Exhibit 10.1

Agreement and Plan of Merger

by and among

TIB The Independent BankersBank,

First California Financial Group, Inc.,

and

South Bay Bank

 

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Dated as of March 23, 2007

 

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Table of Contents

 

     Page GENERAL   

1.01

   Definitions    2

ARTICLE II

MERGER; CLOSING

  

2.01

   The Merger    5

2.02

   Organization Certificate    6

2.03

   By-Laws    6

2.04

   Directors and Officers    6

2.05

   Conversion of Securities; Merger Consideration    6

2.06

   No Further Ownership Rights in SBB Capital Stock    6

2.07

   Further Assurances    7

2.08

   Board Recommendation    7

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF FCFG AND SBB

  

3.01

   Organization    7

3.02

   Capitalization    8

3.03

   Authority; No Violation    8

3.04

   Consents and Approvals    9

3.05

   Pro Forma Balance Sheet    9

3.06

   Taxes    9

3.07

   Legal Proceedings    11

3.08

   Compliance with Applicable Law    11

3.09

   Brokers and Finders    12

3.10

   CRA Compliance    12

3.11

   Information to be Supplied    12

3.12

   Nothing Precludes Consummation    12

3.13

   Disclosure    12

3.14

   Compliance with Foreign Corrupt Practices Act    12

3.15

   Bank Accounts; Powers of Attorney    12

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF FCFG

  

4.01

   Organization    13

4.02

   Authority; No Violation    13

4.03

   Consents and Approvals    14

4.04

   Legal Proceedings    14

4.05

   Brokers and Finders    14

 

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4.06

   Information to be Supplied    14

4.07

   Ownership of SBB    14

4.08

   Taxes    14

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF TIB

  

5.01

   Organization    15

5.02

   Authority; No Violation    15

5.03

   Consents and Approvals    16

5.04

   Cash for Closing    16

5.05

   Legal Proceedings    16

5.06

   Brokers and Finders    16

5.07

   Information to be Supplied    16

ARTICLE VI

COVENANTS OF THE PARTIES

  

6.01

   Applications for Regulatory Approval    17

6.02

   Consents to Contemplated Transactions    17

6.03

   Taking of Necessary Actions    17

6.04

   Public Announcements    17

6.05

   No Solicitation    17

6.06

   Notification of Certain Matters    18

6.07

   Relocation of Head Office    19

6.08

   Execution by SBB; No Amendment of Initial Purchase Agreement or Purchase and
Assumption Agreement    19

ARTICLE VII

CONDITIONS PRECEDENT

  

7.01

   Conditions Precedent to Each Party’s Obligation to Effect the Merger    19

7.02

   Conditions Precedent to Obligations of TIB    19

7.03

   Conditions Precedent to Obligations of FCFG and SBB    21

7.04

   Potential Restructuring of Transaction    21

ARTICLE VIII

TERMINATION

  

8.01

   Termination    22

8.02

   Effect of Termination    22

ARTICLE IX

INDEMNIFICATION; REMEDIES

  

9.01

   Survival    23

9.02

   Indemnification by FCFG    23

9.03

   Non-Exclusive Remedy    23

 

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ARTICLE X

MISCELLANEOUS

    

10.01

   Expenses and Other Fees    23

10.02

   Specific Performance    24

10.03

   Amendment, Extension and Waiver    24

10.04

   Entire Agreement; No Third Party Beneficiaries    24

10.05

   No Assignment    24

10.06

   Notices    25

10.07

   Schedules    25

10.08

   Captions    26

10.09

   Counterparts    26

10.10

   Severability    26

10.11

   Governing Law    26

10.12

   Consent to Jurisdiction; Service of Process    26

10.13

   Waiver of Jury Trial    26

 

Exhibit A

   Indemnity Agreement

Schedule 3.05

   Pro Forma Balance Sheet

Schedule 3.06

   Tax Matters

Schedule 3.15

   Bank Accounts; Powers of Attorney

Schedule 5.03

   Regulatory Approvals

 

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER, dated as of March 23, 2007, is made by and
among TIB THE INDEPENDENT BANKERSBANK, a Texas state-chartered banking
institution (“TIB”), FIRST CALIFORNIA FINANCIAL GROUP, INC., a Delaware
corporation (“FCFG”), and SOUTH BAY BANK, a national banking association
(“SBB”). Capitalized terms have the meanings set forth in Article I.

RECITALS

WHEREAS, TIB is a Texas state-chartered banking institution with its home office
located at 350 Phelps Drive, Irving, Texas.

WHEREAS, FCFG is a Delaware company with its main office located at 1880 Century
Park East, Suite 800, Los Angeles, California.

WHEREAS, SBB is a national banking association and a wholly-owned subsidiary of
FCFG with its main office located at 1880 Century Park East, Suite 1200, Los
Angeles, California.

WHEREAS, FIRST CALIFORNIA BANK (“FCBank”) is a California state-chartered
banking corporation and wholly-owned subsidiary of FCFG with its main office
located at 1100 Paseo Camarillo, Camarillo, California.

WHEREAS, FCBank and SBB, prior to the Merger contemplated herein, shall enter
into a Purchase and Assumption Agreement (the “Purchase and Assumption
Agreement”), whereby immediately prior to the Merger contemplated herein, FCBank
shall purchase all the assets and assume all the liabilities of SBB, except for
such assets and liabilities set forth in the Pro Forma Balance Sheet.

WHEREAS, the parties have agreed that it is in their mutual best interests and
in the best interests of their respective stockholders for SBB to be merged with
and into TIB pursuant to the terms of this Agreement, and the parties desire to
provide for certain undertakings, conditions, representations, warranties and
covenants in connection with the Merger and transactions contemplated thereby.

WHEREAS, the Boards of Directors of TIB, SBB and FCFG have approved this
Agreement and the transactions contemplated hereby.

NOW, THEREFORE, in consideration of the foregoing 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 hereto intending to be legally bound do hereby agree
as follows:

 

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GENERAL

1.01 Definitions. As used in this Agreement, the following terms shall have the
indicated meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):

Acquisition Agreement has the meaning given to such term in Section 6.05 of this
Agreement.

Acquisition Proposal has the meaning given to such term in Section 6.05 of this
Agreement.

Action means any legal action, administrative, arbitration, audit, hearing,
investigation, proceeding, litigation, claim or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought, conducted or
heard by or before, or otherwise involving, any governmental body or arbitrator.

Affiliate means, with respect to any corporation, any person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such corporation and, without limiting the
generality of the foregoing, includes any executive officer, director or 10%
equity owner of such corporation.

Agreement means this Agreement and Plan of Merger, including any amendment or
supplement, exhibit or schedule attached hereto.

Application means any application or notice or request for waiver to a
Regulatory Authority for the purpose of effecting the transactions contemplated
hereby.

Business Day shall mean a day that is not a Saturday, Sunday or a statutory or
civic holiday in the State of California.

Closing has the meaning given to such term in Section 2.01 of this Agreement.

Closing Date has the meaning given to such term in Section 2.01(b) of this
Agreement.

Confidentiality Agreement means the confidentiality agreement among TIB, FCFG
and SBB.

Contemplated Transactions means all of the transactions contemplated by this
Agreement, including (a) the Merger and (b) the performance by SBB, FCFG and TIB
of their respective covenants and obligations under this Agreement.

CRA means the Community Reinvestment Act of 1977 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.

Damages has the meaning given to such term in Section 9.02 of this Agreement.

Effective Time has the meaning given to such term in Section 2.01(b) of this
Agreement.

 

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FCB has the meaning given to such term in the recitals.

FCBank has the meaning given to such term in the recitals.

FCFG has the meaning given to such term in the heading of this Agreement.

FDIC means the Federal Deposit Insurance Corporation.

FINCEN means the Financial Crimes Enforcement Network.

FRB means the Board of Governors of the Federal Reserve System, including the
appropriate Reserve Bank.

Indemnified Persons has the meaning given to such term in Section 9.02 of this
Agreement.

Indemnity Agreement means the Indemnity Agreement in the form of Exhibit A.

Initial Mergers has the meaning given to such term in the recitals.

Initial Purchase Agreement has the meaning given to such term in the recitals.

Initial Purchase Closing Date has the meaning given to such term in Article III
of this Agreement.

IRC means the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.

Knowledge means (a) an individual is actually aware of a particular fact or
other matter; or (b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of conducting
a reasonably comprehensive investigation concerning the existence of such fact
or other matter.

Knowledge of FCFG means the Knowledge of the executive officers and directors
(or persons serving in any similar capacity) of FCFG.

Knowledge of SBB means the Knowledge of executive officers and directors (or
persons serving in any similar capacity) of SBB and FCFG.

Laws means all applicable laws, statutes, ordinances, rules, regulations,
orders, writs, injunctions, judgments or decrees entered, enacted, promulgated,
enforced or issued by any court or other governmental or regulatory authority,
domestic or foreign.

Material Adverse Effect means, with respect to any Person (unless otherwise
specified), a material adverse effect on:

(a) the business, condition (financial or otherwise), liabilities, properties,
assets or results of operations of such Person, or

 

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(b) the ability of such Person to perform its obligations under this Agreement
or to consummate the Contemplated Transactions.

Merger means the merger of SBB with and into TIB, with TIB surviving such
merger, as contemplated by this Agreement.

Merger Consideration has the meaning given to such term in Section 2.05(a) of
this Agreement.

NMB has the meaning given to such term in the recitals.

OCC means the Office of the Comptroller of the Currency, the primary regulator
of national banks.

Organization Certificate means with respect to any Person, the articles or
certificate of incorporation, by-laws or other organizational documents.

Person means an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.

Pro Forma Balance Sheet has the meaning given to such term in Section 3.05.

Purchase and Assumption Agreement has the meaning given to such term in the
recitals.

Reasonable Best Efforts means prompt, substantial and persistent efforts as a
prudent Person desirous of achieving a result would use in similar
circumstances.

Regulatory Agreement has the meaning given to that term in Section 3.08(e) of
this Agreement.

Regulatory Authority means any agency, department or unit of any United States
federal, state or local governmental body or of any self-regulatory organization
located in the United States, including without limitation the FDIC, the FRB,
FINCEN, the CDFI, the TDB, the OCC, and the respective staffs thereof.

Rights means warrants, options, rights, convertible securities and other capital
stock equivalents which obligate an entity to issue its securities.

SBB has the meaning given to such term in the heading of this Agreement.

SBB Capital Stock has the meaning given to such term in Section 3.02(a) of this
Agreement.

Schedule means, collectively, the disclosure schedules delivered by SBB to TIB
at or prior to the execution and delivery of this Agreement.

Stock Certificate has the meaning given to such term in Section 2.05(c) of the
Agreement.

 

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Stock Transfer has the meaning given to such term in Section 2.01 of this
Agreement.

Stockholders means the holders of SBB Capital Stock.

Subsidiary means any corporation, 10% or more of the capital stock of which is
owned, either directly or indirectly, by another entity, except any corporation
the stock of which is held in the ordinary course of the lending activities of a
bank.

Surviving Bank has the meaning given to that term in Section 2.01(a) of this
Agreement.

Tax (and, with correlative meaning, “Taxes” and “Taxable”) shall mean (i) any
federal, state, local, municipal or foreign net income, gross income, gross
receipts, windfall profit, severance, property, production, sales, use, license,
excise, franchise, employment, payroll, withholding, alternative or add-on
minimum, ad valorem, value-added, transfer, stamp, or environmental tax, or any
other tax, custom, duty, tariff levy, import fee or other like assessment or
charge of any kind whatsoever, together with any interest or penalty, addition
to tax or additional amount imposed by any governmental authority, domestic and
foreign, and (ii) any liability for the payment of any amount of the type
described in clause (i) as a result of being or having been before the Closing a
member of an affiliated, consolidated, combined, unitary or similar group.

Tax Return shall mean any return, report or similar statement required to be
filed with respect to any Tax (including any attached schedules), including,
without limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.

TDB means the Texas Department of Banking or any successor governmental body.

TIB has the meaning given to such term in the heading of this Agreement.

ARTICLE II

MERGER; CLOSING

2.01 The Merger.

(a) Subject to the terms and conditions of this Agreement and in accordance with
applicable law, at the Effective Time and immediately preceding the Merger, the
outstanding stock of SBB shall be transferred to TIB (the “Stock Transfer”).

(b) Immediately following the Stock Transfer, without any further conditions to
proceeding, (i) SBB shall be merged with and into TIB, (ii) the separate
corporate existence of SBB shall cease and (iii) TIB shall be the surviving bank
(the “Surviving Bank”) and shall continue its corporate existence as a bank
chartered under the laws of the State of Texas.

(c) The Merger shall become effective upon the close of business on the Closing
Date (the “Effective Time”). The closing of the Merger (the “Closing”) shall
take place at the offices of Bingham McCutchen LLP, 3 Embarcadero Center, San
Francisco, California, or at such other location as may be agreeable to the
parties, at 10:00 a.m. two Business Days after the date on

 

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which the last of the conditions set forth in Article VII shall have been
satisfied or waived, or on such other date, time and place as the parties may
mutually agree (the “Closing Date”).

(d) At the Effective Time, the effect of the Merger shall be as provided in the
applicable Laws. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of SBB shall vest in the Surviving Bank, and all debts, liabilities,
obligations, restrictions, disabilities and duties of SBB shall become the
debts, liabilities, obligations, restrictions, disabilities and duties of the
Surviving Bank.

2.02 Organization Certificate. The Organization Certificate of TIB, as in effect
immediately prior to the Effective Time, shall be the Organization Certificate
of the Surviving Bank until thereafter amended as provided therein and by law.

2.03 By-Laws. The by-laws of TIB, as in effect immediately prior to the
Effective Time, shall be the by-laws of the Surviving Bank until thereafter
amended as provided therein and by law.

2.04 Directors and Officers. From and after the Effective Time, (a) the
directors of TIB at the Effective Time shall be the initial directors of the
Surviving Bank, each to hold office in accordance with the Organization
Certificate and by-laws of the Surviving Bank, and (b) the officers of TIB at
the Effective Time shall be the initial officers of the Surviving Bank, in each
case, until their respective successors are duly elected or appointed and
qualified.

2.05 Conversion of Securities; Merger Consideration. At the Effective Time, by
virtue of the Merger and without any action on the part of TIB, SBB, FCFG or the
holders of any of the following securities:

(a) Each share of SBB Capital Stock issued and outstanding as of the Effective
Time shall be deemed cancelled and FCFG shall have the right to receive from the
Surviving Bank in cash, without interest, an amount that is equal to $1,000,000
plus an amount equal to the shareholders equity of SBB at such time as reflected
in the Pro Forma Balance Sheet (the “Merger Consideration”).

(b) Each share of TIB capital stock issued and outstanding as of the Effective
Time shall remain outstanding and continue to represent the capital stock of the
Surviving Bank.

(c) At the Effective Time, FCFG shall deliver to TIB the certificate
representing all shares of SBB (the “Stock Certificate”).

2.06 No Further Ownership Rights in SBB Capital Stock. Upon delivery and payment
of Merger Consideration in exchange for the Stock Certificate, such Merger
Consideration shall be deemed paid in full satisfaction of all rights pertaining
to SBB Capital Stock previously represented by such Stock Certificate and FCFG
as sole owner of all shares of SBB Capital Stock shall have

 

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no right to receive shares of capital stock of the Surviving Bank and shall have
no rights against the Surviving Bank.

2.07 Further Assurances.

(a) If, at any time after the Effective Time, the Surviving Bank shall consider
or be advised that any deeds, bills of sale, assignments or assurances or any
other acts or things are necessary, desirable or proper (a) to vest, perfect or
confirm, of record or otherwise, in the Surviving Bank, its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of SBB or (b) otherwise to carry out the purposes of this
Agreement, the Surviving Bank and its proper officers and directors or their
designees shall be authorized to execute and deliver, in the name and on behalf
of SBB, all such deeds, bills of sale, assignments and assurances and do, in the
name and on behalf of SBB, all such other acts and things necessary, desirable
or proper to vest, perfect or confirm its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
SBB, as applicable, and otherwise to carry out the purposes of this Agreement.

(b) TIB, FCFG and SBB each agree to execute and deliver such further documents
and instruments and to do such other acts and things as may be reasonably
required to complete all requisite corporate action in connection with the
transactions contemplated by this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF FCFG AND SBB

Each of FCFG and SBB jointly and severally hereby represents and warrants to TIB
as follows:

3.01 Organization.

(a) SBB is a national banking association duly organized, validly existing and
in good standing under the laws of the United States of America. SBB has the
corporate power to carry on its business and operations as now being conducted
and to own and operate its properties and assets now owned and being operated by
it. SBB is not required under any applicable Law to be licensed or registered,
or to qualify to do business, in any other jurisdiction.

(b) SBB has no Subsidiaries.

(c) The minute book of SBB accurately records, in all material respects, all
material corporate actions of its Stockholders and Board of Directors, including
committees. SBB has made available to TIB for its review the minute book or
copies thereof from January 1, 2002 to the date hereof.

(d) SBB has delivered to TIB true and correct copies of the Organization
Certificate and by-laws of SBB, as in effect on the date hereof; such
Organization Certificate and by-laws

 

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are in full force and effect. SBB is not in violation of any provision of its
Organization Certificate or other organizational documents.

3.02 Capitalization.

(a) The authorized capital stock of SBB consists solely of                     
shares of common stock, $         par value per share (“SBB Capital Stock”), of
which at the date hereof all of the                      shares, are validly
issued and outstanding, fully paid and nonassessable, and free of preemptive
rights, and none are held as treasury shares. SBB has not issued nor is SBB
bound by any subscription, option, warrant, call, commitment, agreement or other
Right of any character relating to the purchase, sale, or issuance of, or right
to receive dividends or other distributions on, any shares of SBB Capital Stock
or any other security of SBB or any securities representing the right to vote,
purchase or otherwise receive any shares of SBB Capital Stock or any other
security of SBB, whether or not presently issued or outstanding. All shares of
SBB Capital Stock have been issued in compliance in all material respects with
all Laws.

(b) FCFG owns all SBB Capital Stock.

3.03 Authority; No Violation.

(a) SBB has full power and authority to execute, deliver and perform this
Agreement and to consummate the Contemplated Transactions. The execution,
delivery and performance of this Agreement by SBB and the consummation by SBB of
the Merger have been duly authorized and approved by all necessary corporate or
other action and no other corporate proceedings on the part of SBB are necessary
to authorize this Agreement and the transactions contemplated hereby.

(b) This Agreement has been duly and validly executed and delivered by SBB and,
subject to receipt of, or exemption from, the required approvals of applicable
Regulatory Authorities described in Section 5.03 hereof, constitutes the valid
and binding obligation of SBB, enforceable against SBB in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and subject, as to enforceability, to general
principles of equity.

(c) Each of (i) the execution and delivery of this Agreement by SBB,
(ii) subject to receipt of, or exemption from, approvals of the Regulatory
Authorities referred to in Section 5.03 hereof and compliance by the parties
hereto with any conditions contained therein, the consummation of the
Contemplated Transactions, and (iii) the compliance by SBB with any of the terms
or provisions hereof, do not and will not:

(A) conflict with or result in a breach of any provision of the Organization
Certificate or by-laws of SBB;

(B) violate any statute, rule, regulation, judgment, order, injunction, writ,
decree or injunction applicable to SBB or any of its properties or assets; or

 

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(C) violate, conflict with, result in a breach of any provisions of, constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of, or acceleration of,
the performance required by, or result in a right of termination or acceleration
or the creation of any lien, security interest, charge or other encumbrance upon
any of the properties or assets of SBB under any of the terms or conditions of
any note, bond, mortgage, indenture, license, lease, agreement, commitment or
other instrument or obligation to which SBB is a party, or by which SBB or any
of its properties or assets may be bound or affected.

(d) The Board of Directors of SBB has approved this Agreement and the
Contemplated Transactions.

3.04 Consents and Approvals. No consents or approvals of, or filings or
registrations with, any Regulatory Authority are necessary, and no consents or
approvals of any third parties are necessary, in connection with the execution
and delivery of this Agreement by SBB or, subject to the consents, approvals,
filings and registrations from or with the Regulatory Authorities referred to in
Section 5.03 hereof and compliance with any conditions contained therein, the
consummation by SBB of the Contemplated Transactions. There is no fact or
circumstance or set of facts or circumstances which would cause, or be likely to
cause, any Regulatory Authority to fail to approve the Contemplated
Transactions.

3.05 Pro Forma Balance Sheet. Attached hereto as Schedule 3.05 is a true and
correct unaudited pro forma balance sheet (the “Pro Forma Balance Sheet”) of SBB
reflecting the pro forma effect of the purchase of assets and assumption of
liabilities pursuant to the Purchase and Assumption Agreement. Upon consummation
of the Purchase and Assumption Agreement, SBB shall have no liabilities
whatsoever, whether accrued, contingent or otherwise, except liabilities that
are reflected or disclosed in the Pro Forma Balance Sheet.

3.06 Taxes.

Except as set forth on Schedule 3.06,

(i) SBB has filed, or has had filed on its behalf, all Tax Returns required to
be filed by or with respect to SBB on or prior to the date hereof, and all such
Tax Returns are complete and accurate and disclose all Taxes required to be paid
by or with respect to SBB for the periods covered thereby, and all Taxes shown
to be due on such Tax Returns (and deficiencies asserted or assessments made as
a result of any examination of such Tax Returns) have been timely paid;

(ii) SBB is not currently the beneficiary of any extension of time within which
to file any Tax Return;

(iii) SBB has not waived or been requested to waive any statute of limitations
in respect of Taxes which waiver is currently in effect;

 

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(iv) the Tax Returns referred to in clause (i) have been examined by the
appropriate taxing authority or the period for assessment of the Taxes in
respect of which each such Tax Return was required to be filed (taking into
account all applicable extensions and waivers) has expired;

(v) there is no action, suit, investigation, audit, claim or assessment pending
or proposed or threatened with respect to Taxes of SBB, and no basis exists
therefor;

(vi) Schedule 3.06 contains a list of all jurisdictions (whether foreign or
domestic) to which any Tax is properly payable by SBB;

(vii) Any Tax indemnity arrangements or Tax sharing agreements to which SBB is a
party (other than this Agreement) will terminate prior to the Closing Date and
neither SBB nor the Surviving Bank will have any liability thereunder on or
after the Closing Date;

(viii) there are no liens for Taxes upon the assets of SBB except liens relating
to current Taxes not yet due;

(ix) all Taxes which SBB is required by law to withhold or to collect for
payment have been duly withheld and collected and have been paid to the
appropriate governmental authority;

(x) SBB has not filed a consent under IRC Section 341(f) or any comparable
provision of state statutes;

(xi) SBB is not currently liable, nor does SSB have any potential liability, for
the Taxes of another person (a) under Treasury Regulations Section 1.1502-6 (or
comparable provision of state, local or foreign law), (b) as transferee or
successor, or (c) by contract or indemnity or otherwise;

(xii) no stock transfer Taxes, sales Taxes, use Taxes, real estate transfer or
gains Taxes, or other similar Taxes will be imposed on SBB, or TIB as its
successor, as a result of the transactions contemplated by this Agreement;

(xiii) no payment or other benefit, and no acceleration of the vesting of any
options, payments or other benefits, will be, an “excess parachute payment” to a
“disqualified individual” as those terms are defined in IRC Section 280G as a
direct or indirect result of the transactions contemplated by this Agreement;
and

(xiv) SBB is not a party to any understanding or arrangement described in IRC
Section 6111(d) or Section 6662(d)(2)(C)(iii) and has not participated in a
reportable transaction within the meaning of Section 1.6011-4 of the Treasury
Regulations (without regard to Section (b)(3) thereof).

 

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3.07 Legal Proceedings. SBB is not a party to any, and there are no pending or
threatened Actions, customer complaints, or governmental inquiries of any
nature:

(a) against SBB;

(b) to which the assets of SBB are subject;

(c) challenging the validity or propriety of any of the Contemplated
Transactions; or

(d) which could materially adversely affect the ability of SBB to perform its
obligations under this Agreement.

3.08 Compliance with Applicable Law.

(a) SBB holds all licenses, franchises, permits and authorizations necessary for
the lawful conduct of its business under, and has complied in all material
respects with, all applicable Laws.

(b) SBB has filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, that it was required to
file with any Regulatory Authority, and has filed all other reports and
statements required to be filed by it, including without limitation, any report
or statement required to be filed pursuant to the Laws, of the United States,
any state or any Regulatory Authority, and has paid all fees and assessments due
and payable in connection therewith.

(c) No Regulatory Authority has initiated any Action or investigation into the
business or operations of SBB.

(d) There is no:

(i) violation by SBB of the statutes, regulations or ordinances enforced by any
Regulatory Authority or law enforcement agency or body;

(ii) basis for the revocation of any license, franchise, permit or governmental
authorization which is material to SBB; or

(iii) basis for any sanctions, monetary or otherwise, by a Regulatory Authority
or law enforcement agency or body or any further cease and desist order,
agreement or memorandum of understanding or any other agreement restricting or
limiting, or purporting to restrict or limit, in any manner the operations of
SBB.

(e) SBB has not received, consented to, or entered into any notice,
communication, memorandum, agreement or order of any Regulatory Authority
directing, restricting or limiting, or purporting to direct, restrict or limit,
in any manner the operations of SBB (a “Regulatory Agreement”), except as
heretofore disclosed to TIB.

 

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(f) SBB is not aware of any basis for any unresolved violation, criticism, or
exception by any Regulatory Authority with respect to any Regulatory Agreement.

3.09 Brokers and Finders. Neither SBB nor any of its officers, directors,
employees, independent contractors or agents, has employed any broker, finder,
investment banker or financial advisor, or incurred any liability for any fees
or commissions to any such person, in connection with the Contemplated
Transactions.

3.10 CRA Compliance. SBB is in compliance, in all material respects, with the
applicable provisions of the CRA, and, as of the date hereof, SBB has received a
CRA rating of “satisfactory” or better from the applicable Regulatory Authority.
There is no fact or circumstance or set of facts or circumstances which would
cause SBB to fail to comply with such provisions in a manner which could have a
Material Adverse Effect. SBB is not a party or subject to any agreement with
respect to the CRA.

3.11 Information to be Supplied. The information supplied by SBB for inclusion
in the Applications will, at the time each such document is filed with any
Regulatory Authority and up to and including the dates of any required
regulatory approvals or consents, as such Applications may be amended by
subsequent filings, be accurate in all material respects.

3.12 Nothing Precludes Consummation. SBB is not aware of any facts or
circumstances which may preclude SBB from successfully consummating the
Contemplated Transactions or obtaining the regulatory approvals required to
consummate such transactions.

3.13 Disclosure. None of the representations or warranties of SBB contained
herein, and none of the information contained in the Schedules referred to in
this Article III, contains any untrue statement of a material fact or omits to
state a material fact herein or therein necessary in order to make the
statements contained herein or therein not misleading in any material respect.

3.14 Compliance with Foreign Corrupt Practices Act. Neither SBB, nor to the
Knowledge of SBB, any agent, employee or other person acting on behalf of SBB
has, directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns
from corporate funds, violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment,
kickback or other similar unlawful payment.

3.15 Bank Accounts; Powers of Attorney. Schedule 3.15 sets forth a complete and
correct list of all bank accounts and safe deposit boxes of SBB and persons
authorized to sign or otherwise act with respect thereto as of the date

 

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hereof and a complete and correct list of all persons holding a general or
special power of attorney granted by SBB.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF FCFG

FCFG hereby represents and warrants to TIB as follows:

4.01 Organization.

(a) FCFG is a corporation duly organized and validly existing and in good
standing under the laws of the Delaware, and is a bank holding company. FCBank
is a banking institution duly organized and validly existing and in good
standing under the laws of the State of California.

4.02 Authority; No Violation.

(a) Each of FCFG and FCBank has full corporate power and authority to execute
and deliver this Agreement (in the case of FCFG Bancorp only) and the Indemnity
Agreement and to consummate the Contemplated Transactions.

(b) The execution and delivery of this Agreement by FCFG and the consummation by
FCFG of the Merger have been duly and validly approved by the Board of Directors
of FCFG and FCBank and no other corporate proceedings on the part of FCFG or
FCBank are necessary to consummate the Merger and the transactions contemplated
hereby.

(c) This Agreement has been duly and validly executed and delivered by FCFG and,
subject to receipt of the required approvals of Regulatory Authorities described
in Section 5.03 hereof, constitutes the valid and binding obligation of FCFG,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and subject,
as to enforceability, to general principles of equity.

(d) Each of (i) the execution of this Agreement by FCFG and the execution of the
Indemnity Agreement by FCFG and FCBank, (ii) subject to receipt of, or exemption
from, approvals from the Regulatory Authorities referred to in Section 5.03
hereof and compliance by the parties hereto with any conditions contained
therein, the consummation of the Contemplated Transactions, and (iii) compliance
by FCFG with any of the terms or provisions hereof, do not and will not:

(A) conflict with or result in a breach of any provision of the Organization
Certificate or by-laws of FCFG or FCBank;

(B) violate any statute, rule, regulation, judgment, order, writ, decree or
injunction applicable to FCFG or FCBank or any of their respective properties or
assets; or

 

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(C) violate, conflict with, result in a breach of any provisions of, constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of, or acceleration of,
the performance required by, or result in a right of termination or acceleration
or the creation of any lien, security interest, charge or other encumbrance upon
any of the properties or assets of FCFG or FCBank under any of the terms or
conditions of any note, bond, mortgage, indenture, license, lease, agreement,
commitment or other instrument or obligation to which FCFG or FCBank is a party,
or by which FCFG, FCBank or any of their respective properties or assets may be
bound or affected, excluding from clauses (B) and (C) any such items which, in
the aggregate, would not have a Material Adverse Effect.

4.03 Consents and Approvals.

Except for (i) the notices, consents and approvals of, or exemptions from, the
applicable Regulatory Authorities set forth in Schedule 5.03 and (ii) the filing
of appropriate merger documents, no consents or approvals of, or filings or
registrations with, any Regulatory Authority are necessary, and no consents or
approvals of any third parties are necessary, in connection with the execution
and delivery of this Agreement by FCFG or the consummation by FCFG or FCBank of
the Contemplated Transactions. There is no fact or circumstance or set of facts
or circumstances which would cause, or be likely to cause, any Regulatory
Authority to fail to approve the Contemplated Transactions.

4.04 Legal Proceedings. Neither FCFG nor FCBank is a party to any, and there are
no pending or, to the Knowledge of FCFG, threatened Actions which could
materially adversely affect the ability of FCFG to perform its obligations under
this Agreement.

4.05 Brokers and Finders. None of FCFG, FCBank or any of their respective
officers, directors, employees, independent contractors or agents, has employed
any broker, finder, investment banker or financial advisor, or incurred any
liability for any fees or commissions to any such person, in connection with the
Contemplated Transactions.

4.06 Information to be Supplied. The information supplied by FCFG for inclusion
in the Applications will, at the time each such document is filed with any
Regulatory Authority and up to and including the dates of any required
regulatory approvals or consents, as such Applications may be amended by
subsequent filings, be accurate in all material respects.

4.07 Ownership of SBB. FCFG owns of record and beneficially all the shares of
SBB Capital Stock free and clear of any liens, security interests, pledges,
charges, encumbrances, agreements and restrictions of any kind of nature.

4.08 Taxes. Each of FCFG and FCBank has filed, or has had filed on its behalf,
all Tax Returns required to be filed by or with respect to FCFG and FCBank on or
prior to the date hereof, and all such Tax Returns are complete and

 

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accurate and disclose all Taxes required to be paid by or with respect to FCFG
and FCBank for the periods covered thereby, and all Taxes shown to be due on
such Tax Returns (and deficiencies asserted or assessments made as a result of
any examination of such Tax Returns) have been timely paid.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF TIB

TIB hereby represents and warrants to FCFG as follows:

5.01 Organization.

(a) TIB is a banking institution duly organized and validly existing and in good
standing under the laws of the State of Texas.

5.02 Authority; No Violation.

(a) TIB has full corporate power and authority to execute and deliver this
Agreement and to consummate the Contemplated Transactions.

(b) The execution and delivery of this Agreement by TIB and the consummation by
TIB of the Merger have been duly and validly approved by the Board of Directors
of TIB and no other corporate proceedings on the part of TIB are necessary to
consummate the Merger and the transactions contemplated hereby.

(c) This Agreement has been duly and validly executed and delivered by TIB and,
subject to receipt of the required approvals of Regulatory Authorities described
in Section 5.03 hereof, constitutes the valid and binding obligation of TIB,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and subject,
as to enforceability, to general principles of equity.

(d) Each of (i) the execution of this Agreement by TIB, (ii) subject to receipt
of, or exemption from, approvals from the Regulatory Authorities referred to in
Section 5.03 hereof and compliance by the parties hereto with any conditions
contained therein, the consummation of the Contemplated Transactions, and
(iii) compliance by TIB with any of the terms or provisions hereof, do not and
will not:

(A) conflict with or result in a breach of any provision of the Organization
Certificate or by-laws of TIB;

(B) violate any statute, rule, regulation, judgment, order, writ, decree or
injunction applicable to TIB or any of its properties or assets; or

(C) violate, conflict with, result in a breach of any provisions of, constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of, or acceleration of,
the performance required by, or result in a right of termination or acceleration
or

 

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the creation of any lien, security interest, charge or other encumbrance upon
any of the properties or assets of TIB under any of the terms or conditions of
any note, bond, mortgage, indenture, license, lease, agreement, commitment or
other instrument or obligation to which TIB is a party, or by which TIB or any
of its properties or assets may be bound or affected, excluding from clauses
(B) and (C) any such items which, in the aggregate, would not have a Material
Adverse Effect.

5.03 Consents and Approvals.

Except for (i) the notices, consents and approvals of, or exemptions from, the
applicable Regulatory Authorities set forth in Schedule 5.03 and (ii) the filing
of appropriate merger documents, no consents or approvals of, or filings or
registrations with, any Regulatory Authority are necessary, and no consents or
approvals of any third parties are necessary, in connection with the execution
and delivery of this Agreement by TIB or the consummation by TIB of the
Contemplated Transactions. There is no fact or circumstance or set of facts or
circumstances which would cause, or be likely to cause, any Regulatory Authority
to fail to approve the Contemplated Transactions.

5.04 Cash for Closing. At the Closing Date, TIB will have available cash
sufficient to pay the Merger Consideration to FCFG upon consummation of the
Contemplated Transactions.

5.05 Legal Proceedings. TIB is not a party to any, and there are no pending or,
to the Knowledge of TIB, threatened Actions which could materially adversely
affect the ability of TIB to perform its obligations under this Agreement.

5.06 Brokers and Finders. Neither TIB nor any of its officers, directors,
employees, independent contractors or agents, has employed any broker, finder,
investment banker or financial advisor, or incurred any liability for any fees
or commissions to any such person, in connection with the Contemplated
Transactions.

5.07 Information to be Supplied. The information supplied by TIB for inclusion
in the Applications will, at the time each such document is filed with any
Regulatory Authority and up to and including the dates of any required
regulatory approvals or consents, as such Applications may be amended by
subsequent filings, be accurate in all material respects.

 

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ARTICLE VI

COVENANTS OF THE PARTIES

The parties covenant and agree as follows, provided that the covenants and
agreements of SBB shall take effect on the Initial Purchase Closing Date:

6.01 Applications for Regulatory Approval.

(a) Each of FCFG, SBB and TIB shall use its Reasonable Best Efforts to prepare
and file, as soon as practicable and at such party’s expense, all Applications
required by law with the appropriate Regulatory Authorities for approval to
consummate the Contemplated Transactions and to comply with the terms and
conditions thereof. To the extent not filed prior to the date hereof, all such
Applications shall be filed within thirty (30) days from the date that all
Regulatory Applications filed in connection wit the Initial Merger have been
accepted by the Regulatory Authority. Each of FCFG, SBB and TIB agrees to
process all such Applications diligently and on a priority basis. Each of FCFG,
SBB and TIB shall cooperate with the other party in the preparation of all such
Applications and as otherwise reasonably requested by such other party in order
for such other party to be able to comply with the requirements or reasonable
requests of the Regulatory Authorities. Each of FCFG, SBB and TIB shall consult
with the other party with respect to the substance and status of such filings.

(b) Each of FCFG, SBB and TIB shall promptly notify the other party upon receipt
by such party of any notification that any Application provided for under this
Agreement has not been accepted for processing or has been denied.

6.02 Consents to Contemplated Transactions. FCFG and SBB shall obtain all
required consents to the Contemplated Transactions under any contracts or
personal or real property leases, if any, each of which consents shall be in
such form as shall reasonably be specified by TIB.

6.03 Taking of Necessary Actions. Through the Closing Date, in addition to the
specific agreements contained herein, each party hereto shall use Reasonable
Best Efforts to take all actions, and to do all things necessary, proper or
advisable under applicable Laws to consummate the Contemplated Transactions
including, if necessary, appealing any adverse ruling in respect of any
Application.

6.04 Public Announcements. FCFG and TIB shall agree upon the form and substance
of any press release related to this Agreement and the Contemplated
Transactions, but nothing contained herein shall prohibit either party,
following notification to the other party, from making any disclosure which its
counsel deems necessary under applicable law, provided that any such
announcement follows reasonable consultation with the other party and its
counsel.

6.05 No Solicitation. (a) Each of SBB and FCFG shall not, nor shall it authorize
or permit its directors, officers or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
to, directly or indirectly through another person, (i) solicit, initiate or
encourage

 

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(including by way of furnishing information), or take any other action to
facilitate, any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal or (ii) participate
in any discussions or negotiations regarding any Acquisition Proposal.

For purposes of this Agreement:

“Acquisition Proposal” means any written or oral proposal for a merger or other
business combination involving SBB or any written or oral proposal or offer to
acquire in any manner, directly or indirectly, an equity interest in SBB, any
voting securities of SBB or a substantial portion of the assets of SBB (other
than sales of SBB’s products in the ordinary course of business consistent with
past practice), other than the transactions contemplated by this Agreement;

(b) Subject to being obligated to take such action by its fiduciary duties under
applicable law, neither the Board of Directors of SBB or FCFG nor any committee
thereof shall (i) withdraw or modify, or propose publicly to withdraw or modify,
in a manner adverse to TIB, the approval or recommendation by such Board of
Directors or such committee of the Merger or this Agreement, (ii) approve or
recommend, or propose publicly to approve or recommend, any Acquisition Proposal
or (iii) approve or recommend, or propose to approve or recommend, or execute or
enter into, any letter of intent, agreement in principle, merger agreement,
acquisition agreement, option agreement or other similar agreement or propose
publicly or agree to do any of the foregoing (each, an “Acquisition Agreement”)
related to any Acquisition Proposal; and

(c) FCFG and SBB shall promptly advise TIB in writing of any Acquisition
Proposal, the material terms and conditions of such request or Acquisition
Proposal and the identity of the Person making such request or Acquisition
Proposal. FCFG and SBB will keep TIB informed of the status and material terms
and conditions (including amendments or proposed amendments) of any such request
or Acquisition Proposal. FCFG and SBB shall, and shall cause its stockholders,
advisors, employees and other agents of FCFG and SBB to, cease immediately and
cause to be terminated any and all existing activities, discussions or
negotiations, if any, with any third party conducted prior to the date hereof
with respect to any Acquisition Proposal and shall use its Reasonable Best
Efforts to cause any such third party (or its agents or advisors) in possession
of confidential information about SBB that was furnished by or on behalf of SBB
to return or destroy such information.

6.06 Notification of Certain Matters. FCFG and SBB shall give prompt notice to
TIB, and TIB shall give prompt notice to FCFG, of (a) the actual or prospective
occurrence, or non-occurrence, of any event which would be likely to cause
(i) any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect or (ii) any covenant, condition or agreement
contained in this Agreement not to be complied with or satisfied in any material
respect; and (b) any failure of FCFG, SBB or TIB, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it in any material respect hereunder; provided that the delivery of
any notice pursuant to this Section 6.06 shall not limit or otherwise affect the
remedies available to the party receiving such notice.

 

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6.07 Relocation of Head Office. Prior to the Closing Date, upon reasonable
notice by TIB, FCFG and SBB shall cause the head office of SBB to be relocated
(including the filing of any notice or application with any applicable
Regulatory Authority for such relocation) to 17011 Beach Boulevard, Suite 1260,
Huntington Beach, California or such other location in the greater Los Angeles,
California area as directed by TIB.

6.08 No Amendment of Purchase and Assumption Agreement. Neither SBB nor FCFG
shall amend or modify, or in the case of FCFG, permit FCBank or SBB to amend,
the Purchase and Assumption Agreement in a manner adverse to TIB without the
written consent of TIB.

ARTICLE VII

CONDITIONS PRECEDENT

7.01 Conditions Precedent to Each Party’s Obligation to Effect the Merger. The
respective obligations of each party hereto to effect the Merger shall be
subject to the fulfillment or satisfaction, prior to or on the Closing Date, of
the following conditions, unless waived by TIB, FCFG and SBB pursuant to
Section 10.03 hereof:

(a) Approvals of Regulatory Authorities. All requisite approvals and consents of
Regulatory Authorities and the expiration of the statutory waiting period or
periods relating to the Contemplated Transactions shall have been obtained, made
or occurred and this Agreement shall have been filed, together with such
certificates and the original of the approval of the Texas Banking Commissioner
and the OCC.

(b) No Litigation. No judgment, order, decree, statute, law, ordinance, rule or
regulation, entered, enacted, promulgated, enforced or issued by any court or
other governmental entity of competent jurisdiction or other legal restraint or
prohibition shall be in effect with respect to the transactions contemplated
hereby, and there shall not be pending any suit, action or proceeding by any
governmental entity (i) preventing the consummation of the Contemplated
Transactions or (ii) which otherwise is reasonably likely to have a Material
Adverse Effect on FCFG, SBB or TIB, as applicable.

(c) Closing of the Purchase and Assumption Agreement. The closing of the
transactions contemplated in the Purchase and Assumption Agreement shall have
occurred. The Purchase and Assumption Agreement shall be in a form satisfactory
to TIB.

7.02 Conditions Precedent to Obligations of TIB. All obligations of TIB under
this Agreement are subject to the fulfillment or satisfaction, prior to or on
the Closing Date, of each of the following conditions precedent, unless waived
by TIB pursuant to Section 10.03 hereof:

(a) Performance of Obligations; Representations and Warranties. FCFG and SBB
shall have performed and complied in all material respects with all agreements
and conditions contained in this Agreement that are required to be performed or
complied with by it prior to or

 

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at the Closing. Each of FCFG and SBB’s representations and warranties contained
in Articles III and IV of this Agreement and in the Purchase and Assumption
Agreement to the extent it is qualified by Material Adverse Effect or
materiality shall be true and correct, and each of FCFG and SBB’s
representations and warranties contained in Article III and IV of this Agreement
and the Purchase and Assumption Agreement to the extent it is not so qualified
by Material Adverse Effect or materiality shall be true and correct in all
material respects, in each case, at and as of the Effective Time with the same
effect as though such representations and warranties were made at and as of the
Effective Time, except for changes permitted by this Agreement and except to the
extent that any representations and warranties expressly relate to an earlier
date, in which case such representations and warranties shall be as of such
earlier date.

(b) Good Standing. FCFG shall have delivered a certificate of good standing of
SBB issued as of a recent date by the OCC.

(c) Consents. SBB shall have received all necessary consents or waivers, in form
and substance satisfactory to TIB, from the other parties to each contract,
lease or agreement to which SBB is a party, except where the failure to receive
such consent would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect on SBB.

(d) Indemnity Agreement. FCFG and FCBank shall have executed and delivered to
TIB the Indemnity Agreement in the form of Exhibit A, which shall be in full
force and effect.

(e) Opinion of Counsel. TIB shall have received the favorable written opinion
dated the Closing Date of Horgan, Rosen, Beckham & Coren, L.L.P., counsel to
FCFG, FCBank and SBB, in form and satisfactory to TIB, to the effect that:

(i) Each of FCFG, FCBank and SBB is, to counsel’s Knowledge, duly organized, and
each of FCBank and SBB is validly existing in good standing as a bank organized
under the laws of the United States, and has the corporate power to own all its
properties and assets and to carry on its business as it is now being conducted;

(ii) This Agreement (in the case of SBB and FCFG) and the Indemnity Agreement
(in the case of FCBank and FCFG) has been duly authorized, executed, and
delivered by FCBank, FCFG and SBB and constitutes a valid and binding agreement
of such party, enforceable against such party in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
or similar laws affecting the rights of creditors now or hereafter in effect and
subject, as to enforceability, to general principles of equity;

(iii) Neither the execution and delivery of this Agreement (in the case of SBB
and FCFG) or the Indemnity Agreement (in the case of FCBank and FCFG) nor the
consummation of the transactions contemplated herein or therein will result in a
material default under or violation of any provision of the organizational
documents of FCFG, FCBank or SBB or any material indenture, mortgage, deed of
trust, loan agreement or other material agreement, known to such counsel after
due inquiry, to which FCFG, FCBank or SBB is a party or by which FCFG, FCBank or
SBB is bound or as to which any of FCFG, FCBank or SBB’s properties are subject,
and no consents or waivers

 

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thereunder are required to be obtained by FCFG, FCBank or SBB in connection
therewith except the consents or waivers which have been obtained;

(iv) All consents, authorizations, orders and approvals of any Regulatory
Authority (specifying the same) required for the execution, delivery, and
performance of this Agreement (in the case of SBB and FCFG) and the Indemnity
Agreement (in the case of FCBank and FCFG) and the consummation of the
transactions contemplated herein have been obtained or the relevant waiting
periods have expired.

(f) Officer’s Certificate. TIB shall have received a certificate dated the
Closing Date and signed by the President or a Vice-President of FCFG and SBB,
respectively, certifying that, the conditions specified in Section 7.02(a) have
been satisfied.

7.03 Conditions Precedent to Obligations of FCFG and SBB. All obligations of
FCFG and SBB under this Agreement are subject to the fulfillment or
satisfaction, prior to or on the Closing Date, of each of the following
conditions precedent, unless waived by FCFG and SBB pursuant to Section 10.03
hereof:

(a) Performance of Obligations; Representations and Warranties. TIB shall have
performed and complied in all material respects with all agreements and
conditions contained in this Agreement that are required to be performed or
complied with by it prior to or at the Closing. TIB’s representations and
warranties contained in Article V of this Agreement to the extent it is
qualified by Material Adverse Effect or materiality shall be true and correct,
and TIB’s representations and warranties contained in Article V of this
Agreement to the extent it is not so qualified by Material Adverse Effect or
materiality shall be true and correct in all material respects, in each case, on
and as of the Closing with the same effect as though such representations and
warranties were made on and as of the Closing, except for changes permitted by
this Agreement and except to the extent that any representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall be as of such earlier date.

(b) Stockholder Approval. TIB shall have received the requisite stockholder
approval of this Agreement and the Merger as required under its Organization
Certificate.

(c) Officer’s Certificate. FCFG and SBB shall have received a certificate dated
the Closing Date and signed by a duly authorized officer of TIB, certifying
that, the conditions specified in Section 7.03(a) have been satisfied.

7.04 Potential Restructuring of Transaction. At TIB’s request, the acquisition
by TIB of SBB pursuant to the Merger may be effected by an alternative
transaction structure different than that contemplated by this Agreement, and
each of SBB and FCFG agrees to amend this Agreement to effect such alternative
structure; provided, that no such amendment shall adversely affect SBB or FCFG.

 

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ARTICLE VIII

TERMINATION

8.01 Termination. This Agreement may be terminated on or at any time prior to
the Closing Date:

(a) By the mutual written consent of each of the parties hereto;

(b) By FCFG, if TIB shall have breached or failed in any material respect to
perform or comply with any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to perform
or comply (A) would give rise to the failure of a material condition set forth
in Section 7.03 and (B) cannot be, or shall not have been, remedied within 30
days after receipt by such party of written notice specifying the nature of such
breach and requesting that it be remedied; provided, that, if such breach cannot
reasonably be cured within such 30-day period but may reasonably be cured within
60 days, and such cure is being diligently pursued, no such termination shall
occur prior to the expiration of such 60-day period;

(c) By TIB, if FCFG or SBB shall have breached or failed in any material respect
to perform or comply with any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to perform
or comply (A) would give rise to the failure of a material condition set forth
in Section 7.02 and (B) cannot be, or shall not have been, remedied within 30
days after receipt by such party of written notice specifying the nature of such
breach and requesting that it be remedied; provided, that, if such breach cannot
reasonably be cured within such 30-day period but may reasonably be cured within
60 days, and such cure is being diligently pursued, no such termination shall
occur prior to the expiration of such 60-day period;

(d) By either FCFG or TIB, if the Closing shall not have occurred by
December 31, 2007; provided, however, that the right to terminate this Agreement
under this Section 8.01(d) shall not be available to any party whose failure to
fulfill any obligation under this Agreement shall have been the cause of, or
shall have resulted in, the failure of the Closing to occur on or prior to such
date;

(e) By either FCFG or TIB, if any Regulatory Authority whose approval or consent
is required for consummation of the Contemplated Transactions shall issue a
definitive written denial of such approval or consent and the time period for
appeals and requests for reconsideration has run.

8.02 Effect of Termination.

(a) If this Agreement is terminated pursuant to Section 8.01 hereof, this
Agreement shall forthwith become void, other than Sections 6.04, 8.02, 10.01,
10.04 and 10.06 hereof which shall remain in full force and effect, and there
shall be no further liability on the part of any party hereto, except for any
liability of a party under such Sections of this Agreement, and except that no
party shall be relieved or released from any liabilities or damages arising out
of its breach of any provision of this Agreement.

 

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(b) If this Agreement is terminated by TIB pursuant to Section 8.01(c), FCFG
shall pay TIB liquidated damages in the amount of $100,000. If this Agreement is
terminated by FCFG pursuant to Section 8.01(b), TIB shall pay FCFG liquidated
damages in the amount of $100,000. The parties hereto recognize and agree that
the ascertainment of damages in the event of a default by the other party is
difficult or impossible with any degree of definiteness. Accordingly, the
parties hereto agree that such measure of liquidated damages is fair and
equitable under the circumstances.

(c) Any amounts in respect of liquidated damages shall be paid by wire transfer
within 7 days following the date of termination or within 7 days of such later
date as it shall become payable.

ARTICLE IX

INDEMNIFICATION; REMEDIES

9.01 Survival. All representations, warranties, covenants, and obligations in
this Agreement will survive the Closing.

9.02 Indemnification by FCFG.

FCFG and FCB will jointly and severally indemnify and hold harmless TIB and its
respective directors, officers, employees, agents and other representatives (the
“Indemnified Persons”) from and against any loss, liability, claim, damage,
expense (including, without limitation, costs of investigation, defense and
litigation, and reasonable fees and expenses of attorneys, accountants and
investment bankers incurred in connection with such investigation, defense and
litigation or in connection with the execution of this Agreement and the
carrying out of any and all acts contemplated herein) (all of the foregoing,
collectively, “Damages”) arising, directly or indirectly, from or in connection
with (i) any inaccuracy of any representation or warranty of SBB or FCFG or
(ii) any breach of covenant or obligations of SBB or FCFG.

9.03 Non-Exclusive Remedy. The remedies provided in this Article IX are not
exclusive of, and shall not preclude, any other remedies that would otherwise be
available to TIB or any other Indemnified Person, but are in addition to any
other rights or remedies available to the parties hereto at law or in equity.

ARTICLE X

MISCELLANEOUS

10.01 Expenses and Other Fees. Each party hereto shall bear and pay all costs
and expenses incurred by it in connection with the Contemplated Transactions,
including fees and expenses of its own attorneys, accountants and investment
bankers.

 

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10.02 Specific Performance. The parties hereto agree that irreparable damage
would occur in the event that the provisions contained in this Agreement were
not performed in accordance with its specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to seek an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States or any state having jurisdiction, including those courts
specifically identified in Section 10.12 of this Agreement, this being in
addition to any other remedy to which they are entitled at law or in equity.

10.03 Amendment, Extension and Waiver. Subject to applicable law, at any time
prior to the Closing Date, the parties may:

(a) amend this Agreement;

(b) extend the time for the performance of any of the obligations or other acts
of either party hereto;

(c) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto; or

(d) to the extent permitted by law, waive compliance with any of the agreements
or conditions of the other party contained herein.

This Agreement may not be amended except by an instrument in writing signed, by
authorized officers, on behalf of the parties hereto. Any agreement on the part
of a party hereto to any extension or waiver shall be valid only if set forth in
an instrument in writing signed by a duly authorized officer on behalf of such
party, but such waiver or failure to insist on strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.

10.04 Entire Agreement; No Third Party Beneficiaries.

(a) This Agreement and the Indemnity Agreement, including the documents referred
to herein or delivered pursuant hereto, contains the entire agreement and
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior arrangements and understandings between the parties, both
written and oral, with respect to its subject matter other than the
Confidentiality Agreement (if any).

(b) This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors; provided, however, that except as
provided in Article IX with respect to Indemnified Persons, nothing in this
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto and their respective successors, any rights, remedies,
obligations or liabilities.

10.05 No Assignment. No party hereto may assign any of its rights or obligations
hereunder to any other person, without the prior written consent of the other
parties hereto which consent shall not be unreasonably withheld; provided,

 

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however, that TIB may assign this Agreement to an Affiliate of TIB without the
consent of SBB and FCFG but such assignment shall not relieve TIB of its
obligations hereunder.

10.06 Notices. All notices or other communications hereunder shall be in writing
and shall be deemed given upon delivery if delivered personally, two Business
Days after mailing if mailed by prepaid registered or certified mail, return
receipt requested, or upon confirmation of good transmission if sent by
telecopy, addressed as follows:

 

(a) If to SBB or FCFG, to:

c/o First California Bank

1100 Paseo Camarillo Camarillo,

California 93010

Attention: C. G. Kum

President and CEO

Telecopy No.: 805-388-0536

with a copy to:

Gary M. Horgan

Horgan, Rosen, Beckham & Coren, L.L.P.

23975 Park Sorrento, Suite 200

Calabasas, California 91302-4001

Telecopy No.: 818-591-3838

 

(b) If to TIB, to:

TIB The Independent BankersBank

350 Phelps Drive

Irving, TX 75038

Attention: Curtis R. Harvey

Executive Vice President and CFO

Telecopy No.: 972- 541-2211

with a copy to:

James M. Rockett

Bingham McCutchen LLP

3 Embarcadero Center

San Francisco, CA 94111

Telecopy No.: 415-393-2286

10.07 Schedules. Information contained on any Schedule shall be deemed to cover
the express disclosure requirement contained in a representation or warranty of
this Agreement and any other representation or warranty of this Agreement of
such party where it is readily apparent it applies to such provision.

 

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The mere inclusion of an item in a Schedule as an exception to a representation
or warranty shall not be deemed an admission by a party that such item
represents a material exception or fact, event or circumstance or that such item
is or could result in a Material Adverse Effect.

10.08 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.

10.09 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.

10.10 Severability. If any provision of this Agreement or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provisions
to other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.

10.11 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to conflicts of
laws principles.

10.12 Consent to Jurisdiction; Service of Process. Each of SBB, FCFG and TIB
irrevocably and unconditionally (a) agree that any Action arising out of this
Agreement shall be brought and adjudicated in the in the federal courts situated
in Dallas, Texas; (b) submit to the exclusive jurisdiction of such courts for
the purpose of any such Action; (c) waive and agree not to assert by way of
motion, as a defense or otherwise in any such Action, any claim that such party
is not subject to the jurisdiction of the such courts, that such Action is
brought in an inconvenient forum, or that the venue of such Action is improper;
and (d) agree that process in any such Action may be served by ordinary mail
addressed to the last known address of SBB, FCFG or TIB, as the case may be,
anywhere in the world to the extent permitted by Federal rules.

10.13 Waiver of Jury Trial. SBB, FCFG and TIB each irrevocably and
unconditionally agree that any Action arising out of this Agreement shall be
tried only by a court and judge and not by a jury. EACH PARTY HEREBY EXPRESSLY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH ACTION.

 

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

 

TIB THE INDEPENDENT BANKERSBANK By:   /s/ Michael G. O’Rourke   Name:   Michael
G. O’Rourke   Title:   President & CEO

Attest:   /s/ Patricia Blackshear   Name:   Patricia Blackshear   Title:  
Senior Vice President & Corp. Secretary

FIRST CALIFORNIA FINANCIAL GROUP, INC. By:   /s/ C. G. Kum   Name:   C. G. Kum  
Title:   President & Chief Executive Officer

Attest:   /s/ Romolo Santarosa   Name:   Romolo Santarosa   Title:   Assistant
Corporate Secretary

SOUTH BAY BANK, N.A. By:   /s/ C. G. Kum   Name:   C. G. Kum   Title:  
President & Chief Executive Officer

Attest:   /s/ Romolo Santarosa   Name:   Romolo Santarosa   Title:   Assistant
Corporate Secretary

 

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