AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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1ST PACIFIC BANCORP | 1st Pacific Bank of California | FB Bancorp, First Business Bank, 1st Pacific Bancorp | First Business Bank, National Association

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: California Date: 7/17/2009
Industry: Conglomerates Law Firm: Luce Forward Sector: Conglomerates

Exhibit 10.1

AGREEMENT AND PLAN OF MERGER

BY AND BETWEEN

FB BANCORP

AND

FIRST BUSINESS BANK, NATIONAL ASSOCIATION

AND

1ST PACIFIC BANCORP

AND

1ST PACIFIC BANK OF CALIFORNIA

TABLE OF CONTENTS

			Page

ARTICLE I	CERTAIN DEFINITIONS		3
	1.1	Certain Definitions	3

ARTICLE II	THE MERGER		11
	2.1	Merger	11
	2.2	Effective Time	12
	2.3	Articles of Incorporation and Bylaws	12
	2.4	Directors and Officers of Surviving Corporation	12
	2.5	Effects of the Merger	13
	2.6	Intentionally omitted	13
	2.7	Possible Alternative Structures	13
	2.8	Bank Holding Company Merger and Bank Merger	13
	2.9	Additional Actions	13

ARTICLE III	CONVERSION OF SHARES		14
	3.1	Conversion of 1st Pacific Bancorp Common Stock; Merger Consideration	14
	3.2	Dissenting Shares	15
	3.3	Surrender of Certificates and Payment of Merger Consideration; Earn Out	15

ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF 1ST PACIFIC BANCORP AND 1ST PACIFIC BANK		19
	4.1	Standard	19
	4.2	Organization	19
	4.3	Capitalization	20
	4.4	Authority; No Violation	21
	4.5	Consents	22
	4.6	Financial Statements	22
	4.7	Taxes	24
	4.8	Intentionally omitted	24
	4.9	Material Contracts; Leases; Defaults	24
	4.10	Ownership of Property; Insurance Coverage	26
	4.11	Legal Proceedings	27
	4.12	Compliance With Applicable Law	28
	4.13	Employee Benefit Plans	29
	4.14	Brokers, Finders and Financial Advisors	31
	4.15	Environmental Matters	31
	4.16	Loan Portfolio	33
	4.17	Securities Law Documents	34
	4.18	Related Party Transactions	34
	4.19	Deposits	34
	4.20	Antitakeover Provisions Inapplicable; Required Vote	34

	4.21	Registration Obligations	34
	4.22	Risk Management Instruments	34
	4.23	Fairness Opinion	35
	4.24	Intellectual Property	35
	4.25	Labor Matters	35
	4.26	1st Pacific Bancorp Information Supplied	35
	4.27	Regulatory Orders	36
	4.28	Disclaimer of Other Representations and Warranties	36

ARTICLE V	REPRESENTATIONS AND WARRANTIES OF FB BANCORP AND FIRST BUSINESS BANK		36
	5.1	Standard	36
	5.2	Organization	37
	5.3	Capitalization	37
	5.4	Authority; No Violation	38
	5.5	Consents	38
	5.6	Financing Commitments	39
	5.7	Licenses and Permits	39
	5.8	Intentionally Omitted	39
	5.9	Stock Purchase	39
	5.10	FB Bancorp and First Business Bank Information Supplied	40
	5.11	Intentionally Omitted	40
	5.12	Funds for Stock Purchase on Deposit with First Business Bank	40
	5.13	Antitakeover Provisions Inapplicable; Required Vote	40
	5.14	Legal Proceedings	40
	5.15	Disclaimer of Other Representations and Warranties	40

ARTICLE VI	COVENANTS OF 1ST PACIFIC BANCORP		41
	6.1	Conduct of Business	41
	6.2	Current Information	45
	6.3	Access to Properties and Records	46
	6.4	Financial and Other Statements	47
	6.5	Maintenance of Insurance	47
	6.6	Disclosure Supplements	48
	6.7	Consents and Approvals of Third Parties	48
	6.8	All Commercially Reasonable Efforts	48
	6.9	Failure to Fulfill Conditions	48
	6.10	No Solicitation	49
	6.11	Reserves and Merger-Related Costs	52
	6.12	Board of Directors and Committee Meetings	53
	6.13	Cooperation with Bank Holding Company Merger and Bank Merger	53

ARTICLE VII	COVENANTS OF FB BANCORP AND FIRST BUSINESS BANK		53
	7.1	Conduct of Business	53
	7.2	Disclosure Supplements	53
	7.3	Consents and Approvals of Third Parties	54

	7.4	All Reasonable Efforts	54
	7.5	Failure to Fulfill Conditions	54
	7.6	Directors and Officers Indemnification and Insurance	54
	7.7	Change of Control Benefits Approval	55
	7.8	Reasonable Regulatory Restrictions	55
	7.9	Restrictions on Transfer	55

ARTICLE VIII	REGULATORY AND OTHER MATTERS		56
	8.1	Proxy Statement-Prospectus	56
	8.2	Shareholders Meeting	57
	8.3	Regulatory Approvals	57

ARTICLE IX	CLOSING CONDITIONS		58
	9.1	Conditions to Each Party’s Obligations under this Agreement	58
	9.2	Conditions to the Obligations of FB Bancorp and First Business Bank under this Agreement	59
	9.3	Conditions to the Obligations of 1st Pacific Bancorp and 1st Pacific Bank under this Agreement	60

ARTICLE X	THE CLOSING		61
	10.1	Time and Place	61
	10.2	Deliveries at the Closing	61

ARTICLE XI	TERMINATION, AMENDMENT AND WAIVER		62
	11.1	Termination	62
	11.2	Effect of Termination	63
	11.3	Amendment, Extension and Waiver	64

ARTICLE XII	EMPLOYEE BENEFITS		65
	12.1	Employee Benefits	65

ARTICLE XIII	MISCELLANEOUS		66
	13.1	Confidentiality	66
	13.2	Expenses	66
	13.3	Public Announcements	66
	13.4	Survival	66
	13.5	Notices	67
	13.6	Parties in Interest	67
	13.7	Complete Agreement	68
	13.8	Counterparts	68
	13.9	Severability	68
	13.10	Governing Law; Venue	68
	13.11	Intentionally omitted	68
	13.12	Interpretation	68
	13.13	Specific Performance	69

iii

EXHIBITS

Exhibit A:	Agreement and Plan of Merger

Exhibit B:	Agreement to Merge and Plan of Bank Holding Company Formation

Exhibit C:	Agreement and Plan of Bank Holding Company Merger

Exhibit D:	Agreement and Plan of Bank Merger

Exhibit E:	Voting Agreement

Exhibit F:	Earn Out Loans

Exhibit G:	Form of Termination of Employment Agreement

Exhibit H:	Shareholder Agreement

Exhibit I:	Directors Agreement

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of July 16, 2009, by and among, FB Bancorp, a California corporation (“ FB Bancorp ”), First Business Bank, National Association, a national banking association (“ First Business Bank ”), 1st Pacific Bancorp, a California corporation (“ 1st Pacific Bancorp ”), and 1st Pacific Bank of California, a California state-chartered bank and the wholly-owned subsidiary of 1st Pacific Bancorp (“ 1st Pacific Bank ”), is made with reference to the following:

RECITALS

WHEREAS , the Boards of Directors of each of FB Bancorp, First Business Bank, 1st Pacific Bancorp and 1st Pacific Bank: (i) have determined that this Agreement and the business combination and related transactions contemplated hereby are in the best interests of their respective companies and shareholders, (ii) have determined that this Agreement and the transactions contemplated hereby are consistent with and in furtherance of their respective business strategies, and (iii) have adopted resolutions approving this Agreement and declaring its advisability;

WHEREAS , subject to the terms and conditions of this Agreement and an Agreement and Plan of Merger, the form of which is attached as Exhibit “A” hereto (the “ Merger Agreement ”), FB Bancorp desires to acquire all of the issued and outstanding shares of 1st Pacific Bancorp common stock, no par value (the “ 1st Pacific Bancorp Common Stock ”), in exchange for cash through the merger of a wholly-owned subsidiary of FB Bancorp (“ FB Merger Sub ”) with and into 1st Pacific Bancorp (the “ Merger ”), with 1st Pacific Bancorp surviving the Merger (the “ Surviving Corporation ”);

WHEREAS , subject to the terms and conditions of this Agreement and an Agreement to Merge and Plan of Bank Holding Company Formation, the form of which is attached as Exhibit “B” hereto (the “ Bank Holding Company Formation Agreement ”), immediately prior to the Merger, FB Bancorp and First Business Bank will reorganize pursuant to which FB Bancorp will become the bank holding company for First Business Bank (the “ Bank Holding Company Formation ”);

WHEREAS , immediately after the consummation of the Bank Holding Company Formation and the Merger and subject to the terms and conditions of this Agreement and an Agreement and Plan of Bank Holding Company Merger, the form of which is attached as Exhibit “C” hereto (the “ Bank Holding Company Merger Agreement ”), the Surviving Corporation will merge with and into FB Bancorp (the “ Bank Holding Company Merger ”) with the Surviving Corporation surviving the Bank Holding Company Merger (the “ Surviving Bank Holding Company ”);

WHEREAS , immediately after the consummation of the Bank Holding Company Formation, the Merger and the Bank Holding Company Merger and subject to the terms and conditions of this Agreement and an Agreement and Plan of Bank Merger, the form of which is attached as Exhibit “D” hereto (the “ Bank Merger Agreement ”), First Business Bank will be merged with and into 1st Pacific Bank (the “ Bank Merger ”) with 1st Pacific Bank surviving the Bank Merger and continuing operations under its California banking charter and as the wholly-owned bank subsidiary of the Surviving Bank Holding Company (the “ Surviving Bank ”);

WHEREAS , as a condition to the willingness of FB Bancorp and First Business Bank to enter into this Agreement, each of the directors of 1st Pacific Bancorp has entered into a Voting Agreement, substantially in the form of Exhibit “E” hereto, dated as of the date hereof, with First Business Bank (the “ Voting Agreement ”), pursuant to which each such director has agreed, among other things, to vote all shares of 1st Pacific Bancorp Common Stock owned by such person in favor of the approval of this Agreement and the transactions contemplated hereby, upon the terms and subject to the conditions set forth in such Voting Agreements;

WHEREAS , as a condition to the willingness of 1st Pacific Bancorp and 1st Pacific Bank to enter into this Agreement, Ernest Auerbach, an adult individual and the principal shareholder of First Business Bank and FB Bancorp (“ Auerbach ”) has entered into a Shareholder Agreement, substantially in the form of Exhibit “H” hereto, dated as of the date hereof, with 1st Pacific Bancorp and 1st Pacific Bank (the “ Shareholder Agreement ”), pursuant to which Auerbach has agreed, among other things, to vote all shares of First Business Bank Common Stock and FB Bancorp Common Stock currently or hereafter beneficially owned by him in favor of the approval of this Agreement and the transactions contemplated hereby, upon the terms and subject to the conditions set forth in the Shareholder Agreement;

WHEREAS , as a condition to the willingness of 1st Pacific Bancorp and 1st Pacific Bank to enter into this Agreement, each of the directors of First Business Bank has entered into a Directors Agreement, substantially in the form of Exhibit “I” hereto, dated as of the date hereof, with 1st Pacific Bancorp and 1st Pacific Bank (the “ Directors Agreement ”), pursuant to which each such director has agreed, among other things, to vote all shares of First Business Bank Common Stock and FB Bancorp Common Stock currently or hereafter owned by such person in favor of the approval of this Agreement and the transactions contemplated hereby, upon the terms and subject to the conditions set forth in such Director Agreements;

WHEREAS , as a condition to the willingness of FB Bancorp and First Business Bank to enter into this Agreement, Richard H. Revier and James H. Burgess have executed and delivered to FB Bancorp and First Business Bank a termination of employment agreement in the form attached hereto as Exhibit “G,” terminating the 1st Pacific Bancorp Employment Agreements (as defined below) without liability to 1st Pacific Bancorp, 1st Pacific Bank or Surviving Corporation, except for such liabilities and obligations provided therein; and

WHEREAS , the parties desire to make certain representations, warranties and agreements in connection with the business transactions described in this Agreement and to prescribe certain conditions thereto;

NOW, THEREFORE , in consideration of the mutual covenants, representations, warranties and agreements herein contained, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

1.1 Certain Definitions

As used in this Agreement, the following terms have the following meanings (unless the context otherwise requires, references to Articles and Sections refer to Articles and Sections of this Agreement).

“ 1st Pacific Bancorp Common Stock ” shall have the meaning set forth in the Recitals to this Agreement.

“ 1st Pacific Bancorp Compensation and Benefit Plans ” shall have the meaning set forth in Section 4.13.1 .

“ 1st Pacific Bancorp Disclosure Schedule ” shall mean a written disclosure schedule delivered by 1st Pacific Bancorp to First Business Bank and subject to the introduction of Article IV, referencing the appropriate section of this Agreement.

“ 1st Pacific Bancorp Employment Agreements ” shall mean those agreements of employment in effect as of June 1, 2009 by and between 1st Pacific Bancorp or 1st Pacific Bank and Richard H. Revier and James H. Burgess.

“ 1st Pacific Bancorp Equity Plans ” shall mean the Second Amended and Restated 2000 Stock Option Plan and the 2007 Omnibus Stock Incentive Plan of 1st Pacific Bancorp and any amendments thereto.

“ 1st Pacific Bancorp Financial Statements ” shall mean (i) the audited consolidated balance sheets (including related notes and schedules, if any) of 1st Pacific Bancorp and subsidiaries as of December 31, 2008, 2007 and 2006 and the consolidated statements of operations, stockholders’ equity and cash flows (including related notes and schedules, if any) of 1st Pacific Bancorp and subsidiaries for each of the three years ended December 31, 2008, 2007 and 2006, and (ii) the unaudited interim consolidated financial statements of 1st Pacific Bancorp and subsidiaries as of the end of each calendar quarter following December 31, 2008 and for the periods then ended.

“ 1st Pacific Bancorp Option ” shall mean an option to purchase shares of 1st Pacific Bancorp Common Stock granted pursuant to the 1st Pacific Bancorp Equity Plans and as set forth in the 1st Pacific Bancorp Disclosure Schedule 4.3.1.

“ 1st Pacific Bancorp Recommendation ” shall have the meaning set forth in Section 8.2.1 .

“ 1st Pacific Bancorp Regulatory Agreement ” shall have the meaning set forth in Section 4.12.3 .

“ 1st Pacific Bancorp Regulatory Reports ” means the Reports of Condition and Income of 1st Pacific Bank and accompanying schedules, as filed with the FDIC, for each calendar quarter beginning with the quarter ended March 31, 2007, through the Closing Date, and all Reports from March 31, 2007 through the Closing Date.

“ 1st Pacific Bancorp Shareholders Meeting ” shall have the meaning set forth in Section 8.2.1 .

“ 1st Pacific Bancorp Subsequent Determination ” shall have the meaning set forth in Section 6.10 .

“ 1st Pacific Bancorp Transaction Expenses ” shall have the meaning set forth in Section 6.11.3 .

“ 1st Pacific Bancorp Trust Preferred Securities ” means the floating rate preferred securities issued by the FPBN Trust I, a Delaware trust affiliate, which trust securities mature on September 1, 2037.

“ 1st Pacific Bancorp ” shall mean 1st Pacific Bancorp, a California corporation, with its principal office located at 9333 Genesee Avenue #300, San Diego, California, 92121.

“ 1st Pacific Bank ” shall mean 1st Pacific Bank of California, a California-chartered commercial bank, with its principal office located at 9333 Genesee Avenue #300, San Diego, California, 92121, which is a wholly-owned subsidiary of 1st Pacific Bancorp.

“ 1st Pacific Bank Common Stock ” shall mean the common stock of 1st Pacific Bank, no par value.

“ 1st Pacific Bank’s Core Deposits ” shall mean total deposits (regardless of amount) less brokered deposits (as brokered deposits are defined in the Glossary for the Reports of Condition and Income Instructions for the then current version of the report forms FFIEC 031 and 041).

“ 1st Pacific Bank Tier 1 Capital ” shall mean Tier 1 capital as determined in accordance with the Reports of Condition and Income Instructions for the then current version of the report forms FFIEC 031 and 041, but shall not be deemed to include the impact of any reassessment of the amount of 1st Pacific Bank’s deferred tax asset as a result of this Agreement, it being understood and acknowledged that the execution and delivery of this Agreement will cause 1st Pacific Bank to reassess the amount of its deferred tax asset, which is disallowed for Tier 1 capital purposes, in accordance with the Report of Condition and Income instructions and that any adverse changes in its Tier 1 Capital that result from changes in the disallowed deferred tax asset will be considered a result of this Agreement.

“ Acquisition Proposal ” shall have the meaning set forth in Section 6.10 .

“ Acquisition Transaction ” shall have the meaning set forth in Section 6.10 .

“ Affiliate ” means any Person who directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person and, without limiting the generality of the foregoing, includes any executive officer or director of such Person and any Affiliate of such executive officer or director.

“ Agreement ” means this agreement and any amendment hereto.

“ Applications ” means the applications for regulatory approval that are required by the transactions contemplated hereby.

“ Auerbach ” shall have the meaning set forth in the Recitals to this Agreement.

“ Bank Holding Company Formation ” shall have the meaning set forth in the Recitals to this Agreement.

“ Bank Holding Company Formation Agreement ” shall have the meaning set forth in the Recitals to this Agreement.

“ Bank Holding Company Merger Agreement ” shall have the meaning set forth in the Recitals to this Agreement.

“ Bank Holding Company Merger ” shall have the meaning set forth in the Recitals to this Agreement.

“ Bank Merger Agreement ” shall have the meaning set forth in the Recitals to this Agreement.

“ Bank Merger ” shall have the meaning set forth in the Recitals to this Agreement.

“ Bank Regulator ” shall mean any Federal or state banking regulator including, but not limited to, the OCC, the FDIC, the FRB and the Department, which regulates 1st Pacific Bank or First Business Bank, or any of their respective holding companies or subsidiaries, as the case may be.

“ BHCA ” shall mean the Bank Holding Company Act of 1956, as amended.

“ Certificate ” or “ Certificates ” shall have the meaning set forth in Section 3.1.5 .

“ CGCL ” shall mean the California General Corporation Law.

“ Claim ” shall have the meaning set forth in Section 7.6.1 .

“ Closing Date ” shall have the meaning set forth in Section 2.2 .

“ Closing ” shall have the meaning set forth in Section 2.2 .

“ COBRA ” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended.

“ Confidentiality Agreement ” shall mean the confidentiality agreement referred to in Section 13.1 of this Agreement.

“ CRA ” shall mean the Community Reinvestment Act of 1977, as amended

“ Department ” shall mean the California Department of Financial Institutions.

“ Director Agreement ” shall have the meaning set forth in the Recitals to this Agreement.

“ Dissenting Shares ” shall have the meaning set forth in Section 3.2.1 .

“ Earn Out Amount ” shall have the meaning set forth in Section 3.3.4 .

“ Earn Out Lawsuit ” shall have the meaning set forth in Section 3.3.4 .

“ Earn Out Loans ” shall have the meaning set forth in Section 3.3.4 .

“ Earn Out Period ” shall have the meaning set forth in Section 3.3.4 .

“ Earn Out Report ” shall have the meaning set forth in Section 3.3.4 .

“ Effective Time ” shall mean the date and time specified pursuant to Section 2.2 hereof as the effective time of the Merger.

“ Environmental Laws ” means any applicable Federal, state or local law, statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent, order, judgment, decree, injunction or agreement with any governmental entity relating to (1) the protection, preservation or restoration of the environment (including, without limitation, air, water vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (2) the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Materials of Environmental Concern. The term Environmental Law includes without limitation (a) the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. § 9601, et seq; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901, et seq; the Clean Air Act, as amended, 42 U.S.C. § 7401, et seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251, et seq; the Toxic Substances Control Act, as amended, 15 U.S.C. § 2601, et seq; the Emergency Planning and Community Right to Know Act, 42 U.S.C. § 11001, et seq; the Safe Drinking Water Act, 42 U.S.C. § 300f, et seq; and all comparable state and local laws, and (b) any common law (including without limitation common law that may impose strict liability) that may impose liability or obligations for injuries or damages due to the presence of or exposure to any Materials of Environmental Concern.

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

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

“ Exchange Agent ” shall have the meaning set forth in Section 3.3.1 .

“ FDIC ” shall mean the Federal Deposit Insurance Corporation or any successor thereto.

“ Federal Reserve Bank ” shall mean the Federal Reserve Bank of San Francisco.

“ FB Bancorp ” means FB Bancorp, a California corporation with its principal office located at 12265 El Camino Real, Suite #100, San Diego, California 92130.

“ FB Merger Sub ” shall have the meaning set forth in the Recitals to this Agreement.

“ First Business Bank Common Stock ” shall have the meaning set forth in Section 2.1.1 .

“ First Business Bank Preferred Stock ” shall mean the Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A, liquidation preference $1,000 per share, and the Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B, liquidation preference $1,000 per share.

“ First Business Bank Fee ” shall have the meaning set forth in Section 11.2.2(C) .

“ First Business Bank Shareholders Meeting ” shall have the meaning set forth in Section 8.2.2 .

“ First Business Bank Stock Benefit Plan ” means the Ramona National Bank 2001 Stock Option Plan.

“ First Business Bank ” shall mean First Business Bank, National Association, a national banking association, with its principal office located at 12265 El Camino Real, Suite #100 San Diego, California 92130.

“ FRB ” shall mean the Board of Governors of the Federal Reserve System or any successor thereto.

“ GAAP ” shall mean accounting principles generally accepted in the United States of America, consistently applied with prior practice.

“ Governmental Entity ” shall mean any Federal or state court, administrative agency or commission or other governmental authority or instrumentality.

“ HIPAA ” shall mean the Health Insurance Portability and Accountability Act.

“ HOLA ” shall mean the Home Owners’ Loan Act, as amended.

“ Indemnified Liabilities ” shall have the meaning set forth in Section 7.6.1 .

“ Indemnified Parties ” shall have the meaning set forth in Section 7.6.1 .

“ IRS ” shall mean the United States Internal Revenue Service.

“ Junior Subordinated Debt Securities ” means 1st Pacific Bancorp’s unsecured floating rate junior subordinated debt securities due September 1, 2037.

“ Knowledge ” as used with respect to a Person (including references to such Person being aware of a particular matter) means those facts that are known or should have been known after reasonable investigation by the executive officers and directors of such Person, and includes any facts, matters or circumstances set forth in any written notice from any Bank Regulator. For

purposes of this definition, a “reasonable investigation” shall mean a review of written records in such Person’s possession and interview of the executive officers and directors of such Person.

“ Loan Property ” shall have the meaning set forth in Section 4.15.2 .

“ Material Adverse Effect ” shall mean, with respect to FB Bancorp or First Business Bank, any effect that (i) is material and adverse to the financial condition, results of operations or business of such party taken as a whole, or (ii) does or would materially impair the ability of FB Bancorp or First Business Bank to perform its obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the transactions contemplated by this Agreement. With respect to 1st Pacific Bancorp or 1st Pacific Bank, “Material Adverse Effect” shall mean any effect that (i) is material and adverse to the financial condition, results of operations or business of such party taken as a whole, or (ii) does or would materially impair the ability of 1st Pacific Bancorp or 1st Pacific Bank to perform its obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the transactions contemplated by this Agreement. The failure to satisfy any of the closing conditions set forth in Section 9.2.7 shall not be deemed a Material Adverse Effect unless otherwise meeting the definition set forth above. For purposes of this Agreement, the term “Material Adverse Effect” shall not be deemed to include the impact of (a) changes in laws and regulations affecting banks or thrift institutions or their holding companies generally, or interpretations thereof by courts or governmental agencies, (b) changes in GAAP or regulatory accounting principles generally applicable to financial institutions and their holding companies, (c) the impact of compliance with this Agreement on the business, financial condition or results of operations of the parties and their respective subsidiaries, including the expenses incurred by the parties hereto in consummating the transactions contemplated by this Agreement, (d) any charge or reserve taken by 1st Pacific Bancorp at the request of FB Bancorp pursuant to Section 6.11 of this Agreement, (e) actions and omissions of a party hereto taken with the prior written consent of another non-affiliated party or pursuant to the terms of this Agreement, (f) changes in national or international political or social conditions including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon or within the United States, or any of its territories, possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, unless it uniquely affects any of the parties or any of their subsidiaries, and/or (g) any change in the value of the securities or loan portfolio, or any change in the value of the deposits or borrowings, of FB Bancorp or 1st Pacific Bancorp, or any of their Subsidiaries, respectively, resulting from a change in interest rates generally.

“ Materials of Environmental Concern ” means pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products, and any other materials regulated under Environmental Laws.

“ Maximum Amount ” shall have the meaning set forth in Section 7.6.3 .

“ Merger Agreement ” shall have the meaning set forth in the Recitals to this Agreement.

“ Merger Consideration ” shall have the meaning set forth in Section 3.1.4 .

“ Merger Registration Statement ” shall mean the registration statement on Form S-4, together with all amendments, filed with the SEC under the Securities Act for the purpose of registering shares of FB Bancorp Common Stock to be offered to holders of First Business Bank Common Stock in connection with the Bank Holding Company Merger. The Proxy Statement-Prospectus contained in the Merger Registration Statement will be utilized to solicit Shareholder Approvals.

“ Merger ” shall mean the merger of 1st Pacific Bancorp with and into FB Merger Sub pursuant to the terms hereof.

“ Nasdaq ” shall mean the Nasdaq Global Select Market.

“ Net Lawsuit Collections ” shall have the meaning set forth in Section 3.3.4 .

“ Net Loan Collections ” shall have the meaning set forth in Section 3.3.4 .

“ Notice of Superior Proposal ” shall have the meaning set forth in Section 6.10 .

“ Observer ” shall have the meaning set forth in Section 6.12 .

“ OCC ” shall mean the Office of the Comptroller of the Currency or any successor thereto.

“ Participation Facility ” shall have the meaning set forth in Section 4.15.2 .

“ Pension Plan ” shall have the meaning set forth in Section 4.13.2 .

“ Per Share Consideration ” shall have the meaning set forth in Section 3.1.4 .

“ Person ” shall mean any individual, corporation, partnership, joint venture, association, trust or “group” (as that term is defined under the Exchange Act).

“ Pre-Closing Earn Out Amount ” shall have the meaning set forth in Section 3.3.4 .

“ Pre-Closing Earn Out Period ” shall have the meaning set forth in Section 3.3.4 .

“ Pre-Closing Earn Out Report ” shall have the meaning set forth in Section 3.3.4 .

“ Pre-Closing Net Lawsuit Collections ” shall have the meaning set forth in Section 3.3.4 .

“ Pre-Closing Net Loan Collections ” shall have the meaning set forth in Section 3.3.4 .

“ Proxy Statement-Prospectus ” shall have the meaning set forth in Section 8.1.1 .

“ Regulatory Approvals ” means the approval of any Bank Regulator that is necessary in connection with the consummation of the Bank Holding Company Formation, the Merger, the Bank Holding Company Merger, the Bank Merger and the related transactions contemplated by this Agreement.

“ Reports ” means all forms, statements, certifications, reports and documents required to be filed or furnished by 1st Pacific Bancorp with the FRB or 1st Pacific Bank with the FDIC or the Department.

“ Representatives ” shall have the meaning set forth in Section 6.10 .

“ Rights ” shall mean warrants, options, rights, convertible securities, stock appreciation rights and other arrangements or commitments which obligate an entity to issue or dispose of any of its capital stock or other ownership interests or which provide for compensation based on the equity appreciation of its capital stock.

“ SEC ” shall mean the Securities and Exchange Commission or any successor thereto.

“ Securities Act ” shall mean the Securities Act of 1933, as amended.

“ Securities Documents ” shall mean all reports, offering circulars, proxy statements, registration statements and all similar documents filed, or required to be filed, pursuant to the Securities Laws.

“ Securities Laws ” shall mean the Securities Act; the Exchange Act; the Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940, as amended; the Trust Indenture Act of 1939, as amended; and the rules and regulations of the SEC promulgated thereunder.

“ Shareholder ” or “ Shareholders ” shall have the meaning set forth in Section 3.1.5 .

“ Shareholder Agreement ” shall have the meaning set forth in the Recitals to this Agreement.

“ Shareholder Approvals ” shall mean the approval of the shareholders of First Business Bank at the First Business Bank Shareholders Meeting, the approval of the Shareholders of 1st Pacific Bancorp at the 1st Pacific Bancorp Shareholders Meeting, the written consent of 1st Pacific Bancorp, as the sole shareholder of 1st Pacific Bank, and any other approval by the holders of any voting capital stock of FB Bancorp, FB Merger Sub, First Business Bank, 1st Pacific Bancorp and 1st Pacific Bank as required to approve the transactions contemplated herein, including the Bank Holding Company Formation, the Merger, the Bank Holding Company Merger, and the Bank Merger.

“ Stock Purchase ” shall mean the purchase by Auerbach of shares of the no par value common stock of FB Bancorp having an aggregate purchase price of approximately fifteen million dollars ($15,000,000).

“ Subsidiaries ” shall have the meaning set forth in Section 4.3.2 .

“ Superior Proposal ” shall have the meaning set forth in Section 6.10 .

“ Surviving Bank ” shall have the meaning set forth in Recitals to this Agreement.

“ Surviving Bank Holding Company ” shall have the meaning set forth in Recitals to this Agreement.

“ Surviving Corporation ” shall have the meaning set forth in Recitals to this Agreement.

“ Takeover Laws ” means any “moratorium,” “business combination,” “control share,” “fair price” or other takeover defense laws and regulations.

“ Tail Coverage ” shall have the meaning set forth in Section 7.6 .

“ Tail Policy ” shall have the meaning set forth in Section 7.6 .

“ Terminated Employees ” shall have the meaning set forth in Section 12.1.2 .

“ Termination Date ” shall mean December 31, 2009.

“ Trust ” means FPBN Trust I, a Delaware statutory business trust, the common securities of which are held by 1st Pacific Bancorp.

“ Voting Agreement ” shall have the meaning set forth in the Recitals to this Agreement.

“ Warrants ” shall mean any warrant to purchase shares of 1st Pacific Bancorp Common Stock as set forth in the 1st Pacific Bancorp Disclosure Schedule 4.3.1.

Other terms used herein are defined in the Preamble and elsewhere in this Agreement.

ARTICLE II

THE MERGER

2.1 Merger

2.1.1 Bank Holding Company Formation . Immediately prior to the Closing and subject to the terms and conditions of this Agreement and the Bank Holding Company Formation Agreement in the form attached hereto as Exhibit “B,” the receipt of all necessary Regulatory Approvals and Shareholder Approvals, FB Bancorp will acquire all of the outstanding voting common stock, $5.00 par value, of First Business Bank (the “ First Business Bank Common Stock ”) and thereby become a bank holding company for First Business Bank.

2.1.2 The Merger . Subject to the terms and conditions of this Agreement and the Merger Agreement in the form attached hereto as Exhibit “A,” the receipt of all necessary Regulatory Approvals and Shareholder Approvals, at the Effective Time: (a) FB Bancorp will cause FB Merger Sub to merge with and into 1st Pacific Bancorp, with 1st Pacific Bancorp as the Surviving Corporation; and (b) the separate existence of FB Merger Sub shall cease and all of the rights, privileges, powers, franchises, properties, assets, liabilities and obligations of FB Merger Sub shall be vested in and assumed by the Surviving Corporation. As part of the Merger, each share of 1st Pacific Bancorp Common Stock will be converted into the right to receive the Per Share Consideration pursuant to the terms of Article III hereof.

2.1.3 Bank Holding Company Merger . Immediately following the Closing for the Merger, and subject to the terms and conditions of this Agreement and the Bank Holding Company Merger Agreement to be entered into by and between FB Bancorp and the Surviving Corporation, the form of which is attached as Exhibit “C” hereto, the receipt of all necessary Regulatory Approvals and Shareholder Approvals: (a) FB Bancorp will merge with the Surviving Corporation with the Surviving Corporation as the Surviving Bank Holding Company; and (b) the separate existence of FB Bancorp shall cease and all of the rights, privileges, powers, franchises, properties, assets, liabilities and obligations of FB Bancorp shall be vested in and assumed by the Surviving Bank Holding Company.

2.1.4 Bank Merger . Immediately following the Bank Holding Company Merger and subject to the terms and conditions of this Agreement the Bank Merger Agreement, the form of which is attached as Exhibit “D” hereto, the Surviving Bank Holding Company shall cause the Bank Merger of First Business Bank with and into 1st Pacific Bank, with 1st Pacific Bank as the Surviving Bank and continuing banking operations as a California state-chartered bank and as the wholly-owned subsidiary bank of the Surviving Bank Holding Company.

2.2 Effective Time

The Closing for the Merger shall occur no later than the close of business on the tenth (10th) business day following the latest to occur of (i) all Regulatory Approvals of the Bank Holding Company Formation, the Merger, the Bank Holding Company Merger and the Bank Merger, (ii) all Shareholder Approvals, (iii) all closing conditions having been met or waived, or (iv) the passing of any applicable waiting periods; or at such other date or time upon which the parties hereto shall mutually agree (the “ Closing ”). The Merger shall be effected by the filing of the Merger Agreement with the California Secretary of State on the day of the Closing (the “ Closing Date ”), in accordance with the CGCL. The “ Effective Time ” means the date and time upon which the Merger Agreement is filed with the California Secretary of State, or as otherwise stated in the Merger Agreement, in accordance with the CGCL.

2.3 Articles of Incorporation and Bylaws

The Articles of Incorporation and bylaws of 1st Pacific Bancorp as in effect immediately prior to the Effective Time shall be the Articles of Incorporation and bylaws of the Surviving Corporation, until thereafter amended as provided therein and by applicable law.

2.4 Directors and Officers of Surviving Corporation

The directors and executive officers of FB Merger Sub immediately prior to the Effective Time will become the directors and executive officers of the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified. In addition, at the Effective Time, two board members of 1st Pacific Bancorp immediately prior to the Effective Time will be invited by the board of directors of FB Merger Sub to join the board of directors of the Surviving Corporation, which shall become the board of directors of the Surviving Bank Holding Company until their respective successors are duly elected or appointed and qualified.

2.5 Effects of the Merger

At and after the Effective Time, the Merger shall have the effects as set forth in the CGCL.

2.6 Intentionally omitted.

2.7 Possible Alternative Structures

Notwithstanding anything to the contrary contained in this Agreement, prior to the Effective Time, FB Bancorp shall be entitled, upon the consent of 1st Pacific Bancorp, which shall not be unreasonably withheld, to revise the structure of the transactions contemplated herein, provided that (i) there are no adverse Federal or state income tax consequences to 1st Pacific Bancorp shareholders as a result of the modification; (ii) the consideration to be paid to the holders of 1st Pacific Bancorp Common Stock under this Agreement is not thereby changed in kind, value or reduced in amount; and (iii) such modification will not delay materially or jeopardize the receipt of Regulatory Approvals or other consents and approvals relating to the consummation of the transactions contemplated herein or otherwise cause any condition to Closing set forth in Article IX not to be capable of being fulfilled. The parties hereto agree to appropriately amend this Agreement and any related documents in order to reflect any such revised structure.

2.8 Bank Holding Company Merger and Bank Merger

FB Bancorp and First Business Bank shall use their reasonable best efforts to cause the Bank Holding Company Formation to occur as soon as possible and to cause the consummation of the Bank Holding Company Merger and the Bank Merger to occur as soon as reasonably practicable after the Effective Time.

2.9 Additional Actions

If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any further deeds, assignments or assurances in law or any other acts are necessary or desirable to (i) vest, perfect or confirm, of record or otherwise, in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of 1st Pacific Bancorp or FB Merger Sub, or (ii) otherwise carry out the purposes of this Agreement, 1st Pacific Bancorp and 1st Pacific Bank and their respective officers and directors shall be deemed to have granted to the Surviving Corporation an irrevocable power of attorney to execute and deliver, in such official corporate capacities, all such deeds, assignments or assurances in law or any other acts as are necessary or desirable to (a) vest, perfect or confirm, of record or otherwise, in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of 1st Pacific Bancorp or (b) otherwise carry out the purposes of this Agreement, and the officers and directors of the Surviving Corporation are authorized in the name of 1st Pacific Bancorp or otherwise to take any and all such action.

ARTICLE III

CONVERSION OF SHARES

3.1 Conversion of 1st Pacific Bancorp Common Stock; Merger Consideration

At the Effective Time, by virtue of the Merger and without any action on the part of FB Bancorp or First Business Bank, 1st Pacific Bancorp or the holders of any of the shares of 1st Pacific Bancorp Common Stock, the Merger shall be effected in accordance with the following terms:

3.1.1 Each share of FB Bancorp Common Stock that is issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding following the Effective Time and shall be unchanged by the Merger.

3.1.2 Each share of common stock, no par value, of FB Merger Sub issued and outstanding immediately prior to the Effective Time will be converted into and become one fully paid and nonassessable share of common stock of the Surviving Corporation.

3.1.3 Intentionally omitted.

3.1.4 Subject to the provisions of this Article III , each share of 1st Pacific Bancorp Common Stock issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares) shall become and be converted into, as provided in and subject to the limitations set forth in this Agreement, the right to receive $1.40 in cash (the “ Per Share Consideration ”). The aggregate amount of the Per Share Consideration to be paid to all holders of 1st Pacific Bancorp Common Stock is referred to herein as the “ Merger Consideration .” In the case of 1st Pacific Bancorp Options under the Second Amended and Restated 2000 Stock Option Plan, such 1st Pacific Bancorp Options shall be accelerated in full so as to become fully exercisable. Such 1st Pacific Bancorp Option holders will be given notice at least thirty (30) days prior to the Closing of the Merger and of the acceleration of such 1st Pacific Bancorp Options, which shall be exercisable for a period of thirty (30) days from the date of such notice. All unexercised 1st Pacific Bancorp Options under the Second Amended and Restated 2000 Stock Option Plan shall terminate thirty (30) days after the date of such notice. In the case of 1st Pacific Bancorp Options under the 2007 Omnibus Stock Incentive Plan of 1st Pacific Bancorp, such 1st Pacific Bancorp Options shall be accelerated in full so as to become fully exercisable. Such 1st Pacific Bancorp Option holders will be given notice of the acceleration of such 1st Pacific Bancorp Options, which shall be exercisable for a period of three (3) months from the date of such notice. All unexercised 1st Pacific Bancorp Options under the 2007 Omnibus Stock Incentive Plan of 1st Pacific Bancorp shall terminate three (3) months after the date of such notice. In the case of Warrants, such Warrants shall immediately become one hundred percent (100%) vested upon the approval of this Agreement by the shareholders of 1st Pacific Bancorp and will remain fully exercisable for a period of three (3) months thereafter, at which time any unexercised Warrants will automatically terminate.

3.1.5 Upon the Effective Time, holders of shares of 1st Pacific Bancorp Common Stock that were outstanding immediately prior to the Effective Time shall cease to have any rights as shareholders of 1st Pacific Bancorp (individually, a “ Shareholder ,” and collectively the “ Shareholders ”), and the stock transfer books of 1st Pacific Bancorp shall be closed with respect to all shares of 1st Pacific Bancorp Common Stock outstanding immediately prior to the Effective

Time. No further transfer of any such shares of 1st Pacific Bancorp Common Stock shall be made on such stock transfer books after the Effective Time. If, after the Effective Time, a valid certificate previously representing any of such shares of 1st Pacific Bancorp Common Stock, or valid representation of ownership of certificateless shares of 1st Pacific Bancorp Common Stock (each a “ Certificate ” and collectively, the “ Certificates ”) is presented to the Surviving Corporation or 1st Pacific Bank, such Certificate shall be canceled and shall be exchanged as provided in Section 3.3 .

3.2 Dissenting Shares

3.2.1 If demands for payment are filed with respect to 5% or more of the outstanding shares 1st Pacific Bancorp Common Stock in accordance with Section 1301 of the CGCL, then notwithstanding any provision of this Agreement to the contrary, any shares of 1st Pacific Bancorp Common Stock held by a holder that has demanded and perfected dissenters’ rights for such shares in accordance with the CGCL and who, as of the Effective Time, has not effectively withdrawn or lost such dissenters’ rights (“ Dissenting Shares ”) shall not be converted into or represent the right to receive the Per Share Consideration set forth in Section 3.1.4 or any share of the Earn Out Amount pursuant to Section 3.3.4 , but the holder thereof shall only be entitled to such rights as are granted under the CGCL.

3.2.2 Notwithstanding the provisions of Section 3.2.1 , if any holder of 1st Pacific Bancorp Common Stock that demands, in accordance with Section 1301 of the CGCL, that 1st Pacific Bancorp purchase such shares under the CGCL, shall effectively withdraw or lose (through failure to perfect or otherwise) such holder’s dissenters’ rights, then, as of the later of (i) the Effective Time or (ii) the occurrence of such event, such holder’s shares shall automatically be converted into and represent only the right to receive the Per Share Consideration set forth in Section 3.1.4 (without interest), upon surrender of the Certificate representing such shares in accordance with Section 3.3 .

3.2.3 1st Pacific Bancorp shall give FB Bancorp and First Business Bank: (i) prompt notice of its receipt of any written demands for purchase of any shares of 1st Pacific Bancorp Common Stock, withdrawals of such demands, and any other instruments relating to the Merger served pursuant to the CGCL, and (ii) the opportunity to participate in all negotiations and proceedings with respect to demands for purchase under the CGCL. 1st Pacific Bancorp shall not, except with the prior written consent of FB Bancorp and First Business Bank or as may be required under applicable law, voluntarily make any payment with respect to any demands for purchase of 1st Pacific Bancorp Common Stock, or offer to settle or settle any such demands.

3.3 Surrender of Certificates and Payment of Merger Consideration; Earn Out

3.3.1 Exchange Agent . Computershare shall serve as the exchange agent (the “ Exchange Agent ”) in the Merger. No later than the Effective Time, FB Bancorp shall deposit with the Exchange Agent the Merger Consideration to be held by the Exchange Agent in escrow for a period not to exceed six (6) months from the Effective Time.

3.3.2 As promptly as practicable after the Effective Time, but in no event later than ten (10) days after the Effective Time, FB Bancorp shall cause the Exchange Agent to make available

for exchange in accordance with this Section 3.3 the Merger Consideration issuable pursuant to Section 3.1 in exchange for outstanding shares of 1st Pacific Bancorp Common Stock.

3.3.3 Exchange Procedures . As soon as reasonably practicable after the Effective Time, but in no event later than ten (10) days after the Effective Time, the Surviving Corporation shall cause to be mailed to each holder of record of a Certificate or Certificates: (i) a letter of transmittal in customary form, reasonably acceptable to FB Bancorp and 1st Pacific Bancorp (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent); and (ii) instructions for use in effecting the surrender of the Certificates in exchange for Per Share Consideration. Upon surrender of a Certificate for cancellation to the Exchange Agent or to such other agent or agents as may be appointed by FB Bancorp together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, the holder of such Certificate shall be entitled to receive in exchange therefore the Per Share Consideration to which such holder is entitled pursuant to Section 3.1 . Until surrendered, each outstanding Certificate that, prior to the Effective Time, represented shares of 1st Pacific Bancorp Common Stock will be deemed from and after the Effective Time, for all corporate purposes including the payment of dividends, to evidence only the right to receive the Per Share Consideration pursuant to this Article III . Holders of outstanding 1st Pacific Bancorp Options under a 1st Pacific Bancorp Equity Plan shall be paid the applicable consideration in accordance with the terms of this Agreement and the agreement for the 1st Pacific Bancorp Option between 1st Pacific Bancorp and each of them.

3.3.4 Calculation and Payment of the Earn Out Amount

(A) For purposes of this Agreement, “ Earn Out Amount ” shall mean an amount equal to the product of (i) 66-2/3% and (ii) the sum of (A) the “ Net Loan Collections ” (as defined below) and (B) the “ Net Lawsuit Collections ” (as defined below). Further, “ Pre-Closing Earn Out Amount ” shall mean an amount equal to the sum of (Y) the “ Pre-Closing Net Loan Collections ” (as defined below) and (Z) the “ Pre-Closing Net Lawsuit Collections ” (as defined below). Notwithstanding the foregoing, the sum of the Pre-Closing Earn Out Amount and the Earn Out Amount shall not exceed Four Million Dollars ($4,000,000).

(B) For purposes of this Agreement, “ Net Loan Collections ” shall mean (i) all monies on account of principal, interest, attorneys’ fees and costs actually collected and received by Surviving Bank on account of the loans identified on Exhibit “F” hereto (the “ Earn Out Loans ”) during the Earn Out Period minus (ii) the sum of the following incurred by Surviving Bank in connection with collecting the Earn Out Loans for which monies are actually collected: (A) attorneys’ fees, (B) court costs, (C) arbitration costs, (D) expert witness fees, (E) consultant fees, (F) collection agency fees, (G) all interest and principal remitted or to be remitted to a person or entity on account of the Earn Out Loans other than FB Bancorp, First Business Bank, 1st Pacific Bancorp, 1st Pacific Bank or their Affiliates, and (H) all other fees, costs and expenses incurred by Surviving Bank (or their agents) in collecting the Earn Out Loans.

(C) For purposes of this Agreement, “ Pre-Closing Net Loan Collections ” shall mean all monies on account of principal, interest, attorneys’ fees and costs actually collected and received by 1st Pacific Bank on account of the Earn Out Loans during the Pre-Closing Earn Out Period (as defined below).

(D) For purposes of this Agreement, “ Net Lawsuit Collections ” shall mean (i) all monies actually received by Surviving Bank as a result of a court order, arbitrator award, or settlement from any and all defendants, and their insurers, if any, in the action entitled “1st Pacific Bank, a California corporation vs. San Diego Private Bank, a California corporation,” Case # 37-2008-00079995-CU-BT-CTL, pending in the Superior Court of California, County of San Diego, Central Division (the “ Earn Out Lawsuit ”) during the Earn Out Period minus (ii) the sum of the following incurred by Surviving Bank in initiating and prosecuting the Earn Out Lawsuit: (A) attorneys’ fees, (B) court costs, (C) arbitration costs, (D) expert witness fees, (E) consultant fees, (F) collection agency fees, and (G) all other fees, costs and expenses incurred by Surviving Bank in initiating and prosecuting the Earn Out Lawsuit.

(E) For purposes of this Agreement, “ Pre-Closing Net Lawsuit Collections ” shall mean all monies actually received by 1st Pacific Bank as a result of a court order, arbitrator award, or settlement from any and all defendants, and their insurers, if any, in the Earn Out Lawsuit during the Pre-Closing Earn Out Period, less any amount paid to Marty Goldberg as receiver of Explorer, LLC.

(F) For purposes of this Agreement, “ Earn Out Period ” shall mean the three (3) year period from and after the Closing Date. Further, “ Pre-Closing Earn Out Period ” shall mean the period from and after the date of this Agreement until and including the day immediately prior to the Closing Date.

(G) Upon the Effective Time, Surviving Bank shall pay the Pre-Closing Earn Out Amount, if any, to the Exchange Agent for distribution on a pro rata basis to all shareholders of record of 1st Pacific Bancorp immediately before the Effective Time in accordance with Section 3.3.3 above. Immediately prior to the Effective Time, 1st Pacific Bancorp or 1st Pacific Bank shall deliver a report (the “ Pre-Closing Earn Out Report ”) to FB Bancorp setting forth a detailed calculation of the Pre-Closing Net Loan Collections, the Pre-Closing Net Lawsuit Collections and the Pre-Closing Earn Out Amount for the Pre-Closing Earn Out Period and shall be certified by an officer of 1st Pacific Bancorp or 1st Pacific Bank as to completeness and accuracy in all material respects.

(H) Within forty-five (45) days of each anniversary of the Closing Date during the Earn Out Period, Surviving Bank shall deliver an Earn Out Report (an “ Earn Out Report ”) to the Exchange Agent, which Earn Out Report shall set forth a detailed calculation of the Net Loan Collection, Net Lawsuit Collection and the Earn Out Amount for the Earn Out Period up to and including such date, net of any previous Earn Out Amounts reported pursuant to Earn Out Reports for previous anniversaries, and shall be certified by an officer of Surviving Bank as to completeness and accuracy in all material respects. To the extent the Earn Out Report reflects that the Earn Out Amount is a positive number up to such date, Surviving Bank shall pay the Earn Out Amount calculated up to such date, if any, to the Exchange Agent for distribution on a pro rata basis to all shareholders of record of 1st Pacific Bancorp immediately before the Effective Time in accordance with Section 3.3.3 above. The determination of the Earn Out Amount as set forth on the Earn Out Report shall be conclusive and binding upon the Parties.

(I) In collecting the Earn Out Loans, the parties agree that Surviving Bank shall apply the same level of collection efforts it applies for loans originated by Surviving Bank in the

normal course of business and that Surviving Bank shall not be obligated to apply any special efforts or dedicate any special level of personnel or other resources beyond what Surviving Bank would normally apply when collecting loans originated by Surviving Bank in the normal course of business.

(J) In prosecuting the Earn Out Lawsuit, the parties agree that Surviving Bank shall apply the same level of efforts it applies for actions initiated by Surviving Bank in the normal course of business and will not be obligated to apply any special efforts or dedicate any special level of personnel or other resources beyond what Surviving Bank would normally apply when prosecuting actions initiated by Surviving Bank in the normal course of business. Moreover, Surviving Bank shall be entitled to use its sole discretion in determining whether and at what level to settle the Earn Out Lawsuit as opposed to prosecute the Earn Out Lawsuit to a final judgment.

(K) On or before the 30th day following each calendar quarter of the Earn Out Period, Surviving Bank shall provide its Board of Directors with a report regarding the status of collection and prosecution efforts for the Earn Out Loans and Earn Out Lawsuit.

3.3.5 No Further Ownership Rights in 1st Pacific Bancorp Common Stock . Any and all Merger Consideration paid in exchange for shares of 1st Pacific Bancorp Common Stock in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares of 1st Pacific Bancorp Common Stock, and there shall be no further registration of transfers on the record book of 1st Pacific Bancorp of shares of 1st Pacific Bancorp Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Section 3.3 .

3.3.6 Lost, Stolen or Destroyed Certificates . In the event any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, the Merger Consideration to which the holder of such shares of 1st Pacific Bancorp Common Stock would be entitled under this Article III ; provided, however, that the Surviving Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed Certificates to provide an indemnity against any claim that may be made against the Surviving Corporation, FB Bancorp or First Business Bank with respect to the Certificates alleged to have been lost, stolen or destroyed.

3.3.7 FB Bancorp and the Surviving Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable to any holder or former holder of capital stock of 1st Pacific Bancorp Common Stock pursuant to this Agreement such amounts as FB Bancorp or the Surviving Corporation may be required to deduct or withhold therefrom under the Code or under any provision of state, local or foreign tax law. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the person to whom such amounts would otherwise have been paid.

3.3.8 Neither FB Bancorp nor the Surviving Corporation shall be liable to any holder or former holder of capital stock of 1st Pacific Bancorp for any cash amounts, delivered to any public official pursuant to any applicable abandoned property, escheat or similar law.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF 1ST PACIFIC BANCORP AND 1ST PACIFIC BANK

1st Pacific Bancorp and 1st Pacific Bank represent and warrant to FB Bancorp and First Business Bank that the statements contained in this Article IV are correct and complete as of the date of this Agreement, subject to the standard set forth in Section 4.1 and except as set forth in the 1st Pacific Bancorp Disclosure Schedule delivered by 1st Pacific Bancorp and 1st Pacific Bank to FB Bancorp and First Business Bank on the date hereof, as amended pursuant to Section 6.6 , and except as to any representation or warranty which specifically relates to an earlier date, which only need be so correct as of such earlier date. 1st Pacific Bancorp and 1st Pacific Bank have made a good faith effort to ensure that the disclosure on each schedule of the 1st Pacific Bancorp Disclosure Schedule corresponds to the section referenced herein. However, for purposes of the 1st Pacific Bancorp Disclosure Schedule, any item disclosed on any schedule therein is deemed to be fully disclosed with respect to all schedules under which such item may be relevant as and to the extent that it is reasonably clear on the face of such schedule that such item applies to such other schedule. References to the Knowledge of 1st Pacific Bancorp shall include the Knowledge of 1st Pacific Bank.

4.1 Standard

No representation or warranty of 1st Pacific Bancorp contained in this Article IV shall be deemed untrue or incorrect, and 1st Pacific Bancorp shall not be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, circumstance or event unless such fact, circumstance or event, individually or taken together with all other facts, circumstances or events inconsistent with any provision of Article IV , has had or is reasonably expected to have a Material Adverse Effect, disregarding for these purposes (x) any qualification or exception for, or reference to, materiality in any such representation or warranty and (y) any use of the terms “material,” “materially,” “in all material respects,” “Material Adverse Effect” or similar terms or phrases in any such representation or warranty. The foregoing standard shall not apply to representations and warranties contained in Sections 4.2 (other than the last sentence of Section 4.2.1 , 4.2.2 , 4.2.3 and 4.2.4 ), 4.3 , 4.4 , 4.9.5 , 4.13.5 , 4.13.8 , 4.13.10 and 4.13.11 , which shall be deemed untrue, incorrect and breached if they are not true and correct in all material respects based on the qualifications and standards therein contained. Provided further, that as to the representations contained in Sections 4.13.5 , 4.13.8 , 4.13.10 , and 4.13.11 , if there is a breach that relates to an undisclosed payment, expense accrual or cost in excess of $150,000 (either individually or in the aggregate), such breach shall be considered material.

4.2 Organization

4.2.1 1st Pacific Bancorp is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and is duly registered as a bank holding company under the BHCA. 1st Pacific Bancorp has full corporate power and corporate authority to carry on its business as now conducted and is duly licensed or qualified to do business in the states of the United States and foreign jurisdictions where its ownership or leasing of property or the conduct of its business requires such qualification.

4.2.2 1st Pacific Bank is a California state-chartered commercial bank duly organized and validly existing under the laws of State of California. The deposits of 1st Pacific Bank are insured by the FDIC to the fullest extent permitted by law, and all premiums and assessments required to be paid in connection therewith have been paid by 1st Pacific Bank when due. 1st Pacific Bank is a member of the Federal Reserve System and owns the requisite amount of stock therein.

4.2.3 The respective minute books of 1st Pacific Bancorp and 1st Pacific Bank accurately records, in all material respects, all material corporate actions of their respective shareholders and boards of directors (including committees).

4.2.4 Prior to the date of this Agreement, 1st Pacific Bancorp has made available to FB Bancorp true and correct copies of the Articles of Incorporation and bylaws of 1st Pacific Bancorp and 1st Pacific Bank.

4.3 Capitalization

4.3.1 The authorized capital stock of 1st Pacific Bancorp consists of 10,000,000 shares of common stock, no par value per share, of which, as of the date of this Agreement, 4,980,481 shares are outstanding, validly issued, fully paid and nonassessable and free of preemptive rights, and 10,000,000 shares of Preferred Stock, no par value per share, of which there are no shares issued and outstanding. There are no shares of 1st Pacific Bancorp Common Stock held by 1st Pacific Bancorp in its treasury. Neither 1st Pacific Bancorp nor 1st Pacific Bank has or is bound by any Rights of any character relating to the purchase, sale or issuance or voting of, or right to receive dividends or other distributions on any shares of 1st Pacific Bancorp Common Stock, or any other security of 1st Pacific Bancorp or any securities representing the right to vote, purchase or otherwise receive any shares of 1st Pacific Bancorp Common Stock or any other security of 1st Pacific Bancorp other than shares issuable under the 1st Pacific Bancorp Equity Plans and the Warrants. 1st Pacific Bancorp Disclosure Schedule 4.3.1 sets forth (i) the name of each holder of options to purchase 1st Pacific Bancorp Common Stock, the number of shares each such individual may acquire pursuant to the exercise of such options, the grant and vesting dates, and the exercise price relating to the options held, and (ii) the name of each holder of Warrants, the number of shares each such individual may acquire pursuant to the exercise of such Warrants, the expiration date, and the exercise price relating to the Warrants.

4.3.2 1st Pacific Bancorp Disclosure Schedule 4.3.2 sets forth a true and correct list of all of the subsidiaries of 1st Pacific Bancorp (the “ Subsidiaries ”). Except for (i) the Subsidiaries, (ii) equity interests held in the investment portfolios of 1st Pacific Bank, (iii) equity interests held by 1st Pacific Bank in a fiduciary capacity, and (iv) equity interests held in connection with the lending activities of 1st Pacific Bank, including stock in the Federal Reserve Bank, 1st Pacific Bancorp does not possess, directly or indirectly, any material equity interest in any corporate entity. Except for the 1st Pacific Bancorp Trust Preferred Securities, 1st Pacific Bancorp owns, directly or indirectly, all of the issued and outstanding shares of the capital stock or other equity interests of each of the Subsidiaries, free and clear of all liens, charges, encumbrances and security interests whatsoever, and all of such shares or equity interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. No Subsidiary of 1st Pacific Bancorp, other than the Trust, is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any

other equity interest of such Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity interest of such Subsidiary.

4.3.3 To 1st Pacific Bancorp’s Knowledge, no Person or “group” (as that term is used in Section 13(d)(3) of the Exchange Act), is the beneficial owner (as defined in Section 13(d) of the Exchange Act) of 5% or more of the outstanding shares of 1st Pacific Bancorp Common Stock, except as listed on 1st Pacific Bancorp’s Disclosure Schedule 4.3.3.

4.4 Authority; No Violation

4.4.1 Each of 1st Pacific Bancorp and 1st Pacific Bank has full corporate power and corporate authority to execute and deliver this Agreement and, subject to the receipt of the Regulatory Approvals and the Shareholder Approvals, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by 1st Pacific Bancorp and 1st Pacific Bank and the completion of the transactions contemplated hereby, including the Merger, have been duly and validly approved by the Boards of Directors of 1st Pacific Bancorp and 1st Pacific Bank, and no other corporate proceedings on the part of 1st Pacific Bancorp, except for the approval of the shareholders of 1st Pacific Bancorp and 1st Pacific Bank, is necessary to complete the transactions contemplated hereby, including the Merger. This Agreement has been duly and validly executed and delivered by 1st Pacific Bancorp and 1st Pacific Bank, and subject to approval by the shareholders of 1st Pacific Bancorp and 1st Pacific Bank and receipt of the Regulatory Approvals and due and valid execution and delivery of this Agreement by FB Bancorp and First Business Bank, constitutes the valid and binding obligation of 1st Pacific Bancorp and 1st Pacific Bank, enforceable against them 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 and Section 8(b)(6)(D) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1818(b)(6)(D) (as applicable).

4.4.2 Except as listed on 1st Pacific Bancorp Disclosure Schedule 4.4.2, subject to receipt of Regulatory Approvals and compliance by the parties hereto with any conditions contained therein, and to the receipt of Shareholder Approvals; (A) the execution and delivery of this Agreement by 1st Pacific Bancorp and 1st Pacific Bank, (B) the consummation of the transactions contemplated hereby, and (C) compliance by 1st Pacific Bancorp and 1st Pacific Bank with all of the terms and provisions hereof will not (i) conflict with or result in a breach of any provision of the Articles of Incorporation or bylaws of 1st Pacific Bancorp or the Articles of Incorporation or bylaws of 1st Pacific Bank; (ii) to the Knowledge of 1st Pacific Bancorp, violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to 1st Pacific Bancorp or 1st Pacific Bank or any of their respective properties or assets; or (iii) 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, accelerate 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 1st Pacific Bancorp or 1st Pacific Bank under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other investment or obligation to which 1st Pacific Bancorp or 1st Pacific Bank is a party, or by which they or any of their respective properties or assets may be bound or affected, except for such violations, conflicts, breaches or

defaults under clause (ii) or (iii) hereof which, either individually or in the aggregate, will not have a Material Adverse Effect on 1st Pacific Bancorp and 1st Pacific Bank taken as a whole.

4.5 Consents

Except as listed on 1st Pacific Bancorp Disclosure Schedule 4.5 and except for (a) filings with Bank Regulators, the receipt of the Regulatory Approvals, and compliance with any conditions contained therein, (b) the filing of the certificate of merger with the Secretary of State of the State of California, (c) the filing with the SEC of (i) the Merger Registration Statement and (ii) such reports under Sections 13(a), 13(d), 13(g), 14(f) and 16(a) of the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby and the obtaining from the SEC of such orders as may be required in connection therewith, (d) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of the shares of FB Bancorp Common Stock pursuant to this Agreement and the Bank Holding Company Merger Agreement, and (e) Shareholder Approvals, no consents, waivers or approvals of, or filings or registrations with, any Governmental Entity are necessary, and, to 1st Pacific Bancorp’s Knowledge, no consents, waivers or approvals of, or filings or registrations with, any other third parties are necessary, in connection with (x) the execution and delivery of this Agreement by 1st Pacific Bancorp and 1st Pacific Bank, and (y) the completion of the Merger and the transactions contemplated thereby. 1st Pacific Bancorp and 1st Pacific Bank have no reason to believe that (i) any Regulatory Approvals or other required consents or approvals will not be received, or that (ii) any public body or authority, the consent or approval of which is not required or to which a filing is not required, will object to the completion of the transactions contemplated by this Agreement.

4.6 Financial Statements

4.6.1 1st Pacific Bancorp has previously made available to FB Bancorp and First Business Bank the 1st Pacific Bancorp Regulatory Reports. The 1st Pacific Bancorp Regulatory Reports have been prepared in all material respects in accordance with applicable regulatory accounting principles and practices throughout the periods covered by such statements.

4.6.2 1st Pacific Bancorp has previously made available to FB Bancorp and First Business Bank the 1st Pacific Bancorp Financial Statements. The 1st Pacific Bancorp Financial Statements have been prepared in accordance with GAAP (including the related notes where applicable), and fairly present in each case in all material respects (subject in the case of the unaudited interim statements to normal year-end adjustments), the consolidated financial position, results of operations and cash flows of 1st Pacific Bancorp and 1st Pacific Bank on a consolidated basis as of and for the respective periods ending on the dates thereof, except as indicated in the notes thereto, or in the case of unaudited statements, as permitted by Form 10-Q.

4.6.3 At the date of each balance sheet included in the 1st Pacific Bancorp Financial Statements or the 1st Pacific Bancorp Regulatory Reports, neither 1st Pacific Bancorp nor 1st Pacific Bank, as applicable, had any liabilities, obligations or loss contingencies of any nature (whether absolute, accrued, contingent or otherwise) of a type required to be reflected in such 1st Pacific Bancorp Financial Statements or 1st Pacific Bancorp Regulatory Reports or in the footnotes thereto which are not fully reflected or reserved against therein or fully disclosed in a footnote thereto,

except for liabilities, obligations and loss contingencies which are not material individually or in the aggregate or which are incurred in the ordinary course of business, consistent with past practice, and except for liabilities, obligations and loss contingencies which are within the subject matter of a specific representation and warranty herein and subject, in the case of any unaudited statements, to normal, recurring audit adjustments and the absence of footnotes.

4.6.4 Except as listed on 1st Pacific Bancorp Disclosure Schedule 4.6.4, the records, systems, controls, data and information of 1st Pacific Bancorp and 1st Pacific Bank are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of 1st Pacific Bancorp or 1st Pacific Bank or accountants (including all means of access thereto and therefrom), except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have a Material Adverse Effect on the system of internal accounting controls described below in this Section 4.6.4. 1st Pacific Bancorp: (x) has implemented and maintains a system of internal control over financial reporting (as required by Rule 13a-15(a) of the Exchange Act) that is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of its financial statements for external purposes in accordance with GAAP, (y) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to 1st Pacific Bancorp and 1st Pacific Bank, is made known to the chief executive officer and the chief financial officer of 1st Pacific Bancorp by others within those entities, and (z) has disclosed, based on its most recent evaluation prior to the date hereof, to 1st Pacific Bancorp’s outside auditors and the audit committee of 1st Pacific Bancorp’s Board of Directors (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to materially adversely affect 1st Pacific Bancorp’s ability to record, process, summarize and report financial information and (ii) any fraud of which 1st Pacific Bancorp has Knowledge of, whether or not material, that involves management or other employees who have a significant role in 1st Pacific Bancorp’s internal control over financial reporting. These disclosures (if any) were made in writing by management to 1st Pacific Bancorp’s auditors and audit committee and a copy has previously been made available to FB Bancorp and First Business Bank. As of the date hereof, to the Knowledge of 1st Pacific Bancorp, its chief executive officer and chief financial officer would be able to give the certifications required pursuant to the rules and regulations adopted pursuant to Section 302 of the Sarbanes-Oxley Act, without qualification.

4.6.5 Since January 1, 2007: (i) to the Knowledge of 1st Pacific Bancorp, no director, officer, employee, auditor, accountant or representative of 1st Pacific Bancorp or 1st Pacific Bank had or obtained Knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of 1st Pacific Bancorp or 1st Pacific Bank or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that 1st Pacific Bancorp or 1st Pacific Bank has engaged in questionable accounting or auditing practices; and (ii) no attorney representing 1st Pacific Bancorp or 1st Pacific Bank, whether or not employed by 1st Pacific Bancorp or 1st Pacific Bank, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by 1st Pacific Bancorp or 1st Pacific Bank or any of their respective officers, directors, employees or agents to the Board of Directors of 1st Pacific Bancorp or 1st Pacific Bank or any committee thereof or to any director or officer of 1st Pacific Bancorp or 1st Pacific Bank.

4.7 Taxes

1st Pacific Bancorp and 1st Pacific Bank have duly filed all federal, state and material local tax returns required to be filed by or with respect to 1st Pacific Bancorp and 1st Pacific Bank on or prior to the date of this Agreement, taking into account any extensions (all such returns, to 1st Pacific Bancorp’s Knowledge, being accurate and correct in all material respects) and has duly paid or made provisions for the payment of all material federal, state and local taxes which have been incurred by or are due, or claimed to be, due from 1st Pacific Bancorp or 1st Pacific Bank by any taxing authority or pursuant to any written tax sharing agreement on or prior to the date of this Agreement other than taxes or other charges which (i) are not delinquent, (ii) are being contested in good faith, or (iii) have not yet been fully determined. As of the date of this Agreement, 1st Pacific Bancorp has received no written notice of, and to 1st Pacific Bancorp’s Knowledge there is no audit examination, deficiency assessment, tax investigation or refund litigation with respect to any taxes of 1st Pacific Bancorp or 1st Pacific Bank, and no claim has been made by any authority in a jurisdiction where 1st Pacific Bancorp or 1st Pacific Bank does not file tax returns that 1st Pacific Bancorp or any such Subsidiary is subject to taxation in that jurisdiction. 1st Pacific Bancorp and 1st Pacific Bank have not executed an extension or waiver of any statute of limitations on the assessment or collection of any material tax due that is currently in effect. 1st Pacific Bancorp and each of its Subsidiaries has withheld and paid, if due, all taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party, and 1st Pacific Bancorp and each of its Subsidiaries, to 1st Pacific Bancorp’s Knowledge, has timely complied with all applicable information reporting requirements under Part III, Subchapter A of Chapter 61 of the Code and similar applicable state and local information reporting requirements.

4.8 Intentionally omitted

4.9 Material Contracts; Leases; Defaults

4.9.1 Except as set forth in 1st Pacific Bancorp Disclosure Schedule 4.9.1, neither 1st Pacific Bancorp nor 1st Pacific Bank is a party to or subject to: (i) any employment, consulting or severance contract or material arrangement with any past or present officer, director or employee of 1st Pacific Bancorp or 1st Pacific Bank, except for “at will” arrangements; (ii) any plan, material arrangement or contract providing for bonuses, pensions, options, deferred compensation, retirement payments, profit sharing or similar material arrangements for or with any past or present officers, directors or employees of 1st Pacific Bancorp or 1st Pacific Bank; (iii) any collective bargaining agreement with any labor union relating to employees of 1st Pacific Bancorp or 1st Pacific Bank; (iv) any agreement which by its terms limits the payment of dividends by 1st Pacific Bancorp or 1st Pacific Bank; (v) any instrument evidencing or related to material indebtedness for borrowed money whether directly or indirectly, by way of purchase money obligation, conditional sale, lease purchase, guaranty or otherwise, in respect of which 1st Pacific Bancorp or 1st Pacific Bank is an obligor to any person, which instrument evidences or relates to indebtedness other than deposits, repurchase agreements, the Federal Reserve Bank advances, bankers’ acceptances, and “treasury tax and loan” accounts and transactions in “federal funds” in each case established in the ordinary course of business consistent with past practice, or which contains financial covenants or other restrictions (other than those relating to the payment of principal and interest when due) which would be applicable on or after the Closing Date to FB Bancorp or First Business Bank; (vi) except for items

listed on 1st Pacific Bancorp Disclosure Schedule 4.16 and loans and other extensions of credit made by 1st Pacific Bank in the ordinary course of its business, any other agreement, written or oral, that obligates 1st Pacific Bancorp or 1st Pacific Bank for the payment of more than $100,000 annually or for the payment of more than $50,000 over its remaining term, which is not terminable without cause on 60 days’ or less notice without penalty or payment, or (vii) any agreement (other than this Agreement), contract, arrangement, commitment or understanding (whether written or oral) that restricts or limits in any material way the conduct of business by 1st Pacific Bancorp or 1st Pacific Bank (it being understood that any non-compete or similar provision shall be deemed material).

4.9.2 Each real estate lease that requires the consent of the lessor or its agent resulting from the Merger or the Bank Merger by virtue of the terms of any such lease, is listed in 1st Pacific Bancorp Disclosure Schedule 4.9.2 identifying the section of the lease that contains such prohibition or restriction. Subject to any consents that may be required as a result of the transactions contemplated by this Agreement, to its Knowledge, neither 1st Pacific Bancorp nor 1st Pacific Bank is in default in any material respect under any material contract, agreement, commitment, arrangement, lease, insurance policy or other instrument to which it is a party, by which its assets, business, or operations may be bound or affected, or under which it or its assets, business, or operations receive benefits, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default.

4.9.3 True and correct copies of agreements, contracts, arrangements and instruments referred to in Section 4.9.1 and 4.9.2 have been made available to FB Bancorp and First Business Bank on or before the date hereof, are listed on 1st Pacific Bancorp Disclosure Schedule 4.9.1 or on 1st Pacific Bancorp Disclosure Schedule 4.9.2 and are in full force and effect on the date hereof and neither 1st Pacific Bancorp nor 1st Pacific Bank (nor, to the Knowledge of 1st Pacific Bancorp, any other party to any such contract, arrangement or instrument) has materially breached any provision of, or is in default in any respect under any term of, any such contract, arrangement or instrument. Except as listed on 1st Pacific Bancorp Disclosure Schedule 4.9.3(a), no party to any material contract, arrangement or instrument will have the right to terminate any or all of the provisions of any such contract, arrangement or instrument as a result of the execution of, and the consummation of the transactions contemplated by, this Agreement. Except as set forth in 1st Pacific Bancorp Disclosure Schedule 4.9.3(b), no plan, contract, employment agreement, termination agreement, or similar agreement or arrangement to which 1st Pacific Bancorp or 1st Pacific Bank is a party or under which 1st Pacific Bancorp or 1st Pacific Bank may be liable contains provisions which permit an employee or independent contractor to terminate it without cause and continue to accrue future benefits thereunder. Except as set forth in 1st Pacific Bancorp Disclosure Schedule 4.9.3(c), no such agreement, plan, contract, or arrangement (x) provides for acceleration in the vesting of benefits or payments due thereunder upon the occurrence of a change in ownership or control of 1st Pacific Bancorp or 1st Pacific Bank or upon the occurrence of a subsequent event; or (y) requires 1st Pacific Bancorp or 1st Pacific Bank to provide a benefit in the form of 1st Pacific Bancorp Common Stock or determined by reference to the value of 1st Pacific Bancorp Common Stock.

4.9.4 Since December 31, 2008, through and including the date of this Agreement, except as listed on 1st Pacific Bancorp Disclosure Schedule 4.9.4 or except as publicly disclosed by 1st Pacific Bancorp in the Securities Documents filed or furnished by 1st Pacific Bancorp prior to the date hereof or consistent with the 1st Pacific Bank Layoff Procedure, a copy which has been made available to First Business Bank, neither 1st Pacific Bancorp nor 1st Pacific Bank has

(i) except for (A) normal increases for employees (other than officers and directors subject to the reporting requirements of Section 16(a) of the Exchange Act) made in the ordinary course of business consistent with past practice, or (B) as required by applicable law, increased the wages, salaries, compensation, pension, or other fringe benefits or perquisites payable to any executive officer, employee, or director from the amount thereof in effect as of December 31, 2008 (which amounts have been previously made available to FB Bancorp), granted any severance or termination pay, entered into any contract to make or grant any severance or termination pay (except as required under the terms of agreements or severance plans listed on 1st Pacific Bancorp Disclosure Schedule 4.13.1, as in effect as of the date hereof), or paid any bonus other than the customary year-end bonuses in amounts consistent with past practice, (ii) granted any options to purchase shares of 1st Pacific Bancorp Common Stock, or any right to acquire any shares of its capital stock to any executive officer, director or employee other than grants to employees (other than officers subject to the reporting requirements of Section 16(a) of the Exchange Act) made in the ordinary course of business consistent with past practice under 1st Pacific Bancorp Equity Plans, (iii) increased or established any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards, or restricted stock awards), stock purchase or other employee benefit plan, (iv) made any material election for federal or state income tax purposes, (v) made any material change in the credit policies or procedures of 1st Pacific Bancorp or 1st Pacific Bank, the effect of which was or is to make any such policy or procedure less restrictive in any material respect, (vi) made any material acquisition or disposition of any assets or properties, or any contract for any such acquisition or disposition entered into other than loans and loan commitments, (vii) entered into any lease of real or personal property requiring annual payments in excess of $100,000, other than in connection with foreclosed property or in the ordinary course of business consistent with past practice, (viii) changed any accounting methods, principles or practices of 1st Pacific Bancorp or its Subsidiaries affecting its assets, liabilities or businesses, including any reserving, renewal or residual method, practice or policy or (ix) suffered any strike, work stoppage, labor slow-down, or other labor disturbance.

4.9.5 Neither 1st Pacific Bancorp nor 1st Pacific Bank has accepted funds or sold stock as part of the Capital Purchase Program established by the United States Treasury Department under the Troubled Assets Relief Program, pursuant to the Emergency Economic Stabilization Act of 2008.

4.9.6 Except as of otherwise disclosed on 1st Pacific Bancorp Disclosure Schedule 4.9.6, all payments due on the 1st Pacific Bancorp Trust Preferred Securities and the Junior Subordinated Debt Securities have been paid in accordance with their respective terms.

4.10 Ownership of Property; Insurance Coverage

4.10.1 1st Pacific Bancorp and 1st Pacific Bank have good and, as to real property, marketable title to all material assets and properties owned by 1st Pacific Bancorp or each 1st Pacific Bancorp Subsidiary in the conduct of its businesses, whether such assets and properties are real or personal, tangible or intangible, including assets and property reflected in the balance sheets contained in the 1st Pacific Bancorp Regulatory Reports and in the 1st Pacific Bancorp Financial Statements or acquired subsequent thereto (except to the extent that such assets and properties have been disposed of in the ordinary course of business, since the date of such balance sheets), subject to no material encumbrances, liens, mortgages, security interests or pledges, except (i) those items

which secure liabilities for public or statutory obligations or any discount with, borrowing from or other obligations to the Federal Home Loan Bank of San Francisco or Federal Reserve Bank, inter-bank credit facilities, or any transaction by an 1st Pacific Bancorp Subsidiary acting in a fiduciary capacity, (ii) statutory liens for amounts not yet delinquent or which are being contested in good faith, (iii) non-monetary liens affecting real property which do not adversely affect the value or use of such real property, and (iv) those described and reflected in the 1st Pacific Bancorp Financial Statements. 1st Pacific Bancorp and the 1st Pacific Bancorp Subsidiaries, as lessee, have the right under valid and existing leases of real and personal properties used by 1st Pacific Bancorp and 1st Pacific Bank in the conduct of their businesses to occupy or use all such properties as presently occupied and used by each of them. Such existing leases and commitments to lease constitute or will constitute operating leases for both tax and financial accounting purposes and the lease expense and minimum rental commitments with respect to such leases and lease commitments are as disclosed in all material respects in the notes to the 1st Pacific Bancorp Financial Statements.

4.10.2 With respect to all material agreements pursuant to which 1st Pacific Bancorp or 1st Pacific Bank has purchased securities subject to an agreement to resell, if any, 1st Pacific Bancorp or such 1st Pacific Bancorp Subsidiary, as the case may be, has a lien or security interest (which to 1st Pacific Bancorp’s Knowledge is a valid, perfected first lien) in the securities or other collateral securing the repurchase agreement, and the value of such collateral equals or exceeds the amount of the debt secured thereby.

4.10.3 1st Pacific Bancorp and 1st Pacific Bank currently maintain insurance considered by each of them to be reasonable for their respective operations. Neither 1st Pacific Bancorp nor 1st Pacific Bank, except as disclosed in 1st Pacific Bancorp Disclosure Schedule 4.10.3(a), has received notice from any insurance carrier during the past five years that (i) such insurance will be canceled or that coverage thereunder will be reduced or eliminated, or (ii) premium costs (other than with respect to health insurance) with respect to such policies of insurance will be substantially increased. There are presently no material claims pending under such policies of insurance and no notices have been given by 1st Pacific Bancorp or 1st Pacific Bank under such policies. All such insurance is valid and enforceable and in full force and effect, and within the last three years 1st Pacific Bancorp and 1st Pacific Bank has received each type of insurance coverage for which it has applied and during such periods has not been denied indemnification for any material claims submitted under any of its insurance policies. 1st Pacific Bancorp Disclosure Schedule 4.10.3(b) identifies all material policies of insurance maintained by 1st Pacific Bancorp and 1st Pacific Bank as well as the other matters required to be disclosed under this Section.

4.11 Legal Proceedings

Except as set forth in 1st Pacific Bancorp Disclosure Schedule 4.11, neither 1st Pacific Bancorp nor 1st Pacific Bank is a party to any, and there are no pending or, to 1st Pacific Bancorp’s Knowledge, threatened legal, administrative, arbitration or other proceedings, claims (whether asserted or unasserted), actions or governmental investigations or inquiries of any nature (i) against 1st Pacific Bancorp or 1st Pacific Bank, (ii) to which 1st Pacific Bancorp or 1st Pacific Bank’s assets are or may be subject, (iii) challenging the validity or propriety of any of the transactions contemplated by this Agreement, or (iv) which could adversely affect the ability of 1st Pacific Bancorp or 1st Pacific Bank to perform under this Agreement, except for any proceeding, claim,

action, investigation or inquiry which, if adversely determined, individually or in the aggregate, would not be reasonably expected to have a Material Adverse Effect on 1st Pacific Bancorp.

4.12 Compliance With Applicable Law

4.12.1 To 1st Pacific Bancorp’s Knowledge, each of 1st Pacific Bancorp and 1st Pacific Bank is in compliance in all material respects with all applicable federal, state and local statutes, laws, regulations, ordinances, rules, judgments, or

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