EXHIBIT 10.3

Execution Copy

PURCHASE AND ASSUMPTION AGREEMENT

dated as of

February 19, 2009

between

WACHOVIA BANK, N.A.,

and

PREMIERWEST BANK

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TABLE OF CONTENTS       Page    ARTICLE 1   CERTAIN DEFINITIONS   1.1  Certain
Definitions  1  1.2  Accounting Terms  9  1.3  Interpretation  9    ARTICLE 2  
THE P&A TRANSACTION   2.1  Purchase and Sale of Assets  9  2.2  Assumption of
Liabilities  10  2.3  Purchase Price  11  2.4  Sale and Transfer of Servicing
and Escrows  11  2.5  Assumption of IRA and Keogh Account Deposits  12   
ARTICLE 3   CLOSING PROCEDURES; ADJUSTMENTS   3.1  Closing  12  3.2  Payment at
Closing  13  3.3  Adjustment of Purchase Price  13  3.4  Proration; Other
Closing Date Adjustments  14  3.5  Seller Deliveries  14  3.6  Purchaser
Deliveries  15  3.7  Delivery of the Loan Documents  15  3.8  Collateral
Assignments and Filing  16  3.9  Owned Real Property Filings  16    ARTICLE 4  
TRANSITIONAL MATTERS   4.1  Transitional Arrangements  16  4.2  Customers  16 
4.3  Direct Deposits  17  4.4  Direct Debits  18  4.5  Escheat Deposits  18 
4.6  Access to Records  18  4.7  Interest Reporting and Withholding  18  4.8 
Negotiable Instruments  19  4.9  ATM/Debit Cards; POS Cards  19  4.10  Data
Processing Conversion for the Branches and Handling of Certain Items  19 

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    Page      4.11  Information Regarding Mortgage Loans  21    ARTICLE 5  
REPRESENTATIONS AND WARRANTIES OF SELLER   5.1  Corporate Organization and
Authority  21  5.2  No Conflicts  21  5.3  Approvals and Consents  22  5.4 
Davis Branch Lease  22  5.5  Litigation  22  5.6  Regulatory Matters  22  5.7 
Compliance with Laws  22  5.8  Loans  23  5.9  Records  23  5.10  Title to
Assets  23  5.11  Deposits  24  5.12  Environmental Laws; Hazardous Substances 
24  5.13  Brokers’ Fees  24  5.14  Real Property  25  5.13  Intentionally
Deleted  25  5.16  Employment Matters; Employee Relations  25  5.17  Absence of
Certain Changes  26  5.18  Insurance  26  5.15  Limitations on Representations
and Warranties  26    ARTICLE 6   REPRESENTATIONS AND WARRANTIES OF PURCHASER  
6.1  Corporate Organization and Authority  27  6.2  No Conflicts  27  6.3 
Approvals and Consents  27  6.4  Regulatory Matters  27  6.5  Litigation  28 
6.6  Operation of the Branches  28  6.7  Financing Available  28  6.8  Brokers’
Fees  28    ARTICLE 7   COVENANTS OF THE PARTIES   7.1  Activity in the Ordinary
Course  28  7.2  Access and Confidentiality  30  7.3  Regulatory Approvals  31 
7.4  Landlord Consent  31 

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    Page      7.5  Efforts to Consummate; Further Assurances  31  7.6 
Solicitation of Accounts  32  7.7  Insurance  32  7.8  Servicing Prior to
Closing Date  33  7.9  Change of Name, Etc  33    ARTICLE 8   TAXES AND EMPLOYEE
BENEFITS   8.1  Tax Representations  33  8.2  Proration of Taxes  34  8.3  Sales
and Transfer Taxes  34  8.4  Information Returns  34  8.5  Like Kind Exchange 
34  8.6  [Intentionally Deleted]  34  8.7  Transferred Employees  34    ARTICLE
9   CONDITIONS TO CLOSING   9.1  Conditions to Obligations of Purchaser  37 
9.2  Conditions to Obligations of Seller  38    ARTICLE 10   TERMINATION   10.1 
Termination  38  10.2  Effect of Termination  39    ARTICLE 11   INDEMNIFICATION
  11.1  Indemnification  39  11.2  Exclusivity  41  11.3  AS-IS, WHERE-IS Sale;
Waiver of Warranties  42    ARTICLE 12   MISCELLANEOUS   12.1  Survival  42 
12.2  Assignment  42  12.3  Binding Effect  43  12.4  Public Notice  43 

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    Page      12.5  Notices  43  12.6  Parent Financial Corporation Obligation 
44  12.7  Expenses  44  12.8  Governing Law  44  12.9  Entire Agreement;
Amendment  44  12.10  Third Party Beneficiaries  45  12.11  Counterparts  45 
12.12  Headings  45  12.13  Severability  45  12.14  Specific Performance  45 

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  List of Schedules  Schedule 1.1(a)  Bank Employees on Leave  Schedule 1.1(b) 
Branches/Real Properties  Schedule 1.1(d)  Excluded Deposits and Loans  Schedule
1.1(e)  Loans  Schedule 1.1(f)  Knowledge of Seller  Schedule 2.1(a)(iii) 
Personal Property; Personal Property Leases  Schedule 2.1(a)(vii)  Other Assets 
Schedule 2.2(a)(vii)  Accrued Liabilities  Schedule 3.5(a)  Form of Deed 
Schedule 3.5(b)  Form of Bill of Sale  Schedule 3.5(c)  Form of Assignment and
Assumption Agreement  Schedule 3.5(d)  Form of Assignment of Lease and
Assumption Agreement  Schedule 3.5(e)  Form of Certificate of Officer, Seller 
Schedule 3.6(c)  Form of Certificate of Officer, Purchaser  Schedule 4.10(e) 
Form of Daily Settlement  Schedule 5.4-3  Davis Branch Lease  Schedule 5.17 
Absence of Certain Changes  Schedule 6.3  Purchaser Regulatory Approvals 
Schedule 7.1  Conduct of Business    Confidential Schedule 10.1  Termination 

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     This PURCHASE AND ASSUMPTION AGREEMENT, dated as of February 19, 2009
(“Agreement”), between Wachovia Bank, N.A. (“Seller”) and PremierWest Bank
(“Purchaser”). PremierWest Bancorp, an Oregon corporation and parent of
Purchaser (“Parent”), is executing this Agreement solely for purposes of Section
12.6(a).

RECITALS

     A. Seller. Seller is a national banking association with its principal
office located in Charlotte, North Carolina.

     B. Purchaser. Purchaser is an Oregon state-chartered banking corporation
with its principal office located in Medford, Oregon.

     C. Purchase and Assumption Transaction. Purchaser desires to acquire from
Seller, and Seller desires to sell to Purchaser, certain banking operations of
Seller, in accordance with and subject to the terms and conditions of this
Agreement.

     D. Continuation of Service. Purchaser and Seller each intend to continue
providing retail and business banking services in the geographic regions served
by the Branches (as defined below) to be acquired by Purchaser under this
Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual promises
and obligations set forth herein, the parties agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

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

     “Accounting Firm” means Deloitte & Touche.

     “Accrued Interest” means, as of any date, (a) with respect to a Deposit,
interest which is accrued on such Deposit to but excluding such date and not yet
posted to the relevant deposit account and (b) with respect to a Loan, interest
which is accrued on such Loan to but excluding such date and not yet paid.

     “Accrued Liabilities” has the meaning set forth in Section 2.2(a).

     “ACH Direct Deposit Cut-Off Date” has the meaning set forth in Section 4.3.

     “ACM” has the meaning set forth in Section 5.12(d).

     “Adjusted Payment Amount” means (x) the aggregate balance (including
Accrued Interest) of the Deposits and Accrued Liabilities, minus (y) the
Purchase Price, each as set forth on the Final Closing Statement. For avoidance
of doubt, the Adjusted Payment Amount may be a negative amount.

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     “Adjustment Date” has the meaning set forth in Section 3.3.

     “Affiliate” means, with respect to any person, any other person directly or
indirectly controlling, controlled by or under common control with such person.
As used in this definition, the term “person” shall be broadly interpreted to
include any corporation, company, partnership and individual or group.

     “Agreement” means this Purchase and Assumption Agreement, including all
schedules, exhibits and addenda, each as amended from time to time in accordance
with Section 12.9(b).

     “Assets” has the meaning set forth in Section 2.1(a).

     “Assignment and Assumption Agreement” has the meaning set forth in Section
3.5(c).

     “Branch Employees” means the employees of Seller working at the Branches at
the Closing Date (including those employees who on the Closing Date are on
family and medical leave, military leave or personal, short-term disability or
pregnancy leave and who are eligible to return to work under Seller’s policies
and who are listed on Schedule 1.1(a)).

     “Branch” or “Branches” means each of the banking offices of Seller at the
locations identified on Schedule 1.1(b) hereto.

     “Business Day” means a day on which banks are generally open for business
in California and which is not a Saturday or Sunday.

     “Cash on Hand” means, as of any date, all petty cash, vault cash, teller
cash, on-premise ATM cash, prepaid postage and cash equivalents held at a
Branch.

     “Closing” and “Closing Date” refer to the closing of the P&A Transaction,
which is to be held at such time and date as provided in Article 3 hereof.

     “Code” means the Internal Revenue Code of 1986, as amended, together with
any rules and regulations promulgated thereunder.

     “Davis Branch” means the Branch located at 333 F Street, Davis, California.

     “Davis Branch Lease” means the lease under which Seller leases the land and
building relating to the Davis Branch.

     “Davis Deposit(s)” means deposit liabilities with respect to deposit
accounts booked by Seller at the Davis Branch or allocated by Seller to the
Davis Branch as of the close of business on the Closing Date, which constitute
“deposits” for purposes of the Federal Deposit Insurance Act, 12 U.S.C. § 1813,
including collected and uncollected deposits and Accrued Interest, but excluding
(a) deposit liabilities with respect to accounts booked by Seller at the Davis
Branch and under or pursuant to any judgment,

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decree or order of any court; (b) deposit liabilities with respect to accounts
registered in the name of a trust for which Seller serves as trustee (other than
deposits held by an IRA or Keogh Account); (c) deposit liabilities with respect
to accounts booked by Seller at the Davis Branch for which Seller serves as
guardian or custodian (other than deposits held by an IRA or Keogh Account); (d)
Excluded IRA/Keogh Account Deposits and other deposit liabilities, if any,
designated as “Excluded Deposits”, and (e) deposits in accounts that have been
in an overdrawn status for more than forty-five days at the Closing.

     “Deductible” shall have the meaning set forth in Section 11.1(e).

     “Deposit-Related Loans” means all loans secured by a Deposit as of the
close of business on the Closing Date that are linked to an open account and are
not sixty (60) or more calendar days delinquent as of the Closing Date.

     “Deposit(s)” means deposit liabilities with respect to deposit accounts
booked by Seller at the Branches or allocated by Seller to the Branches as of
the close of business on the Closing Date, which constitute “deposits” for
purposes of the Federal Deposit Insurance Act, 12 U.S.C. § 1813, including
collected and uncollected deposits and Accrued Interest, but excluding (a)
deposit liabilities with respect to accounts booked by Seller at any Branch and
under or pursuant to any judgment, decree or order of any court; (b) deposit
liabilities with respect to accounts registered in the name of a trust for which
Seller serves as trustee (other than deposits held by an IRA or Keogh Account);
(c) deposit liabilities with respect to accounts booked by Seller at any Branch
for which Seller serves as guardian or custodian (other than deposits held by an
IRA or Keogh Account); (d) Excluded IRA/Keogh Account Deposits and other deposit
liabilities, if any, designated as “Excluded Deposits”, and (e) deposits in
accounts that have been in an overdrawn status for more than forty-five days at
the Closing.

     “Draft Closing Statement” means a draft closing statement, prepared by
Seller, as of the close of business on the third (3rd) Business Day preceding
the Closing Date setting forth an estimated calculation of both the Purchase
Price and the Estimated Payment Amount.

     “Encumbrances” means all mortgages, claims, charges, liens, encumbrances,
easements, limitations, restrictions, commitments and security interests, except
for statutory liens securing tax and/or other payments not yet due, liens
incurred in the ordinary course of business, including liens in favor of
mechanics or materialmen, and such other liens, charges, security interests or
encumbrances as do not materially detract from the value or materially and
adversely affect the current use of the properties or assets subject thereto or
affected thereby or which otherwise do not materially impair the value of or
business operations at such properties and except for obligations pursuant to
applicable escheat and unclaimed property laws relating to the Escheat Deposits.

     “Environmental Law” means any Federal, state, or local law, statute, rule,
regulation, code, rule of common law, order, judgment, decree, injunction or
agreement with any Federal, state, or local governmental authority, (a) relating
to the protection, preservation or restoration of the environment (including
air, water vapor, surface water,

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groundwater, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resource) or to human health or safety or (b)
the exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of hazardous substances, in each case as amended and now in effect.
Environmental Laws include the Clean Air Act (42 USC §7401 et seq.); the
Comprehensive Environmental Response Compensation and Liability Act (42 USC
§9601 et seq.); the Resource Conservation and Recovery Act (42 USC §6901 et
seq.); the Federal Water Pollution Control Act (33 USC §1251 et seq.); and the
Occupational Safety and Health Act (29 USC §651 et seq.).

     “Escheat Deposits” means, as of any date, Deposits and safe deposit box
contents, in each case held on such date at the Branches which become subject to
escheat, in the calendar year in which the Closing occurs, to any governmental
authority pursuant to applicable escheat and unclaimed property laws.

     “Estimated Payment Amount” means (x) the aggregate balance (including
Accrued Interest) of the Deposits and Accrued Liabilities, minus (y) the
Estimated Purchase Price, each as set forth on the Draft Closing Statement as
reasonably agreed upon prior to Closing between Seller and Purchaser. For
avoidance of doubt, the Estimated Payment Amount may be a negative amount.

     “Estimated Purchase Price” means the Purchase Price as set forth on the
Draft Closing Statement.

     “Excluded Deposits” means, if any, the Escheat Deposits and Excluded IRA
and Keogh Account Deposits set forth in Schedule 1.1(d), as updated as of the
Closing Date.

     “Excluded IRA and Keogh Account Deposits” shall have the meaning set forth
in section 2.5.

     “Excluded Loans” means with respect to the Loans, as of the Closing Date,
(i) the interest of any participants in such Loans or loans that have been the
subject of securitizations, (ii) any loans that are ninety (90) days or more
past due as to principal or interest, or (iii) any loans that are subject to a
pending bankruptcy proceeding or a current legal proceeding related to an
obligor’s inability or refusal to pay such loan, as set forth on Schedule
1.1(d), as updated as of the Closing Date.

     “FDIC” means the Federal Deposit Insurance Corporation.

     “Federal Funds Rate” on any day means the per annum rate of interest
(rounded upward to the nearest 1/100 of 1%) which is the weighted average of the
rates on overnight federal funds transactions arranged on such day or, if such
day is not a Business Day, the previous Business Day, by federal funds brokers
computed and released by the Federal Reserve Bank of New York (or any successor)
in substantially the same manner as such Federal Reserve Bank currently computes
and releases the weighted average it refers to as the “Federal Funds Effective
Rate” at the date of this Agreement.

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

     “FedWire Direct Deposit Cut-off Date” has the meaning set forth in Section
4.3.

     “Final Closing Statement” means a final closing statement, prepared by
Seller, on or before the thirtieth (30th) calendar day following the Closing
Date setting forth both the Purchase Price and the Adjusted Payment Amount.

     “Grant Deeds” has the meaning set forth in Section 3.5(a).

     “Grass Valley Branch” means the Branch located at 115 W. McKnight Way,
Grass Valley, California.

     “Grass Valley Deposit(s)” means deposit liabilities with respect to deposit
accounts booked by Seller at the Grass Valley Branch or allocated by Seller to
the Grass Valley Branch as of the close of business on the Closing Date, which
constitute “deposits” for purposes of the Federal Deposit Insurance Act, 12
U.S.C. § 1813, including collected and uncollected deposits and Accrued
Interest, but excluding (a) deposit liabilities with respect to accounts booked
by Seller at the Grass Valley Branch and under or pursuant to any judgment,
decree or order of any court; (b) deposit liabilities with respect to accounts
registered in the name of a trust for which Seller serves as trustee (other than
deposits held by an IRA or Keogh Account); (c) deposit liabilities with respect
to accounts booked by Seller at the Grass Valley Branch for which Seller serves
as guardian or custodian (other than deposits held by an IRA or Keogh Account);
(d) Excluded IRA/Keogh Account Deposits and other deposit liabilities, if any,
designated as “Excluded Deposits”, and (e) deposits in accounts that have been
in an overdrawn status for more than forty-five days at the Closing.

     “Hazardous Substance” means any substance, whether liquid, solid or gas (a)
listed, identified or designated as hazardous or toxic; (b) which, applying
criteria specified in any Environmental Law, is hazardous or toxic; or (c) the
use or disposal, or any manner or aspect of management or handling, of which is
regulated under Environmental Law.

     “Immediately Transferred Employees” has the meaning set forth in Section
8.7.

     “Information” has the meaning set forth in Section 7.2(b).

     “IRA” means a non-discretionary “individual retirement account” or similar
account created for the exclusive benefit of any individual or his beneficiaries
in accordance with the provisions of Section 408 of the Code.

     “IRS” means the Internal Revenue Service.

     “Keogh Account” means a non-discretionary account created by a trust for
the benefit of employees (some or all of whom are owner-employees) and that
complies with the provisions of Section 401 of the Code.

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     “Landlord Consent” has the meaning set forth in Section 7.4 “Lease
Assignment” has the meaning set forth in Section 3.5(d). “Liabilities” has the
meaning set forth in Section 2.2.

     “Loans” means, collectively, the Deposit-Related Loans, Mortgage Loans,
Overdraft Loans and other loans and lines of credit as set forth in Schedule
1.1(e), which schedule may be in the form of a magnetic disk or other media
reasonably acceptable to the parties hereto, as updated as of the Closing Date;
provided, however, that “Loans” shall not include Excluded Loans.

     “Loan Documents” means all documents and Records with respect to a Loan
including documents in Seller’s file or imaging system, applications, notes,
security agreements, deeds of trust, mortgages, loan agreements, including
building and loan agreements, guarantees, sureties and insurance policies
(including title insurance policies), flood hazard certifications, and all
modifications, waivers and consents relating to any of the foregoing.

     “Loan Value” means, with respect to a Loan and as of any date, the unpaid
principal balance of any such loan plus Accrued Interest and accrued fees
thereon, net of the interest in such loan of any participant, as of such date.

     “Loss” means the amount of losses, liabilities, damages (including
forgiveness or cancellation of obligations) and reasonable expenses (including
reasonable expenses of investigation and reasonable attorneys’ fees and expenses
in connection with any action, suit or proceeding ) actually incurred or
suffered by the indemnified party or its Affiliates in connection with the
matters described in Section 11.1, less the amount of the economic benefit (if
any) to the indemnified party or its Affiliates obtained or to be obtained in
connection with any such damage, loss, liability or expense (including net Tax
benefits obtainable under applicable law, amounts recovered under insurance
policies (net of all costs and expenses incurred in pursuing any such insurance
recovery, including but not limited to those relating to deductibles and premium
adjustments), recovery by setoffs or counterclaims, and other economic
benefits).

     “Material Adverse Effect” means (a) with respect to Seller, a material
adverse effect on the condition (financial or otherwise), business or direct
economic results of operations of the Branches, taken as a whole, or on the
ability of Seller to timely consummate the P&A Transaction as contemplated by
this Agreement, and (b) with respect to Purchaser, a material adverse effect on
the ability of Purchaser to perform any of its financial or other obligations
under this Agreement, including the ability of Purchaser to timely consummate
the P&A Transaction as contemplated by this Agreement provided that none of the
following shall be deemed, either alone or in combination, to constitute, and
none of the following shall be taken into account in determining whether there
has been or will be, a Material Adverse Effect with respect to Seller: any
effect, event, development or change primarily arising out of or resulting from
(i) changes, after the date hereof, in generally accepted accounting principles
or

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regulatory accounting requirements applicable to banks or savings associations
and their holding companies generally, (ii) changes, after the date hereof, in
laws, rules or regulations of general applicability or interpretations thereof
by courts or governmental agencies or authorities, (iii) the commencement,
occurrence, continuation or intensification of any war, sabotage, armed
hostilities or acts of terrorism not directly involving the properties or assets
of the applicable person or its subsidiaries, (iv) public disclosure of the
transactions contemplated hereby, including the impact thereof on customers,
suppliers, licensors and employees, or (v) changes, after the date hereof, in
global or national political conditions or in general U.S. or global economic or
market conditions affecting banks or their holding companies generally unless
the effect on the business of the Branches is disproportionate to that
experienced by similarly situated financial services companies.

     “Mortgage” means a mortgage, deed of trust or other security instruments
creating a lien upon real property, together with any assignment, reinstatement,
extension, endorsement or modification thereof, securing a Mortgage Loan.

     “Mortgagor” means the obligor(s) under a Mortgage Loan.

     “Mortgage Loan” means a loan that is 100% owned by Seller and secured by a
Mortgage on 1-4 family residential real property.

     “Order” has the meaning set forth in Section 9.1(b).

     “Other Assets” has the meaning set forth in Section 2.1(a).

     “Overdraft Loans” means unsecured overdraft loans, including negotiable
order of withdrawal line of credit accounts, relating to the Deposits, as of the
close of business on the Closing Date, plus Accrued Interest and accrued fees,
which do not exceed the applicable credit limit and are linked to any open
Deposit account.

     “Owned Real Property” means the Real Property and improvements thereon
owned by Seller and used for the Grass Valley Branch.

     “P&A Transaction” means the purchase and sale of Assets and the assumption
of Liabilities described in Sections 2.1 and 2.2.

     “Personal Property” means all of the personal property of Seller located in
the Branches consisting of the trade fixtures, shelving, furniture, on-premises
ATMs, security systems, safe deposit boxes (exclusive of contents), vaults, sign
structures (exclusive of signage containing any trade name, trademark or service
mark, if any, of Seller or any of its Affiliates) and supplies excluding any
items consumed or disposed of, but including new items acquired or obtained, in
the ordinary course of the operation of the Branches through the Closing Date;
provided, however, that Personal Property shall not include computers (except
for ATMs), proprietary or licensed software, electronic teller station hardware
and other hardware related to teller stations and platforms or any personal
property subject to a Personal Property Lease. The Personal Property is set
forth on Schedule 2.1(a)(iii) and shall be updated as of the Closing Date.

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     “Personal Property Leases” means the leases under which Seller leases
certain property in the Branches that would be “Personal Property” but for the
proviso to such defined term, and which lease agreement relates only to one or
more of the Branches and not to any other facilities of Seller or its
Affiliates, as set forth on Schedule 2.1(a)(iii), as updated as of the Closing
Date.

     “Purchase Price” has the meaning set forth in Section 2.3.

     “Real Property” means the parcels of real property on which the Branches
listed on Schedule 1.1(b) are located, including any improvements thereon, which
Schedule indicates whether or not such real property is Owned Real Property.

     “Records” means all current records and original documents, or where
reasonable and appropriate copies thereof, in Seller’s possession that pertain
to and are used by Seller to administer, reflect, monitor, evidence or record
information respecting the business or conduct of the Branches and all such
records and original documents, or where reasonable and appropriate copies
thereof, regarding the Assets, or the Deposits, including all such records
maintained to comply with the applicable laws and governmental regulations to
which the Deposits are subject, including but not limited to applicable
unclaimed property and escheat laws; provided, however, it is understood and
agreed that Seller shall be permitted to retain such books and records that
contain information primarily relating to other assets and liabilities not
constituting Assets and Liabilities; provided further that in any such case
Seller shall provide to Purchaser such portions or copies of such records as are
(i) reasonably necessary to vest in Purchaser title to any of the Assets or for
the enforcement of Purchaser’s rights, title or interest in the Assets or the
Liabilities or (ii) reasonably necessary and material to Purchaser’s conduct of
the business of the Branches after the Closing.

     “Regulatory Approvals” means all approvals, authorizations, waivers or
consents of, or notices to, any governmental agencies or authorities required to
consummate the P&A Transaction, including the following: (i) any required
approvals of and/or notices to the OCC, the Federal Reserve Board, and the FDIC,
(ii) any required approvals of and/or notices to the California Department of
Financial Institutions and the Oregon Department of Consumer and Business
Services Division of Finance and Corporate Securities, and (iii) the expiration
of any waiting period associated with any required Regulatory Approval.

     “Regulatory Authority” means any federal or state banking, other
regulatory, self-regulatory or enforcement authority or any court,
administrative agency or commission or other governmental authority or
instrumentality.

     “Safe Deposit Agreements” means the agreements relating to safe deposit
boxes located in the Branches.

     “Seller’s knowledge” or other similar phrases means information that is
actually known to any of the persons set forth in Schedule 1.1(f).

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     “Seller Disclosure Schedule” means the disclosure schedule of Seller
delivered to Purchaser in connection with the execution and delivery of this
Agreement.

     “Subsequently Transferred Employees” has the meaning set forth in Section
8.7.

     “Tax Returns” means any return or other report required to be filed with
respect to any Tax, including declaration of estimated tax and information
returns.

     “Taxes” means any federal, state, local, or foreign taxes, including but
not limited to taxes on or measured by income, estimated income, franchise,
capital stock, employee’s withholding, non-resident alien withholding, backup
withholding, social security, occupation, unemployment, disability, value added
taxes, taxes on services, real property, personal property, sales, use, excise,
transfer, gross receipts, inventory and merchandise, business privilege, and
other taxes or amounts required to be withheld and paid over to any government
in respect of any tax, including any interest, penalties, or additions to tax on
the foregoing whether or not disputed.

     “Transaction Account” means any account at a Branch in respect of which
deposits therein are withdrawable in practice upon demand or upon which third
party drafts may be drawn by the depositor, including checking accounts,
negotiable order of withdrawal accounts and money market deposit accounts.

     “Transferred Employees” means Branch Employees who accept offers of
employment with Purchaser or an Affiliate of Purchaser as contemplated in
Section 8.7.

     1.2 Accounting Terms. All accounting terms not otherwise defined herein
shall have the respective meanings assigned to them in accordance with
consistently applied generally accepted accounting principles as in effect from
time to time in the United States of America.

     1.3 Interpretation. All references in this Agreement to Articles or
Sections are references to Articles or Sections of this Agreement, unless some
other reference is clearly indicated. Whenever the words “include,” “includes”
or “including” are used in this Agreement, they shall be deemed to be followed
by the words “without limitation”. The rule of construction against the
draftsman shall not be applied in interpreting and construing this Agreement.

ARTICLE 2

THE P&A TRANSACTION

     2.1 Purchase and Sale of Assets. (a) Subject to the terms and conditions
set forth in this Agreement, at the Closing, Seller shall grant, sell, convey,
assign, transfer and deliver to Purchaser, and Purchaser shall purchase and
accept from Seller, all of Seller’s right, title and interest, as of the Closing
Date, in and to the following (collectively, the “Assets”):

                                  (i)     

Cash on Hand;

(ii)     

the Owned Real Property;

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                  (iii)     

the Personal Property and the Personal Property Leases;

(iv)     

the Loans, and servicing rights related thereto pursuant to Section 2.4;

(v)     

the Branch Leases;

(vi)     

the Safe Deposit Agreements;

(vii)     

prepaid expenses, including rents and security deposits as described in Schedule
2.1(a)(vii) (“Other Assets”); and

(viii)     

the Records.

     (b) Purchaser understands and agrees that it is purchasing only the Assets
(and assuming only the Liabilities) specified in this Agreement and, except as
expressly provided in this Agreement, Purchaser will not acquire any interest in
or right to any other business relationship that Seller or its Affiliates may
have with any customer of the Branches, including: (i) any deposit account or
other service of Seller or its Affiliates at any other office of Seller or its
Affiliates that is linked to the Deposits; (ii) any deposit account that sweeps
from the Branch to a third party that is not an Affiliate of Seller; (iii) any
merchant card banking business; and (iv) any cash management service (e.g., cash
concentrator accounts, controlled disbursement accounts) that Seller or its
Affiliates may provide to any customer of the Branches. It is expressly
understood and agreed that the Assets shall not include any securities or
brokerage relationships, custodial and trust relationships, insurance
relationships, credit card relationships, internet or online banking or other
relationships between any customer of the Branches and the Seller or its
Affiliates, or any right to the use of any sign, trade name, trademark or
service mark, if any, of Seller or any of its Affiliates except as agreed to by
Seller in connection with any notices or communications relating to the
transactions contemplated hereby in accordance with the provisions hereof.

     2.2 Assumption of Liabilities. (a) Subject to the terms and conditions set
forth in this Agreement, at the Closing, Purchaser shall assume, pay, perform
and discharge all duties, responsibilities, obligations or liabilities of Seller
(whether accrued, contingent or otherwise) to be discharged, performed,
satisfied or paid after the Closing Date, with respect to the following
(collectively, the “Liabilities”):

           (i)     

the Deposits, including IRA and Keogh Accounts to the extent contemplated by
Section 2.5;

(ii)     

the Branch Leases;

(iii)     

the Personal Property and the Personal Property Leases;

(iv)     

the Safe Deposit Agreements;

(v)     

the Loans, and the servicing of the Loans pursuant to Section 2.4; and

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            (vi)     the accrued liabilities, if any, described in Schedule
2.2(a)(vii) (the “Accrued Liabilities”).

     (b) Notwithstanding anything to the contrary in this Agreement, Purchaser
shall not assume or be bound by any duties, responsibilities, obligations or
liabilities of Seller or of any of its Affiliates, of any kind or nature, known,
unknown, contingent or otherwise, other than the Liabilities or as otherwise
expressly set forth herein.

     2.3 Purchase Price. The purchase price (“Purchase Price”) for the Assets
shall be the sum of:

     (a) An amount equal to 0.75% of the average daily balance (including
Accrued Interest) of the Davis Deposits for the period commencing ten (10)
calendar days prior to and inclusive of the day prior to the Closing Date and
ending on the day prior to the Closing Date (for the avoidance of doubt, it is
understood and agreed that for purposes of this calculation, Davis Deposits
shall include all Davis Deposits existing during such calculation period
regardless of whether any such Davis Deposits exist and are transferred to
Purchaser on the Closing Date)

     (b) An amount equal to 0.50% of the average daily balance (including
Accrued Interest) of the Grass Valley Deposits for the period commencing ten
(10) calendar days prior to and inclusive of the day prior to the Closing Date
and ending on the day prior to the Closing Date (for the avoidance of doubt, it
is understood and agreed that for purposes of this calculation, Grass Valley
Deposits shall include all Grass Valley Deposits existing during such
calculation period regardless of whether any such Grass Valley Deposits exist
and are transferred to Purchaser on the Closing Date);

     (c)  The aggregate amount of Cash on Hand as of the Closing Date;

     (d)  The aggregate net book value of all the Assets, other than Cash on
Hand, Owned Real Property and the Loan Value of the Loans, as reflected on the
books of Seller as of the close of business of the month-end day most recently
preceding the Closing Date;

     (e)  An amount equal to $850,000 for the Owned Real Property; and

     (f)  The aggregate Loan Value of the Loans as of the close of business on
the Closing

     2.4 Sale and Transfer of Servicing and Escrows. (a) The Loans shall be sold
on a servicing-released basis. As of the Closing Date, all rights, obligations,
liabilities and responsibilities with respect to the servicing of the Loans
after the Closing Date shall be assumed by Purchaser. Seller and its Affiliates
shall be discharged and indemnified by Purchaser from all liability with respect
to servicing of the Loans after the Closing Date and Purchaser shall not assume
and shall be discharged and indemnified by Seller and its Affiliates from all
liability with respect to servicing of the Loans on or prior to the Closing
Date.

     (b) As of the Closing Date, Purchaser shall assume, and agrees to undertake
and discharge, any and all obligations of the holder and servicer of Mortgage
Loans as such

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obligations relate to periods after the Closing Date and as they may relate to
the escrow, maintenance of escrow and payments from escrow of moneys paid by or
on account of the applicable Mortgagor. On or before the fifth (5th) Business
Day after the Closing Date, Seller shall remit by wire transfer of immediately
available funds to Purchaser all funds held in escrow that were collected and
received pursuant to a Mortgage Loan for the payment of taxes, assessments,
hazard insurance premiums, primary mortgage insurance policy premiums, if
applicable, or comparable items prior to the Closing Date, plus any Accrued
Interest. Seller makes no warranties or representations of any kind or nature as
to the sufficiency of such sum to discharge any obligations with respect to
Mortgage Loans, or as to the accuracy of such sum.

     2.5 Assumption of IRA and Keogh Account Deposits. (a) With respect to
Deposits in IRAs, Seller will use reasonable efforts and will cooperate with
Purchaser in taking any action reasonably necessary to accomplish either the
appointment of Purchaser as successor custodian or the delegation to Purchaser
of Seller’s authority and responsibility as custodian of all such IRA deposits,
including sending to the depositors thereof appropriate notices, cooperating
with Purchaser in soliciting consents from such depositors, and filing any
appropriate applications with applicable regulatory authorities. If any such
delegation is made to Purchaser, Purchaser will perform all of the duties so
delegated and comply with the terms of Seller’s agreement with the depositor of
the IRA Deposits affected thereby.

     (b) With respect to Deposits in Keogh Accounts, Seller will use reasonable
efforts and will cooperate with Purchaser to invite depositors thereof to direct
a transfer of each such depositor’s Keogh Account and the related Deposits to
Purchaser, as trustee thereof, and to adopt Purchaser’s form of Keogh Master
Plan as a successor to that of Seller. Purchaser will assume no Keogh Accounts
unless Purchaser has received to its satisfaction the documents necessary for
such assumption at or before the Closing.

     (c) If, notwithstanding the foregoing, as of the Closing Date, Purchaser
shall be unable to retain deposit liabilities in respect of an IRA or Keogh
Account, such deposit liabilities shall be excluded from Deposits for purposes
of this Agreement and shall constitute “Excluded IRA/Keogh Account Deposits.”

ARTICLE 3

CLOSING PROCEDURES; ADJUSTMENTS

     3.1 Closing. (a) The Closing will be held at the offices of Seller’s parent
company, Wells Fargo & Company, at 420 Montgomery Street, San Francisco,
California, or such other place as may be agreed to by the parties.

     (b) Subject to the satisfaction or, where legally permitted, the waiver of
the conditions set forth in Article 9, the Closing Date shall be June 5, 2009,
or, if the Closing cannot occur on such date, on a date and time as soon
thereafter as practicable after receipt of all Regulatory Approvals and the
expiration of all related statutory waiting periods, subject to the next
sentence of this Section 3.1(b). Unless the parties agree pursuant to Section
4.10(a) that the conversion of the data processing with respect to the Branches
and the Assets and Liabilities will be performed on a date other than the
Closing Date, the Closing Date shall be a Friday.

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     3.2 Payment at Closing. (a) At Closing, (i) if the Estimated Payment Amount
as set forth on the Draft Closing Statement is a positive amount, Seller shall
pay to Purchaser an amount in dollars equal to such positive amount, or (ii) if
the Estimated Payment Amount as set forth on the Draft Closing Statement is a
negative amount, Purchaser shall pay to Seller an amount in dollars equal to the
absolute value of such negative amount. In addition, Purchaser shall pay to
Seller any sales tax due.

     (b) All payments to be made hereunder by one party to the other shall be
made by wire transfer of immediately available funds (in all cases to an account
specified in writing by Seller or Purchaser, as the case may be, to the other
not later than the third (3rd) Business Day prior to the Closing Date) on or
before 12:00 noon California time on the date of payment.

     (c) If any instrument of transfer contemplated herein shall be recorded in
any public record before the Closing and thereafter the Closing does not occur,
then at the request of such transferring party the other party will deliver (or
execute and deliver) such instruments and take such other action as such
transferring party shall reasonably request to revoke such purported transfer.

     3.3 Adjustment of Purchase Price. (a) On or before 12:00 noon California
time on the thirtieth (30th) calendar day following the Closing Date (the
“Adjustment Date”), Seller shall deliver to Purchaser the Final Closing
Statement and shall make available such work papers, schedules and other
supporting data as may be reasonably requested by Purchaser to enable it to
verify the amounts set forth in the Final Closing Statement. The Final Closing
Statement shall also set forth the Adjusted Payment Amount.

     (b) The determination of the Adjusted Payment Amount shall be final and
binding on the parties hereto on the thirtieth (30th) calendar day after receipt
by Purchaser of the Final Closing Statement, unless Purchaser shall notify
Seller in writing of its disagreement with any amount included therein or
omitted therefrom, in which case, if the parties are unable to resolve the
disputed items within ten (10) Business Days of the receipt by Seller of written
notice of such disagreement, such items shall be determined by the Accounting
Firm; provided, however, that in the event the fees of the Accounting Firm, as
estimated by such firm, would exceed fifty percent (50%) of the net amount in
dispute, the parties agree that the Accounting Firm will not be engaged by
either party and that such net amount in dispute will be equally apportioned
between Seller and Purchaser. The Accounting Firm shall be instructed to resolve
the disputed items within ten (10) Business Days of engagement, to the extent
reasonably practicable. The determination of the Accounting Firm shall be final
and binding on the parties hereto. The fees of the Accounting Firm shall be
divided equally between Seller and Purchaser.

     (c) On or before 12:00 noon California time on the fifth (5th) Business Day
after the Adjusted Payment Amount shall have become final and binding or, in the
case of a dispute, the date of the resolution of the dispute pursuant to
subsection 3.3(b) above, if the Adjusted Payment Amount exceeds the Estimated
Payment Amount, Seller shall pay to Purchaser an amount in dollars equal to such
excess, plus interest on such excess amount from the Closing Date to but
excluding the payment date, at the Federal Funds Rate or, if the Estimated
Payment Amount exceeds the Adjusted Payment Amount, Purchaser shall pay to
Seller an amount in dollars equal

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to such excess, plus interest on such excess amount from the Closing Date to but
excluding the payment date, at the Federal Funds Rate.

     3.4 Proration; Other Closing Date Adjustments. (a) Except as otherwise
specifically provided in this Agreement, it is the intention of the parties that
Seller will operate the Branches for its own account until 11:59 p.m.,
California time, on the Closing Date, and that Purchaser shall operate the
Branches, hold the Assets and assume the Liabilities for its own account after
the Closing Date. Thus, except as otherwise specifically provided in this
Agreement, items of income and expense, as defined herein, shall be prorated as
of 11:59 p.m., California time, on the Closing Date, and settled between Seller
and Purchaser on the Closing Date, whether or not such adjustment would normally
be made as of such time. Items of proration will be handled at Closing as an
adjustment to the Purchase Price unless otherwise agreed by the parties hereto.

     (b) For purposes of this Agreement, items of proration and other
adjustments shall include: (i) rental payments under the Branch Leases; (ii)
personal and real property taxes and assessments; (iii) FDIC deposit insurance
assessments; (iv) other prepaid expenses and items and accrued but unpaid
liabilities of the Branches, as of the close of business on the Closing Date;
and (v) safe deposit rental payments previously received by Seller.

     3.5 Seller Deliveries. At the Closing, Seller shall deliver to Purchaser:

     (a) A deed in substantially the form of Schedule 3.5(a) (the “Grant Deed”);

     (b) A bill of sale in substantially the form of Schedule 3.5(b) (except as
otherwise required by local state law), pursuant to which the Personal Property
shall be transferred to Purchaser “AS IS”, “WHERE IS” and with all faults except
as provided in Article 5 hereof;

     (c) An assignment and assumption agreement in substantially the form of
Schedule 3.5(c) (except as otherwise required by local state law), with respect
to the Liabilities (the “Assignment and Assumption Agreement”);

     (d) A lease assignment and assumption agreement in substantially the form
of Schedule 3.5(d), with respect to the Davis Branch Lease (the “Lease
Assignment”);

     (e)  An Officer’s Certificate in substantially the form of Schedule 3.5(e);

     (f)  The Draft Closing Statement;

     (g)  A certification of non-foreign status meeting the requirements of
Treasury Regulation 1.1445-2(b)(2), duly executed and acknowledged,
substantially in the form of the sample certificates set forth in Treasury
Regulation Section 1.1445-2(b)(2)(iv);

     (h) Seller’s resignation as trustee or custodian, as applicable, with
respect to each IRA or Keogh Account included in the Deposits and designation of
Purchaser as successor trustee or custodian with respect thereto, as
contemplated by Section 2.5;

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     (i) Such other documents as the parties determine are reasonably necessary
to consummate the P&A Transaction as contemplated hereby; and

     (j)  The Estimated Payment Amount, if applicable.

     3.6  Purchaser Deliveries. At the Closing, Purchaser shall deliver to
Seller:

     (a)  The Assignment and Assumption Agreement;

     (b)  The Lease Assignments and such other instruments and documents as any
landlord under a Branch Lease may reasonably require as necessary or desirable
for providing for the assumption by Purchaser of a Branch Lease, each such
instrument and document in form and substance reasonably satisfactory to the
parties and dated as of the Closing Date;

     (c)  An Officer’s Certificate in substantially the form of Schedule 3.6(c);

     (d)  Purchaser’s acceptance of its appointment as successor trustee or
custodian, as applicable, of the IRA and Keogh Accounts included in the Deposits
and assumption of the fiduciary obligations of the trustee or custodian with
respect thereto, as contemplated by Section 2.5;

     (e) Such other documents as the parties determine are reasonably necessary
to consummate the P&A Transaction as contemplated hereby; and

     (f)  The Estimated Payment Amount, if applicable.

3.7  Delivery of the Loan Documents. (a) As soon as reasonably practicable after
the Closing Date, Seller shall deliver to Purchaser or its designee the Loan
Documents, in whatever form or medium (including imaged documents) then
maintained by Seller. Seller makes no representations or warranties to Purchaser
regarding the condition of the Loan Documents or any single document included
therein, or Seller’s interest in any collateral securing any Loan, except as
specifically set forth herein. Seller shall have no responsibility or liability
for loss or destruction of the Loan Documents from and after the time such files
are delivered by Seller to Purchaser or to an independent third party designated
in writing in advance by Purchaser for shipment to Purchaser, the cost of which
shall be the sole responsibility of Purchaser.

     (b) Promptly upon execution of this Agreement, Purchaser shall provide
Seller with the exact name to which the Loans are to be endorsed, or whether any
Loans should be endorsed in blank. Seller will use its reasonable best efforts
to complete such endorsements and deliver the Loan Documents, along with
appropriate assignments of real property security instruments in recordable form
and assignments of financing statements, at the Closing in the case of
commercial Loans and within thirty (30) calendar days after Closing in the case
of all other Loans; provided, however, that in the event that Seller requires
additional time to effectively transfer title under any Loan Document, Purchaser
shall not hold Seller liable for any reasonable delays in the delivery of such
Loan Documents. Purchaser further acknowledges and agrees that Seller may
execute or endorse any Loan Document by way of facsimile signature. Purchaser
shall pay or reimburse Seller for all reasonable third party costs incurred in
connection with the preparation of the assignment documentation.

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     3.8 Collateral Assignments and Filing. Seller shall take all such
reasonable actions as requested by Purchaser to assist Purchaser in obtaining
the valid perfection of a lien or security interest in the collateral, if any,
securing each Loan sold on the Closing Date in favor of Purchaser or its
designated assignee as secured party. Any such action shall be at the sole
expense of Purchaser, and Purchaser shall pay or reimburse Seller for all
reasonable third party costs incurred in connection therewith.

     3.9 Owned Real Property Filings. On or prior to the Closing Date, Purchaser
shall file or record, or cause to be filed or recorded, any and all documents
necessary in order that the legal and equitable title to Owned Real Property
shall be duly vested in Purchaser. Any expenses or documentary transfer taxes
with respect to such filings and all escrow closing costs shall be borne by
Purchaser.

ARTICLE 4

TRANSITIONAL MATTERS

     4.1 Transitional Arrangements. Seller and Purchaser agree to cooperate and
to proceed as follows to effect the transfer of account record responsibility
for the Branches:

     (a) As soon as practicable after the execution of this Agreement by the
parties hereto, but in no event later than thirty (30) calendar days after the
date of this Agreement, Seller will meet with Purchaser to investigate, confirm
and agree upon mutually acceptable transaction settlement procedures and
specifications, files, deliverables, procedures and schedules, for the transfer
of account record responsibility for the Branches; provided, however, that
neither Seller nor its Affiliates shall be obligated under this Agreement to
provide Purchaser any information regarding the business relationships described
in Section 2.1(b) of this Agreement.

     (b) Not later than thirty (30) calendar days after the date of this
Agreement, Seller shall deliver to Purchaser the specifications and conversion
sample files.

     (c) After Purchaser has tested and confirmed the conversion sample files,
Seller shall provide Purchaser with account information, as of a recent date,
including complete name and address, account masterfile, ATM account number
information, applicable transaction and stop/hold/caution information,
account-to-account relationship information and any other related information
with respect to the Deposits and the Loans. Seller shall, upon reasonable
request, provide to Purchaser an updated version of such records; provided,
however, that Seller shall not be obligated to provide such updated records more
than twice.

     4.2 Customers. (a) Not later than thirty (30) calendar days nor earlier
than sixty (60) calendar days prior to the Closing Date (except as otherwise
required by applicable law):

          (i)     

Seller will notify the holders of Deposits to be transferred on the Closing Date
that, subject to the terms and conditions of this Agreement, Purchaser will be
assuming liability for such Deposits; and

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        (ii)     

each of Seller and Purchaser shall provide, or join in providing where
appropriate, all notices to customers of the Branches and other persons that
Seller or Purchaser, as the case may be, is required to give under applicable
law or the terms of any other agreement between Seller and any customer in
connection with the transactions contemplated hereby.

A party proposing to send or publish any notice or communication pursuant to
this Section 4.2 shall furnish to the other party a copy of the proposed form of
such notice or communication at least five (5) calendar days in advance of the
date of the first mailing, posting, or other dissemination thereof to customers,
and shall not unreasonably refuse to amend such notice to incorporate any
changes that the other such party proposes as necessary to comply with
applicable law. All costs and expenses of any notice or communication sent or
published by Purchaser or Seller shall be the responsibility of the party
sending such notice or communication and all costs and expenses of any joint
notice or communication shall be shared equally by Seller and Purchaser. As soon
as reasonably practicable and in any event within thirty (30) calendar days
after the date hereof, Seller shall provide to Purchaser a report of the names
and addresses of the owners of the Deposits, the borrowers on the Loans and the
lessees of the safe deposit boxes as of the date hereof in connection with the
mailing of such materials. No communications by Purchaser, and no communications
by Seller outside the ordinary course of business, to any such owners, borrowers
or lessees shall be made prior to the Closing Date except as provided in this
Agreement or otherwise agreed to by the parties.

     (b) Following the giving of any notice described in paragraph (a) above,
Purchaser and Seller shall deliver to each new customer at any of the Branches
such notice or notices as may be reasonably necessary to notify such new
customers of Purchaser’s pending assumption of liability for the Deposits and to
comply with applicable law.

     (c) Notwithstanding the provisions of Section 7.9, neither Purchaser nor
Seller shall object to the use by depositors of the Deposits of payment orders
issued to or ordered by such depositors on or prior to the Closing Date, which
payment orders bear the name, or any logo, trademark, service mark or
proprietary mark, of Seller or any of its Affiliates.

     4.3 Direct Deposits. Seller will use its reasonable best efforts to
transfer to Purchaser on the Closing Date all of those automated clearing house
(“ACH”) and FedWire direct deposit arrangements related (by agreement or other
standing arrangement) to the Deposits. For a period of three (3) months
following the Closing Date, in the case of ACH direct deposits to accounts
containing Deposits (the final Business Day of such period being the “ACH Direct
Deposit CutOff Date”), Seller shall transfer to Purchaser all received ACH
Direct Deposits each Business Day in accordance with Seller’s customary
procedures. Purchaser will send NACHA compliant Notice of Change on each
transfer received. On each Business Day, for a period of thirty (30) calendar
days following the Closing Date (the final Business Day of such period being the
“FedWire Direct Deposit Cut-Off Date”), FedWire direct deposits received by
Seller shall be returned (as soon as is practicable after receipt) to the
originator with an indication of Purchaser’s correct Wire Room contact
information and an instruction that such wire should be sent to Purchaser.
Compensation for ACH direct deposits or FedWire direct deposits not forwarded to
Purchaser on the same Business Day as that on which Seller has received such
deposits will be handled in accordance with the applicable rules established by
the United States

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Council on International Banking. After the respective ACH Direct Deposit
Cut-Off Date or FedWire Direct Deposit Cut-Off Date, Seller may discontinue
accepting and forwarding ACH and FedWire entries and funds and return such
direct deposits to the originators marked “Account Sold.” Seller and its
Affiliates shall not be liable for any overdrafts that may thereby be created.
Purchaser and Seller shall agree on a reasonable period of time prior to the
Closing during which Seller will no longer be obligated to accept new direct
deposit arrangements related to the Branches. At the time of the ACH Direct
Deposit Cut-Off Date, Purchaser will provide ACH originators with account
numbers relating to the Deposits.

     4.4 Direct Debits. After the notice provided in Section 4.2(a), Purchaser
shall send appropriate notice to all customers having accounts constituting
Deposits, the terms of which provide for direct debit of such accounts by third
parties, instructing such customers concerning the transfer of customer direct
debit authorizations from Seller to Purchaser. Such notice shall be in a form
reasonably agreed to by the parties hereto. For a period of three (3) months
following the Closing, Seller shall transfer to Purchaser all received direct
debits on accounts constituting Deposits each Business Day in accordance with
Seller’s customary procedures. Purchaser will send NACHA compliant Notice of
Change on each direct debit received. Thereafter, Seller may discontinue
forwarding such entries and return them to the originators marked “Account
Sold.” Purchaser and Seller shall agree on a reasonable period of time prior to
the Closing during which Seller will no longer be obligated to accept new direct
debit arrangements related to the Branches. On the Closing Date, Purchaser shall
provide ACH originators of such Direct Debits with account numbers relating to
the Deposits.

     4.5 Escheat Deposits. After Closing, Purchaser shall be solely responsible
for the proper reporting and transmission to the appropriate governmental entity
of Escheat Deposits.

     4.6 Access to Records. From and after the Closing Date, each of the parties
shall permit the other reasonable access to any applicable records in its
possession relating to matters arising on or before the Closing Date and
reasonably necessary in connection with any claim, action, litigation or other
proceeding involving the party requesting access to such records or in
connection with any legal obligation owed by such party to any present or former
depositor or other customer, subject to confidentiality requirements. All
records, whether held by Purchaser or Seller, shall be maintained for such
periods as are required by law, unless the parties shall agree in writing to a
longer period. Seller may maintain such copies of Records as may be required by
applicable law.

     4.7 Interest Reporting and Withholding. (a) Unless otherwise agreed to by
the parties, Seller will report to applicable taxing authorities and holders of
Deposits, with respect to the period from January 1 of the year in which the
Closing occurs through the Closing Date, all interest (including dividends and
other distributions with respect to money market accounts) credited to, withheld
from and any early withdrawal penalties imposed upon the Deposits. Purchaser
will report to the applicable taxing authorities and holders of Deposits, with
respect to all periods from the day after the Closing Date, all such interest
credited to, withheld from and any early withdrawal penalties imposed upon the
Deposits. Any amounts required by any governmental agencies to be withheld from
any of the Deposits through the Closing Date will be withheld by Seller in
accordance with applicable law or appropriate notice from any governmental
agency and will be remitted by Seller to the appropriate agency on or prior to
the

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applicable due date. Any such withholding required to be made subsequent to the
Closing Date will be withheld by Purchaser in accordance with applicable law or
appropriate notice from any governmental agency and will be remitted by
Purchaser to the appropriate agency on or prior to the applicable due date.

     (b) Unless otherwise agreed by the parties, Seller shall be responsible for
delivering to payees all IRS notices with respect to information reporting and
tax identification numbers required to be delivered through the Closing Date
with respect to the Deposits, and Purchaser shall be responsible for delivering
to payees all such notices required to be delivered following the Closing Date
with respect to the Deposits.

     (c) Unless otherwise agreed by the parties, Seller will make all required
reports to applicable tax authorities and to obligors on Loans purchased on the
Closing Date, with respect to the period from January 1 of the year in which the
Closing occurs through the Closing Date, concerning all interest and points
received by Seller. Purchaser will make all required reports to applicable tax
authorities and to obligors on Loans purchased on the Closing Date, with respect
to all periods from the day after the Closing Date, concerning all such interest
and points received.

     4.8 Negotiable Instruments. Seller will remove any supply of Seller’s money
orders, official checks, gift checks, travelers’ checks or any other negotiable
instruments located at each of the Branches on the Closing Date.

     4.9 ATM/Debit Cards; POS Cards. Seller will provide Purchaser with a list
of ATM access/debit cards and Point-of-Sale (“POS”) cards issued by Seller to
depositors of any Deposits, and a record thereof in a format reasonably agreed
to by the parties containing all addresses therefor, as soon as practicable and
in no event later than thirty (30) calendar days after the date of this
Agreement. At or promptly after the Closing, Seller will provide Purchaser with
a revised record through the Closing. In instances where a depositor of a
Deposit made an assertion of error regarding an account pursuant to the
Electronic Funds Transfer Act and Federal Reserve Board Regulation E, and
Seller, prior to the Closing, recredited the disputed amount to the relevant
account during the conduct of the error investigation, Purchaser agrees to
comply with a written request from Seller to debit such account in a stated
amount and remit such amount to Seller, to the extent of the balance of funds
available in the accounts. Seller agrees to indemnify Purchaser for any claims
or losses that Purchaser may incur as a result of complying with such request
from Seller. Seller shall not be required to disclose to Purchaser customers’
PINs or algorithms or logic used to generate PINs. Purchaser shall reissue ATM
access/debit cards to depositors of any Deposits not earlier than forty-five
(45) calendar days nor later than fifteen (15) calendar days prior to the
Closing Date, which cards shall be effective as of the day following the Closing
Date. Purchaser and Seller agree to settle any and all ATM transactions and POS
transactions effected on or before the Closing Date, but processed after the
Closing Date, as soon as practicable following the processing thereof. In
addition, Purchaser assumes responsibility for and agrees to pay on presentation
all POS transactions initiated before or after the Closing with POS cards issued
by Seller to access Transaction Accounts.

     4.10 Data Processing Conversion for the Branches and Handling of Certain
Items. (a) The conversion of the data processing with respect to the Branches
and the Assets and Liabilities

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will be completed on the Closing Date unless otherwise agreed to by the parties.
Seller and Purchaser agree to cooperate to facilitate the orderly transfer of
data processing information in connection with the P&A Transaction. Within ten
(10) calendar days of the date of this Agreement, Purchaser and/or its
representatives shall be permitted access (subject to the provisions of section
7.2(a)) to review each Branch for the purpose of installing automated equipment
for use by Branch personnel. Following the receipt of all Regulatory Approvals
(except for the expiration of statutory waiting periods), Purchaser shall be
permitted, at its expense, to install and test communication lines, both
internal and external, from each Branch and prepare for the installation of
automated equipment on the Closing Date.

     (b) As soon as practicable and in no event more than three (3) Business
Days after the Closing Date, Purchaser shall mail to each depositor in respect
of a Transaction Account (i) a letter approved by Seller requesting that such
depositor promptly cease writing Seller’s drafts against such Transaction
Account and (ii) new drafts which such depositor may draw upon Purchaser against
such Transaction Accounts. Purchaser shall use its reasonable best efforts to
cause these depositors to begin using such drafts and cease using drafts bearing
Seller’s name. The parties hereto shall use their reasonable best efforts to
develop procedures that cause Seller’s drafts against Transaction Accounts
received after the Closing Date to be cleared through Purchaser’s then-current
clearing procedures. During the ninety (90) calendar-day period after the
Closing Date, if it is not possible to clear Transaction Account drafts through
Purchaser’s then-current clearing procedures, Seller shall make available to
Purchaser as soon as practicable but in no event more than three (3) Business
Days after receipt all Transaction Account drafts drawn against Transaction
Accounts. Seller shall have no obligation to pay such forwarded Transaction
Account drafts. Upon the expiration of such ninety (90) calendar-day period,
Seller shall cease forwarding drafts against Transaction Accounts.

     (c) Any items that were credited for deposit to or cashed against a Deposit
prior to the Closing and are returned unpaid on or within ninety (90) calendar
days after the Closing Date (“Returned Items”) will be handled as set forth
herein. Except as set forth below, Returned Items shall be the responsibility of
Seller. If depositor’s bank account at Seller is charged for the Returned Item,
Seller shall forward such Returned Item to Purchaser. If upon Purchaser’s
receipt of such Returned Item there are sufficient funds in the Deposit to which
such Returned Item was credited or any other Deposit transferred at the Closing
standing in the name of the party liable for such Returned Item, Purchaser will
debit any or all of such Deposits an amount equal in the aggregate to the
Returned Item, and shall repay that amount to Seller. If there are not
sufficient funds in the Deposit because of Purchaser’s failure to honor holds
placed on such Deposit, Purchaser shall repay the amount of such Returned Item
to Seller.

     (d) During the ninety (90) calendar-day period after the Closing Date, any
deposits or other payments received by Purchaser in error shall be returned to
Seller within two (2) Business Days of receipt by Purchaser. Payments received
by Seller with respect to any Loans shall be forwarded to Purchaser within two
(2) Business Days of receipt by Seller.

     (e) Prior to the Closing Date, Purchaser will open and maintain two demand
deposit accounts with Seller, one for deposits and one for loans/lines, to be
used for settlement activity following the Closing Date. Seller will provide
Purchaser with a daily statement substantially in the form set forth as Schedule
4.10(e) for these accounts. Purchaser will be responsible for

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initiating all funding and draw-down activity against these accounts. Purchaser
will ensure that all debit (negative) balances are funded no later then one day
following the day the account went into a negative status. Activity that will be
settled through these accounts will include but not be limited to: items drawn
on a Deposit but presented to Seller for payment, ACH transactions, Direct Debit
transactions, Returned Items, and payments made to Seller for Loans.

     4.11 Information Regarding Mortgage Loans. Not later than fifteen (15)
calendar days prior to the Closing Date, Seller will provide to Purchaser
information regarding the Mortgage Loans on a magnetic disk or other media
acceptable to the parties, which shall contain the following fields of
information:

Current Principal Balance;
Delinquency Status as of the Run Date;
Paid to Date;
Current Interest Rate;
Total Monthly Payment;
Next Interest Rate Change Date; and
Next Payment Change Date.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Purchaser as follows:

     5.1 Corporate Organization and Authority. Seller is a national banking
association, duly organized and validly existing under the laws of the United
States of America, and has the requisite power and authority to conduct its
business as now being conducted at the Branches, to accept and maintain the
Deposits, and to own the Assets. Seller has the requisite corporate power and
authority and has taken all corporate action necessary in order to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Seller and
(assuming due authorization, execution and delivery by Purchaser) constitutes
the valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms (except as may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of creditors
generally and except as the availability of equitable remedies may be limited by
general principles of equity).

     5.2 No Conflicts. The execution, delivery and performance of this Agreement
by Seller does not, and will not, (i) violate any provision of Seller’s charter
or by-laws or (ii) subject to Regulatory Approvals, violate or constitute a
breach of, or default under, any law, rule, regulation, judgment, decree, ruling
or order of any court, government or governmental agency to which Seller is
subject or any agreement or instrument of Seller, or to which Seller is subject
or by which Seller is otherwise bound, which violation, breach, contravention or
default referred to in this clause (ii), individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect with respect to Seller
(assuming the receipt of any required consents of lessors under the Branch
Leases in respect of the transactions herein contemplated). Seller has

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all material licenses, franchises, permits, certificates of public convenience,
orders and other authorizations of all federal, state and local governments and
governmental authorities necessary for the lawful conduct of its business at
each of the Branches as now conducted and, except as would not individually or
in the aggregate be reasonably expected to have a Material Adverse Effect with
respect to Seller, all such licenses, franchises, permits, certificates of
public convenience, orders and other authorizations, are valid and in good
standing and, to Seller’s knowledge, are not subject to any suspension,
modification or revocation or proceedings related thereto.

     5.3 Approvals and Consents. No notices, reports or other filings are
required to be made by Seller with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by Seller from, any
governmental or regulatory authorities of the United States or the several
States in connection with the execution and delivery of this Agreement by Seller
and the consummation of the transactions contemplated hereby by Seller, the
failure to make or obtain any or all of which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect with respect to
Seller.

     5.4 Davis Branch Lease. The Davis Branch Lease is the valid and binding
obligation of Seller, and to Seller’s knowledge, of each other party thereto;
and, except as would not reasonably be expected to have a Material Adverse
Effect with respect to Seller, there does not exist with respect to Seller’s
obligations thereunder, or, to Seller’s knowledge, with respect to the
obligations of the lessor thereof, any default, or event or condition which
constitutes or, after notice or passage of time or both, would constitute a
default on the part of Seller or the lessor under the Davis Branch Lease. The
Davis Branch Lease gives Seller the right to occupy the building and land
comprising the Davis Branch. There are no subleases relating to any Branch
created or suffered to exist by Seller, or to Seller’s knowledge, created or
suffered to exist by any other person. All rents, expenses, and charges payable
by Seller have been paid in accordance with the terms of the Davis Branch Lease.
Except as set forth on Schedule 5.4, no consent is required with respect to the
assignment of the Davis Branch Lease to the Purchaser.

     5.5 Litigation. There are no actions, suits or proceedings pending or, to
Seller’s knowledge, threatened against Seller or, to Seller’s knowledge,
obligations or liabilities (whether accrued, contingent, or otherwise), or facts
or circumstances that could reasonably be expected to result in any claims
against or obligations or liabilities of Seller that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect with
respect to Seller.

     5.6 Regulatory Matters. (a) There are no pending or, to Seller’s knowledge,
threatened disputes or controversies between Seller or its Affiliates and any
federal, state or local governmental agency or authority that, individually or
in the aggregate, would reasonably be expected to have a Material Adverse Effect
with respect to Seller.

     (b) Neither Seller nor any of its Affiliates is aware of any facts or
circumstances that would indicate that any federal or state governmental agency
or authority would oppose or refuse to grant a Regulatory Approval.

     5.7 Compliance with Laws. The business of the Branches has been conducted
in compliance with all federal, state and local laws, regulations and ordinances
applicable thereto,

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except for any failures to comply that would not, individually or in the
aggregate, result in a Material Adverse Effect with respect to Seller.

     5.8  Loans.

     (a)  With respect to each Loan: (i) it represents the valid and legally
binding obligation of the obligor(s), guarantor(s) or sureties thereunder,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of relating to
or affecting creditors’ rights and to general equity principles; (ii) it (A) was
originated or purchased by Seller, (B) to the extent secured is secured by a
valid and enforceable lien in the collateral therefor, which lien is assignable
and has the priority reflected in Seller’s records, (C) contains customary and
enforceable provisions such that the rights and remedies of the holder thereof
shall be adequate for the practical realization against any collateral therefor;
(iii) it complied at the time the Loan was solicited and originated in all
material respects with all applicable requirements of federal, state, and locals
laws, and regulations thereunder and there was no fraud on the part of Seller
with respect to the origination of any Loan; (iv) the servicing practices of
Seller used with respect to the Loan have been customary industry practices; and
(v) to Seller’s Knowledge, no claims, counterclaims, set-off rights, or other
rights exist, nor do the grounds for any such claim, counterclaim, set-off
rights, or other rights exist, with respect to such Loan which could impair the
collectibility thereof.

     (b) Except as set forth in Section 5.8(a) above, Seller makes no
representation or warranty of any kind to Purchaser relating to the Loans
including with respect to (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency, value or collectibility of the Loans
or any Loan Documents, including documents granting a security interest in any
collateral relating to a Loan, (ii) any representation, warranty or statement
made by an obligor or any other party in connection with any Loan, (iii) the
financial condition or creditworthiness of any primary or secondary obligor
under any Loan or any guarantor or surety or other obligor thereof, (iv) the
performance of the obligor or compliance with any of the terms or provisions of
any of the documents, instruments and agreements relating to any Loan, (v)
inspecting any of the property, books or records of any obligor, or (vi) any of
the warranties set forth in Section 3-417 of the Uniform Commercial Code.

     5.9 Records. The Records respecting the operations of the Branches and the
Assets and Liabilities are complete and correct in all material respects. The
Records accurately reflect in all material respects as of their respective dates
the net book value of the Assets and Liabilities being transferred to Purchaser
hereunder, and the results of operations related to the Branches, Assets and
Liabilities for the periods referred to therein. The Records include all
customary Branch, customer and customer-related information reasonably necessary
to service the Deposits and Loans on an ongoing basis, and to otherwise operate
the business being acquired under this Agreement in substantially the manner
currently operated by Seller

     5.10 Title to Assets; Personal Property. Subject to the terms and
conditions of this Agreement, on the Closing Date Purchaser will acquire good,
valid and marketable title to all of the Assets, free and clear of any
Encumbrances. All material Personal Property is in good operating or working
condition and good repair (normal wear and tear excepted) and free from any
material defect.

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     5.11 Deposits. Seller is an “insured institution” as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder. All of the Deposit
accounts have been administered and originated in compliance in all material
respects with the documents governing the relevant type of Deposit account and
all applicable laws. The Deposit accounts are insured by the FDIC through the
Deposit Insurance Fund to the fullest extent permitted by law, and all premiums
and assessments required to be paid in connection therewith have been paid in
full when due, and, to the knowledge of Seller, no proceedings have been
commenced or are contemplated by the FDIC or otherwise to terminate such
insurance. The Deposits (a) are genuine and enforceable obligations of Seller;
(b) were acquired in the ordinary course of Seller’s business; and (c) are not
subject to any Encumbrances that are superior to the rights of persons shown on
the records delivered to Purchaser indicating the owners of such Deposits, other
than claims against the Deposit owners that have matured or may mature into
claims against the respective Deposits.

     5.12 Environmental Laws; Hazardous Substances. (a) Except as would not,
individually or in the aggregate, have a Material Adverse Effect with respect to
Seller, to Seller’s knowledge each parcel of Real Property:

     (i) is and has been operated by Seller in compliance with all applicable
Environmental Laws;

     (ii) is not currently subject to any court order, administrative order or
decree arising under any Environmental Law;

     (iii) has not been used for the disposal of Hazardous Substances and is not
contaminated with any Hazardous Substances requiring remediation or response
under any applicable Environmental Law; and

     (iv) has not had any releases, emissions, or discharges of Hazardous
Substances except as permitted under applicable Environmental Laws.

     (b) Seller has not received any written notice from any governmental
authority or other person alleging the violation of, or liability under, any
applicable Environmental Laws.

     (c) Seller has made available to Purchaser correct and complete copies of
all existing Phase I, Phase II and other environmental assessments, reviews,
audits and similar reports and all material written information pertaining to
actual or potential liabilities arising under Environmental Laws at the
Branches.

     (d) To Seller’s knowledge based solely on that certain Operations and
Maintenance Plan prepared by ECS Ltd dated May 6, 2008, there is no asbestos
containing material (“ACM”) present on the Owned Real Property except
non-friable ACM which can be managed in place in compliance with Environmental
Laws without air monitoring, removal or encapsulation.

     5.13 Brokers’ Fees. Seller has not employed any broker or finder or
incurred any liability for any brokerage fees, commission or finders’ fees in
connection with the transactions contemplated by this Agreement, except for fees
and commissions for which Seller shall be solely liable.

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     5.14 Real Property.

     (a) Seller will convey to Purchaser good and marketable title, such as is
insurable byany reputable title insurance company, to the Owned Real Property,
free and clear of all Encumbrances.

     (b) The buildings, structures, fixtures and improvements on the Real
Property are structurally sound, in good repair (normal wear and tear excepted)
and usable and adequate for their intended purpose and to conduct the business
of the Branches as it is now being conducted. Reasonable and adequate utility
services, including sewer, water, gas, electric power, and telephone service, as
applicable, are available to the Branches.

     (c) Seller has not received any written notice of a current violation,
citations, summonses, subpoenas, compliance orders, directives, suits, other
legal process, or other written notice of potential liability under applicable
zoning, building, fire and other applicable laws and regulations relating to the
Real Property.

     (d) Seller has not received any written notice of any actual or pending
condemnation proceeding relating to the Branches.

     (e) Seller has not entered into any agreement regarding the Owned Real
Property, and the Owned Real Property is not subject to any claim, demand, suit,
lien, proceeding or litigation of any kind, pending or outstanding, or to
Seller’s knowledge, threatened, which would be binding upon Purchaser or its
successors or assigns or materially affect or limit Purchaser’s or its
successors’ or assigns’ use and enjoyment of the Owned Real Property or which
would materially limit or restrict Purchaser’s right or ability to enter into
this Agreement and consummate the sale and purchase contemplated hereby.

     5.15 Intentionally Deleted.

     5.16 Employment Matters; Employee Relations. Seller (i) has paid in full to
or accrued on behalf of all of its employees at the Branches all wages,
salaries, commissions, bonuses, fees and other direct compensation for all labor
or services rendered, including all wages, salaries, commissions, bonuses, fees
and other direct compensation for all labor or services performed by them and
all vacation pay, sick pay, severance pay and other amounts promised to the
extent required by law or its existing policies or practices, and (ii) is in
compliance in all material respects with all applicable federal, state and local
laws, statutes, rules and regulations with regard to employment and employment
practices, terms and conditions, and wages and hours and other compensation
matters; and no person has, to the Knowledge of Seller, asserted that Seller is
liable in any amount for any arrearages in wages or employment taxes or for any
penalties for failure to comply with any of the foregoing. There is no action,
suit or proceeding by any person pending or, to the Knowledge of Seller,
threatened against Seller (or its employees), involving employment
discrimination, harassment, wrongful discharge or similar claims relating in any
way to the Branches or any of Seller’s employees at the Branches. Seller is not
a party to or bound by any collective bargaining agreement with any of the
employees of the Branches, any labor union or any other collective bargaining
unit or organization. There is no pending or, to Seller’s Knowledge, threatened
labor dispute, work stoppage or strike

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involving a Branch or any of Seller’s employees at a Branch, or any pending or,
to Seller’s Knowledge, threatened proceeding in which it is asserted that Seller
has committed an unfair labor practice, and, to Seller’s Knowledge, there is no
activity involving it or any of the employees of the Branches seeking to certify
a collective bargaining unit or engaging in any other labor organization
activity.

     5.17 Absence of Certain Changes. Except in connection with the transactions
contemplated hereby, or as set forth in Schedule 5.17, since December 31, 2008,
Seller’s business at the Branches has been conducted only in the ordinary course
of business consistent with past practice, and there has not been any Material
Adverse Effect with respect to Seller, or to Seller’s Knowledge any development
or combination of developments which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect with respect to
Seller.

     5.18 Insurance. Seller has in effect with respect to each Branch a
“financial institutions bond” and policies of general liability, casualty,
employee fidelity, errors and omissions and other property and liability
insurance in such amounts and against such liabilities, casualties, losses or
risks as is required by applicable law or regulation and reasonable and adequate
for the Branches. Each of the policies is in full force and effect and is valid
and enforceable in accordance with its terms, and is underwritten by an insurer
of recognized financial responsibility that is qualified to transact business in
California; and Seller has taken all requisite actions (including the giving of
required notices) under each such policy to preserve all rights thereunder with
respect to all matters. Seller is not in default under the provisions of, has
not received notice of cancellation or nonrenewal of or any premium increase on,
and has no Knowledge of any failure to pay any premium on or any inaccuracy in
any application for, any policy. There are no pending claims with respect to the
Branches or any Assets under any policy, and Seller has no Knowledge of any
facts or of the occurrence of any event that is reasonably likely to result in
any such claim. Seller has not made any claims on its employee fidelity bonds
with respect to the Branches during the three (3) years preceding the date of
this Agreement.

     5.19 Limitations on Representations and Warranties. Notwithstanding
anything to the contrary contained herein, Seller makes no representations or
warranties to Purchaser in this Agreement or in any agreement, instrument or
other document executed in connection with any of the transactions contemplated
hereby or provided or prepared pursuant hereto or in connection with any of the
transactions contemplated hereby:

     (a) As to the physical condition of the Branches or Personal Property, all
of which are being sold “AS IS”, “WHERE IS” and with all faults at the Closing
Date except as provided in this Article 5;

     (b) As to whether, or the length of time during which, any accounts will be
maintained by the depositors at the Branches after the Closing Date; or

     (c) As to the creditworthiness, credit history or financial condition of
any obligor.

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ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser represents and warrants to Seller as follows:

     6.1 Corporate Organization and Authority. Purchaser is a state-chartered
non-member commercial bank, duly organized and validly existing under the laws
of the State of Oregon and has the requisite power and authority to conduct its
business as currently conducted and as contemplated to be conducted at the
Branches. Purchaser has the requisite corporate power and authority and has
taken all corporate action necessary in order to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Purchaser and (assuming due
authorization, execution and delivery by Seller) constitutes the valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms (except as may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors generally and
except as the availability of equitable remedies may be limited by general
principles of equity).

     6.2 No Conflicts. The execution, delivery and performance of this Agreement
by Purchaser does not, and will not, (i) violate any provision of its Articles
of Incorporation or bylaws or (ii) subject to Regulatory Approvals, violate or
constitute a breach of, or default under, any law, rule, regulation, judgment,
decree, ruling or order of any court, government or governmental authority to
which Purchaser is subject or any agreement or instrument of Purchaser, or to
which Purchaser is subject or by which Purchaser is otherwise bound, which
violation, breach, contravention or default referred to in this clause (ii),
individually or in the aggregate, would be reasonably expected to have a
Material Adverse Effect with respect to Purchaser.

     6.3 Approvals and Consents. Other than Regulatory Approvals relating to
Purchaser set forth in Schedule 6.3, no notices, reports or other filings are
required to be made by Purchaser with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by Purchaser from,
any governmental or regulatory authorities of the United States or the several
States in connection with the execution and delivery of this Agreement by
Purchaser and the consummation of the transactions contemplated hereby by
Purchaser, the failure to make or obtain any or all of which, individually or in
the aggregate, would be reasonably expected to have a Material Adverse Effect
with respect to Purhcaser.

     6.4 Regulatory Matters. (a) Except as set forth in Schedule 6.4, there are
no pending or, to Purchaser’s knowledge, threatened disputes or controversies
between Purchaser and any federal, state or local governmental agency or
authority that, individually or in the aggregate, would be reasonably expected
to have a Material Adverse Effect with respect to Purchaser.

     (b) Neither Purchaser nor any of its Affiliates is aware of any facts or
circumstances that would indicate that any federal or state governmental agency
or authority would oppose or refuse to grant a Regulatory Approval.

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     (c) Purchaser is, and on a pro forma basis giving effect to the P&A
Transaction, will be, (i) at least “well capitalized”, as defined for purposes
of the tests used by the FDIC to evaluate the capital of a state non-member
bank, and (ii) in compliance with all capital requirements, standards and ratios
required by each state or federal bank regulator with jurisdiction over
Purchaser, including any such higher requirement, standard or ratio as shall
apply to institutions engaging in the acquisition of insured institution
deposits, assets or branches, and no such regulator is likely to, or has
indicated that it may, condition any of the Regulatory Approvals upon an
increase in Purchaser’s capital or compliance with any capital requirement,
standard or ratio.

     (d) Purchaser has no reason to believe that it will be required to divest
deposit liabilities, branches, loans or any business or line of business as a
condition to the receipt of any of the Regulatory Approvals.

     (e) Purchaser and each of the subsidiaries or Affiliates of Purchaser that
is an insured depository institution was rated “Satisfactory” or “Outstanding”
following its most recent Community Reinvestment Act examination by the
regulatory agency responsible for its supervision. Purchaser has received no
notice of and has no knowledge of any planned or threatened objection by any
community group to the transactions contemplated hereby.

     6.5 Litigation. There are no actions, suits or proceedings that have a
reasonable likelihood of an adverse determination pending or, to Purchaser’s
knowledge, threatened against Purchaser or, to Purchaser’s knowledge, facts or
circumstances that could reasonably be expected to result in any claims against
Purchaser that, individually or in the aggregate, would have a Material Adverse
Effect with respect to Purchaser.

     6.6 Operation of the Branches. Purchaser intends to continue to provide
retail and business banking services in the geographical area served by the
Branches.

     6.7 Financing Available. Not later than the Closing Date, Purchaser will
have available sufficient cash or other liquid assets to fund the P&A
Transaction. Purchaser’s ability to consummate the transactions contemplated by
this Agreement is not contingent on raising any equity capital, obtaining
specific financing therefor, consent of any lender or any other matter relating
to funding the P&A Transaction.

     6.8 Brokers’ Fees. Purchaser has not employed any broker or finder or
incurred any liability for any brokerage fees, commission or finders’ fees in
connection with the transactions contemplated by this Agreement, except for fees
and commissions for which Purchaser shall be solely liable.

ARTICLE 7

COVENANTS OF THE PARTIES

     7.1 Activity in the Ordinary Course. Until the Closing Date, except (i) as
may be required by a Regulatory Authority or applicable law, or (ii) as
contemplated hereby, Seller (a) shall conduct the business of the Branches in
the ordinary and usual course of business consistent

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with past practice and (b) shall not, without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld, conditioned or
delayed:

           (i)     

Solicit any Branch Employee to transfer to or post for positions at any other
branch or office of Seller or its Affiliates or increase or agree to increase
the salary of any Branch Employee other than in accordance with Seller’s
existing customary policies generally applicable to employees having similar
rank or duties, or pay or agree to pay any uncommitted bonus to any Branch
Employee other than payment of regular bonuses in the ordinary course of
business (which bonuses, in any event, shall be the responsibility of Seller),
or, other than in the ordinary course of business, consistent with past
practice, transfer any Branch Employee to another branch or office of Seller or
any of its Affiliates;

(ii)     

Offer interest rates or terms on any category of deposits at a Branch except as
determined in a manner materially consistent with Seller’s practice with respect
to its branches which are not being sold;

(iii)     

Transfer to or from any Branch to or from any of Seller’s or its Affiliates’
other operations or branches any material Assets or any Deposits, except (A) in
the ordinary course of business or as contemplated by this Agreement, (B) upon
the unsolicited request of a depositor or customer, or (C) if such Deposit is
pledged as security for a loan or other obligation that is not a Loan;

(iv)     

Sell, transfer, assign, encumber or otherwise dispose of or enter into any
contract, agreement or understanding to sell, transfer, assign, encumber or
dispose of any of the Assets existing on the date hereof, except in the ordinary
course of business consistent with past practice;

(v)

Make or agree to make any material improvements to the Owned Real Property,
except with respect to commitments for such improvements made on or before the
date of this Agreement as set forth on Schedule 7.1(v) and normal maintenance or
refurbishing purchased or made in the ordinary course of business;

(vi)

File any application or give any notice to relocate or close any Branch or
relocat or close any Branch;

(vii)

Amend, terminate or extend in any material respect the Davis Branch Lease;
provided, however, Seller shall provide notice to the lessor under the Davis
Branch Lease no earlier than March 23, 2009 or later than March 30, 2009 that
Seller intends to exercise its option to extend the Davis Branch Lease for an
additional three (3) year period, which term shall run from October 1, 2009
through September 30, 2012, pursuant to the terms set forth in the Davis Branch
Lease; or

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            (viii)     

Agree with, or commit to, any person to do any of the things described in
clauses (i) through (vii) except as contemplated hereby.

     7.2 Access and Confidentiality; Maintenance of Records. (a) Until the
Closing Date, Seller shall afford to Purchaser and its officers and authorized
agents and representatives reasonable access to the Branches, Records, Loan
Documents (including loan files), Branch Leases, Personal Property Leases, Safe
Deposit Agreements, and other information of or relating to the Assets and
Liabilities. Purchaser and Seller each will identify to the other, within ten
(10) calendar days after the date hereof, a selected group of their respective
salaried personnel that shall constitute a “transition group” and will be
available to Seller and Purchaser, respectively, at reasonable times (limited to
normal operating hours) to provide information and assistance in connection with
Purchaser’s investigation of matters relating to the Assets and Liabilities.
Such transition group will also work cooperatively to identify and resolve
issues arising from any commingling of Seller’s records with respect to the
Branches with Seller’s records for its other branches and operations not subject
to this Agreement. Seller shall furnish Purchaser with such additional financial
and operating data and other information about Seller’s business operations at
the Branches as the Seller determines may be reasonably necessary for the
orderly transfer of the business operations of the Branches. Any investigation
pursuant to this Section 7.2 shall be conducted in such manner as not to
interfere unreasonably with the conduct of Seller’s businesses. Notwithstanding
the foregoing, Seller shall not be required to provide access to or disclose
information where such access or disclosure would impose an unreasonable burden
on Seller or its Affiliates, or any employee of Seller or its Affiliates or
would violate or prejudice the rights of customers, jeopardize any
attorney-client privilege or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or binding agreement entered into prior to the
date of this Agreement. The parties hereto shall use reasonable best efforts to
make appropriate substitute disclosure arrangements under circumstances in which
the restrictions of the preceding sentence apply.

     (b) From the date hereof and after the Closing Date, each party to this
Agreement shall hold, and shall cause its respective directors, officers,
employees, agents, consultants and advisors to hold, in strict confidence,
except to the extent necessary to discharge obligations pursuant to Section 7.3
or unless compelled to disclose by judicial or administrative process or, in the
opinion of its counsel, by other requirements of law or the applicable
requirements of any regulatory agency or relevant stock exchange, all non-public
records, books, contracts, instruments, computer data and other data and
information (collectively, “Information”) concerning the other party (or, if
required under a contract with a third party, such third party) furnished it by
such other party or its representatives pursuant to this Agreement (except to
the extent that such information was publicly available prior to the date of
this Agreement or hereafter becomes publicly available without any violation of
this Agreement, was available to the party receiving the information on a
non-confidential basis prior to its disclosure by the other party hereto or
becomes available from a person (other than the party providing such information
in connection herewith) who is not, to the knowledge of the party receiving the
information, subject to any legally binding obligation to keep such information
confidential), and neither party shall release or disclose such Information to
any other person, except its auditors, attorneys, financial advisors, bankers,
other consultants and advisors and, to the extent permitted above, to bank
regulatory authorities; provided, however, upon consummation of the P&A
Transaction,

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this Section 7.2(b) shall terminate as to any Information provided by Seller to
Purchaser solely to the extent such Information relates exclusively to the
Assets and the Liabilities.

     (c) Through the Closing Date, Seller will maintain the Records in a manner
consistent in all material respects with past practice.

     7.3 Regulatory Approvals. (a) As soon as practicable and in no event later
than fifteen (15) calendar days after the date of this Agreement, Purchaser
shall prepare and file any applications, notices and filing required in order to
obtain the Regulatory Approvals. Purchaser shall use reasonable best efforts to
obtain each such approval as promptly as reasonably practicable and, to the
extent best possible, in order to permit the Closing to occur not later than
June 5, 2009. Seller will use reasonable best efforts to cooperate in connection
therewith (including the furnishing of any information and any reasonable
undertaking or reasonable commitments which may be required to obtain the
Regulatory Approvals). Each party will provide the other with copies of any
applications and all correspondence relating thereto prior to filing, other than
material filed in connection therewith under a claim of confidentiality, and
each party will notify the other of any significant development with respect to
any application, notice or filing made pursuant to this Agreement. If any
Regulatory Authority shall require the modification of any of the terms and
provisions of this Agreement as a condition to granting any Regulatory Approval,
the parties hereto will negotiate in good faith to seek a mutually agreeable
adjustment to the terms of the transaction contemplated hereby, such agreement
not to be unreasonably withheld, conditioned or delayed.

     7.4 Landlord Consent. Seller agrees to use commercially reasonable best
efforts to obtain from the lessor under the Davis Branch Lease any required
consent to the assignment of the Davis Branch Lease to Purchaser on the Closing
Date (“Landlord Consent”).

     7.5 Efforts to Consummate; Further Assurances. (a) Purchaser and Seller
agree to use reasonable best efforts to satisfy or cause to be satisfied as soon
as practicable their respective obligations hereunder and the conditions
precedent to the Closing set forth in Article 9 of this Agreement.

     (b) From time to time following the Closing, at Purchaser’s request, Seller
will duly execute and deliver such assignments, bills of sale, deeds,
acknowledgments and other instruments of conveyance and transfer as shall be
reasonably necessary or appropriate to vest in Purchaser the full legal and
equitable title to the Assets. From time to time following the Closing, at
Seller’s request and expense, Purchaser will duly execute and deliver such
documents and other instruments as shall be reasonably necessary or appropriate
to relieve and discharge Seller from its obligations with respect to the
Liabilities.

     (c) Subject to Section 4.3, on and after the Closing Date, each party will
promptly deliver to the other all mail and other communications properly
addressable or deliverable to the other as a consequence of the P&A Transaction;
and without limitation of the foregoing, on and after the Closing Date, Seller
shall promptly forward any mail, communications or other material relating to
the Branches, Deposits or the Assets transferred on the Closing Date, including,
but not limited to, that portion of any IRS “B” tapes that relates to such
Deposits, to such employees of Purchaser at such addresses as may from time to
time be specified by Purchaser in writing.

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     (d) The costs incurred by a party in performing its obligations to the
other (x) under Sections 7.5(a) and (c) shall be borne by the initial recipient
and (y) otherwise under this Section 7.5 shall be borne by Purchaser.

     7.6 Solicitation of Accounts. (a) Until the Closing Date and for a period
of one (1) year following the Closing Date, Seller (i) will not solicit
deposits, sweep accounts or loans of the type sold to Purchaser pursuant to the
P&A Transaction (but may solicit and provide other financial services, including
mutual fund purchases, investment advisory services, securities and brokerage
services, custodial and trust services, capital markets services, or insurance
products or other business) from or to persons or entities who were depositors
or borrowers at the Branches on the Closing Date by personal contact, by
telephone, by facsimile, by mail or other similar solicitation, or in any other
way except for general solicitations, advertisements, marketing campaigns and
other solicitations, including through internet and online banking channels,
that are not directed specially to persons or entities who were depositors or
borrowers of the Branches on the Closing Date, and (ii) will not transmit or
otherwise make available to its Affiliates its records relating to customers of
the Branches, and to the extent any of such Affiliates has in its possession
such records as of the date hereof, none of such records shall be used in
violation of this Section 7.6; provided, however, Seller and its Affiliates may
solicit such customers who as of the Closing Date have existing accounts, loans
or other relationships originating at branches or other offices of Seller or its
Affiliates other than the Branches pursuant to solicitations which arise from
their status as a customer at such other branch or offices and are not targeted
at the customers of the Branches. Notwithstanding the foregoing sentence, Seller
and its Affiliates shall be permitted to (i) respond to unsolicited inquiries by
such Branch customers with respect to banking or other financial services and
(ii) provide notices or communications relating to the transactions contemplated
hereby in accordance with the provisions hereof.

     (b) Prior to the Closing Date, Purchaser agrees that it will not attempt to
solicit Branch customers through advertising or transact its business in a way
which would induce such Branch customers to close any account and open accounts
directly with Purchaser or would otherwise result in a transfer of all or a
portion of an existing account from Seller to Purchaser or its Affiliates.
Notwithstanding the foregoing sentence, Purchaser and its Affiliates shall be
permitted to (i) engage in advertising, solicitations or marketing campaigns not
directed specially to or targeted at such Branch customers, (ii) engage in
lending, deposit, safe deposit, trust or other financial services relationships
existing as of the date hereof with such Branch customers at or through branch
offices of Purchaser, (iii) respond to unsolicited inquiries by such Branch
customers with respect to banking or other financial services and (iv) provide
notices or communications relating to the transactions contemplated hereby in
accordance with the provisions hereof.

     7.7 Insurance . Seller will use reasonable best efforts to maintain in
effect until the Closing Date all casualty and public liability policies
relating to the Branches and maintained by Seller on the date hereof or to
procure comparable replacement coverage and maintain such policies or
replacement coverage in effect until the Closing Date. Purchaser shall provide
all casualty and public liability insurance for the Branches after the Closing
Date. In the event of any material damage or destruction affecting Real Property
between the date hereof and the time of the Closing, Purchaser shall have the
right to require Seller to take reasonable steps to repair

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or replace the damaged or destroyed property, or require Seller to deliver to
Purchaser any insurance proceeds and other payments, to the extent of the fair
market value or the replacement cost of the Real Property, received by Seller as
a result thereof unless, in the case of damage or destruction, Seller has
repaired or replaced the damaged or destroyed property. .

     7.8 Servicing Prior to Closing Date. From the date hereof until the Closing
Date, Seller shall provide servicing for the Loans that is consistent with the
servicing provided with respect to its loans that are not Loans. Further,
without the prior written consent of Purchaser (which consent shall not be
unreasonably withheld or delayed), Seller shall not (a) except as required by
law or the terms of the Loan Documents, release any collateral or any party from
any liability on or with respect to any of the Loans; (b) compromise or settle
any material claims of any kind or character with respect to the Loans; or (c)
amend or waive any of the material terms of any Loan as set forth in the Loan
Documents.

     7.9 Change of Name, Etc. Immediately after the Closing, Purchaser will (a)
change the name and logo on all documents and facilities relating to the Assets
and the Liabilities to Purchaser’s name and logo, (b) notify all persons whose
Loans, Deposits or Safe Deposit Agreements are transferred under this Agreement
of the consummation of the transactions contemplated by this Agreement, and (c)
provide all appropriate notices to the FDIC and any other regulatory authorities
required as a result of the consummation of such transactions. Seller shall
cooperate with any commercially reasonable request of Purchaser directed to
accomplish the removal of Seller’s signage by Purchaser and the installation of
Purchaser’s signage by Purchaser; provided, however, that (i) all such removals
and all such installations shall be at the expense of Purchaser, (ii) such
removals and installations shall be performed in such a manner that does not
unreasonably interfere with the normal business activities and operations of the
Branches, (iii) such installed signage shall comply with the applicable Branch
Lease and all applicable zoning and permitting laws and regulations, and (iv)
such installed signage shall have, if necessary, received the prior approval of
the owner or landlord of the facility, and such installed signage shall be
covered in such a way as to make the Purchaser signage unreadable at all times
prior to the Closing, but such cover shall display the name and/or logo of
Seller (or of its Affiliates) in a manner reasonably acceptable to Seller.
Purchaser agrees not to use any forms or other documents bearing Seller or any
of its Affiliates’ name or logo after the Closing without the prior written
consent of Seller, and, if such consent is given, Purchaser agrees that all such
forms or other documents to which such consent relates will be stamped or
otherwise marked in such a way that identifies Purchaser as the party using the
form or other document. As soon as practicable and, in any event, not more than
three (3) Business Days after the Closing Date, Purchaser will mail new checks
reflecting its transit and routing number to customers of the Branches with
check writing privileges. Purchaser shall use its reasonable best efforts to
cause these customers to begin using such checks and cease using checks bearing
Seller’s name.

ARTICLE 8

TAXES AND EMPLOYEE BENEFITS

     8.1 Tax Representations. Seller represents and warrants to Purchaser that
with respect to the Deposits, Seller is in compliance in all material respects
with the Code and regulations thereunder relative to obtaining from depositors
of the Deposits executed IRS Forms W-8 and

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W-9 and reporting of interest. Seller represents and warrants to Purchaser that
Seller has paid when due all material Taxes in respect of the Assets and there
are no liens for Taxes allocated to or imposed on Seller on any of the Assets.

     8.2 Proration of Taxes. Except as otherwise agreed to by the parties,
whenever it is necessary to determine the liability for property Taxes for a
portion of a taxable year or period that begins before and ends after the
Closing Date, the determination of the property Taxes for the portion of the
year or period ending on, and the portion of the year or period beginning after
the Closing Date shall be determined by assuming that the taxable year or period
ended at 11:59 p.m. Eastern Standard Time on the Closing Date.

     8.3 Sales and Transfer Taxes. All excise, sales, use and transfer taxes
that are payable or that arise as a result of the consummation of the P&A
Transaction shall be paid by Purchaser and Purchaser shall indemnify and hold
Seller harmless from and against any such taxes.

     8.4 Information Returns. At the Closing or as soon thereafter as is
practicable, Seller shall provide Purchaser with a list of all Deposits for
which Seller has not received a properly completed Form W-8 or W-9 (or a
substitute form meeting applicable requirements) or on which Seller is back-up
withholding as of the Closing Date.

     8.5 Like Kind Exchange. Purchaser acknowledges that Seller may desire to
complete one or more like kind exchanges (including transactions which are
intended to qualify under Section 1031 of the Code). If requested by Seller, at
Seller’s expense, Purchaser shall cooperate to the extent reasonably necessary
in order to accomplish such like kind exchanges and shall execute all documents
and provide all consents reasonably necessary to complete such like kind
exchanges including an amendment to or an assignment of this Agreement;
provided, however, that (a) Purchaser’s obligations under this Agreement shall
not be increased, (b) Seller’s representations, warranties, covenants and
obligations under this Agreement shall continue in full force and effect and (c)
the total Purchase Price will not change as a result of this assignment.

     8.6 [Intentionally Deleted]

     8.7 Transferred Employees.

     (a) On or prior to the date hereof, Seller has delivered to Purchaser a
list of all Branch Employees by name, date of hire, position, status as full or
part-time and active or on leave and base salary or wages, as of the most recent
practicable date. Purchaser shall have the opportunity to meet each Branch
Employee (excluding those absent, to the extent within job reinstatement rights
period, due to vacation, holiday, leave of absence or illness upon the terms and
conditions described below) within 15 days of the date hereof, subject to
Seller’s reasonable approval, and shall, or shall cause one of its Affiliates
to, offer employment at will effective as of the Closing Date to all Branch
Employees (including those absent, to the extent within job reinstatement rights
period, due to vacation, holiday, leave of absence or illness upon the terms and
conditions described below); provided, however, that all further communications
between Purchaser and the Branch Employees shall be made at such times and in
such manner as Seller and Purchaser mutually agree. Branch Employees who accept
such offer of employment, as of the effective

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date of their employment with Purchaser or one of its Affiliates, shall be
referred to as “Immediately Transferred Employees.” In addition, Purchaser
shall, or shall cause one of its Affiliates to, make offers of employment to any
Branch Employee who is, as of the Closing Date, absent due to an approved leave
of absence and is able and willing to return to work in accordance with the
terms of such Branch Employee’s leave under Seller’s or its Affiliates’
policies. Each such Branch Employee who accepts such offer and actually returns
to work in accordance with the terms of such Branch Employee’s leave under
Seller’s or its Affiliates’ policies shall be referred to as a “Subsequently
Transferred Employee,” and the Immediately Transferred Employees and the
Subsequently Transferred Employees shall be referred to collectively as the
“Transferred Employees” for purposes of this Agreement. The date on which a
Transferred Employee’s employment with Purchaser or one of its Affiliates, as
applicable, becomes effective and actively commences is herein referred to as
that Transferred Employee’s “Transfer Date.” Effective as of a Transferred
Employee’s Transfer Date, a Branch Employee’s employment with Seller shall
terminate.

     (b) Each Branch Employee shall be offered employment with Purchaser with
the following terms and conditions:

          (i)     

Employment shall be on an at-will basis, and nothing in this Agreement shall be
deemed to constitute an employment agreement with any Transferred Employee or to
obligate Purchaser to employ any such person for any specific period of time or
in any specific position or to restrict Purchaser’s right to terminate the
employment of any Transferred Employee at any time and for any reason.

(ii)     

For a period of one year following the Transfer Date, base salary or wage rate
shall be at least equivalent to the rate of base salary or wage rate paid by
Seller to such Branch Employee as of the close of business on the Business Day
prior to the Transfer Date.

(iii)     

Incentive compensation opportunities (including equity awards) that are made
available to employees of Purchaser similarly situated to the Branch Employee
shall be made available to the Branch Employee immediately following the
Transfer Date.

(iv)     

Employment in a comparable position and work schedule and at a location no more
than twenty (20) miles from the Branch Employee’s principal work location
immediately prior to the Transfer Date.

     (c) Except as otherwise specifically provided herein, Transferred Employees
shall be provided employee benefits that are no less favorable than those
provided to similarly situated employees of Purchaser. Purchaser shall provide
each Transferred Employee with credit for such Transferred Employee’s period of
service with Seller and its Affiliates (including any service credited from
predecessor or successor entities to Seller and its Affiliates) towards the
calculation of eligibility and vesting for such purposes as vacation, severance
and other benefits and participation and vesting in Purchaser’s retirement
plans, as such plans may exist.

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     (d) Each Transferred Employee shall be eligible to participate in the
medical, dental, or other welfare plans of Purchaser, as such plans may exist,
on and after the Transferred Employee’s Transfer Date, and any pre-existing
conditions provisions of such plans shall be waived with respect to any such
Transferred Employees; provided, however, that if Purchaser’s relevant health or
disability insurance policy or plan has a pre-existing condition limitation and
a Transferred Employee’s condition is being excluded as a pre-existing condition
under Seller’s or its Affiliates’ plan (as applicable to the Transferred
Employee) as of the Transferred Employee’s Transfer Date, Purchaser may treat
such condition as a pre-existing condition for the period such condition would
have been treated as a pre-existing condition under Seller’s or its Affiliates’
plan (as applicable to the Transferred Employee). Subject to the acceptance of
the following provision by the applicable insurers for the medical, dental or
other welfare plans of Purchaser, to the extent that any Transferred Employee
has satisfied in whole or in part any annual deductible or has paid any
out-of-pocket expenses pursuant to any co-insurance under a medical, dental or
other welfare plan of Seller or its Affiliates (as applicable to the Transferred
Employee), such amount shall be counted toward the satisfaction of any
applicable deductible or out-of-pocket expense maximum, respectively under the
medical, dental or other welfare plans of Purchaser.

     (e) For a period of one year following the Transfer Date, Purchaser shall,
or shall cause its Affiliates to, provide severance pay and benefits to any
Transferred Employee who is terminated without cause pursuant to the Purchaser’s
severance policy as in effect as of the Transfer Date (or, if such severance
policy is amended to provide for a greater benefit, the greater benefit);
thereafter, Transferred Employees shall be eligible to receive severance pay and
benefits pursuant to the Purchaser’s severance policy in effect at the time of
termination without cause. Purchaser shall not assume or be liable for any
severance costs associated with terminating the employment of, or any accrued
vacation costs for, any Branch Employee who is not a Transferred Employee or any
Branch Employee who declines Purchaser’s offer of employment.

     (f) Except as provided in this Agreement, Seller shall pay, discharge, and
be responsible for, and shall indemnify Purchaser and its Affiliates for (i) all
salary and wages arising out of the employment of the Transferred Employees
prior to the applicable Transfer Date, (ii) any employee benefits under Seller’s
or its Affiliates’ employee benefit plans and employee programs of Seller and
its Affiliates arising out of the employment of the Transferred Employees prior
to the applicable Transfer Date (but not including post-retirement welfare
benefits, if any, to Transferred Employees who retire after their applicable
Transfer Date), including welfare benefits with respect to claims incurred prior
to the applicable Transfer Date but reported after such Transfer Date and (iii)
claims for workers’ compensation incurred prior to the applicable Transfer Date.
From and after the applicable Transfer Date, Purchaser shall pay, discharge, and
be responsible for, and shall indemnify Seller and its Affiliates for, all
salary, wages, and benefits arising out of or relating to the employment of the
Transferred Employees by Purchaser from and after the applicable Transfer Date,
including all claims for welfare benefits and for workers’ compensation incurred
on or after such Transfer Date. With respect to welfare benefits, claims are
considered incurred as of the date services are provided or disability payments
are accrued, notwithstanding when the injury or illness may have occurred, and
with respect to workers’ compensation benefits, claims are considered incurred
prior to the applicable

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Transfer Date if the injury or condition giving rise to the claim occurs prior
to such Transfer Date. With respect to life insurance benefits, claims are based
on the date of death.

     (g) To the extent permitted under Purchaser’s 401(k) plan, Seller and
Purchaser shall cooperate in arranging for the transfer to Purchaser’s 401(k)
plan, on or after the Closing Date and in a manner that satisfies sections
414(l) and 411(d)(6) of the Code, of those accounts and loan balances held under
Seller’s or its Affiliates’ 401(k) plan on behalf of Transferred Employees,
subject to receipt of any necessary consents and approvals of the Transferred
Employees.

     (h) For a period of one (1) year from the Closing Date, Seller shall not
directly or indirectly solicit for employment any Branch Employee other than,
following termination, Branch Employees terminated by Purchaser after the
Closing Date; provided that the foregoing shall not prohibit general
solicitations to the public or general advertising that is not specifically
targeted at Branch Employees.

     (i) Nothing in this Agreement shall be construed to grant any employee of
Seller or any Transferred Employee a right to continued employment by, or to
receive any payments or benefits from, Seller or Purchaser or through any
employee benefit plan. This Agreement shall not limit Seller’s, Purchaser’s or
their respective Affiliates’ ability or right to amend or terminate any benefit
or compensation plan or program maintained or sponsored by any such entity , and
nothing contained herein shall be construed as an amendment to, or modification
of, any such plan or program.

ARTICLE 9

CONDITIONS TO CLOSING

     9.1 Conditions to Obligations of Purchaser. Unless waived in writing by
Purchaser, the obligation of Purchaser to consummate the P&A Transaction is
conditioned upon satisfaction of each of the following conditions:

     (a) Regulatory Approvals. The Regulatory Approvals shall have been made or
obtained and shall remain in full force and effect, and all waiting periods
thereunder applicable to the consummation of the P&A Transaction shall have
expired or been terminated.

     (b) Orders. No court or governmental authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) (any of the foregoing, an “Order”) which is in effect
and which prohibits or makes illegal the consummation of the P&A Transaction.

     (c) Representations and Warranties; Covenants. The representations and
warranties of Seller contained in this Agreement shall be true in all respects
as of the Closing Date (except that representations and warranties as of a
specific date need only be true as of such date); provided, however, that for
purposes of determining the satisfaction of the condition set forth in this
Section 9.1(c), such representations and warranties shall be deemed to be so
true and correct

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if the failure or failures of such representations and warranties to be true and
correct (such representations and warranties to be read for this purpose without
reference to any qualification set forth therein relating to “materiality” or
“Material Adverse Effect”) do not constitute, individually or in the aggregate,
a Material Adverse Effect with respect to Seller. Purchaser shall have received
at Closing a certificate to that effect dated as of such Closing Date and
executed by an authorized officer of Seller. Each of the covenants and
agreements of Seller to be performed on or prior to the Closing Date shall have
been performed in all material respects. Purchaser shall have received at
Closing a certificate to that effect dated as of such Closing Date and executed
by an authorized officer of Seller.

     9.2 Conditions to Obligations of Seller. Unless waived in writing by
Seller, the obligation of Seller to consummate the P&A Transaction is
conditioned upon satisfaction of each of the following conditions:

     (a) Regulatory Approvals. The Regulatory Approvals shall have been made or
obtained and shall remain in full force and effect, and all waiting periods
applicable to the consummation of the P&A Transaction shall have expired or been
terminated.

     (b) Orders. No Order shall be in effect that prohibits or makes illegal the
consummation of the P&A Transaction.

     (c) Representations and Warranties; Covenants. The representations and
warranties of Purchaser contained in this Agreement shall be true in all
respects as of the Closing Date (except that representations and warranties as
of a specific date need to be true only as of such date); provided, however,
that for purposes of determining the satisfaction of the condition set forth in
this Section 9.2(c), such representations and warranties (except for Section
6.7, which shall be true and correct as of the Closing as written) shall be
deemed to be so true and correct if the failure or failures of such
representations and warranties to be true and correct (such representations and
warranties to be read for this purpose without reference to any qualification
set forth therein relating to “materiality” or “Material Adverse Effect”) do not
constitute, individually or in the aggregate, a Material Adverse Effect with
respect to Purchaser. Seller shall have received at Closing a certificate to
that effect dated as of such Closing Date and executed by the Chief Executive
Officer, Chief Financial Officer or President of Purchaser. Each of the
covenants and agreements of Purchaser to be performed on or prior to the Closing
Date shall have been performed in all material respects. Seller shall have
received at Closing a certificate to that effect dated as of such Closing Date
and executed by the Chief Executive Officer, Chief Financial Officer or
President of Purchaser.

ARTICLE 10

TERMINATION

     10.1 Termination. (a) This Agreement may be terminated at any time prior to
the Closing Date:

                 (i) By the mutual written agreement of Purchaser and Seller;

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             (ii)     

By Seller or Purchaser, in the event of a breach by the other of any
representation, warranty or agreement contained herein which is not cured or
cannot be cured within thirty (30) calendar days after written notice of such
termination has been delivered to the breaching party and which, in the case of
a breach of a representation or warranty, would if occurring or continuing on
the Closing Date permit the terminating party not to consummate the P&A
Transaction under the standard set forth in Section 9.1(c) or 9.2(c), as
applicable; provided, however, that termination pursuant to this Section 10.1(b)
shall not relieve the breaching party of liability arising out of or related to
such breach;

(iii)     

By Seller, in the event the Closing has not occurred on or prior to June 29,
2009 unless caused by the Seller’s willful misconduct of this Agreement with
respect to Regulatory Approvals;

(iv)     

By Seller or Purchaser, in the event the Closing has not occurred by the date
that is nine months after the date of this Agreement, unless the failure to so
consummate is due to a breach of this Agreement by the party seeking to
terminate; or

(v)     

By either Seller or Purchaser, if any governmental agencies or authorities that
must grant a Regulatory Approval has denied approval of the P&A

 

Transaction and such denial has become final and nonappealable or any
governmental agency or authority of competent jurisdiction shall have issued a
final and nonappealable order permanently enjoining or otherwise prohibiting the
consummation of the P&A Transaction, unless such denial was caused by the
willful misconduct of the party seeking to terminate.

     (b) The provisions of this Agreement which relate solely to the acquisition
of the Davis Branch may be terminated by Purchaser in the event that Seller has
failed to obtain the Landlord Consent on or before the Closing Date except as
otherwise provided in Confidential Schedule 10.1 hereto.

     10.2 Effect of Termination. In the event of termination of this Agreement
and abandonment of the transactions contemplated hereby pursuant to Section
10.1(a), no party hereto (or any of its directors, officers, employees, agents
or Affiliates) shall have any liability or further obligation to any other
party, except as provided in Section 7.2(b) and except that nothing herein will
relieve any party from liability for any breach of this Agreement.

ARTICLE 11

INDEMNIFICATION

     11.1 Indemnification. (a) Subject to Sections 11.1(e), 11.2 and 12.1,
Seller shall indemnify and hold harmless Purchaser and its officers, directors
and Affiliates, and any person directly or indirectly controlling or controlled
by Purchaser, and their respective successors and

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assigns, from and against any and all Losses which they may suffer, incur or
sustain arising out of or attributable to the following:

           (i)     

any breach of any representation or warranty made by Seller in this Agreement;

(ii)     

any material breach of any covenant or agreement to be performed by Seller
pursuant to this Agreement; or

(iii)     

any claim, penalty asserted, liability, legal action or administrative
proceeding based upon any action taken or omitted to be taken by Seller or,
except as otherwise expressly set forth herein, occurrences on or prior to the
Closing Date, relating in any such case to the operation of the Branches, the
Real Property, the Assets or the Liabilities.

     (b) Subject to Sections 11.1(e) and 12.1, Purchaser shall indemnify and
hold harmless Seller and its officers, directors and Affiliates, and any person
directly or indirectly controlling or controlled by Seller, and their respective
successors and assigns, from and against any and all Losses which they may
suffer, incur or sustain arising out of the following:

          (i)     

any breach of any representation or warranty made by Purchaser in this
Agreement;

(ii)     

any material breach of any covenant or agreement to be performed by Purchaser
pursuant to this Agreement;

(iii)     

any claim, penalty asserted, legal action or administrative proceeding based
upon any action taken or omitted to be taken by Purchaser after the Closing
Date, relating in any such case to the operation of the Branches, the Real
Property or the Assets; or

(iv)     

the Liabilities.

     (c) Any party seeking indemnification must give the other party (the
“Indemnifying Party”) prompt written notice of the claim for Losses stating the
aggregate amount of the Losses or an estimate thereof, in each case to the
extent known or determinable at such time; provided that the failure to provide
such notice shall not relieve the Indemnifying Party of its indemnification
obligations hereunder except to the extent that the Indemnifying Party is
actually prejudiced by the failure to give such notice. The indemnified party
shall advise the indemnifying party of all facts relating to such assertion
within the knowledge of the indemnified party, and shall afford the indemnifying
party the opportunity, at the indemnifying party’s sole cost and expense, to
defend against such claims for liability. In any such action or proceeding, the
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at its own expense unless (i) the
indemnifying party and the indemnified party mutually agree to the retention of
such counsel or (ii) the named parties to any such suit, action, or proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party, and in the reasonable judgment of the indemnified party,
representation of

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the indemnifying party and the indemnified party by the same counsel would be
inadvisable due to actual or potential differing defenses or conflicts of
interests between them.

     (d) The indemnified party shall have the right to settle or compromise any
claim or liability subject to indemnification under this Section, and to be
indemnified from and against all Losses resulting therefrom, unless the
indemnifying party, within forty-five (45) calendar days after receiving written
notice of the claim or liability in accordance with Section 11.1(c) above,
notifies the indemnified party that it intends to defend against such claim or
liability and undertakes such defense, or, if required in a shorter time than
forty-five (45) calendar days, the indemnifying party makes the requisite
response to such claim or liability asserted. Notwithstanding anything in this
Section 11 to the contrary, (i) the indemnifying party shall not, without the
indemnified party’s written consent, settle or compromise any claim or consent
to entry of any judgment which does not include as an unconditional term thereof
the giving by the claiming party or the plaintiff to the indemnified party of a
release from all liability in respect of such claim, and (ii) in the event that
the indemnifying party undertakes defense of any claim, the indemnified party,
by counsel or other representative of its own choosing and at its sole cost and
expense, shall have the right to consult with the indemnifying party and its
counsel or other representatives concerning such claim, and the indemnifying
party and the indemnified party and their respective counsel or other
representatives shall cooperate with respect to such claim, subject to the
execution and delivery of a mutually satisfactory joint defense agreement.

     (e) Notwithstanding anything to the contrary contained in this Agreement,
an indemnifying party shall not be liable under Section 11.1(a)(i) and Section
11.1(b)(i) for any Losses sustained by the indemnified party unless and until
the aggregate amount of all indemnifiable Losses sustained by the indemnified
party shall exceed $25,000 (the “Deductible”), in which event the indemnifying
party shall provide indemnification hereunder of all such indemnifiable Losses
in excess of the Deductible; provided, however, that the aggregate amount of
indemnification payments payable pursuant to Section 11.1(a)(i) or Section
11.1(b)(i) shall not exceed the deposit premium to be paid pursuant to Section
2.3. In no event shall either party hereto be entitled to consequential or
punitive damages or damages for lost profits in any action relating to the
subject matter of this Agreement.

     (f) The indemnification obligations of each party under this Section 11.1
in respect of breaches of, or inaccuracies in, representations and warranties
shall remain in full force and effect for eighteen (18) months following the
Closing Date; provided, however, that the indemnification obligations with
respect to the representations and warranties contained in Sections 5.1, 5.10
and 6.1 and the indemnification obligations with respect to fraud shall remain
in full force and effect indefinitely. Notwithstanding the preceding sentence,
indemnification obligations under this Section 11.1 shall survive the time at
which they would otherwise terminate pursuant to this subection (f) with respect
to Losses set forth in a written notice, given to the party against whom
indemnification is sought prior to such time of termination, which notice shall
state (a) the inaccuracy or breach giving rise to such indemnification
obligations, and (b) the aggregate amount of Losses or an estimate thereof, in
each case to the extent known or reasonably determinable at such time, resulting
from such inaccuracy or breach

     11.2 Exclusivity. After the Closing, except as expressly set forth in
Sections 2.4, 4.9, and 8.3, and except in the case of common law fraud relating
to the entry into this Agreement,

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Article 11 will provide the exclusive remedy for any misrepresentation, breach
of warranty, covenant or other agreement or other claim arising out of this
Agreement or the transactions contemplated hereby; provided that it is
understood and agreed that the foregoing shall not prevent a party from
obtaining specific performance, injunctive relief or any other available
non-monetary equitable remedy.

     11.3 AS-IS, WHERE-IS Sale; Waiver of Warranties. Except as set forth in
Article 5 and Section 8.1, Purchaser acknowledges that the Assets and
Liabilities are being sold and accepted on an “AS-IS”, WHERE-IS” basis, and are
being accepted without any representation or warranty. As part of Purchaser’s
agreement to purchase and accept the Assets and Liabilities AS-IS-WHERE-IS, and
not as a limitation on such agreement, TO THE FULLEST EXTENT PERMITTED BY LAW,
SELLER HEREBY DISCLAIMS AND PURCHASER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES AND RELEASES ANY AND ALL ACTUAL OR POTENTIAL RIGHTS PURCHASER MIGHT HAVE
AGAINST SELLER OR ANY PERSON DIRECTLY OR INDIRECTLY CONTROLLING SELLER REGARDING
ANY FORM OF WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE
ASSETS AND LIABILITIES INCLUDING, BUT NOT LIMITED TO, THE LOANS AND/OR THE
COLLATERAL THEREFOR EXCEPT THOSE SET FORTH IN ARTICLE 5 AND SECTION 8.1. SUCH
WAIVER AND RELEASE IS, TO THE FULLEST EXTENT PERMITTED BY LAW, ABSOLUTE,
COMPLETE, TOTAL AND UNLIMITED IN EVERY WAY. SUCH WAIVER AND RELEASE INCLUDES TO
THE FULLEST EXTENT PERMITTED BY LAW, BUT IS NOT LIMITED TO, A WAIVER AND RELEASE
OF EXPRESS WARRANTIES (EXCEPT THOSE SET FORTH IN ARTICLE 5 AND SECTION 8.1),
IMPLIED WARRANTIES, WARRANTIES OF FITNESS FOR A PARTICULAR USE, WARRANTIES OF
MERCHANTABILITY, WARRANTIES OF HABITABILITY, STRICT LIABILITY RIGHTS AND CLAIMS
OF EVERY KIND AND TYPE, INCLUDING BUT NOT LIMITED TO CLAIMS REGARDING DEFECTS
WHICH WERE NOT OR ARE NOT DISCOVERABLE, ALL OTHER EXTANT OR LATER CREATED OR
CONCEIVED OF STRICT LIABILITY OR STRICT LIABILITY TYPE CLAIMS AND RIGHTS.

ARTICLE 12

MISCELLANEOUS

     12.1 Survival. (a) The parties’ respective representations and warranties
contained in this Agreement shall survive until for a period of eighteen (18)
months following the Closing Date, and thereafter neither party may claim any
Loss in relation to a breach thereof. The agreements and covenants contained in
this Agreement shall not survive the Closing except to the extent expressly set
forth herein, provided that the agreements and covenants set forth in Section
12.4 shall survive the Closing or any termination of this Agreement.

     (b) No claim based on any breach of any representation or warranty shall be
valid or made unless notice with respect thereto is given to the indemnifying
party in accordance with this Agreement on or before the date specified in
Section 11.1(c).

     12.2 Assignment. Neither this Agreement nor any of the rights, interests or
obligations of either party may be assigned by either party hereto without the
prior written consent of the

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other party, and any purported assignment in contravention of this Section 12.2
shall be void. Purchaser further agrees not to sell, transfer or assign any of
the Loans prior to the Closing Date.

     12.3 Binding Effect. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

     12.4 Public Notice. Neither Purchaser, Seller nor any of their respective
Affiliates shall directly or indirectly make or cause to be made any press
release for general circulation, public announcement or disclosure or issue any
notice with respect to any of the transactions contemplated hereby without the
prior written consent of the other party (which consent shall not be
unreasonably withheld, conditioned or delayed). Consent shall be deemed granted
by the party from which it is sought unless such party objects within three (3)
Business Days after receipt of the proposed press release or other announcement
from the party requesting consent. Purchaser and Seller each agree that, without
the other party’s prior written consent, neither Purchaser, Seller nor any of
their respective Affiliates shall release or disclose any of the terms or
conditions of the transactions contemplated herein to any other person.
Notwithstanding the foregoing, each party may make such public disclosure as, in
the opinion of its counsel, may be required by law or as necessary to obtain the
Regulatory Approvals.

     12.5 Notices. All notices, requests, demands, consents and other
communications given or required to be given under this Agreement and under the
related documents shall be in writing and delivered to the applicable party at
the address indicated below:

If to Seller:

Wachovia Bank, N.A.
301 South College Street
Charlotte, North Carolina 28288
Attention: Corporate Secretary
Facsimile: (704) 715-4494

 

With a copy to:

Wells Fargo & Company
Wells Fargo Center
MAC #N9305-173
Sixth and Marquette
Minneapolis, Minnesota 55479
Attention: Corporate Secretary
Facsimile: (612) 667-6082

 

If to Purchaser:

PremierWest Bank
503 Airport Road
Medford, OR 97501
Attention: President and CEO
Facsimile: 541-

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With a copy to:

Foster Pepper LLP
601 SW Second Avenue
Suite 1800
Portland, OR 97204
Facsimile: 503-221-1510

or, as to each party at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section. Any notices shall be in writing, including telegraphic or
facsimile communication, and may be sent by registered or certified mail, return
receipt requested, postage prepaid, or by fax, or by overnight delivery service.
Notice shall be effective upon actual receipt thereof.

     12.6 Parent Obligation. Parent, as the ultimate parent of Purchaser, by its
signature hereto irrevocably, absolutely and unconditionally guarantees the
performance of Purchaser of its obligations under this Agreement. Parent waives
presentment, demand, protest, notice of acceptance, notice of obligations
incurred and all other notices of any kind, all legal or equitable defenses
which may be available by virtue of any change in the time, manner or place of
Purchaser’s performance, any right to require the marshalling of assets, and all
suretyship defenses generally. Parent represents that it has the corporate
authority to undertake its obligations hereunder, and the execution and delivery
of this Agreement has been duly authorized by all necessary corporate action by
Parent. Upon execution and delivery by Seller, Parent’s obligations hereunder
will constitute valid and binding obligations of Parent, enforceable in
accordance with its terms subject to subject to bankruptcy, insolvency and other
similar laws of general applicability relating to or affecting creditors’ rights
and to general equity principles. This Section 12.6 shall be binding upon
Parent’s successors and permitted assigns.

     12.7 Expenses. Except as expressly provided otherwise in this Agreement,
each party shall bear any and all costs and expenses which it incurs, or which
may be incurred on its behalf, in connection with the preparation of this
Agreement and consummation of the transactions described herein, and the
expenses, fees, and costs necessary for any approvals of the appropriate
regulatory authorities.

     12.8 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware.

     12.9 Entire Agreement; Amendment. (a) This Agreement contains the entire
understanding of and all agreements between the parties hereto with respect to
the subject matter hereof and supersedes any prior or contemporaneous agreement
or understanding, oral or written, pertaining to any such matters which
agreements or understandings shall be of no force or effect for any purpose;
provided, however, that the terms of any confidentiality agreement between the
parties hereto previously entered into, to the extent not inconsistent with any
provisions of this Agreement, shall continue to apply, except that, upon
consummation of the P&A Transaction, Purchaser’s confidentiality obligations
under any such confidentiality agreement shall terminate solely with respect to
that portion of the confidential information exclusively relating to the Assets
and the Liabilities. If, for any reason, the P&A Transaction is not consummated,
any such confidentiality agreement shall nevertheless continue in full force and
effect and shall remain binding on Purchaser.

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     (b) This Agreement may not be amended or supplemented in any manner except
by mutual agreement of the parties and as set forth in a writing signed by the
parties hereto or their respective successors in interest. The waiver of any
beach of any provision under this Agreement by any party shall not be deemed to
be waiver of any preceding or subsequent breach under this Agreement. No such
waiver shall be effective unless in writing.

     12.10 Third Party Beneficiaries. Except as expressly provided in Section
11.1, this Agreement shall not benefit or create any right or cause of action in
or on behalf of any person other than Seller and Purchaser and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person, including, without limitation, any employee or former employee of
Seller, any legal or equitable right, benefit, or remedy of any nature
whatsoever, including, without limitation, any rights of employment or benefits
for any specified period, under or by reason of this Agreement.

     12.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     12.12 Headings. The headings used in this Agreement are inserted for
purposes of convenience of reference only and shall not limit or define the
meaning of any provisions of this Agreement.

     12.13 Severability. If any provision of this Agreement, as applied to any
party or circumstance, shall be judged by a court of competent jurisdiction to
be void, invalid or unenforceable, the same shall in no way effect any other
provision of this Agreement, the application of any such provision and any other
circumstances or the validity or enforceability of the other provisions of this
Agreement.

     12.14 Specific Performance. The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof (and, more specifically, that irreparable
damage would likewise occur if the P&A Transaction was not consummated), and,
accordingly, that the parties shall be entitled to an injunction or injunctions
to prevent breaches of this Agreement or to enforce specifically the performance
of the terms and provisions hereof (including the parties’ obligation to
consummate the P&A Transaction, subject to the terms and conditions of this
Agreement).

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

WACHOVIA BANK, N.A.

By: ________________________________
                  Name:_________________________
                  Title:  _________________________

PREMIERWEST BANK

By: _________________________________
                  Name:_________________________
                  Title:  _________________________

Accepted and Acknowledged
with respect to the obligations
set forth in Section 12.6(a)

PARENT
PREMIERWEST BANCORP

By: _________________________
Name: ______________________
Title:   _______________________

SIGNATURE PAGE TO PURCHASE AND ASSUMPTION AGREEMENT

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