FIRST BANCSHARES INC /MS/ (Form: 8-K, Received: 10/14/2016 16:39:50)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 12, 2016

The First Bancshares, Inc.

(Exact name of registrant as specified in its charter)

Mississippi

(State or other jurisdiction

of incorporation)

000-22507

(Commission

File Number)

64-0693170

(I.R.S. Employer

Identification No.)

6480 U.S. Highway 98 West, Suite A
Hattiesburg, Mississippi

(Address of principal executive offices)

39402

(Zip Code)

(601) 268-8998

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Acquisition and Merger

The First Bancshares, Inc. (the “Company”), which is the holding company of The First, A National Banking Association, (“The First”), entered into a Stock Purchase Agreement (the “Iberville Bank Acquisition Agreement”) with A. Wilbert’s Sons Lumber and Shingle Company (the “Iberville Bank Parent”), the parent company of Iberville Bank (“Iberville Bank”), dated October 12, 2016, under which the Company has agreed to acquire 100% of the common stock of Iberville Bank for a purchase price of $31.1 million in cash (the “Iberville Bank Acquisition”).

Separately, the Company and The First entered into an Agreement and Plan of Merger (the “GCCB Merger Agreement,” and together with the Iberville Bank Acquisition Agreement, the “Bank Transaction Agreements”), dated October 12, 2016, pursuant to which it has agreed to acquire Gulf Coast Community Bank (“GCCB”), Pensacola, Florida, in an all-stock transaction (the “GCCB Merger,” and together with the Iberville Bank Acquisition, the “Bank Transactions”). The purchase price for the GCCB Merger of $2.3 million is based on a price of $0.50 per share of GCCB stock and will be paid in the form of Company common stock issued to GCCB shareholders with the number of Company shares issued based on a 30-day average of the Company’s common stock price as of five business days prior to closing.

The Company expects to fund the Iberville Bank Acquisition, in part, through a private offering of mandatorily convertible non-cumulative, non-voting, perpetual Preferred Stock, which is subject to a registration rights agreement (the “PIPE Transaction”).

Iberville Bank Acquisition

The Iberville Bank Acquisition Agreement contains customary representations and warranties by both the Company and the Iberville Bank Parent and each have agreed to customary covenants, including, among others, covenants relating to (1) the conduct of Iberville Bank’s businesses during the interim period between the execution of the Agreement and the completion of the Iberville Bank Acquisition and (2) cooperation with respect to the filing of regulatory approval applications regarding the Iberville Bank Acquisition.

Completion of the Iberville Bank Acquisition is subject to certain customary conditions, including, among others, (1) approval by the Iberville Bank Parent shareholders, (2) receipt of all required regulatory approvals, (3) the accuracy of the representations and warranties of the other party, and (4) performance in all material respects by the other party of its obligations under the Agreement.

The Agreement contains certain termination rights for the Company and Iberville Bank Parent, as the case may be, applicable upon: (1) March 31, 2017, if the Iberville Bank Acquisition has not been completed by that date, (2) final, non-appealable denial of required regulatory approvals or an injunction prohibiting the transactions contemplated by the Iberville Bank Acquisition Agreement, or (3) a breach by the other party that is not or cannot be cured within 45 days’ notice of such breach if such breach would result in a failure of the conditions to closing set forth in the Iberville Bank Acquisition Agreement. Under certain, the Iberville Bank Acquisition Agreement may be terminated in the event that the Iberville Bank Parent Board of Directors approves an alternative transaction. In the event of a termination due to approval of an alternative transaction, the Iberville Bank Parent will be required to pay the Company a termination fee of $1,088,500.

GCCB Merger

The GCCB Merger Agreement contains customary representations and warranties by both the Company and the GCCB and each have agreed to customary covenants, including, among others, covenants relating to the conduct of GCCB’s businesses during the interim period between the execution of the GCCB Merger Agreement and the completion of the GCCB Merger.

Completion of the GCCB Merger is subject to certain customary conditions, including, among others, (1) receipt of all required regulatory approvals, (2) the accuracy of the representations and warranties of the other party, and (3) performance in all material respects by the other party of its obligations under the Agreement.

The GCCB Merger Agreement contains certain termination rights for the Company and GCCB, as the case may be, applicable upon: (1) April 30, 2017, if the GCCB Merger has not been completed by that date, (2) final, non-appealable denial of required regulatory approvals or an injunction prohibiting the transactions contemplated by the GCCB Merger Agreement, or (3) a breach by the other party that is not or cannot be cured within 30 days’ notice of such breach if such breach would result in a failure of the conditions to closing set forth in the GCCB Merger Agreement. The Company may terminate the GCCB Merger Agreement in the event that the GCCB Board of Directors withdraws its recommendation for approval of the GCCB Merger or approves any alternative transaction. In the event of a termination due to approval of an alternative transaction, GCCB will be required to pay the Company a termination fee of $500,000.

Note Regarding the Bank Transaction Agreements

The foregoing descriptions of the Bank Transactions and the Bank Transaction Agreements do not purport to be complete and are qualified in their entirety by reference to the Iberville Bank Acquisition Agreement and GCCB Merger Agreement, which are filed as Exhibits 1.1 and 1.2, respectively, and incorporated into this report by reference. The Bank Transaction Agreements have been attached as exhibits to this report in order to provide investors and security holders with information regarding their terms. They are not intended to provide any other financial information about the Company, the Iberville Bank Parent, Iberville Bank, GCCB, or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Bank Transaction Agreements were made only for purposes of the Bank Transactions Agreements and as of specific dates, are solely for the benefit of the parties to the Bank Transaction Agreements, may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Bank Transaction Agreements instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors. Investors should not rely on the representations, warranties, or covenants or any description thereof as characterizations of the actual state of facts or condition of the Company, the Iberville Bank Parent, Iberville Bank, GCCB or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, and covenants may change after the date of the Bank Transaction Agreements, which subsequent information may or may not be fully reflected in public disclosures by the Company.

PIPE Transaction

On October 12, 2016 the Company entered into Securities Purchase Agreements with a limited number of institutional and other accredited investors, including certain directors of the Company (collectively the “Purchasers”) to privately place a total of 3,563,380 shares of mandatorily convertible non-cumulative, non-voting, perpetual Preferred Stock, Series E, $1.00 par value (the “Series E Preferred Stock”) at a price of $17.75 per share, for aggregate gross proceeds of $63.25 million (the “Private Offering”).

The sale and issuance of the Series E Preferred Stock to the Purchasers have been determined to be exempt from registration under the U.S. Securities Act of 1933, as amended, in reliance on Section 4(a)(2) thereof and Rule 506(b) safe harbor of Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering, involving only a limited number of institutional and other accredited investors, which have acquired the Series E Preferred Stock for investment purposes only and not with a view to or for sale in connection with any distribution thereof.

Each share of Series E Preferred stock is mandatorily convertible into one share of common stock of the Company. The Company expects that a shareholder meeting will be called for purposes of a shareholder vote regarding approval of issuance of the common shares of the Company into which the Series E Preferred Stock is expected to be converted.

The Company expects to use the proceeds of the Private Offering, along with cash on hand, to (1) fund the Iberville Bank Acquisition, (2) support the acquired assets in the GCCB Merger and (3) support the Company’s general working capital requirements.

As part of the Private Offering, the Company entered into a Registration Rights Agreement with the Purchasers on October 12, 2016 (the “Registration Rights Agreement”), providing for registration for resale of the Company’s common stock issuable upon conversion of the Series E Preferred Stock. The Registration Rights Agreement require the Company to use its commercially reasonable efforts to file the registration statement by January 10, 2017 and cause it to be effective by February 9, 2016, subject to certain exceptions.

Item 3.02 Unregistered Sales of Equity Securities.

The information contained above in Item 1.01 under the section “PIPE Transaction” is hereby incorporated by reference into this Item 3.02.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

As part of the Private Offering described above, the Company filed a Certificate of Designation with the Mississippi Secretary of State, effective October 14, 2016, for the purpose of amending its Amended and Restated Articles of Incorporation, in order to fix the powers, preferences, rights, qualifications, restrictions and limitations of the Series E Preferred Stock. A copy of the Certificate of Designation is attached as Exhibit 3.1 and is incorporated herein by reference. The information set forth under Item 1.01 of this report is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On October 14, 2016, the Company issued a press release announcing the Bank Transactions and the PIPE Transaction. A copy of this press release is attached hereto as Exhibit 99.1.

The Company provided certain information to investors in the Offering as part of the private placement process. A copy of this information is attached hereto as Exhibit 99.2.

This information is furnished under Item 7.01 Regulation FD Disclosure and shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibit

The exhibit to this current report on Form 8-K is provided in the Exhibit Index, which appears at the end of this report, and is incorporated by reference herein.

Important Additional Information

This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.

Forward Looking Statements

This Form 8-K contains regarding financial projections and expectations related to certain merger and offering agreements entered into by The First Bancshares, Inc. and its subsidiary. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act. Actual results may differ materially from the projections provided in this release since such projections involve significant known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: the possibility that the proposed transactions do not close when expected or at all because required regulatory or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all; the terms of the proposed transactions may need to be modified to satisfy such approvals or conditions; the risk that anticipated benefits from the proposed transactions are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations (including changes to capital requirements) and their enforcement; competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; and legislation or regulatory changes which adversely affect the ability of the combined Company to conduct business combinations or new operations. The Company disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Further information on The First Bancshares, Inc. is available in its filings with the Securities and Exchange Commission, available at the SEC’s website, http://www.sec.gov .

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE FIRST BANCSHARES, INC.

October 14, 2016	/s/ Donna T. (Dee Dee) Lowery
	Name: Donna T. (Dee Dee) Lowery Title: Chief Financial Officer

Exhibit Index

Exhibit Number	Description
1.1*	Stock Purchase Agreement between the Company and Iberville Bank Parent, dated October 12, 2016

1.2*	Agreement and Plan of Merger between the Company, The First and GCCB, dated October 12, 2016

1.3*	Securities Purchase Agreement between the Company and the Purchasers provided therein, dated October 12, 2016

1.4*	Registration Rights Agreement between the Company and the Purchasers provided therein, dated October 12, 2016

3.1*	Certificate of Designation of the Series E Preferred Stock of The First Bancshares, Inc., effective October 14, 2016

99.1*	Press Release dated October 14, 2016

99.2*	Private Placement Materials dated October 2016

* Filed herewith

Exhibit 1.1

EXECUTION COPY

STOCK PURCHASE AGREEMENT

between

THE FIRST BANCSHARES, INC.

and

A. WILBERT’S SONS LUMBER AND SHINGLE CO.

for the purchase and sale of
100% of the capital stock of

IBERVILLE BANK

Dated as of October 12, 2016

TABLE OF CONTENTS
			Page
ARTICLE I THE PURCHASE AND SALE			1
	1.1	Purchase and Sale of the Bank Shares	1
	1.2	Purchase Price	1
	1.3	Allocation of Purchase Price	1
	1.4	Closing	2
	1.5	Merger	2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY			2
	2.1	Making of Representations and Warranties	2
	2.2	Organization, Standing and Authority	2
	2.3	Capitalization	2
	2.4	Subsidiaries	3
	2.5	Corporate Power	3
	2.6	Corporate Authority	3
	2.7	Non-Contravention	3
	2.8	Compliance with Laws	4
	2.9	Litigation; Regulatory Action	4
	2.10	Financial Reports and Regulatory Reports	5
	2.11	Absence of Certain Changes or Events	5
	2.12	Taxes and Tax Returns	6
	2.13	Employee Benefit Matters	7
	2.14	Labor Matters	9
	2.15	Insurance	9
	2.16	Environmental Matters	9
	2.17	Intellectual Property	10
	2.18	Material Agreements	10
	2.19	Title to Assets; Real Property	11
	2.20	Regulatory Capitalization	12
	2.21	Loans; Nonperforming and Classified Assets; Allowance	12
	2.22	Deposits	13
	2.23	Investment Securities	14
	2.24	Investment Management; Trust Activities	14
	2.25	Derivative Transactions	14
	2.26	Deposit Insurance	14
	2.27	CRA, Anti-money Laundering and Customer Information Security	14

	2.28	Transactions with Affiliates	15
	2.29	No Brokers	16
	2.30	Flood-Affected Loans	16
	2.31	No Other Representations and Warranties	16
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER			16
	3.1	Making of Representations and Warranties	16
	3.2	Organization, Standing and Authority	16
	3.3	Corporate Power	16
	3.4	Corporate Authority	16
	3.5	Non-Contravention	17
	3.6	Compliance with Laws	17
	3.7	Litigation; Regulatory Action	17
	3.8	Regulatory Capitalization	17
	3.9	Investment Purpose	17
	3.10	Brokers	18
	3.11	Sufficient Funds	18
	3.12	Independent Investigation	18
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS			18
	4.1	Bank and Company Forbearances	18
	4.2	Forbearances of Buyer	21
ARTICLE V ADDITIONAL AGREEMENTS			21
	5.1	Shareholder Approval	21
	5.2	Access; Information	21
	5.3	Regulatory Applications; Filings; Consents	22
	5.4	Public Announcements	23
	5.5	No Solicitation	23
	5.6	Indemnification; Directors’ and Officers’ Insurance	25
	5.7	Employees and Benefit Plans	25
	5.8	Retirement Plans	26
	5.9	WARN Act Liability	27
	5.10	Notification of Certain Matters	27
	5.11	Confidentiality Agreement	27
	5.12	Closing Conditions	28
	5.13	Supplement to Disclosure Schedules	28
	5.14	Appointment of Board Member	28
	5.15	Coordination; Integration	28

	5.16	Invitations to and Attendance at Directors’ and Committee Meetings	28
	5.17	Resignation of Officers, Directors, or Managers of Subsidiaries	29
	5.18	Escrow Agreement	29
ARTICLE VI TAX MATTERS			29
	6.1	Preparation and Filing of Tax Returns	29
	6.2	Transfer Taxes	30
	6.3	Cooperation	30
	6.4	Straddle Period	30
	6.5	Tax Refunds	30
	6.6	Escrow Amount	31
ARTICLE VII CONDITIONS TO CLOSING			31
	7.1	Conditions to Each Party’s Obligation to Close	31
	7.2	Conditions to the Obligations of Buyer	31
	7.3	Conditions to the Obligations of the Company	32
ARTICLE VIII TERMINATION			32
	8.1	Termination	32
	8.2	Effect of Termination	33
ARTICLE IX MISCELLANEOUS			34
	9.1	Waiver; Amendment	34
	9.2	Survival of Representations and Warranties; Indemnity	34
	9.3	Expenses	38
	9.4	Acknowledgment of Disclaimer of Other Representations and Warranties	39
	9.5	Notices	39
	9.6	Understanding; No Third-Party Beneficiaries	40
	9.7	Headings; Interpretation	40
	9.8	Counterparts	41
	9.9	Governing Law	41
	9.10	Specific Performance	41
	9.11	Time is of the Essence	42
	9.12	Entire Agreement	42
	9.13	Severability	42
	9.14	Non-recourse	42
ARTICLE X DEFINED TERMS			42
	10.1	Certain Definitions	42

iii

STOCK PURCHASE AGREEMENT , dated as of October 12, 2016 (this “ Agreement ”), between The First Bancshares, Inc., a Mississippi corporation (“ Buyer ”), and A. Wilbert’s Sons Lumber and Shingle Co., a Louisiana corporation (the “ Company ”). Certain capitalized terms used in this Agreement are defined in Article X , and Article X also includes an index of all other capitalized terms used in this Agreement.

WHEREAS , the Company owns one hundred percent (100%) of the issued and outstanding capital stock (the “ Bank Shares ”) of Iberville Bank, a Louisiana banking corporation (the “ Bank ”); and

WHEREAS , the Company desires to sell to Buyer, and Buyer desires to purchase from the Company, the Bank Shares on the terms and conditions set forth in this Agreement.

NOW, THEREFORE , in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I
THE PURCHASE AND SALE

1.1 Purchase and Sale of the Bank Shares . Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company will sell, assign and transfer the Bank Shares to Buyer, and Buyer will purchase the Bank Shares from the Company, free and clear of all mortgages, pledges, liens, security interests, encumbrances, easements, encroachments or other similar encumbrances (collectively, “ Liens ”).

1.2 Purchase Price .

(a) The aggregate consideration for the Bank Shares shall be $31,100,000.00 (the “ Purchase Price ”).

(b) At the Closing, Buyer shall pay and satisfy the Purchase Price as follows:

(i)	Buyer shall pay to the Company, in immediately available funds by wire transfer to an account designated by the Company, an amount in cash equal to the Purchase Price less the Escrow Amount; and

(ii)	Buyer shall pay to the Escrow Agent, in immediately available funds by wire transfer to an account designated by the Escrow Agent, an amount in cash equal to $2,500,000 (the “ Escrow Amount ”) to be held by the Escrow Agent in accordance with the Escrow Agreement.

1.3 Allocation of Purchase Price . The Company and Buyer acknowledge that the purchase of Bank Shares pursuant to this Agreement is expected to be treated for federal income tax purposes as a sale of the assets of the Bank. The Company shall prepare an allocation of the Purchase Price (and other capitalized costs, including liabilities of the Bank) among the assets of the Bank in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended (the “ Code ”) and the Treasury Regulations thereunder (and any similar provision of state or local law, as appropriate. The Company shall deliver such allocation to Buyer within 60 days after the Closing Date. The Company and Buyer and their Affiliates shall report, act, and file Tax Returns (including, but not limited to, Internal Revenue Service Form 8594) in all respects and for all purposes consistent with such allocation prepared by the Company, absent manifest error. Buyer shall timely and properly prepare, execute, file, and deliver all such documents, forms, and other information as the Company may reasonably request in preparing such allocation. Neither the Company nor Buyer shall take any position (whether in audits, Tax Returns, or otherwise) that is inconsistent with such allocation unless required to do so by applicable Law.

1.4 Closing . The Transactions shall be consummated at a closing (the “ Closing ”) that will take place at the offices of the Company, 58020 Bayou Road, Plaquemine, LA 70764, on a date to be specified by the parties, which shall be no later than two Business Days after all of the conditions to the Closing set forth in Article VII (other than conditions to be satisfied at the Closing, which shall be satisfied or waived at the Closing) have been satisfied or waived in accordance with the terms hereof, such day being referred to herein as the “ Closing Date .” Notwithstanding the foregoing, the Closing may take place at such other place, time or date as may be mutually agreed upon in writing by Buyer and the Company.

1.5 Merger . Subject to the terms and conditions of this Agreement, simultaneous with the Closing, the Company and Buyer shall cause the Bank to merge with and into (the “ Merger ”) The First, A National Banking Association (the “ Buyer Bank ”). Buyer Bank shall be the surviving entity in the Merger and shall continue its corporate existence under the name “The First, A National Banking Association”, and, following the Merger, the separate corporate existence of Bank shall cease. The Merger shall be implemented pursuant to a plan of merger, in the form attached hereto as Exhibit A (the “ Plan of Merger ”). Prior to the Closing Date, Bank and Buyer Bank shall execute such certificates of merger and articles of combination and such other documents and certificates as are necessary to make the Merger effective (“ Merger Certificates ”) at the Closing Date.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

2.1 Making of Representations and Warranties . Except as set forth in the Bank Disclosure Schedule, the Company represents and warrants to Buyer as of the date of this Agreement and as of the Closing, as follows:

2.2 Organization, Standing and Authority . The Bank is a bank duly organized, validly existing and in good standing under the Laws of the State of Louisiana. The Bank is duly qualified to do business and is in good standing (with respect to jurisdictions that recognize the concept of good standing) in the jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where the failure to so qualify has not had and would not reasonably be expected to have a Bank Material Adverse Effect. The Bank engages only in activities (and holds properties only of the types) permitted by the Federal Deposit Insurance Act (“ FDIA ”) and Louisiana Law and the rules and regulations of the Federal Deposit Insurance Corporation (“ FDIC ”) and the Louisiana Bank Commissioner promulgated thereunder. The Company has made available to Buyer accurate and complete copies of the Bank’s Organizational Documents as in effect on the date of this Agreement.

2.3 Capitalization . As of the date hereof, the authorized capital stock of the Bank consists solely of 150 shares of common stock of $10,000 par value, of which 81 shares are issued and outstanding. All of such shares have been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by the Company, free and clear of all Liens. There are no other shares of capital stock, preferred stock or other equity securities of the Bank, or any right thereto, outstanding.

2.4 Subsidiaries .

(a) Section 2.4(a) (i) of the Bank Disclosure Schedule lists each of the Subsidiaries of the Bank as of the date hereof, which are each wholly-owned by the Bank. The Bank owns all of the issued and outstanding capital stock or equity securities of the Subsidiaries free and clear of all Liens and all such capital stock or equity securities of the Subsidiaries are validly issued, fully-paid and non-assessable. Except for the capital stock of, or other equity or voting interests in, its Subsidiaries and as set forth in Section 2.4(a) (ii) of the Bank Disclosure Schedule, the Bank does not own, directly or indirectly, any capital stock of, or other equity or voting interests in, any Person.

(b) Each of the Bank’s Subsidiaries has been duly organized and qualified under the Laws of the jurisdiction of its organization and is duly qualified to do business and in good standing (with respect to jurisdictions that recognize the concept of good standing) in the jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where the failure to so qualify has not had and would not reasonably be expected to have a Bank Material Adverse Effect. The Company has made available to Buyer accurate and complete copies of the Bank’s Subsidiaries’ Organizational Documents as in effect on the date of this Agreement.

2.5 Corporate Power . Each of the Bank and its Subsidiaries has the corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it is currently conducted.

2.6 Corporate Authority . The Company has the corporate authority to execute and deliver this Agreement, to perform its obligations under this Agreement and, subject to obtaining the approval of this Agreement and the Transactions by the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock entitled to vote thereon (the “ Company Shareholder Approval ”), to consummate the Transactions. The Company has duly executed and delivered this Agreement and, assuming the due authorization, execution and delivery by Buyer, this Agreement is a legal, valid and binding agreement of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’ rights or by general principles of equity (the “ Bankruptcy and Equity Exception ”). The Company Board (i) approved this Agreement and the Transactions, and determined that this Agreement and the Transactions are advisable and in the best interests of the Company’s shareholders and (ii) resolved to recommend the shareholders of the Company vote for the approval of this Agreement and the Transactions (the “ Company Board Recommendation ”).

2.7 Non-Contravention .

(a) Subject to obtainment of the Company Shareholder Approval and the receipt of the Regulatory Approvals, the execution, delivery and performance of this Agreement and the consummation of the Transactions by the Company do not and will not: (i) result in a breach or violation of any provision of the Organizational Documents of the Company, the Bank or any of its Subsidiaries; (ii) constitute a breach or violation of, or a default under, or result in a right of termination or the acceleration of any right or obligation under, any Law, Governmental Order, or Bank Material Contract applicable to the Bank or any of its Subsidiaries or to which the Bank or any of its Subsidiaries, properties or assets is subject or bound; or (iii) except as set forth on Section 2.7(a) of the Bank Disclosure Schedule, require the consent or approval of any Third Party under any such Law, Governmental Order or Bank Material Contract, except in the cases of clauses (ii) and (iii), where the violation, breach, conflict, default, acceleration or failure to give notice would not have a Bank Material Adverse Effect.

(b) No Governmental Order, Permit, Regulatory Approval, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to the Company, the Bank or any of its Subsidiaries in connection with the execution and delivery of this Agreement and the consummation of the Transactions, except for the Regulatory Approvals and such Governmental Orders, Permits, declarations, filings or notices, the failure of which to make or obtain would not have a Bank Material Adverse Effect.

2.8 Compliance with Laws . Except as set forth in Section 2.8 of the Bank Disclosure Schedule, the Bank and each of its Subsidiaries:

(a) since January 1, 2013, has been and is in material compliance with all Laws and Governmental Orders applicable thereto, including, without limitation, the Truth in Lending Act, the Real Estate Settlement Procedures Act, the Consumer Credit Protection Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Homeowners Ownership and Equity Protection Act, the Fair Debt Collections Act, CRA, and other federal, state, local and foreign Laws regulating lending (“ Finance Laws ”), and all other applicable fair lending Laws and other Laws relating to discriminatory business practices and record retention, in each case, applicable to it or its business, properties or assets, except where the failure to be in compliance would not have a Bank Material Adverse Effect; and

(b) since January 1, 2013, has been, and is in material compliance with, all material Permits and has made all material filings, applications and registrations with, all Governmental Authorities that are required in order to permit them to own or lease their properties and to conduct their businesses as presently conducted; all such Permits are in full force and effect, except where the failure to obtain such would not have a Bank Material Adverse Effect.

None of the representations and warranties contained in this Section 2.8 shall be deemed to relate to environmental matters (which are governed by Section 2.16 ), employee benefits matters (which are governed by Section 2.13 ), labor matters (which are governed by Section 2.14 ) or Tax matters (which are governed by Section 2.12 ).

2.9 Litigation; Regulatory Action .

(a) Except as set forth in Section 2.9(a) of the Bank Disclosure Schedule, there are no Actions, investigations or other legal proceedings instituted, pending or, to the Company’s Knowledge, threatened against or by the Bank or any of its Subsidiaries affecting any of their properties or assets (or by or against the Company and relating to the Bank or any of its Subsidiaries), which if determined adversely to the Bank or any of its Subsidiaries (or to the Company) would result in a Bank Material Adverse Effect.

(b) Except as set forth in Section 2.9(b) of the Bank Disclosure Schedule, neither the Bank nor any of its Subsidiaries is, or to the Company’s knowledge, is reasonably likely to be, a party to or is subject to any assistance agreement, board resolution, Governmental Order, supervisory agreement, memorandum of understanding, condition or similar arrangement with, or a commitment letter or similar submission to, any Governmental Authority charged with the supervision or regulation of financial institutions or issuers of securities or engaged in the insurance of deposits (including, without limitation, the FDIC and the Louisiana Office of Financial Institutions (the “ OFI ”)) or the supervision or regulation of the Bank or any of its Subsidiaries.

2.10 Financial Reports and Regulatory Reports .

(a) Copies of the Company and Bank audited financial statements consisting of the consolidated balance sheets of the Company and the Bank as at December 31 in each of the years 2015 and 2014 and the related statements of income and retained earnings, stockholders’ equity and cash flow for the years then ended (the “ Audited Financial Statements ”), and unaudited financial statements consisting of the balance sheet of the Bank at June 30, 2016 and the related statements of income and retained earnings, stockholders’ equity and cash flow for the six period then ended (the “ Interim Financial Statements ” and together with the Audited Financial Statements, the “ Financial Statements ”) have been made available to Buyer. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved, subject to normal and recurring year-end adjustments and, in the case of the Interim Financial Statements, the absence of notes. The Financial Statements fairly present in all material respects the financial condition of the Bank and its consolidated Subsidiaries as of the respective dates they were prepared and the results of the operations of the Bank for the periods indicated. The balance sheet of the Bank as of December 31, 2015 is referred to herein as the “ Balance Sheet ” and the date thereof as the “ Balance Sheet Date ” and the balance sheet of the Bank as of June 30, 2016 is referred to herein as the “ Interim Balance Sheet ” and the date thereof as the “ Interim Balance Sheet Date ”.

(b) Neither the Bank nor any of its Subsidiaries has any liabilities, obligations or commitments of a type required to be reflected on a balance sheet prepared in accordance with GAAP, except (i) those which are adequately reflected or reserved against in the Interim Balance Sheet as of the Interim Balance Sheet Date or the Balance Sheet as of the Balance Sheet Date (including the notes thereto); (ii) those which have been incurred in the ordinary course of business since the Interim Balance Sheet Date and which are not material in amount; (iii) as set forth in the Bank’s call report for the period ended on the Interim Balance Sheet Date; (iv) are incurred in connection with the Transactions; or (v) as would not, in the aggregate, have a Bank Material Adverse Effect.

(c) Since January 1, 2013, the Bank and its Subsidiaries have duly filed with the FDIC and any other applicable Governmental Authority the reports required to be filed under applicable Laws and such reports were in all material respects accurate and complete and in compliance with the requirements of applicable Laws.

2.11 Absence of Certain Changes or Events . Except as set forth on Section 2.11 of the Bank Disclosure Schedule or in the Financial Statements, since the Interim Balance Sheet Date and through the date hereof, except as specifically contemplated by, or as disclosed in, this Agreement, the Bank and its Subsidiaries have conducted their businesses in all material respects in the ordinary course consistent with past practice and, since and through such dates, there has not been any Bank Material Adverse Effect.

2.12 Taxes and Tax Returns . Except as set forth on Section 2.12 of the Bank Disclosure Schedule:

(a) Other than as disclosed on Schedule 2.12(a), the Company, the Bank and each of their Subsidiaries have filed all Tax Returns that they were required to file under applicable Laws with respect to the business of the Bank or any of its Subsidiaries, other than Tax Returns that are not yet due or for which a request for extension was filed consistent with requirements of applicable Law. All such Tax Returns to the extent, but only to the extent, that they relate to the Bank or any of its Subsidiaries, are complete and accurate in all material respects and were prepared in substantial compliance with all applicable Laws. Taxes due and owing by the Company, the Bank or any of their Subsidiaries (whether or not shown on any Tax Return) with respect to the business of the Bank or any of its Subsidiaries have been paid other than Taxes that have been reserved or accrued on the Balance Sheet and which the Company, the Bank, or any of their Subsidiaries is contesting in good faith. None of the Company, the Bank or their Subsidiaries is the beneficiary of any extension of time within which to file any Tax Return. Since January 1, 2013, no written claim has been made by an authority in a jurisdiction where the Company, the Bank or any of their Subsidiaries does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Liens for Taxes (other than Taxes not yet delinquent or the amount or validity of which is being contested in good faith) upon any of the Bank, the assets of the Bank or any of its Subsidiaries.

(b) The Company, the Bank and each of their subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, shareholder, or other Third Party.

(c) Other than as disclosed on Schedule 2.12(c), no foreign, federal, state, or local Tax audits or administrative or judicial Tax proceedings are being conducted or to the Company’s Knowledge are pending with respect to the Company, the Bank or any of their Subsidiaries. Other than with respect to audits that have already been completed and resolved, neither the Company nor the Bank nor any of their Subsidiaries has received from any foreign, federal, state, or local taxing authority (including jurisdictions where the Company, the Bank or any of its Subsidiaries have not filed Tax Returns) any (i) written notice indicating an intent to open an audit or other review; (ii) written request for information related to Tax matters; or (iii) written notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any taxing authority against the Bank or its Subsidiaries, or against the Company or any of its other Subsidiaries that relates to the business of the Bank or its Subsidiaries. Section 2.12(c) of the Disclosure Schedule lists all federal, state, local, and non-U.S. income Tax Returns filed with respect to any of Bank or its Subsidiaries for taxable periods ended on or after December 31, 2013, indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit.

(d) The Company has made available to Buyer accurate and complete copies of the United States federal, state, local, and foreign income Tax Returns filed with respect to the Company, the Bank and their Subsidiaries for taxable periods ended on or after December 31, 2013. The Company has made available to Buyer accurate and complete copies of all examination reports, letter rulings, technical advice memoranda, and similar documents, and statements of deficiencies assessed against or agreed to by the Company, the Bank or any of their Subsidiaries filed for the years ended on or after December 31, 2013. The Company, the Bank and their Subsidiaries have timely and properly taken such actions in response to and, in compliance with notices, the Company, the Bank or any of their Subsidiaries has received from the Internal Revenue Service (the “ IRS ”) in respect of information reporting and backup and nonresident withholding as are required by Law except as disclosed on Schedule 2.12(d).

(e) The Company, the Bank and their Subsidiaries have not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(f) The Company, the Bank and their Subsidiaries have not been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii). The Bank and its Subsidiaries (i) have not been members of an affiliated group filing a consolidated federal income Tax Return (other than a group the common parent of which was the Bank or the Company) and (ii) have no liability for the Taxes of any individual, bank, corporation, partnership, association, joint stock company, business trust, limited liability company, or unincorporated organization (other than the Company or its Subsidiaries) under Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign Law).

(g) The Company, the Bank and their Subsidiaries have not distributed stock of another Person nor had its stock distributed by another Person in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code.

(h) The Company has been a validly electing S corporation within the meaning of Code §1361 and §1362 at all times since January 1, 2006, and the Company will be an S corporation up to and including the Closing Date.

(i) The Bank is a “qualified subchapter S subsidiary” within the meaning of Code §1361(b)(3)(B) and has been a “qualified subchapter S subsidiary” at all times since January 1, 2006 and Bank will be a “qualified subchapter S subsidiary” up to the Closing Date.

(j) The Tax Disclosure Schedule identifies each Bank Subsidiary that is a ‘‘qualified subchapter S subsidiary’’ within the meaning of Code §1361(b)(3)(B). Each Bank Subsidiary so identified has been a “qualified subchapter S subsidiary” at all times since the date shown on such schedule up to and including the day before the Closing Date.

(k) Since January 1, 2006, the Company has not treated the Bank or its Subsidiaries as a separate corporation under the provisions of La. Rev. Stat. Ann. 47: 287.732.

2.13 Employee Benefit Matters .

(a) Section 2.13(a) of the Bank Disclosure Schedule contains a list of each material benefit, pension, profit sharing, retirement, employment, consulting, compensation, incentive, deferred compensation, bonus, stock option, restricted stock, stock appreciation right, phantom equity, change in control, retention, severance, death benefit, vacation, paid time off, welfare and fringe-benefit agreement, arrangement, plan, policy or program in effect and covering one or more Employees or former Employees of the Bank or any of its ERISA Affiliates, current or former directors of the Bank or any of its ERISA Affiliates or the beneficiaries or dependents of any such Persons, which is maintained, sponsored, contributed to, or required to be contributed to by the Bank or any of its ERISA Affiliates, or under which the Bank or any of its ERISA Affiliates has any liability for premiums or benefits (as listed on Section 2.13(a) of the Bank Disclosure Schedule, each, a " Benefit Plan ").

(b) Except as would not have a Bank Material Adverse Effect, each Benefit Plan and related trust complies with all applicable Laws (including ERISA, the Code and applicable local Laws). Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (a " Qualified Benefit Plan ") has received a favorable determination letter from the IRS which remains in effect and has not expired, or with respect to a prototype plan, can rely on an opinion letter from the IRS to the prototype plan sponsor for the current remedial amendment period, to the effect that such Qualified Benefit Plan is so qualified and that the plan and the trust related thereto are exempt from federal income Taxes under Sections 401(a) and 501(a), respectively, of the Code, and nothing has occurred that could reasonably be expected to cause the revocation of such determination letter from the IRS or the unavailability of reliance on such opinion letter from the IRS. Except as would not have a Bank Material Adverse Effect, all benefits, contributions and premiums required by and due under the terms of each Benefit Plan or applicable Law have been timely paid in accordance with the terms of such Benefit Plan and/or the terms of all applicable Laws and all required contributions, premiums or payments for which the due date has not yet occurred are properly accrued in accordance with GAAP. To the Company’s Knowledge, no amount or any assets of any Qualified Benefit Plan are subject to Tax as unrelated business taxable income. To the extent any assets of any Qualified Business Plan are subject to Tax as unrelated business taxable income, all such Tax due on or before the Closing Date has been or will be reported and paid as required under the applicable provisions of the Code.

(c) Except as set forth in Section 2.13(c) of the Bank Disclosure Schedule and other than as required under Section 4980B of the Code or other applicable Law, no Benefit Plan provides benefits or coverage in the nature of health, life or disability insurance following retirement or other termination of employment (other than death benefits when termination occurs upon death). Section 2.13(c) of the Bank Disclosure Schedule contains a list identifying the retirees, if any, who are currently participating in the Bank’s health plan and a list identifying any COBRA qualified beneficiaries currently participating in the Bank’s health plan.

(d) Except as would not have a Bank Material Adverse Effect: (i) there is no pending or, to the Company’s Knowledge, threatened Action relating to a Benefit Plan and (ii) no Benefit Plan has within the three years prior to the date hereof been the subject of an examination or audit by a Governmental Authority.

(e) Except as set forth in Section 2.13(e) of the Bank Disclosure Schedule, or as would not have a Bank Material Adverse Effect, no Benefit Plan exists that could: (i) result in the payment to any Employee, director or consultant of any money or other property; (ii) accelerate the vesting of or provide any additional rights or benefits (including funding of compensation or benefits through a trust or otherwise) to any Employee, director or consultant; or (iii) limit or restrict the ability of Buyer or its Affiliates to merge, amend or terminate any Benefit Plan, in each case, as a result of the execution of this Agreement or the consummation of the Transactions. Neither the execution of this Agreement nor the consummation of the Transactions will result in "excess parachute payments" within the meaning of Section 280G(b) of the Code.

(f) All filings required by ERISA and/or the Code as to each Benefit Plan, including but not limited to the annual report (Form 5500) and Tax information returns, have been timely filed in all material respects, and all notices and disclosures to participants required by either ERISA or the Code have been timely provided in all material respects. Neither the Bank or any of its ERISA Affiliates has any liability to any Governmental Authority for failure to timely or properly make such filings or provide such notices or disclosures when due.

(g) To the Company’s Knowledge, each Benefit Plan that is a “nonqualified deferred compensation plan” subject to Section 409A of the Code is in documentary compliance with Section 409A, and has been established, operated, and maintained in compliance with Section 409A. To the Company’s Knowledge, no acts or omissions have occurred with respect to any Benefit Plan that is subject to Section 409A which would reasonably be expected to give rise to any excise Taxes thereunder.

(h) Bank owns or will own by the Closing Date, annuities and/or other insurance products in sufficient amounts, and from which Bank may draw, to satisfy its liabilities to its employees and/or directors under each Benefit Plan that is a “nonqualified deferred compensation plan,” including but not limited to each Salary Reduction Agreement and Supplemental Income Plan between the Bank and any such employee or director.

2.14 Labor Matters . Each of the Bank and its Subsidiaries is in material compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate to employees of the Bank and its Subsidiaries, respectively. Neither the Bank nor any of its Subsidiaries is a party to, or bound by, any collective bargaining or other agreement with a labor organization representing any of its Employees. Since January 1, 2013, there has not been, nor, to the Company’s Knowledge, has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor activity or dispute affecting the Bank or any of its Subsidiaries.

2.15 Insurance . Section 2.15 of the Bank Disclosure Schedule sets forth a list, as of the date hereof, of all material insurance policies maintained by the Bank and its Subsidiaries or with respect to which the Bank is a named insured or otherwise the beneficiary of coverage, including, without limitation, any bank-owned life insurance policies (“ BOLI ”) (collectively, the “ Insurance Policies ”). Such Insurance Policies are in full force and effect on the date of this Agreement and all premiums which have become due on such Insurance Policies have been timely paid. The value of the BOLI set forth on Section 2.15 of the Bank Disclosure Schedule is fairly and accurately reflected on the Interim Balance Sheet in all material respects. Except as set forth on Section 2.15 of the Bank Disclosure Schedule, the BOLI, and any other life insurance policies on the lives of any current and former officers and directors of the Bank and its Subsidiaries that are maintained by the Bank or any such Subsidiary or otherwise reflected on the Interim Balance Sheet are, and will at the Closing be, owned by the Bank or such Subsidiary, as the case may be, free and clear of any claims thereon by the officers, directors or members of their families.

2.16 Environmental Matters . To the Company’s Knowledge, the Bank and its Subsidiaries are and have been in compliance with all applicable Environmental Laws, except where the failure to be in such compliance would not have a Bank Material Adverse Effect. Neither the Bank nor any of its Subsidiaries has received any written notice from a Governmental Authority that alleges that such entity has violated or is violating any Environmental Law, which notice or required action remains outstanding or unresolved as of the date of this Agreement. To the Company’s Knowledge, there has been no material release of any hazardous materials by the Bank or any of its Subsidiaries at or from any facilities or Real Property owned or leased by the Bank or any of its Subsidiaries or at any other locations where any hazardous materials were generated, manufactured, refined, transferred, stored, produced, imported, used, processed or disposed of by the Bank or any of its Subsidiaries and, in each case, for which the Company has any material liability. The representations and warranties set forth in this Section 2.16 are the Company’s sole and exclusive representations and warranties regarding environmental matters.

2.17 Intellectual Property .

(a) Section 2.17(a) of the Bank Disclosure Schedule lists all patents, patent applications, trademark registrations and pending applications for registration, copyright registrations and pending applications for registration and internet domain name registrations owned by the Bank or any of its Subsidiaries. Except as would not have a Bank Material Adverse Effect, the Bank and its Subsidiaries own or have the right to use all Intellectual Property currently used in its respective businesses (the “ Business Intellectual Property ”).

(b) Except as would not have a Bank Material Adverse Effect, to the Company’s Knowledge: (i) the Business Intellectual Property as currently licensed or used by the Bank and its Subsidiaries, and each of the Bank’s and its Subsidiaries’ conduct of business as currently conducted, do not infringe, misappropriate or otherwise violate the Intellectual Property of any Person; and (ii) no Person is infringing, misappropriating or otherwise violating any Business Intellectual Property. This Section 2.17(b) constitutes the sole representation and warranty of the Company under this Agreement with respect to any actual or alleged infringement, misappropriation or other violation by the Company, the Bank and its Subsidiaries of the Intellectual Property of any other Person.

(c) No proceedings have been instituted, or are pending or, to the Company’s Knowledge, overtly threatened, that challenge the rights of the Bank or any of its Subsidiaries with respect to its Business Intellectual Property used, sold or licensed by Bank or any of its Subsidiaries in the course of its business, nor has any person claimed or alleged any right to such Business Intellectual Property.

2.18 Material Agreements .

(a) Except as set forth on Section 2.18(a) of the Bank Disclosure Schedule, and except for the Leases, this Agreement and the Transactions, neither the Bank nor any of its Subsidiaries is a party to or is bound by any Contract:

(i)	with respect to the employment or service of any director, officer, employee, Affiliate or consultant for future payments (including change of control or severance), individually or in the aggregate, in excess of $100,000;

(ii)	which would entitle any director or officer of the Bank or any of its Subsidiaries to indemnification from the Bank or any of its Subsidiaries;

(iii)

by and among the Bank or any of its Subsidiaries, and/or any Affiliate thereof;

(iv)	which grants any exclusive right of first refusal, right of first offer or similar right with respect to any equity rights (including the Bank Shares), material assets or properties of the Bank and or any of its Subsidiaries;

(v)	which provides for the lease of personal property having a value in excess of $50,000 individually or $250,000 in the aggregate;

(vi)	which relates to capital expenditures and involves future payments in excess of $50,000 individually or $250,000 in the aggregate;

(vii)

which relates to the disposition or acquisition of any equity rights (including the Bank Shares), material assets or any material interest in any business enterprise outside the ordinary course of business of the Bank or its Subsidiaries;

(viii)

which is not terminable on 90 days or less notice and involving the payment of more than $50,000 per annum or a termination fee; or

(ix)	which materially restricts the conduct of, or ability of the Bank or any of its Subsidiaries to compete in, any business or the solicitation of employees or customers by the Bank or any of its Subsidiaries.

Each Contract of the type described in this Section 2.18(a) , whether or not set forth on Section 2.18(a) of the Bank Disclosure Schedule, together with all Leases, is referred to herein as a “ Bank Material Contract .” The Company has made available to Buyer accurate and complete copies of all of the Bank Material Contracts, including any and all material amendments and modifications thereto.

(b) Each Bank Material Contract is legal, valid and binding upon the Bank or its Subsidiaries, as the case may be, and to the Knowledge of the Company, all other parties thereto, and is in full force and effect. Neither the Bank nor any of its Subsidiaries is in material breach of or default under any Bank Material Contract, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a breach or default. To the Knowledge of the Company, no other party to any Bank Material Contract is in material breach of or default under such Bank Material Contract, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a breach or default.

2.19 Title to Assets; Real Property .

(a) The Bank and its Subsidiaries have good and valid (and, in the case of owned Real Property, good and marketable fee simple) title to, or a valid leasehold interest in, all Real Property and tangible personal property and other assets reflected in the Audited Financial Statements or acquired after the Balance Sheet Date, other than properties and assets sold or otherwise disposed of in the ordinary course of business since the Interim Balance Sheet Date. All such properties and assets (including leasehold interests) are free and clear of Encumbrances except for the following:

(i)	those items set forth in Section 2.19(a)(i) of the Bank Disclosure Schedule;

(ii)	Liens for Taxes accrued but not yet due and payable or being contested in good faith by appropriate procedures;

(iii)

mechanics', carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business;

(iv)	servitudes, easements, rights of way, zoning ordinances and other similar encumbrances affecting Real Property that are properly recorded;

(v)	other than with respect to owned Real Property, Liens arising under original purchase price conditional sales Contracts and equipment Leases with Third Parties entered into in the ordinary course of business;

(vi)	those items that secure public or statutory obligations or any discount with, borrowing from, or obligations to any Federal Home Loan Bank, interbank credit facilities, or any transaction by the Bank’s Subsidiaries acting in a fiduciary capacity; or

(vii)

other imperfections of title or encumbrances, if any, that have not had, and would not have, a Bank Material Adverse Effect.

(b) Section 2.19(b) of the Bank Disclosure Schedule lists: (i) the street address of each parcel of owned Real Property and (ii) the street address of each parcel of leased Real Property, and a list, as of the date of this Agreement, of all leases for each parcel of leased Real Property involving total annual payments of at least $50,000 (collectively, “ Leases ”), including the identification of the lessee and lessor thereunder.

2.20 Regulatory Capitalization . The Bank is “well capitalized,” as such term is defined in 12 C.F.R. Part 324, Subpart A.

2.21 Loans; Nonperforming and Classified Assets; Allowance . Each loan agreement, note or direct borrowing arrangement, including, without limitation, portions of outstanding lines of credit, guarantees, credit card accounts, and loan commitments, on the Bank’s books and records (collectively, “ Loans ”) (i) is evidenced by documentation appropriate and sufficient to enforce such Loan in accordance with its terms and (ii) represents the legal, valid and binding obligation of the related borrower, enforceable in accordance with its terms, except as enforcement may be limited by receivership, conservatorship and supervisory powers of bank regulatory agencies generally as well as by the Bankruptcy and Equity Exception. With respect to each Loan the Loan file contains all original or copies of notes, agreements, other evidences of indebtedness, security instruments and financing statements.

(a) Other than Loans that have been pledged to the Federal Home Loan Bank in the ordinary course of business, no Loan has been assigned or pledged, and the Bank has good and marketable title thereto, without any basis for forfeiture thereof. The Bank is the sole owner and holder of the Loan free and clear of any and all Liens other than a Lien of the Bank.

(b) Each Loan, to the extent purported to be secured by a Lien of the Bank, is secured by a valid, perfected and enforceable Lien of the Bank in the collateral for such Loan.

(c) Except as set forth in Section 2.21(c) of the Bank Disclosure Schedule, each Loan was underwritten and originated by the Bank (i) in the ordinary course of business and (ii) in accordance with applicable Law, including without limitation, Laws related to usury, truth-in-lending, real estate settlement procedures, consumer credit protection, predatory lending, abusive lending, fair credit reporting, unfair collection practice, origination, collection and servicing, provided, that such representation and warranty is made solely with respect to such Loan in respect of which any applicable statute of limitations period for any related claim or dispute has not yet expired.

(d) No Loan is subject to any valid right of rescission, set-off, counterclaim or defense, including the valid defense of usury, nor will the operation of any of the terms of the note or the mortgage (if applicable), or the exercise of any right thereunder, render either the note or the mortgage (if applicable) unenforceable, in whole or in part, or subject to any valid right of rescission, set-off, counterclaim or defense, including the valid defense of usury; provided that such representation and warranty is made solely with respect to such Loans in respect of which any applicable statute of limitations period for any claim or dispute arising from or relating to such then-applicable valid right of rescission, set-off, counterclaim or defense has not yet expired.

(e) Section 2.21(e) of the Bank Disclosure Schedule discloses as of June 30, 2016: (i) any Loan under the terms of which the obligor is thirty (30) or more days delinquent in payment of principal or interest or placed on non-accrual status (iii) a listing of the real estate owned, acquired by foreclosure or by deed‑in‑lieu thereof, including the book value thereof; and (iv) each Loan with any director, executive officer or 5% or greater shareholder of the Bank, or to the Knowledge of the Company, any Person controlling, controlled by or under common control with any of the foregoing. All Loans which are classified as “Insider Transactions” by Regulation O of the Board of Governors of the Federal Reserve System (the “ FRB ”) have been made by the Bank in an arms‑length manner on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other Persons and do not involve more than normal risk of collectability or present other unfavorable features.

(f) Except as set forth in Section 2.21(f) of the Bank Disclosure Schedule, there is no Action or investigation pending, or to the Company’s Knowledge, threatened, with respect to any Loan.

(g) The Bank's allowance for loan losses is, and has been since January 1, 2013, in compliance with the Bank's methodology for determining the adequacy of its allowance for loan losses as well as the standards established by any applicable Governmental Authority and the Financial Accounting Standards Board in all material respects.

2.22 Deposits .

(a) The deposits of the Bank have been solicited, originated and administered by the Bank in accordance with the terms of their governing documents in effect from time to time and with applicable Law.

(b) Each of the agreements relating to the deposits of the Bank is valid, binding, and enforceable upon its respective parties in accordance with its terms except as enforceability may be limited by the Bankruptcy and Equity Exception.

(d) Any debit cards issued by the Bank with respect to the deposits of the Bank have been issued and administered in accordance with applicable Law, including the Electronic Fund Transfer Act of 1978, as amended, and Regulation E of the Consumer Financial Protection Bureau.

2.23 Investment Securities . Each of the Bank and its Subsidiaries has good title to all securities owned by it (except those sold under repurchase agreements or held in any fiduciary or agency capacity), free and clear of any Liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of the Bank or its Subsidiaries. Such securities are valued on the books of the Bank in accordance with GAAP. The Bank and its Subsidiaries and their respective businesses employ investment, securities, risk management and other policies, practices and procedures which the Bank believes are prudent and reasonable in the context of such businesses.

2.24 Investment Management; Trust Activities .

(a) Except as set forth on Section 2.24(a) of the Bank Disclosure Schedule, none of the Bank, any of its Subsidiaries or the Bank’s or its Subsidiaries’ directors, officers or employees is required to be registered, licensed or authorized under the Laws issued by any Governmental Authority as an investment adviser, a broker or dealer, an insurance agency or company, a commodity trading adviser, a commodity pool operator, a futures commission merchant, an introducing broker, a registered representative or associated person, investment adviser, representative or solicitor, a counseling officer, an insurance agent, a sales person or in any similar capacity with a Governmental Authority.

(b) Except as set forth on Section 2.24(b) of the Bank Disclosure Schedule, neither the Bank nor any of its Subsidiaries engages in any trust business, nor administers or maintains accounts for which it acts as fiduciary (other than individual retirement accounts and Keogh accounts), including accounts for which it serves as trustee, custodian, agent, personal representative, guardian or conservator.

2.25 Derivative Transactions . Except as set forth on Section 2.25 of the Bank Disclosure Schedule, Bank has not engaged in or been party to any Derivative Transactions.

2.26 Deposit Insurance . The deposits of the Bank are insured by the FDIC in accordance with the FDIA to the fullest extent permitted by Law, and the Bank has paid all premiums and assessments and filed all reports required by the FDIA. No proceedings for the revocation or termination of such deposit insurance are pending or, to the Knowledge of the Company, threatened.

2.27 CRA, Anti-money Laundering and Customer Information Security .

(a) Neither the Bank nor any of its Subsidiaries is a party to any agreement with any individual or group regarding matters related to the Community Reinvestment Act of 1977, as amended, and any equivalent applicable state Laws (collectively, the “ CRA ”). The Bank is in compliance with all applicable requirements of the CRA.

(b) To the Company’s Knowledge, the Bank and each of its Subsidiaries is in compliance, and has complied with, all applicable Laws relating to the prevention of money laundering of any Governmental Authority applicable to it or its property or in respect of its operations, including all applicable financial record-keeping, know-your-customer and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended from time to time, including by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “ USA PATRIOT Act ” and all such applicable Laws, the “ Money Laundering Laws ”). The Board of Directors of the Bank has adopted, and the Bank has implemented, a written anti-money laundering program that contains adequate and appropriate customer identification verification procedures that has not been deemed ineffective by any Governmental Authority and that meets the requirements of Sections 352 and 326 and all other applicable provisions of the USA PATRIOT Act and the regulations thereunder.

(c) To the Knowledge of the Company, none of (i) the Bank, (ii) any Subsidiary of the Bank, (iii) any Person on whose behalf the Bank or any Subsidiary of the Bank is acting, or (iv) to the Company’s Knowledge, any Person who directly or indirectly beneficially owns securities issued by the Bank or any Subsidiary of the Company, is (A) named on the most current list of “Specially Designated Nationals” published by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“ OFAC ”) or the most recent Consolidated Sanctions List published by OFAC; (B) otherwise a country, territory or Person that is the target of sanctions administered by OFAC or the U.S. Department of State; (C) a Person engaged, directly or indirectly, in any transactions or other activities with any country, territory or Person prohibited by OFAC; (D) a Person that resides or has a place of business in a country or territory named on such lists or which is designated as a Non-Cooperative Jurisdiction by the Financial Action Task Force on Money Laundering; (E) a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act; (F) a Person that resides in, or is organized under the Laws of, a jurisdiction designated by the Secretary of the Treasury under Section 311 or Section 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns; (G) a Person that is designated by the Secretary of the Treasury as warranting such special measures due to money laundering concerns; or (H) a Person that otherwise appears on any U.S.-government provided list of known or suspected terrorists or terrorist organizations. Neither the Bank nor any of its Subsidiaries has engaged in transactions of any type with any party described in clauses (A) through (H) in the past and neither the Bank nor any of its Subsidiaries is currently engaging in such transactions. The Bank and its Subsidiaries have in place and maintain internal policies and procedures that are reasonably designed to ensure the foregoing.

(d) The Bank is in compliance with all applicable Laws related to privacy of customer information, including, without limitation, Title V of the Gramm-Leach-Bliley Act of 1999 and regulations promulgated thereunder, and the Interagency Guidelines Establishing Information Securities Standards set forth 12 C.F.R. Part 364, Appendix B (collectively, the “ Privacy Laws ”). The Board of Directors of the Bank has adopted, and the Bank has implemented, a written information security program that meets the requirements of applicable Law.

2.28 Transactions with Affiliates . Except as set forth on Section 2.28 of the Bank Disclosure Schedule, there are no outstanding amounts payable to or receivable from, or advances by the Bank or any of its Subsidiaries to, and neither the Bank nor any of its Subsidiaries is otherwise a creditor or debtor to, any shareholder owning 5% or more of the outstanding capital stock of the Company or the Bank, director, Employee or Affiliate of the Bank or any of its Subsidiaries, other than as part of the normal and customary terms of such persons’ employment or service as a director with the Bank or any of its Subsidiaries. Except as set forth on Section 2.28 of the Bank Disclosure Schedule, neither the Bank nor any of its Subsidiaries is a party to any transaction or agreement with any of its respective Affiliates, shareholders owning, directly or indirectly, 5% or more of the outstanding capital stock of the Company or Bank, directors or executive officers or any material transaction or agreement with any Employee other than executive officers. All agreements between the Bank and any of its Affiliates comply, to the extent applicable, with Regulation W of the FRB.

2.29 No Brokers . There are no claims for brokerage commissions, finders’ fees or other similar compensation in connection with the Transactions based on any arrangement or agreement made by or on behalf of the Company, except for the fees and expenses of Sheshunoff & Co. Investment Banking, L.P. (“ Sheshunoff ”), which shall be paid by the Company at the Closing.

2.30 Flood-Affected Loans . To the Company’s Knowledge, the loans set forth in Section 5.18(b) of the Bank Disclosure Schedule are all of the loans of the Bank directly affected by the August 2016 flooding in the Baton Rouge, Louisiana area.

2.31 No Other Representations and Warranties . Except for the representations and warranties contained in this Article II (including the related portions of the Bank Disclosure Schedule), none of the Company, the Bank or any of its Subsidiaries, or any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of the Company or the Bank or any of its Subsidiaries, including any representation or warranty as to the accuracy or completeness of any information regarding the Bank or its Subsidiaries furnished or made available to Buyer and its Representatives (including the Diligence Materials) or as to the future revenue, profitability or success of the Bank, or any representation or warranty arising from any Law.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER

3.1 Making of Representations and Warranties . Except as set forth in the Buyer Disclosure Schedule, Buyer represents and warrants to the Company as of the date of this Agreement and as of the Closing, as follows:

3.2 Organization, Standing and Authority . Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Mississippi. Buyer is a bank holding company under the Bank Holding Company Act of 1956, as amended, and the regulations of the FRB promulgated thereunder. Buyer is duly qualified to do business and is in good standing (with respect to jurisdictions that recognize the concept of good standing) in the jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where the failure to so qualify has not had and would not reasonably be expected to have a Buyer Material Adverse Effect. Each of Buyer’s Subsidiaries has been duly organized and qualified under the Laws of the jurisdiction of its organization and is duly qualified to do business and in good standing (with respect to jurisdictions that recognize the concept of good standing) in the jurisdiction where its ownership or leasing of property or the conduct of its business requires such Subsidiary to be so qualified, except where the failure to so qualify has not had and would not reasonably be expected to have a Buyer Material Adverse Effect. Buyer owns, directly or indirectly, all of the issued and outstanding equity securities of each of its Subsidiaries.

3.3 Corporate Power . Buyer has the power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transactions.

3.4 Corporate Authority . This Agreement and the Transactions have been authorized by all necessary action by Buyer and no action is required of the equity holders of Buyer with respect to any of the Transactions. Buyer has duly executed and delivered this Agreement and, assuming the due authorization, execution and delivery by the Company, this Agreement is a legal, valid and binding agreement of Buyer, enforceable in accordance with its terms, except as such enforceability may be limited by the Bankruptcy and Equity Exception.

3.5 Non-Contravention .

(a) Subject to the receipt of the Regulatory Approvals, the execution, delivery and performance of this Agreement and the consummation of the Transactions by Buyer do not and will not: (i) result in a breach or violation of any provision of the Organizational Documents of Buyer or any of its Subsidiaries; (ii) constitute a breach or violation of, or a default under, or result in a right of termination, or the acceleration of any right or obligation under, any Law, Governmental Order or material Contract applicable to Buyer or any of its Subsidiaries or to which Buyer or any of its Subsidiaries, properties or assets is subject or bound; or (iii) require the consent or approval of any Third Party under any such Law, Governmental Order or material Contract applicable to Buyer or any of its Subsidiaries.

(b) No Governmental Order, Permit, Regulatory Approval, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer or any of its Subsidiaries in connection with the execution and delivery of this Agreement and the consummation of the Transactions, except for the Regulatory Approvals and such Governmental Orders, Permits, declarations, filings or notices, the failure of which to make or obtain would not have a Buyer Material Adverse Effect.

3.6 Compliance with Laws . To the Buyer’s Knowledge, Buyer and each of its Subsidiaries, since January 1, 2013, has all material Permits and has made all material filings, applications and registrations with, all Governmental Authorities that are required in order to permit them to own or lease their properties and to conduct their businesses as presently conducted; all such Permits are in full force and effect, except where the failure to obtain such would not have a Buyer Material Adverse Effect.

3.7 Litigation; Regulatory Action . Neither Buyer nor any of its Subsidiaries is a party to or is subject to any assistance agreement, board resolution, Governmental Order, supervisory agreement, memorandum of understanding, condition or similar arrangement with, or a commitment letter or similar submission to, any Governmental Authority charged with the supervision or regulation of financial institutions or issuers of securities or engaged in the insurance of deposits (including, without limitation, the FRB or the OCC) or the supervision or regulation of Buyer or any of its Subsidiaries.

3.8 Regulatory Capitalization . Buyer Bank is, and immediately after the Closing will be, “well capitalized,” as such term is defined in 12 C.F.R. Part 3. Buyer meets the standards set forth in 12 C.F.R § 225.14(c)(1), (2) and (3)(ii).

3.9 Investment Purpose . Buyer is acquiring the Bank Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer acknowledges that the Bank Shares are not registered under the Securities Act of 1933, as amended, or any state securities Laws, and that the Bank Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act of 1933, as amended, applicable regulations of the FDIC, or an applicable exemption therefrom and subject to state securities Laws, as applicable. Buyer is able to bear the economic risk of holding the Bank Shares for an indefinite period (including total loss of its investment), and has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

3.10 Brokers . Except for Keefe, Bruyette & Woods, Inc., no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Buyer, and whose expenses shall be paid by Buyer.

3.11 Sufficient Funds . Buyer or Buyer Bank has, and will have at the Closing, sufficient funds to enable Buyer to make payment of the Purchase Price and consummate the Transactions.

3.12 Independent Investigation . Buyer has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Bank and its Subsidiaries, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Bank and its Subsidiaries for such purpose. Buyer acknowledges and agrees that: (i) in making its decision to enter into this Agreement and to consummate the Transactions, Buyer has relied solely upon its own investigation and the express representations and warranties of the Company set forth in Article II of this Agreement (including the related portions of the Bank Disclosure Schedule); and (ii) none of the Company, the Bank or any of its Subsidiaries, or any other Person has made any representation or warranty as to the Company, the Bank or any of its Subsidiaries, or this Agreement, except as expressly set forth in Article II of this Agreement (including the related portions of the Bank Disclosure Schedule).

ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS

4.1 Bank and Company Forbearances . From the date hereof until the Closing, except (i) to the extent Buyer shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) as set forth in the Bank Disclosure Schedule, (iii) as contemplated or permitted by this Agreement, (iv) as may be necessary or appropriate to carry out the Transactions, or (v) as may be required to facilitate compliance with any Law or Contract, the Bank shall not, and the Company will use commercially reasonable efforts to cause each of the Bank and its Subsidiaries not to,:

(a) Ordinary Course . Conduct its business other than in the ordinary and usual course consistent with past practice, or fail to use reasonable best efforts to preserve intact its business organizations and assets and maintain its rights, franchises and existing relations with customers, employees and business associates; provided that this Section 4.1(a) shall not prohibit the Company or the Bank, as applicable, from fulfilling its obligations specifically set forth elsewhere in this Agreement..

(b) Stock . (i) Issue, sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares of stock, any securities convertible into or exchangeable for any additional shares of stock, any stock options or stock appreciation rights, or any other rights to subscribe for or acquire shares of stock, or take any action related to such issuance or sale or (ii) grant or approve any preemptive or similar rights with respect to any Bank Shares.

(c) Dividends, Etc . (i) Make, declare or pay any dividend on or in respect of, or declare or make any distribution on, any shares of stock other than (A) dividends from wholly owned Subsidiaries to the Bank or (B) from the Bank to the Company for purposes of funding Tax distributions to Company shareholders, in the ordinary course of business and consistent with past practice or (ii) directly or indirectly combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock (other than with respect to shares withheld for Tax purposes upon the vesting of restricted stock awards or performance share awards or tendered to pay withholding Taxes or in payment of the exercise price of stock options).

(d) Compensation . Increase the compensation of its employees, other than as provided for in any written agreements entered into prior to the date hereof and disclosed in Section 4.1(d) of the Bank Disclosure Schedule or in the ordinary course of business, including discretionary bonus payments of the type and in amounts consistent with past practice and not to exceed the amounts accrued for by the Bank.

(e) Benefit Plans . Except (i) as may be required by applicable Law or (ii) to satisfy contractual obligations existing as of the date hereof and disclosed on Section 2.13(e) of the Bank Disclosure Schedule, adopt, amend or modify any Benefit Plan, the effect of which in the aggregate would increase the obligations of the Bank. Nothing contained in this Section 4.1(e) shall prohibit the Bank or the Company from satisfying its obligations under Section 2.13(h) .

(f) Dispositions . Sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any of its assets, deposits, business or properties except in the ordinary course of business and in a transaction that, together with all other such transactions, is not material to the Bank and its Subsidiaries taken as a whole.

(g) Organizational Documents . Amend its Organizational Documents.

(h) Acquisitions . Acquire (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business consistent with past practice) all or any portion of the assets, business, securities, deposits or properties of any other entity.

(i) Capital Expenditures . Except for any emergency repairs to Real Property or personal property owned by Bank (in which case it will use commercially reasonable efforts to notify Buyer), make any capital expenditures other than capital expenditures in the ordinary course of business consistent with past practice in amounts not exceeding $100,000 in the aggregate.

(j) Contracts . Enter into or terminate any Bank Material Contract or amend or modify in any material respect any Bank Material Contract.

(k) Claims . Enter into any settlement or similar agreement with respect to any Action, Governmental Order or investigation to which the Company or any of its Subsidiaries is a party, which settlement or similar agreement involves payment by the Company or any of its Subsidiaries of any amount which exceeds $50,000 individually or $100,000 in the aggregate and/or would impose any material restriction on the business of the Bank or any of its Subsidiaries after the Closing; provided, however , that the foregoing shall not apply to any shareholder litigation against the Company, the Bank or any of its Subsidiaries and/or their directors relating to the Transactions, or any other Action or investigation relating to the Transactions or that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied.

(l) Banking Operations . Enter into any new material line of business; change its material lending, investment, underwriting, risk and asset liability management and other material banking and operating policies, except as required by applicable Law; introduce any material new products or services, any material marketing campaigns or any material new sales compensation or incentive programs or arrangements; or file any application or make any Contract with respect to branching or site location or branching or site relocation.

(m) Derivative Transactions . Enter into any Derivative Transactions.

(n) Indebtedness . Incur, modify, extend or renegotiate any indebtedness for borrowed money (other than deposits, federal funds purchased, Federal Home Loan Bank advances, and securities sold under agreements to repurchase, in each case in the ordinary course of business consistent with past practice), prepay any indebtedness or other similar arrangements so as to cause the Company or any of its Subsidiaries to incur any prepayment penalty thereunder, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person, other than in the ordinary course of business consistent with past practice.

(o) Investment Securities . Acquire (other than by way of foreclosures or acquisitions in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business consistent with past practice) (i) any debt security or equity investment of a type or in an amount not in accordance with the Company’s investment policy or (ii) any other debt security other than in accordance with the Company’s investment policy, or restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise.

(p) Loans . (i) Make, increase or purchase any Loan (which for purposes of this Section 4.1(p) shall include both funded and unfunded commitments) if, as a result of such action, the total commitment to the borrower and the borrower’s Affiliates would equal or exceed $500,000 for secured Loans or $100,000 for unsecured loans or (ii) renegotiate, renew, increase, extend, modify or purchase any existing Loan rated “special mention” or lower in an amount equal to or greater than $250,000.

(q) Accounting Methods . Implement any material change in any method of accounting or accounting practice, except as required by GAAP or applicable Law or as disclosed in the notes to the Financial Statements.

(r) Tax Matters . Make or change any material Tax election, change an annual accounting period, adopt or change any material accounting method, file any material amended Tax Return, fail to timely file any material Tax Return, enter into any material closing agreement, settle or compromise any material liability with respect to Taxes, agree to any material adjustment of any Tax attribute, surrender any material right to claim a refund of Taxes, consent to any material extension or waiver of the limitation period applicable to any Tax claim or assessment, or take any other similar action relating to the filing of any material Tax Return or the payment of any material Tax. For purposes of this Section 4.1(r) , “material” means affecting or relating to $50,000 or more of taxable income.

(s) Loan Policies . Change its Loan policies or procedures in effect as of the date hereof, except as required by any Governmental Authority.

(t) Agreements . Agree to do, or make any commitment to, take or adopt any resolution of the Board of Directors of Bank or any of its Subsidiaries in support of anything prohibited by this Section 4.1 .

4.2 Forbearances of Buyer . From the date hereof until the Closing, except as set forth on the Buyer Disclosure Schedule or as expressly contemplated by this Agreement, without the prior written consent of the Company, Buyer will not, and will cause its Subsidiaries not to (i) knowingly take any action that would be reasonably likely to cause a material delay in or impediment to the consummation of the Transactions or (ii) take any action that is intended or is reasonably likely to result in any of the conditions set forth in Article VII not being satisfied.

ARTICLE V
ADDITIONAL AGREEMENTS

5.1 Shareholder Approval . As promptly as practicable following the date of this Agreement, the Company and Bank shall take all action necessary in accordance with applicable Law and their Organizational Documents to convene a meeting (the “ Special Meeting ”) (or, in the case of the Bank, execute a waiver of such meeting and adopt a unanimous consent in lieu thereof) of their respective shareholders to be held to consider (i) adoption of this Agreement and (ii) approval of the Transactions. Unless there has been a Company Board Recommendation Change, the Company will make the Company Board Recommendation and use its reasonable best efforts to solicit from its shareholders the requisite votes in favor of the adoption of this Agreement and the approval of the Transactions. The Company will use reasonable best efforts to ensure that the Special Meeting is held and conducted, and that all proxies and votes solicited by the Company in connection with the Special Meeting are solicited, in compliance with applicable Law.

5.2 Access; Information . From the date hereof until the Closing, the Company shall, and shall cause the Bank and its Subsidiaries to: (i) afford Buyer and its Representatives reasonable access to and the right to inspect all of the Real Property, properties, assets, premises, books and records, Contracts and other documents and data related to the Bank and its Subsidiaries; (ii) furnish Buyer and its Representatives with such financial, operating and other data and information related to the Bank and its Subsidiaries as Buyer or any of its Representatives may reasonably request; and (iii) instruct the Representatives of the Company and the Bank to cooperate with Buyer in its investigation of the Bank and its Subsidiaries; provided, however, that any such investigation shall be conducted during normal business hours upon reasonable advance notice to the Company, under the supervision of the Bank’s personnel and in such a manner as not to interfere with the normal operations of the Bank. All requests by Buyer for access pursuant to this Section 5.2 shall be submitted or directed exclusively to Klein Kirby, President or such other individuals as the Company may designate in writing from time to time. Notwithstanding anything to the contrary in this Agreement, none of the Company, the Bank or any of its Subsidiaries shall be required to disclose any information to Buyer if such disclosure would, in the Company’s reasonable discretion: (A) cause significant competitive harm to the Company, the Bank or any of its Subsidiaries and their respective businesses if the Transactions are not consummated; (B) jeopardize any attorney-client or other privilege; or (C) contravene any applicable Law or fiduciary duty. Prior to the Closing, without the prior written consent of the Company, which may be withheld for any reason, Buyer shall not, unless required by applicable Law, contact any suppliers to, or customers of, the Bank or any of its Subsidiaries and Buyer shall have no right to perform invasive or subsurface investigations of the Real Property. Buyer shall, and shall cause its Representatives to, abide by the terms of the Confidentiality Agreement with respect to any access or information provided pursuant to this Section 5.2 . No investigation by Buyer of the business and affairs of Bank and its Subsidiaries shall affect or be deemed to modify or waive any representation, warranty, covenant or agreement in this Agreement, or the conditions to Buyer’s obligation to consummate the Transactions.

5.3 Regulatory Applications; Filings; Consents .

(a) Each party hereto shall, as promptly as possible, use its reasonable best efforts to obtain, or cause to be obtained, all Permits and orders from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement, including the Regulatory Approvals. Each party shall cooperate fully with the other party and its Affiliates in promptly seeking to obtain all such Permits and orders. The parties hereto shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required Permits or orders. Buyer shall make all applicable Regulatory Filings with respect to the Transactions within 20 Business Days after the date hereof and shall supply as promptly as practicable to the appropriate Governmental Authority any additional information and documentary material that may be requested in connection therewith.

(b) Without limiting the generality of Buyer’s undertaking pursuant to this Section 5.3 , each party agrees to use its commercially reasonable efforts and to take commercially reasonable steps necessary to avoid or eliminate each and every impediment under any antitrust, competition or trade regulation Law that may be asserted by any Governmental Authority or any other party so as to enable the parties hereto to close the Transactions as promptly as possible, including proposing, negotiating, committing to and effecting, by consent decree, hold separate orders, or otherwise, the sale, divestiture or disposition of its assets, properties or businesses or of the assets, properties or businesses to be acquired by it pursuant to this Agreement as are required to be divested in order to avoid the entry of, or to effect the dissolution of, any Governmental Order in any Action, which would otherwise have the effect of materially delaying or preventing the consummation of the Transactions. In addition, each party shall use its reasonable best efforts to defend through litigation on the merits any Action asserted in court by any party in order to avoid entry of, or to have vacated or terminated, any Governmental Order (whether temporary, preliminary or permanent) that would prevent the consummation of the Closing.

(c) All analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals made by or on behalf of either party before any Governmental Authority or the staff or regulators of any Governmental Authority, in connection with the Transactions (but, for the avoidance of doubt, not including any interactions between the Company or the Bank with Governmental Authorities in the ordinary course of business, any disclosure which is not permitted by Law or any disclosure containing confidential information) shall be disclosed to the other party hereunder in advance of any filing, submission or attendance, it being the intent that the parties will consult and cooperate with one another, and consider in good faith the views of one another, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Each party shall give notice to the other party with respect to any meeting, discussion, appearance or contact with any Governmental Authority or the staff or regulators of any Governmental Authority, with such notice being sufficient to provide the other party with the opportunity to attend and participate in such meeting, discussion, appearance or contact.

(d) The Company and Buyer shall use commercially reasonable efforts to give all notices to, and obtain all consents from, all Third Parties that are described in Section 2.7(a) of the Bank Disclosure Schedule and Section 3.5(a) of the Buyer Disclosure Schedule; provided, however, that the Company shall not be obligated to pay any consideration therefor to any Third Party from whom consent or approval is requested.

5.4 Public Announcements . The initial press release relating to this Agreement shall be a joint press release issued by the Company and Buyer, and thereafter the Company and Buyer shall consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or any of the Transactions and shall not issue any such press release or make any such public statement without the prior consent of the other parties hereto, which consent shall not be unreasonably withheld or delayed; provided that (i) a party hereto may, without the prior consent of the other parties hereto, issue such press release or make such public statement as may be required by Law or Governmental Order or the applicable rules of any stock exchange if it has used its commercially reasonable efforts to consult with the other party and to obtain such party’s consent but has been unable to do so prior to the time such press release or public statement is so required to be issued or made and (ii) the Company will not be obligated to engage in such consultation with respect to communication that are principally directed to employees, customers, partners or vendors of the Bank or any of its Subsidiaries so long as such communications are consistent with previous releases, public disclosures or public statements made jointly by the parties (or individually, if approved the other party).

5.5 No Solicitation .

(a) The Company shall not, and shall cause its Subsidiaries not to, and shall not authorize or permit its and its Subsidiaries' Representatives to, directly or indirectly, solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Takeover Proposal or the making of any proposal that would reasonably be expected to lead to any Takeover Proposal, or, subject to Section 5.5(b) , directly or indirectly, (i) initiate, solicit, knowingly encourage or knowingly facilitate any inquiries or the making of any proposal or offer with respect to, or a transaction to effect, a merger, reorganization, share exchange, consolidation, sale of assets, sale of shares of capital stock (including by way of tender offer), business combination, recapitalization, liquidation, dissolution or similar transaction involving the Bank or any of its Subsidiaries that, if consummated, would constitute a Takeover Proposal or (ii) participate in any discussions with or provide any confidential information or data to any Person (or Representative of such Person) relating to a Takeover Proposal or engage in any negotiations concerning a Takeover Proposal, or knowingly facilitate any effort or attempt to make or implement a Takeover Proposal, or (iii) approve or execute or enter into any letter of intent, agreement in principle, merger agreement, asset purchase or share exchange agreement, option agreement or other Contract related to a Takeover Proposal (each, a " Bank Acquisition Agreement ") or (iv) propose or agree to do any of the following. Subject to Section 5.5(b) , neither the Company Board nor any committee thereof shall fail to make, withdraw, amend, modify or materially qualify, in a manner materially adverse to Buyer, the Company Board Recommendation, or recommend a Takeover Proposal, or resolve or agree to take any of the foregoing actions (any of the foregoing, a " Company Board Recommendation Change "). The Company shall, and shall cause its Subsidiaries to cease immediately and cause to be terminated, and shall not authorize or knowingly permit any of its or their Representatives to continue, any and all existing activities, discussions or negotiations, if any, with any Third Party conducted prior to the date hereof with respect to any Takeover Proposal.

(b) Notwithstanding Section 5.5(a) , prior to obtaining the Company Shareholder Approval, the Company Board, directly or indirectly through any Representative, may, (i) subject to Section 5.5(c) , participate in negotiations or discussions with any Third Party that has made (and not withdrawn) a bona fide, unsolicited Takeover Proposal in writing that the Company Board believes in good faith, after consultation with its outside legal counsel and financial advisor, constitutes or could reasonably be expected to lead to a Superior Proposal; (ii) thereafter furnish to such Third Party non-public information relating to the Bank or any of its Subsidiaries and afford access to the business, properties, assets, books or records of the Bank or any of its Subsidiaries after first entering into an Acceptable Confidentiality Agreement; and (iii) following receipt of and on account of a Superior Proposal, make a Company Board Recommendation Change if and only to the extent that the Company Board determines in good faith (after consultation with outside legal counsel) that failure to do so would be inconsistent with the directors’ fiduciary duties under applicable Law.

(c) The Company shall notify Buyer in writing promptly (but in no event later than one Business Day) after it obtains receipt by the Company (or any of its Representatives) of any Takeover Proposal, any inquiry that would reasonably be expected to lead to a Takeover Proposal, any request for non-public information relating to the Company or any of its Subsidiaries or for access to the business, properties, assets, books or records of the Company or any of its Subsidiaries by any Third Party.

(d) Except as set forth in this Section 5.5(d) , the Company Board shall not make any Company Board Recommendation Change or enter into (or permit any Subsidiary to enter into) a Bank Acquisition Agreement. Notwithstanding the foregoing, at any time prior to obtaining the Company Shareholder Approval, the Company Board may make a Company Board Recommendation Change or enter into (or permit any Subsidiary to enter into) a Bank Acquisition Agreement, if and only if: (i) the Company notifies Buyer in writing at least four Business Days (the " Notice Period ") before making a Company Board Recommendation Change or entering into (or causing a Subsidiary to enter into) a Bank Acquisition Agreement, of its intention to take such action with respect to a Superior Proposal; (ii) the Company attaches to such notice the most current version of the proposed agreement and the identity of the Third Party making such Superior Proposal; (iii) the Company shall, and shall cause its Subsidiaries to, and shall use its reasonable best efforts to cause its and its Subsidiaries' Representatives to, during the Notice Period, negotiate with Buyer in good faith to make such adjustments in the terms and conditions of this Agreement so that such Takeover Proposal ceases to constitute a Superior Proposal, if Buyer, in its discretion, proposes to make such adjustments; and (iv) the Company Board determines in good faith, after consulting with its outside legal counsel and financial advisor, that such Takeover Proposal continues to constitute a Superior Proposal after taking into account any written adjustments made by Buyer during the Notice Period in the terms and conditions of this Agreement.

(e) Nothing contained in this Section 5.5 or elsewhere in this Agreement shall prohibit the Company, the Company Board or their Representatives from: (i) disclosing to the Company’s shareholders any factual information regarding the business, financial condition or results of operations of the Bank or the fact that a Bank Acquisition Proposal has been made, the identity of the party making such Bank Acquisition Proposal or the material terms of such Bank Acquisition Proposal (and no such disclosure shall, taken by itself, be deemed to be a Company Board Recommendation Change); or (ii) furnishing excerpts of this Agreement to any Third Party (or the Representatives of such Third Party) that makes any inquiry regarding a Takeover Proposal or communicating with such Third Party to the extent necessary to direct such Person to the provisions of this Section 5.5 ; provided, however, that the Company Board shall not make any express Company Board Recommendation Change except in accordance with Section 5.5 .

5.6 Indemnification; Directors’ and Officers’ Insurance .

(a) Buyer agrees that all rights to indemnification, advancement of expenses and exculpation by the Bank and its Subsidiaries now existing in favor of each Person who is now, or has been at any time prior to the date hereof or who becomes prior to the Closing Date, an officer or director of the Bank or any of its Subsidiaries, as provided in the Organizational Documents of the Bank or any of its Subsidiaries, in each case as in effect on the date of this Agreement, or pursuant to any other agreements in effect on the date hereof and disclosed in Section 5.6(a) of the Bank Disclosure Schedule, shall survive the Closing Date and shall continue in full force and effect in accordance with their respective terms.

(b) Prior to Closing, the Bank shall purchase, effective as of the Closing Date, “tail” insurance policies with respect to the insurance coverages currently maintained by the Company on behalf of the Company, the Bank and their Subsidiaries with respect to the business and operations of the Bank and its Subsidiaries (including without limitation, directors’ and officers’ liability, employment practices liability, fiduciary liability and professional liability insurance) with a reporting period of at least six (6) years from the Closing Date with at least the same coverage and amounts and containing terms and conditions that are not less advantageous to the directors and officers of the Company, the Bank and their Subsidiaries when compared to the insurance coverages currently maintained by the Company on behalf of the Company, the Bank and their Subsidiaries and their directors and officers, in each case with respect to claims arising out of or relating to events which occurred on or prior to the Closing Date (including in connection with the Transactions).

(c) The obligations of Buyer, the Bank and its Subsidiaries under this Section 5.6 shall not be terminated or modified in such a manner as to adversely affect any director or officer to whom this Section 5.6 applies without the consent of such affected director or officer (it being expressly agreed that the directors and officers to whom this Section 5.6 applies shall be third party beneficiaries of this Section 5.6 , each of whom may enforce the provisions of this Section 5.6 ) .

(d) In the event Buyer, the Bank or its Subsidiaries, or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in either such case, proper provision shall be made so that the successors and assigns of Buyer, the Bank and its Subsidiaries, as the case may be, shall assume all of the obligations set forth in this Section 5.6 .

5.7 Employees and Benefit Plans .

(a) Each Employee who remains employed by Buyer or the Buyer Bank after the Closing (“ Continuing Employee ”) shall be entitled to: (i) a base salary or hourly wages and (ii) bonus opportunities which are commensurate with the compensation and bonus opportunities available to the other employees of the Buyer and/or the Buyer Bank serving in comparable positions. Buyer shall provide to each Employee who is not a Continuing Employee or who is terminated within one (1) year following the Closing (other than for cause, death, disability, normal retirement or voluntarily resignation) a severance payment equal to one (1) weeks’ pay for each year of service with the Bank or its Subsidiaries; provided that the minimum severance payment shall be four (4) weeks’ pay and the maximum severance shall be twelve (12) weeks’ pay. The severance payment shall be payable in a lump sum, in cash, on the first payroll date following the Employee’s termination date .

(b) With respect to any employee benefit plan maintained by Buyer, the Buyer Bank, or their Subsidiaries (collectively, “ Buyer Benefit Plans ”), Buyer shall, or shall cause the Buyer Bank to, recognize service of the Continuing Employees with the Bank or any of its ERISA Affiliates prior to the Closing as if such service were with Buyer and/or the Buyer Bank for vesting and eligibility purposes, but not for purposes of determining the level of benefits, in any Buyer Benefit Plan in which such Continuing Employees may be eligible to participate after the Closing Date; provided, however , such service shall not be recognized to the extent that (i) such recognition would result in a duplication of benefits or (ii) such service was not recognized under the corresponding Benefit Plan. All Continuing Employees will be covered by the Buyer Benefit Plans on substantially the same basis as other employees of the Buyer or the Buyer Bank performing services in comparable positions and after meeting the eligibility requirements for such Buyer Benefit Plan taking into account credit for service prior to the Closing as provided above. Notwithstanding the preceding and except as provided in Section 5.8 below with respect to the Retirement Plans, Buyer may determine to continue any Benefit Plan for the Continuing Employees in lieu of offering participation in a Buyer Benefit Plan for such periods as Buyer determines. Alternatively, Buyer may elect (i) after the Closing, to terminate or amend any of the Benefit Plans or to merge any of the Benefit Plans with a Buyer Benefit Plan or (ii) to require that the Company cause the Bank to terminate such Benefit Plan immediately prior to the Closing.

(c) This Section 5.7 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Section 5.7 , express or implied, shall confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.7 . Nothing contained herein, express or implied, shall be construed to establish, amend or modify any benefit plan, program, agreement or arrangement. The parties hereto acknowledge and agree that the terms set forth in this Section 5.7 shall not create any right in any employee or any other Person to any continued employment with the Bank, Buyer or any of their respective Affiliates or to any compensation or benefits of any nature or kind whatsoever.

5.8 Retirement Plans .

(a) The Bank currently maintains the Iberville Bank 401(k) Plan (the “401(k) Plan”) and the Group Pension Plan For Employees of Iberville Bank (the “Pension Plan”). The 401(k) Plan and the Pension Plan are herein referred to collectively as the “Retirement Plans.” The Company agrees to cause the Bank and its Subsidiaries to take all steps necessary to terminate the Retirement Plans, such terminations to be subject to the consummation of the Transactions and effective as of the day immediately prior to the Closing.

(b) The Company shall cause Bank and its ERISA Affiliates, as necessary, to (i) fully fund the Pension Plan prior to Closing cost in the amount necessary to terminate the Pension Plan under the Pension Benefit Guaranty Corporation (“PBGC”) standardized termination process, (ii) to make all filings and provide all notices required to complete the termination of the Pension Plan in accordance with the PBGC standard termination process, and (iii) if, in the reasonable opinion of the independent accounting firm of the Company or the Bank, allowed under GAAP, accrue on the financial statements of the Bank a liability in an amount reasonably calculated to be sufficient to satisfy the Bank’s obligation for all benefits due to participants under the Pension Plan on a termination basis. The termination of the Pension Plan is to be effective on such date as to allow for completion of the standard termination process prior to Closing; provided, however, if it is determined to be in the best interest of the participants in the Pension Plan to obtain a favorable determination letter from the IRS in connection with the termination, completion of the standard termination process may be delayed until receipt of such favorable determination letter.

(c) The termination of the 401(k) Plan shall be effective no later than the day immediately preceding the Closing. The Company shall cause the Bank and its Subsidiaries to make all contributions due under the terms of the 401(k) Plan through the date of such termination. At the request of Buyer, the Company shall cause the Bank and its ERISA Affiliates, as necessary, to authorize the filing of the 401(k) Plan with the IRS for a determination letter as to the effect of the termination on the qualified status of the 401(k) Plan, and Buyer shall be responsible for payment of the application fee in connection therewith. The assets of the 401(k) Plan shall be distributed to the participants in accordance with the terms thereof as soon as administratively feasible after the termination and, if applicable, receipt of a favorable determination letter from the IRS.

(d) The Company agrees to cause the Bank and its ERISA Affiliates, as necessary, to adopt, or cause to be adopted, resolutions of their respective Boards of Directors to (i) terminate the Retirement Plans in accordance with the preceding provisions and at Buyer’s cost; (ii) fully vest the account balances of the affected participants in the Retirement Plans to the extent not previously vested, no later than the date of the respective terminations; (iii) appoint a committee (“Administrative Committee”) to serve as plan administrator of each Retirement Plan from and after the effective date of the Closing; (iv) amend the Retirement Plans, as necessary, to accomplish the termination and reserve to the Administrative Committee the power to further amend the Retirement Plans following the date of termination to the extent necessary to comply with all applicable Laws or to facilitate the termination thereof; and (v) provide for the distribution of benefits from the Retirement Plans in accordance with the respective terms thereof and as permitted under applicable Law. To the extent not completed prior to the Closing, the Administrative Committee will be responsible for the termination, allocation and distribution of plan assets, related notices and reporting responsibilities to the IRS, Department of Labor, PBGC and other government entities, if any.

5.9 WARN Act Liability . Buyer shall not, and shall cause the Bank and its Subsidiaries not to, take any action following the Closing that could result in WARN Act liability.

5.10 Notification of Certain Matters . Each of Buyer and the Company shall give prompt notice to the other of any fact, event or circumstance known to it that (i) is reasonably likely, individually or taken together with all other facts, events and circumstances known to it, to result in any condition set forth in Article VII not being satisfied, or (ii) would cause or constitute a material breach of any of its representations, warranties, covenants or agreements contained herein. No such notice by Buyer or the Company shall affect or be deemed to modify or waive any representation, warranty, covenant or agreement in this Agreement, or the conditions to Buyer’s or the Company’s obligations to consummate the Transactions.

5.11 Confidentiality Agreement . Each party acknowledges and agrees that the Confidentiality Agreement remains in full force and effect and, in addition, covenants and agrees to keep confidential, in accordance with the provisions of the Confidentiality Agreement, information provided or made available pursuant to this Agreement. If this Agreement is, for any reason, terminated prior to the Closing, the Confidentiality Agreement and the provisions of this Section 5.11 shall nonetheless continue in full force and effect.

5.12 Closing Conditions . From the date hereof until the Closing, each party shall, and the Company shall cause the Bank and its Subsidiaries to, use commercially reasonable efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VII hereof.

5.13 Supplement to Disclosure Schedules . From time to time prior to the Closing, the Company shall have the right (but not the obligation) to supplement or amend the Bank Disclosure Schedule hereto with respect to any matter hereafter arising or of which it becomes aware after the date hereof (each a “ Schedule Supplement ”). Any disclosure in any such Schedule Supplement shall not be deemed to have cured any inaccuracy in or breach of any representation or warranty contained in this Agreement, including for purposes of the termination rights contained in this Agreement or of determining whether or not the conditions set forth in Article VII have been satisfied; provided, however , that if Buyer has the right to, but does not elect to, terminate this Agreement within five Business Days of its receipt of such Schedule Supplement, then Buyer shall be deemed to have irrevocably waived any right to terminate this Agreement with respect to such matter as disclosed.

5.14 Appointment of Board Member . Prior to the Closing Date, Buyer will appoint one additional member to the Board of Directors of Buyer Bank, who is to be selected by Buyer and Buyer Bank in its sole discretion according to the provisions of Buyer Bank’s Articles of Incorporation and Bylaws. The election of such board member will be made effective on the Closing Date. At the next meeting of Buyer’s board of directors, Buyer shall nominate the same director to serve a full term of office as director of Buyer Bank according to the provisions of its Articles of Association and Bylaws.

5.15 Coordination; Integration . Notwithstanding the conversion of the core processing and other data processing and information systems of Bank in conjunction with the Merger, and subject to applicable provisions of Law and non-objection from any Governmental Authority (including any commercially unreasonable restrictions imposed thereby), following the Merger the former main office and each branch of the Bank, will operate and conduct business under the trade name “Iberville Bank, a division of The First, A National Banking Association” or some mutually acceptable variation thereof for at least two (2) years following the Closing Date (along with signage, stationery and marketing materials in such name).

5.16 Invitations to and Attendance at Directors’ and Committee Meetings . Bank will give notice to two (2) designees of Buyer and invite those persons to attend all regular and special meetings of the Board of Directors of Bank and all regular and special meetings of any board or senior management committee of Bank. However, Bank may exclude such invitees from any portion of any meeting (i) during which any aspect of the Transactions is discussed; (ii) as a result of which the invitee’s presence may, in the opinion of its counsel, constitute a breach of attorney-client privilege; or (iii) as otherwise prohibited by applicable Law. In addition, Bank will provide Buyer with copies of the minutes of all regular and special meetings of the Board of Directors of Bank and minutes of all regular and special meetings of any board or senior management committee of Bank held on or after the date of this Agreement (except portions of such minutes that are devoted to the discussion of this Agreement or the Merger that, upon the advice of legal counsel, are otherwise privileged) at the same time that those minutes are provided to directors or officers of Bank or otherwise upon the request of Buyer.

5.17 Resignation of Officers, Directors, or Managers of Subsidiaries . Prior to the Closing, the Company and the Bank shall use commercially reasonably efforts to deliver, or cause the Subsidiaries to deliver, to the Company the resignation of any and all officers, directors or managers of the Subsidiaries as may be required by Buyer upon not less than 10 Business Days’ notice in advance of the Closing.

5.18 Escrow Agreement . Prior to the Closing, the Company and Buyer shall cooperate in good faith in engaging a mutually acceptable escrow agent (the “ Escrow Agent ”) to hold the Escrow Amount in accordance with a mutually acceptable escrow agreement (the “ Escrow Agreement ”), which will include the key terms set forth on Section 5.18(a) of the Bank Disclosure Schedule with regard to the loans set forth on Section 5.18(b) of the Bank Disclosure Schedule .

ARTICLE VI
TAX MATTERS

6.1 Preparation and Filing of Tax Returns .

(a) Tax Indemnification . The Company shall indemnify Bank, its Subsidiaries, Buyer, and each Buyer Affiliate and hold them harmless from and against, any loss, claim, liability, expense, or other damage attributable to (i) all Taxes (or the non-payment thereof) of the Company, the Bank and their Subsidiaries for all taxable periods ending on or before the Closing Date and the portion through the end of the Closing Date for any taxable period that includes (but does not end on) the Closing Date (‘‘ Pre-Closing Tax Period ’’), (ii) all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Company, the Bank or any of their Subsidiaries (or any predecessor of any of the foregoing) is or was a member on or prior to the Closing Date, including pursuant to Treasury Regulation §1.1502-6 or any analogous or similar state, local, or non-U.S. law or regulation, and (iii) any and all Taxes of any person imposed on the Company, the Bank or any of their Subsidiaries as a transferee or successor, by contract or pursuant to any law, rule, or regulation, which Taxes relate to an event or transaction occurring before the Closing.

(b) Company and its shareholders shall not revoke Company’s election to be taxed as an S corporation within the meaning of Code §1361 and §1362 that would be effective on or before the Closing Date. Company and its shareholders shall not take or allow any action that would result in the termination of Company’s status as a validly electing S corporation within the meaning of Code §1361 and §1362 that would be effective on or before the Closing Date.

(c) The Company shall not take or allow any action other than the sale of Bank’s stock pursuant to this Agreement that would result in the Bank or its Subsidiaries being treated as a separate corporation under the provisions of La. Rev. Stat. Ann. 47:287.732.

(d) Company and its shareholders shall not revoke Company’s election to treat Bank as a “qualified subchapter S subsidiary” within the meaning of Code §1361(b)(3)(B). Company and its shareholders shall not take or allow any action other than the sale of Bank’s stock pursuant to this Agreement that would result in the termination of Bank’s status as a validly existing “qualified subchapter S subsidiary” within the meaning of Code §1361(b(3)(B).

(e) The Company shall cause the Company and each of its Subsidiaries to prepare and file all income Tax Returns of the Company and each of its Subsidiaries for Tax periods ending on or before the Closing Date and all other Tax Returns that are due on or before the Closing Date. Such Tax Returns shall be prepared in accordance with existing procedures and practices and accounting methods of the Company and its Subsidiaries as in effect on the date hereof, unless otherwise required by Law. All Tax Returns described in this Section 6.1(e) shall be prepared at the sole cost and expense of the Company.

(f) Buyer shall prepare, or cause to be prepared, at Buyer’s expense, in accordance with existing procedures and practices and accounting methods of the Company and its Subsidiaries as in effect on the date hereof, unless otherwise required by Law, all Tax Returns other than income Tax Returns of the Bank and its Subsidiaries for any Pre-Closing Tax Period and all Tax Returns for the Bank and its Subsidiaries for any Straddle Period. At least 20 days prior to the fling of such Tax Returns, Buyer shall provide such Tax Returns to the Company for the Company’s review and reasonable approval.

6.2 Transfer Taxes . All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with the Transactions (including any Real Property transfer Tax and any similar Tax) shall be borne and paid by Buyer, and Buyer will file all necessary Tax Returns and other documentation with respect to all such Taxes and fees (the cost of which shall be borne by Buyer), and, if required by Applicable Law, the Company will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.

6.3 Cooperation . Buyer, the Company and each of their Subsidiaries shall provide each other with such assistance as may reasonably be requested by the others in connection with the preparation of any Tax Return or any Tax Contest. Such assistance shall include making employees available on a mutually convenient basis to provide additional information or explanation of material provided hereunder and shall include providing copies of relevant Tax Returns and supporting material.

6.4 Straddle Period . In the case of a Straddle Period, the amount of any Tax based on or measured by income or receipts of the Bank that is allocable to the portion of a Straddle Period ending on the Closing Date shall be determined based on an interim closing of the books as of the close of business on the Closing Date (and for such purpose, the Tax period of any partnership or other pass-through entity in which the Company holds a beneficial interest shall be deemed to terminate at such time), and the amount of any other Tax of the Bank that is allocable to the portion of a Straddle Period ending on the Closing Date shall be deemed to be the amount of such Tax for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days in the portion of the Straddle Period ending on and including the Closing Date and the denominator of which is the total number of days in the entire Straddle Period.

6.5 Tax Refunds . The Company will be entitled to any Tax refunds or overpayments, net of any Taxes imposed with respect to the receipt or payment thereof and any expenses incurred in obtaining any such refund or overpayment, that are actually received by Buyer or any of its Subsidiaries with respect to Pre-Closing Tax Periods, except to the extent such refund arises as a result of a carryback of a loss or other Tax benefit from a Tax period (or portion thereof) beginning after the Closing Date and net of any third party costs to Buyer or its Affiliates attributable to the obtaining and receipt of such Tax refunds. To the extent such refund is subsequently disallowed or required to be returned to the applicable Governmental Authority, the Company agrees to promptly repay the amount of such refund, together with any interest, penalties or other additional amounts imposed by such Governmental Authority, to Buyer. Buyer will endeavor in good faith, if the Company so requests in writing and at the Company’s sole expense, to assist the Company in obtaining any material Tax refunds to which the Company is entitled hereunder unless Buyer reasonably determines that any such action could give rise to an adverse Tax effect to Buyer or its Affiliates (including the Company or its Subsidiaries) in a taxable period beginning after the date hereof.

6.6 Escrow Amount . Buyer and the Company agree for all Tax purposes that: (a) Buyer shall be treated as the owner of the Escrow Amount solely for Tax purposes, and all interest and earnings earned from the investment and reinvestment of the Escrow Amount, or any portion thereof, shall be allocable to Buyer pursuant to Section 468B(g) of the Code and Proposed Treasury Regulations Section 1.468B-8; (b) if and to the extent any amount of the Escrow Amount that is paid to the Company is actually distributed to the Company, interest may be imputed on such amount as required by Section 483 or Section 1274 of the Code; and (c) in the event that the total amount of any interest and earnings earned on the portion of the Escrow Amount that is paid to the Company exceeds the imputed interest, such interest shall be treated as interest or other income and not as Purchase Price. Clause “(c)” of the preceding sentence is intended to ensure that the right of the Company to the Escrow Amount that is paid to the Company and any interest and earnings earned thereon is not treated as a contingent payment without a stated maximum selling price under Section 453 of the Code and the Treasury Regulations promulgated thereunder. All parties hereto shall file all Tax Returns consistently with the foregoing.

ARTICLE VII
CONDITIONS TO CLOSING

7.1 Conditions to Each Party’s Obligation to Close . The obligations of each of the parties to consummate the Transactions is conditioned upon the satisfaction at or prior to the Closing of each of the following conditions:

(a) Company Shareholder Approval . The Company Shareholder Approval shall have been obtained.

(b) Regulatory Approvals . All Regulatory Approvals shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired.

(c) No Injunction . No order, decree or injunction of any court or agency of competent jurisdiction shall be in effect, and no Law shall have been enacted or adopted, that enjoins, prohibits, materially restricts or makes illegal consummation of any of the Transactions.

(d) Escrow Agreement . The Escrow Agreement shall have been executed by each of the Escrow Agent, the Company and Buyer.

7.2 Conditions to the Obligations of Buyer . The obligation of Buyer to consummate the Transactions is also conditioned upon the satisfaction or waiver by Buyer, at or prior to the Closing, of each of the following conditions:

(a) Representations, Warranties and Covenants of the Company . (i) Each of the representations and warranties of the Company contained herein shall be true and correct in all respects as of the date hereof and as of the Closing Date as if made at and as of the Closing Date (except for any such representations and warranties made as of a specified date, which shall be true and correct as of such date), except where the failure of such representations and warranties to be true and correct would not have a Bank Material Adverse Effect and (ii) each and all of the agreements and covenants of the Company to be performed and complied with pursuant to this Agreement on or prior to the Closing Date shall have been duly performed and complied with in all material respects. Buyer shall have received a certificate, dated the Closing Date, signed by the President of the Company, to the effect that the conditions set forth in Sections 7.1 and 7.2(a) have been satisfied.

(b) No Bank Material Adverse Effect . Since the date hereof, there shall not have occurred a Bank Material Adverse Effect that is continuing as of the Closing.

(c) Certificates . The Company shall have delivered to Buyer stock certificates evidencing the Bank Shares, free and clear of all Liens, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank, with all required stock transfer Tax stamps affixed thereto.

(d) Bank Adjusted Capital Calculation . The Company shall have delivered to Buyer a true, correct and complete copy of the calculation of the Bank Adjusted Capital as of the Closing Date, including a certification signed by the President of Bank to the effect that such calculation is true, correct and complete as of such time and any supporting documentation for such calculation as Buyer may reasonably request in its discretion.

7.3 Conditions to the Obligations of the Company . The obligation of the Company to consummate the Transactions is also conditioned upon the satisfaction or waiver by the Company, at or prior to the Closing, of each of the following conditions:

(a) Representations, Warranties and Covenants of Buyer . (i) Each of the representations and warranties of Buyer contained herein shall be true and correct in all material respects (except that those representations and warranties that are limited by materiality shall be true and correct in all respects) as of the date hereof and as of the Closing Date with the same effect as though all such representations and warranties had been made on the Closing Date, except for any such representations and warranties made as of a specified date, which shall be true and correct as of such date and (ii) each and all of the agreements and covenants of Buyer to be performed and complied with pursuant to this Agreement on or prior to the Closing Date shall have been duly performed and complied with in all material respects. The Company shall have received a certificate, dated the Closing Date, signed by the Chief Executive Officer of Buyer, to the effect that the conditions set forth in this Section 7.3(a) have been satisfied.

(b) Purchase Price . Buyer shall have delivered to the Company cash in an amount equal to the Purchase Price in accordance with Section 1.2 .

(c) Real Property . Buyer shall have purchased the real estate listed in Section 7.3(c) of the Bank Disclosure Schedule from the Management Company for fair market value.

ARTICLE VIII
TERMINATION

8.1 Termination . This Agreement may be terminated at any time prior to the Closing:

(a) by the mutual written consent of Buyer and the Company;

(b) by written notice of Buyer or the Company, in the event that Closing does not occur by March 31, 2017 (the “ Outside Date ”), except to the extent that the failure of the Closing to occur shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the covenants and agreements of such party set forth herein and provided that such date shall be extended for an additional 90 days in the event that the Regulatory Approvals shall not have been obtained and neither party has received notice from any applicable Governmental Authority that any request for such Regulatory Approval has been denied;

(c) by written notice of Buyer or the Company in the event that any Governmental Authority shall have issued a Governmental Order restraining or enjoining the Transactions, and such Governmental Order shall have become final and non-appealable;

(d) by Buyer if:

(i) prior to obtaining the Company Shareholder Approval, a Company Board Recommendation Change shall have occurred, except that Buyer’s right to terminate this Agreement pursuant to this Section 8.1(d)(i) will expire at 5:00 p.m., Central time, on the fifth Business Day following the date on which such right to terminate arose; or

(ii) prior to the Closing, the Company shall have breached or failed to perform any of its representations, warranties, covenants or other agreements set forth in this Agreement, which breach or failure to perform would give rise to the failure of a condition set forth in Section 7.2(a) (and in each case such breach or failure to perform is incapable of being cured by the Outside Date, or if curable, has not been cured within 45 days after its receipt of written notice thereof from Buyer); provided that Buyer shall have given the Company at least 45 days written notice prior to such termination stating Buyer’s intention to terminate this Agreement pursuant to this Section 8.1(d)(ii) ;

(e) by the Company if:

(i) prior to obtaining the Company Shareholder Approval, the Company Board authorizes the Company, in compliance with the terms of this Agreement, including Section 5.5(b) , to enter into a Bank Acquisition Agreement (other than an Acceptable Confidentiality Agreement) in respect of a Superior Proposal; provided that the Company shall have paid any amounts due pursuant to Section 9.3(b) ; or

(ii) prior to the Closing, Buyer shall have breached or failed to perform any of its representations, warranties, covenants or other agreements set forth in this Agreement, which breach or failure to perform would give rise to the failure of a condition set forth in Section 7.3(a) (and in each case such breach or failure to perform is incapable of being cured by the Outside Date, or if curable, has not been cured within 45 days after its receipt of written notice thereof from the Company), provided that the Company shall have given Buyer at least 45 days written notice prior to such termination stating the Company's intention to terminate this Agreement pursuant to this Section 8.1(e)(ii) ) .

8.2 Effect of Termination . In the event of termination of this Agreement in accordance with Section 8.1 , this Agreement shall forthwith become void and have no effect, and neither of Buyer nor the Company, any of their respective Subsidiaries or any of the officers or directors of any of them shall have any liability of any nature whatsoever hereunder, or in connection with the Transactions, except that Section 5.4 (Public Announcements), Section 5.11 (Confidentiality Agreement), Section 9.3 (Expenses) and this Section 8.2 and all other obligations of the parties specifically intended to be performed after the termination of this Agreement shall survive any termination of this Agreement; provided, however , that, notwithstanding anything to the contrary herein, neither Buyer nor the Company shall be relieved or released from any liabilities or damages arising out of its intentional and material breach of any provision of this Agreement. Without limiting the generality of the foregoing, Buyer and the Company acknowledge and agree that any failure of Buyer to pay the Purchase Price in exchange for the Bank Shares following satisfaction of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied by actions taken at the Closing) will be deemed to constitute an intentional and material breach of a covenant of this Agreement by Buyer. The Confidentiality Agreement shall not be affected by a termination of this Agreement.

ARTICLE IX
MISCELLANEOUS

9.1 Waiver; Amendment . Subject to compliance with applicable Law, prior to the Closing, any provision of this Agreement may be (i) waived by the party intended to benefit by the provision or (ii) amended or modified at any time, by an agreement in writing between the parties hereto approved by their respective Boards of Directors and executed in the same manner as this Agreement; provided, however , that after any approval of the Transactions by the shareholders of the Company, no amendment of this Agreement shall be made which by Law requires further approval of the shareholders of the Company without first obtaining such approval.

9.2 Survival of Representations and Warranties; Indemnity .

(a) Survival . Subject to the limitations and other provisions of this Agreement, the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Closing and shall remain in full force and effect until the date that is eighteen (18) months from the Closing Date; provided that the representations and warranties in Section 2.2 , Section 2.3 , Section 2.4 , Section 2.29 , Section 3.2 , Section 3.3 and Section 3.4 (collectively, the “ Fundamental Representations ”) shall survive indefinitely. All covenants and agreements of the parties contained herein (other than any covenants or agreements contained in Article VI which are subject to Article VI) shall survive the Closing indefinitely or for the period explicitly stated therein. This Section 9.2 shall not limit any covenant or agreement of the parties hereto in this Agreement that by its terms contemplates performance after the Closing. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.

(b) Indemnification by Company . Subject to the other terms and conditions of this Section 9.2 , the Company shall indemnify and defend each of Buyer and its Affiliates (including the Buyer Bank) and their respective Representatives (collectively, the " Buyer Indemnitees ") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:

(i)

any inaccuracy in or breach of any of the representations or warranties of Company contained in this Agreement or in the certificate delivered by the Company pursuant to Section 7.2(a) (other than in respect of Section 2.12 , it being understood that the sole remedy for any such inaccuracy in or breach thereof shall be pursuant to Article VI), as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date); or

(ii)

any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Company or Bank pursuant to this Agreement (other than any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking or obligation in Article VI, it being understood that the sole remedy for any such breach, violation or failure shall be pursuant to Article VI.

(c) Indemnification by Buyer . Subject to the other terms and conditions of this Section 9.2 , Buyer shall indemnify and defend each of Company and its Affiliates and their respective Representatives (collectively, the " Company Indemnitees ") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Company Indemnitees based upon, arising out of, with respect to or by reason of:

(i)

any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or in the certificate delivered by Buyer pursuant to Section 7.3(a) , as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date); or

(ii)	any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement (other than Article VI, it being understood that the sole remedy for any such breach thereof shall be pursuant to Article VI).

(d) Certain Limitations . The indemnification provided for in Section 9.2(b) and Section 9.2(c) shall be subject to the following limitations:

(i)

Company shall not be liable to the Buyer Indemnitees for indemnification under Section 9.2(b) until the aggregate amount of all Losses in respect of indemnification under Section 9.2(b) exceeds $250,000 (the " Deductible "), in which event Company shall be required to pay or be liable for only such amounts that exceed the Deductible. The aggregate amount of all Losses for which Company shall be liable pursuant to Section 9.2(b) shall not exceed $1,500,000 (the " Cap ").

(ii)

Buyer shall not be liable to the Company Indemnitees for indemnification under Section 9.2(c) until the aggregate amount of all Losses in respect of indemnification under Section 9.2(c) exceeds the Deductible, in which event Buyer shall be required to pay or be liable for only such amounts that exceed the Deductible. The aggregate amount of all Losses for which Buyer shall be liable pursuant to Section 9.2(c) shall not exceed the Cap.

(iii)

Notwithstanding the foregoing, the limitations set forth in Section 9.2(d)(i) and Section 9.2(d)(ii) shall not apply to Losses based upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any Fundamental Representation; provided that the aggregate amount of Losses to which the Company shall be liable in respect of Fundamental Representations shall not exceed the Purchase Price.

(iv)

The Company shall have no indemnification obligations hereunder for any Losses arising out of a breach of or inaccuracy of any representation, warranty, covenant or agreement set forth in this Agreement (and the amount of any Losses incurred in respect of such breach or inaccuracy shall not be included in the calculation of any limitations on indemnification set forth herein) if the matter giving rise to such breach or inaccuracy was included in the determination of the release of the Escrow Amount under the Escrow Agreement.

(e) Indemnification Procedures . The party making a claim under this Section 9.2 is referred to as the " Indemnified Party ", and the party against whom such claims are asserted under this Section 9.2 is referred to as the " Indemnifying Party ".

(i)

Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Action made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing (a " Third Party Claim ") against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 calendar days after receipt of such notice of such Third Party Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third Party Claim at the Indemnifying Party's expense and by the Indemnifying Party's own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided, that if the Indemnifying Party is Company, such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that (x) is asserted directly by or on behalf of a Person that is a supplier or customer of the Company or the Management Company, or (y) seeks an injunction or other equitable relief against the Indemnified Party. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 9.2(e)(ii), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party's right to control the defense thereof. The fees and disbursements of such counsel shall be at the expense of the Indemnified Party, provided, that if in the reasonable opinion of counsel to the Indemnified Party, (A) there are legal defenses available to an Indemnified Party that are different from or additional to those available to the Indemnifying Party; or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party that cannot be waived, the Indemnifying Party shall be liable for the reasonable fees and expenses of one counsel to the Indemnified Party in each jurisdiction for which the Indemnified Party determines counsel is required. If the Indemnifying Party elects not to compromise or defend such Third Party Claim, fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, or fails to diligently prosecute the defense of such Third Party Claim, the Indemnified Party may, subject to Section 9.2(e)(ii), pay, compromise, defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim. Company and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available (subject to the provisions of Section 5.2) records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

(ii)

Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Party, except as provided in this Section 9.2(e)(ii). If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense pursuant to Section 9.2(e)(i), it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed)

(iii)

Direct Claims. Any Action by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a " Direct Claim ") shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 days after the Indemnified Party becomes aware of such Direct Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have 30 days after its receipt of such notice to respond in writing to such Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party's investigation by giving such information and assistance (including access to the Company's premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such 30 day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

(iv)

Tax Claims. Notwithstanding any other provision of this Agreement, any claim, assertion, event or proceeding in respect of Taxes of the Company (including, but not limited to, any such claim in respect of a breach of the representations and warranties in Section 2.12 hereof or any breach or violation of or failure to fully perform any covenant, agreement, undertaking or obligation in Article VI) shall be subject to paragraphs (d) through (h) of this Section 9.2.

(f) Payments . Once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Section 9.2 , the Indemnifying Party shall satisfy its obligations within 15 Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.

(g) Tax Treatment of Indemnification Payments . The treatment of all indemnification payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price, unless otherwise required by Law.

(h) Exclusive Remedies . Subject to Section 9.10 , the parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from intentional fraud on the part of a party hereto in connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Section 9.2 . In furtherance of the foregoing, each party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other parties hereto and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Section 9.2 . Nothing in this Section 9.2 shall limit any Person's right to seek and obtain any equitable relief to which any Person shall be entitled pursuant to Section 9.10 or to seek any remedy on account of intentional fraud by any party hereto. Nothing provided in this Section 9.2(h) shall limit or otherwise terminate Company’s obligations, if any, under Section 9.3(c) or Section 9.3(d) .

9.3 Expenses . Except as expressly set forth in this Section 9.3 , all expenses incurred in connection with this Agreement and the Transactions will be paid by the party incurring such expenses; provided that Buyer shall pay (or allow Bank to pay prior to Closing) all of the expenses set forth in Section 9.3 of the Bank Disclosure Schedule.

(a) If this Agreement is terminated by Buyer pursuant to Section 8.1(d)(i) , then the Company shall pay to Buyer (by wire transfer of immediately available funds), within two Business Days after such termination, the Termination Fee.

(b) If this Agreement is terminated by the Company pursuant to Section 8.1(e)(i) , then the Company shall pay to Buyer (by wire transfer of immediately available funds), prior to or substantially concurrently with such termination, the Termination Fee.

(c) In the event that (i) prior to the Special Meeting a Takeover Proposal shall have been made directly to Company shareholders or communicated, or otherwise made known to the senior management or Board of Directors of Company or Bank, or any Person shall have publically announced an intention (whether or not conditional) to make a Takeover Proposal after the date of this Agreement, in each case, which has not been withdrawn or abandoned, (ii) thereafter the Company withdraws or fails to give the Company Board Recommendation, effects a Company Board Recommendation Change, or resolves to do any of the foregoing, and (iii) this Agreement is terminated pursuant to Section 8.1(d)(ii) due to a willful breach by the Company and (iv) prior to the date that is 12 months after the date of such termination, the Bank or Company consummates a Takeover Proposal, then Bank shall on the date a Takeover Proposal is consummated pay the Buyer the Termination Fee.

(d) Notwithstanding anything to the contrary in this Agreement, the parties hereby acknowledge that in the event that the Termination Fee becomes payable and is paid by the Company pursuant to this Section 9.3 , the Termination Fee shall be Buyer’s sole and exclusive remedy for monetary damages under this Agreement. For the avoidance of doubt, in no event shall the Company be obligated to pay, or cause to be paid, the Termination Fee on more than one occasion.

9.4 Acknowledgment of Disclaimer of Other Representations and Warranties . Buyer acknowledges and agrees that, except for the representations and warranties expressly set forth in Article II and any certificate delivered hereunder, (i) neither the Company nor any of its Subsidiary makes, or has made, any representation or warranty relating to itself, the Bank or its Subsidiaries or their respective businesses or otherwise in connection with the transactions contemplated under this Agreement, and Buyer is not relying on any representation or warranty except for those expressly set forth in Article II ; (ii) no Person has been authorized by the Company, the Bank or any of its Subsidiaries to make any representation or warranty relating to itself or its business or otherwise in connection with the Transactions, and, if made, such representation or warranty must not be relied upon by Buyer as having been authorized by such entity; and (iii) any estimate, projection, prediction, data, financial information, memorandum, presentation or any other materials or information made available, provided or addressed to Buyer or any of its Affiliates or their respective Representatives, including any Diligence Materials, are not and shall not be deemed to be or include representations or warranties unless, and then solely to the extent that, any such materials or information is the subject of any express representation or warranty set forth in Article II . Buyer has conducted, to its satisfaction, its own independent review and analysis of the businesses, assets, condition, operations and prospects of the Bank and its Subsidiaries and, in making its determination to proceed with the Transactions, including the purchase of the Bank Shares, Buyer has relied on the results of its own independent review and analysis.

9.5 Notices . All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.5 ):

If to Buyer:

The First Bancshares, Inc.

6480 HWY 98 West

P.O. Box 15549

Hattiesburg, MS 39404

Attention: M. Ray (Hoppy) Cole, Jr., President & CEO

Facsimile: 601.268.0812

With a copy to (which shall not constitute notice):

Jones Walker LLP

Attn: Neal C. Wise, Esquire

190 East Capital Street – Suite 800

Jackson, Mississippi 39201

Facsimile: 601.709.8636

If to the Company, to:

A. Wilbert’s Sons Lumber And Shingle Co.
58020 Bayou Road

Plaquemine, LA 70764
Attention: Klein Kirby, President
Facsimile: 225.687.2850

E-mail: kkirby@awilbertsons.com

With a copy to (which shall not constitute notice):

Goodwin Procter LLP
620 Eighth Avenue
New York, New York 10018
Attention: Andrew H. Goodman, Esq.

Samantha M. Kirby, Esq.

E-mail: agoodman@goodwinlaw.com

skirby@goodwinlaw.com

Facsimile: 212.937.3172

9.6 Understanding; No Third-Party Beneficiaries . Except for the Confidentiality Agreement, which shall remain in effect, this Agreement represents the entire understanding of the parties hereto with reference to the Transactions and thereby and supersedes any and all other oral or written agreements heretofore made. Except for Section 5.6 (Indemnification; Directors’ and Officers’ Insurance), nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto or their respective successors, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

9.7 Headings; Interpretation . When a reference is made in this Agreement to an Article or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise indicated. The table of contents, headings and index of defined terms contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the word "include," "includes" or "including" is used in this Agreement, it shall be deemed to be followed by the words "without limitation." Unless the context of this Agreement otherwise requires, (a) the words "hereof," "herein" and "hereby" refer to this Agreement; (b) words using the singular or plural form also include the plural or singular form, respectively and; (c) words of any gender include each other gender. The Disclosure Schedules, as well as any schedules thereto and any exhibits hereto, shall be deemed part of this Agreement and included in any reference to this Agreement. The word "extent" in the phrase "to the extent" means the degree to which a subject or other thing extends and such phrase shall not mean simply "if." References to a Person are also to its permitted successors and assigns. References to "$" and "dollars" are to the currency of the United States. All references to "days" shall be to calendar days unless otherwise indicated as a "Business Day."

9.8 Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to constitute an original.

9.9 Governing Law . This Agreement shall be governed by, and interpreted in accordance with, the Laws of the State of Louisiana, without regard to the conflict of Law principles thereof. Each of the parties hereto (a) hereby irrevocably and unconditionally consents to and submit itself to the personal jurisdiction of the state or federal courts located in the State of Louisiana (“ Louisiana Courts ”) in any Action arising out of or relating to this Agreement or any of the Transactions; (b) agrees that all claims in respect of such Action may be heard and determined only in any such Louisiana Courts; and (c) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such Louisiana Courts. Each of the parties hereto waives any defense or inconvenient forum to the maintenance of any Action so brought in any such Louisiana Courts and waives any bond, surety or other security that might be required of any other party in any such Louisiana Courts with respect thereto. To the extent permitted by applicable Law, any party hereto may make service on another party by sending or delivering a copy of the process to the party to be served at the address and in the manner provided for the giving of notices in Section 9.5 . Nothing in this Section 9.9 , however, shall affect the right of any party to serve legal process in any other manner permitted by Law. EACH OF BUYER AND THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

9.10 Specific Performance . Each of the parties hereto agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, in addition to any other remedy that a party hereto may have under Law or in equity, in the event of any breach or threatened breach by Buyer or the Company of any covenant or obligation of such party contained in this Agreement (including a party failing to take actions as are required of it under the Agreement to consummate the Transactions), the other party shall be entitled to obtain (a) a Governmental Order of specific performance to enforce the observance and performance of such covenant (including with respect to the obligations of Buyer pay for the Bank Shares and the obligation of Buyer to consummate the Closing) and (b) an injunction restraining such breach or threatened breach (including with respect to the obligations of Buyer pay for the Bank Shares and the obligation of Buyer to consummate the Closing). In the event that any Action is brought in equity to enforce the provisions of this Agreement, no party hereto shall allege, and each party hereto hereby waives the defense or counterclaim, that there is an adequate remedy at Law. Each party hereto further agrees that no other party hereto or any other Person shall be required to obtain, furnish, or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 9.10 , and each party hereto irrevocably waives any right it may have to require the obtaining, furnishing, or posting of any such bond or similar instrument.

9.11 Time is of the Essence . Time is of the essence with respect to the Transactions.

9.12 Entire Agreement . This Agreement, together with the Disclosure Schedules hereto, the Confidentiality Agreement and any documents delivered by the parties in connection herewith constitutes the entire agreement and supersede all prior agreements and understandings, both written and oral, among the parties hereto, or any of them, with respect to the subject matter hereof.

9.13 Severability . In the event that any one or more provisions of this Agreement shall for any reason be held invalid, illegal, or unenforceable in any respect by any court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement and the parties shall use their reasonable best efforts to substitute a valid, legal, and enforceable provision which, insofar as practicable, implements the original purposes and intents of this Agreement.

9.14 Non-recourse . This Agreement may only be enforced against, and any Action based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the entities that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such party. No past, present or future director, officer, employee, incorporator, manager, member, partner, stockholder, Affiliate, agent, attorney or other Representative of any party hereto or of any Affiliate of any party hereto, or any of their successors or permitted assigns, shall have any liability for any obligations or liabilities of any party hereto under this Agreement or for any Action based on, in respect of or by reason of the Transactions.

ARTICLE X
DEFINED TERMS

10.1 Certain Definitions . As used in this Agreement, the following terms shall have the meanings set forth below:

“ Acceptable Confidentiality Agreement " means a confidentiality agreement that contains confidentiality provisions that are not materially less favorable to the Company than those contained in the Confidentiality Agreement.

“ Action ” means any action, claim, demand, assertion, proceeding, arbitration, suit or any appeal therefrom.

“ Affiliate ” means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person. As used in this definition, “ control ” (including, with its correlative meanings, “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of power to direct or cause the direction of the management and policies of a Person whether through the ownership of voting securities, by Contract or otherwise.

“ Bank Adjusted Capital ” shall equal the sum of Bank’s consolidated total common equity, including common stock, additional paid-in-capital, retained earnings and accumulated other comprehensive income (loss), but reduced by the sum of the following if not already incorporated pursuant to GAAP applied on a consistent basis: (i) goodwill and (ii) such other amounts as are agreed upon by the Parties. The Bank Adjusted Capital calculation shall be calculated on a consolidated basis, as determined pursuant to GAAP applied on a consistent basis as of the Closing Date.

“ Bank Disclosure Schedule ” means the Bank Disclosure Schedule delivered by the Company concurrently with the execution and delivery of this Agreement.

“ Bank Material Adverse Effect ” means any Effect that is materially adverse to (a) the business, results of operations, financial condition or assets of the Bank and its Subsidiaries, taken as a whole or (b) the ability of the Company to consummate the Transactions; provided, however, that “Bank Material Adverse Effect” shall not include any Effect, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Bank or its Subsidiaries operate; (iii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of Buyer, or the failure to take any action prohibited by this Agreement; (vi) any matter set forth in the Bank Disclosure Schedule; (vii) any changes in applicable Laws or accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof; (viii) the announcement, pendency or completion of the Transactions, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with the Bank; (ix) any natural or man-made disaster or acts of God; (x) the availability or cost of equity, debt or other financing to Buyer; or (xi) any failure by the Bank and its Subsidiaries to meet any internal or published projections, forecasts or revenue or earnings predictions ( provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded).

“ Business Day ” means Monday through Friday of each week, except any legal holiday recognized as such by the U.S. Government or any day on which banking institutions in the State of Louisiana are authorized or obligated to close.

“ Buyer Material Adverse Effect ” means any Effect that, individually or in the aggregate, with respect to Buyer, is or would be reasonably likely to prevent or materially delay the performance by Buyer of any of its obligations under this Agreement or the consummation of the Transactions.

“ Buyer Disclosure Schedule ” means the Buyer Disclosure Schedule delivered by Buyer concurrently with the execution and delivery of this Agreement.

“ Company Board ” means the Board of Directors of the Company.

“ Confidentiality Agreement ” means the confidentiality agreement, dated as of May 31, 2016, by and between Buyer and Sheshunoff for the benefit of the Company.

“ Contract ” means any written, oral or other agreement, lease, license, indenture, note, bond, agreement, undertaking or any other legally binding commitment or undertaking of any nature.

“ Data Room ” means any physical or virtual data room or other document repository established by the Company to facilitate Buyer’s due diligence with respect to the Bank, its Subsidiaries and the Transactions, and all of their respective contents.

“ Derivative Transactions ” means any swap transaction, option, warrant, forward purchase or forward sale transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, credit related events or conditions or any indexes, or any other similar transaction or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or other similar arrangements related to such transactions.

“ Diligence Materials ” means (a) due diligence materials distributed in written or digital

form by or on behalf of the Company to Buyer or contained in the Data Room; (b) the Confidential Information Memorandum prepared by Sheshunoff dated May 2016; (c) all written

answers to questions provided to Buyer and; (d) all information or materials discussed with or

disclosed to Buyer in management presentations.

“ Disclosure Schedules ” means the Bank Disclosure Schedule and the Buyer Disclosure Schedule, collectively.

“ Effect ” means any effect, change, event, occurrence, circumstance or development.

“ Employees ” means those Persons employed by the Bank and its Subsidiaries immediately prior to the Closing.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

“ ERISA Affiliate ” means, with respect to the Bank, any other Person that, together with the Bank, would be treated as a single employer under Section 414 of the Code with respect to any Benefit Plan.

“ Environmental Law ” means any Law relating to pollution or protection of the environment, including any such Law regulating emissions, discharges or releases of pollutants, contaminants, wastes and toxic substances.

“ GAAP ” means generally accepted accounting principles in the United States.

“ Governmental Authority ” means any U.S. or foreign federal, state or local governmental commission, board, body, bureau or other regulatory authority or agency, including, without limitation, courts and other judicial bodies, bank regulators, insurance regulators, applicable state securities authorities, the SEC, the IRS or any self-regulatory body or authority, including any instrumentality or entity designed to act for or on behalf of the foregoing.

“ Governmental Order ” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“ Intellectual Property ” means any and all of the following in any jurisdiction throughout the world: (a) trademarks and service marks, including all applications and registrations and the goodwill connected with the use of and symbolized by the foregoing; (b) copyrights, including all applications and registrations related to the foregoing; (c) trade secrets and confidential know-how; (d) patents and patent applications; (e) internet domain name registrations; and (f) other intellectual property and related proprietary rights, interests and protections.

“ Knowledge ” or any similar expression used (a) with respect to the Company means the actual knowledge of the Company’s President, the Company’s Controller, the Bank’s President, the Bank’s Chief Operating Officer, or the knowledge that any such Person would reasonably be expected to have after reasonable inquiry and (b) with respect to Buyer means the actual knowledge of Buyer’s Chief Executive Officer or Chief Financial Officer or the knowledge that any such Person would reasonably be expected to have after reasonable inquiry.

“ Law ” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

" Losses " means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or reasonable out-of-pocket expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder; provided, however , that " Losses " shall not include (a) incidental, special, speculative, indirect or consequential damages, in each case that are not reasonably foreseeable, (b) diminution in value, lost profits or lost business opportunities and (c) punitive damages, except in the case of fraud or to the extent actually awarded to a Governmental Authority or other third party arising solely from acts or omissions made by the Company or Bank prior to the Closing.

“ Management Company ” means A. Wilbert’s Sons, L.L.C.

“ Organizational Documents ” means, with respect to any entity, (a) if such entity is a corporation, such entity’s certificate or articles of incorporation, by-laws and similar organizational documents, as amended and in effect on the date hereof, and (b) if such entity is a limited liability company, such entity’s certificate or articles of formation and operating agreement.

“ Permits ” means all permits, licenses, franchises, approvals, authorizations, and consents required to be obtained from Governmental Authorities.

“ Person ” or “ person ” means any individual, bank, corporation, partnership, limited liability company, association, joint stock company, business trust or unincorporated organization.

“ Real Property ” means the real property owned, leased or subleased by the Bank and its Subsidiaries, together with all buildings, structures and facilities located thereon.

“ Regulatory Approvals ” means any approval or non-objection from any Governmental Authority necessary to consummate the Transactions, including, without limitation, (a) the waiver or approval of the FRB and (b) the approval of the Office of the Comptroller of the Currency.

“ Representative ” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“Straddle Period” means any period for Taxes beginning on or before and ending after the Closing Date.

“ Subsidiary ” an entity shall be deemed to be a “Subsidiary” of another Person if such Person directly or indirectly owns, beneficially or of record, (a) an amount of voting securities or other interests in such entity that is sufficient to enable such Person to elect at least a majority of the members of such entity’s board of directors or comparable governing body or (b) at least 50% of the outstanding voting equity interests issued by such entity.

“ Superior Proposal " means a bona fide written Takeover Proposal involving the direct or indirect acquisition pursuant to a tender offer, exchange offer, merger, consolidation or other business combination, of all or substantially all of the Company's consolidated assets or a majority of the outstanding Bank capital stock, that the Company Board determines in good faith (after consultation with its outside legal counsel and financial advisor) is more favorable from a financial point of view to the holders of Company common stock than the Transactions, taking into account (a) all financial considerations; (b) the identity of the Third Party making such Takeover Proposal; (c) the anticipated timing, conditions and prospects for completion of such Takeover Proposal; (d) the other terms and conditions of such Takeover Proposal and the implications thereof on the Company, including relevant legal, regulatory and other aspects of such Takeover Proposal deemed relevant by the Company Board and (e) any written revisions to the terms of this Agreement and the Transaction proposed by Buyer in accordance with this Agreement.

" Takeover Proposal " means a proposal or offer from, or indication of interest in making a proposal or offer by, any Third Party relating to any (a) direct or indirect acquisition of assets of the Bank or its Subsidiaries (excluding sales of assets in the ordinary course of business) equal to 50% or more of the fair market value of the Bank’s consolidated assets or to which 50% or more of the Bank’s net revenues or net income on a consolidated basis are attributable; (b) direct or indirect acquisition of 50% or more of the voting equity interests of the Bank; (c) tender offer or exchange offer that if consummated would result in any Third Party beneficially owning 50% or more of the voting equity interests of the Bank; or (d) merger, consolidation, other business combination or similar transaction involving the Bank or any of its Subsidiaries, pursuant to which such Third Party would own 50% or more of the consolidated assets, net revenues or net income of the Bank, taken as a whole.

“ Tax ” or “ Taxes ” means all taxes, charges, fees, levies or other assessments, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, goods and services, capital, transfer, franchise, profits, license, withholding, payroll, employment, employer health, excise, estimated, severance, stamp, occupation, property or other taxes, custom duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority, whether disputed or not.

“ Tax Returns ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Termination Fee " means $1,088,500.

“ Third Party ” means any Person other than the Company, the Bank, Buyer or any Affiliates thereof.

“ Transactions ” means the transactions contemplated by this Agreement.

Other Defined Terms . The following terms are defined elsewhere in this Agreement, as indicated below:

“ Agreement ”	Preamble	“ Finance Laws ”	2.8(a)
“ Audited Financial Statements ”	2.10(a)	“ Financial Statements ”	2.10(a)
“ Average Price ”	1.2(a)	“ FRB ”	2.21(e)
“ Bank ”	Recitals	“ Fundamental Representations ”	9.2(a)
“ Bank Shares ”	Recitals	“ Indemnified Party ”	9.2(e)
“ Bank Material Contract ”	2.18(a)	“ Indemnifying Party ”	9.2(e)
“ Balance Sheet ”	2.10(a)	“ Insurance Policies ”	2.15
“ Balance Sheet Date ”	2.10(a)	“ Interim Balance Sheet ”	2.10(a)
“ Bank Acquisition Agreement ”	5.5(a)	“ Interim Balance Sheet Date ”	2.10(a)
“ Bankruptcy and Equity Exception”	2.6	“ Interim Financial Statements ”	2.10(a)
“ Deductible ”	9.2(d)(i)	“ IRS ”	2.12(d)
“ Buyer Bank ”	1.4	“ Leases ”	2.19(b)
“ Buyer Benefit Plan ”	5.7(b)	“ Letter of Transmittal ”	1.2(b)
“ Buyer Common Stock Consideration ”	1.2(a)	“ Liens ”	1.1
“ Benefit Plan ”	2.13(a)	“ Loans ”	2.21(a)
“ BOLI ”	2.15	“ Louisiana Courts ”	9.9
“ Business Intellectual Property ”	2.17(a)	“ Merger ”	1.4
“ Buyer ”	Preamble	“ Merger Certificates ”	1.4
“ Buyer Bank ”	1.4	“ Money Laundering Laws ”	2.27(b)
“ Buyer Indemnitees ”	9.2(b)	“ Notice Period ”	5.5(d)
“ Cap ”	9.2(d)(i)	“ OFAC	2.27(c)
“ Closing ”	1.4	“ OFI ”	2.9(b)
“ Closing Date ”	1.4	“ Old Certificates ”	1.2(b)
“ Code ”	2.12(f)	“ Outside Date ”	8.1(b)
“ Company ”	Preamble	PBGC	5.8
		“ Privacy Laws ”	2.27(d)
“ Company Board Recommendation Change ”	5.5(a)	“ Plan of Merger ”	1.4
		“ Purchase Price ”	1.2
		“ Qualified Benefit Plan ”	2.13(b)
“ Company Board Recommendation ”	2.6	“ Retirement Plans	5.8
“ Company Indemnitees ”	9.2(c)	“ Schedule Supplement ”	5.13
“ Company Shareholder Approval ”	2.6	“ Sheshunoff ”	2.29
“ Continuing Employee ”	5.7(a)	“ Special Meeting ”	5.1
“ CRA ”	2.27(a)	“ Third Party Claim ”	9.2(e)(i)
“ Direct Claim ”	9.2(e)(iii)	“ USA PATRIOT Act ”	2.27(b)
“ Escrow Agent ”	5.18	“ USA PATRIOT Act ”	2.27(b)
“ Escrow Agreement ”	5.18
“ Escrow Amount ”	1.2(b)
“ FDIA ”	2.2
“ FDIC	2.2
“ FDIC	2.2

[ Remainder of Page Intentionally Left Blank ]

IN WITNESS WHEREOF , the parties hereto have caused this Stock Purchase Agreement to be executed in counterparts by their duly authorized officers, all as of the day and year first above written.

	The First Bancshares, Inc.


	By:
		Name: M. Ray (Hoppy) Cole, Jr.
		Title: Vice-Chairman, President & Chief Executive Officer



	A. Wilbert’s Sons Lumber And Shingle Co.


	By:
		Name: Klein Kirby
		Title: President

[Signature Page to Stock Purchase Agreement]

EXHIBIT A

BANK PLAN AND AGREEMENT OF MERGER

This Bank Plan and Agreement of Merger (the " Bank Merger Agreement ") is made and entered into as of the ___ day of ______, 2016, between The First, A National Banking Association (" The First ") and Iberville Bank, Plaquemine, Louisiana, a Louisiana banking corporation (" Bank ").

WITNESSETH:

WHEREAS, The First and Bank (collectively, the “ Constituent Banks ”) and their respective Boards of Directors deem it advisable that Bank be merged with and into The First (the " Bank Merger ") pursuant to the provisions of the Louisiana Banking Law (codified at La. Rev. Stat. Ann. § 6:1 et seq.) and the National Bank Act, and upon the terms and conditions hereinafter set forth;

NOW THEREFORE, the Constituent Banks hereby make, adopt and approve this Bank Merger Agreement, as follows:

ARTICLE I

THE BANK MERGER

Upon the terms and subject to the conditions set forth, on the Effective Date (as defined in Article Two hereof) Bank shall be merged into The First and the separate existence of Bank shall cease.

ARTICLE II

EFFECTIVE DATE AND TIME

The Bank Merger shall be effective no earlier than the later of: (a) the date and time specified or permitted by the Louisiana Office of Financial Institutions (" OFI ") in a Certificate of Merger or other written record issued by the OFI; or (b) fifteen (15) days after the time specified in the certificate to be issued by the Office of the Comptroller of the Currency under its seal approving the Bank Merger, such date to be determined by resolution of the Board of Directors of The First (such time and date being herein referred to as the " Effective Time " and the " Effective Date ", respectively).

ARTICLE III

CONVERSION AND CANCELLATION OF SHARES

Except for shares as to which dissenters’ rights have been perfected and not withdrawn or otherwise forfeited under Section 6:376 of the Louisiana Banking Law, on the Effective Date each issued and outstanding share of Bank Common Stock, par value $10,000, shall be cancelled.

ARTICLE IV

EFFECTS OF BANK MERGER

The Bank Merger shall have the effects set forth in Section 6:355 of the Louisiana Banking Law, including that all of the property, rights, privileges, powers, and franchises of Bank shall vest in The First, and that all debts, liabilities, obligations, restrictions, disabilities, and duties of Bank shall be assumed by and become the debts, liabilities, obligations, restrictions, disabilities, and duties of The First . Upon the Effective Date, the main office maintained by Bank as an office immediately before the Bank Merger becomes effective, shall become branch offices of The First.

ARTICLE V

CERTIFICATIONS AND RECORDATION

Upon and subject to approval of this Merger Agreement by the respective shareholders of Bank and The First, the fact of such approval shall be certified hereon by the Secretary or Assistant Secretary of the Constituent Banks, and this Merger Agreement, as approved and certified, shall be signed and acknowledged by the President or Vice President of each to the Constituent Banks. Thereafter, a multiple original of this Merger Agreement, so certified, signed and acknowledged, shall be delivered to the OFI for filing and recordation in the manner required by law; and thereafter, as soon as practicable (but not later than the time required by law), a copy of the Certificate of Merger issued by the OFI shall be filed of record in the office of the recorder of mortgages for the Louisiana Parishes in which each of the Constituent Banks has its registered office and shall also be recorded in the conveyance records for each parish in which either of the Constituent Banks owns real property on the Effective Date of the Bank Merger.

ARTICLE VI

MISCELLANEOUS

The obligations of the Constituent Banks to effect the Bank Merger shall be subject to all of the terms and conditions of the Stock Purchase Agreement dated October 12, 2016 by and between the respective parent companies of each of the Constituent Banks (“Stock Purchase Agreement”). At any time prior to the Effective Date, this Bank Merger Agreement may be terminated (a) by the mutual agreement of the Boards of Directors of the Constituent Banks or (b) pursuant to the terms and provisions of the Stock Purchase Agreement.

IN WITNESS WHEREOF, this Bank Merger Agreement is signed by a majority of the Directors of each of the Constituent Banks as of the date first above written.

(Remainder of page intentionally left blank.)

[SIGNATURE PAGE TO BANK PLAN AND AGREEMENTS OF MERGER]

The First, A National Banking Association			Iberville Bank

By:			By:
Name: M. Ray (Hoppy) Cole, Jr.			Name: Bob Smith
Title: President & Chief Executive Officer			Title: President

	THE FIRST, A NATIONAL BANKING ASSOCIATION
	By a majority of its directors












	IBERVILLE BANK
	By a majority of its Directors

[SIGNATURE PAGE TO BANK PLAN AND AGREEMENTS OF MERGER]

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

by and between

THE FIRST BANCSHARES, INC., and

THE FIRST, A NATIONAL BANKING ASSOCIATION,

on the one hand,

and

GULF COAST COMMUNITY BANK,

on the other hand.

DATED AS OF OCTOBER 12, 2016

	TABLE OF CONTENTS
			Page

ARTICLE 1 TRANSACTIONS AND TERMS OF MERGER			1
	1.1	Merger	1
	1.2	Time and Place of Closing	1
	1.3	Effective Time	2
	1.4	Effects of the Merger	2
	1.5	Tax Consequences	2

ARTICLE 2 MANAGEMENT AND GOVERNING DOCUMENTS FOLLOWING MERGER			2
	2.1	Articles of Association	2
	2.2	Bylaws	2
	2.3	Directors and Officers	2

ARTICLE 3 MERGER CONSIDERATION			2
	3.1	Conversion of Shares	2

ARTICLE 4 EXCHANGE OF SHARES			4
	4.1	Exchange Procedures	4
	4.2	Rights of Former Gulf Coast Shareholders	5

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF GULF COAST			6
	5.1	Organization, Standing, and Power	6
	5.2	Authority of Gulf Coast; No Breach By Agreement	6
	5.3	Capital Stock	7
	5.4	Gulf Coast Subsidiaries	8
	5.5	Financial Statements	8
	5.6	Absence of Undisclosed Liabilities	8
	5.7	Loan and Investment Portfolios	8
	5.8	Absence of Certain Changes or Events	10
	5.9	Tax Matters.	11
	5.10	Allowance for Possible Loan Losses	14
	5.11	Assets.	14
	5.12	Derivative Instruments	15
	5.13	Intellectual Property	15
	5.14	Environmental Matters	16
	5.15	Compliance with Laws	16
	5.16	Labor Relations	17
	5.17	Employee Benefit Plans	17
	5.18	Material Contracts	21
	5.19	Legal Proceedings	22

	5.20	Reports	23
	5.21	Accounting, Tax and Regulatory Matters	23
	5.22	Technology Systems	23
	5.23	Gulf Coast Disclosure Memorandum	24
	5.24	Board Recommendation	24
	5.25	No Investment Adviser	24
	5.26	Gulf Coast Information	24
	5.27	Brokers and Finders	25
	5.28	Gulf Coast Adjusted Capital	25

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF FBMS			25
	6.1	Organization, Standing and Power	25
	6.2	Authority; No Breach By Agreement	25
	6.3	Capital Stock	26
	6.4	SEC Filings; Financial Statements	27
	6.5	Absence of Undisclosed Liabilities	27
	6.6	Absence of Certain Changes or Events	27
	6.7	Legal Proceedings	28
	6.9	Brokers and Finders	28

ARTICLE 7 CONDUCT OF BUSINESS PENDING CONSUMMATION			28
	7.1	Affirmative Covenants of Gulf Coast	28
	7.2	Negative Covenants of Gulf Coast	29
	7.3	Reports and Notification	31

ARTICLE 8 ADDITIONAL AGREEMENTS			31
	8.1	Applications	31
	8.2	Shareholder Approval and SEC Filings	32
	8.3	Agreement as to Efforts to Consummate	33
	8.4	Access to Information and Confidentiality	33
	8.5	No Solicitations	34
	8.6	Press Releases	36
	8.7	Indemnification and Insurance	36
	8.8	Employee Benefits and Contracts	37
	8.9	Gulf Coast 401(k) Plan	37
	8.10	Takeover Laws	38
	8.11	Voting Support Agreements	38
	8.12	Invitations to and Attendance at Directors’ and Committee Meetings	38

ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE			39
	9.1	Conditions to Obligations of Each Party	39
	9.2	Conditions to Obligations of FBMS	40
	9.3	Conditions to Obligations of Gulf Coast	41

ARTICLE 10 TERMINATION			42
	10.1	Termination	42
	10.2	Effect of Termination	43
	10.3	Termination Payment and Reimbursement of Expenses	43

ARTICLE 11 MISCELLANEOUS			44
	11.1	Definitions	44
	11.2	Expenses	53
	11.3	Entire Agreement	53
	11.4	Amendments	53
	11.5	Waivers	54
	11.6	Assignment; Third Party Beneficiaries	54
	11.7	Notices	54
	11.8	Governing Law; Jurisdiction	55
	11.9	Waiver of Jury Trial	56
	11.10	Specific Performance	56
	11.11	Alternative Structure	56
	11.12	Counterparts	56
	11.13	Captions; Articles and Sections	56
	11.14	Interpretations	56
	11.15	Severability	57
	11.16	Survival	57

List of Exhibits

Exhibit A – Form of Bank Merger Agreement and Plan of Merger
Exhibit B – Form of Voting and Support Agreement

iii

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as of October 12, 2016, by and between THE FIRST BANCSHARES, INC. (“FBMS”), a corporation organized under the laws of the State of Mississippi, with its principal office located in Hattiesburg, Mississippi, and its wholly-owned subsidiary, THE FIRST, A NATIONAL BANKING ASSOCIATION, with its principal office located in Hattiesburg, Mississippi, (“The First”), on the one hand, and GULF COAST COMMUNITY BANK (“Gulf Coast”), a banking corporation organized under the laws of the State of Florida, with its principal office located in Pensacola, Florida.

Preamble

WHEREAS, the respective Boards of Directors of Gulf Coast, FBMS and The First are of the opinion that the transactions described herein are in the best interests of the Parties to this Agreement and their respective shareholders;

WHEREAS, this Agreement provides for the merger of Gulf Coast with and into The First, with The First being the surviving corporation of the merger.

Certain terms used in this Agreement are defined in Section 11.1 of this Agreement.

NOW, THEREFORE, in consideration of the above and the mutual warranties, representations, covenants, and agreements set forth herein, the Parties agree as follows:

ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER

1.1 Merger . Subject to the terms and conditions of this Agreement, Gulf Coast will merge with and into The First (the “Merger”). The First shall be the surviving entity in the Merger and shall continue its corporate existence under the name “The First, A National Banking Association”, and, following the Merger, the separate corporate existence of Gulf Coast shall cease. The Merger shall be implemented pursuant to a bank merger agreement and plan of merger, in the form attached hereto as Exhibit A (the “Bank Merger Agreement”). Prior to the Effective Time, Gulf Coast and The First shall execute such certificates of merger and articles of combination and such other documents and certificates as are necessary to make the Merger effective (“Merger Certificates”) at the Effective Time.

1.2 Time and Place of Closing . On the terms and subject to the conditions set forth in this Agreement, the closing of the Merger (the “Closing”) shall take place at 10:00 a.m., Central Time, at the offices of Jones Walker LLP, 190 E. Capitol St., Suite 800, Jackson, Mississippi 39201, as soon as practicable (and, in any event, within five Business Days) after the satisfaction or waiver (subject to applicable Law) of the latest to occur of the conditions set forth in Article 9 (other than those conditions that by their nature are to be satisfied or waived at the Closing, but subject to the satisfaction of such conditions and the continued satisfaction or waiver of all other conditions set forth in Article 9), or such other date or location as mutually agreed to by the Parties (the “Closing Date”).

1.3 Effective Time . The Merger and other transactions contemplated by this Agreement shall become effective on the date and at the time the Articles or Certificate of Merger reflecting the Merger shall become effective with the OCC (the “Effective Time”).

1.4 Effects of the Merger . At and after the Effective Time, the Merger shall have the effects set forth in this Agreement and in the relevant provisions of the National Bank Act and the Florida Statutes.

1.5 Tax Consequences . It is intended that the Merger shall qualify as a “reorganization” within the meaning of Code Section 368(a), and that this Agreement shall constitute a “plan of reorganization” for purposes of Code Sections 354 and 361. From and after the date of this Agreement and until the Closing Date, each Party hereto shall use its reasonable best efforts to cause the Merger to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action not to be taken, which action or failure to act could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Code Section 368(a).

ARTICLE 2
MANAGEMENT AND GOVERNING DOCUMENTS FOLLOWING MERGER

2.1 Articles of Association . The Articles of Association of The First in effect immediately prior to the Effective Time shall be the Articles of Association of the surviving bank.

2.2 Bylaws . The Bylaws of The First in effect immediately prior to the Effective Time shall be the Bylaws of the surviving bank until duly amended or repealed.

2.3 Directors and Officers . The directors and officers of The First immediately prior to the Effective Time shall be the directors and officers of the surviving bank, respectively, in each case until their respective successors are duly elected or appointed and qualified.

ARTICLE 3
MERGER CONSIDERATION

3.1 Conversion of Shares . Subject to the provisions of this Article 3, at the Effective Time, by virtue of the Merger and without any action on the part of FBMS, The First, Gulf Coast, or the shareholders of the foregoing, the shares of the constituent corporation and banks shall be converted as follows:

(a) Each share of capital stock of FBMS and The First issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding from and after the Effective Time and shall not be affected by the Merger.

(b) Subject to Sections 3.1(c) and Section 3.1(e) hereof, each share of Gulf Coast Common Stock outstanding immediately prior to the Effective Time, (other than (i) the shares that are cancelled pursuant to Section 3.1(c) and (ii) the shares with respect to which the holders thereof have perfected dissenters’ rights under the Dissenters Provisions (the “Dissenting Shares”)), shall automatically be converted at the Effective Time into the right to receive a Pro Rata Share of the Merger Consideration. Such shares of Gulf Coast Common Stock to be converted are sometimes referred to herein as the “Outstanding Gulf Coast Shares.”

For purposes of this Agreement:

“Merger Consideration” shall mean the number of whole shares of FBMS Common Stock obtained by (i) dividing $0.50 by (ii) the average of the closing prices of the FBMS Common Stock as reported on the Nasdaq Stock Market on each of the thirty (30) trading days ending five (5) Business Days prior to the Closing Date (the “Average Price”) and (iii) multiplied by the total number of shares of Gulf Coast Common Stock outstanding as of the Effective Time; and

“Pro Rata Share” shall mean the quotient obtained by dividing (i) the number one by (ii) the total number of shares of Gulf Coast Common Stock outstanding as of the Effective Time.

(c) All shares of Gulf Coast Common Stock issued and outstanding immediately prior to the Effective Time that are owned by FBMS, The First, Gulf Coast or any of their respective Subsidiaries (other than (i) shares of Gulf Coast Common Stock held in trust accounts, managed accounts and the like, or otherwise held in a fiduciary or agency capacity, that are beneficially owned by third parties and (ii) shares of Gulf Coast Common Stock held, directly or indirectly, by FBMS, The First or Gulf Coast in respect of a debt previously contracted) shall be cancelled and shall cease to exist and no Merger Consideration shall be delivered in exchange therefor.

(d) No Dissenting Shares shall be converted in the Merger. All such shares shall be cancelled and the holders thereof shall thereafter have only such rights as are granted to dissenting shareholders under the Dissenters Provisions; provided, however, that if any such shareholder fails to perfect his or her rights as a dissenting shareholder with respect to his or her Dissenting Shares in accordance with the Dissenters Provisions or withdraws or loses such holder’s dissenter’s rights, such shares held by such shareholder shall be treated the same as all other holders of Gulf Coast Common Stock who at the Effective Time held Gulf Coast Common Stock.

(e) In the event FBMS or Gulf Coast changes the number of shares of FBMS Common Stock or Gulf Coast Common Stock, respectively, issued and outstanding prior to the Effective Time as a result of a stock split, stock dividend or similar recapitalization with respect to such stock and the record date or effective date thereof is prior to the Effective Time, the Merger Consideration shall be proportionately adjusted.

(f) FBMS shall not issue fractional shares of FBMS Common Stock for any portion of the Merger Consideration. In lieu of issuing fractional shares, FBMS will pay the Gulf Coast shareholders entitled to otherwise receive such fractional share cash for the fractional share in an amount equal to the Average Price multiplied by the fractional share due to the Gulf Coast stockholder, rounded to the nearest one cent

ARTICLE 4
EXCHANGE OF SHARES

4.1 Exchange Procedures .

(a) Prior to the Effective Time, The First and FBMS shall select a transfer agent, bank or trust company to act as exchange agent (the “Exchange Agent”) to effect the delivery of the Merger Consideration to holders of Gulf Coast Common Stock. No later than five (5) Business Days prior to the Closing Date, Gulf Coast shall deliver to the Exchange Agent a preliminary list of all Gulf Coast shareholders entitled to receive the Merger Consideration, along with such shareholders’ amount of Gulf Coast Common Stock owned. Prior to the Closing Date, The First and FBMS shall deliver (or cause to be delivered) the Merger Consideration to the Exchange Agent. Promptly following the Effective Time (but no later than five (5) Business Days thereafter), the Exchange Agent shall send to each holder of Gulf Coast Common Stock immediately prior to the Effective Time a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the certificates previously evidencing shares of Gulf Coast Common Stock (“Old Certificates”) shall pass, only upon delivery of the Old Certificates, or affidavits of loss and a bond, to the Exchange Agent (the “Letter of Transmittal”) for use in exchanging Old Certificates. The Letter of Transmittal will include instructions with respect to the surrender of Old Certificates and the distribution of the Merger Consideration.

(b) Upon surrender of an Old Certificate to the Exchange Agent for exchange, together with a duly executed Letter of Transmittal and such other documents as may be reasonably required by the Exchange Agent, The First or FBMS, such Old Certificate shall be cancelled and the holder of such Old Certificate shall be entitled to receive, and the Exchange Agent shall in exchange therefor transfer to such holder the Merger Consideration, including any cash in lieu of fractional shares of FBMS Common Stock to be issued or paid in consideration therefor in respect of the shares of Gulf Coast Common Stock represented by such Old Certificate.

(c) If any certificates or book-entry allocations for shares of FBMS Common Stock are to be issued in a name other than that for which an Old Certificate surrendered or exchanged is issued, the Old Certificate so surrendered shall be properly endorsed and otherwise in proper form for transfer and the person requesting such exchange shall affix any requisite stock transfer tax stamps to the Old Certificate surrendered or provide funds for their purchase or establish to the satisfaction of the Exchange Agent that such taxes are not payable.

(d) All Merger Consideration, if held by the Exchange Agent for payment or delivery to the holders of unsurrendered Old Certificates and unclaimed at the end of one year after the Effective Time, shall at such time be paid or redelivered by the Exchange Agent to The First or FBMS, and after such time any holder of an Old Certificate who has not surrendered such certificate shall, subject to applicable laws and to the extent that the same has not yet been paid to a Regulatory Authority pursuant to applicable abandoned property laws, look as a general creditor only to The First for payment or delivery of such property. None of FBMS, The First, Gulf Coast, the Exchange Agent or any other Person shall be liable to any former holder of shares of Gulf Coast Common Stock for any amount delivered in good faith to a Regulatory Authority pursuant to applicable abandoned property, escheat or similar Laws. In no event will any holder of Gulf Coast Common Stock exchanged in the Merger be entitled to receive any interest on any amounts held by the Exchange Agent, The First or FBMS of the Merger Consideration.

(e) At any time following six (6) months after the Effective Time, any portion of the Merger Consideration made available to the Exchange Agent in respect of any Dissenting Shares shall be returned to The First or FBMS upon demand.

(f) In the event that any Old Certificate shall have been lost, stolen or destroyed, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Old Certificate the Merger Consideration deliverable in respect thereof pursuant to this Agreement. Upon the making of an affidavit of that fact by the Person claiming such Old Certificate to be lost, stolen or destroyed and, if reasonably required by The First or the Exchange Agent, the posting by such Person of a bond in such amount as The First may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Old Certificate.

(g) Each of The First or the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Code, or any provision of state, local or foreign Tax Law. To the extent that amounts are so deducted and withheld by the Exchange Agent or The First, as the case may be, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which the Exchange Agent or The First, as the case may be, made such deduction and withholding.

(h) In the case of outstanding shares of Gulf Coast Common Stock that are not represented by physical certificates, the Parties shall make such adjustments to Article 4 as are necessary or appropriate to implement the same purpose and effect that Article 4 have with respect to shares of Gulf Coast Common Stock that are represented by physical certificates.

4.2 Rights of Former Gulf Coast Shareholders . All Merger Consideration paid upon the surrender of Old Certificates in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Gulf Coast Common Stock formerly represented by such Old Certificate. At the Effective Time, the stock transfer books of Gulf Coast shall be closed as to holders of Gulf Coast Common Stock immediately prior to the Effective Time and no transfer of Gulf Coast Common Stock by any such holder shall thereafter be made or recognized. Until surrendered for exchange in accordance with the provisions of Section 4.1, each Old Certificate representing Gulf Coast Common Stock shall from and after the Effective Time represent for all purposes only the right to receive the Merger Consideration provided in Section 3.1 in exchange therefor. Whenever a dividend or other distribution is declared by FBMS on the FBMS Common Stock, the record date for which is at or after the Effective Time, the declaration shall include dividends or other distributions on all shares of FBMS Common Stock issuable pursuant to this Agreement, but no dividend or other distribution payable to the holders of record of FBMS Common Stock as of any time subsequent to the Effective Time shall be delivered to the holder of any Old Certificate representing Gulf Coast Common Stock until such holder surrenders such Old Certificate for exchange as provided in Section 4.1. However, upon surrender of such Old Certificate representing Gulf Coast Common Stock, both the Merger Consideration and any undelivered dividends and cash payments payable hereunder (without interest) shall be delivered and paid with respect to each share represented by such Old Certificate.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GULF COAST

Except as disclosed in writing in the correspondingly enumerated section or subsection of the Gulf Coast Disclosure Memorandum, Gulf Coast hereby represents and warrants to The First and FBMS as follows:

5.1 Organization, Standing, and Power . Gulf Coast is a bank duly organized, validly existing and in good standing under the Laws of the State of Florida. Gulf Coast has the corporate power and authority to carry on its business as now conducted and to own, lease and operate its Assets. Gulf Coast is duly qualified or licensed to transact business as a foreign corporation in good standing in the jurisdictions where the character of its Assets or the nature or conduct of its business requires it to be so qualified or licensed, except where the failure to be so qualified or licensed, individually or in the aggregate, has not had and would not reasonably be expected to have a Gulf Coast Material Adverse Effect. The deposit accounts of Gulf Coast are insured by the FDIC through the bank insurance fund to the fullest extent permitted by Law, and all premiums and assessments required in connection therewith have been paid by Gulf Coast when due. Gulf Coast is a member in good standing of the Federal Home Loan Bank of Atlanta and owns the requisite amount of stock therein. True and complete copies of Gulf Coast’s articles of incorporation and bylaws (or comparable organizational documents) as in effect as of the date of this Agreement, have previously been made available to The First and FBMS. Gulf Coast is not in violation of any of the provisions of its articles of incorporation or bylaws (or comparable organizational documents), as applicable. The minute book (except for portions redacted for preservation of the attorney-client privilege) and other organizational documents for Gulf Coast have been made available to The First and FBMS for its review, and accurately reflect all amendments to such organizational documents and, in all material respects, all proceedings of the Board of Directors and shareholders thereof.

5.2 Authority of Gulf Coast; No Breach By Agreement .

(a) Gulf Coast has the corporate power and authority necessary to execute, deliver, and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, have been duly, validly approved by the Board of Directors of Gulf Coast, the Board of Directors of Gulf Coast has resolved to recommend to Gulf Coast’s shareholders the approval and adoption of this Agreement and the transactions contemplated herein, and all necessary corporate action in respect thereof on the part of Gulf Coast has been taken, subject to the approval by the affirmative vote of the holders of two-thirds of the issued and outstanding shares of Gulf Coast Common Stock (the “Requisite Shareholder Approval”). This Agreement has been duly and validly executed and delivered by Gulf Coast. Assuming due authorization, execution and delivery by The First and FBMS, this Agreement constitutes a valid and binding obligation of Gulf Coast, enforceable against Gulf Coast in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship, moratorium, or similar Laws affecting the enforcement of creditors’ rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought).

(b) Neither the execution and delivery of this Agreement by Gulf Coast, nor the consummation by Gulf Coast of the transactions contemplated hereby, nor compliance by Gulf Coast with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of its articles of incorporation or bylaws or any resolution adopted by the Board of Directors or the shareholders of Gulf Coast that is currently in effect, or (ii) except as set forth in Section 5.2(b) of the Gulf Coast Disclosure Memorandum , constitute or result in a Default under, or require any Consent pursuant to, or result in the creation of any Lien on any Asset of Gulf Coast Entity under any Contract or Permit or, (iii) subject to receipt of the requisite Consents referred to in Section 9.1(b) , constitute or result in a Default under, or require any Consent pursuant to, any Law or Order applicable to Gulf Coast or any of its Assets (including any FBMS Entity becoming subject to or liable for the payment of any Tax or any of the Assets owned by any FBMS Entity being reassessed or revalued by any Taxing authority).

(c) Other than in connection or compliance with the provisions of the Securities Laws, applicable state corporate and securities Laws, and other than Consents required from Regulatory Authorities, no notice to, filing with, or Consent of, any public body or Regulatory Authority is necessary for the consummation by Gulf Coast of the Merger and the other transactions contemplated in this Agreement.

5.3 Capital Stock .

(a) The authorized capital stock of Gulf Coast consists of (i) 5,000,000 shares of Gulf Coast Class A Common Stock, of which 1,272,437 shares are issued and outstanding as of the date of this Agreement and (ii) 30,000,000 shares of Gulf Coast Class B Common Stock, of which 3,243,000 shares are issued and outstanding as of the date of this Agreement and (iii) 2,000,000 shares of Gulf Coast preferred stock, which no shares are issued or outstanding as of the date of this Agreement. All of the issued and outstanding shares of capital stock of Gulf Coast are duly and validly issued and outstanding and are fully paid and nonassessable under the Florida Statutes. None of the outstanding shares of capital stock of Gulf Coast has been issued in violation of any preemptive rights of the current or past shareholders of Gulf Coast.

(b) Except as set forth in Section 5.3(a) of this Agreement or in Section 5.3(b) of the Gulf Coast Disclosure Memorandum , there are no shares of capital stock, preferred stock or other equity securities of Gulf Coast outstanding and no outstanding Equity Rights relating to the capital stock of Gulf Coast.

(c) Except as set forth in Section 5.3(c) of the Gulf Coast Disclosure Memorandum , Gulf Coast does not have and is not bound by any outstanding subscriptions, options, calls, commitments or Contracts of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable for, any shares of capital stock of Gulf Coast, Equity Rights relating to the capital stock of Gulf Coast, or any other equity securities of Gulf Coast or any securities representing the right to purchase or otherwise receive any shares of capital stock of Gulf Coast (including any rights plan or agreement).

5.4 Gulf Coast Subsidiaries . Gulf Coast has no Subsidiaries and does not own, for its own account, any stocks, options, calls, warrants or rights to acquire stock or other equity in any partnership, limited liability company or corporation other than ownership of stock of, or membership interest in, the Federal Home Loan Bank of Atlanta. Except as set forth on Section 5.4 of the Gulf Coast Disclosure Memorandum , no capital stock (or other equity interest) of Gulf Coast is or may become required to be issued by reason of any Equity Rights, and there are no Contracts by which Gulf Coast is bound to issue additional shares of its capital stock (or other equity interests), Equity Rights or by which Gulf Coast is or may be bound to transfer any shares of its capital stock (or other equity interests. There are no Contracts relating to the rights of Gulf Coast to vote or to dispose of any shares of the capital stock (or other equity interests) of Gulf Coast.

5.5 Financial Statements . Each of the Gulf Coast Financial Statements (including, in each case, any related notes) made available to FBMS, including any Gulf Coast Financial Statements provided after the date of this Agreement until the Effective Time, was prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements), and fairly presented in all material respects the consolidated financial position of Gulf Coast as at the respective dates and the consolidated results of operations and cash flows for the periods indicated, except that the unaudited interim consolidated financial statements were or are subject to normal and recurring year-end adjustments which were not or are not expected to be material in amount or effect.

5.6 Absence of Undisclosed Liabilities . Except as set forth in Section 5.6 of the Gulf Coast Disclosure Memorandum , Gulf Coast has no Liabilities of a nature required to be reflected on a consolidated balance sheet prepared in accordance with GAAP, except Liabilities that are accrued or reserved against in the consolidated balance sheet of Gulf Coast as of June 30, 2016, included in the Gulf Coast Financial Statements or reflected in the notes thereto. Gulf Coast has not incurred or paid any Liability since June 30, 2016, except for such Liabilities incurred or paid (i) in the ordinary course of business consistent with past business practice and that are not reasonably likely to have, individually or in the aggregate, a materially adverse effect or (ii) in connection with the transactions contemplated by this Agreement.

5.7 Loan and Investment Portfolios .

(a) Each loan agreement, note or borrowing arrangement (including leases, credit enhancements, commitments, guarantees and interest-bearing assets) (collectively, “Loans”) payable to Gulf Coast (i) is evidenced by Loan Documentation that is true, genuine and what it purports to be and (ii) represents the valid and legally binding obligation of the obligor, maker, co-maker, guarantor, endorser or debtor (such person referred to as an “Obligor”) thereunder, and is enforceable against the Obligor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles. For the purposes of this Agreement, “Loan Documentation” means all Loan files and all documents included in Gulf Coast’s file or imaging system with respect to a Loan, including loan applications, notes, security agreements, deeds of trust, collectors notes, appraisals, credit reports, disclosures, titles to collateral, verifications (including employment verification, deposit verification, etc.), mortgages, loan agreements, including building and loan agreements, guarantees, pledge agreements, financing statements, intercreditor agreements, participation agreements, sureties and insurance policies (including title insurance policies) and all modifications, waivers and consents relating to any of the foregoing.

(b) The information with respect to each Loan set forth in the electronic media produced by Gulf Coast from its management information systems regarding the Loans and delivered to The First and FBMS prior to the date hereof (the “Loan Tape”) is true, correct and accurate as of the dates specified therein, or, if no such date is indicated therein, as of the date the information was entered into electronic media.

(c) (i) Section 5.7(c) of the Gulf Coast Disclosure Memorandum sets forth a list of all Loans as of the date hereof by Gulf Coast to any directors, executive officers and principal shareholders (as such terms are defined in Regulation O of the Federal Reserve (12 C.F.R. Part 215)) of Gulf Coast, (ii) there are no employee, officer, director or other affiliate Loans on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate that was below market at the time the Loan was originated, and (iii) all such Loans are and were originated in compliance in all material respects with all applicable Laws.

(d) Each Loan payable to Gulf Coast (i) was originated or purchased by Gulf Coast and its principal balance as shown on Gulf Coast’s books and records is true and correct as of the date indicated therein, (ii) contains customary and enforceable provisions such that the rights and remedies of the holder thereof shall be adequate for the practical realization against any collateral therefor, and (iii) complies, and at the time the Loan was originated or purchased by Gulf Coast complied, including as to the Loan Document related thereto, in all material respects, with all applicable requirements of federal, state and local Laws.

(e) Each outstanding Loan (including Loans held for resale to investors) payable to Gulf Coast has been solicited and originated and is administered and serviced (to the extent administered and serviced by Gulf Coast), and during the period of time in which such Loan was originated, held or serviced by Gulf Coast, the relevant Loan Documentation was being maintained, in all material respects in accordance with Gulf Coast’s underwriting and servicing standards (and, in the case of Loans held for resale to investors, the underwriting standards, if any, of the applicable investors) and customary industry practices and with all applicable requirements of federal, state and local Laws.

(f) With respect to each Loan payable to Gulf Coast that is secured, Gulf Coast has a valid and enforceable Lien on the collateral described in the documents relating to such Loan, and each such Lien is assignable and has the priority described in the Loan Documentation (except as may be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the rights of creditors generally and except as the availability of equitable remedies may be limited by general principles of equity).

(g) Except as set forth in Section 5.7(g) of the Gulf Coast Disclosure Memorandum , none of the agreements pursuant to which Gulf Coast has sold Loans or pools of Loans or participations in Loans or pools of Loans contains any obligation to repurchase such Loans or interests therein solely on account of a payment default by the Obligor on any such Loan.

(h) Section 5.7(h) of the Gulf Coast Disclosure Memorandum identifies each Loan payable to Gulf Coast that (i) as of June 30, 2016 (A) was on non-accrual status, (B) where the interest rate terms had been reduced and/or the maturity dates had been extended subsequent to the agreement under which the Loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (C) where a specific reserve allocation existed in connection therewith, (D) which was required to be accounted for as a troubled debt restructuring in accordance with Statement of Financial Accounting Standards No. 15 or (E) that was contractually past due 90 days or more in the payment of principal and/or interest, or (ii) as of the date of this Agreement is classified as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,” “Watch List” or words of similar import. For each Loan identified in response to clause (i) or (ii) above, Section 5.7(h) of the Gulf Coast Disclosure Memorandum sets forth the outstanding balance, including accrued and unpaid interest, on each such Loan and the identity of the borrower thereunder as of June 30, 2016.

5.8 Absence of Certain Changes or Events . Since December 31, 2015, except as disclosed in the Gulf Coast Financial Statements delivered prior to the date of this Agreement or as contemplated in this Agreement, (i) there have been no events, changes, or occurrences which have had, or are reasonably likely to have, individually or in the aggregate, a Gulf Coast Material Adverse Effect, (ii) Gulf Coast has not declared, set aside for payment or paid any dividend to holders of, or declared or made any distribution on, any shares of Gulf Coast Common Stock, and (iii) Gulf Coast has not taken any action, or failed to take any action, prior to the date of this Agreement, which action or failure, if taken after the date of this Agreement, would represent or result in a material breach or violation of any of the covenants and agreements of Gulf Coast provided in Article 7. Except as may result from the transactions contemplated by this Agreement, Gulf Coast has not, since the date of the Gulf Coast Financial Statements delivered prior to the date of this Agreement:

(a) borrowed any money other than deposits or overnight fed funds or entered into any capital lease or leases; or, except in the ordinary course of business and consistent with past practices: (i) lent any money or pledged any of its credit in connection with any aspect of its business whether as a guarantor, surety, issuer of a letter of credit or otherwise, (ii) mortgaged or otherwise subjected to any Lien any of its Assets, sold, assigned or transferred any of its Assets in excess of $25,000 in the aggregate or (iii) incurred any other Liability or loss representing, individually or in the aggregate, over $25,000;

(b) suffered over $25,000 in damage, destruction or loss to immovable or movable property, whether or not covered by insurance;

(c) experienced any material adverse change in Asset concentrations as to customers or industries or in the nature and source of its Liabilities or in the mix or interest-bearing versus noninterest-bearing deposits;

(d) except in the ordinary course of business and consistent with past practices, had any customer with a total deposit relationship balance of more than $250,000 terminate, or received notice of such customer’s intent to terminate, its entire deposit relationship with Gulf Coast;

(e) failed to operate its business in the ordinary course consistent with past practices, or failed to use reasonable efforts to preserve its business or to preserve the goodwill of its customers and others with whom it has business relations;

(f) forgiven any debt owed to it in excess of $25,000, or canceled any of its claims or paid any of its noncurrent obligations or Liabilities;

(g) made any capital expenditure or capital addition or betterment in excess of $25,000;

(h) entered into any agreement requiring the payment, conditionally or otherwise, of any salary, bonus, compensation (including payments for unused vacation or sick time), pension or severance payment to any of its present or former directors, officers, employees or contractors, except such agreements (i) as are terminable at will without any penalty or other payment by it or (ii) that increase (except for increases of not more than 5% consistent with past practices) the compensation (including salaries, fees, bonuses, profit sharing, incentive, severance, pension, retirement or other similar payments) of any such person whose annual compensation would not, following such increase, exceed $50,000;

(i) except as set forth in Section 5.8(i) of the Gulf Coast Disclosure Memorandum , adopted, modified or amended any employee benefit plan other than as required by law;

(j) except as required in accordance with GAAP, changed any accounting practice followed or employed in preparing the Gulf Coast Financial Statements;

(k) entered into any agreement, contract or commitment to do any of the foregoing; or

(l) authorized or issued any additional shares of Gulf Coast Common Stock, preferred stock, or Equity Rights.

5.9 Tax Matters .

(a) All Tax Returns required to be filed by or on behalf of Gulf Coast have been timely filed or requests for extensions have been timely filed, granted, and have not expired for all periods ended on or before the date of the most recent fiscal year end immediately preceding the Effective Time. All such Tax Returns are complete and accurate in all material respects and were prepared in substantial compliance with all applicable Laws. All Taxes due and payable have been timely paid. There is no audit examination, deficiency, or refund Litigation with respect to any Taxes, except as reserved against in the Gulf Coast Financial Statements delivered prior to the date of this Agreement. The Gulf Coast federal income Tax Returns have not been audited by the IRS or any state or local jurisdiction, and no notices have been received indicating an intent to open an audit or other review. All Taxes and other Liabilities due with respect to completed and settled examinations or concluded Litigation have been paid. There are no Liens with respect to Taxes upon any of the Assets of Gulf Coast. Gulf Coast has withheld and paid over all Taxes required to have been withheld to all applicable Tax authorities. Gulf Coast is not and has never been a party to any tax sharing agreement. Gulf Coast does not have any liability for the Taxes of any person or entity other than itself either as a result of being a transferee or successor by contract or otherwise. No claim has ever been made by a Regulatory Authority in a jurisdiction where Gulf Coast does not file Tax Returns that Gulf Coast may be subject to taxes in that jurisdiction.

(b) Gulf Coast has not executed an extension or waiver of any statute of limitations on the assessment or collection of any Tax due that is currently in effect.

(c) The provision for any Taxes due or to become due for Gulf Coast for the period or periods through and including the date of the respective Gulf Coast Financial Statements that has been made and is reflected on such Gulf Coast Financial Statements is sufficient to cover all such Taxes.

(d) Deferred Taxes of Gulf Coast have been provided for in accordance with GAAP.

(e) Gulf Coast is in compliance with, and their respective records contain all information and documents (including properly completed IRS Forms W-9) necessary to comply with, all applicable information reporting and Tax withholding (from any employee or other Person) requirements under federal, state, and local Tax Laws, and such records identify with specificity all accounts subject to backup withholding under Code Section 3406.

(f) Gulf Coast has not experienced a change in ownership with respect to its respective stock, within the meaning of Code Section 382, other than the ownership change that will occur as a result of the transactions contemplated by this Agreement.

(g) Gulf Coast has not made any payments, Gulf Coast is not obligated to make any payments, nor is Gulf Coast a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Code Section 280G. Gulf Coast has not been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii). Gulf Coast has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Code Section 6662.

(h) Gulf Coast has no potential liability for any Tax under Code Section 1374. Gulf Coast has not in the past 10 years: (A) acquired assets from another corporation in a transaction in which Gulf Coast’s tax basis for the acquired assets was determined, in whole or in part, by any reference to the tax basis of the acquired assets (or any other property) in the hands of the transferor, or (B) acquired the stock of any corporation which is a qualified subchapter S subsidiary under the Code.

(i) Gulf Coast will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any:

(i) change in method of accounting for a taxable period ending on or prior to the Closing Date;

(ii) “closing agreement” as described in Code Section 7121 (or any corresponding or similar provision of state, local, or non-U.S. income Tax Law) executed on or prior to the Closing Date;

(iii) intercompany transaction or excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of state, local, or non-U.S. income Tax Law);

(iv) installment sale or open transaction disposition made on or prior to the Closing Date;

(v) prepaid amount received on or prior to the Closing Date; or

(vi) election under Code Section 108(i).

(j) Gulf Coast has not received any private letter rulings from the IRS (or any comparable ruling from any other taxing authority).

(k) Gulf Coast is not nor has it ever been a member of an affiliated group (other than a group the common parent of which was Gulf Coast) filing a consolidated, combined or unitary Tax Return. Gulf Coast does not have any liability for Taxes of any person (other than Gulf Coast) arising from the application of Treasury Regulation Section 1.1502-6 or any analogous provision of state, local or foreign law, or as a transferee or successor, by contract, or otherwise.

(l) Gulf Coast is not a party to or bound by or has any obligation under any Tax sharing, allocation or indemnification agreement or similar contract or arrangement or any agreement that obligates it to make any payment computed by reference to the Taxes, taxable income or taxable losses of any other person.

(m) Gulf Coast has not been either a “distributing corporation” or a “controlled corporation” within the meaning of Code Section 355(a)(1)(A) in a distribution occurring during the last five years in which the parties to such distribution treated the distribution as qualifying for tax-free treatment under Code Section 355.

(n) Gulf Coast has not been a party to any “reportable transaction” as defined in Code Section 6707A(c)(i) and Regulation Section 1.6011-4(b).

5.10 Allowance for Possible Loan Losses . The allowance for loan or credit losses or similar term (as applicable, the “Allowance”) shown on the balance sheets of Gulf Coast included in the Gulf Coast Financial Statements and the Allowance shown on the balance sheets of Gulf Coast as of dates subsequent to the execution of this Agreement will be, as of the dates thereof, adequate (within the meaning of GAAP and applicable regulatory requirements or guidelines) to provide for all known or reasonably anticipated losses relating to or inherent in the loan and lease portfolios (including accrued interest receivables) of Gulf Coast and other extensions of credit (including letters of credit and commitments to make loans or extend credit) by Gulf Coast as of the dates thereof.

5.11 Assets .

(a) Except as disclosed in Section 5.11 of the Gulf Coast Disclosure Memorandum , to the Knowledge of Gulf Coast, Gulf Coast has good and marketable title, free and clear of all Liens, to its respective Assets, except for (i) mortgages and encumbrances that secure indebtedness that is properly reflected in the Gulf Coast Financial Statements or that secure deposits of public funds as required by law; (ii) Liens for taxes accrued but not yet payable; (iii) Liens arising as a matter of law in the ordinary course of business, provided that the obligations secured by such Liens are not delinquent or are being contested in good faith; (iv) such imperfections of title and encumbrances, if any, as do not materially detract from the value or materially interfere with the present use of any of such properties or Assets or the potential sale of any of such owned properties or Assets; and (v) capital leases and leases, if any, to third parties for fair and adequate consideration. All tangible properties used in the business of Gulf Coast are in good condition, reasonable wear and tear excepted, and are usable in the ordinary course of business consistent with Gulf Coast’s past practices. All Assets which are material to the Gulf Coast’s business on a consolidated basis, held under leases or subleases by any of the Gulf Coast, are held under valid Contracts enforceable against Gulf Coast in accordance with their respective terms (except as enforceability may be limited by applicable Bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the enforcement of creditors’ rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceedings may be brought), and each such Contract is in full force and effect.

(b) Gulf Coast has paid all amounts due and payable under any insurance policies and guarantees applicable to Gulf Coast and its Assets and operations; all such insurance policies and guarantees are in full force and effect, and all of Gulf Coast’s material properties are insured against fire, casualty, theft, loss, and such other events against which Gulf Coast reasonably believes it is customary to insure, all such insurance policies being in amounts and with deductibles that Gulf Coast reasonably believes are adequate and are consistent with past practice and experience. With respect to any policy of insurance in effect as of the date hereof, Gulf Coast has not received written notice from any insurance carrier that, (i) any policy of insurance will be canceled or that coverage thereunder will be reduced or eliminated, or (ii) premium costs with respect to such policies of insurance will increase by more than 10%. There are presently no claims for amounts exceeding in any individual case $10,000 pending under such policies of insurance and no notices of claims in excess of such amounts have been given by Gulf Coast under such policies.

(c) Section 5.11(c) of the Gulf Coast Disclosure Memorandum lists (i) all real property owned by Gulf Coast (the “Owned Real Property”); (ii) all leases, subleases, licenses or other contracts (including all amendments, modifications, and supplements thereto) pursuant to which Gulf Coast leases land and/or buildings, together with the real property rights (including security deposits), benefits and appurtenances pertaining thereto and rights in respect thereof, including ground leases (the “Real Property Leases”) and lists all parcels of real property leased to Gulf Coast pursuant to the Real Property Leases (the “Leased Premises”) and (iii) all leases, subleases, licenses or other use agreements between Gulf Coast, as landlord, sublandlord or licensor, and third parties with respect to Owned Real Property or Leased Premises, as tenant, subtenant or licensee (“Tenant Leases”), in each case including all amendments, modifications, and supplements thereto, and all such documentation has been made available to FBMS or The First on or prior to the date hereof Gulf Coast does not use in its businesses any real property other than the Owned Real Property and the Leased Premises. Except as set forth in Section 5.11(c) of the Gulf Coast Disclosure Memorandum , no Person other than Gulf Coast has (or will have, at Closing) (i) any right in any of the Owned Real Property or any right to use or occupy any portion of the Owned Real Property or (ii) any right to use or occupy any portion of the Leased Premises.

(d) Gulf Coast has good and marketable leasehold interests in the Leased Premises, free and clear of all Liens of any nature whatsoever, except for Permitted Encumbrances, and is in sole possession of the properties purported to be leased thereunder, subject and pursuant to the terms of the Real Property Leases. With respect to each lease of any real property or personal property to which Gulf Coast is a party (whether as lessee or lessor, including without limitation, the Real Property Leases and Tenant Leases) (i) such lease is in full force and effect in accordance with its terms by Gulf Coast; (ii) all rents and other monetary amounts that have become due and payable thereunder have been paid by Gulf Coast; (iii) there exists no Default under such lease by Gulf Coast or, to the Knowledge of Gulf Coast, with respect to the other parties thereto; and (iv) except as set forth in Section 5.11(d) of the Gulf Coast Disclosure Memorandum , the Merger will not constitute a default or a cause for termination or modification of such lease.

(e) Except as contemplated by this Agreement, Gulf Coast has no legal obligation, absolute or contingent, to any other person to sell or otherwise dispose of any substantial part of its Assets or to sell or dispose of any of its Assets except in the ordinary course of business consistent with past practices.

(f) The Gulf Coast Assets include all material Assets required to operate the business of Gulf Coast as presently conducted.

5.12 Derivative Instruments . Except as disclosed in Section 5.12 of the Gulf Coast Disclosure Memorandum , Gulf Coast has not engaged in or been party to any Derivative Transactions.

5.13 Intellectual Property . Gulf Coast owns or has a valid license to use all of the Intellectual Property used by it in the course of its business. Gulf Coast is the owner of or has a license to any Intellectual Property sold or licensed to a third party by Gulf Coast in connection with Gulf Coast’s business operations, and Gulf Coast has the right to convey by sale or license any Intellectual Property so conveyed. Gulf Coast has not received notice of Default under any of its Intellectual Property licenses. No proceedings have been instituted, or are pending or, to the Knowledge of Gulf Coast, overtly threatened, that challenge the rights of Gulf Coast with respect to its Intellectual Property used, sold or licensed by Gulf Coast in the course of its business, nor has any person claimed or alleged any rights to such Intellectual Property. The conduct of Gulf Coast’s business does not infringe any Intellectual Property of any other person. Gulf Coast is not obligated to pay any recurring royalties to any Person with respect to any such Intellectual Property. Gulf Coast is not a party to any agreement to indemnify any Person against a claim of infringement of or misappropriation by any Intellectual Property.

5.14 Environmental Matters .

(a) Gulf Coast and its Operating Properties are, and have been, to the Knowledge of Gulf Coast, in compliance in all material respects with all Environmental Laws.

(b) There is no Litigation pending or to the Knowledge of Gulf Coast overtly threatened before any court, governmental agency, or authority or other forum in which Gulf Coast or any of its Operating Properties (or Gulf Coast in respect of such Operating Property) has been or, with respect to overtly threatened Litigation, may be named as a defendant (i) for alleged noncompliance (including by any predecessor) with any Environmental Law or (ii) relating to the Release into the indoor or outdoor Environment of any Hazardous Material, whether or not occurring in, at, on, under, about, adjacent to, or affecting (or potentially affecting) an Asset currently or formerly owned, leased, or operated by Gulf Coast or any of its Operating Properties, nor is there any reasonable basis for any Litigation of a type described in this sentence.

(c) During the period of (i) Gulf Coast’s ownership or operation of any of its Assets, (ii) Gulf Coast’s participation in the management of any Operating Property, or (iii) Gulf Coast’s holding of a security interest in an Operating Property, there has been no Release of any Hazardous Material in, at, on, under, about, or, to the Knowledge of Gulf Coast, adjacent to or affecting (or potentially affecting) such properties. To the Knowledge of Gulf Coast, prior to the period of (i) Gulf Coast’s ownership or operation of any of its Assets, (ii) Gulf Coast’s participation in the management of any Operating Property, or (iii) Gulf Coast’s holding of a security interest in an Operating Property, there was no Release of any Hazardous Material in, at, on, under, about, or affecting any such property, Operating Property. To the Knowledge of Gulf Coast, no lead based paint or asbestos in any form is present in, at, on, under, about, of affecting (or potentially affecting) any branch office of Gulf Coast or, any other real estate owned by Gulf Coast.

(d) Except as disclosed in Section 5.14(d) of the Gulf Coast Disclosure Memorandum , there are no reports, studies, analyses, tests, or monitoring possessed or initiated by Gulf Coast pertaining to Hazardous Materials in, at, on, under, about, or affecting (or potentially affecting) any Asset, or concerning compliance by Gulf Coast or any other Person for whose conduct it is or may be held responsible, with Environmental Laws.

5.15 Compliance with Laws .

(a) Gulf Coast and each of its employees hold all licenses, registrations, franchises, certificates, variances, Permits and authorizations necessary for the lawful conduct of their respective businesses and properties and are and have been in compliance in all material respects with, and are not and have not been in violation of, any applicable Law and Gulf Coast does not have Knowledge of, or has received notice of, any violations of any of the above.

(b) Gulf Coast has properly administered all accounts for which it acts as a fiduciary, including accounts for which Gulf Coast serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment adviser, in accordance with the terms of the governing documents and applicable Law in all material respects. None of Gulf Coast, or to the Knowledge of Gulf Coast, any director, officer or employee of Gulf Coast, has committed any breach of trust with respect to any such fiduciary account and the accountings for each such fiduciary account are true and correct in all material respects and accurately reflect in all material respects the assets of such fiduciary account.

(c) As of its last written communication with its primary federal regulator, the rating of Gulf Coast under the Community Reinvestment Act of 1997 (“CRA”) is no less than “satisfactory.” Gulf Coast has not been informed that its status as “satisfactory” for CRA purposes will change within one year, nor does Gulf Coast have Knowledge of any conditions or circumstances that are likely to result in a CRA rating of less than “satisfactory” or material criticism from regulators with respect to discriminatory lending practices.

(d) Except as set forth in Section 5.15(d) of the Gulf Coast Disclosure Schedule , Gulf Coast is not in receipt of any notification or communication from any agency or department of federal, state, or local government or any Regulatory Authority or the staff thereof (i) asserting that Gulf Coast is not in compliance with any of the Laws or Orders which such Regulatory Authority enforces, (ii) threatening to revoke any Permits or (iii) requiring Gulf Coast to enter into or consent to the issuance of a cease and desist order, formal agreement, consent decree, directive, commitment, or memorandum of understanding, or to adopt any board resolution or similar undertaking, which restricts materially the conduct of its respective business or in any manner relates to capital adequacy, credit or reserve policies or management.

5.16 Labor Relations . Gulf Coast Entities is not a party to any Litigation asserting that it has committed an unfair labor practice (within the meaning of the National Labor Relations Act or comparable state law) or seeking to compel it to bargain with any labor organization or other employee representative to wages or conditions of employment, nor is Gulf Coast party to any collective bargaining agreement, nor is there any pending or, to the Knowledge of Gulf Coast, threatened strike, slowdown, picketing, work stoppage or other labor dispute involving Gulf Coast. To the Knowledge of Gulf Coast, there is no activity involving any of Gulf Coast’s employees seeking to certify a collective bargaining unit or engaging in any other organization activity.

5.17 Employee Benefit Plans .

(a) Gulf Coast has listed in Section 5.17(a) of the Gulf Coast Disclosure Memorandum , and has delivered or made available to FBMS or The First prior to the execution of this Agreement complete and accurate copies in each case of, all pension, retirement, profit-sharing, employee stock ownership, deferred compensation, stock option, employee stock ownership, severance pay, vacation, cash or stock bonus, or other incentive plans, all employment, change in control, retention, executive compensation or severance arrangements, all other employee programs, arrangements, or agreements, all medical, vision, dental, or other health plans, all life insurance plans, cafeteria plans, flexible spending arrangements, and all other employee benefit plans or fringe benefit plans, including without limitation all “employee benefit plans” as that term is defined in Section 3(3) of ERISA, adopted, maintained by, sponsored in whole or in part by, or contributed to by Gulf Coast or any ERISA Affiliate thereof for the benefit of any of its current or former officers, employees, retirees, dependents, spouses, directors, independent contractors, or other beneficiaries or with respect to which Gulf Coast or any ERISA Affiliate thereof has any liability (whether actual or contingent), in each case, whether or not in writing and whether or not subject to ERISA (collectively, the “Gulf Coast Benefit Plans”). Any of the Gulf Coast Benefit Plans that is an “employee pension benefit plan,” as that term is defined in Section 3(2) of ERISA, is referred to herein as a “Gulf Coast Pension Benefit Plan.”

(b) Each Gulf Coast Pension Benefit Plan that is intended to meet the requirements of a “qualified plan” within the meaning of Code Section 401(a) is so qualified and its related trust is tax-exempt under Code Section 501(a), and no event has occurred and no condition exists that would cause the loss of such qualified or exempt status or the imposition of any liability, penalty or tax under ERISA, the Code or other applicable Law. Each such Gulf Coast Pension Benefit Plan has either received a favorable determination letter from the IRS or is entitled to rely upon a letter issued to a prototype sponsor regarding its qualified status, or has applied to the IRS for a favorable determination letter within the applicable remedial amendment period under Code Section 401(b), and since the date of the letter no fact or event has occurred that could reasonably be expected to materially adversely affect the qualified status of any Gulf Coast Pension Benefit Plan. A copy of the most recent letter issued by the IRS with respect to the qualified status of each Gulf Coast Pension Benefit Plan has been delivered or made available to FBMS or The First prior to the execution of this Agreement. No amount or any assets of a Gulf Coast Pension Benefit Plan is subject to tax as unrelated business taxable income.

(c) Each Gulf Coast Benefit Plan has been established, maintained, funded and administered in accordance with its terms and in compliance in all material respects with applicable Law, including without limitation ERISA and the Code, and all regulations, rulings and announcements promulgated or issued thereunder. Each Gulf Coast Benefit Plan that is a “group health plan” as defined in Section 607(1) of ERISA or Code Section 5000(b)(1) has been operated at all times in material compliance with (i) the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; (ii) the provisions of the Code and ERISA enacted by the Health Insurance Portability and Accountability Act of 1996, as amended, including, without limitation, the privacy and security rules; (iii) the applicable requirements of the Family Medical Leave Act of 1993; (iv) the Americans with Disabilities Act; (v) the applicable provisions of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, including, without limitation, all employer mandate and reporting requirements; and (vi) all other applicable Laws, including all regulations and rulings thereunder.

(d) All required contributions, premiums or payments which are due under each Gulf Coast Benefit Plan, for which the due date has not yet occurred are properly accrued and reflected on the Gulf Coast Financial Statements in accordance with GAAP. Gulf Coast has performed all obligations required to be performed by it under, is not in default under or in violation of, and has no Knowledge of any default or violation by any other party to, any of the Gulf Coast Benefit Plans.

(e) All filings required by ERISA and the Code as to each Gulf Coast Benefit Plan, including but not limited to the annual report, have been timely filed, and all notices and disclosures to participants required by either ERISA or the Code, including notice by any Gulf Coast Benefit Plan grandfathered under the Patient Protection and Affordable Care Act, have been timely provided. A copy of the Form 5500 filed for each Gulf Coast Benefit Plan, if any, for the most recent fiscal year of the plan has been delivered or made available to FBMS or The First prior to the execution of this Agreement.

(f) Gulf Coast has not ever sponsored or maintained and does not have, nor has ever had, any liability (actual or contingent) with respect to (i) any plan which is a “defined benefit plan” within the meaning of Section 3(35) of ERISA; (ii) an employee benefit plan that is subject to Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code; (iii) a multiemployer plan as defined in Code Section 414(f) or Sections 3(37) or 4001(a)(3) of ERISA; or (iv) a multiple employer welfare arrangement within the meaning of Section 3(40) of ERISA. Further, Gulf Coast has no Knowledge of any facts, circumstances or reportable events that may give rise to any liability to the IRS or the Pension Benefit Guaranty Corporation under Title IV of ERISA.

(g) Except as disclosed in Section 5.17(g) of the Gulf Coast Disclosure Memorandum , Gulf Coast has never sponsored, maintained, contributed to, nor does it have or ever had any liability under a multiple employer plan within the meaning of Code Section 413(c) or Sections 4063, 4064 or 4066 of ERISA. Nothing in any multiple employer plan in which Gulf Coast participates would prevent Gulf Coast’s withdrawal from such plan or result in any liability to Gulf Coast as a result of such withdrawal other than liability for contributions due but not yet paid.

(h) There are no (i) investigations or other proceedings by any Regulatory Authority with respect to any Gulf Coast Benefit Plan or any of the assets thereof pending or, to the Knowledge of Gulf Coast, threatened or (ii) pending or, to the Knowledge of Gulf Coast, threatened claims (other than routine claims for benefits in the ordinary course) against any Gulf Coast Benefit Plan or any of the assets thereof, and there exists no facts or circumstances that would give rise to or could be expected to give rise to any such investigations, proceedings or claims.

(i) Each Gulf Coast Benefit Plan that is a “nonqualified deferred compensation plan” subject to Code Section 409A is in written compliance, and has been established, operated, and maintained in compliance with Code Section 409A. All options subject to Code Section 409A have been granted at an exercise price that is no less than fair market value at grant date. No acts or omissions have occurred with respect to any Gulf Coast Benefit Plan that is subject to Code Section 409A which may give rise to any taxes thereunder.

(j) Except as disclosed in Section 5.17(j) of the Gulf Coast Disclosure Memorandum , the consummation of the transactions contemplated by this Agreement (either alone or in combination with any other event, such as, but not limited to, termination of employment) will not (i) entitle any current or former employee, officer, retiree, director or independent contractor of Gulf Coast or their dependents, spouses, or beneficiaries to any severance pay, unemployment compensation or similar payments, (ii) accelerate the time of payment or vesting, require the funding of, or increase the amount of any compensation due to, or in respect of, any such current or former employee, officer, retiree, director or independent contractor of Gulf Coast or their dependents, spouses or beneficiaries or (iii) result in or satisfy any condition to the payment of compensation that would, alone or in combination with any other payment or event, result in an “excess parachute payment” within the meaning of Code Section 280G. No Gulf Coast Benefit Plan provides for any gross-up payments for any current or former employee, officer, retiree, director or independent contractor of Gulf Coast or their dependents, spouses or beneficiaries to cover any liability for tax under Code Section 4999 or 409A or similar laws, including state laws.

(k) No Gulf Coast Benefit Plan provides benefits, including, without limitation, death, medical, health, dental, vision or disability benefits (whether or not insured) with respect to any current or former employees, officers, retirees, directors or independent contractors of Gulf Coast or their dependents, spouses or beneficiaries after retirement or other termination of service (other than coverage mandated by Code Section 4980B or Section 601 of ERISA or any similar state law. Each health or life insurance benefit plan may be amended or terminated at any time by Gulf Coast without incurring any liability thereunder other than in respect of claims incurred prior to such amendment or termination.

(l) All service providers to Gulf Coast have been properly characterized as employees or independent contractors, and Gulf Coast has properly reported all payments of compensation on the applicable Forms W-2 or 1099. Gulf Coast does not have any obligations to provide benefits to any service provider characterized as independent contractors under the Gulf Coast Benefit Plans.

(m) No one authorized to make any representation or communication on behalf of Gulf Coast has made any written or, to the Knowledge of Gulf Coast, oral representation or communication with respect to the participation, eligibility for benefits, vesting, benefit accrual or provisions of any Gulf Coast Benefit Plan to any current or former employee, retiree, director or independent contractor of Gulf Coast or their dependents, spouses or beneficiaries that is inconsistent with the terms of the applicable Gulf Coast Benefit Plan or would otherwise increase the benefits payable under the applicable Gulf Coast Benefit Plan beyond that intended by its terms.

(n) Each Gulf Coast Pension Benefit Plan that is not qualified under Code Section 401(a) is exempt from Parts 2, 3 and 4 of Title 1 of ERISA as an unfunded plan that is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees pursuant to Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. No assets of Gulf Coast are allocated to or held in a “rabbi trust” or similar funding vehicle and all Liability under each such plan has been properly accrued in accordance with GAAP and is reflected on the Gulf Coast Financial Statements. Gulf Coast has complied with the alternative reporting and disclosure provisions under Department of Labor Regulations Section 2520.104-23 with respect to each such Gulf Coast Pension Benefit Plan, if applicable.

(o) Neither Gulf Coast nor any employee or director of Gulf Coast nor any trustee, administrator, or other fiduciary or any other “party in interest” or “disqualified person” with respect to any Gulf Coast Benefit Plan has engaged in a “prohibited transaction” as such term is defined in Code Section 4975 or Section 406 of ERISA that would result in any tax, penalty or liability on any Gulf Coast Benefit Plan or Gulf Coast under Code Section 4975 or Section 502(i) or 4071 of ERISA.

5.18 Material Contracts .

(a) Except as disclosed in Section 5.18(a) of the Gulf Coast Disclosure Memorandum , none of Gulf Coast, nor any of its respective Assets, businesses, or operations is a party to, or is bound or affected by, or receives benefits under (each Contract, the type described in this Section 5.18(a) whether written or oral and whether or not set forth in the Gulf Coast Disclosure Memorandum, is referred to as a “Gulf Coast Contract”):

(i) any Contract entered into for the acquisition of the securities (other than the purchase of investment securities in the ordinary course of business) of or any material portion of the assets of any other Person;

(ii) any trust indenture (including without limitation, those related to the Trust Preferred Securities), mortgage, promissory note, loan agreement or other Contract or instrument for the borrowing of money, any currency exchange, commodities or other hedging arrangement or any leasing transaction of the type required to be capitalized in accordance with GAAP, in each case, where Gulf Coast is a lender, borrower or guarantor other than agreements evidencing deposit liabilities, trade payables and Contracts relating to borrowings entered into in the ordinary course of business;

(iii) any Contract limiting (or purporting to limit) the freedom of Gulf Coast to engage in any line of business or to compete with any other Person or prohibiting Gulf Coast from soliciting customers, clients or employees, in each case whether in any specified geographic region or business or generally;

(iv) any Contract of guarantee, support or indemnification by Gulf Coast, assumption or endorsement by Gulf Coast of, or any similar commitment by Gulf Coast with respect to, the obligations, liabilities (whether accrued, absolute, contingent or otherwise) or indebtedness of any other Person other than those entered into in the ordinary course of business;

(v) any Contract which would be terminable other than by Gulf Coast or any Contract under which a material payment obligation would arise or be accelerated, in each case as a result of the announcement or consummation of the transactions contemplated by this Agreement (either alone or upon the occurrence of any additional acts or events);

(vi) any alliance, cooperation, joint venture, shareholders’ partnership or similar Contract involving a sharing of profits or losses relating to Gulf Coast;

(vii) any employment, change of control, severance, termination, consulting, or retirement Contract;

(viii) any Contract, option or commitment or right with, or held by, any third party to acquire, use or have access to any Assets, or any interest therein, of Gulf Coast, other than in connection with the sale of Loans, Loan participations or investment securities in the ordinary course of business consistent with past practice;

(ix) any Contract that contains any (A) exclusive dealing obligation, (B) “clawback” or similar undertaking requiring the reimbursement or refund of any fees, (C) “most favored nation” or similar provision granted by Gulf Coast or (D) provision that grants any right of first refusal or right of first offer or similar right or that limits or purports to limit the ability of Gulf Coast to own, operate, sell, transfer, pledge or otherwise dispose of any Assets or business;

(x) any material Contract that would require any Consent or approval of a counterparty as a result of the consummation of the transactions contemplated by this Agreement;

(xi) any lease or other contract (whether real, personal or mixed, tangible or intangible) pursuant to which the annualized rent or lease payments are, or are reasonably expected to be, in excess of $10,000;

(xii) any Contract for the use or purchase of materials, supplies, goods, services, equipment or other assets providing for aggregate annual payments by Gulf Coast in excess of $10,000;

(xiii) any Contract involving Intellectual Property (other than Contracts entered into in the ordinary course of business with customers);

(xiv) any Contract relating to the provision of data processing, network communication, or other technical services to or by Gulf Coast; and

(xv) any Contract not listed above that is material to the financial condition, results of operations or business of Gulf Coast.

(b) With respect to each Gulf Coast Contract and except as disclosed in Section 5.18(b) of the Gulf Coast Disclosure Memorandum : (i) the Contract is in full force and effect against Gulf Coast; (ii) Gulf Coast is not in Default thereunder; (iii) Gulf Coast has not repudiated or waived any material provision of any such Contract; and (iv) to the Knowledge of Gulf Coast, no other party to any such Contract is in Default in any respect, or has repudiated or waived any material provision thereunder. Except as disclosed in Section 5.18(b) of the Gulf Coast Disclosure Memorandum, all of the indebtedness of Gulf Coast for money borrowed is prepayable at any time by Gulf Coast without penalty or premium. True, correct and complete copies of all Gulf Coast Contracts have been furnished or made available to FBMS or The First.

5.19 Legal Proceedings . Except as disclosed in Section 5.19 of the Gulf Coast Disclosure Memorandum , there is no Litigation instituted, pending or overtly threatened (or unasserted but to the Knowledge of Gulf Coast considered probable of assertion) against Gulf Coast, or against any employee benefit plan of Gulf Coast, or against any Asset, interest, or right of any of them, nor are there any Orders of any Regulatory Authorities outstanding against Gulf Coast.

5.20 Reports . Since January 1, 2013, Gulf Coast has timely filed all reports and statements, together with any amendments required to be made with respect thereto, that they were required to file with Regulatory Authorities. As of their respective dates, each of such reports and documents, including the financial statements, exhibits, and schedules thereto, complied in all material respects with all applicable Laws. As of its respective date, each such report and document did not, in all material respects, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. Except for normal examinations conducted by a Regulatory Authority in the ordinary course of the business of Gulf Coast, there is no pending proceeding before, or, to the Knowledge of Gulf Coast, examination or investigation by, any Regulatory Authority into the business or operations of Gulf Coast. There are no unresolved violations, criticisms or exceptions by any Regulatory Authority with respect to any Report relating to any examinations of Gulf Coast.

5.21 Accounting, Tax and Regulatory Matters . Gulf Coast has not taken or agreed to take any action and has no Knowledge of any fact or circumstance that is reasonably likely to (i) prevent the Merger from qualifying as a reorganization within the meaning of Code Section 368(a), or (ii) materially impede or delay receipt of any Consents of Regulatory Authorities referred to in Section 9.1(b) or result in the imposition of a condition or restriction of the type referred to in the last sentence of such Section.

5.22 Technology Systems .

(a) Except to the extent indicated in Section 5.22 of the Gulf Coast Disclosure Memorandum , no action will be necessary as a result of the transactions contemplated by this Agreement to enable use of the electronic data processing, information, record keeping, communications, telecommunications, hardware, third party software, networks, peripherals, portfolio trading and computer systems, including any outsourced systems and processes, and Intellectual Property that are used by Gulf Coast (collectively, the “Technology Systems”) to continue by the FBMS Entities to the same extent and in the same manner that it has been used by Gulf Coast.

(b) The Technology Systems (for a period of 24 months prior to the Effective Time) have not suffered unplanned disruption causing an Gulf Coast Material Adverse Effect. Except for ongoing payments due under relevant third party agreements, the Technology Systems are free from any Liens. Access to business critical parts of the Technology Systems is not shared with any third party.

(c) Gulf Coast’s written disaster recovery and business continuity plan has previously been provided to the FBMS Entities.

(d) Gulf Coast has not received notice of or is aware of any material circumstances including, without limitation, the execution of this Agreement, that would enable any third party to terminate Gulf Coast’s agreements or arrangements relating to the Technology Systems (including maintenance and support) other than rights contained in applicable contracts.

5.23 Gulf Coast Disclosure Memorandum . All information set forth in the Gulf Coast Disclosure Memorandum shall be deemed for all purposes of this Agreement to constitute part of the representations and warranties of Gulf Coast under this Article 5.

5.24 Board Recommendation . The Board of Directors of Gulf Coast, at a meeting duly called and held, has by majority vote of the directors present (who constituted all of the directors then in office), resolved to recommend that the holders of the shares of Gulf Coast Common Stock approve this Agreement and accepted the opinion of its financial advisor that this Agreement and the transactions contemplated hereby, including the Merger, and the Voting and Support Agreements and the transactions contemplated thereby, taken together, are fair to and in the best interests of the shareholders.

5.25 No Investment Adviser . Gulf Coast does not serve in a capacity described in Section 9(a) or 9(b) of the Investment Company Act of 1940, as amended, nor acts as an “investment adviser” required to register as such under the Investment Advisers Act of 1940, as amended.

5.26 Gulf Coast Information . None of the information to be supplied by Gulf Coast expressly for inclusion or incorporation by reference in the Proxy Statement and/or in the Form S-4, as applicable, or in any other application, notification or other document filed with any Regulatory Authority in connection with the transactions contemplated by this Agreement, in each case or in any amendment or supplement thereto will, at the time the Proxy Statement or any such supplement or amendment thereto is first mailed to the shareholders of Gulf Coast or at the time the Gulf Coast shareholders vote on the matters constituting the Requisite Shareholder Approval or, if applicable, at the time the Form S-4 or any such amendment or supplement thereto becomes effective under the 1933 Act or at the Effective Time, or at the time any such other applications, notifications or other documents or any such amendments or supplements thereto are so filed, as the case may be, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If requested by an FBMS Entity and provided to Gulf Coast prior to filing, Gulf Coast will review in good faith a form of Proxy Statement and/or Form S-4, as applicable, or any other application, notification or other document to be filed with any Regulatory Authority in connection with the transactions contemplated by this Agreement and provide the FBMS Entities with any corrections to information supplied by Gulf Coast contained in such document. No representation or warranty is made by Gulf Coast in this Section 5.26 with respect to statements made or incorporated by reference therein based on information supplied by any FBMS Entity. If at any time prior to the Effective Time any event should be discovered by Gulf Coast which should be set forth in an amendment to the Form S-4 (if applicable) or a supplement to the Proxy Statement, or in any amendment or supplement to any such other applications, notifications or other documents, Gulf Coast shall promptly so inform the FBMS Entities.

5.27 Brokers and Finders . Except as set forth in Section 5.27 of the of the Gulf Coast Disclosure Memorandum , none of Gulf Coast or any of its respective officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for Gulf Coast, in connection with this Agreement or the transactions contemplated hereby.

5.28 Gulf Coast Adjusted Capital . Section 5.28 of the Gulf Coast Disclosure Memorandum , contains a true, correct and complete copy of the calculation of the Gulf Coast Adjusted Capital as of the business day prior to the date of this Agreement.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF FBMS

FBMS, as to itself, and The First, as to itself, hereby represent and warrant to Gulf Coast as follows:

6.1 Organization, Standing and Power .

(a) FBMS is a corporation duly organized, validly existing, and in good standing under the laws of the State of Mississippi, and is duly registered as a bank holding company under the BHC Act. FBMS has the corporate power and authority to carry on its business as now conducted and to own, lease and operate its Assets. FBMS is duly qualified or licensed to transact business as a foreign corporation in good standing in the jurisdictions where the character of its Assets or the nature or conduct of its business requires it to be so qualified or licensed.

(b) The First is a national banking association duly organized, validly existing, and in good standing under the laws of the United States. The First has the corporate power and authority to carry on its business as now conducted and to own, lease and operate its Assets. The First is duly qualified or licensed to transact business as a foreign corporation in good standing in the jurisdictions where the character of its Assets or the nature or conduct of its business requires it to be so qualified or licensed. The deposit accounts of The First are insured by the FDIC through the bank insurance fund to the fullest extent permitted by Law, and all premiums and assessments required in connection therewith have been paid by The First when due.

6.2 Authority; No Breach By Agreement .

(a) Each of FBMS and The First has the corporate power and authority necessary to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein, including the Merger, have been duly and validly authorized by all necessary corporate action in respect thereof on the part of FBMS and The First. This Agreement has been duly and validly executed and delivered by FBMS and The First. Assuming due authorization, execution and delivery by Gulf Coast, this Agreement constitutes a valid and binding obligation of FBMS and The First, enforceable against FBMS and The First, respectively, in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship, moratorium, or similar Laws affecting the enforcement of creditors’ rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought).

(b) Neither the execution and delivery of this Agreement by FBMS or The First, nor the consummation by FBMS or The First of the transactions contemplated hereby, nor compliance by FBMS or The First with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of FBMS’s articles of incorporation or The First’s articles of association or bylaws or the certificate or articles of incorporation or articles of association or bylaws of any FBMS Entity or any resolution adopted by the Board of Directors or the shareholders of any FBMS Entity that is currently in effect, or (ii) constitute or result in a Default under, or require any Consent pursuant to, or result in the creation of any Lien on any Asset of any FBMS Entity under, any Contract or Permit of any FBMS Entity or, (iii) subject to receipt of the requisite Consents referred to in Section 9.1(b), constitute or result in a Default under, or require any Consent pursuant to, any Law or Order applicable to any FBMS Entity or any of their respective material Assets (including any FBMS Entity or Gulf Coast becoming subject to or liable for the payment of any Tax or any of the Assets owned by any FBMS Entity or Gulf Coast being reassessed or revalued by any Taxing authority).

(c) Other than in connection or compliance with the provisions of the Securities Laws, applicable state corporate and securities Laws, and rules of NASDAQ, and other than Consents required from Regulatory Authorities, no notice to, filing with, or Consent of any public body or authority is necessary for the consummation by FBMS or The First of the Merger and the other transactions contemplated in this Agreement.

6.3 Capital Stock .

(a) The authorized capital stock of FBMS consists of 20,000,000 shares of FBMS Common Stock, of which 5,432,014 shares are issued and outstanding as of June 30, 2016, and 10,000,000 shares of FBMS Preferred Stock, of which 17,123 shares have been designated Fixed Cumulative Perpetual Preferred Stock, Series CD, $1,000 per share liquidation value, and are issued and outstanding as of June 30, 2016. All of the issued and outstanding shares of FBMS Common Stock are, and all of the shares of FBMS Common Stock to be issued in exchange for shares of Gulf Coast Common Stock upon consummation of the Merger, when issued in accordance with the terms of this Agreement, will be, duly and validly issued and outstanding and fully paid and nonassessable under the MBCA and may be freely transferred without restriction. None of the outstanding shares of FBMS Common Stock has been issued in violation of any preemptive rights of the current or past shareholders of FBMS.

(b) The authorized capital stock of The First consists of 10,000,000 shares of $1.00 par value per share common stock, of which 1,029,896 shares are issued and outstanding. All of the issued and outstanding shares of capital stock of The First are owned by FBMS, are duly and validly issued and outstanding and are fully paid and nonassessable. None of the outstanding shares of capital stock of The First has been issued in violation of any preemptive rights.

6.4 SEC Filings; Financial Statements .

(a) Except as disclosed in Section 6.4 of the Gulf Coast Disclosure Memorandum , FBMS has timely filed all SEC Documents required to be filed by FBMS since December 31, 2013 (the “FBMS SEC Reports”). The FBMS SEC Reports (i) at the time filed, complied in all material respects with the applicable requirements of the Securities Laws and other applicable Laws and (ii) did not, at the time they were filed (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated in such FBMS SEC Reports or necessary in order to make the statements in such FBMS SEC Reports, in light of the circumstances under which they were made, not misleading.

(b) Each of the FBMS Financial Statements (including, in each case, any related notes) contained in the FBMS SEC Reports, including any FBMS SEC Reports filed after the date of this Agreement until the Effective Time, complied as to form in all material respects with the applicable published rules and regulations of the SEC with respect thereto, was prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or, in the case of unaudited interim statements, as permitted by Form 10-Q of the SEC), and fairly presented in all material respects the consolidated financial position of FBMS and its Subsidiaries as of the respective dates and the consolidated results of operations and cash flows for the periods indicated, except that the unaudited interim consolidated financial statements were or are subject to normal and recurring year-end adjustments which were not or are not expected to be material in amount or effect.

(c) Since December 31, 2015, neither any FBMS Entity, nor to the Knowledge of FBMS, any director, officer, employee, auditor, accountant or Representative of any FBMS Entity has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion, or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of any FBMS Entity or its internal accounting controls, including material complaints, allegations, assertions, or claims that any FBMS Entity has engaged in questionable accounting or auditing practices.

6.5 Absence of Undisclosed Liabilities . No FBMS Entity has any Liabilities of a nature required to be reflected on a balance sheet prepared in accordance with GAAP, except Liabilities that are accrued or reserved against in the consolidated balance sheets of FBMS as of March 31, 2016, included in the FBMS Financial Statements delivered prior to the date of this Agreement or reflected in the notes thereto. No FBMS Entity has incurred or paid any Liability since March 31, 2016, except for such Liabilities incurred or paid (i) in the ordinary course of business consistent with past business practice and that are not reasonably likely to have, individually or in the aggregate, an FBMS Material Adverse Effect, or (ii) in connection with the transactions contemplated by this Agreement.

6.6 Absence of Certain Changes or Events . Since March 31, 2016, except as disclosed in the FBMS Financial Statements delivered prior to the date of this Agreement or in the FBMS SEC Reports, (i) there have been no events, changes or occurrences which have had, or are reasonably likely to have, individually or in the aggregate, an FBMS Material Adverse Effect, and (ii) none of the FBMS Entities has taken any action, or failed to take any action, prior to the date of this Agreement, which action or failure, if taken after the date of this Agreement, would represent or result in a material breach or violation of any of the covenants and agreements of FBMS or The First provided in Article 7.

6.7 Legal Proceedings .

(a) There is no Litigation instituted, pending or overtly threatened (or unasserted but considered probable of assertion and which if asserted would have at least a reasonable probability of an unfavorable outcome) against any FBMS Entity, or against any director, employee or employee benefit plan of any FBMS Entity, or against any Asset, interest, or right of any of them, nor are there any Orders of any Regulatory Authorities outstanding against any FBMS Entity, that in any case would be required to be disclosed in a Form 8-K, Form 10-K or Form 10-Q pursuant to Item 103 of Regulation S-K that are not so disclosed.

(b) There are no material uncured violations, or violations with respect to which material refunds or restitution may be required, cited in any compliance report to any FBMS Entity as a result of examination by any bank or bank holding company Regulatory Authority.

(c) No FBMS Entity is subject to any written agreement, memorandum or order or decree with or by any bank or bank holding company Regulatory Authority, nor has any FBMS Entity been advised by any regulatory agency that it is considering issuing or requesting any such written agreement, memorandum, letter, order or decree.

6.8 BSA and OFAC Compliance Program . The Board of Directors of The First has adopted, and The First has implemented, an anti-money laundering and OFAC compliance program that, upon FBMS’s and The First’s reasonable belief, contains adequate and appropriate customer identification verification procedures to comply in all Material respects with the U.S. Anti-Money Laundering Laws and OFAC rules and regulations and has kept and filed all Material reports and other necessary Material documents as required, except those that, individually or in the aggregate, would not reasonably be expected to have an FBMS Material Adverse Effect.

6.9 Brokers and Finders . Except for Performance Trust Capital Partners, LLC, none of the FBMS Entities or any of their respective officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for any of the FBMS Entities, in connection with this Agreement or the transactions contemplated hereby.

ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION

7.1 Affirmative Covenants of Gulf Coast . From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of FBMS shall have been obtained, and except as otherwise expressly contemplated herein, Gulf Coast shall:

(a) operate its business only in the usual, regular, and ordinary course; and

(b) preserve intact its business organization and material Assets and maintain its rights and franchises.

7.2 Negative Covenants of Gulf Coast . From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of FBMS or The First shall have been obtained, which consent shall not be unreasonably withheld, and except as otherwise expressly contemplated herein, Gulf Coast covenants and agrees that it will not do or agree or commit to do any of the following:

(a) amend its articles of incorporation, bylaws or other governing instruments;

(b) incur any additional debt obligation or other obligation for borrowed money except in the ordinary course of business of Gulf Coast consistent with past practices, and in no event greater than $100,000 (which shall include purchases of federal funds, advances from the Federal Reserve Bank or Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any Asset of Gulf Coast of any Lien or permit any such Lien to exist (other than in connection with deposits, repurchase agreements, bankers acceptances, “treasury tax and loan” accounts established in the ordinary course of business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Gulf Coast Disclosure Memorandum);

(c) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any shares, or any securities convertible into any shares, of Gulf Coast’s capital stock, or declare or pay any dividend or make any other distribution in respect of Gulf Coast’s capital stock other than as set forth in Section 3.2 of this Agreement;

(d) issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Gulf Coast Common Stock or any other capital stock of Gulf Coast, or any Rights, or other Equity Right;

(e) adjust, split, combine or reclassify any shares of Gulf Coast Common Stock or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Gulf Coast Common Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber any Asset other than in the ordinary course of business and consistent with past practices for reasonable and adequate consideration;

(f) purchase any securities or make any material investment of more than $250,000, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures in the ordinary course of business and consistent with past practices;

(g) enter into or amend any employment or change of control Contract with any Person (unless such amendment is required by Law or this Agreement);

(h) adopt any new employee benefit plan or terminate or withdraw from, or make any change in or to, any existing employee benefit plans of Gulf Coast other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax-qualified status of any such plan, except as contemplated by this Agreement;

(i) make any significant change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in Tax Laws or regulatory accounting requirements or GAAP;

(j) increase (except for increases of not more than 5% consistent with past practices) the compensation including wages, salary, fees, bonuses, profit sharing, incentive, pension, retirement, severance of any such person whose work compensation would, following such increase, exceed $50,000;

(k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of Gulf Coast for over $25,000 in money damages or any restrictions upon the operations of Gulf Coast;

(l) except in the ordinary course of business, enter into, modify, amend or terminate any Contract (including any loan Contract with an unpaid balance) or waive, release, compromise or assign any right or claim in an amount exceeding $25,000;

(m) enter into, modify, amend or terminate any Contract of the sort that is or would be considered a Gulf Coast Contract, Real Property Lease or Tenant Lease;

(n) change its existing deposit policy other than changes made in the ordinary course of business consistent with past practice with respect to interest rates paid on deposits; incur deposit liabilities, other than deposit liabilities incurred in the ordinary course of business consistent with past practice;

(o) accept any brokered deposits;

(p) make any unsecured extension of credit to a borrower in excess of $25,000 or make any secured extension of credit to a borrower in excess of $250,000; provided that for purposes of this Section 7.2(p) , if FBMS or The First does not respond to the request for approval of Gulf Coast within five (5) Business Days, then FBMS or The First, as applicable, shall be deemed to have granted such request but only as to such loan or loans that were included in the request of Gulf Coast;

(q) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office of Gulf Coast;

(r) enter into any new line of business; introduce any new products or services; change its lending, investment, underwriting, pricing, servicing, risk and asset liability management and other material banking and operating policies or otherwise fail to follow such policies, except as required by applicable law, regulation or policies imposed by any Regulatory Authority, or the manner in which its investment securities or loan portfolio is classified or reported; or invest in any mortgage-backed or mortgage-related security that would be considered “high risk” under applicable regulatory guidance; or file any application or enter into any contract with respect to the opening, relocation or closing of, or open, relocate or close, any branch, office, service center or other facility;

(s) introduce any marketing campaigns or any new sales compensation or incentive programs or arrangements;

(t) take any action that is intended to, would or would be reasonably likely to result in any of the conditions set forth in Article 9 not being satisfied or prevent or materially delay the consummation of the transactions contemplated hereby, except, in every case, as may be required by applicable Law; or

(u) agree to, or make any commitment to, take, or adopt any resolutions of the Board of Directors of Gulf Coast in support of, any of the actions prohibited by this Section 7.2 .

7.3 Reports and Notification . Each Party and its Subsidiaries shall:

(a) timely file all reports required to be filed by it with Regulatory Authorities between the date of this Agreement and the Effective Time and shall deliver to the other Party copies of all such reports promptly after the same are filed; and

(b) give written notice promptly to the other Party upon becoming aware of the occurrence or impending occurrence of any event or circumstance relating to it that (i) is reasonably likely to have, individually or in the aggregate, a FBMS Material Adverse Effect or a Gulf Coast Material Adverse Effect, as the case may be, or (ii) is reasonably likely to cause or constitute a material breach of any of its representations, warranties, or covenants contained herein, and to use its reasonable efforts to prevent or promptly remedy the same.

ARTICLE 8
ADDITIONAL AGREEMENTS

8.1 Applications . Each of FBMS, The First and Gulf Coast shall, and shall cause their Subsidiaries to, as soon as practicable, but not later than 45 days following the date of this Agreement, prepare and file applications with the appropriate Regulatory Authorities seeking the approvals necessary to consummate the transactions contemplated by this Agreement. Each of FBMS, The First and Gulf Coast shall have the right to review and approve in advance all characterizations of the information relating to that Party and any of its Subsidiaries that appear in any filing made in connection with the transactions contemplated by this Agreement with any Regulatory Authority. In addition, each of FBMS, The First and Gulf Coast shall furnish to the other Party for review a copy of each such filing made in connection with the transactions contemplated by this Agreement with any Regulatory Authority prior to its filing. Each of FBMS, The First and Gulf Coast shall provide copies of all such filings to each other after such filings are made and copies of written communications received by such party, and shall promptly inform each other of all substantive regulatory contacts concerning the transactions contemplated by this Agreement.

8.2 Shareholder Approval and SEC Filings .

(a) Gulf Coast shall take all action necessary in accordance with the Florida Statutes and its articles of incorporation and bylaws to duly call, give notice of, convene and hold a meeting of its shareholders as promptly as practicable after the Form S-4 is declared effective by the SEC for the purpose of obtaining the Requisite Shareholder Approval (such meeting or any adjournment or postponement thereof, the “Gulf Coast Shareholders’ Meeting”). Except in the case of a Change in Recommendation specifically permitted by Section 8.5(d) , the Board of Directors of Gulf Coast shall (i) recommend to its shareholders the approval and adoption of this Agreement and the transactions contemplated herein (the “Board Recommendation”), (ii) include the Board Recommendation in the Proxy Statement and (iii) use its reasonable best efforts to obtain the Requisite Shareholder Approval. Notwithstanding any Change in Recommendation, unless this Agreement shall have been terminated pursuant to Section 8.5(e) (in which event the Termination Fee shall become due and payable), this Agreement shall be submitted to the shareholders of the Gulf Coast at the Gulf Coast Shareholders’ Meeting for the purpose of voting on the approval of this Agreement and nothing contained herein shall be deemed to relieve Gulf Coast of such obligation; provided, however, that if the Board of Directors of Gulf Coast shall have effected a Change in Recommendation specifically permitted by Section 8.5(d) , then the Board of Directors of Gulf Coast may submit this Agreement to the Gulf Coast’s shareholders without recommendation (although the resolutions adopting this Agreement as of the date hereof may not be rescinded or amended), in which event the Board of Directors of Gulf Coast may communicate the basis for its lack of a recommendation to Gulf Coast’s shareholders in the Proxy Statement or an appropriate amendment or supplement thereto to the extent required by applicable law. In addition to the foregoing, Gulf Coast shall not submit to the vote of its shareholders at the Gulf Coast Shareholders’ Meeting, or otherwise prior to the termination of this Agreement in accordance with its terms, any Acquisition Proposal other than this Agreement and the transactions contemplated hereby.

(b) Except as set forth in Section 8.5(d) , neither the Board of Directors of Gulf Coast nor any committee thereof shall withdraw, qualify or modify, in a manner adverse to FBMS or The First, the Board Recommendation or take any action, or make any public statement, filing or release inconsistent with the Board Recommendation (any of the foregoing being a “Change in Recommendation”); provided that, for the avoidance of doubt, Gulf Coast may not effect a Change in Recommendation unless it has complied in all material respects with the provisions of Section 8.5(d) .

(c) Gulf Coast and FBMS shall as promptly as practicable prepare a proxy statement relating to the Gulf Coast Shareholders’ Meeting (the “Proxy Statement”) which shall be included as part of the Form S-4. Subject to Section 8.5(d) , the Proxy Statement, and any amendment or supplement thereto, shall include the Board Recommendation. If, at any time prior to the receipt of the Requisite Shareholder Approval, any event occurs with respect to Gulf Coast, FBMS or any of their respective Subsidiaries, or any change occurs with respect to other information supplied by a Party for inclusion in the Proxy Statement, which is required to be described in an amendment of, or a supplement to, the Proxy Statement, such Party shall promptly notify the other Party of such event, and Gulf Coast and FBMS shall cooperate to the extent required by applicable law, in disseminating the information contained in such amendment or supplement to the shareholders of Gulf Coast.

(d) Gulf Coast and FBMS shall as promptly as practicable prepare, and FBMS shall file with the SEC, a registration statement on Form S-4 (the “Form S-4”) in which the Proxy Statement will be included as a prospectus, and Gulf Coast and FBMS shall use their respective reasonable best efforts to cause the Form S-4 to be declared effective by the SEC as promptly as practicable after filing. If, at any time prior to the receipt of the Requisite Shareholder Approval, any event occurs with respect to Gulf Coast, FBMS or any of their respective Subsidiaries, or any change occurs with respect to other information supplied by a Party for inclusion in the Form S-4, which is required to be described in an amendment of, or a supplement to, the Form S-4, such Party shall promptly notify the other Party of such event, and Gulf Coast and FBMS shall cooperate in the prompt filing with the SEC of any necessary amendment or supplement to the Form S-4 and, to the extent required by applicable law, in disseminating the information contained in such amendment or supplement to the shareholders of Gulf Coast.

8.3 Agreement as to Efforts to Consummate . Subject to the terms and conditions of this Agreement, each Party agrees to use, and to cause its Subsidiaries to use, its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, or advisable under applicable Laws to consummate and make effective, as soon as reasonably practicable after the date of this Agreement, the transactions contemplated by this Agreement, including using its reasonable best efforts to lift or rescind any Order adversely affecting its ability to consummate the transactions contemplated herein (other than, as to Gulf Coast, its Consent Order) and to cause to be satisfied the conditions referred to in Article 9 ; provided that nothing herein shall preclude either Party from exercising its rights under this Agreement. Each Party shall use, and shall cause each of its Subsidiaries to use, its reasonable efforts to obtain all Consents necessary or desirable for the consummation of the transactions contemplated by this Agreement.

8.4 Access to Information and Confidentiality.

(a) Subject to the Confidentiality Agreement, Gulf Coast agrees to provide FBMS, The First and their Representatives, from time to time prior to the Effective Time, such information as FBMS or The First shall reasonably request with respect to Gulf Coast and its respective businesses, financial conditions and operations and such access to the properties, books and records and personnel of Gulf Coast as FBMS or The First shall reasonably request, which access shall occur during normal business hours and shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of Gulf Coast. Gulf Coast shall not be required to provide access to or disclose information (i) which would jeopardize the attorney-client privilege of Gulf Coast or contravene any binding agreement entered into prior to the date of this Agreement that is disclosed in the Gulf Coast Disclosure Memorandum or any law, rule, regulation, order, judgement, decree or fiduciary duty or (ii) except as otherwise provided in this Agreement, including what is required by applicable law to be included in the Proxy Statement, related to Gulf Coast’s or its directors’, or officers’, employees’, accountants’, counsels’, advisors’ (including investment bankers), agents’, or other representatives’, consideration of, or deliberations regarding, the transactions contemplated by this Agreement, or (iii) the disclosure of which would violate applicable law or regulation.

(b) FBMS, The First and Gulf Coast shall comply with, and shall cause their respective Representatives, directors, officers and employees to comply with, all of their respective obligations under the Confidentiality Agreement, which shall survive the termination of this Agreement in accordance with the terms set forth therein.

8.5 No Solicitations.

(a) Gulf Coast shall not, and shall cause each of its Representatives and Affiliates not to, directly or indirectly (i) solicit, initiate, encourage or facilitate (including by way of furnishing information), or take any other action designed to facilitate, any inquiries or proposals regarding any Acquisition Proposal, (ii) participate in any discussions or negotiations regarding an Alternative Transaction or Acquisition Proposal, (iii) enter into any letter of intent or agreement regarding any Alternative Transaction or Acquisition Proposal or (iv) propose or agree to do any of the foregoing; provided, however, that if Gulf Coast is not otherwise in violation of this Section 8.5 , nothing in this Agreement shall prevent the Gulf Coast Board of Directors from, pursuant to a customary confidentiality agreement that contains provisions that are no less favorable to Gulf Coast than those contained in the Confidentiality Agreement, providing information to, and engaging in such negotiations or discussions with, a person who shall have made from and after the date of this Agreement a bona fide, unsolicited written Acquisition Proposal, with respect to such Acquisition Proposal, directly or through representatives, if the Gulf Coast Board of Directors, after consulting with and considering the advice of its outside counsel and financial advisor, determines in good faith that its failure to engage in any such negotiations or discussions would be reasonably likely to be a violation of its fiduciary duties under applicable Law.

(b) Gulf Coast shall notify FBMS promptly (but in no event later than 48 hours) after receipt of any Acquisition Proposal or any material modification of or material amendment to any Acquisition Proposal, or any request for nonpublic information relating to Gulf Coast or for access to the properties, books or records of Gulf Coast by any Person that has made, or to Gulf Coast’s Knowledge may be considering making, an Acquisition Proposal. Such notice to FBMS shall be made orally and in writing, and shall indicate the identity of the Person making the Acquisition Proposal or intending to make or considering making an Acquisition Proposal or requesting non-public information or access to the books and records of Gulf Coast, and the material terms of any such Acquisition Proposal or modification or amendment to an Acquisition Proposal and indicating whether any such Acquisition Proposal or modification or amendment to an Acquisition Proposal is a Superior Proposal. Gulf Coast shall notify FBMS in writing promptly (but in no event later than 24 hours) of any material changes in the status and any material changes or modifications in the terms of any such Acquisition Proposal, indication or request.

(c) Gulf Coast shall immediately cease and cause to be terminated any existing discussions or negotiations with any Persons (other than FBMS or The First) conducted heretofore with respect to any of the foregoing. Gulf Coast shall not release any third party from, and shall enforce, the confidentiality and standstill provisions of any agreement to which Gulf Coast is a party that remains in effect as of the date hereof, and shall immediately take all steps necessary to terminate any approval that may have been heretofore given under any such provisions authorizing any Person to make an Acquisition Proposal.

(d) Notwithstanding anything herein to the contrary, at any time prior to the Gulf Coast Shareholders’ Meeting, if Gulf Coast has received a Superior Proposal (after giving effect to the terms of any revised offer by FBMS or The First pursuant to this Section 8.5(d) ), the Board of Directors of Gulf Coast may, in connection with such Superior Proposal, and may permit its officers and Representatives to furnish or cause to be furnished non-public information or data and participate in such negotiations or discussions and also may make a Change in Recommendation, if and only to the extent that the Board of Directors of Gulf Coast has determined in good faith, after consultation with outside counsel and its financial advisor, that the failure to take such action would cause it to violate its fiduciary duties under applicable law; provided, that the Board of Directors of Gulf Coast may not effect a Change in Recommendation unless:

(i) Gulf Coast shall have received a bona fide written Acquisition Proposal and the Board of Directors of Gulf Coast shall have concluded in good faith that such Acquisition Proposal is a Superior Proposal, after taking into account any amendment or modification to this Agreement agreed to by FBMS or The First;

(ii) Gulf Coast shall have provided prior written notice to FBMS and The First at least five (5) Business Days in advance (the “Notice Period”) of taking such action, which notice shall advise FBMS and The First that the Board of Directors of Gulf Coast has received a Superior Proposal, specify the material terms and conditions of such Superior Proposal (including the identity of the Person or group making the Superior Proposal);

(iii) during the Notice Period, Gulf Coast shall, and shall cause its financial advisor and outside counsel to, negotiate with FBMS or The First in good faith (to the extent FBMS or The First desire to so negotiate) to make such adjustments in the terms and conditions of this Agreement so that such Superior Proposal ceases to constitute a Superior Proposal; and

(iv) the Board of Directors of Gulf Coast shall have concluded in good faith that, after considering the results of such negotiations and giving effect to any proposals, amendments or modifications offered or agreed to by FBMS or The First, if any, that such Acquisition Proposal continues to constitute a Superior Proposal.

If during the Notice Period any revisions are made to the Superior Proposal and such revisions are material, Gulf Coast shall deliver a new written notice to FBMS and shall comply with the requirements of this Section 8.5(d) with respect to such new written notice, except that the new Notice Period shall be three (3) Business Days. In the event that the Board of Directors of Gulf Coast does not make the determination referred to in clause (iv) of this paragraph and thereafter seeks to effect a Change in Recommendation, the procedures referred to above shall apply anew and shall also apply to any subsequent Change in Recommendation.

(e) Further, if the Board of Directors of Gulf Coast concludes that the Acquisition Proposal constitutes a Superior Proposal (after giving effect to the terms of any revised offer by FBMS or The First pursuant to this Section 8.5 ), Gulf Coast may terminate this Agreement pursuant to Section 10.1(i) to enter into a definitive agreement with respect to such Superior Proposal.

8.6 Press Releases . Prior to the Effective Time, Gulf Coast, FBMS and The First shall consult with each other as to the form and substance of any press release or other public disclosure materially related to this Agreement or any other transaction contemplated hereby; provided, that nothing in this Section 8.6 shall be deemed to prohibit any Party from making any disclosure its legal counsel deems necessary or advisable in order to satisfy such Party’s disclosure obligations imposed by Law, provided such Party shall have consulted in good faith with the other Party prior to such disclosure.

8.7 Indemnification and Insurance.

(a) The First covenants and agrees that:

(i) all rights to indemnification (including, without limitation, rights to mandatory advancement of expenses) and all limitations of liability existing in favor of indemnified parties under Gulf Coast’s articles of incorporation, and bylaws as in effect as of the date of this Agreement with respect to matters occurring prior to or at the Effective Time (an “Indemnified Party”) shall survive the Merger and shall continue in full force and effect, without any amendment thereto; provided, however, that all rights to indemnification in respect of any claim asserted or made as to which The First is notified in writing within such period shall continue until the final disposition of such claim. Without limiting the foregoing, in any case in which approval is required to effect any indemnification, the determination of any such approval shall be made, at the election of the Indemnified Party, by independent counsel mutually agreed upon between The First and the Indemnified Party;

(ii) promptly after receipt by an Indemnified Party of notice of the commencement of any action, such Indemnified Party shall, if a claim in respect thereof is to be made against The First under such subparagraph, notify The First in writing of the commencement thereof. In case any such action shall be brought against any Indemnified Party, The First shall be entitled to participate therein and, to the extent that it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Party, and, after notice from The First to such Indemnified Party of its election so to assume the defense thereof, The First shall not be liable to such Indemnified Party under such subparagraph for any legal expenses of other counsel or any other expenses subsequently incurred by such Indemnified Party; provided, however, if The First elects not to assume such defense or if counsel for the Indemnified Party advises The First in writing that there are material substantive issues that raise conflicts of interest between The First or Gulf Coast and the Indemnified Party, such Indemnified Party may retain counsel reasonably satisfactory to it and The First, and The First shall pay all reasonable fees and expenses of such counsel for the Indemnified Party promptly as statements therefor are received. Notwithstanding the foregoing, The First shall not be obligated to pay the fees and expenses of more than one counsel for all Indemnified Parties in respect of such claim.

(iii) If The First or any of its successors or assigns (A) shall consolidate with or merge into any corporation or entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (B) shall transfer all or substantially all of its properties and assets to any individual, corporation or other entity, then and in each such case, proper provisions shall be made so that the successors and assigns of The First shall assume the obligations set forth in this Section 8.7(a) .

(b) Gulf Coast covenants and agrees that Gulf Coast shall purchase for a period of not less than six (6) years after the Effective Time, past acts insurance coverage for the period immediately preceding the Effective Time under its (A) current directors and officers insurance policy (or comparable coverage), and (B) employment practices liability insurance for each of the directors and officers of Gulf Coast currently covered under comparable policies held by Gulf Coast.

8.8 Employee Benefits and Contracts . All employees of Gulf Coast immediately prior to the Effective Time who continue employment with The First or any of its Affiliates immediately following the Effective Time (“Transferred Employees”) shall receive credit for purposes of eligibility to participate and vesting, but not for purposes of determining of the level of benefits, under each employee benefit plan, program or arrangement established or maintained for employees of FBMS or any of the FBMS Subsidiaries, for service accrued or deemed to accrue prior to and as of the Effective Time, to the same extent that such service was recognized for such employees for similar purposes under comparable benefit plans to which Gulf Coast was a party immediately prior to the Effective Time; provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit. In addition, such accrued service shall be credited for purposes of determining vacation benefits under and in accordance with the terms of the vacation policy of FBMS or any of FBMS Subsidiaries. If allowed under the applicable FBMS or The First benefit plans, FBMS shall recognize any health, dental, vision or other welfare expenses incurred by the Gulf Coast employees in the year that includes the Closing Date (or, if later, the year in which such employee is first eligible to participate) for purposes of any applicable deductible and annual out-of-pocket expense requirements under any such health, dental, vision or other welfare plan. All Transferred Employees will be covered by the employee benefit plans of FBMS and/or FBMS Subsidiaries on substantially the same basis as other employees of FBMS and FBMS Subsidiaries performing services in a comparable position. Notwithstanding the foregoing and except as provided in Section 8.9 below with respect to the Gulf Coast 401(k) Plan, FBMS or The First may determine to continue any of the employee benefit plans of Gulf Coast for Transferred Employees in lieu of offering participation in the benefit plans of FBMS or its Subsidiaries (e.g., medical or hospitalization benefits) for such period as FBMS shall determine. Alternatively, after the Effective Time, FBMS or The First may elect to terminate or amend any of the employee benefits plans of Gulf Coast or to merge any such benefit plans with the plans of FBMS or FBMS Subsidiaries or to require Gulf Coast to terminate such employee benefit plan immediately prior to the Effective Time.

8.9 Gulf Coast 401(k) Plan . Prior to the Closing and subject to the consummation of the Merger, Gulf Coast shall cause to be adopted resolutions of the Board of Directors of Gulf Coast and shall take all steps necessary to terminate, and/or terminate its participation in, any and all employee benefit plans intended to comply with Code Section 401(k) (the “401(k) Plan”), including the revocation of and withdrawal from participation in any multiple employer plan under which any such 401(k) Plan is maintained. Such termination and/or revocation and withdrawal from a multiple employer plan, shall be effective no later than immediately preceding the Effective Time. In furtherance thereof, Gulf Coast agrees to (i) appoint a committee (the “Committee”), if necessary, to serve from and after the Effective Time to complete all administration related to the termination of the 401(k) Plan, and/or revocation and withdrawal from a multiple employer plan under which the 401(k) Plan is maintained, not completed prior to the Closing, and to serve as plan administrator of any 401(k) Plan other than a multiple employer plan; (ii) with respect to each 401(k) plan that is a multiple employer plan, provide to the sponsor of such multiple employer plan any and all documentation and information required to confirm the revocation and withdrawal from participation in such plan, 100% vest all affected participants in their accounts balances thereunder and entitle the participants to distribution of their vested account balances following such revocation and withdrawal; (iii) with respect to any 401(k) plan being terminated, amend the 401(k) Plan, as necessary, to accomplish the termination and reserve the power in the Committee to further amend the 401(k) Plan following the date of termination to the extent necessary to comply with all applicable laws or to facilitate the termination thereof and obtain a favorable determination letter as to the effect of the termination on the qualified status of the 401(k) Plan; (iv) authorize the filing of the 401(k) Plan, other than a multiple employer plan, by the Committee with the IRS for a determination letter as to the effect of the termination on the qualified status of the Plan, and authorize the payment of the application fee in connection therewith; and (v) provide for the distribution of benefits from the 401(k) Plan as permitted under applicable law in connection with such termination after receipt of such favorable determination letter. Following the effective date of the termination of the 401(k) Plan other than a 401(k) Plan maintain under a multiple employer plan, no distributions shall be made from the 401(k) Plan except (x) as may be required by applicable law or (y) in accordance with the terms of the 401(k) Plan regarding distributable events in the ordinary course other than due to such termination (e.g., retirement or termination of employment), until receipt of such favorable determination letter.

8.10 Takeover Laws . Each of Gulf Coast, FBMS, The First and their respective Boards of Directors shall (a) take no action to cause any Takeover Law to become applicable to this Agreement, the Merger or any of the other transactions contemplated hereby and (b) if any Takeover Law is or becomes applicable to this Agreement, the Merger or any of the other transactions contemplated hereby, use reasonable best efforts to take all action necessary to ensure that the Merger and the other transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such Takeover Law with respect to this Agreement, the Merger and the other transactions contemplated hereby.

8.11 Voting Support Agreements . On or prior to the date that is ten (10) Business Days from the date hereof, each person set forth in Section 8.11 of the Gulf Coast Disclosure Memorandum shall execute and deliver to FBMS an agreement in substantially the form set forth in Exhibit B (collectively, the “Voting and Support Agreements”).

8.12 Invitations to and Attendance at Directors’ and Committee Meetings. Gulf Coast will give notice to one (1) designee of FBMS and invite that persons to attend all regular and special meetings of the Board of Directors of Gulf Coast and all regular and special meetings of any board or senior management committee of Gulf Coast. However, Gulf Coast may exclude such invitee from any portion of any meeting (i) during which any aspect of the Merger is discussed; (ii) as a result of which the invitee’s presence may, in the opinion of its counsel, constitute a breach of attorney-client privilege; or (iii) as otherwise prohibited by applicable Law. In addition, Gulf Coast will provide FBMS with copies of the minutes of all regular and special meetings of the Board of Directors of Gulf Coast and minutes of all regular and special meetings of any board or senior management committee of Gulf Coast held on or after the date of this Agreement (except portions of such minutes that are devoted to the discussion of this Agreement or the Merger that, upon the advice of legal counsel, are otherwise privileged) at the same time that those minutes are provided to directors or officers of Gulf Coast or otherwise upon the request of FBMS.

ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

9.1 Conditions to Obligations of Each Party . The respective obligations of each Party to perform this Agreement and consummate the Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by both Parties pursuant to Section 11.5 :

(a) Shareholder Approval . The Requisite Shareholder Approval shall have been obtained.

(b) Regulatory Approvals . All Consents of, filings and registrations with, and notifications to, all Regulatory Authorities required for consummation of the Merger shall have been obtained or made and shall be in full force and effect and all waiting periods required by Law shall have expired. No Consent obtained from any Regulatory Authority that is necessary to consummate the transactions contemplated hereby shall be conditioned or restricted in a manner (including requirements relating to the raising of additional capital or the disposition of Assets) which in the reasonable judgment of the Board of Directors of either Party would so materially adversely impact the economic or business benefits of the transactions contemplated by this Agreement that, had such condition or requirement been known, such Party would not, in its reasonable judgment, have entered into this Agreement.

(c) Consents and Approvals . Each Party shall have obtained any and all Consents required for consummation of the Merger (other than those referred to in Section 9.1(b) ) or for the preventing of any Default under any Contract or Permit of such Party which, if not obtained or made, is reasonably likely to have, individually or in the aggregate, a Gulf Coast Material Adverse Effect or an FBMS Material Adverse Effect, as applicable. No Consent so obtained which is necessary to consummate the transactions contemplated hereby shall be conditioned or restricted in a manner which in the reasonable judgment of the Board of Directors of either Party would so materially adversely impact the economic or business benefits of the transactions contemplated by this Agreement that, had such condition or requirement been known, such Party would not, in its reasonable judgment, have entered into this Agreement.

(d) Legal Proceedings . No court or governmental or Regulatory Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law or Order (whether temporary, preliminary or permanent) or taken any other action that prohibits, restricts or makes illegal consummation of the transactions contemplated by this Agreement.

(e) Form S-4 . If required pursuant to Section 8.2(d) , the Form S-4 shall have become effective under the 1933 Act and shall not be the subject of any stop order suspending the effectiveness of the Form S-4 nor shall proceedings for that purpose have been threatened.

(f) NASDAQ Listing . The shares of FBMS Common Stock that shall be issued pursuant to this Agreement shall have been authorized for listing on NASDAQ, subject to official notice of issuance.

9.2 Conditions to Obligations of FBMS . The obligations of FBMS to perform this Agreement and consummate the Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by FBMS pursuant to Section 11.5(a) :

(a) Representations and Warranties . The representations and warranties of Gulf Coast set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Effective Time with the same effect as though all such representations and warranties had been made on and as of the Effective Time (provided that representations and warranties that are confined to a specified date shall speak only as of such date) except for inaccuracies that are not reasonably likely to have a Gulf Coast Material Adverse Effect; provided, however , that the representations and warranties of Gulf Coast set forth in Sections 5.1, 5.2, 5.3 and 5.26 shall be true and correct in all material respects (without giving effect to any limitation as to materiality or Gulf Coast Material Adverse Effect) as of the date of this Agreement and as of the Effective Time as though made on and as of the Effective Time (except to the extent such representations and warranties speak as of a specific date, in which case, such representations and warranties shall be so true and correct as of such date).

(b) Performance of Agreements and Covenants . Each and all of the agreements and covenants of Gulf Coast to be performed and complied with pursuant to this Agreement and the other agreements contemplated hereby prior to the Effective Time shall have been duly performed and complied with in all material respects.

(c) Certificates . Gulf Coast shall have delivered to FBMS (i) a certificate, dated as of the Effective Time and signed on its behalf by its chief executive officer and chief financial officer, to the effect that the conditions set forth in Section 9.1 , as they relate to Gulf Coast, Section 9.2(a) and Section 9.2(b) have been satisfied, and (ii) certified copies of resolutions duly adopted by Gulf Coast’s Board of Directors, Gulf Coast’s Board of Directors and their respective shareholders evidencing the taking of all corporate action necessary to authorize the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, all in such reasonable detail as FBMS and its counsel shall request.

(d) Employment Agreements . The First and each of the persons set forth on Section 9.2(d) of the Gulf Coast Disclosure Memorandum shall have entered into an employment agreement or consulting agreement on terms mutually satisfactory to the parties thereto.

(e) Restrictive Covenant Agreements . FBMS shall have received from each non-employee director of Gulf Coast a signed mutually satisfactory restrictive covenant agreement providing that for a period of two (2) years after the Effective Time, such director will not, among other things, provide services to, or serve on the board of directors of, a competing financial institution located in certain counties in Alabama and Florida set forth on Section 9.2(e) of the Gulf Coast Disclosure Memorandum .

(f) Fairness Opinion . Gulf Coast shall have received the opinion of Monroe Financial Partners, Inc. (and provided a copy of such opinion to FBMS) to the effect that, as of the date of this Agreement and based upon and subject to the qualifications and assumptions set forth therein, the Merger Consideration is fair, from a financial point of view, to the holders of shares of Gulf Coast Common Stock, and such opinion has not been withdrawn, revoked or modified.

(g) Classified Assets . Gulf Coast’s aggregate Classified Assets, as defined below and as set forth on Section 5.7(g) of the Gulf Coast Disclosure Memorandum , shall not exceed $28,510,763.00 at the month-end that immediately precedes the Closing Date. “Classified Assets” means the sum of (i) loans and leases on nonaccrual status, (ii) loans and lease that were contractually past due 90 days or more in the payment of principal and/or interest (iii) other real estate owned, (iv) loans and leases which were required to be accounted for as troubled debt restructuring in accordance with Statement of Accounting Standards No. 15, (v) loans made or guaranteed by a person or entity presently a debtor in a federal bankruptcy proceeding, and (vi) loans and leases classified as “Substandard,” “Doubtful,” “Loss” or words of similar import; provided however, that “Classified Assets” shall not include any Watch List loans.

(h) Tail Coverage . The tail coverages referenced in Section 8.7(b) shall have been purchased.

(i) Option Cancellation . Gulf Coast shall have entered into cancellation agreements effective no later than the Closing Date with all holders of Gulf Coast Equity Rights, or otherwise have cancelled all Gulf Coast Equity Rights.

9.3 Conditions to Obligations of Gulf Coast . The obligations of Gulf Coast to perform this Agreement and consummate the Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by Gulf Coast pursuant to Section 11.5(b) :

(a) Representations and Warranties . The representations and warranties of FBMS and The First set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Effective Time with the same effect as though all such representations and warranties had been made on and as of the Effective Time (provided that representations and warranties that are confined to a specified date shall speak only as of such date) except for inaccuracies that are not reasonably likely to have a FBMS Material Adverse Effect.

(b) Performance of Agreements and Covenants . Each and all of the agreements and covenants of FBMS or The First to be performed and complied with pursuant to this Agreement and the other agreements contemplated hereby prior to the Effective Time shall have been duly performed and complied with in all material respects.

(c) Certificates . FBMS shall have delivered to Gulf Coast (i) a certificate, dated as of the Effective Time and signed on its behalf by its chief executive officer and its chief financial officer, to the effect that the conditions set forth in Section 9.1 as they relate to FBMS, Section 9.3(a) and Section 9.3(b) have been satisfied, and (ii) certified copies of resolutions duly adopted by FBMS and The First Boards of Directors and FBMS as the sole shareholder of The First evidencing the taking of all corporate action necessary to authorize the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, all in such reasonably detail as Gulf Coast and it counsel shall request.

ARTICLE 10
TERMINATION

10.1 Termination . Notwithstanding any other provision of this Agreement, and notwithstanding the approval of this Agreement by the shareholders of Gulf Coast, this Agreement may be terminated and the Merger abandoned at any time prior to the Effective Time:

(a) By mutual written consent of the Boards of Directors of FBMS, The First and Gulf Coast; or

(b) By the Board of Directors of either Party (provided that the terminating Party is not then in material breach of any representation, warranty, covenant, or other agreement contained in this Agreement) in the event of a material breach by the other Party of any representation, warranty, covenant or agreement contained in this Agreement which cannot be or has not been cured within 30 days after the giving of written notice to the breaching Party of such breach (provided that the right to effect such cure shall not extend beyond the End Date) and which breach would constitute grounds for the conditions set forth in Section 9.2(a), 9.2(b), 9.3(a) or 9.3(b) not to be satisfied on the Closing Date; or

(c) By the Board of Directors of either Party in the event any Consent of any Regulatory Authority required for consummation of the Merger and the other transactions contemplated hereby shall have been denied by final nonappealable action of such authority or if any action taken by such authority is not appealed within the time limit for appeal; or

(d) By the Board of Directors of either Party in the event that the Merger shall not have been consummated by the End Date, if the failure to consummate the transactions contemplated hereby on or before the End Date is not caused by any breach of this Agreement by the Party electing to terminate pursuant to this Section 10.1(d) ; or

(e) By the Board of Directors of either Party in the event that any of the conditions precedent to the obligations of such Party to consummate the Merger cannot be satisfied or waived by the date specified in Section 10.1(d) , provided that the failure to consummate the Merger is not caused by the Party electing to terminate pursuant to this Section 10.1(e) ; or

(f) By the Board of Directors of FBMS if the Board of Directors of Gulf Coast:

(i) withdraws or fails to give the Gulf Coast shareholders the Board Recommendation, effects a Change in Recommendation, whether or not permitted by the terms hereof, or resolves to do any of the foregoing; or

(ii) affirmatively approves any Alternative Transaction or Superior Proposal or makes any announcement of any agreement to enter into an Alternative Transaction or Superior Proposal; or

(g) By the Board of Directors of either Party if the Requisite Shareholder Approval shall not have been obtained at the Gulf Coast Shareholders’ Meeting; or

(h) By the Board of Directors of FBMS if the Dissenting Shares represent more than 10% in the aggregate of the Gulf Coast Common Stock outstanding immediately prior to the record date for the Gulf Coast Shareholders’ Meeting.

(i) By the Board of Directors of Gulf Coast pursuant to Section 8.5(e).

10.2 Effect of Termination . In the event of the termination and abandonment of this Agreement pursuant to Section 10.1 , this Agreement shall become void and have no effect, except that (i) the provisions of Section 10.2 and Section 10.3 and Article 11 shall survive any such termination and abandonment.

10.3 Termination Payment and Reimbursement of Expenses.

(a) In the event that (i) (A) an Acquisition Proposal shall have been made directly to Gulf Coast shareholders or communicated to or otherwise made known to the senior management or Board of Directors of Gulf Coast, or any Person shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal after the date of this Agreement, (B) thereafter Gulf Coast (I) withdraws or fails to give the Gulf Coast shareholders the Board Recommendation, effects a Change in Recommendation, whether or not permitted by the terms hereof, or resolves to do any of the foregoing; or (II) affirmatively approves any Alternative Transaction or Superior Proposal or makes any announcement of any agreement to enter into an Alternative Transaction or Superior Proposal, (C) this Agreement is terminated by FBMS pursuant to Section 10.1(d) or Section 10.1(f) as a result of Gulf Coast’s willful breach of its duties set forth in Section 8.3 , and (D) prior to the date that is 18 months after the date of such termination, Gulf Coast consummates an Alternative Transaction or enters into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to an Alternative Transaction, or (ii) this Agreement is terminated pursuant to Section 10.1(i) , then Gulf Coast shall (x) as it relates to clause (i) of this Section 10.3(a) , on the date an Alternative Transaction is consummated or (y) as it relates to clause (ii) of this Section 10.3(a) , within five (5) Business Days, pay FBMS a fee equal to $500,000 (the “Termination Fee”) by wire transfer of immediately available funds.

(b) The Parties acknowledge that the agreements contained in this Section 10.3 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, neither Party would enter into this Agreement; accordingly, if a Party (the “Aggrieved Party”) fails promptly to pay the amount due pursuant to this Section 10.3 , and, in order to obtain such payment, the Aggrieved Party commences a suit which results in a judgment against the other Party for the fee set forth in this Section 10.3 , such other Party shall pay to the Aggrieved Party its fees and expenses (including attorneys’ fees and expenses) in connection with such suit, together with interest on the amount of the fee at a rate per annum equal to the prime rate published in The Wall Street Journal on the date such payment was required to be made plus 300 basis points.

(c) Each of FBMS and Gulf Coast acknowledges and agrees that the Termination Fee is reasonable under the circumstances, and that it would be impossible to exactly determine FBMS’s actual damages as a result of such termination. The payment of the Termination Fee pursuant to this Section 10.3 shall fully discharge Gulf Coast from, and be the sole and exclusive remedy of FBMS and The First with respect to, any and all losses that may be incurred by them based upon, resulting from or rising out of the circumstances giving rise to the payment of the Termination Fee. In no event shall Gulf Coast be required to pay the Termination Fee on more than one occasion. Each of the parties also agrees that the Termination Fee is fair and reasonable to reimburse FBMS and The First for their losses, damages, costs, including opportunity costs, and not as a penalty, in connection with the termination of this Agreement pursuant to certain sections provided above. If any court, Regulatory Authority, arbitrator or any other judicial, quasi-judicial, or regulatory body charged with determining the enforceability of the Termination Fee determines that the Termination Fee is not enforceable, then the amount of the Termination Fee shall be reduced by the minimum amount necessary such that the Termination Fee, after giving effect to the foregoing reduction, would be enforceable.

ARTICLE 11
MISCELLANEOUS

11.1 Definitions.

(a) Except as otherwise provided herein, the capitalized terms set forth below shall have the following meanings:

“ 1933 Act ” shall mean the Securities Act of 1933, as amended.

“ 1934 Act ” shall mean the Securities Exchange Act of 1934, as amended.

“ Acquisition Proposal ” with respect to a Party shall mean any merger, share exchange, consolidation, sale of assets, sale of shares of capital stock (including, by way of a tender offer) or similar transactions involving Gulf Coast that, if consummated, would constitute an Alternative Transaction.

“ Affiliate ” of a Person or Party shall mean: (i) any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such Person or Party; (ii) any officer, director, partner, employer, or direct or indirect beneficial owner of any 10% or greater equity or voting interest of such Person or Party; or (iii) any other Person for which a Person described in clause (ii) acts in any such capacity.

“ Agreement ” shall mean this Agreement and Plan of Merger, including the Exhibits delivered pursuant hereto and incorporated herein by reference.

“Alternative Transaction” shall mean any transaction or series of transactions involving:

(a) any merger, consolidation, reorganization, share exchange, business combination, issuance of securities, acquisition of securities, tender offer, exchange offer, or other similar transaction (i) in which Gulf Coast is a constituent corporation, (ii) in which a Person or “group” (as defined in the 1934 Act and the rules promulgated thereunder) of Persons directly or indirectly acquires beneficial or record ownership of securities representing more than 20% of the outstanding securities of any class of voting securities of Gulf Coast, or (iii) in which Gulf Coast issues or sells securities representing more than 20% of the outstanding securities of any class of voting securities of Gulf Coast; or

(b) any sale, lease, exchange, transfer, license, acquisition, or disposition of any business or businesses or assets that constitute or account for 20% or more of the consolidated net revenues, net income, or assets of Gulf Coast.

“ Assets ” of a Person shall mean all of the assets, properties, businesses and rights of such Person of every kind, nature, character and description, whether real, personal or mixed, tangible or intangible, accrued or contingent, or otherwise relating to or utilized in such Person’s business, directly or indirectly, in whole or in part, whether or not carried on the books and records of such Person, and whether or not owned in the name of such Person or any Affiliate of such Person and wherever located.

“ BHC Act ” shall mean the federal Bank Holding Company Act of 1956, as amended.

“ Closing Date ” shall mean the date on which the Closing occurs.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

“ Confidentiality Agreement ” shall mean the non-binding indication of interest, May 5, 2016, by and between FBMS and Gulf Coast, as amended.

“ Consent ” shall mean any consent, approval, authorization, clearance, exemption, waiver, or similar affirmation by any Person pursuant to any Contract, Law, Order, or Permit.

“ Consent Order ” shall mean the Consent Order issued January 24, 2010 by the FDIC and the State of Florida Office of Financial Regulation to Gulf Coast and the Modification of Consent Order thereto dated May 13, 2015.

“ Contract ” shall mean any written or oral agreement, arrangement, authorization, commitment, contract, indenture, instrument, lease, obligation, plan, practice, restriction, understanding, or undertaking of any kind or character, or other document to which any Person is a party or that is binding on any Person or its capital stock, Assets or business.

“ Default ” shall mean (i) any breach or violation of, default under, contravention of, or conflict with, any Contract, Law, Order, or Permit, (ii) any occurrence of any event that with the passage of time or the giving of notice or both would constitute a breach or violation of, default under, contravention of, or conflict with, any Contract, Law, Order, or Permit, or (iii) any occurrence of any event that with or without the passage of time or the giving of notice would give rise to a right of any Person to exercise any remedy or obtain any relief under, terminate or revoke, suspend, cancel, or modify or change the current terms of, or renegotiate, or to accelerate the maturity or performance of, or to increase or impose any Liability under, any Contract, Law, Order, or Permit.

“Derivative Transactions” means any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, prices, values, or other financial or non-financial assets, credit-related events or conditions or any indexes, or any other similar transaction or combination of any of these transactions, including any collateralized debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or other similar arrangements related to such transactions.

“ Dissenters Provisions ” means 12 U.S.C. § 215a(b)-(d).

“ End Date ” shall mean April 30, 2017; provided that such date shall be extended for an additional 60 days in the event that the regulatory approvals contemplated by Section 9.1(b) have not been obtained, or the Form S-4 (if required) shall have not been declared effective, by April 30, 2017 and neither Party has received notice from any applicable Regulatory Authority that any request for such regulatory approval has been denied.

“ Environment ” shall mean any soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, natural or artificial drainage systems, and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, biota, and any other environmental media or natural resource.

“ Environmental Laws ” shall mean any applicable Law, and any Order or binding agreement with any Regulatory Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental Law” includes, without limitation, the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

“ Equity Rights ” shall mean all arrangements, calls, commitments, Contracts, options, rights to subscribe to, script, understandings, warrants, or other binding obligations of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of the capital stock of a Person or by which a Person is or may be bound to issue additional shares of its capital stock or other Equity Rights.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“ ERISA Affiliate ” shall mean any Person which is or has been a member of (i) a controlled group of corporations (as defined in Code Section 414(b)), (ii) a group of trades or business under common control (as defined in Code Section 414(c)), or (iii) an affiliated service group (as defined under Code Section 414(m)) any of which includes Gulf Coast.

“ Exhibits ” shall mean the exhibits to this Agreement, copies of which are attached to this Agreement. Such Exhibits are hereby incorporated by reference herein and made a part hereof, and may be referred to in this Agreement and any other related instrument or document without being attached thereto.

“FBCA” shall mean the Florida Business Corporation Act, as amended.

“ FBMS Common Stock ” shall mean the $1.00 par value common stock of FBMS.

“ FBMS Entities ” shall mean, collectively, FBMS and all FBMS Subsidiaries.

“ FBMS Financial Statements ” shall mean (i) the consolidated, audited balance sheets (including related notes and schedules, if any) of FBMS as of December 31, 2015 and 2014, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows (including related notes and schedules, if any), as filed by FBMS in SEC Documents, and (ii) the unaudited consolidated balance sheets (including related notes and schedules, if any) of FBMS as of March 31, 2016, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows (including related notes and schedules, if any), as delivered by FBMS to Gulf Coast prior to execution of this Agreement.

“ FBMS Material Adverse Effect ” shall mean an event, change or occurrence which, individually or together with any other event, change or occurrence, has a material adverse impact on (i) the financial position, business, or results of operations of FBMS and its Subsidiaries, taken as a whole, or (ii) the ability of FBMS to perform its obligations under this Agreement or to consummate the Merger or the other transactions contemplated by this Agreement, provided that “Material Adverse Effect” shall not be deemed to include the impact of (a) changes in banking and similar Laws of general applicability or interpretations thereof by Regulatory Authorities, (b) changes in GAAP or regulatory accounting principles generally applicable to banks and their holding companies, (c) actions and omissions of FBMS (or any of its Subsidiaries) taken with the prior informed written Consent of Gulf Coast in contemplation of the transactions contemplated hereby, and (d) the direct effects of compliance with this Agreement on the operating performance of FBMS, including expenses incurred by FBMS in consummating the transactions contemplated by this Agreement.

“ FBMS Subsidiaries ” shall mean the Subsidiaries of FBMS and any corporation, bank, savings association, or other organization acquired as a Subsidiary of FBMS in the future and held as a Subsidiary by FBMS at the Effective Time.

“ FDIC ” shall mean the Federal Deposit Insurance Corporation.

“ Florida Statutes ” means the laws of the State of Florida, including the Florida Financial Institutions Codes and the Florida Business Corporation Act.

“ GAAP ” shall mean United States generally accepted accounting principles, consistently applied during the periods involved.

“ Gulf Coast Adjusted Capital ” shall equal the sum of Gulf Coast’s consolidated total common equity, including common stock, additional paid-in-capital, retained earnings and accumulated other comprehensive income (loss), but reduced by the sum of the following if not already incorporated pursuant to GAAP applied on a consistent basis: (i) goodwill, (ii) the after-tax amount of any fees and commissions payable to any broker, finder, financial advisor or investment banking firm in connection with this Agreement and the transactions contemplated hereby, (iii) the after-tax amount of any legal and accounting fees incurred in connection with the Merger, this Agreement and the transactions contemplated hereby, (iv) the after-tax premium or additional cost incurred to provide for the continuation of certain of the Gulf Coast’s insurance policies pursuant to Section 8.7(b) , (v) the after-tax amount of any penalty or liquidated damages associated with the termination of the Gulf Coast Contracts identified by FBMS prior to Closing, whether or not such Gulf Coast Contracts are identified on Section 5.18(a) of the Gulf Coast Disclosure Memorandum , (vii) the after-tax amount of any payments to be made by Gulf Coast pursuant to any existing employment, change in control or other similar agreements or severance, retention or bonus arrangements between Gulf Coast and any other Person, (vii) the accrual through the Closing Date of any future benefit payments due under any salary continuation, deferred compensation or other similar agreements, including without limitation, as provided in Section 8.8(b) , and (viii) such other amounts as are agreed upon by the Parties. The Gulf Coast Adjusted Capital calculation shall be calculated on a consolidated basis, as determined pursuant to GAAP applied on a consistent basis as of the Closing Date.

“Gulf Coast Class A Common Stock” shall mean the $10.00 par value voting common stock of Gulf Coast.

“ Gulf Coast Class B Common Stock ” shall mean the $1.00 par value voting common stock of Gulf Coast.

“ Gulf Coast Common Stock ” shall mean the Gulf Coast Class A Common Stock and the Gulf Coast Class B Common Stock, collectively.

“ Gulf Coast Disclosure Memorandum ” shall mean the written information entitled “Gulf Coast Disclosure Memorandum” delivered prior to the date of this Agreement to FBMS describing in reasonable detail the matters contained therein and, with respect to each disclosure made therein, specifically referencing each Section of this Agreement under which such disclosure is being made. Information disclosed with respect to one Section shall not be deemed to be disclosed for purposes of any other Section not specifically referenced with respect thereto.

“ Gulf Coast Financial Statements ” shall mean (i) the consolidated, audited balance sheets (including related notes and schedules, if any) of Gulf Coast as of December 31, 2015 and 2014, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows (including related notes and schedules, if any) as provided by Gulf Coast to FBMS, and (ii) the unaudited consolidated balance sheets (including related notes and schedules, if any) of Gulf Coast as of June 30, 2016, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows (including related notes and schedules, if any) for the six month period ended June 30, 2016, as delivered by Gulf Coast to FBMS prior to execution of this Agreement.

“ Gulf Coast Material Adverse Effect ” shall mean an event, change or occurrence which, individually or together with any other event, change or occurrence, has a material adverse impact on (i) the financial position, business, or results of operations of Gulf Coast, taken as a whole, or (ii) the ability of Gulf Coast to perform its obligations under this Agreement or to consummate the Merger or the other transactions contemplated by this Agreement, provided that “Material Adverse Effect” shall not be deemed to include the impact of (a) changes in banking and similar Laws of general applicability or interpretations thereof by Regulatory Authorities, (b) changes in GAAP or regulatory accounting principles generally applicable to banks and their holding companies, (c) actions and omissions of Gulf Coast taken with the prior informed written Consent of FBMS in contemplation of the transactions contemplated hereby, and (d) the direct effects of compliance with this Agreement on the operating performance of Gulf Coast, including expenses incurred by Gulf Coast in consummating the transactions contemplated by this Agreement.

“ Hazardous Material ” shall mean any substance, whether solid, liquid or gaseous: (i) which is listed, defined or regulated as a “hazardous substance,” “hazardous waste,” “contaminant,” or “solid waste,” or otherwise classified as hazardous or toxic, in or pursuant to any Environmental Law; (ii) which is or contains asbestos, radon, any polychlorinated biphenyl, polybrominated diphenyl ether, urea formaldehyde foam insulation, explosive or radioactive material, or motor fuel, petroleum product, constituent or by-product, or other petroleum hydrocarbons; or (iii) which causes a contamination or nuisance, or a hazard, or threat of the same, to public health, human health or the Environment.

“ Intellectual Property ” shall mean copyrights, patents, trademarks, service marks, service names, domain names, trade names, applications therefor, technology rights and licenses, computer software (including any source or object codes therefor or documentation relating thereto), trade secrets, franchises, know-how, inventions, and other intellectual property rights.

“ IRS ” shall mean the Internal Revenue Service.

“ Knowledge ” as used with respect to a Person (including references to such Person being aware of a particular matter) shall mean (1) the personal knowledge after due inquiry of, and (2) the knowledge obtained or which would have been obtained from a reasonable investigation by, the Person or if a corporation, its Officers. For the purpose of this definition, “Officers” shall be the following executive officers, if any, of a corporation: the chairman, president, chief executive officer, chief financial officer, chief accounting officer, chief operating officer, chief credit officer, and each executive or other vice president.

“ Law ” shall mean any code, law (including common law), ordinance, regulation, reporting or licensing requirement, rule, or statute applicable to a Person or its Assets, Liabilities, or business, including those promulgated, interpreted or enforced by any Regulatory Authority.

“ Liability ” shall mean any direct or indirect, primary or secondary, liability, indebtedness, obligation, penalty, cost or expense (including costs of investigation, collection and defense), claim, deficiency, guaranty or endorsement of or by any Person (other than endorsements of notes, bills, checks, and drafts presented for collection or deposit in the ordinary course of business) of any type, whether accrued, absolute or contingent, liquidated or unliquidated, matured or unmatured, or otherwise.

“ Lien ” shall mean any conditional sale agreement, default of title, easement, encroachment, encumbrance, hypothecation, infringement, lien, mortgage, pledge, reservation, restriction, security interest, title retention or other security arrangement, or any adverse right or interest, charge, or claim of any nature whatsoever of, on, or with respect to any property or property interest, other than (i) Liens for current property Taxes not yet due and payable, (ii) for depository institution Subsidiaries of a Party, pledges to secure deposits and other Liens incurred in the ordinary course of the banking business, and (iii) Liens which do not materially impair the use of or title to the Assets subject to such Lien.

“ Litigation ” shall mean any action, arbitration, cause of action, claim, charge, complaint, criminal prosecution, governmental or other examination or investigation, hearing, administrative or other proceeding relating to or affecting a Party, its business, its Assets (including Contracts related to it), or the transactions contemplated by this Agreement, but shall not include regular, periodic examinations of depository institutions and their Affiliates by Regulatory Authorities.

“ Merger Consideration ” shall mean the consideration described in Section 3.1(b) with respect to each of the Outstanding Gulf Coast Shares (together with any cash in lieu of fractional shares as specified in Section 3.1(c) ).

“ MBCA” shall mean the Mississippi Business Corporation Act.

“ National Bank Act ” shall mean 12 USC §38, et. seq .

“ OCC ” shall mean the Office of the Comptroller of the Currency.

“ Operating Property ” shall mean any property owned, leased, or operated by the Party in question or by any of its Subsidiaries or in which such Party or Subsidiary holds a security interest or other interest (including an interest in a fiduciary capacity), and, where required by the context, includes the owner or operator of such property, but only with respect to such property.

“ Order ” shall mean any administrative decision or award, decree, injunction, judgment, order, quasi-judicial decision or award, ruling, or writ of any federal, state, local or foreign or other court, arbitrator, mediator, tribunal, administrative agency, or Regulatory Authority.

“ Party ” shall mean either Gulf Coast, FBMS or The First, and “ Parties ” shall mean Gulf Coast, FBMS and The First.

“ Permit ” shall mean any federal, state, local, and foreign governmental approval, authorization, certificate, easement, filing, franchise, license, notice, permit, or right to which any Person is a party or that is or may be binding upon or inure to the benefit of any Person or its securities, Assets, or business.

“ Person ” shall mean a natural person or any legal, commercial or governmental entity, such as, but not limited to, a corporation, general partnership, joint venture, limited partnership, limited liability company, trust, business association, group acting in concert, or any person acting in a representative capacity.

“ Proxy Statement ” shall mean the proxy statement used by Gulf Coast to solicit the approval of its shareholders of the transactions contemplated by this Agreement.

“ Regulatory Authorities ” shall mean, collectively, the SEC, the NASDAQ Stock Market, the Federal Trade Commission, the United States Department of Justice, the Board of the Governors of the Federal Reserve System, the OCC, the FDIC, the Mississippi Department of Banking and Consumer Finance, the Florida Office of Financial Regulations, the Internal Revenue Service, the Department of Labor, the Pension Benefit Guaranty Corporation and all other federal, state, county, local or other governmental or regulatory agencies, authorities (including self-regulatory authorities), instrumentalities, commissions, boards or bodies having jurisdiction over the Parties and their respective Subsidiaries.

“ Release ” or “ Released ” means any spilling, leaking, pumping, pouring, emptying, injecting, emitting, discharging, depositing, escaping, leaching, migration, filtration, pouring, seepage, disposal, dumping, or other releasing into the indoor or outdoor Environment, whether intentional or unintentional, including, without limitation, the movement of Hazardous Materials in, on, under or through the Environment .

“ Representative ” shall mean any investment banker, financial advisor, attorney, accountant, consultant, or other representative engaged by a Person.

“ SEC ” shall mean the U.S. Securities and Exchange Commission.

“ SEC Documents ” shall mean all forms, proxy statements, registration statements, reports, schedules, and other documents filed, or required to be filed, by a Party or any of its Subsidiaries with any Regulatory Authority pursuant to the Securities Laws.

“ Securities Laws ” shall mean the 1933 Act, the 1934 Act, the Investment Company Act of 1940, as amended, the Investment Advisors Act of 1940, as amended, the Trust Indenture Act of 1939, as amended, and the rules and regulations of any Regulatory Authority promulgated thereunder.

“ Subsidiaries ” shall mean all those corporations, associations, or other business entities of which the entity in question either (i) owns or controls 50% or more of the outstanding equity securities either directly or through an unbroken chain of entities as to each of which 50% or more of the outstanding equity securities is owned directly or indirectly by its parent (provided, there shall not be included any such entity the equity securities of which are owned or controlled in a fiduciary capacity), (ii) in the case of partnerships, serves as a general partner, (iii) in the case of a limited liability company, serves as a managing member, or (iv) otherwise has the ability to elect a majority of the directors, trustees or managing members thereof.

“ Superior Proposal ” means a bona fide written Acquisition Proposal (with the percentages set forth in the definition of Alternative Transaction changed from 20% to 50%), that the Gulf Coast Board determines in good faith (after consultation with outside legal counsel and financial advisor) is more favorable from a financial point of view to the holders of Gulf Coast Common Stock than the transactions contemplated by this Agreement, taking into account (a) all financial considerations, (b) the identity of the third party making such Acquisition Proposal, (c) the anticipated timing, conditions (including any financing condition or the reliability of any debt or equity funding commitments) and prospects for completion of such Acquisition Proposal, (d) the other terms and conditions of such Acquisition Proposal and the implications thereof on Gulf Coast, including relevant legal, regulatory and other aspects of such Acquisition Proposal deemed relevant by the Gulf Coast Board and (e) any revisions to the terms of this Agreement and the Merger proposed by FBMS or The First during the Notice Period set forth in Section 8.5(d) .

“ Tax ” or “ Taxes ” shall mean any federal, state, county, local, or foreign taxes, charges, fees, levies, imposts, duties, or other assessments, including income, gross receipts, excise, employment, sales, use, transfer, license, payroll, franchise, severance, stamp, occupation, windfall profits, environmental, federal highway use, commercial rent, customs duties, capital stock, paid-up capital, profits, withholding, Social Security, single business and unemployment, disability, real property, personal property, registration, ad valorem, value added, alternative or add-on minimum, estimated, or other tax or governmental fee of any kind whatsoever, imposes or required to be withheld by the United States or any state, county, local or foreign government or subdivision or agency thereof, including any interest, penalties, and additions imposed thereon or with respect thereto.

“ Tax Return ” shall mean any report, return, information return, or other information required to be supplied to a taxing authority in connection with Taxes, including any return of an affiliated or combined or unitary group that includes a Party or its Subsidiaries.

(b) Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed followed by the words “without limitation.”

11.2 Expenses . Except as otherwise provided in this Agreement, each of the Parties shall bear and pay all direct costs and expenses incurred by it or on its behalf in connection with the transactions contemplated hereunder, including filing, registration and application fees, printing fees, and fees and expenses of its own financial or other consultants, investment bankers, accountants, and counsel. In any action at law or suit in equity to enforce this Agreement or the rights of any of the Parties hereunder, the prevailing Party in such action or suit shall be entitled to receive its reasonable attorneys’ fees and costs and expenses incurred in such action or suit.

11.3 Entire Agreement . Except as otherwise expressly provided herein, this Agreement (including the Voting and Support Agreements, Confidentiality Agreement and the other documents and instruments referred to herein) constitutes the entire agreement between the Parties with respect to the transactions contemplated hereunder and supersedes all prior arrangements or understandings with respect thereto, written or oral.

11.4 Amendments . To the extent permitted by Law, this Agreement may be amended by a subsequent writing signed by each of the Parties upon the approval of each of the Parties, whether before or after shareholder approval of this Agreement has been obtained; provided, that after any such approval by the holders of Gulf Coast Common Stock, there shall be made no amendment that pursuant to the Florida Statutes requires further approval by such shareholders without the further approval of such shareholders; and further provided, that after any such approval by the holders of Gulf Coast Common Stock, the provisions of this Agreement relating to the manner or basis in which shares of Gulf Coast Common Stock will be exchanged for the Merger Consideration shall not be amended after the Gulf Coast Shareholders’ Meeting in a manner adverse to the holders of Gulf Coast Common Stock without any requisite approval of the holders of the issued and outstanding shares of Gulf Coast Common Stock entitled to vote thereon.

11.5 Waivers.

(a) Prior to or at the Effective Time, FBMS or The First, acting through their Board of Directors, chief executive officer or other authorized officer, shall have the right to waive any Default in the performance of any term of this Agreement by Gulf Coast, to waive or extend the time for the compliance or fulfillment by Gulf Coast of any and all of its obligations under this Agreement, and to waive any or all of the conditions precedent to the obligations of FBMS or The First under this Agreement, except any condition which, if not satisfied, would result in the violation of any Law. No such waiver shall be effective unless in writing signed by a duly authorized officer of FBMS or The First, as applicable.

(b) Prior to or at the Effective Time, Gulf Coast, acting through its Board of Directors, chief executive officer or other authorized officer, shall have the right to waive any Default in the performance of any term of this Agreement by FBMS or The First, to waive or extend the time for the compliance or fulfillment by FBMS or The First of any and all of its obligations under this Agreement, and to waive any or all of the conditions precedent to the obligations of Gulf Coast under this Agreement, except any condition which, if not satisfied, would result in the violation of any Law. No such waiver shall be effective unless in writing signed by a duly authorized officer of Gulf Coast.

(c) The failure of any Party at any time or times to require performance of any provision hereof shall in no manner affect the right of such Party at a later time to enforce the same or any other provision of this Agreement. No waiver of any condition or of the breach of any term contained in this Agreement in one or more instances shall be deemed to be or construed as a further or continuing waiver of such condition or breach or a waiver of any other condition or of the breach of any other term of this Agreement.

11.6 Assignment; Third Party Beneficiaries . Except as expressly contemplated hereby, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party hereto (whether by operation of Law or otherwise) without the prior written consent of the other Party; provided, however, that FBMS may assign any of its rights under this Agreement to a direct or indirect wholly-owned Subsidiary of FBMS. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns. This Agreement (including the documents and instruments referred to herein) is not intended to confer upon any person other than the Parties hereto any rights or remedies hereunder; provided, that, notwithstanding the foregoing clause, following the Effective Time only, (i) the provisions of Section 8.7 shall be enforceable by each Indemnified Party described therein, and (ii) each holder of Gulf Coast Common Stock who properly surrenders his, her or its Gulf Coast Common Stock in accordance with Article 1 shall have the right to receive the Merger Consideration and such right shall be enforceable by such holder of Gulf Coast Common Stock.

11.7 Notices . All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered by hand, by facsimile transmission to the telephone number listed below, by registered or certified mail, postage pre-paid, or by courier or overnight carrier, to the persons at the addresses set forth below (or at such other address as may be provided hereunder), and shall be deemed to have been delivered as of the date actually delivered:

Gulf Coast: Gulf Coast Community Bank

40 N. Palafox Street

Pensacola, Florida 32502

Attention: Walter J. “Buzz” Ritchie, Chairman and CEO

Facsimile: (850) 434-6686

With a copy to: Smith Mackinnon, PA

255 South Orange Avenue, Suite 1200

Orlando, Florida 32801

Attention: John P. Greeley

Facsimile: (407) 843-2448

FBMS: The First Bancshares, Inc.

6480 HWY 98 West

P.O. Box 15549

Hattiesburg, MS 39404

Attention: M. Ray (Hoppy) Cole, Jr., President & CEO

Facsimile: 601.268.0812

With a copy to: Jones Walker LLP

Attn: Neal C. Wise, Esquire

190 East Capital Street – Suite 800

Jackson, Mississippi 39201

Facsimile: 601.709.8636

11.8 Governing Law; Jurisdiction . This Agreement shall be governed by and construed in accordance with the laws of the State of Mississippi applicable to contracts made and performed entirely within such state, without giving effect to its principles of conflicts of laws and the federal banking laws of the United States, as appropriate. The Parties agree that any suit, action or proceeding brought by either Party to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal or state court located in the State of Mississippi. Each of the Parties hereto submits to the jurisdiction of any such court in any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of, or in connection with, this Agreement or the transactions contemplated hereby and hereby irrevocably waives the benefit of jurisdiction derived from present or future domicile or otherwise in such action or proceeding. Each Party hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

11.9 Waiver of Jury Trial . EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.9 .

11.10 Specific Performance . The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each of the Parties shall be entitled to seek specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which such Party is entitled at law or in equity. Each of the Parties hereby further waives any requirement under any law to post security as a prerequisite to obtaining equitable relief.

11.11 Alternative Structure . Notwithstanding anything to the contrary contained in this Agreement, before the Effective Time, FBMS or The First may revise the structure of the Merger or otherwise revise the method of effecting the Merger and related transactions, provided that (a) such revision does not alter or change the kind or amount of the Merger Consideration, (b) such revised structure or method is reasonably capable of consummation without delay in relation to the structure contemplated herein and (c) such revision does not otherwise cause any of the conditions set forth in Article 9 not to be capable of being fulfilled unless duly waived by the Party entitled to the benefits thereof. This Agreement and any related documents will be appropriately amended in order to reflect any revised structure or method as contemplated by this Section 11.11 .

11.12 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

11.13 Captions; Articles and Sections . The captions contained in this Agreement are for reference purposes only and are not part of this Agreement. Unless otherwise indicated, all references to particular Articles or Sections shall mean and refer to the referenced Articles and Sections of this Agreement.

11.14 Interpretations . Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any Party, whether under any rule of construction or otherwise. No Party to this Agreement shall be considered the draftsman. The Parties acknowledge and agree that this Agreement has been reviewed, negotiated, and accepted by all Parties and their attorneys and shall be construed and interpreted according to the ordinary meaning of the words used so as fairly to accomplish the purposes and intentions of all Parties hereto.

11.15 Severability . Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

11.16 Survival . All covenants and agreements of the parties contained herein shall survive the Closing indefinitely or for the period explicitly specified therein.

[Signatures appear on next page]

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized officers as of the day and year first above written.

	THE FIRST BANCSHARES, INC.


	By:
	Name: M. Ray “Hoppy” Cole, Jr.
	Title: President and Chief Executive Officer


	THE FIRST, A NATIONAL BANKING ASSOCIATION


	By:
	Name: M. Ray “Hoppy” Cole, Jr.
	Title: President and Chief Executive Officer


	GULF COAST COMMUNITY BANK


	By:
	Name: Walter J. Ritchie, Jr.
	Title: Chief Executive Officer

[Signature Page to Agreement and Plan of Merger]

EXHIBIT A

FORM OF BANK MERGER AGREEMENT AND PLAN OF MERGER

This Bank Merger Agreement and Plan of Merger is made and entered into as of the 12 ^th ay of October, 2016, between THE FIRST, A NATIONAL BANKING ASSOCIATION ("The First") and GULF COAST COMMUNITY BANK, Pensacola, Florida, a Florida banking corporation ("Gulf Coast") (the "Bank Merger Agreement").

WITNESSETH:

WHEREAS, The First and Gulf Coast (collectively, the "Constituent Banks") and their respective Boards of Directors deem it advisable that Gulf Coast be merged into The First (the "Bank Merger") pursuant to the provisions of Section 215a of Title 12 of the United States Code, as amended (the "Bank Merger Statute") and Fla. Stat. Ann. §658.41, as amended , and upon the terms and conditions hereinafter set forth.

NOW THEREFORE, the Constituent Banks hereby make, adopt and approve this Bank Merger Agreement and prescribe the terms and conditions of the Bank Merger and the mode of carrying the Bank Merger into effect as follows:

ARTICLE I.

THE BANK MERGER

Upon the terms and subject to the conditions hereinafter set forth and as provided by applicable law, on the Effective Date (as defined in Article II hereof) Gulf Coast shall be merged into The First and the separate existence of Gulf Coast shall cease and all of the rights, privileges, powers, franchises, properties, assets, liabilities and obligations of Gulf Coast shall be vested in and assumed by The First. The First shall continue to be governed by the laws of the United States after the Effective Time

ARTICLE II.

NAME AND MAIN OFFICE OF SURVIVING CORPORATION

At the time the Bank Merger becomes effective, the name of The First, as the surviving corporation, shall remain The First, A National Banking Association, and its main office shall remain the same.

ARTICLE III.

EFFECTIVE DATE AND TIME

The respective obligations of The First and Gulf Coast under this Bank Merger Agreement shall be conditioned upon the prior consummation of the Agreement and Plan of Merger between The First Bancshares, Inc., The First and Gulf Coast, dated as of the date hereof (the “Acquisition Agreement”). The Bank Merger shall become effective (the “Effective Time”) at the later of (a) the time and date designated by The First to the Office of the Comptroller of the Currency as the time and date on which the Bank Merger shall be effective and (b) the time and date on which the Office of the Comptroller of the Currency orders the Bank Merger to be effective.

A-1

ARTICLE IV.

CONVERSION AND CANCELLATION OF SHARES

(a) By virtue of the Bank Merger, automatically and without any action on the part of the holder thereof, each of the shares of the capital stock of Gulf Coast issued and outstanding immediately prior to the Effective Time of the Bank Merger shall be cancelled and retired at the Effective Time, for the consideration set forth in Section 3.1 of the Acquisition Agreement.

(b) Upon and after the Effective Time, each issued and outstanding share of capital stock of The First shall remain unchanged and shall continue to evidence the same number of shares of capital stock of The First.

ARTICLE V.

EFFECTS OF BANK MERGER

The Bank Merger shall have the effects set forth in the Bank Merger Statute. Upon the Effective Date, the main office and each branch office maintained by Gulf Coast as a branch office immediately before the Bank Merger becomes effective, shall become a branch office of The First. Specifically, but not by way of exclusion, on the Effective Date all of the assets and property of every kind and character, real, personal and mixed, tangible and intangible, choses in action, rights, and credits then owned by Gulf Coast, or which would inure to it, shall immediately by operation of law and without any conveyance or transfer or without any further action or deed, be vested in and become the property of The First, which shall have, hold, and enjoy the same in its own right as fully and to the same extent as the same were possessed, held, and enjoyed by Gulf Coast prior to such merger; and The First shall be deemed to be and shall be a continuation of the original entities and all of the rights and obligations of Gulf Coast shall remain unimpaired, and The First, on the Effective Date of the Bank Merger, shall succeed to all such rights, obligations, duties and liabilities connected therewith.

The Charter and Articles of Association and Bylaws of The First shall be the Charter and Articles of Association and Bylaws of the merged corporation following the Effective Date of the Merger, unless and until the same shall be further amended in accordance with the provisions hereof and the applicable statutes. The officers and members of the Board of Directors of The First after the merger shall be the officers and members of the Board of Directors of The First prior to the merger.

ARTICLE VI.

FILING OF ARTICLES OF MERGER

If this Bank Merger Agreement is approved by the federal and state banking regulatory authorities having jurisdiction over the Constituent Banks and by the shareholders of Gulf Coast and The First, then the fact of such approval shall be certified in Articles of Merger which shall be signed and acknowledged by the President or Vice President of each of the Constituent Banks. Thereafter, an original of the Articles of Merger, so certified, signed and acknowledged, shall be delivered to the Office of the Comptroller of the Currency for filing in the manner required by law.

A-2

ARTICLE VII.

MISCELLANEOUS

At any time prior to the Effective Date, this Bank Merger Agreement may be terminated by the mutual agreement of the Boards of Directors of the Constituent Banks. This Bank Merger Agreement shall terminate immediately and automatically without any further action on the part of Gulf Coast or The First or any other person upon the termination of the Acquisition Agreement.

This Bank Merger Agreement may be executed in one or more counterparts, each of which shall be considered one and the same agreement and each of which shall be deemed an original.

[Signature Page Follows]

A-3

IN WITNESS WHEREOF, the Parties hereto have caused this Bank Merger Agreement to be executed by their duly authorized representatives as of the date first above written.

THE FIRST, A NATIONAL BANKING ASSOCIATION			GULF COAST COMMUNITY BANK


By:			By:
Name: M. Ray “Hoppy” Cole, Jr.			Name: Walter J. Ritchie, Jr.
Title: President and Chief Executive Officer			Title: Chief Executive Officer

[Signature Page to Bank Merger Agreement and Plan of Merger]

EXHIBIT B

FORM OF

GULF COAST COMMUNITY BANK VOTING AND SUPPORT AGREEMENT

This Voting and Support Agreement, dated as of [●] (this “Agreement”), is entered into by and among The First Bancshares, Inc., a Mississippi corporation (“FBMS”), and __________________________, an individual resident of the State of _______ (“Stockholder”), with respect to all of Stockholder’s shares of (i) common stock, $10.00 par value per share and (ii) shares of common stock, $1.00 par value per share (collectively, the “Common Stock”), of Gulf Coast Community Bank, a Florida banking corporation (“Gulf Coast”), owned by Stockholder.

WHEREAS, concurrently with the execution and delivery of this Agreement, Gulf Coast, FBMS and its wholly-owned subsidiary, The First, A National Banking Association (“The First”) are entering into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which (and on the terms and subject to the conditions set forth in therein), among other things, Gulf Coast shall be merged with and into The First, all as set forth in the Merger Agreement (the “Transaction”); and

WHEREAS, as of the date hereof, Stockholder is the Beneficial Owner (defined below) and the owner of record and has the power to vote such number of shares of Common Stock as is set forth by the name of Stockholder on the signature page hereto (the “Owned Shares,” and together with any shares of Common Stock of which Stockholder acquires Beneficial Ownership after the date hereof and prior to the termination hereof, whether upon purchase or otherwise, are collectively referred to herein as the “Covered Shares”); and

WHEREAS, as an inducement and condition to entering into the Merger Agreement, FBMS and The First have required that Stockholder agree, and Stockholder has agreed, to enter into this Agreement.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I

VOTING AGREEMENT

Section 1.01 Agreement to Vote . (a) Stockholder undertakes that, prior to any termination in accordance with Section 4.01 hereof, at such time as Gulf Coast conducts a meeting of, or otherwise seeks a vote or consent of, its stockholders in connection with the approval and adoption of the Transaction and the Merger Agreement (any such meeting or any adjournment thereof, or such consent process, the “Stockholders’ Meeting”), such Stockholder shall, and shall cause its Affiliates to, vote or provide a consent (or cause to be voted or to provide a consent) with respect to all Covered Shares Beneficially Owned by Stockholder or its Affiliates, as the case may be, and over which Stockholder or one of its Affiliates has voting power, in favor of the Transaction, the Merger Agreement and each of the other actions contemplated by the Merger Agreement and this Agreement and actions required in furtherance thereof and hereof.

B-1

(b) Without limiting the foregoing, it is understood that the obligations under this Section 1.01 shall not be affected by any recommendation of the board of directors of Gulf Coast as to the Transaction at the time of any such meeting or consent solicitation.

(c) Prior to any termination in accordance with Section 4.01 hereof, at any Stockholders’ Meeting or at any adjournment thereof or in any other circumstances upon which the vote, consent or other approval of Gulf Coast’s stockholders is sought, Stockholder shall, and shall cause its Affiliates to, vote or provide a consent (or cause to be voted or to provide a consent) with respect to all Covered Shares Beneficially Owned by Stockholder or its Affiliates, as the case may be, and over which Stockholder or one of its Affiliates has voting power, against (i) any Acquisition Proposal (as defined in the Merger Agreement) or Alternative Transaction (as defined in the Merger Agreement), including, without limitation, any merger, consolidation or exchange agreement or merger or exchange, consolidation, combination, sale of substantial assets (other than the Transaction, the Merger Agreement or the transactions contemplated thereby), reorganization, recapitalization, dissolution, liquidation or winding up of or by Gulf Coast, or (ii) any amendment of Gulf Coast’s articles of incorporation or bylaws or other proposal or transaction involving Gulf Coast, which amendment or other proposal or transaction would in any manner delay, impede, frustrate, prevent or nullify the Merger Agreement or the Transaction (each of the foregoing in clause (i) or (ii) above, a “Competing Transaction”).

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER

Stockholder represents and warrants to FBMS and The First as follows:

Section 2.01 Authority; Authorization .

(a) Stockholder has all requisite power and authority to execute and deliver this Agreement and to perform Stockholder’s obligations hereunder.

(b) This Agreement has been duly and validly authorized, executed and delivered by Stockholder and, assuming the authorization, execution and delivery of this Agreement by FBMS and The First, constitutes a legal, valid and binding obligation of Stockholder, enforceable against Stockholder in accordance with its terms.

(c) If Stockholder is married and the Owned Shares set forth by the name of Stockholder on the signature page hereto constitute property owned jointly with Stockholder’s spouse, this Agreement constitutes the valid and binding agreement of Stockholder’s spouse. If this Agreement is being executed in a representative or fiduciary capacity, the Person signing this Agreement has full power and authority to enter into and perform this Agreement.

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Section 2.02 Ownership of Securities .

(a) Stockholder is, and at all times during the term of this Agreement will be, the record and Beneficial Owner of the Covered Shares set forth by the name of Stockholder on the signature page hereto, and Stockholder has, and at all times during the term of this Agreement will have, good and marketable title (which may include holding in nominee or “street name”) to all such Covered Shares.

(b) Except for the Covered Shares set forth by the name of Stockholder on the signature page hereto, Stockholder does not Beneficially Own any shares of the capital stock of Gulf Coast.

(i) “ Beneficially Owned ” or “ Beneficial Ownership ” has the meaning given to such term in Rule 13d-3 under the Exchange Act (disregarding the phrase “within 60 days” in paragraph (d)(1)(i) thereof). Without limiting the generality of the foregoing, a person shall be deemed to be the Beneficial Owner of shares (A) which such person or any of its Affiliates or associates (as such term is defined in Rule 12b-2 under the Exchange Act) beneficially owns, directly or indirectly, (B) which such person or any of its Affiliates or associates (as such term is defined in Rule 12b-2 of the Exchange Act) has, directly or indirectly, (1) the right to acquire (whether such right is exercisable immediately or subject only to the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of consideration rights, exchange rights, warrants, options or otherwise, or (2) the right to vote pursuant to any agreement, arrangement or understanding or (C) which are beneficially owned, directly or indirectly, by any other persons with whom such person or any of its Affiliates or associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of such shares.

(ii) “ Beneficial Owner ” means, with respect to any securities, a Person who has Beneficial Ownership of such securities.

Section 2.03 Non-Contravention .

(a) The execution and delivery of this Agreement by Stockholder does not, and the performance of this Agreement by Stockholder will not, (i) violate, conflict with, or result in the breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which Stockholder is a party or by which any of his properties (including the Covered Shares) may be bound, or (ii) violate or conflict with or require any consent, approval, or notice under, any Order or Law applicable to Stockholder or by which any of his respective properties may be bound.

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(b) There is no action pending or, to the knowledge of Stockholder, threatened against Stockholder that questions the validity of this Agreement or any action taken or to be taken by Stockholder in connection with this Agreement.

(c) Without limiting the generality of the foregoing, all proxies or powers-of-attorney heretofore given by Stockholder in respect of any of the Owned Shares, if any, are not irrevocable and all such proxies and powers-of-attorney have been properly revoked or are no longer in effect as of the date hereof.

Section 2.04 Reliance by FBMS and The First . Stockholder understands and acknowledges that FBMS and The First are entering into the Merger Agreement in reliance upon Stockholder’s execution, delivery and performance of this Agreement.

Section 2.05 No Broker . No broker, investment banker, financial adviser or other Person is entitled to any broker’s, finder’s, financial adviser’s or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Stockholder in such capacity.

ARTICLE III

COVENANTS

Section 3.01 No Solicitation . Stockholder shall not and shall cause its Affiliates not to directly or indirectly solicit, initiate or encourage any inquiries or proposals from, discuss or negotiate with, or provide any non-public information to, any Person relating to, or otherwise facilitate, any Acquisition Proposal other than the Transaction, the Merger Agreement and the transactions contemplated thereby. Nothing in this Section 3.01 shall prohibit a Stockholder from (a) furnishing information (including non-public information) with respect to Gulf Coast to any Person in connection with an Acquisition Proposal, (b) participating in negotiations with any Person regarding an Acquisition Proposal or taking any action regarding an Acquisition Proposal or Superior Proposal, as permitted (but only as permitted) by Section 8.5 of the Merger Agreement, or (c) taking any and all action as a director, officer, or employee of Gulf Coast as permitted by Section 8.5 of the Merger Agreement. In addition, Stockholder and its Affiliates shall not, directly or indirectly, make any proposal which constitutes, or could reasonably be expected to lead to, an Acquisition Proposal; provided that, nothing herein shall prevent Stockholder from presenting to the other stockholders of an Acquisition Proposal presented by any Person (other than Stockholder or its Affiliates).

Section 3.02 Restrictions on Transfer and Proxies; Non-Interference . (a) Stockholder undertakes that, except as contemplated by this Transaction or the Merger Agreement, Stockholder shall not and shall cause its Affiliates not to (i) grant or agree to grant any proxy or power-of-attorney with respect to any Covered Shares (except pursuant to this Agreement), (ii) deposit any Covered Shares into a voting trust or enter into any voting agreement or understanding with respect to any Covered Shares (except pursuant to this Agreement) or (iii) Transfer or agree to Transfer any Covered Shares other than with FBMS’s prior written consent; provided, however, that the foregoing shall not preclude a Transfer in connection with bona fide estate planning purposes to the Stockholder’s affiliates or immediate family members, provided that as a condition to such Transfer, such affiliate or immediate family member shall execute an agreement that is identical to this Agreement (except to reflect the change in the identity of the Stockholder). For purposes of this Agreement, “Transfer” shall mean, with respect to a security, to offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of (whether by actual disposition or effective economic disposition due to cash settlement or otherwise)), directly or indirectly, any shares of capital stock of Gulf Coast or any securities convertible into, or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction.

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(b) Stockholder further agrees not to take any action that would or is reasonably likely to (i) make any representation or warranty contained herein untrue or incorrect in any material respect or (ii) have the effect of preventing Stockholder from performing its obligations under this Agreement.

(c) Stockholder agrees that, upon the reasonable request of FBMS or The First, Stockholder will tender to Gulf Coast any and all certificates and instruments representing Stockholder’s Covered Shares and Gulf Coast will inscribe upon the reverse of such certificates the following legend:

THE SHARES OF COMMON STOCK, $10.00 VALUE PER SHARE OR $1.00 PER SHARE, AS APPLICABLE, OF GULF COAST COMMUNITY BANK (THE “COMPANY”) REPRESENTED BY THIS CERTIFICATE OR HEREAFTER ACQUIRED IN RESPECT OF SUCH SHARES ARE SUBJECT TO AN AGREEMENT WITH THE FIRST BANCSHARES, INC. DATED AS OF OCTOBER 12, 2016, AND NONE OF SUCH SHARES, NOR ANY INTEREST THEREIN MAY BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED OR DISPOSED OF, EXCEPT IN ACCORDANCE THEREWITH. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

Section 3.03 Dissenters’ Rights . Stockholder agrees not to exercise any dissenters’ or appraisal rights (including, without limitation, under any set forth in Florida Statutes) as to any Covered Shares which may arise with respect to the Merger.

Section 3.04 Stop Transfer . Stockholder agrees that it shall not request that Gulf Coast register the transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any Covered Shares, unless such transfer is made in compliance with this Agreement.

Section 3.05 Further Assurances; Cooperation .

(a) Stockholder, without further consideration, will (provided that FBMS or The First are not in material breach of the terms of the Merger Agreement), (i) use all reasonable efforts to cooperate with FBMS, The First and Gulf Coast in furtherance of the transactions contemplated by the Merger Agreement, (ii) promptly execute and deliver such additional documents that may be reasonably necessary in furtherance of the transactions contemplated by the Merger Agreement, and take such reasonable actions as are necessary or appropriate to consummate such transactions and (iii) promptly provide any information, and make all filings, reasonably requested by Gulf Coast for any regulatory application or filing made or approval sought in connection with such transactions (including filings with any Regulatory Authority).

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(b) Stockholder hereby consents, and shall cause its Affiliates to consent, to the publication and disclosure in the proxy statement (and, as and to the extent otherwise required by law or any regulatory authority, in any other documents or communications provided by FBMS or Gulf Coast to any regulatory authority or to security holders of Gulf Coast or FBMS) of Stockholder’s identity and Beneficial Ownership of the Covered Shares, the nature of Stockholder’s commitments, arrangements and understandings under and relating to this Agreement and the Merger Agreement and any additional requisite information regarding the relationship of Stockholder and its Affiliates with FBMS and its Subsidiaries and/or Gulf Coast.

ARTICLE IV

MISCELLANEOUS

Section 4.01 Termination . This Agreement shall terminate and become null and void upon the earlier of (a) the Closing or (b) the termination of the Merger Agreement in accordance with its terms. Any such termination shall be without prejudice to liabilities arising hereunder before such termination.

Section 4.02 Stockholder Capacity . Notwithstanding anything herein to the contrary, Stockholder has entered into this Agreement solely in Stockholder’s capacity as the Beneficial Owner of Covered Shares and, if applicable, nothing herein shall limit or affect any actions taken or omitted to be taken at any time by Stockholder in his or her capacity as an officer or director of Gulf Coast.

Section 4.03 Amendment; Waivers . This Agreement may not be amended, changed, supplemented, or otherwise modified or terminated, except upon the execution and delivery of a written agreement executed by the parties hereto; provided , that FBMS may waive compliance by Stockholder with any representation, agreement or condition otherwise required to be complied with by Stockholder under this Agreement or release Stockholder from its obligations under this Agreement, but any such waiver or release shall be effective only if in writing and executed by FBMS and only with respect to Stockholder.

Section 4.04 Expenses . Subject to Section 4.10(c) , all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses. In any legal action or other proceeding relating to this Agreement and the transactions contemplated hereby or if the enforcement of any provision of this Agreement is brought against a Party, the prevailing Party in such action or proceeding shall be entitled to recover all reasonable expenses related thereto (including reasonable attorneys’ fees and expenses, court costs and expenses incident to arbitration, appellate and post-judgement proceedings) from the other Party, in addition to any other relief to which such prevailing Party may be entitled.

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Section 4.05 Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(a) if to Stockholder: The address provided on the signature page.

(b) if to FBMS: The First Bancshares, Inc.

6480 HWY 98 West

P.O. Box 15549

Hattiesburg, MS 39404

Attention: M. Ray (Hoppy) Cole, Jr., President & CEO

With a copy to: Jones Walker LLP

Attn: Neal C. Wise, Esquire

190 East Capital Street – Suite 800

Jackson, Mississippi 39201

Section 4.06 Entire Agreement; Assignment . This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. Neither this Agreement, nor any of the rights and obligations under this Agreement, shall be transferred by any party without the prior written consent of the other parties hereto.

Section 4.07 Parties in Interest . This Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

Section 4.08 Severability . Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

Section 4.09 Specific Performance; Remedies . Stockholder acknowledges and agrees that in the event of any breach of this Agreement, FBMS and The First would be irreparably and immediately harmed and could not be made whole by monetary damages. It is accordingly agreed that (a) Stockholder will waive, in any action for specific performance, the defense of adequacy of a remedy at law, and (b) FBMS and The First shall be entitled, in addition to any other remedy to which it may be entitled at law or in equity, to compel specific performance of this Agreement. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any right, power or remedy thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party; provided, however, FBMS and The First shall have no right to consequential damages for any alleged breach of this Agreement by Stockholder. The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance.

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Section 4.10 Governing Law; Jurisdiction . (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Mississippi, without giving effect to the choice of law principles thereof.

(b) Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of the courts of the State of Mississippi or the Federal courts of the United States of America located in the State of Mississippi if any dispute arises under this Agreement or any transaction contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) waives any right to trial by jury with respect to any action, suit or proceeding related to or arising out of this Agreement or any transaction contemplated by this Agreement, (iv) waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or any transaction contemplated hereby in any such court, (v) waives and agrees not to plead or claim that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum and (vi) agrees that a final judgment in any such action, suit or proceeding in any such court shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by applicable Law.

(c) Notwithstanding any other provision in this Agreement, in the event of any action arising out of or resulting from this Agreement, the prevailing party shall be entitled to recover its costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection therewith.

Section 4.11 Headings . The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

Section 4.12 Counterparts . This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same instrument.

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Section 4.13 Definitions . Capitalized terms not otherwise defined in this Agreement shall have meanings given to such terms in the Merger Agreement.

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly executed as of the day and year first above written.

	THE FIRST BANCSHARES, INC.


	By:
		M. Ray (Hoppy) Cole, Jr.
		President and Chief Executive Officer



	STOCKHOLDER



	Print Name:
	Shares of Common Stock
	Beneficially Owned:
	Address:



	Phone Number:

[Signature Page to Voting and Support Agreement]

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “ Agreement ”) is dated as of October 12, 2016, by and among The First Bancshares, Inc., a Mississippi corporation (the “ Company ”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “ Purchaser ” and collectively, the “ Purchasers ”).

RECITALS

A. The Company and each Purchaser is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “ Securities Act ”), and Rule 506 of Regulation D (“ Regulation D ”) as promulgated by the United States Securities and Exchange Commission (the “ Commission ”) under the Securities Act.

B. Each Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate number of shares of the Company’s mandatorily convertible non-cumulative non-voting perpetual preferred stock, $17.75 liquidation preference per share (the “ Preferred Stock ”), set forth below such Purchaser’s name on the signature page of this Agreement (which aggregate amount for all purchasers shall not be less than $50,000,000 worth (2,816,902 shares) nor more than $ 63,249,995 worth (3,563,380 shares) and shall be collectively referred to herein as the “ Preferred Shares ”). When purchased, the Preferred Stock will have the terms set forth in a Certificate of Designations incorporated into Articles of Amendment for the Preferred Stock in the form attached as Exhibit A hereto (the “ Articles of Amendment ”) made a part of the Company’s Articles of Incorporation, as amended, by the filing of the Articles of Amendment with the Secretary of State of the State of Mississippi (the “ Mississippi Secretary ”). The Preferred Stock will be convertible into shares (the “ Underlying Shares ” and, together with the Preferred Shares, the “ Securities ”) of the common stock, par value $1.00 per share, of the Company (the “ Common Stock ”), subject to and in accordance with the terms and conditions of the Articles of Amendment.

C. The Company has engaged FIG Partners, L.L.C., Stephens Inc., and Keefe, Bruyette & Woods, Inc. as its exclusive placement agents (the “ Placement Agents ”) for the offering of the Preferred Shares.

D. Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (the “ Registration Rights Agreement ”), pursuant to which, among other things, the Company will agree to provide certain registration rights with respect to the Securities under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers hereby agree as follows:

ARTICLE I
DEFINITIONS

1.1. Definitions . In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:

“ Action ” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or, to the Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any of their respective properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility.

“ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

“ Agreement ” shall have the meaning ascribed to such term in the Preamble.

“ Articles of Amendment ” has the meaning set forth in the Recitals.

“ Articles of Incorporation ” means the Articles of Incorporation of the Company and all amendments thereto, as the same may be amended from time to time.

“ Business Day ” means a day, other than a Saturday or Sunday, on which banks in Mississippi are open for the general transaction of business.

“ Buy-In ” has the meaning set forth in Section 4.1(e).

“ Buy-In Price ” has the meaning set forth in Section 4.1(e).

“ Closing ” means the closing of the purchase and sale of the Preferred Shares pursuant to this Agreement.

“ Closing Date ” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied, or such other date as the parties may agree.

“ Commission ” has the meaning set forth in the Recitals.

“ Common Stock ” has the meaning set forth in the Recitals, and also includes any securities into which the Common Stock may hereafter be reclassified or changed.

“ Company Counsel ” means Jones Walker LLP.

“ Company Deliverables ” has the meaning set forth in Section 2.2(a).

“ Company Reports ” has the meaning set forth in Section 3.1(kk).

“ Company’s Knowledge ” means with respect to any statement made to the knowledge of the Company, that the statement is based upon the actual knowledge of the executive officers of the Company having responsibility for the matter or matters that are the subject of the statement after reasonable investigation.

“ Control ” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“ Disclosure Materials ” has the meaning set forth in Section 3.1(h).

“ DTC ” means The Depository Trust Company.

“ Effective Date ” means the date that the initial Registration Statement required by Section 2(a) of the Registration Rights Agreement is first declared effective by the Commission.

“ Environmental Laws ” has the meaning set forth in Section 3.1(l).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“ FDIC ” means the Federal Deposit Insurance Corporation.

“ Federal Reserve ” has the meaning set forth in Section 3.1(ll).

“ GAAP ” means U.S. generally accepted accounting principles, as applied by the Company.

“ Indemnified Person ” has the meaning set forth in Section 4.8(b).

“ Intellectual Property ” has the meaning set forth in Section 3.1(r).

“ Lien ” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

“ Material Adverse Effect ” means any of (i) a material and adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, properties, business, condition (financial or otherwise) or prospects of the Company and the Subsidiaries, taken as a whole, or (iii) any adverse impairment to the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.

“ Material Contract ” means any contract of the Company that has been filed as an exhibit to the SEC Reports pursuant to Item 601 of Regulation S-K.

“ Material Permits ” has the meaning set forth in Section 3.1(p).

“ Mississippi Courts ” means the state and federal courts sitting in the State of Mississippi.

“ Mississippi Secretary ” has the meaning set forth in the Recitals.

“ OCC ” means the Office of the Comptroller of the Currency.

“ Outside Date ” means the thirtieth day following the date of this Agreement; provided that if such day is not a Business Day, the first day following such day that is a Business Day.

“ Person ” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

“ Placement Agents ” has the meaning set forth in the Recitals.

“ Preferred Shares ” has the meaning set forth in the Recitals.

“ Preferred Stock ” has the meaning set forth in the Recitals.

“ Principal Trading Market ” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date, shall be the NASDAQ Global Market.

“ Private Placement Memorandum ” means the Private Placement Memorandum dated October 12, 2016 which was furnished to the Purchaser prior to the execution of this Agreement.

“ Proceeding ” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“ Purchase Price ” means $17.75 per Preferred Share.

“ Purchaser Deliverables ” has the meaning set forth in Section 2.2(b).

“ Purchaser Party ” has the meaning set forth in Section 4.8(a).

“ Registration Rights Agreement ” has the meaning set forth in the Recitals.

“ Registration Statement ” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement).

“ Regulation D ” has the meaning set forth in the Recitals.

“ Regulatory Agreement ” has the meaning set forth in Section 3.1(mm).

“ Required Approvals ” has the meaning set forth in Section 3.1(e).

“ Rule 144 ” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ SEC Report s” has the meaning set forth in Section 3.1(h).

“ Secretary’s Certificate ” has the meaning set forth in Section 2.2(a)(v).

“ Securities ” has the meaning set forth in the Recitals.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Shareholder Approval ” has the meaning set forth in Section 4.11.

“ Shareholder Proposal ” has the meaning set forth in Section 4.11.

“ Subscription Amount ” means with respect to each Purchaser, the aggregate amount to be paid for the Preferred Shares purchased hereunder as indicated on such Purchaser’s signature page to this Agreement next to the heading “Aggregate Purchase Price (Subscription Amount).”

“ Subsidiary ” means any entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company.

“ Trading Day ” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided , that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

“ Trading Market ” means whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

“ Transaction Documents ” means this Agreement, the Schedules and Exhibits attached hereto, the Registration Rights Agreement, the Articles of Amendment, and any other documents or agreements executed in connection with the transactions contemplated hereunder.

“ Transfer Agent ” means in the case of the Preferred Shares, the Company; and in the case of the Underlying Shares, Computershare, or any successor transfer agent for the Company.

“ Underlying Shares ” has the meaning set forth in the Recitals.

ARTICLE II
PURCHASE AND SALE

2.1. Closing .

(a) Purchase of Preferred Shares . Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell to each Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, the number of Preferred Shares set forth below such Purchaser’s name on the signature page of this Agreement at a per Preferred Share price equal to the Purchase Price.

(b) Closing . The Closing of the purchase and sale of the Preferred Shares shall take place at the offices of Jones Walker LLP, 190 E. Capitol St., Suite 800, Jackson, Mississippi, 39201 on the Closing Date or at such other locations or remotely by facsimile transmission or other electronic means as the parties may mutually agree.

(c) Delivery of Preferred Shares; Form of Payment . Unless otherwise agreed to by the Company and a Purchaser (as to itself only), on the Closing Date, (1) the Company shall deliver to each Purchaser one or more stock certificates (if physical certificates are required by the Purchaser to be held immediately prior to Closing; if not, then facsimile or “.pdf” copies of such certificates shall suffice for purposes of Closing with the original stock certificates to be delivered within two Business Days of the Closing Date), evidencing the number of Preferred Shares set forth on such Purchaser’s signature page to this Agreement and as further set forth on the Stock Certificate Questionnaire included as Exhibit C-2 hereto and (2) upon receipt thereof, each Purchaser shall wire its Subscription Amount, in United States dollars and in immediately available funds, in accordance with the Company’s written wire transfer instructions.

2.2. Closing Deliveries .

(a) On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser the following (the “ Company Deliverables ”):

(i) this Agreement, duly executed by the Company;

(ii) one or more stock certificates (if physical certificates are required by the Purchaser to be held immediately prior to Closing; if not, then facsimile or “.pdf” copies of such certificates shall suffice for purposes of Closing with the original stock certificates to be delivered within two Business Days of the Closing Date), evidencing the Preferred Shares subscribed for by Purchaser hereunder, registered in the name of such Purchaser or as otherwise set forth on the Stock Certificate Questionnaire (the “ Stock Certificates ”);

(iii) a legal opinion of Company Counsel, dated as of the Closing Date and in the form attached hereto as Exhibit D, executed by such counsel and addressed to the Purchasers;

(iv) the Registration Rights Agreement, duly executed by the Company; and

(v) a certificate of the Secretary of the Company, in the form attached hereto as Exhibit E (the “ Secretary’s Certificate ”), dated as of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Securities, (b) certifying the current versions of the Articles of Incorporation, as amended, and by-laws, as amended, of the Company and (c) certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company; and

(vi) the compliance certificate referred to in Section 5.1(g).

(b) On or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following (the “ Purchaser Deliverables ”):

(i) this Agreement, duly executed by such Purchaser;

(ii) its Subscription Amount, in U.S. dollars and in immediately available funds, in the amount indicated below such Purchaser’s name on the applicable signature page hereto under the heading “Aggregate Purchase Price (Subscription Amount)” by wire transfer in accordance with the Company’s written instructions;

(iii) the Registration Rights Agreement, duly executed by such Purchaser; and

(iv) a fully completed and duly executed Accredited Investor Questionnaire, reasonably satisfactory to the Company, and Stock Certificate Questionnaire in the forms attached hereto as Exhibits C-1 and C-2 , respectively.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

3.1. Representations and Warranties of the Company . The Company hereby represents and warrants as of the date hereof and the Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to each of the Purchasers that:

(a) Subsidiaries . The Company has no direct or indirect Subsidiaries except as set forth in Exhibit 21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Commission on March 30, 2016, as amended. Except as disclosed in Schedule 3.1(a) hereto, the Company owns, directly or indirectly, all of the capital stock or comparable equity interests of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

(b) Organization and Qualification . The Company and each of its “Significant Subsidiaries” (as defined in Rule 1-02 of Regulation S-X) is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Significant Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. The Company and each of its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not in the reasonable judgment of the Company be expected to have a Material Adverse Effect. The Company is duly registered as a financial holding company under the Bank Holding Company Act of 1956, as amended. Each of the Company’s depository institution Subsidiaries’ deposit accounts are insured up to applicable limits by the FDIC, and all premiums and assessments required to be paid in connection therewith have been paid when due. The Company has conducted its business in compliance with all applicable federal, state and foreign laws, orders, judgments, decrees, rules, regulations and applicable stock exchange requirements, including all laws and regulations restricting activities of bank holding companies and banking organizations, except for any noncompliance that, individually or in the aggregate, has not had and would not be reasonably expected to have a Material Adverse Effect.

(c) Authorization; Enforcement; Validity . The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder, including, without limitation, to issue the Preferred Shares in accordance with the terms hereof and, subject to Shareholder Approval, to issue the Underlying Shares in accordance with the Articles of Amendment. The Company’s execution and delivery of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Preferred Shares and the Underlying Shares) have been duly authorized by all necessary corporate action on the part of the Company, and no further corporate action is required by the Company, its board of directors or its stockholders in connection therewith other than in connection with the Required Approvals. Each of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. Except for Material Contracts, there are no stockholder agreements, voting agreements, or other similar arrangements with respect to the Company’s capital stock to which the Company is a party or, to the Company’s Knowledge, between or among any of the Company’s stockholders.

(d) No Conflicts . The execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby or thereby (including, without limitation, the issuance of the Preferred Shares and the Underlying Shares) do not and will not (i) conflict with or violate any provisions of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or otherwise result in a violation of the organizational documents of the Company or any Subsidiary, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations and the rules and regulations thereunder, assuming, without investigation, the correctness of the representations and warranties made by the Purchasers herein, of any self-regulatory organization to which the Company or its securities are subject, including all applicable Trading Markets), or by which any property or asset of the Company is bound or affected, except in the case of clauses (ii) and (iii) such as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e) Filings, Consents and Approvals . Neither the Company nor any of its Subsidiaries is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents (including, without limitation, the issuance of the Preferred Shares and the Underlying Shares), other than (i) obtaining Shareholder Approval to issue the Underlying Shares in accordance with the terms of the Articles of Amendment, (ii) the filing of the Articles of Amendment with the Mississippi Secretary, (iii) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (iv) filings required by applicable state securities laws, (v) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (vi) the filing of any requisite notices and/or application(s) to the Principal Trading Market for the issuance and sale of the Underlying Shares and the listing of the Underlying Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby, (vii) the filings required in accordance with Section 4.6 of this Agreement and (viii) those that have been made or obtained prior to the date of this Agreement (collectively, the “ Required Approvals ”).

(f) Issuance of the Preferred Shares . The issuance of the Preferred Shares has been duly authorized and the Preferred Shares, when issued and paid for in accordance with the terms of the Transaction Documents, will be duly and validly issued, fully paid and non-assessable and free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights. The issuance of the Underlying Shares has been duly authorized and the Underlying Shares, when issued upon conversion of the Preferred Shares in accordance with the terms of the Articles of Amendment, will be duly and validly issued, fully paid and non-assessable and free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights. Assuming the accuracy of the representations and warranties of the Purchasers in this Agreement, the Securities will be issued in compliance with all applicable federal and state securities laws.

(g) Capitalization . The number of shares and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) has been set forth in the SEC Reports and has changed since the date of such SEC Reports only due to stock grants or other equity awards or stock option and warrant exercises that have not, individually or in the aggregate, had a material effect on the issued and outstanding capital stock, options and other securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance in all material respects with all applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase any capital stock of the Company. Except as specified in the SEC Reports: (i) no shares of the Company’s outstanding capital stock are subject to preemptive rights or any other similar rights; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company, other than those issued or granted pursuant to Material Contracts or equity or incentive plans or arrangements described in the SEC Reports; (iii) there are no material outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing indebtedness of the Company or by which the Company is bound; (iv) except for the Registration Rights Agreement and the “Existing Contracts” referenced therein, there are no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act; (v) there are no outstanding securities or instruments of the Company that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company; (vi) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (vii) the Company has no liabilities or obligations required to be disclosed in the SEC Reports but not so disclosed in the SEC Reports, which, individually or in the aggregate, will have or would reasonably be expected to have a Material Adverse Effect. There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities.

(h) SEC Reports; Disclosure Materials . Except as set forth in Schedule 3.1(h) , the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “ SEC Reports ” and together with this Agreement and the Schedules to this Agreement, and any other factual information concerning by the Company furnished in connection with the offering of the Preferred Shares, the “ Disclosure Materials ”), on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. Except as set forth in Schedule 3.1(h) , as of their respective filing dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(i) Financial Statements . Except as set forth in Schedule 3.1(i) , the financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the balance sheet of the Company and its consolidated subsidiaries taken as a whole as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments, which would not be material, either individually or in the aggregate.

(j) Tax Matters . The Company (i) has prepared and filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, with respect to which adequate reserves have been set aside on the books of the Company and (iii) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply, except, in the case of clauses (i) and (ii) above, where the failure to so pay or file any such tax, assessment, charge or return would not have or reasonably be expected to have a Material Adverse Effect.

(k) Material Changes . Since the date of the latest audited financial statements included within the SEC Reports, except as disclosed in subsequent SEC Reports filed prior to the date hereof, (i) there have been no events, occurrences or developments that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered materially its method of accounting or the manner in which it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except Common Stock issued pursuant to existing Company stock option or stock purchase plans or equity based plans disclosed in the SEC Reports and (vi) there has not been any material change or amendment to, or any waiver of any material right by the Company under, any Material Contract under which the Company or any of its Subsidiaries is bound or subject. Except as set forth in Schedule 3.1(k) and except for the transactions contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least one Trading Day prior to the date that this representation is made. Moreover, since the date(s) the Company afforded Purchaser (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Preferred Shares and the merits and risks of investing in the Preferred Shares; and (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management, prospects and any potential transactions sufficient to enable it to evaluate its investment, there have been no events, occurrences or developments that have materially affected or would reasonably be expected to materially affect, either individually or in the aggregate, the information as presented to the Purchasers in connection with the offering of the Preferred Shares.

(l) Environmental Matters . Neither the Company nor any of its Subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “ Environmental Laws ”), (ii) owns or operates any real property contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; in each case, which violation, contamination, liability or claim has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and, to the Company’s Knowledge, there is no pending or threatened investigation that might lead to such a claim.

(m) Litigation . There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares or (ii) except as disclosed in the SEC Reports, is reasonably likely to have a Material Adverse Effect, individually or in the aggregate, if there were an unfavorable decision. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the Company’s knowledge there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any of its Subsidiaries under the Exchange Act or the Securities Act.

(n) Employment Matters . No material labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees of the Company which would have or reasonably be expected to have a Material Adverse Effect. None of the Company’s employees is a member of a union that relates to such employee’s relationship with the Company, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and each Subsidiary believes that its relationship with its employees is good. To the Company’s Knowledge, no executive officer is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such executive officer does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing matters. The Company is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(o) Compliance . Neither the Company nor any of its Subsidiaries (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any of its Subsidiaries under), nor has the Company or any of its Subsidiaries received written notice of a claim that it is in default under or that it is in violation of, any Material Contract (whether or not such default or violation has been waived), (ii) is in violation of any order of which the Company has been made aware in writing of any court, arbitrator or governmental body having jurisdiction over the Company or its properties or assets, or (iii) except as set forth in Schedule 3.1(o) , is in violation of, or in receipt of written notice that it is in violation of, any statute, rule or regulation of any governmental authority applicable to the Company, o r which would have the effect of revoking or limiting FDIC deposit insurance , except in each case as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(p) Regulatory Permits . The Company and each of its Subsidiaries possess or have applied for all certificates, authorizations, consents and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted and as described in the SEC Reports, except where the failure to possess such permits, individually or in the aggregate, has not and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (“ Material Permits ”), and (i) neither the Company nor any of its Subsidiaries has received any notice in writing of proceedings relating to the revocation or material adverse modification of any such Material Permits and (ii) the Company is unaware of any facts or circumstances that would give rise to the revocation or material adverse modification of any Material Permits.

(q) Title to Assets . The Company and its Subsidiaries have good and marketable title to all real property and tangible personal property owned by them which is material to the business of the Company and its Subsidiaries, taken as a whole, in each case free and clear of all Liens except such as do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

(r) Patents and Trademarks . The Company and its Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “ Intellectual Property ”) necessary for the conduct of their respective businesses as now conducted or as proposed to be conducted in the SEC Reports except where the failure to own, possess, license or have such rights would not have or reasonably be expected to have a Material Adverse Effect. Except as set forth in the SEC Reports and except where such violations or infringements would not have or reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (a) there are no rights of third parties to any such Intellectual Property; (b) there is no infringement by third parties of any such Intellectual Property; (c) there is no pending or threatened action, suit, proceeding or claim by others challenging the Company’s and its Subsidiaries’ rights in or to any such Intellectual Property; (d) there is no pending or threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property; and (e) there is no pending or threatened action, suit, proceeding or claim by others that the Company and/or any Subsidiary infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others.

(s) Insurance . The Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which the Company and the Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable to renew their respective existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

(t) Transactions With Affiliates and Employees . Except as set forth in the SEC Reports and other than the grant of stock options or other equity awards that are not individually or in the aggregate material in amount, none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company, is presently a party to any transaction with the Company or to a presently contemplated transaction (other than for services as employees, officers and directors) that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.

(u) Internal Control Over Financial Reporting . Except as set forth in the SEC Reports, the Company maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and such internal control over financial reporting is effective.

(v) Sarbanes-Oxley; Disclosure Controls . Except as disclosed in Schedule 3.1(v) , the Company is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it. Except as disclosed in the SEC Reports, the Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), and such disclosure controls and procedures are effective.

(w) Certain Fees . No person or entity will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or, to the Company’s knowledge, a Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, other than the Placement Agents with respect to the offer and sale of the Shares (which placement agents fees are being paid by the Company).

(x) Private Placement . Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 of this Agreement and the accuracy of the information disclosed in the Accredited Investor Questionnaires, no registration under the Securities Act is required for the offer and sale of the Preferred Shares by the Company to the Purchasers under the Transaction Documents. The issuance and sale of the Preferred Shares hereunder does not contravene the rules and regulations of the Principal Trading Market and, upon Shareholder Approval, the issuance of the Underlying Shares in accordance with the Articles of Amendment will not contravene the rules and regulations of the Principal Trading Market.

(y) Registration Rights . Other than each of the Purchasers, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company other than those securities which are currently registered on an effective registration statement on file with the Commission.

(z) No Integrated Offering . Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, none of the Company, its Subsidiaries nor, to the Company’s Knowledge, any of its Affiliates or any Person acting on its behalf has, directly or indirectly, at any time within the past six months, made any offers or sales of any Company security or solicited any offers to buy any security under circumstances that would eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Preferred Shares as contemplated hereby.

(aa) Listing and Maintenance Requirements . The Company’s Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act nor has the Company received any written notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received written notice from any Trading Market on which the Common Stock is listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance in all material respects with the listing and maintenance requirements for continued trading of the Common Stock on the Principal Trading Market.

(bb) Investment Company . Neither the Company nor any of its Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(cc) Unlawful Payments . Neither the Company nor any of its Subsidiaries, nor to the Company’s Knowledge, any directors, officers, employees, agents or other Persons acting at the direction of or on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company: (a) directly or indirectly, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to foreign or domestic political activity; (b) made any direct or indirect unlawful payments to any foreign or domestic governmental officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (c) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (d) made any other unlawful bribe, rebate, payoff, influence payment, kickback or other material unlawful payment to any foreign or domestic government official or employee.

(dd) Application of Takeover Protections; Rights Agreements . Except as set forth in the Company’s Articles of Incorporation, as amended, and as described in the section entitled “Description of Capital Stock” in the Private Placement Memorandum, the Company has not adopted any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Articles of Incorporation or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is or could become applicable to any Purchaser solely as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and any Purchaser’s ownership of the Securities.

(ee) Off Balance Sheet Arrangements . There is no transaction, arrangement, or other relationship between the Company (or any Subsidiary) and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not so disclosed and would have a Material Adverse Effect.

(ff) Acknowledgment Regarding Purchasers’ Purchase of Preferred Shares . The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Preferred Shares.

(gg) Absence of Manipulation . The Company has not, and to the Company’s Knowledge no one acting on its behalf has, taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities.

(hh) OFAC . Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or Person acting on behalf of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC ”); and the Company will not knowingly use the proceeds of the sale of the Preferred Shares towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.

(ii) Money Laundering Laws . The operations of each of the Company and any Subsidiary are in compliance in all material respects with the money laundering statutes of applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any applicable governmental agency (collectively, the “ Money Laundering Laws ”) and to the Company’s Knowledge, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company and/or any Subsidiary with respect to the Money Laundering Laws is pending or threatened.

(jj) No Additional Agreements . The Company does not have any agreement or understanding with any Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.

(kk) Reports, Registrations and Statements . Since December 31, 2012, the Company and each Subsidiary have filed all material reports, registrations and statements, together with any required amendments thereto, that it was required to file with the Board of Governors of the Federal Reserve System (the “ Federal Reserve ”), FDIC, OCC, the Mississippi Department of Banking and Consumer Finance (the “ DBCF ”), and any other applicable federal or state securities or banking authorities, except where the failure to file any such report, registration or statement would not have or reasonably be expected to have a Material Adverse Effect. All such reports and statements filed with any such regulatory body or authority are collectively referred to herein as the “ Company Reports .” As of their respective dates, except as set forth in Schedule 3.1(kk), the Company Reports complied as to form in all material respects with all the rules and regulations promulgated by the Federal Reserve, the FDIC, the DBCF and any other applicable foreign, federal or state securities or banking authorities, as the case may be.

(ll) Adequate Capitalization . As of December 31, 2015, the Company’s Subsidiary insured depository institution met or exceeded the standards necessary to be considered “adequately capitalized” under the Federal Deposit Insurance Company’s regulatory framework for prompt corrective action.

(mm) Agreements with Regulatory Agencies; Compliance with Certain Banking Regulations . Neither the Company nor any Subsidiary is subject to any cease-and-desist or other similar order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any capital directive by, or since December 31, 2013, has adopted any board resolutions at the request of, any governmental entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business (each item in this sentence, a “ Regulatory Agreement ”), nor has the Company or any Subsidiary been advised in writing since December 31, 2013 by any governmental entity that it intends to issue, initiate, order, or request any such Regulatory Agreement.

To the Company’s Knowledge, there are no facts and circumstances, and has no reason to believe that any facts or circumstances exist, that would cause any of its Subsidiary banking institutions: (i) to be deemed not to be in satisfactory compliance with the Community Reinvestment Act and the regulations promulgated thereunder or to be assigned a CRA rating by federal or state banking regulators of lower than “satisfactory;” (ii) to be deemed to be operating in violation, in any material respect, of the Bank Secrecy Act, the Patriot Act, any order issued with respect to anti-money laundering by OFAC, or any other anti-money laundering statute, rule or regulation; or (iii) to be deemed not to be in satisfactory compliance, in any material respect, with all applicable privacy of customer information requirements contained in any applicable federal and state privacy laws and regulations as well as the provisions of all information security programs adopted by the Subsidiaries.

(nn) No General Solicitation or General Advertising . Neither the Company nor, to the Company’s Knowledge, any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Preferred Shares.

(oo) Risk Management Instruments . Except as has not had or would not reasonably be expected to have a Material Adverse Effect, since January 1, 2015, all material derivative instruments, including, swaps, caps, floors and option agreements, whether entered into for the Company’s own account, or for the account of one or more of the Company Subsidiaries, were entered into (1) only in the ordinary course of business, (2) in accordance with prudent practices and in all material respects with all applicable laws, rules, regulations and regulatory policies and (3) with counterparties believed to be financially responsible at the time; and each of them constitutes the valid and legally binding obligation of the Company or one of the Company Subsidiaries, enforceable in accordance with its terms. Neither the Company or the Company Subsidiaries, nor, to the knowledge of the Company, any other party thereto, is in breach of any of its material obligations under any such agreement or arrangement.

(pp) ERISA . The Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (herein called “ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company would have any liability; the Company has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan;” or (ii) Sections 412 or 4971 of the Code; and each “Pension Plan” for which the Company would have liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.

(qq) Shell Company Status . The Company is not, and has never been, an issuer identified in Rule 144(i)(1).

(rr) Reservation of Underlying Shares . The Company has reserved, and will continue to reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Common Stock, sufficient to issue and deliver the Underlying Shares into which the Preferred Shares are convertible, assuming Shareholder Approval has been obtained.

(ss) No More Favorable Terms . Except for the Subscription Amount, each Purchaser is receiving Preferred Shares on the same terms and conditions as all other Purchasers, including the Purchase Price for the Preferred Shares.

3.2. Representations and Warranties of the Purchasers . Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as of the date hereof and as of the Closing Date to the Company as follows:

(a) Organization; Authority . If such Purchaser is an entity, it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. If such purchaser is an entity, the execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser. If such Purchaser is an entity, each of this Agreement and the Registration Rights Agreement has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

(b) No Conflicts . The execution, delivery and performance by such Purchaser of this Agreement and the Registration Rights Agreement and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Purchaser (if such Purchaser is an entity), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations hereunder.

(c) Investment Intent . Such Purchaser understands that the Preferred Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Preferred Shares as principal for its own account and not with a view to, or for distributing or reselling such Preferred Shares or any part thereof in violation of the Securities Act or any applicable state securities laws, provided, however , that by making the representations herein, such Purchaser does not agree to hold any of the Preferred Shares for any minimum period of time and reserves the right at all times to sell or otherwise dispose of all or any part of such Preferred Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws. Such Purchaser is acquiring the Preferred Shares hereunder in the ordinary course of its business. Such Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Preferred Shares (or any securities which are derivatives thereof) to or through any person or entity.

(d) Purchaser Status . At the time such Purchaser was offered the Preferred Shares, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act and, with respect to a Purchaser whose principal business address is in New York, at the date hereof it is an “institutional investor” as described in the Accredited Investor/Institutional Investor Questionnaire. Such Purchaser has provided the information in the Accredited Investor/Institutional Investor Questionnaire attached hereto as Exhibit A.

(e) Reliance . The Company and the Placement Agent will be entitled to rely upon this Agreement and is irrevocably authorized to produce this Agreement or a copy hereof to (A) any regulatory authority having jurisdiction over the Company and its affiliates and (B) any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby, in each case, to the extent required by any court or governmental authority to which the Company is subject, provided that the Company provides the Purchaser with prior written notice of such disclosure to the extent practicable and allowed by applicable law.

(f) General Solicitation . Such Purchaser is not purchasing the Preferred Shares as a result of any advertisement, article, notice or other communication regarding the Preferred Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.

(g) Direct Purchase . Purchaser is purchasing the Preferred Shares directly from the Company and not from the Placement Agents. The Placement Agents did not make any representations or warranties to Purchaser, express or implied, regarding the Preferred Shares, the Company or the Company’s offering of the Preferred Shares.

(h) Experience of Such Purchaser . Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Preferred Shares, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Preferred Shares and, at the present time, is able to afford a complete loss of such investment. Further Purchaser understands that no representation is being made as to the future trading value or trading volume of the Preferred Shares.

(i) Access to Information . Such Purchaser acknowledges that it has had the opportunity to review the Disclosure Materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Preferred Shares and the merits and risks of investing in the Preferred Shares and any such questions have been answered to such Purchaser’s reasonable satisfaction; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment; and (iv) the opportunity to ask questions of management and any such questions have been answered to such Purchaser’s reasonable satisfaction. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Preferred Shares. Purchaser acknowledges that neither the Company nor the Placement Agents has made any representation, express or implied, with respect to the accuracy, completeness or adequacy of any available information except that the Company has made the express the representations and warranties contained in Section 3.1.

(j) Brokers and Finders . Other than the Placement Agents with respect to the Company, no Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser.

(k) Independent Investment Decision . Such Purchaser has independently evaluated the merits of its decision to purchase Preferred Shares pursuant to the Transaction Documents, and such Purchaser confirms that it has not relied on the advice of the Company or the Placement Agent (or any of their respective agents, counsel or Affiliates) or any other Purchaser or Purchaser’s business and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company (including, without limitation, by the Placement Agent) to the Purchaser in connection with the purchase of the Preferred Shares constitutes legal, tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Preferred Shares. Such Purchaser understands that the Placement Agent has acted solely as the agent of the Company in this placement of the Preferred Shares and such Purchaser has not relied on the business or legal advice of the Placement Agent or any of its agents, counsel or Affiliates in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to such Purchaser in connection with the transactions contemplated by the Transaction Documents.

(l) Reliance on Exemptions . Such Purchaser understands that the Preferred Shares being offered and sold to it in reliance on specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire the Preferred Shares.

(m) No Governmental Review . Such Purchaser understands that no U.S. federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Preferred Shares or the fairness or suitability of the investment in the Preferred Shares nor have such authorities passed upon or endorsed the merits of the offering of the Preferred Shares.

(n) Residency . Such Purchaser’s residence (if an individual) or office in which its investment decision with respect to the Preferred Shares was made (if an entity) are located at the address immediately below such Purchaser’s name on its signature page hereto.

(o) Trading . Purchaser acknowledges that there is no trading market for the Preferred Stock, and no such market is expected to develop.

(p) OFAC and Anti-Money Laundering . The Purchaser understands, acknowledges, represents and agrees that (i) the Purchaser is not the target of any sanction, regulation, or law promulgated by the Office of Foreign Assets Control, the Financial Crimes Enforcement Network or any other U.S. governmental entity (“U.S. Sanctions Laws”); (ii) the Purchaser is not owned by, controlled by, under common control with, or acting on behalf of any person that is the target of U.S. Sanctions Laws; (iii) the Purchaser is not a “foreign shell bank” and is not acting on behalf of a “foreign shell bank” under applicable anti-money laundering laws and regulations; (iv) the Purchaser’s entry into this Agreement or consummation of the transactions contemplated hereby will not contravene U.S. Sanctions Laws or applicable anti-money laundering laws or regulations; (v) the Purchaser will promptly provide to the Company or any regulatory or law enforcement authority such information or documentation as may be required to comply with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations; and (vi) the Company may provide to any regulatory or law enforcement authority information or documentation regarding, or provided by, the Purchaser for the purposes of complying with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations.

(q) No Discussions . Purchaser has not discussed the offering of the Preferred Shares with any other party or potential investors (other than the Company, any other Purchaser, and Purchaser’s authorized representatives or other potential investors who are subject to a similar duty of confidentiality with the Company), except as expressly permitted under the terms of this Agreement.

(r) Knowledge as to Conditions . Purchaser does not know of any reason why any regulatory approvals and, to the extent necessary, any other approvals, authorizations, filings, registrations, and notices required or otherwise a condition to the consummation by it of the transactions contemplated by this Agreement will not be obtained.

(s) No Regulatory Consents or Approvals. No consent, approval, order or authorization of, or registration, declaration or filing with, any bank regulatory authority or other third party is required on the part of the Purchaser in connection with (i) the execution, delivery or performance by Purchaser of this Agreement and the Transaction Documents contemplated hereby or (ii) the consummation by Purchaser of the transactions contemplated hereby.

(t) Private Placement Memorandum . Purchaser acknowledges that it has received, reviewed, and had adequate time to consider the information contained in, the Private Placement Memorandum.

The Company and each of the Purchasers acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article III and the Transaction Documents.

ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES

4.1. Transfer Restrictions .

(a) Compliance with Laws . Notwithstanding any other provision of this Article IV, each Purchaser covenants that it understands that it may not sell or transfer the Securities except pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state, federal or foreign securities laws. In connection with any sale or transfer of the Securities other than (i) pursuant to an effective registration statement, (ii) to the Company or (iii) pursuant to Rule 144 (provided that the transferor provides the Company with reasonable assurances (in the form of a seller representation letter and, if applicable, a broker representation letter) that such securities may be sold pursuant to such rule), the Company may require the transferor thereof to provide to the Company and the Transfer Agent, at the transferor’s expense, an opinion of counsel selected by the transferor and reasonably acceptable to the Company and the Transfer Agent, the form and substance of which opinion shall be reasonably satisfactory to the Company and the Transfer Agent, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer (other than pursuant to clauses (i), (ii) or (iii) of the preceding sentence), any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights Agreement with respect to such transferred Securities.

(b) Legends . Certificates evidencing the Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form, until such time as they are not required under Section 4.1(c) or applicable law:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL, WHICH COUNSEL AND OPINION MUST BE REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT, OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM OF A SELLER REPRESENTATION LETTER AND, IF APPLICABLE, A BROKER REPRESENTATION LETTER THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE). NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.

(c) Removal of Legends . The restrictive legend set forth in Section 4.1(b) above shall be removed and the Company shall issue a certificate without such restrictive legend or any other restrictive legend to the holder of the applicable Securities upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at DTC, if (i) such Securities are registered for resale under the Securities Act, (ii) such Securities are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company), or (iii) such Securities are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) as to such securities and without volume or manner-of-sale restrictions. Following the earlier of (i) the Effective Date or (ii) the date Rule 144 becoming available for the resale of Securities, without the requirement for the Company to be in compliance with the current public information required under 144(c)(1) (or Rule 144(i)(2), if applicable) as to the Securities and without volume or manner-of-sale restrictions, the Company shall instruct the Transfer Agent to remove the legend from the Securities and shall cause its counsel to issue any legend removal opinion required by the Transfer Agent. Any fees (with respect to the Transfer Agent, Company counsel or otherwise) associated with the issuance of such opinion or the removal of such legend shall be borne by the Company. If a legend is no longer required pursuant to the foregoing, the Company will no later than three (3) Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent (with notice to the Company) of a legended certificate or instrument representing such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer) and a representation letter to the extent required by Section 4.1(a), (such third Trading Day, the “ Legend Removal Date ”) deliver or cause to be delivered to such Purchaser a certificate or instrument (as the case may be) representing such Securities that is free from all restrictive legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1(c). Certificates for Securities free from all restrictive legends may be transmitted by the Transfer Agent to the Purchasers by crediting the account of the Purchaser’s prime broker with DTC as directed by such Purchaser.

(d) Acknowledgement . Each Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the Securities or any interest therein without complying with the requirements of the Securities Act. Except as otherwise provided below, while the above-referenced registration statement remains effective, each Purchaser hereunder may sell the Securities in accordance with the plan of distribution contained in the registration statement and if it does so it will comply therewith and with the related prospectus delivery requirements unless an exemption therefrom is available or unless the Securities are sold pursuant to Rule 144. Each Purchaser, severally and not jointly with the other Purchasers, agrees that if it is notified by the Company in writing at any time that the registration statement registering the resale of the Securities is not effective or that the prospectus included in such registration statement no longer complies with the requirements of Section 10 of the Securities Act, the Purchaser will refrain from selling such Securities until such time as the Purchaser is notified by the Company that such registration statement is effective or such prospectus is compliant with Section 10 of the Exchange Act, unless such Purchaser is able to, and does, sell such Securities pursuant to an available exemption from the registration requirements of Section 5 of the Securities Act.

(e) Buy-In . If the Company shall fail for any reason or for no reason to issue to a Purchaser unlegended certificates within three (3) Trading Days of receipt of all documents necessary for the removal of the legend set forth above (the “ Deadline Date ”), then, in addition to all other remedies available to such Purchaser, if on or after the Trading Day immediately following such three (3) Trading Day period, such Purchaser purchases (in an open market transaction or otherwise) Securities (or a broker or trading counterparty through which the Purchaser has agreed to sell shares makes such purchase) to deliver in satisfaction of a sale by the holder of Securities that such Purchaser anticipated receiving from the Company without any restrictive legend (a “ Buy-In ”), then the Company shall, within three (3) Trading Days after such Purchaser’s request and in such Purchaser’s sole discretion, either (i) pay cash to the Purchaser in an amount equal to such Purchaser’s total purchase price (including brokerage commissions, if any) for the Securities so purchased (the “ Buy-In Price ”), at which point the Company’s obligation to deliver such certificate (and to issue such Securities) shall terminate, or (ii) promptly honor its obligation to deliver to such Purchaser a certificate or certificates representing such Securities and pay cash to the Purchaser in an amount equal to the excess (if any) of the Buy-In Price over the product of (a) such number of Securities, times (b) the closing bid price of such security on the Deadline Date.

4.2. Acknowledgment of Dilution . The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock. The Company further acknowledges that its obligations under the Transaction Documents, including without limitation its obligation to issue the Securities pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

4.3. Furnishing of Information . In order to enable the Purchasers to sell the Securities under Rule 144 of the Securities Act, for a period of one year from the Closing, the Company shall maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. During such one year period, if the Company is not required to file reports pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly available the information described in Rule 144(c)(2), if the provision of such information will allow resales of the Securities pursuant to Rule 144.

4.4. Form D and Blue Sky . The Company agrees to timely file a Form D with respect to the Preferred Shares as required under Regulation D. Purchaser agrees to timely provide Company with any and all needed information in connection with Company’s preparation and filing of a Form D. The Company, on or before the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Preferred Shares for sale to the Purchasers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification). The Company shall make all filings and reports relating to the offer and sale of the Preferred Shares required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date.

4.5. No Integration . The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Preferred Shares in a manner that would require the registration under the Securities Act of the sale of the Preferred Shares to the Purchasers.

4.6. Securities Laws Disclosure; Publicity . Within one (1) Trading Day immediately following the Closing Date, the Company shall issue one or more press releases (collectively, the “ Press Release ”) reasonably acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby. On or before 9:00 a.m., New York City time, on the fourth Trading Day immediately following the execution of this Agreement, the Company will file a Current Report on Form 8-K with the Commission describing the terms of the Transaction Documents (and including as exhibits to such Current Report on Form 8-K the material Transaction Documents (including, without limitation, this Agreement, the Registration Rights Agreement and the Articles of Amendment)). Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser or any Affiliate or investment adviser of any Purchaser, or include the name of any Purchaser or any Affiliate or investment adviser of any Purchaser in any press release or filing with the Commission (other than the Registration Statement) or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with (A) any registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Documents with the Commission and (ii) to the extent such disclosure is required by law, at the request of the Staff of the Commission or Trading Market regulations, in which case the Company shall provide the Purchasers with prior written notice of such disclosure permitted under this subclause (ii). Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, such Purchaser will maintain the confidentiality of the existence and terms of the transaction contemplated herein.

4.7. Non-Public Information . Except with the express written consent of such Purchaser and unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information, the Company shall not, and shall cause each Subsidiary and each of their respective officers, directors, employees and agents, not to, and each Purchaser shall not directly solicit the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents to provide any Purchaser with any material, non-public information regarding the Company or any of its Subsidiaries from and after the filing of the Press Release.

4.8. Indemnification .

(a) Indemnification of Purchasers . In addition to the indemnity provided in the Registration Rights Agreement, the Company will indemnify and hold each Purchaser and its directors, officers, stockholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling person (each, a “ Purchaser Party ”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of (i) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (ii) any action instituted against a Purchaser Party in any capacity, or any of them or their respective affiliates, by any stockholder of the Company who is not an affiliate of such Purchaser Party, with respect to any of the transactions contemplated by this Agreement. The Company will not be liable to any Purchaser Party under this Agreement to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.

(b) Conduct of Indemnification Proceedings . Promptly after receipt by any Person (the " Indemnified Person ”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to Section 4.8(a), such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however , that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is actually and materially and adversely prejudiced by such failure to notify. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; (ii) the Company shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to such Indemnified Person in such proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified Person, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, delayed or conditioned, the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.

(i) Deductible. Except as provided otherwise in 4.8(c)(iii), the Company will not be liable for Losses that otherwise are indemnifiable under Section 4.8(a) until the total of all losses under Section 4.8(a) incurred by a Purchaser Party Purchasers exceeds $100,000.

(ii) Maximum. Except as provided otherwise in Section 4.8(c)(iii), the maximum aggregate liability of the Company for all losses under Section 4.8(a) is the Aggregate Subscription Amount by all Purchasers, provided however , that the maximum aggregate liability of the Company for all losses under Section 4.8(a) as to any individual Purchaser is the Aggregate Subscription Amount of such individual Purchaser.

(iii) Exceptions. The provisions of Section 4.8(c)(i) and (ii) do not apply to (A) claims due to the inaccuracy of any of the representations or breach of any of the warranties of the Company in Sections 3.1(a), 3.1(b), 3.1(c), 3.1(e), 3.1(f), 3.1(g) or 3.1(i) or (B) indemnification claims involving fraud or knowing and intentional misconduct on behalf of the Company.

4.9. Listing of Common Stock . The Company will use its reasonable best efforts to list the Underlying Shares for quotation on the NASDAQ Global Market and maintain the listing of the Common Stock on the NASDAQ Global Market.

4.10. Use of Proceeds . The Company intends to use the net proceeds from the sale of the Preferred Shares hereunder in accordance with the section entitled “Use of Proceeds” as set forth in the Private Placement Memorandum.

4.11. Shareholders Meeting . The Company shall call a special meeting of its shareholders, as promptly as practicable following the Closing, but in no event later than December 31, 2016, to vote on a proposal (the “ Shareholder Proposal ”) to approve the issuance of the total number of Common Stock issuable upon conversion of all of the Preferred Shares, all in accordance with Rule 5635 of the NASDAQ Stock Market Rules (such approval of the Shareholder Proposal, “ Shareholder Approval ”). The Board of Directors of the Company shall unanimously recommend to the Company’s shareholders that such shareholders vote in favor of the Shareholder Proposal. In addition, all of the members of the Board of Directors will vote their shares in favor of the Shareholder Proposal. In connection with such meeting, the Company shall promptly prepare and file (but in no event more than thirty (30) business days after the Closing Date) with the Commission a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the Commission or its staff and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders not more than seven (7) business days after clearance thereof by the Commission, and shall use its reasonable best efforts to solicit proxies for such Shareholder Approval. The Company shall notify Purchaser promptly of the receipt of any comments from the SEC or its staff with respect to the proxy statement and of any request by the SEC or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, nonpublic information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information). If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. In the event that Shareholder Approval is not obtained at such special shareholders meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its shareholders to be held no less than once in each subsequent three-month period beginning on the date of such special shareholders meeting until such approval is obtained.

ARTICLE V
CONDITIONS PRECEDENT TO CLOSING

5.1. Conditions Precedent to the Obligations of the Purchasers to Purchase Preferred Shares . The obligation of each Purchaser to acquire Preferred Shares at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by such Purchaser (as to itself only):

(a) Representations and Warranties . The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date when made and as of the Closing Date, as though made on and as of such date, except for such representations and warranties that speak as of a specific date.

(b) Performance . The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing.

(c) No Injunction . No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

(d) Consents . The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Preferred Shares (including all Required Approvals), all of which shall be and remain so long as necessary in full force and effect.

(e) No Suspensions of Trading in Common Stock; Listing . The Common Stock (i) shall be designated for quotation or listed on the Principal Trading Market and (ii) shall not have been suspended, as of the Closing Date, by the Commission or the Principal Trading Market from trading on the Principal Trading Market nor shall suspension by the Commission or the Principal Trading Market have been threatened, as of the Closing Date, either (A) in writing by the Commission or the Principal Trading Market or (B) by falling below the minimum listing maintenance requirements of the Principal Trading Market. The Company shall have obtained approval of the Principal Trading Market to list the Underlying Shares.

(f) Company Deliverables . The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).

(g) Compliance Certificate . The Company shall have delivered to each Purchaser a certificate, dated as of the Closing Date and signed by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in Sections 5.1(a) and (b) in the form attached hereto as Exhibit F .

(h) Articles of Amendment . The Company shall have filed the Articles of Amendment with the Mississippi Secretary.

(i) Minimum Offering Amount . The Company shall have received and accepted fully paid subscriptions for shares totaling not less than $50,000,000 (2,816,902 shares).

(j) Termination . This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.16 herein.

5.2. Conditions Precedent to the Obligations of the Company to sell Preferred Shares . The Company’s obligation to sell and issue the Preferred Shares at the Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

(a) Representations and Warranties . The representations and warranties made by each Purchaser in Section 3.2 hereof shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date, except for representations and warranties that speak as of a specific date.

(b) Performance . Such Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing Date.

(d) Consents . The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Preferred Shares, all of which shall be and remain so long as necessary in full force and effect.

(e) Purchasers Deliverables . Such Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(b).

(f) Termination . This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.16 herein.

ARTICLE VI
MISCELLANEOUS

6.1. Fees and Expenses . Except as set forth above or elsewhere in the Transaction Documents, the parties hereto shall be responsible for the payment of all expenses incurred by them in connection with the preparation and negotiation of the Transaction Documents and the consummation of the transactions contemplated hereby. The Company shall pay all amounts owed to the Placement Agents relating to or arising out of the transactions contemplated hereby. The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the Securities to the Purchasers.

6.2. Entire Agreement . The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. At or after the Closing, and without further consideration, the Company and the Purchasers will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

6.3. Notices . Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail (provided the sender receives a machine-generated confirmation of successful facsimile transmission or e-mail notification or confirmation of receipt of an e-mail transmission) at the facsimile number or e-mail address specified in this Section prior to 5:00 p.m., New York time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:00 p.m., New York time, on any Trading Day, (c) if sent by U.S. nationally recognized overnight courier service with next day delivery specified (receipt requested) the Trading Day following delivery to such courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

If to the Company:

The First Bancshares, Inc.

6480 U.S. Highway. 98 West

Hattiesburg, Mississippi 39402

Attention: Mr. M. Ray (Hoppy) Cole, Jr.

Telephone: (601) 268-8998

Facsimile: (601) 450-0050

Email: hcole@thefirstbank.com

With a copy to:	Jones Walker LLP 190 E. Capitol St., Suite 800 Jackson, Mississippi 39201 Attention: Neal C. Wise, Esq. Telephone: (601) 949-4631 Facsimile: (601) 949-4804 Email: nwise@joneswalker.com

If to a Purchaser:	To the address set forth under such Purchaser’s name on the signature page hereof; or such other address as may be designated in writing hereafter, in the same manner, by such Person.

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

6.4. Amendments; Waivers; No Additional Consideration . No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by a duly authorized representative of such party. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same consideration is also offered to all Purchasers who then hold Preferred Shares.

6.5. Construction . The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

6.6. Successors and Assigns . The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior written consent of the Purchasers. Any Purchaser may assign its rights hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any Securities in compliance with the Transaction Documents and applicable law, provided such transferee shall agree in writing to be bound, with respect to the transferred Securities, by the terms and conditions of this Agreement that apply to the “Purchasers.”

6.7. No Third-Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than Indemnified Persons.

6.8. Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) may be commenced on a non-exclusive basis in the Mississippi Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Mississippi Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Mississippi Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

6.9. Survival . Subject to applicable statute of limitations, the representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Preferred Shares.

6.10. Execution . This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

6.11. Severability . If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

6.12. Replacement of Shares . If any certificate or instrument evidencing any Preferred Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company and the Transfer Agent for any losses in connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares. If a replacement certificate or instrument evidencing any Preferred Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

6.13. Remedies . In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other than in connection with any action for a temporary restraining order) the defense that a remedy at law would be adequate.

6.14. Payment Set Aside . To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

6.15. Independent Nature of Purchasers’ Obligations and Rights . The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Preferred Shares pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or arising from any such information, materials, statement or opinions. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Preferred Shares or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.

6.16. Termination . This Agreement may be terminated and the sale and purchase of the Preferred Shares abandoned at any time prior to the Closing by either the Company or any Purchaser (with respect to itself only) upon written notice to the other, if the Closing has not been consummated on or prior to 5:00 p.m., New York City time, on the Outside Date; provided, however, that the right to terminate this Agreement under this Section 6.16 shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time. Nothing in this Section 6.16 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents. In the event of a termination pursuant to this Section, the Company shall promptly notify all non-terminating Purchasers. Upon a termination in accordance with this Section, the Company and the terminating Purchaser(s) shall not have any further obligation or liability (including arising from such termination) to the other, and no Purchaser will have any liability to any other Purchaser under the Transaction Documents as a result therefrom.

6.17. Rescission and Withdrawal Right . Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

IN WITNESS WHEREOF , the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

	THE FIRST BANCSHARES, INC.


	By:
		M. Ray (Hoppy) Cole, Jr. President and Chief Executive Officer

	NAME OF PURCHASER:


	By:	/s/
	Name:
	Title:

	Aggregate Purchase Price
	(Subscription Amount):	$

	Number of Preferred Shares
	to be Acquired:

Tax ID No.:

	Address for Notice:

		Telephone:
		Facsimile:
		Email:

		Attention:


Delivery Instructions: (if different than above)

EXHIBITS

A	−	Form of Articles of Amendment
B	−	Form of Registration Rights Agreement
C-1	−	Accredited Investor Questionnaire
C-2		Stock Certificate Questionnaire
D	−	Form of Opinion of Company Counsel
E	−	Form of Secretary’s Certificate
F		Form of Officer’s Certificate

EXHIBIT A

Form of Articles of Amendment

EXHIBIT B

Form of Registration Rights Agreement

EXHIBIT C-1

ACCREDITED INVESTOR QUESTIONNAIRE

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

To: The First Bancshares, Inc.

This Investor Questionnaire (“ Questionnaire ”) must be completed by each potential investor in connection with the offer and sale of shares of mandatorily convertible non-cumulative non-voting perpetual preferred stock, $17.75 liquidation preference per share (the “ Preferred Shares ”), of The First Bancshares, Inc., a Mississippi corporation (the “ Company ”). The Preferred Shares are being offered and sold by the Company without registration under the Securities Act of 1933, as amended (the “ Act ”), and the securities laws of certain states, in reliance on the exemptions contained in Section 4(2) of the Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The Company must determine that a potential investor meets certain suitability requirements before offering or selling Preferred Shares to such investor. The purpose of this Questionnaire is to assure the Company that each investor will meet the applicable suitability requirements. The information supplied by you will be used in determining whether you meet such criteria, and reliance upon the private offering exemptions from registration is based in part on the information herein supplied.

This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy any security. Your answers will be kept strictly confidential. However, by signing this Questionnaire, you will be authorizing the Company to provide a completed copy of this Questionnaire to such parties as the Company deems appropriate in order to ensure that the offer and sale of the Preferred Shares will not result in a violation of the Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers of the Preferred Shares. All potential investors must answer all applicable questions and complete, date and sign this Questionnaire. Please print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item.

PART A. BACKGROUND INFORMATION

Name of Beneficial Owner of the Preferred Shares:

Business Address:
	(Number and Street)


(City)	(State)	(Zip Code)

Telephone Number: (___)

If a corporation, partnership, limited liability company, trust or other entity:

Type of entity:

Were you formed for the purpose of investing in the securities being offered?

Yes ____ No ____

Social Security or Taxpayer Identification No.

If an individua l:

Residence Address:
	(Number and Street)


(City)	(State)	(Zip Code)

Telephone Number: (___)

Age:__________ Citizenship: ____________ Where registered to vote: _______________

Set forth in the space provided below the state(s), if any, in the United States in which you maintained your residence during the past two years and the dates during which you resided in each state:

Are you a director or executive officer of the Company?

Yes ____ No ____

Social Security or Taxpayer Identification No.

PART B. ACCREDITED INVESTOR QUESTIONNAIRE

In order for the Company to offer and sell the Preferred Shares in conformance with state and federal securities laws, the following information must be obtained regarding your investor status. Please initial each category applicable to you as a Purchaser of Preferred Shares.

	1.	A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A)
		of the Securities Act whether acting in its individual or fiduciary capacity;

	2.	A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;

	3.	An insurance company as defined in Section 2(13) of the Securities Act;

	4.	An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)
		(48) of that Act;

	5.	A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business
		Investment Act of 1958;

	6.	A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for
		the benefit of its employees, if such plan has total assets in excess of $5,000,000;

	7.	An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a
		plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered
		investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions
		made solely by persons that are accredited investors;

	8.	A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

	9.	An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or
		partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000;

	10.	A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a
		sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the
		merits and risks of investing in the Company;

	11.	A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000 ( see
		Note 11 below );

	12.	A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s
		spouse in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the current year;

	13.	An executive officer or director of the Company; and

	14.	An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category
		only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies.

Note 11.	For purposes of calculating net worth under paragraph (11):
(A)	The person’s primary residence shall not be included as an asset;
(B)	Indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and
(C)	Indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability.

A. FOR EXECUTION BY AN INDIVIDUAL :

Date:
	By:
		Print Name:

B. FOR EXECUTION BY AN ENTITY :

Entity Name:


Date:
	By:
		Print Name: Title:

C.	ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):

Entity Name:


Date:
	By:
		Print Name: Title:

Entity Name:


Date:
	By:
		Print Name: Title:

EXHIBIT C-2

Stock Certificate Questionnaire

Pursuant to Section 2.2(b) of the Agreement, please provide us with the following information:

1.	The exact name that the Preferred Shares are to be registered in (this is the name that will appear on the stock certificate(s)). You may use a nominee name if appropriate:

2.	The relationship between the Purchaser of the Preferred Shares and the Registered Holder listed in response to Item 1 above:

3.	The mailing address, telephone and telecopy number of the Registered Holder listed in response to Item 1 above:









4.	The Tax Identification Number (or, if an individual, the Social Security Number) of the Registered Holder listed in response to Item 1 above:

EXHIBIT D

Form of Opinion of Company Counsel

[JW to add Preamble and Carveouts]

1.	The Company validly exists as a corporation in good standing under the laws of the State of Mississippi.

2.	The Company has the corporate power and authority to execute and deliver and to perform its obligations under the Transaction Documents, including, without limitation, to issue the Preferred Shares and the Underlying Shares.

3.	The Company is a registered financial holding company under the Bank Holding Company Act of 1956, as amended.

4.	The deposit accounts of the Bank are insured by the Federal Deposit Insurance Corporation under the provisions of the Federal Deposit Insurance Act.

Each of the Transaction Documents has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Purchasers (to the extent they are a party), each of the Transaction Documents constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.

The execution and delivery by the Company of each of the Transaction Documents and the performance by the Company of its obligations under such agreements, including its issuance and sale of the Preferred Shares and the Underlying Shares, do not and will not: (a) require any consent, approval, license or exemption by, order or authorization of, or filing, recording or registration by the Company with any federal or state governmental authority, except (1) as may be required by federal securities laws with respect to the Company’s obligations under the Registration Rights Agreement, (2) the filing of Form D pursuant to Securities and Exchange Commission Regulation D, and (3) the filings required in accordance with Section 4.6 of the Securities Purchase Agreement, (b) violate any federal or state statute, rule or regulation, or any rule or regulation of the NASDAQ Global Select Market, or any court order, judgment or decree, if any, listed in Exhibit A hereto, which exhibit lists all court orders, judgments and decrees that the Company has certified to us are applicable to it, (c) result in any violation of the Articles of Incorporation or Bylaws of the Company or (d) result in a breach of, or constitute a default under, any Material Contract.

Assuming the accuracy of the representations, warranties and compliance with the covenants and agreements of the Purchasers and the Company contained in the Securities Purchase Agreement, it is not necessary, in connection with the offer, sale and delivery of the Preferred Shares to the Purchasers to register the Preferred Shares under the Securities Act.

The Preferred Shares being delivered to the Purchasers pursuant to the Securities Purchase Agreement have been duly and validly authorized and, when issued, delivered and paid for as contemplated in the Securities Purchase Agreement, will be duly and validly issued, fully paid and non-assessable, and free of any preemptive right or similar rights contained in the Company’s Articles of Incorporation or Bylaws. The Underlying Shares, when issued in accordance with the Articles of Amendment and upon approval by the Company shareholders, will be duly and validly issued, fully paid and non-assessable, and free of any preemptive right or similar rights contained in the Company’s Articles of Incorporation or Bylaws.

EXHIBIT E

Form of Secretary’s Certificate

The undersigned hereby certifies that she is the duly elected, qualified and acting Secretary of The First Bancshares, Inc., a Mississippi corporation (the " Company "), and that as such he is authorized to execute and deliver this certificate in the name and on behalf of the Company and in connection with the Securities Purchase Agreement, dated as of October 12, 2016, by and among the Company and the investors party thereto (the "Securities Purchase Agreement" ), and further certifies in her official capacity, in the name and on behalf of the Company, the items set forth below. Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement.

Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions duly adopted by the Board of Directors of the Company at a meeting held on October 7, 2016. Such resolutions have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof and are now in full force and effect.

The Company’s Amended and Restated Articles of Incorporation were filed as an Exhibit to the Company's Current Report on Form 8-k filed on July 28, 2016; the Articles of Amendment Containing Certificate of Designations for the Fixed Rate Cumulative Perpetual Preferred Stock, Series CD were filed as Exhibit 3.1 to Form 8-K filed with the SEC on October 4, 2010; Articles of Amendment Containing Certificate of Designations for the Series E Nonvoting Convertible Preferred Stock were filed with the Company’s Amended and Restated Articles of Incorporation as Exhibit 3.1 to Form 8-K filed with the SEC on [●], 2016; and the Company’s Bylaws were filed as Exhibit 3.2 to the Company's Current Report on Form 8-K filed on March 18, 2016. Such Amended and Restated Articles of Incorporation and Bylaws, as amended, constitute true, correct and complete copies of the Amended and Restated Articles of Incorporation and Bylaws as in effect on the date hereof.

Each person listed below has been duly elected or appointed to the position(s) indicated opposite his name and is duly authorized to sign the Securities Purchase Agreement and each of the Transaction Documents on behalf of the Company, and the signature appearing opposite such person’s name below is such person’s genuine signature.

Name	Position	Signature
M. Ray (Hoppy) Cole, Jr.	President/ Chief Executive Officer	_________________________
Donna T. (Dee Dee) Lowery	Executive Vice President/ Chief Financial Officer	_________________________

IN WITNESS WHEREOF , the undersigned has hereunto set her hand as of this ___ day of October, 2016.


	Chandra B. Kidd Secretary

I, Donna T. (Dee Dee) Lowery, Executive Vice President and Chief Financial Officer, hereby certify that Chandra B. Kidd is the duly elected, qualified and acting Secretary of the Company and that the signature set forth above is her true signature.


	Donna T. (Dee Dee) Lowery Executive Vice President and Chief Financial Officer

Exhibit A

Resolutions

EXHIBIT F

Form of Officer’s Certificate

The undersigned, the Chief Executive Officer of The First Bancshares, Inc., a Mississippi corporation (the “ Company ”), pursuant to Section 5.1(g) of the Securities Purchase Agreement, dated as of October 12, 2016, by and among the Company and the investors signatory thereto (the “ Securities Purchase Agreement ”), hereby represents, warrants and certifies as follows (capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement):

1.	The representations and warranties of the Company contained in the Securities Purchase Agreement are true and correct as of the date when made and as of the Closing Date, as though made on and as of such date, except for such representations and warranties that speak as of a specific date.

2.	The Company has performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing.

IN WITNESS WHEREOF , the undersigned has executed this certificate this ___ day of October, 2016.


	M. Ray (Hoppy) Cole, Jr. President and Chief Executive Officer

Schedule 3.1(a)

Certain preferred equity interests of the following entities are not owned by the Company:

The First Bancshares Statutory Trust 2

(Delaware statutory trust)

The First Bancshares Statutory Trust 3

(Delaware statutory trust)

Schedule 3.1(h)

During the 3 ^rd quarter of 2016, after consultation with outside counsel, the Company determined that the Company had become, as of January 1, 2016, an “accelerated filer” as defined in Exchange Act Rule 12b-2. The Company came to this realization late, because it had previously been under a mistaken belief that certain of its stockholders were affiliates, and therefore had excluded the shares that they owned from calculating its public float. Once clarified, the Company determined that its public float had exceeded $75 million at June 30, 2015, and therefore it had become an accelerated filer under the Exchange Act. As an accelerated filer, there were certain aspects of the Company’s 2015 Annual Report on Form 10-K that were not compliant with certain Exchange Act rules applicable to accelerated filers and its Quarterly Reports on Form 10-Q for the 1 ^st and 2 ^nd quarters of 2016 did not satisfy all of the requirements applicable to accelerated filers (in all cases due to the fact that the Company mistakenly believed it had continued to be a smaller reporting company rather than an accelerated filer). Because of the foregoing, these three filings were not considered to have been timely filed, as a result of which the Company was not eligible to use its previously filed Registration on Form S-3, as to which it filed a withdrawal request on October 7, 2016. On October 11, 2016, the Company amended its 2015 Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q for the 1 ^st and 2 ^nd quarters of 2016 to provide all information required to be filed by accelerated filers. The Company will file all future Exchange Act reports under the applicable accelerated filer Exchange Act rules

Schedule 3.1(i)

See Schedule 3.1(h).

Schedule 3.1(k)

See Schedule 3.1(h).

Schedule 3.1(o)

See Schedule 3.1(h).

Schedule 3.1(v)

See Schedule 3.1(h). Based on the foregoing, the Company did not include in its initial filing of its 2015 Annual Report on Form 10-K (“10-K”) an opinion of its independent auditors as to the Company’s internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002. However, the Company amended its 10-K on October 11, 2016 and provided such opinion.

Schedule 3.1(kk)

See Schedule 3.1(h).

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “ Agreement ”) is made and entered into as of October 12, 2016, by and among The First Bancshares, Inc., a Mississippi corporation (the “ Company ”), and the several purchasers signatory hereto (each a “ Purchaser ” and collectively, the “ Purchasers ”).

This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof between the Company and each Purchaser (the “ Purchase Agreement ”).

1. Definitions . Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

“ Advice ” shall have the meaning set forth in Section 6(d).

“ Affiliate ” means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common control with, such person.

“ Agreement ” shall have the meaning set forth in the Preamble.

“ Business Day ” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

“ Closing ” has the meaning set forth in the Purchase Agreement.

“ Closing Date ” has the meaning set forth in the Purchase Agreement.

“ Commission ” means the Securities and Exchange Commission.

“ Common Stock ” means the common stock of the Company, no par value per share, and any securities into which such shares of common stock may hereinafter be reclassified.

“ Company ” shall have the meaning set forth in the Preamble.

“Contractual Securities” means collectively, (i) securities of the Company which are subject to an Existing Contract and (ii) Registrable Securities.

“Contractual Securityholder” means all Persons that hold Contractual Securities.

“ Effective Date ” means the date that the Registration Statement filed pursuant to Section 2(a) is first declared effective by the Commission.

“ Effectiveness Deadline ” means, with respect to the Initial Registration Statement or the New Registration Statement, the earlier of (i) the 120 ^th calendar day following the Closing Date (or the 150 ^th calendar day following the Closing Date in the event that such registration statement is subject to review by the Commission) and (ii) the 5 ^th Trading Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review; provided , that if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business.

“ Effectiveness Period ” shall have the meaning set forth in Section 2(b).

“ Event ” shall have the meaning set forth in Section 2(c).

“ Event Date ” shall have the meaning set forth in Section 2(c).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Existing Contract” means any contract to which the Company is a party and in effect as of the date hereof, under which the Company may be required to register securities on the Registration Statement, including but not limited to any securities issued to the U.S. Treasury Department on February 6, 2009 in connection with the TARP Capital Purchase Program and other securities that may be issued from time to time in connection therewith.

“ Filing Deadline ” means, with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a), the 90 ^th calendar day following the Closing Date, provided, however , that if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline shall be extended to the next business day on which the Commission is open for business.

“ Holder ” or “ Holders ” means the holder or holders, as the case may be, from time to time of Registrable Securities.

“ Indemnified Party ” shall have the meaning set forth in Section 5(c).

“ Indemnifying Party ” shall have the meaning set forth in Section 5(c).

“ Initial Registration Statement ” means the initial Registration Statement filed pursuant to Section 2(a) of this Agreement.

“Liquidated Damages” shall have the meaning set forth in Section 2(c).

“Losses ” shall have the meaning set forth in Section 5(a).

“ New Registration Statement ” shall have the meaning set forth in Section 2(a).

“ Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“ Principal Market ” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the Closing Date, shall be the NASDAQ Global Select Market.

“ Prospectus ” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post‑effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“ Purchase Agreement ” shall have the meaning set forth in the Recitals.

“ Purchaser ” or “ Purchasers ” shall have the meaning set forth in the Preamble.

“ Registrable Securities ” means all of the Underlying Shares (as defined in Recital B of the Purchase Agreement) and any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the Underlying Shares, provided , that the Holder has completed and delivered to the Company a Selling Stockholder Questionnaire; and provided, further , that the Underlying Shares shall cease to be Registrable Securities upon the earliest to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act (in which case, only such security sold shall cease to be a Registrable Security); or (B) becoming eligible for sale without the requirement for the Company to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) and without volume or manner of sale restrictions by Holders who are not Affiliates of the Company.

“ Registration Statements ” means any one or more registration statements of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Initial Registration Statement, the New Registration Statement and any Remainder Registration Statements), amendments and supplements to such Registration Statements, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.

“ Remainder Registration Statement ” shall have the meaning set forth in Section 2(a).

“ Rule 415 ” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ Rule 424 ” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ SEC Guidance” means (i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff and (ii) the Securities Act.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Selling Stockholder Questionnaire ” means a questionnaire in the form attached as Annex B hereto, or such other form of questionnaire as may reasonably be adopted by the Company from time to time.

“ Trading Day ” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over‑the‑counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over‑the‑counter market as reported in the “pink sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided , that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

“ Trading Market ” means whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

2. Registration .

a. On or prior to the Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities, by such other means of distribution of Registrable Securities as the Company may reasonably determine (the “ Initial Registration Statement ”). The Initial Registration Statement shall be on Form S-1 subject to the provisions of Section 2(f) and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” section substantially in the form attached hereto as Annex A . Notwithstanding the registration obligations set forth in this Section 2, in the event the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly (i) inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission and/or (ii) withdraw the Initial Registration Statement and file a new registration statement (a “ New Registration Statement ”), in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-1 or such other form available to the Company to register for resale the Registrable Securities as a secondary offering; provided, however , that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09. Notwithstanding any other provision of this Agreement and subject to the payment of Liquidated Damages in Section 2(c), if any SEC Guidance sets forth a limitation of the number of Registrable Securities or other shares of Common Stock permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater number of Registrable Securities), the number of Registrable Securities or other shares of Common Stock to be registered on such Registration Statement will be reduced on a pro rata basis. In the event the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-1 or such other form available to the Company to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement (the “ Remainder Registration Statements ”). No Holder shall be named as an “underwriter” in any Registration Statement without such Holder’s prior written consent.

b. The Company shall use its commercially reasonable efforts to cause each Registration Statement to be declared effective by the Commission as soon as practicable and, with respect to the Initial Registration Statement or the New Registration Statement, as applicable, no later than the Effectiveness Deadline, and shall use its commercially reasonable efforts to keep each Registration Statement continuously effective under the Securities Act until the earlier of (i) such time as all of the Registrable Securities covered by such Registration Statement have been publicly sold by the Holders or (ii) the date that all Registrable Securities covered by such Registration Statement may be sold by non-affiliates without volume or manner of sale restrictions under Rule 144, without the requirement for the Company to be in compliance with the current public information requirements under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agent and the effected Holders (the “ Effectiveness Period ”). The Company shall request effectiveness of a Registration Statement as of 5:00 p.m. New York City time on a Trading Day. The Company shall promptly notify the Holders via facsimile or electronic mail of a “.pdf” format data file of the effectiveness of a Registration Statement within one (1) Business Day of the Effective Date. The Company shall, by 9:30 a.m. New York City time on the first Trading Day after the Effective Date, file a final Prospectus with the Commission, as required by Rule 424(b).

c. If: (i) the Initial Registration Statement is not filed with the Commission on or prior to the Filing Deadline, (ii) the Initial Registration Statement or the New Registration Statement, as applicable, is not declared effective by the Commission (or otherwise does not become effective) for any reason on or prior to the Effectiveness Deadline, other than as a result of any open issues arising out of any routine Commission review of Exchange Act filings in effect as of the date hereof, or (iii) after its Effective Date, (A) such Registration Statement ceases for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement), to remain continuously effective as to all Registrable Securities for which it is required to be effective or (B) the Holders are not permitted to utilize the Prospectus therein to resell such Registrable Securities, in the case of (A) and (B) (other than during an Allowable Grace Period (as defined in Section 2(e) of this Agreement)), (iv) a Grace Period (as defined in Section 2(e) of this Agreement) exceeds the length of an Allowable Grace Period, or (v) after the date six months following the Closing Date, and only in the event a Registration Statement is not effective or available to sell all Registrable Securities, the Company fails to file with the SEC any required reports under Section 13 or 15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable), as a result of which the Holders who are not affiliates are unable to sell Registrable Securities without restriction under Rule 144 (or any successor thereto) (any such failure or breach in clauses (i) through (v) above being referred to as an “ Event ,” and, for purposes of clauses (i), (ii), (iii) or (v), the date on which such Event occurs, or for purposes of clause (iv) the date on which such Allowable Grace Period is exceeded, being referred to as an “ Event Date ”), then in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty (“ Liquidated Damages ”), equal to 0.5% of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for any Registrable Securities held by such Holder on the Event Date. The parties agree that notwithstanding anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages shall be payable (i) if as of the relevant Event Date, the Registrable Securities may be sold by non-affiliates without volume or manner of sale restrictions under Rule 144 and the Company is in compliance with the current public information requirements under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agent and (ii) with respect to any period after the expiration of the Effectiveness Period (it being understood that this sentence shall not relieve the Company of any Liquidated Damages accruing prior to the Effectiveness Period). If the Company fails to pay any Liquidated Damages pursuant to this Section 2(c) in full within five (5) Business Days after the date payable, the Company will pay interest thereon at a rate of 1.0% per month (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such Liquidated Damages are due until such amounts, plus all such interest thereon, are paid in full. The Liquidated Damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event, except in the case of the first Event Date. The Effectiveness Deadline for a Registration Statement shall be extended without default or Liquidated Damages hereunder in the event that the Company’s failure to obtain the effectiveness of the Registration Statement on a timely basis results from the failure of a Purchaser to timely provide the Company with information requested by the Company and necessary to complete the Registration Statement in accordance with the requirements of the Securities Act (in which case the Effectiveness Deadline would be extended with respect to Registrable Securities held by such Purchaser).

d. Each Holder agrees to furnish to the Company a completed Selling Stockholder Questionnaire not more than ten (10) Trading Days following the date of this Agreement. At least five (5) Trading Days prior to the first anticipated filing date of a Registration Statement for any registration under this Agreement, the Company will notify each Holder of the information the Company requires from that Holder other than the information contained in the Selling Stockholder Questionnaire, if any, which shall be completed and delivered to the Company promptly upon request and, in any event, within two (2) Trading Days prior to the applicable anticipated filing date. Each Holder further agrees that it shall not be entitled to be named as a selling securityholder in the Registration Statement or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company a completed and signed Selling Stockholder Questionnaire and a response to any requests for further information as described in the previous sentence. If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire or a request for further information, in either case, after its respective deadline, the Company shall use its commercially reasonable efforts at the expense of the Holder who failed to return the Selling Stockholder Questionnaire or to respond for further information to take such actions as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective or post-effective amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable Securities identified in such late Selling Stockholder Questionnaire or request for further information. Each Holder acknowledges and agrees that the information in the Selling Stockholder Questionnaire or request for further information as described in this Section 2(d) will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion of such information in the Registration Statement.

e. Notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared effective by the Commission, the Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information at the time is not, in the good faith judgment of the Company, in the best interests of the Company (a “ Grace Period ”); provided, however , the Company shall promptly (i) notify the Holders in writing of the existence of material non-public information giving rise to a Grace Period (provided that the Company shall not disclose the content of such material non-public information to the Holders) or the need to file a post-effective amendment, as applicable, and the date on which such Grace Period will begin, (ii) use reasonable best efforts to terminate a Grace Period as promptly as practicable and (iii) notify the Holders in writing of the date on which the Grace Period ends; provided, further , that no single Grace Period shall exceed thirty (30) consecutive days, and during any three hundred sixty-five (365) day period, the aggregate of all Grace Periods shall not exceed an aggregate of sixty (60) days (each Grace Period complying with this provision being an “ Allowable Grace Period ”). For purposes of determining the length of a Grace Period, the Grace Period shall be deemed to begin on and include the date the Holders receive the notice referred to in clause (i) above and shall end on and include the later of the date the Holders receive the notice referred to in clause (iii) above and the date referred to in such notice; provided, however , that no Grace Period shall be longer than an Allowable Grace Period. Notwithstanding anything to the contrary, the Company shall cause the Transfer Agent to deliver unlegended Common Stock to a transferee of a Holder in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which a Holder has entered into a contract for sale prior to the Holder’s receipt of the notice of a Grace Period and for which the Holder has not yet settled.

3. Registration Procedures

In connection with the Company's registration obligations hereunder:

a. the Company shall not less than three (3) Trading Days prior to the filing of a Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports), the Company shall, furnish to the Holder copies of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be filed, which documents will be subject to the review of such Holder (it being acknowledged and agreed that if a Holder does not object to or comment on the aforementioned documents within such three (3) Trading Day or one (1) Trading Day period, as the case may be, then the Holder shall be deemed to have consented to and approved the use of such documents). The Company shall not file any Registration Statement or amendment or supplement thereto in a form to which a Holder reasonably objects in good faith, provided that, the Company is notified of such objection in writing within the three (3) Trading Day or one (1) Trading Day period described above, as applicable.

b. (i) the Company shall prepare and file with the Commission such amendments (including post‑effective amendments) and supplements, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period (except during an Allowable Grace Period); (ii) the Company shall cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424 (except during an Allowable Grace Period); (iii) the Company shall respond as promptly as reasonably practicable to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains to the Holders as “Selling Stockholders” but not any comments that would result in the disclosure to the Holders of material and non-public information concerning the Company; and (iv) the Company shall comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until such time as all of such Registrable Securities shall have been disposed of (subject to the terms of this Agreement) in accordance with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; provided, however , that each Purchaser shall be responsible for the delivery of the Prospectus to the Persons to whom such Purchaser sells any of the Registrable Securities (including in accordance with Rule 172 under the Securities Act), and each Purchaser agrees to dispose of Registrable Securities in compliance with the plan of distribution described in the Registration Statement and otherwise in compliance with applicable federal and state securities laws. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the Commission on the same day on which the Exchange Act report which created the requirement for the Company to amend or supplement such Registration Statement was filed.

c. the Company shall notify the Holders (which notice shall, pursuant to clauses (iii) through (v) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably practicable (and, in the case of (i)(A) below, not less than two Trading Days prior to such filing, in the case of (iii) and (iv) below, not more than one Trading Day after such issuance or receipt, and in the case of (v) below, not more than one Trading Day after the occurrence or existence of such development) and (if requested by any such Person) confirm such notice in writing no later than one Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post‑effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on any Registration Statement (in which case the Company shall provide to each of the Holders true and complete copies of all comments that pertain to the Holders as a “Selling Stockholder” or to the “Plan of Distribution” and all written responses thereto, but not information that the Company believes would constitute material and non-public information); and (C) with respect to each Registration Statement or any post‑effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information that pertains to the Holders as “Selling Stockholders” or the “Plan of Distribution”; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading.

d. the Company shall use commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as soon as practicable.

e. the Company shall, if requested by a Holder, furnish to such Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission; provided , that the Company shall have no obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system.

f. the Company shall, prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided , that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

g. the Company shall, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement and under law, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may reasonably request. Certificates for Registrable Securities free from all restrictive legends may be transmitted by the transfer agent to a Holder by crediting the account of such Holder’s prime broker with DTC as directed by such Holder.

h. the Company shall following the occurrence of any event contemplated by Section 3(c)(iii)-(v), as promptly as reasonably practicable (taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event), prepare and file a supplement or amendment, including a post‑effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading.

i. the Company may require each selling Holder to furnish to the Company a certified statement as to (i) the number of shares of Common Stock beneficially owned by such Holder and any Affiliate thereof, (ii) any Financial Industry Regulatory Authority (“ FINRA ”) affiliations, (iii) any natural persons who have the power to vote or dispose of the Common Stock and (iv) any other information as may be requested by the Commission, FINRA or any state securities commission. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of Registrable Securities because any Holder fails to furnish such information within three Trading Days of the Company’s request, any Liquidated Damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.

j. the Company shall cooperate with any registered broker through which a Holder proposes to resell its Registrable Securities in effecting a filing with FINRA pursuant to NASD Rule 2710 as requested by any such Holder and the Company shall pay the filing fee required for the first such filing within two (2) Business Days of the request therefore.

k. if requested by a Holder, the Company shall (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as reasonably practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment.

l. the Company shall otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and the Exchange Act, including Rule 172, notify the Holders promptly if the Company no longer satisfies the conditions of Rule 172 and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earning statement shall satisfy the provisions of Section 11(a) of the Securities Act, including Rule 158 promulgated thereunder (for the purpose of this Section 3, “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter).

4. Registration Expenses . All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding any underwriting discounts and selling commissions and all legal fees and expenses of legal counsel for any Holder) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (B) with respect to compliance with applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders) and (C) if not previously paid by the Company in connection with an Issuer Filing, with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any underwriting, broker or similar fees or commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

5. Indemnification .

a. Indemnification by the Company . The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless each Holder, the officers, directors, agents, partners, members, managers, stockholders, Affiliates and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, managers, stockholders, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and investigation and reasonable attorneys' fees) and expenses (collectively, “ Losses ”), as incurred, that arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (A) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and approved by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that each Holder has approved Annex A hereto for this purpose), or (B) in the case of an occurrence of an event of the type specified in Section 3(c)(iii)-(v), related to the use by a Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated and defined in Section 6(d) below, but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party (as defined in Section 5(c)) and shall survive the transfer of the Registrable Securities by the Holders.

b. Indemnification by Holders . Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein or (ii) to the extent, but only to the extent, that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 3(c)(iii)-(v), to the extent, but only to the extent, related to the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

c. Conduct of Indemnification Proceedings . If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “ Indemnified Party ”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “ Indemnifying Party ”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable fees and expenses incurred in connection with defense thereof; provided , that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest exists if the same counsel were to represent such Indemnified Party and the Indemnifying Party; provided , that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

Subject to the terms of this Agreement, all fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 5(c)) shall be paid to the Indemnified Party, as incurred, within twenty Trading Days of written notice thereof to the Indemnifying Party; provided , that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder). The failure to deliver written notice to the Indemnifying Party within a reasonable time of the commencement of any such action shall not relieve such Indemnifying Party of any liability to the Indemnified Party under this Section 5, except to the extent that the Indemnifying Party is materially and adversely prejudiced in its ability to defend such action.

d. Contribution . If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 5(d) was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section 5 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.

6. Miscellaneous .

a. Remedies . In the event of a breach by the Company or by a Holder of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

b. No Piggyback on Registrations; Prohibition on Filing Other Registration Statements . Neither the Company nor any of its security holders (other than the Contractual Securityholders) may include securities of the Company in a Registration Statement hereunder other than the Contractual Securities and the Company shall not prior to the Effective Date enter into any agreement providing any such right to any of its security holders. The Company shall not, from the date hereof until the date that is 60 days after the Effective Date of the Initial Registration Statement, prepare and file with the Commission a registration statement relating to an offering for its own account under the Securities Act of any of its equity securities, other than (i) a registration statement on Form S-8, (ii) in connection with an acquisition, on Form S-4 or (iii) a registration statement to register for resale securities issued by the Company pursuant to acquisitions or strategic transactions, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

c. Compliance . Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration Statement

d. Discontinued Disposition . By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(iii)-(v), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “ Advice ”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

e. No Inconsistent Agreements . Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date hereof, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.

f. Amendments and Waivers . The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, or waived unless the same shall be in writing and signed by the Company and Holders holding at least two-thirds (2/3) of the then outstanding Registrable Securities, provided that any party may give a waiver as to itself. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates; provided , however , that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. Notwithstanding the foregoing, if any such amendment, modification or waiver would adversely affect in any material respect any Holder or group of Holders who have comparable rights under this Agreement disproportionately to the other Holders having such comparable rights, such amendment, modification, or waiver shall also require the written consent of the Holder(s) so adversely affected.

g. Notices . Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement; provided that the Company may deliver to each Holder the documents required to be delivered to such Holder under Section 3(a) of this Agreement by e-mail to the e-mail address(es) provided by such Holder to the Company solely for such specific purpose.

h. Successors and Assigns . This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Company may not assign its rights (except by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) or obligations hereunder without the prior written consent of all the Holders of the then outstanding Registrable Securities. Each Holder may assign its respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement.

i. Execution and Counterparts . This Agreement may be executed in two or more counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature were the original thereof.

j. Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.

k. Cumulative Remedies . Except as provided in Section 2.c with respect to Liquidated Damages, the remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

l. Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their good faith reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

m. Headings . The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

n. Independent Nature of Purchasers’ Obligations and Rights . The obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. The decision of each Purchaser to purchase the Preferred Shares pursuant to the Transaction Documents has been made independently of any other Purchaser. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Registrable Securities or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Purchasers has been provided with the same Registration Rights Agreement for the purpose of closing a transaction with multiple Purchasers and not because it was required or requested to do so by any Purchaser.

EXECUTION COPY

IN WITNESS WHEREOF , the parties have executed this Registration Rights Agreement as of the date first written above.

	THE FIRST BANCSHARES, INC.


	By:

		M. Ray (Hoppy) Cole, Jr. President and Chief Executive Officer

IN WITNESS WHEREOF , the parties have executed this Registration Rights Agreement as of the date first written above.

	NAME OF INVESTING ENTITY

	AUTHORIZED SIGNATORY

	By:

		Name Title

	ADDRESS FOR NOTICE:

	c/o:

	Street:

	City/State/Zip:

	Attention:

	Telephone:

	Facsimile:

	Email:

Annex A

PLAN OF DISTRIBUTION

We are registering the Securities issued to the selling stockholder to permit the resale of these Securities by the holders of the Securities from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the Securities. We will bear all fees and expenses incident to our obligation to register the Securities.

The selling stockholders may sell all or a portion of the Securities beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the Securities are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent's commissions. The Securities may be sold on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter market and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions. The selling stockholders may use any one or more of the following methods when selling Securities:

●	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

●	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

●	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

●	an exchange distribution in accordance with the rules of the applicable exchange;

●	privately negotiated transactions;

●	settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;

●	broker-dealers may agree with the selling stockholders to sell a specified number of such securities at a stipulated price per share;

●	through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise;

●	a combination of any such methods of sale; and

●	any other method permitted pursuant to applicable law.

The selling stockholders also may resell all or a portion of the Securities in open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or Section 4(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the criteria and conform to the requirements of those provisions.

Broker‑dealers engaged by the selling stockholders may arrange for other broker‑dealers to participate in sales. If the selling stockholders effect such transactions by selling Securities to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the Securities for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission in compliance with NASD Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with NASD IM-2440.

A-1

In connection with sales of the Securities or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the Securities in the course of hedging in positions they assume. The selling stockholders may also sell Securities short and if such short sale shall take place after the date that the Registration Statement of which this prospectus is a part is declared effective by the Commission, the selling stockholders may deliver Securities covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge Securities to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the selling stockholders have been advised that they may not use shares registered on this registration statement to cover short sales of our Securities made prior to the date the registration statement, of which this prospectus forms a part, has been declared effective by the SEC.

The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the Securities owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Securities from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the Securities in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The selling stockholders and any broker-dealer or agents participating in the distribution of the Securities may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Selling Stockholders who are "underwriters" within the meaning of Section 2(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of the Securities Act and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Each selling stockholder has informed the Company that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the Securities. Upon the Company being notified in writing by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of Securities through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the Securities were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In no event shall any broker-dealer receive fees, commissions and markups, which, in the aggregate, would exceed eight percent (8%).

Under the securities laws of some states, the Securities may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Common Stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that any selling stockholder will sell any or all of the Securities registered pursuant to the registration statement, of which this prospectus forms a part.

Each selling stockholder and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the Securities by the selling stockholder and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the Securities to engage in market-making activities with respect to the Securities. All of the foregoing may affect the marketability of the Securities and the ability of any person or entity to engage in market-making activities with respect to the Securities.

A-2

We will pay all expenses of the registration of the Securities pursuant to the registration rights agreement, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided , however , that each selling stockholder will pay all underwriting discounts and selling commissions, if any and any related legal expenses incurred by it. We will indemnify the selling stockholders against certain liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreement, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholders specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.

A-3

Annex B

THE FIRST BANCSHARES, INC.

SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE

The undersigned holder of securities of The First Bancshares, Inc., a Mississippi corporation (the “ Company ”), issued pursuant to a certain Securities Purchase Agreement by and among the Company and the Purchasers named therein, dated as of October 12, 2016, understands that the Company intends to file with the Securities and Exchange Commission a registration statement on Form S-1 (the “ Resale Registration Statemen t”) for the registration and the resale under Rule 415 of the Securities Act of 1933, as amended (the “ Securities Act ”), of the Registrable Securities in accordance with the terms of a certain Registration Rights Agreement by and among the Company and the Purchasers named therein, dated as of October 12, 2016 (the “ Agreement ”). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Agreement.

In order to sell or otherwise dispose of any Registrable Securities pursuant to the Resale Registration Statement, a holder of Registrable Securities generally will be required to be named as a selling stockholder in the related prospectus or a supplement thereto (as so supplemented, the “ Prospectus ”), deliver the Prospectus to purchasers of Registrable Securities (including pursuant to Rule 172 under the Securities Act) and be bound by the provisions of the Agreement (including certain indemnification provisions, as described below). Holders must complete and deliver this Notice and Questionnaire in order to be named as selling stockholders in the Prospectus. Holders of Registrable Securities who do not complete, execute and return this Notice and Questionnaire within ten (10) Trading Days following the date of the Agreement (1) will not be named as selling stockholders in the Resale Registration Statement or the Prospectus and (2) may not use the Prospectus for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling stockholder in the Resale Registration Statement and the Prospectus. Holders of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not named as a selling stockholder in the Resale Registration Statement and the Prospectus.

NOTICE

The undersigned holder (the “ Selling Stockholder ”) of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities owned by it and listed below in Item (3), unless otherwise specified in Item (3), pursuant to the Resale Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire, understands and agrees that it will be bound by the terms and conditions of this Notice and Questionnaire and the Agreement.

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate and complete:

B-4

QUESTIONNAIRE

Name :

(a)

Full Legal Name of Selling Stockholder:

(b)

Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held:

(c)

Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):

2.	Address for Notices to Selling Stockholder :




	Telephone:
	Fax:
	Contact Person:
	E-mail address of Contact Person:______________________________________________

3.	Beneficial Ownership of Registrable Securities Issuable Pursuant to the Purchase Agreement :

(a)

Type and Number of Registrable Securities beneficially owned and issued pursuant to the Agreement:

(b)

Number of Securities to be registered pursuant to this Notice for resale:

4.	Broker-Dealer Status :

(a)

Are you a broker-dealer?

Yes ☐

No ☐

B-5

(b)

If “yes” to Section 4(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?

Yes ☐

No ☐

Note:

If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

(c)

Are you an affiliate of a broker-dealer?

Yes ☐

No ☐

Note:

If yes, provide a narrative explanation below:

(d)

If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

Yes ☐

No ☐

Note:

If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

5.	Beneficial Ownership of Other Securities of the Company Owned by the Selling Stockholder :

Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item 3 .

Type and amount of other securities beneficially owned:

6.	Relationships with the Company :

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here:

7.	Plan of Distribution :

The undersigned has reviewed the form of Plan of Distribution attached as Annex A to the Registration Rights Agreement, and hereby confirms that, except as set forth below, the information contained therein regarding the undersigned and its plan of distribution is correct and complete.

State any exceptions here:

***********

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items (1) through (7) above and the inclusion of such information in the Resale Registration Statement and the Prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of any such Registration Statement and the Prospectus.

By signing below, the undersigned acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder, particularly Regulation M in connection with any offering of Registrable Securities pursuant to the Resale Registration Statement. The undersigned also acknowledges that it understands that the answers to this Questionnaire are furnished for use in connection with Registration Statements filed pursuant to the Registration Rights Agreement and any amendments or supplements thereto filed with the Commission pursuant to the Securities Act.

I confirm that, to the best of my knowledge and belief, the foregoing statements (including without limitation the answers to this Questionnaire) are correct.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Dated:	Beneficial Owner:



	By:

		Name Title

CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS

SERIES E NONVOTING CONVERTIBLE PREFERRED STOCK

THE FIRST BANCSHARES, INC.

The First Bancshares, Inc., a corporation organized and existing under the laws of the State of Mississippi (the " Corporation ") DOES HEREBY CERTIFY:

That pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation of the Corporation, the Board of Directors on October 7, 2016 adopted the following resolution creating a series of 3,563,380 shares of preferred stock designated as "Series E Nonvoting Convertible Preferred Stock" of $1.00 par value per share:

RESOLVED, that pursuant to the authority conferred upon the Board of Directors in accordance with the provisions of the Articles of Incorporation, a series of preferred stock, of $1.00 par value per share, of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:

1. Definitions . As used herein, the following terms have the following meanings:

(a) " Affiliate " has the meaning set forth in 12 C.F.R. §225.2(a) or any successor provision.

(b) " Articles of Incorporation " means the Articles of Incorporation of the Corporation, as amended and in effect from time to time.

(d) " business day " means any day other than a Saturday or a Sunday or a day on which banks in the State of Mississippi are authorized or required by law, executive order or regulation to close.

(e) " By-Laws " means the By-Laws of the Corporation, as amended and in effect from time to time.

(f) " Certificate " means a certificate representing one or more shares of Series E Preferred Stock.

(g) " Certificate of Designation " means this Certificate of Designation, Preferences and Rights of Series E Preferred Stock.

(h) " Common Stock " means the common stock of the Corporation, par value of one U.S. dollar ($1.00) per share.

(i) " Corporation " means The First Bancshares, Inc., a corporation organized and existing under the laws of the State of Mississippi, and any successor Person.

(j) " Dividends " has the meaning set forth in Section 3.

(k) “ Fixed Preferred Dividend ” has the meaning set forth in Section 3(a)(i).

(l) " Mandatory Conversion " has the meaning set forth in Section 5(b)(i).

(m) " Mandatory Conversion Date " has the meaning set forth in Section 5(b)(i).

(n) " Notice of Conversion " has the meaning set forth in Section 5(b)(iii).

(o) " Permissible Transfer " means a transfer by the holder of Series E Preferred Stock (i) to an Affiliate of such holder or to the Corporation, (ii) in a widespread public distribution of Common Stock or Series E Preferred Stock, (iii) in which no transferee (or group of associated transferees) would receive 2% or more of any class of Voting Securities of the Corporation (including pursuant to a related series of such transfers), or (iv) to a transferee that would control more than a majority of the Voting Securities of the Corporation (not including Voting Securities such Person is acquiring from the transferor).

(p) " Person " means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, or any other form of entity not specifically listed herein.

(q) " Reorganization Event " means (i) any consolidation, merger or other similar business combination of the Corporation with or into another Person, in each case pursuant to which the Common Stock will be converted into cash, securities or other property of the Corporation or another Person; (ii) any sale, transfer, lease or conveyance to another Person of all or substantially all of the property or assets of the Corporation, in each case pursuant to which the Common Stock will be converted into cash, securities or other property of the Corporation or another Person; or (iii) any change, including by capital reorganization, reclassification or otherwise (other than a transaction resulting in an adjustment pursuant to Section 3(b) below), of the Common Stock into securities including securities other than Common Stock.

(r) " Series E Liquidation Preference " has the meaning set forth in Section 4(b).

(s) " Series E Preferred Stock " has the meaning set forth in Section 2.

(t) " Voting Security " has the meaning set forth in 12 C.F.R. §225.2(q) or any successor provision.

2. Designation and Amount . There shall be a series of preferred stock of the Corporation, of $1.00 par value per share, which shall be designated "Series E Nonvoting Convertible Preferred Stock" (the " Series E Preferred Stock "), and the number of shares constituting that series shall be 3,563,380. Such number of shares may be increased or decreased by resolution of the Board of Directors and by the filing of a certificate in accordance with the provisions of the laws of the State of Mississippi stating that such increase or reduction has been so authorized; provided , however , that no decrease shall reduce the number of shares of Series E Preferred Stock to a number that is less than the number of shares of Series E Preferred Stock then outstanding plus the number of shares of Series E Preferred Stock issuable upon exercise of then outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation. Shares of Series E Preferred Stock that are redeemed, purchased or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized and unissued shares of preferred stock, undesignated as to series and available for future issuance.

3. Dividends and Distributions; Adjustments for Combinations and Divisions of Common Stock .

(a) Holders of Series E Preferred Stock will be entitled to receive, when, as and if declared by the Board of Directors or a duly authorized committee of the Board of Directors, out of funds legally available therefor, non-cumulative Dividends (as defined below) in the amounts determined as set forth in this Section 3, and no more. The Series E Preferred Stock will rank subordinate and junior to all other shares of preferred stock other than those which, by their respective terms, rank pari passu with or junior to the Series E Preferred Stock and shall rank pari passu with the Common Stock with respect to the payment of dividends or distributions, whether payable in cash, securities, options or other property, and with respect to the issuance of any rights to purchase stock, warrants, securities or other property (collectively, the " Dividends "). The holders of record of Series E Preferred Stock will be entitled to receive as, when, and if declared by the Board of Directors, Dividends on each share of Preferred Stock equal to the per share amount paid on a share of Common Stock (the “Preferred Dividend”), and no Dividends will be payable on the Common Stock or any other class or series of capital stock ranking with respect to Dividends pari passu with the Common Stock unless a Preferred Dividend is payable at the same time on the Series E Preferred Stock; provided , however , that if a stock Dividend is declared on Common Stock, the holders of Series E Preferred Stock will be entitled to a stock Dividend payable solely in shares of Series E Preferred Stock. Dividends that are payable on Series E Preferred Stock will be payable to the holders of record of Series E Preferred Stock as they appear on the stock register of the Corporation on the applicable record date, as determined by the Board of Directors, which record date will be the same as the record date for the equivalent Dividend of the Common Stock. In the event that the Board of Directors does not declare or pay any Dividends with respect to shares of Common Stock, then the holders of Series E Preferred Stock will have no right to receive any Dividends. Notwithstanding the foregoing, in the event the shareholders of the Company do not approve the conversion of the Series E Preferred Stock to Common Stock within six (6) months of issuance pursuant to Section 5(b)(i) below, the holders of record of Series E Preferred Stock shall be entitled to receive as, when, and if declared by the Board of Directors, Dividends on each share of Preferred Stock equal to six (6) percent of liquidation value per annum, or $1.065 per share (the “ Fixed Preferred Dividend ”) subject to adjustment, as provided in Section 3(b) and Section 6 below, and no Dividends will be payable on the Common Stock or any other class or series of capital stock ranking with respect to Dividends pari passu with the Common Stock unless a Preferred Dividend is payable at the time on the Series E Preferred Stock. Such Fixed Preferred Dividends will be payable semi-annually in arrears on June 30 and December 31, beginning on June 30, 2017, until the Mandatory Conversion as defined herein .

(b) Subject to Section 6 below, in the event that the Corporation at any time or from time to time will effect a division of the Common Stock into a greater number of shares (by stock split, reclassification or otherwise than by payment of a Dividend in Common Stock or in any right to acquire the Common Stock), or in the event the outstanding Common Stock will be combined or consolidated, by reclassification, reverse stock split or otherwise, into a lesser number of shares of the Common Stock, then the Series E Preferred Stock will, concurrently with the effectiveness of such event, be proportionately split, reclassified, combined, consolidated, reverse-split or otherwise, as appropriate, such that the number of shares of Common Stock and Series E Preferred Stock outstanding immediately following such event shall bear the same relationship to each other as did the number of shares of Common Stock and Series E Preferred Stock outstanding immediately prior to such event.

4. Liquidation, Dissolution or Winding Up .

(a) Rank . The Series E Preferred Stock will, with respect to rights upon liquidation, winding up and dissolution, rank subordinate and junior in right of payment to all other shares of preferred stock other than those which, by their respective terms, rank pari passu with or junior to the Series E Preferred Stock and shall rank senior to the Common Stock in respect of the Series E Liquidation Preference as set forth below.

(b) Liquidation Preference . Upon any voluntary liquidation, dissolution or winding up of the Corporation, subject to the rights of any holders of securities to which the rights of the holders of the Series E Preferred Stock are subordinate or on parity, the holders of Series E Preferred Stock shall be entitled to receive, and no distribution shall be made to the holders of shares of Common Stock or any other shares of capital stock of the Corporation ranking junior upon liquidation, dissolution or winding up to the Series E Preferred Stock, unless, prior thereto, the holders of Series E Preferred Stock shall have received an amount (the " Series E Liquidation Preference " ) equal to the greater of (i) seventeen and 75/100 dollars ($17.75) per share and (ii) the amount the holder of such share of Series E Preferred Stock would receive in respect of such share if such share had been converted into Common Stock at the time of such liquidation, dissolution or winding up (assuming the conversion of all shares of Series E Preferred Stock at such time, without regard to any limitations on conversion of the Series E Preferred Stock).

(c) Merger, Consolidation and Sale of Assets Not Liquidation . For purposes of this Section 4, the merger or consolidation of the Corporation with or into any other corporation or other entity, including a merger or consolidation in which the holders of Series E Preferred Stock receive cash, securities or other property for their shares, or the sale, lease or exchange (for cash, securities or property) of all or substantially all of the assets of the Corporation, will not constitute a liquidation, dissolution or winding up of the Corporation.

5. Transfer; Conversion .

(a) Transfer . Neither the initial holder of any share of Series E Preferred Stock nor any of its Affiliates shall be permitted to sell, transfer or otherwise dispose of such Series E Preferred Stock other than in a Permissible Transfer.

(b) Conversion .

(i) Subject to approval by the shareholders of the Company, three (3) business days following the Company’s receipt of shareholder approval for the issuance of the Common Stock issuable upon conversion of the Preferred Stock, each share of Preferred Stock will be automatically converted into one share of Common Stock (“ Mandatory Conversion ”); provided that upon such conversion the holder, together with all Affiliates of the holder, will not own or control in the aggregate more than 9.99% of the Common Stock (or of any class of Voting Securities issued by the Corporation), excluding for the purpose of this calculation any reduction in ownership resulting from transfers by such holder and its Affiliates of Voting Securities of the Corporation (which, for the avoidance of doubt, does not include Series E Preferred Stock). In any such conversion, each share of Series E Preferred Stock will convert into one (1) share of Common Stock. To effect the Mandatory Conversion, the holder shall surrender (the date of such surrender, the " Mandatory Conversion Date " ) the certificate or certificates evidencing such shares of Series E Preferred Stock, duly endorsed, at the registered office of the Corporation, and provide written instructions to the Corporation as to the number of whole shares for which such conversion shall be effected, together with any appropriate documentation that may be reasonably required by the Corporation. Upon the surrender of such certificate(s), the Corporation will issue and deliver to such holder a certificate or certificates for the number of shares of Common Stock into which the Series E Preferred Stock has been converted.

(ii) [Reserved].

(iii) As promptly as practicable following any Mandatory Conversion, the holder of the converted shares shall provide the Corporation a written notice of such conversion (a " Notice of Conversion " ). In addition to any information required by applicable law or regulation, the Notice of Conversion shall state (x) the number of shares of Common Stock to be issued in respect of such conversion, (y) the name in which shares of Common Stock to be issued upon such conversion should be registered, and (z) the manner in which certificates of Series E Preferred Stock held by such holder are to be surrendered for issuance of certificates representing shares of Common Stock. No later than three (3) business days following delivery of the Notice of Conversion, with respect to any shares of Series E Preferred Stock as to which a Mandatory Conversion shall have occurred, the Corporation shall issue and deliver certificates representing shares of Common Stock to the holder thereof or such holder's designee upon presentation and surrender of the certificate evidencing such Series E Preferred Stock to the Corporation and, if required, furnishing appropriate endorsements and transfer documents and the payment of all transfer and similar taxes, and, in the event that such conversion is with respect to some, but not all, of the shares of Series E Preferred Stock represented by the certificate surrendered, the Corporation shall issue and deliver a certificate or certificate(s) representing the number of shares of Series E Preferred Stock that were not converted to Common Stock.

(iv) Shares of Series E Preferred Stock converted in accordance with this Section 5 will resume the status of authorized and unissued preferred stock, undesignated as to series and available for future issuance.

(v) Prior to the close of business on the Mandatory Conversion Date with respect to any share of Series E Preferred Stock, shares of Common Stock issuable upon conversion thereof, or other securities issuable upon conversion of such shares of Series E Preferred Stock, shall not be deemed outstanding for any purpose, and the holder thereof shall have no rights with respect to the Common Stock (including voting rights) by virtue of holding such share of Series E Preferred Stock.

(vi) All shares of Common Stock delivered upon conversion of the Series E Preferred Stock shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens, claims, security interests, charges and other encumbrances.

(c) No Impairment . The Corporation will not, by amendment of its Articles of Incorporation or the By-Laws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions hereof, including Section 3(b) and this Section 5 and in the taking of all such actions as may be necessary or appropriate in order to protect the adjustment and conversion rights of the holders of the Series E Preferred Stock against impairment. Nothing in this Section 5(c) shall be deemed to grant approval or voting rights to the holders of Series E Preferred Stock that are in addition to those set forth in Section 9 hereof.

(d) Reservation of Shares Issuable upon Conversion . The Corporation will at all times reserve and keep available out of its authorized but unissued Common Stock solely for the purpose of effecting the conversion of the Series E Preferred Stock such number of shares of Common Stock as will from time to time be sufficient to effect the conversion of all outstanding Series E Preferred Stock; provided that if at any time the number of authorized but unissued Common Stock will not be sufficient to effect the conversion of all then outstanding Series E Preferred Stock, the Corporation will take such action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Common Stock to such number of shares as will be sufficient for such purpose.

6. Reorganization Events .

(a) So long as any shares of Series E Preferred Stock are outstanding, if there occurs a Reorganization Event, then a holder of shares of Series E Preferred Stock shall, effective as of the consummation of such Reorganization Event, automatically receive for such Series E Preferred Stock the type and amount of securities, cash and other property receivable in such Reorganization Event by a holder of the number of shares of Common Stock into which the number of shares of Series E Preferred Stock held by such holder would then be convertible (without regard to any limitations on conversion of the Series E Preferred Stock).

(b) In the event that holders of shares of Common Stock have the opportunity to elect the form of consideration to be received in such transaction, the holders of Series E Preferred Stock shall be entitled to participate in such elections as if they had converted all of their Series E Preferred Stock into Common Stock immediately prior to the election deadline.

(c) For the avoidance of doubt, nothing set forth herein shall prohibit the Corporation from entering into or consummating a transaction constituting a Reorganization Event provided that the Series E Preferred Stock is treated as set forth in this Section 6.

7. Maturity; Redemption . The Series E Preferred Stock shall be perpetual unless converted in accordance with this Certificate of Designation. The Series E Preferred Stock will not be redeemable at the option of the Corporation or any holder of Series E Preferred Stock at any time. Notwithstanding the foregoing, nothing contained herein shall prohibit the Corporation from repurchasing or otherwise acquiring shares of Series E Preferred Stock in voluntary transactions with the holders thereof. Any shares of Series E Preferred Stock repurchased or otherwise acquired may be cancelled by the Corporation and thereafter be reissued as shares of any series of preferred stock of the Corporation.

8. Voting Rights . The holders of Series E Preferred Stock will not have any voting rights, except as provided in Section 9 below or as otherwise from time to time required by law.

9. Protective Provisions .

(a) So long as any shares of Series E Preferred Stock are outstanding, the vote or consent of the holders of a majority of the shares of Series E Preferred Stock at the time outstanding, voting as a single class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating any of the following actions, whether or not such approval is required by Mississippi law:

(i) any amendment, alteration or repeal (including by means of a merger, consolidation or otherwise) of any provision of the Articles of Incorporation (including this Certificate of Designation) or the By-Laws that would adversely affect the rights or preferences of the Series E Preferred Stock (which shall not include, for the avoidance of doubt, any Reorganization Event in connection with which the Series E Preferred Stock is treated as provided in Section 6 above or any increase or decrease in the authorized amount of capital stock of the Corporation); or

(ii) the consummation of a Reorganization Event in connection with which the Series E Preferred Stock is not converted or otherwise treated as provided in Section 6.

Notwithstanding anything to the contrary herein, any increase in the amount of the authorized preferred stock or any securities convertible into preferred stock or the creation and issuance, or an increase in the authorized or issued amount, of any series of preferred stock or any securities convertible into preferred stock, in any case ranking equally with, junior to and/or senior to the Series E Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the Corporation's liquidation, dissolution or winding up will not, in and of itself, be deemed to adversely affect rights, preferences or privileges of the Series E Preferred Stock and, notwithstanding any provision of Mississippi law, holders of Series E Preferred Stock will have no right to vote solely by reason of such an increase, creation or issuance.

(b) Notwithstanding the foregoing, holders of Series E Preferred Stock shall not have any voting rights if, at or prior to the effective time of the act with respect to which such vote would otherwise be required, all outstanding shares of Series E Preferred Stock shall have been converted into shares of Common Stock.

(c) In the event that the Corporation makes (i) an offer to repurchase shares of Common Stock from all of the holders thereof, or (ii) a tender offer for any shares of Common Stock, the Corporation shall also offer to repurchase or make a tender offer for, as applicable, shares of Series E Preferred Stock pro rata based upon the number of shares of Common Stock such holders would be entitled to receive if such shares were converted into shares of Common Stock immediately prior to such repurchase and otherwise on terms which would provide the holders of the Series E Preferred Stock consideration and other terms equivalent to the terms offered to the holders of Common Stock assuming the Series E Preferred Stock were so converted.

10. Notices . Any notice required by the provisions hereof to be given to the holders of Series E Preferred Stock will be deemed given upon the earlier of (i) actual receipt and (ii) three (3) business days after being sent by certified or registered mail, postage prepaid, return receipt requested, and addressed to each holder of record at such holder's address as it appears on the books of the Corporation.

11. Record Holders . To the fullest extent permitted by law, the Corporation will be entitled to recognize the record holder of any share of Series E Preferred Stock as the true and lawful owner thereof for all purposes and will not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other Person, whether or not it will have express or other notice thereof.

12. No Preemptive Rights . Except as may be set forth in any agreement between the Corporation and any holder of Series E Preferred Stock, the holders of Series E Preferred Stock are not entitled to any preemptive or preferential right to purchase or subscribe for any capital stock, obligations, warrants or other securities or rights of the Corporation.

13. Replacement Certificates . In the event that any Certificate will have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Corporation, the posting by such Person of a bond in such amount as the Corporation may determine is necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Corporation or the Corporation's transfer agent, as applicable, will deliver in exchange for such lost, stolen or destroyed Certificate a replacement Certificate.

14. Other Rights . The shares of Series E Preferred Stock have no rights, preferences, privileges or voting powers or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or as provided by applicable law.

Exhibit 99.1

The First Bancshares, Inc. Announces the Acquisition of Iberville Bank and Gulf Coast Community Bank, and a Private Placement of Preferred Stock

HATTIESBURG, Miss.--(BUSINESS WIRE)--October 14, 2016--The First Bancshares, Inc. (NASDAQ: FBMS) (“First Bancshares” or “the Company”), holding company for The First, A National Banking Association, (“The First”) announced today the signing of a Stock Purchase Agreement with A. Wilbert’s Sons Lumber and Shingle Company (“A. Wilbert’s Sons”), parent company of Iberville Bank, Plaquemine, Louisiana, under which First Bancshares has agreed to acquire 100% of the common stock of Iberville Bank in an all-cash transaction. The Company also announced today the signing of an Agreement and Plan of Merger under which it has agreed to acquire Gulf Coast Community Bank (“GCCB”), Pensacola, Florida, in an all-stock transaction. In addition, the Company entered into Securities Purchase Agreements (“SPAs”) with a limited number of institutional and other accredited investors, including certain directors of the Company (collectively the “Purchasers”) to sell a total of 3,563,380 shares of mandatorily convertible non-cumulative, non-voting, perpetual Preferred Stock, Series E, $1.00 par value (the “Series E Preferred Stock”) at a price of $17.75 per share, for aggregate gross proceeds of $63.25 million.

Iberville Bank Transaction

Under the terms of the Stock Purchase Agreement, First Bancshares will pay A. Wilbert’s Sons a total of $31.1 million in cash. Approximately 8% of the purchase price payable to A. Wilbert’s Sons is being held in escrow as contingency for flood-related loan losses in the event losses occur due to recent flooding in Iberville Bank’s market area.

At June 30, 2016, Iberville Bank had approximately $258.5 million in assets, $140.8 million in net loans, $230.6 million in deposits and $26.2 million in stockholder’s equity. Iberville Bank serves the Baton Rouge, LA area through 10 locations operating in Addis, Baton Rouge, Denham Springs, Pierre Part, Plaquemine, Plattenville, Port Allen, Prairieville, Saint Gabriel and White Castle, Louisiana. The transaction will significantly increase the combined banks market share in the Baton Rouge area. Additional information is available on the Iberville Bank’s website: www.ibervillebank.com .

The Stock Purchase Agreement has been approved by the Board of Directors of First Bancshares and A. Wilbert’s Sons. Closing of the transaction, which is expected to occur late in the fourth quarter of 2016 or early in the first quarter of 2017, is subject to customary conditions, including regulatory approval and approval by the shareholders of A. Wilbert’s Sons.

First Bancshares currently estimates annual pre-tax expense reductions associated with the transaction will be approximately 40% of Iberville Bank’s annual non-interest expenses. Assuming the transaction is completed in the first quarter of 2017, the expense savings are estimated to be fully achieved by the end of 2017. The transaction is expected to be accretive in 2018, the first full year of combined operations. Estimated acquisition and conversion related costs are approximately $6.6 million on a pre-tax basis.

The transaction is expected to have an earnback period of approximately 4 years from the completion of the transaction. The internal rate of return for the transaction is projected to be greater than 25% which is well above First Bancshares’ estimated cost of capital.

Klein W. Kirby, President of A. Wilbert’s Sons, commented, “Iberville Bank has been a part of A. Wilbert’s Sons since 1931. We are proud of our 85 year bank history and are very pleased that Iberville Bank will continue to be operated as a community bank under the leadership of The First. Iberville Bank’s customers should see a seamless transaction and the same local leadership after the transaction is closed. The First is an outstanding banking organization and we look forward to an even better Iberville Bank going forward.”

Advisors

Keefe, Bruyette & Woods, Inc., with Christopher T. Mihok as lead investment banker, acted as financial advisor to First Bancshares, and Jones Walker LLP, with lead attorney Neal Wise, acted as its legal advisor. Sheshunoff & Co., with Curtis Carpenter as lead investment banker, acted as financial advisor to A. Wilbert’s Sons Lumber and Shingle Company, and Goodwin Procter, LLP, with lead attorney Andrew Goodman, acted as its legal advisor.

Gulf Coast Community Bank Transaction

Under the terms of the Agreement and Plan of Merger, GCCB will merge with and into The First. First Bancshares will issue GCCB’s shareholders shares of the First Bancshares’ common stock which, for purposes of the acquisition, will be valued through a 30-day average of First Bancshares’ Common Stock price as of five (5) business days prior to closing. The merger consideration is valued at $0.50 per share of GCCB common stock for a total of approximately $2.3 million.

As of June 30, 2016, GCCB had $133.4 million in total assets, $82.8 million in net loans, $115.7 million in deposits and $5.8 million in stockholders’ equity. GCCB serves the Pensacola, Florida metropolitan statistical area through five locations in Gulf Breeze, Pace and Pensacola, Florida. Information is available on GCCB’s website: www.mygulfbank.com .

The merger agreement has been approved by the Board of Directors of each company. Closing of the transaction, which is expected to occur late in the fourth quarter of 2016 or early in the first quarter of 2017, is subject to customary conditions, including regulatory approval and approval by the shareholders of GCCB.

First Bancshares currently estimates annual pre-tax expense reductions associated with the transaction will be approximately 46% of GCCB’s annual non-interest expenses. Assuming the transaction is completed in the first quarter of 2017, the expense savings are estimated to be fully achieved by the end of 2017. The transaction is expected to be accretive in 2018, the first full year of combined operations. Estimated acquisition and conversion related costs are approximately $3.3 million on a pre-tax basis.

The transaction is expected to have an earnback period of less than 3 years from the completion of the transaction. The internal rate of return for the transaction is projected to be greater than 25% which is well above First Bancshares’ estimated cost of capital.

Buzz Ritchie, President and Chief Executive Officer of GCCB, stated, "We are pleased to have the opportunity to join The First. We are convinced that they are fully committed to the values of community banking with an emphasis placed upon long term relationships. This is a strategic move for us as we will strengthen and expand our core products and services and will better serve existing and future customers. We believe this merger also provides strong value for our shareholders who have been committed and loyal to us over the years."

Advisors

Performance Trust Capital Partners, with Jonathan W. Briggs as lead investment banker, acted as financial advisor to First Bancshares, and Jones Walker LLP, with lead attorney Neal Wise, acted as its legal advisor. Monroe Financial Partners, Inc., with Paula S. Johannsen as lead investment banker, acted as financial advisor to Gulf Coast Community Bank, and Smith MacKinnon, PA, with lead attorney John P. Greeley, acted as its legal advisor.

Combined Company

Upon completion of all transactions, the combined Company will have approximately $1.6 billion in total assets, $1.4 billion in total deposits and $1.1 billion in total loans. The Company will have 48 locations in Mississippi, Louisiana, Alabama, and Florida.

Private Placement of Preferred Stock

First Bancshares also announced today the signing of SPAs for a private placement of Preferred Stock, Series E, $1.00 par value. The Company expects to raise gross proceeds of $63.25 million in new capital through the private placement of 3,563,380 shares of its Series E Preferred Stock at a price of $17.75 per share.

The preferred stock will automatically convert into shares of First Bancshares’ Common Stock at a ratio of one share of Common Stock for each share of Preferred Stock owned within three business days following the Company’s receipt of shareholder approval. It is currently anticipated that the shareholders’ meeting at which this approval is to be solicited will be scheduled for December 7, 2016.

The Company intends to use the net proceeds from this offering to finance a portion of the Iberville Bank Acquisition and related expenses, to support its capital ratios in connection with Iberville Bank and GCCB acquisitions and for general corporate purposes. If the Iberville Bank or GCCB acquisitions are not completed, the shares of Series E Preferred Stock will remain outstanding and proceeds will be used for general corporate purposes to support growth strategy, which may include organic growth, funding acquisition opportunities, de novo branching into new markets, redemption of our CDCI securities or other organic expansion of our business.

The Company engaged the investment banking firm of FIG Partners, LLC to act as its Senior Placement Agent, Stephens Inc. to act as its Junior Placement Agent, and Keefe Bruyette & Woods, Inc. as its Co-Placement Agent, all to assist with the offering. The law firm of Jones Walker LLP acted as legal counsel to First Bancshares and King, Holmes, Paterno & Soriano, LLP served as counsel to the Placement Agents.

M. Ray “Hoppy” Cole, President & Chief Executive Officer of First Bancshares and The First, commented, “We believe that the announcements today of two mergers and the capital raise are transformational in the history of our company and create tremendous value for our shareholders. We are thrilled to join forces with Iberville Bank and Gulf Coast Community Bank. Both institutions share a common set of core values with our company. They have distinguished themselves in their respective markets by being totally focused on serving their clients and communities, by delivering exemplary service and being good corporate citizens. Their respective cultures align perfectly with ours which focuses on safe, sound, profitable growth.

The combination of these institutions is a continuation of our strategic plan of creating a regional community bank in the Gulf South. The resulting company will offer additional products, services, locations and capacity which will allow us to better serve our existing clients and provide opportunities for growth in two very attractive markets, Pensacola, FL and Baton Rouge, LA. We are excited and honored that these institutions have agreed to partner with us to form a company that we believe will provide exceptional returns to our shareholders.”

About The First Bancshares, Inc.

The First Bancshares, Inc., headquartered in Hattiesburg, Mississippi, is the parent company of The First, A National Banking Association. Founded in 1996, the First has operations in Mississippi, Louisiana and Alabama. The Company’s stock is traded on NASDAQ Global Market under the symbol FBMS. Information is available on the Company’s website: www.thefirstbank.com .

Forward Looking Statement

This news release contains statements regarding the projected performance of The First Bancshares, Inc. and its subsidiary. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act. Actual results may differ materially from the projections provided in this release since such projections involve significant known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; and legislation or regulatory changes which adversely affect the ability of the combined Company to conduct business combinations or new operations. The Company disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Further information on The First Bancshares, Inc. is available in its filings with the Securities and Exchange Commission, available at the SEC’s website, http://www.sec.gov .

CONTACT:
The First Bancshares, Inc.
M. Ray “Hoppy” Cole, Jr., 601-268-8998
Chief Executive Officer
or
Dee Dee Lowery, 601-268-8998
Chief Financial Officer

Filed Pursuant to Rule 433Registration Statement No. __________Issuer Free Writing Prospectus Dated October __, 2015Relating to Preliminary Prospectus Supplement Dated October __, 2015 1 $63,250,000 Private PlacementOctober 2016Strictly Confidential

Caution Regarding Forward Looking Statements This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, descriptions of the financial condition, results of operations, asset and credit quality trends, profitability, projected earnings, future plans, strategies and expectations of The First Bancshares, Inc. (the “Company”). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions of the Company, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “seek,” “target,” “potential,” “focus,” “may,” “could,” “should” or similar expressions. These forward-looking statements express management’s current expectations or forecasts of future events, and by their nature, are subject to risks and uncertainties. Therefore, there are a number of factors that might cause actual results to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to: (i) the effects of future economic, business and market conditions and changes, domestic and foreign, including seasonality; (ii) governmental monetary and fiscal policies; (iii) legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by the Company’s regulators, and changes in the scope and cost of Federal Deposit Insurance Corporation insurance and other coverages; (iv) changes in accounting policies, rules and practices; (v) the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand, and the values and liquidity of loan collateral, securities, and other interest sensitive assets and liabilities; (vi) the failure of assumptions and estimates underlying the establishment of reserves for possible loan losses and other estimates; (vii) changes in borrowers’ credit risks and payment behaviors; (viii) changes in the availability and cost of credit and capital in the financial markets; (ix) changes in the prices, values and sales volumes of residential and commercial real estate; (x) the effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services; (xi) the risks of mergers, acquisitions and divestitures, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions; (xii) changes in technology or products that may be more difficult, costly, or less effective than anticipated; (xiii) the effects of war or other conflicts, acts of terrorism or other catastrophic events, including hurricanes, storms, droughts, tornados and flooding, that may affect economic conditions generally and in the Company’s markets; (xiv) the failure or inadequecy of assumptions and estimates used in the Company’s reviews of its loan portfolio, the review of its credit grading methods by an independent firm and the Company’s analysis of its capital position; and (xv) such other matters as discussed in this presentation or identified in the Company’s periodic filings with the Securities and Exchange Commission, particularly those matters described under the heading “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2015. You are cautioned not to place undue reliance on forward-looking statements, which reflect the Company’s outlook only and speak only as of the date of this presentation or the dates indicated in the statements. The Company assumes no obligation to update or supplement forward-looking statements. For further information on these and other factors that could impact the Company and the statements contained herein, reference should be made to the Company’s filings with the Securities and Exchange Commission. This presentation is a summary only. The Company is not making any implied or express representation or warranty as to the accuracy or completeness of the information contained herein. This presentation is neither an offer to sell nor a solicitation of an offer to purchase any securities of the Company. Any offer to sell or solicitation of an offer to purchase securities of the Company will be made only pursuant to the preliminary prospectus supplement and accompanying prospectus filed with the Securities and Exchange Commission. Stephens- To be reviewed by Counsel 2

These slides may contain non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of the registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Non-GAAP Financial Measures Stephens- To be reviewed by Counsel 3

Offering Summary Issuer: The First Bancshares, Inc. Ticker: NASDAQ: FBMS Offering Type: Private placement Security Type: Mandatorily convertible preferred stock Offering Amount: $63,250,000 Expected Closing Date: October 2016 Conversion: Convertible into common stock; mandatory conversion immediately following shareholder approval; shareholders meeting scheduled as soon as practical following the offering Registration: FBMS will register the shares within 90 days of conversion to common Use of Proceeds: Support the acquisitions of Gulf Coast Community Bank and Iberville Bank and for general corporate purposes, including organic growth and other potential acquisitions Senior Placement Agent: FIG Partners, LLC Junior Placement Agent: Stephens Inc. Co-Placement Agent: Keefe, Bruyette & Woods, Inc. 4

Offering Rationale Supports the acquisitions of Gulf Coast Community Bank and Iberville BankGulf Coast Community Bank - $133 million in assets, headquartered in Pensacola, FLIberville Bank - $258 million in assets, headquartered in Plaquemine, LAAcquisitions are consistent with the Company’s expansion strategy first developed in 2009 and will substantially increase the Company’s presence in the Baton Rouge MSA and expand FBMS into the contiguous Florida Panhandle marketManagement has a proven track record and history of successful acquisitionsStrengthens capital ratiosTangible Common EquityLeverage RatioTotal RBCNormalizes tangible common equity to appropriate peer levelsOffering is an opportunity to broaden the Company’s investor base and sponsorshipGreater market capitalization and potential for improved trading liquidity post-offering 5

Balance Sheet (06/30/16):Assets - $1.2 billionGross Loans - $833.0 millionDeposits - $1.0 billionCDCI Preferred - $17.1 millionTangible Common Equity - $77.5 millionProfitability (6/30/16 YTD):Net Income of $5.3 million vs $4.2 million YTD 2015ROAA - 0.87%ROATCE - 14.1%Efficiency Ratio of 68.0% vs 71.4% YTD 2015Asset Quality:Manageable NPA levelsLimited direct energy exposureDisciplined approach has concentration levels within regulatory guidelines Operates 29 branches and 4 LPOs in the Gulf South Region www.thefirstbank.com Note: Financial information excludes announced mergers of Gulf Coast Community Bank and Iberville BankSource: Company documents and SNL Financial Company Overview: The First Bancshares, Inc. FBMS Locations LPO Locations 6

M. Ray “Hoppy” Cole, Jr. Dee Dee Lowery President, CEO30 years experience Executive VP, CFO26 years experience Ion Mixon Eric Waldron Executive VP, Risk Manager17 years experience President, Northern Region21 years experience Chris Ryals Carol Daniel Executive VP, COO22 years experience Executive VP, Credit Administrator34 years experience Hayden Mitchell Dave Bush Executive VP, Chief Retail Banking Officer 40 years experience Executive VP, Private Banking Manager37 years experience Ray Wesson Wade Neth President, Southern Region24 years experience President, Alabama Region30 years experience Executive Leadership Team 7 Executive leadership team has been with the Company for an average of 9 yearsSame team responsible for devising and executing the plan to double the size of the Company Source: Company documents and SNL Financial

Source: Company documents Recent Franchise Expansion 2011 Acquired 8 Whitney Branches in MS: $179 million Deposits 2013 De Novo Expansion: Ocean Springs, MS Branch 2013 Successful Private Placement: $20 million 2013 Acquired First National Bank of Baldwin County in a bankruptcy transaction: $187 million Assets 2014 Acquisition of BCB Holding Co. of Mobile (Bay Bank) with Assets of $79 million/Valued at 115% of TBV Post Acquisition: 30 locations; $250 million Deposits in Mobile MSA 9th Market Ranking 2014 Opened Full Service Office in Baton Rouge, LA Opened Slidell Loan Production Office (New Orleans area) 2015 Expansion into Jackson MS Metro Area with Acquisition of The Mortgage Connection 2016 Opened LPO in Jackson, MS 2016 Pending acquisitions of Gulf Coast Community Bank in Pensacola, FL and Iberville Bank in Plaquemine, LA 8 In 2009, FBMS formulated a 5-year, tri-state expansion strategy focused on branch expansion and acquisitions of banks with assets less than $500 million in MS, AL and LAThe proposed acquisitions of Gulf Coast Community Bank and Iberville Bank are consistent with this strategy

1 As of June 30, 20162 CAGR based on YTD annualized net income of $10.6 million3 CAGR based on YTD annualized diluted EPS of $1.86Source: SNL Financial; GAAP Data; Company documents Financial Performance Since 2009 $ In Millions 2009 2010 2011 2012 2013 2014 2015 YTD1 CAGR Since 2009 Balance Sheet Total Assets $478 $503 $681 $721 $941 $1,094 $1,145 $1,225 15.6% Gross Loans $320 $333 $388 $414 $583 $707 $776 $833 15.9% Deposits $384 $396 $573 $597 $780 $893 $917 1,032 16.4% Loans/Deposits 83% 84% 68% 69% 75% 79% 85% 81% Net Income $1.7 $2.5 $2.9 $4.0 $4.6 $6.6 $8.8 $5.3 29.9%2 ROAA 0.36% 0.51% 0.50% 0.57% 0.49% 0.64% 0.78% 0.87% ROATCE 4.0% 6.4% 9.2% 10.6% 8.5% 10.9% 12.7% 14.1% Net Interest Margin2 3.32% 3.74% 3.99% 3.59% 3.44% 3.70% 3.72% 3.68% Diluted Earnings Per Share $0.49 $0.74 $0.82 $1.16 $0.96 $1.19 $1.55 $0.93 21.0%3 9

Execution on 5-Year Plan CAGR since 2009 (w/ pending deals): 20.6%CAGR since 2009 (w/o pending deals): 15.6%Legacy CAGR since 2009: 7.8% $ in millions 10 *YTD is as of June 30, 2016Note: Acquired assets excludes Mortgage Connection acquisition and includes pending acquisitions of Gulf Coast Community Bank and Iberville BankSource: Company documents

Execution on 5-Year Plan 11 *YTD is as of June 30, 2016Source: Company documents

Execution on 5-Year Plan 12 *YTD is as of June 30, 2016Source: Company documents

Execution on 5-Year Plan 13 2015 Deposits by Market 2009 Deposits by Market Source: Company documents

Market Demographics 14 *FBMS represents an average rate weighted by deposits for each county in which the Company operatesSource: SNL Financial FBMS operates in diverse markets within the growing Gulf South Hattiesburg is home to University of Southern Mississippi, and its economy is driven by strong retail and medical industries The Mississippi Gulf Coast has a $1.1 billion gaming industry with a focus on tourism and hospitality – currently 12 casinos with 2 additional properties planned for future developmentBaldwin County, AL is among the nation’s fastest growing areas with a heavy manufacturing presence as well as a significant tourism industry

Commercial Real Estate Portfolio 15 1 Based on internal Company calculationsNote: CRE loans do not include Owner Occupied CRESource: Internal Company documents 2Q 2013 2Q 2014 2Q 2015 2Q 2016 CRE Loans: $177.8 $166.9 $206.8 $250.1 CRE Annual Growth: - (6%) 24% 21% 3 Year CRE Growth - - - 41% CRE Concentration Ratio1: 210% 188% 207% 231% C&D Concentration Ratio1: 86% 83% 93% 94%

Net Interest Margin Analysis 16 Source: GAAP data; Company documents

Asset Liability Management 17 Source: ALM report by First National Bankers Bank The Company maintains an asset sensitive balance sheet that would benefit from an increase in interest rates Changes to net interest income and economic value of equity are well within policy limits in all rate shock scenarios The First Bancshares is Asset Sensitive

Capital Raising Thought Process 18 Since early 2015, FBMS has been evaluating the timing of a smaller capital raise intended to strengthen TCE / TADuring the course of evaluating the capital raise, FBMS was presented with the opportunity to minimize the dilutive effects of the offering Strengthen Capital Levels M&A Transactions Iberville BankPlaquemine, LA$258 million in assets$31.1 million transaction value100% Cash Gulf Coast Community BankPensacola, FL$133 million in assets$2.3 million transaction value100% Stock $63,250,000Support the acquisitions of Gulf Coast Community Bank and Iberville Bank and for general corporate purposes, including organic growth and other potential acquisitions Proposed Offering

19 Proposed Acquisition Transaction Value: $2.3 million Price / TBV: 39% Exchange Ratio1: 0.0285x Consideration: 100% Stock Shares Issued2: 128,643 FBMS shares issued PF Ownership3: 2.3% Cost Saves4: 46% Transaction Expenses: $3.3 million (pre-tax) Intangibles Created: $2.4 million Expected Closing: 4th Quarter 2016 TBV Earnback Period: 2.3 years IRR: 38.3% Gulf Coast Community Bank 1 Based on FBMS stock price of $17.502 Based on average price of $17.50 for FBMS common stock3 Does not include additional shares from the capital offering4 100% realized in 2017 Financial Highlights Pro Forma Regional Branch Map FBMS Locations Gulf Coast Locations Transaction Terms

Expansion into attractive contiguous marketExisting knowledge of the Pensacola market with management structure already in placeAbility to leverage the Company’s lending expertise and higher lending limit to better serve new and existing clientsLow cost deposit base and well-situated offices provide low cost entry into the Pensacola market Operating synergies and current inefficiencies result in significant cost savings StrategicRationale Comprehensive due diligence process completed, rigorous internal loan review and OREO inspectionCredit Risk Management reviewed 53% of the total loan portfolioMarking down and selling the bulk of the problem loans and OREO greatly reduces credit risk$3.5 million gross loan mark (4.0%) and $12.0 million mark on OREO Commitment in place to sell $15.8 million in OREO at closing for $6.0 millionFBMS will only assume $3 million of classified loans and $1.4 million of OREO RiskMitigation Transaction Rationale 20

Expansion into the Pensacola Market 21 Growing economy based on tourism, military and educationVisitors to Pensacola spent $849 million in 2015 and supported approximately 20,000 jobs in the area Location of Naval Air Station Pensacola, employing more than 16,000 military and 7,400 civilian personnelUniversity of West Florida has more than 12,000 students enrolled in its undergrad, graduate and research programsNavy Federal Credit Union recently moved its headquarters to Pensacola, bringing 5,200 jobs to the area with an additional 5,000 expected in coming years Source: SNL Financial; www.visitpensacola.org; www.navymwrpensacola.com; www.uwf.edu

22 Proposed Acquisition Iberville Bank 1 75% realized in 2017, 100% thereafter Transaction Value: $31.1 million Price / TBV: 122% Consideration: 100% Cash Cost Saves1: 40% Transaction Expenses: $6.0 million (pre-tax) Intangibles Created: $6.6 million Board Representation: 1 seat on bank level Board Expected Closing: 4th Quarter 2016 TBV Earnback Period: 4.1 years IRR: 33.9% FBMS Locations Iberville Bank Locations Financial Highlights Pro Forma Regional Branch Map Transaction Terms

Founded in 1931, Iberville Bank is an established franchise with deep ties to the local communityIncreases the Company’s presence in one of the Gulf South’s premier markets, ranking in the top 10 in deposit market share in the Baton Rouge MSA Leverages existing local infrastructure for maximum efficienciesLow loan/deposit ratio provides significant potential for loan growthExcellent credit quality due to strong underwriting standards Low cost deposit base with 31% non-interest bearing deposits Comprehensive due diligence process completed, rigorous internal loan review External loan review by Credit Risk Management - reviewed 53% of the principal loan dollar balanceGross credit mark to loans of $3.9 million (2.7%)Additional due diligence to measure impact of the recent storm – FBMS has visited all flood-impacted propertiesApproximately 8% of deal value is being held in escrow as contingency for flood-related loan losses3rd party accounting firm reviewed accounting treatment as a section 1361 asset purchase – no deferred tax assets or liabilities to be created in the transaction Transaction Rationale 23 StrategicRationale RiskMitigation

Iberville provides FBMS with stable, low cost deposits and… 24 Note: All data is representative of Iberville Bank unless indicated otherwise1Net income tax-effected at 35%Source: SNL Financial …the ability to generate significant operating efficiencies Loans / Deposits Cost of Interest-Bearing Deposits % Noninterest-Bearing Deposits Efficiency Ratio, FTE Noninterest Exp. / Avg. Assets Tax-Effected ROAA1 Avg. Deposits per Branch ($M)

Core Earnings Capacity 25 Last Twelve Months Core Earnings Reconciliation ($000)1 Baseline earnings of $3.6 million Excludes revenue synergies opportunities Excludes ability to leverage excess liquidity of 61.9% Loan / Deposit ratio 1Data for the twelve months ended 6/30/162Tax rate of 35%3Based on Iberville Bank reported LTM noninterest expense of $9,704 3 (S-Corp) 2

Strengthened Market Presence 26 Strong, diverse economy focused on government, education and energyAs the capitol of Louisiana, more than 22,000 people are employed in state and local government jobs Louisiana State University is one of the largest universities in the country with more than 31,000 students enrolled in undergrad, graduate and research programs Petrochemical hub of the region – ExxonMobil employs approximately 5,000 people in its 8 Baton Rouge locations Source: SNL Financial; www.brgov.com; www.lsu.edu; www.exxonmobil.com

Pro Forma Map Source: SNL Financial 27 FBMS Locations FBMS LPO LocationsGulf Coast Locations Iberville Locations

28 Pro Forma Deposit Market Composition 2009 Deposits by State 2015 Deposits by State Pro Forma Deposits by State Note: Based on June 30, 2015 deposit data Since 2009, FBMS has significantly improved its geographic diversity and reduced risk by decreasing its percentage of Mississippi deposits from 100% to 54% of total depositsThe Company has expanded into markets with better growth prospects than its legacy branches, driving recent and future growth

Pro Forma Loans 1 Includes purchase accounting adjustments and $63.25 million capital offering with 5% selling expensesNote: FBMS concentration ratios based on internal Company calculationsSource: SNL Financial, internal Company documents FBMS Gulf Coast Iberville Pro Forma1 29 Gross Loans: $143 million C&D Concentration: 82% CRE Concentration: 255% NPA / Assets: 1.54% Gross Loans: $87 million C&D Concentration: 180% CRE Concentration: 402% NPA / Assets: 16.58% Gross Loans: $831 million C&D Concentration: 94% CRE Concentration: 231% NPA / Assets: 1.13% Net Loans: $1,049 million C&D Concentration: 85% CRE Concentration: 219% NPA / Assets: 0.89%

Pro Forma Deposits Note: Does not include purchase accounting adjustmentsSource: SNL Financial 30 FBMS Gulf Coast Iberville Pro Forma Deposits: $231 million MRQ Cost of Deposits: 0.16% Loans / Deposits: 62% Deposits: $116 million MRQ Cost of Deposits: 0.28% Loans / Deposits: 75% Deposits: $1,032 million MRQ Cost of Deposits: 0.32% Loans / Deposits: 81% Deposits: $1,379 million MRQ Cost of Deposits: 0.29% Loans / Deposits: 76%

Pro Forma Balance Sheet 31 Note: See footnotes on next page for additional detail

Pro Forma Balance Sheet Footnotes 32 Footnotes a. Proceeds from sale of loans and OREO, net of transaction costs b. $2.8 million reversal of reserves, $3.5 million loan credit mark, $1.4 million loan rate mark up, and $3.4 million reduction from loan sale c. $12.0 million OREO fair value mark plus $6.0 million OREO sold at close d. Goodwill created e. Core deposit intangible created f. Net DTA from fair value adjustments and NOL carry-forward g. Time deposit mark h. Purchase price, transaction costs, and repayment of FHLB advances i. $2.0 million reversal of reserves, $3.9 million loan credit mark and $3.0 million rate mark up j. Mark on OREO k. Goodwill created l. Core deposit intangible created m. Time deposit mark n. Redemption of FHLB o. Proceeds from capital raise, net of expenses

Pro Forma Impact 33 $63,250,000 common stock raise The transaction is $0.64 dilutive1 to tangible book value at close, earned back over approximately 4.1 yearsPro forma capital ratios: FBMS(6/30/2016) Transactions & $63.25 Million Base Offering (6/30/2016) TCE / TA: 6.4% 8.0% Leverage Ratio: 8.5% 9.3% CET1 Ratio: 7.8% 10.2% Tier 1 Risk Weighted Ratio: 10.5% 12.4% Total Risk Based Ratio: 11.3% 13.0% 1 Tangible book value dilution from the Gulf Coast Community Bank and Iberville Bank deals is estimated to be $0.64 per share. Overall tangible book value dilution, including capital to be used for general corporate purposes, is estimated to be $0.12 per share.Note: TBV dilution and payback projections assume $63.25 million offering at $17.75 per share

Investment Highlights FBMS presents an opportunity to invest in a premier Gulf South franchise with an experienced management team and attractive growth opportunities Attractive entry point for a growing Gulf South franchise with excellent operating metricsThe community bank of choice in southern Mississippi, with a growing presence in Alabama, Louisiana and the Florida Panhandle Experienced and successful leadership teamSuperior performance and execution on five year plan14% ROATCEApproaching 1% ROAAMinimal direct exposure to energyStrengthens capital ratios Greater market capitalization and potential for improved trading liquidity post-offeringOffering is an opportunity to broaden the Company’s investor base and sponsorshipSignificant M&A opportunities with over 180 potential target banksOpportunity to invest in a growth story 34

Growing in the Gulf South 35