EXHIBIT 10.1
 
SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of March 20,
2013, by and among The First Bancshares, Inc., a Mississippi corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).
 
RECITALS
 
A.           The Company and each Purchaser is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “Commission”) under the
Securities Act.
 
B.           Each Purchaser, severally and not jointly, wishes to purchase, and
the Company wishes to sell, upon the terms and conditions stated in this
Agreement, that aggregate number of shares of the Company’s mandatorily
convertible non-cumulative non-voting perpetual preferred stock, $10.25
liquidation preference per share (the “Preferred Stock”), set forth below such
Purchaser’s name on the signature page of this Agreement (which aggregate amount
for all purchasers shall not be less than $18 million worth (1,756,098 shares)
and shall be collectively referred to herein as the “Preferred Shares”).  When
purchased, the Preferred Stock will have the terms set forth in a Certificate of
Designations incorporated into Articles of Amendment for the Preferred Stock in
the form attached as Exhibit A hereto (the “Articles of Amendment”) made a part
of the Company’s Articles of Incorporation, as amended, by the filing of the
Articles of Amendment with the Secretary of State of the State of Mississippi
(the “Mississippi Secretary”).  The Preferred Stock will be convertible into
shares (the “Underlying Shares” and, together with the Preferred Shares, the
“Securities”) of the common stock, par value $1.00 per share, of the Company
(the “Common Stock”), subject to and in accordance with the terms and conditions
of the Articles of Amendment.
 
C.           The Company has engaged FIG Partners, L.L.C. as its exclusive
placement agent (the “Placement Agent”) for the offering of the Preferred
Shares.
 
D.           Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit B (the
“Registration Rights Agreement”), pursuant to which, among other things, the
Company will agree to provide certain registration rights with respect to the
Securities under the Securities Act and the rules and regulations promulgated
thereunder and applicable state securities laws.
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers hereby
agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
1.1. Definitions.  In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms shall have the meanings
indicated in this Section 1.1:
 
“Action” means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending
or, to the Company’s Knowledge, threatened in writing against the Company, any
Subsidiary or any of their respective properties or any officer, director or
employee of the Company or any Subsidiary acting in his or her capacity as an
officer, director or employee before or by any federal, state, county, local or
foreign court, arbitrator, governmental or administrative agency, regulatory
authority, stock market, stock exchange or trading facility.
 
 
 

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“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, Controls, is controlled by or
is under common control with such Person, as such terms are used in and
construed under Rule 405 under the Securities Act.  With respect to a Purchaser,
any investment fund or managed account that is managed on a discretionary basis
by the same investment manager as such Purchaser will be deemed to be an
Affiliate of such Purchaser.
 
“Agreement” shall have the meaning ascribed to such term in the Preamble.
 
“Articles of Amendment” has the meaning set forth in the Recitals.
 
“Articles of Incorporation” means the Articles of Incorporation of the Company
and all amendments thereto, as the same may be amended from time to time.
 
“Business Day” means a day, other than a Saturday or Sunday, on which banks in
Mississippi are open for the general transaction of business.
 
“Buy-In” has the meaning set forth in Section 4.1(e).
 
“Buy-In Price” has the meaning set forth in Section 4.1(e).
 
“Closing” means the closing of the purchase and sale of the Preferred Shares
pursuant to this Agreement.
 
“Closing Date” means the Trading Day when all of the Transaction Documents have
been executed and delivered by the applicable parties thereto, and all of the
conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied, or
such other date as the parties may agree.
 
“Commission” has the meaning set forth in the Recitals.
 
“Common Stock” has the meaning set forth in the Recitals, and also includes any
securities into which the Common Stock may hereafter be reclassified or changed.
 
“Company Counsel” means Jones Walker LLP.
 
“Company Deliverables” has the meaning set forth in Section 2.2(a).
 
“Company Reports” has the meaning set forth in Section 3.1(kk).
 
“Company’s Knowledge” means with respect to any statement made to the knowledge
of the Company, that the statement is based upon the actual knowledge of the
executive officers of the Company having responsibility for the matter or
matters that are the subject of the statement after reasonable investigation.
 
“Control” (including the terms “controlling,” “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
 
“Disclosure Materials” has the meaning set forth in Section 3.1(h).
 
“DTC” means The Depository Trust Company.
 
“Effective Date” means the date on which the initial Registration Statement
required by Section 2(a) of the Registration Rights Agreement is first declared
effective by the Commission.
 
 “Environmental Laws” has the meaning set forth in Section 3.1(l).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
 
 
 

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“FDIC” means the Federal Deposit Insurance Corporation.
 
“Federal Reserve” has the meaning set forth in Section 3.1(ll).
 
“GAAP” means U.S. generally accepted accounting principles, as applied by the
Company.
 
“Indemnified Person” has the meaning set forth in Section 4.8(b).
 
“Intellectual Property” has the meaning set forth in Section 3.1(r).
 
“Lien” means any lien, charge, claim, encumbrance, security interest, right of
first refusal, preemptive right or other restrictions of any kind.
 
“Material Adverse Effect” means any of (i) a material and adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material and adverse effect on the results of operations, assets, properties,
business, condition (financial or otherwise) or prospects of the Company and the
Subsidiaries, taken as a whole, or (iii) any adverse impairment to the Company’s
ability to perform in any material respect on a timely basis its obligations
under any Transaction Document.
 
“Material Contract” means any contract of the Company that was filed as an
exhibit to the SEC Reports pursuant to Item 601 of Regulation S-K.
 
“Material Permits” has the meaning set forth in Section 3.1(p).
 
“Mississippi Courts” means the state and federal courts sitting in the State of
Mississippi.
 
“Mississippi Secretary” has the meaning set forth in the Recitals.
 
“Outside Date” means the fifteenth day following the date of this Agreement;
provided that if such day is not a Business Day, the first day following such
day that is a Business Day.
 
“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.
 
“Placement Agent” has the meaning set forth in the Recitals.
 
“Preferred Shares” has the meaning set forth in the Recitals.
 
“Preferred Stock” has the meaning set forth in the Recitals.
 
“Principal Trading Market” means the Trading Market on which the Common Stock is
primarily listed on and quoted for trading, which, as of the date of this
Agreement and the Closing Date, shall be the NASDAQ Global Market.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Purchase Price” means $10.25 per Preferred Share.
 
“Purchaser Deliverables” has the meaning set forth in Section 2.2(b).
 
“Purchaser Party” has the meaning set forth in Section 4.8(a).
 
“Registration Rights Agreement” has the meaning set forth in the Recitals.
 
 
 

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“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Registrable Securities (as defined in the Registration Rights
Agreement).
 
“Regulation D” has the meaning set forth in the Recitals.
 
“Regulatory Agreement” has the meaning set forth in Section 3.1(mm).
 
“Required Approvals” has the meaning set forth in Section 3.1(e).
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“SEC Reports” has the meaning set forth in Section 3.1(h).
 
“Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(v).
 
“Securities” has the meaning set forth in the Recitals.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Shareholder Approval” has the meaning set forth in Section 4.11.
 
“Shareholder Proposal” has the meaning set forth in Section 4.11.
 
“Subscription Amount” means with respect to each Purchaser, the aggregate amount
to be paid for the Preferred Shares purchased hereunder as indicated on such
Purchaser’s signature page to this Agreement next to the heading “Aggregate
Purchase Price (Subscription Amount).”
 
“Subsidiary” means any entity in which the Company, directly or indirectly, owns
sufficient capital stock or holds a sufficient equity or similar interest such
that it is consolidated with the Company in the financial statements of the
Company.
 
“Trading Day” means (i) a day on which the Common Stock is listed or quoted and
traded on its Principal Trading Market (other than the OTC Bulletin Board), or
(ii) if the Common Stock is not listed on a Trading Market (other than the OTC
Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
 
“Trading Market” means whichever of the New York Stock Exchange, the NYSE Amex,
the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market or the OTC Bulletin Board on which the Common Stock is listed or quoted
for trading on the date in question.
 
“Transaction Documents” means this Agreement, the Schedules and Exhibits
attached hereto, the Registration Rights Agreement, the Articles of Amendment,
and any other documents or agreements executed in connection with the
transactions contemplated hereunder.
 
“Transfer Agent” means Computershare, or any successor transfer agent for the
Company.
 
“Underlying Shares” has the meaning set forth in the Recitals.
 
 
 

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ARTICLE II
 
PURCHASE AND SALE
 
2.1. Closing.
 
(a) Purchase of Preferred Shares.  Subject to the terms and conditions set forth
in this Agreement, at the Closing the Company shall issue and sell to each
Purchaser, and each Purchaser shall, severally and not jointly, purchase from
the Company, the number of Preferred Shares set forth below such Purchaser’s
name on the signature page of this Agreement at a per Preferred Share price
equal to the Purchase Price.
 
(b) Closing.  The Closing of the purchase and sale of the Preferred Shares shall
take place at the offices of Jones Walker LLP, 190 E. Capitol St., Suite 800,
Jackson, Mississippi, 39201 on the Closing Date or at such other locations or
remotely by facsimile transmission or other electronic means as the parties may
mutually agree.
 
(c) Form of Payment.  Unless otherwise agreed to by the Company and a Purchaser
(as to itself only), on the Closing Date, (1) the Company shall deliver to each
Purchaser one or more stock certificates (if physical certificates are required
by the Purchaser to be held immediately prior to Closing; if not, then facsimile
or “.pdf” copies of such certificates shall suffice for purposes of Closing with
the original stock certificates to be delivered within two Business Days of the
Closing Date), evidencing the number of Preferred Shares set forth on such
Purchaser’s signature page to this Agreement (or, if the Company and such
Purchaser agree, the Company shall cause to be made a book-entry record through
the facilities of DTC representing the Preferred Shares registered in the name
of such Purchaser or as otherwise set forth on the Stock Certificate
Questionnaire included as Exhibit C-2 hereto) and (2) upon receipt thereof, each
Purchaser shall wire its Subscription Amount, in United States dollars and in
immediately available funds, in accordance with the Company’s written wire
transfer instructions.
 
2.2. Closing Deliveries.
 
(a) On or prior to the Closing, the Company shall issue, deliver or cause to be
delivered to each Purchaser the following (the “Company Deliverables”):
 
(i) this Agreement, duly executed by the Company;
 
(ii) one or more stock certificates (if physical certificates are required by
the Purchaser to be held immediately prior to Closing; if not, then facsimile or
“.pdf” copies of such certificates shall suffice for purposes of Closing with
the original stock certificates to be delivered within two Business Days of the
Closing Date), evidencing the Preferred Shares subscribed for by Purchaser
hereunder, registered in the name of such Purchaser or as otherwise set forth on
the Stock Certificate Questionnaire (the “Stock Certificates”) (or, if the
Company and such Purchaser agree, the Company shall cause to be made a
book-entry record through the facilities of DTC representing the Preferred
Shares registered in the name of such Purchaser or as otherwise set forth on the
Stock Certificate Questionnaire);
 
(iii) a legal opinion of Company Counsel, dated as of the Closing Date and in
the form attached hereto as Exhibit D, executed by such counsel and addressed to
the Purchasers;
 
(iv) the Registration Rights Agreement, duly executed by the Company; and
 
(v) a certificate of the Secretary of the Company, in the form attached hereto
as Exhibit E (the “Secretary’s Certificate”), dated as of the Closing Date,
(a) certifying the resolutions adopted by the Board of Directors of the Company
or a duly authorized committee thereof approving the transactions contemplated
by this Agreement and the other Transaction Documents and the issuance of the
Securities, (b) certifying the current versions of the Articles of
Incorporation, as amended, and by-laws, as amended, of the Company and
(c) certifying as to the signatures and authority of persons signing the
Transaction Documents and related documents on behalf of the Company; and
 
 
 

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(vi) the compliance certificate referred to in Section 5.1(g).
 
(b) On or prior to the Closing, each Purchaser shall deliver or cause to be
delivered to the Company the following (the “Purchaser Deliverables”):
 
(i) this Agreement, duly executed by such Purchaser;
 
(ii) its Subscription Amount, in U.S. dollars and in immediately available
funds, in the amount indicated below such Purchaser’s name on the applicable
signature page hereto under the heading “Aggregate Purchase Price (Subscription
Amount)” by wire transfer in accordance with the Company’s written instructions;
 
(iii) the Registration Rights Agreement, duly executed by such Purchaser; and
 
(iv) a fully completed and duly executed Accredited Investor Questionnaire,
reasonably satisfactory to the Company, and Stock Certificate Questionnaire in
the forms attached hereto as Exhibits C-1 and C-2, respectively.
 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES
 
3.1. Representations and Warranties of the Company.  The Company hereby
represents and warrants as of the date hereof and the Closing Date (except for
the representations and warranties that speak as of a specific date, which shall
be made as of such date), to each of the Purchasers that:
 
(a) Subsidiaries.  The Company has no direct or indirect Subsidiaries except as
set forth in Exhibit 21 to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2011, as filed with the Commission on March 29, 2012.  Except
as disclosed in Schedule 3.1(a) hereto, the Company owns, directly or
indirectly, all of the capital stock or comparable equity interests of each
Subsidiary free and clear of any and all Liens, and all the issued and
outstanding shares of capital stock or comparable equity interest of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities.
 
(b) Organization and Qualification.  The Company and each of its “Significant
Subsidiaries” (as defined in Rule 1-02 of Regulation S-X) is an entity duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own or lease and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Significant Subsidiary is in violation
of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.  The Company
and each of its Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not in the reasonable judgment of the
Company be expected to have a Material Adverse Effect.  The Company is duly
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended.  Each of the Company’s depository institution Subsidiaries’ deposit
accounts are insured up to applicable limits by the Federal Deposit Insurance
Corporation, and all premiums and assessments required to be paid in connection
therewith have been paid when due.  The Company has conducted its business in
compliance with all applicable federal, state and foreign laws, orders,
judgments, decrees, rules, regulations and applicable stock exchange
requirements, including all laws and regulations restricting activities of bank
holding companies and banking organizations, except for any noncompliance that,
individually or in the aggregate, has not had and would not be reasonably
expected to have a Material Adverse Effect.
 
 
 

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(c) Authorization; Enforcement; Validity.  The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and
otherwise to carry out its obligations hereunder and thereunder, including,
without limitation, to issue the Preferred Shares in accordance with the terms
hereof and, subject to Shareholder Approval, to issue the Underlying Shares in
accordance with the Articles of Amendment.  The Company’s execution and delivery
of each of the Transaction Documents to which it is a party and the consummation
by it of the transactions contemplated hereby and thereby (including, but not
limited to, the sale and delivery of the Preferred Shares and the Underlying
Shares) have been duly authorized by all necessary corporate action on the part
of the Company, and no further corporate action is required by the Company, its
board of directors or its stockholders in connection therewith other than in
connection with the Required Approvals.  Each of the Transaction Documents to
which it is a party has been (or upon delivery will have been) duly executed by
the Company and is, or when delivered in accordance with the terms hereof, will
constitute the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.  Except for Material Contracts,
there are no stockholder agreements, voting agreements, or other similar
arrangements with respect to the Company’s capital stock to which the Company is
a party or, to the Company’s Knowledge, between or among any of the Company’s
stockholders.
 
(d) No Conflicts.  The execution, delivery and performance by the Company of the
Transaction Documents to which it is a party and the consummation by the Company
of the transactions contemplated hereby or thereby (including, without
limitation, the issuance of the Preferred Shares and the Underlying Shares) do
not and will not (i) conflict with or violate any provisions of the Company’s or
any Subsidiary’s certificate or articles of incorporation, bylaws or otherwise
result in a violation of the organizational documents of the Company or any
Subsidiary, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would result in a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any Material Contract, or
(iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations and the
rules and regulations thereunder, assuming, without investigation, the
correctness of the representations and warranties made by the Purchasers herein,
of any self-regulatory organization to which the Company or its securities are
subject, including all applicable Trading Markets), or by which any property or
asset of the Company is bound or affected, except in the case of clauses
(ii) and (iii) such as would not have or reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
 
(e) Filings, Consents and Approvals.  Neither the Company nor any of its
Subsidiaries is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents (including, without limitation, the issuance of the
Preferred Shares and the Underlying Shares), other than (i) obtaining
Shareholder Approval to issue the Underlying Shares in accordance with the terms
of the Articles of Amendment, (ii) the filing of the Articles of Amendment with
the Mississippi Secretary, (iii) the filing with the Commission of one or more
Registration Statements in accordance with the requirements of the Registration
Rights Agreement, (iv) filings required by applicable state securities laws,
(v) the filing of a Notice of Sale of Securities on Form D with the Commission
under Regulation D of the Securities Act, (vi) the filing of any requisite
notices and/or application(s) to the Principal Trading Market for the issuance
and sale of the Underlying Shares and the listing of the Underlying Shares for
trading or quotation, as the case may be, thereon in the time and manner
required thereby, (vii) the filings required in accordance with Section 4.6 of
this Agreement and (viii) those that have been made or obtained prior to the
date of this Agreement (collectively, the “Required Approvals”).
 
 
 

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(f) Issuance of the Shares.  The issuance of the Preferred Shares has been duly
authorized and the Preferred Shares, when issued and paid for in accordance with
the terms of the Transaction Documents, will be duly and validly issued, fully
paid and non-assessable and free and clear of all Liens, other than restrictions
on transfer provided for in the Transaction Documents or imposed by applicable
securities laws, and shall not be subject to preemptive or similar rights.  The
issuance of the Underlying Shares has been duly authorized and the Underlying
Shares, when issued in accordance with the terms of the Articles of Amendment,
will be duly and validly issued, fully paid and non-assessable and free and
clear of all Liens, other than restrictions on transfer provided for in the
Transaction Documents or imposed by applicable securities laws, and shall not be
subject to preemptive or similar rights.  Assuming the accuracy of the
representations and warranties of the Purchasers in this Agreement, the
Securities will be issued in compliance with all applicable federal and state
securities laws.
 
(g) Capitalization.  The number of shares and type of all authorized, issued and
outstanding capital stock, options and other securities of the Company (whether
or not presently convertible into or exercisable or exchangeable for shares of
capital stock of the Company) has been set forth in the SEC Reports and has
changed since the date of such SEC Reports only due to stock grants or other
equity awards or stock option and warrant exercises that do not, individually or
in the aggregate, have a material effect on the issued and outstanding capital
stock, options and other securities.  All of the outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and
non-assessable, have been issued in compliance in all material respects with all
applicable federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to
subscribe for or purchase any capital stock of the Company.  Except as specified
in the SEC Reports: (i) no shares of the Company’s outstanding capital stock are
subject to preemptive rights or any other similar rights; (ii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company, or contracts, commitments, understandings or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares of
capital stock of the Company, other than those issued or granted pursuant to
Material Contracts or equity or incentive plans or arrangements described in the
SEC Reports; (iii) there are no material outstanding debt securities, notes,
credit agreements, credit facilities or other agreements, documents or
instruments evidencing indebtedness of the Company or by which the Company is
bound; (iv) except for the Registration Rights Agreement and the “Existing
Contracts” referenced therein, there are no agreements or arrangements under
which the Company is obligated to register the sale of any of its securities
under the Securities Act; (v) there are no outstanding securities or instruments
of the Company that contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
is or may become bound to redeem a security of the Company; (vi) the Company
does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement; and (vii) the Company has no
liabilities or obligations required to be disclosed in the SEC Reports but not
so disclosed in the SEC Reports, which, individually or in the aggregate, will
have or would reasonably be expected to have a Material Adverse Effect.  There
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities.
 
(h) SEC Reports; Disclosure Materials.  The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the twelve months preceding the date hereof (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports” and together with
this Agreement and the Schedules to this Agreement, and any other factual
information concerning by the Company furnished in connection with the offering
of the Preferred Shares, the “Disclosure Materials”), on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension.  As of their respective
filing dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
 
 
 

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(i) Financial Statements.  The financial statements of the Company included in
the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements have been
prepared in accordance with GAAP applied on a consistent basis during the
periods involved, except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all
material respects the balance sheet of the Company and its consolidated
subsidiaries taken as a whole as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments, which would not be
material, either individually or in the aggregate.
 
(j) Tax Matters.  The Company (i) has prepared and filed all foreign, federal
and state income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith, with respect to which adequate reserves have been
set aside on the books of the Company and (iii) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply,
except, in the case of clauses (i) and (ii) above, where the failure to so pay
or file any such tax, assessment, charge or return would not have or reasonably
be expected to have a Material Adverse Effect.
 
(k) Material Changes.  Since the date of the latest audited financial statements
included within the SEC Reports, except as disclosed in subsequent SEC Reports
filed prior to the date hereof, (i) there have been no events, occurrences or
developments that have had or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, (ii) the Company
has not incurred any material liabilities (contingent or otherwise) other than
(A) trade payables, accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered materially its method of accounting or the manner in
which it keeps its accounting books and records, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock, (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except Common Stock issued
pursuant to existing Company stock option or stock purchase plans or equity
based plans disclosed in the SEC Reports and (vi) there has not been any
material change or amendment to, or any waiver of any material right by the
Company under, any Material Contract under which the Company or any of its
Subsidiaries is bound or subject.  Except for the transactions contemplated by
this Agreement, no event, liability or development has occurred or exists with
respect to the Company or its Subsidiaries or their respective business,
properties, operations or financial condition that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed at least one Trading
Day prior to the date that this representation is made.  Moreover, since the
date(s) the Company afforded Purchaser (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of
the Company concerning the terms and conditions of the offering of the Preferred
Shares and the merits and risks of investing in the Preferred Shares; and (ii)
access to information about the Company and the Subsidiaries and their
respective financial condition, results of operations, business, properties,
management, prospects and any potential transactions sufficient to enable it to
evaluate its investment, there have been no events, occurrences or developments
that have materially affected or would reasonably be expected to materially
affect, either individually or in the aggregate, the information as presented to
the Purchasers in connection with the offering of the Preferred Shares.
 
(l) Environmental Matters.  Neither the Company nor any of its Subsidiaries
(i) is in violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any
real property contaminated with any substance that is in violation of any
Environmental Laws, (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or (iv) is subject to any claim relating to
any Environmental Laws; in each case, which violation, contamination, liability
or claim has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and, to the Company’s Knowledge, there is
no pending or threatened investigation that might lead to such a claim.
 
 
 

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(m) Litigation.  There is no Action which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Shares or (ii) except as disclosed in the SEC Reports, is reasonably likely
to have a Material Adverse Effect, individually or in the aggregate, if there
were an unfavorable decision.  Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.  There has not been, and to the Company’s
knowledge there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of
the Company.  The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any of its Subsidiaries under the Exchange Act or the Securities Act.
 
(n) Employment Matters.  No material labor dispute exists or, to the Company’s
Knowledge, is imminent with respect to any of the employees of the Company which
would have or reasonably be expected to have a Material Adverse Effect.  None of
the Company’s employees is a member of a union that relates to such employee’s
relationship with the Company, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and the Company
and each Subsidiary believes that its relationship with its employees is
good.  To the Company’s Knowledge, no executive officer is, or is now expected
to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of a third party, and to the Company’s Knowledge, the
continued employment of each such executive officer does not subject the Company
or any Subsidiary to any liability with respect to any of the foregoing
matters.  The Company is in compliance with all U.S. federal, state, local and
foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure
to be in compliance would not have or reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
 
(o) Compliance.  Neither the Company nor any of its Subsidiaries (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any of its Subsidiaries under), nor has the Company or any of its
Subsidiaries received written notice of a claim that it is in default under or
that it is in violation of, any Material Contract (whether or not such default
or violation has been waived), (ii) is in violation of any order of which the
Company has been made aware in writing of any court, arbitrator or governmental
body having jurisdiction over the Company or its properties or assets, or
(iii) is in violation of, or in receipt of written notice that it is in
violation of, any statute, rule or regulation of any governmental authority
applicable to the Company, or which would have the effect of revoking or
limiting FDIC deposit insurance, except in each case as would not have or
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
 
(p) Regulatory Permits.  The Company and each of its Subsidiaries possess or
have applied for all certificates, authorizations, consents and permits issued
by the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as currently conducted and as
described in the SEC Reports, except where the failure to possess such permits,
individually or in the aggregate, has not and would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect (“Material
Permits”), and (i) neither the Company nor any of its Subsidiaries has received
any notice in writing of proceedings relating to the revocation or material
adverse modification of any such Material Permits and (ii) the Company is
unaware of any facts or circumstances that would give rise to the revocation or
material adverse modification of any Material Permits.
 
(q) Title to Assets.  The Company and its Subsidiaries have good and marketable
title to all real property and tangible personal property owned by them which is
material to the business of the Company and its Subsidiaries, taken as a whole,
in each case free and clear of all Liens except such as do not materially affect
the value of such property or do not interfere with the use made and proposed to
be made of such property by the Company and any of its Subsidiaries.  Any real
property and facilities held under lease by the Company and any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries.
 
 
 

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(r) Patents and Trademarks.  The Company and its Subsidiaries own, possess,
license or have other rights to use all foreign and domestic patents, patent
applications, trade and service marks, trade and service mark registrations,
trade names, copyrights, inventions, trade secrets, technology, Internet domain
names, know-how and other intellectual property (collectively, the “Intellectual
Property”) necessary for the conduct of their respective businesses as now
conducted or as proposed to be conducted in the SEC Reports except where the
failure to own, possess, license or have such rights would not have or
reasonably be expected to have a Material Adverse Effect.  Except as set forth
in the SEC Reports and except where such violations or infringements would not
have or reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect, (a) there are no rights of third parties to any such
Intellectual Property; (b) there is no infringement by third parties of any such
Intellectual Property; (c) there is no pending or threatened action, suit,
proceeding or claim by others challenging the Company’s and its Subsidiaries’
rights in or to any such Intellectual Property; (d) there is no pending or
threatened action, suit, proceeding or claim by others challenging the validity
or scope of any such Intellectual Property; and (e) there is no pending or
threatened action, suit, proceeding or claim by others that the Company and/or
any Subsidiary infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others.
 
(s) Insurance.  The Company and each of the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as the Company believes to be prudent and customary in the businesses
and locations in which the Company and the Subsidiaries are engaged.  Neither
the Company nor any of its Subsidiaries has received any notice of cancellation
of any such insurance, nor, to the Company’s Knowledge, will it or any
Subsidiary be unable to renew their respective existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
have a Material Adverse Effect.
 
(t) Transactions With Affiliates and Employees.  Except as set forth in the SEC
Reports and other than the grant of stock options or other equity awards that
are not individually or in the aggregate material in amount, none of the
officers or directors of the Company and, to the Company’s Knowledge, none of
the employees of the Company, is presently a party to any transaction with the
Company or to a presently contemplated transaction (other than for services as
employees, officers and directors) that would be required to be disclosed
pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.
 
(u) Internal Control Over Financial Reporting.  Except as set forth in the SEC
Reports, the Company maintains internal control over financial reporting (as
such term is defined in Rule 13a-15(f) under the Exchange Act) designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and such internal control over
financial reporting is effective.
 
(v) Sarbanes-Oxley; Disclosure Controls.  The Company is in compliance in all
material respects with all of the provisions of the Sarbanes-Oxley Act of 2002
which are applicable to it.  Except as disclosed in the SEC Reports, the Company
maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act), and such disclosure
controls and procedures are effective.
 
(w) Certain Fees.  No person or entity will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or, to the Company’s knowledge, a Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company, other than the
Placement Agent with respect to the offer and sale of the Shares (which
placement agent fees are being paid by the Company).
 
(x) Private Placement.  Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2 of this Agreement and the accuracy of
the information disclosed in the Accredited Investor Questionnaires, no
registration under the Securities Act is required for the offer and sale of the
Preferred Shares by the Company to the Purchasers under the Transaction
Documents.  The issuance and sale of the Preferred Shares hereunder does not
contravene the rules and regulations of the Principal Trading Market and, upon
Shareholder Approval, the issuance of the Underlying Shares in accordance with
the Articles of Amendment will not contravene the rules and regulations of the
Principal Trading Market.
 
 
 

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(y) Registration Rights.  Other than each of the Purchasers, except as set forth
on Schedule 3.1(y), no Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company other
than those securities which are currently registered on an effective
registration statement on file with the Commission.
 
(z) No Integrated Offering.  Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, none of the Company,
its Subsidiaries nor, to the Company’s Knowledge, any of its Affiliates or any
Person acting on its behalf has, directly or indirectly, at any time within the
past six months, made any offers or sales of any Company security or solicited
any offers to buy any security under circumstances that would eliminate the
availability of the exemption from registration under Regulation D under the
Securities Act in connection with the offer and sale by the Company of the
Preferred Shares as contemplated hereby.
 
(aa) Listing and Maintenance Requirements.  The Company’s Common Stock is
registered pursuant to Section 12(b) of the Exchange Act, and the Company has
taken no action designed to terminate the registration of the Common Stock under
the Exchange Act nor has the Company received any written notification that the
Commission is contemplating terminating such registration.  The Company has not,
in the 12 months preceding the date hereof, received written notice from any
Trading Market on which the Common Stock is listed or quoted to the effect that
the Company is not in compliance with the listing or maintenance requirements of
such Trading Market.  The Company is, and has no reason  to believe that it will
not in the foreseeable future continue to be, in compliance in all material
respects with the listing and maintenance requirements for continued trading of
the Common Stock on the Principal Trading Market.
 
(bb) Investment Company.  Neither the Company nor any of its Subsidiaries is
required to be registered as, and is not an Affiliate of, and immediately
following the Closing will not be required to register as, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.
 
(cc) Unlawful Payments.  Neither the Company nor any of its Subsidiaries, nor to
the Company’s Knowledge, any directors, officers, employees, agents or other
Persons acting at the direction of or on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the
Company: (a) directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
foreign or domestic political activity; (b) made any direct or indirect unlawful
payments to any foreign or domestic governmental officials or employees or to
any foreign or domestic political parties or campaigns from corporate funds;
(c) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or (d) made any other unlawful bribe, rebate, payoff, influence
payment, kickback or other material unlawful payment to any foreign or domestic
government official or employee.
 
(dd) Application of Takeover Protections; Rights Agreements.  The Company has
not adopted any stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.  The Company and its board of directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s Articles
of Incorporation or other organizational documents or the laws of the
jurisdiction of its incorporation or otherwise which is or could become
applicable to any Purchaser solely as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company’s issuance of the
Securities and any Purchaser’s ownership of the Securities.
 
(ee) Off Balance Sheet Arrangements.  There is no transaction, arrangement, or
other relationship between the Company (or any Subsidiary) and an unconsolidated
or other off balance sheet entity that is required to be disclosed by the
Company in its Exchange Act filings and is not so disclosed and would have a
Material Adverse Effect.
 
(ff) Acknowledgment Regarding Purchasers’ Purchase of Preferred Shares.  The
Company acknowledges and agrees that each of the Purchasers is acting solely in
the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby.  The Company
further acknowledges that no Purchaser is acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and any advice
given by any Purchaser or any of their respective representatives or agents in
connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Purchasers’ purchase of the Preferred
Shares.
 
 
 

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(gg) Absence of Manipulation.  The Company has not, and to the Company’s
Knowledge no one acting on its behalf has, taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of any
of the Securities.
 
(hh) OFAC.  Neither the Company nor any Subsidiary nor, to the Company’s
Knowledge, any director, officer, agent, employee, Affiliate or Person acting on
behalf of the Company or any Subsidiary is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not knowingly use the
proceeds of the sale of the Preferred Shares towards any sales or operations in
Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for
the purpose of financing the activities of any Person currently subject to any
U.S. sanctions administered by OFAC.
 
(ii) Money Laundering Laws.  The operations of each of the Company and any
Subsidiary are in compliance in all material respects with the money laundering
statutes of applicable jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or
enforced by any applicable governmental agency (collectively, the “Money
Laundering Laws”) and to the Company’s Knowledge, no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company and/or any Subsidiary with respect to the Money
Laundering Laws is pending or threatened.
 
(jj) No Additional Agreements.  The Company does not have any agreement or
understanding with any Purchaser with respect to the transactions contemplated
by the Transaction Documents other than as specified in the Transaction
Documents.
 
(kk) Reports, Registrations and Statements.  Since December 31, 2008, the
Company and each Subsidiary have filed all material reports, registrations and
statements, together with any required amendments thereto, that it was required
to file with the Board of Governors of the Federal Reserve System (the “Federal
Reserve”), FDIC, the Mississippi Department of Banking and Consumer Finance (the
“DBCF”), and any other applicable federal or state securities or banking
authorities, except where the failure to file any such report, registration or
statement would not have or reasonably be expected to have a Material Adverse
Effect.  All such reports and statements filed with any such regulatory body or
authority are collectively referred to herein as the “Company Reports.” As of
their respective dates, the Company Reports complied as to form in all material
respects with all the rules and regulations promulgated by the Federal Reserve,
the FDIC, the DBCF and any other applicable foreign, federal or state securities
or banking authorities, as the case may be.
 
(ll) Adequate Capitalization.  As of December 31, 2012, the Company’s Subsidiary
insured depository institution met or exceeded the standards necessary to be
considered “adequately capitalized” under the Federal Deposit Insurance
Company’s regulatory framework for prompt corrective action.
 
(mm) Agreements with Regulatory Agencies; Compliance with Certain Banking
Regulations.  Neither the Company nor any Subsidiary is subject to any
cease-and-desist or other similar order or enforcement action issued by, or is a
party to any written agreement, consent agreement or memorandum of understanding
with, or is a party to any commitment letter or similar undertaking to, or is
subject to any capital directive by, or since December 31, 2010, has adopted any
board resolutions at the request of, any governmental entity that currently
restricts in any material respect the conduct of its business or that in any
material manner relates to its capital adequacy, its liquidity and funding
policies and practices, its ability to pay dividends, its credit, risk
management or compliance policies, its internal controls, its management or its
operations or business (each item in this sentence, a “Regulatory Agreement”),
nor has the Company or any Subsidiary been advised in writing since December 31,
2010 by any governmental entity that it intends to issue, initiate, order, or
request any such Regulatory Agreement.
 
 
 

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To the Company’s Knowledge, there are no facts and circumstances, and has no
reason to believe that any facts or circumstances exist, that would cause any of
its Subsidiary banking institutions: (i) to be deemed not to be in satisfactory
compliance with the Community Reinvestment Act and the regulations promulgated
thereunder or to be assigned a CRA rating by federal or state banking regulators
of lower than “satisfactory;” (ii) to be deemed to be operating in violation, in
any material respect, of the Bank Secrecy Act, the Patriot Act, any order issued
with respect to anti-money laundering by OFAC, or any other anti-money
laundering statute, rule or regulation; or (iii) to be deemed not to be in
satisfactory compliance, in any material respect, with all applicable privacy of
customer information requirements contained in any applicable federal and state
privacy laws and regulations as well as the provisions of all information
security programs adopted by the Subsidiaries.
 
(nn) No General Solicitation or General Advertising.  Neither the Company nor,
to the Company’s Knowledge, any person acting on its behalf has engaged or will
engage in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with any offer
or sale of the Preferred Shares.
 
(oo) Risk Management Instruments.  Except as has not had or would not reasonably
be expected to have a Material Adverse Effect, since January 1, 2012, all
material derivative instruments, including, swaps, caps, floors and option
agreements, whether entered into for the Company’s own account, or for the
account of one or more of the Company Subsidiaries, were entered into (1) only
in the ordinary course of business, (2) in accordance with prudent practices and
in all material respects with all applicable laws, rules, regulations and
regulatory policies and (3) with counterparties believed to be financially
responsible at the time; and each of them constitutes the valid and legally
binding obligation of the Company or one of the Company Subsidiaries,
enforceable in accordance with its terms.  Neither the Company or the Company
Subsidiaries, nor, to the knowledge of the Company, any other party thereto, is
in breach of any of its material obligations under any such agreement or
arrangement.
 
(pp) ERISA.  The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder (herein called “ERISA”); no “reportable event” (as defined in ERISA)
has occurred with respect to any “pension plan” (as defined in ERISA) for which
the Company would have any liability; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan;” or (ii) Sections 412 or
4971 of the Code; and each “Pension Plan” for which the Company would have
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
 
(qq) Shell Company Status.  The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).
 
(rr) Reservation of Underlying Shares.  The Company has reserved, and will
continue to reserve, free of any preemptive or similar rights of stockholders of
the Company, a number of unissued shares of Common Stock, sufficient to issue
and deliver the Underlying Shares into which the Preferred Shares are
convertible, assuming Shareholder Approval has been obtained.
 
3.2. Representations and Warranties of the Purchasers.  Each Purchaser hereby,
for itself and for no other Purchaser, represents and warrants as of the date
hereof and as of the Closing Date to the Company as follows:
 
(a) Organization; Authority.  If such Purchaser is an entity, it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder.  If such purchaser is an entity, the
execution, delivery and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate or, if such Purchaser is not a corporation, such partnership, limited
liability company or other applicable like action, on the part of such
Purchaser.  If such Purchaser is an entity, each of this Agreement and the
Registration Rights Agreement has been duly executed by such Purchaser, and when
delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against
it in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.
 
 
 

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(b) No Conflicts.  The execution, delivery and performance by such Purchaser of
this Agreement and the Registration Rights Agreement and the consummation by
such Purchaser of the transactions contemplated hereby and thereby will not
(i) result in a violation of the organizational documents of such Purchaser (if
such Purchaser is an entity), (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such Purchaser
is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
such Purchaser, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to perform its obligations hereunder.
 
(c) Investment Intent.  Such Purchaser understands that the Preferred Shares are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Preferred Shares as
principal for its own account and not with a view to, or for distributing or
reselling such Preferred Shares or any part thereof in violation of the
Securities Act or any applicable state securities laws, provided, however, that
by making the representations herein, such Purchaser does not agree to hold any
of the Preferred Shares for any minimum period of time and reserves the right at
all times to sell or otherwise dispose of all or any part of such Preferred
Shares pursuant to an effective registration statement under the Securities Act
or under an exemption from such registration and in compliance with applicable
federal and state securities laws.  Such Purchaser is acquiring the Preferred
Shares hereunder in the ordinary course of its business.  Such Purchaser does
not presently have any agreement, plan or understanding, directly or indirectly,
with any Person to distribute or effect any distribution of any of the Preferred
Shares (or any securities which are derivatives thereof) to or through any
person or entity.
 
(d) Purchaser Status.  At the time such Purchaser was offered the Preferred
Shares, it was, and at the date hereof it is, an “accredited investor” as
defined in Rule 501(a) under the Securities Act and, with respect to a Purchaser
whose principal business address is in New York, at the date hereof it is an
“institutional investor” as described in the Accredited Investor/Institutional
Investor Questionnaire.  Such Purchaser has provided the information in the
Accredited Investor/Institutional Investor Questionnaire attached hereto as
Exhibit A.
 
(e) Reliance.  The Company and the Placement Agent will be entitled to rely upon
this Agreement and is irrevocably authorized to produce this Agreement or a copy
hereof to (A) any regulatory authority having jurisdiction over the Company and
its affiliates and (B) any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby, in
each case, to the extent required by any court or governmental authority to
which the Company is subject, provided that the Company provides the Purchaser
with prior written notice of such disclosure to the extent practicable and
allowed by applicable law.
 
(f) General Solicitation.  Such Purchaser is not purchasing the Preferred Shares
as a result of any advertisement, article, notice or other communication
regarding the Preferred Shares published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or any
other general advertisement.
 
(g) Direct Purchase.  Purchaser is purchasing the Preferred Shares directly from
the Company and not from the Placement Agent.  The Placement Agent did not make
any representations or warranties to Purchaser, express or implied, regarding
the Preferred Shares, the Company or the Company’s offering of the Preferred
Shares.
 
(h) Experience of Such Purchaser.  Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Preferred Shares, and has so
evaluated the merits and risks of such investment.  Such Purchaser is able to
bear the economic risk of an investment in the Preferred Shares and, at the
present time, is able to afford a complete loss of such investment.  Further
Purchaser understands that no representation is being made as to the future
trading value or trading volume of the Preferred Shares.
 
 
 

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(i) Access to Information.  Such Purchaser acknowledges that it has had the
opportunity to review the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Preferred Shares and the merits and risks of investing in
the Preferred Shares and any such questions have been answered to such
Purchaser’s reasonable satisfaction; (ii) access to information about the
Company and the Subsidiaries and their respective financial condition, results
of operations, business, properties, management and prospects sufficient to
enable it to evaluate its investment; (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment; and (iv) the opportunity to ask
questions of management and any such questions have been answered to such
Purchaser’s reasonable satisfaction.  Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or counsel shall modify, amend or affect such Purchaser’s right to rely on the
truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents.  Such
Purchaser has sought such accounting, legal and tax advice as it has considered
necessary to make an informed decision with respect to its acquisition of the
Preferred Shares.  Purchaser acknowledges that neither the Company nor the
Placement Agent has made any representation, express or implied, with respect to
the accuracy, completeness or adequacy of any available information except that
the Company has made the express the representations and warranties contained in
Section 3.1.
 
(j) Brokers and Finders.  Other than the Placement Agent with respect to the
Company, no Person will have, as a result of the transactions contemplated by
this Agreement, any valid right, interest or claim against or upon the Company
or any Purchaser for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Purchaser.
 
(k) Independent Investment Decision.  Such Purchaser has independently evaluated
the merits of its decision to purchase Preferred Shares pursuant to the
Transaction Documents, and such Purchaser confirms that it has not relied on the
advice of the Company or the Placement Agent (or any of their respective agents,
counsel or Affiliates) or any other Purchaser or Purchaser’s business and/or
legal counsel in making such decision.  Such Purchaser understands that nothing
in this Agreement or any other materials presented by or on behalf of the
Company (including, without limitation, by the Placement Agent) to the Purchaser
in connection with the purchase of the Preferred Shares constitutes legal, tax
or investment advice.  Such Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Preferred Shares.  Such
Purchaser understands that the Placement Agent has acted solely as the agent of
the Company in this placement of the Preferred Shares and such Purchaser has not
relied on the business or legal advice of the Placement Agent or any of its
agents, counsel or Affiliates in making its investment decision hereunder, and
confirms that none of such Persons has made any representations or warranties to
such Purchaser in connection with the transactions contemplated by the
Transaction Documents.
 
(l) Reliance on Exemptions.  Such Purchaser understands that the Preferred
Shares being offered and sold to it in reliance on specific exemptions from the
registration requirements of U.S. federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Purchaser’s
compliance with, the representations, warranties, agreements, acknowledgements
and understandings of such Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire
the Preferred Shares.
 
(m) No Governmental Review.  Such Purchaser understands that no U.S. federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Preferred Shares or the fairness
or suitability of the investment in the Preferred Shares nor have such
authorities passed upon or endorsed the merits of the offering of the Preferred
Shares.
 
(n) Residency.  Such Purchaser’s residence (if an individual) or office in which
its investment decision with respect to the Preferred Shares was made (if an
entity) are located at the address immediately below such Purchaser’s name on
its signature page hereto.
 
(o) Trading.  Purchaser acknowledges that there is no trading market for the
Preferred Stock, and no such market is expected to develop.
 
 
 

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(p) OFAC and Anti-Money Laundering.  The Purchaser understands, acknowledges,
represents and agrees that (i) the Purchaser is not the target of any sanction,
regulation, or law promulgated by the Office of Foreign Assets Control, the
Financial Crimes Enforcement Network or any other U.S. governmental entity
(“U.S. Sanctions Laws”); (ii) the Purchaser is not owned by, controlled by,
under common control with, or acting on behalf of any person that is the target
of U.S. Sanctions Laws; (iii) the Purchaser is not a “foreign shell bank” and is
not acting on behalf of a “foreign shell bank” under applicable anti-money
laundering laws and regulations; (iv) the Purchaser’s entry into this Agreement
or consummation of the transactions contemplated hereby will not contravene U.S.
Sanctions Laws or applicable anti-money laundering laws or regulations; (v) the
Purchaser will promptly provide to the Company or any regulatory or law
enforcement authority such information or documentation as may be required to
comply with U.S. Sanctions Laws or applicable anti-money laundering laws or
regulations; and (vi) the Company may provide to any regulatory or law
enforcement authority information or documentation regarding, or provided by,
the Purchaser for the purposes of complying with U.S. Sanctions Laws or
applicable anti-money laundering laws or regulations.
 
(q) No Discussions.  Purchaser has not discussed the offering of the Preferred
Shares with any other party or potential investors (other than the Company, any
other Purchaser, and Purchaser’s authorized representatives or other potential
investors who are subject to a similar duty of confidentiality with the
Company), except as expressly permitted under the terms of this Agreement.
 
(r) Knowledge as to Conditions.  Purchaser does not know of any reason why any
regulatory approvals and, to the extent necessary, any other approvals,
authorizations, filings, registrations, and notices required or otherwise a
condition to the consummation by it of the transactions contemplated by this
Agreement will not be obtained.
 
(s) No Regulatory Consents or
Approvals.                                                                                     No
consent, approval, order or authorization of, or registration, declaration or
filing with, any bank regulatory authority or other third party is required on
the part of the Purchaser in connection with (i) the execution, delivery or
performance by Purchaser of this Agreement and the Transaction Documents
contemplated hereby or (ii) the consummation by Purchaser of the transactions
contemplated hereby.
 
The Company and each of the Purchasers acknowledge and agree that no party to
this Agreement has made or makes any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in this Article III and the Transaction Documents.
 
ARTICLE IV
 
OTHER AGREEMENTS OF THE PARTIES
 
4.1. Transfer Restrictions.
 
(a) Compliance with Laws.  Notwithstanding any other provision of this Article
IV, each Purchaser covenants that the Securities may be disposed of only
pursuant to an effective registration statement under, and in compliance with
the requirements of, the Securities Act, or pursuant to an available exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable state, federal or foreign
securities laws.  In connection with any transfer of the Securities other than
(i) pursuant to an effective registration statement, (ii) to the Company or
(iii) pursuant to Rule 144 (provided that the transferor provides the Company
with reasonable assurances (in the form of a seller representation letter and,
if applicable, a broker representation letter) that such securities may be sold
pursuant to such rule), the Company may require the transferor thereof to
provide to the Company and the Transfer Agent, at the transferor’s expense, an
opinion of counsel selected by the transferor and reasonably acceptable to the
Company and the Transfer Agent, the form and substance of which opinion shall be
reasonably satisfactory to the Company and the Transfer Agent, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act.  As a condition of transfer (other than pursuant to
clauses (i), (ii) or (iii) of the preceding sentence), any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights Agreement
with respect to such transferred Securities.
 
 
 

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(b) Legends.  Certificates evidencing the Securities shall bear any legend as
required by the “blue sky” laws of any state and a restrictive legend in
substantially the following form (and, with respect to Securities held in
book-entry form, the Transfer Agent will record such a legend on the share
register), until such time as they are not required under Section 4.1(c) or
applicable law:
 
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL, WHICH COUNSEL AND OPINION MUST BE REASONABLY
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT, OR (II) UNLESS SOLD PURSUANT
TO RULE 144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY
WITH REASONABLE ASSURANCES (IN THE FORM OF A SELLER REPRESENTATION LETTER AND,
IF APPLICABLE, A BROKER REPRESENTATION LETTER THAT THE SECURITIES MAY BE SOLD
PURSUANT TO SUCH RULE).  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALES OF THESE SECURITIES.
 
(c) Removal of Legends.  The restrictive legend set forth in Section 4.1(b)
above shall be removed and the Company shall issue a certificate without such
restrictive legend or any other restrictive legend to the holder of the
applicable Securities upon which it is stamped or issue to such holder by
electronic delivery at the applicable balance account at DTC, if (i) such
Securities are registered for resale under the Securities Act, (ii) such
Securities are sold or transferred pursuant to Rule 144 (if the transferor is
not an Affiliate of the Company), or (iii) such Securities are eligible for sale
under Rule 144, without the requirement for the Company to be in compliance with
the current public information required under Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) as to such securities and without volume or manner-of-sale
restrictions.  Following the earlier of (i) the Effective Date or (ii) Rule 144
becoming available for the resale of Securities, without the requirement for the
Company to be in compliance with the current public information required under
144(c)(1) (or Rule 144(i)(2), if applicable) as to the Securities and without
volume or manner-of-sale restrictions, the Company shall instruct the Transfer
Agent to remove the legend from the Securities and shall cause its counsel to
issue any legend removal opinion required by the Transfer Agent.  Any fees (with
respect to the Transfer Agent, Company counsel or otherwise) associated with the
issuance of such opinion or the removal of such legend shall be borne by the
Company.  If a legend is no longer required pursuant to the foregoing, the
Company will no later than three (3) Trading Days following the delivery by a
Purchaser to the Company or the Transfer Agent (with notice to the Company) of a
legended certificate or instrument representing such Securities (endorsed or
with stock powers attached, signatures guaranteed, and otherwise in form
necessary to affect the reissuance and/or transfer) and a representation letter
to the extent required by Section 4.1(a), (such third Trading Day, the “Legend
Removal Date”) deliver or cause to be delivered to such Purchaser a certificate
or instrument (as the case may be) representing such Securities that is free
from all restrictive legends.  The Company may not make any notation on its
records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section 4.1(c).  Certificates for Securities free
from all restrictive legends may be transmitted by the Transfer Agent to the
Purchasers by crediting the account of the Purchaser’s prime broker with DTC as
directed by such Purchaser.
 
 
 

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(d) Acknowledgement.  Each Purchaser hereunder acknowledges its primary
responsibilities under the Securities Act and accordingly will not sell or
otherwise transfer the Securities or any interest therein without complying with
the requirements of the Securities Act.  Except as otherwise provided below,
while the above-referenced registration statement remains effective, each
Purchaser hereunder may sell the Securities in accordance with the plan of
distribution contained in the registration statement and if it does so it will
comply therewith and with the related prospectus delivery requirements unless an
exemption therefrom is available or unless the Securities are sold pursuant to
Rule 144.  Each Purchaser, severally and not jointly with the other Purchasers,
agrees that if it is notified by the Company in writing at any time that the
registration statement registering the resale of the Securities is not effective
or that the prospectus included in such registration statement no longer
complies with the requirements of Section 10 of the Securities Act, the
Purchaser will refrain from selling such Securities until such time as the
Purchaser is notified by the Company that such registration statement is
effective or such prospectus is compliant with Section 10 of the Exchange Act,
unless such Purchaser is able to, and does, sell such Securities pursuant to an
available exemption from the registration requirements of Section 5 of the
Securities Act.
 
(e) Buy-In.  If the Company shall fail for any reason or for no reason to issue
to a Purchaser unlegended certificates within three (3) Trading Days of receipt
of all documents necessary for the removal of the legend set forth above (the
“Deadline Date”), then, in addition to all other remedies available to such
Purchaser, if on or after the Trading Day immediately following such three
(3) Trading Day period, such Purchaser purchases (in an open market transaction
or otherwise) Securities (or a broker or trading counterparty through which the
Purchaser has agreed to sell shares makes such purchase) to deliver in
satisfaction of a sale by the holder of Securities that such Purchaser
anticipated receiving from the Company without any restrictive legend (a
“Buy-In”), then the Company shall, within three (3) Trading Days after such
Purchaser’s request and in such Purchaser’s sole discretion, either (i) pay cash
to the Purchaser in an amount equal to such Purchaser’s total purchase price
(including brokerage commissions, if any) for the Securities so purchased (the
“Buy-In Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Securities) shall terminate, or (ii) promptly
honor its obligation to deliver to such Purchaser a certificate or certificates
representing such Securities and pay cash to the Purchaser in an amount equal to
the excess (if any) of the Buy-In Price over the product of (a) such number of
Securities, times (b) the closing bid price of such security on the Deadline
Date.
 
4.2. Acknowledgment of Dilution.  The Company acknowledges that the issuance of
the Securities may result in dilution of the outstanding shares of Common
Stock.  The Company further acknowledges that its obligations under the
Transaction Documents, including without limitation its obligation to issue the
Securities pursuant to the Transaction Documents, are unconditional and absolute
and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have
against any Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other stockholders of the Company.
 
4.3. Furnishing of Information.  In order to enable the Purchasers to sell the
Securities under Rule 144 of the Securities Act, for a period of one year from
the Closing, the Company shall maintain the registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act.  During such one year period, if the Company is not required
to file reports pursuant to such laws, it will prepare and furnish to the
Purchasers and make publicly available the information described in Rule
144(c)(2), if the provision of such information will allow resales of the
Securities pursuant to Rule 144.
 
4.4. Form D and Blue Sky.  The Company agrees to timely file a Form D with
respect to the Preferred Shares as required under Regulation D.  Purchaser
agrees to timely provide Company with any and all needed information in
connection with Company’s preparation and filing of a Form D. The Company, on or
before the Closing Date, shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Preferred Shares for sale to the Purchasers at the Closing pursuant to this
Agreement under applicable securities or “Blue Sky” laws of the states of the
United States (or to obtain an exemption from such qualification).  The Company
shall make all filings and reports relating to the offer and sale of the
Preferred Shares required under applicable securities or “Blue Sky” laws of the
states of the United States following the Closing Date.
 
 
 

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4.5. No Integration.  The Company shall not, and shall use its commercially
reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that will be integrated
with the offer or sale of the Preferred Shares in a manner that would require
the registration under the Securities Act of the sale of the Preferred Shares to
the Purchasers.
 
4.6. Securities Laws Disclosure; Publicity.  Within one (1) Trading Day
immediately following the Closing Date, the Company shall issue one or more
press releases (collectively, the “Press Release”) reasonably acceptable to the
Purchasers disclosing all material terms of the transactions contemplated
hereby.  On or before 9:00 a.m., New York City time, on the fourth Trading Day
immediately following the execution of this Agreement, the Company will file a
Current Report on Form 8-K with the Commission describing the terms of the
Transaction Documents (and including as exhibits to such Current Report on Form
8-K the material Transaction Documents (including, without limitation, this
Agreement, the Registration Rights Agreement and the Articles of
Amendment)).  Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Purchaser or any Affiliate or investment adviser of any
Purchaser, or include the name of any Purchaser or any Affiliate or investment
adviser of any Purchaser in any press release or filing with the Commission
(other than the Registration Statement) or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the filing
of final Transaction Documents with the Commission and (ii) to the extent such
disclosure is required by law, at the request of the Staff of the Commission or
Trading Market regulations, in which case the Company shall provide the
Purchasers with prior written notice of such disclosure permitted under this
subclause (ii).  Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions contemplated by
this Agreement are publicly disclosed by the Company, such Purchaser will
maintain the confidentiality of the existence and terms of the transaction
contemplated herein.
 
4.7. Non-Public Information.  Except with the express written consent of such
Purchaser and unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information, the Company
shall not, and shall cause each Subsidiary and each of their respective
officers, directors, employees and agents, not to, and each Purchaser shall not
directly solicit the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents to provide any Purchaser with any
material, non-public information regarding the Company or any of its
Subsidiaries from and after the filing of the Press Release.
 
4.8. Indemnification.
 
(a) Indemnification of Purchasers.  In addition to the indemnity provided in the
Registration Rights Agreement, the Company will indemnify and hold each
Purchaser and its directors, officers, stockholders, members, partners,
employees and agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who controls such Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, stockholders, agents, members, partners or employees (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title) of such
controlling person (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of (i) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (ii) any action instituted against a
Purchaser Party in any capacity, or any of them or their respective affiliates,
by any stockholder of the Company who is not an affiliate of such Purchaser
Party, with respect to any of the transactions contemplated by this Agreement. 
The Company will not be liable to any Purchaser Party under this Agreement to
the extent, but only to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this
Agreement or in the other Transaction Documents.
 
 
 

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(b) Conduct of Indemnification Proceedings.  Promptly after receipt by any
Person (the "Indemnified Person”) of notice of any demand, claim or
circumstances which would or might give rise to a claim or the commencement of
any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to Section 4.8(a), such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; provided,
however, that the failure of any Indemnified Person so to notify the Company
shall not relieve the Company of its obligations hereunder except to the extent
that the Company is actually and materially and adversely prejudiced by such
failure to notify.  In any such proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless: (i) the Company and
the Indemnified Person shall have mutually agreed to the retention of such
counsel; (ii) the Company shall have failed promptly to assume the defense of
such proceeding and to employ counsel reasonably satisfactory to such
Indemnified Person in such proceeding; or (iii) in the reasonable judgment of
counsel to such Indemnified Person, representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them.  The Company shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned.  Without the prior written
consent of the Indemnified Person, which consent shall not be unreasonably
withheld, delayed or conditioned, the Company shall not effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such proceeding.
 
(c) Limitation on Amount of Company’s Indemnification Liability.
 
(i) Deductible.  Except as provided otherwise in 4.8(c)(iii), the Company will
not be liable for Losses that otherwise are indemnifiable under Section 4.8(a)
until the total of all losses under Section 4.8(a) incurred by all Purchasers
exceeds $25,000.
 
(ii) Maximum.  Except as provided otherwise in Section 4.8(c)(iii), the maximum
aggregate liability of the Company for all losses under Section 4.8(a) is the
Aggregate Subscription Amount by all Purchasers, provided however, that the
maximum aggregate liability of the Company for all losses under Section 4.8(a)
as to any individual Purchaser is the Aggregate Subscription Amount of such
individual Purchaser.
 
(iii) Exceptions.  The provisions of Section 4.8(c)(i) and (ii) do not apply to
(A) claims due to the inaccuracy of any of the representations or breach of any
of the warranties of the Company in Sections 3.1(a), 3.1(b), 3.1(c), 3.1(e),
3.1(f), 3.1(g) or 3.1(i) or (B) indemnification claims involving fraud or
knowing and intentional misconduct on behalf of the Company.
 
4.9. Listing of Common Stock.  The Company will use its reasonable best efforts
to list the Underlying Shares for quotation on the NASDAQ Global Market and
maintain the listing of the Common Stock on the NASDAQ Global Market.
 
4.10. Use of Proceeds.  The Company intends to use the net proceeds from the
sale of the Preferred Shares hereunder for the purpose of general corporate
planning purposes including organic and acquisitive growth; and to fund the
potential acquisition of First National Bank of Baldwin County.
 
 
 

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4.11. Shareholders Meeting.  The Company shall call a special meeting of its
shareholders, as promptly as practicable following the Closing, but in no event
later than May 31, 2013, to vote on a proposal (the “Shareholder Proposal”) to
approve the conversion of the Preferred Shares into Common Stock for purposes of
Rule 5635 of the NASDAQ Stock Market Rules (such approval of the Shareholder
Proposal, “Shareholder Approval”).  The Board of Directors of the Company shall
unanimously recommend to the Company’s shareholders that such shareholders vote
in favor of the Shareholder Proposal.  In addition, all of the members of the
Board of Directors, plus one Director Emeritus, have agreed to vote their shares
in favor of the Shareholder Proposal.  In connection with such meeting, the
Company shall promptly prepare and file (but in no event more than thirty (30)
business days after the Closing Date) with the Commission a preliminary proxy
statement, shall use its reasonable best efforts to respond to any comments of
the Commission or its staff and to cause a definitive proxy statement related to
such shareholders’ meeting to be mailed to the Company’s shareholders not more
than seven (7) business days after clearance thereof by the Commission, and
shall use its reasonable best efforts to solicit proxies for such Shareholder
Approval.  The Company shall notify Purchaser promptly of the receipt of any
comments from the SEC or its staff with respect to the proxy statement and of
any request by the SEC or its staff for amendments or supplements to such proxy
statement or for additional information (but the Company shall not provide any
Purchaser with any material, nonpublic information, unless requested by such
Purchaser and pursuant to a written agreement regarding the confidentiality and
use of such information).  If at any time prior to such shareholders’ meeting
there shall occur any event that is required to be set forth in an amendment or
supplement to the proxy statement, the Company shall as promptly as practicable
prepare and mail to its shareholders such an amendment or supplement.  In the
event that Shareholder Approval is not obtained at such special shareholders
meeting, the Company shall include a proposal to approve (and the Board of
Directors shall recommend approval of) such proposal at a meeting of its
shareholders to be held no less than once in each subsequent three-month period
beginning on the date of such special shareholders meeting until such approval
is obtained.
 
ARTICLE V
 
CONDITIONS PRECEDENT TO CLOSING
 
5.1. Conditions Precedent to the Obligations of the Purchasers to Purchase
Preferred Shares.  The obligation of each Purchaser to acquire Preferred Shares
at the Closing is subject to the fulfillment to such Purchaser’s satisfaction,
on or prior to the Closing Date, of each of the following conditions, any of
which may be waived by such Purchaser (as to itself only):
 
(a) Representations and Warranties.  The representations and warranties of the
Company contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date, as though made on and as of
such date, except for such representations and warranties that speak as of a
specific date.
 
(b) Performance.  The Company shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by it at
or prior to the Closing.
 
(c) No Injunction.  No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits
the consummation of any of the transactions contemplated by the Transaction
Documents.
 
(d) Consents.  The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Preferred Shares (including all
Required Approvals), all of which shall be and remain so long as necessary in
full force and effect.
 
(e) No Suspensions of Trading in Common Stock; Listing.  The Common Stock
(i) shall be designated for quotation or listed on the Principal Trading Market
and (ii) shall not have been suspended, as of the Closing Date, by the
Commission or the Principal Trading Market from trading on the Principal Trading
Market nor shall suspension by the Commission or the Principal Trading Market
have been threatened, as of the Closing Date, either (A) in writing by the
Commission or the Principal Trading Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Trading Market.  The Company
shall have obtained approval of the Principal Trading Market to list the
Underlying Shares.
 
(f) Company Deliverables.  The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a).
 
(g) Compliance Certificate.  The Company shall have delivered to each Purchaser
a certificate, dated as of the Closing Date and signed by its Chief Executive
Officer or its Chief Financial Officer, dated as of the Closing Date, certifying
to the fulfillment of the conditions specified in Sections 5.1(a) and (b) in the
form attached hereto as Exhibit F.
 
 
 

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

 
(h) Articles of Amendment.  The Company shall have filed the Articles of
Amendment with the Mississippi Secretary.
 
(i) Minimium Offering Amount.  The Company shall have received and accepted
fully paid subcriptions for shares totaling not less than $18 million (1,756,098
shares).
 
(j) Termination.  This Agreement shall not have been terminated as to such
Purchaser in accordance with Section 6.16 herein.
 
5.2. Conditions Precedent to the Obligations of the Company to sell Preferred
Shares.  The Company’s obligation to sell and issue the Preferred Shares at the
Closing is subject to the fulfillment to the satisfaction of the Company on or
prior to the Closing Date of the following conditions, any of which may be
waived by the Company:
 
(a) Representations and Warranties.  The representations and warranties made by
each Purchaser in Section 3.2 hereof shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on
and as of such date, except for representations and warranties that speak as of
a specific date.
 
(b) Performance.  Such Purchaser shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by such
Purchaser at or prior to the Closing Date.
 
(c) No Injunction.  No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits
the consummation of any of the transactions contemplated by the Transaction
Documents.
 
(d) Consents.  The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Preferred Shares, all of which
shall be and remain so long as necessary in full force and effect.
 
(e) Purchasers Deliverables.  Such Purchaser shall have delivered its Purchaser
Deliverables in accordance with Section 2.2(b).
 
(f) Termination.  This Agreement shall not have been terminated as to such
Purchaser in accordance with Section 6.16 herein.
 
ARTICLE VI
 
MISCELLANEOUS
 
6.1. Fees and Expenses.  Except as set forth above or elsewhere in the
Transaction Documents, the parties hereto shall be responsible for the payment
of all expenses incurred by them in connection with the preparation and
negotiation of the Transaction Documents and the consummation of the
transactions contemplated hereby.  The Company shall pay all amounts owed to the
Placement Agent relating to or arising out of the transactions contemplated
hereby.  The Company shall pay all Transfer Agent fees, stamp taxes and other
taxes and duties levied in connection with the sale and issuance of the
Securities to the Purchasers.
 
6.2. Entire Agreement.  The Transaction Documents, together with the Exhibits
and Schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.  At or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the
other such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.
 
 
 

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

 
6.3. Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile or e-mail (provided the
sender receives a machine-generated confirmation of successful facsimile
transmission or e-mail notification or confirmation of receipt of an e-mail
transmission) at the facsimile number or e-mail address specified in this
Section prior to 5:00 p.m., New York time, on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a Trading Day or later than 5:00 p.m., New York time, on any
Trading Day, (c) if sent by U.S. nationally recognized overnight courier service
with next day delivery specified (receipt requested) the Trading Day following
delivery to such courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as follows:
 
If to the Company:
The First Bancshares, Inc.
6480 U.S. Highway. 98 West
Hattiesburg, Mississippi 39402
Attention:  Mr. M. Ray (Hoppy) Cole, Jr.
Telephone:  (601) 268-8998
Facsimile:  (601) 450-0050
Email:  hcole@thefirstbank.com
   

With a copy to:
Jones Walker LLP
190 E. Capitol St., Suite 800
Jackson, Mississippi 39201
Attention:  J. Andrew Gipson, Esq.
Telephone:  (601) 949-4631
Facsimile:  (601) 949-4804
Email:  agipson@joneswalker.com
   
If to a Purchaser:
To the address set forth under such Purchaser’s name on the signature page
hereof; or such other address as may be designated in writing hereafter, in the
same manner, by such Person.

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
 
6.4. Amendments; Waivers; No Additional Consideration.  No provision of this
Agreement may be waived or amended except in a written instrument signed, in the
case of an amendment, by the Company and each of the Purchasers holding or
having the right to acquire at least a majority of the Preferred Shares at the
time of such amendment or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought.  No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right. No consideration shall be offered or paid
to any Purchaser to amend or consent to a waiver or modification of any
provision of any Transaction Document unless the same consideration is also
offered to all Purchasers who then hold Preferred Shares.
 
 
 

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

 
6.5. Construction.  The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party. This
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement or any of the
Transaction Documents.
 
6.6. Successors and Assigns.  The provisions of this Agreement shall inure to
the benefit of and be binding upon the parties and their successors and
permitted assigns. This Agreement, or any rights or obligations hereunder, may
not be assigned by the Company without the prior written consent of the
Purchasers. Any Purchaser may assign its rights hereunder in whole or in part to
any Person to whom such Purchaser assigns or transfers any Securities in
compliance with the Transaction Documents and applicable law, provided such
transferee shall agree in writing to be bound, with respect to the transferred
Securities, by the terms and conditions of this Agreement that apply to the
“Purchasers.”
 
6.7. No Third-Party Beneficiaries.  This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and
is not for the benefit of, nor may any provision hereof be enforced by, any
other Person, other than Indemnified Persons.
 
6.8. Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware, without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
Affiliates, employees or agents) may be commenced on a non-exclusive basis in
the Mississippi Courts. Each party hereto hereby irrevocably submits to the
non-exclusive jurisdiction of the Mississippi Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such Mississippi Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
6.9. Survival.  Subject to applicable statute of limitations, the
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Preferred Shares.
 
6.10. Execution.  This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile signature page were an original thereof.
 
6.11. Severability.  If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
 
6.12. Replacement of Shares.  If any certificate or instrument evidencing any
Preferred Shares is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company and the Transfer Agent of such loss, theft or destruction and the
execution by the holder thereof of a customary lost certificate affidavit of
that fact and an agreement to indemnify and hold harmless the Company and the
Transfer Agent for any losses in connection therewith or, if required by the
Transfer Agent, a bond in such form and amount as is required by the Transfer
Agent. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Shares. If a replacement certificate or
instrument evidencing any Preferred Shares is requested due to a mutilation
thereof, the Company may require delivery of such mutilated certificate or
instrument as a condition precedent to any issuance of a replacement.
 
 
 

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

 
6.13. Remedies.  In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agree to waive in any action for
specific performance of any such obligation (other than in connection with any
action for a temporary restraining order) the defense that a remedy at law would
be adequate.
 
6.14. Payment Set Aside.  To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
 
6.15. Independent Nature of Purchasers’ Obligations and Rights.  The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under any
Transaction Document.  The decision of each Purchaser to purchase Preferred
Shares pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or any Subsidiary which may have been
made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and any of its agents or employees shall have any
liability to any other Purchaser (or any other Person) relating to or arising
from any such information, materials, statement or opinions.  Nothing contained
herein or in any Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser acknowledges that no other Purchaser has
acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in
connection with monitoring its investment in the Preferred Shares or enforcing
its rights under the Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  It is expressly understood
and agreed that each provision contained in this Agreement is between the
Company and a Purchaser, solely, and not between the Company and the Purchasers
collectively and not between and among the Purchasers.
 
6.16. Termination.  This Agreement may be terminated and the sale and purchase
of the Preferred Shares abandoned at any time prior to the Closing by either the
Company or any Purchaser (with respect to itself only) upon written notice to
the other, if the Closing has not been consummated on or prior to 5:00 p.m., New
York City time, on the Outside Date; provided, however, that the right to
terminate this Agreement under this Section 6.16 shall not be available to any
Person whose failure to comply with its obligations under this Agreement has
been the cause of or resulted in the failure of the Closing to occur on or
before such time.  Nothing in this Section 6.16 shall be deemed to release any
party from any liability for any breach by such party of the terms and
provisions of this Agreement or the other Transaction Documents or to impair the
right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents. In the
event of a termination pursuant to this Section, the Company shall promptly
notify all non-terminating Purchasers. Upon a termination in accordance with
this Section, the Company and the terminating Purchaser(s) shall not have any
further obligation or liability (including arising from such termination) to the
other, and no Purchaser will have any liability to any other Purchaser under the
Transaction Documents as a result therefrom.
 
6.17. Rescission and Withdrawal Right.  Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.
 
 
 

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

 
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 

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

 
NAME OF PURCHASER:
 
__________________________________
 
By:           /s/                                                      
Name:      __________________________
Title:        __________________________
 
Aggregate Purchase Price
(Subscription Amount): $________
 
Number of Preferred Shares
to be Acquired: _______
 
Tax ID No.: __________________
 
Address for Notice:
____________________________________
____________________________________
____________________________________
____________________________________
 
Telephone: ________________
Facsimile:  ________________
Email:         ________________
 
Attention:    ________________
   
Delivery Instructions:
(if different than above)
 
 
 
 
 
 

 
 

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EXHIBITS
 

A
−
Form of Articles of Amendment
B
−
Form of Registration Rights Agreement
C-1
−
Accredited Investor Questionnaire
C-2
 
Stock Certificate Questionnaire
D
−
Form of Opinion of Company Counsel
E
−
Form of Secretary’s Certificate
F
 
Form of Officer’s Certificate

 
 

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EXHIBIT A
 
Form of Articles of Amendment
 

 
 

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EXHIBIT B
 
Form of Registration Rights Agreement
 

 
 

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EXHIBIT C-1
 
ACCREDITED INVESTOR QUESTIONNAIRE
 
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
 

To:           The First Bancshares, Inc.
 
This Investor Questionnaire (“Questionnaire”) must be completed by each
potential investor in connection with the offer and sale of shares of
mandatorily convertible non-cumulative non-voting perpetual preferred stock,
$10.25 liquidation preference per share (the “Preferred Shares”), of The First
Bancshares, Inc., a Mississippi corporation (the “Company”).  The Preferred
Shares are being offered and sold by the Company without registration under the
Securities Act of 1933, as amended (the “Act”), and the securities laws of
certain states, in reliance on the exemptions contained in Section 4(2) of the
Act and on Regulation D promulgated thereunder and in reliance on similar
exemptions under applicable state laws.  The Company must determine that a
potential investor meets certain suitability requirements before offering or
selling Preferred Shares to such investor.  The purpose of this Questionnaire is
to assure the Company that each investor will meet the applicable suitability
requirements.  The information supplied by you will be used in determining
whether you meet such criteria, and reliance upon the private offering
exemptions from registration is based in part on the information herein
supplied.
 
This Questionnaire does not constitute an offer to sell or a solicitation of an
offer to buy any security.  Your answers will be kept strictly
confidential.  However, by signing this Questionnaire, you will be authorizing
the Company to provide a completed copy of this Questionnaire to such parties as
the Company deems appropriate in order to ensure that the offer and sale of the
Preferred Shares will not result in a violation of the Act or the securities
laws of any state and that you otherwise satisfy the suitability standards
applicable to purchasers of the Preferred Shares.  All potential investors must
answer all applicable questions and complete, date and sign this
Questionnaire.  Please print or type your responses and attach additional sheets
of paper if necessary to complete your answers to any item.
 
PART A.                      BACKGROUND INFORMATION
 
Name of Beneficial Owner of the Preferred
Shares:                                                                                       

Business
Address:                                                                                                                                
(Number and Street)
 
_____________________________________________________________________________
(City)                                                        (State)                                                              (Zip
Code)

Telephone Number:
(___)                                                                                                                                  

If a corporation, partnership, limited liability company, trust or other entity:

Type of
entity:                                                                                                                                      

 
Were you formed for the purpose of investing in the securities being offered?

Yes ____                      No ____

 
 

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

 
If an individual:

Residence
Address:                                                                                                                                          
(Number and Street)

_____________________________________________________________________________
(City)                                                        (State)                                                              (Zip
Code)
 
 
Telephone Number:
(___)                                                                                                                                          

Age:__________                                                      Citizenship:
____________                                                                Where
registered to vote: _______________

Set forth in the space provided below the state(s), if any, in the United States
in which you maintained your residence during the past two years and the dates
during which you resided in each state:

 
Are you a director or executive officer of the Company?

Yes ____                      No ____

Social Security or Taxpayer Identification
No.                                                                                                                                          

PART B.                      ACCREDITED INVESTOR QUESTIONNAIRE
 
In order for the Company to offer and sell the Preferred Shares in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status.  Please initial each
category applicable to you as a Purchaser of Preferred Shares.
 
_____
1.
A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act whether acting in its individual or fiduciary capacity;
_____
2.
A broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934;
_____
3.
An insurance company as defined in Section 2(13) of the Securities Act;
_____
4.
An investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act;
_____
5.
A Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;
_____
6.
A plan established and maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of $5,000,000;
_____
7.
An employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors;
_____
8.
A private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;
_____
9.
An organization described in Section 501(c)(3) of the Internal Revenue Code, a
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the Shares, with total assets in excess of
$5,000,000;

 
 
 

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

 
_____
10.
A trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the Shares, whose purchase is directed by a sophisticated
person who has such knowledge and experience in financial and business matters
that such person is capable of evaluating the merits and risks of investing in
the Company;
_____
11.
A natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his purchase exceeds $1,000,000 (see Note 11
below);
_____
12.
A natural person who had an individual income in excess of $200,000 in each of
the two most recent years, or joint income with that person’s spouse in excess
of $300,000, in each of those years, and has a reasonable expectation of
reaching the same income level in the current year;
_____
13.
An executive officer or director of the Company; and
_____
14.
An entity in which all of the equity owners qualify under any of the above
subparagraphs. If the undersigned belongs to this investor category only, list
the equity owners of the undersigned, and the investor category which each such
equity owner satisfies.

Note 11.
For purposes of calculating net worth under paragraph (11):
(A)
The person’s primary residence shall not be included as an asset;
(B)
Indebtedness that is secured by the person’s primary residence, up to the
estimated fair market value of the primary residence at the time of the sale of
securities, shall not be included as a liability (except that if the amount of
such indebtedness outstanding at the time of sale of securities exceeds the
amount outstanding 60 days before such time, other than as a result of the
acquisition of the primary residence, the amount of such excess shall be
included as a liability); and
(C)
Indebtedness that is secured by the person’s primary residence in excess of the
estimated fair market value of the primary residence at the time of the sale of
securities shall be included as a liability.

A.           FOR EXECUTION BY AN INDIVIDUAL:
 
Date:
 
 
By:                                                                 
Print Name:

B.           FOR EXECUTION BY AN ENTITY:
 

 
Entity Name:                                                       
Date:
 
 
By:                                                                 
Print Name:
Title:

 
 

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

 

C.
ADDITIONAL SIGNATURES (if required by partnership, corporation or trust
document):

 

 
Entity Name:                                                                 
Date:
 
 
By:                                                                 
Print Name:
Title:

 
Entity Name:                                                                 
Date:
 
 
By:                                                                 
Print Name:
Title:

 
 

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EXHIBIT C-2
 
Stock Certificate Questionnaire
 
Pursuant to Section 2.2(b) of the Agreement, please provide us with the
following information:
 
1.
The exact name that the Preferred Shares are to be registered in (this is the
name that will appear on the stock certificate(s)).  You may use a nominee name
if appropriate:
 
2.
The relationship between the Purchaser of the Preferred Shares and the
Registered Holder listed in response to Item 1 above:
 
3.
The mailing address, telephone and telecopy number of the Registered Holder
listed in response to Item 1 above:
 
4.
The Tax Identification Number (or, if an individual, the Social Security Number)
of the Registered Holder listed in response to Item 1 above:
 

 

 
 

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EXHIBIT D
 
Form of Opinion of Company Counsel
 
[JW to add Preamble and Carveouts]
 
1.
The Company validly exists as a corporation in good standing under the laws of
the State of Mississippi.

 
2.
The Company has the corporate power and authority to execute and deliver and to
perform its obligations under the Transaction Documents, including, without
limitation, to issue the Preferred Shares and the Underlying Shares.

 
3.
The Company is a registered bank holding company under the Bank Holding Company
Act of 1956, as amended.

 
4.
The deposit accounts of the Bank are insured by the Federal Deposit Insurance
Corporation under the provisions of the Federal Deposit Insurance Act.

 
5.
Each of the Transaction Documents has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and delivery
by the Purchasers (to the extent they are a party), each of the Transaction
Documents constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.

 
6.
The execution and delivery by the Company of each of the Transaction Documents
and the performance by the Company of its obligations under such agreements,
including its issuance and sale of the Preferred Shares and the Underlying
Shares, do not and will not: (a) require any consent, approval, license or
exemption by, order or authorization of, or filing, recording or registration by
the Company with any federal or state governmental authority, except (1) as may
be required by federal securities laws with respect to the Company’s obligations
under the Registration Rights Agreement, (2) the filing of Form D pursuant to
Securities and Exchange Commission Regulation D, and (3) the filings required in
accordance with Section 4.6 of the Securities Purchase Agreement, (b) violate
any federal or state statute, rule or regulation, or any rule or regulation of
the NASDAQ Global Select Market, or any court order, judgment or decree, if any,
listed in Exhibit A hereto, which exhibit lists all court orders, judgments and
decrees that the Company has certified to us are applicable to it, (c) result in
any violation of the Articles of Incorporation or Bylaws of the Company or (d)
result in a breach of, or constitute a default under, any Material Contract.

 
7.
Assuming the accuracy of the representations, warranties and compliance with the
covenants and agreements of the Purchasers and the Company contained in the
Securities Purchase Agreement, it is not necessary, in connection with the
offer, sale and delivery of the Preferred Shares to the Purchasers to register
the Preferred Shares under the Securities Act.

 
8.
The Preferred Shares being delivered to the Purchasers pursuant to the
Securities Purchase Agreement have been duly and validly authorized and, when
issued, delivered and paid for as contemplated in the Securities Purchase
Agreement, will be duly and validly issued, fully paid and non-assessable, and
free of any preemptive right or similar rights contained in the Company’s
Articles of Incorporation or Bylaws.  The Underlying Shares, when issued in
accordance with the Articles of Amendment and upon approval by the Company
shareholders, will be duly and validly issued, fully paid and non-assessable,
and free of any preemptive right or similar rights contained in the Company’s
Articles of Incorporation or Bylaws.

 

 
 

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EXHIBIT E
 
Form of Secretary’s Certificate
 
The undersigned hereby certifies that she is the duly elected, qualified and
acting Secretary of The First Bancshares, Inc., a Mississippi corporation (the
"Company"), and that as such he is authorized to execute and deliver this
certificate in the name and on behalf of the Company and in connection with the
Securities Purchase Agreement, dated as of March ___, 2013, by and among the
Company and the investors party thereto (the "Securities Purchase Agreement"),
and further certifies in his official capacity, in the name and on behalf of the
Company, the items set forth below.  Capitalized terms used but not otherwise
defined herein shall have the meaning set forth in the Securities Purchase
Agreement.
 
1.
Attached hereto as Exhibit A is a true, correct and complete copy of the
resolutions duly adopted by the Board of Directors of the Company at a meeting
held on March ___, 2013.  Such resolutions have not in any way been amended,
modified, revoked or rescinded, have been in full force and effect since their
adoption to and including the date hereof and are now in full force and effect.

 
2.
The Company’s Amended and Restated Articles of Incorporation were filed as an
Exhibit to the Company's Registration Statement No. 33-94288 on Form S-1; the
Articles of Amendment Containing Certificate of Designations for the Fixed Rate
Cumulative Perpetual Preferred Stock, Series CD were filed as Exhibit 3.1 to
Form 8-K filed with the SEC on October 4, 2010; Articles of Amendment Containing
Certificate of Designations for the Series D Nonvoting Convertible Preferred
Stock were filed with the Company’s Amended and Restated Articles of
Incorporation as Exhibit 3.1 to Form 8-K filed with the SEC on March 20, 2013;
and the Company’s Bylaws were filed as Exhibit 3.2 to the Company's Registration
Statement No. 33-94288 on Form S-1.  Such Amended and Restated Articles of
Incorporation and Bylaws, as amended, constitute true, correct and complete
copies of the Amended and Restated Articles of Incorporation and Bylaws as in
effect on the date hereof.

 
3.
Each person listed below has been duly elected or appointed to the position(s)
indicated opposite his name and is duly authorized to sign the Securities
Purchase Agreement and each of the Transaction Documents on behalf of the
Company, and the signature appearing opposite such person’s name below is such
person’s genuine signature.

 
Name
Position
Signature
M. Ray (Hoppy) Cole, Jr.
President/
Chief Executive Officer
_________________________
Donna T. (Dee Dee) Lowery
Executive Vice President/
Chief Financial Officer
_________________________

 
 

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

 

IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of this ___ day
of March, 2013.
 

 
_________________________________________
Chandra B. Kidd
Secretary

I, Donna T. (Dee Dee) Lowery, Chief Financial Officer, hereby certify that
Chandra B. Kidd is the duly elected, qualified and acting Secretary of the
Company and that the signature set forth above is her true signature.
 

 
_________________________________________
Donna T. (Dee Dee)  Lowery
Chief Financial Officer

 
 

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Exhibit A
 
Resolutions
 

 
 

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EXHIBIT F
 
Form of Officer’s Certificate
 
The undersigned, the Chief Executive Officer of The First Bancshares, Inc., a
Mississippi corporation (the “Company”), pursuant to Section 5.1(g) of the
Securities Purchase Agreement, dated as of March 20, 2013, by and among the
Company and the investors signatory thereto (the “Securities Purchase
Agreement”), hereby represents, warrants and certifies as follows (capitalized
terms used but not otherwise defined herein shall have the meaning set forth in
the Securities Purchase Agreement):
 
1.
The representations and warranties of the Company contained in the Securities
Purchase Agreement are true and correct as of the date when made and as of the
Closing Date, as though made on and as of such date, except for such
representations and warranties that speak as of a specific date.

 
2.
The Company has performed, satisfied and complied in all material respects with
all covenants, agreements and conditions required by the Transaction Documents
to be performed, satisfied or complied with by it at or prior to the Closing.

 
IN WITNESS WHEREOF, the undersigned has executed this certificate this ___ day
of March, 2013.
 

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