Exhibit 2.1

AGREEMENT AND PLAN OF REORGANIZATION

by and between

BUSINESS FIRST BANCSHARES, INC.

and

OAKWOOD BANCSHARES, INC.

Dated as of April 25, 2024

TABLE OF CONTENTS

Page

EXHIBITS

Exhibit A – Form of Bank Merger Agreement

Exhibit B – Form of Voting Agreement

Exhibit C – Form of Director Support Agreement

Exhibit D – Form of Employment Agreement

Exhibit E – Form of Release by Director/Officer

Exhibit F – Form of Escrow Agreement

INDEX OF DEFINED TERMS

AGREEMENT AND PLAN OF REORGANIZATION

This Agreement and Plan of Reorganization (“Agreement”) dated as of April 25, 2024, is by and between Business First Bancshares, Inc. (“BFST”), a Louisiana corporation and financial holding company registered under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and Oakwood Bancshares, Inc. (“Oakwood”), a Texas corporation and bank holding company registered under the BHC Act.

RECITALS

WHEREAS, the respective boards of directors of BFST and Oakwood believe that the merger of Oakwood with and into BFST, with BFST continuing as the surviving entity (the “Merger”), in the manner provided by, and subject to the terms and conditions set forth in, this Agreement and all exhibits, schedules and supplements hereto and the other transactions contemplated by this Agreement are advisable and in the best interests of their respective companies and shareholders;

WHEREAS, immediately following the Merger, and pursuant to a separate agreement and plan of merger in the form attached hereto as Exhibit A (the “Bank Merger Agreement”), b1BANK, a Louisiana state-chartered bank and wholly-owned subsidiary of BFST (“b1BANK”), and Oakwood Bank, a Texas state-chartered bank and wholly-owned subsidiary of Oakwood (“Oakwood Bank”), shall be combined through merger, with b1BANK continuing as the surviving entity (the “Bank Merger”);

WHEREAS, for federal income tax purposes, the parties intend that (i) the Merger will qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”) (and any comparable provision of state law), and the Treasury Regulations promulgated thereunder, and (ii) this Agreement is a “plan of reorganization” within the meaning of Treasury Regulations §§ 1.368-2(g) and 1.368-3(a) for purposes of Sections 354, 356 and 361 of the Code (and any comparable provision of state law) for federal and applicable state income tax purposes;

WHEREAS, the respective boards of directors of BFST and Oakwood have approved this Agreement and the transactions proposed herein on the terms and conditions set forth in this Agreement; and

WHEREAS, as a condition and inducement to BFST’s willingness to enter into this Agreement, (i) each member of the board of directors and the executive officers of Oakwood and Oakwood Bank has entered into an agreement, in the form attached hereto as Exhibit B, dated as of the date of this Agreement, pursuant to which he or she agrees to vote the issued and outstanding shares of common stock, par value $0.01 per share, of Oakwood (“Oakwood Stock”) beneficially owned by such person in favor of this Agreement and the transactions contemplated hereby (the “Voting Agreement”), (ii) each non-employee director of Oakwood or Oakwood Bank has entered into a support agreement in the form attached hereto as Exhibit C (the “Director Support Agreements”), (iii) a certain executive officer and director of Oakwood Bank and Oakwood has entered into an employment agreement with BFST in the form attached hereto as Exhibit D (the “Employment Agreement”), (iv) each of the directors and executive officers of Oakwood and Oakwood Bank has entered into an agreement releasing Oakwood and Oakwood Bank from any and all claims by such directors and officers (except as described in such instrument), which shall each be in substantially the form attached hereto as Exhibit E (the “Releases”) and (v) Oakwood and Oakwood Bank shall have entered into an escrow agreement in the form attached hereto as Exhibit F (the “Escrow Agreement”).

AGREEMENT

NOW, THEREFORE, in consideration of such premises and the mutual representations, warranties, covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as set forth below.

ARTICLE I.
THE MERGER

Section 1.1         The Merger. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time (as defined herein), Oakwood shall be merged with and into BFST, with BFST continuing as the surviving corporation (which, as the surviving corporation, is hereinafter referred to as “Continuing Corporation” whenever reference is made to it at or after the Effective Time) pursuant to, and with the effect provided for in, the applicable provisions of the Louisiana Business Corporation Act (“LBCA”) and the Texas Business Organizations Code (“TBOC”).

Section 1.2         Organizational Documents and Facilities of Continuing Corporation. At the Effective Time and until thereafter amended in accordance with applicable law, the Organizational Documents (as defined herein) of Continuing Corporation shall be the Organizational Documents of BFST as in effect at the Effective Time. Unless and until changed by the board of directors of Continuing Corporation, the main office of Continuing Corporation shall be the main office of BFST as of the Effective Time. The established offices and facilities of Oakwood immediately prior to the Effective Time shall become established offices and facilities of Continuing Corporation. Until thereafter changed in accordance with law or the Organizational Documents of Continuing Corporation, all corporate acts, plans, policies, contracts, approvals and authorizations of Oakwood and BFST and their respective shareholders, boards of directors, committees elected or appointed thereby, officers and agents, which were valid, lawful, and effective immediately prior to the Effective Time, shall be taken for all purposes as the corporate acts, plans, policies, contracts, approvals and authorizations of Continuing Corporation and shall be as effective and binding thereon as the same were with respect to Oakwood and BFST, respectively, as of the Effective Time.

Section 1.3        Board of Directors and Executive Officers of Continuing Corporation. Subject to Section 6.10, at the Effective Time and until thereafter changed in accordance with applicable law and the Organizational Documents of Continuing Corporation, the members of the board of directors of BFST at the Effective Time shall be the members of the board of directors of Continuing Corporation. At the Effective Time and until thereafter changed in accordance with applicable law and the Organizational Documents of Continuing Corporation, the executive officers of BFST immediately prior to the Effective Time shall be the executive officers of Continuing Corporation.

Section 1.4          Effect of Merger. At the Effective Time, the corporate existence of Oakwood and BFST shall, as provided in the provisions of law heretofore mentioned, be consolidated and continued in Continuing Corporation, and Continuing Corporation shall be deemed to be a continuation in entity and identity of Oakwood and BFST. All rights, franchises and interests of Oakwood and BFST, respectively, in and to any type of property and choses in action shall be transferred to and vested in Continuing Corporation by virtue of the Merger without reversion or impairment, without further act or deed and without any assignment having occurred, but subject to any existing liens or other encumbrances thereon. The Merger shall have all other effects set forth in the applicable provisions of the LBCA and the TBOC.

Section 1.5        Liabilities of Continuing Corporation. At the Effective Time, Continuing Corporation shall be liable for all Liabilities (as defined herein) of Oakwood and BFST. All Liabilities and obligations of Oakwood and of BFST, respectively, matured or unmatured, whether accrued, absolute, contingent or otherwise, and whether or not reflected or reserved against on balance sheets, books of account, or records of Oakwood or BFST, as the case may be, shall be those of Continuing Corporation and shall not be released or impaired by the Merger. All rights of creditors and other obligees and all liens on property of either Oakwood or BFST shall be preserved unimpaired subsequent to the Merger.

Section 1.6          Bank Merger. Immediately after entering into this Agreement, b1BANK and Oakwood Bank shall enter into the Bank Merger Agreement. In the Bank Merger, Oakwood Bank shall be merged with and into b1BANK immediately following the Merger, with b1BANK continuing as the surviving entity and succeeding to and assuming all rights and obligations of Oakwood Bank in accordance with the applicable laws of Louisiana and Texas. At the request of BFST, Oakwood shall cause Oakwood Bank to execute such articles or certificate of merger and such other documents and certificates as are necessary to make the Bank Merger effective immediately following the Effective Time. Following the Bank Merger, the separate corporate existence of Oakwood Bank shall cease.

Section 1.7          Approvals and Notices. This Agreement shall be submitted to the shareholders of Oakwood in accordance with the terms of this Agreement, the applicable provisions of law and the Organizational Documents of Oakwood. Oakwood and BFST shall proceed with Commercially Reasonable Efforts (as defined herein) and cooperate fully in the procurement of any other consents and approvals and the taking of any other actions in satisfaction of all other requirements prescribed by law or otherwise necessary for consummation of the Merger on the terms herein provided, including the preparation and submission of all necessary filings, requests for waivers, notices and certificates with the Securities and Exchange Commission (the “SEC”), the NASDAQ Global Select Market (“NASDAQ”), the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), the Texas Department of Banking (the “TDB”), the Louisiana Office of Financial Institutions (the “OFI”), and the Federal Deposit Insurance Corporation (the “FDIC”).

Section 1.8          Tax Consequences. It is intended by the parties hereto that the Merger shall qualify as a reorganization under Section 368(a) of the Code (and any comparable provision of state law). The parties hereto hereby adopt this Agreement as a “plan of reorganization” within the meaning of Treasury Regulations §§ 1.368-2(g) and 1.368-3(a) for purposes of Sections 354, 356 and 361 of the Code (and any comparable provision of state law) for federal and applicable state income Tax purposes. This Agreement shall be interpreted consistent with that intent.

Section 1.9          Modification of Structure. Notwithstanding any provision of this Agreement to the contrary, BFST may elect, subject to the filing of all necessary applications and the receipt of all required regulatory approvals, to modify the structure of the transactions contemplated hereby so long as (a) there are no adverse federal or state income tax consequences to the shareholders of Oakwood as a result of such modification, (b) the consideration to be paid to holders of Oakwood Stock and Oakwood Equity Awards under this Agreement is not thereby changed in kind or reduced in amount because of such modification, (c) such modification will not be likely to materially delay or jeopardize receipt of any required regulatory approvals, or (d) such modification will not require submission to or approval of Oakwood shareholders after receipt of the Oakwood Shareholder Approval. In the event of such election, the parties agree to execute an appropriate amendment to this Agreement in order to reflect such election.

ARTICLE II.
CONSIDERATION AND EXCHANGE PROCEDURES

Section 2.1           Merger Consideration. At the Effective Time, by virtue of the Merger and without any action on the part of Oakwood, BFST or the holders of any of the following securities:

(a)          Each share of common stock, par value $1.00 per share, of BFST (“BFST Common Stock”) issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding and shall not be affected by the Merger.

(b)          Each share of Oakwood Stock issued and outstanding immediately prior to the Effective Time (other than any Cancelled Shares and Dissenting Shares (as such terms are defined herein)) shall be converted into the right to receive, without interest, the Per Share Merger Consideration. “Per Share Merger Consideration” means:

(i)    0.5112 shares of validly issued, fully paid and nonassessable shares of BFST Common Stock (the “Exchange Ratio”), subject to adjustment pursuant to Section 2.2; and

(ii)    in lieu of the issuance of any fractional share of BFST Common Stock, an amount in cash (rounded to the nearest cent) determined by multiplying (A) the volume-weighted average of the closing price per share of BFST Common Stock on the NASDAQ for the consecutive period of twenty (20) full trading days ending on the third (3rd) Business Day immediately preceding the Closing Date, as reported by Bloomberg L.P. (or, if not reported therein, in another authoritative source mutually agreed upon by BFST and Oakwood) (the “BFST Share Closing Price”) by (B) the fraction of a share (after taking into account all shares of Oakwood Stock held by such holder immediately prior to the Effective Time and rounded to the nearest ten-thousandth when expressed in decimal form) of BFST Common Stock to which such holder would otherwise be entitled to receive pursuant to Section 2.1(b)(i) (the product of (A) and (B) being the “Fractional Share Cash Consideration”).

(c)          Treatment of Oakwood Equity Awards.

(i)    Oakwood Stock Options. At the Effective Time, each option to acquire shares of Oakwood Stock issued, outstanding and unexercised immediately prior to the Effective Time (the “Oakwood Stock Options”) shall cease to represent a right to acquire shares of Oakwood Stock and shall be converted automatically into an option to purchase shares of BFST Common Stock in an amount and at an exercise price determined as provided below (and otherwise subject to the terms of the Oakwood Bancshares, Inc. 2017 Equity Incentive Plan and the agreements evidencing grants thereunder). The number of shares of BFST Common Stock subject to, and the option price and terms and conditions of, the new option shall be determined in a manner that preserves both (i) the aggregate gain (or loss) on the Oakwood Stock Options immediately prior to the Effective Time and (ii) the ratio of the exercise price per share subject to the Oakwood Stock Options to the fair market value (determined immediately prior to the Effective Time) per share subject to such option, provided that any fractional shares of BFST Common Stock resulting from such determination shall be rounded down to the nearest share. The adjustment provided herein with respect to any Oakwood Stock Options that are “incentive stock options” (as defined in Section 422 of the Code) shall be and is intended to be effected in a manner that is consistent with Section 424(a) of the Code. The duration, vesting and any other terms of the new options shall be the same as the Oakwood Stock Options that they replace, except that all references to Oakwood shall be deemed to be a reference to BFST.

(ii)    Oakwood Restricted Stock Awards. At the Effective Time, each award of shares of Oakwood Stock subject to vesting or repurchase granted by Oakwood that is outstanding immediately prior to the Effective Time (each, an “Oakwood Restricted Stock Award”) shall convert automatically into the right to receive the Per Share Merger Consideration in respect of each share of Oakwood Stock underlying such Oakwood Restricted Stock Award, without interest.

(iii)    Oakwood Restricted Stock Unit Awards. At the Effective Time, each restricted stock unit award in respect of shares of Oakwood Stock granted by Oakwood (an “Oakwood RSU Award”) that is outstanding immediately prior to the Effective Time shall convert automatically into the right to receive the Per Share Merger Consideration in respect of each share of Oakwood Stock underlying such Oakwood RSU Award, without interest.

(iv)    At or prior to the Effective Time, Oakwood and the board of directors of Oakwood shall adopt any resolutions and take any actions that are necessary to effectuate the provisions of this Section.

(d)        All shares of Oakwood Stock issued and outstanding immediately prior to the Effective Time that are owned directly by BFST, Oakwood or Oakwood Bank (other than (i) shares held in trust accounts, managed accounts and the like, or otherwise held in a fiduciary or agency capacity, that are beneficially owned by third parties and (ii) shares held, directly or indirectly, by such parties in respect of a debt previously contracted) shall be cancelled and shall cease to exist and no Merger Consideration or other consideration shall be delivered in exchange therefor (such cancelled shares, “Cancelled Shares”).

Section 2.2           Escrow Consideration.

(a)         At or before the Effective Time, BFST shall deposit or cause to be deposited, from the Aggregate Stock Consideration, a number of validly issued, fully paid and nonassessable shares of BFST Common Stock, having a value equal to $1,500,000.00 based on the BFST Share Closing Price (the “Escrow Consideration”), into a segregated escrow account (the “Escrow Account”) with Computershare Trust Company, N.A. (the “Escrow Agent”) until the later of (i) the date that the litigation set forth on Section 2.2 of the Oakwood Disclosure Schedules (the “Escrow Litigation”) is fully and finally resolved in accordance with the terms of the Escrow Agreement or (ii) two (2) years from the Closing Date; provided, however, if BFST is not a party to any claim related to the Escrow Litigation at the expiration of the two (2) year period described in clause (ii) of this Section 2.2(a), then the Escrow Consideration shall be distributed in accordance with Section 6(b) of the Escrow Agreement (the “Escrow Period”). BFST shall cause the Escrow Agent to distribute the Escrow Consideration to the holders of Oakwood Stock immediately prior to the Effective Time (other than Cancelled Shares and Dissenting Shares) in accordance with the terms and conditions of this Agreement and the Escrow Agreement.

(b)       From and after the Effective Time, BFST and Oakwood agree that for all Tax purposes, (i) the Oakwood shareholders shall be treated as the owners of the Escrow Consideration in the Escrow Account, (ii) the Escrow Consideration shall be treated as part of the Merger Consideration for such shareholders’ Oakwood Stock pursuant to the Merger to the extent permissible under applicable law, and (iii) the Oakwood shareholders shall be entitled to receive dividends on, and shall be entitled to vote on, the shares of BFST Common Stock held in the Escrow Account. The Oakwood shareholders shall take into account all items of income, deduction and credit with respect to the Escrow Consideration while it is held in the Escrow Account. No party shall take any position on an income Tax Return that is inconsistent with the foregoing unless otherwise required pursuant to applicable law.

Section 2.3          Anti-Dilutive Adjustment. If the number of shares of BFST Common Stock or Oakwood Stock issued and outstanding prior to the Effective Time shall be increased or decreased, or changed into or exchanged for a different number or kind of shares or securities, in any such case as a result of a stock split, reverse stock split, stock combination, stock dividend, reclassification, 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 Oakwood Stock the same economic effect as contemplated by this Agreement prior to such event.

Section 2.4          Dissenting Shares. Each share of Oakwood Stock issued and outstanding immediately prior to the Effective Time, the holder of which has not voted in favor of nor consented in writing to the approval of the Merger and who has properly perfected his or her dissenter’s rights of appraisal by following the exact procedure required by Title 1, Chapter 10, Subchapter H of the TBOC is referred to herein as a “Dissenting Share.” Notwithstanding any provision of this Agreement to the contrary, each Dissenting Share shall not be converted into or represent the right to receive the Merger Consideration pursuant to this Article II and shall be entitled only to such rights as are available to such holder pursuant to the applicable provisions of the TBOC. Each holder of Dissenting Shares shall be entitled to receive the value of such Dissenting Shares held by him or her in accordance with the applicable provisions of the TBOC; provided, such holder complies with the procedures contemplated by and set forth in the applicable provisions of the TBOC. If any holder of any Dissenting Shares shall effectively withdraw or lose his or her dissenter’s rights of appraisal under the applicable provisions of the TBOC, each such Dissenting Share shall be deemed to have been converted into and to have become exchangeable for, only the right to receive the Merger Consideration without any interest thereon in accordance with the provisions of this Article II.

Section 2.5         Deposit of Merger Consideration. At or before the Effective Time, BFST shall deposit with or make available to the Exchange Agent (as defined herein) for exchange in accordance with Section 2.6: (a) evidence of shares in book entry representing the number of shares of BFST Common Stock sufficient to deliver the Aggregate Stock Consideration (other than the Escrow Consideration subject to Section 2.2(a)); and (b) immediately available funds equal to the Aggregate Cash Consideration (together with, to the extent then determinable, any cash payable to holders of Dissenting Shares pursuant to Section 2.4) (collectively, the “Exchange Fund”), and BFST shall instruct the Exchange Agent to timely deliver the Merger Consideration.

Section 2.6           Delivery of Merger Consideration.

(a)          Within five (5) Business Days (as defined herein) after the Effective Time and subject to the receipt by Computershare Trust Company, N.A. (the “Exchange Agent”) of a list of Oakwood shareholders in a format that is acceptable to the Exchange Agent, the Exchange Agent shall mail to each holder of record immediately prior to the Effective Time of certificates (other than with respect to Cancelled Shares and Dissenting Shares) representing shares of Oakwood Stock (each, a “Certificate”), (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to each Certificate shall pass, only upon delivery of such Certificate (or an affidavit of loss in lieu of such Certificate)) to the Exchange Agent and shall be substantially in such form and have such other provisions as shall be prescribed by the Exchange Agent Agreement (the “Letter of Transmittal”) and (ii) instructions for use in surrendering each Certificate in exchange for the Merger Consideration and any dividends or distributions to which such holder is entitled pursuant to Section 2.6(c).

(b)          Within ten (10) days after surrender to the Exchange Agent of its Certificate or Certificates, accompanied by a properly completed Letter of Transmittal, such holder of Oakwood Stock will be entitled to receive the Per Share Merger Consideration to be issued or paid in consideration therefor in respect of the shares of Oakwood Stock represented by such holder’s Certificate or Certificates. Until so surrendered, each Certificate (other than Certificates representing Cancelled Shares, which shall be treated as provided in Section 2.1(c), and Dissenting Shares, which shall be treated as provided in Section 2.4) shall represent after the Effective Time, for all purposes, only the right to receive, without interest, the Per Share Merger Consideration to be issued or paid in consideration therefor upon surrender of such Certificate in accordance with this Section 2.6, and any dividends or distributions to which such holder is entitled pursuant to this Section 2.6.

(c)          No dividends or other distributions with respect to BFST Common Stock shall be paid to the holder of any unsurrendered Certificate with respect to the shares of BFST Common Stock represented thereby, in each case unless and until the surrender of such Certificate in accordance with this Section 2.6. Subject to the effect of applicable abandoned property, escheat or similar laws, following surrender of any such Certificate in accordance with this Section 2.6, the record holder thereof shall be entitled to receive, without interest, the amount of dividends or other distributions payable with respect to shares of BFST Common Stock represented by such Certificate with a record date after the Effective Time (but before such surrender date).

(d)          In the event of a transfer of ownership of a Certificate representing Oakwood Stock prior to the Effective Time that is not registered in the stock transfer records of Oakwood, the Per Share Merger Consideration to be issued or paid in consideration therefor shall be issued or paid in exchange therefor to a person other than the person in whose name the Certificate so surrendered is registered if the Certificate formerly representing such Oakwood Stock shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment or issuance shall pay any transfer or other similar Taxes required by reason of the payment or issuance to a person other than the registered holder of the Certificate or establish to the satisfaction of BFST and the Exchange Agent that the Tax has been paid or is not applicable.

(e)         After the Effective Time, there shall be no transfers on the stock transfer books of Oakwood of the shares of Oakwood Stock that were issued and outstanding immediately prior to the Effective Time other than to settle transfers of Oakwood Stock that occurred prior to the Effective Time. If, after the Effective Time, Certificates representing such shares are presented to BFST, they shall be promptly presented to the Exchange Agent for exchange as provided in this Section 2.6, and shall be cancelled and exchanged for the Per Share Merger Consideration to be issued or paid in consideration therefor in accordance with the procedures set forth in this Section 2.6.

(f)         Notwithstanding anything to the contrary contained in this Agreement, no fractional shares of BFST Common Stock shall be issued upon the surrender of Certificates for exchange, no dividend or distribution with respect to BFST Common Stock shall be payable on or with respect to any fractional share, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a shareholder of BFST.

(g)         Any portion of the Exchange Fund that remains unclaimed by the shareholders of Oakwood at the expiration of six (6) months after the Effective Time shall be paid to BFST. In such event, any former shareholders of Oakwood who have not theretofore complied with the exchange procedures in this Section 2.6 shall thereafter look only to BFST with respect to the Merger Consideration and any unpaid dividends and distributions on the BFST Common Stock deliverable in respect of each share represented by a Certificate such shareholder holds as determined pursuant to this Agreement, in each case, without any interest thereon. Notwithstanding the foregoing, none of BFST, Oakwood, the Continuing Corporation, the Exchange Agent or any other person shall be liable to any former holder of shares of Oakwood Stock for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar laws.

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

Section 2.7          Tax Adjustment. Notwithstanding anything in this Agreement to the contrary, to preserve the status of the Merger as a tax-free reorganization within the meaning of Section 368(a)(1)(A) of the Code, if the value of the Aggregate Stock Consideration based upon the closing price of the BFST Common Stock as reported on NASDAQ on the trading day immediately preceding the Closing Date would be less than forty percent (40%) of the sum of (i) the Aggregate Cash Consideration, (ii) the Aggregate Stock Consideration, and (iii) any other amounts that would be considered “boot” received by the Oakwood shareholders for purposes of Section 368(a) of the Code, then the Exchange Ratio will be increased with a corresponding decrease to the Aggregate Cash Consideration, in such amounts as agreed to by the parties in writing, so that the Aggregate Stock Consideration is equal to forty percent (40%) of the sum of (i) the Aggregate Cash Consideration, (ii) the Aggregate Stock Consideration, and (iii) any other amounts that would be considered “boot” received by the Oakwood shareholders for purposes of Section 368(a) of the Code, without changing the aggregate value of the Merger Consideration under Section 2.1(b).

Section 2.8           Withholding. BFST and the Exchange Agent, as applicable, will be entitled to deduct and withhold from the amounts otherwise payable by it pursuant to this Agreement (including any Aggregate Cash Consideration) to any person such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign Tax law, and to collect any necessary Tax forms, including IRS Forms W-8 or W-9, as applicable, or any necessary similar information, from a shareholder and any other recipients of payments hereunder. In the event that any amount is so deducted and withheld and properly and timely remitted to the appropriate Governmental Body, such amount will be treated for all purposes of this Agreement as having been paid to the person to whom the payment from which such amount was withheld. If any such deduction or withholding is taken in BFST Common Stock, the applicable withholding agent shall be treated as having sold such BFST Common Stock on behalf of the applicable recipient for an amount of cash equal to the fair market value of such BFST Common Stock at the time of such deemed sale.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF OAKWOOD

Oakwood represents and warrants to BFST as set forth below. On the date of this Agreement, Oakwood delivered to BFST schedules (the “Oakwood Disclosure Schedules”) setting forth, among other things, items the disclosure of which are necessary or appropriate (a) in response to an express disclosure requirement contained in a provision hereof, (b) as an exception to one or more representations and warranties contained in this Article III or (c) as an exception to one or more covenants contained in this Agreement. Disclosure in any section of the Oakwood Disclosure Schedules shall apply only to the indicated section of this Agreement, except to the extent that it is reasonably apparent on its face that such disclosure is relevant to another section of this Agreement. The mere inclusion of an item in the Oakwood Disclosure Schedules as an exception to a representation, warranty or covenant contained in this Agreement shall not be deemed an admission by Oakwood 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 on Oakwood.

Section 3.1           Organization.

(a)        Oakwood is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Texas and a bank holding company duly registered under the BHC Act, subject to all laws, rules and regulations applicable to bank holding companies. Oakwood Bank is a Texas state-chartered bank duly formed, validly existing and in good standing under the laws of the State of Texas. Other than Oakwood Bank, Oakwood has no other Subsidiaries (as defined herein).

(b)         Oakwood and each of its Subsidiaries has requisite power and authority (including all licenses, registrations, qualifications, franchises, permits and other governmental authorizations which are legally required) to own, lease and operate their respective properties, to engage in the business and activities now conducted by each of them, 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 Oakwood and each of its Subsidiaries. To Oakwood’s knowledge (as defined herein), no suspension or cancellation of any such necessary license, registration, qualification, franchise, permit or authorization is threatened.

(c)          Oakwood Bank is duly authorized to conduct general banking business, embracing all usual deposit functions of commercial banks as well as commercial, industrial and real estate loans, installment credits, collections and safe deposit facilities subject to the supervision of the FDIC and the TDB, and is an insured depository institution as defined in the Federal Deposit Insurance Act.

(d)          True and complete copies of the Organizational Documents of Oakwood and each Subsidiary, each as amended to date, have been delivered to BFST.

(e)          Section 3.1(f) of the Oakwood Disclosure Schedules lists each of the Subsidiaries of Oakwood and any other Person in which Oakwood or any of its Subsidiaries own, or have the right to acquire, any ownership interest. Except as set forth in Section 3.1(f) of the Oakwood Disclosure Schedules, neither Oakwood nor any of its Subsidiaries (i) has any Subsidiaries or Affiliates (as defined herein), (ii) is a general partner or owner in any joint venture, general partnership, limited partnership, trust or other non-corporate entity or (iii) knows of any arrangement pursuant to which the capital stock of any corporation is or has been held in trust (whether express, constructive, resulting or otherwise) for the benefit of all shareholders of Oakwood.

(f)           The deposit accounts of Oakwood Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by law, and all premiums and assessments due and owing as of the date of this Agreement required in connection therewith have been paid by Oakwood Bank.

Section 3.2           Capitalization.

(a)         The authorized capital stock of Oakwood consists of 20,000,000 shares of Oakwood Stock, 7,700,727 of which are issued and outstanding and none of which are held in treasury as of the date of hereof. As of the date hereof, there are 19,000 shares of Oakwood Stock granted in respect of outstanding Oakwood Restricted Stock Awards and 53,100 shares of Oakwood Stock subject to outstanding Oakwood RSU Awards. As of the date hereof, there are 407,500 Oakwood Stock Options issued, outstanding and unexercised. The authorized capital stock of Oakwood Bank consists of 250 shares of common stock, par value $100.00 per share (“Bank Stock”), all of which are issued and outstanding and held by Oakwood. All of the issued and outstanding shares of Oakwood Stock and Bank Stock are validly issued, fully paid and nonassessable and have not been issued in violation of the preemptive rights of any Person or in violation of any applicable federal or state securities laws.

(b)        Oakwood owns, either directly or indirectly, all of the issued and outstanding capital stock and other securities of its Subsidiaries. The outstanding capital stock and other securities of Oakwood’s Subsidiaries are, as applicable, (i) duly authorized, validly issued, fully paid and nonassessable and (ii) except as set forth in Section 3.2(b) of the Oakwood Disclosure Schedules, free and clear of any liens, claims, security interests and encumbrances of any kind. There are no irrevocable proxies with respect to shares of the Subsidiaries and there are no outstanding or authorized subscriptions, options, warrants, calls, rights or other agreements or commitments of any kind restricting the transfer of, requiring the issuance or sale of or otherwise relating to any such shares of capital stock of the Subsidiaries to any Person.

(c)         Other than the Oakwood Stock Options, Oakwood RSU Awards and Oakwood Restricted Stock Awards (collectively, the “Oakwood Equity Awards”), issued prior to the date of this Agreement and as set forth in Section 3.2(c) of the Oakwood Disclosure Schedules, there are no existing options, stock appreciation rights, stock appreciation units, warrants, calls, convertible securities or commitments of any kind obligating Oakwood to issue any authorized and unissued Oakwood Stock. Section 3.2(c) of the Oakwood Disclosure Schedules sets forth a true, correct and complete list of all Oakwood Equity Awards outstanding as of the date hereof specifying, on a holder-by-holder basis, as applicable, (A) the name of each holder, (B) the number of shares subject to each such Oakwood Equity Award, (C) the grant date of each such Oakwood Equity Award, (D) the vesting schedule for each Oakwood Equity Award, (E) the Oakwood benefit plan under which such Oakwood Equity Award was granted, (F) the exercise price for each such Oakwood Equity Award that is an Oakwood Stock Option, and (G) the expiration date for each such Oakwood Equity Award that is an Oakwood Stock Option. Other than the Oakwood Equity Awards, no equity-based awards (including any cash awards where the amount of payment is determined in whole or in part based on the price of any capital stock of Oakwood or any of its Subsidiaries) are outstanding. No Subsidiary of Oakwood owns any capital stock of Oakwood.

(d)        Except as set forth in Section 3.2(d) of the Oakwood Disclosure Schedules, Oakwood does not have any outstanding commitment or obligation to repurchase, reacquire or redeem any of its outstanding capital stock or other securities. Except as set forth in Section 3.2(d) of the Oakwood Disclosure Schedules, other than the Voting Agreement, to the knowledge of Oakwood, there are no voting trusts, voting agreements, buy-sell agreements or other similar arrangements affecting Oakwood Stock.

(e)          Oakwood does not have a past practice of paying dividends nor does it pay dividends on Oakwood Stock in the ordinary course of business.

Section 3.3           Authority; Approvals.

(a)         Oakwood has the requisite corporate power and authority to execute and deliver this Agreement and any related documents to which it is a party and, subject to the Oakwood Shareholder Approval, perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by Oakwood and, assuming due authorization, execution and delivery by BFST, is a duly authorized, valid, legally binding agreement of Oakwood enforceable against Oakwood in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors’ rights generally and general equitable principles.

(b)        The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly, validly and unanimously approved by the board of directors of Oakwood. The board of directors of Oakwood has (i) determined that this Agreement and the transactions contemplated hereby are advisable and in the best interests of Oakwood and its shareholders, (ii) directed that this Agreement be submitted to Oakwood’s shareholders for approval and adoption, and (iii) resolved to recommend to Oakwood’s shareholders that they approve this Agreement and the transactions contemplated by this Agreement. Except for the Oakwood Shareholder Approval (as defined herein), no further corporate proceedings on the part of Oakwood are necessary for Oakwood to execute and deliver this Agreement or the related documents to which it is a party and to consummate the transactions contemplated hereby or thereby.

(c)        Section 3.3(c) of the Oakwood Disclosure Schedules lists all governmental and any other consents, approvals, authorizations, applications, filings, notices, registrations and qualifications that are required to be made or obtained by Oakwood or any of its Subsidiaries in connection with or for the consummation of the transactions contemplated by this Agreement, including the Merger and the Bank Merger, and any filings with the SEC or the TDB with respect to the change in control, or BFST’s or b1BANK’s acquisition, the TBOC or any other applicable law (collectively, the “Oakwood Regulatory Approvals”). Other than federal and state securities laws and the Oakwood Regulatory Approvals, no consents or approvals of or filings or registrations with any Governmental Body (as defined herein) or with any other Person are necessary in connection with the execution and delivery by (i) Oakwood of this Agreement (and the related documents to which it is a party or the consummation by Oakwood of the transactions contemplated hereby or thereby), or (ii) Oakwood Bank of the Bank Merger Agreement (and the related documents to which it is a party or the consummation by Oakwood of the transactions contemplated hereby or thereby).

Section 3.4           No Conflicts; Consents.

(a)          Neither the execution and delivery by Oakwood of this Agreement and the related documents nor the consummation of the transactions contemplated hereby or thereby, nor compliance by Oakwood with any of the provisions hereof or thereof, will, assuming that the Oakwood Regulatory Approvals and the Oakwood Shareholder Approval are duly obtained, (i) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien, charge or encumbrance upon any of the material properties or assets of Oakwood or any of its Subsidiaries under any of the terms, conditions or provisions of (1) the Organizational Documents of Oakwood or any of its Subsidiaries or (2) except as set forth in Section 3.4(a) of the Oakwood Disclosure Schedules, any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which Oakwood or any of its Subsidiaries is a party or by which it may be bound, or to which Oakwood or any of its Subsidiaries or any of the properties or assets of Oakwood or any of its Subsidiaries may be subject, or (ii) violate any law, statute, code, ordinance, rule, regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to Oakwood or any of its Subsidiaries or any of their respective properties or assets, except, with respect to clause (i)(2) and clause (ii), for such violations, conflicts, breaches or defaults which either individually or in the aggregate would not have or be reasonably likely to have a Material Adverse Effect on Oakwood or any of its Subsidiaries.

(b)         Except for the Oakwood Regulatory Approvals, the Oakwood Shareholder Approval and as set forth in Section 3.4(b) of the Oakwood Disclosure Schedules (the items so set forth therein collectively, the “Required Consents”), and except where the failure to make or obtain such consents, approvals, notices, licenses, permits, orders, registrations, declarations, or filings either individually or in the aggregate would not have or be reasonably likely to have a Material Adverse Effect on Oakwood or any of its Subsidiaries, no consent, approval, notice, license, permit, order or authorization of or registration, declaration or filing with any Person is required to be obtained or made by Oakwood or any of its Subsidiaries in connection with the execution and delivery of this Agreement and the related documents to which they are a party and the consummation of the transactions contemplated hereby and thereby.

Section 3.5           Proceedings. Except as set forth in Section 3.5 of the Oakwood Disclosure Schedules, there are no Proceedings (as defined herein) pending or, to Oakwood’s knowledge, threatened against Oakwood or any of its Subsidiaries, and Oakwood has no knowledge of any basis on which any such Proceedings could be brought, which could reasonably be expected to result in a Material Adverse Effect (as defined herein) on Oakwood or which could question the validity of any action taken or to be taken in connection with this Agreement or the transactions contemplated hereby. Neither Oakwood nor any of its Subsidiaries is in default with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any arbitrator or Governmental Body.

Section 3.6           Financial Statements.

(a)          Oakwood has furnished and made available to BFST true, correct and complete copies of Oakwood’s audited consolidated balance sheets as of December 31, 2022 and 2021, and the related consolidated statements of income and comprehensive income, changes in stockholders’ equity and cash flows for the years ended December 31, 2022, 2021 and 2020, accompanied by the report thereon of Oakwood’s independent auditors, and true, correct and complete copies of Oakwood’s unaudited consolidated balance sheet as of December 31, 2023, and the consolidated statement of income for the eleven (11) months ended November 30, 2023 (the “Oakwood Annual and Quarterly Financial Statements”). Oakwood has also furnished or made available to BFST a true, correct and complete copy of the Consolidated Reports of Condition and Income (the “Call Reports”) filed by Oakwood Bank as of and for each period during the three years ended December 31, 2023. The Oakwood Annual and Quarterly Financial Statements and the Call Reports are collectively referred to in this Agreement as the “Oakwood Financial Statements.”

(b)         The Oakwood Annual and Quarterly Financial Statements have been prepared from the books and records of Oakwood and its Subsidiaries and fairly present, in all material respects, the consolidated financial position, results of operations, shareholders’ equity and cash flows of Oakwood at the dates and for the periods indicated in conformity with GAAP applied on a consistent basis throughout the periods indicated. The Call Reports fairly present the financial position of Oakwood Bank and the results of its operations at the dates, and for the periods indicated in compliance with the rules and regulations of applicable federal banking authorities.

(c)           As of the dates of Oakwood Financial Statements and as of the date of this Agreement, neither Oakwood nor any of its Subsidiaries had any material Liabilities (whether accrued, absolute, contingent or otherwise) except as fully set forth or provided for in such Oakwood Financial Statements.

Section 3.7           Compliance with Laws and Regulatory Filings.

(a)        Oakwood and each of its Subsidiaries have complied in all material respects with and are not in material default or violation under any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Body relating to Oakwood or any of its Subsidiaries, including, as applicable, the Investment Advisers Act, all laws related to data protection or privacy, the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Interagency Policy Statement on Retail Sales of Non-deposit Investment Products, the SAFE Mortgage Licensing Act of 2008, the Real Estate Settlement Procedures Act, Regulation X, Flood Disaster Protection Act, Home Owners Equity Protection Act, Right to Financial Privacy Act, Unfair, Deceptive or Abusive Acts or Practices and any other law relating to bank secrecy, discriminatory lending, financing or leasing practices, money laundering prevention, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act, and all agency requirements relating to the origination, sale and servicing of mortgage and consumer loans (collectively, “Banking Laws”). Neither Oakwood nor any of its Subsidiaries has had nor suspected any material incidents of fraud or defalcation involving Oakwood, Oakwood Bank or any of their respective officers, directors or Affiliates during the last two (2) years. To the knowledge of Oakwood, each of Oakwood and Oakwood Bank has timely and properly filed and maintained all requisite Currency Transaction Reports and Suspicious Activity Reports and has properly monitored transaction activity (including wire transfers). Oakwood Bank is designated as an intermediate small bank for purposes of the Community Reinvestment Act and has a Community Reinvestment Act rating of “needs to improve.”

(b)          Oakwood and its Subsidiaries have filed all reports, registrations and statements, together with any amendments required to be made thereto, that are required to be filed with the Federal Reserve Board, the FDIC, the TDB, or any other Governmental Body having supervisory jurisdiction over Oakwood and its Subsidiaries, and such reports, registrations and statements as finally amended or corrected, are true and correct in all material respects. Except for normal examinations conducted by bank regulatory agencies in the ordinary course of business, no Governmental Body has initiated any Proceeding or, to Oakwood’s knowledge, investigation into the business or operations of Oakwood or its Subsidiaries. There is no material unresolved violation, criticism or exception by any bank regulatory agency with respect to any report relating to any examinations of Oakwood Bank or Oakwood. Oakwood is “well capitalized” (as that term is defined in 12 C.F.R. § 225.2(r)) and “well managed” (as that term is defined in 12 C.F.R. § 225.2(s)). Oakwood Bank is “well capitalized” (as that term is defined in 12 C.F.R. §325.103(b)(1)).

(c)          None of Oakwood, or its Subsidiaries, or to the knowledge of Oakwood, any director, officer, employee, agent or other person acting on behalf of Oakwood or any of its Subsidiaries has, directly or indirectly, (i) used any funds of Oakwood or any of its Subsidiaries for unlawful contributions, unlawful gifts, unlawful entertainment or other expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic governmental officials or employees or to foreign or domestic political parties or campaigns from funds of Oakwood or any of its Subsidiaries, (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any similar law, (iv) established or maintained any unlawful fund of monies or other assets of Oakwood or any of its Subsidiaries, (v) made any fraudulent entry on the books or records of Oakwood or any of its Subsidiaries, or (vi) made any unlawful bribe, unlawful rebate, unlawful payoff, unlawful influence payment, unlawful kickback or other unlawful payment to any person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business to obtain special concessions for Oakwood or any of its Subsidiaries, to pay for favorable treatment for business secured or to pay for special concessions already obtained for Oakwood or any of its Subsidiaries, or is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury.

Section 3.8         Absence of Certain Changes. Except as set forth in Section 3.8 of the Oakwood Disclosure Schedules, since December 31, 2023, (a) Oakwood and its Subsidiaries have conducted their respective businesses in the ordinary and usual course consistent with safe and sound banking practices (except as otherwise required by this Agreement and excluding the incurrence of expenses related to this Agreement and the transactions contemplated hereby), (b) neither Oakwood nor any of its Subsidiaries has engaged in the activities proscribed by Section 5.2(b), and (c) no Material Adverse Effect on Oakwood or Oakwood Bank has occurred.

Section 3.9          Investments. Oakwood has furnished to BFST a true, correct and complete list, as of March 31, 2024, of all securities, including municipal bonds, owned by Oakwood Bank (the “Securities Portfolio”). All such securities are carried in accordance with GAAP consistent with applicable guidance issued by applicable regulatory authorities and are owned by Oakwood Bank (a) of record, except those held in bearer form, and (b) beneficially, free and clear of all mortgages, liens, pledges and encumbrances. There is no Person (other than Oakwood Bank) in which the ownership interest of Oakwood, whether held directly or indirectly, equals five percent (5%) or more of the issued and outstanding voting securities of the issuer thereof. To Oakwood’s knowledge, there are no voting trusts or other agreements or understandings with respect to the voting of any of the securities in the Securities Portfolio. Each of Oakwood and its Subsidiaries employs, to the extent applicable, investment, securities, risk management and other policies, practices and procedures that Oakwood believes are prudent and reasonable in the context of their respective businesses, and each of Oakwood and its Subsidiaries has, since December 31, 2021, been in compliance with such policies, practices and procedures in all material respects.

Section 3.10         Loan Portfolio and Reserve for Loan Losses.

(a)         All evidences of indebtedness to which Oakwood or any of its Subsidiaries is a party as a lender, lessor or creditor (individually a “Loan” and collectively, the “Loans”), including any renewals and extensions of any Loan, were solicited, originated and currently exist in compliance in all material respects with all applicable requirements of federal and state law and regulations promulgated thereunder. The Loans are adequately documented, and each note evidencing a Loan or credit agreement or security instrument related to a Loan constitutes a valid and binding obligation of the obligor thereunder, and, assuming due authorization, execution and delivery thereof by the obligor, enforceable in accordance with the terms thereof, except as the enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights, and all actions necessary to protect any related security interest have been duly taken. Neither Oakwood nor any of its Subsidiaries has entered into any oral modifications or amendments or additional agreements related to the Loans that are not reflected in its records. There is no valid claim or defense to the enforcement of any Loan, and none has been asserted, and Oakwood has no knowledge of any acts or omissions that would give rise to any claim or right of rescission, set off, counterclaim or defense.

(b)          The credit files of Oakwood and each of its Subsidiaries contain all material information (excluding general, local or national industry, economic or similar conditions) known to Oakwood or any of its Subsidiaries that is reasonably required to evaluate in accordance with generally prevailing practices in the banking industry the collectability of the Loan portfolio of Oakwood or any of its Subsidiaries (including Loans that will be outstanding if it advances funds it is obligated to advance).

(c)          The allowance for credit losses (the “Allowance”) shown on Oakwood Financial Statements as of December 31, 2023 was, and the allowance for credit losses to be shown on any financial statements of Oakwood or Oakwood Bank or Consolidated Reports of Condition and Income of Oakwood Bank as of any date subsequent to the execution of this Agreement shall be, calculated in accordance with GAAP in all material respects as applied to banking institutions and all applicable rules and regulations, and in the reasonable opinion of management, adequate in all respects to provide for all probable losses, net of recoveries relating to loans previously charged off, on Loans outstanding (including accrued interest receivable) of Oakwood or any of its Subsidiaries and other extensions of credit (including letters of credit or commitments to make loans or extend credit). Oakwood has adopted and fully implemented CECL, effective as of January 1, 2023.

Section 3.11         Certain Loans and Related Matters.

(a)         Except as set forth in Section 3.11(a) of the Oakwood Disclosure Schedules, as of December 31, 2023, neither Oakwood nor any of its Subsidiaries is a party to any written or oral: (i) loan agreement, note or borrowing arrangement (other than credit card loans and other loans the unpaid balance of which does not exceed $10,000 per loan) under the terms of which the obligor is sixty (60) days delinquent in payment of principal or interest or in default of any other material provisions as of the date of this Agreement; (ii) loan agreement, note or borrowing arrangement which has been classified as “substandard,” “doubtful,” “loss,” “other loans especially mentioned,” “other assets especially mentioned” or any comparable classifications by such persons; (iii) loan agreement, note or borrowing arrangement, including any loan guaranty, with any director or executive officer of Oakwood or any of its Subsidiaries, or any ten percent (10%) or more shareholder of Oakwood, or any person, corporation or enterprise controlling, controlled by or under common control with any of the foregoing; or (iv) loan agreement, note or borrowing arrangement in violation of any law, regulation or rule applicable to Oakwood or any of its Subsidiaries including those promulgated, interpreted or enforced by any regulatory agency with supervisory jurisdiction over Oakwood or any of its Subsidiaries.

(b)          Section 3.11(b) of the Oakwood Disclosure Schedules contains the “watch list of loans” of Oakwood Bank (“Watch List”) as of March 31, 2024. To the knowledge of Oakwood, there is no other Loan, loan agreement, note or borrowing arrangement which should be included on the Watch List based on Oakwood’s or Oakwood Bank’s ordinary course of business and safe and sound banking principles.

(c)         No contracts pursuant to which Oakwood 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. Each Loan included in a pool of Loans originated, securitized or acquired by Oakwood or any of its Subsidiaries (a “Pool”) meets all eligibility requirements (including all applicable requirements for obtaining mortgage insurance certificates and Loan guaranty certificates) for inclusion in such Pool. All such Pools have been finally certified or, if required, recertified in accordance with all applicable laws, rules and regulations, except where the time for certification or recertification has not yet expired. No Pools have been improperly certified, and, except as would not be material to Oakwood or any of its Subsidiaries, no Loan has been bought out of a Pool without all required approvals of the applicable investors.

Section 3.12        Books and Records. The minute books, stock certificate books and stock transfer ledgers of Oakwood and each of its Subsidiaries (a) are complete and correct in all material respects, (b) the transactions entered therein represent bona fide transactions, and (c) do not fail to reflect transactions involving the business of Oakwood or any of its Subsidiaries that properly should have been set forth therein and that have not been accurately so set forth.

Section 3.13        Fiduciary Responsibilities. Neither Oakwood 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 accounts for which Oakwood or any of its Subsidiaries serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment adviser.

Section 3.14         Real Property Owned or Leased.

(a)          Section 3.14(a) of the Oakwood Disclosure Schedules contains a true, correct and complete list of all real property owned or leased by Oakwood or its Subsidiaries, including non-residential other real estate, and the owner or lessee thereof (the “Oakwood Real Property”). True and complete copies of all deeds and leases for, or other documentation evidencing ownership of or a leasehold interest in, Oakwood Real Property, title insurance policies for Oakwood Real Property that is owned by Oakwood or its Subsidiaries, and all mortgages, deeds of trust and security agreements to which such property is subject have been furnished or made available to BFST.

(b)          No lease or deed with respect to any Oakwood Real Property contains any restrictive covenant that materially restricts the use, transferability or value of such Oakwood Real Property pertaining to its current primary purpose.

(c)         None of the buildings and structures located on any Oakwood Real Property, nor any appurtenances thereto or equipment therein, nor the operation or maintenance thereof, violates in any manner any restrictive covenants or encroaches on any property owned by others, nor does any building or structure of third parties encroach upon any Oakwood Real Property, except those violations and encroachments that do not, individually or in the aggregate, materially adversely affect the value or use and enjoyment of the relevant Oakwood Real Property. No condemnation proceeding is pending or, to Oakwood’s knowledge, threatened, which could reasonably be expected to preclude or materially impair the use of any Oakwood Real Property in the manner in which it is currently being used.

(d)         Oakwood or one of its Subsidiaries has good and indefeasible title to, or a valid and enforceable leasehold interest in, all Oakwood Real Property, and such interest is free and clear of all liens, charges, imperfections of title or other encumbrances, except (i) statutory liens for amounts not yet delinquent or which are being contested in good faith through proper proceedings and for which adequate reserves have been provided in Oakwood Financial Statements; and (ii) easements, covenants, restrictions and other matters of record which do not, individually or in the aggregate, materially adversely affect the use and enjoyment of the relevant real property.

(e)         All buildings and other facilities used in the business of Oakwood and its Subsidiaries are in adequate condition (ordinary wear and tear excepted) and are free from defects which could reasonably be expected to materially interfere with the current or future use of such facilities consistent with past practices.

Section 3.15       Personal Property. Each of Oakwood and its Subsidiaries has good title to, or a valid leasehold interest in, all personal property, whether tangible or intangible, used in the conduct of its business (the “Oakwood Personal Property”), free and clear of all liens, charges, imperfections of title or other encumbrances and except (a) statutory liens for amounts not yet delinquent or which are being contested in good faith through proper proceedings and for which adequate reserves have been provided in Oakwood Financial Statements and (b) such other liens, charges imperfections of title and encumbrances as do not, individually or in the aggregate materially adversely affect the use and enjoyment of the relevant Oakwood Personal Property. Subject to ordinary wear and tear, Oakwood Personal Property, taken as a whole, is in good operating condition and repair and is adequate for the uses to which it is being put.

Section 3.16         Environmental Laws. Oakwood and its Subsidiaries and any business owned or operated by any of them, whether or not held in a fiduciary or representative capacity, are and for the last seven (7) years have been in compliance in all material respects with all Environmental Laws (as defined herein) and permits thereunder. Neither Oakwood nor any of its Subsidiaries has received written notice of any violation of any Environmental Laws or generated, stored, or disposed of any materials designated as Hazardous Materials (as defined herein), and they are not subject to any claim, lien, charge or other encumbrance under any Environmental Laws. No Oakwood Real Property and no real estate currently owned, operated or leased (including any property acquired by foreclosure or deeded in lieu thereof) by Oakwood or its Subsidiaries or owned, operated or leased by Oakwood or its Subsidiaries within the ten (10) years preceding the date of this Agreement, has been designated by a Governmental Body as requiring any environmental investigation, cleanup or response action to comply with Environmental Laws, or, to the knowledge of Oakwood, has been the site of any release of any Hazardous Materials. To Oakwood’s knowledge, (a) no asbestos was used in the construction of any Oakwood Real Property (or any improvements thereon), (b) no real property currently or previously owned by Oakwood or any of its Subsidiaries is, or has been, a heavy industrial site or landfill, and (c) there are no underground storage tanks at any properties owned or operated by Oakwood or any of its Subsidiaries and, (d) no underground storage tanks have been closed or removed from any properties owned or operated by Oakwood or any of its Subsidiaries. Oakwood has made available to BFST all environmental audits, site assessments, documentation regarding off-site disposal of Hazardous Materials, reports and other material environmental documents related to Oakwood Real Property, any real property formerly owned or operated by Oakwood or any of its Subsidiaries or any of their respective predecessors, and any other real property acquired by foreclosure or deeded in lieu thereof, which are in the possession or reasonable control of Oakwood or any of its Subsidiaries.

Section 3.17         Taxes.

(a)        Each of Oakwood and its Subsidiaries has duly and timely filed all income and other material Tax Returns it was required to file with the appropriate Governmental Bodies, including any Tax Returns of any affiliated, consolidated, combined or unitary group of which either Oakwood or any of its Subsidiaries is or was a member. All such Tax Returns are true, correct and complete in all material respects. All income and other material Taxes due and owing by Oakwood or any of its Subsidiaries (whether or not shown on any Tax Return) have been duly and timely paid to the appropriate Governmental Bodies. Neither Oakwood nor any of its Subsidiaries is currently the beneficiary of any extension of time within which to file any Tax Return (excluding automatic extensions obtained in the ordinary course of business). No written claim has ever been received by Oakwood or any of its Subsidiaries from a Governmental Body in a jurisdiction where Oakwood or any of its Subsidiaries, as applicable, does not file Tax Returns that indicates that Oakwood or any of its Subsidiaries, as applicable, is or may be subject to taxation by that jurisdiction or required to file a Tax Return in that jurisdiction, in each case, which claim is unresolved. There are no Security Interests on any of the assets of Oakwood or any of its Subsidiaries that arose in connection with any failure (or alleged failure) of Oakwood or any of its Subsidiaries to pay any Tax.

(b)         Each of Oakwood and its Subsidiaries has collected or withheld and duly paid to the appropriate Governmental Body all material Taxes required to have been collected or withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder, or other third party and each of Oakwood and its Subsidiaries has materially complied with all information reporting obligations with respect thereto.

(c)          There is no pending action, suit, proceeding, audit, assessment, dispute or claim concerning any Tax Liability of Oakwood or any of its Subsidiaries claimed or raised by any Governmental Body in writing.

(d)          Neither Oakwood nor any of its Subsidiaries has waived any statute of limitations in respect of any Tax or agreed to any extension of time with respect to a Tax assessment or deficiency, which waiver or extension remains outstanding.

(e)          Neither Oakwood nor any of its Subsidiaries has participated in a listed transaction as defined under Sections 6011 and 6111 of the Code and Treasury Regulations § 1.6011-4. Neither Oakwood nor any of its Subsidiaries (i) has been a member of an Affiliated Group filing a consolidated federal income Tax Return (other than the Affiliated Group of which Oakwood is the common parent) or (ii) has any Liability for the Taxes of any Person (other than Oakwood and its Subsidiaries) under Treasury Regulations § 1.1502‑6 (or any similar provision of state, local, or foreign law), or as a transferee or successor.

(f)           Neither Oakwood nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending on or after the Closing Date as a result of any: (i) change in method of accounting for a taxable period ending on or prior to the Closing Date under Section 481 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date or (iii) installment sale or open transaction disposition made on or prior to the Closing Date.

(g)        Neither Oakwood nor any of its Subsidiaries has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock under Sections 355 or 361 of the Code (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement.

(h)          Each of Oakwood and its Subsidiaries has complied in all material respects with all of its escheat and unclaimed property obligations.

(i)           Neither Oakwood nor any of its Subsidiaries is aware of any fact or circumstance or has taken any action that reasonably would be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

Section 3.18         Contracts and Commitments.

(a)          Except as set forth in Section 3.18(a) of the Oakwood Disclosure Schedules (the “Oakwood Contracts”), neither Oakwood nor any of its Subsidiaries is a party to or bound by any of the following (whether written or oral, express or implied):

(i)    employment, services, independent contractor, consulting, change-in-control, retention, or severance contracts or similar arrangements;

(ii)    collective bargaining agreements, memorandums of understanding, or other contracts with any Union (as defined herein);

(iii)    bonus, stock option, restricted stock, stock appreciation, phantom stock, equity or equity-based compensation, deferred compensation arrangement, profit-sharing plan, pension plan, retirement plan, welfare plan or other employee benefit agreement or arrangement;

(iv)    any material lease or license with respect to any property, real or personal, whether as landlord, tenant, licensor or licensee;

(v)    contract or commitment for capital expenditures in excess of $50,000 in the aggregate;

(vi)    material contract or commitment for the purchase of materials or supplies or for the performance of services over a period of more than sixty (60) days after the date of this Agreement and not terminable upon notice of sixty (60) days or less;

(vii)    contract or option to purchase or sell any real or personal property other than any contract for the purchase of personal property in the ordinary course of business;

(viii)    contract, agreement or letter with respect to the management or operations of Oakwood or Oakwood Bank imposed by any Governmental Body having supervisory jurisdiction over Oakwood or Oakwood Bank;

(ix)    note, debenture, agreement, contract or indenture related to the borrowing by Oakwood or any of its Subsidiaries of money other than those entered into in the ordinary course of business;

(x)    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;

(xi)    agreement with or extension of credit to any executive officer or director of Oakwood or any of its Subsidiaries or holder of ten percent (10%) or more of the issued and outstanding Oakwood Stock, or any affiliate of such person;

(xii)    agreement with any executive officer or director of Oakwood or any of its Subsidiaries or holder of ten percent (10%) or more of the issued and outstanding Oakwood Stock or any affiliate of such person, relating to bank owned life insurance (“BOLI”);

(xiii)    lease of real property;

(xiv)    any agreement containing covenants that limit the ability of Oakwood or any of its Subsidiaries to compete in any line of business or with any Person, or that involve any restriction on the geographic area in which, or method by which, Oakwood (including any successor thereof) or any of its Subsidiaries (including any successor thereof) may carry on its business (other than as may be required by law or any Governmental Body);

(xv)    any data processing or other electronic banking services agreement or contract which may not be terminated without payment or penalty upon notice of thirty (30) days or less;

(xvi)    any agreement pursuant to which Oakwood or any of its Subsidiaries may become obligated to invest in or contribute capital to any Person;

(xvii)    any agreement between Oakwood Bank, on the one hand, and a Person listed on Section 3.1(f) of the Oakwood Disclosure Schedules, on the other hand; or

(xviii)     contracts, other than the foregoing, with payments aggregating $50,000 or more not made in the ordinary course of business.

(b)        Each Oakwood Contract is legal, valid and binding on Oakwood or its Subsidiaries, as the case may be, and to the knowledge of Oakwood, the other parties thereto, enforceable by Oakwood or its Subsidiaries, as the case may be, in accordance with its terms (subject to the effect of bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors’ rights generally and general equitable principles). Each of Oakwood and its Subsidiaries has performed in all material respects all obligations required to be performed by it to date under each Oakwood Contract and there are no existing material defaults by Oakwood or its Subsidiary, as the case may be, or, to the knowledge of Oakwood, the other party thereunder and, to the knowledge of Oakwood, there are no allegations or assertions of such by any party under such Oakwood Contract or any events that with notice, lapse of time or the happening or occurrence of any other event would be reasonably likely to constitute a default thereunder. A true and complete copy of each Oakwood Contract has been delivered or made available to BFST.

Section 3.19         Fidelity Bonds and Insurance.

(a)         A true, correct and complete list of all fidelity bonds and insurance policies (including any BOLI) owned or held by or on behalf of either Oakwood or any of its Subsidiaries (other than credit-life policies), including the insurer, policy numbers, amount of coverage, deductions, type of insurance, effective and termination dates and any material pending claims thereunder is set forth in Section 3.19(a) of the Oakwood Disclosure Schedules.

(b)          All policies of general liability, theft, life, fire, workers’ compensation, health, directors and officers, business interruption and other forms of insurance owned or held by Oakwood or any of its Subsidiaries (i) are in full force and effect and all premiums that are due and payable with respect thereto are currently paid; (ii) are sufficient for compliance with all requirements of applicable laws and all agreements to which Oakwood or such Subsidiary is a party; (iii) are usual and customary as to amount and scope for the business conducted by Oakwood and its Subsidiaries in respect of amounts, types and risks insured; (iv) are valid, outstanding and enforceable policies (except as may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the rights of creditors generally and the availability of equitable remedies); and (v) will remain in full force and effect through the Effective Time, subject to normal renewal policies and procedures, including the payment of premiums. To the knowledge of Oakwood, no insurer under any such policy or bond has canceled or indicated to Oakwood or any of its Subsidiaries an intention to cancel or not to renew any such policy or bond effective at any time prior to the Effective Time or generally disclaimed liability thereunder. Neither Oakwood nor any of its Subsidiaries is in default under any such policy or bond, and all material claims thereunder have been filed. Neither Oakwood nor any of its Subsidiaries has been denied or had revoked or rescinded any policy of insurance during the last three (3) fiscal years.

Section 3.20         Regulatory Actions and Approvals. There are no Proceedings pending or, to the knowledge of Oakwood, threatened, against Oakwood or any of its Subsidiaries by or before any Governmental Body or arbitrator having jurisdiction over Oakwood or any of its Subsidiaries. Neither Oakwood nor any of its Subsidiaries is subject to a formal or informal agreement, memorandum of understanding, enforcement action with, or any type of financial assistance by, any Governmental Body or arbitrator having jurisdiction over it. Neither Oakwood nor any of its Subsidiaries knows of any fact or circumstance relating to it that would materially impede or delay receipt of any Regulatory Approvals (as defined herein), the Merger, the Bank Merger or the other transactions contemplated by this Agreement, nor does Oakwood or any of its Subsidiaries have any reason to believe that it will not be able to obtain all Oakwood Regulatory Approvals.

Section 3.21         Employee Matters.

(a)         Oakwood has provided or made available a list of all current employees of Oakwood or any of its Subsidiaries (including, without limitation, those individuals for whom Oakwood or any of its Subsidiaries is a joint employer) as of the date of this Agreement, including any such employee who is on a leave of absence of any nature, and sets forth for each such individual the following: (i) name; (ii) title or position (including whether full or part time); (iii) hire date; (iv) current base compensation rate; (v) bonus or other incentive-based compensation paid in the prior calendar year; (vi) exempt or non-exempt classification under the Fair Labor Standards Act; and (vii) pay-rolling entity. As of the Closing Date, all compensation payable to all employees of Oakwood and its Subsidiaries for services performed on or prior to the Closing Date have been paid in full (or accrued in full on Oakwood’s interim financial statements) and there are no outstanding agreements, understandings or commitments of Oakwood or its Subsidiaries with respect to any compensation.

(b)        Oakwood has provided or made available a list of all individuals who, as of the date of this Agreement, are parties to an independent contract or consulting agreement directly with Oakwood or its Subsidiaries, and for each such individual the following information: (i) name; (ii) compensation rate; (iii) contract expiration date and terms; and (iv) a brief description of services provided. As of the Closing Date, all compensation payable to all independent contractors and consultants of Oakwood and its Subsidiaries for services performed on or prior to the Closing Date have been paid in full (or accrued in full on Oakwood’s interim financial statements) and there are no outstanding agreements, understandings or commitments of Oakwood or its Subsidiaries with respect to any compensation.

(c)        Neither Oakwood nor any of its Subsidiaries is, nor has been, a party to, bound by, or negotiating any collective bargaining agreement or other contract with a Union, and there is not, and has not been, any Union representing or purporting to represent any employee of Oakwood or its Subsidiaries. Neither Oakwood nor any of its Subsidiaries has a duty to bargain with any Union. As of the date of this Agreement, there is not any unfair labor practice charge or complaint or any other Proceedings pending before the National Labor Relations Board or any other Governmental Body having jurisdiction thereof and, to Oakwood’s knowledge, no such complaint has been threatened. Neither Oakwood nor any of its Subsidiaries has received any written notice concerning, and, to Oakwood’s knowledge, there is not and has never been, any activities or proceedings of any Union (or representatives thereof) to organize any employees, or of any strikes, slowdowns, work stoppages, lockouts or threats thereof, by or with respect to any employees.

(d)        Oakwood and its Subsidiaries have complied in all material respects with all labor and employment laws, including, without limitation, any provisions thereof relating to wages, hours, workplace discrimination, collective bargaining and the payment of workman’s compensation insurance and social security and similar Taxes, and, to the knowledge of Oakwood, no person has asserted to Oakwood or any of its Subsidiaries that Oakwood or any of its Subsidiaries is liable for any arrearages of wages, workman’s compensation insurance premiums or any taxes or penalties for failure to comply with any of the foregoing. There are no Proceedings pending, or to Oakwood’s knowledge, threatened against Oakwood or any of its Subsidiaries with respect to allegations of a violation of any labor or employment law, and Oakwood has no knowledge of any basis on which any such Proceedings could be brought.

(e)          Neither Oakwood nor any of its Subsidiaries has implemented, and does not intend to implement, any plant closing or layoff of employees that could implicate the WARN Act (as defined herein).

Section 3.22         Compensation and Employee Benefit Plans.

(a)          Section 3.22(a) of the Oakwood Disclosure Schedules lists all employee benefit plans, policies, arrangements, programs, practices or agreements (i) providing benefits or compensation to any current or former employees, directors, consultants or other service providers of Oakwood or any of its ERISA Affiliates (as defined herein), or (ii) that are sponsored or maintained by Oakwood or any of its ERISA Affiliates, or (iii) to which Oakwood or any of its ERISA Affiliates contributes or is obligated to contribute on behalf of current or former employees, directors, consultants or other service providers of Oakwood or any of its ERISA Affiliates, or (iv) with respect to which Oakwood or any of its ERISA Affiliates has any Liability, including, but not limited to, any employee welfare benefit plan within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA, any “employee benefit plan” within the meaning of Section 3(3) of ERISA, or employee stock ownership, bonus, incentive, profit sharing, equity or equity-based compensation, stock purchase, stock option, stock appreciation, restricted stock, restricted stock unit, phantom stock, deferred compensation, retention, severance, change of control, hospitalization or other medical, dental, vision, accident, disability, life or other insurance, executive compensation, pension, paid time off or fringe benefit plan, policy, arrangement, program, practice or agreement (each of the foregoing, a “Oakwood Employee Plan”).

(b)         Neither Oakwood nor any of its Subsidiaries has any Liability under any employee benefit plans, policies, arrangements, programs, practices or agreements providing benefits or compensation to any service providers of Oakwood or any of its ERISA Affiliates through a contractual arrangement with a third-party professional employer organization. There are no pending or, to the knowledge of Oakwood, threatened Proceedings, audits or other claims (except routine claims for benefits) relating to any Oakwood Employee Plan. All of the Oakwood Employee Plans comply and have been administered in all material respects with their terms and with all applicable requirements of ERISA, the Code and other applicable laws. To the knowledge of Oakwood, there has occurred no “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) with respect to Oakwood Employee Plans. All contributions, premiums or other payments required by law or by any Oakwood Employee Plan have been made or accrued by the due date thereof.

(c)         Neither Oakwood nor any of its ERISA Affiliates has any Liabilities for post-retirement or post-employment health benefits under any Oakwood Employee Plan, except for coverage required by Part 6 of Title I of ERISA or Section 4980B of the Code, or similar state laws. Each Oakwood Employee Plan that is intended to be a “qualified plan” within the meaning of Section 401(a) of the Code has received or is the subject of a favorable determination or opinion letter from the IRS and, to the knowledge of Oakwood, no event or circumstance has occurred that would disqualify any such Oakwood Employee Plan. Oakwood has provided or made available copies of (i) each Oakwood Employee Plan, including all amendments thereto, (ii) the most recent summary plan descriptions of each Oakwood Employee Plan together with each summary of material modification required under ERISA with respect to such Oakwood Employee Plan, (iii) all determination, opinion or advisory letters from the IRS with respect to any Oakwood Employee Plan, (iv) each trust agreement, insurance policy or other instrument relating to the funding or administration of any Oakwood Employee Plan, (v) the three (3) most recent annual reports (Form 5500 series) and accompanying schedules filed with the IRS or the U.S. Department of Labor with respect to each Oakwood Employee Plan, (vi) the most recent determination or opinion letter issued by the IRS with respect to each Oakwood Employee Plan that is intended to qualify under Section 401 of the Code, (vii) the most recent available financial statements for each Oakwood Employee Plan, and (viii) the most recent audited financial statements for each Oakwood Employee Plan for which audited statements are required by ERISA.

(d)         Oakwood and its ERISA Affiliates have complied with the continuation coverage requirements of Section 601 et. seq. of ERISA and section 4980B of the Code, as well as the requirements of the Health Insurance Portability and Accountability Act of 1996, and the rules and regulations promulgated thereunder, and the Patient Protection and Affordable Care Act of 2010, and the rules and regulations promulgated thereunder. No event or circumstance exists that could reasonably be expected to result in a Tax, penalty or other Liability under Code sections 4980B, 4980D, 4980G, 4980H or 5000.

(e)        Neither Oakwood nor any of its ERISA Affiliates has any Liability with respect to a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (“Multiemployer Plans”). Neither Oakwood nor any of its ERISA Affiliates has ever contributed to or been obligated to contribute to any Multiemployer Plan, and neither Oakwood nor any of its ERISA Affiliates has incurred any withdrawal liability under Part I of Subtitle E of Title IV of ERISA that has not been satisfied in full. Neither Oakwood nor any of its ERISA Affiliates sponsors, maintains or contributes to any employee benefit plan that is subject to Section 412 of the Code or Title IV of ERISA, and neither Oakwood nor any of its ERISA Affiliates has ever sponsored, maintained, contributed to or been obligated to contribute to any plan subject to Section 412 of the Code or Title IV of ERISA.

(f)           There does not now exist, nor do any circumstances exist that could result in, any Controlled Group Liability (as defined herein) of Oakwood or any of its Subsidiaries now or following the Closing.

(g)          Except as set forth in Section 3.22(g) of the Oakwood Disclosure Schedules, the consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event (where such other event by itself would not result in such consequence), (i) entitle any current or former employee, director, officer, consultant or other service provider of Oakwood or any of its Subsidiaries to severance pay, retention bonuses, parachute payments, noncompetition payments, unemployment compensation or any other payment or benefit, (ii) accelerate the time of payment or vesting, or increase the amount of compensation due to any current or former employee, director, officer, consultant or other service provider of Oakwood or any of its Subsidiaries (whether by virtue of any termination, severance, change of control or similar benefits or otherwise), (iii) cause Oakwood to transfer or set aside any assets to fund any benefits under any Oakwood Employee Plan, or (iv) limit or restrict the right to amend, terminate, or transfer the assets of any Oakwood Employee Plan on or following the Effective Time. Section 3.22(g) of the Oakwood Disclosure Schedule sets forth the amounts that, as of the date of this Agreement, have been, and as of the Closing Date, will be, accrued pursuant to any such severance, noncompetition, retention or bonus arrangements under this Section 3.22(g) in accordance with GAAP on Oakwood’s consolidated balance sheet. There is no contract, agreement, plan or other arrangement covering any service provider or former service provider of Oakwood or any of its Subsidiaries that, individually or in the aggregate, could give rise to the payment by Oakwood or any of its Subsidiaries of any amount that would not be deductible pursuant to the terms of Section 162(m) or Section 280G of the Code (or any corresponding provision of state, local or foreign Tax law).

(h)         Section 3.22(h) of the Oakwood Disclosure Schedules lists each Person who (i) as of the Closing Date, could be reasonably expected to be a “disqualified individual” (within the meaning of Section 280G of the Code and the regulations promulgated thereunder) with respect to Oakwood or any of its Subsidiaries and (ii) who could reasonably be expected to receive an “excess parachute payment” within the meaning of Section 280G of the Code (or any corresponding or similar provision of state, local or foreign Tax law).

(i)          Except as set forth in Section 3.22(i) of the Oakwood Disclosure Schedules, neither Oakwood nor any of its Subsidiaries is a party to or bound by any plan under which compensatory equity awards, including any arrangements awarding stock options, stock appreciation rights, stock appreciation units, restricted stock, deferred stock, phantom stock or any other equity or equity-based compensation, may be granted to any employee, director or other service provider of Oakwood or any of its ERISA Affiliates.

(j)           Neither Oakwood nor any of its Subsidiaries has an obligation to gross-up or indemnify any Person for any Taxes, penalties, interest or other liabilities under any Oakwood Employee Plan, including under Sections 409A and 4999 of the Code.

Section 3.23         Deferred Compensation and Salary Continuation Arrangements.

(a)         Section 3.23(a) of the Oakwood Disclosure Schedules contains a list of all nonqualified deferred compensation arrangements of Oakwood or any of its Subsidiaries, including (i) the terms under which the cash value of any life insurance purchased in connection with any such arrangement can be realized and (ii) the amount of all accruals due each participant under any such arrangement, which amounts have been, as of the date of this Agreement, and will be, as of the Closing Date, accrued in accordance with GAAP on Oakwood’s consolidated balance sheet. To the knowledge of Oakwood, each nonqualified deferred compensation arrangement has been in compliance with section 409A of the Code, to the extent applicable, in form and operation.

(b)         Section 3.23(b) of the Oakwood Disclosure Schedules contains a list of all salary continuation arrangements of Oakwood or any of its Subsidiaries, including (i) the terms under which the cash value of any life insurance purchased in connection with any such arrangement can be realized and (ii) the amount of all accruals due each participant under any such arrangement, which amounts have been, as of the date of this Agreement, and will be, as of the Closing Date, accrued in accordance with GAAP on Oakwood’s consolidated balance sheet.

Section 3.24        Internal Controls. Oakwood and each of its Subsidiaries maintain accurate books and records reflecting its material assets and material liabilities in all material respects and maintain proper and adequate internal accounting controls that provide reasonable assurance that (a) all material transactions are executed with management’s authorization; (b) all material transactions are recorded as necessary to permit preparation of the consolidated financial statements of Oakwood and to maintain accountability for Oakwood’s consolidated assets; (c) access to Oakwood’s material assets is permitted only in accordance with management’s authorization; (d) the reporting of Oakwood’s material assets is compared with existing assets at regular intervals; and (e) extensions of material credit and other receivables are recorded accurately, and reasonably proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis. Neither Oakwood’s nor any of its Subsidiary’s systems, controls, data or information are recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) are not under the exclusive ownership and direct control of Oakwood, its Subsidiaries or their accountants, vendors and consultants, except as would not reasonably be expected to have a Material Adverse Effect on the system of internal accounting controls described in the preceding sentence.

Section 3.25        Derivative Contracts. Neither Oakwood nor any of its Subsidiaries is a party to nor has agreed to enter into an exchange traded or over-the-counter swap, forward, future, option, cap, floor or collar financial contract or agreement, or any other contract or agreement not included in Oakwood Financial Statements which is a financial derivative contract (including various combinations thereof).

Section 3.26        Deposits. Except as listed in Section 3.26 of the Oakwood Disclosure Schedules, no deposit of Oakwood Bank is a “brokered” deposit (as such term is defined in 12 C.F.R. § 337.6(a)(2)) or is subject to any encumbrance, legal restraint or other legal process (other than garnishments, pledges, set off rights, escrow limitations and similar actions taken in the ordinary course of business).

Section 3.27         Intellectual Property; Privacy.

(a)         Section 3.27(a) of the Oakwood Disclosure Schedules contains a correct and complete list of all registered trademarks, registered service marks, trademark and service mark applications, trade names and registered copyrights presently owned or held by Oakwood or any of its Subsidiaries or used in a material manner by them in the conduct of their business under license pursuant to a material contract (the “Intellectual Property”). Oakwood and its Subsidiaries own or have the right to use and continue to use the Intellectual Property in the operation of their business. Neither Oakwood nor any of its Subsidiaries is, to Oakwood’s knowledge, infringing or violating any patent, copyright, trademark, service mark, label filing or trade name owned or otherwise held by any other party, nor has Oakwood or any of its Subsidiaries used any confidential information or any trade secrets owned or otherwise held by any other party, without holding a valid license for such use.

(b)          Neither Oakwood nor any of its Subsidiaries is engaging, nor has any been charged with engaging, in any kind of unfair or unlawful competition. Neither the execution, delivery or performance of this Agreement or the related documents nor the consummation of the transactions contemplated hereby or thereby will in any way impair the right of Oakwood or any of its Subsidiaries or the Continuing Corporation to use, sell, license or dispose of, or to bring any action for the infringement of, the Intellectual Property.

(c)         (i) The computer, information technology and data processing systems, facilities and services used by Oakwood and each of its Subsidiaries, including all software, hardware, networks, communications facilities, platforms and related systems and services (collectively, the “Systems”), are reasonably sufficient for the conduct of the respective businesses of Oakwood and each of its Subsidiaries as currently conducted and (ii) the Systems are in good working condition to effectively perform all computing, information technology and data processing operations necessary for the operation of the respective businesses of Oakwood and each of its Subsidiaries as currently conducted. To Oakwood’s knowledge, no third party or representative has gained unauthorized access to any Systems owned or controlled by Oakwood or its Subsidiaries, and Oakwood and each of its Subsidiaries has taken commercially reasonable steps and implemented commercially reasonable safeguards to ensure that the Systems are secure from unauthorized access and free from any disabling codes or instructions, spyware, Trojan horses, worms, viruses or other software routines that permit or cause unauthorized access to, or disruption, impairment, disablement, or destruction of, software, data or other materials. Oakwood and each of its Subsidiaries has implemented backup and disaster recovery policies, procedures and systems consistent with generally accepted industry standards and sufficient to reasonably maintain the operation of the respective businesses of Oakwood and each of its Subsidiaries in all material respects. Oakwood and each of its Subsidiaries has implemented and maintained commercially reasonable measures and procedures designed to reasonably mitigate the risks of cybersecurity breaches and attacks.

Section 3.28         Shareholders’ List. Section 3.28 of the Oakwood Disclosure Schedules contains a true, correct and complete list of the record holders of shares of Oakwood Stock as of a date within ten (10) Business Days prior to the date of this Agreement, containing their names and number of shares held of record, which shareholders’ list is in all respects, to the knowledge of Oakwood, accurate as of such date and shall be updated not more than five (5) Business Days prior to Closing.

Section 3.29         SEC Status; Securities Issuances. Oakwood is not subject to the registration provisions of Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor the rules and regulations of the SEC promulgated under Section 12 of the Exchange Act, other than anti-fraud provisions of such act. All issuances of securities by Oakwood and any of its Subsidiaries have been registered under the Securities Act, applicable state securities laws, and all other applicable laws or were exempt from any such registration requirements.

Section 3.30         Dissenting Shareholders. Oakwood has no knowledge of any plan or intention on the part of any shareholder of Oakwood to make a written demand for payment of the fair value of such holder’s shares of Oakwood Stock in the manner provided in Section 2.2.

Section 3.31         Takeover Laws. This Agreement and the Merger contemplated hereby are not subject to the requirements of any “moratorium,” “control stock,” “fair price,” “affiliate transactions,” “business combination” or other antitakeover laws and regulations of any state applicable to Oakwood.

Section 3.32        Brokers, Finders and Financial Advisors. Section 3.32 of the Oakwood Disclosure Schedules sets forth fees or commissions payable by Oakwood to any broker, finder, financial advisor or investment banker in connection with this Agreement and the transactions contemplated hereby (collectively, the “Oakwood Advisory Fees”). Other than the Oakwood Advisory Fees, none of Oakwood, any of its Subsidiaries or any of their respective officers, directors or employees have employed any broker, finder, financial advisor or investment banker or incurred any Liability for any brokerage, financial advisory, investment banking or other similar fees or commissions in connection with this Agreement and the transactions contemplated hereby.

Section 3.33        Fairness Opinion. Prior to the execution of this Agreement, Oakwood has received a written opinion from Stephens Inc., dated as of the date of this Agreement, to the effect that, subject to the terms, conditions and qualifications set forth therein, as of the date of this Agreement, the Merger Consideration to be received by the shareholders of Oakwood pursuant to this Agreement is fair, from a financial point of view, to such shareholders. Such opinion has not been amended or rescinded.

Section 3.34        Bank Owned Life Insurance. Section 3.34 of the Oakwood Disclosure Schedules contains a true, correct and complete description of all BOLI owned by Oakwood Bank, including the cash surrender value of the BOLI as of December 31, 2023, March 31, 2024 and April 30, 2024. Oakwood Bank has taken all actions necessary to comply with applicable law in connection with the purchase and maintenance of BOLI. The cash surrender value of such BOLI is and has been fairly and accurately reflected in the most recent balance sheet included in the Oakwood Financial Statements in accordance with GAAP. All BOLI set forth in Section 3.34 of the Oakwood Disclosure Schedules is owned solely by Oakwood Bank, no other person has any ownership claims with respect to such BOLI or proceeds of insurance derived therefrom and, except as set forth in Section 3.34 of the Oakwood Disclosure Schedules, there are no split dollar or similar benefit plans, programs or arrangements with Oakwood Bank. Oakwood Bank has no outstanding borrowings secured in whole or part by its BOLI.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BFST

BFST represents and warrants to Oakwood as set forth below. On the date of this Agreement, BFST delivered to Oakwood schedules (the “BFST Disclosure Schedules”) setting forth, among other things, items the disclosure of which are necessary or appropriate (a) in response to an express disclosure requirement contained in a provision hereof, (b) as an exception to one or more representations and warranties contained in this Article IV or (c) as an exception to one or more covenants contained in this Agreement. Disclosure in any section of the BFST Disclosure Schedules shall apply only to the indicated section of this Agreement, except to the extent that it is reasonably apparent on its face that such disclosure is relevant to another section of this Agreement. The representations and warranties set forth below are further qualified by BFST’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 1, 2024 with the SEC, BFST’s Definitive Proxy Statement for the 2024 Annual Meeting of Shareholders of BFST and any Current Reports on Form 8-K filed prior to the date of this Agreement with respect to events occurring since December 31, 2023 (collectively, “BFST SEC Reports”) (it being understood that anything disclosed in the BFST SEC Reports shall be deemed disclosed for purposes of this Agreement).

Section 4.1           Organization.

(a)         BFST is a corporation duly organized, validly existing and in good standing under the laws of the State of Louisiana and a financial holding company duly registered under the BHC Act, subject to all laws, rules and regulations applicable to financial holding companies. b1BANK is a Louisiana state-chartered bank duly organized, validly existing and in good standing under the laws of the State of Louisiana.

(b)         BFST and b1BANK have full power and authority (including all licenses, registrations, qualifications, franchises, permits and other governmental authorizations which are legally required) to own, lease and operate their properties, to engage in the business and activities now conducted by them and to enter into this Agreement, except where the failure to be so licensed or qualified would not have a Material Adverse Effect on BFST. BFST engages only in activities (and holds properties only of the types) permitted to financial holding companies by the BHC Act, and the rules and regulations promulgated thereunder.

(c)         b1BANK (i) is duly authorized to conduct a general banking business, embracing all usual deposit functions of commercial banks as well as commercial, industrial and real estate loans, installment credits, collections and safe deposit facilities subject to the supervision of the FDIC and the OFI, and (ii) is an insured depository institution as defined in the Federal Deposit Insurance Act. The deposit accounts of b1BANK are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by law, and all premiums and assessments due and owing as of the date of this Agreement required in connection therewith have been paid by b1BANK.

Section 4.2           Capitalization.

(a)          The authorized capital stock of BFST consists of 50,000,000 shares of BFST Common Stock, par value $1.00 per share, 25,485,273 shares of which are outstanding as of the date hereof, and 5,000,000 shares of preferred stock, no par value per share, 72,010 shares of which are issued and outstanding as of the date of this Agreement. As of the date hereof, there are 98,108 options issued, outstanding and unexercised to purchase shares of BFST Common Stock. BFST owns all of the issued and outstanding shares of common stock, par value $1.00 per share, of b1BANK (“b1BANK Stock”). All of the issued and outstanding shares of BFST Common Stock and b1BANK Stock are validly issued, fully paid and nonassessable, have been issued in compliance with and not in violation of any applicable federal or state laws, and have not been issued in violation of the preemptive rights of any Person.

(b)          The shares of BFST Common Stock issued pursuant to the Merger in accordance with this Agreement will be duly authorized, validly issued, fully paid and nonassessable, and will not be issued in violation of any preemptive rights or any applicable federal or state laws.

Section 4.3           Authority; Approvals.

(a)        BFST has the requisite corporate power and authority to execute and deliver this Agreement and any related documents to which it is a party and perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by BFST and is a duly authorized, valid, legally binding agreement of BFST enforceable against BFST in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors’ rights generally and general equitable principles.

(b)          The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly, validly and unanimously approved by the board of directors of BFST. No further corporate proceedings on the part of BFST are necessary to execute and deliver this Agreement or the related documents and to consummate the transactions contemplated hereby or thereby.

(c)          Section 4.3(c) of the BFST Disclosure Schedules lists all governmental and any other consents, approvals, authorizations, applications, filings, notices, registrations and qualifications that are required to be made or obtained by BFST or any of its Subsidiaries in connection with or for the consummation of the transactions contemplated by this Agreement, including the Merger and the Bank Merger (collectively, the “BFST Regulatory Approvals” and together with the Oakwood Regulatory Approvals, the “Regulatory Approvals”). Other than the federal and state securities filings, including the Registration Statement on Form S-4, to be filed with the SEC under the Securities Act (the “Registration Statement”), and the BFST Regulatory Approvals, no consents or approvals of or filings or registrations with any Governmental Body or with any other Person are necessary in connection with the execution and delivery by (i) BFST of this Agreement, or (ii) b1BANK of the Bank Merger Agreement.

Section 4.4           No Conflicts; Consents. Neither the execution and delivery by BFST of this Agreement and the related documents nor the consummation of the transactions contemplated hereby or thereby, nor compliance by BFST with any of the provisions hereof or thereof, will (a) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien, charge or encumbrance upon any of the material properties or assets of BFST or any of its Subsidiaries under any of the terms, conditions or provisions of (i) the Organizational Documents of BFST or any of its Subsidiaries or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which BFST or any of its Subsidiaries is a party or by which it may be bound, or to which BFST or any of its Subsidiaries or any of the properties or assets of BFST or any of its Subsidiaries may be subject, or (b) assuming that the BFST Regulatory Approvals are duly obtained, violate any law, statute, code, ordinance, rule, regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to BFST or any of its Subsidiaries or any of their respective properties or assets, except, with respect to clause (ii), for such violations, conflicts, breaches or defaults which either individually or in the aggregate would not have or be reasonably likely to have a Material Adverse Effect on BFST.

Section 4.5           Proceedings. There are no Proceedings pending or, to BFST’s knowledge, threatened against BFST or any of its Subsidiaries, and BFST has no knowledge of any basis on which any such Proceedings could be brought which could reasonably be expected to result in a Material Adverse Effect on BFST or which could question the validity of any action taken or to be taken in connection with this Agreement and the transactions contemplated hereby. Neither BFST nor b1BANK is in default with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any arbitrator or Governmental Body.

Section 4.6           Financial Statements.

(a)          BFST has furnished or made available to Oakwood true and complete copies of its Annual Report on Form 10-K as filed with the SEC on March 1, 2024, which contains BFST’s audited consolidated balance sheet (which includes the allowance for loan losses) as of December 31, 2023, and the related statements of income, comprehensive income, shareholders’ equity and cash flows for the year ended December 31, 2023 (the “BFST Financial Statements”).

(b)         The BFST Financial Statements have been prepared from the books and records of BFST and its Subsidiaries and fairly present, in all material respects, the consolidated financial position, results of operations, shareholders’ equity and cash flows of BFST at the dates and for the periods indicated in conformity with GAAP applied on a consistent basis throughout the periods indicated.

(c)           As of the dates of the BFST Financial Statements, neither BFST nor any of its Subsidiaries had any material Liabilities (whether accrued, absolute, contingent or otherwise) except as fully set forth or provided for in such BFST Financial Statements.

(d)        BFST and each of its Subsidiaries has established and maintains a system of “internal controls over financial reporting” (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that is sufficient to provide reasonable assurance (i) regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, (ii) that receipts and expenditures of BFST and its Subsidiaries are being made only in accordance with authorizations of management and the board of directors of BFST, and (iii) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of BFST’s and its Subsidiaries’ assets that could have a material effect on BFST’s financial statements.

(e)         BFST’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are reasonably designed to ensure that all information (both financial and non-financial) required to be disclosed by BFST in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to BFST’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the chief executive officer and chief financial officer of BFST required under the Exchange Act with respect to such reports. BFST has disclosed, based on its most recent evaluation of its disclosure controls and procedures prior to the date of this Agreement, to BFST’s auditors and the audit committee of the board of directors of BFST (i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that could adversely affect in any material respect BFST’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in BFST’s internal controls over financial reporting. For purposes of this Agreement, the terms “significant deficiency” and “material weakness” shall have the meaning assigned to them in Public Company Accounting Oversight Board Auditing Standard 2, as in effect on the date of this Agreement.

Section 4.7    Compliance with Laws and Regulatory Filings.

(a)         BFST and b1BANK have complied in all material respects with and are not in material default or violation under any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Body relating to BFST or b1BANK, including all Banking Laws and Environmental Laws. BFST and b1BANK have neither had nor suspected any material incidents of fraud or defalcation involving BFST, b1BANK or any of their respective officers, directors or Affiliates during the last two (2) years. Each of BFST and b1BANK has timely and properly filed and maintained in all material respects all requisite Currency Transaction Reports and Suspicious Activity Reports and has systems customarily used by financial institutions of a similar size to b1BANK that are designed to properly monitor transaction activity (including wire transfers). b1BANK is designated as an intermediate small institution for purposes of the Community Reinvestment Act.

(b)         BFST and its Subsidiaries have filed all reports, registrations and statements, together with any amendments required to be made thereto, that are required to be filed with the Federal Reserve Board, the FDIC, the OFI, or any other Governmental Body having supervisory jurisdiction over BFST and its Subsidiaries, and such reports, registrations and statements as finally amended or corrected, are true and correct in all material respects. Except for normal examinations conducted by bank regulatory agencies in the ordinary course of business, no Governmental Body has initiated any Proceeding or, to BFST’s knowledge, an investigation into the business or operations of BFST or its Subsidiaries. There is no material unresolved violation, criticism or exception by any bank regulatory agency with respect to any report relating to any examinations of BFST or b1BANK. BFST is “well capitalized” (as that term is defined in 12 C.F.R. § 225.2(r)) and “well managed” (as that term is defined in 12 C.F.R. § 225.2(s)). b1BANK is “well capitalized” (as that term is defined in 12 C.F.R. §325.103(b)(1)).

(c)          There are no Proceedings pending or, to the knowledge of BFST, threatened, against BFST or any of its Subsidiaries by or before any Governmental Body or arbitrator having jurisdiction over Oakwood or any of its Subsidiaries. Neither BFST nor any of its Subsidiaries is subject to a formal or informal agreement, memorandum of understanding, enforcement action with, or any type of financial assistance by, any Governmental Body or arbitrator having jurisdiction over it. BFST has no knowledge of any fact or circumstance relating to BFST or any of its Subsidiaries that would materially impede or delay receipt of any required regulatory approval of the Merger or the other transactions contemplated by this Agreement, including the Bank Merger, nor does BFST have any reason to believe that it will not be able to obtain all requisite regulatory and other approvals or consents which it is required to obtain in a timely manner in order to consummate the Merger and the Bank Merger.

Section 4.8           SEC Reports.

(a)         BFST has timely filed all material reports and statements, together with any amendments required to be made with respect thereto, that it was required to file with the SEC pursuant to the Exchange Act since December 31, 2020. As of their respective dates (or if amended, as of the date so amended), each of such reports and statements (i) complied in all material respects as to form with the applicable requirements under the Exchange Act and (ii) were true and correct and complied in all material respects with the relevant statutes, rules and regulations enforced or promulgated by the SEC and such reports did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b)          BFST is in compliance with all applicable provisions of the Sarbanes-Oxley Act, except for any non‐compliance that has not had and is not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on BFST.

Section 4.9         Absence of Certain Changes. Except as set forth in Section 4.9 of the BFST Disclosure Schedules, since December 31, 2023, (a) BFST and b1BANK have conducted their respective businesses in the ordinary and usual course consistent with safe and sound banking practices (except as otherwise required by this Agreement and excluding the incurrence of expenses related to this Agreement and the transactions contemplated hereby), and (b) no Material Adverse Effect on BFST or b1BANK has occurred.

Section 4.10         Taxes.

(a)          BFST and its Subsidiaries have duly and timely filed with the appropriate Governmental Body all income and other material Tax Returns that each was required to file, including any Tax Returns of any affiliated, consolidated, combined or unitary group of which either BFST or any of its Subsidiaries is or was a member. All such Tax Returns are true, correct and complete in all material respects. All income and other material Taxes due and owing by BFST or any of its Subsidiaries and any affiliated, consolidated, combined or unitary group of which either BFST or any of its Subsidiaries is or was a member (whether or not shown on any Tax Return) have been duly and timely paid to the appropriate Governmental Bodies. Neither BFST nor any of its Subsidiaries is currently the beneficiary of any extension of time within which to file any Tax Return (excluding automatic extensions obtained in the ordinary course of business). No written claim has ever been received by BFST or any of its Subsidiaries from a Governmental Body in a jurisdiction where BFST or any of its Subsidiaries, as applicable, does not file Tax Returns that indicates that BFST or any of its Subsidiaries, as applicable, is or may be subject to taxation by that jurisdiction or required to file a Tax Return in that jurisdiction, in each case, which claim is unresolved. There are no Security Interests on any of the assets of BFST or any of its Subsidiaries that arose in connection with any failure (or alleged failure) of BFST or any of its Subsidiaries to pay any Tax.

(b)          Each of BFST and its Subsidiaries have collected or withheld and duly paid to the appropriate Governmental Body all material Taxes required to have been collected or withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder, or other third party and each of BFST and its Subsidiaries has materially complied with all information reporting obligations with respect thereto.

(c)          There is no pending action, suit, proceeding, audit, assessment, dispute or claim concerning any Tax Liability of BFST or any of its Subsidiaries claimed or raised by any Governmental Body in writing.

(d)          Neither BFST nor any of its Subsidiaries has waived any statute of limitations in respect of any Tax or agreed to any extension of time with respect to a Tax assessment or deficiency, which waiver or extension remains outstanding.

(e)         Neither BFST nor any of its Subsidiaries has participated in a listed transaction as defined under Sections 6011 and 6111 of the Code and Treasury Regulations § 1.6011-4. Neither BFST nor any of its Subsidiaries (i) has been a member of an Affiliated Group filing a consolidated federal income Tax Return (other than the Affiliated Group of which BFST is the common parent) or (ii) has any Liability for the Taxes of any Person (other than BFST and its Subsidiaries) under Treasury Regulations § 1.1502‑6 (or any similar provision of state, local, or foreign law), or as a transferee or successor.

(f)          Neither BFST nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending on or after the Closing Date as a result of any: (i) change in method of accounting for a taxable period ending on or prior to the Closing Date under Section 481 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; or (iii) installment sale or open transaction disposition made on or prior to the Closing Date.

(g)          Neither BFST nor any of its Subsidiaries has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock under Sections 355 or 361 of the Code (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement.

(h)          BFST and each of its Subsidiaries has complied in all material respects with all of its escheat and unclaimed property obligations.

(i)           Neither BFST nor any of its Subsidiaries is aware of any fact or circumstance or has taken any action that reasonably would be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

Section 4.11         Brokers, Finders and Financial Advisors. Other than fees payable by BFST to Raymond James & Associates, Inc., neither BFST, any of its Subsidiaries nor any of its or their respective officers, directors or employees have employed any broker, finder, financial advisor or investment banker or incurred any Liability for any brokerage, financial advisory, investment banking or other similar fees or commissions in connection with this Agreement and the transactions contemplated hereby.

Section 4.12        Fairness Opinion. Prior to the execution of this Agreement, BFST has received a written opinion from Raymond James & Associates, Inc., dated as of the date of this Agreement, to the effect that, subject to the terms, conditions and qualifications set forth therein, as of the date of this Agreement, the Merger Consideration to be paid by BFST to the shareholders of Oakwood pursuant to this Agreement is fair, from a financial point of view, to BFST. Such opinion has not been amended or rescinded.

Section 4.13         No Financing. BFST has, and will have as of the Effective Time, sufficient cash on hand available to pay the Aggregate Cash Consideration. BFST does not need to obtain any financing in order to fund the payment of the Aggregate Cash Consideration.

Section 4.14         Compensation and Benefit Plans. Section 4.14 the BFST Disclosure Schedules lists all employee benefit plans, policies, arrangements, programs, practices or agreements (a) providing benefits or compensation to any current or former employees, directors, consultants or other service providers of BFST or any of its ERISA Affiliates (as defined herein), or (b) that are sponsored or maintained by BFST or any of its ERISA Affiliates, or (c) to which BFST or any of its ERISA Affiliates contributes or is obligated to contribute on behalf of current or former employees, directors, consultants or other service providers of BFST or any of its ERISA Affiliates, or (d) with respect to which BFST or any of its ERISA Affiliates has any Liability, including, but not limited to, any employee welfare benefit plan within the meaning of Section 3(1) of ERISA, any employee pension benefit plan within the meaning of Section 3(2) of ERISA or employee stock ownership, severance, hospitalization or other medical, dental, vision, accident, disability, life or other insurance, paid time off or fringe benefit plan, policy, arrangement, program, practice or agreement (each of the foregoing, a “BFST Employee Plan”). All of the BFST Employee Plans comply and have been administered in all material respects with their terms and with all applicable requirements of ERISA, the Code and other applicable laws.

Section 4.15       BFST Information. The information relating to BFST and its Subsidiaries that is supplied by or on behalf of BFST for inclusion or incorporation by reference in the Registration Statement and the Registration Statement will not (with respect to the Proxy Statement, as of the date the Registration Statement is first mailed to Oakwood shareholders, and 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 BFST Report as of a later date shall be deemed to modify information as of an earlier date. The portions of the Registration Statement relating to BFST and BFST’s Subsidiaries and other portions thereof within the reasonable control of BFST and its Subsidiaries will comply as to form in all material respects with the provisions of the Exchange Act, and the rules and regulations thereunder.

Section 4.16        Community Reinvestment Act. BFST Bank has complied in all material respects with the provisions of the Community Reinvestment Act and the rules and regulations thereunder, has a Community Reinvestment Act rating of not less than “satisfactory” in its most recently completed exam, and has received no material criticism from regulators with respect to discriminatory lending practices, and BFST has no Knowledge of any conditions, facts or circumstances that could result in a Community Reinvestment Act rating for BFST Bank of less than “satisfactory” or material criticism from regulators or consumers with respect to discriminatory lending practices.

ARTICLE V.
COVENANTS OF OAKWOOD

Oakwood covenants and agrees with BFST as follows:

Section 5.1           Approval of Shareholders of Oakwood; Efforts.

(a)         Oakwood shall, and shall cause its board of directors to, (i) take all action in accordance with the federal securities laws, the laws of the State of Texas and the Organizational Documents of Oakwood necessary to (1) call and give notice of a special meeting of its shareholders (the “Oakwood Shareholder Meeting”) for the purpose of (A) considering and voting upon the approval of this Agreement and the transactions contemplated hereby and (B) for such other purposes consistent with the complete performance of this Agreement as may be necessary and desirable within fifteen (15) days following the date the Registration Statement is declared effective under the Securities Act (the “Notice Date”) and (2) schedule the Oakwood Shareholder Meeting to take place on a date that is within sixty (60) days after the Notice Date; (ii) use Commercially Reasonable Efforts to (x) cause the Oakwood Shareholder Meeting to be convened and held on the scheduled date and (y) obtain the necessary approvals by Oakwood’s shareholders of this Agreement and the transactions contemplated hereby (the “Oakwood Shareholder Approval”); (iii) include in the Proxy Statement (as defined herein) the recommendation of the board of directors of Oakwood that the Oakwood shareholders approve and adopt this Agreement and the transactions contemplated hereby (the “Oakwood Board Recommendation”), (iv) not withdraw, amend or modify the Oakwood Board Recommendation in a manner adverse to BFST (a “Change in Recommendation”), (v) recommend against any then-pending tender or exchange offer that constitutes an Acquisition Proposal within five (5) Business Days after it is announced, (vi) reaffirm the Oakwood Board Recommendation within three (3) Business Days following a request by BFST, and (vii) not make any statement, filing or release, in connection with the Oakwood Shareholder Meeting or otherwise, inconsistent with the Oakwood Board Recommendation.

(b)         Notwithstanding the foregoing, if Oakwood has complied with Section 5.5, the board of directors of Oakwood may effect a Change in Recommendation if Oakwood or any of its representatives receives an unsolicited bona fide Acquisition Proposal (as defined herein) before the Oakwood Shareholder Approval that the board of directors of Oakwood has (i) determined in its good faith judgment (after consultation with its financial advisors and outside legal counsel) that such Acquisition Proposal constitutes or would reasonably be expected to result in a Superior Proposal (as defined herein), and (ii) determined in its good faith judgment (after consultation with Oakwood’s outside legal counsel) that the failure to effect a Change in Recommendation would cause it to violate its fiduciary duties under applicable law. Notwithstanding anything to the contrary herein, unless this Agreement has been terminated in accordance with its terms, the Oakwood Shareholder Meeting shall be convened, this Agreement and the transactions contemplated hereby shall be submitted to the shareholders of Oakwood at the Oakwood Shareholder Meeting for the purpose of voting on the approval of such proposals and the other matters contemplated hereby, and nothing contained herein shall be deemed to relieve Oakwood of such obligation. In the event that there is present at the Oakwood Shareholder Meeting, in person or by proxy, sufficient favorable voting power to secure the Oakwood Shareholder Approval, Oakwood will not adjourn or postpone the Oakwood Shareholder Meeting unless Oakwood is advised by counsel in writing that failure to do so would result in a breach of the fiduciary duties of the board of directors of Oakwood. Oakwood shall keep BFST updated with respect to the proxy solicitation results in connection with the Oakwood Shareholder Meeting as reasonably requested by BFST.

(c)         If this Agreement is approved by Oakwood’s shareholders, Oakwood shall take all reasonable actions to aid and assist in the consummation of the Merger, and shall use Commercially Reasonable Efforts to take or cause to be taken all other actions necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including such actions as it and BFST reasonably consider necessary, proper or advisable in connection with filing applications and registration statements with, or obtaining approvals from, all Governmental Bodies having jurisdiction over the transactions contemplated by this Agreement.

Section 5.2           Activities of Oakwood Pending Closing.

(a)          From the date of this Agreement to and including the Closing Date, as long as this Agreement remains in effect, and unless BFST has consented in writing (which consent shall not be unreasonably withheld, conditioned or delayed) or as otherwise expressly contemplated or permitted by other provisions of this Agreement or except as may be required by applicable law or an order or policy of a Governmental Body, Oakwood shall, and shall cause each of its Subsidiaries to:

(i)    conduct its affairs (including the making of or agreeing to make any loans or other extensions of credit) only in the ordinary course of business consistent with past practices and safe and sound banking principles;

(ii)    use Commercially Reasonable Efforts to preserve intact its present business organizations, keep available the services of its present officers, directors, employees and agents and preserve its relationships and goodwill with customers and advantageous business relationships;

(iii)    promptly give written notice to BFST of (A) any material change in its business, operations or prospects, (B) any complaints, investigations or hearings (or communications indicating that the same may be contemplated) of any Governmental Body having jurisdiction over Oakwood or any of its Subsidiaries, (C) the commencement or threat of any Proceeding against Oakwood or any of its Subsidiaries or (D) the occurrence of any event or the failure of any event to occur or the existence of any circumstance that would reasonably be expected to cause (1) a breach of any covenant, condition or agreement contained herein, (2) any of the representations or warranties of Oakwood contained in this Agreement to be untrue or inaccurate in any material respect (without regard to any materiality qualifiers contained therein) or (3) a Material Adverse Effect on Oakwood or Oakwood Bank; and

(iv)    except as required by law or regulation or expressly permitted by this Agreement, take no action which would adversely affect or delay the ability of Oakwood or BFST to obtain the Regulatory Approvals or any other approvals required for the consummation of the transactions contemplated hereby or to perform its obligations and agreements under this Agreement.

(b)         From the date of this Agreement to and including the Effective Time, except (1) as expressly permitted by this Agreement (including in Section 5.2(b) of the Oakwood Disclosure Schedules) or (2) as may be required by applicable law or an order or policy of a Governmental Body, Oakwood shall not, and shall not permit any of its Subsidiaries to, without the written consent of BFST (which consent shall not be unreasonably withheld, conditioned or delayed; provided, that if BFST does not respond to such request for consent within two (2) Business Days after receipt by BFST of such request, BFST shall be deemed to have consented in writing with respect to such request):

(i)    adjust, split, combine or reclassify any of Oakwood Stock;

(ii)    make, acquire, modify or renew, or agree to make, acquire, modify or renew, any loans, loan participations or other extensions of credit (whether directly or indirectly through the purchase of loan participations from other lenders, deal paper or otherwise) to any Borrower that (A) would be a material violation of its policies and procedures in effect as of the date of this Agreement, or (B) would not be in the ordinary course of business consistent with past practices and safe and sound banking principles;

(iii)    make, acquire, renew, amend, modify, extend the term of, extend the maturity of or grant the forbearance or issue a commitment to do any of the foregoing for any loan of more than $5,000,000;

(iv)    issue or sell or obligate itself to issue or sell any shares of its capital stock or any warrants, rights or options to acquire, or any securities convertible into, any shares of its capital stock, other than in connection with the exercise, vesting or settlement of Oakwood Equity Awards outstanding as of the date of this Agreement in accordance with their terms in effect on the date of this Agreement;

(v)    grant any Oakwood Equity Awards, stock appreciation rights, stock appreciation units, restricted stock, stock options, phantom stock or other form of equity or equity-based compensation;

(vi)    open, close or relocate any branch office, or acquire or sell or agree to acquire or sell, any branch office or any deposit liabilities;

(vii)    enter into, amend or terminate any agreement of the type that would be required to be disclosed in Section 3.18(a) of the Oakwood Disclosure Schedules, or any other material agreement, or acquire or dispose of any material amount of assets or Liabilities or make any change in any of its leases, except in the ordinary course of business consistent with past practices and safe and sound banking practices;

(viii)    hire any employee or independent contractor with an annual salary in excess of $150,000;

(ix)    grant any severance, change in control or termination payment to, or enter into any collective bargaining, change-in-control, retention, or severance agreement with, any officer, director, employee or agent of Oakwood or any of its Subsidiaries, either individually or as part of a class of similarly situated Persons;

(x)    except in the ordinary course of business consistent with past practice and safe and sound banking practices, (A) increase in any manner the compensation, benefits or fringe benefits of any of its employees, directors, consultants or other service providers, (B) pay any perquisite such as automobile allowance, club membership or dues or other similar benefits, or (C) institute any employee welfare, retirement or similar plan or arrangement or any plan or arrangement that would constitute an Oakwood Employee Plan;

(xi)    amend any Oakwood Employee Plan, other than as required to maintain the tax qualified status of such plan or as contemplated under this Agreement;

(xii)    (A) declare, pay or set aside for payment any dividend or other distribution (whether in cash, stock or property) in respect of Oakwood Stock (other than the payment of dividends from Oakwood Bank to Oakwood), or (B) directly or indirectly, purchase, redeem or otherwise acquire any shares of Oakwood Stock;

(xiii)    make any change in accounting methods, principles and practices, except as may be required by GAAP or any Governmental Body;

(xiv)    sell, transfer, convey, mortgage, encumber or otherwise dispose of any material properties or assets (including “other real estate owned”) or interest therein, except in the ordinary course of business consistent with past practices and safe and sound banking practices;

(xv)    foreclose upon or otherwise acquire any commercial real property prior to receipt and approval by BFST of a recent Phase I environmental review thereof;

(xvi)    increase or decrease the rate of interest paid on deposit accounts, except in the ordinary course of business consistent with past practices and safe and sound banking practices;

(xvii)    charge off any loan or other extension of credit greater than $50,000 without two (2) Business Days’ prior written notice to BFST of the amount of such charge-off; provided, that if such charge-off is made at the request of a Governmental Body, then no prior notice or consent by BFST will be required;

(xviii)    (A) establish any new Subsidiary or Affiliate or enter into any new line of business, or (B) except pursuant to contracts or agreements in force at the date of or permitted by this Agreement, make any equity investment in, or purchase outside the ordinary course of business any property or assets of, any other Person;

(xix)    materially deviate from policies and procedures existing as of the date of this Agreement with respect to (A) classification of assets, (B) the Allowance, or (C) accrual of interest on assets, except as otherwise required by the provisions of this Agreement, applicable law or regulation or any Governmental Body;

(xx)    amend or change any provision of the Organizational Documents of Oakwood or any of its Subsidiaries;

(xxi)    make any capital expenditure which would exceed an aggregate of $50,000;

(xxii)    excluding deposits and certificates of deposit, incur or modify any indebtedness for borrowed money, including Federal Home Loan Bank advances, except in the ordinary course of business consistent with past practices and safe and sound banking practices;

(xxiii)    prepay any indebtedness or other similar arrangements so as to cause Oakwood to incur any prepayment penalty thereunder;

(xxiv)    settle any Proceeding (A) involving payment by it of money damages in excess of $50,000 in the aggregate or (B) imposing any material restriction on the operations of Oakwood or any of its Subsidiaries;

(xxv)    make any changes to its Securities Portfolio or the manner in which the Securities Portfolio is classified or reported;

(xxvi)    make (inconsistent with past practices), change or revoke any material Tax election or Tax method of accounting, settle or compromise any Tax Liability, enter into any Tax closing agreement, actively surrender any right to claim a refund of material Taxes, file any amended income Tax Return, or consent to any extension (excluding automatic extensions of time to file Tax Returns) or waiver of any statute of limitations with respect to any Tax; or

(xxvii)    agree to do any of the foregoing.

Section 5.3           Access to Properties and Records.

(a)         To the extent permitted by applicable law, Oakwood shall and shall cause each of its Subsidiaries, upon reasonable notice from BFST to Oakwood to: (i) afford the employees and officers and authorized representatives (including legal counsel, accountants and consultants) of BFST full access to the properties, books and records of Oakwood and its Subsidiaries during normal business hours in order that BFST may have the opportunity to make such reasonable investigation as it shall desire to make of the affairs of Oakwood and its Subsidiaries, and (ii) furnish BFST with such additional financial and operating data and other information as to the business and properties of Oakwood as BFST shall, from time to time, reasonably request.

(b)          As soon as practicable after they become available, Oakwood shall deliver or make available to BFST all unaudited monthly and quarterly financial information prepared for the internal use of management of Oakwood and all Consolidated Reports of Condition and Income filed by Oakwood Bank with the appropriate Governmental Body after the date of this Agreement. In the event of the termination of this Agreement, BFST shall return to Oakwood all documents and other information obtained pursuant hereto and shall keep confidential any information obtained pursuant to Section 7.2.

Section 5.4           Information for Regulatory Applications and SEC Filings.

(a)         To the extent permitted by law and during the pendency of this Agreement, Oakwood shall furnish BFST with all information concerning Oakwood or any of its Subsidiaries required for inclusion in any application, filing, statement or document to be made or filed by BFST with any Governmental Body in connection with the transactions contemplated by this Agreement and any filings with the SEC and any applicable state securities authorities. Oakwood shall fully cooperate with BFST in the filing of any applications or other documents necessary to complete the transactions contemplated by this Agreement. Oakwood shall, upon reasonable request by BFST, furnish to BFST all information concerning itself, its Subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with the Proxy Statement, the Registration Statement or any other statement, filing, notice or application made by or on behalf of BFST, Oakwood or any of their respective Subsidiaries to any regulatory agency or other Governmental Body in connection with the Merger or the Bank Merger and the other transactions contemplated by this Agreement.

(b)          None of the information relating to Oakwood and its Subsidiaries that is provided by Oakwood for inclusion in (i) the Proxy Statement to be prepared in accordance with Oakwood’s Organizational Documents and applicable law and mailed to Oakwood’s shareholders in connection with the solicitation of proxies by the board of directors of Oakwood for use at the Oakwood Shareholder Meeting, any filings or approvals under applicable federal or state banking laws or regulations or state securities laws, or any filing pursuant to Rule 165 or Rule 425 under the Securities Act will, at the time of mailing the Proxy Statement to Oakwood’s shareholders, at the time of the Oakwood Shareholder Meeting and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, and (ii) the Registration Statement (as defined herein) will, at the time the Registration Statement and each amendment or supplement thereto, if any, becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

Section 5.5           No Solicitation; Acquisition Proposals.

(a)          Neither Oakwood nor any of its Subsidiaries shall, and they shall instruct their respective directors, officers, agents or representatives not to, directly or indirectly, (i) solicit, initiate, or knowingly encourage (including by providing information or assistance), facilitate or induce any Acquisition Proposal, (ii) engage or participate in any discussions or negotiations regarding, or furnish or cause to be furnished to any Person any confidential or nonpublic information or data with respect to, or take any other action to facilitate any inquiries or the making of any offer or proposal that would reasonably be expected to lead to, an Acquisition Proposal, or (iii) adopt, approve, agree to, accept, endorse or recommend any Acquisition Proposal. Without limiting the foregoing, it is agreed that any violation of the restrictions set forth in this Section 5.5 by any Subsidiary of Oakwood shall constitute a breach of this Section 5.5 by Oakwood. In addition to the foregoing, unless this Agreement has been terminated in accordance with Section 9.1, Oakwood shall not submit to the vote of its shareholders any Acquisition Proposal other than the Merger. Notwithstanding any other provision in this Agreement, nothing herein shall restrict Oakwood or any of its Subsidiaries, or their respective directors, officers, agents or representatives, from (y) informing any Person of the terms of Sections 5.1 and 5.5 or (z) seeking a clarification or other information from any Person with respect to an Acquisition Proposal.

(b)         Promptly (but in no event more than 48 hours) following receipt of any Acquisition Proposal or any request for nonpublic information or any inquiry that would reasonably be expected to lead to any Acquisition Proposal, Oakwood shall advise BFST in writing of the receipt of such Acquisition Proposal, request or inquiry, and the terms and conditions of such Acquisition Proposal, request or inquiry (including, in each case, the identity of the Person making any such Acquisition Proposal, request or inquiry), and Oakwood shall as promptly as reasonably practicable provide to BFST (i) a copy of such Acquisition Proposal, request or inquiry, if in writing, or (ii) a written summary of the material terms of such Acquisition Proposal, request or inquiry, if oral. Oakwood shall keep BFST reasonably informed on a reasonably current basis of any material developments, discussions, negotiations and communications regarding (including amendments or proposed amendments to) such Acquisition Proposal, request or inquiry.

(c)         Notwithstanding anything herein to the contrary, if at any time prior to the Oakwood Shareholder Meeting either Oakwood or any of its Subsidiaries receives an Acquisition Proposal that did not result from a breach of Section 5.5(a) and that the board of directors of Oakwood determines in good faith, after consultation with its legal counsel and financial advisor, constitutes or would be reasonably be expected to lead to a Superior Proposal, then Oakwood or any of its Subsidiaries may (i) engage or participate in discussions or negotiations with the Person making such Acquisition Proposal (and its representatives) and (ii) furnish or cause to be furnished to such Person (and its representatives) any confidential or nonpublic information or data with respect to Oakwood and any of its Subsidiaries, provided that before furnishing any such information to such Person pursuant to this clause (ii), Oakwood shall have entered into a customary confidentiality agreement with such Person and, provided further, that such information shall be provided by Oakwood to BFST prior to or substantially concurrently with providing such information to such Person to the extent not previously furnished to BFST.

(d)        Notwithstanding anything herein to the contrary, at any time prior to the Oakwood Shareholder Meeting, the board of directors of Oakwood may make a Change in Recommendation and submit this Agreement to Oakwood’s shareholders without the Oakwood Board Recommendation (although the resolution approving this Agreement may not be rescinded), if (i) Oakwood has received a Superior Proposal (after giving effect to the terms of any revised offer by BFST pursuant to this Section 5.5(d)), and (ii) the board of directors of Oakwood has determined in good faith, after consultation with its financial advisors and outside legal counsel, that it would be reasonably expected to result in a violation of the directors’ fiduciary duties under applicable law to fail to make the Change in Recommendation; provided, that the board of directors of Oakwood may not take the actions set forth in this Section 5.5(d) unless:

(i)    such Superior Proposal did not result from a violation of this Section 5.5;

(ii)    Oakwood has provided BFST at least four (4) Business Days prior written notice of its intention to take such action and a copy of any proposed agreement or other document relating to such Superior Proposal (including the identity of the Person or “Group” (as such term is defined in Section 13(d) under the Exchange Act) making the Superior Proposal);

(iii)    during such four (4) Business Day period, Oakwood has and has caused its financial advisors and outside legal counsel to, consider and negotiate with BFST in good faith (to the extent BFST desires to so negotiate) regarding any proposals, adjustments or modifications to the terms and conditions of this Agreement proposed by BFST; and

(iv)    the board of directors of Oakwood has determined in good faith, after consultation with its financial advisors and outside legal counsel and considering the results of such negotiations and giving effect to any proposals, amendments or modifications proposed in writing by BFST prior to the close of business on such fourth (4th) Business Day, if any, that such Superior Proposal remains a Superior Proposal and that it would nevertheless reasonably be expected to result in a violation of the director’s fiduciary duties under applicable law to fail to make the Change in Recommendation.

Any material amendment to any Acquisition Proposal will be deemed to be a new Acquisition Proposal for purposes of this Section 5.5(d) and will require a new determination and notice period as referred to in this Section 5.5(d); provided, that such notice period shall be two (2) Business Days.

(e)         Oakwood and each of its Subsidiaries shall, and Oakwood shall direct its representatives to, (i) immediately cease and cause to be terminated any and all existing activities, discussions or negotiations with any Persons conducted heretofore with respect to any offer or proposal that constitutes, or may reasonably be expected to lead to, an Acquisition Proposal, (ii) request the prompt return or destruction of all confidential information previously furnished to any Person (other than BFST, b1BANK and their representatives) that has made or indicated an intention to make an Acquisition Proposal, and (iii) except to the extent the board of directors of Oakwood determines that such action or failure to act would reasonably be expected to result in a violation of the director’s fiduciary duties under applicable law, not waive or amend any “standstill” provision or provisions of similar effect to which it is a party or of which it is a beneficiary and shall strictly enforce any such provisions.

(f)        Nothing contained in this Agreement shall prevent Oakwood or its board of directors from making any other disclosure to the shareholders of Oakwood that Oakwood or its board of directors determines in good faith is reasonably required by applicable law; provided, that any Change in Recommendation must comply with this Section 5.5.

Section 5.6           Termination of Contracts. Until the thirtieth (30th) calendar day after the date of this Agreement, BFST shall have the right to add to Section 5.6 of the Oakwood Disclosure Schedules any contract involving Oakwood or any of its Subsidiaries, or any of their respective Affiliates, and Oakwood shall use Commercially Reasonable Efforts, including notifying appropriate parties and negotiating in good faith a reasonable settlement, to ensure that each contract to be listed on Section 5.6 of the Oakwood Disclosure Schedules within thirty (30) calendar days after the date of this Agreement will, if the Merger occurs, be terminated prior to the date on which the data processing conversion and the operational integration occurs between Oakwood Bank and b1BANK; provided, however, that until the thirtieth (30th) calendar day prior to Closing, BFST shall have the right to add to Section 5.6 of the Oakwood Disclosure Schedules any data processing contracts and contracts related to the provision of electronic banking services of Oakwood or Oakwood Bank not then listed in Section 5.6 of the Oakwood Disclosure Schedules to the extent any such contract had not been made available to BFST prior to the date of this Agreement (the “Contracts to be Terminated”); provided further, that any and all costs, fees, expenses, contract payments, penalties or liquidated damages necessary to be paid by Oakwood or Oakwood Bank in connection with the termination of any Contract to be Terminated shall be accrued or paid by Oakwood on or prior to the Closing Date. Such notice and actions by Oakwood shall be in accordance with the terms of such contracts. For the avoidance of doubt, the use of “Commercially Reasonable Efforts” by Oakwood as used in this Section 5.6 shall include the payment or accrual of any termination fees or liquidated damages required by the terms of the contracts referenced in this Section 5.6 upon the termination of such contracts.

Section 5.7          Liability Insurance. Oakwood shall purchase for a period of not less than four (4) years after the Effective Time, past acts and extended reporting period insurance coverage for no less than the four-year period immediately preceding the Effective Time, under its current (i) directors and officers insurance (or comparable coverage), (ii) employment practices liability insurance, (iii) financial institutions bond (or comparable coverage), (iv) bankers professional liability insurance, (v) mortgage errors and omissions insurance, (vi) fiduciary liability insurance and (vii) cyber liability insurance ((i) through (vii) collectively, the “Tail Policy”), for each person and entity, including, without limitation, Oakwood, its Subsidiaries and their respective directors, officers and employees, currently covered under those policies held by Oakwood or its Subsidiaries.

Section 5.8          Allowance for Credit Losses. Oakwood shall cause Oakwood Bank to maintain its Allowance at a level consistent with Oakwood Bank’s historical levels and its existing policies and in compliance with GAAP as applied to banking institutions, including with respect to CECL, and all applicable rules and regulations, and in the reasonable opinion of management, at a level adequate in all respects to provide for all probable losses, net of recoveries relating to loans previously charged off, on Loans outstanding (including accrued interest receivable) of Oakwood or any of its Subsidiaries and other extensions of credit (including letters of credit or commitments to make loans or extend credit).

Section 5.9         Third-Party Consents. Oakwood shall use Commercially Reasonable Efforts, and BFST shall reasonably cooperate with Oakwood at Oakwood’s request, to provide all required notices and obtain all consents, approvals, authorizations, waivers or similar affirmations described in Section 3.4(b) of the Oakwood Disclosure Schedules.

Section 5.10         Coordination; Integration.

(a)          The senior officers of Oakwood and Oakwood Bank agree to meet with senior officers of BFST and b1BANK, on a semi-monthly basis or as reasonably requested by BFST or Oakwood, relating to the development, coordination and implementation of the post-Merger operating and integration plans of b1BANK, as the resulting institution in the Bank Merger and to otherwise review the financial and operational affairs of Oakwood and Oakwood Bank; provided, that BFST and b1BANK shall have no right to review confidential supervisory information (as such term is defined in 12 C.F.R. § 261.2) of Oakwood or Oakwood Bank, and to the extent permitted by applicable law, each of Oakwood and Oakwood Bank agrees to give reasonable consideration to BFST’s input on such matters, consistent with this Section 5.10, with the understanding that BFST shall in no event be permitted to exercise control of Oakwood or Oakwood Bank prior to the Effective Time and, except as specifically provided under this Agreement, Oakwood and Oakwood Bank shall have no obligation to act in accordance with BFST’s input.

(b)       Commencing after the date of this Agreement, Oakwood shall provide BFST with real time access to a data share file portal (the “Loan Portal”), which is updated weekly and used by the senior loan officers and members of Oakwood Bank’s Loan Committee (collectively, the “Oakwood Loan Representatives”). The Loan Portal contains all documents, reports and other materials prepared for and/or provided to Oakwood Loan Representatives, including, but not limited to, summaries of all loans, loan participations, other extensions of credit and charge-offs approved or requested in a given week and certain documents related thereto.

(c)        Commencing after the date of this Agreement and to the extent permitted by applicable law, BFST, b1BANK, Oakwood and Oakwood Bank shall use their Commercially Reasonable Efforts to plan the integration of Oakwood and Oakwood Bank with the businesses of BFST and its Affiliates to be effective as much as practicable as of the Closing Date; provided, however, that in no event shall BFST or its Affiliates be entitled to control Oakwood or Oakwood Bank prior to the Effective Time. Without limiting the generality of the foregoing, from the date of this Agreement through the Effective Time and consistent with the performance of their day-to-day operations and the continuous operation of Oakwood and Oakwood Bank in the ordinary course of business, Oakwood’s and Oakwood Bank’s employees and officers shall use their Commercially Reasonable Efforts to provide support, including support from Oakwood’s and Oakwood Bank’s outside contractors, and to assist BFST in performing all tasks, including equipment installation, reasonably required to result in a successful integration at the Closing; provided, however, that no integration shall take place prior to the Closing. BFST shall provide such assistance of its personnel as Oakwood and Oakwood Bank shall request to permit Oakwood and Oakwood Bank to comply with their obligations under this Section 5.10.

Section 5.11         Bank Merger. Prior to the Effective Time, Oakwood shall cause Oakwood Bank to cooperate with BFST and b1BANK as necessary in conjunction with all approvals, filings, and other steps necessary to cause the consummation of the Bank Merger after the Effective Time and after the Merger.

Section 5.12        Financial Statements. The consolidated balance sheets as of future dates and the related statements of income, changes in shareholders’ equity and cash flows of Oakwood for the periods then ended, which may be provided by Oakwood to BFST subsequent to the date of this Agreement, shall be prepared from the books and records of Oakwood and its Subsidiaries and shall fairly present, in all material respects, the consolidated financial position, results of operations, shareholders’ equity and cash flows of Oakwood at the dates and for the periods indicated in conformity with GAAP applied on a consistent basis throughout the periods indicated, except that unaudited financial statements may (a) omit the footnote disclosure required by GAAP and (b) be subject to normal year-end audit adjustments required by GAAP. The Consolidated Reports of Condition and Income filed by Oakwood Bank subsequent to the date of this Agreement shall fairly present the financial position of Oakwood Bank and the results of its operations at the dates and for the periods indicated in compliance with the rules and regulations of applicable federal and state banking authorities.

Section 5.13         Employee Benefit Plans. Oakwood or its appropriate Subsidiary shall execute and deliver such instruments and take such other actions as BFST may reasonably require in order to cause the termination of all the Oakwood Employee Plans listed on Section 3.22 of the Oakwood Disclosure Schedules on terms reasonably satisfactory to BFST and in accordance with applicable law, with such termination effective not later than immediately prior to the Effective Time or, with respect to any Oakwood Employee Plan that is intended to qualify under Section 401(a) of the Code that includes a cash or deferred arrangement intended to satisfy the provisions of Section 401(k) of the Code, not later than the date immediately preceding the Closing Date, it being understood and agreed that the winding up of any such Oakwood Employee Plan may be completed following the Closing Date. For the avoidance of doubt, this Section 5.13 shall not apply to any Oakwood Employee Plan with respect to which Oakwood or one of its Subsidiaries does not possess the unilateral right to amend or terminate such plan.

Section 5.14        Change in Control Payments. Oakwood shall, and shall cause Oakwood Bank to, take all necessary actions to ensure that no payment set forth in Section 3.22(f) of Oakwood Disclosure Schedules would constitute an “excess parachute payment” within the meaning of Section 280G of the Code (or any corresponding or similar provision of state, local or foreign Tax law), and be subject to the excise tax imposed by Section 4999 of the Code.

Section 5.15       Regulatory Matters. Oakwood shall and shall cause Oakwood Bank to take all necessary actions to address and remediate any findings of or requests, if any, made by a Governmental Body of Oakwood or Oakwood Bank prior to Closing, or if not possible to address and remediate such findings or requests prior to Closing, Oakwood shall accrue an amount sufficient to cover expenses reasonably required by BFST to timely remediate after the Merger.

Section 5.16        No Control. Nothing contained in this Agreement shall give BFST, directly or indirectly, the right to control or direct the operations of Oakwood or any of its Subsidiaries prior to the Effective Time, and nothing contained in this Agreement shall give Oakwood, directly or indirectly, the right to control or direct the operations of BFST or any its Subsidiaries prior to the Effective Time. Prior to the Effective Time, each of Oakwood and BFST shall exercise, consistent with the terms of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.

Section 5.17       Payment of Bank Stock Loan Indebtedness. On or before the Closing Date, Oakwood shall pay or cause to be paid the aggregate amount of the principal and interest due as of the Effective Time (the “Bank Stock Loan Indebtedness”) due under the Promissory Note, dated April 20, 2023, made by Oakwood to the holder thereof in accordance with the Payoff Letter.

ARTICLE VI.
COVENANTS OF BFST

BFST covenants and agrees with Oakwood as follows:

Section 6.1         Regulatory Filings; Efforts. Within forty-five (45) calendar days following the date of this Agreement, BFST shall prepare and file, or shall cause to be prepared and filed, all necessary applications or other documentation with the Federal Reserve Board, the FDIC, the TDB, the OFI, and any other appropriate Governmental Bodies having jurisdiction over the transactions contemplated by this Agreement, including the Bank Merger. Prior to filing such applications, BFST will provide Oakwood drafts of the non-confidential portions of such applications and incorporate Oakwood’s reasonable comments to such applications. BFST shall take all reasonable action to aid and assist in the consummation of the Merger, and shall use Commercially Reasonable Efforts to take or cause to be taken all other actions necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including such actions which are necessary, proper or advisable in connection with filing applications and registration statements with, or obtaining approvals from, all Governmental Bodies having jurisdiction over the transactions contemplated by this Agreement and the Merger. BFST shall provide Oakwood with copies of all such regulatory filings and all correspondence with Governmental Bodies in connection with the Merger for which confidential treatment has not been requested. BFST shall pay, or shall cause to be paid, any applicable fees and expenses incurred by it or any of its Subsidiaries in connection with the preparation and filing of such regulatory applications.

Section 6.2           Registration Statement.

(a)        Within forty-five (45) calendar days following the date of this Agreement, BFST shall prepare and file the Registration Statement and any other applicable documents, including the notice, proxy statement and prospectus and other proxy solicitation materials of Oakwood constituting a part thereof (collectively, the “Proxy Statement”), relating to the shares of BFST Common Stock to be delivered to the shareholders of Oakwood pursuant to this Agreement. Each of BFST and Oakwood shall use its Commercially Reasonable Efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing and to maintain such effectiveness for as long as necessary to consummate the Merger and the other transactions contemplated by this Agreement. Oakwood and its counsel shall be given the opportunity to participate in the preparation of the Registration Statement and shall have the right to approve the content of the Registration Statement with respect to information about Oakwood and the meeting of Oakwood’s shareholders. At the time the Registration Statement becomes effective, the Registration Statement shall comply in all material respects with the provisions of the Securities Act and the published rules and regulations thereunder.

(b)        BFST shall also use its commercially reasonable best efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to carry out the transactions contemplated by this Agreement. If at any time prior to the Effective Time any event occurs or information relating to Oakwood or BFST, or any of their respective affiliates, directors or officers, should be discovered by Oakwood or BFST that should be set forth in an amendment or supplement to either the Registration Statement or the Proxy Statement, so that either such document would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other party hereto and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by applicable law, disseminated to Oakwood’s shareholders.

(c)         None of the information relating to BFST and its Subsidiaries that is provided by BFST for inclusion in (i) the Proxy Statement, any filings or approvals under applicable federal or state banking laws or regulations or state securities laws, or any filing pursuant to Rule 165 or Rule 425 under the Securities Act will, at the time of mailing the Proxy Statement to Oakwood’s shareholders or at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, and (ii) the Registration Statement will, at the time the Registration Statement and each amendment or supplement thereto, if any, becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

Section 6.3           NASDAQ Listing. BFST shall file all documents required to be filed to have the shares of BFST Common Stock to be issued pursuant to this Agreement included for listing on NASDAQ and use its Commercially Reasonable Efforts to effect said listing.

Section 6.4          Affirmative Covenants. Except as otherwise permitted or required by this Agreement, from the date of this Agreement until the Effective Time, BFST shall and shall cause each of its Subsidiaries to (a) maintain its corporate existence in good standing; (b) maintain the general character of its business and conduct its business in its ordinary and usual manner; (c) extend credit only in accordance with its existing lending policies and practices; and (d) use Commercially Reasonable Efforts to (i) preserve intact its present business organizations, (ii) keep available the services of its present executive officers and directors and (iii) preserve its relationships and goodwill with customers and advantageous business relationships.

Section 6.5           Negative Covenants. BFST shall not, nor shall it permit any of its Subsidiaries to, (a) amend its Organizational Documents in a manner that would adversely affect Oakwood, (b) take, or fail to take, any action that would reasonably be expected to prevent the Merger or the Bank Merger from qualifying as a “reorganization” under Section 368(a) of the Code, (c) take any action that, to the knowledge of BFST, would adversely affect or delay (i) BFST’s ability to obtain the necessary approvals of any Governmental Body required for the consummation of the transactions contemplated hereby or (ii) BFST’s ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby, or (d) agree or commit to do any of the foregoing.

Section 6.6           Employee Matters.

(a)        Following the Effective Time and until the first anniversary of the Closing Date (or, if earlier, the date of termination of employment of an applicable Oakwood Employee), BFST shall, or shall cause one of its Subsidiaries to, provide each employee of Oakwood and its Subsidiaries who remains employed by BFST or its Subsidiaries immediately after the Effective Time (each, an “Oakwood Employee”) and who continues employment during such time period with (i) an annualized base salary or wage rate (as applicable) that is no less favorable than the annualized base salary or wage rate (as applicable) provided to such Oakwood Employee immediately prior to the Effective Time, and (ii) employee benefits (excluding any defined benefit pension and retiree or post-termination health or welfare benefits) that are (A) no less favorable in the aggregate to the employee benefits provided to the Oakwood Employee as of the date immediately preceding the Closing Date under the Oakwood Employee Plans and (B) no less favorable in the aggregate to the employee benefits provided by BFST and its Subsidiaries to similarly situated employees of BFST or its Subsidiaries.

(b)         Each Oakwood Employee will be entitled to participate as an employee in the employee benefit plans and programs maintained for employees of BFST and b1BANK with credit for prior service with Oakwood or any of its Subsidiaries for all purposes under the employee welfare benefit plans and other employee benefit plans and programs (including any severance programs but excluding vesting requirements under any equity or equity-based incentive plans and benefits accrued under any retirement plans) sponsored by BFST or b1BANK in which such Oakwood Employee becomes eligible to participate from and after the Closing Date, to the extent such service was credited under a comparable Oakwood Employee Plan immediately prior to the Closing, to the extent permitted by such BFST plans and applicable law and to the extent that such service crediting will not result in any duplication of benefits for the same period of service. To the extent permitted by such BFST plans and applicable law, BFST shall use Commercially Reasonable Efforts to cause any eligibility waiting period and pre-existing condition exclusion applicable to such plans and programs to be waived with respect to each Oakwood Employee and their eligible dependents. To the extent permitted by the applicable BFST plans and applicable law, BFST shall use Commercially Reasonable Efforts to credit each Oakwood Employee and his or her eligible dependents for the year during which coverage under BFST’s group health plans begins, with any deductibles, co-pays or out-of-pocket payments already incurred by such Oakwood Employee during such year under the corresponding Oakwood group health plans. For purposes of determining Oakwood Employee’s benefits for the calendar year in which the Merger occurs under BFST’s vacation program, any vacation taken by an Oakwood Employee immediately preceding the Closing Date for the calendar year in which the Merger occurs shall be deducted from the total BFST vacation benefit available to such Oakwood Employee for such calendar year.

(c)          The provisions of this Section 6.6 are for the sole benefit of the parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any person (including, for the avoidance of doubt, any Oakwood Employee or other current or former employee of Oakwood or any of its Subsidiaries), other than the parties and their respective permitted successors and assigns, any legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.6) under or by reason of any provision of this Agreement. Nothing in this Section 6.6 amends, or will be deemed to amend (or prevent the amendment or termination of), any Oakwood Employee Plan or any employee benefit plan of BFST or any of its Affiliates.

(d)        BFST’s retention of the Oakwood Employees will be contingent on the recipient of such offer of employment complying with all of BFST’s standard employment requirements, and BFST will not be obligated to extend offers of employment to any individual who, following BFST’s standard pre-employment tests and screenings, does not meet BFST’s employment rules, standards or policies. Furthermore, it is understood and agreed that (i) BFST’s offer of employment to an Oakwood Employee will not alone constitute a commitment, contract or understanding (expressed or implied) or any obligation on the part of BFST or its Affiliates to a post-Closing employment relationship of any fixed term or duration or upon any specific terms or conditions, and (ii) employment is “at-will” and may be terminated by BFST or by the hired employee at any time, for any reason or for no reason whatsoever. Any Oakwood Employee who is not a party to an employment, change in control or severance agreement or other separation agreement that provides a benefit on termination of employment, whose employment is terminated involuntarily (other than for cause, death, disability or normal retirement) by BFST or its Affiliates within twelve (12) months from the Closing will receive, subject to the Oakwood Employee’s execution, return, and non-revocation of a release of claims against BFST and its Affiliates in a form reasonably acceptable to BFST, a lump sum severance payment in an amount equal to one (1) week’s pay for each year of prior service with Oakwood; provided, that the minimum severance payment shall be four (4) weeks’ pay and the maximum severance shall be twenty-six (26) weeks’ pay. For purposes of this Section 6.6, “cause” means any termination of employment due to the occurrence of one of more of the following events: (i) the employee’s willful refusal to comply in any material respect with the lawful employment policies of BFST and its Subsidiaries, provided that the employee was given prior written notice of such policies, (ii) the employee’s commission of an act of fraud, embezzlement or theft against BFST or any of its Subsidiaries, (iii) the conviction or plea of nolo contendere to any crime involving moral turpitude or a felony, or (iv) the employee’s willful refusal to substantially perform the duties and responsibilities of his or her position with b1BANK; provided that, in the case of (i) and (iv), if curable, the employee must be provided notice of the refusal to comply with policy or perform duties, and be provided a reasonable opportunity to cure such basis for cause. Notwithstanding the foregoing, all Oakwood Employees then employed by BFST or its Affiliates will be “at-will” employees of BFST.

Section 6.7          Financial Statements. The consolidated balance sheets as of future dates and the related statements of income, comprehensive income, shareholders’ equity and cash flows of BFST for the periods then ended, which may be filed by BFST with the SEC subsequent to the date of this Agreement, shall be prepared from the books and records of BFST and its Subsidiaries and shall fairly present, in all material respects, the consolidated financial position, results of operations, shareholders’ equity and cash flows of BFST at the dates and for the periods indicated in conformity with GAAP applied on a consistent basis throughout the periods indicated, except that unaudited financial statements may (a) omit the footnote disclosure required by GAAP and (b) be subject to normal year-end audit adjustments required by GAAP.

Section 6.8           Issuance of BFST Common Stock; Stock Reserves. The shares of BFST Common Stock to be issued by BFST to the shareholders of Oakwood pursuant to this Agreement will, on the issuance and delivery to such shareholders pursuant to this Agreement, be duly authorized, validly issued, fully paid and nonassessable. The shares of BFST Common Stock to be issued to the shareholders of Oakwood pursuant to this Agreement are and shall be free of any preemptive rights of the shareholders of BFST or any other Person. BFST agrees at all times from the date of this Agreement until the Merger Consideration has been paid in full to reserve a sufficient number of shares of BFST Common Stock to fulfill its obligations under this Agreement.

Section 6.9           Director and Officer Indemnification.

(a)          For a period of four (4) years after the Effective Time, and subject to the limitations contained in applicable Federal Reserve Board and FDIC regulations and to any limitations contained in the Organizational Documents of Oakwood and each of its Subsidiaries, BFST shall indemnify and hold harmless each present and former director and officer of Oakwood or Oakwood Bank, as applicable, determined as of the Effective Time (each, an “Indemnified Party”) against any costs or expenses (including reasonable attorneys’ 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 matters existing or occurring at or before the Effective Time, whether asserted or claimed before, at or after the Effective Time, arising in whole or in part out of or pertaining to the fact that he or she was acting in his or her capacity as a director or officer of Oakwood or any of its Subsidiaries to the fullest extent that the Indemnified Party would be entitled under the Organizational Documents, as applicable, in each case as in effect on the date of this Agreement and to the extent permitted by applicable law.

(b)          Any Indemnified Party wishing to claim indemnification under this Section 6.9, upon learning of any such claim, action, suit, proceeding or investigation, is to promptly notify BFST, but the failure to so notify will not relieve BFST of any liability it may have to the Indemnified Party to the extent such failure does not prejudice BFST. In any such claim, action, suit, proceeding or investigation (whether arising before or after the Effective Time), (i) BFST will have the right to assume the defense thereof and bear the costs incurred in connection therewith and BFST will not be liable to an Indemnified Party for any legal expenses of other counsel or any other expenses subsequently incurred by an Indemnified Party in connection with the defense thereof, except that if BFST elects not to assume such defense or counsel for the Indemnified Party advises that there are issues which raise conflicts of interest between BFST and the Indemnified Party, the Indemnified Party may retain counsel reasonably satisfactory to BFST, and BFST shall promptly pay the reasonable fees and expenses of such counsel for the Indemnified Party as any such fees and expenses are incurred by such Indemnified Party (which may not exceed one firm in any jurisdiction), provided that the Indemnified Party for whom fees and expenses are to be paid provides a signed written undertaking to repay such amounts if it is ultimately determined by a court of competent jurisdiction that such Indemnified Party is not entitled to indemnification under applicable laws or regulations, (ii) the Indemnified Party shall cooperate in the defense of any such matter, (iii) BFST will not be liable for any settlement effected without its prior written consent and (iv) BFST will have no obligation hereunder if indemnification of an Indemnified Party in the manner contemplated hereby is prohibited by applicable laws and regulations.

(c)         If BFST fails promptly to pay the amounts due pursuant to this Section 6.9, and, in order to obtain such payment, an Indemnified Party commences a Proceeding which results in a judgment against BFST for failure to provide indemnification, BFST shall pay the costs and expenses of the Indemnified Party (including attorneys’ fees and expenses) in connection with such Proceeding. Furthermore, if BFST, or any of its successors or assigns, shall consolidate with or merge into any other entity and shall not be the continuing or surviving entity of such consolidation or merger or shall transfer all or substantially all of its assets to any other entity, then and in each case, proper provision shall be made so that the successors and assigns of BFST, or the surviving company shall assume the obligations set forth in this Section 6.9 prior to or simultaneously with the consummation of such transaction.

Section 6.10         Board Nomination; Director Resignations.

(a)         BFST Board Nomination. Contemporaneously with Closing, and subject to the satisfaction of the fiduciary duties of the board of directors of BFST and all other legal and regulatory requirements regarding service and election or appointment as a director of BFST, BFST shall appoint Mr. William G. Hall, or if such individual is unable to serve, one (1) other individual from the boards of directors of Oakwood Bank or Oakwood, to be chosen by BFST in its sole discretion (such appointed individual, the “Board Representative”), as a director of BFST in connection with and to commence serving immediately following the Closing. If the Escrow Period has not expired at the time of the first annual meeting of the shareholders of BFST after the Effective Time, then BFST shall nominate the Board Representative, or cause the Board Representative to be nominated, for election by the BFST shareholders at such annual meeting of the BFST shareholders and, subject to the reasonable satisfaction of the fiduciary duties of the board of directors of BFST and all other legal and regulatory requirements regarding service and election or appointment as a director of BFST, use Commercially Reasonable Efforts to provide that the Board Representative is elected at such annual meeting of the BFST shareholders. After such first annual meeting of the shareholders of BFST, if the Escrow Period has not expired at the time of each succeeding annual meeting of the shareholders of BFST during the Escrow Period, and provided that the Board Representative is elected or reelected by the BFST shareholders at each succeeding annual meeting of BFST shareholders during the Escrow Period, then BFST shall continue to nominate the Board Representative, or cause the Board Representative to be nominated, for election by the BFST shareholders at such annual meetings of the BFST shareholders and, subject to the reasonable satisfaction of the fiduciary duties of the board of directors of BFST and all other legal and regulatory requirements regarding service and election or appointment as a director of BFST, use Commercially Reasonable Efforts to provide that the Board Representative is elected at such annual meetings of the BFST shareholders during the Escrow Period. For the avoidance of doubt, BFST shall have no further obligation under this Section 6.10(a) or otherwise to nominate the Board Representative for election to the board of directors of BFST by the BFST shareholders following the expiration of the Escrow Period.

(b)          b1BANK Board Nomination. Contemporaneously with Closing, and subject to the satisfaction of the fiduciary duties of the board of directors of b1BANK and all other legal and regulatory requirements regarding service and election or appointment as a director of b1BANK, BFST, as sole shareholder of b1BANK, shall cause b1BANK to appoint the Board Representative as a director of b1BANK in connection with and to commence serving immediately following the Closing. If the Escrow Period has not expired at the time of the first annual meeting of the sole shareholder of b1BANK after the Effective Time, then BFST, as sole shareholder of b1BANK, shall cause b1BANK to nominate the Board Representative, or cause the Board Representative to be nominated, for election by the sole shareholder of b1BANK, at such annual meeting of the sole shareholder of b1BANK and, subject to the reasonable satisfaction of the fiduciary duties of the board of directors of b1BANK and all other legal and regulatory requirements regarding service and election or appointment as a director of b1BANK, use Commercially Reasonable Efforts to provide that the Board Representative is elected at such annual meeting of the sole shareholder of b1BANK. After such first annual meeting of the sole shareholder of b1BANK, if the Escrow Period has not expired at the time of each succeeding annual meeting of the sole shareholder of b1BANK during the Escrow Period, then BFST, as sole shareholder of b1BANK, shall continue to cause b1BANK to nominate the Board Representative, or cause the Board Representative to be nominated, for election by BFST, as sole shareholder of b1BANK, at such annual meetings of the sole shareholder of b1BANK and, subject to the reasonable satisfaction of the fiduciary duties of the board of directors of b1BANK and all other legal and regulatory requirements regarding service and election or appointment as a director of b1BANK, use Commercially Reasonable Efforts to provide that the Board Representative is elected at such annual meetings of the sole shareholder of b1BANK during the Escrow Period. For the avoidance of doubt, BFST shall have no further obligation under this Section 6.10(b) or otherwise to cause b1BANK to nominate the Board Representative for election to the board of directors of b1BANK by the sole shareholder of b1BANK following the expiration of the Escrow Period.

(c)          Resignations of Oakwood Directors. Prior to the Closing, Oakwood will cause to be delivered to BFST resignations of all the directors of Oakwood and its Subsidiaries, such resignations to be effective as of the Effective Time.

ARTICLE VII.
MUTUAL COVENANTS OF BFST AND OAKWOOD

Section 7.1           Notification; Updated Disclosure Schedules.

(a)          Oakwood shall give prompt written notice to BFST, and BFST shall give prompt written notice to Oakwood, of (i) any representation or warranty made by it in this Agreement becoming untrue or inaccurate in any material respect (without regard to any materiality qualifier contained therein), including as a result of any change in the Oakwood Disclosure Schedules or the BFST Disclosure Schedules, respectively, or (ii) the failure by it to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement; and provided further, however, that if such notification under clause (i) relates to any matter which arises for the first time after the date of this Agreement, then the other party may only terminate this Agreement if such matter would cause the condition set forth in Section 10.1(c), with respect to Oakwood, and in Section 10.2(c), with respect to BFST, incapable of being satisfied.

(b)        At least ten (10) Business Days prior to the Closing Date, Oakwood shall provide BFST with updated Oakwood Disclosure Schedules and BFST shall provide Oakwood with updated BFST Disclosure Schedules reflecting any material changes to the Oakwood Disclosure Schedules and the BFST Disclosure Schedules, respectively, between the date of this Agreement and the date thereof. Delivery of such updated Oakwood Disclosure Schedules and updated BFST Disclosure Schedules shall not cure a breach or modify a representation or warranty of this Agreement.

Section 7.2           Confidentiality. BFST and Oakwood agree that terms of that Confidentiality Agreement, dated as of July 18, 2023, by and between BFST and Oakwood (the “Confidentiality Agreement”) are incorporated into this Agreement by reference and shall continue in full force and effect and shall be binding on BFST and Oakwood and their respective affiliates, officers, directors, employees and representatives as if parties thereto, in accordance with the terms thereof.

Section 7.3           Publicity. Except as otherwise required by applicable law or securities exchange rules or in connection with the regulatory application process, as long as this Agreement is in effect, neither BFST nor Oakwood shall, nor shall they permit any of their officers, directors or representatives to, issue or cause the publication of any press release or public announcement with respect to, or otherwise make any public announcement concerning, the transactions contemplated by this Agreement without the consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed.

Section 7.4           Certain Tax Matters.

(a)         Each of Oakwood and BFST shall (and they shall cause their respective Affiliates to) use its reasonable best efforts and take any reasonable actions required to cause the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code, including by reporting consistently for all U.S. federal, state, and local income Tax or other purposes. Without limiting the generality of the foregoing, neither Oakwood nor BFST (nor any of their respective Affiliates) shall knowingly take any action, or fail to take any action, which would reasonably be expected to cause the Merger to fail to qualify as a reorganization within the meaning of Section 368(a) of the Code.

(b)         The appropriate authorized officer of BFST shall execute and deliver to Hunton Andrews Kurth LLP (“Hunton”) and Norton Rose Fulbright US LLP (“NRF”) one or more officer’s certificates at such time or times as may be reasonably requested by each counsel, including an officer’s certificate, dated as of the Closing Date, containing such certifications, representations, warranties and covenants of BFST as shall be reasonably necessary or appropriate to enable Hunton and NRF to render the opinions described in Section 10.3(c), on the Closing Date (and, if requested, dated as of the date on which the Registration Statement is declared effective by the SEC) (each, a “BFST Tax Representation Letter”). BFST shall not take or cause to be taken any action that would cause to be untrue (or fail to take or cause not to be taken any action that would cause to be untrue) any of the certifications, representations, warranties and covenants included in the BFST Tax Representation Letter.

(c)       The appropriate authorized officer of Oakwood shall execute and deliver to Hunton and NRF one or more officer’s certificates at such time or times as may be reasonably requested by each counsel, including an officer’s certificate dated as of the Closing Date, containing such certifications, representations, warranties and covenants of Oakwood as shall be reasonably necessary or appropriate to enable Hunton and NRF to render the opinions described in Section 10.3(c) on the Closing Date (and, if requested, dated as of the date on which the Registration Statement is declared effective by the SEC) (each, an “Oakwood Tax Representation Letter”). Oakwood shall not take or cause to be taken any action that would cause to be untrue (or fail to take or cause not to be taken any action that would cause to be untrue) any of the certifications, representations, warranties and covenants included in an Oakwood Tax Representation Letter.

(d)          Without limiting the provisions of this Section 7.4, BFST shall comply with the recordkeeping and information reporting requirements set forth in Treasury Regulations § 1.368-3.

(e)          On or prior to the Closing Date, Oakwood shall deliver to BFST a statement along with the required notice to the IRS that meets the requirements of Treasury Regulations sections 1.1445-2(c)(3) and 1.897-2(h), provided that if Oakwood fails to timely deliver such statement and IRS notice BFST’s sole recourse will be to withhold pursuant to Section 2.8.

Section 7.5          Efforts to Consummate. Subject to the terms and conditions set forth in this Agreement, BFST and Oakwood shall, and shall cause their respective Subsidiaries to, use Commercially Reasonable Efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other party in doing, all things reasonably necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including, without limitation, (i) the satisfaction of the conditions precedent to the obligations of Oakwood (in the case of BFST) and BFST (in the case of Oakwood) to the Merger and the Bank Merger, (ii) the obtaining of all necessary consents or waivers from third parties, (iii) the obtaining of all necessary consents, approvals and authorizations of, or exemptions by, any Governmental Body, and (iv) the execution and delivery of any additional instruments necessary to consummate the Merger or the Bank Merger and to fully carry out the purposes of this Agreement.

Section 7.6         Retention Agreements. BFST and Oakwood will use Commercially Reasonable Efforts to facilitate the entering into written retention agreements ("Retention Agreements"), with the persons set forth on Section 7.6 of the BFST Disclosure Schedules prior to the Closing Date, but will have no responsibility or obligation if such persons elect not to enter into the Retention Agreements. Notwithstanding the foregoing, the failure for any Retention Agreement to be executed shall not be deemed a Material Adverse Effect with respect to either party hereto, and shall not serve as a basis for the termination of this Agreement. 

ARTICLE VIII.
CLOSING

Section 8.1          Closing. The closing of the transactions contemplated by this Agreement (“Closing”) shall take place remotely via the exchange of documents and signatures or at such location mutually acceptable to the parties hereto. The Closing shall take place as soon as practicable once the conditions of Article X have been satisfied or waived but in any event within the thirty (30) day period commencing on the later of the following dates and in no event later than January 20, 2025, unless extended pursuant to Section 9.1(a)(iii) or the parties otherwise mutually agree in writing (“Closing Date”):

(a)          the receipt of the Oakwood Shareholder Approval and the last Regulatory Approval and the expiration of any statutory or regulatory waiting period which is necessary to effect the Merger and the Bank Merger; and

(b)          if the transactions contemplated by this Agreement are being contested in any Proceeding and BFST or Oakwood, pursuant to Section 10.3(a), has elected to contest the same, then the date that such Proceeding has been brought to a conclusion favorable, in the reasonable judgment of each of BFST and Oakwood, to the consummation of the transactions contemplated herein, or such prior date as each of BFST and Oakwood shall elect whether or not such proceeding has been brought to a conclusion.

Section 8.2          Effective Time. Subject to the terms and upon satisfaction of all requirements of law and the conditions specified in this Agreement including, among other conditions, the receipt of the Oakwood Shareholder Approval and the Regulatory Approvals, the Merger shall become effective, and the effective time of the Merger shall occur, at the date and time specified in the certificate of merger to be filed with the Secretary of State of the State of Louisiana (“Effective Time”).

ARTICLE IX.
TERMINATION

Section 9.1           Termination.

(a)          Notwithstanding any other provision of this Agreement, this Agreement may be terminated and the Merger contemplated hereby may be abandoned by action of the board of directors of BFST or Oakwood at any time prior to the Effective Time if:

(i)    any court of competent jurisdiction in the United States or other Governmental Body shall have issued an Order enjoining or otherwise prohibiting the Merger or the Bank Merger and such Order shall be final and non-appealable;

(ii)    any of the transactions contemplated by this Agreement are disapproved (or the applications or notices for which are suggested or recommended to be withdrawn) by any Governmental Body or other Person whose approval is required to consummate any of such transactions;

(iii)    the Effective Time has not occurred on or before January 20, 2025, unless one or more of the Regulatory Approvals has not been received on or before January 20, 2025 and the application therefor remains being processed, in which case the Effective Time has not occurred on or before March 21, 2025, or such later date as has been approved in writing by the boards of directors of BFST and Oakwood; but the right to terminate under this Section (iii) shall not be available to any party whose failure to fulfill any material obligation under this Agreement has been the cause of, or has resulted in, the failure of the Effective Time to occur on or before such applicable date; or

(iv)    the Oakwood Shareholder Approval shall not have been obtained by reason of the failure to obtain the required vote at the Oakwood Shareholder Meeting.

(b)    This Agreement may be terminated at any time prior to the Effective Time by action of the board of directors of Oakwood if BFST shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement, or if any of the representations or warranties of BFST contained herein shall be inaccurate in any material respect. If the board of directors of Oakwood desires to terminate this Agreement because of an alleged breach or inaccuracy as provided in this Section 9.1(b), the board of directors must notify BFST in writing of its intent to terminate stating the reason therefor. BFST shall have thirty (30) days from the receipt of such notice to cure the alleged breach or inaccuracy, if the breach or inaccuracy is capable of being cured.

(c)    This Agreement may be terminated at any time prior to the Effective Time by action of the board of directors of BFST if (i) Oakwood fails to comply in any material respect with any of its covenants or agreements contained in this Agreement, or if any of the representations or warranties of Oakwood contained herein shall be inaccurate in any material respect, or (ii) any approval required to be obtained from any regulatory authority or agency is obtained subject to restrictions or conditions on the operations of Oakwood, Oakwood Bank, BFST or b1BANK that, in the reasonable judgment of BFST, materially and adversely impairs the value of Oakwood and its Subsidiaries, taken as a whole, to BFST, that materially and adversely impairs the economic or business benefits of the transactions contemplated by this Agreement to BFST or otherwise would, in the reasonable judgment of BFST, be so burdensome as to render inadvisable the consummation of the transactions contemplated by this Agreement. In the event the board of directors of BFST desires to terminate this Agreement because of an alleged breach or inaccuracy as provided in clause (i) of this Section 9.1(c), the board of directors must notify Oakwood in writing of its intent to terminate stating the reason therefor. Oakwood shall have thirty (30) days from the receipt of such notice to cure the alleged breach or inaccuracy, if the breach or inaccuracy is capable of being cured.

(d)          This Agreement may be terminated at any time prior to the Effective Time upon the mutual written consent of BFST and Oakwood and the approval of such action by their respective boards of directors.

(e)         This Agreement may be terminated at any time before the Oakwood Shareholder Approval by the board of directors of Oakwood if before such time, Oakwood receives an unsolicited bona fide Acquisition Proposal and the board of directors of Oakwood determines in its good faith judgment (after consultation with its financial advisors and outside legal counsel), that (A) such Acquisition Proposal (if consummated pursuant to its terms and after giving effect to the payment of the Termination Fee (as defined herein)) is a Superior Proposal and (B) the failure to terminate this Agreement and accept such Superior Proposal would cause or would be reasonably likely to cause it to violate its fiduciary duties under applicable law; provided, however, that Oakwood may not terminate this Agreement under this Section 9.1(e) unless the provisions of Section 5.5(d) have been satisfied:

(f)         This Agreement may be terminated at any time before the Closing by the board of directors of BFST if (i) Oakwood has breached the covenant contained in Section 5.5 in a manner adverse to BFST; (ii) the board of directors of Oakwood resolves to accept a Superior Proposal; or (iii) the board of directors of Oakwood effects a Change in Recommendation.

Section 9.2          Effect of Termination. Except as provided in Section 9.3, if this Agreement is terminated by either BFST or Oakwood as provided in Section 9.1, this Agreement shall become void and have no effect, without any liability on the part of any party or its directors, officers or shareholders, except that the provisions of Section 7.2, this Section 9.2 and Section 11.5 shall survive termination of this Agreement. Nothing contained in this Section 9.2 shall relieve any party hereto of any liability for a breach of this Agreement.

Section 9.3          Termination Fee. To compensate BFST for entering into this Agreement, taking actions to consummate the transactions contemplated hereunder and incurring the costs and expenses related thereto and other losses and expenses, including foregoing the pursuit of other opportunities by BFST, Oakwood and BFST agree as follows:

(a)        Provided that BFST is not in material breach of any covenant or obligation under this Agreement (which breach has not been cured within thirty (30) days following receipt of written notice thereof by Oakwood specifying in reasonable detail the basis of such alleged breach), if this Agreement is terminated by:

(i)    Oakwood under the provisions of Section 9.1(e), then Oakwood shall pay to BFST in immediately available funds the sum of $3,503,010.41 (the “Termination Fee”);

(ii)    BFST under the provisions of Section 9.1(f), then Oakwood shall pay to BFST the Termination Fee in immediately available funds;

(iii)    either BFST or Oakwood under the provisions of Section 9.1(a)(iii), if, at the time of termination, the Registration Statement has been declared effective for at least twenty-five (25) Business Days prior to such termination and Oakwood shall have failed to call, give notice of, convene and hold Oakwood Shareholder Meeting in accordance with Section 5.1, then Oakwood shall pay to BFST the Termination Fee in immediately available funds;

(iv)    either BFST or Oakwood under the provisions of Section 9.1(a)(iv), if, at the time of termination, there exists an Acquisition Proposal with respect to Oakwood, then Oakwood shall pay to BFST the Termination Fee in immediately available funds; or

(v)    either BFST or Oakwood under the provisions of Section 9.1(a)(iii), if, at such time, the Oakwood Shareholder Approval has not occurred and if, at the time of termination, there exists an Acquisition Proposal with respect to Oakwood and within twelve (12) months of the termination of this Agreement, Oakwood enters into an Acquisition Agreement with any Person with respect to such Acquisition Proposal, then Oakwood shall pay to BFST the Termination Fee in immediately available funds.

(b)          The payment of the Termination Fee shall be BFST’s sole and exclusive remedy with respect to termination of this Agreement as set forth in this Section 9.3. For the avoidance of doubt, in no event shall the Termination Fee under the circumstances described in this Section 9.3 be payable on more than one occasion.

(c)         Any payment required by this Section 9.3 shall become payable within two (2) Business Days after receipt by the non-terminating party of written notice of termination of this Agreement; provided, however, that if the payment of the Termination Fee is required pursuant to Section 9.3(a)(v) then such payment shall become payable on or before the second (2nd) Business Day following the execution by Oakwood of an Acquisition Agreement.

ARTICLE X.
CONDITIONS PRECEDENT

Section 10.1        Conditions Precedent to Obligations of BFST. The obligation of BFST under this Agreement to consummate the Merger is subject to the satisfaction, at or prior to the Closing Date of the following conditions, which may be waived by BFST in its sole discretion, to the extent permitted by applicable law:

(a)         Compliance with Representations and Warranties. (i) Each of the representations and warranties of Oakwood set forth in Sections 3.1, 3.2, 3.3, 3.8, 3.32 and 3.33 shall be true and correct in all respects (other than inaccuracies that are de minimis in amount and effect) as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representation or warranty is made specifically as of an earlier date, in which case as of such earlier date); (ii) each of the other representations and warranties made by Oakwood in this Agreement shall be true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality or Material Adverse Effect, in which case such representations and warranties as so qualified shall be true and correct in all respects) as of the date of this Agreement (except to the extent such representation or warranty is made specifically as of an earlier date, in which case as of such earlier date); provided, however, that Oakwood may cure any such inaccurate representation or warranty covered by this clause (ii) by providing written notice to BFST or taking lawful action to cure within thirty (30) days of Oakwood having knowledge of such inaccuracy; and (iii) each of the representations and warranties made by Oakwood in this Agreement, other than set forth in Sections 3.1, 3.2, 3.3, 3.8, 3.32 and 3.33, shall be true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality or Material Adverse Effect, in which case such representations and warranties as so qualified shall be true and correct in all respects) as of the Closing Date with the same force and effect as if such representations and warranties were made on and as of the Closing Date (except to the extent such representation or warranty is made specifically as of an earlier date, in which case as of such earlier date). BFST shall have received a certificate, executed by an appropriate representative of Oakwood and dated as of the Closing Date, to the foregoing effect.

(b)          Performance of Obligations. Oakwood shall have performed or complied in all material respects with all covenants and obligations required by this Agreement to be performed and complied with prior to or at the Closing. BFST shall have received a certificate, executed by an appropriate representative of Oakwood and dated as of the Closing Date, to the foregoing effect.

(c)          Absence of Material Adverse Change. No Material Adverse Effect on Oakwood or Oakwood Bank shall have occurred since the date of this Agreement.

(d)          Certain Agreements.

(i)     The Employment Agreement listed on Section 10.1(d)(i) of the BFST Disclosure Schedules shall remain in full force and effect as of the Effective Time.

(ii)    Each of the Director Support Agreements shall remain in full force and effect.

(iii)    The Escrow Agreement shall remain in full force and effect.

(iv)    Each of the Releases shall remain in full force and effect.

(e)          Dissenters’ Rights. Holders of shares representing no more than five percent (5%) of the issued and outstanding Oakwood Stock, in the aggregate, shall have demanded or shall be entitled to receive payment of the fair value of their shares as dissenting shareholders.

(f)          Consents and Approvals. The Required Consents shall have been obtained, and BFST shall have received evidence thereof in form and substance reasonably satisfactory to BFST and all applicable waiting periods shall have expired.

(g)         Outstanding Litigation. Oakwood shall accrue for any reasonable costs and expenses, including legal fees and expenses and settlement costs, related to the outstanding Proceedings set forth in Section 3.5 of the Oakwood Disclosure Schedules (other than the Escrow Litigation), as such schedule may be updated, as specified in such schedule, or if no such amount is specified, as jointly determined by Oakwood and BFST. No accrual will be required for any Proceeding that is settled or dismissed in any final, binding and non-appealable Proceeding after payment of all related fees, costs and expenses owed by Oakwood or any of its Subsidiaries.

(h)          Termination of Oakwood Employee Plans. Oakwood shall have terminated all Oakwood Employee Plans listed on Section 3.22 of the Oakwood Disclosure Schedules.

(i)         Secretary’s Certificate. Oakwood shall have delivered to BFST a certificate, dated as of the Closing Date, executed by the Secretary or an Assistant Secretary of Oakwood, acting solely in his or her official capacity, certifying (i) the due adoption by the Oakwood board of directors of corporate resolutions attached to such certificate authorizing the Merger and the execution and delivery of this Agreement and the other agreements and documents contemplated by this Agreement; (ii) the Oakwood Shareholder Approval; (iii) the Organizational Documents of Oakwood; (iv) a true and correct list of record shareholders of Oakwood as of the Closing Date; and (v) the incumbency and true signatures of those officers of Oakwood duly authorized to act on its behalf in connection with the Merger and to execute and deliver this Agreement and the other agreements, documents and instruments contemplated by this Agreement.

(j)         Bank Stock Loan Indebtedness; Release of Encumbrances. Oakwood will have delivered to BFST on or prior to the second Business Day prior to the Closing Date a letter from the lender with respect to the Bank Stock Loan Indebtedness evidencing the aggregate amount of such indebtedness outstanding as of the Closing Date (including any interest accrued thereon and any prepayment or similar penalties and expenses associated with the prepayment of such indebtedness on the Closing Date), including (i) a customary statement that (A) if such aggregate amount is paid to the lender on the Closing Date, such indebtedness will be repaid and/or redeemed in full, and (B) all encumbrances securing such Bank Stock Loan Indebtedness (if any) may thereafter be automatically released and terminated, (ii) authorizations to file any Uniform Commercial Code termination statements, terminations and releases of outstanding Security Interests as are reasonably necessary to release such encumbrances, and (iii) a customary statement that, upon the receipt of payment of such indebtedness, all tangible collateral (including, without limitation, all stock certificates representing shares of Oakwood Stock and Bank Stock) securing the obligations under such indebtedness in possession of the lender with respect thereto will be promptly delivered to BFST (the “Payoff Letter”).

(k)          Other Documents. Oakwood shall have delivered to BFST all other instruments and documents which BFST or its counsel may reasonably request to effectuate the transactions contemplated hereby.

Section 10.2        Conditions Precedent to Obligations of Oakwood. The obligation of Oakwood under this Agreement to consummate the Merger is subject to the satisfaction, at or prior to the Closing Date, of the following conditions, which may be waived by Oakwood in its sole discretion, to the extent permitted by applicable law:

(a)          Compliance with Representations and Warranties. (i) Each of the representations and warranties of BFST set forth in Sections 4.1, 4.2, 4.3, 4.9, 4.11 and 4.12 shall be true and correct (other than inaccuracies that are de minimis in amount and effect) as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representation or warranty is made specifically as of an earlier date, in which case as of such earlier date); (ii) each of the other representations and warranties made by BFST in this Agreement shall be true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality or Material Adverse Effect, in which case such representations and warranties as so qualified shall be true and correct in all respects) as of the date of this Agreement (except to the extent such representation or warranty is made specifically as of an earlier date, in which case as of such earlier date); provided, however, that BFST may cure any such inaccurate representation or warranty covered by this clause (ii) by providing written notice to Oakwood or taking lawful action to cure within thirty (30) days of BFST having knowledge of such inaccuracy; and (iii) each of the representations and warranties made by BFST in this Agreement, other than set forth in Sections 4.1, 4.2, 4.3, 4.9, 4.11 and 4.12, shall be true and correct in all material respects (except to the extent such representations and warranties are qualified by materiality or Material Adverse Effect, in which case such representations and warranties as so qualified shall be true and correct in all respects) as of the Closing Date with the same force and effect as if such representations and warranties were made on and as of the Closing Date (except to the extent such representation or warranty is made specifically as of an earlier date, in which case as of such earlier date). Oakwood shall have received a certificate, executed by an appropriate representative of BFST and dated as of the Closing Date, to the foregoing effect.

(b)          Performance of Obligations. BFST shall have performed or complied in all material respects with all covenants and obligations required by this Agreement to be performed and complied with prior to or at the Closing. Oakwood shall have received a certificate, executed by an appropriate representative of BFST and dated as of the Closing Date, to the foregoing effect.

(c)          Absence of Material Adverse Change. No Material Adverse Effect on BFST or b1BANK shall have occurred since the date of this Agreement.

(d)         Certain Agreements. (i) The Employment Agreement listed on Section 10.1(d)(i) of the BFST Disclosure Schedules shall remain in full force and effect as of the Effective Time, and (ii) the Escrow Agreement shall remain in full force and effect.

(e)          Consents and Approvals. The consents set forth in the BFST Disclosure Schedules shall have been obtained, and Oakwood shall have received evidence thereof in form and substance reasonably satisfactory to Oakwood and all applicable waiting periods shall have expired.

(f)          Secretary’s Certificate. BFST shall have delivered to Oakwood a certificate, dated as of the Closing Date, executed by the Secretary or an Assistant Secretary of BFST, acting solely in his or her official capacity, certifying (i) the due adoption by the board of directors of BFST of corporate resolutions attached to such certificate authorizing the Merger and the execution and delivery of this Agreement and the other agreements and documents contemplated by this Agreement; (ii) the Organizational Documents of BFST; and (iii) the incumbency and true signatures of those officers of BFST duly authorized to act on its behalf in connection with the Merger and to execute and deliver this Agreement and the other agreements, documents and instruments contemplated by this Agreement.

Section 10.3       Conditions Precedent to Obligations of BFST and Oakwood. The respective obligations of BFST and Oakwood under this Agreement are subject to the satisfaction, at or prior to the Closing Date, of the following conditions which may be waived by BFST and Oakwood, respectively, in their sole discretion, to the extent permitted by applicable law:

(a)       Government Approvals. BFST shall (i) have received the Regulatory Approvals, which approvals shall not impose any restrictions on the operations of BFST or the Continuing Corporation that, in the reasonable judgment of BFST, materially and adversely impairs the value of Oakwood and its Subsidiaries, taken as a whole, to BFST or that materially and adversely impairs the economic or business benefits of the transactions contemplated by this Agreement to BFST or otherwise would, in the reasonable judgment of BFST, be so burdensome as to render inadvisable the consummation of the transactions contemplated by this Agreement, and (ii) any statutory or regulatory waiting period necessary to effect the Merger and the transactions contemplated hereby, including the Bank Merger, shall have expired. Such approvals and the transactions contemplated hereby shall not have been contested by any Governmental Body or any third party (except shareholders asserting dissenters’ rights) by formal proceeding. It is understood that, if any such contest is brought by formal proceeding, BFST or Oakwood may, but shall not be obligated to, answer and defend such contest or otherwise pursue the Merger and the transactions contemplated hereby over such objection.

(b)          Shareholder Approval. The shareholders of Oakwood shall have approved this Agreement and the transactions contemplated hereby by the requisite vote.

(c)         Tax Opinions. Oakwood shall have received an opinion of NRF, and BFST shall have received an opinion of Hunton, in each case dated the Closing Date, to the effect that, based on the terms of this Agreement and on the basis of certain facts, representations and assumptions set forth in such opinion that the Merger will qualify as a reorganization under Section 368(a) of the Code. In rendering such opinion, such counsel may require and rely upon and may incorporate by reference certifications, representations, warranties and covenants, including (without limitation) those contained in the BFST Tax Representation Letter and Oakwood Tax Representation Letter, and such other information reasonably requested by and provided by Oakwood and BFST for purposes of rendering such opinion.

(d)         No Adverse Action, Law or Order. No action having been taken, and no law, statute, rule, regulation or Order being promulgated, enacted, entered, enforced or deemed applicable to this Agreement or the transactions contemplated hereby by any federal, state or foreign government or Governmental Body or by any court, including the entry of a preliminary or permanent injunction, which, if successful, would (i) make this Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby illegal, invalid or unenforceable, (ii) impose material limits on the ability of any party to this Agreement to complete this Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby, or (iii) if this Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby are completed, subject Oakwood, BFST or any of their Subsidiaries or any officer, director, shareholder or employee of Oakwood, BFST or their respective Subsidiaries to criminal or civil liability. Further, no action or Proceeding prior to any court or Governmental Body, by any government or Governmental Body or by any other Person is threatened, instituted or pending that would reasonably be expected to result in any of the consequences referred to in clauses (i) through (iii) above.

(e)         Registration of BFST Common Stock. The Registration Statement covering the shares of BFST Common Stock to be issued in the Merger shall have become effective under the Securities Act and no stop orders suspending such effectiveness shall be in effect, and no Proceeding by the SEC to suspend the effectiveness of the Registration Statement shall have been initiated or continuing, or have been threatened and be unresolved, and all necessary approvals under state’s securities laws relating to the issuance or trading of the BFST Common Stock to be issued in the Merger shall have been received and such approval shall not have been withdrawn or revoked.

(f)           Listing of BFST Common Stock. The shares of BFST Common Stock to be delivered to the shareholders of Oakwood pursuant to this Agreement shall have been authorized for listing on NASDAQ.

ARTICLE XI.
MISCELLANEOUS

Section 11.1         Certain Definitions. Except as otherwise provided herein, the capitalized terms set forth below shall have the following meanings:

(a)          “Acquisition Agreement” means any letter of intent, agreement in principle, memorandum of understanding, merger agreement, asset or share purchase agreement, share exchange agreement, option agreement or any similar agreement related to any Acquisition Proposal.

(b)         “Acquisition Proposal” means any bona fide proposal (whether communicated to Oakwood or publicly announced to Oakwood’s shareholders) by any Person (other than BFST or any of its Affiliates) for an Acquisition Transaction (as defined herein) involving Oakwood, any Subsidiary of Oakwood or any future Subsidiary of Oakwood, or any combination of such Subsidiaries, the assets of which constitute, or would constitute, twenty percent (20%) or more of the consolidated assets of Oakwood as reflected on Oakwood’s most recent consolidated statement of condition prepared in accordance with GAAP.

(c)         “Acquisition Transaction” means any transaction or series of related transactions (other than the transactions contemplated by this Agreement) involving: (i) any acquisition or purchase from Oakwood by any Person or “Group” (as such term is defined in Section 13(d) under the Exchange Act), other than BFST or any of its Affiliates, of twenty percent (20%) or more in interest of the total outstanding voting securities of Oakwood or Oakwood Bank, or any tender offer or exchange offer that if consummated would result in any Person or Group (other than BFST or any of its Affiliates) beneficially owning twenty percent (20%) or more in interest of the total outstanding voting securities of Oakwood or Oakwood Bank, or any merger, consolidation, business combination or similar transaction involving Oakwood or Oakwood Bank pursuant to which the shareholders of Oakwood immediately preceding such transaction hold less than eighty percent (80%) of the equity interests in the surviving or resulting entity (which includes the parent corporation of any constituent corporation to any such transaction) of such transaction; (ii) any sale or lease (other than in the ordinary course of business), or exchange, transfer, license, acquisition or disposition of twenty percent (20%) or more of the assets of Oakwood or Oakwood Bank; or (iii) any liquidation or dissolution of Oakwood or Oakwood Bank.

(d)        “Affiliate” means, with respect to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified, unless a different definition has been included in this Agreement for purposes of a particular provision hereof. For purposes of this definition, “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting equity interest, by contract or otherwise.

(e)          “Affiliated Group” means any affiliated group within the meaning of Section 1504(a) of the Code.

(f)          “Aggregate Cash Consideration” means the Fractional Share Cash Consideration.

(g)         “Aggregate Stock Consideration” means the product of (A) the Exchange Ratio, multiplied by (B) the aggregate of the number of shares of Oakwood Stock issued and outstanding immediately prior to the Effective Time, rounded up to the nearest whole share of BFST Common Stock.

(h)         “Borrower” means any Person (including any Affiliate, shareholder, member or partner of such Person) and any guarantor, surety, spouse, co-maker or co-obligor of any extension of credit to any Person;

(i)          “Business Day” means any day that is not a Saturday, a Sunday or any other day on which banks are required or authorized by law to be closed in Baton Rouge, Louisiana or Dallas, Texas.

(j)          “CECL” means Current Expected Credit Losses, a credit loss accounting standard that was issued by the Financial Accounting Standards Boards on June 16, 2016, pursuant to Accounting Standards Update (ASU) No. 2016, Topic 326, as amended.

(k)         “Commercially Reasonable Efforts” means the reasonable efforts that a reasonably prudent Person would use in similar circumstances to achieve such results as expeditiously as possible, provided that such Person is not required to expend funds or assume Liabilities beyond those that are reasonable in nature and amount in the context of the transactions contemplated by this Agreement.

(l)          “Controlled Group Liability” means any and all Liabilities (i) under Title IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and 4971 of the Code, (iv) as a result of a failure to comply with the continuation coverage requirements of Section 601 et. seq. of ERISA and Section 4980B of the Code or similar state law, and (v) under corresponding or similar provisions of foreign laws or regulations.

(m)        “Environmental Laws,” as used in this Agreement, means all applicable federal, state or local statutes, laws, rules, regulations, ordinances or codes now in effect and in each case as amended to date and any controlling judicial or administrative interpretation thereof, including all common law theories (at law or in equity), any judicial or administrative order, consent decree, or judgment, relating to pollution, preservation, remediation or protection of the environment, natural resources, human health or safety, or Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et seq.; the Hazardous Materials Transportation Authorization Act, as amended, 49 U.S.C. § 5101, et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. § 6901, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1201, et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.; the Clean Air Act, 42 U.S.C. § 7401, et seq.; and the Safe Drinking Water Act, 42 U.S.C. § 300f, et seq.

(n)         “ERISA Affiliates” means, with respect to any entity, trade or business, any other entity, trade or business that is a member of a group described in Sections 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

(o)         “Governmental Body” means any supranational, national, federal, state, local, municipal, foreign or other government or quasi-governmental authority or any department, agency, commission, board, subdivision, bureau, agency, instrumentality, court or other tribunal of any of the foregoing.

(p)         “Hazardous Materials” includes, but is not limited to, (i) any petroleum or petroleum products, natural gas, or natural gas products, radioactive materials, asbestos, mold, urea formaldehyde foam insulation, transformers or other equipment that contains dielectric fluid containing levels of polychlorinated biphenyls (PCBs), and radon gas; (ii) any chemicals, materials, waste or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any Environmental Laws; and (iii) any other chemical, material, waste or substance which is in any way regulated as hazardous or toxic by any federal, state or local Governmental Body, agency or instrumentality, including mixtures thereof with other materials, and including any regulated building materials such as asbestos and lead, provided, notwithstanding the foregoing or any other provision in this Agreement to the contrary, the words “Hazardous Material” shall not mean or include any such Hazardous Material used, generated, manufactured, stored, disposed of or otherwise handled in normal quantities in the ordinary course of the business of Oakwood or any of its Subsidiaries in compliance with all Environmental Laws, or such that may be naturally occurring in any ambient air, surface water, ground water, land surface or subsurface strata.

(q)         “Investment Advisers Act” means the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder.

(r)        “knowledge” and phrases of similar import means, as to Oakwood, the actual knowledge of any executive officer of Oakwood Bank designated by Oakwood Bank as an “executive officer” pursuant to Regulation O, 12 C.F.R. § 215.1, et seq., after reasonable inquiry and, as to BFST, the actual knowledge of any executive officer of BFST after reasonable inquiry.

(s)        “Liability” means any liability, debt, obligation, loss, damage, claim, cost or expense (including court costs and reasonable attorneys’, accountants’ and other experts’ fees and expenses associated with investigating, preparing for and participating in any litigation or proceeding, including all appeals), interest, penalties, amounts paid in settlement, Taxes, fines, judgments or assessments, in each case, whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due.

(t)          “Material Adverse Effect” with respect to any Person means any effect, change, development or occurrence that individually, or in the aggregate together with all other effects, changes, developments or occurrences, (i) is material and adverse to the financial condition, assets, properties, deposits, results of operations, earnings, business or cash flows of that Person, taken as a whole; provided, that a Material Adverse Effect shall not be deemed to include any effect on the referenced Person which is caused by (A) changes in laws and regulations or interpretations thereof that are generally applicable to the banking or savings industries; (B) changes in GAAP or regulatory accounting principles that are generally applicable to the banking or savings industries; (C) changes in global, national or regional political conditions or general economic or market conditions in the United States (and with respect to each of Oakwood and BFST, in the respective markets in which they operate), including changes in prevailing interest rates, credit availability and liquidity, currency exchange rates, and price levels or trading volumes in the United States or foreign securities markets affecting other companies in the financial services industry; (D) general changes in the credit markets or general downgrades in the credit markets; (E) actions or omissions of a party required by this Agreement or taken with the prior informed written consent of the other party or parties in contemplation of the transactions contemplated hereby; (F) any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism; (G) changes, after the date hereof, resulting from hurricanes, earthquakes, tornados, floods or other natural disasters or from any epidemic, pandemic, or outbreak of any disease or other public health event in the jurisdictions in which Oakwood Bank or b1BANK operate; except to the extent that the effects of such changes in the foregoing (A) through (G) disproportionately affect such Person and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such Person and its Subsidiaries operate; or (ii) prevents or materially impairs any party from consummating the Merger, or any of the transactions contemplated by this Agreement, including the Bank Merger to which such Person is a party.

(u)         “Merger Consideration” means the sum of the Aggregate Stock Consideration and the Aggregate Cash Consideration.

(v)         “Order” means any award, decision, decree, injunction, judgment, order, ruling, or verdict entered, issued, made or rendered by any court, administrative agency or any other Governmental Body.

(w)        “Organizational Documents” means (i) with respect to a corporation, the articles or certificate of incorporation or formation and bylaws of such entity, (ii) with respect to a limited partnership, the certificate of limited partnership (or equivalent document) and partnership agreement or similar operational agreement, (iii) with respect to a limited liability company, the articles of organization (or equivalent document) and regulations, company agreement, or similar operational document and (iv) with respect to any foreign entity, equivalent constituent and governance documents.

(x)         “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a Governmental Body or any department, agency or political subdivision thereof.

(y)      “Proceeding” means any action, suit, litigation, arbitration, lawsuit, claim, proceeding, hearing, audit, investigation or dispute (whether civil, criminal, administrative, investigative, at law or in equity) commenced, brought, conducted, pending or heard by or before, or otherwise involving, any Governmental Body or any arbitrator.

(z)          “Representative” shall have the meaning assigned to such term in the Escrow Agreement.

(aa)        “Retention Agreements” means those certain retention agreements entered into by BFST with those certain individuals listed on Section 7.6 of the BFST Disclosure Schedules.

(bb)      “Security Interest” means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (i) mechanic’s, materialmen’s, and similar liens, (ii) liens for Taxes not yet delinquent or for Taxes that Oakwood or any of its Subsidiaries is contesting in good faith through appropriate proceedings, if any, and for which adequate reserves have been established in accordance with GAAP, (iii) purchase money liens and liens securing rental payments under capital lease arrangements, and (iv) other liens arising in the ordinary course of business and not incurred in connection with the borrowing of money.

(cc)        “Shareholders” shall have the meaning assigned to such term in the Escrow Agreement.

(dd)       “Subsidiary” or “Subsidiaries” means, with respect to any Person, any other Person (other than a natural person), whether incorporated or unincorporated, in which such Person, directly or indirectly through one or more Subsidiaries (i) has fifty percent (50%) or more equity interest or (ii) owns at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other persons performing similar functions; provided, however, that the term shall not include any such entity in which such voting securities or equity interest is owned or controlled in a fiduciary capacity, without sole voting power, or was acquired in securing or collecting a debt previously contracted in good faith.

(ee)      “Superior Proposal” means any bona fide written Acquisition Proposal which the board of directors of Oakwood reasonably determines, in its good faith judgment based on, among other things, the advice of Oakwood’s outside legal counsel and the financial advisor, (i) to be more favorable from a financial point of view to Oakwood’s shareholders than the Merger taking into account all terms and conditions of the proposal and (ii) reasonably capable of being consummated on the terms proposed, taking into account all legal, financial, regulatory (including the advice of Oakwood’s outside legal counsel regarding the potential for regulatory approval of any such proposal) and other aspects of such proposal and any other relevant factors permitted under applicable law; provided, that for purposes of the definition of “Superior Proposal,” the references to “twenty percent (20%)” and “eighty percent (80%)” in the definitions of Acquisition Proposal and Acquisition Transaction shall be deemed to be references to “fifty percent (50%).”

(ff)         “Tax” or “Taxes” means all U.S. federal, state or local or non-U.S. taxes and other assessments, duties, levies or other similar governmental charges that are in the nature of a tax, including all income, franchise, margin, profits, capital gains, capital stock, transfer, sales, use, occupation, property, excise, severance, windfall profits, stamp, stamp duty reserve, license, payroll, employment, withholding, ad valorem, value added, alternative minimum, environmental, customs, social security (or similar), unemployment, sick pay, disability, registration and other taxes, whether disputed or not, together with all estimated taxes, deficiency assessments, additions to tax, penalties and interest.

(gg)        “Tax Return” means any return, declaration, report, claim for refund, or information return or statement filed or required to be filed with any Governmental Body with respect to any Tax, including any schedule or attachment thereto, and including any amendment thereof.

(hh)        “Treasury Regulations” means the regulations (including temporary regulations) promulgated by the U.S. Department of the Treasury pursuant to and in respect of the provisions of the Code.

(ii)         “Union” means a union, works council or other labor organization.

(jj)         “WARN Act” means the federal Worker Adjustment and Retraining Notification Act of 1988, and similar state, local and foreign laws related to plant closings, relocations, mass layoffs and employment losses.

Section 11.2         Other Definitional Provisions.

(a)         All references in this Agreement to Oakwood Disclosure Schedules, BFST Disclosure Schedules, Articles, Sections, subsections and other subdivisions refer to the corresponding Oakwood Disclosure Schedules, BFST Disclosure Schedules, Articles, Sections, subsections and other subdivisions of or to this Agreement unless expressly provided otherwise. Titles appearing at the beginning of any Articles, Sections, subsections or other subdivisions of this Agreement are for convenience only, do not constitute any part of this Agreement, and shall be disregarded in construing the language hereof.

(b)         The words “this Agreement,” “herein,” “hereby,” “hereunder” and “hereof,” and words of similar import, refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The words “this Article,” “this Section” and “this subsection,” and words of similar import, refer only to the Article, Section or subsection hereof in which such words occur. The word “or” is exclusive, and the word “including” (in its various forms) means including without limitation.

(c)          All references to “$” and dollars shall be deemed to refer to U.S. currency unless otherwise specifically provided.

(d)         Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender, and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.

(e)         References herein to any law shall be deemed to refer to such law as amended, reenacted, supplemented or superseded in whole or in part and in effect from time to time and also to all rules and regulations promulgated thereunder.

(f)        References herein to any contract, agreement, commitment, arrangement or similar terms mean the foregoing as amended, supplemented or modified (including any waiver thereto) in accordance with the terms thereof, except that with respect to any contract, agreement, commitment, arrangement or similar matter listed on any schedule hereto, all such amendments, supplements, modifications must also be listed on such schedule.

(g)         If the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a Business Day, then the time for the giving of such notice or the performance of such action shall be extended to the next succeeding Business Day.

(h)       Each representation, warranty, covenant and agreement contained in this Agreement will have independent significance, and the fact that any conduct or state of facts may be within the scope of two or more provisions in this Agreement, whether relating to the same or different subject matters and regardless of the relative levels of specificity, shall not be considered in construing or interpreting this Agreement.

(i)         References herein to documents being “made available” means that such documents, prior to the date of this Agreement, have been uploaded by the applicable party to the virtual data room maintained by Oakwood’s financial advisor and to which representatives of each of the parties hereto have access, or are incorporated in, attached to or otherwise available in any of the publicly-available filings that BFST or Oakwood Bank has made with any Governmental Body.

Section 11.3        Investigation; Survival of Agreements. No investigation by the parties hereto made heretofore or hereafter shall affect the representations and warranties of the parties which are contained herein, and each such representation and warranty shall survive such investigation. Except for those covenants and agreements expressly to be carried out after the Effective Time, the agreements, representations, warranties and covenants in this Agreement or in any instrument delivered pursuant to this Agreement shall not survive the Effective Time.

Section 11.4       Amendments. This Agreement may be amended by the parties hereto, by action taken by or on behalf of their respective boards of directors, at any time before or after the Oakwood Shareholder Approval; provided, however, that after such approval no such amendment shall reduce the value of or change the form of the consideration to be delivered to each of Oakwood’s shareholders as contemplated by this Agreement, unless such amendment is subject to the obtaining of the approval of the amendment by the shareholders of Oakwood and such approval is obtained. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto which expressly states its intention to amend this Agreement.

Section 11.5       Expenses. Whether or not the transactions provided for herein are consummated, each party to this Agreement shall pay its respective expenses incurred in connection with the preparation and performance of its obligations under this Agreement. Similarly, each party agrees to indemnify the other party against any cost, expense or Liability (including reasonable attorneys’ fees) in respect of any claim made by any party for a broker’s or finder’s fee in connection with this transaction other than one based on communications between the party and the claimant seeking indemnification.

Section 11.6       Notices. Except as explicitly provided herein, any notice given hereunder shall be in writing and shall be delivered in person, mailed by first class mail, postage prepaid or sent by email, courier or personal delivery to the parties at the following addresses unless by such notice a different address shall have been designated:

If to BFST:

Business First Bancshares, Inc.

500 Laurel Street, Suite 101

Baton Rouge, Louisiana 70801

Attention: Saundra Strong, General Counsel

Email:       saundra.strong@b1bank.com

With a copy to:

Hunton Andrews Kurth LLP

1445 Ross Avenue, Suite 3700

Dallas, Texas 75202

Attention: Peter G. Weinstock

   Beth A. Whitaker

Email:       pweinstock@HuntonAK.com

bwhitaker@HuntonAK.com

If to Oakwood:

Oakwood Bancshares, Inc.

8411 Preston Road, Suite 106

Dallas, Texas 75225

Attention: Roy Salley

Email:       rsalley@oakwoodbank.com

With a copy to:

Norton Rose Fulbright US LLP

2200 Ross Avenue, Suite 3600

Dallas, Texas 75201

Attention: Mike Keeley

Email:       mike.keeley@nortonrosefulbright.com

All notices sent by mail as provided above shall be deemed delivered three (3) days after deposit in the mail. All notices sent by courier as provided above shall be deemed delivered one day after being sent and all notices sent by email shall be deemed delivered upon confirmation of receipt. All other notices shall be deemed delivered when actually received. Any party to this Agreement may change its address for the giving of notice specified above by giving notice as herein provided. Notices permitted to be sent via e-mail shall be deemed delivered only if sent to such persons at such e-mail addresses as may be set forth in writing (and confirmation of receipt is received by the sending party).

Section 11.7        Controlling Law; Jurisdiction.

(a)        This Agreement and any claim, controversy or dispute arising under or related in any way to this Agreement and/or the interpretation and enforcement of the rights and duties of the parties hereunder or related in any way to the foregoing, shall be governed by and construed in accordance with the internal, substantive laws of the State of Louisiana applicable to agreements entered into and to be performed solely within such state without giving effect to the principles of conflict of laws thereof.

(b)         Any Proceeding arising out of or relating to the matters contemplated by this Agreement must be brought in the courts of the State of Louisiana, Parrish of East Baton Rouge, or, if it has or can acquire jurisdiction, in the U.S. District Court for the Middle District of Louisiana (Baton Rouge, Louisiana), and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such Proceeding, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of such Proceeding shall be heard and determined only in any such court, and agrees not to bring any Proceeding arising out of or relating to the matters contemplated by this Agreement in any other court. Each party acknowledges and agrees that the provisions of this Section 11.7 constitute a voluntary and bargained for agreement between the parties. Process in any Proceeding may be served on any party anywhere in the world.

Section 11.8        Waiver. At any time prior to the Effective Time, the parties hereto, by action taken or authorized by their respective boards of directors, may, to the extent legally allowed: (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto; (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto; and (c) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 11.9        Severability. Any term or provision of this Agreement, which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is enforceable. In all such cases, the parties shall use Commercially Reasonable Efforts to substitute a valid, legal and enforceable provision which, insofar as practicable, implements the original purposes and intents of this Agreement.

Section 11.10      Entire Agreement. Except for the Confidentiality Agreement, this Agreement and the exhibits and attachments hereto represent the entire agreement between the parties respecting the transactions contemplated hereby, and all understandings and agreements heretofore made between the parties hereto are merged in this Agreement, including the exhibits and schedules delivered pursuant hereto, which (together with any agreements executed by the parties hereto contemporaneously with or, if contemplated hereby, subsequent to the execution of this Agreement) shall be the sole expression of the agreement of the parties respecting the Merger. Each party to this Agreement acknowledges that, in executing and delivering this Agreement, it has relied only on the written representations, warranties and promises of the other parties hereto that are contained herein or in the other agreements executed by the parties contemporaneously with or, if contemplated hereby, subsequent to the execution of this Agreement, and has not relied on the oral statements of any other party or its representatives.

Section 11.11      Counterparts. This Agreement may be executed in multiple counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

Section 11.12      Assignment; Binding on Successors. Except as otherwise provided herein, this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, executors, trustees, administrators, guardians, successors and permitted assigns, but shall not be assigned by any party without the prior written consent of the other party.

Section 11.13      No Third-Party Beneficiaries. Nothing contained in this Agreement, express or implied, is intended to confer upon any Persons, other than the parties hereto or their respective successors, any rights, remedies, obligations, or Liabilities under or by reason of this Agreement, except for those Indemnified Parties specifically provided for under Section 6.9.

Section 11.14      Attorney-Client Privilege. BFST agrees not to assert any attorney-client privilege with respect to communications between NRF, any officer, director or employee of Oakwood, or the Representative related to the Merger and occurring prior to the Closing, it being the intention of the parties hereto that such attorney-client privilege shall be deemed to be the right of, and retained by, the Representative on behalf of the Shareholders, and not that of BFST, following the Closing; provided, that the foregoing shall in no event limit or otherwise affect BFST’s right to assert any attorney-client privilege with respect to any such communication against any Person other than the Representative or any officer or director of Oakwood prior to the Closing; provided, further, that the Representative will not waive such attorney-client privilege without the prior consent of BFST, which consent shall not be unreasonably withheld, conditioned or delayed.

Section 11.15     Conflict of Interest. If the Representative so desires, acting on behalf of the Shareholders and without the need for any consent or waiver by BFST, NRF shall be permitted to represent the Representative, the Shareholders or their agents or affiliates after the Closing in connection with any matter, including without limitation, anything related to the transactions contemplated by this Agreement, any other agreements referenced herein or any disagreement or dispute relating thereto. Without limiting the generality of the foregoing, after the Closing, NRF shall be permitted to represent the Representative, the Shareholders, any of their agents and affiliates, or any one or more of them, in connection with any negotiation, transaction or dispute (including any litigation, arbitration or other adversary proceeding) with BFST or any of its agents or affiliates under or relating to this Agreement, any transaction contemplated by this Agreement, and any related matter, such as claims or disputes arising under other agreements entered into in connection with this Agreement, including with respect to any indemnification claims. Upon and after the Closing, neither BFST nor any Subsidiary of BFST shall have any attorney-client relationship with NRF, unless and to the extent NRF is specifically engaged in writing by BFST or a Subsidiary of BFST to represent BFST or a Subsidiary of BFST, respectively, after the Closing and either such engagement involves no conflict of interest with respect to the Shareholders or the Representative consents in writing at the time to such engagement. Any such representation of BFST or a Subsidiary of BFST by NRF after the Closing shall not affect the foregoing provisions hereof.

[Signature Page Immediately Follows]

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written.

Exhibit 10.1

FORM OF VOTING AGREEMENT

This VOTING AGREEMENT (this “Agreement”), dated as of April 25, 2024, is executed by and among Business First Bancshares, Inc. (“BFST”), a Louisiana corporation and financial holding company registered under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and Oakwood Bancshares, Inc. (“Oakwood”), a Texas corporation and bank holding company registered under the BHC Act, and the shareholders of Oakwood who are signatories hereto (referred to herein individually as a “Shareholder” and collectively as the “Shareholders”). Terms with their initial letters capitalized and not otherwise defined herein have the meanings given to them in the Reorganization Agreement (as defined below).

RECITALS

WHEREAS, concurrently with the execution of this Agreement, BFST and Oakwood are entering into that certain Agreement and Plan of Reorganization, dated as of the date hereof (as such agreement may be amended or supplemented from time to time, the “Reorganization Agreement”), pursuant to which Oakwood will merge with and into BFST, with BFST continuing as the surviving entity (the “Merger”), and which further contemplates that Oakwood Bank, a Texas banking association and wholly-owned subsidiary of Oakwood (“Oakwood Bank”), and b1BANK, a Louisiana state-chartered bank and wholly-owned subsidiary of BFST (“b1BANK”), will be combined through merger, with b1BANK continuing as the surviving entity, pursuant to a separate agreement and plan of bank merger;

WHEREAS, the Reorganization Agreement provides that all of the issued and outstanding shares of common stock of Oakwood (the “Oakwood Stock”) (other than any Cancelled Shares or Dissenting Shares) will be exchanged for such consideration as set forth in the Reorganization Agreement;

WHEREAS, as a condition and inducement to BFST’s willingness to enter into the Reorganization Agreement, each of the Shareholders has agreed to vote his or her shares of Oakwood Stock in favor of approval of the Reorganization Agreement and the transactions contemplated thereby; and

WHEREAS, BFST is relying on this Agreement in incurring expenses in reviewing Oakwood’s business, in preparing a proxy statement/prospectus, in proceeding with the filing of applications for regulatory approvals and in undertaking other actions necessary for the consummation of the Merger.

NOW, THEREFORE, in consideration of the substantial expenses that BFST will incur in connection with the transactions contemplated by the Reorganization Agreement and to induce BFST to execute the Reorganization Agreement and to proceed to incur such expenses, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby, severally and not jointly, agree as follows:

AGREEMENT

1.           Each of the Shareholders hereby severally, but not jointly, represents and warrants to BFST that:

(a)    such Shareholder is the registered owner or beneficial owner of, or has full voting power with respect to, the number of shares of Oakwood Stock set forth below such Shareholder’s name on such Shareholder’s signature page to this Agreement (the “Shares”) free and clear of all liens or encumbrances, except as set forth on Schedule 1(a) hereto;

(b)    except pursuant to this Agreement, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which such Shareholder is a party relating to the pledge, disposition or voting of any of the Shares and there are no voting trusts or voting agreements with respect to the Shares, except as set forth on Schedule 1(b) hereto;

(c)    such Shareholder does not beneficially own any Oakwood Stock other than (i) the Shares and (ii) any options, warrants or other rights (including any Oakwood Equity Awards) to acquire any additional shares of Oakwood Stock or any security exercisable for or convertible into shares of Oakwood Stock set forth on Schedule 1(c) hereto; and

(d)    such Shareholder has had an opportunity to obtain the advice of legal counsel prior to executing this Agreement.

2.        Each Shareholder hereby agrees during the term of this Agreement to vote the Shares, and any additional shares of Oakwood Stock or other voting securities of Oakwood acquired by such Shareholder after the date hereof, (a) in favor of the approval and adoption of the Reorganization Agreement and the transactions contemplated thereby at the meeting of shareholders of Oakwood called for the purpose of considering and voting upon the approval of the Reorganization Agreement and the transactions contemplated thereby (the “Oakwood Shareholder Meeting”) and (b) against approval of any Acquisition Proposal or any other proposal made in opposition to or in competition with this Agreement or the Reorganization Agreement (such Acquisition Proposal or other proposal, an “Opposing Proposal”) presented at the Oakwood Shareholder Meeting or any other meeting of shareholders held prior or subsequent to the Oakwood Shareholder Meeting or for which Oakwood otherwise seeks the approval of Oakwood’s shareholders.

3.           Subject to Section 7 hereof, each Shareholder shall not solicit, initiate, or knowingly encourage (including by providing information or assistance), facilitate or induce any Opposing Proposal, support (or publicly suggest that anyone else should support) any Opposing Proposal that may be made, or ask the board of directors of Oakwood to consider, support or seek any Opposing Proposal or otherwise take any action designed to make any Opposing Proposal more likely; none of the Shareholders shall meet or otherwise communicate with any Person that makes or is considering making an Opposing Proposal or any representative of such Person after becoming aware that the Person has made or is considering making an Opposing Proposal. Each Shareholder shall promptly advise Oakwood of each contact the Shareholder or any of the Shareholder’s representatives may receive from any Person relating to any Opposing Proposal or otherwise indicating that any Person may wish to participate or engage in any transaction arising out of any Opposing Proposal and shall provide Oakwood with all information that is reasonably requested by BFST and is reasonably available to the Shareholder regarding any such Opposing Proposal or possible Opposing Proposal, unless such Shareholder knows Oakwood has provided BFST with such information, and Oakwood shall in turn provide any such information to BFST. Each Shareholder shall not make any claim or join in any litigation alleging that the board of directors of Oakwood is required to consider, endorse or support any Opposing Proposal or to invite or seek any Opposing Proposal. Each Shareholder shall not take any other action that is reasonably likely to make consummation of the Merger less likely or to impair BFST’s ability to exercise any of the rights granted by the Reorganization Agreement.

4.          While this Agreement is in effect, each Shareholder shall not, directly or indirectly, (a) sell, transfer, assign, pledge, encumber, hypothecate, cause to be redeemed or otherwise dispose (any such transaction, a “Transfer”) of any or all Shares or any shares of Oakwood Stock subsequently acquired, (b) grant any proxy or interest in or with respect to any Shares or (c) deposit any Shares of Oakwood Stock into a voting trust or enter into a voting agreement or arrangement with respect to any shares of Oakwood Stock or grant any proxy with respect thereto, other than to other members of the board of directors of Oakwood for the purpose of voting to approve the Reorganization Agreement and the transactions contemplated thereby. This Section 4 shall not prohibit (v) Transfers to any member of the Shareholder’s family, subject to the transferee agreeing in writing to be bound by the terms of this Agreement, (w) Transfers for estate and tax planning purposes, including Transfers to relatives, trusts and charitable organizations, subject to the transferee agreeing in writing to be bound by the terms of this Agreement and the delivery of such agreement to BFST, (x) Transfers to any other shareholder of Oakwood who has executed a copy of this Agreement on the date hereof, (y) a Transfer or surrender of Shares to Oakwood in connection with the vesting, settlement or exercise of Oakwood Equity Awards to satisfy any withholding for the payment of taxes incurred in connection with such vesting, settlement or exercise, or, in respect of Oakwood Stock Options, the exercise price thereon and (z) such Transfers as BFST may otherwise permit in its sole discretion in writing. Any attempted Transfer of Shares or any shares of Oakwood Stock subsequently acquired or any interest therein in violation of this Section 4 shall be null and void.

5.          Each Shareholder acknowledges that BFST is relying on this Agreement in reviewing the business of Oakwood and its Subsidiaries, including without limitation, Oakwood Bank, in preparing a proxy statement/prospectus, in proceeding with the filing of applications for regulatory approvals and in undertaking other actions necessary for the consummation of the Merger. Oakwood and each Shareholder acknowledges that the performance of this Agreement is intended to benefit BFST and Oakwood.

6.           This Agreement shall continue in effect until the earlier to occur of (a) the termination of the Reorganization Agreement in accordance with its terms, (b) the consummation of the Merger, or (c) twelve (12) months from the date hereof.

7.           Nothing in this Agreement shall be deemed to restrict any of the Shareholders from taking any action on behalf of Oakwood solely in the capacity of a director or officer of Oakwood (if applicable) that such Shareholder believes is necessary to fulfill the Shareholder’s duties and obligations as a director or officer (if applicable). Each Shareholder is executing this Agreement solely in his or her capacity as a shareholder of Oakwood.

8.         Each Shareholder has the legal capacity, power and authority to enter into and perform all of the Shareholder’s obligations under this Agreement. This Agreement has been duly and validly executed and delivered by the Shareholder and constitutes the legal, valid and binding obligation of the Shareholder, enforceable against the Shareholder in accordance with its terms except as the enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors rights (whether enforced in law or in equity). If the Shareholder is married and his or her Shares constitute community property, this Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement of, such Shareholder’s spouse, enforceable against such spouse in accordance with its terms.

9.         Each Shareholder hereby (a) confirms such Shareholder’s knowledge of the availability of the rights of dissenting shareholders under the Texas Business Organizations Code (the “TBOC”) with respect to the Merger and (b) confirms receipt of a copy of the provisions of the TBOC related to the rights of dissenting shareholders attached hereto as Annex A. Each Shareholder hereby waives and agrees not to assert, and shall use its best efforts to cause any of its Affiliates who hold of record any of the Shareholder’s Shares to waive and not to assert, any appraisal rights with respect to the Merger that the Shareholder or such Affiliate may now or hereafter have with respect to any Shares (or any other shares of capital stock of Oakwood that the Shareholder shall hold of record at the time that the Shareholder may be entitled to assert appraisal rights with respect to the Merger) whether pursuant to the TBOC or otherwise.

10.        This Agreement may not be modified, amended, altered or supplemented with respect to a particular Shareholder except upon the execution and delivery of a written agreement executed by each of BFST, Oakwood and the Shareholder. Any such amendment, modification, alteration or supplement shall only apply to the Shareholder(s) executing such written agreement and this Agreement shall remain in full force and effect with respect to Shareholders who do not execute such written agreement.

11.         For the convenience of the parties hereto, this Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original but all of which shall constitute one and the same instrument. An email or electronic scan in “.pdf” format of a signed counterpart of this Agreement will be sufficient to bind the party or parties whose signature(s) appear thereon.

12.         This Agreement, together with the Reorganization Agreement and the agreements contemplated thereby, embody the entire agreement and understanding of the parties hereto in respect to the subject matter contained herein. This Agreement supersedes all prior agreements and understandings among the parties with respect to such subject matter contained herein. In the event of a conflict between the terms of this Agreement and the terms of the Reorganization Agreement, the terms of the Reorganization Agreement shall control.

13.         All notices, consents, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered in person, mailed by first class mail (postage prepaid) or sent by email, courier or personal delivery to the parties hereto at the following addresses unless by such notice a different address shall have been designated:

If to BFST:

Business First Bancshares, Inc.

500 Laurel Street, Suite 101

Baton Rouge, Louisiana 70801

Attention: Saundra Strong, General Counsel

Email:       saundra.strong@b1bank.com

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

Hunton Andrews Kurth LLP

1445 Ross Avenue, Suite 3700

Dallas, Texas 75202

Attention: Peter G. Weinstock

   Beth A. Whitaker

Email:       pweinstock@HuntonAK.com

   bwhitaker@HuntonAK.com

If to Oakwood:

Oakwood Bancshares, Inc.

8411 Preston Road, Suite 106

Dallas, Texas 75225

Attention: Roy Salley

Email:       rsalley@oakwoodbank.com

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

Norton Rose Fulbright US LLP

2200 Ross Avenue, Suite 3600

Dallas, Texas 75201

Attention: Mike Keeley

Email:       mike.keeley@nortonrosefulbright.com

If to a Shareholder:

At the address set forth on such Shareholder’s signature page to this Agreement.

All notices sent by mail as provided above shall be deemed delivered three (3) days after deposit in the mail, all notices sent by courier as provided above shall be deemed delivered one (1) day after being sent and all notices sent by email shall be deemed delivered upon confirmation of receipt. All other notices shall be deemed delivered when actually received. Any party to this Agreement may change its address for the giving of notice specified above by giving notice as provided herein. Notices permitted to be sent via email shall be deemed delivered only if sent to such persons at such email addresses as may be set forth in writing (and confirmation of receipt is received by the sending party).

14.       From time to time, at BFST’s request and without further consideration, each Shareholder shall execute and deliver such additional documents reasonably requested by BFST as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement.

15.         Each Shareholder recognizes and acknowledges that a breach by the Shareholder of any covenants or agreements contained in this Agreement will cause BFST or Oakwood, as the case may be, to sustain damages for which it would not have an adequate remedy at law for money damages. Consequently, each of BFST and Oakwood shall have the right, in addition to any other rights it may have, to seek specific performance, to obtain injunctive relief to restrain any proposed or actual breach or threatened breach or otherwise to specifically enforce any provision of this Agreement without the obligation to post bond or other security in seeking such relief. Such equitable remedies are in addition to the right to obtain compensatory and punitive damages and attorney’s fees, and, notwithstanding BFST’s or Oakwood’s, as the case may be, right to so seek damages, the Shareholder waives any defense that an adequate remedy for BFST or Oakwood, as the case may be, exists under law. If the Shareholder, on the one hand, or BFST or Oakwood, on the other hand, must bring suit to enforce this Agreement, the prevailing party shall be entitled to recover its attorneys’ fees and costs related thereto.

16.         THIS AGREEMENT IS TO BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF LOUISIANA WITHOUT REGARD FOR CONFLICT OF LAWS PRINCIPLES THEREOF. ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MUST BE BROUGHT IN THE COURTS OF THE STATE OF LOUISIANA, PARRISH OF EAST BATON ROUGE, OR, IF IT HAS OR CAN ACQUIRE JURISDICTION, IN THE U.S. DISTRICT COURT FOR THE MIDDLE DISTRICT OF LOUISIANA (BATON ROUGE, LOUISIANA), AND EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURT IN ANY SUCH SUIT, ACTION OR OTHER PROCEEDING. PROCESS IN ANY SUIT, ACTION OR OTHER PROCEEDING REFERRED TO IN THE PRECEDING SENTENCE MAY BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD. NOTWITHSTANDING THE FOREGOING A PARTY MAY COMMENCE ANY ACTION OR PROCEEDING IN A COURT OTHER THAN THE ABOVE-NAMED COURTS SOLELY FOR THE PURPOSE OF ENFORCING AN ORDER OR JUDGMENT ISSUED BY ONE OF THE ABOVE-NAMED COURTS.

17.      EACH PARTY HERETO 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, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY HERETO 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 ANY ACTION, SUIT OR PROCEEDING, 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 17.

18.         This Agreement shall be binding upon, and shall inure to the benefit of and are enforceable by, the parties and their respective successors and assigns, including, without limitation, any successor by merger, consolidation or stock purchase of BFST, Oakwood and any Person that acquires all or substantially all of the assets of BFST or Oakwood. Nothing contained in this Agreement, express or implied, is intended to confer upon any Persons, other than the parties hereto or their respective successors, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

19.         If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, there will be added automatically as a part of this Agreement a provision mutually agreed to which is similar in terms to such invalid or unenforceable provision as may be possible and still be valid and enforceable, and the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

[Signature Page Follows]

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

Schedule 1(a)

Schedule 1(b)

Schedule 1(c)

ANNEX A

TEXAS BUSINESS ORGANIZATIONS CODE

CHAPTER 10. MERGERS, INTEREST EXCHANGES,
CONVERSIONS, AND SALES OF ASSETS

SUBCHAPTER H. RIGHTS OF DISSENTING OWNERS

Sec. 10.351. APPLICABILITY OF SUBCHAPTER. (a) This subchapter does not apply to a fundamental business transaction of a domestic entity if, immediately before the effective date of the fundamental business transaction, all of the ownership interests of the entity otherwise entitled to rights to dissent and appraisal under this code are held by one owner or only by the owners who approved the fundamental business transaction. (b) This subchapter applies only to a “domestic entity subject to dissenters’ rights,” as defined in Section 1.002. That term includes a domestic for-profit corporation, professional corporation, professional association, and real estate investment trust. Except as provided in Subsection (c), that term does not include a partnership or limited liability company. (c) The governing documents of a partnership or a limited liability company may provide that its owners are entitled to the rights of dissent and appraisal provided by this subchapter, subject to any modification to those rights as provided by the entity’s governing documents.

Sec. 10.352. DEFINITIONS. In this subchapter: (1) “Dissenting owner” means an owner of an ownership interest in a domestic entity subject to dissenters’ rights who: (A) provides notice under Section 10.356; and (B) complies with the requirements for perfecting that owner’s right to dissent under this subchapter. (2) “Responsible organization” means: (A) the organization responsible for: (i) the provision of notices under this subchapter; and (ii) the primary obligation of paying the fair value for an ownership interest held by a dissenting owner; (B) with respect to a merger or conversion: (i) for matters occurring before the merger or conversion, the organization that is merging or converting; and (ii) for matters occurring after the merger or conversion, the surviving or new organization that is primarily obligated for the payment of the fair value of the dissenting owner’s ownership interest in the merger or conversion; (C) with respect to an interest exchange, the organization the ownership interests of which are being acquired in the interest exchange; (D) with respect to the sale of all or substantially all of the assets of an organization, the organization the assets of which are to be transferred by sale or in another manner; and (E) with respect to an amendment to a domestic for-profit corporation’s certificate of formation described by Section 10.354(a)(1)(G), the corporation.

Sec. 10.353. FORM AND VALIDITY OF NOTICE. (a) Notice required under this subchapter: (1) must be in writing; and (2) may be mailed, hand-delivered, or delivered by courier or electronic transmission. (b) Failure to provide notice as required by this subchapter does not invalidate any action taken.

Sec. 10.354. RIGHTS OF DISSENT AND APPRAISAL. (a) Subject to Subsection (b), an owner of an ownership interest in a domestic entity subject to dissenters’ rights is entitled to: (1) dissent from: (A) a plan of merger to which the domestic entity is a party if owner approval is required by this code and the owner owns in the domestic entity an ownership interest that was entitled to vote on the plan of merger; (B) a sale of all or substantially all of the assets of the domestic entity if owner approval is required by this code and the owner owns in the domestic entity an ownership interest that was entitled to vote on the sale; (C) a plan of exchange in which the ownership interest of the owner is to be acquired; (D) a plan of conversion in which the domestic entity is the converting entity if owner approval is required by this code and the owner owns in the domestic entity an ownership interest that was entitled to vote on the plan of conversion; (E) a merger effected under Section 10.006 in which: (i) the owner is entitled to vote on the merger; or (ii) the ownership interest of the owner is converted or exchanged; (F) a merger effected under Section 21.459(c) in which the shares of the shareholders are converted or exchanged; or (G) if the owner owns shares that were entitled to vote on the amendment, an amendment to a domestic for-profit corporation’s certificate of formation to: (i) add the provisions required by Section 3.007(e) to elect to be a public benefit corporation; or (ii) delete the provisions required by Section 3.007(e), which in effect cancels the corporation’s election to be a public benefit corporation; and (2) subject to compliance with the procedures set forth in this subchapter, obtain the fair value of that ownership interest through an appraisal. (b) Notwithstanding Subsection (a), subject to Subsection (c), an owner may not dissent from a plan of merger or conversion in which there is a single surviving or new domestic entity or non-code organization, or from a plan of exchange, if: (1) the ownership interest, or a depository receipt in respect of the ownership interest, held by the owner: (A) in the case of a plan of merger, conversion, or exchange, other than a plan of merger pursuant to Section 21.459(c), is part of a class or series of ownership interests, or depository receipts in respect of ownership interests, that, on the record date set for purposes of determining which owners are entitled to vote on the plan of merger, conversion, or exchange, as appropriate, are either: (i) listed on a national securities exchange; or (ii) held of record by at least 2,000 owners; or (B) in the case of a plan of merger pursuant to Section 21.459(c), is part of a class or series of ownership interests, or depository receipts in respect of ownership interests, that, immediately before the date the board of directors of the corporation that issued the ownership interest held, directly or indirectly, by the owner approves the plan of merger, are either: (i) listed on a national securities exchange; or (ii) held of record by at least 2,000 owners; (2) the owner is not required by the terms of the plan of merger, conversion, or exchange, as appropriate, to accept for the owner’s ownership interest any consideration that is different from the consideration to be provided to any other holder of an ownership interest of the same class or series as the ownership interest held by the owner, other than cash instead of fractional shares or interests the owner would otherwise be entitled to receive; and (3) the owner is not required by the terms of the plan of merger, conversion, or exchange, as appropriate, to accept for the owner’s ownership interest any consideration other than: (A) ownership interests, or depository receipts in respect of ownership interests, of a domestic entity or non-code organization of the same general organizational type that, immediately after the effective date of the merger, conversion, or exchange, as appropriate, will be part of a class or series of ownership interests, or depository receipts in respect of ownership interests, that are: (i) listed on a national securities exchange or authorized for listing on the exchange on official notice of issuance; or (ii) held of record by at least 2,000 owners; (B) cash instead of fractional ownership interests, or fractional depository receipts in respect of ownership interests, the owner would otherwise be entitled to receive; or (C) any combination of the ownership interests, or fractional depository receipts in respect of ownership interests, and cash described by Paragraphs (A) and (B). (c) Subsection (b) shall not apply to a domestic entity that is a subsidiary with respect to a merger under Section 10.006. (d) Notwithstanding Subsection (a), an owner of an ownership interest in a domestic for-profit corporation subject to dissenters’ rights may not dissent from an amendment to the corporation’s certificate of formation described by Subsection (a)(1)(G) if the shares held by the owner are part of a class or series of shares, on the record date set for purposes of determining which owners are entitled to vote on the amendment: (1) listed on a national securities exchange; or (2) held of record by at least 2,000 owners.

Sec. 10.355. NOTICE OF RIGHT OF DISSENT AND APPRAISAL. (a) A domestic entity subject to dissenters’ rights that takes or proposes to take an action regarding which an owner has a right to dissent and obtain an appraisal under Section 10.354 shall notify each affected owner of the owner’s rights under that section if: (1) the action or proposed action is submitted to a vote of the owners at a meeting; or (2) approval of the action or proposed action is obtained by written consent of the owners instead of being submitted to a vote of the owners. (b) If a parent organization effects a merger under Section 10.006 and a subsidiary organization that is a party to the merger is a domestic entity subject to dissenters’ rights, the responsible organization shall notify the owners of that subsidiary organization who have a right to dissent to the merger under Section 10.354 of their rights under this subchapter not later than the 10th day after the effective date of the merger. The notice must also include a copy of the certificate of merger and a statement that the merger has become effective. (b-1) If a corporation effects a merger under Section 21.459(c), the responsible organization shall notify the shareholders of that corporation who have a right to dissent to the plan of merger under Section 10.354 of their rights under this subchapter not later than the 10th day after the effective date of the merger. Notice required under this subsection that is given to shareholders before the effective date of the merger may, but is not required to, contain a statement of the merger’s effective date. If the notice is not given to the shareholders until on or after the effective date of the merger, the notice must contain a statement of the merger’s effective date. (c) A notice required to be provided under Subsection (a), (b), or (b-1) must: (1) be accompanied by: (A) a copy of this subchapter; or (B) information directing the owner to a publicly available electronic resource at which this subchapter may be accessed without subscription or cost; and (2) advise the owner of the location of the responsible organization’s principal executive offices to which a notice required under Section 10.356(b)(1) or a demand under Section 10.356(b)(3), or both, may be provided. (d) In addition to the requirements prescribed by Subsection (c), a notice required to be provided: (1) under Subsection (a)(1) must accompany the notice of the meeting to consider the action; (2) under Subsection (a)(2) must be provided to: (A) each owner who consents in writing to the action before the owner delivers the written consent; and (B) each owner who is entitled to vote on the action and does not consent in writing to the action before the 11th day after the date the action takes effect; and (3) under Subsection (b-1) must be provided: (A) if given before the consummation of the offer described by Section 21.459(c)(2), to each shareholder to whom that offer is made; or (B) if given after the consummation of the offer described by Section 21.459(c)(2), to each shareholder who did not tender the shareholder’s shares in that offer. (e) Not later than the 10th day after the date an action described by Subsection (a)(1) takes effect, the responsible organization shall give notice that the action has been effected to each owner who voted against the action and sent notice under Section 10.356(b)(1). (f) If the notice given under Subsection (b-1) did not include a statement of the effective date of the merger, the responsible organization shall, not later than the 10th day after the effective date, give a second notice to the shareholders notifying them of the merger’s effective date. If the second notice is given after the later of the date on which the offer described by Section 21.459(c)(2) is consummated or the 20th day after the date notice under Subsection (b-1) is given, then the second notice is required to be given to only those shareholders who have made a demand under Section 10.356(b)(3).

Sec. 10.356. PROCEDURE FOR DISSENT BY OWNERS AS TO ACTIONS; PERFECTION OF RIGHT OF DISSENT AND APPRAISAL. (a) An owner of an ownership interest of a domestic entity subject to dissenters’ rights who has the right to dissent and appraisal from any of the actions referred to in Section 10.354 may exercise that right to dissent and appraisal only by complying with the procedures specified in this subchapter. An owner’s right of dissent and appraisal under Section 10.354 may be exercised by an owner only with respect to an ownership interest that is not voted in favor of the action. (b) To perfect the owner’s rights of dissent and appraisal under Section 10.354, an owner: (1) if the proposed action is to be submitted to a vote of the owners at a meeting, must give to the domestic entity a written notice of objection to the action that: (A) is addressed to the entity’s president and secretary; (B) states that the owner’s right to dissent will be exercised if the action takes effect; (C) provides an address to which notice of effectiveness of the action should be delivered or mailed; and (D) is delivered to the entity’s principal executive offices before the meeting; (2) with respect to the ownership interest for which the rights of dissent and appraisal are sought: (A) must vote against the action if the owner is entitled to vote on the action and the action is approved at a meeting of the owners; and (B) may not consent to the action if the action is approved by written consent; and (3) must give to the responsible organization a demand in writing that: (A) is addressed to the president and secretary of the responsible organization; (B) demands payment of the fair value of the ownership interests for which the rights of dissent and appraisal are sought; (C) provides to the responsible organization an address to which a notice relating to the dissent and appraisal procedures under this subchapter may be sent; (D) states the number and class of the ownership interests of the domestic entity owned by the owner and the fair value of the ownership interests as estimated by the owner; and (E) is delivered to the responsible organization at its principal executive offices at the following time: (i) not later than the 20th day after the date the responsible organization sends to the owner the notice required by Section 10.355(e) that the action has taken effect, if the action was approved by a vote of the owners at a meeting; (ii) not later than the 20th day after the date the responsible organization sends to the owner the notice required by Section 10.355(d)(2) that the action has taken effect, if the action was approved by the written consent of the owners; (iii) not later than the 20th day after the date the responsible organization sends to the owner a notice that the merger was effected, if the action is a merger effected under Section 10.006; or (iv) not later than the 20th day after the date the responsible organization gives to the shareholder the notice required by Section 10.355(b-1) or the date of the consummation of the offer described by Section 21.459(c)(2), whichever is later, if the action is a merger effected under Section 21.459(c). (c) An owner who does not make a demand within the period required by Subsection (b)(3)(E) or, if Subsection (b)(1) is applicable, does not give the notice of objection before the meeting of the owners is bound by the action and is not entitled to exercise the rights of dissent and appraisal under Section 10.354. (d) Not later than the 20th day after the date an owner makes a demand under Subsection (b)(3), the owner must submit to the responsible organization any certificates representing the ownership interest to which the demand relates for purposes of making a notation on the certificates that a demand for the payment of the fair value of an ownership interest has been made under this section. An owner’s failure to submit the certificates within the required period has the effect of terminating, at the option of the responsible organization, the owner’s rights to dissent and appraisal under Section 10.354 unless a court, for good cause shown, directs otherwise. (e) If a domestic entity and responsible organization satisfy the requirements of this subchapter relating to the rights of owners of ownership interests in the entity to dissent to an action and seek appraisal of those ownership interests, an owner of an ownership interest who fails to perfect that owner’s right of dissent in accordance with this subchapter may not bring suit to recover the value of the ownership interest or money damages relating to the action.

Sec. 10.357. WITHDRAWAL OF DEMAND FOR FAIR VALUE OF OWNERSHIP INTEREST. (a) An owner may withdraw a demand for the payment of the fair value of an ownership interest made under Section 10.356 before: (1) payment for the ownership interest has been made under Sections 10.358 and 10.361; or (2) a petition has been filed under Section 10.361.(b) Unless the responsible organization consents to the withdrawal of the demand, an owner may not withdraw a demand for payment under Subsection (a) after either of the events specified in Subsections (a)(1) and (2).

Sec. 10.358. RESPONSE BY ORGANIZATION TO NOTICE OF DISSENT AND DEMAND FOR FAIR VALUE BY DISSENTING OWNER. (a) Not later than the 20th day after the date a responsible organization receives a demand for payment made by a dissenting owner in accordance with Section 10.356(b)(3), the responsible organization shall respond to the dissenting owner in writing by: (1) accepting the amount claimed in the demand as the fair value of the ownership interests specified in the notice; or (2) rejecting the demand and including in the response the requirements prescribed by Subsection (c).(b) If the responsible organization accepts the amount claimed in the demand, the responsible organization shall pay the amount not later than the 90th day after the date the action that is the subject of the demand was effected if the owner delivers to the responsible organization: (1) endorsed certificates representing the ownership interests if the ownership interests are certificated; or (2) signed assignments of the ownership interests if the ownership interests are uncertificated. (c) If the responsible organization rejects the amount claimed in the demand, the responsible organization shall provide to the owner: (1) an estimate by the responsible organization of the fair value of the ownership interests; and (2) an offer to pay the amount of the estimate provided under Subdivision (1).(d) If the dissenting owner decides to accept the offer made by the responsible organization under Subsection (c)(2), the owner must provide to the responsible organization notice of the acceptance of the offer not later than the 90th day after the date the action that is the subject of the demand took effect. (e) If, not later than the 90th day after the date the action that is the subject of the demand took effect, a dissenting owner accepts an offer made by a responsible organization under Subsection (c)(2) or a dissenting owner and a responsible organization reach an agreement on the fair value of the ownership interests, the responsible organization shall pay the agreed amount not later than the 120th day after the date the action that is the subject of the demand took effect, if the dissenting owner delivers to the responsible organization: (1) endorsed certificates representing the ownership interests if the ownership interests are certificated; or (2) signed assignments of the ownership interests if the ownership interests are uncertificated.

Sec. 10.359. RECORD OF DEMAND FOR FAIR VALUE OF OWNERSHIP INTEREST. (a) A responsible organization shall note in the organization’s ownership interest records maintained under Section 3.151 the receipt of a demand for payment from any dissenting owner made under Section 10.356.(b) If an ownership interest that is the subject of a demand for payment made under Section 10.356 is transferred, a new certificate representing that ownership interest must contain: (1) a reference to the demand; and (2) the name of the original dissenting owner of the ownership interest.

Sec. 10.360. RIGHTS OF TRANSFEREE OF CERTAIN OWNERSHIP INTEREST. A transferee of an ownership interest that is the subject of a demand for payment made under Section 10.356 does not acquire additional rights with respect to the responsible organization following the transfer. The transferee has only the rights the original dissenting owner had with respect to the responsible organization after making the demand.

Sec. 10.361. PROCEEDING TO DETERMINE FAIR VALUE OF OWNERSHIP INTEREST AND OWNERS ENTITLED TO PAYMENT; APPOINTMENT OF APPRAISERS. (a) If a responsible organization rejects the amount demanded by a dissenting owner under Section 10.358 and the dissenting owner and responsible organization are unable to reach an agreement relating to the fair value of the ownership interests within the period prescribed by Section 10.358(d), the dissenting owner or responsible organization may file a petition requesting a finding and determination of the fair value of the owner’s ownership interests in a court in: (1) the county in which the organization’s principal office is located in this state; or (2) the county in which the organization’s registered office is located in this state, if the organization does not have a business office in this state. (b) A petition described by Subsection (a) must be filed not later than the 60th day after the expiration of the period required by Section 10.358(d). (c) On the filing of a petition by an owner under Subsection (a), service of a copy of the petition shall be made to the responsible organization. Not later than the 10th day after the date a responsible organization receives service under this subsection, the responsible organization shall file with the clerk of the court in which the petition was filed a list containing the names and addresses of each owner of the organization who has demanded payment for ownership interests under Section 10.356 and with whom agreement as to the value of the ownership interests has not been reached with the responsible organization. If the responsible organization files a petition under Subsection (a), the petition must be accompanied by this list. (d) The clerk of the court in which a petition is filed under this section shall provide by registered mail notice of the time and place set for the hearing to: (1) the responsible organization; and (2) each owner named on the list described by Subsection (c) at the address shown for the owner on the list. (e) The court shall: (1) determine which owners have: (A) perfected their rights by complying with this subchapter; and (B) become subsequently entitled to receive payment for the fair value of their ownership interests; and (2) appoint one or more qualified appraisers to determine the fair value of the ownership interests of the owners described by Subdivision (1). (f) The court shall approve the form of a notice required to be provided under this section. The judgment of the court is final and binding on the responsible organization, any other organization obligated to make payment under this subchapter for an ownership interest, and each owner who is notified as required by this section. (g) The beneficial owner of an ownership interest subject to dissenters’ rights held in a voting trust or by a nominee on the beneficial owner’s behalf may file a petition described by Subsection (a) if no agreement between the dissenting owner of the ownership interest and the responsible organization has been reached within the period prescribed by Section 10.358(d). When the beneficial owner files a petition described by Subsection (a): (1) the beneficial owner shall at that time be considered, for purposes of this subchapter, the owner, the dissenting owner, and the holder of the ownership interest subject to the petition; and (2) the dissenting owner who demanded payment under Section 10.356 has no further rights regarding the ownership interest subject to the petition.

Sec. 10.362. COMPUTATION AND DETERMINATION OF FAIR VALUE OF OWNERSHIP INTEREST. (a) For purposes of this subchapter, the fair value of an ownership interest of a domestic entity subject to dissenters’ rights is the value of the ownership interest on the date preceding the date of the action that is the subject of the appraisal. Any appreciation or depreciation in the value of the ownership interest occurring in anticipation of the proposed action or as a result of the action must be specifically excluded from the computation of the fair value of the ownership interest. (b) In computing the fair value of an ownership interest under this subchapter, consideration must be given to the value of the domestic entity as a going concern without including in the computation of value any control premium, any minority ownership discount, or any discount for lack of marketability. If the domestic entity has different classes or series of ownership interests, the relative rights and preferences of and limitations placed on the class or series of ownership interests, other than relative voting rights, held by the dissenting owner must be taken into account in the computation of value. (c) The determination of the fair value of an ownership interest made for purposes of this subchapter may not be used for purposes of making a determination of the fair value of that ownership interest for another purpose or of the fair value of another ownership interest, including for purposes of determining any minority or liquidity discount that might apply to a sale of an ownership interest.

Sec. 10.363. POWERS AND DUTIES OF APPRAISER; APPRAISAL PROCEDURES. (a) An appraiser appointed under Section 10.361 has the power and authority that: (1) is granted by the court in the order appointing the appraiser; and (2) may be conferred by a court to a master in chancery as provided by Rule 171, Texas Rules of Civil Procedure. (b) The appraiser shall: (1) determine the fair value of an ownership interest of an owner adjudged by the court to be entitled to payment for the ownership interest; and (2) file with the court a report of that determination. (c) The appraiser is entitled to examine the books and records of a responsible organization and may conduct investigations as the appraiser considers appropriate. A dissenting owner or responsible organization may submit to an appraiser evidence or other information relevant to the determination of the fair value of the ownership interest required by Subsection (b)(1).(d) The clerk of the court appointing the appraiser shall provide notice of the filing of the report under Subsection (b) to each dissenting owner named in the list filed under Section 10.361 and the responsible organization.

Sec. 10.364. OBJECTION TO APPRAISAL; HEARING. (a) A dissenting owner or responsible organization may object, based on the law or the facts, to all or part of an appraisal report containing the fair value of an ownership interest determined under Section 10.363(b).(b) If an objection to a report is raised under Subsection (a), the court shall hold a hearing to determine the fair value of the ownership interest that is the subject of the report. After the hearing, the court shall require the responsible organization to pay to the holders of the ownership interest the amount of the determined value with interest, accruing from the 91st day after the date the applicable action for which the owner elected to dissent was effected until the date of the judgment. (c) Interest under Subsection (b) accrues at the same rate as is provided for the accrual of prejudgment interest in civil cases. (d) The responsible organization shall pay the amount of the judgment to the holder of the ownership interest on the terms and conditions ordered by the court. (e) On payment of the judgment, the dissenting owner does not have an interest in the: (1) ownership interest for which the payment is made; or (2) responsible organization with respect to that ownership interest.

Sec. 10.365. COURT COSTS; COMPENSATION FOR APPRAISER. (a) An appraiser appointed under Section 10.361 is entitled to a reasonable fee payable from court costs. (b) All court costs shall be allocated between the responsible organization and the dissenting owners in the manner that the court determines to be fair and equitable.

Sec. 10.366. STATUS OF OWNERSHIP INTEREST HELD OR FORMERLY HELD BY DISSENTING OWNER. (a) An ownership interest of an organization acquired by a responsible organization under this subchapter: (1) in the case of a merger, conversion, or interest exchange, shall be held or disposed of as provided in the plan of merger, conversion, or interest exchange; and (2) in any other case, may be held or disposed of by the responsible organization in the same manner as other ownership interests acquired by the organization or held in its treasury. (b) An owner who has demanded payment for the owner’s ownership interest under Section 10.356 is not entitled to vote or exercise any other rights of an owner with respect to the ownership interest except the right to: (1) receive payment for the ownership interest under this subchapter; and (2) bring an appropriate action to obtain relief on the ground that the action to which the demand relates would be or was fraudulent. (c) An ownership interest for which payment has been demanded under Section 10.356 may not be considered outstanding for purposes of any subsequent vote or action.

Sec. 10.367. RIGHTS OF OWNERS FOLLOWING TERMINATION OF RIGHT OF DISSENT. (a) The rights of a dissenting owner terminate if: (1) the owner withdraws the demand under Section 10.356; (2) the owner’s right of dissent is terminated under Section 10.356; (3) a petition is not filed within the period required by Section 10.361; or (4) after a hearing held under Section 10.361, the court adjudges that the owner is not entitled to elect to dissent from an action under this subchapter. (b) On termination of the right of dissent under this section: (1) the dissenting owner and all persons claiming a right under the owner are conclusively presumed to have approved and ratified the action to which the owner dissented and are bound by that action; (2) the owner’s right to be paid the fair value of the owner’s ownership interests ceases; (3) the owner’s status as an owner of those ownership interests is restored, as if the owner’s demand for payment of the fair value of the ownership interests had not been made under Section 10.356, if the owner’s ownership interests were not canceled, converted, or exchanged as a result of the action or a subsequent action; (4) the dissenting owner is entitled to receive the same cash, property, rights, and other consideration received by owners of the same class and series of ownership interests held by the owner, as if the owner’s demand for payment of the fair value of the ownership interests had not been made under Section 10.356, if the owner’s ownership interests were canceled, converted, or exchanged as a result of the action or a subsequent action; (5) any action of the domestic entity taken after the date of the demand for payment by the owner under Section 10.356 will not be considered ineffective or invalid because of the restoration of the owner’s ownership interests or the other rights or entitlements of the owner under this subsection; and (6) the dissenting owner is entitled to receive dividends or other distributions made after the date of the owner’s payment demand under Section 10.356, to owners of the same class and series of ownership interests held by the owner as if the demand had not been made, subject to any change in or adjustment to the ownership interests because of an action taken by the domestic entity after the date of the demand.

Sec. 10.368. EXCLUSIVITY OF REMEDY OF DISSENT AND APPRAISAL. In the absence of fraud in the transaction, any right of an owner of an ownership interest to dissent from an action and obtain the fair value of the ownership interest under this subchapter is the exclusive remedy for recovery of: (1) the value of the ownership interest; or (2) money damages to the owner with respect to the action.

Exhibit 10.2

FORM OF DIRECTOR SUPPORT AGREEMENT

This DIRECTOR SUPPORT AGREEMENT (this “Agreement”) is made and entered into as of April 25, 2024 (the “Execution Date”), by and between Business First Bancshares, Inc., a Louisiana corporation (“BFST”), Oakwood Bancshares, Inc., a Texas corporation (“Oakwood”), and __________, an individual resident of the State of __________ (the “Undersigned”). Terms with their initial letters capitalized and not otherwise defined herein have the meanings given to them in the Reorganization Agreement (as defined below).

RECITALS

WHEREAS, the Undersigned is a director of Oakwood and/or Oakwood Bank, a Texas banking association and wholly-owned subsidiary of Oakwood (“Oakwood Bank”);

WHEREAS, in connection with the execution of this Agreement, BFST and Oakwood are entering into that certain Agreement and Plan of Reorganization, dated as of the date hereof (as such agreement may be amended or supplemented from time to time, the “Reorganization Agreement”), pursuant to which Oakwood will merge with and into BFST, with BFST continuing as the surviving entity (the “Merger”), and which further contemplates that Oakwood Bank and b1BANK, a Louisiana state-chartered bank and wholly-owned subsidiary of BFST (“b1BANK”), will be combined through merger, with b1BANK continuing as the surviving entity, pursuant to a separate agreement and plan of bank merger;

WHEREAS, the term “Oakwood” as used in this Agreement with respect to time periods after the Effective Time shall mean BFST, as successor to Oakwood in the Merger;

WHEREAS, the Undersigned, as a director of Oakwood and/or Oakwood Bank, as the case may be, has had access to certain Confidential Information (as defined below), including, without limitation, information concerning Oakwood’s and Oakwood Bank’s business and the relationships between Oakwood and Oakwood Bank, their respective Subsidiaries, vendors and customers, and Oakwood’s and/or Oakwood Bank’s status and relationship with peer institutions that compete with BFST, b1BANK, Oakwood and/or Oakwood Bank, and has had access to trade secrets, customer goodwill and proprietary information of Oakwood and/or Oakwood Bank and their respective businesses that constitute a substantial asset to be acquired by BFST and b1BANK; and

WHEREAS, the Undersigned recognizes that BFST’s willingness to enter into the Reorganization Agreement is dependent on the Undersigned entering into this Agreement (including the anti-piracy/non-solicitation/non-competition covenants below) and, therefore, this Agreement is incident thereto.

NOW, THEREFORE, for the new Confidential Information the Undersigned will be provided, training that is expected to be made available to the Undersigned and for other good and valuable consideration contained herein and in the Reorganization Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1.           Director Support. The Undersigned agrees to use his or her best efforts to refrain from harming the goodwill and business relationships of BFST, b1BANK, Oakwood, Oakwood Bank and their respective Subsidiaries, and their respective customer and client relationships during the term of this Agreement.

2.          Non-Disclosure Obligations. The Undersigned agrees that he or she will not make any unauthorized disclosure, directly or indirectly, of any Confidential Information of BFST, b1BANK, Oakwood or Oakwood Bank to third parties, or make any use thereof, directly or indirectly, except solely in their capacity as a director or an officer of BFST, b1BANK, Oakwood, or Oakwood Bank (as the case may be). The Undersigned also agrees that he or she shall deliver promptly to BFST or Oakwood at any time at its reasonable request, without retaining any copies, all documents and other material in the Undersigned’s possession at that time relating, directly or indirectly, to any Confidential Information or other information of BFST, b1BANK, Oakwood or Oakwood Bank, or Confidential Information or other information regarding third parties, learned in such person’s position as a director, officer, employee or shareholder of Oakwood or Oakwood Bank, as applicable.

For purposes of this Agreement, “Confidential Information” means and includes BFST’s, b1BANK’s, Oakwood’s and Oakwood Bank’s confidential and/or proprietary information and/or trade secrets, including those of their respective Subsidiaries, that have been and/or will be developed or used and that cannot be obtained readily by third parties from outside sources. Confidential Information includes, but is not limited to, the: information regarding past, current and prospective customers and investors and business Affiliates, employees, contractors, and the industry not generally known to the public; strategies, methods, books, records, and documents; technical information concerning products, equipment, services, and processes; procurement procedures, pricing, and pricing techniques, including contact names, services provided, pricing, type and amount of services used; financial data; pricing strategies and price curves; positions; plans or strategies for expansion or acquisitions; budgets; research; financial and sales data; trading methodologies and terms; communications information; evaluations, opinions and interpretations of information and data; marketing and merchandising techniques; electronic databases; models and the output from same; specifications; computer programs; contracts; bids or proposals; technologies and methods; training methods and processes; organizational structure; personnel information, including compensation and bonuses; payments or rates paid to consultants or other service providers; other such confidential or proprietary information; and notes, analysis, compilations, studies, summaries, and other material prepared by or for BFST, b1BANK, Oakwood, Oakwood Bank or any of their respective Subsidiaries containing or based, in whole or in part, on any information included in any of the foregoing. The term “Confidential Information” does not include any information that (a) at the time of disclosure or thereafter is generally available to and known to the public, other than by a breach of this Agreement by the disclosing party; (b) was available to the disclosing party, prior to disclosure by BFST, b1BANK, Oakwood or Oakwood Bank, as applicable, on a non-confidential basis from a source other than the Undersigned and is not known by the Undersigned, after reasonable investigation, to be subject to any fiduciary, contractual or legal obligations of confidentiality; or (c) was independently acquired or developed by the Undersigned without violating any obligations of this Agreement. The Undersigned acknowledges that BFST’s, b1BANK’s, Oakwood’s and Oakwood Bank’s respective businesses are highly competitive, that this Confidential Information constitutes valuable, special and unique assets to be acquired by BFST in the Merger and constitutes existing valuable, special and unique assets held by Oakwood pre-Merger, and that protection of such Confidential Information against unauthorized disclosure and use is of critical importance to BFST.

3.           Non-Competition Obligations. The Undersigned agrees that, for the period beginning on the Execution Date and continuing until the date that is two (2) years after the Effective Time of the Merger (the “Non-Competition Period”), the Undersigned will not, except as a director or officer of Oakwood or Oakwood Bank prior to the Effective Time of the Merger, as a director or officer of BFST or b1BANK after the Effective Time (if applicable), or as set forth on Schedule A hereto, in any capacity, directly or indirectly:

(a)    compete or engage, anywhere in the geographic area comprised of the fifty (50) mile radius surrounding the locations of Oakwood Bank before the Effective Time or, following the Effective Time, the locations of b1BANK banking centers that were formerly locations of Oakwood Bank (the “Market Area”), in a business as a federally insured depository institution;

(b)    take any action to invest in, own, manage, operate, control, participate in, be employed or engaged by, be a director of, or otherwise be connected in any manner with any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or Governmental Body (each, a “Person”) engaging in a business similar to that of BFST, b1BANK, Oakwood or Oakwood Bank anywhere within the Market Area. Notwithstanding the foregoing, the Undersigned is permitted hereunder to own, directly or indirectly, up to one percent (1.0%) of the issued and outstanding securities of any publicly traded financial institution conducting business in the Market Area;

(c)    (i)  call on, service, solicit or respond to inquiries for competing business from customers of BFST, b1BANK, Oakwood or Oakwood Bank or any of their respective Affiliates if, within the twelve (12) months before the Execution Date, the Undersigned had or made contact with the customer, or had access to information and files about the customer, or (ii) interfere with or damage (or attempt to interfere with or damage) any relationship between BFST, b1BANK, Oakwood or Oakwood Bank or any of their respective Affiliates and any such customer; or

(d)    call on, solicit, induce or respond to inquiries to or from any employee of BFST, b1BANK, Oakwood or Oakwood Bank or any of their respective Affiliates whom the Undersigned had contact with, knowledge of, or association with in the course of service with Oakwood or Oakwood Bank (whether as an employee or a contractor) to terminate his or her employment from or contract with BFST, b1BANK, Oakwood or Oakwood Bank or any of their respective Affiliates, or assist any other Person in such activities;

provided, however, that the restrictions in the foregoing (c) and (d) will not prohibit the Undersigned from responding to inquiries made in response to a general solicitation for customers or employees or publicly advertised employment opportunities (including through employment agencies).

The Undersigned may not avoid the purpose and intent of this Section 3 by engaging in conduct within the Market Area from a remote location through means such as telecommunications, written correspondence, computer generated or assisted communications or other similar methods.

4.         Non-Competition Covenant Reasonable. The Undersigned acknowledges that the restrictions imposed by this Agreement are legitimate, reasonable and necessary to protect BFST’s acquisition of Oakwood and the goodwill and business prospects thereof. The Undersigned acknowledges that the scope and duration of the restrictions contained herein are reasonable in light of the time that the Undersigned has been engaged in the business of Oakwood and/or Oakwood Bank and the Undersigned’s relationship with the customers of Oakwood and/or Oakwood Bank. The Undersigned further acknowledges that the restrictions contained herein are not burdensome to the Undersigned in light of the other opportunities that remain open to the Undersigned. Moreover, the Undersigned acknowledges that he or she has and will have other means available to him or her for the pursuit of his or her livelihood after the Effective Time of the Merger.

5.           Consideration. In consideration for the above obligations of the Undersigned, in addition to those matters set forth in the Recitals to this Agreement, Oakwood agrees to provide the Undersigned with access to new Confidential Information and training relating to Oakwood’s business, which will become BFST’s business after the Effective Time of the Merger, in a greater quantity and/or expanded nature than that already provided to the Undersigned. The Undersigned also will have access to, or knowledge of, new Confidential Information of third parties, such as actual and potential customers, suppliers, partners, joint venturers, investors, financing sources, etc., of Oakwood and/or Oakwood Bank prior to the Merger.

6.          Injunctive Relief and Additional Remedies. The Undersigned acknowledges that the injury that would be suffered by BFST or Oakwood as a result of a breach of the provisions of this Agreement (including any provision of Section 3) would be irreparable and that an award of monetary damages to BFST or Oakwood, as the case may be, for such a breach would be an inadequate remedy. Consequently, each of BFST and Oakwood shall have the right, in addition to any other rights it may have, to seek specific performance, to obtain injunctive relief to restrain any proposed or actual breach or threatened breach or otherwise to specifically enforce any provision of this Agreement without the obligation to post bond or other security in seeking such relief. Such equitable remedies are in addition to the right to obtain compensatory and punitive damages and attorney’s fees, and, notwithstanding BFST’s or Oakwood’s, as the case may be, right to so seek damages, the Undersigned waives any defense that an adequate remedy for BFST or Oakwood, as the case may be, exists under law. If the Undersigned, on the one hand, or BFST or Oakwood, on the other hand, must bring suit to enforce this Agreement, the prevailing party shall be entitled to recover its attorneys’ fees and costs related thereto.

7.          Extension of Restrictive Covenant Period. In the event that BFST or Oakwood shall file a lawsuit in any court of competent jurisdiction alleging a breach of Section 3 by the Undersigned and BFST or Oakwood is successful on the merits of such lawsuit, then any time period set forth in this Agreement including the time periods set forth in Section 3, will be extended one month for each month the Undersigned was in breach of this Agreement, so that BFST or Oakwood, as the case may be, is provided the benefit of the full Non-Competition Period.

8.        Effectiveness of this Agreement; Termination. This Agreement shall become effective on the Execution Date. This Agreement shall automatically terminate and be of no further force or effect if (a) the Reorganization Agreement is not executed on or prior to the Execution Date or (b) the Reorganization Agreement (once executed) is terminated in accordance with its terms and the Merger does not occur. In the event of such termination, this Agreement will become null and void and neither BFST nor Oakwood nor their respective directors, officers, employees or stockholders will have any liability hereunder.

9.          Waiver; Amendment. The rights and remedies of the parties hereto are cumulative and not alternative. Any party may unilaterally waive a right which is solely applicable to it. Such action will be evidenced by a signed written notice. Neither the failure nor any delay in exercising any right, power or privilege under this Agreement by any party hereto will operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver of any party of any right or remedy on any one occasion will not be construed as a bar to any right or remedy that such party would otherwise have on any future occasion or to any right or remedy that any other party may have hereunder. This Agreement may be amended, modified or supplemented only by an instrument in writing executed by each of the parties hereto.

10.         Notices. All notices, consents, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered in person, mailed by first class mail (postage prepaid) or sent by email, courier or personal delivery to the parties hereto at the following addresses unless by such notice a different address shall have been designated:

If to BFST:

Business First Bancshares, Inc.

500 Laurel Street, Suite 101

Baton Rouge, Louisiana 70801

Attention: Saundra Strong, General Counsel

Email:       saundra.strong@b1bank.com

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

Hunton Andrews Kurth LLP

1445 Ross Avenue, Suite 3700

Dallas, Texas 75202

Attention: Peter G. Weinstock

   Beth A. Whitaker

Email:       pweinstock@HuntonAK.com

   bwhitaker@HuntonAK.com

If to Oakwood:

Oakwood Bancshares, Inc.

8411 Preston Road, Suite 106

Dallas, Texas 75225

Attention: Roy Salley

Email:       rsalley@oakwoodbank.com

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

Norton Rose Fulbright US LLP

2200 Ross Avenue, Suite 3600

Dallas, Texas 75201

Attention: Mike Keeley

Email:       mike.keeley@nortonrosefulbright.com

If to the Undersigned:

At the address set forth on the Undersigned’s signature page hereto.

All notices sent by mail as provided above shall be deemed delivered three (3) days after deposit in the mail, all notices sent by courier as provided above shall be deemed delivered one (1) day after being sent and all notices sent by email shall be deemed delivered upon confirmation of receipt. All other notices shall be deemed delivered when actually received. Any party to this Agreement may change its address for the giving of notice specified above by giving notice as provided herein. Notices permitted to be sent via email shall be deemed delivered only if sent to such persons at such email addresses as may be set forth in writing (and confirmation of receipt is received by the sending party).

11.         Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of BFST, Oakwood and their respective successors and assigns, including, without limitation, any successor by merger, consolidation or stock purchase of BFST, Oakwood and any Person that acquires all or substantially all of the assets of BFST or Oakwood.

12.        Governing Law; Jurisdiction. This Agreement is to be construed in accordance with and governed by the laws of the State of Louisiana without regard for conflict of laws principles thereof. Any suit, action or other proceeding directly or indirectly arising out of or relating to this Agreement or the transactions contemplated hereby must be brought in the courts of the State of Louisiana, Parrish of East Baton Rouge, or, if it has or can acquire jurisdiction, in the U.S. District Court for the Middle District of Louisiana (Baton Rouge, Louisiana), and each party irrevocably submits to the exclusive jurisdiction of such court in any such suit, action or other proceeding. Process in any suit, action or other proceeding referred to in the preceding sentence may be served on any party anywhere in the world. Notwithstanding the foregoing a party may commence any action or proceeding in a court other than the above-named courts solely for the purpose of enforcing an order or judgment issued by one of the above-named courts.

13.        Entire Agreement. This Agreement, together with the Reorganization Agreement and the agreements contemplated thereby, embody the entire agreement and understanding of the parties hereto in respect to the subject matter contained herein. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to such subject matter contained herein. In the event of a conflict between the terms of this Agreement and the terms of the Reorganization Agreement, the terms of the Reorganization Agreement shall control.

14.         No Third-Party Beneficiaries. Nothing contained in this Agreement, express or implied, is intended to confer upon any persons, other than the parties hereto or their respective successors, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

15.        Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. If any restriction in this Agreement is held invalid or unenforceable by any court of competent jurisdiction, it is the intention of the parties hereto that the restrictions be reformed by such court in such a manner that protects the business and Confidential Information of BFST, b1BANK, Oakwood and Oakwood Bank to the maximum extent permissible.

16.        Representation by Counsel; Interpretation. Each party hereto acknowledges that it has had the opportunity to be represented by counsel in the negotiation, preparation and execution of this Agreement and the transactions contemplated hereby. Accordingly, any rule of law, including, but not limited to, the doctrine of contra proferentem, or any legal decision which would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties hereto.

17.        Section Headings, Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement unless otherwise specified. All words used in this Agreement will be construed to be of such gender or number, as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

18.         Counterparts. For the convenience of the parties hereto, this Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original but all of which shall constitute one and the same instrument. An email or electronic scan in “.pdf” format of a signed counterpart of this Agreement will be sufficient to bind the party or parties whose signature(s) appear thereon.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

SCHEDULE A

EXISTING CAPACITY

Exhibit 99.1

500 Laurel Street Baton Rouge, LA 70801 Phone: 877.614.7600

Business First Bancshares, Inc., Announces Financial Results for Q1 2024

Baton Rouge, La. (April 25, 2024) – Business First Bancshares, Inc. (NASDAQ: BFST) (Business First), parent company of b1BANK, today announced its unaudited results for the quarter ended March 31, 2024, including net income available to common shareholders of $12.2 million or $0.48 per diluted common share, decreases of $2.3 million and $0.09, respectively, compared to the linked quarter ended December 31, 2023. On a non-GAAP basis, core net income for the quarter ended March 31, 2024, which excludes certain income and expenses, was $12.8 million or $0.50 per diluted common share, decreases of $4.0 million and $0.16, respectively, from the linked quarter.

“We didn’t earn as much in the first quarter as I would have liked,” said Jude Melville, president and CEO, “but we did accomplish core foundational work that will lead to greater earnings power over the course of the year. We improved the funding side of our balance sheet, achieving stability in non-interest bearing accounts, increasing liquidity though the raising of core deposits, and paying down debt. We deepened the production side of our house by acquiring and integrating Waterstone, a Loan Service Provider that facilitates SBA production for banks around the country.  And we grew loans at a healthy, normalized rate, further diversifying our credit exposure by product type and geography.”

On Tuesday, April 23, 2024, Business First’s board of directors declared a quarterly preferred dividend in the amount of $18.75 per share, which is the full quarterly dividend of 1.875% based on the per annum rate of 7.50%. Additionally, the board of directors declared a quarterly common dividend based upon financial performance for the first quarter in the amount of $0.14 per share. The preferred and common dividends will be paid on May 31, 2024, or as soon thereafter as practicable, to the shareholders of record as of May 15, 2024.

Quarterly Highlights

Statement of Financial Condition

Loans

Loans held for investment increased $96.1 million or 1.92%, 7.74% annualized, from the linked quarter. Loan growth from the linked quarter was largely attributable to net growth in the C&I portfolio of $68.1 million and in the residential real estate portfolio of $34.6 million, offset by a $7.8 million reduction in the C&D portfolio.

The Dallas Fort Worth region produced 43.75% of net loan growth from the linked quarter based on unpaid principal balance, while the Southwest Louisiana region produced 28.55% and Capital region produced 14.47%. Based on unpaid principal balances, Texas-based loans represent approximately 37% of the overall loan portfolio as of March 31, 2024.

Credit Quality

The ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets increased from 0.34% and 0.28%, respectively, at December 31, 2023, to 0.43% and 0.34% at March 31, 2024. The increase was attributable to an additional $4.6 million in nonaccrual loans, largely comprised of two lending relationships.

Securities

The securities portfolio decreased $6.7 million or 0.76%, from the linked quarter. The increase was driven by negative fair value adjustments of $6.4 million. The securities portfolio, based on estimated fair value, represented 13.04% of total assets as of March 31, 2024.

Deposits

Deposits increased $324.0 million or 6.17%, 24.82% annualized, for the quarter ended March 31, 2024, compared to the linked quarter. During the quarter ended March 31, 2024, noninterest-bearing deposits remained stable with a decrease of $4.0 million or 0.31% compared to the linked quarter and interest-bearing deposits increased $328.0 million or 8.30%, with certificate of deposit (CD) accounts declining $31.4 million or 2.41%.

The Capital and Dallas markets led the franchise with $55.8 million and $45.5 million in deposit growth. The Capital and Dallas markets opened 758 and 296 new accounts, respectively, during the quarter. All new deposit generations for Business First had a weighted average rate of 4.32% as of March 31, 2024, a decrease of 0.29% from the linked quarter.

Money market accounts increased $448.8 million or 33.41% from the linked quarter with a total portfolio weighted average of 4.10%, up slightly from 4.07% at December 31, 2023. However, lower rate demand deposit accounts of $32.0 million were also opened in connection with these money market accounts during the quarter ended March 31, 2024. This represented an 18.43% increase from the linked quarter and an increase of 28.23% from the last twelve months beginning April 1, 2023.

New money market account openings in March 2024 totaled $94.0 million with a weighted average rate of 4.29% as of March 31, 2024, compared to $84.0 million in new account openings during February 2024 with a weighted average rate of 5.03% as of February 29, 2024. Money market account balances increased from $1.34 billion as of December 31, 2023, to $1.79 billion as of March 31, 2024.

Borrowings

Borrowings decreased $204.7 million or 32.24%, from the linked quarter due to a full repayment of the $300.0 million Federal Reserve’s Bank Term Funding Program (BFTP) in March 2024. The repayment was funded through additional advances from the Federal Home Loan Bank (FHLB) of approximately $100.0 million, brokered CDs of $52.0 million and the remaining $148.0 million from cash.

Shareholders’ Equity

Accumulated other comprehensive income (AOCI) decreased $5.0 million during the first quarter due to negative after-tax fair value adjustments in the securities portfolio. Book value per common share increased to $22.64 at March 31, 2024, compared to $22.58 at December 31, 2023. On a non-GAAP basis, tangible book value per common share decreased slightly from $18.62 at December 31, 2023, to $18.61 at March 31, 2024.

Results of Operations

Net Interest Income

For the quarter ended March 31, 2024, net interest income totaled $51.5 million, compared to $53.8 million from the linked quarter. Loan and interest-earning asset yields of 6.88% and 6.18%, respectively, increased one basis point each compared to 6.87% and 6.17% from the linked quarter. Both ratios were negatively impacted by $1.1 million less in loan discount accretion. Net interest margin and net interest spread were 3.32% and 2.36% compared to 3.50% and 2.53%, respectively, for the linked quarter. The overall cost of funds, which include noninterest-bearing deposits, increased from 2.79% to 3.00% or 21 basis points, from the linked quarter due to higher cost deposits and less average noninterest bearing deposits; however, ending noninterest bearing deposits only decreased $4.0 million from the linked quarter.

Non-GAAP net interest income (excluding loan discount accretion of $0.8 million) totaled $50.7 million for the quarter ended March 31, 2024, compared to $51.8 million (excluding loan discount accretion of $1.9 million) from the linked quarter. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $0.8 million) were 3.27% and 2.31%, respectively, for the quarter ended March 31, 2024, compared to 3.38% and 2.40% (excluding loan discount accretion of $1.9 million) for the linked quarter. Excluding loan discount accretion, loan yields increased nine basis points to 6.81% from 6.72%, and interest earnings asset yields increased eight basis points to 6.13% from 6.05%, compared to the linked quarter.

Provision for Credit Losses

During the quarter ended March 31, 2024, Business First recorded a provision for credit losses of $1.2 million, compared to $119,000 from the linked quarter. The current quarter’s reserve increased largely due to loan growth.

Other Income

For the quarter ended March 31, 2024, other income increased $2.9 million or 46.36%, compared to the linked quarter. The net increase was largely attributable to a $2.5 million loss on sale of securities due to Business First’s security repositioning initiative and a $1.0 million loss in equity investment income which both occurred during the linked quarter, partially offset by a $735,000 reduction in back-to-back customer swap fee income compared to the linked quarter.

Other Expenses

For the quarter ended March 31, 2024, other expenses increased by $2.8 million or 7.07%, compared to the linked quarter. The net increase was attributable to a $2.8 million increase in salaries and employee benefits compared to the linked quarter. The increase was largely associated with the Waterstone LSP acquisition, bonus-related expenses and cost of living adjustments.

Return on Assets and Common Equity

Return to common shareholders on average assets and common equity, each on an annualized basis, were 0.74% and 8.51% for the quarter ended March 31, 2024, compared to 0.88% and 10.54%, respectively, for the linked quarter. Non-GAAP return to common shareholders on average assets and common equity, each on an annualized basis, were 0.77% and 8.92% for the quarter ended March 31, 2024, compared to 1.03% and 12.27%, respectively, for the linked quarter.

Conference Call and Webcast

Executive management will host a conference call and webcast to discuss results on Thursday, April 25, 2024, at 4:00 p.m. Central Time. Interested parties may attend the call by dialing toll-free 1-800-715-9871 (North America only), conference ID 5574541, or asking for the Business First Bancshares conference call. The live webcast can be found at https://edge.media-server.com/mmc/p/kqiwvpsh. On the day of the presentation, the corresponding slide presentation will be available to view on the b1BANK website at https://www.b1bank.com/shareholder-info.

About Business First Bancshares, Inc.

Business First Bancshares, Inc., (Nasdaq: BFST) through its banking subsidiary b1BANK, has $6.7 billion in assets, $6.1 billion in assets under management through b1BANK’s affiliate Smith Shellnut Wilson, LLC (SSW) (excludes $0.9 billion of b1BANK assets managed by SSW) and operates Banking Centers and Loan Production Offices in markets across Louisiana and the Dallas and Houston, Texas areas, providing commercial and personal banking products and services. Commercial banking services include commercial loans and letters of credit, working capital lines and equipment financing, and treasury management services. b1BANK was awarded #1 Best-In-State Bank, Louisiana, by Forbes and Statista, and is a multiyear winner of American Banker’s “Best Banks to Work For.” Visit b1BANK.com for more information.

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures (e.g., referenced as “core” or “tangible”) intended to supplement, not substitute for, comparable GAAP measures. “Core” measures typically adjust income available to common shareholders for certain significant activities or transactions that, in management’s opinion, can distort period-to-period comparisons of Business First’s performance. Transactions that are typically excluded from non-GAAP “core” measures include realized and unrealized gains/losses on former bank premises and equipment, investment sales, acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). “Tangible” measures adjust common equity by subtracting goodwill, core deposit intangibles, and customer intangibles, net of accumulated amortization. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of Business First’s core business. These non-GAAP disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of the tables below.

Special Note Regarding Forward-Looking Statements

Certain statements contained in this release may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could,” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including those factors specified in our Annual Report on Form 10-K and other public filings. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release.

Additional Information

For additional information about Business First, you may obtain Business First’s reports that are filed with the Securities and Exchange Commission (SEC) free of charge by using the SEC’s EDGAR service on the SEC’s website at www.SEC.gov or by contacting the SEC for further information at 1-800-SEC-0330. Alternatively, these documents can be obtained free of charge from Business First by directing a request to: Business First Bancshares, Inc., 500 Laurel Street, Suite 101, Baton Rouge, Louisiana 70801, Attention: Corporate Secretary.

No Offer or Solicitation

This release does not constitute or form part of any offer to sell, or a solicitation of an offer to purchase, any securities of Business First. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.