**Exhibit 2.1**

**BRANCH PURCHASE AND ASSUMPTION AGREEMENT**

             THIS BRANCHPURCHASE AND ASSUMPTION AGREEMENT ("Agreement") is made as of July__, 2001, by and between WESTAMERICA BANK, a California state bank (the"Seller"), and HERITAGE OAKS BANK, a California state bank (the "Buyer").

             WHEREAS,Seller maintains branch offices located at 1255 Grand Avenue, Arroyo Grande, California (the “Arroyo GrandeBranch”), 310 Morro Bay Boulevard, Morro Bay, California (the “Morro BayBranch”), 1204 Spring Street, Paso Robles, California (the “Paso RoblesBranch”), and 545 Higuera Street, San Luis Obispo, California (the “San LuisObispo Branch”) (sometimes referred to herein collectively as the"Branches");

             WHEREAS, theBuyer wishes to purchase certain of the assets and assume certain of theliabilities of the Branches and the Seller is willing to sell and transfer thesame upon the terms and subject to the conditions hereinafter set forth; and

             WHEREAS, theSeller and Buyer are concurrently executing a real estate purchase agreement inconnection with certain of the real estate and buildings in which the Branchesare located.

             NOW,THEREFORE, in consideration of the premises and the respective representations,warranties, covenants, agreements and conditions contained herein, the Sellerand the Buyer hereby agree as follows:

**ARTICLE 1.   Definitions**

             1.1        Definitions.  For purposes of this Agreement:

             "Account"means, as of any date, a deposit liability of the Seller which is maintained atthe Branches.

             "AccruedExpenses" means the accrued and unpaid expenses appearing as a liabilityon the Financial Statements pursuant to Section 3.2(c).

             "AccruedInterest" on any Deposits at any date means interest which is accrued onsuch Deposits to and including such date and not yet posted to such depositaccounts.

             "Affiliate"of a person means any person directly or indirectly controlling or controlledby or under direct or indirect common control with such person.

             "Agreement"means this Branch Purchase and Assumption Agreement, including all schedules,exhibits and addenda, as modified, amended or extended from time to time.

             "Allocation"shall have the meaning set forth in Section 10.3.

             "Assets"means the Furniture, Fixtures and Equipment, Cash on Hand, Prepaid Expenses,Overdrafts and all books, records, files and documentation relating to theforegoing.  “Assets” shall not includeany loans (other than Overdrafts).

             "AssumedContracts" shall have the meaning set forth in Section 2.2(d).

             "AssumedDeposits" means all Deposits existing on the Closing Date in the Branches,together with all Accrued Interest thereon as of the Closing Date; provided,however, that Assumed Deposits shall not include any of the following, whichshall be retained by Seller:  (i)Deposits which secure loans, (ii) Deposits not assumed pursuant to Sections3.2(f) or 3.2(g), (iii) other Deposits, if any, for which Buyer would requirefiduciary powers.

             “Average”means, when used in reference to a type of deposit account at the Branches forpurposes of determining the Purchase Premium, the daily average amount of suchtype of deposit at the Branches for the thirty (30) day period ending three (3)Business Days prior to the Closing Date.

             "BranchPremises Leases" means the leases between Seller and the owners of theMorro Bay Branch and the San Luis Obispo Branch premises a copies of which areattached hereto as Exhibit A-1 and A-2 respectively..

             "BranchPremises Lease Assignments" means real estate agreements to be executedbetween the Seller and the Buyer by which the Buyer shall assume and beresponsible for all future obligations of the lessee under the Branch PremisesLeases.

             “Book Value”means the depreciated value of an Asset or the Real Property as set forth onthe Financial Statements of the Branches as of the Closing Date and reflectingall depreciation for the month in which the Closing Date occurs.

             "BusinessDay" means a day on which the Branches are open for business and which isnot a Saturday or Sunday.

             "Cash onHand" means, as of any date, all petty cash, vault cash, teller cash, andprepaid postage maintained at the Branches.

             "Closing"and "Closing Date" refer to the closing of the sale, purchase,transfer and assumption provided for herein to be held at the time and dateprovided for in Section 2.2(a) hereof.

             "ClosingFinancial Statement" means the estimated balance sheet of the Branchesprepared by the Seller as of the close of business at the Branches on theClosing Date and on which are recorded as of such date, in accordance with theSeller’s normal practices and procedures, the Assets and the Liabilities(except that such normal practices and procedures shall be modified asnecessary to implement prorations required by, or other provisions of, thisAgreement).

             “ConfidentialInformation” means all information exchanged heretofore or hereafter betweenSeller and its Affiliates and agents, on the one hand, and Buyer and itsAffiliates and agents, on the other hand, which is information related to thebusiness, financial position or operations of the Party responsible forfurnishing the information or an Affiliate of such Party (such information toinclude, by way of example only and not of limitation, client lists, companymanuals, internal memoranda, strategic plans, budgets, forecasts/ projections,computer models, marketing plans, files relating to loans originated by suchParty, loans and loan participation purchased by such Party from others,investments, deposits, leases, contracts, employment records, minutes of boardof directors meetings (and committees thereof) and stockholder meetings, legalproceedings, reports of examination by any governmental entity, and such otherrecords or documents such Party may supply to the other Party pursuant to theterms of this Agreement or as contemplated hereby).  Notwithstanding the foregoing, “Confidential Information” shallnot include any information that (i) at the time of disclosure or thereafter isgenerally available to and known by the public (other than as a result of adisclosure directly or indirectly by the recipients or any of their officers,directors, employees or other representatives or agents), (ii) was available tothe recipients on a nonconfidential basis from a source other than Partyresponsible for furnishing the information, provided that such source isnot and was not bound by a confidentiality agreement with respect to theinformation, or (iii) has been independently acquired or developed by therecipients without violating any obligations under this Agreement.

             "Deposits"means, as of any date, all deposit liabilities of the Seller that are Accountsor certificates of deposit maintained at the Branches, including, withoutlimitation, Time Deposits, and including all uncollected items included indepositors’ balances, as of such date.

             "DirectDeposit Cut-off Date" shall have the meaning set forth in Section 4.1(g).

             "Employee"means any employee employed by Seller on the Closing Date at the Branchesincluding without limitation, those employees on medical leave, family leave,military leave or personal leave under Seller’s policies.

             “Encumbrances”means any option, pledge, security interest, lien, charge, encumbrance,mortgage, assessment, claim or restriction (whether on voting, disposition orotherwise), whether imposed by agreement, understanding, law or otherwise.

             "FederalFunds Rate" on any day means the per annum rate of interest (roundedupward to the nearest 1/100 of 1%) which is the weighted average of the rateson overnight federal funds transactions arranged on such day or, if such day isnot a banking day, the previous banking day, by federal funds brokers computedand released by the Federal Reserve Bank of San Francisco (or any successor) insubstantially the same manner as such Federal Reserve Bank currently computesand releases the weighted average it refers to as the "Federal FundsEffective Rate" at the date of this Agreement.

             "FinalFinancial Statement" means the balance sheet of the Branches prepared bythe Seller as of the close of business at the Branches on the Closing Date, anddelivered by the Seller to the Buyer pursuant to Section 3.2(a)(ii).  The Final Financial Statement is to beprepared in accordance with the Seller’s normal practices and procedures(except that such normal practices and procedures shall be modified asnecessary to implement prorations required by, or other provisions of, thisAgreement) and in a manner consistent with the Closing Financial Statement.

             "FinancialStatements" shall mean collectively the Closing Financial Statement, the Pre-FinalFinancial Statement and the Final Financial Statement.

             "Furniture,Fixtures and Equipment" means all furniture, fixtures and equipment thatare listed on Schedule 1.1(a) under the caption "Sold to Buyer."  Buyer acknowledges that there shall be excludedfrom this definition any and all other items, including those listed onSchedule 1.1(a) under the caption "Retained by Seller (Items Excluded fromSale)."

             "IndividualRetirement Account" or "IRA" means an account created by trustfor the exclusive benefit of an individual or his or her beneficiaries inaccordance with the provisions of Section 408 of the IRC.

             "InitialBase Amount" shall have the meaning set forth in Section 3.1.

             "IRADeposits" shall have the meaning set forth in Section 3.2(e).

             "IRC"means the Internal Revenue Code of 1986, as amended.

             "Liabilities"means (i) the Assumed Deposits, (ii) the Assumed Contracts, if any, (iii) theBranch Premise Leases, (iv) the Seller’s obligations to provide services fromand after the Closing Date in connection with the Assets and the AssumedDeposits, and (v) such other liabilities of the Seller with respect to theoperations of the Branches as may be described on Schedule 1.1(b) (the"Other Liabilities"); excluding, however, (A) any Assumed Contractsas to which any consents required to transfer the same to the Buyer at Closingcannot be obtained; (B) no other duty, obligation or liability whatsoever(including, without limitation, any and all penalties, fines, compensatory orpunitive damages of any kind whatsoever) of the Seller, its Affiliates or anyother person or with respect to the Assets or Liabilities.

             "MagneticTapes" shall mean the computer data storage tapes (which may be inreel-to-reel or cartridge form) prepared by Seller which contain theinformation to be used for an automated conversion of the Assumed Deposits.

             "Overdrafts"means only overdrafts in Accounts (other than overdrafts extended pursuant to aformal line of credit or similar arrangement) maintained at the Branches.

             “Party” meansthe Buyer or the Seller.

             "Pre-FinalFinancial Statement" means the balance sheet of the Branches prepared bythe Seller as of the close of business at the Branches on the Closing Date, anddelivered by the Seller to the Buyer pursuant to Section 3.2(a)(i).  The Pre-Final Financial Statement is to beprepared in accordance with the Seller’s normal practices and procedures(except that such normal practices and procedures shall be modified asnecessary to implement prorations required by, or other provisions of, thisAgreement) and in a manner consistent with the Closing Financial Statement, andshall, to the extent practicable, reflect actual Deposits and Cash on Hand asof the Closing Date, and any third-party invoices (such as from communicationvendors) available by the time the Seller prepares the Pre-Final FinancialStatement.

             "PrepaidExpenses" means the prepaid expenses appearing as an asset on theFinancial Statements pursuant to Section 3.2(c).

             "PurchasePremium" means the amount calculated in accordance with the PremiumSchedule to this Agreement. Classification of Assumed Deposits into the categories set forth on thePremium Schedule shall be based on Seller’s normal practices and procedures asreflected historically in its internal reports, as shown on internal reports ofSeller as of May 31, 2001, which have been provided to Buyer.

             “RealProperty” means the premises on which the Arroyo Grande and Paso RoblesBranches are located as well as the buildings and structures in which the ArroyoGrande, Morro Bay, San Luis Obispo and Paso Robles Branches are situated, allas set forth on Exhibit B hereto.

             “Real PropertyPurchase Agreement” means the real property purchase agreement in the form ofExhibit C hereto pursuant to which the Seller will sell and Bank will purchasethe Real Property at its Book Value for cash on the Closing Date.

             "ReturnedItems" shall have the meaning set forth in Section 3.2(f).

             "Seller’sKnowledge" or other similar phrases shall mean the actual knowledge, withouthaving conducted any independent inquiry or investigation, of the manager(s) ofthe Seller responsible for the Branches (but only as to information as to theBranches).

             "SettlementDate" means the sixtieth (60th) calendar day following the Closing Date.

             "TimeDeposit" means a certificate of deposit which is not transferable ornegotiable, and earns interest at a fixed or variable rate for a specific term.

             "ValidationRun" shall have the meaning set forth in Section 2.2(b)(vi).

**ARTICLE 2.  Purchase and Sale**

             2.1        Purchaseand Sale.  Upon the terms and subject tothe conditions of this Agreement, the Seller agrees to sell and transfer andthe Buyer agrees to purchase and assume the Assets and the Liabilities at theClosing as provided in Section 2.2.

             2.2        Closing.

             (a)         Closing Date and Place.  The closing of the transactions provided forherein will be held at the offices of the Buyer, 545 12th Street, Paso Robles,California.  The closing shall be heldon a date that is mutually agreeable to the Buyer and the Seller as soon aspracticable (but no later than 15 Business Days) following the receipt of allgovernment and other approvals and consents necessary for the consummation ofthe transactions contemplated hereby (including the expiration of any statutorywaiting periods) and the satisfaction (or waiver) of all other conditions toclosing provided for herein.

             (b)        Conveyances; Payment.

             The followingshall be delivered by the parties at the Closing, subject to Sections 2.2(d),3.2(b), 4.3 and the final paragraph of Section 7.2:

             (i)          The Seller and the Buyer shallmutually execute and deliver the Branch Premises Lease Assignments;

             (ii)         The Seller shall deliver to the Buyerone or more bills of sale in the form attached hereto as Schedule 2.2(b)(ii)for the Furniture, Fixtures and Equipment;

             (iii)        The Seller shall deliver to the Buyerone or more assignments in the form attached hereto as Schedule 2.2(b)(iii) forthe Assumed Contracts, if any;

             (iv)       The Seller shall make the payment to theBuyer required by Section 3.1 in immediately available funds (such payment tobe made no later than 2:00 p.m. (Pacific Time));

             (v)        The Seller shall deliver to Alltel inLos Angeles, California on behalf of the Buyer by approximately 12:00 p.m. onthe day following the Closing Date or as soon thereafter as commerciallypracticable; (i) hard copy (printed) lists of Assumed Deposits maintained atthe Branches, which lists shall identify each Assumed Deposit by type ofAccount, with appropriate information regarding the depositor and the terms ofthe Account and (ii) Magnetic Tapes;

             (vi)       The Seller shall prepare for the Branchesa readable set of the Magnetic Tapes and printed reports referred to in Section2.2(b)(v) to be used for a validation (practice) run ("Validation Run")on a mutually agreed-upon date thirty (30) to sixty (60) calendar days prior tothe Closing Date, at no cost to the Buyer, provided that, the Parties may agreeto conduct more than one Validation Run. If the Buyer thereafter requests any additional Magnetic Tapes (whetheror not Buyer also concurrently requests printed reports) for Validation Runpurposes, the Seller will provide the Magnetic Tapes (and printed reports ifrequested by Buyer) at a cost to Buyer of no more than $1,000 for each set of MagneticTapes (whether or not accompanied by printed reports); and

             (vii)      The Seller shall deliver to the Buyercopies of written consents to the assignment of any Assumed Contracts requiringsuch consent.

             (c)         Closing Costs; Proration.  The Seller and the Buyer shall each payone-half of any documentary, stamp, deed, sales, use or other transfer taxes,recording fees and escrow fees relating to the sale of the Assets andassumption of the Liabilities.  On theClosing Date, (i) all real and personal property taxes and current installmentsof special assessments levied or assessed with respect to the Furniture,Fixtures and Equipment shall be prorated between the Seller and the Buyer on adaily basis as of the Closing Date based upon the fiscal year of the appropriatetaxing authority, (ii) utilities and any other normal maintenance and operatingexpenses relating to the Furniture, Fixtures and Equipment shall be proratedbetween the Seller and the Buyer as of the Closing Date on a daily basis, and(iii) rent payments under the Branch Premises Leases shall be prorated betweenthe Seller and the Buyer for the month during which the Closing occurs on adaily basis.

             (d)        Contracts.  At the Closing, the Seller shall assign to the Buyer all of theSeller’s right, title and interest in those equipment leases and service and maintenance contracts, if any, relatingto the operations of the Branches which are set forth in Schedule 2.2(d) andwhich the Buyer indicates in writing to the Seller not later than thirty (30)Business Days prior to Closing the Buyer wishes to assume (collectively, the"Assumed Contracts").  TheSeller shall not be required to provide Buyer with any information regarding,or to set forth in Schedule 2.2(d), equipment leases or service and maintenancecontracts which it believes are not legally assignable and the Seller shallhave no liability to the Buyer as the result of its inability to accomplishassignments thereof.  After the date ofthis Agreement, the Seller shall not enter into, except in the ordinary courseof  business or with the prior writtenconsent of the Buyer, any service, maintenance or other contracts, or anyequipment lease, relating to the operations of the Branches for which the Buyershall have any responsibility after the Closing.

             2.3        TransitionalMatters.

             (a)         Conduct of Business Prior to theClosing.  From the date hereof until theClosing, except as expressly permitted by this Agreement or otherwise consentedto or approved by the Buyer in writing (such consent or approval not to beunreasonably withheld), provided that nothing in this agreement shall precludeSeller from operating the Branches in the ordinary course of business:

                           (i)          The Seller shall not permit theBranches to incur any material liabilities or material obligations (whetherdirectly or by way of guaranty, endorsement, surety contract or otherwise)including without limitation any obligation for borrowed money or evidenced byany note, bond, debenture or similar instrument, except for deposit liabilitiesincurred in the ordinary course of business pursuant to the Seller’s customaryrate schedules, and except for other liabilities and obligations incurred inthe ordinary course of business;

                           (ii)         The Seller shall not sell, transfer,mortgage, encumber or otherwise dispose of any of the Assets except for thedisposition of Assets in the ordinary course of business;

                           (iii)        Except as provided in Article 6, theSeller will not cause the transfer from the Branches to the Seller’s otheroperations of any deposits of the type included in the Liabilities; provided,however, that the Seller may transfer deposits to the Seller’s other officesupon request of the depositors and may transfer to its other offices otherdeposits which are not to be transferred to Buyer pursuant to this Agreement;

                           (vi)      The Seller will maintain the RealProperty, the Furniture, Fixtures and Equipment substantially in accordancewith its normal practices, and keep such property in its present condition,ordinary wear and tear excepted;

                           (vii)      The Seller shall operate the Branches andthe businesses thereof in accordance with its normal practices,  will use reasonable efforts to preserve forthe benefit of the Buyer after the Closing its business, goodwill andrelationships with customers, suppliers and Employees and will not increase ordecrease interest rates paid on any deposit accounts in the Branches other thanin the ordinary course of business; and

                           (viii)     TheSeller shall provide the Buyer reasonable access during normal business hoursto and the opportunity to review and inspect the Furniture, Fixtures andEquipment of the Branches, and the books, records, files, documentation andaccounts of the Branches; shall furnish to the Buyer such reports andcompilations pertaining thereto already in Seller’s possession as the Buyershall reasonably request from time to time; and shall furnish to the Buyer allsuch other information already in Seller’s possession pertaining to the Assetsand the Liabilities and the business of the Branches as the Buyer mayreasonably request.  In addition, theSeller shall provide the Buyer reasonable access to the Branches during thethirty (30) calendar day period immediately preceding the Closing Date for thepurpose of installing electronic equipment wiring, telephone lines and withSeller’s prior consent, other equipment, provided that (A) Seller shall not berequired to provide such access to the Branches until after all consents,approvals and authorizations referred to in Sections 7.1(c) and 7.2(c) hereofhave been obtained with respect to the Branches (and all material conditions toclosing have been satisfied as of such date) and (B) Buyer shall give Seller atleast twenty-four (24) hours advance notice that it wishes to have such access.  The Buyer agrees to conduct such inspectionsand cause the installation of such electronic equipment wiring, telephone linesand other equipment to be effected in a manner intended to minimize disruptionto the operations of the Branches.  Suchactivities that Buyer and Seller agree are likely to have a disruptive effecton Branch operations shall be conducted during non-business hours, and suchactivities that Buyer and Seller agree are not likely to have a disruptiveeffect on Branch operations may be conducted during regular business hours.

             (b)        Buyer’s Access to Premises.  The Buyer will indemnify, defend, and holdSeller harmless for, from and against any and all claims, damages, costs,liabilities and losses (including mechanics’ liens) arising out of any entry byBuyer or its agents, designees or representatives on the Branches property forpurposes of the review, inspection and installation provided for in Section2.3(a)(viii) or for any other purpose. Without limiting the scope of the foregoing, Buyer also will restore theFurniture, Fixtures and Equipment, books, records, files, and documentation ofthe Branches at its sole cost and expense if the transactions contemplated bythis Agreement do not close.  Untilrestoration is complete, Buyer will take all steps necessary to ensure that anyconditions at the Branches created by any testing, review, inspection,installation or other actions performed by or for Buyer will not unreasonablyinterfere with the normal operation of the Branches or create any dangerous, unhealthy,unsightly or noisy conditions at the Branches. The provisions of this Section 2.3(b) shall survive the Closing or anyearlier termination of this Agreement.

             (c)         Data Processing Conversion.  The conversion of the data processing withrespect to the Branches and the Assets and the Liabilities to be transferredhereunder will commence on the Closing Date and continue during the night onthe Closing Date and the following morning. In connection with the conversion of the data processing, the Seller andthe Buyer shall each cooperate with the other and, except as otherwise providedin this Agreement, shall each pay their own costs and expenses associated withthe conversion of the data processing.

             2.4        EmployeeConsiderations.  Buyer shall offer comparablegrade employment at one of Buyer’s offices and at a salary comparable to theircurrent wage, to all Employees of the Branches who are in good standing withSeller.  Following the Closing Date, allEmployees to whom employment has been offered will become at will employees ofBuyer and shall be eligible for all employee benefits of Buyer with vestingcredit for service at Seller or its predecessors.

             2.5        RealEstate Purchase Agreement.   Concurrentwith the execution of this Agreement, the Seller and Buyer have executed theReal Estate Purchase Agreement.

             2.6        Fromthe date hereof until the Closing, except as expressly permitted by thisAgreement or otherwise consented to or approved by the Seller in writing (suchconsent or approval not to be unreasonably withheld), the Buyer agrees not toincrease or decrease interest rates paid on any deposit accounts in itsbranches other than in the ordinary course of business.

**ARTICLE 3.  Price and Adjustments**

             3.1        Price.  The Seller agrees that in the event theInitial Base Amount (as hereinafter defined) is less than the sum of (i) theamount of the Assumed Deposits and (ii) the amount of the Accrued Expenses, theSeller shall transfer to the Buyer cash in the amount equal to the deficit.   The "Initial Base Amount" shallbe equal to the sum of (i) the amount of Cash on Hand, (ii) the amount of theBook Value for the Furniture, Fixtures and Equipment (which amount is allocatedas listed on Schedule 1.1(b)), (iii) the amount of Prepaid Expenses at the Branches,(iv) the amount of the Overdrafts, (v) the amount of any fees, charges oraccrued interest receivable on such Overdrafts, (vi) the amount of the PurchasePremium, minus the sum of the lease payments to be made under the BranchPremise Lease for the San Luis Obispo Branch for the period from the ClosingDate to and including May 31, 2002, discounted to  present value at a discount rate of 5%;  and (vii) the Seller’s pro rata portion of IRA Deposit and KeoghAccount trustee fees accrued on such accounts held in the Branches through theClosing Date.

             3.2        Adjustments.  Subject to the provisions of Article 9, theassignments, transfers, acceptances and assumptions of the Assets and theLiabilities and the payment of the amounts due in respect thereof in accordancewith Sections 2.2 and 3.1 shall be final and without recourse and not subjectto any claim for reimbursement, repayment, rescission or avoidance; provided,however, that:

             (a)         The following adjustments shall bemade:

                           (i)          As soon as practicable after theClosing Date, but in no event later than ten (10) calendar days thereafter, theSeller shall deliver the Pre-Final Financial Statement to the Buyer.  After delivery of the Pre-Final FinancialStatement, the Seller shall pay the Buyer or the Buyer shall pay the Seller, asappropriate, by wire transfer no later than the next Business Day afterdelivery of the Pre-Final Financial Statement, the difference between theamount paid at the Closing and the amount calculated on the Pre-Final FinancialStatement, plus interest accrued from the Closing Date at the Federal FundsRate in effect on the Closing Date.

                           (ii)         As soon as practicable after theClosing Date, but in no event later than sixty (60) calendar days thereafter,the Seller shall deliver the Final Financial Statement to the Buyer.  Subject to the Seller’s and Buyer’s rightsof indemnification pursuant to Article 9, the Final Financial Statement shallbecome final and binding on the Buyer and the Seller ten (10) calendar daysafter its delivery to the Buyer, unless the Buyer gives written notice to theSeller of its disagreement with respect to any item included in such FinalFinancial Statement.  The Seller and theBuyer shall use their respective reasonable efforts to resolve the disagreementduring the ten (10) calendar day period following receipt by the Seller of thenotice. If the disagreement is not resolved during such ten (10) calendar dayperiod, the parties shall submit the dispute for mediation and resolution to aneutral certified public accounting firm that is knowledgeable about bankaccounting issues.  Such resolutionshall be consistent with the methodology and accounting procedures of Seller asapproved by Buyer under Section 7.1(b) and such Final Financial Statement shallbe modified by any such resolution, whereupon the Final Financial Statementshall become final and binding.  Whenthe Final Financial Statement becomes final and binding, and after givingeffect to any payment made based on the Pre-Final Financial Statement, theSeller shall pay the Buyer or the Buyer shall pay the Seller, as appropriate,the difference between the amount paid at the Closing and the amount calculatedon the Final Financial Statement, plus interest accrued from the Closing Dateat the average Federal Funds Rate in effect over the period from the ClosingDate to the date of settlement.

             (b)        If any non-material Asset (materialityto be determined by Buyer in good faith) shall not have been assigned to theBuyer at the Closing, then the Seller shall use its reasonable efforts toassign such Asset to the Buyer as soon as possible after the Closing Date butin any event no later than on the Settlement Date.  In the event the Seller for any reason is unable to assign anysuch Asset to the Buyer prior to or on the Settlement Date, then the Sellershall no longer have any obligation to assign such Asset to the Buyer and theSeller shall refund to the Buyer the value of such Asset as reflected on theClosing Financial Statement plus interest accrued from the Closing Date at theaverage Federal Funds Rate in effect over the period from the Closing Date tothe date of such refund;

             (c)         All operating expenses and fees accruedor prepaid prior to the Closing Date, including, without limitation, wages,salaries, rents, utility payments, personal property taxes, non-delinquent realproperty taxes and assessments relating to the Assets and the Liabilitiestransferred at the Closing, shall be prorated between the parties.  To the extent that the Seller has paidexpenses that are expenses allocable to the Buyer pursuant to this Section3.2(c), such expenses shall appear as an asset on the FinancialStatements.  To the extent that expenseshave been accrued and not paid by the Seller prior to the Closing Date, theyshall appear as a liability on the Financial Statements;

             (d)        As soon as practicable after the ClosingDate, the Seller will provide to the Buyer a report of customer data for theBranches showing the names, addresses, tax identification numbers (whereavailable from the Seller’s records) and deposit balances of each and all ofthe customers of the Branches as of such date; the customer data shall includethe signature cards for all Assumed Deposits and a list of Accounts andcertificates of deposit subject as of the Closing Date to annual TaxpayerIdentification Number solicitation by Seller in the normal course of itsbusiness;

             (e)         With respect to Deposits which areIndividual Retirement Accounts ("IRA Deposits") created by a trustfor the exclusive benefit of an individual or his or her beneficiaries inaccordance with the provisions of Section 408 of the IRC, the Seller will usereasonable efforts and will cooperate with the Buyer, both before and after theClosing, in taking whatever actions are reasonably necessary to accomplisheither the appointment of the Buyer as successor custodian or the delegation tothe Buyer (or an affiliate of the Buyer) of the Seller’s authority andresponsibility as custodian of all such IRA Deposits except self-directed IRADeposits (and, for those customers with self-directed IRA Deposits, any otherIRA Deposits), including but not limited to, sending to the depositors thereofappropriate notices, cooperating with the Buyer (or such affiliate) insoliciting consents from such depositors, and filing any appropriateapplications with applicable regulatory authorities.  If any such delegation is made to the Buyer (or such affiliate),the Buyer (or such affiliate) will perform all of the duties so delegated andcomply with the terms of the Seller’s agreement with the depositor of the IRADeposits affected thereby;

             (f)         Any items that were credited fordeposit to or cashed against an Assumed Deposit prior to the Closing and arereturned unpaid on or within thirty (30) calendar days after the Closing Date("Returned Items") will be handled as set forth herein.  If the Seller’s bank account is charged forthe Returned Item, the Seller shall forward such Returned Item to the Buyer.  If upon the Buyer’s receipt of such ReturnedItem there are sufficient funds in the Assumed Deposit to which such ReturnedItem was credited or any other Assumed Deposit transferred at the Closingstanding in the name of the party liable for such Returned Item, the Buyer willdebit any or all of such Assumed Deposits an amount equal in the aggregate tothe Returned Item, and shall repay that amount to the Seller.  If there are not sufficient funds in theAssumed Deposit because of the Buyer’s failure to honor holds placed on suchAssumed Deposit, the Buyer shall repay the amount of the Returned Item to theSeller.  If there are not sufficientfunds in the Assumed Deposit for any other reason, the Buyer shall repay thebalance of the Assumed Deposit to the Seller and create an overdraft for theunrecovered portion of the Returned Item. Any items that were credited for deposit to or cashed against an AssumedDeposit at the Branches prior to the Closing Date and are returned unpaid morethan thirty (30) calendar days after the Closing Date will be theresponsibility of the Buyer, except that for a period of six (6) months afterthe Closing Date checks drawn on the United States Treasury, checks issued bystate governments and municipalities and checks returned for endorsementirregularities will be the responsibility of the Seller; and

             (g)        The Seller will pay the Buyer for suchportion of any overdraft on an Assumed Deposit (plus accrued interest from theClosing Date at the average Federal Funds Rate in effect over the period fromthe Closing Date to the date of such payment) created by Returned Itemsreceived by the Seller and passed on to the Buyer during the thirty (30)calendar days that follow the Closing Date, which is not recovered by the Buyerwithin thirty (30) calendar days after the Closing Date.

**ARTICLE 4.  Additional Covenants**

             4.1        Seller'sCovenants.  The Seller agrees:

             (a)         To use reasonable efforts to sign anddeliver to the Buyer such additional agreements and other documents, and to dosuch other acts and things, as may be required to complete the transactionscontemplated by this Agreement;

             (b)        To reasonably cooperate with the Buyerin obtaining all governmental and regulatory consents, approvals, licenses,waivers and the like required to be fulfilled or obtained for the completion ofthe transactions contemplated by this Agreement;

             (c)         To deliver to the Buyer those books,records, accounts and other documents relating solely to the Assets and theLiabilities as soon as practicable after the Closing and to store the otherbooks, records and accounts of the Branches relating to the Seller’s formeroperation of the Branches in accordance with Seller’s normal records retentionpolicy;

             (d)        Until Closing or the earlier terminationof this Agreement, to cause the business of the Branches to be conducted inaccordance with Section 2.3 above;

             (e)         To permit Buyer to remove and disposeof all Seller’s plastic signage from the Branches at the expense of the Buyeron or after the Closing Date, it being understood that the Buyer shall beresponsible for installation of its signage at its expense and further thatBuyer is purchasing the housing for the signage as part of the Assets;

             (f)         As soon as practicable after thereceipt of all regulatory approvals required by Sections 7.1(c) and 7.2(c) withrespect to the Branches, and no later than thirty (30) calendar days prior tothe Closing Date (unless earlier required by law, regulation or regulatorypolicy), each of the Seller and the Buyer shall provide, or join in providingwhere appropriate, all notices, separately as to the Branches, to holders ofDeposits and other persons that the Seller or the Buyer, as the case may be, isrequired to give by any regulatory authority having jurisdiction or underapplicable law or the terms of any other agreement between the Seller and anycustomer in connection with the transactions contemplated hereby.  A Party proposing to send or publish anynotice or communication pursuant to any provision of this Section 4.1(f) orSection 4.2(f) shall furnish to the other Party a copy of the proposed form ofsuch notice or communication as soon as practicable in advance of the proposeddate of the first mailing, posting, or other dissemination thereof tocustomers, and shall not unreasonably refuse to amend such notice toincorporate any changes that the other such party proposes as necessary tocomply with applicable statutes, rules, regulations or requirements of anyregulatory authority having jurisdiction or such further change as each partyshall reasonably suggest.  All costs andexpenses of any notice or communication sent or published by the Buyer or theSeller shall be the responsibility of the Party sending such notice orcommunication.  All out-of-pocket costsand expenses of any joint notice or communication which Buyer or Seller pays toa third-party vendor shall be shared equally by the Seller and the Buyer andshall be agreed to in advance.  EachParty shall bear the costs and expenses of its own employees or agents engagedin any joint notice or communication. It is understood that Buyer shall not send out information to customersof Seller without prior written approval of Seller, which approval shall not beunreasonably withheld

             (g)        The Seller will use reasonable effortsto transfer to the Buyer on the Closing Date all of those automated clearinghouse and fed wire direct deposit arrangements which are tied by agreement orother standing arrangement to Assumed Deposits.  For a period of ninety (90) calendar days after the Closing Date,in the case of automated clearing house direct deposits to Assumed Deposits,and thirty (30) calendar days after the Closing Date, in the case of fed wiredirect deposits to Assumed Deposits (each, a "Direct Deposit Cut-offDate"), the Seller will, no later than the next Business Day following thedate of receipt thereof, remit and transfer to the Buyer all direct depositsintended for Accounts which are Assumed Deposits.  After the applicable Direct Deposit Cut-off Date, the Seller maydiscontinue accepting and forwarding automated clearing house and fed wireentries and funds and return such direct deposits to the originators.  The Seller shall not be liable for anyaccount overdrafts that may thereby be created or for any other matter.  The Buyer and the Seller shall agree on areasonable period of time prior to the Closing during which the Seller will nolonger be obligated to accept new direct deposit arrangements.  At the time of each Direct Deposit Cut-offDate, the Buyer will provide automated clearing house originators with accountnumbers and conversion tapes relating to Assumed Deposits;

             (h)        As soon as practicable after the receiptof all regulatory approvals required by Sections 7.1(c) and 7.2(c) with respectto the Branches (except for statutory waiting periods), and after the notice providedin Section 4.1(f) above, the Buyer will send appropriate notice to all holdersof Deposits which are to be assumed by the Buyer at the Closing the terms ofwhich provide for direct debit of such accounts by third parties, instructingsuch customers concerning transfer of customer direct debit authorizations fromthe Seller to the Buyer.  The Sellershall cooperate in soliciting the transfer of such authorizations.  Such notice shall be in a form agreed to bythe parties. For a period of ninety (90) calendar days following the ClosingDate, the Seller will, on the Business Day following the date of receiptthereof, forward to the Buyer all direct debits on Accounts which are AssumedDeposits transferred on the Closing Date and will give the Buyer a dailyaccounting of such debits to its clearing account.  Thereafter, the Seller may discontinue forwarding such entriesand return them to the originators.  TheBuyer and the Seller shall agree on a reasonable period of time prior to theClosing during which the Seller will no longer be obligated to accept newdirect debit arrangements.  At the timeof the Closing Date, the Buyer will provide automated clearing houseoriginators of such direct debits with account numbers and conversion tapes;

             (i)          In addition to the requirements andprocedures set forth in Sections 4.1(g) and 4.1(h), the Buyer shall, commencingon the first Business Day following the Closing Date, deliver to theoriginators of the direct deposits of Assumed Deposits and the originators of directdebits of Assumed Deposits specified in such sections, notices of changeinstructing such originators to change the routing transit number for suchdeposits and debits from the Seller’s routing transit number to the Buyer’srouting transit number.

             4.2        Buyer'sCovenants.  The Buyer agrees:

             (a)         To use reasonable efforts to sign anddeliver to the Seller such additional agreements and other documents, and to dosuch other acts and things, as may be required to complete the transactionscontemplated by this Agreement;

             (b)        To use its reasonable best efforts to:(1) fulfill all governmental, regulatory and other requirements (including,without limitation, obtaining the approval of all California and federal bankor other financial institution regulatory agencies and any other governmentalentity having jurisdiction over the Buyer’s acquisition of the Branches or theBuyer) required to be fulfilled by the Buyer for the completion of thetransactions contemplated by this Agreement, and (2) to take the initialdrafting responsibility therefore, (3) to seek processing of all suchregulatory applications on expedited bases, and (4) to seek to have the waitingperiod following approval of the FDIC Application shortened to 15 days.  The Seller shall have the right to reviewand comment upon all applications to, and filings with, governmental andregulatory agencies and entities made for the above purpose, prior to theirfiling; provided that, the Seller shall have no responsibility for any suchapplication or filing and provided, further, that Seller’s comments on saidapplications shall be given to Buyer by the next business day following receiptby Seller of said draft application or if comments are not given within thistimeframe, Seller shall be deemed not to have any comments on saidapplications.  Without limiting thegenerality of the foregoing, Buyer agrees to use its best efforts to file allrequired regulatory applications within thirty (30) calendar days after thedate of this Agreement;

             (c)         To pay, honor, discharge and performall liabilities and obligations in respect of the Assets and the Liabilitiesand any other liabilities of the Branches arising, accruing or subsisting afterthe Closing which the Buyer is obligated to assume pursuant to this Agreement,subject to applicable indemnification rights of the Buyer;

             (d)        Not to use, keep or claim any registeredor unregistered trademark, service mark or other identification commonlyassociated with the Seller, or any sign, display or similar material of theSeller or any banking or other forms, stationery, passbooks, checks, traveler’schecks, cashier’s checks, manager’s checks or similar banking material of theSeller or bearing the Seller’s name or other similar marks or identification(except to the extent necessary to conduct business operations, and then onlyif the Seller’s name, marks or identification are obliterated from suchmaterial, and such material is clearly identified as that of the Buyer), or anyproprietary material of the Seller including, without limitation, operatingmanuals, training manuals and public relations, explanatory or advertisingmaterials;

             (e)         As of the Closing Date, to become the"holder," as that term is defined in the California UnclaimedProperty Law (Code of Civil Procedure " 1500, et seq.), of all AssumedDeposits which the Buyer assumes under this Agreement.  The Buyer will be responsible for theescheat of any property for which it becomes the holder and which becomes abandonedduring the calendar year in which the Closing occurs;

             (f)         As soon as practicable after thereceipt of all regulatory approvals required by Sections 7.1(c) and 7.2(c) withrespect to all Branches, and no later than thirty (30) calendar days prior tothe Closing Date (unless earlier required by law, regulation or regulatorypolicy), the Buyer shall, subject to Section 4.1(f) and Section 11.1 hereof,notify the holders of Deposits to be transferred on the Closing Date that,subject to Closing, the Buyer will be assuming liability for such Deposits, andfollowing or concurrently with such notices the Buyer may communicate with anddeliver information, brochures, bulletins and other communications to holdersof Deposits concerning the transactions contemplated by this Agreement andconcerning the business and operations of the Buyer; and

             (g)        To obtain approval of this Agreement andthe transactions contemplated hereby by the requisite vote or consent of theholders of outstanding securities of the Buyer if such approval is required byapplicable law, contract, the Buyer’s Articles of Incorporation or Bylaws, orotherwise.

             4.3        Consents.  The Seller shall use its reasonable effortsto obtain any nongovernmental consents required for the transfer or assignmentof the Assets and Liabilities to Buyer pursuant to this Agreement, includingAssumed Contracts, if any; provided, however, that (a) the Seller shall not berequired to pay any additional compensation or fee to any person or entity toobtain any such consent, (b) and the Buyer agrees that it shall providereasonable assistance to the Seller to obtain such consents.

             4.4        IRADeposits and Keogh Accounts.  The Sellerwill deliver to the Buyer, on the Closing Date, copies of the Seller’sdocuments for each IRA Deposit and Keogh Account which is included in theAssumed Deposits.  The Seller willprepare and file all reports to government authorities required to be filed forthe period ending on the Closing Date and all prior periods.  The Buyer will be responsible for all suchreporting for periods commencing on the day after the Closing.

             4.5        InterestReporting and Withholding.  Unlessotherwise agreed to by the parties, the Seller will report to applicable taxingauthorities and holders of Assumed Deposits transferred on the Closing Date,with respect to the period from January 1 of the year in which the Closingoccurs through and including the Closing Date, all interest credited to,withheld from and any early withdrawal penalties imposed upon the AssumedDeposits.  The Buyer will report to theapplicable taxing authorities and holders of Assumed Deposits, with respect toall periods from the day after the Closing Date, all such interest credited to,withheld from and any early withdrawal penalties imposed upon such AssumedDeposits.  Any amounts required by anygovernmental agencies to be withheld from any of the Assumed Deposits throughthe Closing Date will be withheld by the Seller in accordance with applicablelaw or appropriate notice from any governmental agency and will be remitted bythe Seller to the appropriate agency on or prior to the applicable duedate.  Any such withholding required tobe made subsequent to the Closing Date shall be withheld by the Buyer inaccordance with applicable law or the appropriate notice from any governmentalagency and will be remitted by the Buyer to the appropriate agency on or priorto the applicable due date.  Promptlyafter the Closing Date, but in no event later than the date the Buyer isobligated to remit such amounts to the applicable governmental agency, theSeller will pay to the Buyer that portion of any sums theretofore withheld bythe Seller from any Assumed Deposits transferred on the Closing Date which areor may be required to be remitted by the Buyer pursuant to the foregoing andshall directly remit to the applicable governmental agency that portion of anysuch sums which are required to be remitted by the Seller.

             4.6        EminentDomain or Taking.  If proceedings undera power of eminent domain relating to the Branches or any part thereof are commencedprior to the Closing Date, Seller will promptly inform Buyer in writing.

             (a)         If such proceedings involve the takingof all of or a material interest in the Branches, the Buyer may elect toterminate this Agreement by notice in writing sent within ten (10) calendardays of Seller’s written notice to Buyer, in which case neither party will haveany further obligation to or rights against the other with respect to theBranches except any rights or obligations of either party which are expresslystated to survive termination of this Agreement.

             (b)        If the proceedings do not involve thetaking of all of or a material interest in the Branches, or if the Buyer doesnot elect to terminate this Agreement as to the Branches, this transaction willbe consummated as described herein, and, subject to the Branch Premises LeaseAgreement, or other  encumbrances, ifany, relating to the Branches, any award or settlement payable with respect tosuch proceeding will be paid or assigned to the Buyer on the Closing Date.

             (c)         If the Closing contemplated by thisAgreement is not  consummated for anyreason, the Buyer will have no claim to any condemnation award or settlementwith respect to the Branches.

             4.7        Damageor Destruction.  Prior to the ClosingDate, as between the Seller and the Buyer, the entire risk of loss or damage byearthquake, flood, landslide, fire or other casualty is borne and assumed bythe Seller.

**ARTICLE 5.  Representations and Warranties.**

             5.1        Seller'sRepresentations and Warranties.  TheSeller represents and warrants to the Buyer that, as of the date of thisAgreement (or, as to any information specified in a Schedule to have beencompiled as of some earlier date, as of such earlier date):

             (a)         The Seller is a California state bank,duly organized under the California Financial Code and in good standing underthe laws of the State of California;

             (b)        The Seller has the requisite power andauthority to execute, deliver and perform this Agreement and to consummate thetransactions contemplated hereby; all corporate action necessary to be taken byor on the part of the Seller to execute, deliver and perform this Agreement andto consummate the transactions contemplated hereby has been duly and validlytaken; and this Agreement has been duly executed and delivered by, andconstitutes the valid and binding agreement of the Seller, enforceable inaccordance with its terms except as limited by bankruptcy, insolvency,reorganization, fraudulent transfer, moratorium and similar laws affectingcreditors generally and by the availability of equitable remedies and bySection 8(b)(6)(D) of the Federal Deposit Insurance Act;

             (c)         The execution, delivery and performanceby the Seller of this Agreement do not, and the consummation by the Seller ofthe transactions contemplated hereby will not, violate or conflict with theArticles of Incorporation or Bylaws of the Seller, or any law or regulationcurrently applicable to the Seller, or any material agreement or instrument, orcurrently applicable award, order, judgment or decree to which the Seller is aparty or by which it is bound, or require any filing by the Seller with, orauthorization, approval, consent or other action with respect to the Seller by,any governmental or regulatory agency except such as have been made or obtainedand are in full force and effect;

             (d)        Schedule 2.2(d) sets forth a list of allmaterial written contracts, agreements and other obligations known to theSeller to which the Seller is a signatory which relate to the operation of theBranches including without limitation equipment leases and service andmaintenance contracts, consulting contracts, agency agreements and licensingagreements; provided, however, that equipment leases and service andmaintenance contracts which the Seller does not believe are assignable are notlisted;

             (e)         Except as set forth in Schedule5.1(e):  (i) there is no litigation,claim, action, suit or proceeding pending which, if adversely determined, wouldadversely affect the use of the Assets or the Liabilities; and (ii) to theSeller’s knowledge, there is no litigation, claim, action, suit or proceedingthreatened by any organization, person, individual or governmental agencywhich, if adversely determined, would, individually or in the aggregate,materially and adversely affect the use of the Assets or the Liabilities;

             (f)         The Seller has not in any mannerwhatsoever paid or agreed to pay any fee or commission to any agent, broker,finder or other person for or on account of services rendered as a broker orfinder in connection with this Agreement or the transactions covered andcontemplated hereby.  All negotiationsrelating to this Agreement have been conducted by the Seller directly andwithout the intervention of any person in such manner as to give rise to anyvalid claim against the Seller for any brokerage commission or like payment;

             (g)        This sub-section intentionally leftblank.

             (h)        Except as set forth in Schedule5.1(h),  to the knowledge of Seller,(i)Seller is in compliance with all Environmental Laws relating to the RealProperty and the premise covered by the Branch Premise Lease; (ii) there are noTanks on or about the Real Property or the premise covered by the BranchPremise Lease; (iii) there are no Hazardous Materials on, below or above the surfaceof, or migrating to or from the Real Property or the premise covered by theBranch Premise Lease; and (iv) without limiting the foregoing representationsand warranties contained in clauses (i) through (iii), as of the date of thisAgreement, there is no claim, action , suit, or proceeding or notice thereofbefore any governmental entity pending against Seller, any Affiliate of Selleror concerning the Real Property or the premise covered by the Branch PremiseLease and there is no outstanding judgment, order, writ, injunction, decree, oraward against or affecting the Real Property or the premise covered by theBranch Premise Lease.  For purposes ofthis Agreement, the term “Environmental Laws” shall mean all applicablestatutes, regulations, rules, ordinances, codes, licenses, permits, orders,approvals, plans, authorizations, concessions, franchises, and similar items ofall governmental entities and all applicable judicial, administrative, andregulatory decrees, judgments, and orders relating to the protection of humanhealth or the environment, including, without limitation: all requirements,including, but not limited to those pertaining to reporting, licensing,permitting, investigation, and remediation of emissions, discharges, releases,or threatened releases of Hazardous Materials, chemical substances, pollutants,contaminants, or hazardous or toxic substances, materials or wastes whethersolid, liquid, or gaseous in nature, into the air, surface water, groundwater,or land, or relating to the manufacture, processing, distribution, use,treatment, storage, disposal, transport, or handling of chemical substances,pollutants, contaminates, or hazardous or toxic substances, materials, orwastes, whether solid, liquid, or gaseous in nature and all requirementspertaining to the protection of the health and safety of employees or thepublic.  “Tank” shall mean treatment orstorage tanks, sumps, or water, gas or oil wells and associated pipingtransportation devices.  “HazardousMaterials” shall mean any substance the presence of which requiresinvestigation or remediation under any federal, state, or local statute,regulation, ordinance, order, action, policy or common law, or which is orbecomes defined as a hazardous waste, hazardous substance, hazardous material,used oil, pollutant or contaminant under any federal, state or local statute,regulation, rule or ordinance or amendments thereto including withoutlimitation, the Comprehensive Environmental Response; Compensation andLiability Act (42 U.S.C. Section 9601, *et seq*.); the Resource Conservation andRecovery Act (42 U.S.C. Section 6901,*et seq*.); the Clean Air Act, as amended(42 U.S.C.  Section 7401, *et seq*.);the Federal Water Pollution Control Act, as amended (33 U.S.C.  Section 1251, *et seq.*); the ToxicSubstances Control Act, as amended (15 U.S.C. Section 2601, et seq.); the Occupational Safety and Health Act, asamended (29 U.S.C.  Section 65); theEmergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.  Section 11001,*et seq*.); the Mine Safetyand Health Act of 1977, as amended (30 U.S.C. Section 801, *et seq*.); the Safe Drinking Water Act (42U.S.C.  Section 300f,*et seq*.);and all comparable state and local laws, including without limitation, theCarpenter-Presley-Tanner Hazardous Substance Account Act (State Superfund), thePorter-Cologne Water Quality Control Action, Section 25140, 25501(j) and (k); 25501.1.25281 and 25250.1 of theCalifornia *Healthand Safety Code*and/or Article I of Title 22 of the California *Code of Regulations*,Division 4, Chapter 30; laws of other jurisdictions or orders and regulations;or the presence of which causes or threatens to cause a nuisance, trespass orother common law tort upon real property or adjacent properties or poses orthreatens to pose a hazard to the health or safety of persons or withoutlimitation, which contains gasoline, diesel fuel or other petroleumhydrocarbons; polychlorinated biphenyls (PCB’s), asbestos or urea formaldehydefoam insulation;

             (i)          Subject to all exception shown in thePreliminary Title Reports for the Branches provided to the Buyer, Seller hasgood and marketable title to the Real Property, and valid leasehold interestsin the Branch Premise Lease, free and clear of all Encumbrances, except (a) forrights of lessors, co-lessees or sublessees in such matters that are reflectedin the Branch Premise Leases; (b) Encumbrances for current taxes not yet dueand payable; and (c) Encumbrances incurred in the ordinary course of business,if any, that (i) are not substantial in character, amount or extent, (ii) donot materially detract from the value, (iii) do not interfere with present use,of the property subject thereto or affected thereby, and (iv) do not otherwisematerially impair the conduct of business of Seller.  Seller, as lessee, has the right under the Branch Premise Leasesto occupy, use and possess such premises, and there has not occurred under anysuch Leases any breach, violation or default. Seller has not experienced any uninsured damage or destruction withrespect to the Real Property or the Branch Premises Leases.  To the knowledge of Seller, the RealProperty and the premises covered by the Branch Premise Leases are in goodoperating condition and repair, suitable for the purposes for which they are currentlyutilized, and comply in all material respects with all applicable governmentalrules related thereto and contain no material defects in condition oroperation. Seller enjoys peaceful and undisturbed possession under the BranchPremises Leases and such Leases are valid and enforceable in all materialrespects in accordance with the terms thereof except as may be limited bybankruptcy, insolvency, moratorium or other similar laws affecting creditors'rights and except as may be limited by the exercise of judicial discretion inapplying principles of equity.  Selleris not in default with respect to the Branch Premises Leases and no event hasoccurred which with the lapse of time or the giving of notice, or both, wouldconstitute a default under such Leases;

             (j)          The Seller has not received writtennotice from any federal or California governmental or regulatory agencyindicating that it would oppose or not grant or issue its consent or approval,if required, with respect to the transactions contemplated by this Agreement;

             (k)         The Seller satisfies each and all ofthe standards and requirements lawfully within the control of the Seller ofwhich it is aware (and, as of the Closing Date, will use its best efforts tosatisfy each and all of the standards and requirements lawfully within thecontrol of the Seller) imposed as a condition to obtaining or necessary tocomply with and in order to obtain any of the governmental or regulatoryapprovals referred to in Section 4.2(b) of this Agreement;

             (l)          At the time of the most recentregulatory evaluation of Seller’s performance under the Community ReinvestmentAct (the "CRA"), Seller’s record of performance was deemed to be"outstanding" or "satisfactory", and no proceedings are pendingor to the knowledge of Seller, threatened, that would result in a change insuch evaluation.  Seller has notreceived any adverse public comments with respect to its compliance under theCRA with respect to the Branches since the date of its most recent regulatoryevaluation of its performance under the CRA except comments that are not likelyto have a material adverse effect on regulatory approval of sale of theBranches, or on future operations of the Branches; and

             (m)        There are no controversies pending orthreatened between Seller and any of its Employees.  The Seller is not a party to any collective bargaining agreementwith respect to any of its Employees or any labor organization to which itsEmployees or any of them belong.

             5.2        Buyer'sRepresentations and Warranties.  TheBuyer represents and warrants to the Seller that, as of the date of thisAgreement:

             (a)         The Buyer is a California state bank,duly organized under the California Financial Code and in good standing underthe laws of the State of California;

             (b)        Subject to the satisfaction of anyapplicable governmental or regulatory requirements referred to in Section4.2(b) and to approval of this Agreement and the transactions contemplatedhereby by the requisite vote or consent of the holders of outstanding securitiesof the Buyer if such approval is required by applicable law, contract, theBuyer’s Articles of Incorporation or Bylaws, or otherwise, the Buyer has therequisite power and authority to execute, deliver and perform this Agreementand to consummate the transactions contemplated hereby; all acts and otherproceedings required to be taken by or on the part of the Buyer to execute,deliver and perform this Agreement and to consummate the transactionscontemplated hereby have been duly and validly taken; and this Agreement hasbeen duly executed and delivered by, and constitutes the valid and bindingagreement of, the Buyer, enforceable in accordance with its terms except aslimited by bankruptcy, insolvency, reorganization, fraudulent transfer,moratorium and similar laws affecting creditors generally and by theavailability of equitable remedies and by Section 8(b)(6)(D) of the FederalDeposit Insurance Act;

             (c)         Subject to the satisfaction of anyapplicable governmental or regulatory requirements referred to in Section4.2(b), the execution, delivery and performance by the Buyer of this Agreementdo not, and the consummation by the Buyer of the transactions contemplatedhereby will not, violate or conflict with the articles of incorporation orbylaws of the Buyer, or any law or regulation currently applicable to theBuyer, or any material agreement or instrument, or currently applicable order,judgment or decree to which the Buyer is a party or by which it is bound orrequire any prior filing by the Buyer with, or authorization, approval, consentor other action with respect to the Buyer by, any governmental or regulatoryagency except such as have been made or obtained and are in full force andeffect or will be made or obtained and in full force and effect as of theClosing;

             (d)        There are no actions, suits orproceedings pending or, to the knowledge of the Buyer, threatened against oraffecting, the Buyer, which may cause a material adverse change in the Buyer’sbusiness or financial condition;

             (e)         The Buyer has not paid or agreed to payany fee or commission to any agent, broker, finder or other person for or onaccount of services rendered as a broker or finder in connection with thisAgreement or the transactions covered and contemplated hereby.  All negotiations relating to this Agreementhave been conducted by the Buyer directly and without the intervention of anyperson in such manner as to give rise to any valid claim against the Seller forany brokerage commission or like payment;

             (f)         The Buyer has not received writtennotice from any federal or California governmental or regulatory agencyindicating that it would oppose or not grant or issue its consent or approval,if required, with respect to the transactions contemplated by this Agreement;

             (g)        The Buyer satisfies each and all of thestandards and requirements lawfully within the control of the Buyer of which itis aware (and, as of the Closing Date, will use its best efforts to satisfyeach and all of the standards and requirements lawfully within the control ofthe Buyer) imposed as a condition to obtaining or necessary to comply with andin order to obtain any of the governmental or regulatory approvals referred toin Section 4.2(b) of this Agreement; and

             (h)        At the time of the most recent regulatoryevaluation of Buyer’s performance under the CRA, Buyer’s record of performancewas deemed to be "outstanding" or "satisfactory", and noproceedings are pending or to the knowledge of Buyer, threatened, that wouldresult in a change in such evaluation. Buyer has not received any adverse public comments with respect to itscompliance under the CRA since the date of its most recent regulatoryevaluation of its performance under the CRA.

**ARTICLE 6.  Understandings**

             Buyer andSeller understand and agree as follows:

             6.1        Depositors'Rights.  The Buyer and the Sellerunderstand and agree that all transfers to the Buyer of Assumed Deposits aresubject to the individual depositors’ continuing rights to withdraw, and theSeller makes no representation or warranty to the Buyer concerning thecontinuing maintenance of such deposits at the Branches.

             6.2        Non-Solicitation.  Between the date of this Agreement and thedate of the Closing (or, in the event of termination of this agreement pursuantto article 8 hereof, for a two year period following such termination), Buyershall not solicit any deposit business from any customer of the Branchesunless, (i) such solicitation is pursuant to general advertising of Buyer inthe ordinary course of its business, or (ii) otherwise permitted in writing bySeller.  Between the date of thisAgreement and the date of the Closing, Seller shall not solicit any customer ofthe Branches to transfer their deposit to another office of the Seller or of anaffiliate of the Seller.  Following theClosing, Seller shall not solicit any deposit business from any customer of theBranches who (A) is a customer as of the date of this Agreement or (B) was acustomer within two years preceding the date of this Agreement.

             6.3        Non-Disclosure.  Except as may be required by applicable lawor regulation including, but not limited to, federal securities laws or inconnection with obtaining the necessary governmental approvals for thetransactions contemplated by this Agreement each party shall treat the terms ofthis Agreement confidentially and shall not disclose terms to any third partyand shall so advise its agents, attorneys and employees who are required towork on this transaction.

**ARTICLE 7.  Conditions to the Closing**

             7.1        Seller'sConditions.  The obligations of theSeller to consummate the Closing shall be subject to the satisfaction at orprior to Closing of all of the following conditions, any one or more of whichmay be waived, in whole or in part, by the Seller:

             (a)         The Buyer shall have complied in allmaterial respects with each of its covenants and agreements contained herein tobe performed at or prior to the Closing Date, and each of the representationsand warranties of the Buyer in Section 5.2 hereof shall be true and correct inall material respects as if made at and as of the Closing;

             (b)        The Buyer shall have delivered to theSeller a duly authorized and signed officer’s certificate, dated as of theClosing Date, certifying as to the matters specified in Section 7.1(a), andfurther that (i) the methodology and accounting procedures used by the Sellerin preparing the Closing Financial Statement have been reviewed and areacceptable to the Buyer, and (ii) the Buyer, to and including the Closing Date,has performed such review of the books, records, files, documentation andaccounts of the Branches as it has deemed appropriate;

             (c)         All consents, approvals andauthorizations required to be obtained prior to the Closing from governmentaland regulatory authorities in connection with the execution and delivery ofthis Agreement and the consummation of the transactions contemplated hereby tobe consummated at the Closing shall have been made or obtained, and shallremain in full force and effect, all waiting periods applicable to the consummationof the transactions contemplated hereby shall have expired or been terminatedand all required regulatory filings shall have been made; provided, however,that no governmental or regulatory consent, approval or authorization shallhave imposed any condition or requirement that the Seller in good faithdetermines to be materially burdensome upon the business of the Seller or uponthe consummation of the transactions contemplated hereby;

             (d)        There shall not be in effect anynonappealable final order, decree or judgment of any court or governmental bodyhaving competent jurisdiction that would be violated by consummation of thetransactions contemplated hereby, nor any material pending or threatenedaction, proceeding or investigation, the adverse determination of which wouldresult in such order, decree or judgment; provided, that in the case of suchmaterial pending or threatened action, proceeding or investigation, neitherparty shall decline to proceed with the Closing pending final resolution thereofwithout exercising its reasonable efforts promptly to determine jointly withthe other party the merit thereof and the likelihood of an adversedetermination in such proceeding;

             (e)         This Agreement and the transactionscontemplated hereby shall have been approved by the requisite vote or consentof the sole holder of outstanding securities of the Buyer if such approval isrequired by applicable law, contract, the Buyer’s Articles of Incorporation orBylaws, or otherwise; and

             (f)         The Real Property Purchase Agreementshall have been consummated concurrent with the Closing of the transactionscontemplated by this Agreement.

             7.2        Buyer'sConditions.  The obligations of theBuyer to consummate the Closing shall be subject to the satisfaction at orprior to Closing of all of the following conditions, any one or more of whichmay be waived, in whole or in part, by the Buyer:

             (a)         The Seller shall have complied in allmaterial respects with each of its covenants and agreements herein to beperformed at or prior to the Closing Date and each of the representations andwarranties of the Seller contained in this Agreement and the Schedules shall betrue and correct in all material respects as if made at and as of Closingexcept to the extent of changes that have occurred prior to Closing that areconsistent with the provisions of Section 2.3(a);

             (b)        The Seller shall have delivered to theBuyer a duly authorized and signed officer’s certificate, dated as of theClosing Date, certifying that (i) the representations and warranties of theSeller contained in this Agreement and the Schedules are true and correct as ofthe Closing Date, and (ii) the Seller has complied in all material respectswith each of its covenants and agreements herein to be performed at or prior tothe Closing Date;

             (c)         As to the Branches, there shall havebeen given, obtained or satisfied in final form any notice, approval, permit orother requirement of law or any competent governmental or regulatory authoritythat is necessary to proceed with the Closing, including without limitationsuch approvals as may be required of any California or federal bank or otherfinancial institution regulatory agency and any other entity or entities havingjurisdiction over the Branches, the Buyer or the Seller, and no such agency orentity shall, in connection therewith, have imposed any condition orrequirement that would result in a material adverse effect on the business orprospects of the Branches or the Buyer on the consummation of the transactionscontemplated hereby or would be materially burdensome;

             (d)        There shall not be in effect anynonappealable final order, decree or judgment of any court or governmental bodyhaving competent jurisdiction that would be violated by consummation of thetransactions contemplated hereby, nor any material pending or threatenedaction, proceeding or investigation, the adverse determination of which wouldresult in such order, decree or judgment; provided, that in the case of suchmaterial pending or threatened action, proceeding or investigation, neitherparty shall decline to proceed with the Closing pending final resolutionthereof without exercising its reasonable efforts promptly to determine jointlywith the other party the merit thereof and the likelihood of an adverse determinationin such proceeding; and

             e)          The Real Property Purchase Agreementshall have been consummated concurrent with the Closing of the transactionscontemplated by this Agreement.

**ARTICLE 8.  Termination**

             8.1        Eventsof Termination.  This Agreement may beterminated at any time prior to Closing:

             (a)         By the mutual written agreement of theSeller and the Buyer;

             (b)        By the Seller or by the Buyer in theevent that the Closing has not occurred on or before December 15, 2001, or suchother date as the Seller and the Buyer shall agree in writing, unless thefailure to so consummate by such time is due to a breach of this Agreement bythe party seeking to terminate;

             (c)         By the Seller or by the Buyer ifconsummation of the transactions contemplated hereby would violate anynonappealable final order, decree or judgment of any court or governmental bodyhaving competent jurisdiction; and

             (d)        By the Seller or the Buyer, in the eventof a material breach by the other of any representation, warranty or agreementcontained herein which is not cured or cannot be cured within thirty (30)calendar days after written notice of such termination has been delivered tothe breaching party; provided, however, that termination pursuant to thisSection 8.1(d) shall not relieve the breaching party of liability for suchbreach or otherwise.

             Any partydesiring to terminate this Agreement pursuant to any of the foregoing clausesshall give written notice of such termination to the other party.

             8.2        Liabilityfor Termination.  If this Agreement isterminated as permitted by Section 8.1, except as provided in Section 8.1(d),such termination shall be without liability of either party (or anyshareholder, director, officer, employee, agent, consultant or representativeof such party) to the other party to this Agreement.  If said termination is pursuant to Section 8.1(d), such breachingparty shall be fully liable for the Termination Fee of $200,000.00.  The Termination Fee is an attempt by theparties to calculate the reasonable compensation for the loss of a party,including but not limited to the party’s administrative time, in the event oftermination and as  liquidated damagesand not as a penalty or as a forfeiture.

**ARTICLE9.  Survival, Indemnification**

             9.1        Survival.  The covenants,agreements, representations and warranties of the parties hereto made,contained in or to be performed pursuant to this Agreement, the Scheduleshereto or the officers’ certificates delivered pursuant hereto or in connectionherewith shall survive Closing and remain operative and in full force andeffect until the first anniversary of the Closing Date, except for theprovisions of Sections 10.1 and 11.11, which shall survive such firstanniversary.  Notwithstanding thepreceding sentence, any covenant, agreement, representation, warranty or claimin respect of which indemnity may be sought under Sections 9.2 or 9.3 shallsurvive the time at which it would otherwise terminate pursuant to thepreceding sentence if notice of the claim, inaccuracy or breach giving rise tosuch right to indemnity shall have been given to the party against whom suchindemnity may be sought prior to such time. After Closing, the sole and exclusive remedy of the Buyer and the Sellerfor any breach of any covenant or agreement or any inaccuracy of any suchrepresentation or warranty by the Seller or the Buyer shall be the indemnitiescontained in Sections 9.2 and 9.3, respectively, which shall survive Closing.

             9.2        Seller'sIndemnity.  The Seller herebyindemnifies the Buyer against and agrees to hold it harmless from any and alldamage, loss, liability and expense (including, without limitation, reasonableexpenses of investigation and attorney’s fees and expenses in connection withany action, suit or proceeding brought against the Buyer) demanded, claimed orthreatened in writing against the Buyer or incurred or suffered by the Buyerarising out of (i) any action taken or omitted to be taken by the Seller priorto the Closing relating to the ownership or operation of the Branches prior toClosing, but excluding any damage, loss, liability or expense resulting fromactions taken by the Seller at the written direction of the Buyer; and (ii) anymaterial misrepresentation or material breach of warranty, covenant or agreementmade, contained in or to be performed by the Seller pursuant to this Agreement,the Schedules hereto or the Seller’s officer’s certificate  The Seller shall not be liable under thisSection 9.2 for any settlement effected without its consent (which consentshall not be unreasonably withheld) of any claim, litigation or proceeding inrespect of which indemnity may be sought hereunder.  The Buyer agrees to give prompt notice to the Seller of theassertion of any claim, or the commencement of any suit, action or proceedingin respect of which indemnity may be sought hereunder.  The Seller may, and at the request of theBuyer shall, participate in and control the defense of any such suit, action orproceeding at its own expense.

             9.3        Buyer'sIndemnity.  The Buyer hereby indemnifiesthe Seller against and agrees to hold it harmless from any and all damage,loss, liability and expense (including, without limitation, reasonable expensesof investigation and attorney’s fees and expenses in connection with any action,suit or proceeding brought against the Seller) demanded, claimed or threatenedin writing against the Seller or incurred or suffered by the Seller arising outof (i) ownership or operation of the Branches on and after Closing (except asto such damage, liability, loss or expense resulting from actions taken by theBuyer at the written direction of the Seller); and (ii) any materialmisrepresentation or material breach of warranty, covenant or agreement made,contained in or to be performed by the Buyer pursuant to this Agreement, theSchedules hereto or the Buyer’s officer’s certificate.  The Buyer shall not be liable under thisSection 9.3 for any settlement effected without its consent (which consentshall not be unreasonably withheld) of any claim, litigation or proceeding inrespect of which indemnity may be sought hereunder.  The Seller agrees to give prompt notice to the Buyer of theassertion of any claim, or the commencement of any suit, action or proceedingin respect of which indemnity may be sought hereunder.  The Buyer may, and at the request of theSeller shall, participate in and control the defense of any such suit, actionor proceeding at its own expense.

             9.4        Limiton Indemnities.

             (a)         Notwithstanding any other provisionhereof, an indemnifying party shall not be liable under this Article 9 for anylosses sustained by the indemnified party with respect to the Branches unlessand until the aggregate amount of all such losses sustained by the indemnifiedparty with respect to the Branches shall exceed $10,000, in which event theindemnifying party shall be liable only for such losses in excess of$10,000.  The minimum $10,000 amountshall not apply to amounts which one party may be required to pay to the otherunder Sections 3.2, 4.1(g), 4.1(h) and 10.1 of this Agreement or otherprovisions dealing with customary and foreseeable post-closing adjustments.

             (b)        Each party’s right to indemnificationunder this Article 9 shall preclude any other monetary award (whether at law orin equity) and shall preclude assertion by such party of any right to any suchmonetary award from the indemnifying party.

**ARTICLE 10.  Taxes**

             10.1      Obligationsof the Buyer and the Seller.  The Buyerand the Seller shall each assume and pay one-half of the following:  any documentary, stamp, deed, sales, use orother transfer taxes, recording fees and escrow fees relating to the sale ofthe Assets and assumption of the Liabilities. On the Closing Date, all real and personal property taxes and currentinstallments of special assessments levied or assessed with respect to theFurniture, Fixtures and Equipment shall be prorated between the Seller and theBuyer on a daily basis as of the Closing Date based upon the fiscal year of theappropriate taxing authority.

             10.2      Accessto Information.  For the applicableperiod required by law, the Seller and the Buyer shall have a right to haveaccess to and to copy all of the records of the other Party relevant to theAssets and the Liabilities and necessary for the preparation of income taxreturns, employee tax returns, employee reports, employee benefitscalculations, and for customary accounting functions and other similar bonafide purposes.  Additionally, the Buyerand the Seller each agree to make available to the other party, at reasonabletimes and upon reasonable advance notice, relevant records and personnel inconnection with an investigation or the preparation of or participation in adefense, negotiation or settlement relating to any pending, future, orthreatened litigation or government agency proceeding (including a tax audit)involving the conduct or interest of such other party.

             10.3      Allocationof Consideration.  The Buyer and theSeller shall use reasonable efforts to allocate the consideration payablehereunder at the Closing among the Assets, tangible and intangible, on thebasis of an allocation (the "Allocation") to be agreed upon by theBuyer and the Seller prior to the Closing.

**ARTICLE 11. Miscellaneous**

             11.1      PublicNotice.  All written notices to third parties,including customers of the Branches, all oral or written notices or generalcommunications to employees of the Branches, and all public announcements andpress releases concerning the transactions contemplated by this Agreement madeprior to Closing shall be jointly planned and coordinated by the Buyer and theSeller.  Neither party shall actunilaterally in this regard without the prior approval of the other party,which shall not be unreasonably withheld or delayed; provided, however, that inthe event that a party reasonably concludes that a public announcement orrelease is required by applicable law and the parties cannot reach agreementupon a mutually acceptable release, the party releasing the information,announcement or public statement shall not be deemed to be in breach of thisAgreement, provided to party releasing the information giving the other party24 hours written notice of its intent to do so.

             11.2      Assignment  Neither Party shall assign this Agreement orany of its rights, duties or obligations hereunder without the prior writtenconsent of the other Party.

             11.3      Notices.  Notices and legal process to be delivered toor served upon either Party hereto shall be deemed to have been duly deliveredor served when delivered in written form by hand or by telegraph, telex orfacsimile transmission, or the day after being sent from within the continentalUnited States by overnight delivery or courier service, or three (3) calendardays after posting by registered mail or certified mail with return receiptrequested, to the parties hereto at the following addresses:
|   | If to the  Seller:                                   |
|--------|------------------------------------------------------|
|   |                                                 |
|   | Westamerica  Bank                                    |
|   | 4550  Mangels Blvd.,                                 |
|   | Fairfield,  CA 94585-1200                            |
|   | Attn: David  L. Payne, Chairman, President & CEO |
|   |                                                 |
|   | Fax: (707)  863-6226                                 |
|   |                                                 |
|   | With a copy  to:                                     |
|   | McCutchen  Doyle Brown & Enersen, LLP            |
|   | 3 Embarcadero Center Suite 1800                      |
|   | San  Francisco, CA 94111                             |
|   | Attention:  Thomas G. Reddy, Esq.                    |
|   | Fax: (415)  393-2286                                 |
|   |                                                 |
|   | If to the  Buyer:                                    |
|   |                                                 |
|   | Heritage  Oaks Bank                                  |
|   | 545 12th  Street                                     |
|   | Paso  Robles, CA 93446                               |
|   | Attention:  Lawrence P. Ward, President & CEO    |
|   | Fax: (805)  239-5210                                 |
|   |                                                 |
|   | With a copy  to:                                     |
|   |                                                 |
|   | Reitner  & Stuart                                |
|   | 1319 Marsh  Street                                   |
|   | San Luis Obispo, CA 93401                            |
|   | Attention:  John F. Stuart, Esq.                     |
|   | Fax:  (805) 545-8599                            |

or to such other authorized agent or address as either Party mayhereafter select by written notice to the other party.

             11.4      Time.  Time shall be of the essence for allpurposes connected with this Agreement.

             11.5      Expenses.  Except as otherwise expressly providedherein, the Buyer and the Seller shall each bear its own out-of-pocket expensesincurred in connection with the transactions contemplated by this Agreement.

             11.6      Communications.  If for any reason any payment orcommunication to which one Party is entitled is received by the other Partyhereto, the receiving Party shall promptly forward such payment orcommunication to the other Party.

             11.7      EntireAgreement.  This Agreement and the RealProperty Purchase Agreement, along with the additional agreements to be adoptedpursuant hereto, constitute the entire agreement and understanding between theParties hereto and supersedes all prior agreements and understandings relatingto the subject matter of this Agreement.

             11.8      Amendment.  Neither this Agreement nor any provisionhereof may be changed, waived, discharged or terminated orally.  Any such change, waiver, discharge ortermination may be effected only by an instrument in writing signed by theParty against which enforcement of such change, waiver, discharge ortermination is sought.

             11.9      GoverningLaw, Severability.  This Agreement shallbe governed by and construed in accordance with the laws of the State ofCalifornia.  If any one or more of theprovisions of this Agreement shall for any reason be held to be invalid, illegalor unenforceable in any respect, such invalidity, illegality orunenforceability shall not affect any other provision of this Agreement, andthis Agreement shall be construed as if such invalid, illegal or unenforceableprovision were not contained herein.

             11.10    Waiver.  No delay or omission to exercise any right,power or remedy accruing to either Party upon any breach or default under thisAgreement shall impair any such right, power or remedy of such Party, nor shallit be construed to be a waiver of any such breach or default, or anacquiescence therein, or in any similar breach or default thereafter occurring;nor shall any waiver of any single breach or default be deemed a waiver of anyother breach of default theretofore or thereafter occurring.  Any waiver, permit, consent or approval orany kind or character of any breach or default under this Agreement, or anywaiver of any provision or condition of this Agreement, must be in writing andshall be effective only to the extent specifically set forth in such writing.All rights and remedies, either under this Agreement or by law or otherwiseafforded to a party, shall be cumulative and not alternative.

             11.11    Confidentiality. AllConfidential Information disclosed heretofore or hereafter by any Party to thisAgreement to any other Party to this Agreement shall be kept confidential bysuch other Party and shall not be used by such other Party otherwise than asherein contemplated, except to the extent that (a) it is necessary orappropriate to disclose to a governmental entity having jurisdiction over anyof the Parties or as may be otherwise be required by any governmental rule (anydisclosure of Confidential Information to a governmental entity shall beaccompanied by a request that such governmental entity preserve theconfidentiality of such Confidential Information): or (b) to the extent suchduty as to confidentiality is waived by the other Party.  Such obligation as to confidentiality andnon-use shall survive the termination of this Agreement.  In the event of such termination and onrequest of another Party, each Party shall use all reasonable efforts to (1)return to the other Parties all documents (and reproductions thereof) receivedfrom such other Parties that contain Confidential Information (and, in the caseof reproductions, all such reproductions made by the receiving Party); and (2)destroy the originals and all copies of any analyses, computations, studies orother documents prepared for the internal use of such Party that includedConfidential Information.

             11.12    ThirdParty Rights.  Nothing contained in thisAgreement, whether express or implied, is intended to (i) confer any rights orremedies upon any persons other than the Parties hereto and their respectivesuccessors and assigns, (ii) relieve or discharge the obligations orliabilities of any third person to either Party to this Agreement, or (iii)give any third person any right of subrogation or action over either Party tothis Agreement.

             11.13    Headings.  The headings and captions used herein and inthe Schedules are included for purposes of convenience of reference only andshall not limit or define the meaning of any provisions of this Agreement.

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

                           INWITNESS WHEREOF, the parties hereto have caused this Agreement to be executedby their duly authorized officers or representatives as of the date first abovewritten.
| SELLER: | WESTAMERICA  BANK   |   |    |
|---------|---------------------|--------|---------|
|    |                |   |    |
|    |                |   | By its  |
|    |                |        |    |
|    |                |   |    |
|    |                |   | Attest: |
|    |                |   |    |
| BUYER:  | HERITAGE  OAKS BANK |   |    |
|    |                |   |    |
|    |                |   | By its  |
|    |                |        |    |
|    |                |   |    |
|    |                |   | Attest: |