Exhibit 10.1


 


Execution Version


 


AGREEMENT AND PLAN OF MERGER


 


by and between


 


THE FIRST BANCSHARES, INC.


 


and


 


SOUTHWEST BANC SHARES, INC.


 


Dated as of October 24, 2017


 




    	 	 	 



     


    

 


TABLE OF CONTENTS




 





	 	Article I	 
	 	 	 
	 	THE MERGER	 
	 	 	 
	Section 1.01	The Merger	1
	Section 1.02	Articles of Incorporation and Bylaws	2
	Section 1.03	Bank Merger	2
	Section 1.04	Effective Time; Closing	2
	Section 1.05	Additional Actions	3
	Section 1.06	Reservation of Right to Revise Structure	3
	 	 	 
	 	Article II	 
	 	 	 
	 	MERGER CONSIDERATION; EXCHANGE PROCEDURES	 
	 	 	 
	Section 2.01	Merger Consideration	3
	Section 2.02	SWBS Stock-Based Awards	5
	Section 2.03	Rights as Shareholders; Stock Transfers	5
	Section 2.04	Fractional Shares	6
	Section 2.05	Plan of Reorganization	6
	Section 2.06	Exchange Procedures	6
	Section 2.07	Deposit of Merger Consideration	6
	Section 2.08	Delivery of Merger Consideration	7
	Section 2.09	Anti-Dilution Provisions	8
	 	 	 
	 	Article III	 
	 	 	 
	 	REPRESENTATIONS AND WARRANTIES OF SWBS	 
	 	 	 
	Section 3.01	Organization and Standing	8
	Section 3.02	Capital Stock	9
	Section 3.03	Subsidiaries	10
	Section 3.04	Corporate Power; Minute Books	10
	Section 3.05	Corporate Authority	11
	Section 3.06	Regulatory Approvals; No Defaults	11
	Section 3.07	Financial Statements; Internal Controls	12
	Section 3.08	Regulatory Reports	13
	Section 3.09	Absence of Certain Changes or Events	14
	Section 3.10	Legal Proceedings	14
	Section 3.11	Compliance With Laws	14
	Section 3.12	SWBS Material Contracts; Defaults	15
	Section 3.13	Agreements with Regulatory Agencies	16
	Section 3.14	Brokers; Fairness Opinion.	16
	Section 3.15	Employee Benefit Plans	17
	Section 3.16	Labor Matters	19



 






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	Section 3.17	Environmental Matters	20
	Section 3.18	Tax Matters	20
	Section 3.19	Investment Securities	23
	Section 3.20	Derivative Transactions	23
	Section 3.21	Regulatory Capitalization	23
	Section 3.22	Loans; Nonperforming and Classified Assets	24
	Section 3.23	Allowance for Loan and Lease Losses	25
	Section 3.24	Trust Business; Administration of Fiduciary Accounts	25
	Section 3.25	Investment Management and Related Activities	25
	Section 3.26	Repurchase Agreements	25
	Section 3.27	Deposit Insurance	25
	Section 3.28	Community Reinvestment Act, Anti-money Laundering and Customer Information Security	26
	Section 3.29	Transactions with Affiliates	26
	Section 3.30	Tangible Properties and Assets	26
	Section 3.31	Intellectual Property	27
	Section 3.32	Insurance	28
	Section 3.33	Antitakeover Provisions	28
	Section 3.34	SWBS Information	28
	Section 3.35	Transaction Costs	29
	 	 	 
	 	Article IV	 
	 	 	 
	 	REPRESENTATIONS AND WARRANTIES OF FBMS	 
	 	 	 
	Section 4.01	Organization and Standing	29
	Section 4.02	Capital Stock	29
	Section 4.03	Corporate Power	29
	Section 4.04	Corporate Authority	29
	Section 4.05	SEC Documents; Financial Statements	30
	Section 4.06	Regulatory Reports	31
	Section 4.07	Regulatory Approvals; No Defaults	31
	Section 4.08	FBMS Information	32
	Section 4.09	Absence of Certain Changes or Events	32
	Section 4.10	Compliance with Laws	32
	Section 4.11	FBMS Regulatory Matters	33
	Section 4.12	Brokers	34
	Section 4.13	Tax Matters	34
	Section 4.14	Regulatory Capitalization	35
	Section 4.15	No Financing	35
	 	 	 
	 	Article V	 
	 	 	 
	 	COVENANTS	 
	 	 	 
	Section 5.01	Covenants of SWBS	37
	Section 5.02	Covenants of FBMS	42



 






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	Section 5.03	Commercially Reasonable Efforts	42
	Section 5.04	SWBS Shareholder Approval	42
	Section 5.05	Registration Statement; Proxy Statement-Prospectus; NASDAQ Listing	43
	Section 5.06	Regulatory Filings; Consents	44
	Section 5.07	Publicity	45
	Section 5.08	Access; Current Information	45
	Section 5.09	No Solicitation by SWBS; Superior Proposals	46
	Section 5.10	Indemnification	50
	Section 5.11	Employees; Benefit Plans	51
	Section 5.12	Notification of Certain Changes	52
	Section 5.13	Transition; Informational Systems Conversion	53
	Section 5.14	No Control of Other Party’s Business.	53
	Section 5.15	Certain Litigation	53
	Section 5.16	Director Resignations	53
	Section 5.17	Non-Competition and Non-Disclosure Agreement	53
	Section 5.18	Claims Letters	54
	Section 5.19	Coordination	54
	Section 5.20	Transactional Expenses	55
	Section 5.21	Confidentiality	55
	Section 5.22	Tax Matters	55
	 	 	 
	 	Article VI	 
	 	 	 
	 	CONDITIONS TO CONSUMMATION OF THE MERGER	 
	 	 	 
	Section 6.01	Conditions to Obligations of the Parties to Effect the Merger	56
	Section 6.02	Conditions to Obligations of SWBS	57
	Section 6.03	Conditions to Obligations of FBMS	58
	Section 6.04	Frustration of Closing Conditions	59
	 	 	 
	 	Article VII	 
	 	 	 
	 	TERMINATION	 
	 	 	 
	Section 7.01	Termination	59
	Section 7.02	Termination Fee.	61
	Section 7.03	Effect of Termination	61
	 	 	 
	 	Article VIII	 
	 	 	 
	 	DEFINITIONS	 
	 	 	 
	Section 8.01	Definitions	62
	 	 	 







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	 	Article IX	 
	 	 	 
	 	MISCELLANEOUS	 
	 	 	 
	Section 9.01	Survival	71
	Section 9.02	Waiver; Amendment	71
	Section 9.03	Governing Law; Jurisdiction; Waiver of Right to Trial by Jury	72
	Section 9.04	Expenses	72
	Section 9.05	Notices	72
	Section 9.06	Entire Understanding; No Third Party Beneficiaries	73
	Section 9.07	Severability	74
	Section 9.08	Enforcement of the Agreement	74
	Section 9.09	Interpretation	74
	Section 9.10	Assignment	75
	Section 9.11	Counterparts	75



 





Exhibit A – Form of SWBS Voting Agreement


Exhibit B – Form of Bank Plan of Merger
and Merger Agreement


Exhibit C – Form of Director Non-Competition
and Non-Disclosure Agreement


Exhibit D – Form of Director Non-Competition
and Non-Disclosure Agreement


Exhibit E – Form of Claims Letter


Exhibit F – Form of Letter of Transmittal







 









    	 	 iv	 



     


    


 


AGREEMENT AND PLAN OF MERGER


 


This Agreement and Plan
of Merger (this “Agreement”) is dated as of October 24, 2017, 2017, by and between The First Bancshares,
Inc., a Mississippi corporation (“FBMS”), and Southwest Banc Shares, Inc., an Alabama corporation (“SWBS”)
and, together with FBMS, the “Parties” and each a “Party”).


 


WITNESSETH


 


WHEREAS, the boards
of directors of the Parties have determined that it is in the best interests of their respective companies and their respective
shareholders to consummate the business combination transaction provided for in this Agreement in which SWBS will, on the terms
and subject to the conditions set forth in this Agreement, merge with and into FBMS (the “Merger”), with
FBMS as the surviving company in the Merger (sometimes referred to in such capacity as the “Surviving Entity”);


 


WHEREAS, as a condition
to the willingness of FBMS to enter into this Agreement, certain directors of SWBS have entered into voting agreements (each a
“SWBS Voting Agreement” and collectively, the “SWBS Voting Agreements”), substantially
in the form attached hereto as Exhibit A, dated as of the date hereof, with FBMS, pursuant to which each such director has
agreed, among other things, to vote certain of the SWBS Common Stock owned by such director in favor of the approval of this Agreement
and the transactions contemplated hereby, subject to the terms of the SWBS Voting Agreement;


 


WHEREAS, the Parties
desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions
to the Merger; and


 


WHEREAS, for federal
income tax purposes, it is intended that the Merger qualify as a “reorganization” within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the “Code”), and this Agreement is intended to be and
is adopted as a “plan of reorganization” for purposes of Sections 354 and 361 of the Code.


 


NOW, THEREFORE,
in consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:


 


Article
I


 


THE MERGER


 


Section 1.01     The
Merger. Subject to the terms and conditions of this Agreement, in accordance with the
Mississippi Business Corporation Act (the “MBCA”) and the Alabama
Business Corporation Law (the “ABCL”), at the Effective Time, SWBS shall merge with and into FBMS pursuant
to the terms of this Agreement. FBMS shall be the Surviving Entity in the Merger and shall continue its existence as a corporation
under the laws of the State of Mississippi. As of the Effective Time, the separate corporate existence of SWBS shall cease.


 






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Section 1.02     Articles
of Incorporation and Bylaws. At the Effective Time, the articles of incorporation of FBMS in effect immediately prior to the
Effective Time shall be the articles of incorporation of the Surviving Entity until thereafter amended in accordance with applicable
Law. The bylaws of FBMS in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Entity until thereafter
amended in accordance with applicable Law and the terms of such bylaws.


 


Section 1.03     Bank
Merger. Except as provided below, immediately following the Effective Time and sequentially but in effect simultaneously
on the Closing Date, First Community Bank, an Alabama state-chartered bank and a direct wholly owned subsidiary of SWBS (“First
Community Bank”), shall be merged (the “Bank Merger”) with and into The First, A National
Banking Association, a national banking association and a direct wholly owned subsidiary of FBMS (“The First”),
in accordance with the provisions of applicable federal and state banking laws and regulations, and The First shall be the surviving
bank (the “Surviving Bank”). The Bank Merger shall have the effects as set forth under applicable federal
and state banking laws and regulations, and the board of directors of the Parties shall cause the board of directors of The First
and First Community Bank, respectively, to approve a separate merger agreement (the “Bank Plan of Merger”)
in substantially the form attached hereto as Exhibit B, and cause the Bank Plan of Merger to be executed and delivered
as soon as practicable following the date of execution of this Agreement. Each of FBMS and SWBS shall also approve the Bank Plan
of Merger in their capacities as sole shareholders of The First and First Community Bank, respectively. As provided in the Bank
Plan of Merger, the Bank Merger may be abandoned at the election of The First at any time, whether before or after filings are
made for regulatory approval of the Bank Merger, but if the Bank Merger is abandoned for any reason, First Community Bank shall
continue to operate under its name; provided that prior to any such election, FBMS shall (a) reasonably consult with SWBS
and its regulatory counsel and (b) reasonably determine in good faith that such election will not, and would not reasonably be
expected to, prevent, delay or impair any Party’s ability to consummate the Merger or the other transactions contemplated
by this Agreement.


 


Section 1.04     Effective
Time; Closing.


 


(a)       Subject
to the terms and conditions of this Agreement, the Parties
will make all such filings as may be required to consummate the Merger and the Bank
Merger by applicable Laws. The Merger shall
become effective as set forth in the articles of merger (the “Articles of Merger”)
related to the Merger that shall be filed with the Secretary of State of the State of Mississippi
and the Secretary of State of the State of Alabama, as provided in the MBCA and ABCL, on
the Closing Date. The “Effective Time” of the Merger
shall be the later of (i) the date and time of filing of the Articles of Merger,
or (ii) the date and time when the Merger becomes
effective as set forth in the Articles of Merger, which shall be no later than three (3)
Business Days after all of the conditions to the Closing
set forth in Article VI (other than conditions to be satisfied at the Closing,
which shall be satisfied or waived at the Closing)
have been satisfied or waived in accordance with the terms hereof.


 


(b)       The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place beginning immediately prior to the Effective Time (such date, the “Closing
Date”) at the offices of Alston & Bird LLP, One Atlantic Center, 1201 West Peachtree Street, Atlanta,
GA 30309, or such other place as the Parties may
mutually agree. At the Closing, there shall be delivered to FBMS
and SWBS the Articles of Merger and such other
certificates and other documents required to be delivered under Article VI.


 






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Section 1.05     Additional
Actions. If, at any time after the Effective Time, any Party shall consider or be advised that any further deeds, documents,
assignments or assurances in Law or any other acts are necessary or desirable to carry out the purposes of this Agreement (such
Party, the “Requesting Party”), the other Party and its Subsidiaries and their respective officers and
directors shall be deemed to have granted to the Requesting Party and its Subsidiaries, and each or any of them, an irrevocable
power of attorney to execute and deliver, in such official corporate capacities, all such deeds, assignments or assurances in
Law or any other acts as are necessary or desirable to carry out the purposes of this Agreement, and the officers and directors
of the Requesting Party and its Subsidiaries, as applicable, are authorized in the name of the other Party and its Subsidiaries
or otherwise to take any and all such action.


 


Section 1.06     Officers
and Directors. The officers and directors of FBMS immediately prior to the Effective Time shall remain the officers and directors
of FBMS, until their respective successors have been duly elected, appointed or qualified or until their earlier death, resignation
or removal in accordance with the articles of incorporation and bylaws of FBMS.


 


Section 1.07     Reservation
of Right to Revise Structure. FBMS may at any time and without the approval of SWBS
change the method of effecting the business combination contemplated by this Agreement if and to the extent that it reasonably
deems such a change to be necessary; provided, however, that no such change shall (i) alter or change the amount
or form of the consideration to be issued to Holders as Merger Consideration as currently contemplated in this Agreement, (ii)
reasonably be expected to materially impede or delay consummation of the Merger, (iii) adversely affect the federal or state income
tax treatment of Holders in connection with the Merger, (iv) require submission to or approval of SWBS’s shareholders after
the plan of merger set forth in this Agreement has been approved by SWBS’s shareholders, or (v) result in the Merger or
other method of effecting the business combination failing to be a reorganization described in Section 368(a) of the Code or FBMS
and SWBS failing to be parties to such reorganization. In the event that FBMS elects to make such a change, the Parties agree
to cooperate to execute appropriate documents to reflect the change.


 


Article
II



MERGER CONSIDERATION; EXCHANGE PROCEDURES


 


Section 2.01     Merger
Consideration. Subject to the provisions of this Agreement, at the Effective Time, automatically by virtue of the Merger
and without any action on the part of the Parties or any shareholder of SWBS:


 


(a)       Each
share of FBMS Common Stock that is issued and outstanding immediately prior to the Effective
Time shall remain outstanding following the Effective Time and shall be unchanged
by the Merger.


 






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(b)       Each
share of SWBS Common Stock owned directly by FBMS,
SWBS or any of their respective Subsidiaries (other
than shares in trust accounts, managed accounts and the like for the benefit of customers or shares
held as collateral for outstanding debt previously contracted) immediately prior to the Effective
Time shall be cancelled and retired at the Effective Time without any conversion
thereof, and no payment shall be made with respect thereto.


 


(c)       Each
share of SWBS Common Stock outstanding immediately prior to the Effective Time (other than
Dissenting Shares, treasury stock and shares described in Section 2.01(b)), shall
be converted, in accordance with the procedures set forth in this Article II, into the right to receive (i) the Per Share
Cash Consideration, and (ii) the Per Share Stock Consideration.


 


For purposes of
this Agreement:


 


“Cash
Consideration” means an amount equal to $24 million, provided that if SWBS’s Adjusted Tangible Common Equity
as of the Closing is less than $32 million, the Cash Consideration shall be reduced by an amount equal to (x) $32 million minus
(y) SWBS’s actual Adjusted Tangible Common Equity as of the Closing.


 


“Actual
Closing Price” means the average closing price of the FBMS Common Stock as reported on the Nasdaq Stock Market for
the ten Trading Days preceding the date that is the fifth business day preceding the Closing Date.


 


“Adjusted
Closing Price” means (i) if the Actual Closing Price is at least 20% higher than the Signing Price (as defined below),
then an amount equal to 120% of the Signing Price; or (ii) if the Actual Closing Price is at least 20% lower than the Signing Price,
an amount equal to 80% of the Signing Price; or (iii) if the Actual Closing Price is neither 20% higher than the Signing Price
nor 20% lower than the Signing Price, then an amount equal to the Actual Closing Price.


 


“Merger
Consideration” means the Per Share Stock Consideration together with the Per Share Cash Consideration.


 


“Per
Share Cash Consideration” means Pro Rata Share of the Cash Consideration.


 


“Per
Share Stock Consideration” means a Pro Rata Share of the Stock Consideration.


 


“Signing
Price” means $30.45.


 


“Stock
Consideration” shall mean a number of shares of FBMS Common Stock calculated by dividing $36 million by the Adjusted
Closing Price.


 


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


 






    	 	4	 



     


    

 


(d)       Notwithstanding
anything in this Agreement to the contrary, shares of SWBS
Common Stock that are issued and outstanding immediately prior to the Effective Time and
which are held by a shareholder who did not vote in favor of the Merger (or
consent thereto in writing) and who is entitled to demand and properly demands the fair value of such shares pursuant to,
and who complies in all respects with, the provisions of Article 13 of the ABCL (the “Dissenting
Shares”), shall not be converted into or be exchangeable for the right
to receive the Merger Consideration, but instead the holder
of such Dissenting Shares (hereinafter called
a “Dissenting Shareholder”) shall be entitled to payment of the
fair value of such shares in accordance with the provisions of Article 13 of the ABCL (and at the Effective
Time, such Dissenting Shares shall no longer be outstanding and shall automatically
be cancelled and shall cease to exist), unless and until such Dissenting Shareholder shall
have failed to perfect such holder’s right to receive, or
shall have effectively withdrawn or lost rights to
demand or receive, the fair value of such shares of SWBS
Common Stock under such provisions of the ABCL. If any Dissenting
Shareholder shall effectively withdraw or lose such Holder’s
dissenter’s rights under the applicable provisions of the ABCL,
each such Dissenting Share shall be deemed to have been converted into and to have become
exchangeable for, the right to receive the Merger Consideration, without any interest thereon,
in accordance with the applicable provisions of this Agreement. SWBS
shall give FBMS (i) prompt notice of any written notices to exercise dissenters’
rights in respect of any shares of SWBS Common Stock,
attempted withdrawals of such notices and any other instruments served pursuant to the ABCL and
received by SWBS relating to dissenters’ rights and
(ii) the opportunity to participate in negotiations and proceedings with respect to demands for fair value under the ABCL.
SWBS shall not, except with the prior written consent of FBMS,
voluntarily make any payment with respect to, or settle, or
offer or agree to settle, any such demand for payment. Any portion of the Merger
Consideration made available to the Exchange Agent pursuant to this Article II
to pay for shares of SWBS Common Stock for which dissenters’ rights
have been perfected shall be returned to FBMS upon demand. If the amount paid to
a Dissenting Shareholder exceeds such Dissenting Shareholder’s Merger Consideration, such excess amount shall not reduce
the amount of Merger Consideration paid to other Holders.


 


Section 2.02     SWBS
Stock-Based Awards.


 


(a)       Immediately
prior to the Effective Time, each share of SWBS Common Stock subject to vesting restrictions
granted under the SWBS Stock Plans (a “SWBS Restricted Share”)
that is outstanding immediately prior to the Effective Time shall become fully vested and nonforfeitable and shall be converted
automatically into and shall thereafter represent the right to receive the Per Share Cash Consideration and the Per Share Stock
Consideration, less the amount of any required withholding Tax, pursuant to Section 2.01(c).


 


(b)       Prior
to the Effective Time, the board of directors of SWBS (or,
if appropriate, any committee thereof administering the SWBS Stock Plans) shall adopt such
resolutions or take such other actions, including obtaining
any necessary consents or amendments to the applicable award agreements and equity plans,
as may be required to effectuate the provisions of this Section 2.02.


 


Section 2.03     Rights
as Shareholders; Stock Transfers. At the Effective Time, all shares of SWBS Common Stock, when converted in
accordance with Section 2.01, shall no longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each Certificate or Book-Entry Share previously evidencing such shares shall thereafter represent only the
right to receive for each such share of SWBS Common Stock, the Merger Consideration and any cash in lieu of fractional shares
of FBMS Common Stock in accordance with this Article II. At the Effective Time, holders of SWBS Common Stock shall cease
to be, and shall have no rights as, shareholders of SWBS, other than the right to receive the Merger Consideration and cash in
lieu of fractional shares of FBMS Common Stock as provided under this Article II. After the Effective Time, there shall
be no registration of transfers on the stock transfer books of SWBS of shares of SWBS Common Stock.


 






    	 	5	 



     


    

 


Section 2.04     Fractional
Shares. Notwithstanding any other provision hereof, no fractional shares of FBMS Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the Merger. In lieu thereof, FBMS shall pay or cause to be
paid to each holder of a fractional share of FBMS Common Stock, rounded to the nearest one hundredth of a share, an amount of
cash (without interest and rounded to the nearest whole cent) determined by multiplying the fractional share interest in FBMS
Common Stock to which such holder would otherwise be entitled by the Adjusted Closing Price.


 


Section 2.05     Plan
of Reorganization. It is intended that the Merger and the Bank Merger shall each qualify as a “reorganization”
within the meaning of Section 368(a) of the Code, and that this Agreement shall constitute a “plan of reorganization”
as that term is used in Sections 354 and 361 of the Code.


 


Section 2.06     Exchange
Procedures. As promptly as practicable after the Effective Time but in no event later than three (3) Business Days after the
Closing Date, and provided that SWBS has delivered, or caused to be delivered, to the Exchange Agent all information that
is necessary for the Exchange Agent to perform its obligations as specified herein, the Exchange Agent shall mail or otherwise
cause to be delivered to each Holder appropriate and customary transmittal materials, which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates or Book-Entry Shares shall pass, only upon delivery of the Certificates
or Book-Entry Shares to the Exchange Agent, as well as instructions for use in effecting the surrender of the Certificates or
Book-Entry Shares in exchange for the Merger Consideration as provided for in this Agreement (the “Letter of Transmittal”).
The form of the Letter of Transmittal is attached hereto at Exhibit F.


 


Section 2.07     Deposit
of Merger Consideration.


 


(a)       Prior
to the Effective Time, FBMS shall (i) deposit, or
shall cause to be deposited, with the Exchange Agent stock certificates representing
the number of shares of FBMS Common Stock and cash sufficient to deliver the Merger
Consideration (together with, to the extent then determinable, any cash payable in lieu of fractional shares pursuant to
Section 2.04, and if applicable, cash in an aggregate amount sufficient to make the appropriate payment to the holders of
Dissenting Shares) (collectively, the “Exchange
Fund”), and (ii) instruct the Exchange Agent to promptly pay such Merger
Consideration and cash in lieu of fractional shares upon receipt of a properly completed Letter
of Transmittal in accordance with this Agreement.


 






    	 	6	 



     


    

 


(b)       Any
portion of the Exchange Fund that remains unclaimed by the shareholders of SWBS for one
(1) year after the Effective Time (as well as any interest or
proceeds from any investment thereof) shall be delivered by the Exchange Agent to
FBMS. Any shareholders of SWBS who have not theretofore
complied with this Section 2.07 and Section 2.08(a) shall thereafter look only to FBMS
for the Merger Consideration deliverable in respect of each share of SWBS
Common Stock such shareholder held as of immediately prior to the Effective Time,
as determined pursuant to this Agreement, in each case without any interest thereon. If
outstanding Certificates or Book-Entry Shares for shares of SWBS
Common Stock are not surrendered or the payment for them is not claimed prior to
the date on which such shares of FBMS Common Stock or cash escheat to or
become the property of any governmental unit or agency according to the relevant
abandoned property laws, such unclaimed items shall escheat to the appropriate governmental unit or agency. Neither the Exchange
Agent nor any Party shall be liable to any Holder
represented by any Certificate or Book-Entry Share for any Merger
Consideration (or any dividends or distributions
with respect thereto) paid to a public official pursuant to applicable abandoned property, escheat or
similar Laws. FBMS and the Exchange
Agent shall be entitled to rely upon the stock transfer books of SWBS to establish
the identity of those Persons entitled to receive the Merger
Consideration specified in this Agreement, which books shall be conclusive with respect
thereto. In the event of a dispute with respect to ownership of any shares of SWBS Common Stock
represented by any Certificate or Book-Entry Share, FBMS
and the Exchange Agent shall be entitled to tender to the custody of any court of
competent jurisdiction any Merger Consideration represented by such Certificate
or Book-Entry Share and file legal proceedings interpleading all parties to such
dispute, and will thereafter be relieved with respect to any claims thereto.


 


Section 2.08     Delivery
of Merger Consideration.


 


(a)       Upon
surrender to the Exchange Agent of its Certificate(s) or
Book-Entry Share(s), accompanied by a properly completed Letter of Transmittal timely
delivered to the Exchange Agent, a Holder will be
entitled to receive such Holder’s pro rata portion of the Aggregate Merger
Consideration and any cash in lieu of fractional shares of FBMS Common Stock to be
issued or paid in consideration therefor (with such cash rounded to the nearest whole cent)
in respect of the shares of SWBS Common Stock represented by such Holder’s
Certificates or Book-Entry Shares. FBMS shall use commercially reasonable efforts to cause the Exchange Agent to provide
to each such Holder their pro rata portion of the Aggregate Merger Consideration and any cash in lieu of fractional shares of SWBS
Common Stock to be issued or paid in consideration therefor (with such cash rounded to the nearest whole cent) in respect of the
shares of SWBS Common Stock represented by such Holder’s Certificates or Book-Entry Shares promptly after the Effective Time.
The Exchange Agent and FBMS, as the case may be,
shall not be obligated to deliver cash and/or shares of FBMS
Common Stock to a Holder to which such Holder would
otherwise be entitled as a result of the Merger until such Holder
surrenders the Certificates or Book-Entry Shares representing the shares of SWBS
Common Stock for exchange as provided in this Article II, or, an appropriate
affidavit of loss and indemnity agreement and/or a
bond in such amount as may be reasonably required in each case by FBMS or the Exchange
Agent.


 






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(b)       All
shares of FBMS Common Stock to be issued pursuant to the Merger
shall be deemed issued and outstanding as of the Effective Time and if ever a dividend
or other distribution is declared by FBMS in respect
of the FBMS Common Stock, the record date for which is at or
after the Effective Time, that declaration shall include
dividends or other distributions in respect of all shares of FBMS
Common Stock issuable pursuant to this Agreement. No dividends or
other distributions in respect of the FBMS Common Stock shall be paid to any holder
of any unsurrendered Certificate or Book-Entry Share until such Certificate
or Book-Entry Share is surrendered for exchange in accordance with this Article II.
Subject to the effect of applicable Laws, following surrender of any such Certificate
or Book-Entry Share, there shall be issued and/or paid to the holder
of the certificates representing whole shares of FBMS Common Stock issued in exchange
therefor, without interest, (i) at the time of such surrender, the dividends or other distributions
with a record date at or after the Effective Time and with a payment date prior to surrender
with respect to such whole shares of FBMS Common Stock and not paid and (ii) at the appropriate
payment date, the dividends or other distributions payable with respect to such whole shares
of FBMS Common Stock with a record date at or after the Effective
Time but with a payment date subsequent to surrender.


 


(c)       FBMS
or the Exchange Agent, as applicable, shall be entitled to deduct and withhold from
any amounts otherwise payable pursuant to this Agreement to any Holder
such amounts as FBMS is required to deduct and withhold under applicable Law.
Any amounts so deducted and withheld shall be remitted to the appropriate Governmental Authority
and upon such remittance shall be treated for all purposes of this Agreement as having
been paid to the Holder in respect of which such deduction and withholding was made by FBMS
or the Exchange Agent, as applicable.


 


Section 2.09     Anti-Dilution
Provisions. If the number of shares of FBMS Common Stock or SWBS Common Stock issued and outstanding prior to the Effective
Time shall be increased or decreased, or changed into or exchanged for a different number of kind of shares or securities, in
any such case as a result of a stock split, reverse stock split, stock combination, stock dividend, recapitalization, reclassification,
reorganization or similar transaction, or there shall be any extraordinary dividend or distribution with respect to such stock,
and the record date therefor shall be prior to the Effective Time, an appropriate and proportionate adjustment shall be made to
the Merger Consideration to give holders of SWBS Common Stock the same economic effect as contemplated by this Agreement prior
to such event.


 


Article
III



REPRESENTATIONS AND WARRANTIES OF SWBS


 


Except as set forth in
the disclosure schedule delivered by SWBS to FBMS prior to or concurrently with the execution of this Agreement with respect to
each such Section below (the “SWBS Disclosure Schedule”), SWBS hereby represents and warrants to FBMS
as follows:


 


Section 3.01     Organization
and Standing. Each of SWBS and its Subsidiaries is (a) an entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation and (b) is duly licensed or qualified to do business and in good
standing in each jurisdiction where its ownership or leasing of property or the conduct of its business requires such qualification,
except where the failure to be so licensed or qualified has not had, and is not reasonably likely to have, a Material Adverse
Effect with respect to SWBS. A complete and accurate list of all such jurisdictions described in (a) and (b) is
set forth in SWBS Disclosure Schedule 3.01.


 






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Section 3.02     Capital
Stock.


 


(a)       The
authorized capital stock of SWBS consists of 3,000,000 shares of SWBS Common Stock. As of
the date hereof, there are 71,317 shares of SWBS Common
Stock issued and outstanding. As of the date hereof, there were no exercisable options
to acquire shares of SWBS Common Stock outstanding. There are no shares of SWBS
Common Stock held by any of SWBS’s Subsidiaries.
SWBS Disclosure Schedule 3.02(a) sets forth, as of the
date hereof, the name and address, as reflected on the books and records of SWBS,
of each Holder, and the number of shares of SWBS Common
Stock held by each such Holder. The issued and outstanding shares of SWBS
Common Stock are duly authorized, validly issued, fully paid, non-assessable and
have not been issued in violation of nor are they subject to preemptive rights of any SWBS
shareholder. All shares of SWBS’s capital stock issued and outstanding have
been issued in compliance with and not in violation of any applicable federal or state securities
Laws.


 


(b)       SWBS
Disclosure Schedule 3.02(b) sets forth, as of the date hereof, for each grant
or award of SWBS Restricted Shares or other outstanding
Rights of SWBS the (i) name of the grantee, (ii)
date of the grant, (iii) expiration date, (iv) vesting schedule, (v) number of shares of
SWBS Common Stock, or any other security of SWBS,
subject to such award, (vi) number of shares subject to such award that are exercisable or have
vested as of the date of this Agreement, and (vii) name of the SWBS
Stock Plan under which such award was granted, if applicable. Each SWBS Restricted Share
and all other outstanding SWBS Rights complies with or is exempt from Section 409A
of the Code and qualifies for the tax treatment afforded thereto in SWBS’s
Tax Returns. Each grant of SWBS Restricted Shares or other
outstanding SWBS Rights was appropriately authorized by the board of directors of SWBS or
the compensation committee thereof, was made in accordance, with the terms of the SWBS Stock
Plans and any applicable Law and regulatory rules or
requirements and has a grant date identical to (or later than) the date on which
it was actually granted or awarded by the board of directors of SWBS
or the compensation committee thereof. There are no outstanding shares of capital stock of any class, or
any options, warrants or other similar rights,
convertible or exchangeable securities, “phantom stock” rights,
stock appreciation rights, stock based performance units, agreements, arrangements, commitments
or understandings to which SWBS or any of its Subsidiaries
is a party, whether or not in writing, of
any character relating to the issued or unissued capital stock or
other securities of SWBS or any of SWBS’s
Subsidiaries or obligating SWBS or any of SWBS’s
Subsidiaries to issue (whether upon conversion, exchange or
otherwise) or sell any share of capital stock of, or
other equity interests in or other securities of, SWBS
or any of SWBS’s Subsidiaries other
than those listed in SWBS Disclosure Schedule 3.02(b). Except as set forth
in SWBS Disclosure Schedule 3.02(b), there are no obligations, contingent or otherwise,
of SWBS or any of SWBS’s Subsidiaries
to repurchase, redeem or otherwise acquire any shares of SWBS
Common Stock or capital stock of any of SWBS’s Subsidiaries
or any other securities of SWBS or any of SWBS’s
Subsidiaries or to provide funds to or make any investment
(in the form of a loan, capital contribution or otherwise) in any such Subsidiary
or any other entity. Except for the Shareholders’ Agreement and the SWBS Voting
Agreements, there are no agreements, arrangements or other understandings with respect
to the voting of SWBS’s capital stock and there are no agreements or
arrangements under which SWBS is obligated to register the sale of any of its securities
under the Securities Act.


 


(c)       All
of the issued and outstanding shares of capital stock of each of SWBS’s Subsidiaries
are duly authorized, validly issued, fully paid, non-assessable and not subject to
preemptive rights, and, except as set forth in SWBS Disclosure
Schedule 3.02(c), all such shares are owned by SWBS or a Subsidiary
of SWBS free and clear of all security interests, liens, claims, pledges, taking
actions, agreements, limitations in SWBS’s voting rights,
charges or other Liens of any nature whatsoever,
except as set forth in the Shareholders’ Agreement. Neither SWBS
nor any of its Subsidiaries has any trust preferred securities or
other similar securities outstanding.


 






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Section 3.03     Subsidiaries.


 


(a)       SWBS
Disclosure Schedule 3.03(a) sets forth a complete and accurate list of all Subsidiaries
of SWBS, including the jurisdiction of organization and all jurisdictions in which
any such entity is qualified to do business. Except as set forth in SWBS Disclosure Schedule
3.03(a), (i) SWBS owns, directly or indirectly,
all of the issued and outstanding equity securities of each SWBS Subsidiary, (ii) no
equity securities of any of SWBS’s Subsidiaries are
or may become required to be issued (other than to SWBS)
by reason of any contractual right or otherwise, (iii) there are no contracts, commitments,
understandings or arrangements by which any of such Subsidiaries
is or may be bound to sell or otherwise transfer
any of its equity securities (other than to SWBS or a wholly-owned Subsidiary
of SWBS), (iv) there are no contracts, commitments, understandings or arrangements
relating to SWBS’s rights to vote or
to dispose of such securities, (v) all of the equity securities of each such Subsidiary
held by SWBS, directly or indirectly, are
validly issued, fully paid, non-assessable and are not subject to preemptive or
similar rights, and (vi) all of the equity securities of each Subsidiary
that is owned, directly or indirectly, by SWBS or
any Subsidiary thereof, are free and clear of all Liens,
other than restrictions on transfer under applicable securities Laws.


 


(b)       Except
as set forth in SWBS Disclosure Schedule 3.03, neither SWBS nor any of SWBS’s
Subsidiaries owns any stock or equity interest in
any depository institution (as defined in 12 U.S.C. Section 1813(c)(1)) other than First
Community Bank. Except as set forth in SWBS Disclosure Schedule 3.03(b), neither
SWBS nor any of SWBS’s Subsidiaries
beneficially owns, directly or indirectly (other than in a bona fide fiduciary capacity
or in satisfaction of a debt previously contracted), any equity securities or
similar interests of any Person, or any interest
in a partnership or joint venture of any kind.


 


Section 3.04     Corporate
Power; Minute Books.


 


(a)       SWBS
and each of its Subsidiaries has the corporate or
similar power and authority to carry on its business as it is now being conducted and to own all of its properties and assets;
and SWBS has the corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions
contemplated hereby, subject to receipt of all necessary approvals of Governmental Authorities,
the Regulatory Approvals and the Requisite SWBS Shareholder
Approval.


 


(b)       SWBS
has made available to FBMS a complete and
correct copy of its articles of incorporation and bylaws or equivalent organizational documents,
each as amended to date, of SWBS and each of its Subsidiaries,
the minute books of SWBS and each of its Subsidiaries,
and the stock ledgers and stock transfer books of SWBS and each of its Subsidiaries.
Neither SWBS nor any of its Subsidiaries is in violation
of any of the terms of its articles of incorporation, bylaws or equivalent organizational
documents. The minute books of SWBS and each of its Subsidiaries
contain records of all meetings held by, and all other corporate or similar actions
of, their respective shareholders and boards of directors (including committees of their
respective boards of directors) or other governing bodies, which records are complete and
accurate in all material respects. The stock ledgers and the stock transfer books of SWBS
and each of its Subsidiaries contain complete and accurate records of the ownership
of the equity securities of SWBS and each of its Subsidiaries.


 






    	 	10	 



     


    

 


Section 3.05     Corporate
Authority. Subject only to the receipt of the Requisite SWBS Shareholder Approval at the SWBS Meeting, this Agreement and
the transactions contemplated hereby have been authorized by all necessary corporate action of SWBS and the board of directors
of SWBS on or prior to the date hereof. The board of directors of SWBS has directed that this Agreement be submitted to SWBS’s
shareholders for approval at a meeting of the shareholders and, except for the receipt of the Requisite SWBS Shareholder Approval
in accordance with the ABCL and SWBS’s articles of incorporation and bylaws, no other vote or action of the shareholders
of SWBS is required by Law, the articles of incorporation or bylaws of SWBS or otherwise to approve this Agreement and the transactions
contemplated hereby. SWBS has duly executed and delivered this Agreement and, assuming due authorization, execution and delivery
by FBMS, this Agreement is a valid and legally binding obligation of SWBS, enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar
Laws of general applicability relating to or affecting creditors’ rights or by general equity principles).


 


Section 3.06     Regulatory
Approvals; No Defaults.


 


(a)       No
consents or approvals of, or waivers by, or
filings or registrations with, any Governmental Authority
are required to be made or obtained by SWBS or any
of its Subsidiaries in connection with the execution, delivery or
performance by SWBS of this Agreement or to
consummate the transactions contemplated by this Agreement, except as may be required for
(i) filings of applications and notices with, and receipt of consents, authorizations, approvals,
exemptions or nonobjections from, the SEC, NASDAQ,
state securities authorities, the Financial Industry Regulatory Authority, Inc., applicable securities, commodities and futures
exchanges, and other industry self-regulatory organizations (each, an “SRO”),
(ii) filings of applications or notices with, and consents, approvals or
waivers by the FRB, the FDIC and applicable
state banking agencies, the Office of the Comptroller of the Currency (the “OCC”),
the Alabama State Banking Department (the “ASBD”) and other banking,
regulatory, self-regulatory or enforcement authorities or
any courts, administrative agencies or commissions or
other Governmental Authorities and approval of or
non-objection to such applications, filings and notices (taken together with the items listed in clause (i),
the “Regulatory Approvals”), (iii) the filing with the SEC
of the Proxy Statement-Prospectus and the Registration
Statement and declaration of effectiveness of the Registration Statement, (iv) the
filing of the Articles of Merger and the filing of documents with the OCC,
applicable Governmental Authorities, and the Secretary of State of the State of Alabama
to cause the Bank Merger to become effective and (v) such filings and approvals as are required
to be made or obtained under the securities or “Blue
Sky” laws of various states in connection with the issuance of the shares of FBMS Common
Stock pursuant to this Agreement and approval of listing of such FBMS
Common Stock on the NASDAQ. Subject to the receipt of the approvals referred to in
the preceding sentence and the Requisite SWBS Shareholder Approval, the execution, delivery
and performance of this Agreement and the consummation of
the transactions contemplated hereby by SWBS do not and will not (1) constitute a
breach or violation of, or a default under, the articles
of incorporation, bylaws or similar governing documents of SWBS
or any of its respective Subsidiaries, (2) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to SWBS
or any of its Subsidiaries, or any of their
respective properties or assets, (3) except as set forth in SWBS
Disclosure Schedule 3.06(a), conflict with, result in a breach or violation of
any provision of, or the loss of any benefit under, or a
default (or an event which, with or without notice
or lapse of time, or both, would constitute a default)
under, result in the creation of any Lien under, result in a right of termination or
the acceleration of any right or obligation under any permit, license, credit agreement,
indenture, loan, note, bond, mortgage, reciprocal easement agreement, lease, instrument,
concession, contract, franchise, agreement or other instrument or
obligation of SWBS or any of its Subsidiaries or
to which SWBS or any of its Subsidiaries,
or their respective properties or assets is subject
or bound, or (4) require the consent or
approval of any third party or Governmental Authority under any such Law,
rule or regulation or any judgment, decree, order,
permit, license, credit agreement, indenture, loan, note, bond, mortgage, reciprocal easement
agreement, lease, instrument, concession, contract, franchise, agreement
or other instrument or obligation.


 






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(b)       As
of the date hereof, SWBS has no Knowledge
of any reason (i) why the Regulatory Approvals referred to in Section 6.01(b)
will not be received in customary time frames from the applicable Governmental Authorities having
jurisdiction over the transactions contemplated by this Agreement or (ii) why any Burdensome
Condition would be imposed.


 


Section 3.07     Financial
Statements; Internal Controls.


 


(a)       SWBS
has previously delivered or made available to FBMS
copies of SWBS’s (i) audited consolidated financial
statements (including the related notes and schedules
thereto) for the years ended December 31, 2016, 2015 and 2014, accompanied by the unqualified audit reports of Mauldin and
Jenkins, LLC, independent registered accountants (collectively, the “Audited Financial
Statements”) and (ii) unaudited interim consolidated financial statements
(including the related notes and schedules thereto)
for the six months ended June 30, 2017 (the “Unaudited
Financial Statements” and collectively with the Audited Financial Statements,
the “Financial Statements”). The Financial
Statements (including any related notes and schedules
thereto) are accurate and complete in all material respects and fairly present in
all material respects the financial condition and the results of operations, changes in
shareholders’ equity, and cash flows of SWBS and its consolidated Subsidiaries
as of the respective dates of and for the periods referred to in such financial statements,
all in accordance with GAAP, consistently applied, subject, in the case of the Unaudited
Financial Statements, to normal, recurring year-end adjustments (the effect of which has not had, and would not reasonably
be expected to have, individually or in the aggregate, a Material
Adverse Effect with respect to SWBS) and the absence of notes and schedules (that,
if presented, would not differ materially from those included in the Audited Financial Statements).
No financial statements of any entity or enterprise
other than the SWBS’s Subsidiaries are required
by GAAP to be included in the consolidated financial statements
of SWBS. The audits of SWBS have been conducted
in accordance with GAAP. Since December 31, 2016, neither SWBS
nor any of its Subsidiaries has any liabilities or
obligations of a nature that would be required by GAAP to be set forth on its consolidated
balance sheet or in the notes thereto except for liabilities reflected or
reserved against in the Financial Statements and current liabilities incurred in
the Ordinary Course of Business since December 31, 2016. True, correct and complete copies
of the Financial Statements are set forth in SWBS Disclosure
Schedule 3.07(a).


 






    	 	12	 



     


    

 


(b)       The
records, systems, controls, data and information of SWBS and its Subsidiaries are recorded,
stored, maintained and operated under means (including any electronic, mechanical or
photographic process, whether computerized or not) that are under the exclusive ownership
and direct control of SWBS or its Subsidiaries or accountants
(including all means of access thereto and therefrom). SWBS and its Subsidiaries have devised
and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of
financial reporting and the preparation of financial statements in accordance with GAAP.
SWBS has disclosed based on its most recent evaluations, to its outside auditors and the
audit committee of the board of directors of SWBS (i) all significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect SWBS’s ability to record, process,
summarize and report financial data and (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in SWBS’s
internal control over financial reporting.


 


(c)       Except
as set forth in SWBS Disclosure Schedule 3.07, since January 1, 2014, neither SWBS nor
any of its Subsidiaries nor, to SWBS’s Knowledge,
any director, officer, employee, auditor, accountant or representative of SWBS
or any of its Subsidiaries has received, or otherwise
had or obtained Knowledge of, any material
complaint, allegation, assertion or claim regarding the accounting or
auditing practices, procedures, methodologies or methods of SWBS
or any of its Subsidiaries or their respective internal accounting controls, including
any material complaint, allegation, assertion or
claim that SWBS or any of its Subsidiaries has
engaged in questionable accounting or auditing practices.


 


Section 3.08     Regulatory
Reports. Since January 1, 2014, SWBS and its Subsidiaries have duly filed with the FRB, the FDIC, and any other applicable
Governmental Authority, in correct form, the material reports and other documents required to be filed under applicable Laws and
regulations and have paid all fees and assessments due and payable in connection therewith, and such reports were complete and
accurate and in compliance in all material respects with the requirements of applicable Laws and regulations. Other than normal
examinations conducted by a Governmental Authority in the Ordinary Course of Business, no Governmental Authority has notified
SWBS or any of its Subsidiaries that it has initiated any proceeding or, to the Knowledge of SWBS, threatened an investigation
into the business or operations of SWBS or any of its Subsidiaries since January 1, 2014. There is no unresolved material violation,
criticism, or exception by any Governmental Authority with respect to any report or statement relating to any examinations or
inspections of SWBS or any of its Subsidiaries. There have been no formal or informal inquiries by, or disagreements or disputes
with, any Governmental Authority with respect to the business, operations, policies or procedures of SWBS or any of its Subsidiaries
since January 1, 2014.


 






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Section 3.09     Absence
of Certain Changes or Events. Except as set forth in SWBS Disclosure Schedule 3.09,
or as otherwise contemplated by this Agreement, since December 31, 2016, (a) SWBS and its Subsidiaries have carried on their respective
businesses in all material respects in the Ordinary Course of Business, (b) there have been no events, changes or circumstances
which have had, or are reasonably likely to have, individually or in the aggregate, a Material Adverse Effect with respect to
SWBS, and (c) neither SWBS nor any of its Subsidiaries has taken any action or failed to take any action prior to the date of
this Agreement which action or failure, if taken after the date of this Agreement, would constitute a material breach or violation
of any of the covenants and agreements set forth in Section 5.01(a), Section 5.01(b), Section 5.01(c), Section
5.01(e), Section 5.01(g), Section 5.01(h), Section 5.01(j), Section 5.01(k), Section 5.01(u)
or Section 5.01(w).


 


Section 3.10     Legal
Proceedings.


 


(a)       Other
than as set forth in SWBS Disclosure Schedule 3.10(a), there are no material
civil, criminal, administrative or regulatory actions, suits, demand letters, demands
for indemnification, claims, hearings, notices of violation, arbitrations, investigations, orders to show cause, market conduct
examinations, notices of non-compliance or other proceedings of any nature pending or,
to the Knowledge of SWBS, threatened against SWBS
or any of its Subsidiaries or to which SWBS or any
of its Subsidiaries is a party, including
without limitation, any such actions, suits, demand letters, demands for indemnification, claims, hearings, notices of violation,
arbitrations, investigations, orders to show cause, market conduct examinations, notices of non-compliance or
other proceedings of any nature that would challenge the validity or propriety of
the transactions contemplated by this Agreement.


 


(b)       Other
than as set forth on SWBS Disclosure Schedule 3.10(b), there is no material
injunction, order, judgment or decree imposed upon SWBS
or any of its Subsidiaries, or the assets
of SWBS or any of its Subsidiaries, and neither SWBS
nor any of its Subsidiaries has been advised of the threat of any such action, other
than any such injunction, order, judgement or decree that is generally applicable to all
Persons in businesses similar to that of SWBS or any
of SWBS’s Subsidiaries.


 


Section 3.11     Compliance
With Laws.


 


(a)       SWBS
and each of its Subsidiaries is, and have been since January 1, 2014, in compliance
in all material respects with all applicable federal, state, local and foreign Laws,
rules, judgments, orders or decrees applicable thereto or
to the employees conducting such businesses, including, without limitation, Laws
related to data protection or privacy, the USA PATRIOT
Act, the Bank Secrecy Act, the Equal Credit Opportunity
Act, the Fair Housing Act, the Home Mortgage Disclosure
Act, the Community Reinvestment Act, the Fair Credit
Reporting Act, the Truth in Lending Act, the Dodd-Frank
Act, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley
Act or the regulations implementing such statutes, all other applicable anti-money
laundering Laws, fair lending Laws and other Laws
relating to discriminatory lending, financing, leasing or business practices and
all agency requirements relating to the origination, sale and servicing of mortgage loans.
Neither SWBS nor any of its Subsidiaries has been
advised of any material supervisory concerns regarding their compliance with the Bank Secrecy Act
or related state or federal anti-money laundering laws, regulations
and guidelines, including without limitation those provisions of federal regulations
requiring (i) the filing of reports, such as Currency Transaction Reports and Suspicious
Activity Reports, (ii) the maintenance of records and (iii) the exercise of due diligence in identifying customers.


 






    	 	14	 



     


    

 


(b)       SWBS
and each of its Subsidiaries have all material permits,
licenses, authorizations, orders and approvals of, and each has made all filings, applications and registrations with, all Governmental
Authorities that are required in order to permit it to own or lease its properties
and to conduct its business as presently conducted. All such permits, licenses, certificates of authority, orders and approvals
are in full force and effect and, to SWBS’s Knowledge,
no suspension or cancellation of any of them is threatened.


 


(c)       Neither
SWBS nor any of its Subsidiaries has received, since
January 1, 2014, written or, to SWBS’s Knowledge,
oral notification from any Governmental Authority (i) asserting that it is not in compliance
with any of the Laws which such Governmental Authority enforces
or (ii) threatening to revoke any license, franchise, permit or
governmental authorization.


 


Section 3.12     SWBS
Material Contracts; Defaults.


 


(a)       Except
as set forth in SWBS Disclosure Schedule 3.12(a), other than the SWBS
Benefit Plans, neither SWBS nor any of its Subsidiaries
is a party to, bound by or subject to any
agreement, contract, arrangement, commitment or understanding
(whether written or oral) (i) which would entitle any present or
former director, officer, employee, consultant or agent of SWBS
or any of its Subsidiaries to indemnification from SWBS
or any of its Subsidiaries; (ii) which grants any right of first refusal, right of
first offer or similar right with respect to any assets or
properties of SWBS or its respective Subsidiaries;
(iii) related to the borrowing by SWBS or any of its Subsidiaries
of money other than those entered into in the Ordinary Course of Business and any
guaranty of any obligation for the borrowing of money, excluding endorsements made for collection, repurchase or
resell agreements, letters of credit and guaranties made in the Ordinary Course of Business;
(iv) which provides for payments to be made by SWBS or any of its Subsidiaries
upon a change in control thereof; (v) relating to the lease of personal property having a value in excess of $50,000
individually or $100,000 in the aggregate;
(vi) relating to any joint venture, partnership, limited liability company agreement or other
similar agreement or arrangement; (vii) which relates to capital expenditures and involves
future payments in excess of $100,000 individually or $250,000
in the aggregate; (viii) which relates to the disposition or acquisition of assets
or any interest in any business enterprise outside the Ordinary
Course of Business; (ix) which is not terminable on sixty (60) days or less
notice and involving the payment of more than $100,000 per annum; (x) which contains a non-compete
or client or customer non-solicit requirement or
any other provision that materially restricts the conduct of any line of business by SWBS
or any of its Affiliates or upon consummation of the Merger
will materially restrict the ability of the Surviving Entity or any of its Affiliates
to engage in any line of business or which grants any right of first refusal, right
of first offer or similar right or that limits or
purports to limit the ability of SWBS or any of its Subsidiaries
(or, following consummation of the transactions contemplated
hereby, FBMS or any of its Subsidiaries) to
own, operate, sell, transfer, pledge or otherwise dispose of any assets or
business; or (xi) pursuant to which SWBS or any
of its Subsidiaries may become obligated to invest in or
contribute capital to any entity. Each contract, arrangement, commitment or understanding
of the type described in this Section 3.12(a), is set forth in SWBS Disclosure Schedule
3.12(a), and is referred to herein as a “SWBS
Material Contract.” SWBS has previously made
available to FBMS true, complete and correct copies of each such SWBS
Material Contract, including any and all amendments and modifications thereto.


 






    	 	15	 



     


    

 


(b)       Each
SWBS Material Contract is valid and binding on SWBS and
any of its Subsidiaries to the extent such Subsidiary is
a party thereto, as applicable, and, to the Knowledge of
SWBS, each other party thereto, and is in full force
and effect and enforceable in accordance with its terms, except to the extent that validity and enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws
affecting the enforcement of creditors’ rights generally or
by general principles of equity or by principles of public policy and except where
the failure to be valid, binding, enforceable and in full force and effect, individually or in
the aggregate, has not had, a Material Adverse Effect with respect to SWBS;
and neither SWBS nor any of its Subsidiaries is in
default under any SWBS Material Contract or other material
agreement, commitment, arrangement, Lease, Insurance
Policy or other instrument to which it is a party, by which its assets, business,
or operations may be bound or affected, or
under which it or its assets, business, or operations
receives benefits, and there has not occurred any event that, with the lapse of time or the
giving of notice or both, would constitute such a default. No power of attorney or
similar authorization given directly or indirectly by SWBS
or any of its Subsidiaries is currently outstanding.


 


(c)       SWBS
Disclosure Schedule 3.12(c) sets forth a true and complete list of all SWBS Material
Contracts pursuant to which consents, waivers or notices are or
may be required to be given thereunder, in each case, prior to the performance by SWBS of
this Agreement and the consummation of the Merger,
the Bank Merger and the other transactions contemplated hereby and thereby.


 


Section 3.13     Agreements
with Regulatory Agencies. Except as set forth in SWBS Disclosure Schedule 3.13, neither SWBS nor any
of its Subsidiaries is subject to any cease-and-desist or other order 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 a recipient
of any extraordinary supervisory letter from, or is subject to any order or directive by, or has adopted any board resolutions
at the request of any Governmental Authority (each, whether or not set forth in SWBS Disclosure Schedule 3.13, a “SWBS
Regulatory Agreement”) that restricts, or by its terms will in the future restrict, the conduct of SWBS’s
or any of its Subsidiaries’ business or that in any manner relates to their capital adequacy, credit or risk management
policies, dividend policies, management, business or operations, nor has SWBS or any of its Subsidiaries been advised by any Governmental
Authority that it is considering issuing or requesting (or is considering the appropriateness of issuing or requesting) any SWBS
Regulatory Agreement. To SWBS’s Knowledge, there are no investigations relating to any regulatory matters pending before
any Governmental Authority with respect to SWBS or any of its Subsidiaries, other than normal examinations conducted by a Governmental
Authority in the Ordinary Course of Business.


 


Section
3.14     Brokers; Fairness Opinion. Neither SWBS nor any of its officers, directors or any of
its Subsidiaries has employed any broker or finder or incurred, nor will it incur, any liability for any broker’s fees,
commissions or finder’s fees in connection with any of the transactions contemplated by this Agreement, except that
SWBS has engaged, and will pay a fee or commission to Hovde Group, LLC (“SWBS Financial Advisor”),
in accordance with the terms of a letter agreement between SWBS Financial Advisor and SWBS. SWBS has received the opinion of
the SWBS Financial Advisor (and, when it is delivered in writing, a copy of such opinion will be promptly provided to FBMS)
to the effect that, as of the date of this Agreement and based upon and subject to the qualifications and assumptions set
forth therein, the Merger Consideration is fair, from a financial point of view, to the holders of shares of SWBS Common
Stock, and, as of the date of this Agreement, such opinion has not been withdrawn, revoked or modified.


 






    	 	16	 



     


    

 


Section 3.15     Employee
Benefit Plans.


 


(a)       SWBS
Disclosure Schedule 3.15(a) sets forth a true and complete list of each SWBS Benefit
Plan. For purposes of this Agreement, “SWBS
Benefit Plan” means all benefit and compensation plans, contracts, policies or
arrangements (i) covering current or former employees of SWBS,
any of its Subsidiaries or any of SWBS’s related
organizations described in Code Sections 414(b), (c) or
(m), or any entity which is considered one employer with SWBS,
any of its Subsidiaries or Controlled Group Members under Section 4001 of ERISA
or Section 414 of the Code (“ERISA Affiliates”)
(such current employees collectively, the “SWBS Employees”), (ii)
covering current or former directors of SWBS, any
of its Subsidiaries, or ERISA Affiliates, or
(iii) with respect to which SWBS or any of its Subsidiaries
has or may have any liability or contingent
liability (including liability arising from ERISA Affiliates)
including, but not limited to, “employee benefit plans”
within the meaning of Section 3(3) of ERISA, health/welfare, change-of-control, fringe benefit,
deferred compensation, defined benefit plan, defined contribution plan, stock option, stock purchase, stock appreciation rights,
stock based, incentive, bonus plans, retirement plans and other policies, plans or arrangements
whether or not subject to ERISA.


 


(b)       With
respect to each SWBS Benefit Plan, SWBS has provided
or made available to FBMS true and complete copies of such SWBS
Benefit Plan, any trust instruments and insurance contracts forming a part of any SWBS Benefit
Plans and all amendments thereto, summary plan descriptions and summary of material modifications,
IRS Form 5500 (for the three (3) most recently completed plan years), the most recent IRS
determination, opinion, notification and advisory letters, with respect thereto and any correspondence from any regulatory
agency. In addition, with respect to the SWBS Benefit Plans for the three most recently
completed plan years, any plan financial statements and accompanying accounting reports,
service contracts, fidelity bonds and employee and participant annual QDIA notice, safe harbor notice, or
fee disclosures notices under ERISA 404(a)(5) have been made
available to FBMS.


 


(c)       All
SWBS Benefit Plans are in compliance in all material respects
in form and operation with all applicable Laws, including
ERISA and the Code. Each SWBS Benefit Plan which
is intended to be qualified under Section 401(a) of the Code (“SWBS
401(a) Plan”), has received a favorable opinion, determination or advisory
letter from the IRS, and SWBS is not aware of any
circumstance that could reasonably be expected to result in revocation of any such favorable determination, opinion, or
advisory letter or the loss of the qualification of such SWBS
401(a) Plan under Section 401(a) of the Code, and nothing has occurred that
would reasonably be expected to result in the SWBS 401(a) Plan ceasing to be qualified under
Section 401(a) of the Code. All SWBS Benefit Plans have
been administered in all material respects in accordance with their terms. There is no pending
or, to SWBS’s Knowledge,
threatened litigation or regulatory action relating to the SWBS
Benefit Plans. Neither SWBS nor any of its Subsidiaries
has engaged in a transaction with respect to any SWBS Benefit Plan, including
a SWBS 401(a) Plan that could subject SWBS or any
of its Subsidiaries to a tax or penalty under any
Law including, but not limited to, Section 4975 of the Code
or Section 502(i) of ERISA. No SWBS 401(a) Plan
has been submitted under or been the subject of an IRS
voluntary compliance program submission that is still outstanding or that has not
been fully corrected in accordance with a compliance statement issued by the IRS with respect
to any applicable failures. There are no audits, inquiries or proceedings pending or,
to SWBS’s Knowledge threatened by the IRS
or the Department of Labor with respect to any SWBS Benefit Plan. To SWBS's Knowledge,
there are no current, pending, or threatened investigations by the IRS or the Department of Labor with respect to any SWBS Benefit
Plan.


 






    	 	17	 



     


    

 


(d)       No
liability under Subtitle C or D of Title IV of ERISA has been or
is expected to be incurred by SWBS, any of its Subsidiaries
or any ERISA Affiliates with respect to any ongoing, frozen or
terminated “single employer plan,” within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by SWBS,
any of its Subsidiaries or any ERISA Affiliates.
Neither SWBS nor any ERISA Affiliate has ever maintained
a plan subject to Title IV of ERISA or Section 412 of the Code.
None of SWBS or any ERISA Affiliate has contributed
to (or been obligated to contribute to) a “multiemployer
plan” within the meaning of Section 3(37) of ERISA or a “multiple
employer plan” within the meaning of ERISA Sections 4063 or
4064 or Code Section 413(c) at any time. Neither SWBS,
nor any of its Subsidiaries or ERISA Affiliates have incurred, and there are no circumstances
under which they could reasonably be expected to incur, liability under Title IV of ERISA (regardless
of whether based on contributions of an ERISA Affiliate). No notice of a “reportable
event,” within the meaning of Section 4043 of ERISA has been required
to be filed for any SWBS Benefit Plan or by any ERISA Affiliate
or will be required to be filed, in either case, in connection with the transactions contemplated by this Agreement.


 


(e)       All
contributions required to be made with respect to all SWBS Benefit Plans have been timely
made. No SWBS Benefit Plan or single employer plan of an ERISA
Affiliate has an “accumulated funding deficiency” (whether or not waived)
within the meaning of Section 412 of the Code or Section 3012 of ERISA and no ERISA Affiliate
has an outstanding funding waiver.


 


(f)       Except
as set forth in SWBS Disclosure Schedule 3.15(f), no SWBS Benefit Plan provides life insurance,
medical or other employee welfare benefits to any SWBS Employee, or
any of their affiliates, upon his or her retirement or
termination of employment for any reason, except as may be required by Law.


 


(g)       All
SWBS Benefit Plans that are group health plans have been operated in all material
respects in compliance with the group health plan continuation requirements of Section 4980B of the Code
and all other applicable sections of ERISA and the Code.
SWBS may amend or terminate any such SWBS
Benefit Plan at any time without incurring any liability thereunder for future benefits coverage at any time after such
termination.


 


(h)       Except
as set forth in SWBS Disclosure Schedule 3.15(h) and except as otherwise provided for in this Agreement,
neither the execution of this Agreement, shareholder approval of this Agreement
or consummation of any of the transactions contemplated by this Agreement (individually
or in conjunction with any other event) will (i) entitle any SWBS Employee to severance
pay or any increase in severance pay upon any termination of employment, (ii) accelerate
the time of payment or vesting (except as required by Law)
or trigger any payment or funding (through a grantor
trust or otherwise) of compensation or benefits under,
increase the amount payable or trigger any other material
obligation pursuant to, any of the SWBS Benefit Plans, (iii) result in any breach
or violation of, or a default under, any of the SWBS
Benefit Plans, (iv) result in any payment that would be an excess “parachute payment” to a “disqualified
individual” as those terms are defined in Section 280G of the Code, or
(v) limit or restrict the right of SWBS or,
after the consummation of the transactions contemplated hereby, FBMS
or any of its Subsidiaries, to merge, amend or terminate
any of the SWBS Benefit Plans.


 






    	 	18	 



     


    

 


(i)       Each
SWBS Benefit Plan that is a non-qualified deferred compensation plan or
arrangement within the meaning of Section 409A of the Code, and any underlying award,
is in compliance in all material respects with Section 409A of the Code.
Except as disclosed in SWBS Disclosure Schedule 3.15(i), no payment or award that has been made to any participant under a SWBS
Benefit Plan is subject to the interest and penalties specified in Section 409A(a)(1)(B) of the Code. Neither SWBS
nor any of its Subsidiaries (i) has agreed to reimburse or
indemnify any participant in a SWBS Benefit Plan for any of the interest and the
penalties specified in Section 409A(a)(1)(B) of the Code that may be currently due
or triggered in the future, or (ii) has been required
to report to any Government Authority any correction or taxes due as a result of a failure
to comply with Section 409A of the Code.


 


(j)       No
SWBS Benefit Plan provides for the gross-up or reimbursement
of any Taxes imposed by Section 4999 of the Code or otherwise.


 


(k)       SWBS
Disclosure Schedule 3.15(k) contains a schedule showing the monetary amounts payable as of the date specified in such
schedule, whether individually or in the aggregate (including
good faith estimates of all amounts not subject to precise quantification as of the date
of this Agreement) under any employment, change-in-control, severance or similar
contract, plan or arrangement with or which covers
any present or former director, officer, employee or consultant
of SWBS or any of its Subsidiaries who may be entitled
to any such amount and identifying the types and estimated amounts of the in-kind benefits due under any SWBS
Benefit Plans (other than a plan qualified under Section 401(a) of the Code)
for each such Person, specifying the assumptions in such schedule and providing estimates
of other required contributions to any trusts for any related fees or expenses.


 


(l)       SWBS
and its Subsidiaries have correctly classified all individuals who directly or indirectly
perform services for SWBS or any of its Subsidiaries for
purposes of each SWBS Benefit Plan, ERISA and the
Code.


 


Section 3.16     Labor
Matters. Neither SWBS nor any of its Subsidiaries is a party to or bound by any collective bargaining agreement, contract
or other agreement or understanding with a labor union or labor organization, nor is there any proceeding pending or, to SWBS’s
Knowledge threatened, asserting that SWBS or any of its Subsidiaries has committed an unfair labor practice (within the meaning
of the National Labor Relations Act) or seeking to compel SWBS or any of its Subsidiaries to bargain with any labor organization
as to wages or conditions of employment, nor is there any strike or other labor dispute against SWBS pending or, to SWBS’s
Knowledge, threatened, nor to SWBS’s Knowledge is there any activity involving SWBS Employees seeking to certify a collective
bargaining unit or engaging in other organizational activity. SWBS and its Subsidiaries have correctly classified all individuals
who directly or indirectly perform services for SWBS or any of its Subsidiaries for purposes of federal and state unemployment
compensation Laws, workers’ compensation Laws and the rules and regulations of the U.S. Department of Labor. To SWBS’s
Knowledge, no officer of SWBS or any of its Subsidiaries is in material violation of any employment contract, confidentiality,
non-competition agreement or any other restrictive covenant.


 






    	 	19	 



     


    

 


Section 3.17     Environmental
Matters. (a) To its Knowledge, SWBS and its Subsidiaries have been and are in material compliance with all applicable Environmental
Laws, including obtaining, maintaining and complying with all permits required under Environmental Laws for the operation of their
respective businesses, (b) there is no action or investigation by or before any Governmental Authority relating to or arising
under any Environmental Laws that is pending or, to the Knowledge of SWBS threatened against SWBS or any of its Subsidiaries or
any real property or facility presently owned, operated or leased by SWBS or any of its Subsidiaries or any predecessor (including
in a fiduciary or agency capacity), (c) neither SWBS nor any of its Subsidiaries has received any notice of or is subject to any
liability, order, settlement, judgment, injunction or decree involving uncompleted, outstanding or unresolved requirements relating
to or arising under Environmental Laws, (d) to its Knowledge, there have been no releases of Hazardous Substances at, on, under,
or affecting any of the real properties or facilities presently owned, operated or leased by SWBS or any of its Subsidiaries or
any predecessor (including in a fiduciary or agency capacity) in amount or condition that has resulted in or would reasonably
be expected to result in liability to SWBS or any of its Subsidiaries relating to or arising under any Environmental Laws, and
(e) to its Knowledge, there are no underground storage tanks on, in or under any property currently owned, operated or leased
by SWBS or any of its Subsidiaries.


 


Section 3.18     Tax
Matters.


 


(a)       Each
of SWBS and its Subsidiaries has filed all material Tax Returns that it was required to
file under applicable Laws, other than Tax Returns that
are not yet due or for which a request for extension was timely filed consistent with requirements
of applicable Law. All such Tax Returns were correct
and complete in all material respects and have been prepared in substantial compliance with
all applicable Laws. All material Taxes due and owing
by SWBS or any of its Subsidiaries (whether or
not shown on any Tax Return) have been paid. Except as set forth in SWBS
Disclosure Schedule 3.18(a), neither SWBS nor any of its Subsidiaries
is currently the beneficiary of any extension of time within which to file any material
Tax Return. Neither SWBS nor any of its Subsidiaries
has ever received written notice of any claim by any Governmental
Authority in a jurisdiction where SWBS or such Subsidiary
does not file Tax Returns that it is or may
be subject to Taxes by that jurisdiction. There are no material
Liens for Taxes (other than Taxes not yet due and payable or
that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established
in accordance with GAAP) upon any of the assets of SWBS
or any of its Subsidiaries.


 


(b)       SWBS
and each of its Subsidiaries have properly withheld and paid over to the appropriate
Governmental Authority all material Taxes required
to have been withheld and paid over in connection with any amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other Person,
and have complied in all material respects with all applicable reporting requirements related
to Taxes.


 






    	 	20	 



     


    

 


(c)       No
foreign, federal, state, or local Tax audits or
administrative or judicial Tax proceedings
are currently being conducted or pending or threatened
in writing, in each case, with respect to a material amount of Taxes
of SWBS or any of its Subsidiaries. Neither
SWBS nor any of its Subsidiaries has received from
any foreign, federal, state, or local taxing authority (including
jurisdictions where SWBS or any of its Subsidiaries
have not filed Tax Returns) any (i) notice
indicating an intent to open an audit or other review with respect to Taxes
or (ii) notice of deficiency or proposed adjustment for any amount of material
Tax proposed, asserted, or assessed by any taxing authority against SWBS
or any of its Subsidiaries which, in either case (i)
or (ii), have not been fully paid or settled.


 


(d)       SWBS
has delivered or made available to FBMS true
and complete copies of the material foreign, federal, state or
local Tax Returns filed with respect to SWBS or any
of its Subsidiaries, and of all material examination
reports and statements of deficiencies assessed against or agreed to by SWBS,
in each case with respect to income Taxes, for taxable periods ended on or
after December 31, 2014.


 


(e)       With
respect to tax years open for audit as of the date hereof,
neither SWBS nor any of its Subsidiaries has waived
any statute of limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.


 


(f)       Neither
SWBS nor any of its Subsidiaries has been a United
States real property holding corporation within the meaning of Code Section 897(c)(2)
during the applicable period specified in Code Section 897(c)(1)(A)(ii). Neither SWBS
nor any of its Subsidiaries is a party to
or is otherwise bound by any material Tax allocation
or sharing agreement (other than such an agreement
(i) exclusively between or among SWBS and its Subsidiaries, (ii) with customers,
vendors, lessors or similar third parties entered
into in the Ordinary Course of Business and not primarily related to Taxes
or (iii) that will terminate as of the Closing Date without any further material
payments being required to be made). SWBS (i) has not been a member of an affiliated
group filing a consolidated federal income Tax Return (other than a group the common parent
of which was SWBS), and (ii) has no liability for the Taxes
of any Person (other than SWBS and its Subsidiaries) under Regulations
Section 1.1502-6 (or any similar provision of foreign, state or
local Law), as a transferee or successor,
by contract, or otherwise.


 


(g)       The
most recent Financial Statements as of the date hereof reflect an adequate reserve, in accordance with GAAP, for all Taxes payable
by SWBS and its Subsidiaries for all taxable periods through the date of such Financial Statements. Since December 31, 2016, neither
SWBS nor any of its Subsidiaries has incurred any liability for Taxes arising from extraordinary gains or losses, as that term
is used in GAAP, outside the Ordinary Course of Business.


 


(h)       Neither
SWBS nor any of its Subsidiaries will be required
to include any material item of income in, or
exclude any material item of deduction from, taxable income for any taxable period
(or portion thereof) ending after the Effective Time as
a result of any: (i) change in method of accounting pursuant to Section 481 of the Code or
any comparable provision under foreign, state or local Law
for a taxable period ending on or prior to the Closing
Date; (ii) “closing agreement” as described in Code
Section 7121 (or any corresponding or similar provision of foreign, state or local Law) executed on or
prior to the Closing Date; (iii) intercompany transactions or
any excess loss account described in Regulations under Code
Section 1502 (or any corresponding or similar provision of foreign, state or local Law); (iv) installment sale
or open transaction disposition made on or prior
to the Closing Date; or (v) prepaid amount received
on or prior to the Closing Date.


 






    	 	21	 



     


    

 


(i)       Since
January 1, 2014, neither SWBS nor any of its Subsidiaries
has distributed stock of another Person nor had its stock distributed by another
Person in a transaction that was intended to be nontaxable and governed in whole or
in part by Section 355 or Section 361 of the Code.


 


(j)       Neither
SWBS nor any of its Subsidiaries has been a party
to any “listed transaction,” as defined in Section 6707A(c)(2) of the Code and
Section 1.6011-4(b)(2) of the Regulations in any tax year
for which the statute of limitations has not expired.


 


(k)       Neither
SWBS nor any of its Subsidiaries (i) is a “controlled
foreign corporation” as defined in Section 957 of the Code, (ii) is a “passive
foreign investment company” within the meaning of Section 1297 of the Code, or
(iii) has a permanent establishment (within the meaning of an applicable Tax treaty)
or otherwise has an office or fixed place of business
in a country other than the country in which it is organized.


 


(l)       Since
January 1, 2001, SWBS has been a validly electing “S corporation” (Subchapter S corporation) under Sections 1361 and
1362 of the Code for federal income Tax purposes, and an “S corporation” in all states that permit comparable flow-through
income Tax treatment for state purposes (whether or not the state requires a separate state election). No actions or omissions
have been committed by SWBS, holders of SWBS Common Stock or otherwise to cause SWBS to cease to so qualify as an “S corporation.”
At no time has SWBS had, within the meaning of Code Section 1361(b) and the Treasury Regulations thereunder: (i) more than 100
shareholders (taking into account the special rules regarding family members in Code Section 1361(c)(1)); (ii) any shareholder
who is a person (other than an estate, a trust described in Code Section 1361(c)(2), or an organization described in Code Section
1361(c)(6)) who is not an individual; (iii) any shareholder that is a nonresident alien; or (iv) more than one class of stock.
Neither SWBS nor any of its Subsidiaries is a financial institution which uses the reserve method of accounting for bad debts described
in Code 585. Any “trust preferred securities” issued by SWBS or any of its Subsidiaries are properly treated as debt,
rather than equity, for federal income Tax purposes. Neither SWBS nor any of its Subsidiaries has, in the past ten years, acquired
assets from a C corporation in a transaction in which the Tax basis of SWBS or any of its Subsidiaries for the acquired assets
was determined, in whole or in part, by reference to the Tax basis of the acquired assets in the hands of the transferor.


 


(m)       Since
January 1, 2001, each Subsidiary of SWBS that otherwise would be taxed as a domestic corporation as that term is defined in Section
7701(a)(3) and the Treasury Regulations thereunder, is and always has been, within the meaning of Section 1361(b)(3) and the Treasury
Regulations thereunder, a domestic corporation, a 100% subsidiary of SWBS, a properly electing ‘‘qualified subchapter
S subsidiary’’ within the meaning of Section 1361(b)(3)(B) of the Code.


 


(n)       Neither
SWBS nor any of its Subsidiaries has taken or
agreed to take any action, or is aware of any fact or
circumstance, that would be reasonably likely to prevent the Merger or the Bank
Merger from qualifying for U.S. federal income tax purposes as a “reorganization”
within the meaning of Section 368(a) of the Code.


 






    	 	22	 



     


    

 


Section 3.19     Investment
Securities. SWBS Disclosure Schedule 3.19(a) sets forth as of December 31, 2016, the SWBS Investment Securities, as
well as any purchases or sales of SWBS Investment Securities between December 31, 2016 to and including July 31, 2017, reflecting
with respect to all such securities, whenever purchased or sold, descriptions thereof, CUSIP numbers, designations as securities
“available for sale” or securities “held to maturity” (as those terms are used in ASC 320), book
values, fair values and coupon rates, and any gain or loss with respect to any SWBS Investment Securities sold during such time
period between December 31, 2016 and July 31, 2017. Except as set forth on SWBS Disclosure Schedule 3.19(b), beither SWBS
nor any of its Subsidiaries owns any of the outstanding equity of any savings bank, savings and loan association, savings and
loan holding company, credit union, bank or bank holding company, insurance company, mortgage or loan broker or any other financial
institution other than First Community Bank.


 


Section 3.20     Derivative
Transactions.


 


(a)       All
Derivative Transactions entered into by SWBS or any
of its Subsidiaries or for the account of any of its customers were entered into in accordance
in all material respects with applicable Laws and
regulatory policies of any Governmental Authority, and in accordance in all material
respects with the investment, securities, commodities, risk management and other policies, practices and procedures employed
by SWBS or any of its Subsidiaries, and were entered
into with counterparties believed at the time to be financially responsible and able to understand (either alone or
in consultation with its advisers) and to bear the risks of such Derivative Transactions.
SWBS and each of its Subsidiaries have duly performed,
in all material respects, all of their obligations under the Derivative Transactions to
the extent that such obligations to perform have accrued, and, there are no material breaches,
violations or defaults or allegations or
assertions of such by any party thereunder.


 


(b)       Each
Derivative Transaction is listed in SWBS Disclosure Schedule
3.20(b), and the financial position of SWBS or its Subsidiaries
under or with respect to each has been reflected in the books and records of SWBS
or its Subsidiaries in accordance with GAAP,
and no material open exposure of SWBS or its Subsidiaries
with respect to any such instrument (or with respect to multiple instruments with
respect to any single counterparty) exists, except as set forth in SWBS Disclosure Schedule
3.20(b).


 


(c)       No
Derivative Transaction, were it to be a Loan held
by SWBS or any of its Subsidiaries, would be classified
as “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,”
“Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List,” as such terms
are defined by the FDIC’s uniform loan classification standards, or
words of similar import.


 


Section 3.21     Regulatory
Capitalization. SWBS and its Subsidiaries are “well-capitalized,” as such term is defined in the applicable state
and federal rules and regulations.


 






    	 	23	 



     


    

 


Section 3.22     Loans;
Nonperforming and Classified Assets.


 


(a)       SWBS
Disclosure Schedule 3.22(a) identifies any written loan, loan agreement, note
or borrowing arrangement and other extensions of credit (including,
without limitation, leases, credit enhancements, commitments, guarantees and interest-bearing
assets) to which SWBS or any of its respective Subsidiaries
is a party (collectively, “Loans”),
under the terms of which the obligor was over sixty (60) days delinquent in payment of principal or
interest as of August 31, 2017.


 


(b)       SWBS
Disclosure Schedule 3.22(b) identifies each Loan that was classified as “Special
Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,”
“Credit Risk Assets,” “Concerned Loans,” “Watch List” or words
of similar import by SWBS or any bank examiner, together with the principal amount of and
accrued and unpaid interest on each such Loan and the identity of the borrower thereunder
as of August 31, 2017.


 


(c)       SWBS
Disclosure Schedule 3.22(c) identifies each asset of SWBS or any of its Subsidiaries
that as of December 31, 2016 was classified as other real estate owned (“OREO”)
and the book value thereof as of August 31, 2017 as well as any assets classified as OREO
between December 31, 2016 and August 31, 2017 and any sales of OREO between December
31, 2016 and August 31, 2017, reflecting any gain or loss
with respect to any OREO sold.


 


(d)       Each
Loan held in SWBS’s or
any of its Subsidiaries’ loan portfolio (each a “SWBS
Loan”) (i) is evidenced by notes, agreements or other evidences
of indebtedness that are true, genuine and what they purport to be, (ii) to the extent secured, is and has been secured by
valid Liens which have been perfected and (iii)  is a legal, valid and binding obligation
of the SWBS and the obligor named therein, and, assuming due authorization, execution and
delivery thereof by such obligor or obligors, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and other Laws of general applicability
relating to or affecting creditors’ rights and
to general equity principles.


 


(e)       All
currently outstanding SWBS Loans were solicited, originated and, currently exist in material
compliance with all applicable requirements of Law and the notes or
other credit or security documents with respect to each such outstanding SWBS
Loan are materially complete and correct. There are no oral modifications or amendments
or additional agreements related to the SWBS Loans that
are not reflected in the written records of SWBS or its Subsidiary,
as applicable. All such SWBS Loans are owned by SWBS or
its Subsidiary free and clear of any Liens.
No claims of defense as to the enforcement of any SWBS Loan have been asserted in writing
against SWBS or any of its Subsidiaries for which
there is a reasonable possibility of a material adverse determination, and SWBS
has no Knowledge of any acts or omissions
which would give rise to any claim or right of rescission, set-off, counterclaim or
defense for which there is a reasonable possibility of a material adverse determination
to its Subsidiaries. Except as set forth in SWBS Disclosure
Schedule 3.22(e), no SWBS Loans are presently serviced by third parties,
and there is no obligation which could result in any SWBS Loan becoming subject to any third
party servicing.


 


(f)       Neither
SWBS nor any of its Subsidiaries is a party
to any agreement or arrangement with (or otherwise
obligated to) any Person which obligates SWBS or any
of its Subsidiaries to repurchase from any such Person any
Loan or other asset of SWBS or any of its Subsidiaries,
unless there is a material breach of a representation or
covenant by SWBS or any of its Subsidiaries,
and none of the agreements pursuant to which SWBS or any of its Subsidiaries
has sold Loans or pools of Loans or participations
in Loans or pools of Loans contains any obligation
to repurchase such Loans or interests therein solely on account of a payment default by
the obligor on any such Loan.


 






    	 	24	 



     


    

 


(g)       Neither
SWBS nor any of its Subsidiaries is now nor has it
ever been since January 1, 2014, subject to any fine, suspension, settlement or other contract
or other administrative agreement or sanction by,
or any reduction in any loan purchase commitment from, any Governmental
Authority relating to the origination, sale or servicing of mortgage or
consumer Loans.


 


Section 3.23     Allowance
for Loan and Lease Losses. SWBS’s allowance for loan and lease losses as reflected in each of (a) the latest balance
sheet included in the Audited Financial Statements and (b) in the balance sheet as of August 31, 2017 included in the Unaudited
Financial Statements, were, in the opinion of management, as of each of the dates thereof, in compliance with SWBS’s existing
methodology for determining the adequacy of its allowance for loan and lease losses as well as the standards established by applicable
Governmental Authority, the Financial Accounting Standards Board and GAAP.


 


Section 3.24     Trust
Business; Administration of Fiduciary Accounts. Except as set forth on SWBS Disclosure Schedule 3.24, neither SWBS
nor any of its Subsidiaries has offered or engaged in providing any individual or corporate trust services or administers any
accounts for which it acts as a fiduciary, including, but not limited to, any accounts in which it serves as a trustee, agent,
custodian, personal representative, guardian, conservator or investment advisor.


 


Section 3.25     Investment
Management and Related Activities. None of SWBS, any SWBS Subsidiary or any of their respective directors, officers or employees
is required to be registered, licensed or authorized under the Laws of any Governmental Authority as an investment adviser, a
broker or dealer, an insurance agency, a commodity trading adviser, a commodity pool operator, a futures commission merchant,
an introducing broker, a registered representative or associated person, investment adviser, representative or solicitor, a counseling
officer, an insurance agent, a sales person or in any similar capacity with a Governmental Authority.


 


Section 3.26     Repurchase
Agreements. With respect to all agreements pursuant to which SWBS or any of its Subsidiaries
has purchased securities subject to an agreement to resell, if any, SWBS or any of its Subsidiaries, as the case may be, has a
valid, perfected first lien or security interest in the government securities or other collateral securing the repurchase agreement,
and the value of such collateral equals or exceeds the amount of the debt secured thereby.


 


Section 3.27     Deposit
Insurance. The deposits of First Community Bank are insured by the FDIC in accordance with the Federal Deposit Insurance Act
(“FDIA”) to the fullest extent permitted by Law, and First Community Bank has paid all premiums and
assessments and filed all reports required by the FDIA. No proceedings for the revocation or termination of such deposit insurance
are pending or, to SWBS’s Knowledge, threatened.




 






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Section 3.28     Community
Reinvestment Act, Anti-money Laundering and Customer Information Security. Neither SWBS nor any of its Subsidiaries is a party
to any agreement with any individual or group regarding Community Reinvestment Act matters and neither SWBS nor any of its Subsidiaries
is aware of or has Knowledge, that any facts or circumstances exist, which would cause SWBS or any of its Subsidiaries: (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 rating for Community Reinvestment Act purposes by federal or state bank regulators of lower than “satisfactory”;
or (ii) to be deemed to be operating in violation of the Bank Secrecy Act and its implementing regulations (31 C.F.R. Part
103), the USA PATRIOT Act, any order issued with respect to anti-money laundering by the U.S. Department of the Treasury’s
Office of Foreign Assets Control, or any other applicable anti-money laundering statute, rule or regulation; or (iii) to be
deemed not to be in satisfactory compliance with the applicable privacy of customer information requirements contained in any federal
and state privacy Laws and regulations, including, without limitation, in Title V of the Gramm-Leach-Bliley Act of 1999 and regulations
promulgated thereunder. Furthermore, the boards of directors of SWBS and its Subsidiaries has implemented an anti-money laundering
program that contains adequate and appropriate customer identification verification procedures that has not been deemed ineffective
by any Governmental Authority and that meets the requirements of Sections 352 and 326 of the USA PATRIOT Act.


 


Section 3.29     Transactions
with Affiliates. Except as set forth in SWBS Disclosure Schedule 3.29, there are no outstanding amounts payable to or
receivable from, or advances by SWBS or any of its Subsidiaries to, and neither SWBS nor any of its Subsidiaries is otherwise a
creditor or debtor to (a) any director, executive officer, five percent (5%) or greater shareholder of SWBS or any of its Subsidiaries
or to any of their respective Affiliates or Associates, other than part of the normal and customary terms of such persons’
employment or service as a director with SWBS or any of its Subsidiaries and other than deposits held by First Community Bank in
the Ordinary Course of Business, or (b) any other Affiliate of SWBS or any of its Subsidiaries. Except as set forth in SWBS
Disclosure Schedule 3.29, neither SWBS nor any of its Subsidiaries is a party to any transaction or agreement with any of its
respective directors, executive officers or other Affiliates. All agreements between First Community Bank and any of its Affiliates
(or any company treated as an affiliate for purposes of such Law) comply, to the extent applicable, with Sections 23A and 23B of
the Federal Reserve Act and Regulation W of the FRB.


 


Section 3.30     Tangible
Properties and Assets.


 


(a)       SWBS
Disclosure Schedule 3.30(a) sets forth a true, correct and complete list of all real property owned by SWBS and each of its
Subsidiaries. Except as set forth in SWBS Disclosure Schedule 3.30(a), SWBS or its Subsidiaries has good, valid and marketable
title to, valid leasehold interests in or otherwise legally enforceable rights to use all of the real property, personal property
and other assets (tangible or intangible), used, occupied and operated or held for use by it in connection with its business as
presently conducted in each case, free and clear of any Lien, except for (i) statutory Liens for amounts not yet delinquent, and
(ii) easements, rights of way, and other similar Liens that do not materially affect the value or use of the properties or assets
subject thereto or affected thereby or otherwise materially impair business operations at such properties. Except as set forth
on SWBS Disclosure Schedule 3.30(a), there is no pending or, to SWBS’s Knowledge, threatened legal, administrative,
arbitral or other proceeding, claim, action or governmental or regulatory investigation of any nature with respect to the real
property that SWBS or any of its Subsidiaries owns, uses or occupies or has the right to use or occupy, now or in the future, including
without limitation a pending or threatened taking of any of such real property by eminent domain. True and complete copies of all
deeds or other documentation evidencing ownership of the real properties set forth in SWBS Disclosure Schedule 3.30(a),
and complete copies of the title insurance policies and surveys for each property, together with any mortgages, deeds of trust
and security agreements to which such property is subject have been furnished or made available to FBMS.


 






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(b)       SWBS
Disclosure Schedule 3.30(b) sets forth a true, correct and complete schedule of all leases, subleases, licenses and other agreements
under which SWBS or any of its Subsidiaries uses or occupies or has the right to use or occupy, now or in the future, real property
(the “Leases”). Each of the Leases is valid, binding and in full force and effect and neither SWBS nor
any of its Subsidiaries has received a written notice of, and otherwise has no Knowledge of any, default or termination with respect
to any Lease. There has not occurred any event and no condition exists that would constitute a termination event or a breach by
SWBS or any of its Subsidiaries of, or default by SWBS or any of its Subsidiaries in, the performance of any covenant, agreement
or condition contained in any Lease. To SWBS’s Knowledge, no lessor under a Lease is in material breach or default in the
performance of any material covenant, agreement or condition contained in such Lease. SWBS and each of its Subsidiaries have paid
all rents and other charges to the extent due under the Leases. True and complete copies of all leases for, or other documentation
evidencing ownership of or a leasehold interest in, the properties listed in SWBS Disclosure Schedule 3.30(b), have been
furnished or made available to FBMS.


 


(c)       All
buildings, structures, fixtures, building systems and equipment, and all components thereof, including the roof, foundation, load-bearing
walls and other structural elements thereof, heating, ventilation, air conditioning, mechanical, electrical, plumbing and other
building systems, environmental control, remediation and abatement systems, sewer, storm and waste water systems, irrigation and
other water distribution systems, parking facilities, fire protection, security and surveillance systems, and telecommunications,
computer, wiring and cable installations, included in the owned real property or the subject of the Leases are in good condition
and repair (normal wear and tear excepted) and sufficient for the operation of the business of SWBS and its Subsidiaries.


 


Section 3.31     Intellectual
Property. SWBS Disclosure Schedule 3.31 sets forth a true, complete and correct list of all SWBS Intellectual Property.
To its Knowledge, SWBS or its Subsidiaries owns or has a valid license to use all SWBS Intellectual Property, free and clear of
all Liens, royalty or other payment obligations (except for royalties or payments with respect to off-the-shelf Software at standard
commercial rates). To its Knowledge, the SWBS Intellectual Property constitutes all of the Intellectual Property necessary to carry
on the business of SWBS and its Subsidiaries as currently conducted. The SWBS Intellectual Property is valid and enforceable and
has not been cancelled, forfeited, expired or abandoned, and neither SWBS nor any of its Subsidiaries has received notice challenging
the validity or enforceability of SWBS Intellectual Property. None of SWBS or any of its Subsidiaries is, nor will any of them
be as a result of the execution and delivery of this Agreement or the performance by SWBS of its obligations hereunder, in violation
of any licenses, sublicenses and other agreements as to which SWBS or any of its Subsidiaries is a party and pursuant to which
SWBS or any of its Subsidiaries is authorized to use any third-party patents, trademarks, service marks, copyrights, trade secrets
or computer software, and neither SWBS nor any of its Subsidiaries has received notice challenging SWBS’s or any of its Subsidiaries’
license or legally enforceable right to use any such third-party intellectual property rights. The consummation of the transactions
contemplated hereby will not result in the material loss or impairment of the right of SWBS or any of its Subsidiaries to own or
use any of SWBS Intellectual Property.


 






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Section 3.32     Insurance.


 


(a)       SWBS
Disclosure Schedule 3.32(a) identifies all of the insurance policies, binders, or bonds currently maintained by SWBS and its
Subsidiaries (the “Insurance Policies”), including the insurer, policy numbers, amount of coverage, effective
and termination dates and any pending claims thereunder involving more than $10,000. SWBS and each of its Subsidiaries is insured
with reputable insurers against such risks and in such amounts as the management of SWBS reasonably has determined to be prudent
in accordance with industry practices. All of the Insurance Policies are in full force and effect, neither SWBS nor any Subsidiary
has received notice of cancellation of any of the Insurance Policies or is otherwise aware that any insurer under any of the Insurance
Policies has expressed an intent to cancel any such Insurance Policies, and neither SWBS nor any of its Subsidiaries is in default
thereunder, and all claims thereunder have been filed in due and timely fashion in all material respects.


 


(b)       SWBS
Disclosure Schedule 3.32(b)(i) sets forth a true, correct and complete description of all bank owned life insurance (“BOLI”)
owned by SWBS or its Subsidiaries, including the value of its BOLI as of the end of the month prior to the date hereof. The value
of such BOLI is and has been fairly and accurately reflected in the most recent balance sheet included in the Financial Statements
in accordance with GAAP. Except as set forth on SWBS Disclosure Schedule 3.32(b)(ii), all BOLI is owned solely by First
Community Bank, no other Person has any ownership claims with respect to such BOLI or proceeds of insurance derived therefrom and
there is no split dollar or similar benefit under SWBS’s BOLI. Neither SWBS nor any of SWBS’s Subsidiaries has any
outstanding borrowings secured in whole or part by its BOLI.


 


Section 3.33     Antitakeover
Provisions. No “control share acquisition,” “business combination moratorium,” “fair price”
or other form of antitakeover statute or regulation is applicable to this Agreement and the transactions contemplated hereby and
thereby.


 


Section 3.34     SWBS
Information. The information relating to SWBS and its Subsidiaries that is provided by or on behalf of SWBS for inclusion in
the Proxy Statement-Prospectus and the Registration Statement will not (with respect to the Proxy Statement-Prospectus, as of the
date the Proxy Statement-Prospectus is first mailed to SWBS’s shareholders, and as of the date of the SWBS Meeting, with
respect to the Registration Statement, as of the time the Registration Statement or any amendment or supplement thereto is declared
effective under the Securities Act) contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances in which they are made, not misleading. The portions of the Proxy
Statement-Prospectus relating to SWBS and SWBS’s Subsidiaries and other portions thereof within the reasonable control of
SWBS and its Subsidiaries will comply in all material respects with the provisions of the Exchange Act, and the rules and regulations
thereunder.


 






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Section 3.35     Transaction
Costs. SWBS Disclosure Schedule 3.35 sets forth an estimate of attorneys’ fees, investment banking fees, accounting
fees and other costs or fees of SWBS and its Subsidiaries that, based upon reasonable inquiry, are expected to be paid or accrued
through the Closing Date in connection with the Merger and the other transactions contemplated by this Agreement.


 


Article
IV


 


REPRESENTATIONS
AND WARRANTIES OF FBMS


 


Except as set forth in
the disclosure schedule delivered by FBMS to SWBS prior to or concurrently with the execution of this Agreement with respect to
each such Section below (the “FBMS Disclosure Schedule”), FBMS hereby represents and warrants to SWBS
as follows:


 


Section 4.01     Organization
and Standing. Each of FBMS and its Subsidiaries is (a) an entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation and (b) is duly licensed or qualified to do business and in good
standing in each jurisdiction where its ownership or leasing of property or the conduct of its business requires such qualification,
except where the failure to be so licensed or qualified has not had, and is not reasonably likely to have, a Material Adverse Effect
with respect to FBMS.


 


Section 4.02     Capital
Stock. The authorized capital stock of FBMS consists of 20,000,000 shares of FBMS Common Stock, and 10,000,000 shares of preferred
stock. As of the date hereof, 9,179,151 shares of FBMS Common Stock were issued and outstanding and no shares of preferred stock
were issued and outstanding. The outstanding shares of FBMS Common Stock have been duly authorized and validly issued and are fully
paid and non-assessable and have not been issued in violation of nor are they subject to preemptive rights of any FBMS shareholder.
The shares of FBMS Common Stock to be issued pursuant to this Agreement, when issued in accordance with the terms of this Agreement,
will be duly authorized, validly issued, fully paid and non-assessable and will not be subject to preemptive rights. All shares
of FBMS’s capital stock issued and outstanding have been issued in compliance with and not in violation of any applicable
federal or state securities Laws.


 


Section 4.03     Corporate
Power. FBMS and each of its Subsidiaries has the corporate or similar power and authority to carry on its business as it is
now being conducted and to own all of its properties and assets; and FBMS has the corporate power and authority to execute, deliver
and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, subject to receipt of
all necessary approvals of Governmental Authorities and the Regulatory Approvals.


 


Section 4.04     Corporate
Authority. This Agreement and the transactions contemplated hereby have been authorized by all necessary corporate action of
FBMS on or prior to the date hereof. FBMS has duly executed and delivered this Agreement and, assuming due authorization, execution
and delivery by SWBS, this Agreement is a valid and legally binding obligation of FBMS, enforceable in accordance with its terms
(except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
and similar Laws of general applicability relating to or affecting creditors’ rights or by general equity principles).


 






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Section 4.05     SEC
Documents; Financial Statements.


 


(a)       FBMS
has filed all required reports, forms, schedules, registration statements and other documents with the SEC that it has been required
to file since December 31, 2014 (the “FBMS Reports”), and has paid all fees and assessments due and payable
in connection therewith. As of their respective dates of filing with the SEC (or, if amended or superseded by a subsequent filing
prior to the date hereof, as of the date of such subsequent filing), the FBMS Reports complied as to form in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder
applicable to such FBMS Reports, and none of the FBMS Reports when filed with the SEC, or if amended prior to the date hereof,
as of the date of such amendment, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not
misleading.


 


(b)       The
consolidated financial statements of FBMS (including any related notes and schedules thereto) included in the FBMS Reports complied
as to form, as of their respective dates of filing with the SEC (or, if amended or superseded by a subsequent filing prior to the
date hereof, as of the date of such subsequent filing), in all material respects, with all applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto (except, in the case of unaudited statements, as permitted
by the rules of the SEC), have been prepared in accordance with GAAP applied on a consistent basis during the periods involved
(except as may be disclosed therein), and fairly present, in all material respects, the consolidated financial position of FBMS
and its Subsidiaries and the consolidated results of operations, changes in shareholders’ equity and cash flows of such companies
as of the dates and for the periods shown.


 


(c)       FBMS
(x) has established and maintained disclosure controls and procedures and internal control over financial reporting (as such terms
are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the
Exchange Act, and (y) has disclosed, based on its most recent evaluation, to its outside auditors and the audit committee of FBMS’s
board of directors (A) all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect FBMS’s
ability to record, process, summarize and report financial data and (B) any fraud, whether or not material, that involves management
or other employees who have a significant role in FBMS’s internal control over financial reporting.


 






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Section 4.06     Regulatory
Reports. Since January 1, 2014, FBMS and each of its Subsidiaries has timely filed with the OCC, the FRB and any other applicable
Governmental Authority, all reports and statements, together with any amendments required to be made with respect thereto, that
they were required to file since January 1, 2014 under applicable Law (other than FBMS Reports) and have paid all fees and assessments
due and payable in connection therewith, except where the failure to file such report or statement or to pay such fees and assessments,
either individually or in the aggregate, would not reasonably be likely to have a Material Adverse Effect with respect to FBMS.
Except for normal examinations conducted by a Governmental Authority in the regular course of the business of FBMS and its Subsidiaries,
no Governmental Authority has notified FBMS that it has initiated or has pending any proceeding or, to the Knowledge of FBMS threatened
an investigation into the business or operations of FBMS or any of its Subsidiaries since January 1, 2014, except where such proceedings
or investigation would not reasonably be likely to have, either individually or in the aggregate, a Material Adverse Effect with
respect to FBMS. There is no unresolved violation, criticism or exception by any Governmental Authority with respect to any report
filed by, or relating to any examinations or inspections by any such Governmental Authority of FBMS or any of its Subsidiaries
which would reasonably be likely to have, either individually or in the aggregate, a Material Adverse Effect with respect to FBMS.


 


Section 4.07     Regulatory
Approvals; No Defaults. No consents or approvals of, or waivers by, or filings or registrations with, any Governmental Authority
are required to be made or obtained by FBMS or any of its Subsidiaries in connection with the execution, delivery or performance
by FBMS of this Agreement or to consummate the transactions contemplated by this Agreement, including the Bank Merger, except for
(i) the Regulatory Approvals, (ii) the filing with the SEC of the Proxy Statement and the filing and declaration of effectiveness
of the Form S-4, (iii) the filing of the Articles of Merger contemplated by Section 1.05(a) and the filing of documents
with the FDIC, the OCC, applicable state banking agencies, and the Secretary of State of Alabama to cause the Bank Merger to become
effective, (iv) such other filings and reports as required pursuant to the Exchange Act and the rules and regulations promulgated
thereunder, or applicable stock exchange requirements, (v) any consents, authorizations, approvals, filings or exemptions in connection
with compliance with the rules and regulations of any applicable SRO and the rules of the NASDAQ and (vi) such filings and approvals
as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with
the issuance of the shares of FBMS Common Stock pursuant to this Agreement and approval of listing of such FBMS Common Stock on
the NASDAQ. Subject to the receipt of the approvals referred to in the preceding sentence, the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby by FBMS do not and will not, (1) constitute
a breach or violation of, or a default under, the articles of incorporation and bylaws of FBMS, (2) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to FBMS or any of its Subsidiaries, or any
of their respective properties or assets, (3) violate, result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation
of any Lien upon any of the respective properties or assets of FBMS or any of its Subsidiaries under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, contract, agreement or other instrument or
obligation to which FBMS or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets
may be bound. As of the date hereof, FBMS is not aware of any reason (i) why the Regulatory Approvals and other necessary consents
and approvals will not be received in order to permit consummation of the Merger and Bank Merger on a timely basis, and (ii) why
any Burdensome Condition would be imposed.


 






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Section 4.08     FBMS
Information. The information relating to FBMS and its Subsidiaries that is supplied by or on behalf of FBMS for inclusion or
incorporation by reference in the Proxy Statement-Prospectus and the Registration Statement will not (with respect to the Proxy
Statement-Prospectus, as of the date the Proxy Statement-Prospectus is first mailed to SWBS shareholders, and as of the date of
the SWBS Meeting, with respect to the Registration Statement, as of the time the Registration Statement or any amendment or supplement
thereto is declared effective under the Securities Act) contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading; provided,
however, that any information contained in any FBMS Report as of a later date shall be deemed to modify information as of
an earlier date.


 


Section 4.09     Absence
of Certain Changes or Events. There has been no change or development with respect to FBMS and its assets and business or combination
of such changes or developments since December 31, 2016, which, individually or in the aggregate, has had or is reasonably likely
to have a Material Adverse Effect with respect to FBMS.


 


Section 4.10     Compliance
with Laws.


 


(a)       FBMS
and each of its Subsidiaries is, and have been since January 1, 2014, in compliance in all material respects with all applicable
federal, state, local and foreign Laws, rules, judgments, orders or decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, Laws related to data protection or privacy, the USA PATRIOT Act, the Bank Secrecy Act,
the Equal Credit Opportunity Act, the Fair Housing Act, the Home Mortgage Disclosure Act, the Community Reinvestment Act, the Fair
Credit Reporting Act, the Truth in Lending Act, the Dodd-Frank Act, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley
Act or the regulations implementing such statutes, all other applicable anti-money laundering Laws, fair lending Laws and other
Laws relating to discriminatory lending, financing, leasing or business practices and all agency requirements relating to the origination,
sale and servicing of mortgage loans. Neither FBMS nor any of its Subsidiaries has been advised of any supervisory concerns regarding
their compliance with the Bank Secrecy Act or related state or federal anti-money laundering laws, regulations and guidelines,
including without limitation those provisions of federal regulations requiring (i) the filing of reports, such as Currency Transaction
Reports and Suspicious Activity Reports, (ii) the maintenance of records and (iii) the exercise of due diligence in identifying
customers.


 


(b)       FBMS
and each of its Subsidiaries have all material permits, licenses, authorizations, orders and approvals of, and each has made all
filings and applications and registrations with, all Governmental Authorities that are required in order to permit it to own or
lease its properties and to conduct its business as presently conducted. All such permits, licenses, certificates of authority,
orders and approvals are in full force and effect and, to FBMS’s Knowledge, no suspension or cancellation of any of them
is threatened.


 






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(c)       Neither
FBMS nor any of its Subsidiaries has received, since January 1, 2014, written or, to FBMS’s Knowledge, oral notification
from any Governmental Authority (i) asserting that it is not in compliance with any of the Laws which such Governmental Authority
enforces or (ii) threatening to revoke any license, franchise, permit or governmental authorization.


 


Section 4.11     FBMS
Regulatory Matters.


 


(a)       FBMS
is regulated as a financial holding company under the Bank Holding Company Act of 1956.


 


(b)       The
deposit accounts of The First are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by Law,
and all premiums and assessments required to be paid in connection therewith have been paid when due, and no proceedings for the
termination of such insurance are pending or, to FBMS’s Knowledge, threatened. The First received a rating of "satisfactory"
in its most recent examination under the Community Reinvestment Act.


 


(c)       Since
January 1, 2014, neither FBMS nor any of its Subsidiaries is party to, or the subject of, any cease-and-desist order, consent order,
written agreement, order for civil money penalty, refund, restitution, prompt corrective action directive, memorandum of understanding,
supervisory letter, individual minimum capital requirement, operating agreement, or any other formal or informal enforcement action
issued or required by, or entered into with, any Governmental Authority. Neither FBMS nor any of its Subsidiaries has made, adopted,
or implemented any commitment, board resolution, policy, or procedure at the request or recommendation of any Governmental Authority
that limits in any material respect the conduct of its business or that in any material manner relates to its capital adequacy,
its payment of dividends or distribution of capital, its credit or risk management, its compliance program, its management, its
growth, or its business. Neither FBMS nor any of its Subsidiaries has Knowledge that any Governmental Authority is considering
issuing, initiating, ordering, requesting, recommending, or otherwise proceeding with any of the items referenced in this paragraph.


 


(d)       Except
for examinations of FBMS and its Subsidiaries conducted by their respective primary functional regulators in the Ordinary Course
of Business, no Governmental Authority has initiated, threatened, or has pending any proceeding or, to the Knowledge of FBMS, any
inquiry or investigation into the business or operations of FBMS or any of its Subsidiaries, except where such proceeding, inquiry,
or investigation would not reasonably be likely to have, either individually or in the aggregate, a Material Adverse Effect with
respect to FBMS or to prevent or materially delay receipt of the Regulatory Approvals.


 


(e)       There
is no unresolved violation, apparent violation, criticism, matter requiring attention, recommendation, or exception cited, made,
or threatened by any Governmental Authority in any report of examination, report of inspection, supervisory letter or other communication
with FBMS or any of its Subsidiaries that (i) would reasonably be likely to have, either individually or in the aggregate, a Material
Adverse Effect with respect to FBMS or (ii) would reasonably be likely to prevent or materially delay the receipt of the Regulatory
Approvals.


 






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Section 4.12     Brokers.
Neither FBMS nor any of its officers, directors or any of its Subsidiaries has employed any broker or finder or incurred, nor will
it incur, any liability for any broker’s fees, commissions or finder’s fees in connection with any of the transactions
contemplated by this Agreement, except that FBMS has engaged, and will pay a fee or commission to Performance Trust Capital Partners,
LLC.


 


Section 4.13     Tax
Matters.


 


(a)       Each
of FBMS and its Subsidiaries has filed all material Tax Returns that it was required to file under applicable Laws, other than
Tax Returns that are not yet due or for which a request for extension was timely filed consistent with requirements of applicable
Law. All such Tax Returns were correct and complete in all material respects and have been prepared in substantial compliance with
all applicable Laws. All material Taxes due and owing by FBMS or any of its Subsidiaries (whether or not shown on any Tax Return)
have been paid. Since January 1, 2014, neither FBMS nor any of its Subsidiaries has received written notice of any claim by any
Governmental Authority in a jurisdiction where FBMS or such Subsidiary does not file Tax Returns that it is or may be subject to
Taxes by that jurisdiction. There are no material Liens for Taxes (other than Taxes not yet due and payable or that are being contested
in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP) upon any
of the assets of FBMS or any of its Subsidiaries.


 


(b)       No
foreign, federal, state, or local Tax audits or administrative or judicial Tax proceedings are currently being conducted or pending
or threatened in writing, in each case, with respect to a material amount of Taxes of FBMS or any of its Subsidiaries. Neither
FBMS nor any of its Subsidiaries has received from any foreign, federal, state, or local taxing authority (including jurisdictions
where FBMS or any of its Subsidiaries have not filed Tax Returns) any (i) notice indicating an intent to open an audit or other
review with respect to Taxes or (ii) notice of deficiency or proposed adjustment for any amount of material Tax proposed, asserted,
or assessed by any taxing authority against FBMS or any of its Subsidiaries which, in either case (i) or (ii), have not been fully
paid or settled.


 


(c)       Since
December 31, 2016, neither FBMS nor any of its Subsidiaries has incurred any liability for Taxes arising from extraordinary gains
or losses, as that term is used in GAAP, outside the ordinary course of business.


 


(d)       Neither
FBMS nor any of its Subsidiaries has been a party to any “listed transaction,” as defined in Section 6707A(c)(2) of
the Code and Section 1.6011-4(b)(2) of the Regulations in any tax year for which the statute of limitations has not expired.


 


(e)       Neither
FBMS nor any of its Subsidiaries has taken or agreed to take any action, or is aware of any fact or circumstance, that would be
reasonably likely to prevent the Merger or the Bank Merger from qualifying for U.S. federal income tax purposes as a “reorganization”
within the meaning of Section 368(a) of the Code.


 






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(f)       Neither
FBMS nor any of its Subsidiaries has been a United States real property holding corporation within the meaning of Code Section 897(c)(2)
during the applicable period specified in Code Section 897(c)(1)(A)(ii).


 


(g)       Neither
FBMS nor any of its Subsidiaries (i) is a “controlled foreign corporation” as defined in Section 957 of the Code, (ii)
is a “passive foreign investment company” within the meaning of Section 1297 of the Code, or (iii) has a permanent
establishment (within the meaning of an applicable Tax treaty) or otherwise has an office or fixed place of business in a country
other than the country in which it is organized.


 


Section 4.14     Regulatory
Capitalization. FBMS and its Subsidiaries are “well-capitalized,” as such term is defined in the applicable state
and federal rules and regulations.


 


Section 4.15     No
Financing. FBMS has and will have as of the Effective Time, without having to resort to external sources, sufficient capital
to effect the transactions contemplated by this Agreement.


 


Section 4.16     Legal
Proceedings.


 


(a)        Other
than as set forth in FBMS Disclosure Schedule 4.16(a), there are no material civil, criminal, administrative or regulatory actions,
suits, demand letters, demands for indemnification, claims, hearings, notices of violation, arbitrations, investigations, orders
to show cause, market conduct examinations, notices of non-compliance or other proceedings of any nature pending or, to the Knowledge
of FBMS, threatened against FBMS or any of its Subsidiaries or to which FBMS or any of its Subsidiaries is a party, including without
limitation, any such actions, suits, demand letters, demands for indemnification, claims, hearings, notices of violation, arbitrations,
investigations, orders to show cause, market conduct examinations, notices of non-compliance or other proceedings of any nature
that would challenge the validity or propriety of the transactions contemplated by this Agreement.


 


(b)        Other
than as set forth on FBMS Disclosure Schedule 4.16(b), there is no material injunction, order, judgment or decree imposed upon
FBMS or any of its Subsidiaries, or the assets of FBMS or any of its Subsidiaries, and neither FBMS nor any of its Subsidiaries
has been advised of the threat of any such action, other than any such injunction, order, judgement or decree that is generally
applicable to all Persons in businesses similar to that of FBMS or any of FBMS’s Subsidiaries


 


Section 4.17     Loans;
Nonperforming and Classified Assets.


 


(a)       FBMS
Disclosure Schedule 4.17(a) identifies any written loan, loan agreement, note or borrowing arrangement and other extensions
of credit (including, without limitation, leases, credit enhancements, commitments, guarantees and interest-bearing assets) to
which FBMS or any of its respective Subsidiaries is a party (collectively, “Loans”), under the terms
of which the obligor was over sixty (60) days delinquent in payment of principal or interest as of August 31, 2017.


 






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(b)       FBMS
Disclosure Schedule 4.17(b) identifies each Loan that was classified as “Special Mention,” “Substandard,”
“Doubtful,” “Loss,” “Classified,” “Criticized” or words of similar import by FBMS
or any bank examiner, together with the principal amount of and accrued and unpaid interest on each such Loan and the identity
of the borrower thereunder as of August 31, 2017.


 


(c)       FBMS
Disclosure Schedule 4.17(c) identifies each asset of FBMS or any of its Subsidiaries that as of December 31, 2016 was classified
as other real estate owned (“OREO”) and the book value thereof as of August 31, 2017 as well as any assets
classified as OREO between December 31, 2016 and August 31, 2017 and any sales of OREO between December 31, 2016 and August 31,
2017.


 


(d)       To
its Knowledge, each Loan held in FBMS’s or any of its Subsidiaries’ loan portfolio (each a “FBMS Loan”),
in all material respects, (i) is evidenced by notes, agreements or other evidences of indebtedness that are true, genuine
and what they purport to be, (ii) to the extent secured, is and has been secured by valid Liens which have been perfected
and (iii)  is a legal, valid and binding obligation of the FBMS and the obligor named therein, and, assuming due authorization,
execution and delivery thereof by such obligor or obligors, enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and other Laws of general applicability relating to or affecting creditors’ rights and to general equity
principles.


 


(e)       All
currently outstanding FBMS Loans were solicited, originated and, currently exist in material compliance with all applicable requirements
of Law and the notes or other credit or security documents with respect to each such outstanding FBMS Loan are materially complete
and correct. There are no oral modifications or amendments or additional agreements related to the FBMS Loans that are not reflected
in the written records of FBMS or its Subsidiary, as applicable. All such FBMS Loans are owned by FBMS or its Subsidiary free and
clear of any Liens. No claims of defense as to the enforcement of any FBMS Loan have been asserted in writing against FBMS or any
of its Subsidiaries for which there is a reasonable possibility of a material adverse determination, and FBMS has no Knowledge
of any acts or omissions which would give rise to any claim or right of rescission, set-off, counterclaim or defense for which
there is a reasonable possibility of a material adverse determination to its Subsidiaries. Except as set forth in FBMS Disclosure
Schedule 4.17(e), no FBMS Loans are presently serviced by third parties, and there is no obligation which could result in any
FBMS Loan becoming subject to any third party servicing.


 


(f)       Neither
FBMS nor any of its Subsidiaries is a party to any agreement or arrangement with (or otherwise obligated to) any Person which obligates
FBMS or any of its Subsidiaries to repurchase from any such Person any Loan or other asset of FBMS or any of its Subsidiaries,
unless there is a material breach of a representation or covenant by FBMS or any of its Subsidiaries, and none of the agreements
pursuant to which FBMS or any of its Subsidiaries has sold Loans or pools of Loans or participations in Loans or pools of Loans
contains any obligation to repurchase such Loans or interests therein solely on account of a payment default by the obligor on
any such Loan.


 


(g)       Neither
FBMS nor any of its Subsidiaries is now nor has it ever been since January 1, 2014, subject to any fine, suspension, settlement
or other contract or other administrative agreement or sanction by, or any reduction in any loan purchase commitment from, any
Governmental Authority relating to the origination, sale or servicing of mortgage or consumer Loans.


 






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Article
V


 


COVENANTS


 


Section 5.01     Covenants
of SWBS. During the period from the date of this Agreement and continuing until the Effective Time or the earlier termination
of this Agreement in accordance with its terms, except as expressly contemplated or permitted by this Agreement (including as set
forth in the SWBS Disclosure Schedule), required by Law or with the prior written consent of FBMS (which consent shall not be unreasonably
withheld, conditioned or delayed), SWBS shall carry on its business, including the business of each of its Subsidiaries, in the
Ordinary Course of Business in all material respects and consistent with prudent banking practice. Without limiting the generality
of the foregoing, SWBS will use commercially reasonable efforts to (i) preserve its business organizations and assets intact,
(ii) keep available to itself the present services of the current officers and employees of SWBS and its Subsidiaries, (iii) preserve
for itself the goodwill of its customers, employees, lessors and others with whom business relationships exist, (iv) continue diligent
collection efforts with respect to any delinquent loans and, to the extent within its control, not allow any material increase
in delinquent loans. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until
the Effective Time, except (x) as set forth in SWBS Disclosure Schedule 5.01, (y) as otherwise expressly required or permitted
by this Agreement, or (z) consented to in writing by FBMS (which consent shall not be unreasonably withheld, conditioned or delayed,
and the Company shall, when considering the reasonableness of any such request, take into account the preservation of the franchise
value of SWBS and First Community Bank as independent enterprises on a going-forward basis), SWBS shall not and shall not permit
its Subsidiaries to:


 


(a)       Stock.
Except as set forth in SWBS Disclosure Schedule 5.01(a), (i) issue, sell, grant, pledge, dispose of, encumber, or otherwise
permit to become outstanding, or authorize the creation of, any additional shares of its stock, any Rights, any new award or grant
under the SWBS Stock Plans or otherwise, or any other securities (including units of beneficial ownership interest in any partnership
or limited liability company), or enter into any agreement with respect to the foregoing, (ii) except as expressly permitted
by this Agreement, accelerate the vesting of any existing Rights, or (iii) except as expressly permitted by this Agreement,
directly or indirectly change (or establish a record date for changing), adjust, split, combine, redeem, reclassify, exchange,
purchase or otherwise acquire any shares of its capital stock, or any other securities (including units of beneficial ownership
interest in any partnership or limited liability company) convertible into or exchangeable for any additional shares of stock,
any Rights issued and outstanding prior to the Effective Time.


 


(b)       Dividends;
Other Distributions. Make, declare, pay or set aside for payment of dividends payable in cash, stock or property on or in respect
of, or declare or make any distribution on, any shares of its capital stock, except for (i) dividends from wholly owned Subsidiaries
to SWBS, (ii) dividends paid to SWBS shareholders in accordance with SWBS’s dividend policy (which provides for a quarterly
dividend to shareholders to cover such shareholders’ tax liability and an additional per share dividend of $1.00 per quarter),
and (iii) only if SWBS’s Adjusted Tangible Common Equity as of the Closing is greater than $32.5 million, SWBS may pay a
dividend to its shareholders immediately prior to Closing in the amount of the excess of SWBS’S Adjusted Tangible Common
Equity over $32.5 million.


 






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(c)       Compensation;
Employment Agreements, Etc. Enter into or amend or renew any employment, consulting, compensatory, severance, retention or
similar agreements or arrangements with any director, officer or employee of SWBS or any of its Subsidiaries, or grant any salary,
wage or fee increase or increase any employee benefit or pay any incentive or bonus payments, except (i) normal increases
in base salary to employees in the Ordinary Course of Business and pursuant to policies currently in effect, provided that,
such increases shall not result in an annual adjustment in base compensation (which includes base salary and any other compensation
other than bonus payments) of more than 5% for any individual or 3% in the aggregate for all employees of SWBS or any of its Subsidiaries
other than as disclosed in SWBS Disclosure Schedule 5.01(c), (ii) as may be required by Law, (iii) to satisfy
contractual obligations existing or contemplated as of the date hereof, as previously disclosed to FBMS and set forth in SWBS
Disclosure Schedule 5.01(c) or (iv) as set forth on SWBS Disclosure Schedule 5.01(c).


 


(d)       Hiring.
Hire any person as an employee of SWBS or any of its Subsidiaries, except for: (i) at-will employees at an annual rate of base
salary not to exceed $120,000, or (ii) at-will senior executive officers, in each case to fill vacancies that currently exist or
may arise from time to time in the Ordinary Course of Business.


 


(e)       Benefit
Plans. Enter into, establish, adopt, amend, modify or terminate (except (i) as may be required by or to make consistent
with applicable Law, subject to the provision of prior written notice to and consultation with respect thereto with FBMS, (ii) to
satisfy contractual obligations existing as of the date hereof and set forth in SWBS Disclosure Schedule 5.01(e), (iii)
as previously disclosed to FBMS and set forth in SWBS Disclosure Schedule 5.01(e), or (iv) as may be required pursuant to
the terms of this Agreement) any SWBS Benefit Plan or other pension, retirement, stock option, stock purchase, savings, profit
sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan
or arrangement, or any trust agreement (or similar arrangement) related thereto, in respect of any current or former director,
officer or employee of SWBS or any of its Subsidiaries.


 


(f)       Transactions
with Affiliates. Except pursuant to agreements or arrangements in effect on the date hereof and set forth in SWBS Disclosure
Schedule 5.01(f), pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or
mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any of
their immediate family members or any Affiliates or Associates of any of its officers or directors other than compensation or business
expense advancements or reimbursements in the Ordinary Course of Business. This subsection shall not restrict First Community Bank
from making or renewing loans to directors, officers, and their immediate family members, Affiliates, or Associates that are below
the thresholds set forth in Section 5.01(s) and which are in compliance with Regulation O.


 






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(g)       Dispositions.
Except as set forth on SWBS Disclosure Schedule 5.01(g) or in the Ordinary Course of Business, sell, license, lease, transfer,
mortgage, pledge, encumber or otherwise dispose of or discontinue any of its rights, assets, deposits, business or properties or
cancel or release any indebtedness owed to SWBS or any of its Subsidiaries.


 


(h)       Acquisitions.
Acquire (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts
previously contracted in good faith, in each case in the Ordinary Course of Business) all or any portion of the assets, debt, business,
deposits or properties of any other entity or Person, except for purchases specifically approved by FBMS pursuant to any other
applicable paragraph of this Section 5.01.


 


(i)       Capital
Expenditures. Make any capital expenditures in amounts exceeding $50,000 individually, or $250,000 in the aggregate.


 


(j)       Governing
Documents. Amend SWBS’s articles of incorporation or bylaws or any equivalent documents of SWBS’s Subsidiaries.


 


(k)       Accounting
Methods. Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by
applicable Laws or GAAP or applicable accounting requirements of any Governmental Authority, in each case, including changes in
the interpretation or enforcement thereof.


 


(l)       Contracts.
Except as set forth in SWBS Disclosure Schedule 5.01(l), enter into, amend, modify, terminate, extend, or waive any material
provision of, any SWBS Material Contract, Lease or Insurance Policy, or make any change in any instrument or agreement governing
the terms of any of its securities, or material lease, license or contract, other than normal renewals of contracts, licenses and
leases without material adverse changes of terms with respect to SWBS or any of its Subsidiaries, or enter into any contract that
would constitute a SWBS Material Contract if it were in effect on the date of this Agreement, except for any amendments, modifications
or terminations reasonably requested by FBMS.


 


(m)     Claims.
Other than settlement of foreclosure actions in the Ordinary Course of Business, (i) enter into any settlement or similar agreement
with respect to any action, suit, proceeding, order or investigation to which SWBS or any of its Subsidiaries is or becomes a party
after the date of this Agreement, which settlement or agreement involves payment by SWBS or any of its Subsidiaries of an amount
which exceeds $100,000 individually or $200,000 in the aggregate and/or would impose any material restriction on the business of
SWBS or any of its Subsidiaries or (ii) waive or release any material rights or claims, or agree or consent to the issuance of
any injunction, decree, order or judgment restricting or otherwise affecting its business or operations.


 


(n)      Banking
Operations. (i) Enter into any material new line of business, introduce any material new products or services, any material
marketing campaigns or any material new sales compensation or incentive programs or arrangements; (ii) change in any material respect
its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as
required by applicable Law, regulation or policies imposed by any Governmental Authority; (iii) make any material changes in its
policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling
rights to service Loans, its hedging practices and policies; and (iv) incur any material liability or obligation relating to retail
banking and branch merchandising, marketing and advertising activities and initiatives except in the Ordinary Course of Business.


 






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(o)       Derivative
Transactions. Enter into any Derivative Transaction.


 


(p)       Indebtedness.
Except as set forth on SWBS Disclosure Schedule 5.01(p), incur any indebtedness for borrowed money other than in the Ordinary Course
of Business consistent with past practice with a term not in excess of twelve (12) months (other than creation of deposit liabilities
or sales of certificates of deposit in the Ordinary Course of Business), or incur, assume or become subject to, whether directly
or by way of any guarantee or otherwise, any obligations or liabilities (absolute, accrued, contingent or otherwise) of any other
Person, other than the issuance of letters of credit in the Ordinary Course of Business and in accordance with the restrictions
set forth in Section 5.01(s).


 


(q)       Investment
Securities. (i) Other than in accordance with SWBS’s investment guidelines, acquire, sell or otherwise dispose of any
debt security or equity investment or any certificates of deposits issued by other banks, nor (ii) change the classification method
for any of the SWBS Investment Securities from “held to maturity” to “available for sale” or from “available
for sale” to “held to maturity,” as those terms are used in ASC 320.


 


(r)       Deposits.
Other than in the Ordinary Course of Business, make any changes to deposit pricing.


 


(s)       Loans.
Except for loans or extensions of credit approved and/or committed as of the date hereof that are listed in SWBS Disclosure
Schedule 5.01(s), (i) make or increase any (A) unsecured loan, if the amount of such unsecured loan, together with any other
outstanding unsecured loans made by SWBS or any of its Subsidiaries to such borrower or its Affiliates, would be in excess of $250,000,
in the aggregate, (B) loan secured by other than a first lien in excess of $500,000, (C) loan in excess of FFIEC regulatory guidelines
relating to loan to value ratios in excess of $500,000, (D) loan secured by a first lien residential mortgage and with no loan
policy exceptions in excess of $750,000, (E) secured loan over $1,750,000, (F) any loan that is not made in conformity with SWBS’s
ordinary course lending policies and guidelines in effect as of the date hereof in excess of $500,000, or (G) loan, whether secured
or unsecured, if the amount of such loan, together with any other outstanding loans (without regard to whether such other loans
have been advanced or remain to be advanced), would result in the aggregate outstanding loans to any borrower of SWBS or any of
its Subsidiaries (without regard to whether such other loans have been advanced or remain to be advanced) to exceed $1,750,000,
(ii) renew, renegotiate, extend or modify any existing loan in which the aggregate amount of all loans to the borrower exceeds
$1,750,000 (other than credits in which the total outstanding loans to the borrower is no more than $3,500,000 and no new money
is extended and which do not have any material deteriorating change in the credit relationship, including, but not limited to,
a downgrade in the risk rating of the credit, declining financial trends, or any other change that would substantially alter the
facts supporting the original approval), (iii) sell any loan or loan pools in excess of $1,000,000 in principal amount or sale
price (other than residential mortgage loan pools sold in the Ordinary Course of Business), or (iv) acquire any servicing rights,
or sell or otherwise transfer any loan where SWBS or any of its Subsidiaries retains any servicing rights. Any loan in excess of
the limits set forth in this Section 5.01(s) shall require the prior written approval of the President or Chief Credit Officer
or Credit Administrator of The First, which approval shall not be unreasonably withheld, conditioned or delayed. First Community
Bank will provide an information package on any such loan to The First at the time it provides such information to its Officer
Loan Committee or Director Loan Committee. The First shall provide its position with respect to any such loan to First Community
Bank no later than 10:00 a.m. CT on the day prior to the Officer Loan Committee meeting or Director Loan Committee meeting. Notwithstanding
the foregoing, The First shall be given at least 24 hours from receipt of the loan package to provide its position to First Community
Bank. If The First denies an approval of a loan to a borrower under this Section 5.01(s), it shall not thereafter make a loan to
such borrower for the same purpose and on substantially similar terms.


 






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(t)       Investments
or Developments in Real Estate. Except as set forth in SWBS Disclosure Schedule 5.01(t), make any investment or commitment
to invest in real estate or in any real estate development project other than by way of foreclosure or deed in lieu thereof or
make any investment or commitment to develop, or otherwise take any actions to develop any real estate owned by SWBS or its Subsidiaries.


 


(u)       Taxes.
Except as required by applicable Law or in the Ordinary Course of Business, make or change any material Tax election, file any
material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle or compromise any material
liability with respect to Taxes, agree to any material adjustment of any Tax attribute, or consent to any extension or waiver of
the limitation period applicable to any material Tax claim or assessment, provided that, for purposes of this Section
5.01(u), “material” means affecting or relating to $100,000 or more in Taxes or $200,000 or more of taxable income.


 


(v)       Adverse
Actions. Take any action or knowingly fail to take any action not contemplated by this Agreement that is intended or is reasonably
likely to (i) prevent, delay or impair SWBS’s ability to consummate the Merger or the transactions contemplated by this Agreement
or (ii) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the
actions prohibited by this Section 5.01.


 


(w)       Capital
Stock Purchase. Except as set forth in SWBS Disclosure Schedule 5.01(w), directly or indirectly repurchase, redeem or
otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital
stock.


 


(x)       Facilities.
Except as set forth in SWBS Disclosure Schedule 5.01(x) or as required by Law, file any application or make any contract
or commitment for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production or
servicing facility or automated banking facility, except for any change that may be reasonably requested by FBMS.


 


(y)       Restructure.
Merge or consolidate itself or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially
liquidate or dissolve it or any of its Subsidiaries.


 






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(z)       Commitments.
(i) Enter into any contract with respect to, or otherwise agree or commit to do, or adopt any resolutions of its board of directors
or similar governing body in support of, any of the foregoing or (ii) take any action that is intended or expected to result in
any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time
prior to the Effective Time, or in any of the conditions to the Merger not being satisfied, in any material respect, or in a violation
of any provision of this Agreement, except, in every case, as may be required by applicable Law.


 


Section 5.02     Covenants
of FBMS.


 


(a)       Affirmative
Covenants. From the date hereof until the Effective Time, FBMS will carry on its business consistent with prudent banking practices
and in compliance in all material respects with all applicable Laws.


 


(b)       Negative
Covenants. From the date hereof until the Effective Time, FBMS shall not and shall not permit any of its Subsidiaries to take
any action or knowingly fail to take any action not contemplated by this Agreement that is intended or is reasonably likely to
(i) prevent, delay or impair FBMS’s ability to consummate the Merger or the transactions contemplated by this Agreement or
(ii) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions
prohibited by this Section 5.02.


 


Section 5.03     Commercially
Reasonable Efforts. Subject to the terms and conditions of this Agreement, each of the Parties agrees to use commercially reasonable
efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable under applicable Laws, so as to permit consummation of the transactions contemplated hereby as promptly as practicable,
including the satisfaction of the conditions set forth in Article VI, and shall reasonably cooperate with the other Party
to that end.


 


Section 5.04     SWBS
Shareholder Approval.


 


(i)       Following
the execution of this Agreement, SWBS shall take, in accordance with applicable Law and the articles of incorporation and bylaws
of SWBS, all action necessary to convene a special meeting of its shareholders as promptly as practicable to consider and vote
upon the approval of this Agreement and the transactions contemplated hereby (including the Merger) and any other matters required
to be approved by SWBS’s shareholders in order to permit consummation of the Merger and the transactions contemplated hereby
(including any adjournment or postponement thereof, the “SWBS Meeting”) and shall take all lawful action
to solicit such approval by such shareholders. SWBS shall use its reasonable best efforts to obtain the Requisite SWBS Shareholder
Approval to consummate the Merger and the other transactions contemplated hereby, and shall ensure that the SWBS Meeting is called,
noticed, convened, held and conducted, and that all proxies solicited by SWBS in connection with the SWBS Meeting are solicited
in material compliance with the ABCL, the articles of incorporation and bylaws of SWBS, and all other applicable legal requirements.
Except with the prior approval of FBMS, no other matters shall be submitted for the approval of SWBS shareholders at the SWBS Meeting.


 






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(ii)       Except
to the extent provided otherwise in Section 5.09(a), the board of directors of SWBS shall at all times prior to and during
the SWBS Meeting recommend approval of this Agreement by the shareholders of SWBS and the transactions contemplated hereby (including
the Merger) and any other matters required to be approved by SWBS’s shareholders for consummation of the Merger and the transactions
contemplated hereby (the “SWBS Recommendation”) and shall not withhold, withdraw, amend, modify, change
or qualify such recommendation in a manner adverse in any respect to the interests of FBMS or take any other action or make any
other public statement inconsistent with such recommendation and the Proxy Statement-Prospectus shall include the SWBS Recommendation.
In the event that there is present at such meeting, in person or by proxy, sufficient favorable voting power to secure the Requisite
SWBS Shareholder Approval, SWBS will not adjourn or postpone the SWBS Meeting unless SWBS is advised by counsel that failure to
do so would result in a breach of the fiduciary duties of the board of directors of SWBS. SWBS shall keep FBMS updated with respect
to the proxy solicitation results in connection with the SWBS Meeting as reasonably requested by FBMS.


 


Section 5.05     Registration
Statement; Proxy Statement-Prospectus; NASDAQ Listing.


 


(a)       FBMS
and SWBS agree to cooperate in the preparation of the Registration Statement to be filed by FBMS with the SEC in connection with
the issuance of FBMS Common Stock in the transactions contemplated by this Agreement (including the Proxy Statement-Prospectus
and all related documents). SWBS shall use its reasonable best efforts to deliver to FBMS such financial statements and related
analysis of SWBS, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
of SWBS, as may be required in order to file the Registration Statement, and any other report required to be filed by FBMS with
the SEC, in each case, in compliance with applicable Laws, and shall, as promptly as practicable following execution of this Agreement,
prepare and deliver drafts of such information to FBMS to review. Each of FBMS and SWBS agree to use their respective commercially
reasonable efforts to cause the Registration Statement to be declared effective by the SEC as promptly as reasonably practicable
after the filing thereof. FBMS also agrees to use commercially reasonable efforts to obtain any necessary state securities Law
or “blue sky” permits and approvals required to carry out the transactions contemplated by this Agreement. SWBS agrees
to cooperate with FBMS and FBMS’s counsel and accountants in requesting and obtaining appropriate opinions, consents and
letters from SWBS’s independent auditors in connection with the Registration Statement and the Proxy Statement-Prospectus.
After the Registration Statement is declared effective under the Securities Act, SWBS, at its own expense, shall promptly mail
or cause to be mailed the Proxy Statement-Prospectus to its shareholders.


 


(b)       FBMS
will advise SWBS, promptly after FBMS receives notice thereof, of the time when the Registration Statement has become effective
or any supplement or amendment has been filed, of the issuance of any stop order or the suspension of the qualification of FBMS
Common Stock for offering or sale in any jurisdiction, of the initiation or threat of any proceeding for any such purpose, or of
any request by the SEC for the amendment or supplement of the Registration Statement or upon the receipt of any comments (whether
written or oral) from the SEC or its staff. FBMS will provide SWBS and its counsel with a reasonable opportunity to review and
comment on the Registration Statement and the Proxy Statement-Prospectus, and all responses to requests for additional information
by and replies to comments of the SEC prior to filing such with, or sending such to, the SEC, and FBMS will provide SWBS and its
counsel with a copy of all such filings made with the SEC. If at any time prior to the SWBS Meeting there shall occur any event
that should be disclosed in an amendment or supplement to the Proxy Statement-Prospectus or the Registration Statement, FBMS shall
use its commercially reasonable efforts to promptly prepare and file such amendment or supplement with the SEC (if required under
applicable Law) and cooperate with SWBS to mail such amendment or supplement to SWBS shareholders (if required under applicable
Law).


 






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(c)       FBMS
will use its commercially reasonable efforts to cause the shares of FBMS Common Stock to be issued in connection with the transactions
contemplated by this Agreement to be approved for listing on NASDAQ, subject to official notice of issuance, prior to the Effective
Time.


 


Section 5.06     Regulatory
Filings; Consents.


 


(a)       Each
of FBMS and SWBS and their respective Subsidiaries shall cooperate and use their respective reasonable best efforts (i) to
prepare all documentation (including the Registration Statement and the Proxy Statement-Prospectus), to effect all filings, to
obtain all permits, consents, approvals and authorizations of all third parties and Governmental Authorities necessary to consummate
the transactions contemplated by this Agreement, the Regulatory Approvals and all other consents and approvals of a Governmental
Authority required to consummate the Merger in the manner contemplated herein, and, specifically, to file all applications for
the required Regulatory Approvals within twenty one (21) days of the date of this Agreement, (ii) to comply with the terms
and conditions of such permits, consents, approvals and authorizations and (iii) to cause the transactions contemplated by
this Agreement to be consummated as expeditiously as practicable; provided, however, notwithstanding the foregoing
or anything to the contrary in this Agreement, nothing contained herein shall be deemed to require FBMS or any of its Subsidiaries
or SWBS or any of its Subsidiaries to take any action, or commit to take any action, or agree to any condition or restriction,
in connection with obtaining the foregoing permits, consents, approvals and authorizations of any Governmental Authority that would
reasonably be likely to have a material and adverse effect (measured on a scale relative to SWBS) on the condition (financial or
otherwise), results of operations, liquidity, assets or deposit liabilities, properties or business of FBMS, SWBS, the Surviving
Entity or the Surviving Bank, after giving effect to the Merger (“Burdensome Condition”); provided,
further, that any capital raise requirement or minimum capital requirement as well as those actions set forth on FBMS
Disclosure Schedule 5.06 shall not constitute a “Burdensome Condition.” FBMS and SWBS will furnish each other and
each other’s counsel with all information concerning themselves, their Subsidiaries, directors, trustees, officers and shareholders
and such other matters as may be necessary or advisable in connection with any application, petition or any other statement or
application made by or on behalf of FBMS or SWBS to any Governmental Authority in connection with the transactions contemplated
by this Agreement. Each Party shall have the right to review and approve in advance all characterizations of the information relating
to such party and any of its Subsidiaries that appear in any filing made in connection with the transactions contemplated by this
Agreement with any Governmental Authority. In addition, FBMS and SWBS shall each furnish to the other for review a copy of each
such filing made in connection with the transactions contemplated by this Agreement with any Governmental Authority prior to its
filing.


 






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(b)       SWBS
will use its commercially reasonable efforts, and FBMS shall reasonably cooperate with SWBS at SWBS’s request, to obtain
all consents, approvals, authorizations, waivers or similar affirmations described on SWBS Disclosure Schedule 3.12(c).
Each Party will notify the other Party promptly and shall promptly furnish the other Party with copies of notices or other communications
received by such Party or any of its Subsidiaries of any communication from any Person alleging that the consent of such Person
(or another Person) is or may be required in connection with the transactions contemplated by this Agreement (and the response
thereto from such Party, its Subsidiaries or its representatives). SWBS will consult with FBMS and its representatives as often
as practicable under the circumstances so as to permit SWBS and FBMS and their respective representatives to cooperate to take
appropriate measures to obtain such consents and avoid or mitigate any adverse consequences that may result from the foregoing.


 


Section 5.07     Publicity.
FBMS and SWBS shall consult with each other before issuing any press release with respect to this Agreement or the transactions
contemplated hereby and shall not issue any such press release or make any such public statement without the prior consent of the
other Party, which shall not be unreasonably delayed or withheld; provided, however, that a party may, without the
prior consent of the other party (but after such consultation, to the extent practicable in the circumstances), issue such press
release or make such public statements as may upon the advice of counsel be required by Law or the rules and regulations of any
stock exchanges. It is understood that FBMS shall assume primary responsibility for the preparation of joint press releases relating
to this Agreement, the Merger and the other transactions contemplated hereby.


 


Section 5.08     Access;
Current Information.


 


(a)       For
the purposes of verifying the representations and warranties of the other and preparing for the Merger and the other matters contemplated
by this Agreement, upon reasonable notice and subject to applicable Laws, SWBS agrees to afford FBMS and its officers, employees,
counsel, accountants and other authorized representatives such access during normal business hours at any time and from time to
time throughout the period prior to the Effective Time to SWBS’s and its Subsidiaries’ books, records (including, without
limitation, Tax Returns and work papers of independent auditors), information technology systems, business, properties and personnel
and to such other information relating to them as FBMS may reasonably request and SWBS shall use its commercially reasonable efforts
to provide any appropriate notices to employees and/or customers in accordance with applicable Law and SWBS’s privacy policy
and, during such period, SWBS shall furnish to FBMS, FBMS’s reasonable request, all such other information concerning the
business, properties and personnel of SWBS and its Subsidiaries that is substantially similar in scope to the information provided
to FBMS in connection with its diligence review prior to the date of this Agreement.


 


(b)       For
the purposes of verifying the representations and warranties of the other and preparing for the Merger and the other matters contemplated
by this Agreement, during the period of time from the date of this Agreement to the Effective Time, upon reasonable notice and
subject to applicable Laws, FBMS agrees to furnish to SWBS such information as SWBS may reasonably request concerning the business
of FBMS and its Subsidiaries that is substantially similar in scope to the information provided to SWBS in connection with its
diligence review prior to the date of this Agreement.


 






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(c)       As
promptly as reasonably practicable after they become available, SWBS will furnish to FBMS copies of the board packages distributed
to its or any of its Subsidiaries’ board of directors, and minutes from the meetings thereof, copies of any internal management
financial control reports showing actual financial performance against plan and previous period, and copies of any reports provided
to the board of directors or any committee thereof relating to the financial performance and risk management.


 


(d)       During
the period from the date of this Agreement to the Effective Time, at the reasonable request of FBMS, SWBS will cause one or more
of its designated representatives to confer with representatives of FBMS and to report the general status of the ongoing operations
of FBMS and its Subsidiaries. Without limiting the foregoing, SWBS agrees to provide FBMS (i) a copy of each report filed
by SWBS or any of its Subsidiaries with a Governmental Authority, (ii) a copy of its monthly loan trial balance, and (iii) a copy
of its monthly statement of condition and profit and loss statement and, if requested, a copy of its daily statement of condition
and daily profit and loss statement, in each case, which shall be provided as promptly as reasonably practicable after it is filed
or prepared, as applicable


 


(e)       No
investigation by either Party or their representatives shall be deemed to modify or waive any representation, warranty, covenant
or agreement of such Party set forth in this Agreement, or the conditions to the respective obligations of the Parties to consummate
the transactions contemplated hereby.


 


(f)       Notwithstanding
anything to the contrary in this Section 5.08, neither Party shall not be required to copy the other Party on any documents
that disclose confidential discussions of this Agreement or the transactions contemplated hereby, that contain competitively sensitive
business or other proprietary information filed under a claim of confidentiality (including any confidential supervisory information)
or any other matter that either Party’s board of directors has been advised by counsel that such distribution to the other
Party may violate a confidentiality obligation or fiduciary duty or any Law or regulation, or may result in a waiver of the attorney-client
privilege. In the event any of the restrictions in this Section 5.08(f) shall apply, each Party shall use its commercially
reasonable efforts to provide appropriate consents, waivers, decrees and approvals necessary to satisfy any confidentiality issues
relating to documents prepared or held by third parties (including work papers), the Parties will make appropriate alternate disclosure
arrangements, including adopting additional specific procedures to protect the confidentiality of sensitive material and to ensure
compliance with applicable Laws.


 


Section 5.09     No
Solicitation by SWBS; Superior Proposals.


 


(a)       SWBS
shall not, and shall cause its Subsidiaries and each of their respective officers, directors and employees not to, and will not
authorize any investment bankers, financial advisors, attorneys, accountants, consultants, affiliates or other agents of SWBS or
any of SWBS’s Subsidiaries (collectively, the “SWBS Representatives”) to, directly or indirectly,
(i) initiate, solicit, induce or knowingly encourage, or take any action to facilitate the making of, any inquiry, offer or proposal
which constitutes, or could reasonably be expected to lead to, an Acquisition Proposal; (ii) participate in any discussions or
negotiations regarding any Acquisition Proposal or furnish, or otherwise afford access, to any Person (other than FBMS) any information
or data with respect to SWBS or any of its Subsidiaries or otherwise relating to an Acquisition Proposal; (iii) release any Person
from, waive any provisions of, or fail to enforce any confidentiality agreement or standstill agreement to which SWBS is a party;
or (iv) enter into any agreement, agreement in principle or letter of intent with respect to any Acquisition Proposal or approve
or resolve to approve any Acquisition Proposal or any agreement, agreement in principle or letter of intent relating to an Acquisition
Proposal. Any violation of the foregoing restrictions by any of the SWBS Representatives, whether or not such SWBS Representative
is so authorized and whether or not such SWBS Representative is purporting to act on behalf of SWBS or otherwise, shall be deemed
to be a breach of this Agreement by SWBS. SWBS and its Subsidiaries shall, and shall cause each of the SWBS Representatives to,
immediately cease and cause to be terminated any and all existing discussions, negotiations, and communications with any Persons
with respect to any existing or potential Acquisition Proposal.


 






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For purposes of this Agreement,
“Acquisition Proposal” means any inquiry, offer or proposal (other than an inquiry, offer or proposal
from FBMS), whether or not in writing, contemplating, relating to, or that could reasonably be expected to lead to, an Acquisition
Transaction.


 


For purposes of this Agreement,
“Acquisition Transaction” means (A) any transaction or series of transactions involving any merger, consolidation,
recapitalization, share exchange, liquidation, dissolution or similar transaction involving SWBS or any of its Subsidiaries; (B)
any transaction pursuant to which any third party or group acquires or would acquire (whether through sale, lease or other disposition),
directly or indirectly, a significant portion of the assets of SWBS or any of its Subsidiaries; (C) any issuance, sale or other
disposition of (including by way of merger, consolidation, share exchange or any similar transaction) securities (or options, rights
or warrants to purchase or securities convertible into, such securities) representing 20% or more of the votes attached to the
outstanding securities of SWBS or any of its Subsidiaries; (D) any tender offer or exchange offer that, if consummated, would result
in any third party or group beneficially owning 20% or more of any class of equity securities of SWBS or any of its Subsidiaries;
or (E) any transaction which is similar in form, substance or purpose to any of the foregoing transactions, or any combination
of the foregoing.


 


For purposes of this Agreement,
“Superior Proposal” means a bona fide, unsolicited Acquisition Proposal (i) that if consummated
would result in a third party (or in the case of a direct merger between such third party and SWBS or any of its Subsidiaries,
the shareholders of such third party) acquiring, directly or indirectly, more than 50% of the outstanding SWBS Common Stock or
more than 50% of the assets of SWBS and its Subsidiaries, taken as a whole, for consideration consisting of cash and/or securities
and (ii) that the board of directors of SWBS reasonably determines in good faith, after consultation with its outside financial
advisor and outside legal counsel, (A) is reasonably capable of being completed, taking into account all financial, legal, regulatory
and other aspects of such proposal, including all conditions contained therein and the person making such Acquisition Proposal,
and (B) taking into account any changes to this Agreement proposed by FBMS in response to such Acquisition Proposal, as contemplated
by Section 5.09(c), and all financial, legal, regulatory and other aspects of such takeover proposal, including all conditions
contained therein and the person making such proposal, is more favorable to the shareholders of SWBS from a financial point of
view than the Merger.


 






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(b)       Notwithstanding
Section 5.09(a) or any other provision of this Agreement, prior to the date of the SWBS Meeting, SWBS may take any of the
actions described in Section 5.09(a) if, but only if, (i) SWBS has received a bona fide unsolicited written Acquisition
Proposal that did not result from a breach of Section 5.09(a); (ii) the board of directors of SWBS reasonably determines
in good faith, after consultation with and having considered the advice of its outside financial advisor and outside legal counsel,
that (A) such Acquisition Proposal constitutes or is reasonably likely to lead to a Superior Proposal and (B) it is reasonably
necessary to take such actions to comply with its fiduciary duties to SWBS’s shareholders under applicable Law; (iii) SWBS
has provided FBMS with at least three (3) Business Days’ prior notice of such determination; and (iv) prior to furnishing
or affording access to any information or data with respect to SWBS or any of its Subsidiaries or otherwise relating to an Acquisition
Proposal, SWBS receives from such Person a confidentiality agreement with terms no less favorable to SWBS than those contained
in the confidentiality agreement with FBMS. SWBS shall promptly provide to FBMS any non-public information regarding SWBS or its
Subsidiaries provided to any other Person which was not previously provided to FBMS, such additional information to be provided
no later than the date of provision of such information to such other party.


 


(c)       SWBS
shall promptly (and in any event within twenty-four (24) hours) notify FBMS in writing if any proposals or offers are received
by, any information is requested from, or any negotiations or discussions are sought to be initiated or continued with, SWBS or
the SWBS Representatives, in each case in connection with any Acquisition Proposal, and such notice shall indicate the name of
the Person initiating such discussions or negotiations or making such proposal, offer or information request and the material terms
and conditions of any proposals or offers (and, in the case of written materials relating to such proposal, offer, information
request, negotiations or discussion, providing copies of such materials (including e-mails or other electronic communications)
except to the extent that such materials constitute confidential information of the party making such offer or proposal under an
effective confidentiality agreement). SWBS agrees that it shall keep FBMS informed, on a reasonably current basis, of the status
and terms of any such proposal, offer, information request, negotiations or discussions (including any amendments or modifications
to such proposal, offer or request).


 


(d)       Neither
the board of directors of SWBS nor any committee thereof shall (i) withdraw, qualify, amend or modify, or propose to withdraw,
qualify, amend or modify, in a manner adverse to FBMS in connection with the transactions contemplated by this Agreement (including
the Merger), the SWBS Recommendation, fail to reaffirm the SWBS Recommendation within three (3) Business Days following a request
by FBMS, or make any statement, filing or release, in connection with the SWBS Meeting or otherwise, inconsistent with the SWBS
Recommendation (it being understood that taking a neutral position or no position with respect to an Acquisition Proposal shall
be considered an adverse modification of the SWBS Recommendation); (ii) approve or recommend, or propose to approve or recommend,
any Acquisition Proposal; or (iii) enter into (or cause SWBS or any of its Subsidiaries to enter into) any letter of intent, agreement
in principle, acquisition agreement or other agreement (A) related to any Acquisition Transaction (other than a confidentiality
agreement entered into in accordance with the provisions of Section 5.09(b)) or (B) requiring SWBS to abandon, terminate
or fail to consummate the Merger or any other transaction contemplated by this Agreement.


 






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(e)       Notwithstanding
Section 5.09(d), prior to the date of the SWBS Meeting, the board of directors of SWBS may withdraw, qualify, amend or modify
the SWBS Recommendation (a “SWBS Subsequent Determination”) after the fifth (5th) Business
Day following FBMS’s receipt of a notice (the “Notice of Superior Proposal”) from SWBS advising
FBMS that the board of directors of SWBS has decided that a bona fide unsolicited written Acquisition Proposal that it received
(that did not result from a breach of Section 5.09(a)) constitutes a Superior Proposal if, but only if, (i) the board of
directors of SWBS has determined in good faith, after consultation with and having considered the advice of outside legal counsel
and its financial advisor, that it is reasonably necessary to take such actions to comply with its fiduciary duties to SWBS’s
shareholders under applicable Law, (ii) during the five (5) Business Day period after receipt of the Notice of Superior Proposal
by FBMS (the “Notice Period”), SWBS and the board of directors of SWBS shall have cooperated and negotiated
in good faith with FBMS to make such adjustments, modifications or amendments to the terms and conditions of this Agreement as
would enable SWBS to proceed with the SWBS Recommendation without a SWBS Subsequent Determination; provided, however,
that FBMS shall not have any obligation to propose any adjustments, modifications or amendments to the terms and conditions of
this Agreement and (iii) at the end of the Notice Period, after taking into account any such adjusted, modified or amended terms
as may have been proposed by FBMS since its receipt of such Notice of Superior Proposal, the board of directors of SWBS has again
in good faith made the determination (A) in clause (i) of this Section 5.09(e) and (B) that such Acquisition Proposal constitutes
a Superior Proposal. In the event of any material revisions to the Superior Proposal, SWBS shall be required to deliver a new Notice
of Superior Proposal to FBMS and again comply with the requirements of this Section 5.09(e), except that the Notice Period
shall be reduced to three (3) Business Days.


 


(f)       Notwithstanding
any SWBS Subsequent Determination, this Agreement shall be submitted to SWBS’s shareholders at the SWBS Meeting for the purpose
of voting on the approval of this Agreement and the transactions contemplated hereby (including the Merger) and nothing contained
herein shall be deemed to relieve SWBS of such obligation; provided, however, that if the board of directors of SWBS
shall have made a SWBS Subsequent Determination with respect to a Superior Proposal, then the board of directors of SWBS may recommend
approval of such Superior Proposal by the shareholders of SWBS and may submit this Agreement to SWBS’s shareholders without
recommendation, in which event the board of directors of SWBS shall communicate the basis for its recommendation of such Superior
Proposal and the basis for its lack of a recommendation with respect to this Agreement and the transactions contemplated hereby
to SWBS’s shareholders in the Proxy Statement-Prospectus or an appropriate amendment or supplement thereto.


 


(g)       Nothing
contained in this Section 5.09 shall prohibit SWBS or the board of directors of SWBS from complying with SWBS’s obligations
required under Rule 14e-2(a) promulgated under the Exchange Act; provided, however, that any such disclosure relating
to an Acquisition Proposal (other than a “stop, look and listen” or similar communication of the type contemplated
by Rule 14d-9(f) under the Exchange Act) shall be deemed a change in the SWBS Recommendation unless the board of directors of SWBS
reaffirms the SWBS Recommendation in such disclosure.


 






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Section 5.10     Indemnification.


 


(a)       For
a period of six (6) years from and after the Effective Time, and in any event subject to the provisions of Section 5.10(b)(iv),
FBMS shall indemnify and hold harmless the present and former directors and officers of SWBS and its Subsidiaries (the “Indemnified
Parties”), against all costs or expenses (including reasonable attorney’s fees), judgments, fines, losses,
claims, damages, or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative arising out of actions or omissions of such persons in the course of performing their
duties for SWBS or such Subsidiary occurring at or before the Effective Time (including the transactions contemplated by this Agreement)
(each a “Claim”), to the same extent as such persons have the right to be indemnified pursuant to the
Indemnification Agreements set forth in SWBS Disclosure Schedule 5.10 or, if not subject to such an agreement, to the fullest
extent permitted by applicable Law.


 


(b)       Any
Indemnified Party wishing to claim indemnification under this Section 5.10 shall promptly notify FBMS upon learning of any
Claim, provided that, failure to so notify shall not affect the obligation of FBMS under this Section 5.10, unless,
and only to the extent that, FBMS is materially prejudiced in the defense of such Claim as a consequence. In the event of any such
Claim (whether asserted or claimed prior to, at or after the Effective Time), (i) FBMS shall have the right to assume the defense
thereof and FBMS shall not be liable to such Indemnified Parties for any legal expenses or other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the defense thereof, (ii) the Indemnified Parties will
cooperate in the defense of any such matter, (iii) FBMS shall not be liable for any settlement effected without its prior
written consent and (iv) FBMS shall have no obligation hereunder to any Indemnified Party if such indemnification would be
in violation of any applicable federal or state banking Laws or regulations, or in the event that a federal or state banking agency
or a court of competent jurisdiction shall determine that indemnification of an Indemnified Party in the manner contemplated hereby
is prohibited by applicable Laws and regulations, whether or not related to banking Laws.


 


(c)       For
a period of six (6) years following the Effective Time, FBMS will provide director’s and officer’s liability insurance
(herein, “D&O Insurance”) that serves to reimburse the present and former officers and directors
of SWBS or its Subsidiaries (determined as of the Effective Time) with respect to claims against such directors and officers arising
from facts or events occurring before the Effective Time (including the transactions contemplated hereby), which insurance will
contain at least the same coverage and amounts, and contain terms and conditions no less advantageous to the Indemnified Party,
as that coverage currently provided by SWBS; provided that, if FBMS is unable to maintain the insurance called for by this
Section 5.10, FBMS will provide as much comparable insurance as is reasonably available; and provided, further,
that officers and directors of SWBS or its Subsidiaries may be required to make application and provide customary representations
and warranties to the carrier of the D&O Insurance for the purpose of obtaining such insurance.


 






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(d)       If
FBMS or any of its successors and assigns (i) shall consolidate with or merge into any other corporation or entity and shall not
be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) shall transfer all or substantially
all of its property and assets to any individual, corporation or other entity, then, in each such case, proper provision shall
be made so that the successors and assigns of FBMS and its Subsidiaries shall assume the obligations set forth in this Section
5.10.


 


Section 5.11     Employees;
Benefit Plans.


 


(a)       Following
the Effective Time, FBMS shall maintain or cause to be maintained employee benefit plans and compensation opportunities for the
benefit of employees who are full time employees of SWBS or any of its Subsidiaries on the Closing Date (“Covered Employees”)
that provide employee benefits and compensation opportunities which, in the aggregate, are substantially comparable to the employee
benefits and compensation opportunities that are made available on a uniform and non-discriminatory basis to similarly situated
employees of FBMS or its Subsidiaries, as applicable; provided, however, that in no event shall any Covered Employee
be eligible to participate in any closed or frozen plan of FBMS or its Subsidiaries. FBMS shall give the Covered Employees full
credit for their prior service with SWBS and its Subsidiaries (i) for purposes of eligibility (including initial participation
and eligibility for current benefits) and vesting under any qualified or non-qualified employee benefit plan maintained by FBMS
and in which Covered Employees may be eligible to participate and (ii) for all purposes under any welfare benefit plans, vacation
plans, severance plans and similar arrangements maintained by FBMS.


 


(b)       With
respect to any employee benefit plan of FBMS that is a health, dental, vision or other welfare plan in which any Covered Employee
is eligible to participate, for the plan year in which such Covered Employee is first eligible to participate, FBMS or its applicable
Subsidiary shall use its commercially reasonable efforts to (i) cause any pre-existing condition limitations or eligibility waiting
periods under such FBMS or Subsidiary plan to be waived with respect to such Covered Employee and his or her covered dependents
to the extent such condition was or would have been covered under the SWBS Benefit Plan in which such Covered Employee participated
immediately prior to the Effective Time, and (ii) recognize any health, dental, vision or other welfare expenses incurred by such
Covered Employee and his or her covered dependents in the year that includes the Closing Date (or, if later, the year in which
such Covered Employee is first eligible to participate) for purposes of any applicable copayment, deductibles and annual out-of-pocket
expense requirements under any such health, dental, vision or other welfare plan.


 


(c)       Prior
to the Effective Time, SWBS shall take, and shall cause its Subsidiaries to take, all actions requested by FBMS that may be necessary
or appropriate to, conditioned on the occurrence of the Effective Time, (i) cause one or more SWBS Benefits Plans to terminate
as of the Effective Time, or as of the date immediately preceding the Effective Time, (ii) cause benefit accruals and entitlements
under any SWBS Benefit Plan to cease as of the Effective Time, or as of the date immediately preceding the Effective Time, (iii)
cause the continuation on and after the Effective Time of any contract, arrangement or insurance policy relating to any SWBS Benefit
Plan for such period as may be requested by FBMS, or (iv) facilitate the merger of any SWBS Benefit Plan into any employee benefit
plan maintained by FBMS or an FBMS Subsidiary, provided in all cases that FBMS shall give SWBS at least five (5) Business Days’
notice of such requested actions, and provided further that in the case of any such actions not within the sole control of SWBS,
SWBS shall only be requested to use its commercially reasonable efforts to complete such actions. Notwithstanding the immediately
preceding sentence, the SWBS Benefit Plans listed on SWBS Disclosure Schedule 5.11(c) shall not be terminated prior to or as of
the Effective Time. SWBS Disclosure Schedule 5.11(c) furthermore sets forth the estimated liabilities under such plans as of the
date hereof. All resolutions, notices, or other documents issued, adopted or executed in connection with the implementation of
this Section 5.11(c) shall be subject to FBMS’s reasonable prior review and approval, which shall not be unreasonably
withheld, conditioned or delayed.


 






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(d)       Nothing
in this Section 5.11 shall be construed to limit the right of FBMS or any of its Subsidiaries (including, following the
Closing Date, SWBS and its Subsidiaries) to amend or terminate any SWBS Benefit Plan or other employee benefit plan, to the extent
such amendment or termination is permitted by the terms of the applicable plan, nor shall anything in this Section 5.11
be construed to require FBMS or any of its Subsidiaries (including, following the Closing Date, SWBS and its Subsidiaries) to retain
the employment of any particular Covered Employee for any fixed period of time following the Closing Date, and the continued retention
(or termination) by FBMS or any of its Subsidiaries of any Covered Employee subsequent to the Effective Time shall be subject in
all events to FBMS’s or its applicable Subsidiary’s normal and customary employment procedures and practices, including
customary background screening and evaluation procedures, and satisfactory employment performance.


 


(e)       Any
employee of SWBS or First Community Bank that becomes an employee of FBMS or The First at the Effective Time who is terminated
within one year following the Effective Time (other than for cause, death, disability, normal retirement or voluntarily resignation)
shall receive a severance payment equal to one week of base salary (up to a maximum of 12 weeks) for each year of employment, including
such employee’s years of employment with SWBS or First Community Bank.


 


Section 5.12     Notification
of Certain Changes. FBMS and SWBS shall promptly advise the other Party of any change or event having, or which could reasonably
be expected to have, a Material Adverse Effect or which it believes would, or which could reasonably be expected to, cause or constitute
a material breach of any of its or its respective Subsidiaries’ representations, warranties or covenants contained herein
and each Party shall provide on a periodic basis written notice to the other Party of any matters that it becomes aware of that
should be disclosed on a supplement or amendment to such Party’s Disclosure Schedule; provided, that any failure to
give notice in accordance with the foregoing shall not be deemed to constitute a violation of this Section 5.12 or the failure
of any condition set forth in Section 6.01, Section 6.02 or Section 6.03 to be satisfied, or otherwise constitute
a breach of this Agreement by the party failing to give such notice, in each case unless the underlying breach would independently
result in a failure of the conditions set forth in Section 6.01, Section 6.02 or Section 6.03 to be satisfied.


 






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Section 5.13     Transition;
Informational Systems Conversion. From and after the date hereof, FBMS and SWBS will use their commercially reasonable efforts
to facilitate the integration of SWBS with the business of FBMS following consummation of the transactions contemplated hereby,
and shall meet on a regular basis to discuss and plan for the conversion of the data processing and related electronic informational
systems of SWBS and each of its Subsidiaries (the “Informational Systems Conversion”) to those used by
FBMS, which planning shall include, but not be limited to, (a) discussion of third-party service provider arrangements of
SWBS and each of its Subsidiaries; (b) non-renewal or changeover, after the Effective Time, of personal property leases and
software licenses used by SWBS and each of its Subsidiaries in connection with the systems operations; (c) retention of outside
consultants and additional employees to assist with the conversion; (d) outsourcing, as appropriate after the Effective Time,
of proprietary or self-provided system services; and (e) any other actions necessary and appropriate to facilitate the conversion,
as soon as practicable following the Effective Time. FBMS shall promptly reimburse SWBS on request for any reasonable and documented
out-of-pocket fees, expenses or charges that SWBS may incur as a result of taking, at the request of FBMS, any action prior to
the Effective Time to facilitate the Informational Systems Conversion.


 


Section 5.14     No
Control of Other Party’s Business. Nothing contained in this Agreement shall give FBMS, directly or indirectly, the right
to control or direct the operations of SWBS or its Subsidiaries prior to the Effective Time, and nothing contained in this Agreement
shall give SWBS, directly or indirectly, the right to control or direct the operations of FBMS or its Subsidiaries prior to the
Effective Time. Prior to the Effective Time, each of SWBS and FBMS shall exercise, consistent with the terms and conditions of
this Agreement, control and supervision over its and its Subsidiaries’ respective operations.


 


Section 5.15     Certain
Litigation. Each Party shall promptly advise the other Party orally and in writing of any actual or threatened shareholder
litigation against such Party and/or the members of the board of directors of SWBS or the board of directors of FBMS related to
this Agreement or the Merger and the other transactions contemplated by this Agreement. SWBS shall: (i) permit FBMS to review and
discuss in advance, and consider in good faith the views of FBMS in connection with, any proposed written or oral response to such
shareholder litigation; (ii) furnish FBMS’s outside legal counsel with all non-privileged information and documents which
outside counsel may reasonably request in connection with such shareholder litigation; (iii) consult with FBMS regarding the defense
or settlement of any such shareholder litigation, shall give due consideration to FBMS’s advice with respect to such shareholder
litigation and shall not settle any such litigation prior to such consultation and consideration; provided, however,
that SWBS shall not settle any such shareholder litigation if such settlement requires the payment of money damages, without the
written consent of FBMS (such consent not to be unreasonably withheld, conditioned or delayed) unless the payment of any such damages
by SWBS is reasonably expected by SWBS, following consultation with outside counsel, to be fully covered (disregarding any deductible
to be paid by SWBS) under SWBS’s existing director and officer insurance policies, including any tail policy.


 


Section 5.16     Director
Resignations. SWBS will use commercially reasonable efforts to cause to be delivered to FBMS resignations of all the directors
of SWBS and its Subsidiaries, such resignations to be effective as of the Effective Time.


 


Section 5.17     Non-Competition
and Non-Disclosure Agreement. Concurrently with the execution and delivery of this Agreement and effective upon Closing, SWBS
has caused each director of SWBS and First Community Bank to execute and deliver the Non-Competition and Non-Disclosure Agreement
in the forms attached hereto as Exhibit C (with respect to William E. Blackmon, Bill Granade, Fred K. Granade, and Stanley
Moore) and Exhibit D (with respect to Lindsey C. Boney III, Paul Bullington, Marietta Urquhart, Carl Craig, Susan Turner,
and James Massey) (collectively, the “Director Restrictive Covenant Agreements”).


 






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Section 5.18     Claims
Letters. Concurrently with the execution and delivery of this Agreement and effective upon the Closing, SWBS has caused each
director of SWBS and First Community Bank to execute and deliver the Claims Letter in the form attached hereto as Exhibit E.


 


Section 5.19     Coordination.


 


(a)       Prior
to the Effective Time, subject to applicable Laws, SWBS and its Subsidiaries shall take any actions FBMS may reasonably request
from time to time to better prepare the parties for integration of the operations of SWBS and its Subsidiaries with FBMS and its
Subsidiaries, respectively. Without limiting the foregoing, senior officers of SWBS and FBMS shall meet from time to time as FBMS
may reasonably request, and in any event not less frequently than monthly, to review the financial and operational affairs of SWBS
and its Subsidiaries, and SWBS shall give due consideration to FBMS’s input on such matters, with the understanding that,
notwithstanding any other provision contained in this Agreement, neither FBMS nor The First shall under any circumstance be permitted
to exercise control of SWBS or any of its Subsidiaries prior to the Effective Time. SWBS shall permit representatives of The First
to be onsite at SWBS to facilitate integration of operations and assist with any other coordination efforts as necessary.


 


(b)       Prior
to the Effective Time, subject to applicable Laws, SWBS and its Subsidiaries shall take any actions FBMS may reasonably request
in connection with negotiating any amendments, modifications or terminations of any Leases or SWBS Material Contracts that FBMS
may request, including, but not limited to, actions necessary to cause any such amendments, modifications or terminations to become
effective immediately prior to, or immediately upon, the Closing, and shall cooperate with FBMS and will use its commercially reasonable
efforts to negotiate specific provisions that may be requested by FBMS in connection with any such amendment, modification or termination.


 


(c)       From
and after the date hereof, subject to applicable Laws, the parties shall reasonably cooperate with the other in preparing for the
prompt conversion or consolidation of systems and business operations promptly after the Effective Time (including by entering
into customary confidentiality, non-disclosure and similar agreements with the other party and appropriate service providers) and
SWBS shall, upon FBMS’s reasonable request, introduce FBMS and its representatives to suppliers of SWBS and its Subsidiaries
for the purpose of facilitating the integration of SWBS and its business into that of FBMS. In addition, after satisfaction of
the conditions set forth in Section 6.01(a) and Section 6.01(b), subject to applicable Laws, SWB shall, upon FBMS’s
reasonable request, introduce FBMS and its representatives to customers of SWB and its Subsidiaries for the purpose of facilitating
the integration of SWB and its business into that of FBMS. Any interaction between FBMS and SWBS’s and any of its Subsidiaries’
customers and suppliers shall be coordinated by SWBS. SWBS shall have the right to participate in any discussions between FBMS
and SWBS’s customers and suppliers.


 






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(d)       FBMS
and SWBS agree to take all action necessary and appropriate to cause First Community Bank to merge with The First in accordance
with applicable Laws and the terms of the Plan of Bank Merger immediately following the Effective Time or as promptly as practicable
thereafter.


 


Section 5.20     Transactional
Expenses. SWBS has provided in SWBS Disclosure Schedule 3.35 a reasonable good faith estimate of costs and fees that
SWBS and its Subsidiaries expect to pay to retained representatives in connection with the transactions contemplated by this Agreement
(collectively, “SWBS Expenses”). SWBS shall use its commercially reasonable efforts to cause the aggregate
amount of all SWBS Expenses to not exceed the total expenses disclosed in SWBS Disclosure Schedule 3.35. SWBS shall promptly
notify FBMS if or when it determines that it expects to exceed its budget for SWBS Expenses. Notwithstanding anything to the contrary
in this Section 5.20, SWBS shall not incur any investment banking, brokerage, finders or other similar financial advisory
fees in connection with the transactions contemplated by this Agreement other than those expressly set forth in SWBS Disclosure
Schedule 3.35.


 


Section 5.21     Confidentiality.
Prior to the execution of this Agreement and prior to the consummation of the Merger, subject to applicable Laws, each of FBMS
and SWBS, and their respective Subsidiaries, affiliates, officers, directors, agents, employees, consultants and advisors have
provided, and will continue to provide one another with information which may be deemed by the party providing the information
to be non-public, proprietary and/or confidential, including, but not limited to, trade secrets of the disclosing party. Each Party
agrees that it will, and will cause its representatives to, hold any information obtained pursuant to this Article V in
accordance with the terms of the confidentiality and non-disclosure agreement, dated as of April 14, 2017 between FBMS and SWBS.


 


Section 5.22     Tax
Matters.


 


(a)       The
Parties intend that the Merger and the Bank Merger shall each qualify as a “reorganization” within the meaning of Section
368(a) of the Code and that this Agreement constitute a “plan of reorganization” within the meaning of Section 1.368-2(g)
of the Regulations. Except as expressly contemplated or permitted by this Agreement, from and after the date of this Agreement,
each of FBMS and SWBS shall use their respective reasonable best efforts to cause each of the Merger and the Bank Merger to qualify
as a reorganization within the meaning of Section 368(a) of the Code, and will not take any action, cause any action to be taken,
fail to take any action or cause any action to fail to be taken which action or failure to act is intended or is reasonably likely
to prevent either the Merger or the Bank Merger from qualifying as a reorganization within the meaning of Section 368(a) of the
Code.


 


(b)       FBMS
will prepare or caused to be prepared and timely file or cause to be timely filed all Tax returns for SWBS and its Subsidiaries
for all periods ending before the Effective Time which are filed after the Effective Time; but such Tax returns will be subject
to the review and approval of one or more representatives of SWBS’s shareholders to be appointed by SWBS’s Board of
Directors prior to the Effective Time. FBMS agrees to engage Mauldin and Jenkins, LLP to prepare such Tax returns.


 






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Section 5.23     Board
Representation. FBMS agrees to consider appointing a representative proposed by SWBS and mutually agreed upon by SWBS
and FBMS to the Board of Directors of The First (the “Bank Board”) after the Effective Time. Notwithstanding
anything to the contrary in this Agreement, the Parties acknowledge and agree that in no event will FBMS or The First be required
by the terms of this Agreement to appoint any director to the Bank Board.


 


Section 5.24     Termination
and Conversion Costs. SWBS shall contact the counterparty to each of the agreements set forth on Schedule 8.01 prior to the
Closing Date and obtain a written statement from such Person setting forth the amount of any fees that would be payable by FBMS
(as successor to SWBS) to (a) terminate each such agreement following the Closing (the “Termination Costs”)
and (b) to convert the services contemplated thereby to FBMS’s preferred vendors (the “Conversion Costs”).
The Termination Costs, as determined in accordance with this Section 5.24, shall be used to calculate the SWBS Transaction Expenses.


 


Article
VI



CONDITIONS TO CONSUMMATION OF THE MERGER


 


Section 6.01     Conditions
to Obligations of the Parties to Effect the Merger.
The respective obligations of the Parties to consummate the Merger are subject to the fulfillment or, to the extent permitted
by applicable Law, written waiver by the Parties prior to the Closing Date of each of the following conditions:


 


(a)      Shareholder
Vote. This Agreement and the transactions contemplated
hereby, as applicable, shall have received the Requisite SWBS Shareholder Approval at
the SWBS Meeting.


 


(b)      Regulatory
Approvals; No Burdensome Condition. All Regulatory Approvals required
to consummate the Merger and the Bank Merger in the
manner contemplated herein shall have been obtained and shall remain in full force and effect
and all statutory waiting periods in respect thereof, if any, shall have expired or been
terminated, and no such Regulatory Approval includes or contains, or
shall have resulted in the imposition of, any Burdensome Condition.


 


(c)      No
Injunctions or Restraints; Illegality. No judgment, order, injunction or
decree issued by any court or agency of competent jurisdiction or
other legal restraint or prohibition preventing the
consummation of any of the transactions contemplated hereby shall be in effect. No statute, rule, regulation, order, injunction
or decree shall have been enacted, entered, promulgated or
enforced by any Governmental Authority that prohibits or
makes illegal the consummation of any of the transactions contemplated hereby.


 


(d)      Effective
Registration Statement. The Registration Statement shall
have become effective and no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC or any other Governmental Authority.


 




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(e)      Tax
Opinions Relating to the Merger. FBMS
and SWBS, respectively, shall have received opinions from Alston & Bird LLP and
Jones Walker LLP, respectively, each dated as of the Closing Date, in substance and form
reasonably satisfactory to FBMS and SWBS, respectively,
to the effect that, on the basis of the facts, representations and assumptions set forth in such opinion, the Merger
will be treated for federal income tax purposes as a “reorganization”
within the meaning of Section 368(a) of the Code. In rendering their opinions, Alston
& Bird LLP and Jones Walker LLP may require and rely upon representations as to certain factual matters contained in certificates
of officers of each of FBMS and SWBS, in form and
substance reasonably acceptable to such counsel.


 


Section 6.02     Conditions
to Obligations of SWBS. The obligations of SWBS to consummate the Merger also are subject
to the fulfillment or written waiver by SWBS prior to the Closing Date of each of the following conditions:


 


(a)      Representations
and Warranties. The representations and warranties of FBMS (i) set forth in Section 4.09 shall be true and correct in all respects
as of the date of this Agreement and as of the Closing Date with the same effect as though made
as of the Closing Date, (ii) Section 4.01, Section 4.02, Section 4.03,
Section 4.04, Section 4.08, and Section 4.12 shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date (except to the extent
expressly made as of an earlier date, in which case as of such date) and (iii) set forth in this Agreement, other than those sections
specifically identified in clauses (i) or (ii) of this Section 6.02(a), shall be true and correct (disregarding all qualifications
or limitations as to “materiality”, “Material Adverse Effect” and words of similar import set forth therein)
as of the date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date (except
to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this clause (iii), where
the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect with respect to FBMS. SWBS shall have received a certificate signed on behalf of FBMS by the Chief Executive Officer
or the Chief Financial Officer of FBMS to the foregoing effect.


 


(b)      Performance
of Obligations of FBMS. FBMS shall have performed
and complied with all of its obligations under this Agreement in all material
respects at or prior to the Closing Date,
and SWBS shall have received a certificate, dated
the Closing Date, signed on behalf of FBMS by its
Chief Executive Officer and the Chief Financial Officer to such effect.


 


(c)      No
Material Adverse Effect. Since the date of this Agreement
(i) no change or event has occurred which has resulted in FBMS
or The First being subject to a Material Adverse Effect and (ii) no condition, event,
fact, circumstance or other occurrence has occurred that may reasonably be expected to have
or result in such parties being subject to a Material
Adverse Effect.


 




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Section 6.03     Conditions
to Obligations of FBMS. The obligations of FBMS to consummate the Merger also are subject
to the fulfillment or written waiver by FBMS prior to the Closing Date of each of the following conditions:


 


(a)      Representations
and Warranties. The representations and warranties of SWBS (i) set forth in Section 3.02(a) and Section 3.09(b)
shall be true and correct in all respects (with respect to Section 3.02(a), other than de minimis inaccuracies, it being
agreed that for purposes of Section 3.02(a), any inaccuracy in which the applicable amounts as of a date of determination
exceed the amounts set forth in Section 3.02(a) by no more than 1% shall be deemed de minimis) as of the date of this Agreement
and as of the Closing Date as though made as of the Closing Date, (ii) the first sentence of Section 3.01, Section 3.04(a),
Section 3.05, Section 3.14 and Section 3.34 shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date (except to the extent expressly
made as of an earlier date, in which case as of such date) and (iii) set forth in this Agreement, other than those sections specifically
identified in clauses (i) or (ii) of this Section 6.03(a), shall be true and correct (disregarding all qualifications or
limitations as to “materiality”, “Material Adverse Effect” and words of similar import set forth therein)
as of the date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date (except
to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this clause (iii), where
the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect with respect to SWBS. FBMS shall have received a certificate signed on behalf of SWBS by the Chief Executive Officer or
the Chief Financial Officer of SWBS to the foregoing effect.


 


(b)      Performance
of Obligations of SWBS. SWBS shall have performed
and complied with all of its obligations under this Agreement in all material
respects at or prior to the Closing Date,
and FBMS shall have received a certificate, dated
the Closing Date, signed on behalf of SWBS by SWBS’s
Chief Executive Officer and Chief Financial Officer, to such effect.


 


(c)      No
Material Adverse Effect. Since the date of this Agreement
(i) no change or event has occurred which has resulted in SWBS
or any of its Subsidiaries being subject to a Material
Adverse Effect and (ii) no condition, event, fact, circumstance or other occurrence
has occurred that may reasonably be expected to have or result in such parties
being subject to a Material Adverse Effect.


 


(d)      Plan
of Bank Merger. Except as otherwise contemplated by Section 1.03, the Plan
of Bank Merger shall have been executed and delivered.


 


(e)      Dissenting
Shares. Dissenting Shares shall be less than five percent (5%) of the
issued and outstanding shares of SWBS Common Stock.


 


(f)      Certification
of Non-USRPI Status. FBMS shall have received from SWBS,
under penalties of perjury, a certificate conforming to the requirements of Regulations
Sections 1.897-2(h) and 1.1445-2(c)(3) and otherwise reasonably acceptable to FBMS,
dated as of the Closing Date, certifying that no interest in SWBS
is a United States real property interest as defined in Section 897(c) of the Code.


 


 




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(g)      Adjusted
Minimum Tangible Common Equity. The Adjusted Tangible Common Equity of SWBS shall be no less than $32 million.


 


Section 6.04     Frustration
of Closing Conditions. Neither FBMS nor SWBS may rely on the failure of any condition
set forth in Section 6.01, Section 6.02 or Section 6.03, as the case may be, to be satisfied if such failure
was caused by such Party’s failure to use its reasonable best efforts to consummate any of the transactions contemplated
hereby, as required by and subject to Section 5.03.


 


Article
VII



TERMINATION


 


Section 7.01     Termination.
This Agreement may be terminated, and the transactions contemplated hereby may be abandoned:


 


(a)      Mutual
Consent. At any time prior to the Effective Time, by the mutual consent, in writing,
of FBMS and SWBS if the board of directors of FBMS
and the board of directors of SWBS each so determines by vote of a majority of the
members of its entire board.


 


(b)      No
Regulatory Approval. By FBMS or SWBS, if either
of their respective boards of directors so determines by a vote of a majority of the members of its entire board, in the event
any Regulatory Approval required for consummation of the transactions contemplated by this
Agreement shall have been denied by final, non-appealable action by such Governmental
Authority or an application therefor shall have been permanently withdrawn at the request of a Governmental
Authority.


 


(c)      No
Shareholder Approval. By either FBMS or SWBS (provided, in the case of SWBS,
that it shall not be in breach of any of its obligations under Section 5.04), if the Requisite
SWBS Shareholder Approval at the SWBS Meeting shall not have been obtained by reason
of the failure to obtain the required vote at a duly held meeting of such shareholders or at
any adjournment or postponement thereof.


 


(d)      Breach
of Representations and Warranties. By either FBMS or SWBS (provided that the terminating
party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein
in a manner that would entitle the other party to not consummate this Agreement)
if there shall have been (i) with respect to representations and warranties set forth in this Agreement
that are not qualified by the term “material” or
do not contain terms such as “Material Adverse Effect,” a material
breach of any of such representations or warranties by the other party
and (ii) with respect to representations and warranties set forth in this Agreement that
are qualified by the term “material” or contain
terms such as “Material Adverse Effect,” any breach of any of such representations
or warranties by the other Party; which breach is
not cured prior to the earlier of (y) thirty (30) days following written notice to the Party committing
such breach from the other Party or (z) two (2) Business
Days prior to the Expiration Date, or which
breach, by its nature, cannot be cured prior to the Closing.


 




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(e)      Breach
of Covenants. By either FBMS or SWBS (provided that the terminating party
is not then in material breach of any representation, warranty, covenant or
other agreement contained herein in a manner
that would entitle the other Party not to consummate the agreement)
if there shall have been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of the other Party,
which breach shall not have been cured prior to the earlier of (i) thirty (30) days following written notice to the Party
committing such breach from the other Party or (ii) two (2) Business
Days prior to the Expiration Date, or which
breach, by its nature, cannot be cured prior to the Closing.


 


(f)      Delay.
By either FBMS or SWBS if the Merger shall not have been consummated on or before February 20, 2018, provided, however,
that such date will be automatically extended to April 21, 2018, if the only outstanding condition to Closing under Article
VI is the receipt of all Regulatory Approvals (the “Expiration Date”), unless the failure of the
Closing to occur by such date shall be due to a material breach of this Agreement by the Party seeking to terminate this Agreement.


 


(g)      Failure
to Recommend; Etc. In addition to and not in limitation of FBMS’s termination
rights under Section 7.01(e), by FBMS if (i) there
shall have been a material breach of Section 5.09, or
(ii) the board of directors of SWBS (A) withdraws, qualifies, amends, modifies or
withholds the SWBS Recommendation, or makes
any statement, filing or release, in connection with the SWBS
Meeting or otherwise, inconsistent with the SWBS Recommendation (it being understood
that taking a neutral position or no position with respect to an Acquisition
Proposal shall be considered an adverse modification of the SWBS Recommendation),
(B) materially breaches its obligation to call, give notice of and commence the SWBS Meeting under
Section 5.04(a), (C) approves or recommends an Acquisition
Proposal, (D) fails to publicly recommend against a publicly announced Acquisition Proposal
within three (3) Business Days of being requested to do so by FBMS,
(E) fails to publicly reconfirm the SWBS Recommendation within three (3) Business
Days of being requested to do so by FBMS, or (F)
resolves or otherwise determines to take, or announces
an intention to take, any of the foregoing actions.


 


(h)      SWBS
Walkaway Right. This Agreement may be terminated prior to Closing by the Board of Directors of SWBS if the Actual Closing Price
of FBMS Common Stock is less than 70% of the Signing Price, subject to the following.  If SWBS elects to exercise its termination
right pursuant to the immediately preceding sentence, it shall give prompt written notice to FBMS; provided, that such notice of
election to terminate may be withdrawn at any time within the five-day period commencing on the delivery of such notice to FBMS. 
During this five-day period, FBMS shall have the option, but not the obligation, to increase the Merger Consideration as defined
in Section 8.01 as the Walkaway Counter Offer.  If FBMS elects to make the Walkaway Counter Offer, it shall give the Walkaway
Counter Offer Notice (as defined in Section 8.01 hereof) to SWBS during the five-day period following receipt of the termination
notice previously sent by the SWBS, whereupon such notice of termination shall be null and void and of no effect, SWBS shall no
longer have the right to terminate the Agreement pursuant to this Section 7.01(h) and this Agreement shall remain in effect
in accordance with its terms (except for the payment of the Merger Consideration).  Any references in this Agreement to the
"Merger Consideration" shall thereafter be deemed to refer to the Merger Consideration after giving effect to any adjustment
set forth in the Walkaway Counter Offer Notice.  FBMS Common Stock shall be appropriately adjusted subject to the provisions
defined in Section 2.09, for the purposes of applying this Section 7.01(h).


 




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Section 7.02     Termination
Fee.


 


(a)      In
recognition of the efforts, expenses and other opportunities foregone by FBMS while structuring
and pursuing the Merger, SWBS shall pay to FBMS
a termination fee equal to $2,250,000 (“SWBS Termination Fee”),
by wire transfer of immediately available funds to an account specified by FBMS in the event
of any of the following: (i) in the event FBMS terminates this Agreement
pursuant to Section 7.01(g), SWBS shall pay FBMS
the Termination Fee within one (1) Business Day after
receipt of FBMS’s notification of such termination; and (ii)
in the event that after the date of this Agreement and prior to the termination of
this Agreement, an Acquisition Proposal shall have
been made known to senior management of SWBS or has been made directly to its shareholders
generally or any Person shall have publicly announced
(and not withdrawn) an Acquisition Proposal with respect to SWBS
and (A) thereafter this Agreement is terminated (x) by either FBMS
or SWBS pursuant to Section 7.01(c) because the Requisite SWBS Shareholder Approval
shall not have been obtained or (y) by FBMS pursuant
to Section 7.01(d) or Section 7.01(e) and (B) prior to the date that is twelve
(12) months after the date of such termination, SWBS enters into any agreement
or consummates a transaction with respect to an Acquisition Proposal (whether or
not the same Acquisition Proposal as that referred to above), then SWBS
shall, on the earlier of the date it enters into such agreement and the date of consummation
of such transaction, pay FBMS the Termination Fee,
provided, that for purposes of this Section 7.02(a)(ii), all references in
the definition of Acquisition Proposal to “20%” shall instead refer to “50%.”


 


(b)      SWBS
agrees that the agreements contained in this Section 7.02 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, FBMS would not enter into this Agreement; accordingly, if SWBS fails promptly to
pay any amounts due under this Section 7.02, SWBS shall pay interest on such amounts from the date payment of such amounts
were due to the date of actual payment at the rate of interest equal to the sum of (i) the rate of interest published from
time to time in The Wall Street Journal, Eastern Edition (or any successor publication thereto), designated therein as the prime
rate on the date such payment was due, plus (ii) 200 basis points, together with the costs and expenses of FBMS (including reasonable
legal fees and expenses) in connection with such suit.


 


(c)      Notwithstanding
anything to the contrary set forth in this Agreement, the Parties
agree that if a SWBS pays or causes to be paid to FBMS the Termination Fee in accordance
with this Section 7.02, SWBS (or any successor to SWBS) will not have any further
obligations or liabilities to FBMS with respect to this Agreement
or the transactions contemplated by this Agreement.


 


Section 7.03     Effect
of Termination. Except as set forth in Section 7.02(c), termination of this Agreement will not relieve a breaching
party from liability for any breach of any covenant, agreement, representation or warranty of this Agreement (a) giving rise to
such termination and (b) resulting from fraud or any willful and material breach.


 




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Article
VIII



DEFINITIONS


 


Section 8.01     Definitions.
The following terms are used in this Agreement with the meanings set forth below:


 


“ABCL”
has the meaning set forth in Section 1.01.


 


“ASBD”
has the meaning set forth in Section 3.06.


 


“Acquisition
Proposal” has the meaning set forth in Section 5.09.


 


“Acquisition
Transaction” has the meaning set forth in Section 5.09.


 


“Adjusted
Tangible Common Equity” means an amount calculated as (i) SWBS’s common equity (as defined in GAAP) minus
(ii) intangible assets (as defined in GAAP) minus (iii) any anticipated but unaccrued SWBS Transaction Expenses minus
(iv) the amount of any reduction in SWBS’s allowance for loan and lease losses below $3,425,000 as of the Effective Time.


 


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


 


“Aggregate
Merger Consideration” means the Cash Consideration and the Stock Consideration.


 


“Agreement”
has the meaning set forth in the preamble to this Agreement.


 


“Articles
of Bank Merger” has the meaning set forth in Section 1.05(b).


 


“Articles
of Merger” has the meaning set forth in Section 1.05(a).


 


“ASC 320”
means GAAP Accounting Standards Codification Topic 320.


 


“Associate”
when used to indicate a relationship with any Person means (1) any corporation or organization (other than SWBS or any of its Subsidiaries)
of which such Person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities, (2) any trust or other estate in which such Person has a substantial beneficial interest or serves as trustee
or in a similar fiduciary capacity, or (3) any relative or family member of such Person.


 


“Audited
Financial Statements” has the meaning set forth in Section 3.07(a).


 




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“Bank Merger”
has the meaning set forth in Section 1.03.


 


“Bank Plan
of Merger” has the meaning set forth in Section 1.03.


 


“Bank Secrecy
Act” means the Bank Secrecy Act of 1970, as amended.


 


“BOLI”
has the meaning set forth in Section 3.32(b).


 


“Book-Entry
Shares” means any non-certificated share held by book entry in SWBS’s stock transfer book, which immediately
prior to the Effective Time represents an outstanding share of SWBS Common Stock.


 


“Burdensome
Condition” has the meaning set forth in Section 5.06(a).


 


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


 


“Cash Consideration”
has the meaning set forth in Section 2.01(c).


 


“Certificate”
means any outstanding certificate, which immediately prior to the Effective Time, represents an outstanding share of SWBS Common
Stock.


 


“Claim”
has the meaning set forth in Section 5.10(a).


 


“Closing”
and “Closing Date” have the meanings set forth in Section 1.05(c).


 


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


 


“Community
Reinvestment Act” means the Community Reinvestment Act of 1977, as amended.


 


“Controlled
Group Members” means any of SWBS’s related organizations described in Code Sections 414(b), (c) or (m).


 


“Conversion
Costs” has the meaning set forth in Section 5.24.


 


“Covered
Employees” has the meaning set forth in Section 5.11(a).


 


“D&O
Insurance” has the meaning set forth in Section 5.10(c).


 


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


 




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“Determination
Date” means the later of (i) the date on which the last required Regulatory Approval is obtained without regard to
any requisite waiting period or (ii) the date on which the Requisite SWBS Shareholder Approval is obtained.


 


“Director
Restrictive Covenant Agreements” has the meaning set forth in Section 5.17.


 


“Dissenting
Shareholder” has the meaning set forth in Section 2.01(d).


 


“Dissenting
Shares” has the meaning set forth in Section 2.01(d).


 


“Dodd-Frank
Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act.


 


“Effective
Time” has the meaning set forth in Section 1.04(a).


 


“Environmental
Law” means any federal, state or local Law, regulation, order, decree, permit, authorization, opinion or agency requirement
relating to: (a) pollution, the protection or restoration of the indoor or outdoor environment, human health and safety, or
natural resources, (b) the handling, use, presence, disposal, release or threatened release of any Hazardous Substance, or
(c) any injury or threat of injury to persons or property in connection with any Hazardous Substance. The term Environmental
Law includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated
pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: (a) Comprehensive
Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act of 1986,
as amended, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901, et seq.;
the Clean Air Act, as amended, 42 U.S.C. § 7401, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. §
1251, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. § 2601, et seq.; the Emergency Planning and Community
Right to Know Act, 42 U.S.C. § 1101, et seq.; the Safe Drinking Water Act; 42 U.S.C. § 300f, et seq.; the Occupational
Safety and Health Act, 29 U.S.C. § 651, et seq.; (b) common Law that may impose liability (including without limitation
strict liability) or obligations for injuries or damages due to the presence of or exposure to any Hazardous Substance.


 


“Equal
Credit Opportunity Act” means the Equal Credit Opportunity Act, as amended.


 


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


 


“ERISA
Affiliate” has the meaning set forth in Section 3.15(a).


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 




    	 	64	 



     


    

 


“Exchange
Agent” means such exchange agent as may be designated by FBMS (which shall be FBMS’s transfer agent), and reasonably
acceptable to SWBS, to act as agent for purposes of conducting the exchange procedures described in Article II.


 


“Exchange
Fund” has the meaning set forth in Section 2.07(a).


 


“Expiration
Date” has the meaning set forth in Section 7.01(f).


 


“Fair Credit
Reporting Act” means the Fair Credit Reporting Act, as amended.


 


“Fair Housing
Act” means the Fair Housing Act, as amended.


 


“FBMS”
has the meaning set forth in the preamble to this Agreement.


 


“FBMS Common
Stock” means the voting and non-voting common stock, $0.01 par value per share, of FBMS.


 


“FBMS Disclosure
Schedule” has the meaning set forth in Article IV.


 


“FBMS Reports”
has the meaning set forth in Section 4.05(a).


 


“FDIA”
has the meaning set forth in Section 3.27.


 


“FDIC”
means the Federal Deposit Insurance Corporation.


 


“FFIEC”
means the Federal Financial Institutions Examination Council.


 


“Financial
Statements” has the meaning set forth in Section 3.07(a).


 


“First
Community Bank” has the meaning set forth in Section 1.03.


 


“FRB”
means the Board of Governors of the Federal Reserve System.


 


“GAAP”
means generally accepted accounting principles in the United States of America, applied consistently with past practice, including
with respect to quantity and frequency.


 


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


 




    	 	65	 



     


    

 


“Hazardous
Substance” means any and all substances (whether solid, liquid or gas) defined, listed, or otherwise regulated as
pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, flammable or explosive materials,
radioactive materials or words of similar meaning or regulatory effect under any present or future Environmental Law or that may
have a negative impact on human health or the environment, including, but not limited to, petroleum and petroleum products, asbestos
and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables and explosives, mold,
mycotoxins, microbial matter and airborne pathogens (naturally occurring or otherwise). Hazardous Substance does not include substances
of kinds and in amounts ordinarily and customarily used or stored for the purposes of cleaning or other maintenance or operations.


 


“Holder”
means the holder of record of shares of SWBS Common Stock.


 


“Home Mortgage
Disclosure Act” means Home Mortgage Disclosure Act of 1975, as amended.


 


“Indemnified
Parties” and “Indemnifying Party” have the meanings set forth in Section 5.10(a).


 


“Informational
Systems Conversion” has the meaning set forth in Section 5.13.


 


“Insurance
Policies” has the meaning set forth in Section 3.32(a).


 


“Intellectual
Property” means (a) trademarks, service marks, trade names, Internet domain names, designs, logos, slogans,
and general intangibles of like nature, together with all goodwill, registrations and applications related to the foregoing; (b) patents
and industrial designs (including any continuations, divisionals, continuations-in-part, renewals, reissues, and applications for
any of the foregoing); (c) copyrights (including any registrations and applications for any of the foregoing); (d) Software;
and (e) technology, trade secrets and other confidential information, know-how, proprietary processes, formulae, algorithms,
models, and methodologies.


 


“IRS”
means the United States Internal Revenue Service.


 


“Knowledge”
means, with respect to SWBS, the actual knowledge, of the Persons set forth in SWBS Disclosure Schedule 8.01, after due
inquiry of their direct subordinates who would be likely to have knowledge of such matter, and with respect to FBMS, the actual
knowledge of the Persons set forth in FBMS Disclosure Schedule 8.01, after due inquiry of their direct subordinates who
would be likely to have knowledge of such matter.


 


“Law”
means any federal, state, local or foreign Law, statute, ordinance, rule, regulation, judgment, order, injunction, decree, arbitration
award, agency requirement, license or permit of any Governmental Authority that is applicable to the referenced Person.


 


“Leases”
has the meaning set forth in Section 3.30(b).


 


“Letter
of Transmittal” has the meaning set forth in Section 2.06.


 


“Liens”
means any charge, mortgage, pledge, security interest, restriction, claim, lien or encumbrance, conditional and installment sale
agreement, charge, claim, option, rights of first refusal, encumbrances, or security interest of any kind or nature whatsoever
(including any limitation on voting, sale, transfer or other disposition or exercise of any other attribute of ownership).


 




    	 	66	 



     


    

 


“Loans”
has the meaning set forth in Section 3.22(a).


 


“Material
Adverse Effect” with respect to any party means (i) any change, development or effect that individually or in the
aggregate is, or is reasonably likely to be, material and adverse to the condition (financial or otherwise), results of operations,
liquidity, assets or deposit liabilities, properties, or business of such party and its Subsidiaries, taken as a whole, or (ii)
any change, development or effect that individually or in the aggregate would, or would be reasonably likely to, materially impair
the ability of such party to perform its obligations under this Agreement or otherwise materially impairs, or is reasonably likely
to materially impair, the ability of such party to consummate the Merger and the transactions contemplated hereby; provided,
however, that, in the case of clause (i) only, a Material Adverse Effect shall not be deemed to include the impact of (A) changes
after the date of this Agreement in banking and similar Laws of general applicability or interpretations thereof by Governmental
Authorities (except to the extent that such change disproportionately adversely affects SWBS and its Subsidiaries or FBMS and its
Subsidiaries, as the case may be, compared to other companies of similar size operating in the same industry in which SWBS and
FBMS operate, in which case only the disproportionate effect will be taken into account), (B) changes after the date of this
Agreement in GAAP or regulatory accounting requirements applicable to banks or bank holding companies generally (except to the
extent that such change disproportionately adversely affects SWBS and its Subsidiaries or FBMS and its Subsidiaries, as the case
may be, compared to other companies of similar size operating in the same industry in which SWBS and FBMS operate, in which case
only the disproportionate effect will be taken into account), (C) changes after the date of this Agreement in global, national
or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market (including equity,
credit and debt markets, as well as changes in interest rates) conditions affecting the financial services industry generally (except
to the extent that such change disproportionately adversely affects SWBS and its Subsidiaries or FBMS and its Subsidiaries, as
the case may be, compared to other companies of similar size operating in the same industry in which SWBS and FBMS operate, in
which case only the disproportionate effect will be taken into account), (D) public disclosure of the transactions contemplated
hereby or actions expressly required by this Agreement or actions or omissions that are taken with the prior written consent of
the other party, or as otherwise expressly permitted or contemplated by this Agreement, (E) any failure by SWBS or FBMS to
meet any internal or published industry analyst projections or forecasts or estimates of revenues or earnings for any period (it
being understood and agreed that the facts and circumstances giving rise to such failure that are not otherwise excluded from the
definition of Material Adverse Effect may be taken into account in determining whether there has been a Material Adverse Effect),
(F) changes in the trading price or trading volume of FBMS Common Stock, and (G)  the impact of this Agreement and the transactions
contemplated hereby on relationships with customers or employees (including the loss of personnel subsequent to the date of this
Agreement).


 


“Merger”
has the meaning set forth in the recitals.


 


“Merger
Consideration” has the meaning set forth in Section 2.01(c).


 




    	 	67	 



     


    

 


“NASDAQ”
means The NASDAQ Global Select Market.


 


“National
Labor Relations Act” means the National Labor Relations Act, as amended.


 


“Notice
of Superior Proposal” has the meaning set forth in Section 5.09(e).


 


“OCC”
has the meaning set forth in Section 3.06.


 


“Ordinary
Course of Business” means the ordinary, usual and customary course of business of SWBS and SWBS’s Subsidiaries
consistent with past practice, including with respect to frequency and amount.


 


“OREO”
has the meaning set forth in Section 3.22(c).


 


“Party”
or “Parties” have the meaning set forth in the preamble.


 


“Per Share
Cash Consideration” has the meaning set forth in Section 2.01(c).


 


“Per Share
Stock Consideration” has the meaning set forth in Section 2.01(c).


 


“Person”
means any individual, bank, corporation, partnership, association, joint-stock company, business trust, limited liability company,
unincorporated organization or other organization or firm of any kind or nature.


 


“Proxy
Statement-Prospectus” means the proxy statement and prospectus and other proxy solicitation materials of FBMS and
SWBS relating to the SWBS Meeting.


 


“Registration
Statement” means the Registration Statement on Form S-4 to be filed with the SEC by FBMS in connection with the issuance
of shares of FBMS Common Stock in the Merger (including the Proxy Statement-Prospectus constituting a part thereof).


 


“Regulations”
means the final and temporary regulations promulgated under the Code by the United States Department of the Treasury.


 


“Regulatory
Approval” has the meaning set forth in Section 3.06.


 


“Requisite
SWBS Shareholder Approval” means the adoption of this Agreement by a vote (in person or by proxy) of two-thirds of
the outstanding shares of SWBS Common Stock entitled to vote thereon at the SWBS Meeting.


 


“Rights”
means, with respect to any Person, warrants, options, rights, convertible securities and other arrangements or commitments which
obligate the Person to issue or dispose of any of its capital stock or other ownership interests.


 


“Sarbanes-Oxley
Act” means the Sarbanes-Oxley Act of 2002, as amended.


 


“SEC”
means the Securities and Exchange Commission.


 




    	 	68	 



     


    

 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Software”
means computer programs, whether in source code or object code form (including any and all software implementation of algorithms,
models and methodologies), databases and compilations (including any and all data and collections of data), and all documentation
(including user manuals and training materials) related to the foregoing.


 


“Stock
Consideration” has the meaning set forth in Section 2.01(c).


 


“Subsidiary”
means, with respect to any party, any corporation or other entity of which a majority of the capital stock or other ownership interest
having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at
the time directly or indirectly owned by such party. Any reference in this Agreement to a Subsidiary of SWBS means, unless the
context otherwise requires, any current or former Subsidiary of SWBS.


 


“Superior
Proposal” has the meaning set forth in Section 5.09.


 


“Surviving
Bank” has the meaning set forth in Section 1.03.


 


“Surviving
Entity” has the meaning set forth in the Recitals.


 


“SWBS”
has the meaning set forth in the preamble to this Agreement.


 


“SWBS 401(a)
Plan” has the meaning set forth in Section 3.15(c).


 


“SWBS Benefit
Plans” has the meaning set forth in Section 3.15(a).


 


“SWBS Common
Stock” means the common stock, $0.10 par value per share, of SWBS.


 


“SWBS Disclosure
Schedule” has the meaning set forth in Article III.


 


“SWBS Employees”
has the meaning set forth in Section 3.15(a).


 


“SWBS Expenses”
has the meaning set forth in Section 5.20.


 


“SWBS Financial
Advisor” has the meaning set forth in Section 3.14.


 


“SWBS Intellectual
Property” means the Intellectual Property used in or held for use in the conduct of the business of SWBS and its
Subsidiaries.


 


“SWBS Investment
Securities” means the investment securities of SWBS and its Subsidiaries.


 


“SWBS Loan”
has the meaning set forth in Section 3.22(d).


 




    	 	69	 



     


    

 


“SWBS Material
Contracts” has the meaning set forth in Section 3.12(a).


 


“SWBS Meeting”
has the meaning set forth in Section 5.04(a)(i).


 


“SWBS Recommendation”
has the meaning set forth in Section 5.04(a)(ii).


 


“SWBS Regulatory
Agreement” has the meaning set forth in Section 3.13.


 


“SWBS Representatives”
has the meaning set forth in Section 5.09(a).


 


“SWBS Restricted
Share” has the meaning set forth in Section 2.01(a).


 


“SWBS Stock
Plans” means all equity plans of SWBS or any Subsidiary, including the Long-Term Equity Incentive Agreement dated
June 30, 2015, and any sub-plans adopted thereunder, each as amended to date.


 


“SWBS Subsequent
Determination” has the meaning set forth in Section 5.09(e).


 


“SWBS Transaction
Expenses” means (a) any fees and commissions payable by SWBS to any broker, finder, financial advisor or investment
banking firm in connection with this Agreement, the Merger, the Bank Merger and the transactions contemplated hereby; (b) any
legal and accounting fees incurred by SWBS in connection with this Agreement, the Merger, the Bank Merger and the transactions
contemplated hereby and any related SEC and regulatory filings (including costs associated with holding the SWBS Meeting and the
preparation and mailing of proxy materials with respect to the SWBS Meeting); (c) all costs, expenses, payments or other amounts
paid or payable pursuant to any existing employment, change-in-control, salary continuation, deferred compensation or other similar
agreements or severance, noncompetition, or retention arrangements between SWBS or any of its Subsidiaries and any other Person;
and (d) the Termination Costs with respect to the agreements set forth on Schedule 8.01. For the avoidance doubt, this shall
not include the items listed in SWBS Disclosure Schedule 8.01. The SWBS Transaction Expenses include, but are not limited
to, all categories of estimated fees and expenses set forth on Schedule 3.35, provided that, for the avoidance of doubt,
such amounts set forth on Schedule 3.35 are not dispositive of the final SWBS Transaction Expenses in any category described therein.


 


“SWBS Voting
Agreement” or “SWBS Voting Agreements” shall have the meaning set forth in the recitals
to this Agreement.


 


“SWBS Walkaway
Right” has the meaning set forth in Section 7.01(h).


 


“Tax”
and “Taxes” mean all federal, state, local or foreign income, gross income, gains, gross receipts, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise, windfall profits, license, withholding, payroll,
employment, disability, employer health, excise, estimated, severance, stamp, occupation, property, environmental, custom duties,
unemployment or other taxes of any kind whatsoever, together with any interest, additions or penalties thereto and any interest
in respect of such interest and penalties.


 


“Tax Returns”
means any return, amended return, declaration or other report (including elections, declarations, schedules, estimates and information
returns) required to be filed with any taxing authority with respect to any Taxes.


 


“Termination
Costs” has the meaning set forth in Section 5.24.


 




    	 	70	 



     


    

 


“Termination
Fee” has the meaning set forth in Section 7.02(a).


 


“The date
hereof” or “the date of this Agreement” means the date first set forth above in the preamble
to this Agreement.


 


“The First”
has the meaning set forth in Section 1.03.


 


“Trading
Day” means any day on which the NASDAQ Stock Market is open for trading; provided that a “Trading Day”
only includes those days that have a scheduled closing time of 4:00 p.m. (Eastern Time).


 


“Truth
in Lending Act” means the Truth in Lending Act of 1968, as amended.


 


“Unaudited
Financial Statements” has the meaning set forth in Section 3.07(a).


 


“USA PATRIOT
Act” means the USA PATRIOT Act of 2001, Public Law 107-56, and the regulations promulgated thereunder.


 


“Walkaway
Counter Offer” shall mean that FBMS has the right, but not the obligation, to provide for not less than $56,400,000
in Merger Consideration, either through additional cash or FBMS common stock with an equivalent value, which will be adjusted downward
on a dollar-for-dollar basis if the Adjusted Tangible Common Equity of SWBS as of the Closing is less than $32,000,000. Under the
Walkaway Counter Offer, FBMS will not provide for Merger Consideration in a manner whereby cash will constitute greater than 45%
of the Merger Consideration.


 


Article
IX



MISCELLANEOUS


 


Section 9.01     Survival.
No representations, warranties, agreements or covenants contained in this Agreement shall survive the Effective Time other than
this Section 9.01 and any other agreements or covenants contained herein that by their express terms are to be performed
after the Effective Time, including, without limitation, Section 5.10.


 


Section 9.02     Waiver;
Amendment. Prior to the Effective Time and to the extent permitted by applicable Law, any provision of this Agreement may be
(a) waived by the Party benefited by the provision, provided such waiver is in writing and signed by such Party, or (b) amended
or modified at any time, by an agreement in writing among the Parties executed in the same manner as this Agreement, except that
after the SWBS Meeting no amendment shall be made which by Law requires further approval by the shareholders of FBMS or SWBS without
obtaining such approval. The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed
as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach.


 




    	 	71	 



     


    

 


Section 9.03     Governing
Law; Jurisdiction; Waiver of Right to Trial by Jury.


 


(a)      This
Agreement shall be governed by, and interpreted and enforced in accordance with, the internal,
substantive laws of the State of Mississippi, without regard for conflict of law
provisions.


 


(b)      Each
Party agrees that it will bring any action or proceeding
in respect of any claim arising out of or related
to this Agreement or the transactions contemplated hereby exclusively in any federal or
state court of competent jurisdiction located in the State of Mississippi (the “Mississippi
Courts”), and, solely in connection with claims arising under this Agreement
or the transactions that are the subject of this Agreement, (i) irrevocably submits
to the exclusive jurisdiction of the Mississippi Courts, (ii) waives any objection to laying
venue in any such action or proceeding in the Mississippi
Courts, (iii) waives any objection that the Mississippi Courts are an inconvenient
forum or do not have jurisdiction over any party and
(iv) agrees that service of process upon such party in any such action or
proceeding will be effective if notice is given in accordance with Section 9.05.


 


(c)      Each
Party acknowledges and agrees that any controversy which may arise under this Agreement
is likely to involve complicated and difficult issues, and therefore each such Party hereby
irrevocably and unconditionally waives any right such Party may have to a trial by jury
in respect of any litigation directly or indirectly arising out of or
relating to this Agreement, or the transactions
contemplated by this Agreement. Each Party certifies
and acknowledges that (i) no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each Party
understands and has considered the implications of this waiver, (iii) each Party makes
this waiver voluntarily, and (iv) each Party has been induced to enter into this Agreement
by, among other things, the mutual waivers and certifications in this Section 9.03.


 


Section 9.04     Expenses.
Except as otherwise provided in Section 7.02 and in this Section 9.04, each Party will bear all expenses incurred
by it in connection with this Agreement and the transactions contemplated hereby, including fees and expenses of its own financial
consultants, accountants and counsel. Notwithstanding the foregoing, in the event that this Agreement is terminated by either
Party due to a failure to obtain any Regulatory Approval from a Governmental Authority necessary to consummate the transactions
contemplated by this Agreement (provided that such failure is not primarily related to the financial or regulatory condition of
SWBS) or due to failure by FBMS to satisfy any conditions contained in any such Regulatory Approval, then FBMS shall pay SWBS
$635,000 as reimbursement for its internal and external transaction-related costs and expenses. Such payment shall be made within
one (1) Business Day after such termination event by wire transfer of immediately available funds to an account specified by SWBS.
Nothing contained in this Agreement shall limit either Party’s rights to recover any liabilities or damages arising out
of the other Party’s willful breach of any provision of this Agreement.


 


Section 9.05     Notices.
All notices, requests and other communications hereunder to a Party, shall be in writing and shall be deemed properly given if
delivered (a) personally, (b) by registered or certified mail (return receipt requested), with adequate postage prepaid thereon,
(c) by properly addressed electronic mail delivery (with confirmation of delivery receipt), or (d) by reputable courier service
to such Party at its address set forth below, or at such other address or addresses as such Party may specify from time to time
by notice in like manner to the Parties. All notices shall be deemed effective upon delivery.


 




    	 	72	 



     


    

 


		(a)	if to FBMS, to:



 


The First Bancshares, Inc.

6480 U.S. Highway 98 West

Hattiesburg, MS 39404-5549

Attn:M. Ray Cole, Jr., President & CEO

E-mail: hcole@thefirstbank.com


 


with a copy (which shall not constitute
notice to FBMS) to:


 


Alston & Bird LLP

One Atlantic Center

1201 West Peachtree Street

Atlanta, GA 30309

Attn:Mark Kanaly

E-mail: mark.kanaly@alston.com


 


		(b)	if to SWBS, to:



 


Southwest Banc Shares, Inc.

2862 Dauphin Street

Mobile, AL 36606

Attn: Bill Blackmon

E-mail: bill.blackmon@fcb-al.com




 


and


 


with a copy (which shall not constitute
notice to SWBS) to:


 


Jones Walker LLP


RSA Battle House Tower


11 North Water Street, Suite 1200


Mobile, AL 36602


Attn: Ron Snider


Email: rsnider@joneswalker.com


 


Section 9.06   Entire
Understanding; No Third Party Beneficiaries. This Agreement represents the entire understanding
of the Parties and thereto with reference to the transactions contemplated hereby, and this Agreement supersedes any and all other
oral or written agreements heretofore made. Except for the Indemnified Parties’ rights under Section 5.10, FBMS and
SWBS hereby agree that their respective representations, warranties and covenants set forth herein are solely for the benefit
of the other Party, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and
does not, confer upon any Person (including any person or employees who might be affected by Section 5.11), other than
the Parties, any rights or remedies hereunder, including, the right to rely upon the representations and warranties set forth
herein. The representations and warranties in this Agreement are the product of negotiations between the Parties and are for the
sole benefit of the Parties. Consequently, Persons other than the Parties may not rely upon the representations and warranties
in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.


 




    	 	73	 



     


    

 


Section 9.07     Severability.
In the event that any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in
any respect, by any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement and the Parties will use their commercially reasonable efforts to substitute a valid, legal and enforceable
provision which, insofar as practical, implements the purposes and intents of this Agreement.


 


Section 9.08     Enforcement
of the Agreement. The Parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the Parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction
without having to show or prove economic damages and without the requirement of posting a bond, this being in addition to any other
remedy to which they are entitled at law or in equity.


 


Section 9.09     Interpretation.


 


(a)      When
a reference is made in this Agreement to sections, exhibits or
schedules, such reference shall be to a section of, or exhibit or
schedule to, this Agreement unless otherwise indicated. The table of contents and
captions and headings contained in this Agreement are included solely for convenience of
reference; if there is any conflict between a caption or heading and the text of this Agreement,
the text shall control. Whenever the words “include,” “includes”
or “including” are used in this Agreement,
they shall be deemed to be followed by the words “without limitation.”


 


(b)      The
Parties have participated jointly in the negotiation and drafting of this Agreement
and the other agreements and documents contemplated herein. In the event an ambiguity
or question of intent or interpretation arises under
any provision of this Agreement or any other agreement or
document contemplated herein, this Agreement and
such other agreements or documents 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 authorizing any of the provisions of this Agreement
or any other agreements or documents contemplated herein.


 




    	 	74	 



     


    

 


(c)      The
SWBS Disclosure Schedule and the FBMS Disclosure Schedule,
as well as all other schedules and all exhibits to this Agreement, shall be deemed part
of this Agreement and included in any reference to this Agreement.
Any matter disclosed pursuant to any section of either Disclosure Schedule shall be deemed
disclosed for purposes of any other section of Article III or Article IV,
respectively, to the extent that applicability of the disclosure to such other section is reasonably apparent on the face, notwithstanding
the absence of a specific cross-reference, of such disclosure. No item is required to be set forth in either Disclosure
Schedule as an exception to a representation or warranty if its absence would not
result in the related representation or warranty being deemed untrue or
incorrect. The mere inclusion of an item in either Disclosure Schedule as an exception
to a representation or warranty shall not be deemed an admission by either party
that such item represents a material exception or
fact, event or circumstance or that such item
is reasonably likely to result in a Material Adverse Effect, or
that any breach or violation of applicable Laws or
any contract exists or has actually occurred. This Agreement
shall not be interpreted or construed to require any person
to take any action, or fail to take any action, if to do so would violate any applicable
Law.


 


(d)      Any
reference contained in this Agreement to specific statutory or
regulatory provisions or to any specific Governmental
Authority shall include any successor statute or
regulation, or successor Governmental Authority,
as the case may be. Unless the context clearly indicates otherwise, the masculine, feminine, and neuter genders will be deemed
to be interchangeable, and the singular includes the plural and vice versa. As used herein,
(i) the term “made available” means any document or
other information that was (a) provided by one party or its representatives
to the other party or its representatives prior to the date
hereof or (b) included in the virtual data room of a party prior to the
date hereof, and (ii) the word “or” is not exclusive.


 


(e)      Unless
otherwise specified, the references to “Section” and “Article” in this Agreement
are to the Sections and Article of this Agreement. When used in this Agreement,
words such as “herein”, “hereinafter”,
“hereof”, “hereto”, and “hereunder”
refer to this Agreement as a whole, unless the context clearly requires otherwise.


 


Section 9.10     Assignment.
No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval
of the other Party, and any purported assignment in violation of this Section 9.10 shall be void. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and
permitted assigns.


 


Section 9.11     Counterparts.
This Agreement may be executed and delivered by facsimile or by electronic data file and in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each
of the Parties and delivered to the other Party, it being understood that all Parties need not sign the same counterpart. Signatures
delivered by facsimile or by electronic data file shall have the same effect as originals.


 


[Signature Page Follows]


 




    	 	75	 



     


    

  


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


 


	 	THE FIRST BANCSHARES, INC.
	 	 	 
	 	By:	 
	 	Name:	M. Ray Cole, Jr.
	 	Title:	President and Chief Executive Officer
	 	 	 
	 	SOUTHWEST BANC SHARES, INC.
	 	 	 
	 	By:	 
	 	Name:	William E. Blackmon
	 	Title:	Chief Executive Officer


 





[Signature
Page to Agreement and Plan of Merger]




 




     


     


    

 


EXHIBIT A


 


FORM OF 


SWBS VOTING AGREEMENT


 


THIS VOTING AGREEMENT
(this “Agreement”) is dated as of [●], 2017, by and between the undersigned holder (“Shareholder”)
of common stock of Southwest Banc Shares, Inc., an Alabama corporation (“SWBS”), and The First Bancshares, Inc.,
a Mississippi corporation (“FBMS”). All capitalized terms used but not defined herein shall have the meanings
assigned to them in the Merger Agreement (defined below).


 


RECITALS:


 


WHEREAS, concurrently
with the execution of this Agreement, FBMS and SWBS are entering into an Agreement and Plan of Merger (as such agreement may be
subsequently amended or modified, the “Merger Agreement”), pursuant to which (i) SWBS will merge with and into
FBMS, with FBMS as the surviving entity, and (ii) First Community Bank, an Alabama-state chartered bank and wholly-owned subsidiary
of SWBS (“First Community Bank”) will merge with and into The First, A National Banking Association, a national
banking association and direct wholly-owned subsidiary of FBMS (“The First Bank”), with The First Bank as the
surviving bank (collectively, the “Merger”), and in connection with the Merger, each outstanding share of common
stock of SWBS, $0.10 par value per share (“SWBS Common Stock”), will be converted into the right to receive
the Merger Consideration and cash in lieu of fractional shares of FBMS Common Stock;


 


WHEREAS, Shareholder
“beneficially owns” (as such term is defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended) and is entitled to dispose of (or direct the disposition of) and to vote (or direct the voting of) directly or indirectly
the number of shares of SWBS Common Stock indicated on the signature page of this Agreement under the heading “Total Number
of Shares of SWBS Common Stock Subject to this Agreement” (such shares, together with any additional shares of SWBS Common
Stock subsequently acquired by Shareholder during the term of this Agreement, including through the exercise of any stock option
or other equity award, warrant or similar instrument, being referred to collectively as the “Shares”); and


 


WHEREAS, it
is a material inducement to the willingness of FBMS to enter into the Merger Agreement that Shareholder execute and deliver this
Agreement.


 


AGREEMENT:


 


NOW, THEREFORE,
in consideration of, and as a material inducement to, FBMS entering into the Merger Agreement and proceeding with the transactions
contemplated thereby, and in consideration of the expenses incurred and to be incurred by FBMS in connection therewith, Shareholder
and FBMS agree as follows:


 


Section 1.         Agreement
to Vote Shares. Shareholder agrees that, while this Agreement is in effect, at any meeting of shareholders of SWBS, however
called, or at any adjournment thereof, or in any other circumstances in which Shareholder is entitled to vote, consent or give
any other approval, except as otherwise agreed to in writing in advance by FBMS, Shareholder shall:


 




    	 	1	 



     


    

 


(a)      appear
at each such meeting in person or by proxy or otherwise cause the Shares to be counted as present thereat for purposes of calculating
a quorum; and


 


(b)      vote
(or cause to be voted), in person or by proxy, all the Shares as to which the Shareholder has, directly or indirectly, the right
to vote or direct the voting, (i) in favor of adoption and approval of the Merger Agreement and the transactions contemplated
thereby (including any amendments or modifications of the terms thereof approved by the board of directors of SWBS and adopted
in accordance with the terms thereof); (ii) in favor of any proposal to adjourn or postpone such meeting, if necessary, to solicit
additional proxies to approve the Merger Agreement; (iii) against any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or agreement of SWBS contained in the Merger Agreement or of Shareholder
contained in this Agreement; and (iv) against any Acquisition Proposal (as defined in the Merger Agreement) or any other action,
agreement or transaction that is intended, or could reasonably be expected, to impede, interfere or be inconsistent with, delay,
postpone, discourage or materially and adversely affect consummation of the transactions contemplated by the Merger Agreement or
this Agreement.


 


Shareholder further agrees not to vote
or execute any written consent to rescind or amend in any manner any prior vote or written consent, as a shareholder of SWBS, to
approve or adopt the Merger Agreement unless this Agreement shall have been terminated in accordance with its terms.


 


Section 2.         No
Transfers. Until the earlier of (i) the termination of this Agreement pursuant to Section 6 and (ii) receipt of
the Requisite SWBS Shareholder Approval, Shareholder agrees not to, directly or indirectly, sell, transfer, pledge, assign or otherwise
dispose of, or enter into any contract option, commitment or other arrangement or understanding with respect to the sale, transfer,
pledge, assignment or other disposition of, any of the Shares, except the following transfers shall be permitted: (a) transfers
by will or operation of Law, in which case this Agreement shall bind the transferee, (b) transfers pursuant to any pledge
agreement, subject to the pledgee agreeing in writing, prior to such transfer, to be bound by the terms of this Agreement, (c) transfers
in connection with estate and tax planning purposes, including transfers to relatives, trusts and charitable organizations, subject
to each transferee agreeing in writing, prior to such transfer, to be bound by the terms of this Agreement, and (d) such transfers
as FBMS may otherwise permit in its sole discretion. Any transfer or other disposition in violation of the terms of this Section 2
shall be null and void.


 


Section 3.         Representations
and Warranties of Shareholder. Shareholder represents and warrants to and agrees with FBMS as follows:


 


(a)      Shareholder
has all requisite capacity and authority to enter into and perform his, her or its obligations under this Agreement.


 




    	 	2	 



     


    

 


(b)      This
Agreement has been duly executed and delivered by Shareholder, and assuming the due authorization, execution and delivery by FBMS,
constitutes the valid and legally binding obligation of Shareholder enforceable against Shareholder in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors’ rights and to general equity principles.


 


(c)      The
execution and delivery of this Agreement by Shareholder does not, and the performance by Shareholder of his, her or its obligations
hereunder and the consummation by Shareholder of the transactions contemplated hereby will not, violate or conflict with, or constitute
a default under, any agreement, instrument, contract or other obligation or any order, arbitration award, judgment or decree to
which Shareholder is a party or by which Shareholder is bound, or any statute, rule or regulation to which Shareholder is subject
or, in the event that Shareholder is a corporation, partnership, trust or other entity, any charter, bylaw or other organizational
document of Shareholder.


 


(d)      Shareholder
is the record and beneficial owner of, or is the trustee that is the record holder of, and whose beneficiaries are the beneficial
owners of, and has good title to all of the Shares, and the Shares are owned free and clear of any liens, security interests, charges
or other encumbrances. The Shares do not include shares over which Shareholder exercises control in a fiduciary capacity for any
other person or entity that is not an Affiliate of Shareholder, and no representation by Shareholder is made with respect thereto.
Shareholder has the right to vote the Shares, and none of the Shares is subject to any voting trust or other agreement, arrangement
or restriction with respect to the voting of the Shares, except as contemplated by this Agreement. Shareholder does not own, of
record or beneficially, any shares of capital stock of SWBS other than the Shares or any other securities convertible into or exercisable
or exchangeable for such capital stock, other than any SWBS Restricted Shares.


 


Section 4.         No
Solicitation. From and after the date hereof until the termination of this Agreement pursuant to Section 6, Shareholder,
in his, her or its capacity as a shareholder of SWBS, shall not, nor shall such Shareholder authorize any partner, officer, director,
advisor or representative of, such Shareholder or any of his, her or its Affiliates to, directly or indirectly (and, to the extent
applicable to Shareholder, such Shareholder shall use commercially reasonable efforts to prohibit any of his, her or its representatives
or Affiliates to), (a) initiate, solicit, induce or knowingly encourage, or take any action to facilitate the making of, any
inquiry, offer or proposal which constitutes, or could reasonably be expected to lead to, an Acquisition Proposal, (b) participate
in any discussions or negotiations regarding any Acquisition Proposal or furnish, or otherwise afford access, to any person (other
than FBMS) any information or data with respect to SWBS or otherwise relating to an Acquisition Proposal, (c) enter into any
agreement, agreement in principle or letter of intent with respect to an Acquisition Proposal or approve or resolve to approve
any Acquisition Proposal or any agreement, agreement in principle or letter of intent relating to an Acquisition Proposal, (d) solicit
proxies with respect to an Acquisition Proposal (other than the Merger Agreement) or otherwise encourage or assist any party in
taking or planning any action that would compete with, restrain or otherwise serve to interfere with or inhibit the timely consummation
of the Merger in accordance with the terms of the Merger Agreement, or (e) initiate a shareholders’ vote or action by
consent of SWBS’s shareholders with respect to an Acquisition Proposal.1


 


 






1
Acting only in capacity of shareholder is covered in Section 10.


 




    	 	3	 



     


    

 


Section 5.         Specific
Performance; Remedies; Attorneys’ Fees. Shareholder acknowledges that it is a condition to the willingness of FBMS to
enter into the Merger Agreement that Shareholder execute and deliver this Agreement and that it will be impossible to measure in
money the damage to FBMS if Shareholder fails to comply with the obligations imposed by this Agreement and that, in the event of
any such failure, FBMS will not have an adequate remedy at law or in equity. Accordingly, Shareholder agrees that injunctive relief
or other equitable remedy is the appropriate remedy for any such failure and will not oppose the granting of such relief on the
basis that FBMS has an adequate remedy at Law. Shareholder further agrees that Shareholder will not seek, and agrees to waive any
requirement for, the securing or posting of a bond in connection with FBMS’ seeking or obtaining such equitable relief. In
addition, after discussing the matter with Shareholder, FBMS shall have the right to inform any third party that FBMS reasonably
believes to be, or to be contemplating, participating with Shareholder or receiving from Shareholder assistance in violation of
this Agreement, of the terms of this Agreement and of the rights of FBMS hereunder, and that participation by any such persons
with Shareholder in activities in violation of Shareholder’s agreement with FBMS set forth in this Agreement may give rise
to claims by FBMS against such third party.


 


Section 6.         Term
of Agreement; Termination. The term of this Agreement shall commence on the date hereof. This Agreement may be terminated at
any time prior to consummation of the transactions contemplated by the Merger Agreement by the mutual written agreement of the
parties hereto, and shall be automatically terminated upon the earlier to occur of (a) the Effective Time, (b) the amendment of
the Merger Agreement in any manner that materially and adversely affects any of Shareholder’s rights set forth therein (including,
for the avoidance of doubt, any reduction to the Merger Consideration), (c) termination of the Merger Agreement or (d) three (3)
years from the date hereof. Upon such termination, no party shall have any further obligations or liabilities hereunder; provided,
however, that such termination shall not relieve any party from liability for any breach of this Agreement prior to such termination.


 


Section 7.         Entire
Agreement. This Agreement represents the entire understanding of the parties and thereto with reference to the transactions
contemplated hereby, and this Agreement supersedes any and all other oral or written agreements heretofore made.


 


Section 8.         Modification
and Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by each party. No waiver by either party hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver
of dissimilar provisions or conditions at the same or any prior subsequent time.


 




    	 	4	 



     


    

 


Section 9.         Severability.
In the event that any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in
any respect, by any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement and the parties shall use their commercially reasonable efforts to substitute a valid, legal and enforceable
provision which, insofar as practical, implements the purposes and intents of this Agreement.


 


Section 10.       Capacity
as Shareholder. This Agreement shall apply to Shareholder solely in his, her or its capacity as a shareholder of SWBS and it
shall not apply in any manner to Shareholder in his, her or its capacity as a director of SWBS, if applicable. Nothing contained
in this Agreement shall be deemed to apply to, or limit in any manner, the obligations of Shareholder to comply with his, her or
its fiduciary duties as a director of SWBS, if applicable.


 


Section 11.       Governing
Law. This Agreement shall be governed by, and interpreted and enforced in accordance with, the internal, substantive laws of
the State of Mississippi, without regard for conflict of law provisions.


 


Section 12.      Jurisdiction.
Any civil action, counterclaim, proceeding, or litigation arising out of or relating to this Agreement shall be brought in the
courts of record of the State of Mississippi in Forrest County or the United States District Court, Southern District of Mississippi.
Each party consents to the jurisdiction of such Mississippi court in any such civil action, counterclaim, proceeding, or litigation
and waives any objection to the laying of venue of any such civil action, counterclaim, proceeding, or litigation in such Mississippi
court. Service of any court paper may be effected on such party by mail, as provided in this letter, or in such other manner as
may be provided under applicable Laws.


 


Section 13.        WAIVER
OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 13.


 




    	 	5	 



     


    

 


Section 14.        Waiver
of Appraisal Rights; Further Assurances. To the extent permitted by applicable law, Shareholder hereby waives any rights of
appraisal or rights to dissent from the Merger or demand fair value for his, her or its Shares in connection with the Merger, in
each case, that Shareholder may have under applicable law. From time to time prior to the termination of this Agreement, at FBMS’s
request and without further consideration, Shareholder shall execute and deliver such additional documents and take all such further
action as may be reasonably necessary or desirable to effect the actions and consummate the transactions contemplated by this Agreement.
Shareholder further agrees not to commence or participate in, and to take all actions necessary to opt out of any class in any
class action with respect to, any claim, derivative or otherwise, against FBMS, The First Bank, SWBS, First Community Bank or any
of their respective successors relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or
the consummation of the Merger.


 


Section 15.       Disclosure.
Shareholder hereby authorizes SWBS and FBMS to publish and disclose in any announcement or disclosure required by the Securities
and Exchange Commission and in the Proxy Statement-Prospectus such Shareholder’s identity and ownership of the Shares and
the nature of Shareholder’s obligations under this Agreement; provided, however, that FBMS shall provide Shareholder
written drafts of any such disclosure and consider in good faith Shareholder’s comments thereto.


 


Section 16.       Counterparts.
This Agreement may be executed and delivered by facsimile or by electronic data file and in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. Signatures
delivered by facsimile or by electronic data file shall have the same effect as originals.


 


[Signature Page Follows]


 




    	 	6	 



     


    

 


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


  


	 	THE FIRST BANCSHARES, INC.
	 	 	 
	 	By:	 
	 	Name:	M. Ray Cole, Jr.
	 	Title:	President and Chief Executive Officer
	 	 	 
	 	SHAREHOLDER
	 	 
	 	Printed or Typed Name of Shareholder
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	Total Number of Shares of SWBS Common Stock Subject to this Agreement:
	 	 
	 	 


 




     


     


    

 


EXHIBIT B


 


PLAN OF MERGER AND MERGER AGREEMENT


FIRST COMMUNITY BANK


with and into


THE FIRST, A NATIONAL BANKING ASSOCIATION


under the charter of


THE FIRST, A NATIONAL BANKING ASSOCIATION


under the title of


“THE FIRST, A NATIONAL BANKING
ASSOCIATION”


(“Resulting Bank”)


 


 


THIS PLAN OF MERGER
AND MERGER AGREEMENT (this “Agreement”) is made and entered into as of [●], 2017, by and between The First,
A National Banking Association (“The First”), a national banking association, with its main office located at
6480 U.S. Highway 98 West, Hattiesburg, MS 39404-5549, and First Community Bank, an Alabama state-chartered bank, with its main
office located at 34 Court St, Chatom, AL 36518 (“First Community Bank,” together with The First, the “Banks”).


 


WHEREAS, at least a
majority of the entire Board of Directors of First Community Bank has approved this Agreement and authorized its execution pursuant
to the authority given by and in accordance with the provisions of Alabama Banking Code (the “ABC”);


 


WHEREAS, at least a
majority of the entire Board of Directors of First Community Bank has approved this Agreement and authorized its execution in accordance
with Section 10A-2-11.01 of the Alabama Business Corporation Law and the Act;


 


WHEREAS, The First
Bancshares, Inc. (“FBMS”), which owns all of the outstanding shares of The First, and Southwest Banc Shares,
Inc. (“SWBS”), which owns all of the outstanding shares of First Community Bank, have entered into an Agreement
and Plan of Merger (the “Holding Company Agreement”) which, among other things, contemplates the merger of SWBS
with and into FBMS, all subject to the terms and conditions of such Holding Company Agreement (the “Holding Company Merger”);


 


WHEREAS, FBMS, as the
sole shareholder of The First, and SWBS, as the sole shareholder of First Community Bank, have approved this Agreement; and


 


WHEREAS, each of the Banks is entering
into this Agreement to provide for the merger of First Community Bank with and into The First, with The First being the surviving
company of such merger transaction (the “Bank Merger”) subject to, and as soon as practicable following, the
closing of the Holding Company Merger.


 


NOW, THEREFORE, for
and in consideration of the premises and the mutual promises and agreements herein contained, the parties hereto agree as follows:


 




     


     


    

 


SECTION 1


 


Subject to the terms
and conditions of this Agreement, at the Effective Time (as defined below) and pursuant to the ABC and the Alabama Business Corporations
Law, First Community Bank shall be merged with and into The First. The First shall continue its existence as the surviving company
and Resulting Bank under the charter of the Resulting Bank and the separate corporate existence of First Community Bank shall cease.
The closing of the Bank Merger shall become effective at the time specified in the certificate of merger issued by the Office of
the Comptroller of the Currency (the “OCC”) in connection with the Bank Merger and the date and time specified
in the Articles of Merger filed with the Alabama Secretary of State (such time when the Bank Merger becomes effective, the “Effective
Time”).


 


SECTION 2


 


The name of the Resulting
Bank shall be “The First, A National Banking Association” or such other name as such bank may adopt prior to the Effective
Time.


 


SECTION 3


 


The business of the Resulting Bank from
and after the Effective Time shall be that of a national banking association. The business of the Resulting Bank shall be conducted
from its main office which shall be located at 6480 U.S. Highway 98 West, Hattiesburg, MS 39404-5549, as well as at its legally
established branches and at the banking offices of First Community Bank that are acquired in the Bank Merger (which such banking
offices are set forth on Exhibit A to this Agreement and shall continue to conduct operations after the closing of the Bank
Merger as branch offices of The First).


 


SECTION 4


 


At the Effective Time,
the amount of issued and outstanding capital stock of the Resulting Bank shall be the amount of capital stock of The First issued
and outstanding immediately prior to Effective Time. Preferred stock shall not be issued by the Resulting Bank.


 


SECTION 5


 


All assets of First
Community Bank and the Resulting Bank, as they exist at the Effective Time, shall pass to and vest in the Resulting Bank without
any conveyance or other transfer; and the Resulting Bank shall be considered the same business and corporate entity as each constituent
bank with all the rights, powers and duties of each constituent bank and the Resulting Bank shall be responsible for all the liabilities
of every kind and description, of each of First Community Bank and the Resulting Bank existing as of the Effective Time, all in
accordance with the provisions of the Act.


 




    	 	3	 



     


    






 


SECTION 6


 


The First and First Community
Bank shall contribute to the Resulting Bank acceptable assets having a book value, over and above liability to its creditors, in
such amounts as set forth on the books of The First and First Community Bank at the Effective Time.


 


SECTION 7


 


At the Effective Time,
each outstanding share of common stock of First Community Bank shall be cancelled with no consideration being paid therefor.


 


Outstanding certificates
representing shares of the common stock of First Community Bank shall, at the Effective Time, be cancelled.


 


SECTION 8


 


Upon the Effective Time,
the then outstanding shares of The First’s common stock shall continue to remain outstanding shares of The First’s
common stock, all of which shall continue to be owned by FBMS.


 


SECTION 9


 


The directors of the Resulting
Bank following the Effective Time shall consist of those directors of The First as of the Effective Time, who shall serve until
their respective successors are duly elected or appointed and qualified or until their earlier death, resignation or removal. The
executive officers of the Resulting Bank following the Effective Time shall consist of those executive officers of The First as
of the Effective Time, who shall serve until their respective successors are duly elected or appointed and qualified or until their
earlier death, resignation or removal.


 


SECTION 10


 


This Agreement has been
approved by FBMS, which owns all of the outstanding shares of The First, and by SWBS, which owns all of the outstanding shares
of First Community Bank


 


SECTION 11


 


This Agreement is also subject to the following
terms and conditions:


 


		a)	The Bank Merger shall not be consummated until after: (i) the Holding Company Merger shall have
closed and become effective, and (ii) the OCC shall have approved this Agreement and the Bank Merger and shall have issued all
other necessary authorizations and approvals for the Bank Merger, and any statutory waiting period shall have expired.



 






    	 	4	 



     


    

 


		b)	The Bank Merger may be abandoned at the election of The First at any time, whether before or after
filings are made for regulatory approval of the Bank Merger.



 


SECTION 12


 


Each of the Banks hereby
invites and authorizes the OCC to examine each of the Bank’s records in connection with the Bank Merger.


 


SECTION 13


 


Effective as of the Effective
Time, the articles of association and bylaws of the Resulting Bank shall consist of the articles of association and bylaws of The
First as in effect immediately prior to the Effective Time.


 


SECTION 14


 


This Agreement shall terminate
if and at the time of any termination of the Holding Company Agreement.


 


SECTION 15


 


This Agreement embodies
the entire agreement and understanding of the Banks with respect to the transactions contemplated hereby, and supersedes all other
prior commitments, arrangements or understandings, both oral and written, among the Banks with respect to the subject matter hereof.


 


The provisions of this
Agreement are intended to be interpreted and construed in a manner so as to make such provisions valid, binding and enforceable.
In the event that any provision of this Agreement is determined to be partially or wholly invalid, illegal or unenforceable, then
such provision shall be deemed to be modified or restricted to the extent necessary to make such provision valid, binding and enforceable,
or, if such provision cannot be modified or restricted in a manner so as to make such provision valid, binding and enforceable,
then such provision shall be deemed to be excised from this Agreement and the validity, binding effect and enforceability of the
remaining provisions of this Agreement shall not be affected or impaired in any manner.


 


No waiver, amendment, modification
or change of any provision of this Agreement shall be effective unless and until made in writing and signed by the Banks. No waiver,
forbearance or failure by any Bank of its rights to enforce any provision of this Agreement shall constitute a waiver or estoppel
of such Bank’s right to enforce any other provision of this Agreement or a continuing waiver by such Bank of compliance with
any provision hereof.


 


Except to the extent federal
law is applicable, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Mississippi
without regard to principles of conflicts of laws.


 






    	 	5	 



     


    

 


This Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the Banks’ respective successors and permitted assigns. Unless
otherwise expressly stated herein, this Agreement shall not benefit or create any right of action in or on behalf of any person
or entity other than the Banks.


 


This Agreement may be executed
in counterparts (including by facsimile or optically-scanned electronic mail attachment), each of which shall be deemed to be original,
but all of which together shall constitute one and the same instrument.


 


[Signatures on Following Page]


 




    	 	6	 



     


    

 


IN WITNESS WHEREOF,
First Community Bank and The First have entered into this Agreement as of the date first set forth above.


 


	 	FIRST COMMUNITY BANK
	 	 	 
	 	By:	 
	 		Name:
	 		Title:
	 	 	 
	 	THE FIRST, A NATIONAL BANKING ASSOCIATION
	 	 	 
	 	By:	 
	 		Name:
	 		Title:


 


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


 




    	 	 	 



     


    


 


Exhibit A


Banking Offices of the Resulting Bank 


 


[To be completed prior to filing.]


 




    	 	 	 



     


    


 


EXHIBIT C


 


FORM
OF 


NON-COMPETITION
AND NON-DISCLOSURE AGREEMENT


 


This Non-Competition and
Non-Disclosure Agreement (the “Agreement”), is dated as of [__________], 2017, by and between ________________________,
an individual resident of the State of Alabama (“Director”), and The First Bancshares, Inc., a Mississippi corporation
(“FBMS”). All capitalized terms used but not defined herein shall have the meanings assigned to them in the
Merger Agreement (defined below).


 


RECITALS:


 


WHEREAS, concurrently
with the execution of this Agreement, FBMS and Southwest Banc Shares, Inc., an Alabama corporation (“SWBS”),
are entering into an Agreement and Plan of Merger (as such agreement may be subsequently amended or modified, the “Merger
Agreement”), pursuant to which (i) SWBS will merge with and into FBMS, with FBMS as the surviving entity, and (ii) First
Community Bank, an Alabama-state chartered bank and wholly-owned subsidiary of SWBS (“First Community Bank”)
will merge with and into The First, National Association, a national banking association and wholly-owned subsidiary of FBMS (“The
First”), with The First as the surviving bank (collectively, the “Merger”);


 


WHEREAS, Director
is a shareholder of SWBS and, as a result of the Merger and pursuant to the transactions contemplated by the Merger Agreement,
Director is expected to receive significant consideration in exchange for the shares of SWBS Common Stock held by Director;


 


WHEREAS, prior to
the date hereof, Director has served as a member of the Board of Directors of SWBS or First Community Bank, and, therefore, Director
has knowledge of the Confidential Information and Trade Secrets (each as hereinafter defined);


 


WHEREAS, as a result
of the Merger, FBMS will succeed to all of the Confidential Information and Trade Secrets, for which FBMS as of the Effective Time,
will have paid valuable consideration and desires reasonable protection; and


 


WHEREAS, it is a
material prerequisite to the consummation of the Merger that each director of SWBS and First Community Bank, including Director,
enter into this Agreement.


 


AGREEMENT:


 


NOW, THEREFORE,
in consideration of these premises and the mutual covenants and undertakings herein contained, FBMS and Director, each intending
to be legally bound, covenant and agree as follows:


 






    	 	 	 



     


    

 


Section 1.     Restrictive
Covenants.


 


(a)          Director
acknowledges that (i) FBMS has separately bargained for the restrictive covenants in this Agreement; and (ii) the types and periods
of restrictions imposed by the covenants in this Agreement are fair and reasonable to Director and such restrictions will not prevent
Director from earning a livelihood.


 


(b)         Having
acknowledged the foregoing, solely in the event that the Merger is consummated, Director covenants and agrees with FBMS as follows:


 


(i)         From
and after the Effective Time, Director will not disclose or use any Confidential Information or Trade Secrets for so long as such
information remains Confidential Information or a Trade Secret, as applicable, for any purpose, except for any disclosure that
is required by applicable Law. In the event that Director is required by Law to disclose any Confidential Information, Director
will: (A) if and to the extent permitted by such Law provide FBMS with prompt notice of such requirement prior to the disclosure
so that FBMS may waive the requirements of this Agreement or seek an appropriate protective order at FBMS’s sole expense;
and (B) use commercially reasonable efforts to obtain assurances that any Confidential Information disclosed will be accorded confidential
treatment. If, in the absence of a waiver or protective order, Director is nonetheless, in the opinion of his or her counsel, required
to disclose Confidential Information, disclosure may be made only as to that portion of the Confidential Information that counsel
advises Director is required to be disclosed.


 


(ii)        Except
as expressly provided on Schedule I to this Agreement, for a period beginning at the Effective Time and ending two (2) years after
the Effective Time, Director will not (except on behalf of or with the prior written consent of FBMS), on Director’s own
behalf or in the service or on behalf of others, solicit or attempt to solicit any customer of FBMS, The First, SWBS or First Community
Bank (each a “Protected Party”), including actively sought prospective customers of First Community Bank as
of the Effective Time, for the purpose of providing products or services that are Competitive (as hereinafter defined) with those
offered or provided by any Protected Party.


 


(iii)       Except
as expressly provided on Schedule I to this Agreement, for a period beginning at the Effective Time and ending two (2) years after
the Effective Time, Director will not (except on behalf of or with the prior written consent of FBMS), either directly or indirectly,
on Director’s own behalf or in the service or on behalf of others, act as a director, manager, officer or employee of any
business which is the same as or essentially the same as the business conducted by any Protected Party and which has an office
located within the Restricted Territory.


 


(iv)      For
a period beginning at the Effective Time and ending two (2) years after the Effective Time, Director will not, on Director’s
own behalf or in the service or on behalf of others, solicit or recruit or attempt to solicit or recruit, directly or by assisting
others, any employee of any Protected Party, whether or not such employee is a full-time employee or a temporary employee of such
Protected Party, whether or not such employment is pursuant to a written agreement and whether or not such employment is for a
determined period or is at will, to cease working for such Protected Party; provided that the foregoing will not prevent the placement
of any general solicitation for employment not specifically directed towards employees of any Protected Party or hiring any such
person as a result thereof.


 






    	 	2	 



     


    


 


(c)          For
purposes of this Section 1, the following terms shall be defined as set forth below:


 


(i)          “Competitive,”
with respect to particular products or services, means products or services that are the same as or similar to the products or
services of any Protected Party.


 


(ii)         “Confidential
Information” means data and information:


 


(A)         relating
to the business of SWBS and its Subsidiaries, including First Community Bank, regardless of whether the data or information constitutes
a Trade Secret;


 


(B)         disclosed
to Director or of which Director became aware as a consequence of Director’s relationship with SWBS and/or First Community
Bank;


 


(C)         having
value to SWBS and/or First Community Bank and, as a result of the consummation of the transactions contemplated by the Merger Agreement,
FBMS and/or The First; and


 


(D)         not
generally known to competitors of SWBS or FBMS.


 


Confidential Information shall include Trade
Secrets, methods of operation, names of customers, price lists, financial information and projections, personnel data and similar
information; provided, however, that the terms “Confidential Information” and “Trade Secrets” shall not
mean data or information that (x) has been disclosed to the public, except where such public disclosure has been made by Director
without authorization from SWBS or FBMS, (y) has been independently developed and disclosed by others, or (z) has otherwise entered
the public domain through lawful means.


 


(iii)        “Restricted
Territory” means each county in Alabama where First Community Bank operates a banking office at the Effective Time and
each county contiguous to each of such counties.


 


(iv)        “Trade
Secret” means information, without regard to form, including technical or nontechnical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans or
a list of actual or potential customers or suppliers, that is not commonly known by or available to the public and which information:


 


(A)         derives
economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use; and


 


(B)         is
the subject of efforts that are reasonable under the circumstances to maintain its secrecy.


 






    	 	3	 



     


    

 


(d)         
Director acknowledges that irreparable loss and injury would result to FBMS upon the breach of any of the covenants contained in
this Section 1 and that damages arising out of such breach would be difficult to ascertain. Director hereby agrees that, in addition
to all other remedies provided at law or in equity, FBMS may petition and obtain from a court of law or equity, without the necessity
of proving actual damages and without posting any bond or other security, both temporary and permanent injunctive relief to prevent
a breach by Director of any covenant contained in this Section 1, and shall be entitled to an equitable accounting of all earnings,
profits and other benefits arising out of any such breach. In the event that the provisions of this Section 1 should ever be determined
to exceed the time, geographic or other limitations permitted by applicable Law, then such provisions shall be modified so as to
be enforceable to the maximum extent permitted by Law. If such provision(s) cannot be modified to be enforceable, the provision(s)
shall be severed from this Agreement to the extent unenforceable. The remaining provisions and any partially enforceable provisions
shall remain in full force and effect.


 


Section 2.         Term;
Termination. This Agreement may be terminated at any time by the written consent of the parties hereto, and this Agreement
shall be automatically terminated upon the earlier of (i) termination of the Merger Agreement; (ii) two (2) years following the
Effective Time or (iii) upon a Change in Control of FBMS (as defined in Schedule I). For the avoidance of doubt, the provisions
of Section 1 shall only become operative upon the consummation of the Merger but, in such event, shall survive the consummation
of the Merger until the earlier of (a) two (2) years after the Effective Time or (b) upon a Change in Control of FBMS. Upon termination
of this Agreement, no party shall have any further obligations or liabilities hereunder, except that termination of this Agreement
will not relieve a breaching party from liability for any breach of any provision of this Agreement occurring prior to the termination
of this Agreement.


 


Section 3.         Notices.
All notices, requests and other communications hereunder to a party, shall be in writing and shall be deemed properly given if
delivered (a) personally, (b) by registered or certified mail (return receipt requested), with adequate postage prepaid thereon,
(c) by properly addressed electronic mail delivery (with confirmation of delivery receipt), or (d) by reputable courier service
to such party at its address set forth below, or at such other address or addresses as such party may specify from time to time
by notice in like manner to the parties hereto. All notices shall be deemed effective upon delivery.


 


	If to FBMS:	The First Bancshares, Inc.
	 	6480 U.S. Highway 98 West
	 	Hattiesburg, MS 39404-5549
	 	Attn: M. Ray Cole, Jr., President & CEO
	 	E-mail:  hcole@thefirstbank.com
	 	 
	If to Director:	The address of Director’s principal residence as it appears in SWBS’s records as of the date hereof, as subsequently modified by Director’s provision of notice regarding the same to FBMS.


 






    	 	4	 



     


    

 


Section 4.         Governing
Law; Jurisdiction. This Agreement shall be governed by, and interpreted and enforced in accordance with, the internal, substantive
laws of the State of Mississippi, without regard for conflict of law provisions. Any civil action, counterclaim, proceeding, or
litigation arising out of or relating to this Agreement shall be brought in the courts of record of the State of Mississippi in
Forrest County or the United States District Court, Southern District of Mississippi. Each party consents to the jurisdiction of
such Mississippi court in any such civil action, counterclaim, proceeding, or litigation and waives any objection to the laying
of venue of any such civil action, counterclaim, proceeding, or litigation in such Mississippi court. Service of any court paper
may be effected on such party by mail, as provided in this letter, or in such other manner as may be provided under applicable
Laws.


 


Section 5.         Modification
and Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by Director and FBMS. No waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed
a waiver of dissimilar provisions or conditions at the same or any prior subsequent time.


 


Section 6.         Severability.
In the event that any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in
any respect, by any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement and the parties shall use their commercially reasonable efforts to substitute a valid, legal and enforceable
provision which, insofar as practical, implements the purposes and intents of this Agreement.


 


Section 7.         Counterparts.
This Agreement may be executed and delivered by facsimile or by electronic data file and in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. Signatures
delivered by facsimile or by electronic data file shall have the same effect as originals.


 


Section 8.         Entire
Agreement. This Agreement represents the entire understanding of the parties and thereto with reference to the transactions
contemplated hereby, and this Agreement supersedes any and all other oral or written agreements heretofore made.


 


Section 9.         Construction;
Interpretation. Whenever the singular number is used in this Agreement and when required by the context, the same shall include
the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they shall be deemed
to be followed by the words “without limitation.” The headings in this Agreement are for convenience only and are in
no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any of its provisions.


 




    	 	5	 



     


    

 


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


 


	 	THE FIRST BANCSHARES, INC.
	 	 	 
	 	By:	 
	 	Name:	M. Ray Cole, Jr.
	 	Title:	President and Chief Executive Officer
	 	 	 
	 	DIRECTOR
	 	 
	 	 
	 	 


 


Signature Page – Non-Competition
and Non-Disclosure Agreement


 




    	 	 	 



     


    


Schedule I


 


For avoidance of doubt,
the parties acknowledge and agree that the restrictions set forth in Sections 1(b) (ii) and (iii) shall not apply to any of the
following activities of Director:


 


		1.	The provision of legal services by Director to any Person.






		2.	The offer and sale of insurance products by Director to any Person.






		3.	The provision of investment advisory and brokerage services by Director to any Person.






		4.	The provision of private equity/venture capital financing by Director to any Person.






		5.	The provision of accounting services by Director to any Person.






		6.	The ownership of 5% or less of any class of securities of any Person.






		7.	The provision of automobile financing in connection with the operation of auto dealerships.






		8.	Obtaining banking-related services or products for entities owned or controlled by the Director.






		9.	Referrals of clients or obtaining banking-related services in connection with the conduct of real
estate or mortgage broker businesses.






		10.	Activities that are incidental to the Director’s performance of his or her profession so
long as such activities are not a scheme to circumvent the restrictions contained in this Agreement.



 


For the purposes of this agreement, “Change
in Control of FBMS” means (a) any person or group of persons within the meaning of §13(d)(3) of the Securities Exchange
Act of 1934, as amended, becomes the beneficial owner, directly or indirectly, of 50% or more of the outstanding voting securities
of FBMS or The First, or (b) individuals serving on the board of directors of FBMS cease for any reason to constitute at least
a majority of the board of directors of FBMS.


 




    	 	 i	 



     


    


EXHIBIT D


 


FORM
OF 


NON-COMPETITION
AND NON-DISCLOSURE AGREEMENT


 


This Non-Competition and
Non-Disclosure Agreement (the “Agreement”), is dated as of [__________], 2017, by and between ________________________,
an individual resident of the State of Alabama (“Director”), and The First Bancshares, Inc., a Mississippi corporation
(“FBMS”). All capitalized terms used but not defined herein shall have the meanings assigned to them in the
Merger Agreement (defined below).


 


RECITALS:


 


WHEREAS, concurrently
with the execution of this Agreement, FBMS and Southwest Banc Shares, Inc., an Alabama corporation (“SWBS”),
are entering into an Agreement and Plan of Merger (as such agreement may be subsequently amended or modified, the “Merger
Agreement”), pursuant to which (i) SWBS will merge with and into FBMS, with FBMS as the surviving entity, and (ii) First
Community Bank, an Alabama-state chartered bank and wholly-owned subsidiary of SWBS (“First Community Bank”)
will merge with and into The First, National Association, a national banking association and wholly-owned subsidiary of FBMS (“The
First”), with The First as the surviving bank (collectively, the “Merger”);


 


WHEREAS, Director
is a shareholder of SWBS and, as a result of the Merger and pursuant to the transactions contemplated by the Merger Agreement,
Director is expected to receive significant consideration in exchange for the shares of SWBS Common Stock held by Director;


 


WHEREAS, prior to
the date hereof, Director has served as a member of the Board of Directors of SWBS or First Community Bank, and, therefore, Director
has knowledge of the Confidential Information and Trade Secrets (each as hereinafter defined);


 


WHEREAS, as a result
of the Merger, FBMS will succeed to all of the Confidential Information and Trade Secrets, for which FBMS as of the Effective Time,
will have paid valuable consideration and desires reasonable protection; and


 


WHEREAS, it is a
material prerequisite to the consummation of the Merger that each director of SWBS and First Community Bank, including Director,
enter into this Agreement.


 


AGREEMENT:


 


NOW, THEREFORE,
in consideration of these premises and the mutual covenants and undertakings herein contained, FBMS and Director, each intending
to be legally bound, covenant and agree as follows:


 






    	 	 	 



     


    

 


Section 1.          Restrictive
Covenants.


 


(e)         Director
acknowledges that (i) FBMS has separately bargained for the restrictive covenants in this Agreement; and (ii) the types and periods
of restrictions imposed by the covenants in this Agreement are fair and reasonable to Director and such restrictions will not prevent
Director from earning a livelihood.


 


(f)         Having
acknowledged the foregoing, solely in the event that the Merger is consummated, Director covenants and agrees with FBMS as follows:


 


(i)         From
and after the Effective Time, Director will not disclose or use any Confidential Information or Trade Secrets for so long as such
information remains Confidential Information or a Trade Secret, as applicable, for any purpose, except for any disclosure that
is required by applicable Law. In the event that Director is required by Law to disclose any Confidential Information, Director
will: (A) if and to the extent permitted by such Law provide FBMS with prompt notice of such requirement prior to the disclosure
so that FBMS may waive the requirements of this Agreement or seek an appropriate protective order at FBMS’s sole expense;
and (B) use commercially reasonable efforts to obtain assurances that any Confidential Information disclosed will be accorded confidential
treatment. If, in the absence of a waiver or protective order, Director is nonetheless, in the opinion of his or her counsel, required
to disclose Confidential Information, disclosure may be made only as to that portion of the Confidential Information that counsel
advises Director is required to be disclosed.


 


(ii)        Except
as expressly provided on Schedule I to this Agreement, for a period beginning at the Effective Time and ending two (2) years after
the Effective Time, Director will not (except on behalf of or with the prior written consent of FBMS), on Director’s own
behalf or in the service or on behalf of others, solicit or attempt to solicit any customer of FBMS, The First, SWBS or First Community
Bank (each a “Protected Party”), including actively sought prospective customers of First Community Bank as
of the Effective Time, for the purpose of providing products or services that are Competitive (as hereinafter defined) with those
offered or provided by any Protected Party.


 


(iii)       Except
as expressly provided on Schedule I to this Agreement, for a period beginning at the Effective Time and ending one (1) year after
the Effective Time, Director will not (except on behalf of or with the prior written consent of FBMS), either directly or indirectly,
on Director’s own behalf or in the service or on behalf of others, act as a director, manager, officer or employee of any
business which is the same as or essentially the same as the business conducted by any Protected Party and which has an office
located within the Restricted Territory.


 


(iv)       For
a period beginning at the Effective Time and ending two (2) years after the Effective Time, Director will not, on Director’s
own behalf or in the service or on behalf of others, solicit or recruit or attempt to solicit or recruit, directly or by assisting
others, any employee of any Protected Party, whether or not such employee is a full-time employee or a temporary employee of such
Protected Party, whether or not such employment is pursuant to a written agreement and whether or not such employment is for a
determined period or is at will, to cease working for such Protected Party; provided that the foregoing will not prevent the placement
of any general solicitation for employment not specifically directed towards employees of any Protected Party or hiring any such
person as a result thereof.






    	 	2	 



     


    

 


(g)          For
purposes of this Section 1, the following terms shall be defined as set forth below:


 


(i)          “Competitive,”
with respect to particular products or services, means products or services that are the same as or similar to the products or
services of any Protected Party.


 


(ii)         “Confidential
Information” means data and information:


 


(A)         relating
to the business of SWBS and its Subsidiaries, including First Community Bank, regardless of whether the data or information constitutes
a Trade Secret;


 


(B)         disclosed
to Director or of which Director became aware as a consequence of Director’s relationship with SWBS and/or First Community
Bank;


 


(C)         having
value to SWBS and/or First Community Bank and, as a result of the consummation of the transactions contemplated by the Merger Agreement,
FBMS and/or The First; and


 


(D)         not
generally known to competitors of SWBS or FBMS.


 


Confidential Information shall include Trade
Secrets, methods of operation, names of customers, price lists, financial information and projections, personnel data and similar
information; provided, however, that the terms “Confidential Information” and “Trade Secrets” shall not
mean data or information that (x) has been disclosed to the public, except where such public disclosure has been made by Director
without authorization from SWBS or FBMS, (y) has been independently developed and disclosed by others, or (z) has otherwise entered
the public domain through lawful means.


 


(iii)        “Restricted
Territory” means each county in Alabama where First Community Bank operates a banking office at the Effective Time and
each county contiguous to each of such counties.


 


(iv)        “Trade
Secret” means information, without regard to form, including technical or nontechnical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans or
a list of actual or potential customers or suppliers, that is not commonly known by or available to the public and which information:


 


(A)         derives
economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use; and


 


(B)         is
the subject of efforts that are reasonable under the circumstances to maintain its secrecy.


 






    	 	3	 



     


    

 


(h)         
Director acknowledges that irreparable loss and injury would result to FBMS upon the breach of any of the covenants contained in
this Section 1 and that damages arising out of such breach would be difficult to ascertain. Director hereby agrees that, in addition
to all other remedies provided at law or in equity, FBMS may petition and obtain from a court of law or equity, without the necessity
of proving actual damages and without posting any bond or other security, both temporary and permanent injunctive relief to prevent
a breach by Director of any covenant contained in this Section 1, and shall be entitled to an equitable accounting of all earnings,
profits and other benefits arising out of any such breach. In the event that the provisions of this Section 1 should ever be determined
to exceed the time, geographic or other limitations permitted by applicable Law, then such provisions shall be modified so as to
be enforceable to the maximum extent permitted by Law. If such provision(s) cannot be modified to be enforceable, the provision(s)
shall be severed from this Agreement to the extent unenforceable. The remaining provisions and any partially enforceable provisions
shall remain in full force and effect.


 


Section 2.         Term;
Termination. This Agreement may be terminated at any time by the written consent of the parties hereto, and this Agreement
shall be automatically terminated upon the earlier of (i) termination of the Merger Agreement; (ii) two (2) years following the
Effective Time or (iii) upon a Change in Control of FBMS (as defined in Schedule I). For the avoidance of doubt, the provisions
of Section 1 shall only become operative upon the consummation of the Merger but, in such event, shall survive the consummation
of the Merger until the earlier of (a) two (2) years after the Effective Time or (b) upon a Change in Control of FBMS. Upon termination
of this Agreement, no party shall have any further obligations or liabilities hereunder, except that termination of this Agreement
will not relieve a breaching party from liability for any breach of any provision of this Agreement occurring prior to the termination
of this Agreement.


 


Section 3.         Notices.
All notices, requests and other communications hereunder to a party, shall be in writing and shall be deemed properly given if
delivered (a) personally, (b) by registered or certified mail (return receipt requested), with adequate postage prepaid thereon,
(c) by properly addressed electronic mail delivery (with confirmation of delivery receipt), or (d) by reputable courier service
to such party at its address set forth below, or at such other address or addresses as such party may specify from time to time
by notice in like manner to the parties hereto. All notices shall be deemed effective upon delivery.


 


	If to FBMS:	The First Bancshares, Inc.
	 	6480 U.S. Highway 98 West
	 	Hattiesburg, MS 39404-5549
	 	Attn:   M. Ray Cole, Jr., President & CEO
	 	E-mail: hcole@thefirstbank.com
	 	 
	If to Director:	The address of Director’s principal residence as it appears in SWBS’s records as of the date hereof, as subsequently modified by Director’s provision of notice regarding the same to FBMS.


 






    	 	4	 



     


    

 


Section 4.         Governing
Law; Jurisdiction. This Agreement shall be governed by, and interpreted and enforced in accordance with, the internal, substantive
laws of the State of Mississippi, without regard for conflict of law provisions. Any civil action, counterclaim, proceeding, or
litigation arising out of or relating to this Agreement shall be brought in the courts of record of the State of Mississippi in
Forrest County or the United States District Court, Southern District of Mississippi. Each party consents to the jurisdiction of
such Mississippi court in any such civil action, counterclaim, proceeding, or litigation and waives any objection to the laying
of venue of any such civil action, counterclaim, proceeding, or litigation in such Mississippi court. Service of any court paper
may be effected on such party by mail, as provided in this letter, or in such other manner as may be provided under applicable
Laws.


 


Section 5.         Modification
and Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by Director and FBMS. No waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed
a waiver of dissimilar provisions or conditions at the same or any prior subsequent time.


 


Section 6.         Severability.
In the event that any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in
any respect, by any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement and the parties shall use their commercially reasonable efforts to substitute a valid, legal and enforceable
provision which, insofar as practical, implements the purposes and intents of this Agreement.


 


Section 7.         Counterparts.
This Agreement may be executed and delivered by facsimile or by electronic data file and in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. Signatures
delivered by facsimile or by electronic data file shall have the same effect as originals.


 


Section 8.         Entire
Agreement. This Agreement represents the entire understanding of the parties and thereto with reference to the transactions
contemplated hereby, and this Agreement supersedes any and all other oral or written agreements heretofore made.


 


Section 9.         Construction;
Interpretation. Whenever the singular number is used in this Agreement and when required by the context, the same shall include
the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they shall be deemed
to be followed by the words “without limitation.” The headings in this Agreement are for convenience only and are in
no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any of its provisions.


 




    	 	5	 



     


    

 


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


 





	 	THE FIRST BANCSHARES, INC.
	 	 	 
	 	By:	 
	 	Name:	M. Ray Cole, Jr.
	 	Title:	President and Chief Executive Officer
	 	 	 
	 	DIRECTOR
	 	 
	 	 
	 	 




 


Signature Page – Non-Competition
and Non-Disclosure Agreement


 




    	 	 	 



     


    


Schedule I


 


For avoidance of doubt,
the parties acknowledge and agree that the restrictions set forth in Sections 1(b) (ii) and (iii) shall not apply to any of the
following activities of Director:


 


		11.	The provision of legal services by Director to any Person.






		12.	The offer and sale of insurance products by Director to any Person.






		13.	The provision of investment advisory and brokerage services by Director to any Person.






		14.	The provision of private equity/venture capital financing by Director to any Person.






		15.	The provision of accounting services by Director to any Person.






		16.	The ownership of 5% or less of any class of securities of any Person.






		17.	The provision of automobile financing in connection with the operation of auto dealerships.






		18.	Obtaining banking-related services or products for entities owned or controlled by the Director.






		19.	Referrals of clients or obtaining banking-related services in connection with the conduct of real
estate or mortgage broker businesses.






		20.	Activities that are incidental to the Director’s performance of his or her profession so
long as such activities are not a scheme to circumvent the restrictions contained in this Agreement.



 


For the purposes of this agreement, “Change
in Control of FBMS” means (a) any person or group of persons within the meaning of §13(d)(3) of the Securities Exchange
Act of 1934, as amended, becomes the beneficial owner, directly or indirectly, of 50% or more of the outstanding voting securities
of FBMS or The First, or (b) individuals serving on the board of directors of FBMS cease for any reason to constitute at least
a majority of the board of directors of FBMS.


 




    	 	 i	 



     


    


 


EXHIBIT E


 


FORM
OF 


CLAIMS
LETTER


 


[·],
2017


 


The First Bancshares, Inc.


6480 U.S. Highway 98 West


Hattiesburg, MS 39404-5549


 


Ladies and Gentlemen:


 


This letter is delivered
pursuant the Agreement and Plan of Merger, dated as of [●], 2017 (the “Merger Agreement”), by and between
The First Bancshares, Inc., a Mississippi corporation (“FBMS”), and Southwest Banc Shares, Inc., an Alabama
corporation (“SWBS”).


 


Concerning claims which
the undersigned may have against SWBS or any of its subsidiaries, including First Community Bank (each, a “SWBS Entity”),
in his or her capacity as an officer, director or employee of any SWBS Entity, and in consideration of the promises, and the mutual
covenants contained herein and in the Merger Agreement and the mutual benefits to be derived hereunder and thereunder, and other
good and valuable consideration, the receipt and sufficiency of which are acknowledged, the undersigned, intending to be legally
bound, hereby agrees as follows:


 


Section 1.        Definitions.
Unless otherwise defined in this letter, capitalized terms used in this letter have the meanings given to them in the Merger Agreement.


 


Section 2.        
Release of Certain Claims.


 


(a)         The
undersigned hereby releases and forever discharges, effective upon the consummation of the Merger pursuant to the Merger Agreement,
each SWBS Entity, and each of their respective directors and officers (in their capacities as such), and their respective successors
and assigns, and each of them (hereinafter, individually and collectively, the “Released Parties”) of and from
any and all liabilities, claims, demands, debts, accounts, covenants, agreements, obligations, costs, expenses, actions or causes
of action of every nature, character or description (collectively, “Claims”), which the undersigned, solely
in his or her capacity as an officer, director or employee of any SWBS Entity has or claims to have, or previously had or claimed
to have, in each case as of the Effective Time, against any of the Released Parties, whether or not in law, equity or otherwise,
based in whole or in part on any facts, conduct, activities, transactions, events or occurrences known or unknown, matured or unmatured,
contingent or otherwise (individually a “Released Claim,” and collectively, the “Released Claims”),
except for (i) compensation for services that have accrued but have not yet been paid in the ordinary course of business consistent
with past practice or other contract rights relating to severance, employment, stock options and restricted stock grants which
have been disclosed in writing to FBMS on or prior to the date of the Merger Agreement, and (ii) the items listed in Section
2(b) below.


 






    	 	 	 



     


    


 


(b)         For
avoidance of doubt, the parties acknowledge and agree that the Released Claims do not include any of the following:


 


(i)         any
Claims that the undersigned may have in any capacity other than as an officer, director or employee of any SWBS Entity, including,
but not limited to, (A) Claims as a borrower under loan commitments and agreements between the undersigned and First Community
Bank, (B) Claims as a depositor under any deposit account with First Community Bank, (C) Claims as the holder of any Certificate
of Deposit issued by First Community Bank, (D) Claims on account of any services rendered by the undersigned in a capacity other
than as an officer, director or employee of any SWBS Entity; (E) Claims in his or her capacity as a shareholder of SWBS, and (F)
Claims as a holder of any check issued by any other depositor of First Community Bank;


 


(ii)        the Claims excluded in Section 2(a)(i) above;


 


(iii)       any
Claims that the undersigned may have under the Merger Agreement;


 


(iv)       any
right to indemnification that the undersigned may have under the articles of incorporation or bylaws of any SWBS Entity, under
Alabama law or the Merger Agreement; or


 


(v)        any
rights or Claims listed on Schedule I to this Agreement.


 


Section 3.         Forbearance.
The undersigned shall forever refrain and forebear from commencing, instituting or prosecuting any lawsuit, action, claim or proceeding
before or in any court, regulatory, governmental, arbitral or other authority to collect or enforce any Released Claims which are
released and discharged hereby.


 


Section 4.         Miscellaneous.


 


(a)         This
letter shall be governed by, and interpreted and enforced in accordance with, the internal, substantive laws of the State of Mississippi,
without regard for conflict of law provisions.


 


(b)         This
letter contains the entire agreement between the parties with respect to the Released Claims released hereby, and the release of
Claims contained in this letter supersedes all prior agreements, arrangement or understandings (written or otherwise) with respect
to such Released Claims and no representation or warranty, oral or written, express or implied, has been made by or relied upon
by any party hereto, except as expressly contained herein or in the Merger Agreement.


 


(c)         This
letter shall be binding upon and inure to the benefit of the undersigned and the Released Parties and their respective heirs, legal
representatives, successors and assigns.


 






    	 	2	 



     


    


 


(d)         This
letter may not be modified, amended or rescinded except by the written agreement of the undersigned and the Released Parties, it
being the express understanding of the undersigned and the Released Parties that no term hereof may be waived by the action, inaction
or course of delaying by or between the undersigned or the Released Parties, except in strict accordance with this paragraph, and
further that the waiver of any breach of the terms of this letter shall not constitute or be construed as the waiver of any other
breach of the terms hereof.


 


(e)         The
undersigned represents, warrants and covenants that the undersigned is fully aware of the undersigned’s rights to discuss
any and all aspects of this matter with any attorney chosen by him or her, and that the undersigned has carefully read and fully
understands all the provisions of this letter, and that the undersigned is voluntarily entering into this letter.


 


(f)         This
letter shall become effective upon the consummation of the Merger, and its operation to extinguish all of the Released Claims released
hereby is not dependent on or affected by the performance or non-performance of any future act by the undersigned or the Released
Parties. If the Merger Agreement is terminated for any reason, this letter shall be of no force or effect.


 


(g)         If
any civil action, arbitration or other legal proceeding is brought for the enforcement of this letter, or because of an alleged
dispute, breach, default or misrepresentation in connection with any provision of this letter, the successful or prevailing party
or parties shall be entitled to recover reasonable attorneys’ fees, court costs, sales and use taxes and all expenses even
if not taxable as court costs (including, without limitation, all such fees, taxes, costs and expenses incident to arbitration,
appellate, bankruptcy and post-judgment proceedings), incurred in that proceeding, in addition to any other relief to which such
party or parties may be entitled. Attorneys’ fees shall include, without limitation, paralegal fees, investigative fees,
administrative costs, sales and use taxes and all other charges billed by the attorney to the prevailing party (including any fees
and costs associated with collecting such amounts).


 


(h)         Each
party acknowledges and agrees that any controversy which may arise under this letter is likely to involve complicated and difficult
issues, and therefore each such party hereby irrevocably and unconditionally waives any right such party may have to a trial by
jury in respect of any litigation directly or indirectly arising out of or relating to this letter, or the transactions contemplated
by this letter. Each party certifies and acknowledges that (i) no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii)
each party understands and has considered the implications of this waiver, (iii) each party makes this waiver voluntarily, and
(iv) each party has been induced to enter into this letter by, among other things, the mutual waivers and certifications in this
Section.


 






    	 	3	 



     


    

 


(i)         Any
civil action, counterclaim, proceeding, or litigation arising out of or relating to this letter shall be brought in the courts
of record of the State of Mississippi in Forrest County or the United States District Court, Southern District of Mississippi.
Each party consents to the jurisdiction of such Mississippi court in any such civil action, counterclaim, proceeding, or litigation
and waives any objection to the laying of venue of any such civil action, counterclaim, proceeding, or litigation in such Mississippi
court. Service of any court paper may be effected on such party by mail, as provided in this letter, or in such other manner as
may be provided under applicable laws, rules of procedure or local rules.


 


[Signature Page Follows]


 




    	 	4	 



     


    

 


	 	Sincerely,
	 	 
	 	 
	 	Signature of Director
	 	 
	 	 
	 	Name of Director


 


Signature Page – Claims Letter


 




    	 	 	 



     


    


 


On behalf of The First
Bancshares, Inc., I hereby acknowledge receipt of this letter as of this ___ day of ______________, 2017.


 


	 	THE FIRST BANCSHARES, INC.
	 	 	 
	 	By:	 
	 	Name:	M. Ray Cole, Jr.
	 	Title:	President and Chief Executive Officer


 


Signature Page – Claims Letter


 




    	 	 	 



     


    


 


Schedule I


 


Additional Excluded Claims


 








    	 	 i