EXHIBIT 10.16

                         AMENDMENT #2 TO LEASE AGREEMENT
                                 BY AND BETWEEN
                         UPWAY PROPERTIES, LLC (LESSOR)
                                       AND
                     NATIONAL BANK OF THE REDWOODS (LESSEE)

This AMENDMENT #2 dated as of September 2, 2003 constitutes additions to or
amendments of that certain Standard Office Lease- Full Service Gross (1984
American Industrial Real Estate Association) entered into by and between Upway
Properties, LLC (Lessor) and National Bank of the Redwoods (Lessee) dated as of
June 1, 1999. In the event of a conflict between the terms of the Lease,
Addendum #1 & Amendment #1, this AMENDMENT #2 shall control.

1)       Section Amending 2.2, Parking and Amendment #1, Vehicle Parking:
         In addition to the existing 39 on site parking spaces currently granted
         to Lessee by Lessor in the original lease, the Lessee shall be granted
         3 additional parking spaces in the garage and 3 additional parking
         spaces in the surface parking area for a total of 45 on site parking
         space, free of charge.

2)       Section Amending 1.6, Base Rent & Addendum #1 Rent Schedule:
         Commencing October 1, 2003, the rent shall be $2.35 per square foot
         Full Service per month on the ground floor and $2.25 per square foot
         Full Service on the second floor, with annual 3% increases occurring
         each October 1st. The Lessee's monthly rent payment commencing on
         October 1, 2003 shall be $59,517.20, which includes an additional
         monthly payment of $90.00 for the storage space in the garage.

3)       Section Amending 1.2, Premises:
         The Lessee leases the entire ground floor, which is revised to be
         18,980 usable square feet, plus 2,847 square feet attributable to the
         load factor of 15% for a total rentable ground floor area of 21,827
         square feet.
         The Lessee also agrees to occupy Suite 210 of the second floor. The
         second floor suite is 3,143 usable square feet, plus 471 square feet
         attributable to the 15% load factor for a total rentable second floor
         area of 3,615 square feet. In addition the tenant also has storage
         space on the second floor.
         The combined usable square footage is 22,123.
         The combined rentable square footage is 25,442.

4)       Section Amending 1.5, Term:
         The Term shall be amended to end September 30, 2014.

5)       Section 34, Signs:
         The Lessee shall have the right to install signage on the building as
         approved by the City of Santa Rosa. Lessee's signage shall be at
         Lessee's expense.

6)       The Lessor shall not have the right to relocate the Lessee during the
         term of the lease or any extension periods.

7)       Operating expenses shall include, but not be limited to, utilities,
         property taxes, property insurance, CAM, interior and exterior property
         maintenance, 5 day per week janitorial service to the interior premises
         and the common areas, property management and property
         repairs/reserves.


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8)       If the Lessee does not purchase the Property, pursuant to that certain
         Option Agreement dated as of September 4, 2003, the Lessor will
         contribute $10 psf as an allocation for Tenant Improvements to Lessee's
         premises based on the Lessee's usable square footage of the Lessee's
         premises and the form of payment shall be as a rent credit equally
         divided over the initial 12 months after Lessor's PUT Option period has
         expired and the Lessee has not purchased the property. If the Lessee
         purchases the property, the Lessee shall not be entitled to any
         reimbursement of this Lessee improvement allowance

9)       The Lessor agrees, not later than January 1, 2004, to complete the
         first and second floor lobbies with new lighting, flooring and interior
         paint to lighten up the 1st and 2nd floor lobbies.

10)      Exclusivity: As long as National Bank of the Redwoods remains in
         possession of the Premises, Lessor shall not lease space to any Lessee
         whose primary business in such location would be a bank, financial
         institution or credit union. No other ATM machine shall be allowed in
         the property.

11)      Commission: Lessee shall pay the real estate leasing fee of $3.00 psf
         based the on combined rentable square footage is 25,442 to Paul
         Gonzalez acting as Lessee's sole representative. The fee shall be paid
         upon the full execution of this Amendment.

12)      Option Term: So long as Lessee, at the end of the Term of Lease is
         conducting regular business operations in the Premises as a Financial
         Institution and is not in default at the time the option is to be
         exercised or has not been in default of any provision of this Lease
         three (3) times in any one year period, Lessor grants to Lessee the
         option to extend the Term of the Lease for three (3) five (5)-year
         periods under the same terms and conditions as the Initial Lease Term.
         Section 39.2 is deleted in its entirety.

         Lessee shall serve written notice to Lessor of Lessee's election to
         extend not later than nine (9) months before expiration of the Term, as
         it may be extended from time to time or the option shall automatically
         terminate.

         Said notice to extend shall, upon delivery to Lessor, be irrevocable
         and bind Lessee to the 60-month extension period. Default hereunder by
         Lessee after the delivery of such notice shall, in addition to all
         other remedies herein described, entitle the Lessor to elect to
         invalidate Lessee's election to extend the Term of this Lease.

13)      Other Terms and Conditions:
         a)     The effectiveness of this Amendment #2 is conditioned upon the
         execution of the Option Agreement by all parties.

         b)     The Lessee will provide the following loan terms to Lessor that
         will be guaranteed for up to 16 months from lease execution to replace
         Lessor's existing loan:

               1)   A principal loan balance of $6,000,000
               2)   30 Year amortization;
               3)   Interest rate Fixed-Years 1-5- 5.25%, Years 6-10- 6.25%;
               4)   1/2 loan point to borrower;
               5)   Option for additional 5 years with both parties to share the
                    interest  risk by agreeing to a margin and index


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         c) The Lessor agrees not to give any further extensions of the current
         purchase agreement due diligence timeline to the current Buyer (James
         Ratto).

         d) The terms contained herein shall be valid upon (i) Upway Properties,
         LLC successfully terminating the existing escrow for the sale of the
         property to James Ratto. If Upway Properties, LLC is unsuccessful in
         terminating the Purchase escrow, these terms shall be null and void and
         neither party shall have any further obligation or liability to each
         other.


The parties agree that the above terms will modify and amend the prior Lease
Agreement and Addenda's, and will control to the extent that they are
inconsistent therewith.

Agreed and Accepted:

LESSEE                                      LESSOR

Date:           9-4-03                      Date:             9-3-03
      ----------------------------                 ------------------------

By:  /s/ Patrick W. Kilkenny                By:  /s/ Paul Louie
     -----------------------------               --------------------------
 National Bank of the Redwoods                       Upway Properties, LLC










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OPTION AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY

This OPTION AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY (hereinafter
referred to as "Agreement") is made on September 2, 2003 and entered into by and
between UPWAY PROPERTIES, LLC, A California Limited Liability Corporation,
(hereinafter referred to as "Optionor") and the NATIONAL BANK OF THE REDWOODS, a
California Corporation (hereinafter referred to as "Optionee").

WHEREAS, Optionor is the owner of a certain improved parcel of real property,
consisting of a 4-story office building with an underground parking garage
located at 111 Santa Rosa Avenue, Santa Rosa, California, County of Sonoma (and
together with all rights, easements, improvements placed thereon and
appurtenances belonging thereto, hereinafter collectively referred to as the
"Property"), identified in red in Exhibit "A" attached hereto and incorporated
herein by this reference; and;

Optionor desires to sell the Property to Optionee and Optionee desires to
purchase the Property from Optionor; and;

This Agreement is only in effect upon Optionor's exercise of Optionor's sole
right to require Optionee to purchase the property. Optionee must close escrow
based on the terms and conditions as outlined herein. If Optionor exercises its
PUT Option as contained herein and Optionee fails to purchase the property, the
Lease and Lease Amendment #2 may be terminated, at Optionor sole discretion, at
the later of October 2004 or 60 days after Optionee's failure to purchase,
without any further liability to Optionee by Optionor.

NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
parties hereby acknowledge the receipt, adequacy and sufficiency of which
hereto, Optionor and Optionee do hereby covenant and agree as follows:

1. Agreement to Sell and Purchase. Optionor hereby agrees to sell to Optionee
and Optionee hereby agrees to purchase from Optionor, upon the terms and
conditions hereinafter set forth, the Property.

2. Purchase Price. The Purchase price to be paid by Optionee to Optionor at
close of escrow for the Property shall be FIFTEEN MILLION SIX HUNDRED AND EIGHTY
NINE THOUSAND and NO/100 Dollars ($15,689,000), hereinafter referred to as the
"Purchase Price", all payable in cash, except that Optionee shall either assume
the existing loan or pay any required prepayment penalties on such loan.

3. Deposit. Optionee shall deliver to Escrow Holder (as that term is hereinafter
defined) a check in the amount of TWENTY FIVE THOUSAND and NO/100 Dollars
($25,000.00) by the end of the second business day following the day upon which
Optionee receives notice of execution of the Agreement by Optionor (the
aforesaid amount together with all interest earned thereon as hereinafter
provided for, called



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collectively the "Deposit"). The proceeds of the aforesaid check and all
subsequent increases in the Deposit shall be promptly deposited by Escrow Holder
into an interest bearing account and shall be disbursed by Escrow Holder in
accordance with the terms and provisions of this Agreement. All deposits shall
be applicable to the purchase price.

In the event that this Agreement is not terminated on or prior to the expiration
of the Inspection Date, Optionee shall thereafter deliver an additional check to
the Escrow Holder in the amount of TWO HUNDRED AND TWENTY FIVE THOUSAND and
NO/100 Dollars ($225,000.00), which amount, together with monies previously
delivered to the Escrow Holder, including interest earned thereon, to be
referred to collectively as the "Deposit" for a total deposit of TWO HUNDRED AND
FIFTY THOUSAND and NO/100 Dollars ($250,000.00)and shall become non refundable
to the benefit of the Optionor, subject to Liquidated Damages as per Section
16.a. and applicable to the purchase price.

4. Escrow. Following full execution of this Agreement an escrow shall be opened
to consummate the transaction contemplated by this Agreement at the offices of
FIRST AMERICAN TITLE 400 E Street Santa Rosa, Ca. 95401 Attn: Dona Robertson,
(the "Escrow Holder"). Said Escrow Holder shall also provide title insurance and
hereinafter may also be referred to as the "Title Company".

5. Title. Optionor shall convey to Optionee a good, marketable and insurable
title to the Property free and clear of all liens, encumbrances, tenants at
will, encroachments, restrictions, covenants, assessments (except for
assessments that are recorded against the Property, payable over a period of
time, billed with the property tax statements from Sonoma County and not yet due
and payable), charges, agreements, taxes (except for current year taxes which
are not yet due and payable) and easements, except as otherwise approved in
writing by Optionee in its sole discretion.

     Following the opening of escrow Optionor shall order and, upon issuance,
deliver a Preliminary Title Report and copies of all CC&R's, cross access, cross
parking agreements and all other documents and/or exceptions including legible
copies of all documents reported as exceptions in such report (hereinafter
referred to collectively as the "Title Review Documents") to Optionee. Optionee
shall have five (5) business days following receipt of the Title Review
Documents to examine title to the Property and to give Optionor written notice
of any liens, encumbrances or other items affecting the Property which are
unacceptable to Optionee (the "Title Defects"), failing which Optionee shall be
deemed to be satisfied with Optionor's title to the Property as reflected in the
Title Review Documents. In the alternative event wherein Optionee is not
satisfied with the Title Review Documents, Optionor shall elect to (i) satisfy
and eliminate the Title Defects and give written notice thereof to Optionee on
or before five (5) days following the date of such notice to Optionor, or (ii)
provide to Optionee assurances satisfactory to Optionee, as determined in
Optionee's sole discretion, that the Title Defects can be satisfied on or before
a date mutually acceptable to Optionor and Optionee, and Optionor shall
thereupon satisfy and eliminate the Title Defects on or before such date, or
(iii) not take any action to eliminate the title defects.

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     In the event Optionor  elects not to take any action to eliminate the Title
Defects  Optionor  shall so advise  Optionee in writing and Optionee  shall have
five (5) days  following  the  receipt  of such  notice to advise  Optionor,  in
writing,  whether or not it will accept  title to the  Property  subject to such
Title  Defects.

     In the event Optionee does not so advise  Optionor within said five (5) day
period,  or Optionee  advises Optionor that it is not willing to accept title to
the Property subject to such Title Defects,  this Agreement shall be terminated,
the Deposit  shall be returned to the Optionee and neither  party shall have any
further obligation or liability one to the other.

     In the event any easement,  restriction,  conveyance,  encumbrance or other
instrument  affecting  the  Property  or title  thereto is executed or filed for
record from and after the date of the  Preliminary  Title Report or in the event
Optionee  receives  notice of any matter other than the Title Defects  affecting
the  Property  or  title  thereto  (hereinafter   collectively  referred  to  as
"Subsequent  Title  Defects"),  Optionor  covenants  and  agrees to remove  such
Subsequent  Title Defects upon notice thereof and no later than seventy-two (72)
hours prior to the close of escrow.

     If Optionor  fails to cure or correct  such Title  Defects  and  Subsequent
Title Defects within the periods  provided for in this Agreement,  then Optionee
may either (i) terminate this  Agreement and receive an immediate  return of the
Deposit,  if any,  from the Escrow  Holder,  after which no party shall have any
further  right,  duty,  obligation  or  liability  hereunder  to any other party
hereto;  or (ii) waive such Title Defects or Subsequent  Title Defects and elect
to close the sale and  purchase  of the  Property in  accordance  with all other
terms and provisions hereof.

     In order to  facilitate  Optionee's  examination  of title  within the time
specified in this Agreement, Optionor covenants and agrees that within three (3)
days  following  the  execution  of this  Agreement  by  Optionor  to furnish to
Optionee  copies of all of Optionor's  title  records  affecting the Property in
possession of Optionor,  including without limitation, deeds or other sources of
Optionor's title, easements, restrictions, reservations, rights-of-way, plats or
maps of survey,  title insurance policies,  abstracts,  attorneys' title opinion
and similar evidence.

6.   Property  Reports and Leases.  Promptly  following  the  execution  of this
Agreement by Optionor,  but in no event more than five (5) days  following  such
execution, Optionor shall deliver to Optionee complete and legible copies of the
following  documents,  leases and reports pertaining to the Property that are in
Optionor's possession or reasonably accessible to Optionor:

a.   The fully  executed  leases and related  Addendum's  and Exhibits  with the
     tenants and all Service Contracts in Effect;

b.   Optionor must provide all property  reports,  including  all  Environmental
     Reports and including the Indemnity Agreement from the prior Owners;


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c.   Preliminary  Title  Report  and  copies of all  exceptions,  including  the
     Property Tax Statement;

d.   Complete  working  Drawings any other  pertinent  Plans and  Specifications
     related to the building;

e.   The existing  loan  documents,  including the  promissory  note and Deed of
     Trust;

f.   The  assignment  of the existing  indemnity  agreement  that Optionor is to
     provide  Optionee  for  the  environmental  condition  that  exists  at the
     property;

g.   Any  other  document  in  Optionor's   possession  that  would   reasonably
     facilitate  Optionee's  inspection  and  analysis of the  Property  and its
     operation.

     Optionor  represents  and  warrants  such  documents to be true and correct
copies  of the  underlying  instrument,  and  makes no other  representation  or
warranty  except as  provided  elsewhere  herein,  unless  said  documents  were
prepared by a third party,  in which case the  Optionor  shall look to their own
review of the  document(s) to determine the validity of each  document,  without
Optionor representation or warranty.

7.   Inspections.  Optionee  shall have five  business  (5) days  following  his
receipt  of all the  documents  described  in  Section  #6 and the Title  Review
Documents  described  in Section #5 to inspect and examine the  Property and the
documents  provided by Optionor,  and to perform any  studies,  reviews or tests
concerning the Property that Optionee may desire (the "Inspection  Period").  On
or before the expiration of the Inspection  Period,  Optionee shall, in its sole
discretion,  advise  Optionor  and  Escrow  Holder in  writing  of its desire to
proceed with the transaction contemplated by this Agreement;  provided, however,
in the event such written  notice is not so provided,  this  Agreement  shall be
deemed null and void,  Optionee shall be entitled to an immediate  return of the
Deposit,  and the parties  hereto  shall have no further  obligations  hereunder
except for the return of said Deposit to Optionee.

     Optionee,  its employees,  agents and engineers shall prior to the close of
escrow have the  privilege of going upon the Property from  time-to-time  during
normal business hours as needed to inspect,  examine and survey the Property and
other  engineering  tests and studies,  all at Optionee's sole cost and expense;
provided,  however,  Optionee  shall first notify and receive  approval for such
entries from  Optionor,  such  approval  not to be  unreasonably  withheld,  and
further  provided,  that Optionee shall hold Optionor  harmless from any damages
and claims of  damages  incurred  through  the  exercise  of such  privilege  by
Optionee.

8.   Financing  Contingency.  None,  the  purchase  will be all payable in cash,
except that  Optionee  shall either assume the existing loan or pay any required
prepayment penalties on such loan.


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9.   Close of Escrow.  Close of Escrow to occur the earlier of (i) 30 days after
Optionor  notifies  Optionee in writing that a Fremont  California  property has
been secured by Optionor or (ii) in the event the  Optionor  does not secure the
Fremont  property,  the close of escrow shall be within 90 days from  Optionor's
written  notification to Optionee of Optionor's exercise of its right to require
the Optionee to purchase the property under the terms and  conditions  contained
herein (the "Closing Date"),  in the offices of the Escrow Holder in Santa Rosa,
CA.

10.  Covenants of Optionor.
     (a) So long as this Agreement remains in full force and effect,  commencing
upon the date of this  Agreement  and  extending  through  the close of  escrow,
Optionor  shall  not  make any  changes  to,  or  otherwise  modify,  any of the
improvements of the property without the written consent of the Optionee.

     (b) So long as this Agreement remains in full force and effect, Optionor
shall not terminate or modify the Lease without the prior written consent of
Optionee.

     (c) The  terms  contained  herein  shall  be  valid  only  upon  (i)  Upway
Properties, LLC successfully terminating the existing escrow for the purchase of
the  property  to  James  Ratto.  If  Upway  Properties,   LLC  is  unsuccessful
terminating the purchase escrow,  these terms shall be null and void and neither
party shall have any further obligation or liability to each other,  except that
Optionee  original  lease  dated  June 1, 1999  shall  remain in full  force and
effect.

11.  Representations and Warranties of Optionor.  Optionor hereby represents and
warrants as follows,  which  representations  and  warranties  shall be true and
correct in all material respects as of the close escrow, shall survive the close
of  escrow  and the  truth  of  which,  as of the  close of  escrow,  shall be a
condition  precedent  to  Optionee's  obligation  to  complete  the  transaction
contemplated by this Agreement:

     (a)  To the best of  Optionor's  actual  knowledge  there  are no  material
          defects in the physical condition of the Property;

     (b)  Except for the  environmental  condition  contained  in the  Indemnity
          Agreement  and  disclosed  by  Optionor  to  Optionee,  to the best of
          Optionor's  actual  knowledge  the Property and the ground water below
          the surface of the Land,  is free of all  contaminants  and  hazardous
          substances as such terms are commonly understood and defined;

     (c)  To the best of Optionor's actual knowledge Optionor knows of no public
          improvements,  which  have been  ordered to be made and which have not
          hereto been completed, assessed and paid for;

     (d)  To the best of  Optionor's  actual  knowledge  there are no unrecorded
          liens  for  overdue  taxes,  state or  federal,  income,  property  or
          otherwise;

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     (e)  To the best of Optionor's actual knowledge there are no actions, suits
          or proceedings of any kind or nature  whatsoever,  legal or equitable,
          pending or threatened against Optionor or the Property, or any portion
          or portions  thereof,  or relating to or arising out of the ownership,
          management or operations of the Property, in any court or before or by
          any federal, state, county or municipal department, commission, board,
          bureau or agency or other governmental instrumentality;

     (f)  To the best of Optionor's  actual knowledge  Optionor has no knowledge
          of  any  pending  or  threatened   condemnation   or  eminent   domain
          proceedings, which would affect any of the Property.

     (g)  No right to the property or any  interest  therein has been granted to
          any other party than  Optionee  other than as  disclosed in writing to
          Optionee.

12.  Covenants of Optionee.

     (a) Optionee shall inspect the Property, review all reports and attempt to
satisfy any conditions for the benefit of Optionee;

     (b) Optionee shall provide the necessary funds required to complete the
successful close of this transaction.

13. Representations and Warranties of Optionee. Optionee hereby represents and
warrants to Optionor as follow:

     (a) The individual(s) executing this Agreement on behalf of Optionee have
the right, power, legal capacity, and authority to enter into this Agreement on
behalf of Optionee and to execute all other documents and perform all other acts
as may be necessary to complete the transaction contemplated herein;

     (b) Optionee acknowledges and agrees that this Agreement constitutes a
legal, valid and binding obligation of Optionee, enforceable against Optionee in
accordance with its terms and provisions, except as may be otherwise limited by
laws affecting the rights of creditors. The Optionee, upon receipt of notice by
Optionor exercising Optionor's PUT Option, agrees to close the purchase of the
property under the terms and conditions as set forth in this Agreement. If the
Optionee defaults and fails to close the escrow, the Optionor can terminate the
Optionee's lease Amendment # 2 at the property, without any liability or
obligation to the Optionee.

14. Documents. At least ten (10) business days prior to the close of escrow,
Optionor shall execute and deliver to Escrow Holder the following:
     (a) a grant deed duly executed by Optionor, and in form for recording,
conveying marketable, and fee simple title to the Property;

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     (b) an assignment in favor of Optionee of the leases, including the balance
of security deposit related to such lease held by Optionor, in respect of the
use and/or occupancy of any portion of the Property;

     (c) a bill of sale conveying, assigning and otherwise transferring to
Optionee (i) that personal property of Optionor located at the Property as of
the date of this Agreement, and (ii) third party warranties and guaranties in
respect of equipment and/or work performed by contractors on behalf of the
Tenant and pursuant to the maintenance and repair of the Property, if any;

     (d) Estoppel certificate(s) signed by the tenants entitled to possession of
the Property, such estoppel certificates to be in form and content acceptable to
Optionee and Optionee's lender, these estoppel(s) to be delivered to Optionee
from Optionor no later than ten (10) days prior to the close of escrow. Among
other things, the estoppel certificates shall contain an acknowledgment as to
the date of the current lease, whether or not there have been any lease
amendments, and if so, the date and nature of such amendments, the amount of
monthly rent currently being paid, the amount of security deposits previously
paid and the nature of any unresolved disputes or claimed defaults between
tenant and Optionor;

    (e) Optionor shall acquire Subordination, Attornment and Non Disturbance
Agreement(s) (SNDA) from the Tenants;

    (h) all other documents as the Escrow Holder may reasonably require to
complete the transaction contemplated by this Agreement;

15.      Costs and Prorations.
         (a) Attorney's Fees. Optionee and Optionor shall be responsible for
fees and charges of their respective attorneys in connection with the closing of
the transaction contemplated by this Agreement.

         (b) Title Insurance. Optionee pays for cost of Owner's policy of Title
insurance and; (c) Escrow Fees. Escrow fees shall be paid by Optionee and;

         (c) Escrow Fees. Escrow fees shall be paid by Optionee and;

         (d) Transfer Taxes. Transfer taxes and any sales taxes shall be paid by
Optionor and;

         (e) Other Closing Costs. All other closing costs, including but not
limited to, recording fees, notary fees and document preparation shall be shared
equally between Optionee and Optionor.

         (f) Prorations. Real property and ad valorem taxes and other state or
local  taxes,  charges and  assessments  (all of which  appear on the County Tax
Statement) affecting the Property,  rent, interest and insurance,  if any, shall
be prorated as of the date of the close of escrow.

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         (g) Assessment. Optionor shall not be required to pay all assessments
against the Property unpaid as of the close of escrow;  because such assessments
are recorded against the Property, payable over a period of time and billed with
property  tax  statements  from  Sonoma  County  and are  part of the  Operating
Expenses  of the  property,  Optionor  shall  only  be  required  to  pay  those
assessments  that  delinquent as of the close of escrow and those taxes not paid
by Tenant pursuant to the lease, if any.

         (h) Security Deposits. Optionee shall be credited at the close of
escrow in an amount equal to the balance of any security  deposit(s)  related to
the Leases held by Optionor.

  16.    Default and Remedies.
     (a) By Optionee Liquidated Damages. In the event the (i) Optionor has
complied with each and every obligation of Optionor hereunder, (ii) each and
every condition precedent to Optionee's obligations hereunder is satisfied, and
(iii) Optionee shall fail to perform Optionee's obligation to purchase the
Property at the close of escrow in accordance with the terms, provisions and
conditions of this Agreement, Optionor shall be entitled to terminate this
Agreement by giving written notice of such termination to Optionee and Escrow
Holder, whereupon the Deposit will be paid to Optionor as full and complete
liquidated damages for the default of Optionee pursuant to California Civil Code
Sections 1671, 1676 and 1677. The parties expressly acknowledge and agree, as
indicated by the initialing of this paragraph, that the liquidated damages are
intended to compensate Optionor for any and all damages suffered by reason of
any default by Optionee, such damages being impossible of calculation, and
further, that the payment of the Deposit is not intended as a penalty, but as
full and complete liquidated damages. Optionor's right to the deposit as
liquidated damages shall be part of Optionor's exclusive right and remedy, and
Optionor waives, relinquishes and releases all other rights, and remedies,
including, but not limited to, any right to sue Optionee for any element of
damages or for specific performance under this Agreement. Notwithstanding
anything to the contrary, the Optionor may also, at Optionor's sole option,
terminate the Optionee existing lease Amendment #2 for the property as further
Liquidated Damages, without any further obligation or liability to Optionee.

/s/ Paul Louie                                    /s/ Patrick W. Kilkenny
------------------------------------              --------------------------
Optionor                                                  Optionee

     (b) By Optionor. In the event Optionor defaults in the performance or
compliance with any of the obligations, covenants or agreements to be performed
or any of the conditions to be complied with by Optionor under the terms and
provisions of this Agreement or if any of the representations or warranties of
Optionor contained herein are untrue at the close of escrow and not waived by
Optionee, Optionee shall, as Optionee's sole and exclusive remedy, be entitled
to, (i) initiate an action against Optionor for the specific performance by
Optionor of the


Initials                               8                                Initials
/s/ PL                                                                  /s/ PWK
------                                                                  -------
<PAGE>

terms and provisions of this Agreement, or (ii) terminate this Agreement by
giving written notice of such termination to Optionor and Escrow Holder,





whereupon Escrow Holder shall promptly refund to Optionee all Deposit monies
paid hereunder and Optionor shall promptly reimburse Optionee for the actual,
and reasonable, expenses incurred by Optionee in Optionee's exercise of its
efforts to satisfy conditions inserted for the benefit of Optionee.

/s/ Paul Louie                              /s/ Patrick W. Kilkenny
---------------------------                 --------------------------
Optionor                                           Optionee

17. Condemnation. In the event the Property or any portions thereof shall be
taken or condemned by any governmental authority or other entity having power of
eminent domain or Optionor shall receive a notice of proposed taking prior to
the close of escrow, Optionor shall immediately notify Optionee to said effect
and Optionee shall have the option of either terminating this Agreement by
giving written notice thereof to Optionor within twenty (20) days after
Optionor's notice of such proposed taking, in which event Optionee shall be
entitled to a refund of all of the Deposit or of consummating the transaction
provided for herein without reduction of the Purchase Price and requiring
Optionor to assign, transfer and set over to Optionee at the close of escrow all
of Optionor's right, title and interest in and to any awards that my be made by
reason of such condemnation. In the event Optionee fails to notify Optionor
within said twenty (20) day period of Optionee's election to terminate this
Agreement, then it shall be conclusively presumed that Optionee has elected to
consummate the transaction provided for herein, without abatement of the
Purchase Price and to receive all of Optionor's right, title and interest in and
to any awards that may be made by reason of such condemnation.

18. Risk of Loss. Prior to the close of escrow all risk of loss to the Property,
from any casualty or otherwise, shall remain upon Optionor. In the event of any
damage or destruction of any portion of the Property prior to the close of
escrow, Optionee shall decide, at its sole discretion, and so advise Optionor in
writing, either (i) to accept an assignment of all insurance proceeds and make
the repairs to the Property at its sole cost and expense, or (ii) to require
that Optionor make the repairs to the Property at its sole cost and expense.
Notwithstanding the foregoing, in the event the estimated cost of repairs to the
Property, as determined from quotations obtained by Optionor from reputable
contractors experienced in making such repairs, shall exceed fifty percent (50%)
of the Purchase Price, then either the Optionor or Optionee shall have the right
to terminate this Agreement by serving written notice on the other party within
ten (10) days of receipt by both parties of the above described estimated cost
of repairs. In the event of such termination, the Deposit shall be returned to
the Optionee, and neither party shall have any further obligation or liability,
one to the other.


Initials                               9                                Initials
/s/ PL                                                                  /s/ PWK
------                                                                  -------
<PAGE>

19. Time. Time is of the essence of this Agreement.

20. California Law. This Agreement is made and entered into as a contract for
the purchase and sale of real property to be interpreted under and governed and
enforced according to the laws of the State of California.

 21. Severability. In the event any term, covenant, condition, agreement,
section or provision shall be deemed invalid or unenforceable by a court of
competent and final jurisdiction, this Agreement shall not terminate or be
deemed void or voidable, but shall continue in full force and effect and there
shall be substituted for such stricken provision a like, but legal and
enforceable, provision which most nearly accomplishes the intention of the
parties hereto and if no such provision is available, the remainder of this
Agreement shall be enforced.

 22. Possession. Optionor shall deliver possession of the Property to Optionee
at the close of escrow subject only to the existing leases and those exceptions
to title approved by Optionee pursuant to the provisions of Paragraph 5 hereof.

 23. Other Assurances. From time to time, either before or after the close of
escrow, and as an obligation of the parties which shall survive the close of
escrow and not be merged with the execution and delivery of the grant deed,
either party, upon the reasonable request of the other party, shall, without
charge, furnish such other instruments, documents, material and information, and
obtain and deliver to the requesting party such other consents, approvals,
estoppel certificates and affidavits as may be reasonably requested by such
party in order to effectuate the transaction contemplated by this Agreement and
the operation of the Property.

24. Notices. All notices required, necessary or desired to be given pursuant to
this Agreement, including a change of address for purposes of notice, shall be
in writing and shall be deemed effective and given (i) upon personal delivery,
(ii) upon delivery if sent by Federal Express or similar private courier company
that maintains records of its deliveries, (iii) upon transmission by facsimile
machine to the facsimile number listed herein, or (iv) upon deposit in the
United States Mail, certified, return receipt requested, postage prepaid and
addressed as follows:

OPTIONOR:                  UPWAY PROPERTIES, LLC
                           39134 State Street
                           Fremont, CA  94538
                           Attn: Paul Louie
                           (510) -791-1333
                           (510) 791-1386 Fax

OPTIONEE:                  National Bank of the Redwoods
                           Attn: Patrick Kilkenny
                           111 Santa Rosa Avenue, Suite 100
                           Santa Rosa, CA 95401



Initials                               10                               Initials
/s/ PL                                                                  /s/ PWK
------                                                                  -------
<PAGE>

                                    (707)
                              Fax # (707)





Copy to:                   CATALYST COMMERCIAL GROUP, INC
                           111 Healdsburg Avenue, Suite C
                           Healdsburg, Ca 95448
                                 (707) 431-3510
                           Fax#: (707) 431-3513
                           Attn.: Paul Gonzalez

Escrow
Holder:                    FIRST AMERICAN TITLE
                           400 E Street
                           Santa Rosa, CA 95401
                           Attn: Dona Robertson, Escrow Officer
                           Facsimile: (707) 523-
                           Phone:      (707) 523-3902

25. Assignment. At any and all times prior to the close of escrow Optionee
shall, without the prior consent of Optionor, have the right to assign its
rights, interest, duties and obligations under this Agreement to any entity in
which Optionee retains an ownership interest or has the financial ability to
close the transaction under the terms contained herein. An assignment of
Optionee's rights, interest and duties and obligations under this Agreement to
any other person or entity shall require the prior written approval of Optionor,
such approval not to be unreasonably withheld or delayed.

 26. Binding Effects. The terms, covenants and conditions of this Agreement
shall be binding upon and shall enure to the benefit of Optionee and Optionor
and their respective successors, assigns, heirs and legal representatives.

 27. Modification and Amendment. This Agreement may not be modified, altered or
amended except by a written instrument executed by both Optionee and Optionor.

 28. Entire Agreement. This Agreement, including all attached Exhibits,
constitutes the entire and complete agreement of Optionee and Optionor with
respect to the transaction contemplated hereby, and conversations, undertakings,
representations, promises, inducements, warranties or statements not reduced to
writing and expressly set forth herein shall be of no force or effect
whatsoever.

29. Broker and Commissions. Optionee and Optionor represent and warrant to each
other that no broker, agent, salesperson, or finder has been engaged with
respect to, or is in any way entitled to, a commission or other fee in
connection with the transaction contemplated hereunder, except for Paul Gonzalez
of CATALYST COMMERCIAL GROUP, INC., of Santa Rosa, CA, hired by the Optionor as
it's sole consultant (the


Initials                               11                               Initials
/s/ PL                                                                  /s/ PWK
------                                                                  -------
<PAGE>

"Broker"). Optionor agrees to pay a real estate commission equal to Two percent
(2%) of the purchase price to be paid Paul Gonzalez, Optionor's Agent upon the
close of escrow. Said commission to be paid out of the Optionor's proceeds, in
escrow, through escrow. In the event of a claim for any commission or fee by any
other broker, agent, salesperson or finder, Optionee and Optionor hereby agree
to indemnify and hold each other harmless from any and all such claims and any
and all demands, costs, expenses, and causes of action therewith. The Optionor
shall pay any legal fees to the Broker, if required to collect Brokers
commissions. The parties acknowledge and consent that Paul Gonzalez is acting as
a dual agent in this transaction.

         Both parties have been advised by the Broker to have the attorney
review and approve this Option Agreement. Unless either party objects to the use
of this Option Agreement prior to ratification, this Option Agreement shall be
deemed approved and the Broker shall not have any liability for the preparation
of this Option Agreement as to the legal content and legal sufficiency of the
Option Agreement.

Optionor's Initial  /s/ PL                  Optionee's Initial  /s/ PWK
                    -------                                     -------

30.  Survival of Agreement.  All of the terms and  provisions of this  Agreement
shall  survive the close of escrow and not merge with the execution and delivery
of the grant deed contemplated herein.

31.  Agreements Affecting the Property. Optionor hereby covenants and agrees
with Optionee that so long as this  Agreement  remains in full force and effect,
Optionor shall not sell,  assign,  convey  (absolutely or as security),  grant a
security  interest in, or  otherwise  encumber or dispose of, any portion of the
Property or any  interest or rights  therein,  and shall not modify any existing
lease(s) or enter into any new  lease(s)  without the prior  written  consent of
Optionee.  Optionee is aware that an existing loan  encumbering  the property is
currently  in place,  the property is pledged as security and the loan is due on
October  1, 2004.  If the  Optionee  pays the loan prior to October 1 2004,  the
Optionee will pay the prepayment penalty.

32.  Headings. The paragraph and subparagraph headings throughout this Agreement
are for convenience  and reference  only, and the words contained  therein shall
not  be  held  to  expand,   modify,  amplify  or  aid  in  the  interpretation,
construction or meaning of this Agreement.

33.  Mediation  of Disputes.  Optionee  and  Optionor  agree that in the event a
dispute arises as to the meaning, interpretation or performance of any provision
of this  Agreement,  that  Optionee  and  Optionor  shall submit such dispute to
mediation before resorting to binding arbitration. Either party may initiate the
mediation  process by serving written notice on the other party, and unless both
parties  agree  otherwise,   the  dispute  shall  be  submitted  to  a  Judicial
Arbitration   and  Mediation   Service  with  office  in  either  San  Francisco
California. Prior to commencement of the mediation,  Optionee and Optionor agree
to execute a document  limiting the  admissibility  in  arbitration or any civil
action of anything said, any admission made, and any documents prepared,  in the
course of the

Initials                               12                               Initials
/s/ PL                                                                  /s/ PWK
------                                                                  -------
<PAGE>

mediation.  The mediator, whose fee shall be shared equally between Optionee and
Optionor, shall not be empowered to impose a settlement on either party.

34.  Binding Arbitration. Intentionally deleted.

35.  Attorneys'  Fees.  All fees and  expenses of  attorneys  or other  advisors
retained by Optionor or Optionee  pursuant to this  Agreement and the completion
of the transaction  contemplated thereby shall be the sole responsibility of the
party  engaging the services of such attorney or advisor;  except,  however,  if
following a decision pursuant to binding  arbitration  either party hereto shall
institute  any action or  proceeding  to enforce the award  rendered  said party
shall be entitled to recover,  from the other,  reasonable  attorneys'  fees and
costs for services provided in such proceeding.

36.  Tax Deferred  Exchange.  In the event  Optionor  wishes to enter into a tax
deferred  exchange for the Property,  or if Optionee  wishes to enter into a tax
deferred  exchange with respect to property owned by Optionee in connection with
this  transaction,  each of the parties agrees to cooperate with the other party
in connection with such exchange,  including,  without limitation, the execution
of such documents as may be reasonably  necessary to effectuate  the same.  Such
obligations  shall,  however,  be subject to the following  conditions:  (i) the
party not initiating the exchange shall not be obligated to advance or delay the
closing;  (ii) all  additional  costs in connection  with the exchange,  if any,
shall be borne by the  party  initiating  the  exchange;  (iii)  the  party  not
initiating the exchange shall not be obligated to execute any note, contract, or
other  document  providing  for any  personal  liability;  and  (iv)  the  party
initiating the exchange  shall  indemnify and hold the other party harmless from
and  against  any and all claims and  liabilities  in any way  arising out of or
resulting from the indemnified party's participation in such exchange.

37.  Conditions  Precedent.  Optionee's  obligation to complete the  transaction
contemplated  by this  Agreement  shall be  conditional to each of the following
events:
         (a) Removing contingencies as described in Section #5, 6 & 7.
         (b) Optionor terminating the existing escrow with James Ratto. No
             extension to the current escrow will be granted by Optionor to
             James Ratto

38.  Foreign Person affidavit. At the close of escrow, Optionor shall deliver to
Optionee an affidavit  pursuant to Section 1445 of the Internal  Revenue Code of
1986, as amended, sworn to under the penalty of perjury setting forth Optionor's
U.S. taxpayer  identification  number and stating that Optionor is not a foreign
person,  and is a "United  States  Person" as  defined  in the Code.  In lieu of
furnishing  such  nonforeign  affidavit,  Optionor  may  deliver  to  Optionee a
qualifying statement issued by the United States Treasury,  such statement to be
in accordance  with the rules and provisions as contained in Section 1445 of the
Internal Revenue Code.

39.  Documents  required for Closing in form and content  acceptable to Optionor
and Optionee.


Initials                               13                               Initials
/s/ PL                                                                  /s/ PWK
------                                                                  -------
<PAGE>
         (a) a grant deed duly executed by Optionor, and in form for recording,
conveying marketable, and fee simple title to the Property;

         (b) an assignment in favor of Optionee of the leases, including the
balance of security deposit related to such leases held by Optionor, in respect
of the use and/or occupancy of any portion of the Property;

         (c) a bill of sale conveying, assigning and otherwise transferring to
Optionee (i) that personal property of Optionor located at the Property as of
the date of this Agreement, and (ii) third party warranties and guaranties in
respect of equipment and/or work performed by contractors on behalf of the
Tenant and pursuant to the maintenance and repair of the Property, if any;

         (d) Estoppel certificate(s) signed by the tenants entitled to
possession of the Property, such estoppel certificates to be in form and content
acceptable to Optionee and Optionee's lender, this estoppel to be delivered to
Optionee from Optionor no later than ten (10) days prior to the close of escrow.
Among other things, the estoppel certificate shall contain an acknowledgment as
to the date of the current lease, whether or not there have been any lease
amendments, and if so, the date and nature of such amendments, the amount of
monthly rent currently being paid, the amount of security deposits previously
paid and the nature of any unresolved disputes or claimed defaults between
tenant and Optionor;

         (e) Optionor shall acquire Subordination, Non Disturbance and
Attornment Agreements (SNDA) from the Tenants;

  (i) All other documents as the Escrow Holder may reasonably require to
complete the transaction contemplated by this Agreement;

40.      Extension to Next Business Day. In the event a date for the end of a
period, delivery of notice or the close of escrow shall fall on a Saturday,
Sunday or legal holiday, then such date shall be postponed to the next business
day immediately following such date.

41.      Exhibits. The following attached exhibits are incorporated herein by
this reference:
         Exhibit A - Site Plan Exhibit B - Agency Disclosure

42.      Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


     IN WITNESS WHEREOF, the Optionee has caused this Agreement to be executed
as an offer to Optionor to purchase the Property upon the terms and conditions
set forth herein, which offer shall remain open for acceptance by Optionor until
5:00 o'clock PM

Initials                               14                               Initials
/s/ PL                                                                  /s/ PWK
------                                                                  -------
<PAGE>
California time on the 5th day of September 2003. If Optionor has not delivered
two (2) fully executed copies of this Agreement to Optionee or Broker by such
point in time, said offer might be terminated by either party.

     The date of this Agreement shall be deemed to be the next business day
following the latest date on which this Agreement shall be executed by any of
the parties.


OPTIONEE:


By:  /s/ Patrick W. Kilkenny                      Date:             9-4-03
     ---------------------------------                        -----------------
         National Bank of the Redwoods

  Its:  President & CEO
        ------------------------------

OPTIONOR:


By:  /s/ Paul Louie                               Date:             9-3-03
     ----------------------------------                      -------------------
         Paul Louie, Managing Partner
         Upway Properties, LLC









Initials                               15                               Initials
/s/ PL                                                                  /s/
------                                                                  -------