Exhibit 10.18
                           REDWOOD STATUTORY TRUST II
                             REDWOOD EMPIRE BANCORP

                             SUBSCRIPTION AGREEMENT

                                  July 22, 2003

     THIS SUBSCRIPTION AGREEMENT (this "Agreement") made among Redwood Statutory
Trust  II (the  "Trust"),  a  statutory  trust  created  under  the  Connecticut
Statutory  Trust  Act  (Chapter  615  of  Title  34 of the  Connecticut  General
Statutes,   Section  500,  et  seq.),   Redwood  Empire  Bancorp,  a  California
corporation, with its principal offices located at 1111 Santa Rosa Avenue, Santa
Rosa,  California  95404 (the "Company" and,  collectively  with the Trust,  the
"Offerors"),  and First Tennessee Bank National  Association (the  "Purchaser"),
and,  for  purposes of the rights and  obligations  in Sections  1.2 and 1.4 and
Article III only,  FTN Financial  Capital  Markets and Keefe,  Bruyette & Woods,
Inc. (the "Placement Agents").

                                    RECITALS:

     A. The Trust  desires to issue  10,000 of its  Fixed/Floating  Rate Capital
Securities (the "Capital Securities"),  liquidation amount $1,000.00 per Capital
Security,  representing  an undivided  beneficial  interest in the assets of the
Trust  (the  "Offering"),  to be issued  pursuant  to an  Amended  and  Restated
Declaration  of Trust (the  "Declaration")  by and among the Company,  U.S. Bank
National  Association ("U.S.  Bank"), the administrators  named therein, and the
holders (as defined therein),  which Capital  Securities are to be guaranteed by
the  Company  with  respect to  distributions  and  payments  upon  liquidation,
redemption and otherwise pursuant to the terms of a Guarantee  Agreement between
the Company and U.S. Bank, as trustee (the "Guarantee"); and

     B. The proceeds  from the sale of the Capital  Securities  will be combined
with the  proceeds  from the sale by the  Trust  to the  Company  of its  common
securities,  and will be used by the Trust to purchase an  equivalent  amount of
Fixed/Floating  Rate Junior  Subordinated  Deferrable Interest Debentures of the
Company (the  "Debentures") to be issued by the Company pursuant to an indenture
to be executed by the Company and U.S. Bank, as trustee (the "Indenture"); and

     C. In  consideration  of the  premises and the mutual  representations  and
covenants hereinafter set forth, the parties hereto agree as follows:

                                   ARTICLE I

                     PURCHASE AND SALE OF CAPITAL SECURITIES

     1.1. Upon the execution of this Agreement,  the Purchaser  hereby agrees to
purchase from the Trust 10,000 Capital  Securities at a price equal to $1,000.00
per Capital  Security (the  "Purchase  Price") and the Trust agrees to sell such
Capital  Securities to the Purchaser  for said  Purchase  Price.  The rights and
preferences  of the Capital  Securities  are set forth in the  Declaration.  The
Purchase  Price is payable in immediately  available  funds on July 22, 2003, or
such other business day as may be designated by the  Purchaser,  but in no event
later than July 25, 2003 (the "Closing  Date").  The Offerors  shall provide the
Purchaser  wire  transfer  instructions  no later than 1 day  following the date
hereof.

     1.2. As a condition  to its purchase of the Capital  Securities,  Purchaser
shall enter into the Custodian  Agreement,  the form of which is attached hereto
as Exhibit A (the  "Custodian  Agreement")  and, in  accordance  therewith,  the
certificate  for the Capital  Securities  shall be delivered by the Trust on the
Closing Date to the custodian in accordance with the Custodian Agreement.  On or
before the

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Purchase Date (as defined below),  Purchaser shall take all actions necessary or
advisable to cause the Capital Securities to be delivered in accordance with the
terms of the  Custodian  Agreement.  Purchaser  shall not  transfer  the Capital
Securities to any person or entity  except in  accordance  with the terms of the
Custodian Agreement.

     1.3.  The  Placement  Agreement,   dated  July  17,  2003  (the  "Placement
Agreement"), among the Offerors and the Placement Agents identified therein (the
"Placement Agents") includes certain  representations and warranties,  covenants
and conditions to closing and certain other matters governing the Offering.  The
Placement  Agreement is hereby incorporated by reference into this Agreement and
the Purchaser shall be entitled to each of the benefits of the Placement  Agents
and the Purchaser under the Placement Agreement and shall be entitled to enforce
the  obligations of the Offerors  under such Placement  Agreement as fully as if
the Purchaser were a party to such Placement Agreement.

     1.4.  Purchaser  hereby grants to the Placement Agents an option (the "Call
Option") to purchase,  or arrange for the purchase of, the Capital Securities in
whole or in part from  time to time,  in an amount  not to exceed  their  stated
aggregate liquidation amount of $10,000,000.00. The Call Option may be exercised
by the  Placement  Agents at any time and from  time to time  until the first to
occur of: (i) the transfer of all the Capital Securities from the Purchaser,  or
(ii) the redemption,  exchange or maturity of all the Capital Securities held by
the  Purchaser.  A Call Option shall be exercised by  delivering to Purchaser an
exercise notice  substantially  in the form of Exhibit B attached  hereto,  such
notice to specify the date on which the Capital  Securities  shall be  purchased
(the "Purchase Date") and the amount of the Capital Securities to be purchased.

                                   ARTICLE II

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

     2.1.  The  Purchaser  understands  and  acknowledges  that none of  Capital
Securities,  the  Debentures nor the Guarantee  have been  registered  under the
Securities  Act of  1933,  as  amended  (the  "Securities  Act"),  or any  other
applicable  securities  law,  are  being  offered  for  sale  by  the  Trust  in
transactions not requiring registration under the Securities Act, and may not be
offered,  sold,  pledged or otherwise  transferred  by the  Purchaser  except in
compliance with the registration requirements of the Securities Act or any other
applicable  securities  laws,  pursuant  to  an  exemption  therefrom  or  in  a
transaction not subject thereto.

     2.2. The Purchaser  represents  and warrants that,  except as  contemplated
under Section 1.4 hereof,  it is purchasing  the Capital  Securities for its own
account,  for  investment,  and not  with a view  to,  or for  offer  or sale in
connection with, any distribution  thereof in violation of the Securities Act or
other  applicable  securities  laws,  subject to any requirement of law that the
disposition  of its  property be at all times  within its control and subject to
its  ability  to  resell  such  Capital  Securities  pursuant  to  an  effective
registration  statement under the Securities Act or under Rule 144A or any other
exemption  from  registration  available  under the  Securities Act or any other
applicable securities law.

     2.3. The  Purchaser  represents  and warrants that neither the Offerors nor
the  Placement  Agents are acting as a  fiduciary  or  financial  or  investment
adviser for the Purchaser.

     2.4. The  Purchaser  represents  and  warrants  that it is not relying (for
purposes  of making any  investment  decision  or  otherwise)  upon any  advice,
counsel or  representations  (whether written or oral) of the Offerors or of the
Placement Agents.

     2.5. The Purchaser  represents  and warrants that (a) it has consulted with
its own legal, regulatory, tax, business,  investment,  financial and accounting
advisers in connection  herewith to the extent it has


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deemed  necessary,  (b) it has had a reasonable  opportunity to ask questions of
and receive answers from officers and representatives of the Offerors concerning
their respective  financial condition and results of operations and the purchase
of the Capital  Securities,  and any such  questions  have been  answered to its
satisfaction,  (c) it has had the  opportunity to review all publicly  available
records and filings  concerning the Offerors and it has carefully  reviewed such
records and filings that it considers relevant to making an investment decision,
and (d) it has made its own  investment  decisions  based upon its own judgment,
due diligence  and advice from such advisers as it has deemed  necessary and not
upon any view expressed by the Offerors or the Placement Agents.

     2.6.  The  Purchaser  represents  and  warrants  that  it  is a  "qualified
institutional buyer" as defined under Rule 144A under the Securities Act. If the
Purchaser is a dealer of the type described in paragraph (a)(1)(ii) of Rule 144A
under the Securities Act, it owns and invests on a discretionary  basis not less
than U.S.  $25,000,000.00  in securities of issuers that are not affiliated with
it. The Purchaser is not a participant-directed  employee plan, such as a 401(k)
plan,  or any  other  type of plan  referred  to in  paragraph  (a)(1)(i)(D)  or
(a)(1)(i)(E) of Rule 144A, or a trust fund referred to in paragraph (a)(1)(i)(F)
of Rule 144A that holds the assets of such a plan, unless  investment  decisions
with respect to the plan are made solely by the fiduciary, trustee or sponsor of
such plan.

     2.7. The Purchaser  represents  and warrants that on each day from the date
on which it acquires the Capital  Securities  through and  including the date on
which it disposes of its interests in the Capital  Securities,  either (i) it is
not (a) an  "employee  benefit  plan" (as defined in Section  3(3) of the United
States Employee  Retirement  Income Security Act of 1974, as amended  ("ERISA"))
which is subject to the  provisions of Part 4 of Subtitle B of Title I of ERISA,
or any entity whose  underlying  assets  include the assets of any such plan (an
"ERISA  Plan"),  (b) any other "plan" (as defined in Section  4975(e)(1)  of the
United States  Internal  Revenue Code of 1986, as amended (the "Code")) which is
subject  to the  provisions  of  Section  4975 of the Code or any  entity  whose
underlying assets include the assets of any such plan (a "Plan"),  (c) an entity
whose underlying  assets include the assets of any such ERISA Plan or other Plan
by reason of Department of Labor regulation section 2510.3-101 or otherwise,  or
(d) a governmental or church plan that is subject to any federal, state or local
law which is substantially  similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code (a "Similar  Law");  or (ii) the purchase,  holding and
disposition of the Capital  Securities by it will satisfy the  requirements  for
exemptive relief under Prohibited  Transaction  Class Exemption  ("PTCE") 84-14,
PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar exemption, or, in the
case of a plan  subject  to a  Similar  Law,  will not  result  in a  non-exempt
violation of such Similar Law.

     2.8. The Purchaser represents and warrants that it is acquiring the Capital
Securities  as  principal  for its own account  for  investment  and,  except as
contemplated  under  Section 1.4  hereof,  not for sale in  connection  with any
distribution  thereof.  It was not formed solely for the purpose of investing in
the Capital Securities, and additional capital or similar contributions were not
specifically  solicited  from any person owning a beneficial  interest in it for
the purpose of enabling it to purchase any Capital Securities.  The Purchaser is
not a (i) partnership,  (ii) common trust fund or (iii) special trust,  pension,
profit  sharing or other  retirement  trust fund or plan in which the  partners,
beneficiaries  or  participants,  as  applicable,  may designate the  particular
investments to be made or the allocation of any investment  among such partners,
beneficiaries or participants,  and it agrees that it shall not hold the Capital
Securities for the benefit of any other person and shall be the sole  beneficial
owner  thereof  for all  purposes  and  that it  shall  not  sell  participation
interests in the Capital Securities or enter into any other arrangement pursuant
to which any other  person  shall be  entitled to a  beneficial  interest in the
distribution  on  the  Capital  Securities.  The  Capital  Securities  purchased
directly or indirectly by the Purchaser constitute an investment of no more than
40% of its assets.  The  Purchaser  understands  and agrees  that any  purported
transfer  of the  Capital  Securities  to a  purchaser  which  would  cause  the
representations  and  warranties  of


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Section  2.6 and this  Section  2.8 to be  inaccurate  shall be null and void ab
initio and the Offerors  retain the right to resell any Capital  Securities sold
to non-permitted transferees.

     2.9.  The  Purchaser  represents  and  warrants  that it has full power and
authority to execute and deliver this Agreement, to make the representations and
warranties  specified  herein,  and to consummate the transactions  contemplated
herein and it has full right and power to subscribe for Capital  Securities  and
perform its obligations pursuant to this Agreement.

     2.10.  The  Purchaser  represents  and  warrants  that no filing  with,  or
authorization, approval, consent, license, order, registration, qualification or
decree of, any governmental  body, agency or court having  jurisdiction over the
Purchaser,  other than those that have been made or  obtained,  is  necessary or
required for the  performance  by the  Purchaser of its  obligations  under this
Agreement or to consummate the transactions contemplated herein.

     2.11.  The Purchaser  represents  and warrants that this Agreement has been
duly authorized, executed and delivered by the Purchaser.

     2.12. The Purchaser understands and acknowledges that the Company will rely
upon the truth and accuracy of the foregoing  acknowledgments,  representations,
warranties  and  agreements  and  agrees  that,  if any of the  acknowledgments,
representations,  warranties or agreements deemed to have been made by it by its
purchase of the Capital  Securities  are no longer  accurate,  it shall promptly
notify the Company.

     2.13. The Purchaser understands that no public market exists for any of the
Capital Securities, and that it is unlikely that a public market will ever exist
for the Capital Securities.

                                  ARTICLE III

                                  MISCELLANEOUS

     3.1.  Any notice or other  communication  given  hereunder  shall be deemed
sufficient  if in writing  and sent by  registered  or  certified  mail,  return
receipt  requested,  international  courier or delivered by hand against written
receipt therefor,  or by facsimile  transmission and confirmed by telephone,  to
the following addresses,  or such other address as may be furnished to the other
parties as herein provided:

                  To the Offerors: Redwood Empire Bancorp
                                   1111 Santa Rosa Avenue
                                   Santa Rosa, California 95404
                                   Attention: James E. Beckwith
                                   Fax:  707-579-0860

                 To the Purchaser: First Tennessee Bank National Association
                                   845 Crossover Lane, Suite 150
                                   Memphis, Tennessee 38117
                                   Attention: David Work
                                   Fax:  901-435-7983

                Unless otherwise expressly provided herein, notices shall be
deemed to have been  given on the date of  mailing,  except  notice of change of
address, which shall be deemed to have been given when received.


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     3.2. This Agreement  shall not be changed,  modified or amended except by a
writing  signed by the  parties to be  charged,  and this  Agreement  may not be
discharged  except by performance  in accordance  with its terms or by a writing
signed by the party to be charged.

     3.3. Upon the execution  and delivery of this  Agreement by the  Purchaser,
this Agreement  shall become a binding  obligation of the Purchaser with respect
to the purchase of Capital Securities as herein provided.

     3.4.  NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY
OF THE  PARTIES  HERETO,  THE  PARTIES  EXPRESSLY  AGREE  THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

     3.5. The parties  agree to execute and deliver all such further  documents,
agreements  and  instruments  and take such other and  further  action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.

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

     3.7. In the event that any one or more of the provisions  contained herein,
or the application  thereof in any  circumstances,  is held invalid,  illegal or
unenforceable  in any  respect  for  any  reason,  the  validity,  legality  and
enforceability of any such provision in every other respect and of the remaining
provisions  hereof  shall  not be in any way  impaired  or  affected,  it  being
intended  that all of the Offerors' and the  Purchaser's  rights and  privileges
shall be enforceable to the fullest extent permitted by law.

                     Signatures appear on the following page


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     IN WITNESS WHEREOF,  this Agreement is agreed to and accepted as of the day
and year first written above.


FIRST TENNESSEE BANK NATIONAL ASSOCIATION


By:  /s/ David S. Work
     ------------------------------
Print Name:  David S. Work
             ----------------------
Title:  AVP
        ---------------------------

                             REDWOOD EMPIRE BANCORP


                             By:  /s/ Patrick W. Kilkenny
                                  -----------------------------

                             Name:  Patrick W. Kilkenny
                                    ---------------------------

                             Title: President & CEO
                                    ---------------------------

                             REDWOOD STATUTORY TRUST II


                             By:  /s/ James E. Beckwith
                                  -----------------------------

                             Name:  James E. Beckwith
                                    ---------------------------

                             Title:  Administrator
                                     --------------------------

                             FTN FINANCIAL CAPITAL MARKETS
                             (for purposes of the rights and  obligations  in
                             Sections 1.2 and 1.4 and Article III only)


                             By: /s/ Doug Duncan
                                 ------------------------------

                             Name: Doug Duncan
                                   ----------------------------

                                   Title: Vice President
                                   ----------------------------

                             KEEFE, BRUYETTE & WOODS, INC.
                             (for purposes of the rights and  obligations
                             in  Sections 1.2 and 1.4 and Article III only)


                             By:  /s/ Peter J. Wirth
                                  -----------------------------

                             Name: Peter J. Wirth
                                   ----------------------------

                             Title:   Managing Director
                                      -------------------------


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                       EXHIBIT A TO SUBSCRIPTION AGREEMENT

                           FORM OF CUSTODIAN AGREEMENT

     This Custodian  Agreement (this "Agreement") is made and entered into as of
July 22, 2003 by and among FTN Financial  Capital  Markets,  a division of First
Tennessee  Bank National  Association,  and Keefe,  Bruyette & Woods,  Inc. (the
"Placement  Agents"),  Redwood Empire  Bancorp,  a California  corporation  (the
"Company"),  First  Tennessee  Bank  National  Association,  a national  banking
association (the  "Purchaser"  and,  together with the Company and the Placement
Agents, the "Interested Parties") and U.S. Bank National Association, a national
banking association (the "Custodian").

                                    RECITALS

     A. The  Purchaser  intends to purchase from Redwood  Statutory  Trust II, a
Connecticut statutory trust (the "Trust"),  $10,000,000.00 aggregate liquidation
amount of the Trust's  Fixed/Floating  Rate  Capital  Securities  (the  "Capital
Securities").

     B. The  Purchaser  intends to grant an option  (the "Call  Option")  to the
Placement Agents to purchase the Capital Securities at any time and from time to
time  immediately  following  the date  hereof  in an amount  not to exceed  the
Capital Securities' aggregate liquidation amount.

     C. The Interested  Parties intend to provide for the custody of the Capital
Securities and certain other securities on the terms set forth herein.

     D. The Custodian is willing to hold and administer  such  securities and to
distribute  the  securities  held by it in accordance  with the agreement of the
Interested  Parties and/or  arbitral or judicial orders and decrees as set forth
in this Agreement.

     NOW,  THEREFORE,  in consideration  of the foregoing,  the mutual covenants
herein  contained  and  other  good and  valuable  consideration  (the  receipt,
adequacy  and  sufficiency  of which are hereby  acknowledged  by the parties by
their execution hereof), the parties agree as follows:

1.   Delivery of Securities. On or before the date hereof:

     (a) The Company  shall  deliver to the  Custodian  a signed,  authenticated
     Capital  Securities  certificate,  with the  Purchaser  designated as owner
     thereof  (the  "Original   Securities").   The  Custodian   shall  have  no
     responsibility  for the  genuineness,  validity,  market  value,  title  or
     sufficiency for any intended purpose of the Original Securities.

     (b) The Company shall deliver to the Custodian five signed, unauthenticated
     and undated Capital Securities  certificates with no holder designated (the
     "Replacement  Securities").  The Custodian shall have no responsibility for
     the  genuineness,  validity,  market value,  title or  sufficiency  for any
     intended purpose of the Replacement Securities.

2.   Timing of Release from Custody.

     (a) Upon receipt of a copy of an option  exercise notice to be delivered in
     connection  with the Placement  Agents'  exercise of a Call Option,  on the
     effective  date set forth in such option  exercise  notice,  the  Custodian
     shall:

          (i) Deliver the Original Securities  certificate to U.S. Bank National
          Association,  as  Institutional  Trustee  (the  "Trustee")  under  the
          Amended  and  Restated  Declaration  of



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          Trust, dated as of the date hereof, among the Trustee, the Company and
          the administrators  named therein (the  "Declaration") for the purpose
          of canceling the Original  Securities  certificate in accordance  with
          the terms of the Declaration; and

          (ii) Deliver the Replacement  Securities  certificate(s) in the amount
          designated  in the  option  exercise  notice  to the  Trustee  for the
          purpose of completing and  authenticating  the Replacement  Securities
          certificate(s) in accordance with the terms of the Declaration.

     Upon expiration of the Call Option,  this Agreement shall terminate and the
     Custodian and the Interested Parties shall be released from all obligations
     hereunder.

3.   Concerning the Custodian.

     (a) Each Interested  Party  acknowledges  and agrees that the Custodian (i)
     shall not be responsible for any of the agreements referred to or described
     herein (including without  limitation the Declaration),  or for determining
     or  compelling  compliance  therewith,  and  shall not  otherwise  be bound
     thereby, (ii) shall be obligated only for the performance of such duties as
     are expressly and  specifically  set forth in this Agreement on its part to
     be performed,  each of which are ministerial (and shall not be construed to
     be fiduciary) in nature,  and no implied  duties or obligations of any kind
     shall be read into this Agreement  against or on the part of the Custodian,
     (iii) shall not be obligated  to take any legal or other  action  hereunder
     which  might in its  judgment  involve or cause it to incur any  expense or
     liability   unless  it  shall   have   been   furnished   with   acceptable
     indemnification,  (iv) may rely on and  shall be  protected  in  acting  or
     refraining  from acting upon any written notice,  instruction,  instrument,
     statement, certificate, request or other document furnished to it hereunder
     and  believed by it to be genuine and to have been signed or  presented  by
     the proper person,  and shall have no  responsibility  for  determining the
     accuracy thereof, and (v) may consult counsel satisfactory to it, including
     in-house counsel, and the opinion or advice of such counsel in any instance
     shall be full and complete  authorization  and protection in respect of any
     action  taken,  suffered  or omitted by it  hereunder  in good faith and in
     accordance with the opinion or advice of such counsel.

     (b) The  Custodian  shall not be liable to anyone for any  action  taken or
     omitted to be taken by it hereunder  except in the case of the  Custodian's
     negligence or willful  misconduct in breach of the terms of this Agreement.
     In no event shall the Custodian be liable for indirect,  punitive,  special
     or consequential damage or loss (including but not limited to lost profits)
     whatsoever,  even if the Custodian  has been informed of the  likelihood of
     such loss or damage and regardless of the form of action.

     (c) The Custodian shall have no more or less responsibility or liability on
     account of any action or omission of any book-entry depository,  securities
     intermediary or other subcustodian  employed by the Custodian than any such
     book-entry depository, securities intermediary or other subcustodian has to
     the  Custodian,  except to the extent  that such  action or omission of any
     book-entry  depository,  securities  intermediary or other subcustodian was
     caused by the Custodian's own negligence,  bad faith or willful  misconduct
     in breach of this Agreement.

     (d) The recitals  contained  herein shall be taken as the statements of the
     Company, and the Custodian assumes no responsibility for the correctness of
     the same.  The  Custodian  makes no  representations  as to the validity or
     sufficiency  of this  Agreement or the Capital  Securities.  The  Custodian
     shall not be  accountable  for the use or application by the Company of any
     Capital Securities or the proceeds of any Capital Securities.

4.   Compensation, Expense Reimbursement and Indemnification.




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     (a) The Custodian  hereby waives its customary  fees for services  rendered
     hereunder.

     (b)  Each of the  Interested  Parties  agree,  jointly  and  severally,  to
     reimburse  the  Custodian on demand for all costs and expenses  incurred in
     connection with the  administration of this Agreement or the performance or
     observance  of its duties  hereunder  which are in excess of its  customary
     compensation for normal services  hereunder,  including without limitation,
     payment  of any  legal  fees and  expenses  incurred  by the  Custodian  in
     connection with resolution of any claim by any party hereunder.

     (c)  Each  of the  Interested  Parties  covenant  and  agree,  jointly  and
     severally,  to indemnify the  Custodian  (and its  directors,  officers and
     employees)  and  hold it  (and  such  directors,  officers  and  employees)
     harmless from and against any loss, liability,  damage, cost and expense of
     any nature  incurred by the Custodian  arising out of or in connection with
     this  Agreement  or  with  the  administration  of  its  duties  hereunder,
     including but not limited to  attorney's  fees and other costs and expenses
     of defending or preparing to defend  against any claim of liability  unless
     and except to the extent  such loss,  liability,  damage,  cost and expense
     shall be  caused by the  Custodian's  negligence,  bad  faith,  or  willful
     misconduct. The provisions in this paragraph 4 shall survive the expiration
     of this Agreement.

5. Voting  Rights.  The  Custodian  shall be under no  obligation  to  preserve,
protect or exercise rights in the Original Securities,  and shall be responsible
only for reasonable measures to maintain the physical  safekeeping  thereof, and
otherwise  to perform and observe such duties on its part as are  expressly  set
forth in this  Agreement.  The Custodian shall not be responsible for forwarding
to any Party,  notifying  any Party with  respect  to, or taking any action with
respect to, any notice,  solicitation or other document or information,  written
or  otherwise,  received  from an issuer or other  person  with  respect  to the
Original  Securities,  including  but not limited to, proxy  material,  tenders,
options, the pendency of calls and maturities and expiration of rights.

6. Resignation.  The Custodian may at any time resign as Custodian  hereunder by
giving  thirty (30) days' prior  written  notice of  resignation  to each of the
Interested Parties.  Prior to the effective date of the resignation as specified
in such notice,  the  Interested  Parties will issue to the  Custodian a written
instruction   authorizing   redelivery  of  the  Original   Securities  and  the
Replacement  Securities to a bank or trust company that they select as successor
to the Custodian  hereunder.  If, however,  the Interested Parties shall fail to
name  such a  successor  custodian  within  twenty  days  after  the  notice  of
resignation  from the Custodian,  the Placement Agents shall be entitled to name
such successor  custodian.  If no successor custodian is named by the Interested
Parties or the Placement Agents, the Custodian may apply to a court of competent
jurisdiction for appointment of a successor custodian.

7. Dispute Resolution. It is understood and agreed that should any dispute arise
with respect to the delivery, ownership, right of possession, and/or disposition
of the Original Securities or the Replacement Securities, or should any claim be
made upon the Custodian,  the Original Securities or the Replacement  Securities
by a third party,  the Custodian upon receipt of notice of such dispute or claim
is authorized  and shall be entitled (at its sole option and election) to retain
in its  possession  without  liability  to anyone,  all or any of said  Original
Securities and Replacement Securities until such dispute shall have been settled
either by the mutual  written  agreement  of the parties  involved or by a final
order,  decree or judgment of a court in the United States of America,  the time
for perfection of an appeal of such order,  decree or judgment  having  expired.
The Custodian may, but shall be under no duty whatsoever to, institute or defend
any legal  proceedings  which relate to the Original  Securities and Replacement
Securities.

8. Consent to Jurisdiction  and Service.  Each of the Interested  Parties hereby
absolutely and irrevocably  consent and submit to the jurisdiction of the courts
in the  Commonwealth of  Massachusetts  and of any Federal court located in said
Commonwealth in connection  with any actions or proceedings  brought



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<PAGE>

against any of the Interested Parties (or each of them) by the Custodian arising
out of or relating to this  Agreement.  In any such  action or  proceeding,  the
Interested  Parties  each  hereby  absolutely  and  irrevocably  (i)  waives any
objection to jurisdiction or venue, (ii) waives personal service of any summons,
complaint,  declaration  or other  process,  and (iii)  agrees  that the service
thereof may be made by certified or registered first-class mail directed to such
party,  as the case may be, at their  respective  addresses in  accordance  with
paragraph 10 hereof.

9. Force Majeure.  The Custodian shall not be responsible for delays or failures
in performance  resulting from acts beyond its control.  Such acts shall include
but  not be  limited  to acts of God,  strikes,  lockouts,  riots,  acts of war,
epidemics,   governmental   regulations   superimposed  after  the  fact,  fire,
communication line failures,  computer viruses,  power failures,  earthquakes or
other disasters.

10. Notices.

     (a) Any notice  permitted or required  hereunder  shall be in writing,  and
     shall be sent by personal  delivery,  overnight  delivery  by a  recognized
     courier or delivery service, mailed by registered or certified mail, return
     receipt requested,  postage prepaid, or by confirmed facsimile  accompanied
     by mailing of the  original on the same day by first  class  mail,  postage
     prepaid,  in each case the parties at their  address set forth below (or to
     such other  address as any such party may  hereafter  designate  by written
     notice to the other parties).

     If to the Placement Agents:

        FTN Financial Capital Markets
        845 Crossover Lane, Suite 150
        Memphis, Tennessee  38117
        Attention:  James D. Wingett

        Keefe, Bruyette & Woods, Inc.
        787 7th Avenue
        4th Floor
        New York, New York  10019
        Attention:  Mitchell Kleinman, General Counsel

         If to the Company:

        Redwood Empire Bancorp
        1111 Santa Rosa Avenue
        Santa Rosa, California  95404
        Attention:  James E. Beckwith


         If to the Purchaser:

        First Tennessee Bank National Association
        845 Crossover Lane, Suite 150
        Memphis, Tennessee  38117
        Attention:  David Work


         If to the Custodian:



                                       A-4
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<PAGE>

         U.S. Bank National Association
         1 Federal Street - 3rd Floor
         Boston, Massachusetts 02110
         Attention:        Corporate Trust Services Division
                           Attention: Paul D. Allen
                           Fax:  617-603-6665

11. Miscellaneous.

     (a) Binding  Effect.  This  Agreement  shall be binding upon the respective
     parties hereto and their heirs, executors, successors and assigns.

     (b)  Modifications.  This Agreement may not be altered or modified  without
     the express  written  consent of the parties  hereto.  No course of conduct
     shall  constitute  a waiver  of any of the  terms  and  conditions  of this
     Agreement, unless such waiver is specified in writing, and then only to the
     extent so  specified.  A waiver of any of the terms and  conditions of this
     Agreement on one occasion  shall not constitute a waiver of the other terms
     of this Agreement, or of such terms and conditions on any other occasion.

     (c)  Governing  Law. This  Agreement  shall be governed by and construed in
     accordance with the internal laws of the Commonwealth of Massachusetts.

     (d)  Reproduction of Documents.  This Agreement and all documents  relating
     thereto,   including,   without  limitation,   (a)  consents,  waivers  and
     modifications  which may hereafter be executed,  and (b)  certificates  and
     other information  previously or hereafter furnished,  may be reproduced by
     any  photographic,   photostatic,   microfilm,  optical  disk,  micro-card,
     miniature photographic or other similar process. The parties agree that any
     such reproduction shall be admissible in evidence as the original itself in
     any judicial or administrative  proceeding,  whether or not the original is
     in existence  and whether or not such  reproduction  was made by a party in
     the regular  course of  business,  and that any  enlargement,  facsimile or
     further  reproduction of such reproduction  shall likewise be admissible in
     evidence.

     (e) Counterparts.  This Agreement may be executed in several  counterparts,
     each of which shall be deemed an original,  but all of which together shall
     constitute one and the same instrument.




                     signatures appear on the following page


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<PAGE>



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


                                       FTN FINANCIAL CAPITAL MARKETS


                                       By:
                                          -----------------------------------
                                       Print Name:
                                                  ---------------------------
                                       Title:
                                             --------------------------------

                                       KEEFE, BRUYETTE & WOODS, INC.


                                       By:
                                          -----------------------------------
                                       Print Name:
                                                  ---------------------------
                                       Title:
                                             --------------------------------


                                       U.S. BANK NATIONAL ASSOCIATION


                                       By:
                                          -----------------------------------
                                       Print Name:
                                                  ---------------------------
                                       Title:
                                             --------------------------------

                                       REDWOOD EMPIRE BANCORP


                                       By:
                                          -----------------------------------
                                       Print Name:
                                                  ---------------------------
                                       Title:
                                             --------------------------------

                                       FIRST TENNESSEE BANK NATIONAL ASSOCIATION


                                       By:
                                          -----------------------------------
                                       Print Name:
                                                  ---------------------------
                                       Title:
                                             --------------------------------





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<PAGE>



                       EXHIBIT B TO SUBSCRIPTION AGREEMENT

                         FORM OF OPTION EXERCISE NOTICE

                                     [DATE]

First Tennessee Bank National Association
845 Crossover Lane, Suite 150
Memphis, Tennessee  38117
Attention:  David Work

Ladies and Gentlemen:

         The undersigned hereby exercises its option to purchase, or arrange for
the purchase of [_________] of the Capital Securities of Redwood Statutory Trust
II in accordance with the terms of the Subscription Agreement dated July 22,
2003 among you, the undersigned, Redwood Empire Bancorp and Redwood Statutory
Trust II (the "Offerors"), such purchase to be effective on [DATE OF PURCHASE].
In accordance with Section 7.9 of the Placement Agreement dated July 17, 2003
between the Offerors and the undersigned (the "Placement Agreement"), periodic
reports shall be delivered to [_______________] on each March 17, June 17,
September 17 and December 17 during the term of the Capital Securities,
commencing [___________], in the form attached thereto. Capitalized terms used
in this notice and not otherwise defined shall have the meanings ascribed to
such terms in the Placement Agreement.

         By copy of this notice, the undersigned hereby instructs the Custodian
to deliver the Original Securities certificate to U.S. Bank National
Association, as Institutional Trustee (the "Trustee") under the Amended and
Restated Trust Agreement dated July 22, 2003 among the Trustee, Redwood Empire
Bancorp and the administrative trustees named therein (the "Trust Agreement")
for cancellation in accordance with the terms of the Trust Agreement and to
deliver the Replacement Securities certificate to the Trustee for authentication
in accordance with the terms of the Trust Agreement.

         By copy of this notice, the Institutional Trustee is hereby instructed
to make the Replacement Securities certificate payable to [______________] in
the liquidation amount of [_________] and to authenticate and deliver the
Replacement Securities certificate to [_____________] on or before the [DATE OF
PURCHASE].

                                  FTN FINANCIAL CAPITAL MARKETS


                                  By:
                                     -----------------------------------
                                  Name:
                                       ---------------------------------
                                  Title:
                                        --------------------------------

                                  KEEFE, BRUYETTE & WOODS, INC.


                                  By:
                                     -----------------------------------
                                  Print Name:
                                             ---------------------------
                                  Title:
                                        --------------------------------


cc:      Redwood Empire Bancorp
         U.S. Bank National Association




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