Exhibit 10.1
 
LOAN AGREEMENT

THIS LOAN AGREEMENT (as amended, restated or supplemented or otherwise modified
from time to time, hereinafter called the “Agreement”) made and entered into as
of the 5th day of December, 2016, (“Effective Date”) by and between THE FIRST
BANCSHARES, INC., a Mississippi corporation, (hereinafter called “Borrower”) and
FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association having
its principal office located in Memphis, Tennessee (“Lender”).

W I T N E S S E T H :

WHEREAS, the Borrower has requested that Lender provide a revolving line of
credit loan in the amount of Twenty Million Dollars ($20,000,000.00) (“Loan”)
and Lender has agreed to make this Loan on the terms and conditions hereinafter
set forth;

WHEREAS, Borrower and Lender wish to enter into this Loan Agreement to set forth
certain terms of the Loan.

NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants and conditions herein contained, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto intending to be legally bound hereby
agree as follows:

AGREEMENTS

1.            AMOUNT AND TERMS OF BORROWINGS.
 
1.1            Defined Terms.  Any capitalized term used but not defined in the
body of this Agreement shall have the meaning set forth on Appendix A attached
hereto and incorporated herein by reference.
 
1.2            Loan.  Lender hereby agrees to lend, and Borrower hereby agrees
to borrow, upon the terms and conditions set forth in this Agreement, the sum of
Twenty Million Dollars ($20,000,000.00), as the Loan, to be evidenced by a
promissory note (the “Note”), as set forth in Exhibit A and included herein by
reference.  The Loan shall bear interest and be payable in accordance with the
terms and provisions of the Note.  The Loan shall expire and mature, and the
outstanding principal balance of the Loan and all accrued interest thereon shall
be due and payable, on the Maturity Date.
 
1.3            Fees.
 
(a)
A loan origination fee in the amount of Twenty Thousand Dollars ($20,000.00)
shall be paid by Borrower to Lender on or before the closing of this Loan. 
Borrower agrees that this fee is fair and reasonable considering the condition
of the money market, the creditworthiness of the Borrower, the interest rate to
be paid, and the nature of the security for the Loan.
 

(b)
Borrower shall pay to Lender quarterly an unused line fee at a rate equal to
35/100 percent (0.35%) per annum (the “Unused Line Fee”), applied to the amount
by which $20,000,000.00 exceeds the average daily outstanding principal balance
of the Loan during the immediately preceding calendar quarter (or part thereof)
while this Agreement is in effect and for so long thereafter as any of the
Obligations are outstanding, which fee shall be payable on the thirtieth (30th)
day of the last month of each calendar quarter (i.e., each December 30, March
30, June 30, and September 30), in arrears.

 
1

--------------------------------------------------------------------------------

1.4            Funding.  The advance of Loan proceeds hereunder shall be made,
upon Borrower’s request, by depositing the same into a demand deposit account
with Lender, or by wire transfer to Borrower’s account according to the wire
instructions set forth on Schedule 1.5, or as otherwise agreed between Borrower
and Lender.  The Loan to Borrower may be made, at Borrower’s request, in one or
more advances, each of which shall be subject to the terms and conditions of
this Agreement, including but not limited to Sections 2 and 3 hereof.  Advances
under the Loan may be requested either orally or in writing by Borrower as
provided in this paragraph.  Lender may, but need not, require that all oral
requests be confirmed in writing.  All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender’s
office set forth below.  The following persons, acting individually (each an
“Authorized Agent” and, collectively, the “Authorized Agents”), currently are
authorized to request advances and authorize payments under the Loan until
Lender receives from Borrower, at Lender’s address set forth below, written
notice of revocation of their authority:  M. Ray Cole, Jr. (e-mail address:
hcole@thefirstbank.com), Dee Dee Lowery (e-mail address:
dlowery@thefirstbank.com).  The Borrower agrees that the Lender shall have no
liability or responsibility to identify any party who makes any verbal request
or electronic submission for any of said banking transactions; but the Lender
shall be fully and completely protected in acting upon any such verbal request
or electronic submission made by any party who identifies himself as one of the
Authorized Agents of the Borrower.  Any electronic submission shall be by e-mail
or by facsimile and shall be deemed to have been made and certified by an
Authorized Agent by the applicable method as follows: (i) if the e-mail received
by the Lender shows it was sent from the Authorized Agent’s e-mail address as
set forth herein or (ii) if the facsimile sent to the Bank is signed by the
Authorized Agent.
 
1.5            Increased Costs Generally.
 
(a)
If any Change in Law shall:

(i)            impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or advances, loans or other credit extended
or participated in by, the Lender;
 
(ii)            subject the Lender to any tax of any kind whatsoever with
respect to this Agreement, or the Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof; or
 
(iii)            impose on the Lender any other condition, cost or expense
affecting this Agreement or the Loan made by the Lender;
 
and the result of any of the foregoing shall be to increase the cost to the
Lender of making, converting to, continuing or maintaining the Loan (or of
maintaining its obligations to make the Loan), or to increase the cost to the
Lender of issuing or maintaining any letter of credit (or of maintaining its
obligation to participate in or to issue any letter of credit), or to reduce the
amount of any sum received or receivable by the Lender hereunder (whether of
principal, interest or any other amount) then, upon written request of the
Lender, the Borrower shall promptly pay to the Lender, as the case may be, such
additional amount or amounts as will compensate the Lender, as the case may be,
for such additional costs incurred or reductions suffered.
 
2

--------------------------------------------------------------------------------

 
(b)
Capital Requirements.  If Lender determines that any Change in Law affecting the
Lender or Lender’s holding company, if any, regarding capital requirements, has
or would have the effect of reducing the rate of return on the Lender’s capital
or on the capital of the Lender’s holding company, if any, as a consequence of
this Agreement, the commitment of the Lender hereunder or the Loan made by the
Lender hereunder, to an amount below that which the Lender or the Lender’s
holding company could have achieved but for such Change in Law (taking into
consideration the Lender’s policies and the policies of the Lender’s holding
company with respect to capital adequacy), then from time to time upon written
request of the Lender, the Borrower shall promptly pay to the Lender such
additional amount or amounts as will compensate the Lender or the Lender’s
holding company for any such reduction suffered.
 

(c)
Certificates for Reimbursement.  A certificate of the Lender setting forth the
amount or amounts necessary to compensate the Lender or its holding company, as
the case may be, as specified in this Section and delivered to Borrower, shall
be conclusive absent manifest error.  The Borrower shall pay the amount shown as
due on any such certificate within ten (10) days after receipt thereof.
 

(d)
Delay in Requests.  Failure or delay on the part of Lender to demand
compensation pursuant to this Section shall not constitute a waiver of Lender’s
right to demand such compensation; provided that the Borrower shall not be
required to compensate the Lender pursuant to this Section for any increased
costs incurred or reductions suffered more than six (6) months prior to the date
that the Lender, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions, and of the Lender’s intention to claim
compensation therefor (except that if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 6-month period referred
to above shall be extended to include the period of retroactive effect thereof).

 
2.            USE OF PROCEEDS.
 
2.1            Use of Loan Proceeds.  The proceeds of the Loan shall be used by
the Borrower for the sole purposes of financing all or a portion of the
Borrower’s redemption of preferred stock issued under the United States
Treasury’s Community Development Capital Initiative (“CDCI”), financing mergers
or acquisitions of financial institutions (subject to the terms of this
Agreement), and for financing general corporate activities.
3

--------------------------------------------------------------------------------

3.            CONDITIONS TO LOAN CLOSING.
 
The obligation of Lender to extend any loan or credit to Borrower under this
Agreement or to make any Loan disbursements is subject to the strict
satisfaction of each of the following conditions:

3.1            No Defaults; Certificate.  Borrower and the Bank shall be in full
compliance with all the terms and conditions of this Agreement, and no Event of
Default, nor any event which upon notice or lapse of time or both would
constitute such an Event of Default, shall have occurred.  At Lender’s request,
Lender shall have received from Borrower and the Bank a certificate, in form and
content reasonably acceptable to Lender dated as of and delivered on the date of
the Loan, certifying that (1) the representa-tions and warranties set forth
herein, and the exhibits attached hereto, are accurate, true and correct on and
as of such date, (2) neither the transactions contemplated hereby or by any
other Loan Document will cause or result in any violation of (or creation of any
right in third parties under the provisions of) any laws restricting or
otherwise regulating the use, application or distribution of corporate funds and
assets, and (3) no Event of Default nor any event which upon notice or lapse of
time or both would constitute such an Event of Default, exists.
 
3.2            Accuracy of Representations and Warranties.  At the time of the
initial Loan disbursement, the representa-tions and warranties set forth herein
and in any other Loan Document shall be true and correct.
 
3.3            Corporate Action and Authority.  The Borrower shall have
delivered to Lender: (i) a certificate from the Secretary of State of
Mississippi that Borrower is in good standing and certificates from the
Secretaries of State and of each other State in which the Borrower owns any
property, has stationed any employees or agents, or otherwise conducts business,
certifying the Borrower’s good standing as a corporation in each such State;
(ii) a copy of the Resolutions passed by the Borrower’s Board of Directors
authorizing the execution and delivery of the performance of Borrower’s
obligations under the Loan Documents certified by the Secretary or Assistant
Secretary to be true and correct; and (iii) a certificate or certificates, dated
as of and delivered on the date of the execution of this Agreement and signed on
behalf of the Borrower by the Secretary or Assistant Secretary, certifying the
names of the officers authorized to execute and deliver the Loan Documents on
behalf of the Borrower, together with the original, not photocopied, signatures
of each officer.  Borrower shall also deliver the same items specified in (i)
above pertaining to the Bank from the appropriate regulatory agency.
 
3.4            Delivery of Note, Loan Agreement, and Negative Pledge Agreement. 
At the time of the exten-sion of the Loan, Borrower shall have deliv-ered the
Loan Documents.  There shall be no liens upon the Borrower’s Capital Stock in
The First, a national banking association (the “Bank”).
 
3.5            Proceedings.  The Loan Documents, upon their execution, and all
proceedings in connection with the authorization, execution and delivery of and
the performance of the obligations under the Loan Documents shall be
satisfactory in substance and form to Lender.
4

--------------------------------------------------------------------------------

3.6            Payment of Fees and Expenses.  Borrower shall have paid, at or
prior to the date of the extension of the Loan, all costs and expenses in
accordance with Section 8.9, to the extent then determined by Lender.
 
3.7            Other Writings.  The Lender shall receive such other agreements,
instruments, documents, certificates, affidavits and other writings as Lender
may reasonably require.
 
3.8            Opinion of Counsel.  Borrower shall have delivered to Lender at
Borrower’s expense, favorable written opinions of counsel for Borrower dated as
of and delivered on the date of the extension of the Loan, in form and content
acceptable to Lender, as set forth in Exhibit B.
 
3.9            Financial Statements.  Prior to any disbursement under the Loan,
Borrower shall have delivered to Lender, true and exact copies of the current
financial statements of the Borrower, the Bank and all other Subsidiaries, for
December 31, 2015 and audit report and opinion of  the Borrower’s independent
accounting firm, with respect thereto (it being understood that Lender is
relying upon such audit report and opinion in entering into this Loan
Agreement), the unaudited financial statements of Borrower as of June 30, 2016
and the 2015 F.R. Y-6 Annual Report and F.R. Y-9 Parent Company only (and
Consolidated, if applicable) financial statement(s) filed by Borrower with the
Federal Reserve.
 
3.10            No Material Adverse Change.  At the time the Loan is funded
hereunder, there shall have occurred, in the opinion of Lender, no material
adverse changes in the condition, financial or otherwise, of Borrower or Bank
from that reflected in the financial statements furnished pursuant to Section
3.9 hereof or furnished to Lender from time to time hereafter as required
herein.
 
4.            REPRESENTATIONS AND WARRANTIES.
 
In order to induce the Lender to enter into this Agreement and to make the Loan
(including future advances under the Loan), the Borrower represents and warrants
to the Lender (which representations and warranties shall survive the delivery
of the Loan Documents and the initial funding of the Loan) that:

4.1            Corporate Status.  Borrower is a corporation duly organized and
existing under the laws of the State of Mississippi, is duly qualified to do
business and is in good standing under the laws of other states where the
Borrower does business, if any, and has the corporate power and authority to own
its properties and assets and conduct its affairs and business.
 
4.2            Corporate Power and Authority.  Borrower has full power and
authority to enter into this Agreement, to borrow funds as contemplated herein,
to execute and deliver this Agreement, the Note and other Loan Documents
executed and delivered by it, and to incur the obligations provided for herein,
all of which have been duly authorized by all proper and necessary corporate
action; and the officer executing each of the Loan Documents is duly authorized
to do so by all necessary corporate action.  Any consents or approval of
shareholders or directors of Borrower, or any other party (including without
limitation any regulatory agency or authority) required as a condition to the
execution, delivery, or validity of any Loan Document have been obtained; and
each of said Loan Documents is the valid, legal, and binding obligation of
Borrower enforceable in accordance with its terms.
5

--------------------------------------------------------------------------------

4.3            No Violation of Agreements or Law.  Neither Borrower, Bank, nor
any other Subsidiary of Borrower is in default under any indenture, agreement or
instrument to which it is a party or by which it may be bound, nor in violation
of any state or federal statute, rule, ruling, or regulation governing its
operations and the conduct of its business, operations or financial condition of
Borrower, Bank, or any other Subsidiary.  Neither the execution and delivery of
the Loan Documents nor the consummation of the transactions herein contemplated,
or compliance with the provisions hereof will conflict with, or result in the
breach of, or constitute a default under, any indenture, agreement or other
instrument to which Borrower is a party or by which it may be bound, or result
in the creation or imposition of any lien, charge or encumbrance upon any of the
property of Borrower, or violate or be in conflict with any provision of the
charter or bylaws of Borrower, the Bank or any other Subsidiary.
 
4.4            Compliance With Law; Government Approvals.
 
(a)
Borrower has complied and is complying with all requirements, made all
applications, and submitted all reports required by The Bank Holding Company Act
of 1956, as amended, and any regulations or rulings issued in connection
therewith, and the transaction contemplated hereby will not violate any such
statutes, rules, rulings, or regulations nor will the consummation of said
actions and transactions cause Borrower to be in violation thereof.  Borrower
has, if required, made all filings and received all governmental or regulatory
approvals necessary for the consummation of the transactions described herein
(including its redemption of the CDCI preferred stock referenced above),
including without limitation the approval of the Board of Governors of the
Federal Reserve System.
 

(b)
Borrower has complied and is complying with all other applicable state or
federal statutes, rules, rulings and regulations.  The borrowing of money and
said actions and transactions required hereunder will not violate any of such
statutes, rules, rulings, or regulations.
 

 
4.5            Litigation.  There are no actions, suits or proceedings pending
or, to the knowledge of the Borrower threatened against the Borrower, the Bank
or any other Subsidiary before any court, arbitrator or governmental or
administrative body or agency which, if adversely determined, would result in
any material and adverse change in the financial condition, business operation,
or properties or assets of the Borrower, the Bank, or any other Subsidiary
except as set forth in Exhibit C.
 
4.6            Supervisory Action.  Neither Borrower, the Bank nor any other
Subsidiary is subject to any Supervisory Action by any federal or state bank
regulatory authority, except as set forth on Schedule 4.6 attached hereto and
incorporated by reference herein.
 
4.7            Financial Condition.  The balance sheets and the related
statements of income of Borrower, the Bank, and the other Subsidiaries and the
financial reports of Borrower, the Bank, and the other Subsidiaries which will
be delivered to Lender pursuant to Section 3.9 hereof are, or will be as of
their respective dates and for the respective periods stated therein, complete
and correctly and fairly present the financial condition of Borrower, the Bank,
and the other Subsidiaries, and the results of their operations, respectively,
as of the dates and for the periods stated therein, and have been, or will be as
of their respective dates and for the respective periods stated therein,
prepared in accordance with generally accepted accounting principles
consistently applied throughout the period involved and consistent with that of
the preceding fiscal year or period, as the case may be.  There are no
liabilities of the Borrower, the Bank, or any other Subsidiary not included in
such financial statements.  There has been no material adverse change in the
business, properties or condition of Borrower, the Bank, or the other
Subsidiaries since the date of the financial statement furnished to Lender
pursuant to Section 3.9 hereof.
6

--------------------------------------------------------------------------------

4.8            Tax Liability.  Borrower, the Bank, and the other Subsidiaries
have filed all federal, state and other tax returns, which are required to be
filed by them, and have paid all taxes which have become due pursuant to such
returns or pursuant to any assessments received by Borrower, the Bank, and the
other Subsidiaries.
 
4.9            Subsidiaries.  Borrower has no Subsidiaries and owns stock in no
corporation or banking association other than the Subsidiaries listed in Exhibit
D.
 
4.10            Bank Stock.  The common Capital Stock of the Bank owned by
Borrower or any other Subsidiary of Borrower is duly authorized and validly
issued by the Bank or other Subsidiary.  The total number of shares of common
Capital Stock of the Bank and each other Subsidiary issued and outstanding as of
the date hereof  are all owned by Borrower, the Bank or other Subsidiaries of
Borrower.  Except as set forth in Section 6.2 hereof or on Exhibit E, the stock
of the Bank and each other Subsidiary is free and clear of all liens,
encumbrances, security interests; said common Capital Stock is fully paid and
non-assessable. There are no outstanding warrants or options to acquire any
common Capital Stock of the Bank and any other Subsidiary.  There are no
outstanding securities convertible or exchangeable into shares of common Capital
Stock of any Subsidiary; and there are no restrictions on the transfer or pledge
of any shares of common Capital Stock of any Subsidiary, except as set forth in
Section 6.2 hereof or on Exhibit E.
 
4.11            Title to Assets; Liens.  Borrower and Bank each have good and
marketable title to all its respective properties and assets reflected on the
financial statements referred to herein, except for (i) such assets as have been
disposed of since said date as no longer used or useful in the conduct of
business and (ii) items which have been amortized in accordance with GAAP
applied on a consistent basis.  There are no liens or any assets of the
Borrower, the Bank or any other Subsidiaries other than as set forth in Section
6.2 hereof or as disclosed on Exhibit E.
 
4.12            Options, Warrants, Etc. Related to Shares.  Except as set forth
in Exhibit F, there are no options, warrants or other rights agreements or
commitments (including conversion rights and preemptive rights) obligating the
Borrower, the Bank, or any Subsidiary to issue, sell, purchase or redeem shares
of the Borrower, the Bank, or any other Subsidiary or securities convertible to
such shares.
7

--------------------------------------------------------------------------------

4.13            Environmental Laws.
 
(a)
The Borrower and each of its Subsidiaries have obtained all permits, licenses,
and other authorizations which are required under all Environmental Laws and are
in compliance in all respects with all applicable Environmental Laws.
 

(b)
On or prior to the date hereof, no notice, demand, request for information,
citation, summons, or order has been issued, no complaint has been filed, no
penalty has been assessed, and no investigation or review is pending or, to the
best of the knowledge of the Borrower, threatened by any governmental or other
Person with respect to any alleged or suspected failure by the Borrower or any
of its Subsidiaries to comply in any material respect with any Environmental
Laws.
 

(c)
There are no material Liens arising under or pursuant to any Environmental Laws
on any of the property owned or leased by the Borrower or any of its
Subsidiaries.
 

(d)
There are no conditions existing currently or anticipated to exist during the
term of this Agreement which would subject the Borrower or any of its
Subsidiaries or any of their property to any material Lien, damages, penalties,
injunctive relief, or cleanup costs under any Environmental Laws or which
require or are likely to require cleanup, removal, remedial action, or other
responses by the Borrower and its Subsidiaries pursuant to Environmental Laws.
 

 
4.14            Disclosure.  The Borrower has disclosed to the Lender (i) all
agreements, instruments and corporate or other restrictions to which it, Bank or
any of the other Subsidiaries is subject, the termination of which could
reasonably be expected to result in a material and adverse change in the
financial condition, business operation, or properties or assets of the
Borrower, the Bank  or any of the other Subsidiaries and (ii) all matters known
to it that, individually or in the aggregate, could reasonably be expected to
result in a material and adverse change in the financial condition, business
operation, or properties or assets of the Borrower, the Bank or any of the other
Subsidiaries.  No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of the Borrower to
Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
 
4.15            Contracts or Restrictions Affecting Borrower and/or Bank. 
Neither Borrower nor Bank is a party to any agreement or instrument or subject
to any charter or other corporate restrictions adversely affecting its business,
properties or assets, operations or condition (financial or otherwise).
 
4.16            No Default.  Neither Borrower nor Bank is in default in the
performance, observance or fulfillment of any of the obligations, covenants, or
conditions contained in any agreement or instrument to which it is a party,
which will or might materially and adversely affect the business or operations
of Borrower or the Bank, as the case may be.
8

--------------------------------------------------------------------------------

4.17            ERISA.  Borrower and Bank are in compliance with all applicable
provisions of ERISA and all other laws, state or federal, applicable to any
employees’ retirement plan maintained or established by either of them.
 
4.18            OFAC.  Neither the Borrower nor any Subsidiary (a) is an “enemy”
or an “ally of the enemy” within the meaning of Section 2 of the Trading with
the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), as amended,
(b) is in violation of (i) the Trading with the Enemy Act, as amended, (ii) any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto or (iii) the PATRIOT Act or (c)
is a Sanctioned Person.  No part of the proceeds of the Loan hereunder will be
used directly or indirectly to fund any operations in, finance any investments
or activities in or make any payments to, a Sanctioned Person or a Sanctioned
Country.
 
5.            AFFIRMATIVE COVENANTS.
 
Borrower covenants and agrees that, until the Note together with interest
thereon is paid in full, unless specifically waived by the Lender in writing,
Borrower will, and will cause the Bank and the Subsidiaries to:

5.1            Business and Existence; Compliance with Laws.  Perform all things
necessary to preserve and keep in full force and effect the existence, rights
and franchises of Borrower, the Bank and the other Subsidiaries and to comply
and cause the Bank and the other Subsidiaries to comply in all material respects
with all local, state and federal laws and regulations applicable to banks and
bank holding companies, and all laws and regulations of the Local Authorities,
and the provisions and requirements of all franchises, permits, certificates of
compliance and approval issued by regulatory authorities and other like grants
of authority held by the Borrower and the Bank; and notify Lender immediately
(and in detail) of any actual or alleged failure to comply with or perform,
breach, violation or default under any such laws or regulations or under the
terms of any such franchises or licenses, or grants of authority, the result of
which would constitute a materially adverse effect on the Borrower or the Bank,
or the occurrence or existence of any facts or circumstances which with the
passage of time, the giving of notice or otherwise could create such a breach,
violation or default or could occasion the termination of any such franchises or
grants of authority.
 
5.2            Maintain Property.  Maintain, preserve, and protect all
properties used or useful in the conduct of Borrower’s, the Bank’s, and each
other Subsidiary’s business and keep the same in good repair, working order and
condition.
 
5.3            Insurance.  At all times keep the insurable properties of
Borrower, the Bank, and each other Subsidiary adequately insured and maintain in
force (i) insurance, to such an extent and against such risks, including fire
and theft, as is customary with companies in the same or similar business, (ii)
necessary workmen’s compensation insurance, fidelity bonds and directors’ and
officers’ insurance coverage in amounts satisfactory to Lender, and (iii) such
other insurance as may be required by law; and if required by Lender, deliver to
the Lender a copy of the bonds and policies providing such coverage and a
certificate of Borrower’s, the Bank’s, or each other Subsidiary’s chief
executive officer, as the case may be, setting forth the nature of the risks
covered by such insurance, the amount carried with respect to each risk, and the
name of the insurer.
9

--------------------------------------------------------------------------------

5.4            Taxes and Liens.  Pay and discharge promptly all taxes,
assessments, and governmental charges or levies imposed upon Borrower, the Bank,
or each other Subsidiary or upon any of their respective income and profits, or
their properties, real, personal or mixed, or any part thereof, before the same
shall become delinquent; provided, however, that Borrower, the Bank, and each
other Subsidiary shall not be required to pay and discharge or to cause to be
paid and discharged any such tax, assessment, charge, levy or claim so long as
the amount or validity thereof shall be contested in good faith by appropriate
proceedings and provided that procedures satisfactory to Lender are carried out
to prevent foreclosure of any lien therefrom.
 
5.5            Financial Reports and ERISA.
 
(a)
Furnish to Lender as soon as available and with respect to item (1), in any
event within one hundred twenty (120) days after the end of each calendar year,
(1) consolidated and consolidating balance sheets of Borrower, the Bank, and
each other Subsidiary, as of the end of such year and consolidated and
consolidating statements of income of Borrower, the Bank, and each other
Subsidiary for the year then ended, together with the audit report and opinion
of independent Certified Public Accountants acceptable to the Lender with
respect thereto, such audit report and opinion shall contain no exceptions or
qualifications unacceptable to Lender; (2) promptly upon receipt, copies of all
management letters and other assessments and recommendations, formal or
informal, submitted by the Certified Public Accountants to Borrower or each
Subsidiary; (3) upon Lender’s request, a copy of Borrower’s FR Y-9 Parent
Company Only (and Consolidated, if applicable) financial statement(s) and (4)
upon Lender’s request, a copy of Borrower’s F.R. Y-6 Annual Report promptly upon
the filing of the same with the Federal Reserve Board; and (5) upon Lender’s
request, a copy of the Bank’s Call Report promptly upon the filing with the
appropriate regulatory agency.

 
(b)
Upon senior management of the Borrower obtaining knowledge thereof, the Borrower
will give written notice to the Lender promptly (and in any event within five
(5) business days), of: (1) any event or condition, including, but not limited
to, any Reportable Event, that constitutes, or might reasonably lead to, an
ERISA Event; (2) with respect to any Multiemployer Plan, the receipt of notice
as prescribed in ERISA or otherwise of any withdrawal liability assessed against
the Borrower or any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the mean of
Title IV of ERISA); (3) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which the Borrower, the Bank,
or any other Subsidiary or any ERISA Affiliate is required to contribute to each
Plan pursuant to its terms and as required to meet the minimum funding standard
set forth in ERISA and the Code with respect thereto; or (4) any change in the
funding status of any Plan that could have a material adverse effect, together
with a description of any such event or condition or a copy of any such notice
and a statement by the chief financial officer of the Borrower briefly setting
forth the details regarding such event, condition, or notice, and the action, if
any, which has been or is being taken or is proposed to be taken by the Borrower
with respect thereto. Promptly upon request, the Borrower shall furnish the
Lender and the Lenders with such additional information concerning any Plan as
may be reasonably requested, including, but not limited to, copies of each
annual report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA and the Code, respectively, for each
“plan year” (within the meaning of Section 3(39) of ERISA).

10

--------------------------------------------------------------------------------

(c)
Promptly upon the transmis-sion thereof, copies of all material financial
statements, proxy statements, notices, reports and other communications sent by
the Borrower or any other Subsidiary to the shareholders of the Borrower and any
other such communications as may be requested by Lender and copies of any and
all regular or periodic reports, registration statements, prospectuses or other
written communications that the Borrower or the Bank or any other Subsidiary is
or may be required to file with the Securities and Exchange Commission or any
governmental department, bureau, commission or agency succeeding to the
functions of the Securities and Exchange Commission if any.
 

(d)
With reasonable promptness, such other financial information for the Borrower or
the Bank or any other Subsidiary as Lender may reasonably request.
 

 
5.6            Regulatory Examinations.  (a)  Promptly notify Lender of every
examination by, or any material correspondence, report, memoranda or other
written communication from or with, any federal or state regulatory body or
authority, with respect to the properties, loans, operations and/or condition of
Borrower, the Bank, or any other Subsidiary, and of the receipt by Borrower, the
Bank, or any other Subsidiary of every examination or other report prepared by
such body or authority with respect thereto; and (b) if required by Lender,
fully and completely assist and cooperate with Lender in requesting approval by
such regulatory body or authority of the furnishing to Lender of any such
report, and furnish such report to Lender if such approval is given; provided,
however, that Lender shall take such steps as may be necessary to assure that
all such reports shall remain confidential and shall be used by Lender solely in
connection with the administration of the Loan in accordance with the provisions
of this Agreement.
 
5.7            Additional Information.  Furnish such other information regarding
the operations, business affairs and financial condition of Borrower, the Bank,
and each other Subsidiary as Lender may from time to time reasonably request,
including but not limited to true and exact copies of any monthly management
reports (with confidential customer information redacted) to their respective
directors, their respective tax returns, and all information furnished to
shareholders, or any governmental authority, including the results of any stock
valuation performed.
 
5.8            Right of Inspection.  Except to the extent, if any, prohibited by
applicable law, permit any person designated by Lender, to inspect any of the
properties, books and financial and other reports and records of Borrower, the
Bank, and each other Subsidiary, including, but not limited to, all
documentation and records pertaining to the Bank’s loans, investments and
deposits; and to discuss their affairs; finances and accounts with Borrower’s,
the Bank’s, and each other Subsidiary’s principal officers, at all such
reasonable times and as often as Lender may reasonable request.  If required by
Lender, no more than once per calendar year in the absence of a continuing Event
of Default, Borrower will pay Lender loan fees in an amount determined by Lender
to be necessary to cover the costs of such inspections, including a reasonable
allowance for Lender’s overhead as well as out-of-pocket expenses in connection
with such inspection.
11

--------------------------------------------------------------------------------

5.9            Notice of Default.  At the time of Borrower’s first knowledge or
notice, furnish the Lender with written notice or the occurrence of any event or
the existence of any condition which constitutes or upon written notice or lapse
of time or both would constitute an Event of Default under the terms of this
Loan Agreement or other Loan Documents or an event of default or default under
any other loan documents for any other loan to the Borrower, the Bank, or any
other Subsidiary.
 
5.10            Notice of Litigation.  Borrower shall notify Lender of any
actions, suits or proceedings instituted by any person against the Borrower, the
Bank or other Subsidiary claiming money damages or other monetary liability in
an amount of One Million Dollars ($1,000,000.00) or more, said notice to be
given within ten days of the first notice to Borrower or other party of the
institution of such action, suit or proceeding and to specify the amount of
damages being claimed or other relief being sought, the nature of the claim, the
person instituting the action, suit or proceeding, and any other significant
features of the claim.
 
5.11            Intentionally Omitted.
 
5.12            Dividends to Borrower from the Bank.  Borrower shall cause the
Bank and other Subsidiaries to pay dividends at such times and in such amounts,
as is necessary to enable Borrower to meet all of its obligations under the Loan
Documents on a timely basis, including the payment, when due, of each
installment of interest and the payment of princi-pal on the Loan to the extent
permitted by law including applicable bank regulatory agency rules and
regulations. Without limiting the generality of the foregoing, should any
prepayment, accelerated payment or other payment ever be due with respect to the
Loan, Borrower shall cause the Bank and other Subsidiary to pay dividends or
otherwise make such additional distributions to the Borrower as necessary to
enable the Borrower to make such prepayment, accelerated payment or other
payment, to the extent permitted by law including applicable bank regulatory
agency rules and regulations.
 
5.13            Capital Ratio/Equity Capital Adequacy.
 
(a)
Borrower and Bank shall maintain at all times a “Well Capitalized” rating as
required by any applicable regulatory authority under Basel III capital
requirements, as such requirements may be revised from time to time.
 

(b)
Bank shall maintain as of each Covenant Compliance Date a Risk-Based Capital
Ratio of not less than Ten and 50/100 Percent (10.50%).
 

12

--------------------------------------------------------------------------------

5.14            Adjusted Texas Ratio.  The Adjusted Texas Ratio of Bank as of
each Covenant Compliance Date shall not exceed Thirty-Five Percent (35%).
 
5.15            Fixed Charge Coverage Ratio.  Borrower shall maintain a minimum
Fixed Charge Coverage Ratio of greater than or equal to 1.35x.  This ratio shall
be tested quarterly on a rolling four (4) quarter basis.
 
5.16            Indemnification.  Borrower and Bank shall indemnify the Lender,
and hold it harmless of and from any and all loss, cost, damage or expense, of
every kind and nature, including reasonable attorneys’ fees, which the Lender
could or might incur by reason of any violation of any Environmental Laws by
Borrower or Bank or by any predecessors or successors to title to any property
of the Borrower or Bank.
 
5.17            Compliance Certificate.  Furnish Lender a Certificate of
Compliance duly certified by the Chief Executive Officer of Borrower within
forty-five (45) days after the end of each calendar quarter stating that
Borrower and each Bank Subsidiary and the Borrower and all Subsidiaries, as
applicable, are in compliance with all terms, covenants and conditions of this
Loan Agreement and all related Loan Documents, including, but not limited to,
Sections 5.1 – 5.16 of this Agreement.  Such Certificate of Compliance shall be
as set forth in Exhibit H and otherwise be in form and substance satisfactory to
Lender.
 
6.            NEGATIVE COVENANTS.
 
Borrower covenants and agrees with Lender that Borrower shall comply and cause
the Bank and other Subsidiaries to comply with the following negative covenants
unless the prior written consent of Lender shall be obtained, so long as any
indebtedness remains outstanding under the Loan Documents:

6.1            Indebtedness.  Neither Borrower nor the Bank shall create, incur,
assume or suffer to exist, contingently or otherwise, any indebtedness, except
for the following indebtedness:
 
(a)
    The indebtedness of Borrower under the Loan;
 

(b)
    Indebtedness owed by the Borrower to the Bank or any other Subsidiary;
 

(c)
    Debt for operating expenses or otherwise incurred by the Bank or any other
Subsidiary in the ordinary course of business;
 

(d)
    Indebtedness as set forth in Exhibit G; and
 

(e)
    Obligations (contingent or otherwise) existing or arising under any Interest
Rate Swap approved in advance by Lender.

 
6.2            Mortgages, Liens, Etc.  Neither Borrower nor the Bank shall
create, assume or suffer to exist any mortgage, pledge, lien, charge or other
encumbrance of any nature whatsoever on any of its assets, now or hereafter
owned, except for:
13

--------------------------------------------------------------------------------

(a)
    Liens in favor of Lender securing payment of the Loan; and
 

(b)
    Permitted Encumbrances.

 
6.3            Guaranties.  Except for unsecured guarantees by the Borrower of
indebtedness incurred by the Borrower’s employee stock ownership plan in an
aggregate principal amount not to exceed Two Hundred Thousand Dollars
($200,000.00), guarantee or otherwise in any way become or be responsible for
the indebtedness or obligations of any other Person, by any means whatsoever,
whether by agreement to purchase the indebtedness of any other Person or
agreement for the furnishing of funds to any other Person through the purchase
of goods, supplies or services (or by way of stock purchase, capital
contribution, advance or loan) for the purpose of paying or discharging the
indebtedness of any other Person, or otherwise, except for the endorsement of
negotiable instruments by the Borrower or Bank in the ordinary course of
business for collection.
 
6.4            Merger, Dissolution, Acquisition of Assets.  Borrower shall not
enter into, or permit the Bank or any other Subsidiary to enter into, any
transaction of merger or consolidation, or any reorganization, reclassification
of stock, readjustment or change in capital structure; or acquire, or permit any
Subsidiary to acquire, all of the stock, or other ownership interest, property
or assets of any other person, corporation, partnership or other entity. 
Notwithstanding the foregoing, (a) Lender has consented to the Borrower’s
proposed acquisition of Iberville Bank and Gulf Coast Community Bank on the
terms and conditions currently announced by Borrower provided the conditions set
forth in (i) - (v) below are met at the time of each applicable acquisition and
(b) Borrower may complete additional acquisitions with an aggregate asset total
asset value not to exceed Four Hundred Million Dollars ($400,000,000.00) where
Borrower and the Bank are surviving entities without the Lender’s prior written
consent so long as (i) such acquisition’s financing is in compliance with the
terms of this Agreement, including Section 6.1 hereof; (ii) at the time of such
acquisition, no Event of Default or event which would, with the passage of time,
giving of notice, or both, constitute an Event of Default, has occurred and is
continuing; (iii) upon completion of such acquisition, Borrower’s reasonable,
good faith projections and pro forma financials show that it and Bank will
remain in compliance with all financial and other covenants under this
Agreement; (iv) Borrower, Bank, and all other parties to such acquisition have
received all approvals required by any applicable Bank Regulatory Authorities in
connection with such acquisition as well as all shareholder, board, and/or other
governmental approvals required in connection therewith; and (v) Borrower gives
Lender written notice of such proposed acquisition at least thirty (30) days
prior to consummation of same and provides Lender with such evidence as Lender
reasonably requests to confirm such acquisition’s compliance with the foregoing
requirements.  Unless any acquired bank is merged with and into the Bank, at the
Lender’s request, Borrower shall execute a negative pledge agreement in form and
substance similar to the Negative Pledge Agreement with respect to the Capital
Stock of any such acquired bank.
 
6.5            Subsidiaries.  Except pursuant to a transaction or series of
transactions permitted without the Lender's consent under Section 6.4 above,
Borrower shall not create, establish or acquire Subsidiaries or acquire or own
stock or any other interest in any bank other than the Bank, or permit the
creation, establishment or acquisition of any such Subsidiaries by any other
Subsidiary.
14

--------------------------------------------------------------------------------

6.6            Sale of Stock, Merger, or Asset Disposition.
 
(a)
Borrower shall not sell, transfer, pledge, assign, or otherwise dispose of, or
otherwise encumber, any of the Borrower’s stock of the Bank or the Borrower’s or
the Bank’s or any other Subsidiary’s common Capital Stock in any the Subsidiary
nor permit the Bank or any other Subsidiary to issue additional shares of stock
or rights, options or securities convertible into Capital Stock of the Bank or
any other Subsidiary.

 
(b)
The Borrower will not, nor will it permit any of its Subsidiaries to, make any
Asset Disposition except in the ordinary course of business other than in
respect of special purpose Subsidiaries organized for the management or disposal
of other real estate acquired in the ordinary course of collecting debts
previously contracted.

 
6.7            Dividends, Redemptions and Other Payments.  Borrower shall not
declare or pay any dividends on the stock of Borrower or redeem any stock of
Borrower if an Event of Default has occurred and is continuing under this
Agreement or allow the payment of such a dividend that would create an Event of
Default. The payment of any dividend or the redemption of any stock not
otherwise prohibited shall in all respects comply with the rules and regulations
of the Federal Reserve Board.
 
6.8            Capital Expenditures.  Borrower shall not make or become
committed to make, or permit any Subsidiary to make or to become committed to
make, directly or indirectly, during any calendar year, capital expenditures
which for Borrower and the Subsidiary exceed amounts deemed acceptable to
applicable regulatory authorities.
 
6.9            Relocation.  The Borrower shall not cause or permit Borrower or
any Subsidiary to relocate their principal office, principal banking office,
principal registered office or approved charter location without the written
consent of Lender.
 
6.10            Transactions with Affiliates.  The Borrower shall not, nor will
it permit any of its Subsidiaries to, enter into or permit to exist any
transaction or series of transactions with any officer, director, shareholder,
Subsidiary or Affiliate of such person or entity other than (a) normal
compensation and reimbursement of expenses of officers and directors and (b)
except as otherwise specifically limited in this Agreement, other transactions
which satisfy the applicable requirements under Section 23A of the Federal
Reserve Act, 12 USC §371c and Section 23B of the Federal Reserve Act, 12 USC
§371c-1.  For purposes of this Agreement, the term affiliates shall have the
same meaning as set forth in applicable bank regulations.
 
6.11            Change in Management. Neither the Borrower nor the Bank shall
make any change in its senior executive management personnel (CEO, President,
CFO, or other "c-level" or equivalent offices); provided, however, that if any
of the foregoing officers cease to hold the applicable office described above,
the same shall not be an Event of Default provided that the Borrower or the
Bank, as the case may be, replaces such individual with another officer
reasonably qualified and acceptable to all applicable Bank Regulatory
Authorities within one hundred eighty (180) days of such change. 
15

--------------------------------------------------------------------------------

6.12            Charter or By-Law Amendments.  Neither Borrower, Bank nor any
other Subsidiary shall adopt, amend or enter into, as applicable, any charter,
articles of incorporation, bylaws (or any amendments thereto) or other
provisions or agreements that would affect in any way the rights, obligations
and/or preferences of the Borrower’s Capital Stock in the Bank.
 
6.13            No Defaults.  Borrower shall not permit or suffer the occurrence
of any event nor allow any Subsidiary or other Affiliate to knowingly permit or
suffer the occurrence of any event which constitutes an event of default under
any indenture or loan agreement or otherwise with respect to any indebtedness of
the Borrower, the Bank, or any other Subsidiary.
 
7.            DEFAULT AND REMEDIES.
 
7.1            Events of Default.  Any one or more of the following events shall
constitute an Event of Default under the terms of this Agreement and the other
Loan Documents:
 
(a)
Defaults in the prompt payment as and when due of the principal of or interest
on the Loan or any fees due under this Loan Agreement within ten (10) days of
the date when due, or in the prompt performance or payment when due of any other
obligations of the Borrower to the Bank, whether now existing or hereafter
created or arising, direct or indirect, absolute or contingent.
 

(b)
Default in compliance with or in the performance or observance of any term,
covenant, obligation, condition, or agreement in this Agreement or any other
Loan Document.
 

(c)
If any representation, warranty or any other statement made or deemed to be made
by the Borrower herein, in any other Loan Document, or in any writing,
certificate, or report or statement at any time furnished to Lender pursuant to
or in connection with this Agreement shall to be false or misleading in any
material respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.
 

(d)
Borrower, the Bank or any other Subsidiary shall fail to pay when due and before
the expiration of any grace period, any debt for borrowed money which it is
primarily obligated to pay as borrower, or in any other capacity, whether such
debt shall have become due because of acceleration of maturity or otherwise,
other than debt created by this Agreement.
 

(e)
An event occurs which constitutes an event of default as defined in the Note or
any other Loan Document; or an event occurs which constitutes an event of
default (following the expiration of applicable grace, notice or cure periods)
under any present or future loan agreement between Lender and Borrower for any
other loan.
 

(f)
The Borrower, the Bank, or any other Subsidiary shall

16

--------------------------------------------------------------------------------

(i)            be unable or admits in writing its inability to pay its debts as
they become due; or
 
(ii)            file a petition in bankruptcy or for reorganization or for the
adoption of an arrangement under the Bankruptcy Act as now or in the future
amended, or file a pleading asking such relief, or have or suffer to be filed an
involuntary petition in bankruptcy against it which is not contested and
discharged within sixty (60) days; or
 
(iii)            make an assignment for the benefit of creditors generally; or
 
(iv)            consent to the appointment of a trustee, custodian, or receiver
for all or a major portion of its property; or
 
(v)            be adjudicated a bankrupt or insolvent under any federal or state
law; or
 
(vi)            suffer the entry of a court order under any federal or state law
appointing a receiver, custodian, or trustee for all or a major part of its
property or ordering the winding up or liquidation of its affairs, or approving
a petition filed against it under the Bankruptcy Act, as now or in the future
amended; or
 
(vii)            suffer the entry of a final judgment for the payment of money
in excess of $1,000,000.00 and the same shall not be dis-charged or provision
made for its discharge within 45 days from the date of entry thereof or an
appeal or other appropriate proceeding for review thereof shall not be taken
within said period and a stay of execu-tion pending such appeal shall not be
obtained; or
 
(viii)            suffer a writ or warrant of attachment or any similar process
to be issued by any court against all or any substantial portion of its
property.

 
(g)
The issuance of any Supervisory Action against the Borrower, the Bank or other
Subsidiaries or the Borrower’s, the Bank’s or the other Subsidiaries’ directors,
whether temporary or permanent, by or at the request of any bank regulatory
agency; provided, however, that notwithstanding anything to the contrary in this
Agreement (including without limitation Section 5.9 hereof), Borrower shall not
be required to disclose the existence of any Supervisory Action to the extent
that such disclosure is prohibited by applicable law or regulation; but further
provided that (i) Section 5.9 of this Agreement shall nevertheless require
Borrower to disclose to Lender the maximum amount of information legally
permissible to be disclosed regarding any such Supervisory Action  and (ii) such
Supervisory Action may, even if confidential, constitute an Event of Default
hereunder if Lender becomes aware of such Supervisory Action through other
channels without the violation of applicable law or regulation;

 
(h)
There shall occur any change in the equity ownership of the Bank, or any change
in the equity ownership of the Borrower such that a "change in control" of
Borrower under applicable law or regulation shall have occurred; or

17

--------------------------------------------------------------------------------

(i)
The failure of the Borrower, the Bank, or any other Subsidiary, or the
Borrower’s, the Bank’s, or any other Subsidiary’s directors to comply with the
terms of any memorandum of understanding or letter agreement with any bank
regulatory agency, including but not limited to any applicable state bank
regulatory agency, Federal Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, and the Board of Governors of the Federal Reserve
System and such failure has not been fully corrected within thirty (30) business
days of the Borrower’s or the Bank’s awareness of its failure to comply.

 
7.2            Cure Provisions.  In any Event of Default, other than a default
in payment, is curable and if Borrower has not been given a notice of a breach
in the same provision of the Note within the preceding twelve (12) months, it
may be cured if Borrower, after receiving written notice from Lender demanding
cure of such default:  (1) cures the default within thirty (30) days; or (2) if
the cure requires more than thirty (30) days, immediately initiates steps which
Lender deems in Lender’s sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps
sufficient to product compliance as soon as reasonably practical.
 
7.3            Remedies on Default.  Upon the occurrence of an Event of Default,
Lender may (i) terminate all obligations of Lender to Borrower, the Bank, or any
other Subsidiary including, without limitation, all obli-gations to lend money
to Borrower under this Agreement, (ii) declare the Note immediately due and
payable, without presentment, demand, protest, notice of intent to accelerate
and notice of acceleration of the maturity date of this Note, or any other
notice of any kind, all of which are expressly waived, (iii) declare immediately
due and payable from Borrower the expenses set forth in Section 8.14 hereof, and
(iv) pursue any remedy available to it under this Agreement, the Note, the
Pledge Agreement or any other Loan Document, or available at law or in equity,
concurrently or subsequently, in such order as the Lender may elect, all of
which remedies shall be cumulative.
 
7.4            Liens; Setoff by Lender.  Borrower hereby grants to Lender a
continuing lien for all indebtedness of Borrower, the Bank, or the other
Subsidiaries to Lender upon any and all of its monies, securities and other
property and the proceeds thereof, now or hereafter held or received by or in
transit to Lender from or for Borrower, and also upon any and all deposits
(general or special, matured or unmatured) and credits of Borrower against
Lender at any time existing. Upon the occurrence of any Event of Default as
specified above, Lender is hereby authorized at any time and from time to time,
without notice to Borrower, the Bank, or the other Subsidiaries, to set off,
appropriate, and apply any and all items hereinabove referred to against any or
all indebtedness of Borrower to Lender, whether under this Agreement, or
otherwise, whether now existing or hereafter arising.  Lender shall give written
notice to Borrower of such setoff appropriation or application after such
setoff, appropriation or application occurs.
 
8.            MISCELLANEOUS.
 
8.1            No Waiver.  No delay or failure on the part of Lender or on the
part of any holder of the Note in the exer-cise of any right, power or privilege
granted under this Agreement, or under any other Loan Document, or available at
law or in equity, shall impair any such right, power or privi-lege or be
construed as a waiver of any Event of Default or any acquiescence therein. No
single or partial exercise of any such right, power or privilege shall preclude
the further exer-cise of such right, power or privilege. No waiver shall be
valid against Lender unless made in writing and signed by Lender, and then only
to the extent expressly specified therein.
18

--------------------------------------------------------------------------------

8.2            Notices.  All notices and communications provided for hereunder
shall be in writing, delivered by hand or sent by first‑class, registered or
certified mail, postage prepaid, or express courier to the following addresses:
 
 
(1)
If to Lender:
First Tennessee Bank National Association
 
 
 
165 Madison Avenue
 
 
 
Memphis, Tennessee 38103
 
 
 
Attention: Correspondent Banking
 
 
 
 
 
(2)
If to Borrower:
The First Bancshares, Inc.
 
 
 
P.O. Box 15549
 
 
 
Hattiesburg, MS 39402
 
 
 
Attention: Dee Dee Lowery

 
Any party hereto may change its address for notice purposes by notice to the
other parties in the manner provided herein. Notice shall be deemed given when
hand delivered or first class, certified or registered mail, postage prepaid, or
when delivered by express courier.

8.3            Governing Law.  This Agreement and all other Loan Documents shall
be governed by and interpreted in accor-dance with the laws of the State of
Tennessee except with respect to interest which shall be governed by and
construed in accordance with applicable Federal laws in effect from time to
time.
 
8.4            Survival of Representations and Warranties.  All representations,
warranties and covenants contained herein or made by or furnished on behalf of
Borrower, the Bank, or the other Subsidiaries in connection herewith shall
survive the execution and delivery of this Agreement and all other Loan
Documents and the extension or funding of the loan hereunder.
 
8.5            Descriptive Headings.  The descriptive head-ings of the several
sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
 
8.6            Severability.  If any part of any provision contained in this
Agreement or in any other Loan Document shall be invalid or unenforceable under
applicable law, said part shall be ineffective to the extent of such invalidity
only, without in any way affecting the remaining parts of said provi-sion or the
remaining provisions.
 
8.7            Time is of the Essence.  Time is of the essence in interpreting
and performing this Agreement and all other Loan Documents.
 
8.8            Counterparts.  This Agreement may be exe-cuted in any number of
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same instrument.
19

--------------------------------------------------------------------------------

8.9            Payment of Costs.  Borrower shall pay, promptly demand by Lender,
all reasonable costs, expenses, taxes and fees incurred by Lender in connection
with the preparation, execution and delivery of this Agreement and all other
Loan Documents and the recording and filing and rerecording and refiling
thereof, including, without limitation, the reasonable costs and professional
fees of counsel for Lender, any and all transfer, mortgage or other taxes and
all recording costs that may be payable.  In the future, Borrower shall pay
promptly following written demand by the Lender, all such costs and expenses
determined to be payable, in connection therewith.
 
8.10            Successors and Assigns.  This Agreement shall bind and inure to
the benefit of Borrower and Lender, and their respective successors and assigns;
provided, however, Borrower, the Bank, and the other Subsidiaries shall not have
any right to assign their rights or obligations hereunder to any person. 
Notwithstanding anything in this Agreement to the contrary, but subject to
Section 8.25 hereof, Lender shall have the right, but shall not be obligated, to
sell participation in the loan made pursuant hereto to other banks, financial
institutions and investors.
 
8.11            Amendments; No Implied Waiver.  This Agreement may be amended or
modified, and Borrower, the bank, and the other Subsidiaries may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if Borrower shall obtain the prior written con-sent of Lender to that
specific amendment, modification, action or omission to act, and no course of
dealing between Borrower, the Bank, or the other Subsidiaries and Lender shall
operate as a waiver of any right, power or privilege granted to Lender under
this Agreement or under any other Loan Document, or available to Lender at law
or in equity.
 
8.12            Rights Cumulative.  All rights, powers and privileges granted
hereunder shall be cumulative to and shall not be exclusive of any other rights,
powers and privileges granted by any other Loan Document or available at law or
in equity.
 
8.13            Indemnity.  Borrower agrees to protect, indemnify and save
harmless Lender, and all directors, officers, employees and agents of Lender,
from and against any and all (i) claims, demands and causes of action of any
nature whatsoever brought by any Person not a party to this Agreement and
arising from or related or incident to this Agreement or any other Loan
Document, (ii) costs and expenses incident to the defense of such claims,
demands and causes of action, including, without limitation, reasonable
attorneys’ fees, and (iii) liabilities, judgments, settlements, penalties and
assessments arising from such claims, demands and causes of action; provided,
however, that Borrower does not agree to indemnify Lender against Lender’s own
willful misconduct. The indemnity contained in this section shall survive the
termina-tion of this Agreement.
 
8.14            Expenses.  Borrower agrees to promptly reimburse Lender for (i)
all costs and expenses of collection of the Note, including reasonable
attorneys’ fees, and (ii) all expenses incurred by Lender in acting on behalf of
Borrower, the Bank, or the other Subsidiaries in accordance with the terms of
this Agreement or any other Loan Document.  Such sums shall include interest at
the maximum rate allowed by law accruing from the date Lender requests such
reimbursement.
20

--------------------------------------------------------------------------------

8.15            Usury.  It is the intent of the parties hereto not to violate
any federal or state law, rule or regula-tion pertaining either to usury or to
the contracting for or charging or collecting of interest, and Borrower, the
Bank, and the other Subsidiaries, and Lender agree that, should any provision of
this Agreement, or of the Note, or of any other Loan Document or any act
performed hereunder or thereunder, violate any such law, rule or regulation,
then the excess of interest contracted for or charged or collected over the
maximum lawful rate of interest shall be applied to the outstanding principal
indebtedness due to Lender by Borrower under this Agreement, and if the
princi-pal indebtedness has been paid in full, any remaining excess shall
forthwith be paid to Borrower.
 
8.16            Jurisdiction and Venue.  Borrower, the Bank, and the other
Subsidiaries, and Lender agree, without power of revocation, that any civil suit
or action brought against them as a result of , or which relates to, any of
their obligations under this Agreement or under any other Loan Document may be
brought against them, jointly or singly, in the United States District Court for
the Western District of Tennessee, and Borrower, the Bank, the other
Subsidiaries, and Lender irrevocably submit to the jurisdiction of such court
and irrevocably waive, to the full-est extent permitted by law, any objections
that they may now or hereafter have to the laying of the venue of such civil
suit or action and any claim that such civil suit or action has been brought in
an inconvenient forum, and Borrower, the Bank, and the other Subsidiaries, and
Lender agree that final judgment in any such civil suit or action shall be
conclusive and binding upon them and shall be enforceable against them by suit
upon such judgment in any court of competent jurisdiction.
 
8.17            Construction.  Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against one party by reason of the rule of construction
that a document is to be more strictly construed against the party who itself or
through its agents prepared the same, it being agreed that Borrower, Lender and
their respective agents have participated in the preparation hereof.
 
8.18            Holidays.  In any case where the date for any action required to
be performed under this Agreement or under any other Loan Document shall be, in
the city where the performance is to be made, a Saturday, a Sunday, a legal
holi-day or a day on which banking institutions are authorized by law to close,
then such performance may be made on the next succeeding business day not a
Saturday, a Sunday, a legal holi-day or a day on which banking institutions are
authorized by law to close.
 
8.19            Entire Agreement.  This Agreement and the other Loan Documents
executed and delivered contemporaneously herewith, together with the exhibits
attached hereto and thereto, constitute the entire understanding of the parties
with respect to the subject matter hereof, and any other prior or
contemporaneous agreements, whether written or oral, with respect thereto are
expressly superseded hereby. The execution of this Agreement and the other Loan
Documents by Borrower, the Bank, and the other Subsidiaries was not based upon
any facts or materi-als provided by Lender, nor was Borrower, the Bank, and the
other Subsidiaries induced to execute this Agreement or any other Loan Document
by any representation, statement or analysis made by Lender. In the event that
the provisions of this Loan Agreement shall conflict with provisions of any of
the other Loan Documents, the provi-sions of this Agreement shall control.  This
written Loan Agreement represents the final agreement between the parties and
may not be contradicted by evidence of prior, contemporaneous, or subsequent
oral agreements of the parties.  There are no unwritten oral agreements between
the parties.
21

--------------------------------------------------------------------------------

8.20            Consent.  Borrower hereby represents and warrants that to the
best of Borrower’s knowledge there is no consent from any lender or creditor
needed to prevent Borrower, the Bank, or the other Subsidiaries from being in
default by Borrower executing the Note or Borrower, the Bank, and the other
Subsidiaries executing, this Loan Agreement or any other loan document
associated with this Loan.
 
8.21            Waiver Of Right To Trial By Jury.  EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
 
8.22            Further Assurances.  Borrower agrees to furnish a current
financial statement upon the request of Lender from time to time, and further
agrees to execute and deliver all other instruments and take such other actions
as Lender may from time to time reasonably request in order to carry out the
provisions and intent hereof.
 
8.23            Intentionally Omitted.
 
8.24            Non-Control.  In no event shall the Lender’s rights hereunder be
deemed to indicate that the Lender is in control of the business, management or
properties of the Borrower or the Bank or has power over the daily management
functions and operating decisions made by the Borrower and the Bank, all such
rights and powers being hereby expressly reserved to the Borrower and the Bank.
 
8.25            Assignments and Participations.  Lender may sell or offer to
sell the Loan or interests therein to one or more assignees or participants;
provided, however, that in the absence of an Event of Default, and except in
connection with a merger or sale of all or substantially all of the assets of
the Lender, Lender shall not sell the Loan or interests in the Loan to a
financial institution operating in Mississippi, south Alabama, the northwest
Florida gulf coast area, or eastern/southeastern Louisiana without the prior
written consent of the Borrower.  If the Borrower fails to respond to a request
for such consent for five (5) business days after receipt thereof given in
compliance with Section 8.2, Borrower shall be deemed to have consented to such
sale of the Loan or interests therein.  Borrower shall execute, acknowledge and
deliver any and all instruments reasonably requested by Lender in connection
therewith, and to the extent, if any, specified in any such assignment or
participation, such assignee(s) or participant(s) shall have the same rights and
benefits with respect to the Loan Documents as such Person(s) would have if such
Person(s) were Lender hereunder.  Lender may disseminate any information it now
has or hereafter obtains pertaining to the Loan, including any security for the
Loan, Borrower, Bank, any other Subsidiary, any of Borrower’s, Bank’s, or any
other Subsidiary’s principals, or any guarantor, if any, to any actual or
prospective assignee or participant, to Lender’s affiliates, to any regulatory
body having jurisdiction over Lender, to any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to Lender and
the Loan, or to any other party as necessary or appropriate in Lender’s
reasonable judgment.
22

--------------------------------------------------------------------------------

8.26            Electronic Transmission of Data.  Lender and Borrower agree that
certain data related to the  Loan (including confidential information,
documents, applications and reports) may be transmitted electronically,
including transmission over the internet to the parties, the parties’
affiliates, agents and representatives, and other Persons involved with the
subject matter of this Agreement.  Borrower acknowledges and agrees that (a)
there are risks associated with the use of electronic transmission and that
Lender does not control the method of transmittal or service providers, (b)
Lender has no obligation or responsibility whatsoever and assumes no duty or
obligation for the security, receipt or third party interception of any such
transmission, and (c) Borrower and Bank will release, hold harmless and
indemnify Lender from any claim, damage or loss, including that arising in whole
or part from Lender’s strict liability or sole, comparative or contributory
negligence, which is related to the electronic transmission of data.
 
8.27            USA PATRIOT Act.  The Lender hereby notifies the Borrower and
any guarantor that pursuant to the requirements of the PATRIOT Act, it is
required to obtain, verify and record information that identifies the Borrower
and any guarantors, which information includes the name and address of the
Borrower and any guarantors and other information that will allow Lender to
identify the Borrower and any guarantors in accordance with the PATRIOT Act.
 
8.28            No Inference of Extension Past Maturity Date.  Notwithstanding
any other provision herein, the terms, conditions, and requirements provided for
herein that would, by their express terms, be applicable to time periods after
the Maturity Date of the Note, are not to be interpreted as an inference that
the Lender has agreed to any extension, automatic or otherwise, to the extension
of the Maturity Date.  The Lender has not agreed and is under no obligation to
extend the Maturity Date of the Note.

Signature page follows.
23

--------------------------------------------------------------------------------

WITNESS the hand and seal of the parties hereto through their duly authorized
officers as of the date first above written.
 
LENDER:
 
BORROWER:
 
 
 
 
 
FIRST TENNESSEE BANK NATIONAL
 
THE FIRST BANCSHARES, INC.
ASSOCIATION
 
 
 
/s/ R. Chuck Hunt
 
/s/ M. Ray Cole, Jr.
By:
 
 
By:
 
Printed Name: R. Chuck Hunt
 
Printed Name: M. Ray Cole, Jr.
Title: Vice-President    Title: Chief Executive Officer 

24

--------------------------------------------------------------------------------

  LIST OF EXHIBITS     
EXHIBIT A
NOTE
   
EXHIBIT B
BORROWER’S COUNSEL’S OPINION
   
EXHIBIT C
ACTIONS, SUITS, OR OTHER PROCEEDINGS PENDING OR THREATENED AGAINST OR AFFECTING
BORROWER OR ANY SUBSIDIARY
   
EXHIBIT D
SUBSIDIARIES OF BORROWER
   
EXHIBIT E
LIENS
   
EXHIBIT F
OPTIONS, WARRANTS OR OTHER RIGHTS AGREEMENTS OR COMMITMENTS (INCLUDING
CONVERSION RIGHTS AND PREEMPTIVE RIGHTS) OBLIGATING BORROWER OR ANY SUBSIDIARY
TO ISSUE, SELL, PURCHASE OR REDEEM SHARES OR SECURITIES CONVERTIBLE TO SHARES
   
EXHIBIT G
INDEBTEDNESS NOT AUTHORIZED IN SECTION 6.1
   
EXHIBIT H
COMPLIANCE CERTIFICATE
   
APPENDIX A
DEFINITIONS
   
SCHEDULE 4.6
SUPERVISORY ACTION(S)

--------------------------------------------------------------------------------

EXHIBIT A

NOTE
A-1

--------------------------------------------------------------------------------

EXHIBIT B

BORROWER’S COUNSEL’S OPINION
B-1

--------------------------------------------------------------------------------

EXHIBIT C

ACTIONS, SUITS, OR OTHER PROCEEDINGS PENDING OR THREATENED AGAINST OR AFFECTING
BORROWER OR ANY SUBSIDIARY

None
C-1

--------------------------------------------------------------------------------

EXHIBIT D

SUBSIDIARIES OF BORROWER

The First Bancshares Statutory Trust II, a Delaware statutory trust
The First Bancshares Statutory Trust III, a Delaware statutory trust
The First, a national banking association
TFTC LLC
D-1

--------------------------------------------------------------------------------

EXHIBIT E

ADDITIONAL LIENS

None
E-1

--------------------------------------------------------------------------------

EXHIBIT F

OPTIONS, WARRANTS, OR OTHER RIGHTS, AGREEMENTS, OR
COMMITMENTS (INCLUDING CONVERSION RIGHTS AND
PREEMPTIVE RIGHTS) OBLIGATING BORROWER OR ANY
SUBSIDIARY TO ISSUE, SELL, PURCHASE, OR REDEEM
SHARES OR SECURITIES CONVERTIBLE INTO SHARES

The Borrower has outstanding agreements with each of the purchasers of its
Series E Mandatorily Convertible, Non-Voting , Non-Cumulative Perpetual 
Preferred shares to convert such preferred shares to common shares of the
Borrower aggregating 3,563380 common shares
F-1

--------------------------------------------------------------------------------

EXHIBIT G

INDEBTEDNESS NOT AUTHORIZED IN SECTION 6.1

None
G-1

--------------------------------------------------------------------------------

EXHIBIT H

COMPLIANCE CERTIFICATE

[Place on The First Bancshares, Inc. Letterhead]

[DATE]
  
Mr. __________________________
First Tennessee Bank National Association
Correspondent Banking
165 Madison Ave.
Memphis, TN  38103
 
Re:            Compliance Certificate
 
I, __________________________, ________________, of The First Bancshares, Inc.,
a Mississippi corporation (the "Borrower"), certify to First Tennessee Bank
National Association, a national banking association (the "Lender") that I have
completed the below covenant compliance check for the period ending on
___________________, that all calculations were made in accordance with the
terms and requirements of the applicable sections of the Loan Agreement dated as
of December 5, 2016, between Lender and Borrower, as amended or modified from
time to time (the “Loan Agreement”), and that, to the best of my knowledge,
except where indicated, the Borrower and its Subsidiaries are in compliance with
all of the above covenants and all other affirmative and negative covenants,
events of default, and all other terms of the agreements encompassing the Loan
Agreement.  This certification is provided to Lender under the provisions of
Section 5.17 of the Loan Agreement.  Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Loan Agreement.

[Remainder of Page Intentionally Left Blank]
H-1

--------------------------------------------------------------------------------

Loan Agreement Section - Covenant
Covenant
Actual
In Compliance ? 
 
 
 
 
 
 
5.13(a) -
Capitalization
 
 
 
 
 
 
 
 
 
 
 
Borrower:
“Well
 
 
 
 
 
Capitalized”
 
[Yes]
[No] 
 
 
 
 
 
 
 
Bank:
“Well
 
 
 
 
 
Capitalized”
 
[Yes]
[No] 
 
 
 
 
 
 
5.13(b) -
Risk-Based Capital
not less than
 
 
 
 
 
10.50%
 
[Yes]
[No]              5.14 -  Adjusted Texas Ratio  not more than            35.00% 
 
[Yes]
[No]              5.15 -  Fixed Charge Coverage Ratio  not less than           
1.35 : 1.00   
[Yes]
[No] 

 
 
 
THE FIRST BANCSHARES, INC.
 
 
 
 
By:
 
 
Title:
 

A-2

--------------------------------------------------------------------------------

APPENDIX A

DEFINITIONS

“Adjusted Texas Ratio” shall mean a fraction, expressed as a percentage, where
the numerator is Non-Performing Assets, and where the denominator is the sum of
Bank’s Tier 1 Capital plus the entire balance of Bank’s loan loss reserve, all
determined on a basis satisfactory to Lender.

“Affiliate” shall have the same meaning assigned to it in applicable bank
regulations.

“Asset Disposition” shall mean the disposition (including the sale, lease or
transfer) of any or all of the assets (including without limitation any common
or preferred stock of the Bank or any other Subsidiary) of the Borrower or any
of its Subsidiaries whether by sale, lease, transfer or otherwise.

“Average Assets” shall mean the year-to-date average of total assets of Bank.

“Bank Regulatory Authority” shall mean the Board of Governors of the Federal
Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance
Corporation, and all other relevant bank regulatory authorities (including,
without limitation, relevant state bank regulatory authorities).

“Call Report” shall mean the Bank’s Quarterly Report of Condition and Income.

“Capital Stock” shall mean any and all shares, interests, participations or
other equivalents (however designated) of capital stock or equity, whether now
outstanding or issued after the date hereof, including all common stock,
preferred stock, partnership interests and limited liability company member
interests.

"Cash Flow" means the sum of (a) Borrower's consolidated Net Income, plus (b)
non-cash charges or expenses of Borrower, including depreciation and
amortization, plus (c) all interest expense of the Borrower to the extent
deducted in the determination of consolidated Net Income, plus (d) proceeds from
the purchase of Borrower shares by the Borrower's employee stock ownership plan,
less (e) dividends or other payments (including payments for repurchase of
shares) paid or declared by the Borrower to its shareholders, less (f)
Borrower's non-cash income.

“Change in  Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Entity or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Entity; provided that notwithstanding anything herein to the
contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (ii) all requests, rules, regulations, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

A-3

--------------------------------------------------------------------------------

“Covenant Compliance Date” shall mean the last day of each calendar quarter of
the Borrower.

“Environmental Laws” shall mean all federal, state, and local laws, including
statutes, regulations, ordinances, codes, rules, and other governmental
restrictions and requirements, relating to the discharge of air pollutants,
water pollutants, or process waste water or otherwise relating to the
environment or hazardous substances or the treatment, processing, storage,
disposal, release, transport, or other handling thereof, including, but not
limited to, the federal Solid Waste Disposal Act, the federal Clean Air Act, the
federal Clean Water Act, the federal Resource Conservation and Recovery Act, the
federal Hazardous Materials Transportation Act, the federal Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, the federal
Toxic Substances Control Act, regulations of the Nuclear Regulatory Agency, and
regulations of any state department of natural resources or state environmental
protection agency, in each case as now or at any time hereafter in effect.

“Equity Issuance” shall mean any issuance by the Borrower to any person of
shares of its Capital Stock, any shares of its Capital Stock pursuant to the
exercise of options or warrants or any shares of its Capital Stock pursuant to
the conversion of any debt to equity, after the date of the Loan.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time. 
References to sections of ERISA shall be construed also to refer to any
successor sections.

“ERISA Affiliate” means an entity which is under common control with the
Borrower within the meaning of Section 4001(a)(14) of ERISA, or is a member of a
group which includes the Borrower and which is treated as a single employer
under Sections 414(b) or (c) of the Code.

“ERISA Event” means (i) with respect to any Plan, the occurrence of a Reportable
Event or the substantial cessation of operations (within the meaning of Section
4062(e) of ERISA); (ii) the withdrawal by the Borrower, the Bank, or any other
Subsidiary or any ERISA Affiliate from a Multiple Employer Plan during a plan
year in which it was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan; (iii) the
distribution of a notice of intent to terminate or the actual termination of a
Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of
proceedings to terminate or the actual termination of a Plan by the PBGC under
Section 4042 of ERISA; (v) any event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any plan; (vi) the complete or partial withdrawal of the
Borrower or any of its Subsidiaries or any ERISA Affiliate from a Multiemployer
Plan; (vii) the conditions for imposition of a lien under Section 302(f) of
ERISA exist with respect to any Plan; or (viii) the adoption of an amendment to
any Plan requiring the provision of security to such Plan pursuant to Section
307 of ERISA.

A-4

--------------------------------------------------------------------------------

“Event of Default” shall have the meaning assigned to such term in Section 7.1
of this Agreement.

"Fixed Charge Coverage Ratio" for any period shall mean the ratio of: (a) Cash
Flow for such period to (b) Fixed Charges for such period; provided, however,
that for periods occurring during calendar year 2017 only, there shall be added
to the calculation of Cash Flow for such periods an amount equal to Borrower’s
reasonable out-of-pocket expenses incurred in connection with approved or
otherwise permitted mergers or acquisitions occurring during such periods.

"Fixed Charges" means the sum of (a) all interest expense of the Borrower to the
extent deducted in the determination of consolidated Net Income, plus (b) all
contractually required principal payments on any indebtedness of the Borrower,
all determined with respect to the Borrower in accordance with GAAP.

“GAAP” shall mean generally accepted accounting principles applied on a
consistent basis, maintained throughout the period involved.

“Governmental Entity” means the United States, any State, and/or any political
subdivision, department, agency or instrumentality of any of the foregoing.

“Interest Rate Swap” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of  the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement, together with
any related schedule and confirmation, as amended, supplemented, superseded or
replaced from time to time.

A-5

--------------------------------------------------------------------------------

“Lien(s)” shall have the meaning set forth in Section 4.11 of this Agreement and
are more specifically set forth in Exhibit E attached hereto.

“Loan Documents” shall mean the Note, the Agreement, the Negative Pledge
Agreement, and any and all other documents, instruments or agreements
evidencing, securing, guaranteeing or otherwise related to or delivered in
connection with the Loan.

“Local Authorities” means individually and collectively the state and local
governmental authorities which govern the business and operations owned or
conducted by the Borrower or its Subsidiaries.

“Maturity Date” shall mean December 5, 2017.

“Multiple Employer Plan” shall mean a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.

“Negative Pledge Agreement” shall mean that certain Negative Pledge Agreement
executed by Borrower for the benefit of Lender dated of even date with this
Agreement, with respect to the Borrower’s Capital Stock in the Bank.

“Net Income” shall mean the net income after taxes including the Borrower’s
equity in undistributed earnings of its Subsidiaries as determined under GAAP.

“Net Worth” shall mean the shareholders’ equity, net worth or surplus as
determined under GAAP.

“Non-Performing Assets” shall mean the sum of (1) all Non-Performing Loans and
(2) Other Real Estate Owned listed in Call Reports and other such assets
acquired through foreclosure or other realization upon collateral or
rearrangement or satisfaction of Indebtedness.

“Non-Performing Loans” shall mean the sum of (1) all loans classified internally
or by a Bank Regulatory Authority as non-accrual plus (2) loans past due by 90
days or more plus (3) loans for which the obligee has reduced the agreed
interest rate, reduced the principal or interest obligation, extend the
maturity, applied interest payments to reduce principal, capitalized interest,
or otherwise renegotiated the terms of the obligation based upon the actual or
asserted inability of the obligor(s) of such loans to perform their obligations
pursuant to the agreements with the obligee prior to such modification or
renegotiation; provided, however, that (a) loans for which the Borrower or the
Bank has taken additional collateral satisfactory to it and therefore is
prepared to make additional loan advances or any other loans which have been
restructured and are performing in a manner satisfactory to the Borrower and (b)
any portion of a Non-Performing Loan that is guaranteed by the United States
government or an agency thereof in a manner acceptable to Lender shall not be
included in the definition of Non-Performing Loans (but any un-guaranteed
portion of a Non-Performing Loan covered by item (b) above shall be included as
a Non-Performing Loan).

A-6

--------------------------------------------------------------------------------

“Note” shall have the meaning assigned to such term in Section 1.2 of this
Agreement, together with any and all renewals, modifications, extensions and
replacements thereof.

“Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), as amended.

“Permitted Encumbrances” shall mean and include: (a) liens for taxes,
assessments or similar governmental charges not in default or being contested in
good faith by appropriate proceedings; (b) workmen’s, vendors’, mechanics’ and
materialmen’s liens and other liens imposed by law incurred in the ordinary
course of business, and easements and encumbrances which are not substantial in
character or amount and do not materially detract from the value or interfere
with the intended use of the properties subject thereto and affected thereby;
(c) liens in respect of pledges or deposits under social security laws,
workmen’s compensation laws, unemployment insurance or similar legislation and
in respect of pledges or deposits to secure bids, tenders, contracts (other than
contracts for the payment of money), leases or statutory operations; and (d)
such other liens and encumbrances to which Lender shall consent in writing, if
any.

“Person” means an individual, partnership, corporation, limited liability
company, trust, unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof, joint stock company, or
non-incorporated organization, or any other entity of any kind whatsoever.

“Plan” means any employee benefit plan (as defined in Section 3(3) of ERISA)
which is covered by ERISA and with respect to which the Borrower, the Bank, or
any other Subsidiary or any ERISA affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an “employer”
within the meaning of Section 3(5) of ERISA.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the notice requirement has been
waived by regulation.

“Risk-Based Capital Ratio” shall have the meaning and be calculated as set forth
in Appendix A to Title 12, Code of Federal Regulations, Part 225, Capital
Adequacy Guidelines for Bank Holding Companies.
 
“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx,
or as otherwise published from time to time.

A-7

--------------------------------------------------------------------------------

“Sanctioned Person” means (a) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC available at
http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx,
or as otherwise published from time to time, or (b) (i) an agency of the
government of a Sanctioned Country, (ii) an organization controlled by a
Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the
extent subject to a sanctions program administered by the U.S. Department of
Treasury’s Office of Foreign Assets Control.

“Subsidiaries” or individually “Subsidiary” shall mean any partnership,
corporation, limited liability company, trust, unincorporated organization,
association, joint venture, or other entity other than Borrower in an unbroken
chain of entities beginning with the Borrower with each of the entities or the
Bank other than the last entity in the unbroken chain owning fifty percent (50%)
or more of the total combined voting power of all classes of stock or other form
of equity in one of the other entities or the Bank and are more specifically
listed in Exhibit D attached hereto.

“Supervisory Action” shall mean and include the issuance by or at the behest of
any bank regulatory authority of a letter agreement, memorandum of understanding
(regardless of whether consented or agreed to by the party to whom it is
addressed), cease and desist order, injunction, directive, restraining order,
formal agreement, notice of charges, or civil money penalties, against Borrower,
the Bank, or any other Subsidiary or the directors or officers of any of them,
whether temporary or permanent.

“Tier 1 Capital” shall have the meaning included in Appendix A to Title 12, Code
of Federal Regulations, Part 225, Capital Adequacy Guidelines for Bank Holding
Companies.

“United States” means the government of the United States of America or any
department, agency, division or instrumentality thereof.

A-8

--------------------------------------------------------------------------------

SCHEDULE 1.5

WIRE INSTRUCTIONS
 
Receiving Bank:
The First, A National Banking Association
 
6480 US Hwy 98 West
 
PO Box 15549
 
Hattiesburg, MS 39404-5549
 
 
ABA/Routing No.:
065303360
 
 
Beneficiary Account Number:
5024476
 
 
Beneficiary Account Name:
The First Bancshares, Inc.
 
 
Beneficiary Account Address:
P.O. Box 15549
 
Hattiesburg, MS 39404

 
The following individuals are authorized to request wire transfers:

M. Ray Cole, Jr.
601-705-1141
hcole@thefirstbank.com

Dee Dee Lowery
601-705-1141
dlowery@thefirstbank.com
A-9

--------------------------------------------------------------------------------

 
SCHEDULE 4.6

SUPERVISORY ACTION(S)

None.
A-10