Document:

EXHIBIT 10.31

                              EMPLOYMENT AGREEMENT

         This Agreement is made and entered into on August 22, 2003 by and
between American River Bank, a California state chartered banking corporation
(the "Employer") and William L. Young (the "Employee") for the purposes set
forth hereinafter (the "Agreement").

                                    RECITALS
                                    --------

         WHEREAS, the Employee is currently the Chief Executive Officer of the
Employer pursuant to an employment agreement between the Employer and the
Employee dated August 17, 2000 (the "Prior Employment Agreement");

         WHEREAS, it is the intention of the parties to enter into a new
employment agreement for the purposes of assuring the continued services of the
Employee as the Chief Executive Officer of the Employer;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the Employer and Employee agree as follows:

                                    AGREEMENT
                                    ---------

         1.       Term of Employment; Termination of Prior Employment Agreement
and Waiver of Rights and Benefits and Release of Obligations Thereunder.
Pursuant to this Agreement, the Employer employs the Employee and the Employee
hereby accepts employment with the Employer, upon the terms and conditions
hereinafter set forth. The term of this Agreement shall be a period of two (2)
years from the date hereof. Upon the occurrence of the second annual anniversary
of the date of this Agreement, and on each anniversary date thereafter, the term
of this Agreement shall be deemed automatically extended for an additional one
(1) year term, subject to the termination provisions of paragraph 16.

                  The Employer and the Employee agree that the Prior Employment
Agreement is hereby terminated effective as of the date of this Agreement and
that this Agreement is intended by the parties hereto to supersede in full and
constitute a complete replacement for the Prior Employment Agreement and any
rights and benefits thereunder. In furtherance thereof and notwithstanding any
provision of this Agreement or the Prior Employment Agreement to the contrary,
the Employee, for himself, and his heirs, beneficiaries, executors,
administrators, trustees, and any other legal or personal representatives,
agents, successors or permitted assignees or transferees, further expressly
agrees to and does hereby waive and relinquish any and all rights and benefits
under the Prior Employment Agreement and specifically releases the Employer and
its affiliates and subsidiaries, from any obligations, duties and liabilities
under the Prior Employment Agreement including any matters covered or
contemplated by California Civil Code Section 1542 which reads as follows:

                                       92
<PAGE>

                  "A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his settlement
with the debtor."

         2.       Duties and Obligations of Employee. Employee shall serve as
the Chief Executive Officer of the Employer pursuant to this Agreement and shall
perform the customary duties of each such office in the commercial banking
industry as may from time to time be reasonably requested of him by the Board of
Directors of the Employer including the following:

                  (a)      Providing leadership in planning and implementing the
conduct of the business and affairs of the Employer, subject to the direction of
the Board of Directors of the Employer, and carrying out responsibilities of the
position as outlined in any job description approved by the Board of Directors
of the Employer;

                  (b)      Participating in community affairs which are
beneficial to the Employer;

                  (c)      Maintaining a good relationship with the Board of
Directors of the Employer, its management officers and shareholders;

                  (d)      Maintaining a good relationship with regulatory
agencies and governmental authorities having jurisdiction over the Employer and
its parent holding company;

                  (e)      Acting as a member of the Board of Directors of the
Employer and its parent holding company, and all committees of the respective
Boards of Directors to which the Employee may be appointed or elected; and

                  (f)      Hiring and firing of all employees of the Employer,
subject at all times to the policies and directives set by the Board of
Directors of the Employer.

         3.       Devotion to Employer's Business.
                  -------------------------------

                  (a)      The Employee shall devote his full business time,
ability, and attention to the business of the Employer during the term of this
Agreement and shall not during the term of this Agreement engage in any other
business activities, duties, or pursuits whatsoever, or directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether for compensation or otherwise, without the
prior written consent of the Board of Directors of the Employer. However, the
expenditure of reasonable amounts of time for educational, charitable, or
professional activities shall not be deemed a breach of this Agreement if those
activities do not materially interfere with the services required of the
Employee under this Agreement. Nothing in this Agreement shall be interpreted to
prohibit the Employee from making passive personal investments. However, the
Employee shall not directly or indirectly acquire, hold, or retain any interest
in any business competing with or similar in nature to the business of Employer,
except passive shareholder investments in other financial institutions and their

                                       93
<PAGE>

respective affiliates which do not exceed five percent (5%) of the outstanding
voting securities in the aggregate in any single financial institution and its
affiliates on a consolidated basis.

                  (b)      The Employee agrees to conduct himself at all times
with due regard to public conventions and morals. The Employee further agrees
not to do or commit any act that will reasonably tend to shock or offend the
community, or to prejudice the Employer or the banking industry in general.

                  (c)      The Employee hereby represents and agrees that the
services to be performed under the terms of this Agreement are of a special,
unique, unusual, extraordinary, and intellectual character that gives them a
peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages in an action at law. The Employee therefore expressly agrees that the
Employer, in addition to any other rights or remedies that the Employer may
possess, shall be entitled to injunctive and other equitable relief to prevent
or remedy a breach of this Agreement by the Employee.

         4.       Noncompetition by the Employee. The Employee shall not, during
the term of this Agreement, directly or indirectly, either as an employee,
employer, consultant, agent, principal, stockholder, officer, director, or in
any other individual or representative capacity, engage or participate in any
competitive banking or financial services business without the prior written
consent of the Employer.

         5.       Indemnification.
                  ---------------

                  (a)      The Employee shall indemnify and hold the Employer
harmless from all liability for loss, damage, or injury to persons or property
resulting from the gross negligence or intentional misconduct of the Employee.

                  (b)      To the extent permitted by law, the Employer shall
indemnify the Employee if he was or is a party or is threatened to be made a
party in any action brought by a third party against the Employee (whether or
not the Employer is joined as a party defendant) against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with said action if the Employee acted in good faith and in a manner
the Employee reasonably believed to be in the best interest of the Employer (and
with respect to a criminal proceeding if the Employee had no reasonable cause to
believe his conduct was unlawful), provided that the alleged conduct of the
Employee arose out of and was within the course and scope of his employment as
an officer or employee of the Employer.

         6.       Disclosure of Information. The Employee shall not, either
before or after termination of this Agreement, without the prior written consent
of the Board of Directors of Employer or except as required by law to comply
with legal process including, without limitation, by oral questions,
interrogatories, requests for information or documents, subpoena, civil

                                       94
<PAGE>

investigative demand or similar process, disclose to anyone any financial
information, trade or business secrets, customer lists, computer software or
other information not otherwise publicly available concerning the business or
operations of the Employer, its parent holding company or any subsidiary
thereof. The Employee further recognizes and acknowledges that any financial
information concerning any customers of the Employer, its parent holding company
and any subsidiary thereof as it may exist from time to time, is strictly
confidential and is a valuable, special and unique asset of Employer's and its
parent holding company's business. The Employee shall not, either before or
after termination of this Agreement, without such consent or except as required
by law, disclose to anyone said financial information or any part thereof, for
any reason or purpose whatsoever. In the event the Employee is required by law
to disclose such information described in this paragraph 6, the Employee will
provide the Employer and its counsel with immediate notice of such request so
that they may consider seeking a protective order. If, in the absence of a
protective order or the receipt of a waiver hereunder, the Employee is
nonetheless, in the written opinion of knowledgeable counsel, compelled to
disclose any of such information to any tribunal or any other party or else
stand liable for contempt or suffer other material censure or material penalty,
then the Employee may disclose (on an "as needed" basis only) such information
to such tribunal or other party without liability hereunder. The Employee agrees
to execute such form of confidentiality agreement from time to time during the
term of this Agreement as the Board of Directors of the Employer may require to
be executed by officers of the Employer. Any conflict between this paragraph 6
and such confidentiality agreement shall be resolved in favor of the provisions
of the confidentiality agreement.

         7.       Written, Printed or Electronic Material. All written, printed
or electronic material, notebooks and records including, without limitation,
computer disks used by the Employee in performing duties for the Employer, other
than the Employee's personal notes and diaries, are and shall remain the sole
property of the Employer. Upon termination of employment, the Employee shall
promptly return all such material (including all copies, extracts and summaries
thereof) to the Employer.

         8.       Surety Bond. The Employee agrees that he will furnish all
information and take any other steps necessary from time to time to enable the
Employer to obtain or maintain a fidelity or similar financial institution bond
which includes the Employee within the coverages provided conditional on the
rendering of a true account by the Employee of all monies, goods, or other
property which may come into the custody, charge, or possession of the Employee
during the term of his employment. The surety company issuing the bond and the
amount of the bond must be acceptable to the Employer. All premiums on the bond
shall be paid by the Employer. The Employer, or its successor, shall have no
obligation to pay or provide severance payments or severance benefits to the
Employee in accordance with paragraph 16 (d) or 16 (e), as applicable, of this
Agreement in the event that the Employee's employment is terminated in
connection with the Employee's failure to qualify for a surety bond at any time
during the term of this Agreement and such failure to qualify results from an
occurrence described in paragraph 16 (a) (5), (6), (7), (8), (9), (10) or (11,
to the extent of an Employee breach).

                                       95
<PAGE>

         9.       Base Salary. In consideration for the services to be performed
hereunder, the Employee shall receive a salary at the rate of One Hundred Fifty
Thousand Dollars ($150,000) per annum, payable in installments during the term
of this Agreement of approximately Six Thousand Two Hundred Fifty Dollars
($6,250) on the first and fifteenth days of each month, subject to applicable
adjustments for withholding taxes, prorations for any partial employment period
and such other applicable payroll procedures of the Employer. The Employee shall
receive such annual adjustments in salary, if any, as may be determined by the
Employer's Board of Directors, in its sole discretion, resulting from the Board
of Directors annual review of the Employee's compensation each year during the
term of this Agreement.

         10.      Salary Continuation During Disability. If the Employee for any
reason (except as expressly provided below) becomes temporarily or permanently
disabled so that he is unable to perform the duties under this Agreement, the
Employer agrees to pay the Employee the base salary otherwise payable to
Employee pursuant to paragraph 9 of this Agreement, reduced by the amounts
received by the Employee from state disability insurance, or worker's
compensation or other similar insurance benefits through policies provided by
the Employer, for a period of six (6) months from the date of disability.

         For purposes of this paragraph 10, "disability" shall be defined as
provided in the Employer's disability insurance program. Notwithstanding
anything herein to the contrary, the Employer shall have no obligation to make
payments for a disability resulting from the deliberate, intentional actions of
the Employee, such as, but not limited to, attempted suicide or chemical
dependence of the Employee.

         11.      Incentive Compensation. The Employee shall be entitled to
participate in the Incentive Compensation Plan (the "Plan") attached hereto as
Exhibit A and incorporated herein by reference, and receive incentive
compensation in accordance with the Plan, subject to the right of the Board of
Directors in its sole discretion to modify the terms and provisions of the Plan
each year during the term of this Agreement in connection with its review of the
Employee's performance and the Employer's results of operations. Under no
circumstance shall a right to receive incentive compensation exist in favor of
or accrue to or for the benefit of the Employee prior to actual receipt of a
distribution, if any, under the Plan.

         12.      Stock Options/Employment Rights. The Employee has previously
been granted stock options and may be granted additional stock options in the
future in the discretion of the Board of Directors of the Employer's parent
holding company. Any such stock option grant shall be evidenced by a stock
option agreement in the form required by the applicable stock option plan.
Notwithstanding any provision of such stock option plan or any such stock option
agreement to the contrary, no rights of employment shall be conferred upon the
Employee or result from any such stock option plan or any such stock option
agreement. Any employment rights and corresponding duties of the Employee
pursuant to his employment by the Employer shall be limited to and interpreted
solely in accordance with the terms and provisions of this Agreement.

                                       96
<PAGE>

         13.      Other Benefits. The Employee shall be entitled to those
employee benefits adopted by the Employer for all employees of the Employer,
subject to applicable qualification requirements and regulatory approval
requirements, if any. The Employee shall be further entitled to the following
additional benefits which shall supplement or replace, to the extent duplicative
of any part or all of the general employee benefits, the benefits otherwise
provided to the Employee:

                  (a)      Vacation. The Employee shall be entitled to four (4)
weeks of annual vacation leave and six (6) days of personal absence at his then
existing rate of base salary each year during the term of this Agreement. The
Employee may be absent from his employment for vacation and personal absence as
long as such leave is reasonable and does not jeopardize his responsibilities
and duties specified in this Agreement. The length of vacation should not exceed
two (2) weeks without the approval of the Employer's Board of Directors. The
Employee shall take at least two (2) consecutive weeks of vacation each year
during the term of this Agreement. Vacation time will accrue in accordance with
the Employer's personnel policies.

                  (b)      Automobile Allowance and Insurance. The Employer
shall acquire or otherwise make available to the Employee for his business and
incidental personal use an automobile, suitable to his position, and (i)
maintain it in good condition and repair; and (ii) provide public liability
insurance and property damage insurance policies with insurer(s) acceptable to
the Employer and with coverages in such amounts as may be acceptable to the
Employer from time to time.

                  (c)      Insurance. The Employer shall provide during the term
of this Agreement at the Employer's sole cost, group life, health (including
medical, dental and hospitalization), accident and disability insurance coverage
for the Employee and his dependents through a policy or policies provided by
insurer(s) selected by the Employer in its sole discretion.

         14.      Annual Physical Examination. The Employer shall provide
insurance coverage for or pay or reimburse the Employee for the cost of an
annual physical examination conducted by a California licensed physician
selected by the Employee and reasonably acceptable to the Employer.

         15.      Business Expenses. The Employee shall be reimbursed for all
ordinary and necessary expenses incurred by the Employee in connection with his
employment. The Employee shall also be reimbursed for reasonable expenses
incurred in activities associated with promoting the business of the Employer,
including expenses for entertainment, travel, conventions, educational programs,
and similar items, and with the prior approval of the Employer's Executive
Committee, expenses for club memberships. The Employer will pay for or will
reimburse the Employee for such expenses upon presentation by the Employee from
time to time of receipts or other appropriate evidence of such expenditures.

                                       97
<PAGE>

         16.      Termination of Agreement.
                  ------------------------

                  (a)      Automatic Termination. This Agreement shall terminate
automatically without further act of the parties and immediately upon the
occurrence of any one of the following events, subject to either party's right,
without any obligation whatsoever, to waive an event reasonably susceptible of
waiver, and the obligation of the Employer to pay the amounts which would
otherwise be payable to the Employee under this Agreement through the end of the
month in which the event occurs, except that only in the event of termination
based upon subparagraphs (1), (4) or (11, to the extent of Employer's breach)
below shall the Employee be entitled to receive severance payments and severance
benefits based upon automatic termination pursuant to paragraph 16 (d) of this
Agreement:

                           (1)      The occurrence of circumstances that make it
                                    impossible or impractical for the Employer
                                    to conduct or continue its business.

                           (2)      The death of the Employee.

                           (3)      The loss by the Employee of legal capacity.

                           (4)      The loss by the Employer of legal capacity
                                    to contract.

                           (5)      The willful, intentional and material breach
                                    of duty by the Employee in the course of his
                                    employment.

                           (6)      The habitual and continued neglect by the
                                    Employee of his employment duties and
                                    obligations under this Agreement.

                           (7)      The Employee's willful and intentional
                                    violation of any State of California or
                                    federal banking or securities laws, or of
                                    the Bylaws, rules, policies or resolutions
                                    of the Employer or its parent holding
                                    company and their respective subsidiaries,
                                    or the rules or regulations of the Board of
                                    Governors of the Federal Reserve System,
                                    California Department of Financial
                                    Institutions, or the Federal Deposit
                                    Insurance Corporation, or other regulatory
                                    agency or governmental authority having
                                    jurisdiction over the Employer, or its
                                    parent holding company.

                           (8)      The determination by a state or federal
                                    banking agency or governmental authority
                                    having jurisdiction over the Employer or its
                                    parent holding company that the Employee is
                                    not suitable to act in the capacity for
                                    which he is employed by the Employer.

                           (9)      The Employee is convicted of any felony or a
                                    crime involving moral turpitude or commits a
                                    fraudulent or dishonest act.

                                       98
<PAGE>

                           (10)     The Employee discloses without authority any
                                    secret or confidential information
                                    concerning the Employer, its parent holding
                                    company or their respective subsidiaries or
                                    takes any action which the Employer's Board
                                    of Directors determines, in its sole
                                    discretion and subject to good faith, fair
                                    dealing and reasonableness, constitutes
                                    unfair competition with or induces any
                                    customer to breach any contract with the
                                    Employer, its parent holding company or
                                    their respective subsidiaries.

                           (11)     Either party materially breaches the terms
                                    or provisions of this Agreement.

                  (b)      Termination by Employer. The Employer may, at its
election and in its sole discretion, terminate this Agreement for any reason, or
for no reason, by giving not less than thirty (30) days' prior written notice of
termination to the Employee, without prejudice to any other remedy to which the
Employer may be entitled either at law, in equity or under this Agreement. Upon
such termination, unless otherwise agreed in writing between the Employer and
the Employee, the Employee shall immediately cease performing and discharging
the duties and responsibilities of his position and remove himself and his
personal belongings from the Employer's premises. All rights and obligations
accruing to the Employee under this Agreement shall cease at such termination,
except that such termination shall not prejudice the Employee's rights regarding
employment benefits which shall have accrued prior to such termination,
including the right to receive the severance pay specified in paragraph 16 (d)
below, and any other remedy which the Employee may have at law, in equity or
under this Agreement, which remedy accrued prior to such termination.

                  (c)      Termination by Employee. This Agreement may be
terminated by the Employee for any reason, or no reason, by giving not less than
thirty (30) days' prior written notice of termination to the Employer. Upon such
termination, all rights and obligations accruing to the Employee under this
Agreement shall cease, except that such termination shall not prejudice the
Employee's rights regarding employment benefits which shall have accrued prior
to such termination and any other remedy which the Employee may have at law, in
equity or under this Agreement, which remedy accrued prior to such termination.

                  (d)      Severance Pay - Termination by Employer. In the event
of termination by the Employer pursuant to paragraph 16 (b) or automatic
termination based upon paragraph 16 (a) (1), (4) or (11, to the extent of the
Employer's breach) of this Agreement, the Employee shall be entitled to receive
severance pay at the Employee's rate of base salary immediately preceding such
termination in an amount equal to six (6) months of the Employee's annual base
salary, less applicable withholding deductions (in addition to salary, incentive
compensation, or other payments, if any, due the Employee). Such severance pay
shall be paid to the Employee in lump sum within thirty (30) days following such
termination.

                                       99
<PAGE>

                  Notwithstanding the foregoing, in the event of a "change in
control" as defined in subparagraph (e) below, the Employee shall not be
entitled to the severance pay pursuant to this paragraph 16 (d) and any rights
of the Employee to severance pay shall be limited to such rights as are
specified in paragraph 16 (e) below.

                  The Employee acknowledges and agrees that severance pay
pursuant to this paragraph 16 (d) is in lieu of all damages, payments and
liabilities on account of the early termination of this Agreement and the sole
and exclusive remedy for the Employee terminated at the will of the Employer
pursuant to paragraph 16 (b) or pursuant to certain provisions of paragraph 16
(a) described herein.

                  (e)      Severance Pay - Change in Control. In the event of a
"change in control" as defined herein during the active service of the Employee
with the Employer and within a period of two (2) years following consummation of
such a change in control (i) the Employee's employment is terminated; or (ii)
without the Employee's consent there occurs (A) any adverse change in the nature
and scope of the Employee's salary or benefits, or (B) any event which
reasonably constitutes a constructive termination (by resignation or otherwise)
of the Employee's employment, then the Employee shall be entitled to receive
severance pay at the Employee's rate of base salary immediately preceding such
termination in an amount equal to eighteen (18) months of the Employee's annual
base salary, less applicable withholding deductions (in addition to salary,
incentive compensation, or other payments, if any, due the Employee). Such
severance pay shall be paid to the Employee in lump sum within thirty (30) days
following such termination.

                  The Employee acknowledges and agrees that severance pay
pursuant to this paragraph 16 (e) is in lieu of all damages, payments and
liabilities on account of the events described above for which such severance
pay may be due the Employee under paragraph 16 (e) of this Agreement. This
paragraph 16 (e) shall be binding upon and inure to the benefit of the Employee
and the Employer, and any successors or assigns thereof or any "person" as
defined herein.

                  Notwithstanding the foregoing, the Employee shall not be
entitled to receive severance payments pursuant to this paragraph 16 (e) in the
event of an occurrence described in paragraph 16 (a), subparagraphs (5), (6),
(7), (8), (9), (10) or (11, to the extent of an Employee breach), or in the
event the Employee terminates employment in accordance with paragraph 16 (c) and
the termination is not a result of or based upon the occurrence of any event
described in paragraph 16 (e) (ii) above.

                  If all or any portion of the amounts payable to the Employee
under this Agreement, either alone or together with other payments which the
Employee has the right to receive hereunder, constitute "excess parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), that are subject to the excise tax imposed by

                                      100
<PAGE>

Section 4999 of the Code (or similar tax and/or assessment), such amounts
payable hereunder shall be reduced to the extent necessary, after first applying
any similar reduction in payments to be received from any other plan or program
sponsored by the Employer from which the Employee has a right to receive
payments subject to Sections 280G and 4999 of the Code including, without
limitation, any Salary Continuation Agreement made between the Employer and the
Employee, so as to cause a reduction of any excise tax pursuant to Section 4999
of the Code to equal zero.

                  A "change in control" for purposes of this Agreement and
paragraph 16 (e) shall mean the occurrence of any of the following events with
respect to the Employer: (i) a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or in response to any other form or report to the regulatory
agencies or governmental authorities having jurisdiction over the Employer or
its parent holding company, or any stock exchange on which the shares of the
Employer's parent holding company are listed which requires the reporting of a
change in control; (ii) any merger, consolidation or reorganization of the
Employer or its parent holding company in which the Employer or its parent
holding company does not survive; (iii) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one transaction or a series of
transactions) of any assets of the Employer or its parent holding company having
an aggregate fair market value of fifty percent (50%) of the total value of the
assets of the Employer or its parent holding company, reflected in the most
recent balance sheet of the Employer or its parent holding company; (iv) a
transaction whereby any "person" (as such term is used in the Exchange Act) or
any individual, corporation, partnership, trust or any other entity is or
becomes the beneficial owner, directly or indirectly, of securities of the
Employer representing twenty-five percent (25%) or more of the combined voting
power of the Employer's or its parent holding company's then outstanding
securities; (v) a situation where, in any one-year period, individuals who at
the beginning of such period constitute the Board of Directors of the Employer
or its parent holding company cease for any reason to constitute at least a
majority thereof, except in the cases of retirement, disability or death and
unless the election, or the nomination for election by the Employer's or its
parent holding company's shareholder(s), of each new director is approved by a
vote of at least three-quarters (3/4) of the directors then still in office who
were directors at the beginning of the period; or (vi) the shareholder(s) of the
Employer or its parent holding company approve the sale or transfer of
substantially all of the Employer's or its parent holding company's assets to
parties that are not within a "controlled group of corporations" (as that term
is defined in section 1563 of the Code) in which the Employer or its parent
holding company is a member. Notwithstanding the foregoing or anything else
contained herein to the contrary, there shall not be a change in control for
purposes of this Agreement if the event which would otherwise come within the
meaning of the term "change in control" involves (i) an Employee Stock Ownership
Plan sponsored by the parent holding company of the Employer which Plan is the
party that acquires "control" or is the principal participant in the transaction
constituting a "change in control," as described above, or (ii) a reorganization
in which the Employer is merged with and into another bank subsidiary of such
parent bank holding company to consolidate operations under the charter of such

                                       101
<PAGE>

other bank subsidiary, or (iii) if the individuals who constitute the directors
of the Employer or its parent holding company at the time a specific transaction
described in subparagraphs (ii) or (vi) above is first presented to the Board of
Directors of the Employer or its parent holding company will, according to the
terms of the definitive agreements for the transaction, constitute a majority of
the members of the board of directors of the resulting corporation or acquiring
person immediately after the transaction, then, before an event that would
otherwise constitute a change in control shall be deemed to have occurred, such
Board of Directors of the Employer or its parent holding company may determine
by majority vote that the specific transaction does not constitute a change in
control under such subparagraphs (ii) or (vi) above.

         17.      Notices. Any notices to be given hereunder shall be in writing
and may be transmitted by personal delivery or by U.S. mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices shall
be addressed to the Employee at the address listed in the Employee's personnel
file and to the Employer at its principal business office. A party may change
the address for receipt of notices by written notice in accordance with this
paragraph 17. Notices delivered personally shall be deemed communicated as of
the date of actual receipt; mailed notices shall be deemed communicated as of
three (3) days after the date of mailing.

         18.      Arbitration. All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Employer in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
in accordance with the rules and procedures of JAMS then in effect. In the event
JAMS is unable or unwilling to conduct such arbitration, or has discontinued its
business, the parties agree that a representative member, selected by the mutual
agreement of the parties, of the American Arbitration Association ("AAA"), shall
conduct such binding arbitration in accordance with the rules and procedures of
the AAA then in effect. Notice of the demand for arbitration shall be filed in
writing with the other party to this Agreement and with JAMS (or AAA, if
necessary). In no event shall the demand for arbitration be made after the date
when institution of legal or equitable proceedings based on such claim, dispute
or other matter in question would be barred by the applicable statute of
limitations. Any award rendered by JAMS or AAA shall be final and binding upon
the parties, and as applicable, their respective heirs, beneficiaries, legal
representatives, agents, successors and assigns, and may be entered in any court
having jurisdiction thereof. The obligation of the parties to arbitrate pursuant
to this clause shall be specifically enforceable in accordance with, and shall
be conducted consistently with, the provisions of Title 9 of Part 3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in Sacramento, California, unless otherwise agreed to by the parties.

         19.      Attorneys' Fees and Costs. In the event of litigation,
arbitration or any other action or proceeding between the parties to interpret
or enforce this Agreement or any part thereof or otherwise arising out of or

                                       102
<PAGE>

relating to this Agreement, the prevailing party shall be entitled to recover
its costs related to any such action or proceeding and its reasonable fees of
attorneys, accountants and expert witnesses incurred by such party in connection
with any such action or proceeding. The prevailing party shall be deemed to be
the party which obtains substantially the relief sought by final resolution,
compromise or settlement, or as may otherwise be determined by order of a court
of competent jurisdiction in the event of litigation, an award or decision of
one or more arbitrators in the event of arbitration, or a decision of a
comparable official in the event of any other action or proceeding. Every
obligation to indemnify under this Agreement includes the obligation to pay
reasonable fees of attorneys, accountants and expert witnesses incurred by the
indemnified party in connection with matters subject to indemnification.

         20.      Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
employment of the Employee by the Employer and contains all of the covenants and
agreements between the parties with respect to the employment of the Employee by
the Employer. Each party to this Agreement acknowledges that no other
representations, inducements, promises, or agreements, oral or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
set forth herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding on either party.

         21.      Modifications. Any modification of this Agreement will be
effective only if it is in writing and signed by a party or its authorized
representative.

         22.      Waiver. The failure of either party to insist on strict
compliance with any of the terms, provisions, covenants, or conditions of this
Agreement by the other party shall not be deemed a waiver of any term,
provision, covenant, or condition, individually or in the aggregate, unless such
waiver is in writing, nor shall any waiver or relinquishment of any right or
power at any one time or times be deemed a waiver or relinquishment of that
right or power for all or any other times.

         23.      Partial Invalidity. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.

         24.      Interpretation. This Agreement shall be construed without
regard to the party responsible for the preparation of the Agreement and shall
be deemed to have been prepared jointly by the parties. Any ambiguity or
uncertainty existing in this Agreement shall not be interpreted against either
party, but according to the application of other rules of contract
interpretation, if an ambiguity or uncertainty exists.

         25.      Governing Law and Venue. The laws of the State of California,
other than those laws denominated choice of law rules, shall govern the
validity, construction and effect of this Agreement. Any action which in any way

                                       103
<PAGE>

involves the rights, duties and obligations of the parties hereunder shall be
brought in the courts of the State of California and venue for any action or
proceeding shall be in Sacramento County or in the United States District Court
for the Eastern District of California, and the parties hereby submit to the
personal jurisdiction of said courts.

         26.      Payments Due Deceased Employee. If the Employee dies prior to
the expiration of the term of his employment, any payments that may be due the
Employee from the Employer under this Agreement as of the date of death shall be
paid to the Employee's heirs, beneficiaries, successors, permitted assigns or
transferees, executors, administrators, trustees, or any other legal or personal
representatives.

         27.      Assignment/Binding Effect. Except as specifically set forth in
this Agreement, the Employee may not assign, delegate or otherwise transfer any
of the Employee's rights, benefits, duties or obligations under this Agreement
without the prior written consent of the Employer. This Agreement shall inure to
the benefit of and be binding upon the Employer and its successors and assigns,
and the Employee and the Employee's heirs, beneficiaries, successors, permitted
assigns or transferees, executors, administrators, trustees, and any other legal
or personal representatives.

         30.      Effect of Termination on Certain Provisions. Upon the
termination of this Agreement, the obligations of the Employer and the Employee
hereunder shall cease except to the extent of the Employer's obligation to make
payments, if any, to or for the benefit of the Employee following termination,
and provided that paragraphs 1 (to the extent of waivers and releases therein),
5, 6, 7, 17, 18, 19, 20, 23, 24, 25, 26, and 27 shall remain in full force and
effect.

         31.      Advice of Counsel and Advisors. The Employee acknowledges and
agrees that he has read and understands the terms and provisions of this
Agreement and prior to signing this Agreement, he has read and had the advice of
counsel and/or such other advisors as he deemed appropriate in connection with
his review and analysis of such terms and provisions of this Agreement.

                                      104
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written in the City of Sacramento, County of Sacramento, State
of California.

EMPLOYER:                              EMPLOYEE:

AMERICAN RIVER BANK

By: /s/ CHARLES D. FITE                /s/ WILLIAM L. YOUNG
    --------------------------------   ----------------------------------------
    Charles D. Fite                    William L. Young
    Chairman of the Board

                                       105
<PAGE>

                                    EXHIBIT A

                           INCENTIVE COMPENSATION PLAN

                                       106Exhibit 10.32

  ----------------------------------------------------------------------------
  |                                                                          |
  |                        COMMERCIAL LEASE AGREEMENT                        |
  |                                                                          |
  |                              BY AND BETWEEN                              |
  |                                                                          |
  |             R & R PARTNERS, A CALIFORNIA GENERAL PARTNERSHIP             |
  |                                                                          |
  |                                    AND                                   |
  |                                                                          |
  |                         NORTH COAST BANK, , N. A.                        |
  |                                                                          |
  |                            DATED: JULY 1, 2003                           |
  |                                                                          |
  ----------------------------------------------------------------------------

                                      107
<PAGE>

                           COMMERCIAL LEASE AGREEMENT
                           --------------------------

         This Lease Agreement ("Lease') is made as of the 1st day of July, 2003,
by and between R & R Partners, a California General Partnership ("Landlord"),
and North Coast Bank, N.A.("Tenant").

                                    ARTICLE I
                                    PREMISES
                                    --------

         1.       Demise and Description. Landlord, in consideration of the
rents and covenants herein specified to be paid and performed by Tenant, hereby
leases to Tenant, and Tenant hereby hires from Landlord, on the terms and
conditions and for the purposes herein set forth, that certain real property in
the City of Windsor, County of Sonoma, State of California, located at 8733
Lakewood Drive, Suite A and the ATM room, consisting of approximately 1905
square feet of usable space and 2200 square feet of rentable space together with
all improvements located thereon and all appurtenances thereto (the "Leased
Premises").

         2.       No Representations by Landlord. Landlord has made no
representations or warranties with respect to the Leased Premises and Landlord
shall not be responsible for any latent defect or change of condition of the
Leased Premises and the rent hereunder shall in no case be withheld or
diminished on account of any defect in the Leased Premises, nor for any change
in the condition, nor for any damage occurring thereto, nor because of the
existence of any violations in any municipal department.

         3.       Acceptance of Premises by Tenant. Tenant does hereby
represent and warrant to Landlord that Tenant is fully acquainted with the
nature and conditions, in all respects, of the Leased Premises including but
without limitation the title of Landlord, the conditions and state of repair and
lack of repair of the improvements (which includes all improvements to the
Leased Premises of every nature) and the nature and extent of the rights of
others with respect thereto, whether by way of easement, rights or
rights-of-ways, lease, possession, lien, encumbrance, license, reservation,
condition or otherwise. Tenant hereby represents and warrants to Landlord that
the Leased Premises are suitable and adequate in all respects for any and all
activities and uses which Tenant may elect to conduct thereon at any time during
the term hereof.

                                   ARTICLE II
                                   LEASE TERM
                                   ----------

         4.       Term. The initial term of this Lease shall be for a period of
thirty months commencing at 12:01 a.m. on July 1, 2003 and ending at 11:59 p.m.
December 31, 2005.

         5.       Tenant's Surrender. On the last day of the term hereof, or on
any sooner termination, Tenant shall surrender the Leased Premises to Landlord
in the same condition as when received, broom clean, ordinary wear and tear

                                       108
<PAGE>

excepted. Tenant shall repair any damage to the Leased Premises occasioned by
the removal of its trade fixtures, furnishings and equipment, prior to the
expiration or sooner termination of this Lease.

         6.       Option to Extend Lease Term. Tenant is hereby granted and
shall, if not then in default under this Lease, have an option (a) upon
expiration of this Lease to extend the term of this Lease for an additional
period of five (5) years on the same terms, covenants, and conditions and
subject to the same exceptions and reservations contained in this Lease, except
that the rent to be paid by Tenant to Landlord for the extended term shall be
increased to a mutually agreeable amount, but in no event shall such amount be
less than $1.55 square foot ("Option 1"); and (b) upon expiration of Option 1 to
extend the term of this Lease for an additional period of five (5) years on the
same terms, covenants, and conditions and subject to the same exceptions and
reservations contained in this Lease, except that the rent to be paid by Tenant
to Landlord for such second extended term shall be increased to a mutually
agreeable amount, but in no event shall such amount be less than $1.85 square
foot. These options shall be exercised only by Tenant's delivering to Landlord
sixty (60) days prior to expiration of the initial term of this Lease or Option
1, whichever the case may be, written notice of Tenant's election to renew the
term of this Lease provided in this section.

         7.       Holding Over by Tenant. In the event Tenant does not extend
the term of this Lease under Section 6 above and holds over beyond the
expiration of the term of this lease, such holding over shall be deemed and
construed as a month-to-month tenancy, on the terms and conditions herein
specified so far as applicable, until the tenancy is terminated in a manner
provided by law.

                                   ARTICLE III
                                     RENTS
                                     -----

         8.       Rental and Security Deposit. Tenant shall pay for the Leased
Premises without demand, deduction or set-off and Landlord agrees to accept as
basic rent for the Leased Premises the amount set forth below in lawful money of
the United States, payable as follows:

                  July 1, 2003 to June 30, 2004         $1.40 per square foot
                  July 1, 2004 to June 30, 2005         $1.45 per square foot
                  July 1, 2004 to December 31, 2005     $1.50 per square foot

All lease payments hereunder shall be payable in advance on the first business
day of each month for the term of this lease. Tenant has already paid, and
Landlord has already accepted, rent for the month of July 2003. The first rent
payment due hereunder shall be payable in advance of August1, 2003.

                  Concurrently with Tenant's execution of this Lease, Tenant
shall deposit with Landlord the sum of six thousand one hundred sixty dollars
and 00/100 ($6,160.00.) Said sum shall be held by Landlord as a security deposit

                                       109
<PAGE>

for the faithful performance by Tenant of all terms, covenants and conditions of
this Lease to be kept and performed by Tenant during the term hereof. If Tenant
defaults with respect to any provision of this Lease beyond any applicable
notice or cure periods, including without limitation, the provisions relating to
payment of rent and any of the monetary sums due hereunder, Landlord may (but
shall not be required to) use, apply or retain all or any part of said deposit
for payment of any other which Landlord may spend by reason of Tenant's default
or to compensate Landlord for any other loss or damage which Landlord may suffer
by reason Tenant's default. If any portion of said deposit is so used or
applied, Tenant shall, within ten (10) days after written demand therefor,
deposit cash with Landlord in the amount sufficient to restore said deposit to
its original amount. Tenant's failure to comply with this provision shall be
deemed a material breach of this Lease. Landlord shall not be required to
maintain the deposit in a segregated account and Tenant shall not be entitled to
interest thereon. If Tenant fully and faithfully performs every provision of
this Lease to be performed by it, the deposit or any balance thereof shall be
returned to Tenant at the expiration of the Lease term and after tenant has
vacated the Leased Premises. In the event of termination of Landlord's interest
in this Lease, Landlord shall transfer said deposit to Landlord's
successor-in-interest whereupon Tenant agrees to release Landlord from liability
for the return of such deposit or the accounting therefor.

         9.       Place of Payment. The rental provided for herein shall be
paid to Landlord, in lawful money of the United States of America at 3521 Scott
Street, San Francisco, CA 94123, or at such other address as Landlord may from
time to time designate in writing.

         10.      Cost of Living Increase. The basic rent payable hereunder
shall be adjusted upward annually during the term of this Lease in the following
manner:

                  (a)      Commencing on the first day of the second year of the
lease term and continuing each year thereafter (the "Rent Adjustment Date"), the
minimum rent set forth above in Section 8 shall be subject to the following
adjustment: the "Consumer Price Index--San Francisco Bay Area--All items"
compiled by the U. S. Department of Labor, Bureau of Labor Statistics (the
"Index"). For each Rent Adjustment Date, the Index in effect immediately before
that Rent Adjustment Date shall be used for purposes of calculating the amount
of adjustment, if any.

                  (b)      In no event shall the minimum monthly rent be
decreased below the amount specified in Section 8.

                                   ARTICLE IV
                                 USE OF PREMISES
                                 ---------------

         11.      Use of Premises. Tenant shall have the right to use the
Leased Premises for general office and/or retail banking.

                                       110
<PAGE>

         12.      Signs. Tenant may erect and maintain any signs on the Premises
relating to Tenant's business on the Leased Premises, provided the signs so
erected:

                  (a)      Are removed at the sole cost and expense of Tenant
without damage to any building on the Leased Premises or to the Leased Premises
on expiration or sooner termination of this Lease;

                  (b)      Are erected by Tenant and not by some other person on
space leased by Tenant without Landlord's written consent to some other person
for advertising purposes;

                  (c)      Comply with any law or ordinance of any governmental
agency having jurisdiction over the Leased Premises; and

                  (d)      Are approved by the Landlord prior to installation
and are consistent with signs for other units in the building. Landlord agrees
such approval shall not be unreasonably withheld.

         13.      Waste. Tenant shall not commit, or suffer to be committed,
any waste upon the Leased Premises.

         14.      Legal Requirements. Tenant shall at its sole cost and expense
promptly comply with all laws, statues, ordinances and governmental rules,
regulations or requirements now in force or which may hereafter be in force and
with the requirements of any Board of Fire Underwriters or other similar body
now or hereafter constituted relating to or affecting the condition, use or
occupancy of the Leased Premises, excluding structural changes. . Tenant shall
at its own cost and expense procure each and every permit, license, certificate
or other authorization or any renewals, extensions or continuances of the same
required in connection with the lawful and proper use of the Leased Premises or
any improvements located on the Leased Premises. Neither the failure on the part
of the Tenant to procure such permit, license, certificate or other
authorization nor the revocation of the same shall in any way affect the
liability of Tenant for the payment of rent herein reserved or the performance
or observance of any of the covenants or conditions herein contained on the
Tenant's part to be performed and observed.

                                    ARTICLE V
                          INSURANCE AND INDEMNIFICATION
                          -----------------------------

         15.      Tenant shall, during the entire term of this Lease, keep in
full force and effect a policy of general comprehensive liability insurance for
bodily injury, personal injury and property damage (including loss of use of
such property) occurring or arising out of the use or occupancy of the Leased
Premises in an amount not be less than One Million Dollars ($1,000,000) per
occurrence. The policy shall name Landlord, any mortgagee of which Landlord
gives Tenant notice, and Tenant, as their interests may appear, as insured and
shall contain a clause that neither Tenant nor the insurer will cancel or change

                                      111
<PAGE>

the insurance without first giving Landlord ten (10) days' prior written notice.
The insurance shall be provided by an insurance company with an A-Rating or
better, and a copy of the policy or a Certificate of Insurance shall be
delivered to Landlord.

         16.      Tenant shall, during the entire term of this Lease, keep in
full force and effect a policy of Use, Occupancy and Contents Insurance and
insurance covering all glass and windows in the Leased Premises.

         17.      Tenant shall indemnify and save Landlord and Landlord's
employees and agents harmless from and against any and all claims, action,
damages, liability and expense in connection with loss of life, personal injury
and/or damage to property arising from or out of any occurrence in, upon or at
the Leased Premises or any part thereof, or occasioned wholly or in part by any
act or omission by Tenant, Tenant's employees, agents, invitees or licensees.

         18.      With respect to all insurance policies referred to in this
Lease, renewal of such contracts of insurance shall be presented to Landlord at
least ten (10) days before the expiration of such insurance coverages.

         19.      Tenant agrees to pay, to Landlord, Tenant's pro rata share of
Landlord's premium for insurance for the common areas, and the building within
which the Leased Premises is located. Said insurance policy shall be a standard
fire, extended coverage, earthquake and liability policy of the type commonly
purchased by owners of commercial buildings in the area in which the Leased
Premises are situated. Tenant's portion of such premium shall be in proportion
to the number of square feet of floor space of the building leased by Tenant as
compared with the total number of square feet of floor space in the building.
Such payments shall be due and payable when Landlord pays the insurance premiums
on the building. Landlord shall bill Tenant for Tenant's pro rata share at such
times as Landlord remits payments to the insurers.

         20.      Each party waives all claims against each other of every
character for which the party otherwise entitled to make such claims is covered
by insurance provided the insurance covering the same is not invalidated by such
waiver, and each party shall obtain from its respective insurance company a
waiver of subrogation of all such claims.

                                   ARTICLE VI
                             MAINTENANCE AND REPAIRS
                             -----------------------

         21 (a).  Tenant's Obligations . Tenant covenants and agrees, throughout
the term of this Lease, without cost to Landlord, to take good care of the
interior of the Leased Premises, and to keep the same in good order and
condition, free of accumulation of dirt and rubbish and shall promptly, without
cost to Landlord, make all necessary non-structural repairs to keep the Leased
Premises in safe, clean and sanitary condition. All such repairs made by Tenant
shall be at least equal in quality and class to the original work.

                                       112
<PAGE>

Notwithstanding the foregoing, Landlord shall be responsible for all structural
repairs, including maintenance and repair of all heating and air conditioning
equipment and systems which are located in the Leased Premises or provide
service to the Leased Premises.

         21. (b)  Landlord's Obligations. Landlord covenants and agrees,
throughout the term of this Lease, to maintain the exterior, and the common
areas where the Leased Premises are located, and to keep the same in good order
and condition, free of accumulation of dirt and rubbish, and shall promptly make
all necessary repairs to keep same in a safe, clean and sanitary condition.
Landlord shall all be responsible for maintaining both liability and peril
insurance on the building, and the common areas.

         22.      Failure by Tenant to Make Repairs. If Tenant fails to perform
any of its obligations to repair as provided herein, Landlord may, at its
option, enter upon the Leased Premises in order to place same in good condition
and repair, and the cost thereof, together with interest at the maximum rate
permitted by law in the State of California, shall be due and immediately
payable following completion of Landlord's work.

         23.      Alterations. Tenant shall not make or suffer to be made any
alterations, additions or improvements to or of the Leased Premises or any part
thereof, without the written approval of Landlord. Such approval shall not be
unreasonably withheld.

         24.      Removal of Tenant's Trade Fixtures. Upon the expiration of
the term of this Lease, or upon the earlier termination of this Lease pursuant
to the provisions hereof, Tenant shall remove all of its trade fixtures then
located upon the Leased Premises and shall restore the Leased Premises to the
condition existing upon the commencement of this Lease, reasonable use and wear
alone excepted. If Tenant fails to remove its trade fixtures and restore the
Leased Premises, Landlord may, but shall not be obligated to, effect such
removal and restoration, and Tenant shall pay to Landlord the amount expended by
Landlord in so doing plus interest at the maximum rate permitted by law from the
date such expenditures are made by Landlord. All trade fixtures or other
property not removed by Tenant prior to the termination of this Lease shall, at
Landlord's election, be deemed abandoned and become the property of Landlord.

         25.      Liens. Tenant shall not permit, and shall promptly discharge,
at its sole cost and expense, all liens, encumbrances and charges (other than
liens, encumbrances or charges created by Landlord) upon the Leased Premises or
any part thereof.

         26.      Landlord's Rights to Discharge Lien. If Tenant shall fail to
discharge promptly any lien, claim or charge against the Leased Premises or any
part thereof, then, in addition to any other right or remedy of Landlord,
Landlord may, but shall not be obligated to, discharge the lien, either by
paying the amount claimed to be due or by procuring the discharge of the lien in
any manner authorized by law. Any amount paid by Landlord for any of the

                                      113
<PAGE>

aforesaid purposes and all reasonable expenses of Landlord, including counsel
fees, shall be repaid immediately upon demand by Tenant to Landlord.

         27.      Notice. Tenant agrees to notify Landlord in writing within
five (5) days of the filing of any claims of lien against the Leased Premises
and of the commencement of any action to enforce such a lien.

                                   ARTICLE VII
                               UTILITIES AND TAXES
                               -------------------

         28.      Tenant shall pay for its pro-rata share of all utilities for
the Leased Premises, including but not limited to water, telephone service, gas,
heat, sewer, waste pick-up, air conditioning, light and power. In addition,
Tenant shall pay before they become delinquent all taxes, assessments, and other
charges levied or imposed by any governmental entity on the furniture, trade
fixtures, appliances, and other personal property placed by Tenant in, on, or
about the Leased Premise. Tenant shall also pay its pro-rata share of real
property taxes and assessments levied or assessed against the building within
which the Leased Premises is located.

                                  ARTICLE VIII
                                 LOSS AND DAMAGE
                                 ---------------

         29.      Landlord shall not be liable for any damage to property of
Tenant or of others entrusted to employees of the Leased Premises, nor for any
loss or damage to any property by theft or otherwise. Landlord shall not be
liable for any injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water, rain, or snow or
leaks from any part of the Leased Premises or from the pipes, appliances or
plumbing works or from the roof, street, or sub-surface or from any other place
or by dampness or by any other cause. Landlord shall not be liable for any such
damage caused by other tenants or persons in the Leased Premises. Any hazardous
materials shall be kept or stored at Tenant's risk only, and Tenant shall hold
Landlord harmless from any claims arising out of damage to the same, including
subrogation claims by Tenant's insurance carriers unless such damage shall be
caused by Landlord's willful act or gross neglect.

         30.      In the event the Leased Premises should be damaged by fire,
explosion or any other casualty or occurrence and (i) such casualty or
occurrence shall not be fully covered by Landlord's insurance, or (ii) the
Leased Premises should be damaged to the extent of more than twenty-five percent
(25%) of the cost of replacement thereof, either Landlord or Tenant may elect to
terminate this Lease. In the event that both Landlord and Tenant agree that the
Lease shall continue, repairs to the Leased Premises must be completed within 90
days from the date of the casualty or occurrence. 31. If the casualty,
repairing, or rebuilding shall render the Leased Premises untenantable, in whole
or in part, a proportionate or total abatement of the fixed minimum rent shall
be allowed from the date when the damage occurred until the date when Landlord
completes the repairs or rebuilding, said proportion to be computed on the basis

                                       114
<PAGE>

of the relation which the gross square foot area of the space rendered
untenantable bears to the floor space of the Leased Premises.

                                   ARTICLE IX
                             ASSIGNMENT AND SUBLEASE
                             -----------------------

         32.      Assignment and Subletting. Tenant shall not assign or
hypothecate this Lease or any interest therein. However, if Tenant merges with
another bank, or is purchased by another bank, it is hereby agreed that this
Lease will be assigned to such successor entity. However, under no other event l
shall Tenant be permitted to sublet the Leased Premises or any part thereof or
any right or interest appurtenant thereto, or permit any other person (the
agents and employees of Tenant excepted) to occupy or use the Leased Premises or
any portion thereof, without the prior written consent of Landlord in each
instance. Any such assignment, hypothecation or subletting, whether voluntary or
involuntary, by operation of law, under legal process, by receivership, in
bankruptcy or otherwise, without such written consent first had and obtained,
shall be void and shall, at the option of Landlord, terminate this Lease.

                  Said prior written consent of Landlord shall not be
unreasonably withheld, but Landlord may consider such factors as the reputation,
financial worth and stability and operating ability of any proposed assignee.

                  A consent by Landlord to one assignment, subletting,
occupation, hypothecation or use by any other person, whether by operation of
law or otherwise, shall not be deemed to be a consent to any subsequent
assignment, subletting, occupation, hypothecation or use by any other person.

                  No such assignment, hypothecation or sublease shall, in any
event, cause or result in a release or discharge of Tenant's duties or
liabilities under this Lease.

         33.      Transfer of Landlord's Interest. Landlord shall have the
right at any time and from time to time during the term hereof, to sell or
assign to any person all or any portion of its fee interest in the leased
Premises or any portion thereof, subject, however, to the leasehold estate of
Tenant created hereby. In the event of any such sale or assignment of Landlord's
fee interest in the Leased Premises or any portion thereof, Landlord shall be
entirely relieved of all liability under any and all of its covenants and
obligations contained in this Lease arising out of any act, occurrence or
omission relating to the Leased Premises or this Lease occurring after the
consummation of such sale or assignment. However, in the event of such a sale,
assignment or transfer, Tenant shall not be responsible for paying any portion
of the increased real property taxes that may result from such sale, transfer or
assignment.

                                      115
<PAGE>

                                    ARTICLE X
                             SUBORDINATION TO LIENS
                             ----------------------

         34.      Rights of Lenders. At the option of any mortgagee under a
mortgage or any beneficiary under a deed of trust, this Lease shall be either
(i) subject and subordinated to or (ii) prior to the lien of any mortgages or
deeds of trust in any amount or amounts whatsoever now or hereafter placed on or
against the Leased Premises or on or against Landlord's interest or estate
therein without the necessity of having further instruments on the part of
Tenant to effectuate such subordination. Notwithstanding the foregoing, in the
event of a foreclosure of any such mortgage or deed of trust, or of any other
action or proceeding for the enforcement thereof, or of any sale thereunder,
this Lease will not be barred, terminated, cut off or foreclosed, nor will the
rights and possession of Tenant hereunder be disturbed, if Tenant shall not then
be in default in the payment of rent due or the performance of Tenant's other
obligations hereunder. Upon the request of any mortgagee or beneficiary, Tenant
agrees to execute any amendment to this Lease which does not, in the opinion of
Tenant's counsel, adversely affect Tenant's rights hereunder.

                                   ARTICLE XI
                               TENANT'S COVENANTS
                               ------------------

         35.      Tenant's covenants. Tenant agrees that it shall:

                  (a)      Observe such rules and regulations as from time to
time may be put in effect by us for the general safety, comfort and convenience
of tenants and patrons of the building within which the Leased Premises is
located. Any failure by Landlord to enforce any other Lease in the building
shall not constitute a waiver thereof.

                  (b)      Give Landlord, its agents and employees, its
mortgagees and any other person or persons authorized by Landlord, access to the
Leased Premises upon reasonable notice to examine the same and to make such
repairs, additions and alterations as they may deem advisable.

                  (c)      Keep the Leased Premises in good order and condition,
keep the Leased Premises lien free and commit no waste to the Leased Premises.

                  (d)      Maintain and pay utilities for the lighting fixtures
attached to the Leased Premises and pay its pro-rata share for utilities for
common areas.

                  (e)      Upon the termination of this Lease in any manner
whatever, remove its goods and effects and those of any other persons claiming
under its, and quit and deliver up the Leased Premises to Landlord peaceably and
quietly in as good order and condition as the same are now or hereafter may be
improved, reasonable use and wear thereof excepted. Goods and effects not
removed by Tenant at the termination of this Lease (or within forty-eight [48]
hours after a termination by reason of default by Tenant), shall be considered
abandoned, and Landlord may dispose of the same as it deems expedient, but
Tenant shall promptly upon demand reimburse Landlord for any expenses incurred
by it in connection therewith. All alternations, installations, additions,

                                       116
<PAGE>

whether movable or not, shall not be removed from said property without
Landlord's written consent.

                  (f)      Not place any signs on the outside walls, windows,
roof of the building or otherwise on the Leased Premises or the building or its
common areas without Landlord's specific written approval.

                  (g)      Not do any act or bring or keep anything thereon
which may make void or voidable any insurance, or cause increased or extra
premiums payable for insurance. Should the operation of Tenant's business,
whether it be due to the method of operation or the nature of its business,
cause a higher insurance premium, either for the entire premises or for Tenant's
space, Tenant shall be responsible for the payment of any increase thereof.

                  (h)      Not damage, overload, deface or otherwise harm the
Leased Premises, nor commit any nuisance (including loud speakers, sound
amplifiers or phonographs); nor permit the emission of any objectionable noise
or odor; nor bun any trash or refuse with the Shopping Center, nor sell,
display, distribute or give away any alcoholic liquors or beverages; nor make
any use of the Leased Premises which is improper, offensive or contrary to any
law or ordinance.

         Tenant's obligation under this Article XI to do or not to do a
specified act shall extend to and include Tenant's obligation to see to it that
its employees, invitees and agents shall do or shall not do such acts, as the
case may be.

                                   ARTICLE XII
                                TENANT'S DEFAULT
                                ----------------

         36.      Default by Tenant.
                  -----------------

                  (a)      The occurrence of any of the following shall
constitute a material default and breach of this Lease by Tenant:

                           (i)      Any failure by Tenant to pay the rent or to
make any other payment required to be made by Tenant hereunder, provided that
such failure continues for a period of thirty (30) days after Landlord serves a
written notice of default on Tenant.

                           (ii)     Tenant's abandonment or vacation of the
Leased Premises.

                           (iii)    Tenant's failure to observe and perform any
other provision of this Lease to be observed or performed by Tenant where such
failure continues for ten (10 days after written notice thereof by Landlord to
Tenant; provided, however, that if the nature of such default is such that the
same cannot reasonably be cured within such five-day period, Tenant shall not be

                                       117
<PAGE>

deemed to be in default if Tenant shall within such period commence such cure
and thereafter diligently prosecute the same to completion.

                           (iv)     Tenant's making of any general assignment
for the benefit of creditors; the filing by or against Tenant of a petition to
have Tenant adjudged a bankrupt or of a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days),
the appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets located at the Leased Premises or of Tenant's interest in
this Lease, where possession is not restored to Tenant within thirty (30) days;
or the attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Leased Premises or of Tenant's interest in this
Lease, where such seizure is not discharged within thirty (30) days.

                  (b)      In the event of any such default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights
of Tenant hereunder by giving written notice of such intention to terminate. In
the event that Landlord shall elect to so terminate this Lease then Landlord may
recover from Tenant:

                           (i)      Any unpaid rent which had been earned at the
time of such termination, less any amount that Tenant proves could have been
reasonably mitigated; plus

                           (ii)     Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
his obligations under this Lease or which in the ordinary course of things would
be likely to result therefrom; plus

                           (iii)    Such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by applicable California
law.

                  (c)      In the event of any such default by Tenant, Landlord
shall also have the right, , to reenter the Premises in accordance with
California law, and remove all persons and property from the Premises; such
property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of the Tenant.

                  (d)      In the event of the vacation or abandonment of the
Leased Premises by Tenant or in the event that Landlord shall elect to reenter
as provided in paragraph (c) above or shall take possession of the Leased
Premises pursuant to legal proceeding or pursuant to any notice provided by law,
then if Landlord does not elect to terminate this Lease as provided in paragraph
(b) above, then Landlord may from time to time, without terminating this Lease,
either recover all rent that could not be reasonably mitigated as it becomes due
or relet the Leased Premises or any part thereof for such term or terms and at
such rental or rentals and upon such other terms and conditions as Landlord,
acting in a commercially reasonable manner, elects.

                                      118
<PAGE>

                  In the event that Landlord shall elect to so relet, then
rentals received by Landlord from such reletting shall be applied as follows:
first, to the payment of any indebtedness other than rent due hereunder from
Tenant to Landlord; second, to the payment of any cost of such reletting; third,
to the payment of rent due and unpaid hereunder; and the residue, if any, shall
be held by Landlord and applied in payment of future rent as the same may become
due and payable hereunder. Should that portion of such rentals received from
such reletting during any month, which is applied by the payment of rent
hereunder, be less than the rent payable during that month by Tenant hereunder,
then Tenant shall pay such deficiency to Landlord immediately upon demand
therefor by Landlord. Such deficiency shall be calculated and paid monthly.

                                  ARTICLE XIII
                         COMMON AREAS OWNED BY LANDLORD
                         ------------------------------

         37.      Available Areas. Landlord shall make available within its
ownership of the building such common areas (including but not limited to
parking areas, driveways, access and egress road, walkways, sidewalks,
landscaped and planted areas) as Landlord shall deem appropriate. Landlord shall
manage, repair and maintain the common areas and may from time to time change
the size, location, nature and use of any common area.

         38.      Use of Common Areas. Tenant and Tenant's employees, agents,
customers and invitees shall have the nonexclusive right, in common with all
others to whom Landlord has or may hereafter grant right, to use the common
areas subject to reasonable rules and regulations as Landlord may from time to
time impose. Tenant agrees after notice thereof to abide by such reasonable
rules and regulations and to cause its employees, customers and invitees to
conform thereto. Landlord may at any time close temporarily any common areas to
make repairs or changes, to prevent the acquisition of public rights in such
area, or to discourage noncustomer parking; and may do such other acts in and to
the common area as in Landlord's judgment may be desirable to improve the
convenience thereof, including designating specific area within the common area
for parking by Tenant, Tenant's customers, and Tenant's employees. If requested
to do so by Landlord, Tenant shall use its best efforts to identify vehicles
operated by Tenant and Tenant's employees, and upon request Tenant shall
immediately comply with such parking rules and regulations as Landlord shall
deem appropriate to set forth. Tenant shall not at any time interfere with the
rights of Landlord and other tenants, their employees, customers and invitees,
to use any part of the parking areas and other common areas.

         39.      Charge for Use of Common Areas. Tenant shall, based upon the
proportion that the total square footage of the Leased Premises bear to the
total square footage of the building where the Leased Premises are located, pay
its proportionate share of costs and expenses incurred by Landlord in
maintaining, managing, and operating the common areas. The Leased Premises

                                       119
<PAGE>

represents 18.4 % (Drafting Note: Landlord to confirm ratio) of the total space
available within the subject building. The common area expenses shall include
without limitation all utilities, cleaning, garbage service, landscaping, and
sweeping, and same shall be additional rental hereunder. Such payments shall be
made to Landlord reconciled on a monthly or an annual basis, at Landlord's
election.

                                   ARTICLE XIV
                            MISCELLANEOUS PROVISIONS
                            ------------------------

         40.      Attorney Fees. Should either Landlord or Tenant refer this
Lease to an attorney for collection of rent or seek legal advice following a
default under this Lease, or if an action is instituted on this Lease, or if any
other action or proceeding including but not limited to proceedings in unlawful
detainer, proceedings under the federal bankruptcy act, or in eminent domain, or
under the probate code, or in connection with any state or federal tax lien, or
to enforce an assignment of rents, or for the appointment of a receiver, or
involving mechanics' liens or stop notices, the prevailing party shall be
entitled to collect its reasonable attorneys' fees plus all costs and expenses
incurred incident to such employment.

         41.      Indemnity. Tenant hereby agrees to indemnify and hold
Landlord harmless from and against any and all claims arising from Tenant's use
or occupation of the Leased Premises or from the conduct of Tenant's business
therein, or from any activity, work or things done, permitted or suffered by
Tenant in or about the Leased Premises or elsewhere. Tenant further agrees to
indemnify and hold Landlord harmless from and against any and all claims arising
from any breach or default in the performance of any of tenant's obligations
hereunder, or arising from any negligence of Tenant, or any of Tenant's
obligations hereunder, or arising from any negligence of Tenant, or any of
Tenant's agents, contractors, employees or invitees, and from and against all
costs, attorney fees, expenses and liabilities incurred in the defense of any
such claim or any action or proceeding brought thereon. In the event that
Landlord is ever made a party to any action or proceeding by reason of any
matter for which Tenant has hereby agreed to indemnify Landlord, then Tenant,
upon notice from Landlord, shall defend such action or proceeding on behalf of
Landlord at Tenant's expense by counsel satisfactory to Landlord. As a material
part of the consideration for this Lease, Tenant hereby assumes all risk of
damage to property or injury to persons, in, upon or about the Leased Premises
arising from any cause except such damage resulting from the gross negligence of
willful misconduct of Landlord or his agents or employees, and Tenant hereby
waives all claims in respect thereof against Landlord.

         42.      Notices. All communications, notices and demands of any kind
which either party may be required or desire to give to or serve upon the other
party shall be made in writing and sent by telegram or certified mail, postage
prepaid, return receipt requested to the following addresses:

                                      120
<PAGE>

         To Landlord:      R & R Partners
                           3521 Scott Street
                           San Francisco, CA 94123-1506

         Copies to:        Michael T. Carlson, Esq.
                           Geary, Shea, O'Donnell & Grattan, P.C.
                           P.O. Box 429
                           Santa Rosa, CA 95402-0429

         To Tenant:        Ray Byrne, President
                           North Coast Bank
                           50 Santa Rosa Avenue
                           Santa Rosa, CA   95404

         Copies To:        Richard Borst
                           American River Holding Co.
                           1545 River Park Drive, Suite 107
                           Sacramento, CA   95815

Any such notice sent by mail shall be presumed to have been received by the
addressee two (2) business days after posting in the United States mail. Either
party may change its address by giving the other party written notice of its new
address as herein provided.

         43.      Entry and Inspection. Subject to federal and state banking
regulations which shall prevail in the event of any conflict with the following
right of entry by Landlord, Tenant shall permit Landlord and Landlord's agents
to enter into and upon the Leased Premises at all reasonable times for the
following purposes:

                  (a)      For the purpose of inspecting or maintaining the
same;

                  (b)      For the purpose of making repairs, alterations or
additions to any other portion of the building, including the erection and
maintenance of such scaffolding, canopies, fences and props as may be required;

                  (c)      For the purpose of posting notices of non-liability
for alterations, additions or repairs;

                  (d)      For the purpose of placing upon the Leased Premises
any usual or ordinary "For Sale" signs, and without any liability to Tenant for
any loss of occupation or quiet enjoyment of the Leased Premises thereby
occasioned. Tenant shall permit Landlord, at any time within sixty (60) days

                                      121
<PAGE>

prior to the expiration of this Lease, to place upon the Leased Premises any
usual or ordinary "To Let" or "To Lease" signs. (No item contained in this
Section shall be construed to impose on Landlord any obligation to perform any
of the activities set forth herein.)

         44.      Quiet Enjoyment. Subject to the provisions of this Lease and
upon payment of all rental and other charges herein required and upon
performance of all of the provisions to be performed by Tenant hereunder,
Landlord shall secure to Tenant during the term of this Lease the quiet and
peaceful possession of the Leased Premises and all rights and privileges
appertaining thereto against anyone claiming by or through Landlord.

         45.      Force Majeure--Unavoidable Delays. If the performance of any
act required by this Lease to be performed by either Landlord or Tenant is
prevented or delayed by reason of an act of God, strike, lockout, labor
troubles, inability to secure materials, restrictive governmental laws or
regulations, or other such direct external cause, the time for performance of
the act will be extended for a period equivalent to the period of delay, and
performance of the act during the period of delay will be excused. However,
nothing contained in this section shall excuse the prompt payment of rent by
Tenant as required by this Lease or the performance of any act rendered
difficult because of the financial condition of the party required to perform
the act.

         46.      Partial Invalidity. If any provision of this Lease is held by
a court of competent jurisdiction to be either invalid, void or unenforceable,
the remaining provisions of this Lease shall remain in full force and effect
unimpaired by the holding.

         47.      Successors and Assigns. The covenants and conditions herein
contained shall, subject to the provisions of this Lease, apply to and bind the
heirs, successors, executors, administrators and assigns of all the parties
hereto; and all of the parties hereto shall be jointly and severally liable
hereunder. (No item contained in this Section shall be construed to authorize
Landlord or Tenant to transfer or assign their interests in this Lease except as
authorized elsewhere in this Lease.)

         48.      Choice of Laws. This Lease is governed by the laws of the
State of California and any question arising hereunder shall be construed or
determined according to such law.

         49.      Article and Section Headings. Headings at the beginning of
each Article and Section of this Lease are intended solely for convenience or
reference and are not to be deemed or construed to be of this Lease. This
agreement shall be given a fair and reasonable construction in accordance with
the intentions of the parties and without regard to, or aid of, Section 1654 of
the California Civil Code.

         50.      Time is of the Essence. Time is of the essence of this Lease.

                                      122
<PAGE>

         51.      Prior Agreements. Subject to federal and state banking
regulations that may control over any conflicting provisions set forth in this
Lease, this Lease contains all of the agreements of the parties hereto with
respect to the matters contained herein, and no prior agreement or understanding
pertaining to any such matter shall be effective for any purpose. No provision
of this Lease may be amended or added to except by an agreement in writing
signed by the parties hereto or their respective successors in interest.

         52.      Cumulative Remedies. The remedies granted to Landlord in this
Article shall not be exclusive but shall be cumulative and in addition to all
other remedies now or hereafter allowed by law or authorized in this Lease.

         53.      Waiver of Breach. The waiver by Landlord of any breach by
Tenant of any of the provisions of this Lease shall not constitute a continuing
waiver or a waiver of any subsequent default or breach by Tenant either of the
same or a different provision of this Lease.

         54.      Broker's Commission. Tenant agrees that any claims for or
payment of Tenant's brokerage commissions or finder's fees in connection with
the execution of this Lease by Tenant shall be the sole and exclusive
responsibility of Tenant, and Tenant agrees to indemnify and hold harmless
Landlord from all liabilities arising from any claim resulting from its conduct
or alleged conduct by which might be asserted by any third party regarding the
entitlement to such a brokerage commission or finder's fee. In no event shall
Landlord be responsible for paying any brokerage commission or finder's fees in
connection with the execution of this Lease.

         55.      Estoppel Certificate. At any time and from time to time,
within thirty (30) days after notice or request by either party, the other party
shall execute, acknowledge, and deliver to the requesting party, or to such
other recipient as the notice shall direct, a statement certifying that this
Lease is unmodified and in full force and effect as modified in the manner
specified in the statement.

         The statement shall also state the dates to which the rent and any
other charges have been paid in advance. The statement shall be such that it can
be relied on by any auditor, creditor, commercial banker, and investment banker
or either party and by any prospective purchaser or encumbrancer or the premises
or improvements or both or of all or any part of parts of your interests or our
interests under this Lease.

         Tenant's failure to execute, acknowledge, and deliver, on request, the
certified statement described above within the specified time shall constitute
acknowledgment by Tenant to all persons entitled to rely on the statement that
this Lease is unmodified and in full force and effect and that the rent and
other charges have been duly and fully paid to and including the respective due
date immediately preceding the date of the notice of request and shall

                                      123
<PAGE>

constitute a waiver, with respect to all persons entitled to rely on the
statement, of any defaults that may exist before the date of the notice.

         56.      Signature Warranties . Each of the signatories to this Lease,
by its signature below, warrants and represents that it is authorized to execute
this Lease on behalf of the identified entity.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date first above written.

                                        LANDLORD: R & R Partners, a California
                                        General Partnership

                                        By: /s/ EILEEN J GUIBERT
                                            ------------------------------------

                                        Its: Manager for R&R Partners
                                             -----------------------------------

                                        TENANT: North Coast Bank, N.A.

                                        By: /s/ RAYMOND F BYRNE
                                            ------------------------------------

                                        Its: Pres/CEO
                                             -----------------------------------

                                       124

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]