) in FirstIndependent Bank (as defined below); provided that, Independent shall notremove such funds from the Independent Non-Qualified Stock Option Accountwithout the prior written consent of Greene County; and

 

(ii)           Greene County shall increase theTotal Cash Merger Consideration in Section 2.05(c) by the “in the money” amountof any such exercised Independent Non-Qualified Stock Options; provided that,the “in the money” amount of an Independent Non-Qualified Stock Option shall bethe excess of the Per Share Cash Consideration over the exercise price of suchoption.

 

(e)   Except as provided herein or as otherwiseagreed to by the parties, the Independent Stock Option Plan and any other plan,program or arrangement providing for the issuance or grant of any otherinterest in respect of the capital stock of Independent or any Subsidiarythereof shall terminate as of the Effective Time, and Independent shall ensurethat following the Effective Time no holder of an Independent Incentive StockOption or Independent Non-Qualified Stock Option shall have any right toacquire equity securities of Independent or the Surviving Company (except tothe extent required under any qualified plan maintained by Independent or anyof its Subsidiaries).

 

(f)    Prior to the Effective Time, Independentshall have terminated its Director’s Deferred Compensation Plan and satisfiedany liability to participants thereof (“Deferred Compensation Plan Liability”);*providedthat* if the Deferred Compensation Plan Liability shall exceed$300,000, the aggregate amount of the Total Cash Merger Consideration inSection 2.05 shall be reduced by the amount of such excess (net of any taxdeduction to which Independent and its Subsidiaries are entitled with respectto the payment of such excess) (the “Excess Deferred Compensation PlanLiability”).  If the aggregate amount ofthe Total Cash Merger Consideration is decreased pursuant to this Section2.09(f), then the Exchange Ratio and Per Share Cash Consideration in Section2.05(b) shall be recalculated as follows:

 

(i)            the Exchange Ratio shall equal (A)the Modified Cash Amount of Merger Consideration divided by (B) the product ofthe Starting Share Price and the Independent Common Stock Outstanding (the“Modified Exchange Ratio”); and

 

(ii)           the Per Share Cash Considerationshall equal the Modified Cash Amount of Merger Consideration divided by theIndependent Common Stock Outstanding (the “Modified Per Share CashConsideration”);

* *

*provided that* if theModified Exchange Ratio and Modified Per Share Cash Consideration arecalculated pursuant to this Section 2.09(f), then Modified Exchange Ratio andModified Per Share Cash Consideration shall be used throughout this Agreementin lieu of the Exchange Ratio and Per Share Cash Consideration in Section 2.05(b).

 

For the purposes of thisSection 2.09(f), the following terms shall have the meanings indicated:

 

“Independent CommonStock Outstanding” shall mean 669,031.

 

“Cash Amount of MergerConsideration” shall mean the sum of (A) the product of the Total Stock MergerConsideration and the Starting Share Price and (B) the Total Cash MergerConsideration.

 

“Modified Cash Amount ofMerger Consideration” shall mean the difference between the Cash Amount ofMerger Consideration and Excess Deferred Compensation Plan Liability.

 

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**Section2.10****.  Charter**.  At the Effective Time, the Amended andRestated Charter of Greene County, as amended, as in effect immediately priorto the Effective Time, shall be the Charter of the Surviving Company, untilthereafter amended in accordance with applicable law.

** **

**Section2.11****.  Bylaws**.  At the Effective Time, the Amended andRestated Bylaws of Greene County, as in effect immediately prior to theEffective Time, shall be the Bylaws of the Surviving Company until thereafteramended in accordance with applicable law.

** **

**Section2.12****.  Board ofDirectors**.  Subject toSection 7.13, the directors of Greene County immediately prior to theEffective Time shall continue to be the directors of the Surviving Company,each to hold office in accordance with the Charter and Bylaws of the SurvivingCompany, until their respective successors are duly elected or appointed (asthe case may be) and qualified.

** **

**Section2.13****.  TaxConsequences**.  It is intendedthat the Merger shall constitute a reorganization within the meaning ofSection 368(a) of the Code and that this Agreement shall constitute a“plan of reorganization” as that term is used in Sections 354 and 361 ofthe Code.

** **

**Section2.14****.  Reservationof Right To Revise Structure**. Greene County may at any time change the method of effecting thebusiness combination contemplated by this Agreement if and to the extent thatit deems such a change to be desirable, including, without limitation, to providefor a merger of Independent with a wholly owned subsidiary of Greene County;provided, however, that no such change shall (a) alter or change theamount or kind of the Merger Consideration or the method of electing suchMerger Consideration, (b) adversely affect the anticipated taxconsequences of the Merger to the holders of Independent Common Stock as aresult of receiving the Merger Consideration or (c) materially impede ordelay consummation of the Merger.  Inthe event Greene County elects to make such a change, the parties agree toexecute appropriate documents to reflect the change.

** **

**ARTICLE III**

** **

**EXCHANGE OF CERTIFICATES FORMERGER CONSIDERATION**

** **

**Section3.01.****  Greene CountyTo Make Merger Consideration Available**.  At or promptly after the Election Deadline (but in no event priorto the Effective Time), Greene County shall deposit, or shall cause to bedeposited, with the Exchange Agent, for the benefit of the holders ofCertificates (as defined below), for exchange in accordance with this Article III,certificates representing the shares of Greene County Common Stock and anestimated amount of cash sufficient to pay the Total Cash Merger Considerationpayable hereunder and thereunder and any cash that may be payable in lieu ofany fractional shares (such cash and certificates for shares of Greene CountyCommon Stock, together with any dividends or distributions with respectthereto, being hereinafter referred to as the “Exchange Fund”).

** **

**Section3.02.****  Exchange ofShares**.

 

(a)   As soon as practicable after the EffectiveTime, the Exchange Agent shall mail to each holder of record of a certificateformerly representing shares of Independent Common Stock (a “Certificate”) aform of letter of transmittal (which shall specify that delivery shall be effected,and risk of loss and title to the Certificates shall pass, only upon deliveryof the Certificates to the Exchange Agent) and instructions for use ineffecting the surrender of the Certificates in exchange for certificatesrepresenting, as the case may be, the shares of Greene County Common Stock,cash in respect of the Per Share Cash Consideration and cash in lieu offractional shares of Greene County Common Stock, if any, into which the sharesof Independent Common Stock represented by such Certificate or Certificatesshall have been converted pursuant to this Agreement.  Upon proper surrender of a Certificate for exchange andcancellation to the Exchange Agent, together with a properly completed letterof transmittal, duly executed, the holder of such Certificate shall be entitledto receive in exchange therefor, as applicable, (i) a certificaterepresenting that number of shares of Greene County Common Stock (if any) towhich such former holder of Independent Common Stock shall

 

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have become entitled pursuant to the provisions ofArticle II hereof, (ii) a check representing that amount of cash (ifany) to which such former holder of Independent Common Stock shall have becomeentitled in respect of the Per Share Cash Consideration pursuant to theprovisions of Article II hereof and (iii) a check representing theamount of cash (if any) payable in lieu of fractional shares of Greene CountyCommon Stock, which such former holder has the right to receive in respect ofthe Certificate surrendered pursuant to the provisions of thisArticle III, and the Certificate so surrendered shall forthwith becancelled.  No interest will be paid oraccrued on the cash payable in lieu of fractional shares.

 

(b)   No dividends or other distributions with arecord date after the Effective Time with respect to Greene County Common Stockshall be paid to the holder of any unsurrendered Certificate until the holderthereof shall surrender such Certificate in accordance with this Article III.  After the surrender of a Certificate inaccordance with this Article III, the record holder thereof shall beentitled to receive any such dividends or other distributions, without anyinterest thereon, which theretofore had become payable with respect to sharesof Greene County Common Stock represented by such Certificate.

 

(c)   If any certificate representing shares ofGreene County Common Stock is to be issued in the name of other than theregistered holder of the Certificate surrendered in exchange therefor, it shallbe a condition of the issuance thereof that the Certificate so surrenderedshall be properly endorsed (or accompanied by an appropriate instrument oftransfer) and otherwise in proper form for transfer and that the person requestingsuch exchange shall pay to the Exchange Agent in advance any transfer or othertaxes required by reason of the issuance of a certificate representing sharesof Greene County Common Stock in the name of and payment of cash to any personother than the registered holder of the Certificate surrendered, or requiredfor any other reason relating to such holder or requesting person, or shallestablish to the reasonable satisfaction of the Exchange Agent that such taxhas been paid or is not payable.

 

(d)   At or after the Effective Time, there shallbe no transfers on the stock transfer books of Independent of the shares ofIndependent Common Stock which were issued and outstanding immediately prior tothe Effective Time.  If, after theEffective Time, Certificates representing such shares are presented fortransfer to the Exchange Agent, they shall be cancelled and exchanged forcertificates representing shares of Greene County Common Stock or payment ofcash as provided in this Article III.

 

(e)   Any portion of the Exchange Fund that remainsunclaimed by the shareholders of Independent for six months after the EffectiveTime shall be paid, at the request of Greene County, to Greene County.  Any shareholders of Independent who have nottheretofore complied with this Article III shall thereafter look only toGreene County for payment of the shares of Greene County Common Stock, cash,cash in lieu of any fractional shares and unpaid dividends and distributions onthe Greene County Common Stock deliverable in respect of each share ofIndependent Common Stock held by such shareholders at the Effective Time asdetermined pursuant to this Agreement, in each case, without any interestthereon.  Notwithstanding anything tothe contrary contained herein, none of Greene County, Independent, the ExchangeAgent or any other person shall be liable to any former holder of shares ofIndependent Common Stock, for any amount properly delivered to a publicofficial pursuant to applicable abandoned property, escheat or similar laws.

 

(f)    In the event any Certificate shall have beenlost, stolen or destroyed, upon the making of an affidavit of that fact by theperson claiming such Certificate to be lost, stolen or destroyed and, ifrequired by Greene County, the posting by such person of a bond in such amountas Greene County may determine is reasonably necessary as indemnity against anyclaim that may be made against it with respect to such Certificate, theExchange Agent will issue in exchange for such lost, stolen or destroyedCertificate the shares of Greene County Common Stock, cash and cash in lieu offractional shares deliverable in respect thereof pursuant to this Agreement.

 

(g)   Greene County or the Exchange Agent will beentitled to deduct and withhold from the consideration otherwise payablepursuant to this Agreement or the transactions contemplated hereby to anyholder of Independent Common Stock such amounts as Greene County (or anyaffiliate thereof) or the Exchange Agent are required to deduct and withholdwith respect to the making of such payment under the Code, or any applicableprovision of U.S. federal, state, local or non-U.S. tax law.  To the extent that such amounts are properlywithheld by Greene County or the Exchange Agent, such withheld amounts will betreated for all purposes of this Agreement as having been paid to the holder ofthe Independent Common 

 

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Stock in respect of whom such deduction andwithholding were made by Greene County or the Exchange Agent.

** **

**ARTICLE IV**

 

**REPRESENTATIONS AND WARRANTIES OFINDEPENDENT**

 

Independent herebyrepresents and warrants to Greene County as follows:

** **

**Section4.01****.  CorporateOrganization**.

 

(a)   Independent is a corporation duly organized,validly existing and in good standing under the laws of the State ofTennessee.  Independent has thecorporate power and authority to own or lease all of its properties and assetsand to carry on its business as it is now being conducted, and is duly licensedor qualified to do business in each jurisdiction in which the nature of thebusiness conducted by it or the character or location of the properties andassets owned or leased by it makes such licensing or qualification necessary,except where the failure to be so licensed or qualified would not have nor beexpected to have a Material Adverse Effect (as defined below) onIndependent.  As used in this Agreement,the term “Material Adverse Effect” means, with respect to Independent, GreeneCounty or the Surviving Company, as the case may be, a material adverse effecton the business, results of operations or financial condition of such party andits Subsidiaries taken as a whole or a material adverse effect on such party’sability to consummate the transactions contemplated hereby on a timely basis;provided, however, that in determining whether a Material Adverse Effect hasoccurred, there shall be excluded any effect on the referenced party the causeof which is (i) any change in banking and similar laws, rules orregulations of general applicability or interpretations thereof by courts orgovernmental authorities, (ii) any change in generally accepted accountingprinciples (“GAAP”) or regulatory accounting requirements applicable to banksor their holding companies generally, (iii) the announcement of thisAgreement or any action of either party or any Subsidiary thereof required tobe taken by it under this Agreement and (iv) any changes in generaleconomic conditions affecting banks or their holding companies generally, *providedthat* the effect of such changes described in this clause (iv)(including, without limitation, changes in interest rates) shall not beexcluded to the extent of any materially disproportionate impact (if any) theyhave on such party.  For purposes ofthis Agreement, “Subsidiary” means, with respect to any person, anycorporation, partnership, joint venture, limited liability company or any otherentity that is consolidated with such person for financial reportingpurposes.  Independent is dulyregistered as a bank holding company under the Bank Holding Company Act (asdefined below).  The copies of theCharter and Bylaws of Independent which have previously been made available toGreene County are true, complete and correct copies of such documents as ineffect as of the date of this Agreement. For purposes of this Agreement, “Bank Holding Company Act” shall meanthe Bank Holding Company Act of 1956, as amended, and rules and regulationspromulgated thereunder.

 

(b)   Each Subsidiary of Independent (i) isduly organized and validly existing as a state chartered bank, corporation orpartnership under the laws of its jurisdiction of organization, (ii) isduly licensed or qualified to do business and is in good standing in alljurisdictions (whether federal, state, local or foreign) where its ownership orleasing of property or the conduct of its business requires it to be solicensed or qualified and in which the failure to be so qualified would have orwould be expected to have, either individually or in the aggregate, a MaterialAdverse Effect on Independent and (iii) has all requisite corporate powerand authority to own or lease its properties and assets and to carry on itsbusiness as now conducted.

 

(c)   Except for its ownership of First IndependentBank, a Tennessee state chartered bank (“First Independent Bank”), andRutherford Bank and Trust, a Tennessee state chartered bank (“Rutherford Bankand Trust”), Independent does not beneficially own, either directly or throughits Subsidiaries, any stock or equity interests in any depository institution(as defined in 12 U.S.C. Section 1813(c)(1)).  The deposits of First Independent Bank andRutherford Bank and Trust are insured by the Federal Deposit InsuranceCorporation (the “FDIC”) to the fullest extent permitted by law, and no action,suit or proceeding is

 

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pending, or to the best knowledge of Independent, hasbeen threatened by the FDIC against Independent, First Independent Bank orRutherford Bank and Trust with respect to the termination of suchinsurance.  All premiums and assessmentsrequired to be paid in connection with such insurance has been paid by FirstIndependent Bank and Rutherford Bank and Trust when due.

 

(d)   The minute books of Independent and each ofits Subsidiaries contain records that are accurate in all respects of allmeetings and other corporate actions of their respective shareholders andBoards of Directors (including committees of the Board of Directors) and thesignatures contained therein are the true signatures of the persons whosesignatures they purport to be.

** **

**Section4.02****. Capitalization**.

 

(a)   The authorized capital stock of Independentconsists of 5,000,000 shares of Independent Common Stock, par value $4.00per share.  As of the close of businesson May 31, 2003, there were 669,031 shares of Independent Common Stockoutstanding, and no other shares of Independent Common Stock were issued oroutstanding.  As of the close ofbusiness on May 31, 2003, no shares of Independent Common Stock were reservedfor any purpose, except for 11,365 shares of Independent Common Stockreserved for issuance upon the exercise of incentive stock options, and2,368 shares of Independent Common Stock reserved for issuance upon theexercise of non-incentive stock options, in each case pursuant to theIndependent Stock Option Plan.  All ofthe issued and outstanding shares of Independent Common Stock have been dulyauthorized and validly issued and are fully paid, nonassessable and free ofpreemptive rights, with no personal liability attaching to the ownershipthereof.  As of the date of thisAgreement, except (i) as set forth in Disclosure Schedule 4.02(a) and(ii) as set forth elsewhere in this Section 4.02(a), Independent doesnot have and is not bound by any outstanding subscriptions, options, warrants,calls, commitments or agreements of any character calling for the purchase orissuance of any shares of Independent Common Stock or any other equitysecurities of Independent or any securities representing the right to purchaseor otherwise receive any shares of Independent capital stock (including,without limitation, any rights plan or agreement).  Except as set forth in Disclosure Schedule 4.02(a), sinceApril 30, 2003, Independent has not issued any shares of its capital stockor any securities convertible into or exercisable for any shares of its capitalstock, other than upon the exercise of employee stock options or pursuant toany restricted stock awards granted prior to such date and disclosed in thisSection 4.02(a).

 

(b)   Disclosure Schedule 4.02(b) lists thename, jurisdiction of incorporation, authorized and outstanding shares ofcapital stock and record and beneficial owners of such capital stock (withrespect to owners other than Independent or any Independent Subsidiary) foreach entity in which Independent beneficially owns or controls, directly orindirectly, any equity interest (regardless of whether such entity is aSubsidiary) (a “Controlled Entity”) that is a Significant Subsidiary (as suchterm is defined in Rule 1-02 of Regulation S-X) of Independent.  Each Controlled Entity in which Independentor any Independent Subsidiary beneficially owns or controls, directly orindirectly, more than a 9.9% equity interest is a legal investment for a bankholding company and, with respect to those owned by First Independent Bank andRutherford Bank and Trust, for a state chartered bank.  Except as set forth in DisclosureSchedule 4.02(b), Independent owns, directly or indirectly, all of theissued and outstanding shares of capital stock of or all other equity interestsin each of Independent’s Subsidiaries, free and clear of any liens, charges,encumbrances, adverse rights or claims and security interests whatsoever(“Liens”), and all of such shares are duly authorized and validly issued andare fully paid, nonassessable and free of preemptive rights, with no personalliability attaching to the ownership thereof. Neither Independent nor any Subsidiary thereof has or is bound by anyoutstanding subscriptions, options, warrants, calls, commitments or agreementsof any character calling for the purchase, sale or issuance of any shares ofcapital stock or any other equity security of any Subsidiary of Independent orany securities representing the right to purchase or otherwise receive anyshares of capital stock or any other equity security of any such Subsidiary.

 

(c)   No bonds, debentures, notes or otherindebtedness having the right to vote on any matters on which shareholders mayvote are outstanding.

 

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**Section4.03****.  Authority;No Violation**.

 

(a)   Independent has full corporate power andauthority to execute and deliver this Agreement and to consummate thetransactions contemplated hereby.  TheBoard of Directors of Independent at a meeting held on June 14, 2003 duly(i) determined that this Agreement, the Voting Agreement and the Mergerare fair to and in the best interests of Independent and its shareholders anddeclared this Agreement, the Voting Agreement and the Merger to be advisable,(ii) approved the Merger, the execution and delivery of this Agreement andthe Voting Agreement and the consummation of the transaction contemplatedhereby and (iii) recommended that shareholders of Independent adopt thisAgreement and directed that such matter be submitted for consideration byIndependent’s shareholders at the Independent Shareholders Meeting (as definedbelow).  Except for the adoption of thisAgreement by the affirmative vote of the holders of a majority of theoutstanding shares of Independent Common Stock, no other corporate proceedingson the part of Independent are necessary to approve this Agreement or toconsummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and deliveredby Independent and constitutes a valid and binding obligation of Independent,enforceable against Independent in accordance with its terms, except asenforcement may be limited by general principles of equity whether applied in acourt of law or a court of equity and by bankruptcy, insolvency and similarlaws affecting creditors’ rights and remedies generally.

 

(b)   Neither the execution and delivery of thisAgreement by Independent nor the consummation by Independent of thetransactions contemplated hereby nor compliance by Independent with any of theterms or provisions hereof will (i) violate any provision of the Charteror Bylaws of Independent or any of the similar governing documents of any ofits Subsidiaries or (ii) assuming that the consents and approvals referredto in Section 4.04 are duly obtained, (A) violate any statute, code,ordinance, rule, regulation, judgment, order, writ, decree or injunctionapplicable to Independent or any of its Subsidiaries or any of their respectiveproperties or assets, or (B) violate, conflict with, result in a breach ofany provision of or the loss of any benefit under, or require redemption orrepurchase or otherwise require the purchase or sale of any securities,constitute a default (or an event which, with notice or lapse of time, or both,would constitute a default) under, result in the termination of or a right oftermination or cancellation under, accelerate the performance required by, orresult in the creation of any Lien upon any of the respective properties orassets of Independent or any of its Subsidiaries under, any of the terms,conditions or provisions of any note, bond, mortgage, indenture, deed of trust,license, lease, agreement or other instrument or obligation to whichIndependent or any of its Subsidiaries is a party, or by which they or any oftheir respective properties or assets may be bound or affected, except for suchviolations, conflicts, breaches, defaults or other events which eitherindividually or in the aggregate will not have and would not reasonably beexpected to have a Material Adverse Effect on Independent.

** **

**Section4.04****.  Consents andApprovals**.  Except for(i) approval of the Merger by the Board of Governors of the FederalReserve System (“the Federal Reserve Board”), FDIC and Tennessee Department ofFinancial Institutions, (ii) approval of the listing of Greene CountyCommon Stock to be issued in the Merger on The Nasdaq National Market System(“Nasdaq”), (iii) the filing with the Securities and Exchange Commission (the“SEC”) of a proxy statement in definitive form relating to the meeting ofIndependent’s shareholders to be held to vote on approval of this Agreement andthe Merger (the “Proxy Statement/Prospectus”) and any filings or approvalsunder applicable state securities laws, (iv) the filing of the Articles ofMerger with the Tennessee Secretary, (v) the adoption of this Agreement bythe requisite vote of Independent’s shareholders, (vi) the consents andapprovals set forth in Disclosure Schedule 4.04, and (vii) theconsents and approvals of third parties which are not Governmental Entities (ashereinafter defined), the failure of which to be obtained will not have andwould not be reasonably expected to have, individually or in the aggregate, aMaterial Adverse Effect on Independent or Greene County, no consents orapprovals, of or filings and registrations with, any court, administrativeagency or commission or other governmental authority or instrumentality orself-regulatory organization (each a “Governmental Entity”) or with any thirdparty are required to be obtained by Independent or its Subsidiaries inconnection with (A) the execution and delivery by Independent of thisAgreement and (B) the consummation by Independent of the Merger and theother transactions contemplated hereby.

** **

**Section4.05****.  Reports**.  Independent and each of its Subsidiarieshave timely filed all material reports, registrations and statements, togetherwith any amendments required to be made with respect thereto, that they were

 

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required to filesince December 31, 2000 with any Governmental Entity, including, withoutlimitation, the Federal Reserve Board, FDIC and Tennessee Department ofFinancial Institutions, and have paid all fees and assessments due and payablein connection therewith.  Except fornormal examinations conducted by a Governmental Entity in the regular course ofbusiness of Independent and its Subsidiaries or as set forth in DisclosureSchedule 4.05, no Governmental Entity has initiated any proceeding or, tothe best knowledge of Independent, threatened an investigation into thebusiness or operations of Independent or any of its Subsidiaries sinceDecember 31, 2000.  Except as setforth in Disclosure Schedule 4.05, there is no unresolved violation,criticism or exception by any Governmental Entity with respect to any report orstatement relating to any examinations of Independent or any of itsSubsidiaries, except for such violations, criticisms or exceptions that will nothave and would not be expected to have, individually or in the aggregate, aMaterial Adverse Effect on Independent.

** **

**Section4.06.****  FinancialStatements**.  Independent haspreviously made available to Greene County copies of (a) the consolidatedstatements of financial condition of Independent and its Subsidiaries as ofDecember 31, 2001 and 2002 and the related consolidated statements ofoperations, shareholders’ equity and cash flows for the years endedDecember 31, 2000 through 2002, inclusive, accompanied by the audit reportof Crowe Chizek & Company LLC, independent auditors with respect toIndependent, and (b) the unaudited consolidated statements of financialcondition of Independent and its Subsidiaries as of March 31, 2002 and March 31,2003, and the related unaudited consolidated statements of operations,shareholders’ equity and cash flows for the three-month periods thenended.  Each of the financial statementsreferred to in this Section 4.06 (including the related notes, whereapplicable) fairly present, and the financial statements referred to inSection 7.10(b) hereof (including the related notes, where applicable)will fairly present when filed with the SEC in connection with this transaction(subject, in the case of the unaudited statements, to normal recurringadjustments, none of which are expected to be material in nature or amount),the results of the consolidated operations and changes in shareholders’ equityand consolidated financial position of Independent and its Subsidiaries for therespective fiscal periods or as of the respective dates therein set forth.  Each of such financial statements (includingthe related notes, where applicable) complies, and the financial statementsreferred to in Section 7.10(b) hereof (including the related notes, whereapplicable) will comply when filed with the SEC, in all material respects withapplicable accounting requirements and each of such financial statements(including the related notes, where applicable) has been, and the financialstatements referred to in Section 7.10(b) (including the related notes,where applicable) will be when filed with the SEC, prepared in accordance withGAAP consistently applied during the periods involved, except in each case asindicated in such statements or in the notes thereto.  The books and records of Independent and its Subsidiaries havebeen, and are being, maintained in accordance with GAAP and any otherapplicable legal and accounting requirements and reflect only actualtransactions.

** **

**Section4.07****.  Broker’sFees**.  Except as set forth inDisclosure Schedule 4.07, neither Independent nor any Subsidiary thereof norany of their respective officers or directors has employed any broker or finderor incurred any liability for any broker’s fees, commissions or finder’s feesin connection with any of the transactions contemplated by this Agreement.  Disclosure Schedule 4.07 sets forth thehourly rates and total estimated fees to be charged in this transaction by eachof Crowe Chizek & Company, LLC and Gerrish & McCreary P.C.

** **

**Section4.08****.  Absence ofCertain Changes or Events**.

 

(a)   Except as set forth in DisclosureSchedule 4.08, since December 31, 2002, no event has occurred whichhas had or would be expected to have, individually or in the aggregate, aMaterial Adverse Effect on Independent.

 

(b)   Except as set forth in DisclosureSchedule 4.08(b) or as contemplated by this Agreement or permitted underSection 6.02, since December 31, 2002, Independent and itsSubsidiaries have carried on their respective businesses in the ordinary courseof business, and neither Independent nor any of its Subsidiaries has(i) except for normal increases in the ordinary course of businessconsistent with past practice and except as required by applicable law,increased the wages, salaries, compensation, pension or other fringe benefitsor perquisites payable to any officer or director, other than persons newlyhired for or promoted to such position, from the amount thereof in effect as ofDecember 31, 2002 or granted any severance or termination pay, enteredinto any contract to make or grant any severance or termination pay, or paidany bonus, in each case to any such officer or director, other than pursuant topreexisting

 

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agreements, arrangements or bonus plans, or(ii) suffered any strike, work stoppage, slow-down or other labordisturbance.

** **

**Section4.09****.  LegalProceedings**.

 

(a)   Neither Independent nor any of itsSubsidiaries is a party to any, and there are no pending or, to the best ofIndependent’s knowledge, threatened legal, administrative, arbitral or otherproceedings, claims, actions or governmental or regulatory investigations ofany nature against Independent or any of its Subsidiaries or challenging thevalidity or propriety of the transactions contemplated by this Agreement whichcan be expected to have an adverse determination and which, if adverselydetermined, would, individually or in the aggregate, have or be expected tohave a Material Adverse Effect on Independent.

 

(b)   There is no injunction, order, judgment,decree or regulatory restriction specifically imposed upon Independent, any ofits Subsidiaries or the assets of Independent or any of its Subsidiaries whichhas had, or would be expected to have, a Material Adverse Effect on Independentor the Surviving Company.

** **

**Section4.10****.  Taxes**.

 

(a)   Each of Independent and its Subsidiaries has(i) duly and timely filed (including pursuant to applicable extensionsgranted without penalty) all Tax Returns (as hereinafter defined) required tobe filed by it, and such Tax Returns are true, correct and complete, and(ii) paid in full all Taxes due or made adequate provision in thefinancial statements of Independent (in accordance with GAAP) for any suchTaxes (as hereinafter defined), whether or not shown as due on such TaxReturns; (A) no deficiencies for any Taxes have been proposed, asserted orassessed in writing against or with respect to any Taxes due by or Tax Returnsof Independent or any of its Subsidiaries; and (B) there are no Liens forTaxes upon the assets of either Independent or its Subsidiaries except forstatutory liens for current Taxes not yet due or Liens for Taxes that are beingcontested in good faith by appropriate proceedings and for which reserves adequatein accordance with GAAP have been provided.

 

(b)   Except as set forth in DisclosureSchedule 4.10(b), neither Independent nor any of its Subsidiaries(i) is or has ever been a member of an affiliated group (other than agroup the common parent of which is Independent) filing a consolidated taxreturn or (ii) has any liability for Taxes of any person arising from theapplication of Treasury Regulation Section 1.1502-6 or any analogousprovision of state, local or foreign law, or as a transferee or successor, bycontract, or otherwise.

 

(c)   Except as set forth in DisclosureSchedule 4.10(c), neither Independent nor any of its Subsidiaries is aparty to, is bound by or has any obligation under any Tax sharing or Taxindemnity agreement or similar contract or arrangement for which liability ismaterial.  No closing agreement pursuantto Section 7121 of the Code (or any similar provision of state, local orforeign law) has been entered into by or with respect to Independent or any ofits Subsidiaries for which liability is material.

 

(d)   Neither Independent nor any of itsSubsidiaries has been a party to any distribution occurring during the last twoyears in which the parties to such distribution treated the distribution as oneto which Section 355 of the Code is applicable.

 

(e)   All Taxes required to be withheld, collectedor deposited by or with respect to Independent and each Subsidiary have beentimely withheld, collected or deposited, as the case may be, and to the extentrequired, have been paid to the relevant taxing authority.

 

(f)    Neither Independent nor any of itsSubsidiaries has requested, or been granted any waiver of any federal, state,local or foreign statute of limitations with respect to, or any extension of aperiod for the assessment of, any Tax.

 

(g)   Except as set forth in DisclosureSchedule 4.10(g), neither Independent nor any of its Subsidiaries is aparty to any agreement, contract, arrangement or plan that has resulted orwould result,

 

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individually or in the aggregate, in connection withthis Agreement in the payment of any “excess parachute payments” within themeaning of Section 280G of the Code, and neither Independent nor any ofits Subsidiaries has made any payments and is not a party to any agreement, anddoes not maintain any plan, program or arrangement, that could require it tomake any payments (including any deemed payment of compensation upon theexercise of an Independent Incentive Stock Option or Independent Non-QualifiedStock Option or upon the issuance of any Independent Common Stock), that wouldnot be fully deductible by reason of Section 162(m) of the Code.

 

(h)   Neither Independent nor any of itsSubsidiaries has filed a consent to the application of Section 341(f) ofthe Code.

 

(i)    Independent is not aware of any fact orcircumstance that could prevent the Merger from qualifying as a reorganizationwithin the meaning of Section 368(a) of the Code.

 

(j)    For purposes of this Agreement, “Taxes”shall mean all taxes, charges, levies, penalties or other assessments imposedby any United States federal, state, local or foreign taxing authority,including, but not limited to, income, excise, property, sales, transfer,franchise, payroll, withholding, social security or other similar taxes,including any interest or penalties attributable thereto.

 

(k)   For purposes of this Agreement, “Tax Return”shall mean any return, report, information return or other document (includingany related or supporting information) required to be filed with any taxingauthority with respect to Taxes, including, without limitation, all informationreturns relating to Taxes of third parties, any claims for refunds of Taxes andany amendments or supplements to any of the foregoing.

** **

**Section4.11****.  Employees;Employee Benefit Plans**.

 

(a)   Disclosure Schedule 4.11(a) sets forth atrue and complete list or description of each employee benefit plan,arrangement or agreement and any amendments or modifications thereof(including, without limitation, all stock purchase, stock option, severance,employment, change-in-control, health/welfare plans, fringe benefit, bonus,incentive, deferred compensation, pension and other agreements, programs,policies and arrangements, whether or not subject to the Employee RetirementIncome Security Act of 1974, as amended (“ERISA”)) that is maintained orcontributed to as of the date of this Agreement (the “Plans”) by Independent orany of its Subsidiaries or by any trade or business related thereto, whether ornot incorporated (an “ERISA Affiliate”), all of which together with Independentwould be deemed a “single employer” within the meaning of Section 4001 ofERISA.  Neither Independent nor any ofits Subsidiaries have any stock appreciation rights outstanding.

 

(b)   Except as set forth in DisclosureSchedule 4.11(b), Independent has previously provided or made available toGreene County true and complete copies of each of the Plans and all relateddocuments, including, but not limited to, (i) the actuarial reports foreach Plan (if applicable) for each of the last two years, and (ii) themost recent determination letter from the Internal Revenue Service (ifapplicable) for each Plan.

 

(c)   Except as set forth in DisclosureSchedule 4.11(c), (i) each of the Plans has been operated andadministered in accordance with applicable laws, including, but not limited to,ERISA and the Code, (ii) each of the Plans intended to be “qualified”within the meaning of Section 401(a) of the Code has been determined to beso qualified by the Internal Revenue Service or will be submitted for suchdetermination within the applicable remedial amendment period, and nothing hasoccurred that would be expected to result in any such Plan ceasing to bequalified, (iii) with respect to each Plan that is subject toTitle IV of ERISA, the present value of accrued benefits under such Plan,based upon the actuarial assumptions used for funding purposes in the mostrecent actuarial report prepared by such Plan’s actuary with respect to suchPlan, did not, as of its latest valuation date, exceed the then current valueof the assets of such Plan allocable to such accrued benefits, (iv) noPlan provides benefits, including, without limitation, death or medicalbenefits (whether or not insured), with respect to current or former employeesof Independent, its Subsidiaries or any ERISA Affiliate beyond their retirementor other termination of service, other than

 

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(A) coverage mandated by applicable law,(B) death benefits or retirement benefits under any “employee pensionplan,” as that term is defined in Section 3(2) of ERISA, (C) deferredcompensation benefits accrued as liabilities on the books of Independent, itsSubsidiaries or the ERISA Affiliates or (D) benefits the full cost ofwhich is borne by the current or former employee (or his beneficiary),(v) no liability under Title IV of ERISA has been incurred by Independent,its Subsidiaries or any ERISA Affiliate that has not been satisfied in full(other than payment of premiums not yet due to the Pension Benefit GuarantyCorporation (the “PBGC”)), and no condition exists that would be expected toresult in Independent, its Subsidiaries or any ERISA Affiliate incurring aliability thereunder, (vi) no Plan is a “multi-employer pension plan,” assuch term is defined in Section 3(37) of ERISA, (vii) allcontributions or other amounts payable by Independent or its Subsidiaries as ofthe Effective Time with respect to each Plan in respect of current or priorplan years have been paid or accrued in accordance with GAAP andSection 412 of the Code, (viii) neither Independent, its Subsidiariesnor any ERISA Affiliate has engaged in a transaction in connection with whichIndependent, its Subsidiaries or any ERISA Affiliate could be subject to eithera civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or atax imposed pursuant to Section 4975 or 4976 of the Code, and(ix) there are no pending, or, to the best knowledge of Independent,threatened or anticipated claims (other than routine claims for benefits) by,on behalf of or against any of the Plans or any trusts related thereto.

 

(d)   Except as set forth in DisclosureSchedule 4.11(d), no Plan exists which provides for or could result in thepayment to any Independent employee of any money or other property or rights oraccelerate the vesting or payment of such amounts or rights to any Independentemployee as a result of the transactions contemplated by this Agreement,including the Merger, whether or not such payment or acceleration wouldconstitute a parachute payment within the meaning of Code Section 280G.  Except as set forth in DisclosureSchedule 4.11(d), since March 31, 2003, neither Independent nor anyof its Subsidiaries has taken any action that would result in a payment oracceleration described in the preceding sentence.

 

(e)   Except as set forth in DisclosureSchedule 4.11(e), (i) neither Independent nor any of its Subsidiariesis a party to or is bound by any written contract or arrangement with respectto the employment or compensation of any (A) consultants receiving inexcess of $20,000 annually and (B) any employees, and (ii) except asprovided under the Plans set forth in Disclosure Schedules 4.11(d) and4.11(e) and other agreements or arrangements set forth in DisclosureSchedules 4.11(d) and 4.11(e), consummation of the transactionscontemplated by this Agreement will not (either alone or upon the occurrence ofany additional acts or events) result in any payment (whether of severance payor otherwise) becoming due from Independent or any Subsidiary to any officer oremployee thereof.  No officer oremployee of Independent or any Subsidiary is, or shall be, entitled to receiveduplicative severance payments and benefits under both (i) an employmentor severance agreement and (ii) a severance or change-in-control plan,program or other arrangement. Independent has previously delivered or made available to Greene Countytrue and complete copies of all consulting agreements and employment and deferredcompensation agreements (or forms thereof) to which Independent or any of itsSubsidiaries is a party.

 

(f)    Except as set forth in DisclosureSchedule 4.11(f), no current employee of Independent or any of itsSubsidiaries received aggregate remuneration (bonus, salary and commission) inexcess of $50,000 for 2002 or would be expected to receive aggregateremuneration (excluding severance or other payments which, pursuant to anagreement or arrangement set forth in Disclosure Schedule 4.11(e), aremade as a result of consummation of the transactions contemplated by thisAgreement, either alone or upon the occurrence of any additional acts orevents) in excess of $50,000 in 2003.

** **

**Section4.12****.  ComplianceWith Applicable Law**.  Exceptas disclosed in Disclosure Schedule 4.12, Independent and each of itsSubsidiaries hold, and have at all times held, all licenses, franchises,permits and authorizations necessary for the lawful conduct of their respectivebusinesses, except where the failure to so obtain such licenses, franchises,permits and authorization does not, and is not expected to have, a MaterialAdverse Effect on Independent or any of its Subsidiaries, and have compliedwith and are not in violation under any, applicable law, statute, order, rule,regulation, policy and/or guideline (including, but not limited to, theCommunity Reinvestment Act (the “CRA”), the Truth in Lending Act and theregulations promulgated thereunder, other consumer banking

 

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laws, the customerprivacy provisions of the Gramm-Leach-Bliley Act, and the anti-money launderingprovisions of the Bank Secrecy Act, as amended by the USA PATRIOT Act (asdefined in Section 4.14 below)) of any Governmental Entity relating toIndependent or any of its Subsidiaries, and neither Independent nor any of itsSubsidiaries knows of, or has received notice of, any violations of any of theabove which, individually or in the aggregate, would have or would be expectedto have a Material Adverse Effect on Independent.

** **

**Section4.13****.  CertainContracts**.

 

(a)   Except as set forth in DisclosureSchedule 4.13(a), neither Independent nor any of its Subsidiaries is aparty to or is bound by any contract, arrangement, commitment or understanding(whether written or oral) (i) which is a material contract (as defined inItem 601(b)(10) of Regulation S-K of the SEC) to be performed after thedate of this Agreement, (ii) which limits the freedom of Independent orany of its Subsidiaries to compete in any line of business, in any geographicarea or with any person or which requires exclusive referrals of business orrequires Independent or any of its Subsidiaries to make available investmentopportunities of a nature or magnitude to any person on a priority or exclusivebasis, or (iii) with or to a labor union or guild (including anycollective bargaining agreement).  Eachcontract, arrangement, commitment or understanding of the type described inthis Section 4.13(a), whether or not set forth in Disclosure Schedule 4.13(a),is referred to herein as an “Independent Contract,” and neither Independent norany of its Subsidiaries knows of, or has received notice of, any violation ofthe above by any of the other parties thereto. Independent has made available all contracts which involved payments byIndependent or any of its Subsidiaries in fiscal year 2002 of more than $50,000or which could be expected to involve payments during fiscal year 2003 of morethan $50,000, other than any such contract that is terminable at will on60 days’ or less notice without payment of a penalty in excess of $5,000and other than any contract entered into on or after the date hereof that ispermitted under the provisions of Section 6.02.

 

(b)   Except as set forth in DisclosureSchedule 4.13(b), (i) each Independent Contract is valid and bindingon Independent and in full force and effect and, to the best knowledge ofIndependent, is valid and binding on the other parties thereto,(ii) Independent and each of its Subsidiaries has performed allobligations required to be performed by it to date under each IndependentContract, and (iii) no event or condition exists which constitutes or,after notice or lapse of time or both, would constitute a default on the partof Independent or any of its Subsidiaries under any such Independent Contract,except, in each case, where such invalidity, failure to be binding, failure toso perform or default, individually or in the aggregate, would not have or beexpected to have a Material Adverse Effect on Independent Contract.

** **

**Section4.14****.  AgreementsWith Regulatory Agencies**. Except as set forth in Disclosure Schedule 4.14, neitherIndependent nor any of its Subsidiaries is subject to any cease-and-desist orother order issued by, or is a party to any written agreement, consentagreement or memorandum of understanding with, or is a party to any commitmentletter or similar undertaking to, or is subject to any order or directive by,or has adopted any board resolutions at the request of (each, whether or notset forth in Disclosure Schedule 4.14, a “Regulatory Agreement”), anyGovernmental Entity that currently restricts or by its terms will in the futurerestrict the conduct of its business or relates to its capital adequacy, itscredit policies, its management or its business, nor has Independent or any ofits Subsidiaries been advised by any Governmental Entity that it is consideringissuing or requesting any Regulatory Agreement.  Independent is not aware of any fact or condition relating toIndependent or any of its Subsidiaries (including, without limitation,noncompliance with the CRA or the USA PATRIOT Act (as defined below)) thatwould prevent Independent or Greene County from obtaining all governmentalapprovals and consents required in connection with the consummation byIndependent of the Merger and the other transactions contemplated hereby.  For purposes of this Agreement, “USA PATRIOTAct” shall mean the Uniting and Strengthening America by Providing AppropriateTools Required to Intercept and Obstruct Terrorism Act of 2001, as amended, andrules and regulations promulgated thereunder.

** **

**Section4.15****.  UndisclosedLiabilities**.  Except(a) for those liabilities that are fully reflected or reserved against onthe consolidated balance sheet of Independent for the quarter endedMarch 31, 2003 or (b) for liabilities incurred in the ordinary courseof business consistent with past practice since March 31, 2003, neitherIndependent nor any of its Subsidiaries has incurred any liability of anynature whatsoever (whether absolute, accrued or contingent or otherwise andwhether due or to become due) that, either alone or when combined with all the

 

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liabilities not described in clause (a) or (b), has had, or couldbe expected to have, a Material Adverse Effect on Independent.

 

**Section4.16****. Anti-Takeover Provisions**. The Board of Directors of Independent has taken all necessary action sothat the provisions of Section 103 of the TBCA, as amended, and any applicableprovisions of the takeover laws of any other state (and any comparableprovisions of Independent’s Charter and Bylaws) do not and will not apply tothis Agreement, the Voting Agreement, the Merger or the transactionscontemplated hereby or thereby.

 

**Section4.17****.  IndependentInformation**.  The informationrelating to Independent and its Subsidiaries to be provided by Independent toGreene County for inclusion in the Proxy Statement/Prospectus, the registrationstatement on Form S-4 (the “S-4”) of Greene County in which the ProxyStatement/Prospectus will be included as a prospectus, any filings or approvalsunder applicable state securities laws, any filing pursuant to Rule 165 orRule 425 under the Securities Exchange Act of 1934, as amended (the “ExchangeAct”) or Rule 14a-12 under the Exchange Act, or in any other documentfiled with any other Governmental Entity in connection herewith, will notcontain any untrue statement of a material fact or omit to state a materialfact necessary to make the statements therein, in light of the circumstances inwhich they are made, not misleading. Independent will furnish to Greene County the information required to beincluded in the S-4 with respect to Independent’s business and affairs beforethe S-4 is filed with the SEC and again before any amendments to the S-4 arefiled.

 

**Section4.18****.  Title toProperty**.

 

(a)           ***Real Property***. Except as disclosed in Disclosure Schedule 4.18(a), Independent andits Subsidiaries have good, valid and marketable title to all real propertyowned by them free and clear of all Liens, except Liens for current taxes notyet due and payable and other standard exceptions commonly found in titlepolicies in the jurisdiction where such real property is located, and suchencumbrances and imperfections of title, if any, as do not materially detractfrom the value of the properties and do not materially interfere with thepresent or proposed use of such properties or otherwise impair suchoperations.  All real property andfixtures material to the business, operations or financial condition ofIndependent and its Subsidiaries are in good condition and repair.

 

(b)           ***Personal Property***. Independent and its Subsidiaries have good, valid and marketable titleto all tangible personal property owned by them on the date hereof, free andclear of all Liens except as disclosed in DisclosureSchedule 4.18(b).  With respect topersonal property used in the business of Independent and its Subsidiarieswhich is leased rather than owned, neither Independent nor any Subsidiarythereof is in default under the terms of any such lease the loss of which wouldbe expected to have, either individually or in the aggregate, a MaterialAdverse Effect on Independent.

 

(c)           ***Leased Property***. All leases of real property and all other leases to Independent and itsSubsidiaries under which Independent or a Subsidiary, as lessee, leases real orpersonal property are valid and binding in accordance with their respectiveterms; there is not under such lease any existing default by Independent orsuch Subsidiary or any event which with notice or lapse of time wouldconstitute such a default; and Independent or such Subsidiary quietly enjoysthe premises provided for in such lease.

 

**Section4.19****.  Insurance**.  Independent and its Subsidiaries are insuredwith reputable insurers against such risks and in such amounts as themanagement of Independent has determined to be prudent in accordance withindustry practice.  Independent and itsSubsidiaries are in compliance with their insurance policies and are not indefault under any of the terms thereof. Each such policy is outstanding and in full force and effect and, exceptas set forth on Disclosure Schedule 4.19 and except for policies insuringagainst potential liabilities of officers, directors and employees ofIndependent and its Subsidiaries, Independent or the relevant Subsidiarythereof is the sole beneficiary of such policies.  All premiums and other payments due under any such policy have beenpaid, and all claims thereunder have been filed in due and timely fashion.  Neither Independent nor any of itsSubsidiaries has received notice of any pending or threatened cancellation orpremium increase (retroactive or otherwise) with respect thereto, and each ofIndependent and its Subsidiaries is in compliance in all respects with allconditions contained therein.  There areno pending claims against such insurance policies by Independent or any of itsSubsidiaries as to which insurers are defending under reservation of rights orhave denied liability, and there exists no claim under such insurance policiesthat has not been properly filed by Independent or any of its Subsidiaries.

 

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**Section4.20****. Environmental Liability**. Except as set forth in Disclosure Schedule 4.20, there are nolegal, administrative, arbitral or other proceedings, claims, actions, causesof action, private environmental investigations or remediation activities orgovernmental investigations of any nature seeking to impose, or that could beexpected to result in the imposition, on Independent or any of its Subsidiariesof any liability or obligation arising under common law standards relating toenvironmental protection, human health or safety or under any local, state orfederal environmental statute, regulation or ordinance, including, withoutlimitation, the Comprehensive Environmental Response, Compensation andLiability Act of 1980, as amended (collectively, the “Environmental Laws”),pending or, to the best knowledge of Independent, threatened againstIndependent or any of its Subsidiaries, which liability or obligation wouldhave or would be expected to have a Material Adverse Effect onIndependent.  To the best knowledge ofIndependent, there is no basis for any such proceeding, claim, action orgovernmental investigation that would impose any liability or obligation thatwould have or would be expected to have a Material Adverse Effect onIndependent.  To the best knowledge ofIndependent, during or prior to the period of (a) its or any of itsSubsidiaries’ ownership or operation of any of their respective currentproperties, (b) its or any of its Subsidiaries’ participation in themanagement of any property, or (c) its or any of its Subsidiaries’ holdingof a security interest or other interest in any property, there were noreleases or threatened releases of hazardous, toxic, radioactive or dangerousmaterials or other materials regulated under Environmental Laws in, on, underor affecting any such property.  NeitherIndependent nor any of its Subsidiaries is subject to any agreement, order,judgment, decree, letter or memorandum by or with any court, governmentalauthority, regulatory agency or third party imposing any liability orobligation pursuant to or under any Environmental Law that would have or wouldbe expected to have a Material Adverse Effect on Independent.

 

**Section4.21****.  Opinion ofFinancial Advisor**. Independent has received the opinion of Southard Financial dated as ofthe date of this Agreement, to the effect that, as of such date, the MergerConsideration to be received by holders of Independent Common Stock in theMerger is fair from a financial point of view to such holders of IndependentCommon Stock.

 

**Section4.22****.  Loan Matters**.

 

(a)           In all material respects, eachoutstanding loan and each commitment to extend credit has been solicited andoriginated and is administered and serviced in accordance with the relevantloan documents and Independent’s underwriting standards.

 

(b)           Each of Independent and itsSubsidiaries which is required to be so approved is approved by and is in goodstanding: (i) as a supervised mortgagee by the Department of Housing andUrban Development (“HUD”) to originate and service Title I and Title I FHAmortgage loans; (ii) as a GNMA I and II Issuer by the GovernmentNational Mortgage Association (“Ginnie Mae”); (iii) by the Department ofVeterans Affairs (“VA”) to originate and service VA loans; and (iv) as aseller/servicer by Fannie Mae and Freddie Mac to originate and serviceconventional residential and multifamily mortgage loans.

 

(c)           Neither the terms of outstandingloans, leases, installment sales contracts and other credit transactions, norany of the documentation evidencing such transactions, nor the manner in whichsuch loans, leases, installment sales contracts and other credit transactionshave been administered and serviced, nor Independent’s procedures and practicesof approving or rejecting applications for such transactions, violates anyfederal, state or local law, rule, regulation or ordinance applicable thereto,including without limitation the Truth in Lending Act, Regulations O and Zof the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, eachas amended, and state laws, rules and regulations relating to consumerprotection, installment sales and usury except to the extent of any suchviolations or variations therein that do not, and are not expected to have, aMaterial Adverse Effect on Independent.

 

**Section4.23****.  Labor andEmployment Matters**.

 

(a)           Neither Independent nor any of itsSubsidiaries is a party to or is bound by any collective bargaining agreement,contract or other agreement or understanding with a labor union or labororganization, nor is Independent or any of its Subsidiaries the subject of aproceeding asserting that it or any such Subsidiary has committed an unfairlabor practice (within the meaning of the National Labor Relations Act) orseeking to compel Independent or any such Subsidiary to bargain with any labor

 

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organization as towages or conditions of employment, nor is there any strike or other labordispute or disputes involving it or any of its Subsidiaries pending or, toIndependent’s best knowledge, threatened, nor is Independent aware of anyactivity involving its or any of its Subsidiaries’ employees seeking to certifya collective bargaining unit or engaging in other organizational activity.

 

(b)           Neither Independent nor any of itsSubsidiaries has taken any action that would constitute a “Mass Layoff” or“Plant Closing” within the meaning of the Workers Adjustment and RetrainingNotification Act or would otherwise trigger notice requirements or liabilityunder any state or local plant closing notice law.  No agreement, arbitration or court decision or governmental orderin any way limits or restricts Independent, any of its Subsidiaries or GreeneCounty from relocating or closing any of the operations of Independent or anyof its Subsidiaries.

 

(c)           Neither Independent nor any of itsSubsidiaries has failed in any respect to pay when due any wages (includingovertime wages), bonuses, commissions, benefits, taxes, penalties orassessments or other monies, owed to, or arising out of the employment of or anyrelationship or arrangement with, any officer, director, employee, salesrepresentative, contractor, consultant or other agent.  Independent and its Subsidiaries are incompliance with all applicable laws, rules, regulations and ordinances relatingto employment and the payment of wages and benefits.  There are no, and Independent has no reason to believe therewould be any, citations, investigations, administrative proceedings or formalcomplaints of violations of any federal or state wage and hour laws pending,or, to the best knowledge of Independent, threatened before the Department ofLabor or any federal, state or administrative agency or court against orinvolving Independent or any of its Subsidiaries.

 

(d)           To the best knowledge of Independent,Independent and each of its Subsidiaries are in compliance with all immigrationlaws relating to employment and have properly completed and maintained allapplicable forms (including but not limited to I-9 forms) and, to the bestknowledge of Independent, there are no citations, investigations,administrative proceedings or formal complaints of violations of theimmigration laws pending or threatened before the Immigration andNaturalization Service or any federal, state or administrative agency or courtagainst or involving Independent or any of its Subsidiaries.

 

(e)           There are no investigations,administrative proceedings, charges or formal complaints of discrimination(including discrimination based upon sex, age, marital status, race, nationalorigin, sexual preference, disability, handicap or veteran status) pending or,to the best knowledge of Independent, threatened before the Equal EmploymentOpportunity Commission or any federal, state or local agency or court againstor involving Independent or any of its Subsidiaries.  No discrimination, sexual harassment, retaliation and/or wrongfulor tortious conduct claim is pending or, to the knowledge of Independent,threatened against Independent or any of its Subsidiaries under the 1866, 1877,1964 or 1991 Civil Rights Acts, the Equal Pay Act, the Age Discrimination inEmployment Act, as amended, the Americans with Disabilities Act, the Family andMedical Leave Act, the Fair Labor Standards Act, ERISA, or any other federallaw relating to employment or any comparable state or local fair employmentpractices act regulating discrimination in the workplace, and no wrongfuldischarge, libel, slander, invasion of privacy or other claim (including butnot limited to violations of the Fair Credit Reporting Act, as amended, and anyapplicable whistleblower statutes) under any state or federal law is pendingor, to the best knowledge of Independent, threatened against Independent or anyof its Subsidiaries.

 

(f)            If Independent or any of itsSubsidiaries is a federal, state or local contractor obligated to develop andmaintain an affirmative action plan, no discrimination claim, show-causenotice, conciliation proceeding, sanctions or debarment proceedings is pendingor, to the best knowledge of Independent, has been threatened againstIndependent or any of its Subsidiaries with the Office of Federal ContractCompliance Programs or any other federal agency or any comparable state orlocal agency or court and no desk audit or on-site review is in progress.

 

(g)           There are no citations,investigations, administrative proceedings or formal complaints of violationsof local, state or federal occupational safety and health laws, rules,regulations and ordinances pending or, to the best knowledge of Independent,threatened before the Occupational Safety and Health

 

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Review Commissionor any federal, state or local agency or court against or involving Independentor any of its Subsidiaries.

 

(h)           No workers’ compensation orretaliation claim is pending against Independent or any of its Subsidiaries,and each of Independent and its Subsidiaries maintains adequate insurance withrespect to workers’ compensation claims pursuant to insurance policies that arecurrently in force, or has accrued an adequate liability for such obligations,including, without limitation, adequate accruals with respect to accrued butunreported claims and retroactive insurance premiums.

 

**Section4.24****.  CRAAgreements**.  Except asdisclosed in Disclosure Schedule 4.24, neither Independent nor any of itsSubsidiaries is a party to any “agreement” (as such term is defined in12 U.S.C. Section 1831y(e)(1)), whether entered into before or afterthe enactment date of the Gramm-Leach-Bliley Act.

 

**Section4.25****.  Community ReinvestmentCompliance**.  FirstIndependent Bank and Rutherford Bank and Trust are in compliance in allmaterial respects with all applicable provisions of the CRA and each hasreceived a CRA rating of “Satisfactory” in its most recent exam under the CRA.  Independent has no knowledge of the existenceof any fact or circumstance or set of facts or circumstances which could beexpected to result in either First Independent Bank or Rutherford Bank andTrust failing to be in compliance with such provisions or having theirrespective current rating lowered.

 

**Section4.26****.  CertainBusiness Practices**.  NeitherIndependent nor any of its Subsidiaries, and no director, officer, agent oremployee of Independent or any of its Subsidiaries, has (a) used any fundsfor unlawful contributions, gifts, entertainment or other unlawful expensesrelating to political activity, (b) made any unlawful payment to foreignor domestic government officials or employees or to foreign or domesticpolitical parties or campaigns or violated any provision of the Foreign CorruptPractices Act of 1977, as amended, or (c) made any other unlawful payment.

 

**Section4.27****.  IntellectualProperty**.

 

(a)           Independent has disclosed inDisclosure Schedule 4.27 the Intellectual Property (as defined below)owned by Independent or any of its Subsidiaries, including a complete andaccurate list of all U.S. and foreign (i) trademark or service markregistrations and applications, (ii) copyright registrations andapplications, and (iii) Internet domain names.  Neither Independent nor any of its Subsidiaries owns any patentsor patent applications.  Independent orone of its Subsidiaries owns or has the valid right to use, in each case freeand clear of all Liens, all applications, trademarks, service marks, trademarkor service mark registrations and applications, trade names, logos, designs,Internet domain names, slogans and general intangibles of like nature, togetherwith all goodwill related to the foregoing, copyrights, copyrightregistrations, renewals and applications, Software (as defined below),technology, trade secrets and other confidential information, know-how,proprietary processes, formulae, algorithms, models and methodologies,licenses, agreements and all other proprietary rights (collectively, the“Intellectual Property”), used in the business of Independent and itsSubsidiaries as it currently is conducted. For purposes of this Agreement “Software” means any and all(A) computer programs, including any and all software implementations ofalgorithms, models and methodologies, whether in source code or object code,(B) databases and compilations, including any and all data and collectionsof data, whether machine readable or otherwise, (C) descriptions,flow-charts and other work product used to design, plan, organize and developany of the foregoing, (D) the technology supporting and content containedon any owned or operated Internet site(s), and (E) all documentation,including user manuals and training materials, relating to any of the foregoing.  The ownership or right to use suchIntellectual Property or Software of Independent or its Subsidiaries(i) has not been challenged in any prior litigation, (ii) is notbeing challenged in any pending litigation, and (iii) to the bestknowledge of Independent, is not the subject of any threatened or proposedlitigation. The consummation of the transactions contemplated hereby will notresult in the loss or impairment of any such Intellectual Property or Softwareof Independent or any of its Subsidiaries.

 

(b)           The conduct of the business ofIndependent and its Subsidiaries as currently conducted or planned byIndependent to be conducted does not, in any respect, infringe upon (eitherdirectly or indirectly

 

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such as throughcontributory infringement or inducement to infringe), dilute, misappropriate orotherwise violate any Intellectual Property owned and controlled by any thirdparty.

 

(c)           To the best knowledge of Independent,no third party is misappropriating, infringing, diluting, or violating anyIntellectual Property owned by or licensed to or by Independent or itsSubsidiaries and no such claims have been made against a third party byIndependent or its Subsidiaries.

 

(d)           Each item of Software, which is usedby Independent or its Subsidiaries in connection with the operation of itsbusinesses as currently conducted, is either (i) owned by Independent orits Subsidiaries, (ii) currently in the public domain or otherwiseavailable to Independent without the need of a license, lease or consent of anythird party, or (iii) used under rights granted to Independent or itsSubsidiaries pursuant to a written agreement, license or lease from a thirdparty.

 

**Section4.28****.  RepurchaseAgreements; Derivatives**.

 

(a)           With respect to all IndependentContracts currently outstanding pursuant to which Independent or any of itsSubsidiaries has purchased securities subject to an agreement to resell,Independent or such Subsidiary has a valid, perfected first lien or securityinterest in the securities or other collateral securing such IndependentContract, and the value of such collateral equals or exceeds the amount of thedebt secured thereby.  With respect toall Independent Contracts currently outstanding pursuant to which Independentor any of its Subsidiaries has sold securities subject to an IndependentContract to repurchase, neither Independent nor any of its Subsidiaries haspledged collateral in excess of the amount of the debt secured thereby.  Neither Independent nor any of itsSubsidiaries has pledged collateral in excess of the amount required under anyinterest rate swap or other similar Independent Contract currently outstanding,except as disclosed in Disclosure Schedule 4.28(a).

 

(b)           Neither Independent nor any of itsSubsidiaries is a party to or has agreed to enter into an exchange-traded orover-the-counter swap, forward, future, option, cap, floor, or collar financialcontract, or any other interest rate or foreign currency protection contractnot included on its balance sheets in the most recent financial statements,which is a financial derivative contract (including various combinationsthereof), except for options and forwards entered into in the ordinary courseof its mortgage lending business consistent with past practice and currentpolicy (the “Derivative Transactions”). Independent has delivered to Greene County complete and accurate copiesof all documents relating to the Derivative Transactions.  Each of Independent and its Subsidiaries hasfull power and authority to hold its rights in each Derivative Transaction, andhas good and valid title to such rights free and clear of all Liens.  At the Effective Time, Greene County and itsSubsidiaries will have the rights of Independent and its Subsidiaries withrespect to the Derivative Transactions in accordance with the terms andconditions thereof.  Each suchDerivative Transaction was originated and has been administered in conformitywith all applicable laws, rules, regulations and ordinances; and its remainingpayment terms as shown on the books and records of Independent and itsSubsidiaries are true and correct as of the last day shown thereon.  Each of Independent and its Subsidiaries hascomplied with all of its obligations under the Derivative Transactions and thedocuments relating thereto and each Derivative Transaction is a valid andlegally binding obligation of Independent and its Subsidiaries, enforceable inaccordance with its terms.  Each DerivativeTransaction, to the extent secured, is secured by a valid and enforceable Lienin the collateral therefor.

 

**ARTICLEV**

 

**REPRESENTATIONS AND WARRANTIES OF GREENECOUNTY**

** **

Greene County herebyrepresents and warrants to Independent as follows:

 

**Section5.01****.  CorporateOrganization**.

 

(a)           Greene County is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofTennessee.  Greene County has thecorporate power and authority to own or lease

 

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all of itsproperties and assets and to carry on its business as it is now being conductedand is duly licensed or qualified to do business in each jurisdiction in whichthe nature of the business conducted by it or the character or location of theproperties and assets owned or leased by it makes such licensing orqualification necessary, except where the failure to be so licensed orqualified would not have or reasonably be expected to have a Material AdverseEffect on Greene County.  Greene Countyis duly registered as a bank holding company under the Bank Holding CompanyAct.  The copies of the Amended andRestated Charter and Amended and Restated Bylaws of Greene County which havepreviously been made available to Independent are true, complete and correctcopies of such documents as in effect as of the date of this Agreement.  Greene County Bank is a state chartered bankand wholly-owned subsidiary of Greene County, and its deposits are insured bythe FDIC to the fullest extent permitted by law.

 

(b)           Each Subsidiary of Greene County(i) is duly organized and validly existing as a state chartered bank,corporation or partnership under the laws of its jurisdiction of organization,(ii) is duly licensed or qualified to do business and is in good standingin all jurisdictions (whether federal, state, local or foreign) where itsownership or leasing of property or the conduct of its business requires it tobe so licensed or qualified and in which the failure to be so qualified wouldhave or would be expected to have, either individually or in the aggregate, aMaterial Adverse Effect on Greene County and (iii) has all requisitecorporate power and authority to own or lease its properties and assets and tocarry on its business as now conducted.

 

**Section5.02****.  Capitalization**.  The authorized capital stock of GreeneCounty consists of 15,000,000 shares of Greene County Common Stock, $2.00par value per share.  As of the close ofbusiness on March 31, 2003, there were 6,820,540 shares of GreeneCounty Common Stock outstanding.  As ofthe close of business on March 31, 2003, except for 489,340 shares ofGreene County Common Stock reserved for issuance in connection with the GreeneCounty Stock Option Plan, no shares of Greene County Common Stock were reservedfor issuance.  All of the issued andoutstanding shares of Greene County Common Stock have been duly authorized andvalidly issued and are fully paid, nonassessable and free of preemptive rights,with no personal liability attaching to the ownership thereof.  As of the date of this Agreement, except(a) as set forth in Disclosure Schedule 5.02 and (b) as setforth elsewhere in this Section 5.02, Greene County does not have and isnot bound by any outstanding subscriptions, options, warrants, calls, commitmentsor agreements of any character calling for the purchase or issuance of anyshares of Greene County Common Stock or any other equity securities of GreeneCounty or any securities representing the right to purchase or otherwisereceive any shares of Greene County Common Stock.  The shares of Greene County Common Stock to be issued pursuant tothe Merger will be duly authorized and validly issued, and, at the EffectiveTime, all such shares will be fully paid, nonassessable and free of preemptiverights, with no personal liability attaching to the ownership thereof.

 

**Section5.03****.  Authority;No Violation**.

 

(a)           Greene County has full corporatepower and authority to execute and deliver this Agreement and to consummate thetransactions contemplated hereby.  Theexecution and delivery of this Agreement and the consummation of thetransactions contemplated hereby (including the issuance of Greene CountyCommon Stock hereunder) have been duly and validly approved by the Board ofDirectors of Greene County, and no other corporate proceedings on the part ofGreene County are necessary to approve this Agreement or to consummate thetransactions contemplated hereby.  ThisAgreement has been duly and validly executed and delivered by Greene County,and (assuming due authorization, execution and delivery by Independent) eachconstitutes a valid and binding obligation of Greene County, enforceableagainst Greene County in accordance with its terms, except as enforcement maybe limited by general principles of equity whether applied in a court of law ora court of equity and by bankruptcy, insolvency and similar laws affectingcreditors’ rights and remedies generally.

 

(b)           Except as set forth in DisclosureSchedule 5.03(b), neither the execution and delivery of this Agreement byGreene County nor the consummation by Greene County of the transactionscontemplated hereby nor compliance by Greene County with any of the terms orprovisions hereof will (i) violate any provision of the Amended andRestated Charter or Amended and Restated Bylaws of Greene County or any of thesimilar governing documents of any of its Subsidiaries or (ii) assumingthat the consents and approvals referred to in Section 5.04 are dulyobtained, (A) violate any statute, code, ordinance, rule,

 

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regulation,judgment, order, writ, decree or injunction applicable to Greene County or anyof its Subsidiaries or any of their respective properties or assets, or(B) violate, conflict with, result in a breach of any provision of or theloss of any benefit under, constitute a default (or an event which, with noticeor lapse of time or both, would constitute a default) under, result in thetermination of or a right of termination or cancellation under, accelerate theperformance required by, or result in the creation of any Lien upon any of therespective properties or assets of Greene County or any of its Subsidiariesunder, any of the terms, conditions or provisions of any note, bond, mortgage,indenture, deed of trust, license, lease, agreement or other instrument orobligation to which Greene County or any of its Subsidiaries is a party, or bywhich they or any of their respective properties or assets may be bound oraffected, except for such violations, conflicts, breaches, defaults or otherevents which either individually or in the aggregate will not have and wouldnot reasonably be expected to have a Material Adverse Effect on Greene County.

 

**Section5.04****.  Consents andApprovals**.  Except for(i) approval by the Federal Reserve Board, FDIC and Tennessee Departmentof Financial Institutions, (ii) approval of the listing of Greene CountyCommon Stock to be issued in the Merger on Nasdaq, (iii) the filing withthe SEC of the Proxy Statement/Prospectus and any filings or approvals underapplicable state securities laws, (iv) the filing and declaration ofeffectiveness of the S-4 by the SEC, (iv) the filing of the Articles ofMerger with the Tennessee Secretary, (v) the adoption of this Agreement bythe requisite vote of Independent’s shareholders, (vi) the consents andapprovals set forth in Disclosure Schedule 5.04, and (vii) theconsents and approvals of third parties which are not Governmental Entities,the failure of which to be obtained will not have and would not be reasonablyexpected to have, individually or in the aggregate, a Material Adverse Effecton Greene County, no consents or approvals of, or filings and registrationswith, any Governmental Entity or any third party are required in connectionwith (A) the execution and delivery by Greene County of this Agreement and(B) the consummation by Greene County of the Merger and the othertransactions contemplated hereby.

 

**Section5.05****.  Reports**.  Greene County and each of its Subsidiarieshave timely filed all material reports, registrations and statements, togetherwith any amendments required to be made with respect thereto, that they wererequired to file since January 1, 2003 with any Governmental Entities andhave paid all fees and assessments due and payable in connectiontherewith.  Except as set forth inDisclosure Schedule 5.05 and except for normal examinations conducted by aGovernmental Entity in the regular course of the business of Greene County andits Subsidiaries, no Governmental Entity has initiated any proceeding or, tothe knowledge of Greene County, investigation into the business or operationsof Greene County or any of its Subsidiaries since January 1, 2003.  There is no material unresolved violation,criticism or exception by any Governmental Entity with respect to any report orstatement relating to any examinations of Greene County or any of itsSubsidiaries.

 

**Section5.06****.  FinancialStatements**.  Greene Countyhas previously made available to Independent copies of (a) theconsolidated balance sheets of Greene County and its Subsidiaries as ofDecember 31, 2001 and 2002, and the related consolidated statements ofincome, changes in shareholders’ equity and cash flows for the years endingDecember 31, 2000 through 2002, inclusive, as reported in Greene County’sAnnual Report on Form 10-K for the year ended December 31, 2002 filedwith the SEC under the Exchange Act, accompanied by the audit report of CroweChizek and Company LLC, independent public accountants with respect to GreeneCounty, and (b) the unaudited consolidated balance sheets of Greene Countyand its Subsidiaries as of March 31, 2003, and December 31, 2002, andthe related unaudited consolidated statements of income, cash flows and changesin shareholders’ equity for the three-month periods then ended, as reported inGreene County’s Quarterly Report on Form 10-Q for the period endedMarch 31, 2003 filed with the SEC under the Exchange Act.  Each of the financial statements referred toin this Section 5.06 (including the related notes, where applicable)fairly presents, and the financial statements referred to in Section 7.10hereof (including the related notes, where applicable) will fairly present whenfiled with the SEC (subject, in the case of the unaudited statements, to normalrecurring adjustments, none of which are expected to be material in nature andamount), the results of the consolidated operations and changes inshareholders’ equity and consolidated financial position of Greene County andits Subsidiaries for the respective fiscal periods or as of the respectivedates therein set forth.  Each of suchfinancial statements (including the related notes, where applicable) complies,and the financial statements referred to in Section 7.10 hereof (includingthe related notes, where applicable) will comply when filed with the SEC, inall material respects with applicable accounting requirements and with thepublished rules and regulations of the SEC with respect thereto; and each ofsuch financial statements (including the related notes, where applicable) hasbeen, and the financial statements referred to in Section 7.10 (includingthe related notes, where applicable) will be, prepared in accordance

 

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with GAAP consistently appliedduring the periods involved, except in each case as indicated in suchstatements or in the notes thereto or, in the case of unaudited statements, aspermitted by Form 10-Q.  The booksand records of Greene County and its Subsidiaries have been, and are being,maintained in all material respects in accordance with GAAP and any otherapplicable legal and accounting requirements and reflect only actualtransactions.

 

**Section5.07****.  Broker’sFees**.  Except as set forth inDisclosure Schedule 5.07, neither Greene County nor any Subsidiary thereofnor any of their respective officers or directors has employed any broker orfinder or incurred any liability for any broker’s fees, commissions or finder’sfees in connection with any of the transactions contemplated by this Agreement.

 

**Section5.08****.  Absence ofCertain Changes or Events**. Except as publicly disclosed in Greene County Reports (as defined inSection 5.10) filed prior to the date hereof or as set forth in DisclosureSchedule 5.08, since December 31, 2002, no event has occurred whichhas had or would reasonably be expected to have, individually or in theaggregate, a Material Adverse Effect on Greene County.

 

**Section5.09****.  LegalProceedings**.

 

(a)           Neither Greene County nor any of itsSubsidiaries is a party to any, and there are no pending or, to the best ofGreene County’s knowledge, threatened legal, administrative, arbitral or otherproceedings, claims, actions or governmental or regulatory investigations ofany nature against Greene County or any of its Subsidiaries or challenging thevalidity or propriety of the transactions contemplated by this Agreement as towhich there is a reasonable possibility of an adverse determination and which,if adversely determined, would, individually or in the aggregate, have or reasonablybe expected to have a Material Adverse Effect on Greene County.

 

(b)           There is no injunction, order,judgment, decree or regulatory restriction imposed upon Greene County, any ofits Subsidiaries or the assets of Greene County or any of its Subsidiarieswhich has had, or would reasonably be expected to have, a Material AdverseEffect on Greene County.

 

**Section5.10****.  SEC Reports**.  Greene County has previously made availableto Independent an accurate and complete copy of each final registration statement,prospectus, report, schedule and definitive proxy statement filed sinceJanuary 1, 2001 by Greene County with the SEC pursuant to the SecuritiesAct (as hereinafter defined) or the Exchange Act (the “Greene County Reports”),and no such registration statement, prospectus, report, schedule or proxystatement contained any untrue statement of a material fact or omitted to stateany material fact required to be stated therein or necessary in order to makethe statements therein, in light of the circumstances in which they were made,not misleading.  Greene County and itsSubsidiaries have timely filed all Greene County Reports and other documentsrequired to be filed by them under the Securities Act and the Exchange Act,and, as of their respective dates, all Greene County Reports complied as toform in all material respects with the published rules and regulations of theSEC with respect thereto.

 

**Section5.11****.  ComplianceWith Applicable Law**.  Exceptas disclosed in Disclosure Schedule 5.11, Greene County and each of itsSubsidiaries hold, and have at all times held, all material licenses,franchises, permits and authorizations necessary for the lawful conduct oftheir respective businesses under and pursuant to all, and have complied withand are not in default in any material respect under any, applicable law,statute, order, rule, regulation, policy and/or guideline of any GovernmentalEntity relating to Greene County or any of its Subsidiaries, except where thefailure to hold such license, franchise, permit or authorization or suchnoncompliance or default would not, individually or in the aggregate, have orreasonably be expected to have a Material Adverse Effect on Greene County, andneither Greene County nor any of its Subsidiaries knows of, or has receivednotice of, any material violations of any of the above which, individually orin the aggregate, would have or reasonably be expected to have a MaterialAdverse Effect on Greene County.

 

**Section5.12****.  AgreementsWith Regulatory Agencies**. Except as set forth in Disclosure Schedule 5.12, neither GreeneCounty nor any of its Subsidiaries is subject to any cease-and-desist or otherorder issued by, or is a party to any written agreement, consent agreement ormemorandum of understanding with, or is a party to any commitment letter orsimilar undertaking to, or is subject to any order or directive by, or hasadopted any board resolutions at the request of (each, whether or not set forthin Disclosure Schedule 5.12, a “Greene County

 

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Regulatory Agreement”), anyGovernmental Entity that restricts the conduct of its business or relates toits capital adequacy, its credit policies, its management or its business, norhas Greene County or any of its Subsidiaries been advised by any GovernmentalEntity that it is considering issuing or requesting any RegulatoryAgreement.  Greene County is not awareof any fact or circumstance which is reasonably likely to prevent it or Independentfrom obtaining the governmental approvals and consents required in connectionwith the consummation by Greene County of the Merger and the other transactionscontemplated hereby.

 

**Section5.13****.  UndisclosedLiabilities**.  Except forthose liabilities that are fully reflected or reserved against on theconsolidated balance sheet of Greene County included in the Greene CountyForm 10-Q for the quarter ended March 31, 2003 or for liabilitiesincurred in the ordinary course of business consistent with past practice sinceMarch 31, 2003, neither Greene County nor any of its Subsidiaries hasincurred any liability of any nature whatsoever (whether absolute, accrued,contingent or otherwise and whether due or to become due) that, either alone orwhen combined with all similar liabilities, has had, or would reasonably beexpected to have, a Material Adverse Effect on Greene County.

 

**Section5.14****.  GreeneCounty Information**.  Theinformation relating to Greene County and its Subsidiaries to be provided byGreene County to be contained in the Proxy Statement/Prospectus, the S-4, anyfiling pursuant to Rule 165 or Rule 425 under the Securities Act of1933, as amended (the “Securities Act”) or Rule 14a-12 under the ExchangeAct or in any other document filed with any other Governmental Entity in connectionherewith will not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements therein, in light of thecircumstances in which they are made, not misleading.  The Proxy Statement/Prospectus (except for such portions thereofthat relate only to Independent or any of its Subsidiaries) will comply as toform in all material respects with the provisions of the Exchange Act and therules and regulations thereunder.  TheS-4 will comply as to form in all material respects with the provisions of theSecurities Act and the rules and regulations thereunder.

 

**ARTICLEVI**

 

**COVENANTS RELATING TO CONDUCT OF BUSINESS**

** **

**Section6.01****.  Conduct ofBusiness Prior to the Effective Time**.  Except as expressly contemplated or permitted by this Agreementor as required by applicable law, rule or regulation, during the period fromthe date of this Agreement to the Effective Time, Independent shall, and shallcause each of its Subsidiaries to, (a) conduct its business in the usual,regular and ordinary course consistent with past practice, (b) use bestefforts to maintain and preserve intact its business organization, employeesand advantageous business relationships and retain the services of its officersand key employees and (c) take no action which would be expected toadversely affect or delay its ability to obtain any approvals of anyGovernmental Entity required to consummate the transactions contemplated herebyor to consummate the transactions contemplated hereby.

 

**Section6.02****.  IndependentForbearances**.  Except as setforth in Disclosure Schedule 6.02, as expressly contemplated or permittedby this Agreement or as required by applicable law, rule or regulation, duringthe period from the date of this Agreement to the Effective Time, Independentshall not, and shall not permit any of its Subsidiaries to, without the priorwritten consent of Greene County:

 

(a)           adjust, split, combine or reclassifyany capital stock; set any record or payment dates for the payment of any dividendsor distributions on its capital stock or make, declare or pay any dividend ormake any other distribution on, or directly or indirectly redeem, purchase orotherwise acquire, any shares of its capital stock or any securities orobligations convertible into or exchangeable for any shares of its capitalstock or grant any stock appreciation rights or grant any individual,corporation, joint venture or other entity any right to acquire any shares ofits capital stock, other than (i) subject to Section 6.04, regularquarterly cash dividends on Independent Common Stock equal to the rate declaredand paid during the current fiscal quarter with record and payment datesconsistent with past practice; provided, however, that no dividend shall bepaid by Independent on Independent Common Stock if Independent shall berequired to borrow to do so or such dividend would violate Section 16-401of the TBCA; and (ii) dividends paid by any of the Subsidiaries ofIndependent so long as such dividends are only paid to Independent or any ofits

 

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other wholly ownedSubsidiaries, *provided that* no such dividend shall cause Rutherford Bankand Trust or First Independent Bank to cease to qualify as a “well capitalized”institution under 12 C.F.R. 325; or issue or commit to issue anyadditional shares of capital stock (except pursuant to the exercise of stockoptions or warrants outstanding as of the date hereof) or any securitiesconvertible into or exercisable for, or any rights, warrants or options toacquire, any additional shares of capital stock;

 

(b)           sell, transfer, mortgage, encumber orotherwise dispose of any of its assets or properties to any individual,corporation or other entity (other than a direct wholly owned Subsidiary) bymerger, consolidation, asset sale or other business combination or cancel,release or assign any indebtedness to any such person or any claims held by anysuch person, in each case that is material to Independent, except (i) inthe ordinary course of business consistent with past practice or (ii) asexpressly required by the terms of any contracts or agreements in force at thedate of this Agreement and set out in Disclosure Schedule 6.02;

 

(c)           make any acquisition or investment,by purchase or other acquisition of stock or other equity interests (other thanin a fiduciary or agent capacity or pursuant to written contracts or agreementsentered into prior to the date hereof (true and correct copies of which havebeen delivered to Greene County prior to the date of this Agreement)), bymerger, consolidation, asset purchase or other business combination, or bycontributions to capital, or make any property transfers or purchases of anyproperty or assets, in or from any other individual, corporation, joint ventureor other entity other than a wholly owned Subsidiary of Independent, except asexpressly required by the terms of any contracts or agreements in force at thedate of this Agreement and set out in Disclosure Schedule 6.02;

 

(d)           with respect to any transaction as towhich Independent or any of its Subsidiaries is a party (but, as to any Loan,only if Independent or any Subsidiary is a borrower) enter into, renew, extendor terminate any Loan, lease, contract or other agreement, other than Loansmade in the ordinary course of business and in accordance withparagraph (i) below and other than federal funds purchased, that calls foraggregate annual payments of $250,000 and which either (i) is notterminable at will on 60 days’ or less notice without payment of a penaltyin excess of $100,000 or (ii) has a term of less than one year; or makeany change in any of its leases, contracts or other agreements, other thanrenewals for a term of one year or less without material adverse changes to theterms thereof;

 

(e)           other than general salary increasesconsistent with past practices for employees (other than officers above thelevel of Vice President) or as required by contractual commitments outstandingon the date hereof, (i) increase in any respect the compensation or fringebenefits of any of its employees, (ii) pay any pension or retirementallowance not required by any existing plan or agreement to any such employees,(iii) become a party to, amend (other than amendments required by law orby Greene County as set forth in Section 7.07) or commit itself (orally orin writing) to any compensation (other than any retention plan approved inwriting by Greene County), pension, retirement, profit-sharing, severance,change-in-control or welfare benefit plan or agreement or employment agreementwith or for the benefit of any employee, (iv) hire any new executiveofficers, or (v) except as required pursuant to Section 2.09(c)accelerate the vesting of any stock options or other stock-based compensation;

 

(f)            authorize or permit its officers,directors, employees, agents, advisors and affiliates (collectively,“Representatives”) to (i) initiate, solicit, encourage or knowinglyfacilitate any inquiries or proposals with respect to any Acquisition Proposalor (ii) engage in any negotiations concerning, or provide any nonpublicinformation to or have any discussions with any person relating to, anyAcquisition Proposal; *provided that*, in the event Independentreceives an unsolicited bona fide Acquisition Proposal and Independent’s boardof directors concludes in good faith that such Acquisition Proposal constitutesor is reasonably likely to result in a Superior Proposal, Independent may, andmay permit its Subsidiaries and its and their Representatives to, take anyaction described in clause (ii) above to the extent that the board ofdirectors of Independent concludes in good faith (based on the advice of itsoutside counsel) that failure to take such actions would more likely than notresult in a violation of its fiduciary duties under applicable law; *providedthat* prior to providing any nonpublic information permitted to beprovided pursuant to the foregoing proviso, Independent shall have entered intoa confidentiality agreement with such third party on terms no less favorable toIndependent than Section 7.02(b) below. Independent will immediately cease

 

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and cause to beterminated any activities, discussions or negotiations conducted before thedate of this Agreement with any persons other than Greene County with respectto any Acquisition Proposal and will use its best efforts to enforce anyconfidentiality or similar agreement relating to an Acquisition Proposal.  Independent will promptly (within one BusinessDay) advise Greene County following receipt of any Acquisition Proposal of thesubstance thereof (including the identity of the person making such AcquisitionProposal), and will keep Greene County apprised of any related developments,discussions and negotiations (including the terms and conditions of theAcquisition Proposal) on a current basis. As used in this Agreement, “Acquisition Proposal” shall mean any tenderor exchange offer, proposal for a merger, consolidation or other businesscombination involving Independent or any of its Subsidiaries or any proposal oroffer to acquire in any manner more than 15% of the voting power in, or morethan 15% of the business, assets or deposits of, Independent or any of itsSubsidiaries, other than the transactions contemplated by this Agreement.  As used in this Agreement, “SuperiorProposal” means any bona fide written Acquisition Proposal which the board ofdirectors of Independent concludes in good faith to be more favorable from afinancial point of view to its shareholders than the Merger and the othertransactions contemplated hereby, (A) after receiving the advice of itsfinancial advisors (who shall be Southard Financial, an independent valuationfirm, or an independent investment banking firm), (B) after taking intoaccount the likelihood of consummation of such transaction on the terms setforth therein (as compared to, and with due regard for, the terms herein) and(C) after taking into account all legal (with the advice of outsidecounsel), financial (including the financing terms of any such proposal),regulatory and other aspects of such proposal and any other relevant factorspermitted under applicable law; *provided that* for purposes of thedefinition of “Superior Proposal,” the references to “more than 15%” in thedefinition of Acquisition Proposal shall be deemed to be references to “amajority” and the definition of Acquisition Proposal shall only refer to atransaction involving Independent and not its Subsidiaries;

 

(g)           other than in accordance withcontracts entered into prior to the date of this Agreement which were disclosedto Greene County prior to the date hereof or otherwise in accordance with thisAgreement, make (i)  any capital expenditures relating to technologyinitiatives (including Internet web sites) or (ii) any other capitalexpenditures in excess of (A) $50,000 per project or related series ofprojects or (B) $100,000 in the aggregate, other than expendituresnecessary to maintain existing assets in good repair;

 

(h)           expand its banking business in anymaterial respect or, except in the ordinary course of business, makeapplication for the opening, relocation or closing of any, or open, relocate orclose any, branch office or loan production or servicing facility (*providedthat* Independent shall not open any new branch office or loanproduction or servicing facility in any state in which it does not have suchoperations at the date of this Agreement);

 

(i)            except for loans or commitments forloans that have previously been approved by Independent prior to the date ofthis Agreement, (i) make or acquire any loan or issue a commitment for anyloan other than loans made or acquired in the ordinary course of businessconsistent with past practice which have (A) in the case of commercial andcommercial real estate loans, a principal balance not in excess of $1,000,000which involves aggregate borrowings by the applicable borrower not in excess of$1,500,000, or (B) in the case of loans for the purchase of single-familyresidences, a principal balance not in excess of $1,000,000 unless, in eachsuch case, Independent promptly provides to Greene County copies of theapprovals for such loans; *provided that* Greene County may in itsjudgment determine to require that it consent in advance to loans of the typesreferred to in clause (A) or (B) and in such event Greene County andIndependent will work in a cooperative manner to establish procedures by whichsuch consent will be provided in order to ensure that this consent process doesnot materially interfere with the continued operations of Independent in theordinary course of business consistent with past practice; (ii) take anyaction that would result in any discretionary releases of collateral orguarantees or otherwise restructure any loan or commitment for any loan with aprincipal balance in excess of the respective amounts set forth inclause (i) above; or (iii) agree to guarantee the obligations of anyperson other than any wholly owned Subsidiary of Independent;

 

(j)            settle any claim, action orproceeding involving monetary damages, except in the ordinary course ofbusiness consistent with past practice, or agree or consent to the issuance ofany injunction, decree, order, agreement or judgment restricting its businessor operations;

 

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(k)           amend its charter, bylaws or similargoverning documents, or enter into a plan of consolidation, merger, shareexchange or reorganization with any person or a letter of intent or agreementin principle with respect thereto;

 

(l)            change its investment securitiesportfolio policy, or the manner in which the portfolio is classified orreported;

 

(m)          make any changes in its policies andpractices with respect to (i) underwriting, pricing, originating, acquiring,selling, servicing or buying or selling rights to service loans,(ii) hedging its loan positions or commitments, or (iii) withoutprior notice to Greene County, pricing of its other products and services;

 

(n)           take any action that is intended ormay be expected to result in any of its representations and warranties setforth in this Agreement being or becoming untrue in any respect at any timeprior to the Effective Time, or in any of the conditions to the Merger setforth in Section 8.01 or 8.02 not being satisfied or in a violation of anyprovision of this agreement, except, in every case, as may be required byapplicable law;

 

(o)           make any changes in its accountingmethods or method of Tax accounting, practices or policies, except as may berequired under law, rule, regulation or GAAP, in each case as concurred in byIndependent’s independent public accountants;

 

(p)           enter into any commercial loansecuritizations or create any special purpose funding entity;

 

(q)           enter into any agreement or amend orterminate any agreement between Independent or any of its Subsidiaries, otherthan agreements entered into by Independent and its Subsidiaries with customersin the ordinary course of its banking business;

 

(r)            introduce any new products orservices, any new marketing campaigns not in the ordinary course of business orany new sales compensation or incentive programs or arrangements, in each casewithout prior notice to Greene County;

 

(s)           make or change any Tax election,settle or compromise any Tax liability of Independent or any of itsSubsidiaries, agree to an extension of the statute of limitations with respectto the assessment or determination of Taxes of Independent or any of itsSubsidiaries, enter into any closing agreement with respect to any Tax orsurrender any right to claim a Tax refund;

 

(t)            intentionally take any action orfail to take any action which would be expected to adversely impair or delayconsummation of the transactions contemplated hereby beyond the time periodcontemplated by this Agreement; or

 

(u)           agree to, or make any commitment to,take any of the actions prohibited by this Section 6.02.

 

**Section6.03****.  NoFundamental Greene County Changes**. Except as expressly contemplated or permitted by this Agreement, or asrequired by applicable law, rule or regulation, during the period from the dateof this Agreement to the Effective Time, Greene County shall not, without theprior written consent of Independent (which consent shall not be unreasonablywithheld), (a) amend its charter or bylaws in a manner that wouldmaterially and adversely affect the economic benefits of the Merger to theholders of Independent Capital Stock, (b) take any action that is intendedor may reasonably be expected to result in any of its representations and warrantiesset forth in this Agreement being or becoming untrue in any material respect atany time prior to the Effective Time, or in any of the conditions to the Mergerset forth in Section 8.01 or 8.03 not being satisfied or in a materialviolation of any provision of this Agreement, (c) intentionally take anyaction or fail to take any action which would reasonably be expected tomaterially and adversely impair or delay consummation of the transactionscontemplated hereby beyond the time period contemplated by this Agreement or(d) agree to, or make any commitment to, take any of the actionsprohibited by this Section 6.03.

 

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**Section6.04****.  Dividends**.  Until the Effective Time, Independent andGreene County shall coordinate the declaration and payment of any dividends inrespect of Independent Common Stock and Greene County Common Stock and therecord dates and the payment dates relating thereto, it being the intention ofIndependent and Greene County that holders of Independent Common Stock shallnot receive two dividends, or fail to receive one dividend, for any singlecalendar quarter with respect to their shares of Independent Common Stockand/or any shares of Greene County Common Stock that any such holder receivesin exchange therefor pursuant to the Merger. If the Effective Time occurs after the record date for any dividend paidby Greene County in the fourth quarter of 2003, Independent shall be permittedto pay a dividend prior to the Effective Time equal to the amount that wouldhave been paid on the Independent Common Stock had the Independent Common Stockbeen converted to Greene County Common Stock prior to said record date for anyGreene County dividend or dividends to be paid in the fourth quarter of 2003.

 

**ARTICLEVII**

 

**ADDITIONALAGREEMENTS**

** **

**Section7.01****.  RegulatoryMatters**.

 

(a)           As promptly as practicable after thedate hereof, Greene County shall prepare and file the S-4 with the SEC.  Independent will furnish to Greene Countythe information required to be included in the S-4 with respect to its businessand affairs before it is filed with the SEC and again before any amendments arefiled, and shall have the right to reasonably review and reasonably consultwith Greene County on the form of, and any characterizations of suchinformation included in, the S-4 prior to the filing with the SEC.  Such S-4, at the time it becomes effectiveand on the Effective Time, shall in all material respects conform to therequirements of the Securities Act and the applicable rules and regulations ofthe SEC.  The S-4 shall include the formof Proxy Statement/Prospectus.  GreeneCounty and Independent shall use all reasonable efforts to cause the ProxyStatement/Prospectus to be approved by the SEC for mailing to the Independentstockholders, and such Proxy Statement/Prospectus shall, on the date ofmailing, conform in all material respects to the requirements of the applicablefederal securities laws and the applicable rules and regulations of the SECthereunder.  Independent shall cause theProxy Statement/Prospectus to be mailed to stockholders in accordance with allapplicable notice requirements under the applicable federal securities laws,the TBCA and other applicable rules and regulations of the Nasdaq.

 

(b)           Independent acknowledges that GreeneCounty may cause the merger (the “Second Merger”) of Rutherford Bank and Trustand/or First Independent Bank with and into one of Greene County’s wholly owneddepository institution Subsidiaries to be selected by Greene County.

 

(c)           Subject to the other provisions ofthis Agreement, the parties hereto shall cooperate with each other and usereasonable best efforts to promptly prepare and file all necessarydocumentation, to effect all applications, notices, petitions and filings, toobtain as promptly as practicable all permits, consents, approvals andauthorizations of all third parties and Governmental Entities which arenecessary or advisable to consummate the transactions contemplated by thisAgreement (including without limitation the Merger and the Second Merger) andto comply with the terms and conditions of all such permits, consents,approvals and authorizations of all such third parties and GovernmentalEntities.

 

(d)           Greene County and Independent shall,upon request, furnish each other with all information concerning themselves andtheir Subsidiaries, directors, officers and shareholders and such other mattersas may be reasonably necessary or advisable in connection with the ProxyStatement/Prospectus, the S-4 or any other statement, filing, notice orapplication made by or on behalf of Greene County, Independent or any of theirrespective Subsidiaries to any Governmental Entity in connection with theMerger and the other transactions contemplated by this Agreement.

 

(e)           Greene County and Independent shallpromptly advise each other upon receiving any communication from anyGovernmental Entity whose consent or approval is required for consummation ofthe transactions contemplated by this Agreement which causes such party tobelieve that there is a

 

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reasonablelikelihood that any Requisite Regulatory Approval (as defined inSection 8.01(c) below) will not be obtained or that the receipt of anysuch approval will be materially delayed or conditioned.

 

(f)            If any of Greene County’sapplications for regulatory approval are not approved, and such non-approval isstated in writing by the non-approving regulatory authority to be solelybecause of the condition of Greene County, then Greene County will pay anamount equal to $250,000 to Independent on the second Business Day followingthe receipt of notification that the application has not been approved.  Greene County and Independent agree that theagreement contained in this subsection is an integral part of the transactionscontemplated by this Agreement, that, without such agreement Independent wouldnot have entered into this Agreement, and that such amounts do not constitute apenalty.  If Greene County fails to payIndependent the amounts due under this subsection within the time periodsspecified herein, Greene County shall pay the costs and expenses (includinglegal fees and expenses) incurred by Independent in connection with any actionin which Independent prevails, including the filing of any lawsuit or theinitiation of arbitration proceeding, taken to collect payment of such amounts,together with interest on the amount of any such unpaid amounts at the primelending rate prevailing during such period as published in *The Wall Street Journal*,calculated on a daily basis from the date such amounts were required to be paiduntil the date of actual payment due.

 

**Section7.02****.  Access toInformation**.

 

(a)           Upon notice and subject to applicablelaws relating to the exchange of information, Independent and Greene Countyshall each, and shall cause each of their respective Subsidiaries to, afford tothe officers, employees, accountants, counsel and other Representatives ofeither Greene County or Independent, as the case may be, access, during normalbusiness hours during the period prior to the Effective Time, to all itsproperties, books, contracts, commitments and records, and to its officers,employees, accountants, counsel and other representatives, in each case in amanner not unreasonably disruptive to the operation of the business of theparties hereto and their Subsidiaries, and, during such period, the partieshereto shall, and shall cause their Subsidiaries to, make available to eitherGreene County or Independent, as the case may be, (i) a copy of eachreport, schedule, registration statement and other document filed or receivedby it during such period pursuant to the requirements of federal securitieslaws or federal or state banking, mortgage lending, real estate or consumerfinance or protection laws (other than reports or documents which Independentis not permitted to disclose under applicable law) and (ii) all otherinformation concerning its business, properties and personnel as such otherparty may reasonably request.  Neitherof the parties hereto nor any of their respective Subsidiaries shall berequired to provide access to or to disclose information where such access ordisclosure would violate or prejudice the rights of its customers, jeopardize theattorney-client privilege of the institution in possession or control of suchinformation or contravene any law, rule, regulation, order, judgment, decree,fiduciary duty or binding agreement entered into prior to the date of thisAgreement or in the ordinary course of business consistent with pastpractice.  The parties hereto will makeappropriate and reasonable substitute disclosure arrangements undercircumstances in which the restrictions of the preceding sentence apply.

 

(b)           Prior to consummation of the Merger,the parties hereto will provide one another with information which may bedeemed by the party providing the information to be confidential.  Each party hereto agrees that it will holdconfidential and protect all information provided to it by the other partyhereto or such party’s affiliates, except that the obligations contained inthis Section 7.02(b) shall not in any way restrict the rights of any partyor person to use information that: (a) was known to such party prior tothe disclosure by the other party; (b) is or becomes generally availableto the public other than by breach of this Agreement; (c) is provided byone party for disclosure concerning such party in the S-4; or(d) otherwise becomes lawfully available to a party to this Agreement on anon-confidential basis from a third party who is not under an obligation ofconfidence to the other party to this Agreement.  If this Agreement is terminated prior to the Closing, each partyhereto agrees to return all documents, statements and other written materials,whether or not confidential, and all copies thereof, provided to it by or onbehalf of the other party to this Agreement. The provisions of this Section 7.02(b) shall survive termination,for any reason whatsoever, of this Agreement, and, without limiting theremedies of the parties hereto in the event of any breach of thisSection 7.02(b), the parties hereto will be entitled to seek injunctiverelief against the other party in the event of a breach or threatened breach ofthis Section 7.02(b).

 

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(c)           Notwithstanding anything herein orany other agreement between the parties to the contrary, any party to thisAgreement (and any employee, representative or other agent of such party) maydisclose to any and all persons, without limitation of any kind, the taxtreatment and tax structure of the transactions contemplated by this Agreementand all materials of any kind (including opinions or other tax analyses) thatare provided to it relating to such tax treatment and tax structure; provided,however, that no party nor any employee, representative or other agent of suchparty shall disclose any information relating to such tax treatment or taxstructure to the extent nondisclosure is necessary in order to comply withapplicable securities laws.

 

(d)           No investigation by either of theparties or their respective Representatives shall affect the representations,warranties, covenants or agreements of the other set forth herein.

 

**Section7.03****.  ShareholderApproval**.

 

(a)           Independent shall duly take alllawful action to call, give notice of, convene and hold a meeting of itsshareholders as promptly as practicable following the date upon which the FormS-4 becomes effective (the “Independent Shareholders Meeting”) for the purposeof obtaining the required vote of the holders of Independent Common Stock withrespect to the transactions contemplated by this Agreement and, subject toSection 7.03(b), shall take all lawful action to solicit the adoption ofthis Agreement by such shareholders. The Board of Directors of Independent shall recommend adoption of thisAgreement by the shareholders of Independent and shall not (i) withdraw,modify or qualify in any manner adverse to Greene County such recommendation or(ii) take any other action or make any other public statement inconnection with the Independent Shareholders Meeting inconsistent with suchrecommendation (collectively, a “Change in Independent Recommendation”), exceptas and to the extent expressly permitted by Section 7.03(b).  Notwithstanding any Change in IndependentRecommendation, this Agreement shall be submitted to the shareholders ofIndependent at the Independent Shareholders Meeting for the purpose of adoptingthis Agreement and nothing contained herein shall be deemed to relieveIndependent of such obligation.  Inaddition to the foregoing, Independent shall not submit to the vote of itsshareholders any Acquisition Proposal other than the Merger.

 

(b)           Notwithstanding the foregoing,Independent and its Board of Directors shall be permitted to effect a Change inIndependent Recommendation, if and only to the extent that(i) Independent’s Board of Directors, based on the advice of its outsidecounsel, determines in good faith that failure to take such action would resultin a violation of its fiduciary duties under applicable law, and (ii) ifthe Board of Directors of Independent intends to effect a Change in IndependentRecommendation following an Acquisition Proposal, prior to effecting suchChange in Independent Recommendation, (A) Independent shall have compliedin all respects with Section 6.02(f), (B) the Board of Directors ofIndependent shall have concluded in good faith that such Acquisition Proposalconstitutes a Superior Proposal after giving effect to all of the adjustmentswhich may be offered by Greene County pursuant to clause (D) below,(C) Independent shall notify Greene County, at least five Business Days inadvance, of its intention to effect a Change in Independent Recommendation inresponse to such Superior Proposal, specifying the material terms andconditions of any such Superior Proposal and furnishing to Greene County a copyof the relevant proposed transaction agreements with the party making suchSuperior Proposal and other material documents, and (D) prior to effectingsuch a Change in Independent Recommendation, Independent shall, and shall causeits financial and legal advisors to, during the period following Independent’sdelivery of the notice referred to in clause (C) above, negotiate withGreene County in good faith (to the extent Greene County desires to negotiate)to make such adjustments in the terms and conditions of this Agreement so thatsuch Acquisition Proposal ceases to constitute a Superior Proposal.

 

**Section7.04****.  LegalConditions to Merger**.

 

(a)           Subject to the terms and conditionsof this Agreement, each of Greene County and Independent shall, and shall causetheir respective Subsidiaries to, use their reasonable best efforts (i) totake, or cause to be taken, all actions necessary, proper or advisable tocomply promptly with all legal requirements which may be imposed on such partyor its Subsidiaries with respect to the Merger and, subject to the conditionsset forth in Section 8 hereof, to consummate the transactions contemplatedby this

 

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Agreement and(ii) to obtain (and to cooperate with the other party to obtain) anyconsent, authorization, order or approval of, or any exemption by, any GovernmentalEntity and any other third party which is required to be obtained byIndependent or Greene County or any of their respective Subsidiaries inconnection with the Merger and the other transactions contemplated by thisAgreement; provided, however, that no party shall be required to take anyaction pursuant to the foregoing sentence if the taking of such action or theobtaining of such consents, authorizations, orders, approvals or exemptions isreasonably likely to result in a condition or restriction having an effect ofthe type referred to in Section 8.02(c).

 

(b)           Subject to the terms and conditionsof this Agreement, each of Greene County and Independent agrees to usereasonable best efforts to take, or cause to be taken, all actions and to do, orcause to be done, all things necessary, proper or advisable to consummate andmake effective, as soon as practicable after the date of this Agreement, thetransactions contemplated hereby, including, without limitation, usingreasonable best efforts to (i) modify or amend any contracts, plans orarrangements to which Greene County or Independent is a party (to the extentpermitted by the terms thereof) if necessary in order to satisfy the conditionsto closing set forth in Article VIII hereof, (ii) lift or rescind anyinjunction or restraining order or other order adversely affecting the abilityof the parties to consummate the transactions contemplated hereby, and(iii) defend any litigation seeking to enjoin, prevent or delay theconsummation of the transactions contemplated hereby or seeking materialdamages.

 

**Section7.05****.  Affiliates**.  Independent shall use its best efforts tocause each director, executive officer and other person who is an “affiliate”(for purposes of Rule 145 under the Securities Act) of Independent todeliver to Greene County, as soon as practicable after the date of thisAgreement, and in any event prior to the date of the shareholders meetingcalled by Independent pursuant to Section 7.03 hereof, a writtenagreement, in the form and substance satisfactory to Greene County, relating torequired transfer restrictions on the Greene County Common Stock received bythem in the Merger pursuant to Rule 145.

 

**Section7.06****.  NasdaqListing**.  Greene County shalluse its best efforts to cause the shares of Greene County Common Stock to beissued in the Merger to be approved for listing on the Nasdaq, subject toofficial notice of issuance, as of the Effective Time.

 

**Section7.07****.  Employees;Employee Benefit Plans**.

 

(a)           The benefits to be provided toemployees of Independent and its Subsidiaries as of the Effective Time(“Covered Employees”) shall be the benefits provided to similarly situatedemployees of Greene County, which shall be so provided as soon as practicableafter the Effective Time, but in no event later than the date the CoveredEmployees are placed on the same payroll service as such employees of GreeneCounty; provided, however, that until such time that the Covered Employees areplaced on the same payroll service as such employees of Greene County, GreeneCounty shall, or shall cause its Subsidiaries to, provide benefits no lessfavorable, in the aggregate, than the benefits provided to similarly situatedemployees under Greene County’s plans, programs and arrangements.  Except as provided to the contrary in thisAgreement, Greene County shall, from and after the Effective Time,(i) comply with the contractual commitments of Independent to its currentand former employees in accordance with their terms and honor all employee benefitobligations to current and former employees of Independent and its Subsidiariesunder the applicable contractual commitment, (ii) provide CoveredEmployees credit for the most recent period of uninterrupted service (includingany bridging or prior service credit, without regard to whether there has beenan interruption in service, solely to the extent provided by Independent andits Subsidiaries as of the date hereof) with Independent or any of itsSubsidiaries (and their predecessors) prior to the Effective Time for allpurposes under employee benefit plans of Greene County or its Subsidiaries(including for purposes of benefit accrual), (iii) cause any and allpre-existing condition limitations (to the extent such limitations did notapply to a pre-existing condition under comparable Plans) and eligibilitywaiting periods under group health plans of Greene County to be waived withrespect to Covered Employees (and their eligible dependents) who becomeparticipants in such group health plans and (iv) use reasonable efforts togive credit for or otherwise take into account the out-of-pocket expenses andannual expense limitations paid by each Covered Employee under the comparablePlans for the year in which the Effective Time occurs; provided, however, thatno credits for service as described in clause (ii) above shall bepermitted if to do so would result in duplication of benefits under suchplans.  From and after the

 

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Effective Time,Greene County shall honor all vacation and paid time off of the CoveredEmployees accrued as of the Effective Time, in accordance with the Independentpolicy as in effect on the date hereof. Except as otherwise prohibited under this Section 7.07, nothing inthis Section 7.07 shall be interpreted as preventing Greene County or itsSubsidiaries from amending, modifying or terminating any Plans or othercontracts, arrangements, commitments or understandings, in a manner consistentwith their terms and applicable law.

 

(b)           Subject to applicable law and theamendment provisions of any defined contribution plans maintained byIndependent or its Subsidiaries (the “401(k) Plans”), Independent agrees toamend the 401(k) Plans prior to the Effective Time so that new participant loansare no longer available as of the Effective Time.

 

(c)           With respect to the severance pay, assoon as practicable after the date hereof but in any event prior to theEffective Time, Independent shall, or shall cause its Subsidiaries to, amendsuch plans to provide that the payments to be made to any participants thereinshall only be made in a lump sum cash amount, and in no event shall Independentprovide the participants the right to elect to receive such payments in theform of an annuity.  In addition, assoon as practicable after the date hereof but in any event prior to theEffective Time, Independent shall, or shall cause its Subsidiaries to, use bestefforts to cause Covered Employees who are parties to employment,change-in-control or severance agreements (which have been previously disclosedto Greene County on Disclosure Schedule 4.11(a)) to agree to receive anyseverance or other related payments thereunder, which would otherwise be paidin the form of an annuity, in a lump sum payment within 30 days after thedate such payments would otherwise commence (or, if such payments have alreadycommenced, after the date of such amendment); provided, however, that all suchCovered Employees shall continue to be entitled to all other rights andbenefits to which they are previously entitled under any such agreements, whichshall remain in full force and effect, as modified to take into account solelythe provisions described herein; and provided, further, however, that in noevent shall any such amendments be made to those agreements pursuant to whichany Covered Employee is entitled to receive an amount payable either(i) in respect of a covenant not to solicit or (ii) expressly not inrespect of any severance obligation.

 

**Section7.08****.  Directors’and Officers’ Insurance; Indemnification**.

 

(a)           From and after the Effective Time,Greene County agrees to indemnify and hold harmless each person serving as anofficer or director of Independent and each Subsidiary of Independentimmediately prior to the Effective Time from and against all damages,liabilities, judgments and claims (and related expenses, including reasonableattorney’s fees and amounts paid in settlement) based upon or arising from hisor her capacity as an officer or director of Independent or a Subsidiary ofIndependent, to the full extent as indemnification is required or allowed underthe Charter of Independent or its applicable Subsidiary, as the same is ineffect on the date of this Agreement.

 

(b)           Greene County shall use itsreasonable best efforts to cause the persons serving as officers and directorsof Independent immediately prior to the Effective Time to be covered for aperiod of three years from the Closing Date by the directors’ and officers’liability insurance policy or policies maintained by Greene County (*providedthat* Greene County’s policy or policies provide at least the samecoverage and amounts containing terms and conditions which are in the aggregateno less advantageous to such directors and officers of Independent than the termsand conditions of the existing directors’ and officers’ liability insurancepolicy of Independent, and provided further that in no event will Greene Countybe required to expend in any one year an amount in excess of 150% of the annualpremiums currently paid by Independent for such insurance (the “InsuranceAmount”), and further *provided that* if Greene County is unableto maintain or obtain the insurance called for by this Section 7.08(b) asa result of the preceding proviso, Greene County shall use its reasonable bestefforts to obtain as much comparable insurance as available for the InsuranceAmount with respect to acts or omissions occurring prior to the Effective Timewhich were committed by such officers and directors in their capacity as such).

 

(c)           Each party hereto shall indemnify theother party, including such other party’s officers, agents and any parent,affiliate and subsidiary entities, against, and hold them harmless from, allliability,

 

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damages, costspenalties, expenses and judgments (including attorneys’ fees) relating to anyclaims against the other party which arise out of or in any way relate to(i) such party’s failure prior to the Effective Time to perform, pay,discharge, or satisfy any liabilities in any material respect, or to performany obligation under this Agreement; or (ii) such party’s breach of any ofits representations or warranties set forth in this Agreement.

 

**Section7.09****.  Advice ofChanges; Other Matters**.

 

(a)           Greene County and Independent shallpromptly advise the other party of any change or event which, individually orin the aggregate with other such changes or events, has a Material AdverseEffect on it or which it believes would or would be reasonably likely to causeor constitute a material breach of any of its representations, warranties orcovenants contained herein or delay the consummation of the transactionscontemplated hereby.

 

(b)           Independent and Greene County shalleach update their respective Disclosure Schedules as promptly as practicableafter the occurrence of an event or fact that, if such event or fact hadoccurred prior to the date of this Agreement, would have been disclosed in suchDisclosure Schedules.  The delivery ofsuch updated Disclosure Schedules shall not relieve Independent or itsSubsidiaries or Greene County, as the case may be, from any breach or violationof this Agreement and shall not have any effect for the purposes of determiningthe satisfaction of the condition set forth in Section 8.02(a) orSection 8.03(a) hereof.

 

**Section7.10****.  SubsequentInterim and Annual Financial Statements**.

 

(a)           As soon as reasonably available, butin no event more than 45 days after the end of each fiscal quarter (otherthan the fourth quarter of a fiscal year) or 90 days after the end of eachfiscal year ending after the date of this Agreement, Greene County will deliverto Independent its Quarterly Report on Form 10-Q or its Annual Report onForm 10-K, as the case may be, as filed with the SEC under the ExchangeAct.

 

(b)           As soon as available, Independentwill deliver to Greene County its quarterly or annual report, as the case maybe, as filed with the Federal Reserve Board under the Federal Reserve Act.

 

(c)           As soon as practicable and as soon asthey are available, but in no event more than 30 days, after the end ofeach calendar month ending after the date of this Agreement, Independent shallfurnish to Greene County (i) consolidated and consolidating financialstatements (including balance sheet, statement of operations and shareholders’equity) of Independent and each of its Subsidiaries as of and for such monththen ended, (ii) servicing reports regarding cash flows, delinquencies andforeclosures on asset pools serviced or master serviced by Independent or anyof its Subsidiaries, and (iii) any internal management reports relating tothe foregoing, in each case only to the extent that such reports are producedby Independent or any of its Subsidiaries in the ordinary course of business.  All information furnished by Independent toGreene County pursuant to this Section 7.10(c) shall be held in confidenceby Greene County to the extent required by, and in accordance with,Section 7.02(b).

 

**Section7.11****. Reorganization**. Neither Greene County nor Independent shall take, or cause or permit anyof its Subsidiaries to take, any action that could reasonably be expected toprevent the Merger from qualifying as a reorganization within the meaning ofSection 368(a) of the Code.

 

**Section7.12****.  Board of Directors**.  At or promptly following the Effective Time,Greene County shall take all action necessary to appoint Ronald E.Mayberry to the board of directors of each of Greene County and Greene CountyBank.

 

**Section7.13****.  Insider LoanDisclosure**.  Within 30 daysafter the date of this Agreement Independent shall prepare and deliver toGreene County a schedule setting forth the following information as of a datenot more than 15 days prior to such date of delivery: (a) allevidences of indebtedness reflected as assets on the books and records

 

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of Independent and itsSubsidiaries (“Loans”) by Independent and its Subsidiaries to executiveofficers (as such term is defined in Part 215 of Title 12 of the Code ofFederal Regulations) of Independent or any of its Subsidiaries; (b) anysuch Loans to any employee, officer, director or other affiliate on which theborrower is paying a rate other than that reflected in the note or the relevantcredit agreement or on which the borrower is paying a rate which was belowmarket at the time the Loan was made; and (c) any such Loans which werenot made in compliance in all material respects with all applicable federallaws and regulations.

 

**Section7.14****.  InsuranceDisclosure**.  Within30 days after the date of this Agreement Independent shall prepare anddeliver to Greene County a schedule setting forth the following information asof a date not more than 15 days prior to such date of delivery: a true andcomplete list and a brief description (including name of insurer, agent,coverage and expiration date) of all insurance policies in force with respectto the business and assets of Independent and its Subsidiaries (other thaninsurance policies under which Independent or any Subsidiary thereof is namedas a loss payee, insured or additional insured as a result of its position as asecured lender on specific loans and mortgage insurance policies on specificloans).

 

**Section7.15****.  ManagementConsultation Meetings and Distribution of Information**.  From the date of this Agreement until theEffective Time, Bill Adams, the Greene County officer responsible for theintegration of Greene County and Independent, and an officer of Independent(who shall be selected by Independent and reasonably acceptable to GreeneCounty) responsible for the integration of Greene County and Independent shallconfer on a regular basis regarding the business and operations of GreeneCounty and Independent.

 

**ARTICLEVIII**

** **

**CONDITIONSPRECEDENT**

** **

**Section8.01****.  Conditionsto Each Party’s Obligation To Effect the Merger**.  The respective obligations of each party toeffect the Merger shall be subject to the satisfaction at or prior to theEffective Time of the following conditions:

 

(a)           ***Shareholder Approval***. The agreement of merger contained in this Agreement shall have beenapproved and adopted by the requisite affirmative vote of the shareholders ofIndependent entitled to vote thereon.

 

(b)           ***Nasdaq Listing***. The shares of Greene County Common Stock to be issued to the holders ofIndependent Common Stock upon consummation of the Merger shall have beenauthorized for listing on the Nasdaq subject to official notice of issuance.

 

(c)           ***Other Approvals***. All regulatory approvals required to consummate the transactionscontemplated hereby shall have been obtained and shall remain in full force andeffect and all statutory waiting periods in respect thereof shall have expiredor been terminated (all such approvals and the expiration or termination of allsuch waiting periods being referred to herein as the “Requisite RegulatoryApprovals”).

 

(d)           ***S-4 Effectiveness***. The S-4 shall have become effective under the Securities Act, no stoporder suspending the effectiveness of the S-4 shall have been issued and noproceedings for that purpose shall have been initiated or threatened by theSEC.

 

(e)           ***No Injunctions or Restraints; Illegality***.  No order, injunction or decree issued by anycourt or agency of competent jurisdiction or other legal restraint orprohibition (an “Injunction”) preventing the consummation of the Merger or anyof the other transactions contemplated by this Agreement shall be ineffect.  No statute, rule, regulation,order, injunction or decree shall have been enacted, entered, promulgated orenforced by any Governmental Entity which prohibits or makes illegal theconsummation of the Merger.

 

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(f)            ***Tax Opinion***.  Theparties shall have received an opinion of Kutak Rock LLP, counsel toGreene County, dated the Closing Date, to the effect that, on the basis offacts, representations and assumptions set forth in such opinion, (i) theMerger constitutes a “reorganization” within the meaning of Section 368(a)of the Code, (ii) each of Independent and Greene County will be a party tothat reorganization within the meaning of Section 368(b) of the Code and(iii) subject to customary exceptions, and except to the extent of anycash received, no gain or loss will be recognized by any of the shareholders ofIndependent in the Merger.  In renderingits opinion, such counsel may require and rely upon written representationsfrom Independent, Greene County and shareholders of Independent.

 

**Section8.02****.  Conditionsto Obligations of Greene County**. The obligations of Greene County to effect the Merger are also subjectto the satisfaction or waiver by Greene County at or prior to the EffectiveTime of the following conditions:

 

(a)           ***Representations and Warranties***.  The representations and warranties ofIndependent set forth in this Agreement shall be true and correct in allrespects as of the date of this Agreement and (except to the extent suchrepresentations and warranties speak as of an earlier date) as of the ClosingDate as though made on and as of the Closing Date; provided, however, that forpurposes of determining the satisfaction of this condition, no effect shall begiven to any exception in such representations and warranties relating tomateriality or a Material Adverse Effect, and instead, for purposes of thiscondition, such representations and warranties (other than the representationsand warranties contained in Section 4.02(a), which shall be true andcorrect in all material respects) shall be deemed to be true and correct in allrespects unless the failure or failures of such representations and warrantiesto be so true and correct, individually or in the aggregate, results or wouldreasonably be expected to result in a Material Adverse Effect onIndependent.  Greene County shall havereceived a certificate signed on behalf of Independent by the principalexecutive officer and the principal financial officer of Independent to theforegoing effect; provided that if the principal executive officer andprincipal financial officer of Independent shall be the same person, suchperson shall sign the certificate in both capacities.

 

(b)           ***Performance of Obligations of Independent***.  Independent shall have performed in allrespects all obligations required to be performed by it under this Agreement ator prior to the Closing Date, and Greene County shall have received acertificate signed on behalf of Independent by the principal executive officerand principal financial officer of Independent to such effect; provided that ifthe principal executive officer and principal financial officer of Independentshall be the same person, such person shall sign the certificate in bothcapacities.

 

(c)           ***Burdensome Condition***. There shall not be any action taken, or any statute, rule, regulation ororder enacted, entered, enforced or deemed applicable to the transactionscontemplated by this Agreement, by any Governmental Entity, in connection withthe grant of a Requisite Regulatory Approval or otherwise, which imposes anyrestriction or condition which would be reasonably likely to have or result ina Material Adverse Effect on the Surviving Company or Greene County.

 

(d)           ***Director Resignations***. Greene County shall have received resignations from each director ofeach Independent Subsidiary designated by Greene County.

 

(e)           ***Execution of Voting Agreement***.  Prior to the execution of this Agreement, the directors andexecutive officers of Independent shall have entered into and delivered toGreene County the Voting Agreement.

 

(f)            ***Execution of Non-Compete Agreements***.  Prior to the Effective Date, every directorof Independent that is not an employee of Independent or its Subsidiaries, eachin his or her individual capacity, shall have entered into non-competeagreements, in the form attached hereto as Exhibit B, with a term of twoyears and delivered such agreements to Greene County.

 

**Section8.03****.  Conditionsto Obligations of Independent**. The obligation of Independent to effect the Merger is also subject tothe satisfaction or waiver by Independent at or prior to the Effective Time ofthe following conditions:

 

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(a)           ***Representations and Warranties***.  The representations and warranties of GreeneCounty set forth in this Agreement shall be true and correct in all respects asof the date of this Agreement and (except to the extent such representationsand warranties speak as of an earlier date) as of the Closing Date as thoughmade on and as of the Closing Date; provided, however, that for purposes ofdetermining the satisfaction of this condition, no effect shall be given to anyexception in such representations and warranties relating to materiality or aMaterial Adverse Effect, and instead, for purposes of this condition, suchrepresentations and warranties shall be deemed to be true and correct in allrespects unless the failure or failures of such representations and warrantiesto be so true and correct, individually or in the aggregate, result or wouldreasonably be expected to result in a Material Adverse Effect on Greene County.  Independent shall have received acertificate signed on behalf of Greene County by the Chief Executive Officerand the Chief Financial Officer of Greene County to the foregoing effect.

 

(b)           ***Performance of Obligations of Greene County***.  Greene County shall have performed in allmaterial respects all obligations required to be performed by it under thisAgreement at or prior to the Closing Date, and Independent shall have receiveda certificate signed on behalf of Greene County by the Chief Executive Officerand the Chief Financial Officer of Greene County to such effect.

 

**ARTICLEIX**

** **

**TERMINATION AND AMENDMENT**

** **

**Section 9.01****.  Termination**.  This Agreement may be terminated at any timeprior to the Effective Time:

 

(a)           by mutual consent of Greene Countyand Independent in a written instrument, if the Board of Directors of each sodetermines;

 

(b)           by either Greene County orIndependent if (i) any Governmental Entity which must grant a RequisiteRegulatory Approval has denied approval of the Merger and such denial hasbecome final and nonappealable or (ii) any Governmental Entity ofcompetent jurisdiction shall have issued a final nonappealable order enjoiningor otherwise prohibiting the consummation of the transactions contemplated bythis Agreement;

 

(c)           by either Greene County orIndependent if the Effective Time shall not have occurred on or beforeMarch 31, 2004, unless the failure of the Effective Time to occur by suchdate shall be due to the failure of the party seeking to terminate thisAgreement to perform or observe the covenants and agreements of such party setforth herein;

 

(d)           by either Greene County orIndependent (*provided that* the terminating party is not then in materialbreach of any representation, warranty, covenant or other agreement containedherein) if the other party shall have breached (i) any of the covenants oragreements made by such other party herein or (ii) any of therepresentations or warranties made by such other party herein, and in eithercase, such breach (A) is not cured within 30 days following writtennotice to the party committing such breach or which breach, by its nature,cannot be cured prior to the Closing and (B) would entitle thenonbreaching party not to consummate the transactions contemplated hereby underArticle VIII hereof;

 

(e)           by either Greene County orIndependent if any approval of the shareholders of Independent contemplated bythis Agreement shall not have been obtained by reason of the failure to obtainthe required vote at the Independent Shareholders Meeting or at any adjournmentor postponement thereof;

 

(f)            by Greene County if (i) theBoard of Directors of Independent shall have failed to recommend the Merger, orshall have withdrawn, modified or changed in a manner adverse to Greene Countyits recommendation of the Merger (or shall have disclosed its intention towithdraw, modify or adversely change such recommendation),(ii) Independent shall have breached the terms of Section 6.02(f)hereof in any respect adverse to Greene County, or (iii) Independent shallhave breached its obligations under

 

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Section 7.03by failing to call, give notice of, convene and hold the IndependentShareholders Meeting in accordance with Section 7.03;

 

(g)           by Greene County if a tender offer orexchange offer for 25% or more of the outstanding shares of Independent CommonStock is commenced (other than by Greene County or a Subsidiary thereof), andthe Board of Directors of Independent recommends that the shareholders ofIndependent tender their shares in such tender or exchange offer or otherwisefails to recommend that such shareholders reject such tender offer or exchangeoffer within the 10-business-day period;

 

(h)           by Independent if, on the MeasurementDate, both:

 

(i)            the Average Closing Price is lessthan $21.80; and

 

(ii)           the percentage decline in price ofthe Greene County Common Stock between the Starting Share Price and the AverageClosing Price is more than 113.5% of any decline in the Index;

 

*provided that* Independent must provide written noticeof its election to terminate this Agreement to Greene County within twoBusiness Days after the Measurement Date; *except that* no termination under thisprovision shall be permitted if, within two Business Days after receivingwritten notice of termination from Independent pursuant hereto, Greene Countyshall provide written notice to Independent of Greene County’s determination toincrease the Merger Consideration by the product of (A) the difference between$21.80 and the Average Closing Price and (B) the Total Stock MergerConsideration.

 

For the purposes of this Section 9.01(h),the following terms shall have the meanings indicated:

 

“Average Closing Price” shall meanaverage closing price of the Greene County Common Stock as reported on the NasdaqStock Market (as reported in the *Wall Street Journal*) for the 20 BusinessDays immediately preceding, and inclusive of, the Measurement Date.

 

“Index” shall mean the SNL Financial BankIndex for banks with assets between $500 million and $1.0 billion.

 

“Measurement Date” shall mean the datethat is five Business Days prior to the Closing.

 

“Starting Share Price” shall mean $25.20;or

 

(i)            by Independent if it shall havereceived a Superior Proposal, and in accordance with Section 6.02(f) of thisAgreement, the board of directors of Independent has made a determination toaccept such Superior Proposal.

 

**Section9.02****.  Effect ofTermination**.

 

(a)           In the event of termination of thisAgreement by either Greene County or Independent as provided in Section 9.01,this Agreement shall forthwith become void and have no effect, and none ofGreene County, Independent, any of their respective Subsidiaries or any of theofficers or directors of any of them shall have any liability of any naturewhatsoever hereunder, or in connection with the transactions contemplatedhereby, except that (i) Sections 7.02(b), 7.08(c), 9.02, and 10.02shall survive any termination of this Agreement and (ii) notwithstandinganything to the contrary contained in this Agreement, neither Greene County norIndependent shall be relieved or released from any liabilities or damagesarising out of its willful breach of any provision of this Agreement.

 

(b)           Independent shall pay Greene County,by wire transfer of immediately available funds, the sum of $1.0 million(the “Termination Fee”) if this Agreement is terminated as follows:

 

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(i)            if this Agreement is terminated byGreene County pursuant to Section 9.01(f), 9.01(g) or 9.01(i), then Independentshall pay the entire Termination Fee on the second Business Day following suchtermination; and

 

(ii)           if this Agreement is terminated by(A) Greene County pursuant to Section 9.01(d) if the breach givingrise to such termination was willful or (B) either Greene County orIndependent pursuant to Section 9.01(e) and in any such case anAcquisition Proposal shall have been publicly announced or otherwisecommunicated or made known to the senior management or Board of Directors ofIndependent (or any person shall have publicly announced, communicated or madeknown an intention, whether or not conditional, to make an AcquisitionProposal) at any time after the date of this Agreement and prior to the date ofthe taking of the vote of the shareholders of Independent contemplated by thisAgreement at the Independent Shareholders Meeting, in the case ofclause (B), or the date of termination, in the case of clause (A),then Independent shall (1) pay Greene County an amount equal to $375,000****onthe second Business Day following such termination, and (2) if within18 months after such termination Independent or any of its Subsidiariesenters into a definitive agreement with respect to, or consummates, anAcquisition Proposal, then Independent shall pay the Termination Fee (net ofany payment made pursuant to clause (1) above) on the date of suchexecution or consummation.

 

(c)           Any amount that becomes payablepursuant to Section 9.02(b) shall be paid by wire transfer of immediatelyavailable funds to an account designated by Greene County.

 

(d)           Independent and Greene County agreethat the agreement contained in paragraph (b) above is an integral part ofthe transactions contemplated by this Agreement, that without such agreementGreene County would not have entered into this Agreement, and that such amountsdo not constitute a penalty.  IfIndependent fails to pay Greene County the amounts due under paragraph (b)above within the time periods specified in such paragraph (b), Independentshall pay the costs and expenses (including legal fees and expenses) incurredby Greene County in connection with any action in which Greene County prevails,including the filing of any lawsuit, taken to collect payment of such amounts,together with interest on the amount of any such unpaid amounts at the primelending rate prevailing during such period as published in *The Wall Street Journal*,calculated on a daily basis from the date such amounts were required to be paiduntil the date of actual payment.

 

**Section9.03****.  Amendment**.  Subject to compliance with applicable law,this Agreement may be amended by the parties hereto, by action taken orauthorized by their respective Boards of Directors, at any time before or afterapproval of the matters presented in connection with the Merger by theshareholders of Independent; provided, however, that after any approval of thetransactions contemplated by this Agreement by Independent’s shareholders theremay not be, without further approval of such shareholders, any amendment ofthis Agreement which reduces the amount or changes the form of theconsideration to be delivered to the Independent shareholders hereunder otherthan as contemplated by this Agreement or which negatively impacts the intendedtax treatment of the holders of Independent Common Stock.  This Agreement may not be amended except byan instrument in writing signed on behalf of each of the parties hereto.

 

**Section9.04****.  Extension;Waiver**.  At any time prior tothe Effective Time, the parties hereto may, to the extent legally allowed,(a) extend the time for the performance of any of the obligations or otheracts of the other parties hereto, (b) waive any inaccuracies in therepresentations and warranties contained herein or in any document deliveredpursuant hereto and (c) waive compliance with any of the agreements orconditions contained herein.  Anyagreement on the part of a party hereto to any such extension or waiver shallbe valid only if set forth in a written instrument signed on behalf of suchparty, but such extension or waiver or failure to insist on strict compliancewith an obligation, covenant, agreement or condition shall not operate as awaiver of, or estoppel with respect to, any subsequent or other failure.

 

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**ARTICLEX**

** **

**GENERALPROVISIONS**

** **

**Section10.01****.  Nonsurvivalof Representations, Warranties and Agreements**.  None of the representations, warranties,covenants and agreements in this Agreement or in any instrument deliveredpursuant to this Agreement shall survive the Effective Time, except for thosecovenants and agreements contained herein and therein which by their termsapply in whole or in part after the Effective Time.

 

**Section10.02****.  Expenses**.  Except as provided in Sections 9.02 and7.01(f) hereof, all costs and expenses incurred in connection with thisAgreement and the transactions contemplated hereby shall be paid by the partyincurring such expense.

 

**Section10.03****.  Notices**.  All notices and other communicationshereunder shall be in writing and shall be deemed given if deliveredpersonally, telecopied (with confirmation) or delivered by an overnight courier(with confirmation) to the parties at the following addresses (or at such otheraddress for a party as shall be specified by like notice):

 

(a)   if toGreene County, to:

 

Greene CountyBancshares, Inc.

100 North Main Street

Greeneville, TN  37743-4992

Phone: (423) 639-5111

Facsimile:  (423) 787-1235

Attention:  R. Stan Puckett

William F. Richmond

 

witha copy to:

 

Kutak Rock LLP

1101Connecticut Avenue, NW

Suite1000

Washington,DC  20036

Phone:(202) 828-2400

Facsimile:  (202) 828-2488

Attention:         PaulD. Borja

 

(b)   if to Independent, to:

 

IndependentBankshares Corporation

710Nashville Pike

Gallatin,TN  37066

Facsimile:  (615) 425-9163

Attention:  Ronald E. Mayberry

 

witha copy to:

 

Gerrish &McCreary, P.C. 

5214Maryland Way, Suite 406

Brentwood,TN  37027

Facsimile:  (615) 251-0975

Attention:  J. Franklin McCreary

 

**Section10.04****. Interpretation**.  Thewords “hereof,” “herein” and “hereunder” and words of similar import when usedin this Agreement shall refer to this Agreement as a whole and not to anyparticular provision of this

 

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Agreement, and Sectionreferences are to this Agreement unless otherwise specified.  Whenever the word “include,” “includes” or“including” is used in this Agreement, it shall be deemed to be followed by thewords “without limitation.”  The tableof contents and headings contained in this Agreement are for reference purposesonly and shall not affect in any way the meaning or interpretation of thisAgreement.  No provision of thisAgreement shall be construed to require Independent or Greene County or any oftheir respective officers, directors, Subsidiaries or affiliates to take anyaction which would violate or conflict with any applicable law (whetherstatutory or common), rule or regulation. It is agreed that any disclosure in a particular section of a DisclosureSchedule shall be deemed disclosed in respect of any other section thereof tothe extent it is readily apparent that such disclosure is applicable to suchother section.

 

**Section10.05****.  Counterparts**.  This Agreement may be executed incounterparts, all of which shall be considered one and the same agreement andshall become effective when counterparts have been signed by each of theparties and delivered to the other parties, it being understood that allparties need not sign the same counterpart.

 

**Section10.06****.  EntireAgreement**.  This Agreement(together with the documents and the instruments referred to herein)constitutes the entire agreement and supersedes all prior agreements andunderstandings, both written and oral, among the parties with respect to thesubject matter hereof.

 

**Section10.07****.  GoverningLaw**.  This Agreement shall begoverned and construed in accordance with the laws of the State of Tennessee,without regard to any applicable conflicts of law provisions (except to theextent that mandatory provisions of federal law or the TBCA are applicable).

 

**Section10.08****.  Severability**.  Any term or provision of this Agreementwhich is determined by a court of competent jurisdiction to be invalid orunenforceable in any jurisdiction shall, as to that jurisdiction, beineffective to the extent of such invalidity or unenforceability withoutrendering invalid or unenforceable the remaining terms and provisions of thisAgreement or affecting the validity or enforceability of any of the terms orprovisions of this Agreement in any other jurisdiction, and if any provision ofthis Agreement is determined to be so broad as to be unenforceable, theprovision shall be interpreted to be only so broad as is enforceable, in allcases so long as neither the economic nor legal substance of the transactionscontemplated hereby is affected in any manner materially adverse to any partyor its shareholders.  Upon any suchdetermination, the parties shall negotiate in good faith in an effort to agreeupon a suitable and equitable substitute provision to effect the originalintent of the parties.

 

**Section10.09****.  Publicity**.  Greene County and Independent shall consultwith each other before issuing any press release with respect to the Merger orthis Agreement and shall not issue any such press release or make any such publicstatement without the prior consent of the other party, which shall not beunreasonably withheld; provided, however, that a party may, without the priorconsent of the other party (but after prior consultation, to the extentpracticable in the circumstances), issue such press release or make such publicstatement as may upon the advice of outside counsel be required by law or therules and regulations of the Nasdaq. Without limiting the reach of the preceding sentence, Greene County andIndependent shall cooperate to develop all public announcement materials andmake appropriate management available at presentations related to thetransactions contemplated by this Agreement as reasonably requested by theother party.  In addition, Independentand its Subsidiaries shall (a) consult with Greene County regardingcommunications with customers, shareholders, prospective investors andemployees related to the transactions contemplated hereby, (b) provideGreene County with shareholder lists of Independent and (c) allow andfacilitate Greene County contact with shareholders of Independent and otherprospective investors.

 

**Section10.10****.  Assignment;Third-party Beneficiaries**. Neither this Agreement nor any of the rights, interests or obligationsof any party hereunder shall be assigned by any of the parties hereto (whetherby operation of law or otherwise) without the prior written consent of theother party.  Subject to the precedingsentence, this Agreement will be binding upon, inure to the benefit of and be enforceableby the parties and their respective successors and permitted assigns.  Except as otherwise specifically provided inSection 7.08 hereof, this Agreement (including the documents andinstruments referred to herein) is not intended to confer upon any person otherthan the parties hereto any rights or remedies hereunder.

 

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**Section10.11****.  DisputeResolution**.

 

(a)           Independent and Greene County eachagree to submit all matters of disagreement, dispute, or controversy betweenIndependent and Greene County under this Agreement to binding arbitrationbefore the American Arbitration Association (the “AAA”).  All arbitration proceedings shall beconducted by three arbitrators in Greeneville, Tennessee, under the CommercialArbitration Rules of the AAA, except as otherwise provided in thisSection 10.11.  The partysubmitting a matter to arbitration shall include in the submission the name andaddress of the arbitrator selected by it, and the nonsubmitting party shallsubmit the name and address of the arbitrator selected by it within twenty(20) calendar days after receipt of notice of the submission.  The two arbitrators selected by Independentand Greene County shall be instructed to appoint a third arbitrator as soon aspracticable.  If they fail to do sowithin twenty (20) calendar days after the appointment of thenonsubmitting party’s arbitrator, the AAA may appoint the third arbitrator andshall appoint the third arbitrator within thirty (30) calendar days afterthe appointment of the nonsubmitting party’s arbitrator.

 

(b)           The fees and expenses of eacharbitrator and all other costs and expenses incurred in the arbitration subjectto Section 10.11(a), including reasonable attorneys’ fees, shall be borne asspecified in the arbitrators’ award.

 

(c)           Notwithstanding subsection (a)of this Section 10.11, either party shall be entitled to commence a suitat law for the purpose of (i) obtaining appropriate equitable relief inthe event of a violation, or imminent violation, of Section 7.02(b) ofthis Agreement or (ii) enforcing the indemnification obligation underSection 7.08 of this Agreement. Neither party shall prejudice any right to seek arbitration of anydispute arising with respect to Section 7.02(b) or Section 7.08 bycommencing such a suit at law.

 

**Section10.12****.  Headings**.  The section headings contained in thisAgreement are inserted for convenience only and shall not affect in any way themeaning or interpretation of this Agreement.

 

**Section10.13****.  Construction**.  The parties have participated jointly in thenegotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretationarises, this Agreement shall be construed as if drafted jointly by the partiesand no presumption or burden of proof shall arise favoring or disfavoring anyparty by virtue of the authorship of any of the provisions of thisAgreement.  Any reference to anyfederal, state, local, or foreign statute or law shall be deemed also to referto all rules and regulations promulgated thereunder, unless the contextrequires otherwise.  The parties intendthat each representation, warranty, and covenant contained herein shall haveindependent significance.  If any partyhas breached any representation, warranty, or covenant contained herein in anyrespect, the fact that there exists another representation, warranty, orcovenant relating to the same subject matter (regardless of the relative levelsof specificity) which the party, as the case may be, has not breached shall notdetract from or mitigate the fact that the party, as the case may be, is inbreach of the first representation, warranty, or covenant.

 

**Section10.14****.  Amendmentsand Waivers**.  No amendment ofany provision of this Agreement shall be valid unless the same shall be inwriting and signed by each of the parties. No waiver by either party of any default, misrepresentation, or breachof warranty or covenant hereunder, whether intentional or not, shall be deemedto extend to any prior or subsequent default, misrepresentation, or breach ofwarranty or covenant hereunder or affect in any way any rights arising byvirtue of any prior or subsequent such occurrence.

 

**[SIGNATUREPAGE FOLLOWS]**

 

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IN WITNESSWHEREOF, Greene County and Independent have caused this Agreement to beexecuted by their respective officers hereunto duly authorized as of the datefirst above written.

 
|   | GREENE  COUNTY BANCSHARES, INC.     |
|--------|-------------------------------------|
|   |                                |
|   |                                |
|   | By                                  |  /s/  R. Stan Puckett |
|   |                                |  R.  Stan Puckett |
|   |                                |  Chairman  of the Board and Chief Executive Officer |
|   |                                |
|   |                                |
|   | INDEPENDENT  BANKSHARES CORPORATION |
|   |                                |
|   |                                |
|   | By                                  |  /s/  Ronald E. Mayberry |
|   |                                |  Ronald  E. Mayberry |
|   |                                |  President  and Chief Executive Officer |
|        |                                     |  |  |

 

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**EXHIBITA**

** **

**VOTINGAGREEMENT**

** **

**THIS VOTING AGREEMENT** (the“Agreement”) dated as of June     , 2003, betweenGreene County Bancshares, Inc., a Tennessee corporation (“Greene County”), andeach of the individuals listed on Schedule A attached hereto (collectively,the “Shareholders”).

 

WHEREAS, the Shareholders(i) collectively possess the sole or joint right to vote, or direct thevoting of, an aggregateof              sharesof common stock, $4.00 par value (“Shares”), of Independent Bankshares Corporation,a Tennessee corporation (“Independent”), which constitute approximately          % of theoutstanding capital stock of Independent, no other shares of any other class ofcapital stock of Independent being issued or outstanding, and(ii) individually possess the right to vote, or direct the voting of, thenumber of Shares set forth opposite such Shareholder’s name on Schedule Ahereto; and

 

WHEREAS, the Shareholders(i) collectively possess the sole or joint power to dispose of, or todirect the disposition of, an aggregate of            Shares, which constitute approximately           % of theoutstanding capital stock of Independent, and (ii) individually possessthe power to dispose of, or direct the disposition of, the number of Shares setforth opposite such Shareholder’s name on Schedule A hereto; and

 

WHEREAS, Greene County has entered intoan Agreement and Plan of Merger with Independent, dated as the date hereof (the“Merger Agreement”), pursuant to which Independent will merge with and intoGreene County (the “Merger”); and

 

WHEREAS, as a condition to entering intothe Merger Agreement, Greene County has requested that the Shareholders agree,and the Shareholders have agreed, to support the Merger; and

 

WHEREAS, in consideration for the Shareholders’support of the Merger and entering into this Agreement, the Shareholders willreceive either cash or common stock of Greene County pursuant to the terms andconditions of the Merger Agreement.

 

NOW, THEREFORE, to induce Greene Countyto enter into the Merger Agreement and in consideration of the mutual covenantsand agreements set forth herein and in the Merger Agreement, and intending tobe legally bound hereby, the parties hereto agree as follows:

 

1.             **Representations of Shareholders**.  Each of the Shareholders, severally, and notjointly, represents that:

 

(a)                                           (1) suchShareholder possesses the sole or joint right to vote, or direct the voting of,all of the Shares set forth on Schedule A opposite theShareholder’s name, (2) such number of Shares constitutes all of theShares with respect to which the Shareholder possesses the sole or joint rightto vote, or direct the voting of, as the case may be, and (3) suchShareholder has good and merchantable title to all of the Shares indicated onsaid list opposite the Shareholder’s name, free and clear of all claims, liens,restrictions and encumbrances of every kind and character, except as indicatedon Schedule A.

 

(b)                                           (1) suchShareholder possesses the sole or joint power to dispose of, or direct thedisposition of, the Shares set forth on Schedule A opposite theShareholder’s name, (2) such number of Shares constitutes all of theShares with respect to which the Shareholder possesses or will possess the soleor joint power to dispose of or direct the disposition of, and (3) suchShareholder has good and merchantable title to all of the Shares indicated onsaid list opposite the Shareholder’s name free and clear of all claims, liens,restrictions and encumbrances of any kind or character except as indicated on Schedule A.

 

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(c)                                           suchShareholder does not own, of record or beneficially, any Shares that are notreflected on Schedule A. For the purposes of this Agreement, beneficial ownership has the meaningset forth in Rule 13d-3 of the Securities Exchange Act of 1934, asamended.

 

(d)                                           suchShareholder has full right, power and authority to enter into, deliver andperform this Agreement; this Agreement has been duly executed and delivered bysuch Shareholder; and this Agreement constitutes the legal, valid and bindingobligation of the Shareholder, and is enforceable in accordance with its terms.

 

2.             **Covenants of Shareholders**.  Each of the Shareholders, severally and notjointly, covenants as follows:

 

(a)                                           ***Restrictions on Transfer***.  Subject to the provisions of Section 6.02(f)of the Merger Agreement with respect to the fiduciary obligations, asdirectors, of Shareholders who are also directors of Independent, with respectto Shares listed on Schedule A, during the term of this Agreement,such Shareholder shall not sell, transfer, assign, pledge, hypothecate, tender,grant a security interest in, or otherwise dispose of or encumber any of suchShares and will not enter into any agreement, arrangement or understanding(other than a proxy for the purpose of voting his or her Shares in accordancewith Subparagraph 2(c) hereof) which would, during that term(i) restrict, (ii) establish a right of first refusal to, or(iii) otherwise relate to the transfer or voting of such Shares.

 

(b)                                           ***Other Restrictions***.  Subject to the provisions of Section 6.02(f)of the Merger Agreement with respect to the fiduciary obligations, asdirectors, of Shareholders who are also directors of Independent, during the termof this Agreement, such Shareholder shall not, directly or indirectly, solicit,initiate or encourage inquiries or proposals from, or participate in anydiscussions or negotiations with, or provide any information to, anyindividual, corporation, partnership, limited liability company or otherperson, entity or group (other than Greene County and its affiliates, officers,employees, representatives and agents) concerning any sale of assets, sale ofshares of capital stock, merger, consolidation, share exchange or similartransactions involving Independent and its two wholly owned subsidiaries, FirstIndependent Bank and Rutherford Bank and Trust, each a Tennessee statechartered bank (collectively, the ”Subsidiaries”), and such Shareholderwill use all commercially reasonable efforts to assure that Independent and theSubsidiaries take no such steps.  SuchShareholder shall promptly advise Greene County of, and communicate to GreeneCounty the terms of, any such inquiry or proposal addressed either to suchShareholder or to Independent or the Subsidiaries that such Shareholderreceives or of which such Shareholder has knowledge.

 

(c)                                           ***Merger***.  With respect to the Shares listed on Schedule Apursuant to Subparagraph 1(a) hereof, each of the Shareholders shallvote such Shares in favor of the Merger Agreement, as defined therein, and thetransactions contemplated thereby; each of the Shareholders, as a Shareholder,further agrees to support the effectuation of the Merger, subject to theprovisions of Section 6.02(f) of the Merger Agreement with respectto the fiduciary obligations, as directors, of shareholders who are alsodirectors of Independent.

 

(d)                                           ***Additional Shares***.  The provisions of Subparagraphs (a)and (c) above shall apply to all Shares currently owned and hereafteracquired, of record or beneficially, by each of the Shareholders.

 

(e)                                           ***Death, Incapacity, or Dissolution***.  This Agreement shall not be terminated byany act of any Shareholder or by operation of law, whether by the death orincapacity of such Shareholder or by the occurrence of any other event orevents (including, without limiting the foregoing, the termination of any trustor estate for which such Shareholder is acting as a fiduciary or fiduciaries orthe dissolution or liquidation of any corporation, partnership or limitedliability company).  If between theexecution hereof and the termination of this Agreement, any Shareholder shoulddie or become incapacitated, or if any trust or estate holding the Sharesshould be terminated, or if any corporation, partnership or limited liabilitycompany holding the Shares should be dissolved or liquidated, or if any othersuch similar event or events

 

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shall occur before the termination of this Agreement, certificatesrepresenting the Shares shall be delivered by or on behalf of such Shareholderin accordance with the terms and conditions of the Merger Agreement and thisAgreement, and actions taken by such Shareholder hereunder shall be as valid asif such death, incapacity, termination, dissolution, liquidation or othersimilar event or events had not occurred, regardless of whether or not GreeneCounty has received notice of such death, incapacity, termination, dissolution,liquidation or other event.

 

(f)                            ***Public Announcements***.  Each Shareholder shall consult with GreeneCounty before issuing any press releases or otherwise making any publicstatements with respect to the transactions contemplated herein and shall notissue any such press release or make any public statement without the approvalof Greene County, except as may be required by law.

 

(g)                           ***Disclosure***.  Each Shareholder hereby authorizes GreeneCounty to publish and disclose any announcement or disclosure required by theSecurities and Exchange Commission (the “SEC”) or The Nasdaq National MarketSystem (“Nasdaq”) or any other national securities exchange and in the ProxyStatement/Prospectus (including all documents and schedules filed with the SECin connection with either of the foregoing), its identity and ownership of theShares and the nature of its commitments, arrangements and understandings underthis Agreement.

 

3.             **Termination**.  This Agreement shall terminate upon thetermination of the Merger Agreement and be of no further force and effect,provided that nothing herein shall relieve any party from liability hereof forany breach of this Agreement prior to such termination.

 

4.             **Governing Law**.  This Agreement shall in all respects begoverned by and construed under the laws of Tennessee, all rights and remediesbeing governed by such laws, without regard to any applicable conflicts of lawprinciples.

 

5.             **Benefit of Agreement**.  This Agreement shall be binding upon andinure to the benefit of, and shall be enforceable by, the parties hereto andtheir respective personal representatives, successors and assigns, except thatneither party may transfer or assign any of its respective rights orobligations hereunder without the prior written consent of the other party or,if by Greene County, in accordance with the Merger Agreement.

 

6.             **Notice**.  All notices, requests, claims, demands andother communications hereunder shall be in writing and shall be given (andshall be deemed to have been duly given upon receipt) by delivery in person, byconfirmed facsimile or by registered or certified mail (postage prepaid, returnreceipt requested) to the respective parties at the following addresses (or atsuch other address for a party as shall be specified by like notice):

 

if to Greene County, to:

 
| Greene County  Bancshares, Inc.  |
|----------------------------------|
| 100 North Main Street            |
| Greeneville, TN  37743-4992 |
| Phone:                           |   | (423) 639-5111 |
| Facsimile:                       |   | (423) 787-1235 |
| Attention:                       |   | R. Stan Puckett |
|                             | William F. Richmond |

 

with a copy to:

 
| Kutak Rock LLP               |
|------------------------------|
| 1101 Connecticut  Avenue, NW |
| Suite 1000                   |
| Washington, DC  20036   |
| Phone:                       |   | (202) 828-2400 |
| Facsimile:                   |   | (202) 828-2488 |

 

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Attention:       Paul D. Borja

 

if to a Shareholder, to the Shareholder’s address as set forth underhis or her respective signature to this Agreement.

 

7.             **Counterparts**.  For convenience of the parties hereto, thisAgreement may be executed in several counterparts, each of which shall bedeemed an original, all of which together shall constitute one and the sameinstrument.

 

8.             **Headings**.  The headings contained in this Agreement arefor reference purposes only and shall not affect in any way the meaning orinterpretation of this Agreement.  Timeis of the essence with respect to all provisions of this Agreement.

 

9.             **Entire Agreement**.  This Agreement (together with the MergerAgreement to the extent referred to herein) constitutes the entire agreementand supersedes all prior agreements and understandings, both written and oral,between the parties hereto with respect to the subject matter hereof.  This Agreement may be amended only by awritten instrument duly executed by each of the parties hereto.

 

10.           **FurtherAssurances**.  The Shareholderswill use all reasonable efforts to cooperate with Greene County in connectionwith the Merger, promptly take such actions as are necessary or appropriate toconsummate the Merger, and provide any information requested by Greene Countyfor any registration of shares of Greene County common stock issued in theMerger and any regulatory application or filing made or approval sought for thetransactions contemplated by the Merger Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFTBLANK; SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, Greene County and theShareholders have caused this Agreement to be duly executed as of the day andyear first above written.

 
|   | GREENE  COUNTY BANCSHARES, INC., |                                               |
|--------|----------------------------------|----------------------------------------------------|
|   | a Tennessee  corporation         |                                               |
|   |                             |                                               |
|   | By:                              |                                               |
|   |                             | R. Stan  Puckett                                   |
|   |                             | Chairman of  the Board and Chief Executive Officer |
|   |                             |                                               |
|   | SHAREHOLDERS                     |                                               |
|   |                             |                                               |
|   |                             |                                               |
|   | Printed  Name:                   |                                               |   |
|   | Address:                         |                                               |   |
|   |                             |                                               |   |
|   |                             |                                               |
|   |                             |                                               |
|   | Printed  Name:                   |                                               |   |
|   | Address:                         |                                               |   |
|   |                             |                                               |   |
|   |                             |                                               |
|   |                             |                                               |
|   | Printed  Name:                   |                                               |   |
|   | Address:                         |                                               |   |
|   |                             |                                               |   |
|   |                             |                                               |
|   |                             |                                               |
|   | Printed  Name:                   |                                               |   |
|   | Address:                         |                                               |   |
|   |                             |                                               |   |
|        |                                  |                                                    |  |  |  |  |

 

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|   |           |
|--------|----------------|
|   | Printed  Name: |   |
|   | Address:       |   |
|   |           |   |
|   |           |
|   |           |
|   | Printed  Name: |   |
|   | Address:       |   |
|   |           |   |
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|   | Printed  Name: |   |
|   | Address:       |   |
|   |           |   |
|   |           |
|   |           |
|   | Printed  Name: |   |
|   | Address:       |   |
|   |           |   |
|   |           |
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|   | Printed  Name: |   |
|   | Address:       |   |
|   |           |   |
|   |           |
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|   | Printed  Name: |   |
|   | Address:       |   |
|   |           |   |
|   |           |
|   |           |
|   | Printed  Name: |   |
|   | Address:       |   |
|   |           |   |
|        |                |  |  |  |

 

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|   |           |
|--------|----------------|
|   | Printed  Name: |   |
|   | Address:       |   |
|   |           |   |
|        |                |  |  |  |

 

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**SCHEDULE A**

 
| **Name**        |   | **Number of  Shares as to  which  Holder has  Sole Power  to Vote** |       | **Number of  Shares as to  which Holder  has joint  Power to Vote** |       | **Number of  Shares as to  which Holder  has Direct or  Indirect  Control of  Power to  Vote** |       | **Number of  Shares as to  which Holder  has Sole or  Shared Power  to Dispose or  Direct  Disposition** |       | **Number of  shares as to  which  Holder has  beneficial  Ownership** |       | **Encumbrance** |       |
|-----------------|--------|---------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------|------------|-----------------|------------|
|            |   |                                                                |       |                                                                |       |                                                                                           |       |                                                                                                     |       |                                                                  |       |            |       |
|            |   |                                                                |       |                                                                |       |                                                                                           |       |                                                                                                     |       |                                                                  |       |            |       |
|            |   |                                                                |       |                                                                |       |                                                                                           |       |                                                                                                     |       |                                                                  |       |            |       |
|            |   |                                                                |       |                                                                |       |                                                                                           |       |                                                                                                     |       |                                                                  |       |            |       |
|            |   |                                                                |       |                                                                |       |                                                                                           |       |                                                                                                     |       |                                                                  |       |            |       |
| Aggregate Total |   |                                                                | ** ** |                                                                | ** ** |                                                                                           | ** ** |                                                                                                     | ** ** |                                                                  | ** ** |            | ** ** |

 

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**EXHIBIT B**

 

**NON-COMPETITIONAGREEMENT**

 

**THIS NON-COMPETITION AGREEMENT** (this“Agreement”) is made as of                ,2003, by and between **GREENE COUNTY BANCSHARES, INC.,**aTennessee corporation (“Greene County”), and                (“Non-Employee Director”).

 

**RECITALS**

 

WHEREAS, Non-Employee Director is amember of the Board of Directors of Independent Bankshares Corporation, aTennessee corporation (“Independent”); and

 

WHEREAS, Independent entered into thatcertain Agreement and Plan of Merger dated June         , 2003 (the “MergerAgreement”) with Greene County, pursuant to which Independent shall merge withand into Greene County with Greene County as the surviving entity (the“Merger”); and

 

WHEREAS, Non-Employee Directoracknowledges that he will personally derive substantial economic benefit fromthe Merger; and

 

WHEREAS, it is a condition to theobligation of Greene County to consummate the Merger that Non-Employee Directorexecute this Agreement;

 

and

 

WHEREAS, Non-Employee Directoracknowledges that Greene County would not effect the closing of the Mergerunless Non-Employee Director executes and delivers this Agreement to GreeneCounty;

 

NOW THEREFORE, in consideration of thesepremises and for other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties hereto agree asfollows:

 

7.             **Definitions**.  Capitalized terms not expressly defined inthis Agreement shall have the meanings ascribed to them in the MergerAgreement.

 

8.             **Acknowledgment by Non-Employee Director**.  Non-Employee Director acknowledges that heor she has occupied a position of trust and confidence with Independent priorto the date hereof and has had access to and has become familiar with thefollowing, any and all of which constitute confidential information ofIndependent (collectively, the “Confidential Information”): (a) any andall trade secrets concerning the business and affairs of Independent, customerlists, market studies, business plans, and including, but not limited to, suchtrade secrets involving the origination or sale of loans or lines of creditsecured by real estate, commercial or corporate-business financing, unsecuredloans labeled as consumer loans, or other financial services related businessactivities of Independent and any other information, however documented, ofIndependent that is a trade secret within the meaning of The Uniform TradeSecrets Act of the Tennessee Code or under other applicable law; (b) anyand all information concerning the business and affairs of Independent (whichincludes historical financial statements, financial projections and budgets,historical and projected sales, capital spending budgets and plans, the namesand backgrounds of key personnel, contractors, agents, and personnel trainingtechniques and materials, and (c) any and all notes, analysis,compilations, studies, summaries and other material prepared by or forIndependent containing or based, in whole or in part, upon any informationincluded in the foregoing.

 

Non-Employee Director acknowledges that(a) the business of Independent is conducted primarily in the Tennesseecounties of Rutherford and Sumner and counties contiguous thereto; (b) itsproducts and services related to such business are also marketed primarily inthe Tennessee counties of Rutherford and Sumner and counties contiguousthereto; (c) Independent’s business prior to Closing competes with otherbusinesses that are or could be located in such counties of Tennessee;(d) Greene County has required that Non-Employee Director make thecovenants set forth in Sections 3**and 4 of thisAgreement as a condition to Greene County’s consummation of the Merger;(e) the provisions of Sections 3 and 4 of thisAgreement are reasonable and necessary to protect and

 

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preserve Greene County’sinterests in and right to operate Independent’s business from and afterClosing; and (f) Greene County would be irreparably damaged ifNon-Employee Director were to breach the covenants set forth in Sections 3and 4 of this Agreement.

 

9.             **Confidential Information**.  Non-Employee Director acknowledges and agreesthat the protection of the Confidential Information is necessary to protect andpreserve the value of Independent’s business. Therefore, Non-Employee Director hereby agrees not to disclose to anyunauthorized Persons or use for his or its own account or for the benefit ofany third party any Confidential Information, whether or not such informationis embodied in writing or other physical form or is retained in the memory ofNon-Employee Director, without Greene County’s prior written consent, unlessand to the extent that the Confidential Information is or becomes generallyknown to and available for use by the public other than as a result ofNon-Employee Director’s fault or the fault of any other Person bound by a dutyof confidentiality to Greene County. Non-Employee Director agrees to deliver to Greene County at theEffective Time of the Merger, and at any other time Greene County may request,all documents, memoranda, notes, plans, records, reports and otherdocumentation, models, components, devices or computer software, whetherembodied in a disk or in other form (and all copies of all of the foregoing),that contain Confidential Information and any other Confidential Informationthat Independent may then possess or have under his or her control.

 

10.           **Non-competition and Nonsolicitation**.  As an inducement for Greene County to enterinto the Merger Agreement and as additional consideration for the considerationto be paid to Independent under the Merger Agreement, Non-Employee Directoragrees that:

 

(a)  For a period of two yearsafter the Closing:

 

(i)            Except with respectto business activities conducted in connection with his/her ordinary occupationas conducted while serving as a director of Independent, Non-Employee Directorwill not, directly or indirectly, engage or invest in, own, manage, operate,finance, control or participate in the ownership, management, operation,financing or control of, be employed by, or render services or advice or otheraid to, or guarantee any obligation of, any Person engaged in or planning tobecome engaged in the banking or financial services industry or any otherbusiness whose products or activities compete in whole or in part with thebusiness in which Independent engaged in or proposed to engage in prior to theClosing, anywhere within the Tennessee counties of Rutherford and Sumner andany counties contiguous thereto, provided, however, that any Non-EmployeeDirector may purchase or otherwise acquire up to (but not more than) onepercent 1% of any class of securities of any enterprise (but without otherwiseparticipating in the activities of such enterprise) if such securities arelisted on any national or regional securities exchange or have been registeredunder Section 12(g) of the Securities Exchange Act of 1934.  Non-Employee Director agrees that thiscovenant is reasonable with respect to its duration, geographical area andscope.

 

(ii)           Non-EmployeeDirector agrees not to, directly or indirectly, (A) induce or attempt toinduce any employee of Independent who becomes an employee of Greene County inconnection with the Merger to leave the employ of Greene County; (B) inany way interfere with the relationship between Greene County and any suchemployee of Greene County; (C) employ or otherwise engage as an employee,independent contractor or otherwise any such employee of Greene County; or(D) induce or attempt to induce any customer, supplier, licensee or otherPerson to cease doing business with Greene County or in any way interfere withthe relationship between any such customer, supplier, licensee or otherbusiness entity and Greene County.

 

(iii)          Except with respectto business activities conducted in connection with his/her ordinary occupationas conducted while serving as a director of Independent, Non-Employee Directoragrees that he or she will not, directly or indirectly, solicit the business ofany Person known to Non-Employee Director to be a customer of Independent orGreene County, whether or not Non-Employee Director had personal contact with suchPerson, with respect to products or activities which compete in whole or inpart with the business conducted by Independent or Greene County;

 

(b)  In the event of a breach byNon-Employee Director of any covenant set forth in Subsection 4(a)of this Agreement, the term of such covenant will be extended by the period ofthe duration of such breach;

 

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(c)  Non-Employee Director willnot, at any time during or after the two-year period, disparage Greene County,the business formerly conducted by Independent, the business conducted byGreene County or any shareholder, director, officer, employee or agent ofGreene County; and

 

(d)  Each Non-Employee Directorwill, for a period of two years after the Closing, within ten (10) days afteraccepting any employment, consulting engagement, engagement as an independentdirector, contractor, partnership or other association, advise Greene County ofthe identity of the new employer, client, partner or other Person with whomNon-Employee Director has become associated. Greene County may serve notice upon each such Person that suchNon-Employee Director is bound by this Agreement and furnish each such Personwith a copy of this Agreement or relevant portions thereof.

 

11.           **Remedies**. If Non-Employee Director breaches the covenants set forth in Sections 3or 4 of this Agreement, Greene County will be entitled to the followingremedies:

 

(a)           Damagesfrom Non-Employee Director;

 

(b)           To offset againstany and all amounts owing to Greene County under the Merger Agreement and/orany and all amounts that Greene County claims under Subsection 5(a)of this Agreement; and

 

(c)           In addition to itsright to damages and any other rights it may have, to obtain injunctive orother equitable relief to restrain any breach or threatened breach or otherwiseto specifically enforce the provisions of Sections 3 and 4of this Agreement, it being agreed that money damages alone would be inadequateto compensate Greene County and would be an inadequate remedy for such breach.

 

12.           **Successors and Assigns**.  This Agreement will be binding upon GreeneCounty and Non-Employee Director and will inure to the benefit of Greene Countyand its affiliates, successors and assigns.

 

13.           **Waiver**. The rights and remedies of the parties to this Agreement are cumulativeand not alternative.  Neither thefailure nor any delay by any party in exercising any right, power or privilegeunder this Agreement will operate as a waiver of such right, power orprivilege, and no single or partial exercise of any such right, power orprivilege will preclude any other or further exercise of such right, power orprivilege or the exercise of any other right, power or privilege.  To the maximum extent permitted byapplicable law, (a) no claim or right arising out of this Agreement can bedischarged, in whole or in part, by a waiver or renunciation of the claim orright except in writing; (b) no waiver that may be given by a party willbe applicable except in the specific instance for which it is given; and(c) no notice to or demand on one party will be deemed to be a waiver ofany obligation of such party, or of the right of the party giving such noticeor demand to require the other party, to take further action without notice ordemand as provided in this Agreement.

 

14.           **Governing Law**.  This Agreement shall in all respects be governed by and construedunder the laws of Tennessee, all rights and remedies being governed by suchlaws, without regard to any applicable conflicts of law principles.

 

15.           **Jurisdiction; Service of Process**.  Any action or proceeding seeking to enforceany provision of, or based upon any right arising out of, this Agreement may bebrought against any of the parties in the courts of the State of Tennessee,County of Greene or, if it has or can acquire jurisdiction, in the UnitedStates District Court for the Eastern District of Tennessee, and each of theparties consents to the jurisdiction of such courts (and of the appropriateappellate courts) in any such action or proceeding and waives any objection tovenue laid therein.  Process in anyaction or proceeding referred to in the preceding sentence may be served on anyparty anywhere in the world.

 

16.           **Severability; Reformation**.  Whenever possible, each provision and termof this Agreement will be interpreted in a manner to be effective and valid,but if any provision or term of this Agreement is held to be prohibited orinvalid, then such provision or term will be ineffective only to the extent ofsuch prohibition or invalidity, without invalidating or affecting in any mannerwhatsoever the remainder of such provision or term or the remaining provisionsor terms of this Agreement.  If any ofthe covenants set forth in Section 4 of this Agreement are held tobe unreasonable, arbitrary or against public policy, such covenants will beconsidered divisible with

 

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respect to scope, time andgeographic area, and will be appropriately limited and reformed to the maximumextent permitted by applicable law.

 

17.           **Counterparts**.  This Agreement may be executed in one or more counterparts, eachof which will be deemed to be an original copy of this Agreement and all ofwhich, when taken together, will be deemed to constitute one and the sameagreement, it being understood that all parties need not sign the samecounterpart.

 

18.           **Section Headings, Construction**.  The headings of sections in this Agreementare provided for convenience only and will not affect its construction or interpretation.  All references to “Section” or “Sections”refer to the corresponding Section or Sections of this Agreement unlessotherwise specified.  All words used inthis Agreement will be construed to be of such gender or number as thecircumstances require.  Unless otherwiseexpressly provided, the word “Including” does not limit the preceding words orterms.

 

19.           **Notices**. All notices, consents, waivers and other communications under thisAgreement must be in writing and will be deemed to have been duly given, madeand received when (a) delivered personally; (b) sent by facsimile(with confirmation); (c) if mailed, three days after deposit in the UnitedStates mail, registered or certified, return receipt requested, postageprepaid; or (d) if sent by a nationally recognized overnight courier, onthe next business day after deposit with such service, in each case to theappropriate addresses and facsimile numbers set forth below (or to such otheraddresses and facsimile numbers as a party may designate by notice to the otherparties):

 
|   | If to Greene  County, to:         | Greene  County Bancshares, Inc. |
|--------|-----------------------------------|---------------------------------|
|   | 100 North  Main Street            |
|   | Greeneville,  TN  37743-4992 |
|   | Telephone:  (423) 639-5111   |
|   | Facsimile:  (423) 787-1235   |
|   | Attention:  R. Stan Puckett  |
|   |                              |
|   | with a copy  to:                  | Kutak Rock  LLP                 |
|   | 1101  Connecticut Avenue, NW      |
|   | Suite 1000                        |
|   | Washington,  DC  20036       |
|   | Telephone:  (202) 828-2400   |
|   | Facsimile:  (202) 828-2488   |
|   | Attention:  Paul D. Borja    |
|   |                              |
|   | If to  Non-Employee Director, to: |                            |   |   |
|   |                              |                            |
|   |                              |                            |
|   | Telephone  No.:                   |                            |   |
|   | Facsimile  No.:                   |                            |   |
|   |                              |
|        |                                   |                                 |  |  |  |  |  |

 

20.           **Entire Agreement**.  This Agreement (together with the Merger Agreement) constitutesthe entire agreement between the parties with respect to the subject matter ofthis Agreement and supersedes all prior written and oral agreements andunderstandings between the parties with respect to the subject matter of thisAgreement.  This Agreement may not beamended except by a written agreement executed by the party to be charged withthe amendment.

 

21.           **Further Assurances**.  Non-Employee Director will use all reasonableefforts to cooperate with Greene County in connection with the Merger, promptlytake such actions as are necessary or appropriate to consummate the Merger, andprovide any information requested by Greene County for any registration ofshares of Greene County common stock issued in the Merger and any regulatoryapplication or filing made or approval sought for the transactions contemplatedby the Merger Agreement.

 

22.           **Effectiveness.**  This Agreement shall become effective at the Effective Time ofthe Merger.  If the Merger is terminatedand does not become effective this Agreement shall be void and of no effect.

 

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**[SIGNATURE PAGE FOLLOWS]**

 

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IN WITNESS WHEREOF, the parties haveexecuted and delivered this Agreement as of the date first above written.

 
|   | GREENE  COUNTY BANCSHARES, INC., |
|--------|----------------------------------|
|   | a Tennessee  corporation         |
|   |                             |
|   |                             |
|   | By:                              |   |
|   |                             | R. Stan  Puckett |
|   |                             | Chairman of  the Board and Chief Executive Officer |
|   |                             |
|   | NON-EMPLOYEE  DIRECTOR           |
|   |                             |
|   |                             |
|   | Printed  Name:                   |   |
|        |                                  |  |  |  |

 

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