Document:

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                                                                     Exhibit 4.1

                             PEREGRINE SYSTEMS, INC.

                       DECLARATION OF REGISTRATION RIGHTS

         This Declaration of Registration Rights ("DECLARATION") is made as of
August 15, 2000, by Peregrine Systems, Inc., a Delaware corporation ("PARENT"),
for the benefit of shareholders of Loran Network Holding Corporation Inc., a
Canada Business Corporations Act corporation ("COMPANY"), acquiring shares of
Parent Common Stock pursuant to and as a result of that Acquisition Agreement
for Amalgamation, dated as of August 15, 2000 (the "AMALGAMATION AGREEMENT"), by
and among Parent, Peregrine Ottawa Nova Scotia Company, 3791980 Canada Inc. and
Jay Lefton.

      1.    DEFINITIONS. As used in this Declaration:

            (a) "HOLDER" means: (i) a shareholder of Company to whom shares of
Parent Common Stock are issued pursuant to the Amalgamation Agreement or (ii) a
transferee to whom registration rights granted under this Declaration are
assigned pursuant to Section 7(a) of this Declaration. A Holder shall not
include any holder of any option, warrant or other right to acquire Company
Common Shares which was not exercised on or before the Effective Time.

            (b) The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

            (c) "REGISTRATION EXPENSES" shall mean all expenses incurred in
complying with Section 2 of this Agreement, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for Parent, blue sky fees and expenses, and
the expense of any special audits incident to or required by any such
registration; PROVIDED, HOWEVER, Registration Expenses shall not include any
selling commissions, transfer taxes, or fees and disbursements of any Holder's
counsel (which expenses shall be borne by Holder and not Parent).

            (d) "REGISTRABLE SECURITIES" means for each Holder the number of
shares of Parent Common Stock issued to such Holder pursuant to the Amalgamation
Agreement; PROVIDED, HOWEVER, that such shares of Parent Common Stock shall
cease to be Registrable Securities at such time as (i) they have been registered
for resale pursuant to a prospectus included in a Registration Statement on Form
S-8 under the Securities Act or (ii) they are otherwise available for resale
under Rule 144 of the Securities Act within a period of 90 days.

            (e) "SEC" means the United States Securities and Exchange
Commission.

            (f) "SECURITIES ACT" shall mean the United States Securities Act of
1933, as amended, or any similar federal statute and the rules and regulations
of the SEC thereunder, all as the same shall be in effect at the time.

            Any capitalized term not otherwise defined herein shall have the
meanings ascribed to such term in the Amalgamation Agreement.

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      2.    HOLDER REGISTRATION.

            (a) Parent shall use its best efforts to cause the Registrable
Securities held by the Holders to be registered under the Securities Act so as
to permit the resale thereof, and in connection therewith shall prepare and file
with the SEC within seven (7) days following the Effective Time a registration
statement on Form S-3 covering the Registrable Securities; PROVIDED, HOWEVER, if
Parent shall furnish to the Holders a certificate signed by the President of
Parent stating that, in the good faith judgment of the Board of Directors of
Parent, it would be seriously detrimental to Parent or its stockholders for
registration statements to be filed within such seven (7) day period, then, one
time only, Parent's obligation to use its best efforts to file a registration
statement shall be deferred for a period not to exceed sixty (60) days from the
Effective Time. The offerings made pursuant to such registration shall not be
underwritten.

            (b) Parent shall (i) prepare and file with the SEC the registration
statement in accordance with Section 2 hereof with respect to the Registrable
Securities and shall use its commercially reasonable best efforts to cause such
registration statement to become effective as promptly as practicable after
filing and to keep such registration statement effective until the sooner to
occur of (A) the date on which all Registrable Securities included within such
registration statement have been sold or (B) the expiration of sixty (60) days
after the day on which such registration statement has been declared effective;
(ii) prepare and file with the SEC such amendments to such registration
statement and amendments or supplements to the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all securities registered
by such registration statement; (iii) furnish to each Holder such number of
copies of any prospectus (including any amended or supplemented prospectus) in
conformity with the requirements of the Securities Act, and such other
documents, as each Holder may reasonably request in order to effect the offering
and sale of the Registrable Securities to be offered and sold, but only while
Parent shall be required under the provisions hereof to cause the registration
statement to remain effective; (iv) use its best efforts to register or qualify
the Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request (provided that Parent shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such jurisdiction where it has not
been qualified), and do any and all other acts or things which may be necessary
or advisable to enable each Holder to consummate the public sale or other
disposition of such Registrable Securities in such jurisdictions; and (v) notify
each Holder, promptly after it shall receive notice thereof, of the date and
time the registration statement and each post-effective amendment thereto has
become effective or a supplement to any prospectus forming a part of such
registration statement has been filed.

      3.    SUSPENSION OF PROSPECTUS. Under any registration statement filed
pursuant to Section 2 hereof, Parent may restrict the disposition of Registrable
Securities, and the Holders will not be able to dispose of such Registrable
Securities, if Parent shall have delivered a notice in writing to the Holders
stating that a delay in the disposition of such Registrable Securities is
necessary because Parent, in its reasonable judgment, has determined that such
sales would require public disclosure by Parent of material nonpublic
information that is not included in such registration statement. In the event of
the delivery of the notice described above by Parent, Parent shall use its

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best efforts to amend such registration statement and/or amend or supplement the
related prospectus if necessary and to take all other actions necessary to allow
the proposed sale to take place as promptly as possible, subject, however, to
the right of Parent to delay further sales of Registrable Securities until the
conditions or circumstances referred to in the notice have ceased to exist or
have been disclosed. Such right to delay sales of Registrable Securities shall
not exceed sixty (60) days. Any such delay shall result in a corresponding
extension of the period of time that Parent is required to maintain the
effectiveness of the registration statement under Section 2. Parent represents
and warrants that as of the day it executed the Amalgamation Agreement it knew
of no fact or circumstance that would prevent the filing of a registration
statement by Parent with respect to the Registrable Securities; PROVIDED,
HOWEVER, Parent makes no representation or warranty with respect to its ability
to file a registration statement with respect to the Registrable Securities, or
to permit resales of Registrable Securities under a registration statement that
has been declared effective by the SEC, as of any subsequent date.

      4.    INDEMNIFICATION.

            (a) Parent will indemnify and hold harmless each Holder, each of its
officers and directors and partners and members, and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, with respect
to which registration, qualification or compliance has been effected pursuant to
this Agreement against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by Parent of any rule or
regulation promulgated under the Securities Act applicable to Parent or any
state securities law applicable to Parent in connection with any such
registration, qualification or compliance, and Parent will reimburse (on an as
incurred basis), each Holder, each of its officers and directors and partners
and members, and each person controlling such Holder, for any reasonable legal
and other expenses incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action; PROVIDED, HOWEVER,
that Parent will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to Parent by
a Holder; and PROVIDED, FURTHER, that Parent will not be liable to any such
person or entity with respect to any such untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus that is
corrected in the final prospectus filed with the SEC pursuant to Rule 424(b)
promulgated under the Securities Act (or any amendment or supplement to such
prospectus) if the person asserting any such loss, claim, damage or liability
purchased securities but was not sent or given a copy of the prospectus (as
amended or supplemented) at or prior to the written confirmation of the sale of
such securities to such person in any case where such delivery of the prospectus
(as amended or supplemented) is required by the Securities Act, unless such
failure to deliver the prospectus (as amended or supplemented) was a result of
Parent's failure to provide such prospectus (as amended or supplemented).

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            (b) By electing to exercise the registration rights granted pursuant
to this Declaration, each Holder participating in the registration statement
described in Section 2 agrees to indemnify Parent, each of its directors and
officers and each person who controls Parent within the meaning of Section 15 of
the Securities Act against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, and will reimburse Parent and such
directors, officers and partners and members, persons, or control persons of
Parent for any reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to Parent by
such Holder; PROVIDED, HOWEVER, that the liability of such Holder for
indemnification under this Section 1.4(b) shall not exceed the proceeds from the
offering received by such Holder, prior to deducting any commissions, transfer
taxes or other selling expenses incurred with respect to such sale.

            (c) Each party entitled to indemnification under this Section 4 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 1 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Any
Indemnified Party shall reasonably cooperate with the Indemnifying Party in the
defense of any claim or litigation brought against such Indemnified Party.

            (d) If the indemnification provided for in this Section 4 is for any
reason not available to an Indemnified Party with respect to any loss,
liability, claim, damage, or expense referred to therein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party hereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and of the Indemnified Party on the other in connection with the statements
or omissions that resulted in such loss, liability, claim, damage, or expense as
will as any other relevant equitable considerations. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by reference
to, among other things, whether the untrue or the alleged untrue statement of a
material fact or the omission to state a material fact

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relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. The liability of
Holder under this Section 4(d) shall not exceed the proceeds from the offering
received by Holder, after deducting any reasonable selling commissions incurred
with respect to such sale.

      5.    EXPENSES. All Registration Expenses incurred in connection with any
registration pursuant to Section 2 shall be borne by Parent.

      6.    INFORMATION BY HOLDER. Each Holder shall furnish to Parent such
information regarding such Holder, the Registrable Securities held by it, the
manner in which such Holder holds any securities of Parent, and the distribution
proposed by such Holder as Parent may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Agreement.

      7.    MISCELLANEOUS.

            (a) ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause Parent to
register Registrable Securities pursuant to this Declaration may be assigned by
a Holder to a transferee of Registrable Securities only if: (i) Parent is, prior
to such transfer, furnished with written notice of the name and address of such
transferee and the Registrable Securities with respect to which such
registration rights are being assigned and a copy of a duly executed written
instrument in form reasonably satisfactory to Parent by which such transferee
assumes all of the obligations and liabilities of its transferor hereunder and
agrees itself to be bound hereby; (ii) immediately following such transfer the
disposition of such Registrable Securities by the transferee is restricted under
the Securities Act; and (iii) such assignment includes all of the Registrable
Securities originally issued to the transferee pursuant to the Amalgamation
Agreement.

            (b) THIRD PARTIES. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties to this Agreement, and
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement PROVIDED, HOWEVER, it is intended that the shareholders of
Company shall be third party beneficiaries to this Declaration.

            (c) GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California in the United States of America
without giving effect to the conflicts of laws principles thereof.

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

            (e) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, portions of such provisions, or
such provisions in their entirety, to the extent necessary, shall be severed
from this Agreement, and the balance of this Agreement shall be enforceable in
accordance with its terms.

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            (f) AMENDMENT AND WAIVER. The registration rights granted hereunder
may only be amended with the consent of Whitecastle (as defined in Article XIII
of the Amalgamation Agreement), the holders of a majority of the Registrable
Securities from time to time outstanding, and Parent; PROVIDED, HOWEVER, if at
the time of such amendment and after the Closing (as defined in the Amalgamation
Agreement), Whitecastle is no longer a holder of Registrable Securities, the
registration rights granted hereunder may be amended with the consent of Parent
and the holder of a majority of the Registrable Securities then outstanding.

                                               PEREGRINE SYSTEMS, INC.

                                               By:
                                                  ------------------------------

                                               Name:
                                                    ----------------------------

                                               Title:
                                                     ---------------------------

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                                    AGREEMENT

         THIS AGREEMENT (the "Agreement") is made as of September 7, 2000 by and
among BYL Bancorp, a California corporation (the "Company"), BYL Bank Group, a
California Corporation (the "Bank"), and JAM Partners, L.P., Seymour M. Jacobs,
Everest Partners Limited Partnership, Everest Managers, L.L.C., David M. W.
Harvey and Nick A. Becker (collectively, the "Investors").

         WHEREAS, the Investors have notified the Company that they wish to
nominate for election to the Company's Board of Directors at the Company's
Annual Meeting of Stockholders scheduled to be held on September 27, 2000 (the
"Annual Meeting") certain persons; and

         WHEREAS, the Investors have determined that their and the Company's
best interests would be served by (i) the Investors not engaging in a
solicitation of proxies for the Annual Meeting for the election of the
Investors' nominees in opposition to nominees of the Board of Directors (a
"Proxy Contest"), (ii) the nomination of the Investors' representative to the
Boards of Directors of the Company and the Bank as provided herein and (iii) the
other arrangements set forth herein; and

         WHEREAS, the Company has determined that the best interests of the
Company and its stockholders would be served by (i) the Investors not engaging
in a Proxy Contest for the Annual Meeting, (ii) the nomination of the Investors'
representative to the Boards of Directors of the Company and the Bank as
provided herein and (iii) the other arrangements set forth herein.

         NOW, THEREFORE, in consideration of the promises, mutual covenants and
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by each of the parties
hereto, and intending to be legally bound hereby, each of the parties hereby
agree as follows:

                                       I.

                                 REPRESENTATIONS

         1. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. The Investors each
represent and warrant to the Company as follows:

         a. Such Investor has the requisite legal power and authority to
execute, deliver and carry out this Agreement and has taken all necessary legal
action to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby.

         b. This Agreement has been duly and validly authorized, executed and
delivered by such Investor and constitutes a valid and binding obligation of
such Investor, enforceable in accordance with its terms.

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         c. The Investors and their affiliates beneficially own an aggregate of
228,400 shares of the Company's common stock, no par value per share (the
"Common Stock"). The Investors and their affiliates do not beneficially own any
equity or debt securities of the Company or any subsidiary, other than the
foregoing.

         2. REPRESENTATIONS AND WARRANTS OF THE COMPANY AND THE BANK. The
Company and the Bank represent and warrant to the Investors as follows:

         a. The Company and the Bank are each duly organized and validly
existing and in good standing under the laws of the State of California, have
the requisite corporate power and authority to execute, deliver and carry out
this Agreement and have taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.

         b. This Agreement has been duly and validly authorized, executed and
delivered by the Company and the Bank and constitutes a valid and binding
agreement of the Company and the Bank, enforceable in accordance with its terms.

                                      II.

                        BOARD OF DIRECTORS AND MANAGEMENT

         1. ANNUAL MEETING; INVESTOR DESIGNEE.

         a. The Annual Meeting shall be held on September 27, 2000, or such
later date as the Board of Directors may determine. The parties hereby agree
that the slate of the nominees for election to the Board of Directors at the
Annual Meeting to be proposed by the Board of Directors shall be each of the
four current members of the Board of Directors up for reelection, namely Barry
Moore, John Myers, Brent Wahlberg and Eddie Fischer and the parties hereto
further agree that they shall nominate, recommend and support such slate at the
Annual Meeting and shall vote, and shall cause their affiliates to vote, all
shares of Common Stock or proxies which they are entitled to vote in favor of
the election of such nominees at the Annual Meeting.

         b. The Company shall promptly commence action necessary, including all
necessary regulatory consents, to appoint one representative of the Investors
(the "Investor Designee"), namely Seymour M. Jacobs, to the Board of Directors
of the Company as a Class II director, and to the Board of Directors of the
Bank. The parties acknowledge that the Investor Designee will not be able to
assume office until all required regulatory consents have been obtained.
Accordingly, from and after the date hereof until such time as all such
regulatory consents have been processed, Mr. Jacobs shall have the right to
attend as an observer all meetings of the Board of Directors of each of the
Company and the Bank, and shall receive all materials distributed to the members
of such boards during that time. Within 48 hours of receipt of all necessary
regulatory consents, the Boards of Directors of the Company and the Bank shall
take action necessary to increase the size of the Board of Directors of each of
the Company and the Bank by one member and fill the vacancies created with the
Investor Designee. Prior to expiration of the Investor Designee's initial term
of office at the Company and the Bank, the Company will cause the Investor
Designee to be nominated for reelection to such positions.

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         c. While serving as director, each the Investor Designee shall have the
same legal duties and responsibilities and the same rights and privileges as the
other nonemployee directors of the Company and the Bank, including without
limitation, with respect to expense reimbursement, director compensation,
notice, indemnification, confidentiality, trading blackouts and other trading
restrictions and access to Company and Bank information and personnel.

         2. OTHER OBLIGATIONS. The Investors shall not engage in any
solicitation of proxies in connection with the Annual Meeting. If, at any time
after the date hereof, the Investors and their affiliates beneficially own less
than 114,200 shares of Common Stock, at the Company's option, the Investors
shall cause the Investor Designee to immediately thereafter resign from the
Boards of Directors of each of the Company and the Bank. The Investors agree to
provide the Company with reasonable evidence of the number of shares of Common
Stock and other securities of the Company and its subsidiaries beneficially
owned by them, upon request of the Company from time to time following the
election of the Investor Designee to the Board.

                                      III.

                         STANDSTILL AND VOTING AGREEMENT

     1. STANDSTILL PROVISIONS. The Investors agree that, for so long as an
Investor Designee has observer rights as set forth in Section II, or serves on
the Board of Directors of either the Company or the Bank, and for three months
thereafter (it being understood, in the case of resignation, that such three
month period shall commence upon the date the Company receives notice of
resignation from such boards), without the Company's prior written consent, no
Investor shall:

         a. acquire, announce an intention to acquire, offer or propose to
acquire, or agree to acquire, directly or indirectly, by purchase or otherwise,
beneficial ownership of any Common Stock, or direct or indirect rights to
options to acquire (through purchase, exchange, conversion or otherwise) any
Common Stock, if, immediately after any such acquisition, the Investors would
beneficially own, in the aggregate, Common Stock representing more than 9.9% of
the outstanding Common Stock;

         b. make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" (as such terms are defined in Rule 14a-1 under the
Securities Exchange Act of 1934, as amended (the "1934 Act") to vote any Common
Stock, seek to advise , encourage or influence any person or entity with respect
to the voting of any Common Stock, initiate or propose any shareholder proposal
or induce or attempt to induce any other person to initiate any shareholder
proposal;

         c. make any statement or proposal, whether written or oral, to the
Board of Directors of the Company, or to any director, officer or agent of the
Company, or make any public announcement or proposal whatsoever with respect to
a merger, acquisition of control or other business combination, sale or transfer
of assets, recapitalization, dividend, share repurchase, liquidation or other
extraordinary corporate transaction with the Company or any

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other transaction which could result in a change of control, or solicit or
encourage any other person to make any such statement or proposal;

         d. form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the 1934 Act) with respect to any securities of
the Company, other than the group which the Investors is a member of as of the
date hereof;

         e. deposit any Common Stock into a voting trust or subject any Common
Stock to any arrangement or agreement with respect to the voting of any Common
Stock other than this Agreement;

         f. execute any written consent with respect to the Company, except in
accordance with Section III.3;

         g. otherwise act, alone or in concert with others, to seek to exercise
any control over the management, Board of Directors or policies of the Company;

         h. make a public request to the Company (or its directors, officers,
shareholders, employees or agents) to amend or waive any provisions of this
Agreement, the Articles of Incorporation or Bylaws of the Company, including
without limitation any public request to permit the Investors or any other
person to take any action in respect of the matters referred to in this Section
III.1;

         i. take any action which might require the Company to make a public
announcement regarding the possibility of any transaction referred to in
paragraph (c) above or similar transaction or, advise, assist or encourage any
other persons in connection with the foregoing; or

         j. disclose publicly, or privately in a manner that could reasonably be
expected to become public, any intention, plan or arrangement inconsistent with
the foregoing;

provided that nothing in this Section III.1 shall prohibit any person who is
serving as a director of the Company as contemplated herein from, solely in his
or her capacity as such director, (a) taking any action or making any statement
at any meeting of the Board of Directors or of any committee thereof; (b) making
any statement to any director, officer or agent of the Company, or (c) making
any statement or disclosure required under the federal securities laws or other
applicable laws; and provided, further, that nothing in this Section shall
restrict any private communications between the Investors and any person
designated by the Investors as a director, provided that all such communications
by such person remain subject to the fiduciary duties of such person as a
director.

         2. TRANSFER LIMITATIONS. The Investors agree that, for so long as an
Investor Designee has observer rights as set forth in Section II, or serves on
the Board of Directors of either the Company or the Bank, and for three months
thereafter (it being understood, in the case of resignation, that such three
month period shall commence upon the date the Company receives notice of
resignation from such boards):

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         a. Without the Company's prior written consent, which may not
unreasonably be withheld, no Investor shall, directly or indirectly, sell,
transfer or otherwise dispose of any interest in the Investors shares ,
provided, that the Investors may transfer the Investors' shares: (i) to any
person who the Investors believe, after due inquiry, would beneficially own
immediately after any such sale or transfer less than 5% of the outstanding
Common Stock; (ii) to any person who the Investors believe, after due inquiry,
would be entitled to report beneficial ownership of Common Stock on Schedule 13G
under the Securities Exchange Act of 1934, as amended (the "Exchange Act");
(iii) in a registered broad-distribution underwritten public offering; (iv) to
the Company; (v) pursuant to any tender offer or exchange offer which is
recommended by the Board of Directors of the Company; (vi) to any other person
who enters into a standstill agreement with the Company on terms and conditions
substantially equivalent to those in this Agreement; (vii) to any corporation,
partnership or other entity wholly-owned by the Investors or to any other
Investor; or (viii) to any trust the sole beneficiaries of which are family
members or any charitable trust or charitable foundation established by the
Investors, provided that such trust, charitable trust or charitable foundation
either (y) enters into a standstill agreement with the Company containing terms
and conditions substantially equivalent to those in this Agreement or (z) is and
remains during the term of this Agreement an affiliate of an Investor.

         b. In the event of any proposed sale or transfer of shares of Common
Stock (other than as described in 2(a)(vii or viii above)), such Investor shall
give written notice to the Company of such proposed sale and the bona fide terms
on which the sale is proposed to be made. For these purposes, such notice may
state an intention of the Investor to sell into the public market at the market
price prevailing on the date of sale. The Company and, if the Company is unable
or unwilling to make such purchase, the then current members of the Board of
Directors, shall have a right of first refusal on such shares to buy some or all
of them at the price and terms stated in the notice, which may be exercised no
later than seven days from the date of notice. If not all of such shares are so
purchased by the Company or the members of the Board of Directors, the Investor
may sell them to the third party (subject to the limitations in 2(a) above) at
the price and terms stated in the notice, at any time within the 30 days
following the failure of the Company or the Board of Directors to exercise its
option.

     3. VOTING. The Investors agree that, during the term specified in III.2
above, for so long as the Investors beneficially own any Common Stock, the
Investors will (a) be present, in person or represented by proxy, at all
shareholder meetings of the Company so that all Common Stock beneficially owned
by the Investors may be counted for the purpose of determining the presence of a
quorum at such meetings and (b) with respect to the election of directors, vote
or consent, or cause to be voted or a consent to be given, with respect to all
Common Stock beneficially owned by the Investors on all matters submitted to
shareholders for a vote or consent in the same proportion as Common Stock are
voted by holders unaffiliated with the Investors.

                                      IV.

                              ADDITIONAL AGREEMENTS

     1. PRESS RELEASE. Upon the effectiveness of this Agreement, the Company
shall issue a press release in a form that shall have been previously approved
by the Investors, such

                                       5
<PAGE>

approval not to be unreasonably withheld. Neither the Company nor the Investors
nor any of their affiliates, associates or representatives shall issue any other
press release or other publicly available document that is inconsistent with, or
is otherwise contrary to, the statements in such Company press release. The
Company shall make all filings with the Securities Exchange Commission
appropriate in connection with the execution of this Agreement, including a
Current Report on Form 8-K and amended proxy materials.

     2. WITHDRAWAL OF NOTICES. The Investors hereby withdraw their request made
by letter dated September 5, 2000 giving notice to the Company of the Investors'
wish to nominate directors at the Annual Meeting. The Investors hereby withdraw
the letter of August 30, 2000 from Mr. Jacobs to the Company's Board of
Directors requesting, among other things, a list of the Company's shareholders.
The Investors agree to promptly amend their Schedule 13D filing to reflect, as
appropriate, the substance of this Agreement and that their intention no longer
involves a change in the board of directors or management of the Company except
as specified in this Agreement.

     3. CHALLENGES TO AGREEMENT; DISPARAGING REMARKS. Each party hereto shall
not, and shall use its best efforts to cause each of its affiliates, associates
and representatives not to, challenge the validity of any provisions of this
Agreement. In the event that any part of this Agreement or any transaction
contemplated hereby is temporarily, preliminarily or permanently enjoined or
restrained by a court of competent jurisdiction, the parties hereto shall use
their reasonable best efforts to cause any such injunction or restraining order
to be vacated or dissolved or otherwise declared or determined to be of no
further force or effect. During the term of this Agreement, each of the
Investors agrees not to make any public statement or comment or private
statement or comment which could reasonably be expected to become public which
could in any way be deemed to diminish the reputation of or otherwise disparage
the Company, the Bank or its management; PROVIDED, HOWEVER, this section shall
in no way (i) estop either party from making factual statements which are
reasonably necessary or appropriate in the ordinary course of its business or
(ii) limit the ability of any party to pursue any remedy under this Agreement or
otherwise.

     4. SPECIFIC PERFORMANCE. The Company and the Investors acknowledge and
agree that in the event of any breach of this Agreement, the non-breaching party
would be irreparably harmed and could not be made whole by monetary damages. It
is accordingly agreed that the Company and the Investors, in addition to any
other remedy to which they may be entitled at law or in equity, shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and/or to compel specific performance of this Agreement in any action instituted
in any federal court of the United States having subject matter jurisdiction.

     5. CONFIDENTIALITY AGREEMENT. The Company, the Bank and the Investors shall
enter into the Confidentiality Agreement attached hereto as Annex A. It is
understood and agreed that a material inducement to the Company to enter into
this Agreement is the agreement of the Investors to enter into and perform the
terms of the Confidentiality Agreement. Accordingly, failure of any Investor to
comply with the provisions of such agreements shall constitute cause for the
Company to terminate this Agreement.

                                       6
<PAGE>

                                       V.

                                  MISCELLANEOUS

     1. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding of
the parties with respect to the subject matter hereof and may be amended only by
an agreement in writing executed by all the parties hereto.

     2. HEADINGS. Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement.

     3. COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties, and each such
executed counterpart shall be an original instrument.

     4. NOTICES. All notices, consents, requests, instructions, approvals and
other communications provided for in this Agreement and all legal processes in
regard to this Agreement shall be validly given, made or served, if in writing
and delivered personally, by hand or by telecopy, or sent by registered mail
postage paid, if to the Company to it at:

                                    BYL Bancorp
                                    1875 N. Tustin Avenue
                                    Orange, CA 92865
                                    Attn:   Robert Ucciferri
                                    Fax:    (714) 685-1372

                  with a copy, which shall not constitute notice, too:

                                    Latham & Watkins
                                    650 Town Center Drive
                                    Costa Mesa, California 92626
                                    Attn:   David C. Flattum
                                    Fax:   (714) 755-8290
                                    Knecht & Hansen
                                    1301 Dove Street, Suite 900
                                    Newport Beach, California 92660
                                    Attn: Loren P. Hansen
                                    Fax: (949) 851-1732

                  and if to the Investors as follows:

                                    If to Everest/Harvey:

                                    Mr. David M. W. Harvey
                                    Post Office Box 3176
                                    Gardnerville, NV 89410
                                    Fax:

                                       7
<PAGE>

                                    If to JAM/Jacobs:

                                    Mr. Seymour M. Jacobs
                                    One Fifth Avenue
                                    New York, New York 10003
                                    Fax: (212) 271-5525

                                    If to Becker:

                                    Mr. Nick A. Becker
                                    15061 Springdale Street, Suite 100
                                    Huntington Beach, CA 92649
                                    Fax (714) 890-4863

                  with a copy, which shall not constitute notice, to:

                                    Horgan, Rosen, Beckham & Coren, L.L.P.
                                    21700 Oxnard Street, Suite 1400
                                    Woodland Hills, CA 91367
                                    Attn: Mr. S. Alan Rosen
                                    Fax: (818) 340-6190

                  or to such other address or telecopy number as any party may,
from time to time, designate in a written notice given in a like manner. Notice
given by hand or by telecopy shall be deemed given on the date on which so hand
delivered or telecopied. Notice given by mail as set out above shall be deemed
delivered five business days after the date the same is postmarked.

     5. SUCCESSORS AND ASSIGNS. This Agreement shall bind the successors and
assigns of the parties, and inure to the benefit of any successor or assign of
any of the parties; PROVIDED, HOWEVER, that no party may assign this Agreement
without the other party's prior written consent.

     6. GOVERNING LAW. This Agreement shall be governed by and constricted and
enforced in accordance with the internal laws of the State of California,
without giving effect to the conflict of the laws principles thereof.

     7. CERTAIN TERMS. As used herein, (i) the terms "affiliate" and "associate"
shall have the meanings set forth in Rule 2b-2 under the Securities Exchange Act
of 1934, as amended, and (ii) "beneficial ownership" shall mean beneficial
ownership as determined under Rule 13d-3 under the Securities Exchange Act of
1934, as amended.

     8. SURVIVAL OF REPRESENTATIONS. All representations, warranties and
agreements made by the Investors and the Company in this Agreement or pursuant
hereto shall survive the date hereof through the term of this Agreement.

     9. CONSENT TO SERVICE. Each of the parties hereto hereby consents to the
personal jurisdiction of the United States District Court for the Central
District of California or if jurisdiction does not lie in the federal court,
then the California Superior Court for the County of

                                       8
<PAGE>

Orange, in any action, suit or proceeding arising under this Agreement and each
agrees further that service of process or notice in any action, suit or
proceeding shall be effective if given in the manner set forth in Section V.4
hereof.

     10. NO WAIVER. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.

                               [SIGNATURES FOLLOW]

                                       9
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first referred to above.

                                       BYL Bancorp

                                       By:      /s/ Robert Ucciferri
                                                -----------------------------
                                       Its:     President and Chief Executive
                                                Officer

                                       BYL Bank Group

                                       By:      /s/ Robert Ucciferri
                                                -----------------------------
                                       Its:     President and Chief Executive
                                                Officer

                                       JAM Partners, L.P.

                                       By:      /s/ Seymour M. Jacobs
                                                -----------------------------
                                                Seymour M. Jacobs, general
                                                partner

                                       Everest Partners Limited Partnership

                                                By:  Everest Managers, L.L.C.,
                                                its general partner

                                                By:      /s/ David M. W. Harvey*
                                                         -----------------------
                                                         David M. W. Harvey
                                                         its Managing Member

                                       Everest Managers, L.L.C.

                                                By:      /s/ David M. W. Harvey*
                                                         -----------------------
                                                         David M. W. Harvey
                                                         its Managing Member

                                       /s/ Seymour M. Jacobs
                                       ----------------------------
                                       Seymour M. Jacobs

                                       /s/ David M. W. Harvey*
                                       ----------------------------
                                       David M. W. Harvey

                                       /s/ Nick A. Becker
                                       ----------------------------
                                       Nick A. Becker

* By S. Alan Rosen, attorney-in-fact

                                       10

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