Document:

<PAGE>

                                                                   EXHIBIT 10.45

================================================================================

                    BRANCH PURCHASE AND ASSUMPTION AGREEMENT

                                   dated as of

                                 April 25, 2003

                                     between

                               PLACER SIERRA BANK

                                       and

                                   PLUMAS BANK

================================================================================

Execution Copy

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                    <C>
ARTICLE 1   CERTAIN DEFINITIONS.............................................................             1
     1.1    Certain Definitions.............................................................             1

ARTICLE 2   THE TRANSACTIONS................................................................             6
     2.1    Transfer and Consideration......................................................             6
     2.2    Purchase Premium................................................................             6
     2.3    Calculation of the Payments to Be Made Under Sections 2.1 and 2.2...............             6
     2.4    Assumption of IRA Deposits......................................................             7
     2.5    Assumption of Keogh Deposits....................................................             7
     2.6    Adjustment of Expenses and Fees.................................................             7
     2.7    Post-Closing Adjustment Relating to Fixed Assets................................             7
     2.8    Allocation of Consideration.....................................................             8
     2.9    Other Loans and Deposit-Related Loans...........................................             8

ARTICLE 3   LIMITATION OF LIABILITIES ASSUMED...............................................             8
     3.1    Limitation of Liabilities Assumed...............................................             8

ARTICLE 4   TRANSITIONAL MATTERS............................................................             8
     4.1    Transitional Arrangements.......................................................             8
     4.2    Depositors......................................................................             9
     4.3    Assumption of Obligations.......................................................            10
     4.4    Direct Deposits.................................................................            10
     4.5    Direct Debit....................................................................            11
     4.6    Escheatable Deposits............................................................            11
     4.7    Maintenance of Records..........................................................            11
     4.8    Interest Reporting and Withholding..............................................            11
     4.9    IRA and Keogh Accounts..........................................................            12
     4.10   Negotiable Instruments..........................................................            12
     4.11   ATM Cards.......................................................................            12
     4.12   Leasing of Furniture, Fixtures and Equipment....................................            13
     4.13   Data Processing Conversion for the Branches and Handling of Certain Items.......            13
     4.14   Data Processing Tapes and File Packages.........................................            14

ARTICLE 5   REPRESENTATIONS AND WARRANTIES OF SELLER........................................            14
     5.1    Corporate Organization and Authority............................................            14
     5.2    No Conflict; Licenses and Permits; Compliance with Laws and Regulations.........            14
     5.3    Approvals and Consents..........................................................            15
     5.4    Title to Assets.................................................................            15
     5.5    Leases..........................................................................            15
     5.6    Contracts and Defaults..........................................................            15
     5.7    Employee Benefits...............................................................            16
</TABLE>

Execution Copy

                                       -i-

<PAGE>

                                TABLE OF CONTENTS(CONT.)

<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                    <C>
     5.8    Litigation and Liabilities......................................................            16
     5.9    Regulatory Matters..............................................................            17
     5.10   Brokers' Fees...................................................................            17
     5.11   Environmental Matters...........................................................            17
     5.12   IRAs and Keogh Plans............................................................            18
     5.13   Absence of Certain Changes, Etc.................................................            18
     5.14   Loans...........................................................................            19
     5.15   Collective Bargaining Agreements................................................            19
     5.16   Agreements with Regulatory Authorities..........................................            19

ARTICLE 6   REPRESENTATIONS AND WARRANTIES OF PURCHASER.....................................            19
     6.1    Corporate Organization and Authority............................................            19
     6.2    No Conflict; Licenses and Permits; Compliance with Laws and Regulations.........            19
     6.3    Approvals and Consents..........................................................            20
     6.4    Regulatory Matters..............................................................            20
     6.5    Brokers' Fees...................................................................            20
     6.6    Litigation and Liabilities......................................................            20
     6.7    Agreements with Regulatory Authorities..........................................            20
     6.8    Operation of the Branches.......................................................            20

ARTICLE 7   COVENANTS OF THE PARTIES........................................................            21
     7.1    Activity in the Ordinary Course.................................................            21
     7.2    Access and Confidentiality......................................................            22
     7.3    Regulatory Approvals............................................................            23
     7.4    Consents........................................................................            23
     7.5    Delivery of Records at Closing..................................................            23
     7.6    Continuing Availability of Records..............................................            23
     7.7    Further Assurances..............................................................            23
     7.8    Solicitation of Accounts........................................................            24
     7.9    Solicitation of Accounts.  .....................................................            24
     7.10   Insurance.......................................................................            24
     7.11   Notices of Default..............................................................            24
     7.12   Assumed Contracts...............................................................            25
     7.13   IRA Prototype Plans.............................................................            25
     7.14   Performance of Liabilities......................................................            25
     7.15   Preliminary Environmental Reports...............................................            25
     7.16   Employment Solicitation.........................................................            25

ARTICLE 8   TAXES AND EMPLOYEE BENEFITS.....................................................            25
     8.1    Tax Representations.............................................................            25
     8.2    Proration of Taxes..............................................................            25
     8.3    Sales and Transfer Taxes........................................................            26
     8.4    Information Returns.............................................................            26
     8.5    Payment of Amount Due under Article 8...........................................            26
     8.6    Assistance and Cooperation......................................................            26
</TABLE>

Execution Copy

                                      -ii-

<PAGE>

                                TABLE OF CONTENTS(CONT.)

<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                    <C>
     8.7    Employee Benefits...............................................................            26

ARTICLE 9   CONDITIONS TO CLOSING...........................................................            28
     9.1    Conditions to Obligations of Purchaser..........................................            28
     9.2    Conditions to Obligations of Seller.............................................            29

ARTICLE 10     CLOSING PROCEDURE............................................................            30
     10.1   Closing Date and Place; Notifications...........................................            30
     10.2   Procedure at the Closing; Adjustments...........................................            30
     10.3   Deliveries by Seller............................................................            31
     10.4   Deliveries by Purchaser.........................................................            31
     10.5   Filing..........................................................................            32

ARTICLE 11     TERMINATION..................................................................            32
     11.1   Termination.....................................................................            32
     11.2   Effect of Termination...........................................................            33

ARTICLE 12     INDEMNIFICATION..............................................................            33
     12.1   Indemnification.................................................................            33

ARTICLE 13     MISCELLANEOUS................................................................            35
     13.1   Survival........................................................................            35
     13.2   Assignment......................................................................            35
     13.3   Binding Effect..................................................................            35
     13.4   Public Notice...................................................................            35
     13.5   Notices.........................................................................            35
     13.6   Incorporation...................................................................            36
     13.7   Governing Law...................................................................            36
     13.8   Entire Agreement................................................................            36
     13.9   Counterparts....................................................................            37
     13.10  Headings........................................................................            37
     13.11  Waiver..........................................................................            37
     13.12  Expenses........................................................................            37
     13.13  Arbitration.....................................................................            37
     13.14  Computation of Interest.........................................................            37
     13.15  Third Party Beneficiaries.......................................................            37
     13.16  Severability....................................................................            38
</TABLE>

Execution Copy

                                      -iii-

<PAGE>

                            TABLE OF CONTENTS(CONT.)

                                   SCHEDULES

<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                    <C>
1.1(a)      Branches, Banking Offices and ATMs
1.1(b)      Appraisers
1.1(c)      Other Liabilities
1.1(d)      Other Loans
1.1(e)      Other Real Estate
2.1(c)(iv)  Net Book Value of Branch Real Estate and Other Real Estate
2.1(c)(v)   Net Book Value of Furniture, Fixtures and Equipment and Improvements
5.4         Title to Assets
5.5         Lease Expenses
5.7         Employee Benefit Plans
5.8         Litigation and Liabilities
5.11        Environmental Matters
5.12        IRAs and Keogh Plans
5.13        Absence of Certain Changes, Etc
5.14(a)     Servicing of Other Loans
5.14(b)     Representations and Warranties Other Loans
7.16        Employment Solicitation
8.1         Tax Returns
10.2(c)     Accountants
12.1(c)     Environmental Remediation
</TABLE>

                                     EXHIBIT

1           Statement and Final Statement - Preparation Procedures

Execution Copy

                                      -iv-

<PAGE>

                    BRANCH PURCHASE AND ASSUMPTION AGREEMENT

         BRANCH PURCHASE AND ASSUMPTION AGREEMENT, dated as of April 25, 2003,
between PLACER SIERRA BANK, a California banking corporation ("Seller"), and
PLUMAS BANK, a California banking corporation ("Purchaser").

                                    RECITALS

         A.       Seller. Seller is a California banking corporation and is a
member of the Bank Insurance Fund ("BIF") and of the Savings Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation (the
"FDIC") with its principal executive offices located in Auburn, California.

         B.       Purchaser. Purchaser is a California banking corporation and
is a member of the BIF and SAIF with its principal executive offices located in
Quincy, California.

         C.       Corporate Approvals. Each of the parties to this Agreement has
obtained all necessary corporate approvals for the execution and delivery of
this Agreement.

         D.       Continuation of Service. Purchaser intends to offer the broad
array of retail and business banking services commonly offered in the State of
California in the geographic area served by the Branches to be acquired by
Purchaser under this Agreement.

         NOW, THEREFORE, in consideration of their mutual promises and
obligations and intending to be legally bound hereby, the parties agree as
follows:

                                   ARTICLE 1

                               CERTAIN DEFINITIONS

         1.1      Certain Definitions. As used in this Agreement, the terms
below shall have the meanings set forth.

         "Account" means, as of any date, a deposit liability of Seller which is
not represented by a certificate of deposit having a fixed maturity and which is
maintained at the Branches.

         "Accrued Expenses" means the accrued and unpaid expenses appearing as a
liability on a Statement and a Final Statement pursuant to Section 2.6.

         "Accrued Interest" on any Deposits at any date means interest which is
accrued on such Deposits to such date and not yet posted to such deposit
accounts.

         "ACH Direct Deposit Cut-off Date" has the meaning set forth in Section
4.4.

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

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

Execution Copy

<PAGE>

         "Assets" means the Branch Real Estate, the Other Real Estate, the
Furniture, Fixtures and Equipment, Improvements, Cash on Hand, Leases, any
leases pertaining to the Branch Real Estate where Seller is lessor or
sub-lessor, safe deposit boxes located at the Branches (exclusive of the
contents thereof), Prepaid Expenses, the Records, the Deposit-Related Loans and
the Other Loans.

         "Assumed Contract" shall have the meaning set forth in Section 7.11.

         "Assumed Deposits", as of the Closing Date, means all Branch Deposits
and Escheatable Deposits existing on the Closing Date, together with all Accrued
Interest thereon as of the Closing Date, provided however, that Assumed Deposits
shall not include (a) any Deposits associated with point-of-sale credit card
processing; (b) any Deposits related to any Loans excluded under Section 2.9; or
Branch Deposits that have been overdrawn for a consecutive 30 day period at any
time within the 12 months prior to the Closing Date.

         "ATMs" means all automated teller machines listed on Schedule 1.1(a)
hereto.

         "Branch Deposits" means, as of any date, the Deposits outstanding on
such date at the Branches, provided, however, that Branch Deposits shall not
include (i) self-directed IRA Accounts and Keogh Accounts which will not be or
have not been transferred to Purchaser in accordance with Sections 2.4 and 2.5,
respectively, (ii) Escheatable Deposits, and (iii) any other deposit liabilities
which, by law or contract (including the terms of any relevant deposit
agreement), either Purchaser is not permitted to assume or Seller is not
permitted to sell, transfer, assign or otherwise dispose of.

         "Branch Real Estate" means all real property owned by Seller on which
Branches are located and set forth in Schedule 1.1(f).

         "Branches" means each of the branches, loan production offices, public
accommodation offices, other banking offices and ATMs of Seller owned or leased
by Seller and identified on Schedule 1.1(a) hereto and sold to Purchaser.

         "Business Day" means a day on which Seller is open for business in
California and which is not a Saturday or Sunday.

         "Cash on Hand" means, as of any date, all petty cash, vault cash,
teller cash, ATM cash, and prepaid postage maintained at the Branches.

         "Closing" and "Closing Date" refer to the closing for the sale,
purchase and assumption provided for herein to be held at such time and date as
provided for in Article 10 hereof.

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

         "Deposits" means, as of any date, all deposit liabilities of Seller
that are Accounts or certificates of deposit maintained at the Branches,
including all uncollected items included in depositors' balances.

         "Deposit-Related Loans" means loans secured by deposits in savings
accounts or by certificates of deposit and overdrafts in respect of Transaction
Accounts (other than overdrafts extended pursuant to a formal line of credit or
similar arrangement) maintained at any of the Branches.

         "Direct Deposit Cut off Date" means the ACH Direct Deposit Cut off Date
or the Fed Wire Direct Deposit Cut-off Date.

Execution Copy

                                       -2-

<PAGE>

         "Employees" means (i) any employee employed by Seller or its
subsidiaries or Affiliates on the Closing Date at any Branch being acquired on
such date, including without limitation, those employees who on the Closing Date
are on medical leave, family leave, military leave or personal or pregnancy
leave, and (ii) such other employees of Seller as may be agreed between Seller
and Purchaser.

         "Encumbrances" means all mortgages, claims, charges, liens,
encumbrances, easements, limitations, restrictions, commitments and security
interests, except for statutory liens securing payments not yet due, liens
incurred in the ordinary course of business, including without limitation liens
in favor of mechanics or materialmen, and such other liens, charges, security
interests or encumbrances as do not materially and adversely affect the use of
the properties or assets subject thereto or affected thereby or which otherwise
do not materially impair business operations at such properties and except for
obligations pursuant to the California escheat and unclaimed property laws
relating to the Escheatable Deposits.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "Escheatable Deposits" means, as of any date, Deposits and safe deposit
box contents, in each case held on such date at the Branches which become
subject to escheat, in the calendar year in which the Closing occurs, to the
State of California pursuant to the California escheat and unclaimed property
laws (California Unclaimed Property Law, Chapter 7 (commencing with Section
1500) of Title 10 of Part 3 of the Code of Civil Procedure).

         "Federal Funds Rate" on any day means the per annum rate of interest
(rounded upward to the nearest 1/100 of 1%) which is the weighted average of the
rates on overnight federal funds transactions arranged on such day or, if such
day is not a banking day, the previous banking day by federal funds brokers
computed and released by the Federal Reserve Bank of New York (or any successor)
in substantially the same manner as such Federal Reserve Bank currently computes
and releases the weighted average it refers to as the "Federal Funds Effective
Rate" at the date of this Agreement.

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.

         "Fed Wire Direct Deposit Cut-off Date" has the meaning set forth in
Section 4.4.

         "Final Statement" means the Statement, as of the Closing Date,
delivered by Seller to Purchaser and prepared in accordance with the procedures
set forth in Exhibit 1, setting forth the Assets sold and transferred and the
Statement Liabilities assumed at the Closing.

         "Furniture, Fixtures and Equipment" means all furniture, fixtures and
equipment that are located in or necessary for the conduct of business in the
ordinary course at any Branch or Other Real Estate and also includes all ATM's,
provided, however, there shall be excluded from this definition all proprietary
branch automation.

         "Improvements" means all improvements to the leased or owned real
estate in respect of the Branches or the Other Real Estate purchased, installed
or constructed by or on behalf of Seller and used in connection with the
operation or maintenance of any Branch or the Other Real Estate, including
without limitation buildings, structures, parking facilities and drive-in teller
facilities.

Execution Copy

                                       -3-

<PAGE>

         "Individual Retirement Account" or "IRA" means an account created by a
trust for the exclusive benefit of an individual or his beneficiaries in
accordance with the provisions of Section 408 of the Code.

         "Initial Base Amount" shall have the meaning set forth in Section
2.1(b).

         "IRS" means the Internal Revenue Service.

         "Keogh Account" or "Keogh" means an account created by a trust for the
benefit of employees (some or all of whom are owner-employees) and that complies
with the provisions of Section 401 of the Code.

         "Lease" means any of the real estate leases or a sublease of Seller's
interest thereunder for a Branch or Other Real Estate, as set forth and attached
as Schedule 1.1(g).

         "Lessor" means the lessor of any of the Leases.

         "Liabilities" means the (i) Assumed Deposits, (ii) Assumed Contracts,
(iii) Seller's obligations from and after the Closing Date with respect to the
Leases and any lease or rental agreement or deferred purchase or installment
sale agreement with respect to any of the Furniture, Fixtures and Equipment or
any Improvement as set forth and attached as Schedule 1.1(h), (iv) Seller's
obligations to provide services from and after the Closing Date in connection
with the Assets and the Assumed Deposits, including obligations with respect to
safe deposit boxes, and (v) such other liabilities of Seller with respect to the
operations of the Branches as may be described on Schedule 1.1(c) (the "Other
Liabilities"); excluding, however, any obligation of Seller to advance funds to
any borrower under any loan commitment other than loan commitments referred to
on Schedule 1.1(d) hereto, and also excluding any Leases or Assumed Contracts as
to which any consents required to transfer the same to Purchaser at Closing
cannot be obtained; and shall include no other duty or obligation whatsoever
(including, without limitation, any and all penalties, fines, compensatory or
punitive damages of any kind whatsoever) of Seller, its Affiliates or any other
person.

         "Loan Documents" means all documents executed or delivered in
connection with any Deposit-Related Loan or any Other Loan, including, without
limitation, notes, deeds of trust, security agreements, loan agreements,
including building and loan agreements, guarantees, sureties and insurance
policies and all modifications, waivers and consents relating to any of the
foregoing.

         "Losses" means losses, liabilities, damages (including forgiveness or
cancellation of obligations), expenses, costs and legal fees and disbursements,
collectively.

         "Material Adverse Effect" means a material adverse effect on the
business or prospects of the Branches, taken as a whole in respect of all such
Branches, or on the consummation of the transactions contemplated hereby.

         "Net Book Value" shall mean the cost basis of the Assets less
accumulated depreciation with respect to the Assets as of the month-end prior to
the Closing.

         "Order" shall have the meaning set forth in Section 9.1(b).

         "Other Loans" means the loans described on Schedule 1.1(d) to be
attached hereto (including loan commitments referred to thereon), as provided in
Section 2.9, provided that any loans excluded by Purchaser pursuant to Section
2.9 shall not be deemed to be "Other Loans."

Execution Copy

                                       -4-

<PAGE>

         "Other Real Estate" means the real property and interests therein owned
or leased by Seller as set forth in Schedule 1.1(e) hereto.

         "Prepaid Expenses" means the prepaid expenses appearing as an asset in
respect of any Branch on a Statement and a Final Statement pursuant to Section
2.6.

         "Purchase Premium" means the amount specified as such in Section 2.2.

         "Records" means all records and original documents in Seller's
possession which pertain to and are utilized by Seller to administer, reflect,
monitor, evidence or record information respecting the business or conduct of
the Branches (including transaction tickets through the Closing Date and all
records for closed accounts located in Branches and excluding any other
transaction tickets and records for closed accounts) and all such records and
original documents respecting (i) the Assumed Contracts, (ii) the Assets, (iii)
the Assumed Deposits, or (iv) the Other Liabilities (except confidential
employee records for which consents to release such records to Purchaser have
not been obtained from the relevant employee), including all such records
maintained on electronic or magnetic media in the electronic data base system of
Seller, or to comply with applicable laws and governmental regulations to which
the Assumed Deposits are subject, including but not limited to Federal Reserve
Board Regulation E (12 C.F.R. Section 205), Federal Reserve Board Regulation CC
(12 C.F.R. Section 229) and the California unclaimed property and escheat laws
(California Unclaimed Property Law, Chapter 7 (commencing with Section 1500) of
Title 10 of Part 3 of the Code of Civil Procedure).

         "Regulatory Approvals" means all approvals, permits, authorizations,
waivers or consents of governmental agencies or authorities necessary or
appropriate to permit consummation of the transactions contemplated herein and
includes, without limitation, the following: (i) approval of the Federal Deposit
Insurance Corporation under the FDIA; (ii) approval of the California banking
authorities under California law; and (iii) expiration of the waiting period
provided for in Section 18(c) of the FDIA without commencement of any action
challenging Purchaser's acquisition of the Branches hereunder by the United
States Department of Justice.

         "Seller's knowledge" or other similar phrases shall mean information
which is known to an executive officer of Seller after reasonable investigation.

         "Settlement Payment" means a payment made pursuant to Section 2.1(b).

         "Statement", with reference to the Closing, means the statement
reflecting the Assets and Liabilities estimated to be transferred at the
Closing, as of seven days preceding the Closing Date, which statement shall be
prepared by Seller, in consultation with Purchaser, in accordance with the
procedures set forth in Exhibit 1 hereto.

         "Statement Liabilities" means the Liabilities of Seller that appear on
a Statement or a Final Statement, as the case may be.

         "Tax Returns" means any return or other report required to be filed
with respect to any Tax, including declaration of estimated tax and information
returns.

         "Taxes" means any federal, state, local, or foreign taxes, including
but not limited to taxes on or measured by income, estimated income, franchise,
capital stock, employee's withholding, non-resident alien withholding, backup
withholding, social security, occupation, unemployment, disability, value added
taxes, taxes on services, real property, personal property, sales, use, excise,
transfer, gross receipts, inventory and merchandise, business privilege, and

Execution Copy

                                       -5-

<PAGE>

other taxes or governmental fees or charges or amounts required to be withheld
and paid over to any government in respect of any tax or governmental fee or
charge, including any interest, penalties, or additions to tax on the foregoing
whether or not disputed.

         "Transaction Account" means any account at a Branch in respect of which
deposits therein are withdrawable in practice upon demand or upon which third
party drafts may be drawn by the depositor, including checking accounts, NOW
accounts and money market deposit accounts.

         "Unacceptable Condition" shall have the meaning set forth in Section
9.1(a).

                                   ARTICLE 2

                                THE TRANSACTIONS

         2.1      Transfer and Consideration. (a)      Subject to the terms and
conditions set forth in this Agreement and except as otherwise indicated in the
Schedules hereto, at the Closing, Purchaser shall (i) purchase the Assets and
(ii) assume the Liabilities (including the Assumed Contracts), and the Accrued
Expenses (and only such Liabilities and Accrued Expenses), and Seller shall
sell, assign, transfer, convey and deliver to Purchaser, free and clear of all
Encumbrances (except as set forth in Schedule 5.4), all of Seller's right, title
and interest in and to such Assets.

         (b)      In the event that the Initial Base Amount (as hereinafter
defined) is less than the sum of (i) the amount of the Assumed Deposits (other
than safe deposit box contents) in the Branches and (ii) the amount of the
Accrued Expenses, Seller shall transfer to Purchaser cash in the amount equal to
the deficit. In the event that the Initial Base Amount is greater than the sum
of (i) the amount of the Assumed Deposits (other than safe deposit box contents)
in the Branches and (ii) the amount of the Accrued Expenses, Purchaser shall
transfer to Seller cash in an amount equal to such excess. Calculations and
payments pursuant to this Section 2.1(b) shall be as of the date of the
Statement or the Final Statement, as applicable, all as provided in Section
10.2.

         (c)      For purposes of this Section 2.1, the Initial Base Amount
shall be equal to the sum of (i) the unpaid principal amount of the
Deposit-Related Loans and the Other Loans to be delivered at the Closing, (ii)
the amount of accrued interest receivable on all such Loans, (iii) the amount of
Cash on Hand in the Branches, (iv) the Net Book Value of the Branch Real Estate
and the Other Real Estate, which shall not exceed the amounts provided in
Schedule 2.1(c)(iv), (v) the Net Book Value of the Furniture, Fixtures and
Equipment and the Improvements, which shall not exceed the amounts provided in
Schedule 2.1(c)(v), (vi) the amount of the Purchase Premium, (vii) the amount of
Prepaid Expenses, and (viii) Seller's pro-rata portion of IRA and Keogh Account
trustee fees accrued on such accounts held in the Branches through the Closing
Date.

         2.2      Purchase Premium. The Purchase Premium payable at the Closing
by Purchaser to Seller shall be an amount equal to 4.5% of the average of the
Assumed Deposits for the twenty (20) business days immediately prior to the
Closing Date.

         2.3      Calculation of the Payments to Be Made Under Sections 2.1 and
2.2. For the purpose of determining the amount or type of consideration due and
payable pursuant to Sections 2.1 and 2.2, including, without limitation, any
applicable Settlement Payment, reference

Execution Copy

                                       -6-

<PAGE>

shall be made to the amounts on the applicable Statement and by reference to the
date of the applicable Statement rather than to the Closing Date. In all other
respects, including, without limitation, the payments provided for in Section
10.2(c), reference shall be made to the amounts on the applicable Final
Statement and by reference to the Closing Date.

         2.4      Assumption of IRA Deposits. With respect to Branch Deposits
which are IRAs, Seller will use reasonable efforts and will cooperate with
Purchaser, both before and after the Closing, in taking whatever actions are
reasonably necessary to accomplish either the appointment of Purchaser as
successor custodian or the delegation to Purchaser of Seller's authority and
responsibility as custodian of all such IRA deposits except self-directed IRA
deposits, including but not limited to, sending to the depositors thereof
appropriate notices, cooperating with Purchaser in soliciting consents from such
depositors, and filing any appropriate applications with applicable regulatory
authorities. If any such delegation is made to Purchaser, Purchaser will perform
all of the duties so delegated and comply with the terms of Seller's agreement
with the depositor of the IRA deposits affected thereby.

         2.5      Assumption of Keogh Deposits. With respect to Purchaser's
proposed assumption of Branch Deposits which are Keogh Accounts, Seller shall
cooperate with Purchaser to invite depositors thereof to direct a transfer of
each such depositor's Keogh Account and the related Branch Deposit to Purchaser,
as trustee thereof, and to adopt Purchaser's form of Keogh Master Plan as a
successor to that of Seller. Purchaser will assume no Branch Deposits which are
Keogh Accounts unless Purchaser has received the documents necessary for such
assumption or transfer at or before the Closing. With respect to any depositors
who do not transfer such accounts to Purchaser's form of Keogh Master Plan,
Seller will use reasonable efforts in order to enable Purchaser to retain such
Keogh Accounts at the Branches.

         2.6      Adjustment of Expenses and Fees. (a)      All direct operating
expenses and fees accrued or prepaid prior to the Closing Date, including,
without limitation, wages, salaries, rents, utility payments, personal property
taxes, non-delinquent real property taxes and assessments relating to the
Branches, the Branch Real Estate, and the Other Real Estate, transferred at
Closing, shall be pro-rated between the parties, but excluding any management
fees, overhead, administrative fees or similar fees. The pro-rated sums shall
give credit to Seller for the amount of all security deposits it has paid to
Lessors under the Leases relating to the Branches transferred at Closing. To the
extent that Seller has paid expenses that are expenses allocable to Purchaser
pursuant to this Section 2.6, such expenses shall appear as an asset on the
Statement and the Final Statement. To the extent that expenses have been accrued
and not been paid by Seller prior to the Closing Date, they shall appear as a
liability on the Final Statement.

         (b)      There shall appear as an asset on the Statement and the Final
Statement an amount equal to the benefit that Purchaser has received as a result
of Deposits being assumed at the Closing not having been included in Purchaser's
BIF premium calculation for any period which includes the applicable Closing
Date.

         2.7      Post-Closing Adjustment Relating to Fixed Assets. Promptly
after the Closing, Purchaser and Seller will perform an inventory of the Branch
Real Estate, the Other Real Estate, the Furniture, Fixtures and Equipment and
the Improvements which were to have been transferred at the Closing. To the
extent that such inventory discloses that, as of the Closing, any of such Assets
having a Net Book Value in excess of $10,000 either cannot be located or is
materially damaged and such damage has not been taken into account in the Net
Book Value of

Execution Copy

                                       -7-

<PAGE>

such Asset, then the Final Statement for the Closing shall include a deduction
(i) of the full Net Book Value of any such Asset which has not been located and
(ii) of the appropriate decrease to the Net Book Value of any such Asset which
has been materially damaged.

         2.8      Allocation of Consideration. Purchaser and Seller agree that
the consideration payable hereunder for the Assets at the Closing shall be
allocated among the Assets on the basis of the Net Book Value of each of the
Assets.

         2.9      Other Loans and Deposit-Related Loans. As soon as practicable,
but no later than 30 calendar days from the date hereof, Seller shall provide to
Purchaser a schedule of Other Loans and Deposit-Related Loans to be transferred
to Purchaser pursuant to Section 2.1 and shall afford Purchaser reasonable
access to the Loan Documents relating thereto, subject to Purchaser's rights as
described in this Section 2.9, to exclude any of the Other Loans and
Deposit-Related Loans on the schedule, which schedule shall become Schedule
1.1(d) hereto upon such delivery to Purchaser. Notwithstanding anything in this
agreement to the contrary, from and after the date on which Purchaser receives
Schedule 1.1(d), which shall be no later than 30 days after the date of this
Agreement, until 10 days prior to the Closing Date, Purchaser shall have the
right to exclude from the transaction any loan (an "Excluded Loan") described on
Schedule 1.1(d), which excluded loan shall not be transferred to Purchaser
pursuant to Section 2.1 Purchaser's right to exclude such loans shall be
exercisable by Purchaser giving written notice to Seller at any time until 10
days prior to the Closing Date. From the date hereof and until the expiration of
12 months following the Closing Date, Purchaser will not (and will cause its
Affiliates not to), directly or indirectly, solicit loans or other
credit-related business from any person or entity who was an obligor on any
Excluded Loan.

                                   ARTICLE 3

                        LIMITATION OF LIABILITIES ASSUMED

         3.1      Limitation of Liabilities Assumed. Notwithstanding anything in
this Agreement to the contrary except as otherwise expressly provided in this
Agreement, neither Purchaser nor any of its Affiliates shall assume pursuant
hereto any liabilities, obligations or duties of Seller or any of its Affiliates
of any kind or nature, whether or not accrued or fixed, absolute or contingent,
determined or determinable (including, without limitation, any penalties, fines
or compensatory or punitive damages of any kind whatsoever) existing at the time
of or arising out of or relating to acts, events or omissions to act that
occurred prior to the Closing.

                                   ARTICLE 4

                              TRANSITIONAL MATTERS

         4.1      Transitional Arrangements. Seller and Purchaser agree to
proceed where applicable as follows to effect the conversion of data processing
responsibility for the Branches at Closing:

         (a)      As soon as practicable after the execution of this Agreement,
Seller will meet with Purchaser to investigate, confirm and agree upon mutually
acceptable transaction settlement procedures and specifications, files,
including without limitation conversion sample files,

Execution Copy

                                       -8-

<PAGE>

procedures and schedules, for the transfer of the data processing responsibility
from the Branches.

         (b)      As soon as practicable after the execution of this Agreement,
if requested by Purchaser, Seller shall deliver to Purchaser the specifications
and conversion sample files which shall be in a form reasonably satisfactory to
Purchaser.

         (c)      From time to time prior to the Closing, after Purchaser has
tested and confirmed the conversion sample files, Seller shall provide
additional file related information, including without limitation, complete name
and address, account masterfile, ATM account number information, applicable
transaction and stop/hold/caution information, account to account relationship
information and any other related information with respect to the Assumed
Deposits and the Other Loans.

         (d)      As soon as practicable after the date hereof, if requested by
Purchaser, Seller shall provide Purchaser with (i) a file of all applicable
Check/Savings/Signatures that Seller has for the Assumed Deposits and related
special instructions and (ii) name/address and account information (listing of
file as applicable) on all products related to the Assumed Deposits, including
without limitation, safe box accounting, cash management services, telephone
bill payments, PC banking, payroll customers and account analysis, merchant card
processing, night depository and overdraft protection.

         (e)      Upon request by Purchaser, Seller will make available from
time to time, at Purchaser's expense, a reasonable number of technical personnel
for consultation with Purchaser concerning the matters referred to in the
foregoing provisions of this Section 4.1, such consultations to be completed by
the Closing Date unless otherwise required to facilitate the data processing
transfer contemplated hereunder, provided, however, that any such post-closing
consultation shall be subject to Seller's consent, not to be unreasonably
withheld.

         4.2      Depositors. (a)      No later than 30 days prior to the
Closing Date (unless earlier required by law, regulation or regulatory policy),
(i) Seller will notify the holders of Assumed Deposits to be transferred on the
Closing Date that, subject to Closing, Purchaser will be assuming liability for
such Assumed Deposits, (ii) each of Seller and Purchaser shall provide, or join
in providing where appropriate, all notices to customers of the Branches and
other persons that Seller or Purchaser, as the case may be, is required to give
by any regulatory authority having jurisdiction or under applicable law or the
terms of any other agreement between Seller and any customer in connection with
the transactions contemplated hereby and (iii) following or concurrently with
the notice referred to in clause (i) above, Purchaser may communicate with and
deliver information, brochures, bulletins and other communications to depositors
and other customers of the Branches concerning the transactions contemplated by
this Agreement and concerning the business and operations of Purchaser. A party
proposing to send or publish any notice or communication pursuant to any
subsection of this Section 4.2 shall furnish to the other party a copy of the
proposed form of such notice or communication at least ten days in advance of
the proposed date of the first mailing, posting, or other dissemination thereof
to customers, and shall not unreasonably refuse to amend such notice to
incorporate any changes that the other such party proposes as necessary to
comply with applicable statutes, rules, regulations or requirements of any
regulatory authority having jurisdiction. All costs and expenses of any notice
or communication sent or published by Purchaser or Seller shall be the

Execution Copy

                                       -9-

<PAGE>

responsibility of the party sending such notice or communication and all costs
and expenses of any joint notice or communication shall be shared equally by
Seller and Purchaser.

         (b)      Following the giving of any notice described in paragraph (a)
above, Purchaser and Seller shall deliver to each new customer at any of the
Branches such notice or notices as may be reasonably necessary to notify such
new customers of Purchaser's pending assumption of liability for the Assumed
Deposits and to comply with the requirements of any regulatory authority or
applicable law. The cost of such notices shall be shared equally by Seller and
Purchaser. At any time after the receipt of all Regulatory Approvals, within
five Business Days following any request by Purchaser, Seller will provide
Purchaser with a magnetic tape in Seller's standard file format containing full
account information, including complete mailing addresses for each of the
depositors of the Assumed Deposits as of a recent date, and upon reasonable
request shall provide an updated version of such tape; provided that Seller
shall not be obligated to provide such tape more than twice, unless such tape is
inaccurate, incomplete or defective.

         (c)      Notwithstanding the provisions of Section 7.8, neither
Purchaser nor Seller shall object to the use by depositors of the Assumed
Deposits transferred within six months of the Closing Date of payment orders
issued to or ordered by such depositors on or prior to the Closing Date, which
payment orders bear Seller's name, or any logo, trademark, service mark, trade
name or other proprietary mark of Seller.

         4.3      Assumption of Obligations. Upon the Closing Date, Purchaser
shall assume and timely discharge the duties and obligations of Seller with
respect to the Assumed Deposits transferred on such Closing Date as may arise
under such account agreements, applicable laws, regulations, Operating Circulars
of the Federal Reserve Banks, agreements and rules of automated clearing houses
and other payment systems which relate thereto.

         4.4      Direct Deposits. Seller will use reasonable efforts to
transfer to Purchaser on the Closing Date all of those automated clearing house
and fed wire direct deposit arrangements which are tied by agreement or other
standing arrangement to Accounts that are Assumed Deposits. As soon as
practicable after the receipt of all Regulatory Approvals, Seller will deliver
to Purchaser a listing in a format mutually agreed upon by the parties of all
such direct deposit records which Seller, in the exercise of its reasonable
efforts, is able to identify. On each Business Day for a period of four months
following the Closing, in the case of automated clearing house direct deposits
to Assumed Deposits (the final Business Day of such period being the "ACH Direct
Deposit Cut-Off Date"), Seller shall, as soon as practicable, but in any event
no less than twice daily and no later than 4:00 A.M. California Time of each
Business Day for same day settlement, and no later than 6:00 P.M. California
time of each Business Day for settlement on the following Business Day, remit
and transfer to Purchaser all ACH Direct Deposits intended for Assumed Deposits.
On each Business Day, for a period of 30 days following the Closing Date, in the
case of Fed Wire Direct Deposits to Assumed Deposits (the final Business Day of
such period being the "Fed Wire Direct Deposit Cut-Off Date"), Seller shall, as
soon as practicable, but in any event, no later than 12:00 Noon California Time
of each Business Day following the date of receipt thereof, remit and transfer
to Purchaser all Fed Wire Direct Deposits intended for Assumed Deposits.
Compensation for ACH Direct Deposits or Fed Wire Direct Deposits not forwarded
to Purchaser on the same Business Day as that on which Seller has received such
deposits will be handled in accordance with the rules established by the United
States Council on International Banking. After the applicable Direct Deposit
Cut-off Date,

Execution Copy

                                      -10-

<PAGE>

Seller may discontinue accepting and forwarding automated clearing house and fed
wire entries and funds and return such direct deposits to the originators marked
"Account Closed." Seller shall not be liable for any account overdrafts that may
thereby be created. Purchaser and Seller shall agree on a reasonable period of
time prior to the Closing during which Seller will no longer be obligated to
accept new direct deposit arrangements. At the time of each Direct Deposit
Cut-off Date, Purchaser will provide automated clearing house originators with
account numbers and conversion tapes relating to Assumed Deposits.

         4.5      Direct Debit. As soon as practicable after the receipt of all
Regulatory Approvals, and after the notice provided in Section 4.2(a), Purchaser
will send appropriate notice to all customers having Accounts which are to be
Assumed Deposits that are to be transferred on the Closing Date and the terms of
which provide for direct debit of such Accounts by third parties, instructing
such customers concerning transfer of customer direct debit authorizations from
Seller to Purchaser. Seller shall cooperate in soliciting the transfer of such
authorizations. Such notice shall be in a form agreed to by the parties. For a
period of four months following the Closing Date, Seller shall as soon as
practicable, but in any event, no less than twice daily and no later than 4:00
A.M. California Time of each Business Day for same day settlement, and no later
than 6:00 P.M. California Time of each Business Day for settlement on the
following Business Day, forward to Purchaser all direct debits on Accounts which
are Assumed Deposits transferred on the Closing Date. Thereafter, Seller may
discontinue forwarding such entries and return them to the originators marked
"Account Closed." Purchaser and Seller shall agree on a reasonable period of
time prior to the Closing during which Seller will no longer be obligated to
accept new direct debit arrangements. At the time of the Closing Date, Purchaser
will provide automated clearing house originators of such direct debits with
account numbers and conversion tapes.

         4.6      Escheatable Deposits. As soon as practicable after the Closing
Date, Seller will deliver to Purchaser a tape which will identify all
Escheatable Deposits that have been transferred to Purchaser on the Closing
Date. Thereafter, Purchaser shall be solely responsible for the proper reporting
and transmission to the State of California of such Escheatable Deposits
identified on such tape. Seller shall indemnify Purchaser for the failure to
properly report or transmit any Escheatable Deposits which are not identified on
such tape.

         4.7      Maintenance of Records. Through the Closing Date, Seller will
maintain the Records relating to the Assets and Liabilities being transferred at
the Closing in the same manner and with the same care that such Records have
been maintained prior to the execution of this Agreement. Purchaser may, at its
own expense, make such copies of and excerpts from such Records as it may deem
desirable. All such Records whether held by Purchaser or Seller, shall be
maintained for such periods as are required by law, unless the parties shall,
applicable law permitting, agree in writing to a different period. From and
after the Closing Date, each of the parties shall permit the other reasonable
access to any applicable Records in its possession relating to matters arising
on or before the Closing Date and reasonably necessary in connection with any
claim, action, litigation or other proceeding involving the party requesting
access to such Records or in connection with any legal obligation owed by such
party to any present or former depositor or other customer. After the Closing,
Seller shall deliver the Records to Purchaser, including any plans or drawings
of the Branch Real Estate, Improvements and Other Real Estate in the possession
of Seller.

         4.8      Interest Reporting and Withholding. Unless otherwise agreed to
by the parties, Seller will report to applicable taxing authorities and holders
of Assumed Deposits transferred on

Execution Copy

                                      -11-

<PAGE>

the Closing Date, with respect to the period from January 1 of the year in which
the Closing occurs through the Closing Date, all interest credited to, withheld
from and any early withdrawal penalties imposed upon the Assumed Deposits.
Purchaser will report to the applicable taxing authorities and holders of
Assumed Deposits, with respect to all periods from the day after the Closing
Date, all such interest credited to, withheld from and early withdrawal
penalties imposed upon such Assumed Deposits. Any amounts required by any
governmental agencies to be withheld from any of the Assumed Deposits through
the Closing Date will be withheld by Seller in accordance with applicable law or
appropriate notice from any governmental agency and will be remitted by Seller
to the appropriate agency on or prior to the applicable due date. Any such
withholding required to be made subsequent to the Closing Date shall be withheld
by Purchaser in accordance with applicable law or the appropriate notice from
any governmental agency and will be remitted by Purchaser to the appropriate
agency on or prior to the applicable due date. Promptly after the Closing Date,
but in no event later than the date Purchaser is obligated to remit such amounts
to the applicable governmental agency, Seller will pay to Purchaser that portion
of any sums theretofore withheld by Seller from any Assumed Deposits transferred
on the Closing Date which are or may be required to be remitted by Purchaser
pursuant to the foregoing and shall directly remit to the applicable
governmental agency that portion of any such sums which are required to be
remitted by Seller.

         Unless otherwise agreed by the parties, Seller shall be responsible for
delivering to payees all IRS notices with respect to information reporting and
tax identification numbers required to be delivered through the Closing Date
with respect to the Assumed Deposits, and Purchaser shall be responsible for
delivering to payees all such notices required to be delivered following the
Closing Date with respect to the Assumed Deposits. Purchaser and Seller shall,
prior to the Closing Date, consult (and Seller shall take such actions as are
reasonably necessary) to permit Purchaser timely to deliver notices required to
be delivered in the post-Closing period.

         Unless otherwise agreed by the parties, Seller will make all required
reports to applicable taxing authorities and to obligors on Deposit-Related
Loans and the Other Loans purchased on the Closing Date, with respect to the
period from January 1 of the year in which the Closing occurs through the
Closing Date, concerning all interest and points received by the Seller.
Purchaser will make all required reports to applicable taxing authorities and to
obligors on Deposit-Related Loans and the Other Loans purchased on the Closing
Date, with respect to all periods from the day after the Closing Date,
concerning all such interest and points received.

         4.9      IRA and Keogh Accounts. Seller will deliver to Purchaser on
the Closing Date Seller's documents for each IRA or Keogh Account which is
included in the Assumed Deposits. Seller will prepare and file all reports to
government authorities required to be filed for the period ending on the
Business Day preceding the Closing Date and all prior periods. Purchaser will be
responsible for all such reporting for periods commencing on the Closing Date.

         4.10     Negotiable Instruments. Seller will remove any supply of
Seller's money orders, official checks, gift checks, travelers' checks or any
other negotiable instruments located at each of the Branches on the Closing
Date.

         4.11     ATM Cards. Seller will provide Purchaser with a list of ATM
access cards issued by Seller to depositors of any Assumed Deposits, and a
magnetic tape in a format agreed to by the parties containing all addresses
therefor, as soon as practicable after the receipt of all approvals by bank
regulatory authorities for the transactions hereby contemplated. At or

Execution Copy

                                      -12-

<PAGE>

promptly after the Closing, Seller will provide Purchaser with a revised
magnetic tape. In instances where a depositor of an Assumed Deposit made an
assertion of error regarding an Account pursuant to the Electronic Funds
Transfer Act and Federal Reserve Board Regulation E, and Seller, prior to the
Closing, recredited the disputed amount to such account during the conduct of
the error investigation, Purchaser agrees to comply with a written request from
Seller to debit such account in a stated amount and remit such amount to Seller,
to the extent of the balance of funds available in the relevant Account or
Accounts. Seller agrees to indemnify Purchaser for any claims or losses that
Purchaser may incur as a result of complying with such request from Seller.
Seller will not be required to disclose to Purchaser customers' PINs or
algorithms or logic used to generate PINs. Purchaser shall reissue ATM access
cards to depositors of any Assumed Deposits prior to or within 15 days following
the Closing Date. Seller agrees to settle any and all ATM transactions effected
on or before the Closing Date, but processed after the Closing Date, within 10
Business Days after the Closing Date. Purchaser and Seller agree to remit the
total net balance of such transactions to Seller or Purchaser, as the case may
be, on the same date the transactions are settled.

         4.12     Leasing of Furniture, Fixtures and Equipment. Seller shall use
reasonable efforts to renew or extend on a month-to-month basis, any lease
relating to Furniture, Fixtures or Equipment, that is currently in effect but
that would otherwise expire on or prior to the Closing Date, provided that no
such renewal or extension shall be for a fixed term without the prior written
consent of Purchaser. Seller shall not cancel, terminate or take other action
that may result in any cancellation or termination of any such lease without the
prior written consent of Purchaser.

         4.13     Data Processing Conversion for the Branches and Handling of
Certain Items.

         (a)      The conversion of the data processing with respect to the
Branches and the Assets and Liabilities to be transferred hereunder will be
completed on the Closing Date unless otherwise agreed by the parties. Seller and
Purchaser agree to cooperate to facilitate the orderly transfer of all data
processing information.

         (b)      As soon as practicable after the Closing Date, Purchaser shall
mail to each depositor in respect of a Transaction Account domiciled at the
Branches a letter approved by Seller requesting that such depositor promptly
cease writing Seller's drafts against such Transaction Account. At such time as
Purchaser mails each such notice to each depositor, Purchaser shall also forward
to each such depositor new drafts which such depositor may draw upon Purchaser
for the purpose of effecting transactions with respect to such Transaction
Accounts.

         The parties hereto shall use their best efforts to develop procedures
which cause Seller's drafts against Transaction Accounts which are received
after the Closing Date to be cleared through Purchaser's then current clearing
procedures.

         During the 180-day period from the Closing Date, if it is not possible
to clear Transaction Account drafts through Purchaser's then current clearing
procedures after the Closing Date, Seller shall forward to Purchaser on the same
Business Day all such Transaction Account drafts drawn against Transaction
Accounts domiciled at the Branches and transferred on the Closing Date. Seller
shall have no obligation to pay such Transaction Account drafts. Upon the
expiration of such 180-day period, Seller shall cease forwarding drafts against
Transaction Accounts associated with the Branches transferred on the Closing
Date. Purchaser and Seller

Execution Copy

                                      -13-

<PAGE>

will agree upon reasonable compensation to be paid to Seller for its processing
of the drafts as described in this Section, provided that, Seller shall bear the
expenses for the processing of such drafts for the first 90 days after the
Closing Date and thereafter Purchaser shall pay Seller $0.50 per item

         (c)      Any items that were credited for deposit to or cashed against
an Assumed Deposit prior to the Closing and are returned unpaid on or within 60
days after the Closing ("Returned Items") will be handled as set forth herein.
If Seller's bank account is charged for the Returned Item, Seller shall forward
such Returned Item to Purchaser. If upon Purchaser's receipt of such Returned
Item there are sufficient funds in the Assumed Deposit to which such Returned
Item was credited or any other Assumed Deposit transferred at the Closing
standing in the name of the party liable for such Returned Item, Purchaser will
debit any or all of such Assumed Deposits an amount equal in the aggregate to
the Returned Item, and shall repay that amount to Seller. If there are not
sufficient funds in the Assumed Deposit because of Purchaser's failure to honor
holds placed on such Assumed Deposit, Purchaser shall repay the amount of the
Returned Item to Seller. Any items that were credited for deposit to or cashed
against an account at the Branches to be transferred at the Closing prior to the
Closing and are returned unpaid more than 60 days after the Closing will be the
responsibility of Purchaser, except that for a period of 18 months after the
Closing checks drawn on the United States Treasury, checks issued by state
governments and municipalities and checks returned for endorsement
irregularities will be the responsibility of Seller.

         4.14     Data Processing Tapes and File Packages. Seller will provide
Purchaser with tape record layouts of all account types at the Branches and
initial data processing test file packages and related product and marketing
information as soon as possible, but in no event later than 30 Business Days
following the execution of this Agreement. Seller will provide Purchaser with
conversion tapes on the Closing Date. Seller and Purchaser agree to cooperate to
ensure the orderly transfer of all data processing information.

                                   ARTICLE 5

                    REPRESENTATIONS AND WARRANTIES OF SELLER

         Seller represents and warrants as follows:

         5.1      Corporate Organization and Authority. Seller is a California
banking corporation, duly organized, validly existing and in good standing under
the laws of the State of California and has the requisite power and authority to
conduct the business now being conducted at the Branches, to accept and maintain
the Assumed Deposits and to own the Assets. Seller is a member of SAIF and BIF
and its Deposits are insured by the FDIC, subject to applicable FDIC coverage
limitations. Seller has the requisite corporate power and authority and has
taken all corporate action necessary in order to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This Agreement
is a valid and binding agreement of Seller.

         5.2      No Conflict; Licenses and Permits; Compliance with Laws and
Regulations. The execution, delivery and performance of this Agreement by Seller
does not, and will not, (i) violate any provision of its Articles of
Incorporation or by-laws or (ii) violate or constitute a breach of, or default
under, any law, rule, regulation, judgment, decree, ruling or order of any

Execution Copy

                                      -14-

<PAGE>

court, government or governmental agency to which Seller is subject or under any
agreement or instrument of Seller, or to which Seller is subject or is a party
or by which Seller is otherwise bound, or to which any of the Assets, Assumed
Deposits, Leases or Assumed Contracts (except for any required consents of
Lessors under the Leases or other parties under Assumed Contracts in respect of
the transactions herein contemplated) or Branches are subject, which violation,
breach, contravention or default referred to in this clause (ii) would have a
Material Adverse Effect, individually or in the aggregate. Seller has all
material licenses, franchises, permits, certificates of public convenience,
orders and other authorizations of all federal, state and local governments and
governmental authorities necessary for the lawful conduct of its business at
each of the Branches as now conducted and all such licenses, franchises,
permits, certificates of public convenience, orders and other authorizations,
are valid and in good standing and, to Seller's knowledge, are not subject to
any suspension, modification or revocation or proceedings related thereto.

         5.3      Approvals and Consents. Except as required to obtain the
Regulatory Approvals or as otherwise disclosed in writing to Purchaser by Seller
prior to the date hereof, no notices, reports or other filings are required to
be made, as of the date hereof, by Seller with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained, as
of the date hereof, by Seller from, any governmental or regulatory authorities
of the United States or the State of California in connection with the execution
and delivery of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby.

         5.4      Title to Assets. Except as set forth on Schedule 5.4 hereto,
and except for such imperfections of title as do not materially and adversely
affect the use of the properties or assets subject thereto or affected thereby
or otherwise materially impair business operations at such properties, Seller
has or will have at the Closing good and marketable title to all Branch Real
Estate and good and marketable title or a valid leasehold interest in the other
Assets then being transferred, with all Assets free and clear of all
Encumbrances. The Furniture, Fixtures and Equipment are in adequate working
condition for the conduct of the business of the Branches as currently conducted
by Seller. Seller agrees to provide preliminary title reports as to all Branch
Real Estate to Purchaser within 30 days of the date of this Agreement.

         5.5      Leases. Each Lease and each lease relating to Furniture,
Fixtures and Equipment used in the Branches is the valid and binding obligation
of each of the parties thereto and to Seller's knowledge, there does not exist
with respect to Seller's obligations thereunder, or, with respect to the
obligations of the lessor thereof, any material default, or event or condition
which constitutes, or after notice or passage of time or both would constitute,
a material default on the part of Seller or the lessor under any Lease and each
lease relating to Furniture, Fixtures and Equipment used in the Branches. Except
as set forth in Schedule 5.5, each Lease and each lease relating to Furniture,
Fixtures and Equipment used in the Branches is current and all rents, expenses
and charges payable by Seller have been paid or accrued pursuant to the terms
thereof (except for any payments as to which the obligation to make such payment
is being contested in good faith).

         5.6      Contracts and Defaults. To the knowledge of Seller, no event
has occurred and remains uncured which constitutes a material default or results
in a right of acceleration, termination or any similar right by any party (or
would, but for the passage of time or the giving of notice, constitute a
material default or result in such a right of acceleration, termination or
similar right) under any contract relating to the operation of the Branches or
any other Assumed

Execution Copy

                                      -15-

<PAGE>

Contract except for those agreements that are terminable within 60 days and
without cost to Seller involving an obligation of Seller or the other party or
parties thereto of less than $25,000 in any year (excluding for purposes of this
Section 5.6 any Deposit Related Loans or Other Loans).

         5.7      Employee Benefits. (a)      All material benefit plans,
contracts (regardless of whether they are funded or unfunded) or published
policies covering current employees or former employees of the Branches,
including, but not limited to, "employee benefit plans" within the meaning of
Section 3(3) of the ERISA (the "Plans"), are listed on Schedule 5.7 hereto. True
and complete copies of all material documents relating to the Plans have been
made available to Purchaser. There are no other material written employee
benefit plans or policies.

         (b)      Seller is in substantial compliance under the Plans and all
the Plans, to the extent subject to ERISA, are in substantial compliance with
ERISA. Each Plan which is an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA ("Pension Plan") and which is intended to be qualified
under Section 401(a) of the Code, has received a favorable determination letter
from the IRS, and Seller is not aware of any circumstances likely to result in
revocation of any such favorable determination letter. Except as set forth in
Schedule 5.7, there is no material pending or threatened litigation relating to
any of the Plans. Seller has not engaged in a transaction with respect to any
Plan that, assuming the taxable period of such transaction expired as of the
date hereof, could subject Seller to a tax or penalty imposed by either Section
4975 of the Code or Section 502(i) of ERISA in an amount which would be
material.

         (c)      No liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by Seller with respect to any ongoing, frozen
or terminated "single-employer plan", within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by it, or the single-employer plan of
any entity which is considered one employer with Seller under Section 4001 of
ERISA or Section 414 of the Code (an "ERISA Affiliate"). Seller has not incurred
and does not expect to incur any withdrawal liability with respect to a
multi-employer plan under Subtitle E of Title IV of ERISA (regardless of whether
based on contributions of any ERISA Affiliate). No notice of a "reportable
event", within the meaning of Section 4043 of ERISA for which the 30-day
reporting requirement has not been waived, has been required to be filed for any
Pension Plan or by any ERISA Affiliate within the 12-month period ending on the
date hereof.

         (d)      All contributions required to be made under the terms of any
Plan have been timely made when due.

         5.8      Litigation and Liabilities. Except as set forth in Schedule
5.8, there are no actions, suits or proceedings pending or, to the knowledge of
Seller, threatened against Seller or any of its subsidiaries, violations of law
or regulation, or obligations or liabilities, whether or not accrued, contingent
or otherwise, or any facts or circumstances of which the management of Seller is
aware, including, without limitation, those relating to environmental and
occupational safety and health matters, that could result in any claims against
or obligations or liabilities of Seller or any of its subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. None of the Assumed Deposits is subject to any legal
process, or to any Encumbrance, other than routine matters or encumbrances
arising out of

Execution Copy

                                      -16-

<PAGE>

claims against depositors, such as account restrictions, claims of governmental
authorities and debtor's attachments.

         5.9      Regulatory Matters. Except as previously disclosed in writing
to Purchaser, there are no pending, or, to the knowledge of Seller, threatened,
disputes or controversies between Seller and any federal, state or local
governmental authority that, individually or in the aggregate, directly involve
or reasonably could be expected to have a Material Adverse Effect.

         5.10     Brokers' Fees. Except for The Alford Spencer Group, Seller has
not employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finders' fee in connection with the transactions
contemplated by this Agreement. Seller will pay the fees of The Alford Spencer
Group.

         5.11     Environmental Matters. (a)      For purposes of this Section
5.11, the following terms shall have the indicated meaning:

                           "Business" means the business conducted at the
                  Branches.

                           "Environmental Law" means any federal, state,
                  provincial or local statute, law, ordinance, rule, regulation,
                  order, consent, decree, judicial or administrative decision or
                  directive of the U.S. or other jurisdiction now existing
                  relating to: (a) pollution or protection of the environment,
                  including natural resources; (b) exposure of persons,
                  including employees, to Hazardous Substances or other
                  products, material or chemicals; (c) protection of the public
                  health or welfare from the effects of products, by-products,
                  wastes, emissions, discharges or releases of chemical or other
                  substances from industrial or commercial activities; or (d)
                  regulation of the manufacture, use or introduction into
                  commerce of substances, including, without limitation, their
                  manufacture, formulation, packaging, labeling, distribution,
                  transportation, handling, storage and disposal.

                           "Hazardous Substances" means any substance, whether
                  liquid, solid or gas (a) listed, identified or designated as
                  hazardous or toxic under any Environmental Law, (b) which,
                  applying criteria specified in any Environmental Law, is
                  hazardous or toxic, or (c) the use or disposal of which is
                  regulated under Environmental Law.

                           "Real Property" means all Branch Real Estate and
                  Other Real Estate.

         (b)      Except as set forth on Schedule 5.11, there are no pending or,
to Seller's knowledge threatened, claims, actions or proceedings against Seller
or any person relating to:

                  (i)      an asserted liability of Seller or any prior owner,
         occupier or user of the Real Property under any Environmental Law or
         the terms and conditions of any permit, license, authority, settlement
         or other obligation arising under any Environmental Law;

                  (ii)     the handling, storage, use or disposal of Hazardous
         Substances on or under or within the Real Property or transportation or
         removal of Hazardous Substances to or from the Real Property;

Execution Copy

                                      -17-

<PAGE>

                  (iii)    the actual or threatened discharge, release or
         emission of Hazardous Substances from, on or under or within the Real
         Property into the air, water, surface water, ground water, land surface
         or subsurface strata; or

                  (iv)     actual or asserted claims for personal injuries or
         damage to property related to or arising out of exposure to Hazardous
         Substances discharged, released or emitted from or into, or transported
         from or to, the Real Property.

         (c)      Schedule 5.11 sets forth all Hazardous Substances which, to
Seller's knowledge, are present on or under or within the Real Property and,
except as set forth in Schedule 5.11, the presence of these Hazardous Substances
does not violate any Environmental Law. Except as disclosed in Schedule 5.11, to
Seller's knowledge there are no storage tanks underground or otherwise present
on the Real Property or all such tanks comply with applicable law and all
permits in respect thereof are in full force and effect.

         (d)      To Seller's knowledge, no Hazardous Substances have been, or
have been threatened to be, discharged, released or emitted in to the air,
water, surface water, ground water, land surface or subsurface strata or
transported to or from the Real Property except in accordance with Environmental
Law (in particular, but without limitation, in accordance with any permits
issued pursuant thereto) and as set forth in Schedule 5.11. All notifications in
respect of such discharges, releases and emissions required by Environmental Law
have been made within the time limits prescribed by Environmental Law and copies
of all such notifications have previously been provided to Purchaser.

         (e)      Except as disclosed in Schedule 5.11, no part of the Real
Property is listed as a site containing Hazardous Substances pursuant to any
Environmental Law.

         5.12     IRAs and Keogh Plans. Each type of IRA, and each type of Keogh
plan offered by Seller ("Prototype Plans"), and adopted by depositors of the
Branches, is listed in Schedule 5.12 hereto and is in substantial compliance
with ERISA. Seller shall deliver to Purchaser within 45 days after the date
hereof correct and complete copies of each Prototype Plan, a copy of the last
IRS approval letter with respect to the form of Prototype Plans, and copies of
all forms of IRA and Keogh agreements including any currently effective
amendments. Seller has not engaged in a transaction with respect to any Plan
that, assuming the taxable period of such transaction expired as of the date
hereof, could subject Seller to a tax or penalty imposed by either Section 4975
of the Code or Section 502(i) of ERISA in an amount which would be material.

         5.13     Absence of Certain Changes, Etc. Except as set forth in
Schedule 5.13 or as contemplated under this Agreement, since January 13, 2003,
Seller's business at the Branches has been conducted only in, and there has not
been any material transaction other than according to, the ordinary and usual
course of such businesses and there has not been (a) any material adverse change
in the financial condition, prospects, properties, business or results of
operations of the Branches, or any development or combination of developments of
which management of the Seller has knowledge which, individually or in the
aggregate, is reasonably likely to result in any such change other than changes
in general economic conditions or changes in banking laws or regulations of
general applicability or interpretations thereof, or (b) except as the parties
may otherwise agree in writing, any material change by Seller in accounting
principles, practices or methods that would affect the items reflected in the
Statement or the Final Statement, except as may be required by changes in
applicable accounting principles consistently applied.

Execution Copy

                                      -18-

<PAGE>

         5.14     Loans.

         (a)      Seller represents and warrants that, except as disclosed in
Schedule 5.14(a), none of the Other Loans is presently serviced by third parties
and, prior to the Closing, none will be serviced by third parties, except as
disclosed in such Schedule, and that there are no obligations, agreements or
understandings whatsoever that could result in any Other Loan becoming subject
to any such third party servicing, except as disclosed, and Seller will not
undertake any such obligation or enter into any such agreement or understanding.

         (b)      Seller further represents and warrants with respect to each
Other Loan as set forth in Schedule 5.14(b) hereto.

         5.15     Collective Bargaining Agreements. As of the date of this
Agreement, Seller is not a party to or bound by any collective bargaining
agreement with respect to any Employees at the Branches.

         5.16     Agreements with Regulatory Authorities. Seller is not a party
to any written order, decree, agreement or memorandum of understanding with, or
commitment letter or similar submission to, any federal or state governmental
agency or authority charged with the supervision or regulation of depository
institutions or engaged in the insurance of deposits nor has Seller been advised
by any such regulatory authority that such authority is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such order, decree, agreement, memorandum of understanding, commitment letter or
submission, in each case which order, decree, agreement, memorandum of
understanding, commitment letter or submission (i) could reasonably be expected
to prevent or impair the ability of Seller to perform its obligations under this
Agreement in any material respect or (ii) could impair the validity or
consummation of this Agreement or the transactions contemplated hereby.

                                   ARTICLE 6

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

         Purchaser represents and warrants as follows:

         6.1      Corporate Organization and Authority. Purchaser is a
California banking corporation, duly organized, validly existing and in good
standing under the laws of the State of California. Purchaser has the requisite
corporate power and authority and has taken all corporate action necessary in
order to execute and deliver this Agreement. Purchaser has the requisite
corporate power and authority and will have taken all corporate action necessary
to consummate the transactions contemplated hereby, to accept and maintain the
Assumed Deposits, to own the Assets and to operate the Branches. This Agreement
is a valid and binding agreement of Purchaser.

         6.2      No Conflict; Licenses and Permits; Compliance with Laws and
Regulations. The execution, delivery and performance of this Agreement by
Purchaser does not, and will not violate any provision of Purchaser's Articles
of Incorporation or by-laws or violate or constitute a breach or contravention
of or default under any law, rule, regulation, order, judgment, decree or filing
of any government, governmental authority or court to which Purchaser is subject
or under any agreement or instrument of Purchaser, or to which Purchaser is
otherwise bound, which violation, breach, contravention or default, individually
or in the aggregate, (i) could be expected

Execution Copy

                                      -19-

<PAGE>

to prevent or impair the ability of Purchaser to perform its obligations under
this Agreement in any material respect or (ii) could impair the validity or
consummation of this Agreement or the transactions contemplated hereby.

         6.3      Approvals and Consents. Other than the Regulatory Approvals or
as otherwise disclosed by Purchaser to Seller in writing prior to the date
hereof, no notices, reports or other filings are required to be made by
Purchaser with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Purchaser from any governmental or
regulatory authorities of the United States, or the State of California in
connection with the execution and delivery of this Agreement by Purchaser and
the consummation of the transactions contemplated hereby by Purchaser, the
failure to make or obtain any or all of which could prevent, materially delay or
materially burden the transactions contemplated by this Agreement.

         6.4      Regulatory Matters. Neither Purchaser nor any of its
Affiliates has received any indication from any federal, state or other
governmental agency that such agency would oppose or refuse to grant or issue
its consent or approval, if required, or impose an Unacceptable Condition, with
respect to the transactions contemplated hereby, including, without limitation,
any Regulatory Approval.

         6.5      Brokers' Fees. Except as previously disclosed in writing by
Purchaser to Seller, Purchaser has not employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement. Purchaser will pay the
fees of any such broker or finder.

         6.6      Litigation and Liabilities. There are no actions, suits or
proceedings pending or, to the best knowledge of the management of the
Purchaser, threatened against Purchaser, violations of law or regulation, or
obligations or liabilities, whether or not accrued, contingent or otherwise, or
any facts or circumstances of which the management of Purchaser is aware,
including, without limitation, those relating to environmental and occupational
safety and health matters, that could result in any claims against or
obligations or liabilities of Purchaser that, individually or in the aggregate,
(i) could reasonably be expected to prevent or impair the ability of Purchaser
to perform its obligations under this Agreement in any material respect or (ii)
could impair the validity or consummation of this Agreement or the transactions
contemplated hereby.

         6.7      Agreements with Regulatory Authorities. Purchaser is not a
party to any written order, decree, agreement or memorandum of understanding
with, or commitment letter or similar submission to, any federal or state
governmental agency or authority charged with the supervision or regulation of
depository institutions or engaged in the insurance of deposits nor has
Purchaser been advised by any such regulatory authority that such authority is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, commitment letter or submission, in each case which order,
decree, agreement, memorandum of understanding, commitment letter or submission
(i) could reasonably be expected to prevent or impair the ability of Purchaser
to perform its obligations under this Agreement in any material respect or (ii)
could impair the validity or consummation of this Agreement or the transactions
contemplated hereby.

         6.8      Operation of the Branches. Purchaser intends to offer the
broad array of retail and business banking services commonly offered in the
State of California in the geographic area served by the Branches to be acquired
by Purchaser under this Agreement.

Execution Copy

                                      -20-

<PAGE>

                                   ARTICLE 7

                            COVENANTS OF THE PARTIES

         7.1      Activity in the Ordinary Course. From the date hereof, and
until the Closing Date, Seller shall conduct the business of the Branches to be
transferred at the Closing Date in the ordinary and usual course following the
same practices and standards, including, without limitation, collection
practices, as they have been consistently applied since January 13, 2003 and
will not enter into any material transaction with respect to any of the Assets,
Liabilities or Assumed Contracts or make any material commitment with respect to
the Assets, Liabilities or Assumed Contracts except in the ordinary and usual
course of business consistent with past practice. From the date hereof and until
the Closing Date, Seller shall not, without the prior written consent of
Purchaser:

         (a)      Permit any of the Branches to engage or participate in any
material transaction or incur or sustain any material obligation except in the
ordinary course of Branch business;

         (b)      Increase or agree to increase the salary, remuneration or
compensation of persons employed at the Branches (or make any material increase
or decrease in the number of such persons or transfer such persons to or from
any Branch) other than in accordance with Seller's existing customary policies
generally applicable to employees having similar rank or duties, or pay or agree
to pay any uncommitted bonus to any such employees other than regular bonuses
granted in the ordinary course of Seller's business;

         (c)      Offer interest rates or terms on any category of deposits at
any of the Branches which are not consistent with past practice except as may be
deemed appropriate by Seller in response to competitive developments in the
local area of the Branch;

         (d)      Except in the ordinary course of business, or as contemplated
herein, transfer to or from any Branch to or from any of Seller's other
operations or branches any Assets or Branch Deposits, except upon the request of
a depositor or customer in the ordinary course of business or if such deposit is
pledged as security for a loan or other obligation that is not a Deposit Related
Loan or Other Loan;

         (e)      Except in the ordinary course of business and in an immaterial
aggregate amount, sell, transfer, assign, encumber or otherwise dispose of or
enter into any contract, agreement or understanding to transfer, assign,
encumber or dispose of any of the Assets existing on the date hereof;

         (f)      Sell, transfer, assign, encumber or otherwise dispose of or
enter into any contract, agreement or understanding to sell, transfer, assign,
encumber or dispose (a "disposition") of any Deposit Related Loan or Other Loan.

         (g)      Make or agree to make any material improvements to the
Branches, the Branch Real Estate or the Other Real Estate, except with respect
to commitments for such made on or before the date of this Agreement and normal
maintenance or refurbishing purchased or made in the ordinary course of
business;

         (h)      File any application to relocate any Branch;

Execution Copy

                                      -21-

<PAGE>

         (i)      Enter into any commitment, agreement, understanding or other
arrangements to transfer, assign, encumber or otherwise dispose of any Branch,
Branch Real Estate or Other Real Estate;

         (j)      Terminate the operations of any Branch;

         (k)      Amend in any material respect any Lease, lease relating to
Furniture, Fixtures and Equipment or Assumed Contract except as permitted under
Section 4.12;

         (l)      Except as permitted by this Section 7.1, take, or permit its
Affiliates to take, any action (i) impairing Purchaser's rights in any Assumed
Deposit or Asset, (ii) impairing in any way the ability of Purchaser to collect
upon any Deposit-Related Loan or Other Loan (iii) except in the ordinary course
of servicing, waiving any material right, whether in equity or at law, that it
has with respect to any Deposit-Related Loan or Other Loan or (iv) that could
otherwise have a Material Adverse Effect; or

         (m)      Transfer or cause the movement of deposits from Seller's
branches or from the head office to the Branches, except at the written request
of the depositor.

         7.2      Access and Confidentiality. (a)      Between the date of this
Agreement and the Closing Date, Seller shall afford to Purchaser and its
officers and authorized agents and representatives reasonable access to the
properties, books, records, contracts, documents, files (including loan files)
and other information of or relating to the Branches, the Assets, the Assumed
Contracts and the Deposits. In addition, Seller will use reasonable efforts to
arrange for Purchaser to have reasonable access to similar information held by
third parties, if any, for or on Seller's behalf. Purchaser and Seller each have
identified a selected group of their respective salaried personnel that shall
constitute a "transition group" who shall be available to Seller and Purchaser,
respectively, at reasonable times (limited to normal operating hours) to provide
information and assistance in connection with Purchaser's investigation of
matters relating to the Branches, the Assets, the Assumed Contracts and the
Branch Deposits and to familiarize Purchaser with basic policies and operational
procedures of Seller relating to the Branches. Seller shall cause other
personnel to be reasonably available during normal business hours, to an extent
not disruptive of ongoing operations, for the same purposes. Seller shall
furnish Purchaser with such additional financial and operating data and other
information about its business operations at the Branches as may be reasonably
necessary for the orderly transfer of the business operations of the Branches.
Notwithstanding any other provision hereof, Seller shall not be required to make
available to Purchaser any employment records as to which employees of Seller
have not agreed to release such records to Purchaser.

         (b)      Each party to this Agreement shall hold, and shall cause its
respective directors, officers, employees, agents, consultants and advisors to
hold, in strict confidence, unless disclosure to a bank regulatory authority is
necessary or desirable in connection with any Regulatory Approval or unless
compelled to disclose by judicial or administrative process or, in the written
opinion of its counsel, by other requirements of law or the applicable
requirements of any regulatory agency or relevant stock exchange, all non-public
records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") concerning the other party (or, if
required under a contract with a third party, such third party) furnished it by
such other party or its representatives pursuant to this Agreement (except to
the extent that such information can be shown to have been (a) previously known
by such party on a non-confidential basis, (b) in the public domain through no
fault of such party or (c) later

Execution Copy

                                      -22-

<PAGE>

lawfully acquired from other sources by the party to which it was furnished),
and neither party shall release or disclose such Information to any other
person, except its auditors, attorneys, financial advisors, bankers, other
consultants and advisors and, to the extent permitted above, to bank regulatory
authorities.

         7.3      Regulatory Approvals. As soon as practicable after the date of
this Agreement, Purchaser and Seller shall prepare and file any applications to
federal or state regulatory authorities for approvals necessary, including all
Regulatory Approvals, to consummate the transactions contemplated by this
Agreement. Purchaser and Seller shall each use its good faith efforts to obtain
each such approval, will cooperate in connection therewith (including the
furnishing of any reasonable undertaking or commitments which may be required to
obtain the Regulatory Approvals) and provide the other with copies of any
applications and all correspondence relating thereto prior to filing, other than
material filed in connection therewith under a claim of confidentiality. If any
regulatory authority shall require the modification of any of the terms and
provisions of this Agreement as a condition to granting any Regulatory Approval,
the parties hereto will negotiate in good faith to seek a mutually agreeable
adjustment to the terms of the transactions contemplated hereby, such agreement
not to be unreasonably withheld.

         7.4      Consents. Seller agrees to use reasonable efforts to obtain
from Lessors and any other parties to any Assumed Contracts any required
consents to the assignment of the Leases and Assumed Contracts to Purchaser on
the Closing Date; provided, however, the Seller shall not be obligated to incur
any monetary obligations or expenditures in connection with the utilization of
its reasonable efforts to obtain any such required consents. In the event that
any such required consent cannot be obtained, notwithstanding any other
provision hereof, the Assets and Liabilities of the subject Branch, including
such Lease or Assumed Contract as to which consent cannot be obtained, shall not
be transferred to Purchaser at the Closing and the parties shall negotiate in
good faith and exercise good faith efforts to make alternative arrangements
reasonably satisfactory to the parties, including appropriate adjustments to the
Purchase Premium.

         7.5      Delivery of Records at Closing. At or prior to the Closing (or
to the extent not identifiable at the Closing Date, within 120 days thereafter),
Seller will deliver to Purchaser all Records, including but not limited to
readable microfiche copies of the specimen signature records of all depositors
of the Assumed Deposits transferred at the Closing.

         7.6      Continuing Availability of Records. After the Closing, Seller
will retain for such period as is reasonable under the circumstances all Records
which have not been delivered to Purchaser at any time prior thereto. Seller
shall deliver or make available to Purchaser any such Records that Purchaser may
request, including but not limited to any account histories, deposit records,
and documents provided to or by any depositor of the Assumed Deposits.

         7.7      Further Assurances. Each of Seller and Purchaser will execute,
acknowledge and deliver such instruments and take such other actions as the
other party may reasonably require in order to carry out the intent of this
Agreement. Seller will duly execute and deliver such assignments, bills of sale,
deeds, acknowledgements and other instruments of conveyance and transfer as
shall at any time be necessary or appropriate to vest in Purchaser the full
legal and equitable title to the Assets being sold hereunder, free and clear of
all Encumbrances, except as set forth on Schedule 5.4 hereto. On and after the
Closing Date, each party will promptly deliver

Execution Copy

                                      -23-

<PAGE>

to the other all mail and other communications which are properly addressable or
deliverable to the other as a consequence of the transactions pursuant to this
Agreement; and without limitation of the foregoing, on and after the Closing
Date, Seller shall promptly forward any mail, communications or other material
relating to the Assumed Deposits or the Assets transferred on the Closing Date,
including but not limited to that portion of any IRS "B" tapes that relates to
such Assumed Deposits, to such employees of Purchaser at such addresses as may
from time to time be specified by Purchaser in writing. The costs incurred by a
party in performing its obligations to the other (x) under the third sentence of
this Section 7.7 shall be borne by the initial recipient and (y) otherwise under
this Section 7.7 shall be borne by Purchaser. Seller will cooperate with
Purchaser to minimize the costs referred to in clause (y).

         7.8      Solicitation of Accounts. For a period of 12 months following
the Closing Date, Seller agrees that it will not solicit deposits, loans or
other business from or to persons or entities who were depositors at the
Branches on the Closing Date with respect to Assumed Deposits by personal
contact, by telephone, by facsimile, by mail or other similar solicitation, or
in any other way except for general solicitations which are not directed
primarily to persons or entities who were depositors of the Branches on the
Closing Date; provided, that Seller may solicit depositors who as of the date of
this Agreement have existing accounts at branches or other offices of Seller or
its Affiliates other than the Branches pursuant to solicitations which arise
from their status as a customer at such other branches or offices of Seller or
its Affiliates; and provided, further, that Seller may solicit major or
statewide depositors (such as, for example, a company with more than one
location or the state government or any agency or instrumentality thereof) and
may solicit customers with respect to assets or liabilities of the Branches
which are not sold to or assumed by Purchaser hereunder.

         7.9      Solicitation of Accounts. From the date of this Agreement
through the Closing Date, Purchaser agrees that it will not solicit deposits,
loans or other business from or to persons or entities who are depositors at the
Branches as of the date of this Agreement by personal contact, by telephone, by
facsimile, by mail or other similar solicitation, or in any other way except for
general solicitations which are not directed primarily to persons or entities
who are depositors of the Branches as of the date of this Agreement; provided,
that Purchaser may solicit depositors who as of the date of this Agreement have
existing accounts at branches or other offices of Purchaser or its Affiliates
other than the Branches pursuant to solicitations which arise from their status
as a customer at such other branches or offices of Purchaser or its Affiliates;
and provided, further, that Purchaser may solicit major or statewide depositors
(such as, for example, a company with more than one location or the state
government or any agency or instrumentality thereof). A joint communication by
Purchaser and Seller shall not be deemed to be a solicitation by either
Purchaser or Seller for purposes of this Section 7.9 of this Agreement.

         7.10     Insurance. Seller will maintain in effect until and including
the Closing Date all casualty and public liability policies relating to the
Branches and maintained by Seller on the date hereof or procure comparable
replacement policies and maintain such replacement policies in effect until and
including the Closing.

         7.11     Notices of Default. Seller and Purchaser shall each promptly
give written notice to the other upon becoming aware of the impending or
threatened occurrence of any event which could reasonably be expected to cause
or constitute a breach of any of their respective representations, warranties,
covenants or agreements contained in this Agreement.

Execution Copy

                                      -24-

<PAGE>

         7.12     Assumed Contracts. Seller agrees to provide to Purchaser no
later than 30 days after the date hereof a list of all service or similar
contracts, existing as of the Closing Date, that relate to the operations of the
Branches or other operations that are the subject of this Agreement (and not to
Seller's operations generally). Within 15 days thereafter, Purchaser shall
notify Seller of any such contract that it will assume at the Closing ("Assumed
Contracts").

         7.13     IRA Prototype Plans. While Purchaser acts as Seller's
delegatee with respect to IRA deposits pursuant to Section 2.4, Seller will
continue to seek, receive and maintain all approvals of the IRS necessary for
the maintenance of each Seller's IRA Prototype Plans.

         7.14     Performance of Liabilities. From and after the Closing Date,
Purchaser shall fully perform, pay and discharge all of the Liabilities as and
when due and shall protect and observe the rights of depositors and creditors of
the Branches in the same manner and to the same extent as if Purchaser had
itself incurred the Liabilities and as otherwise may be required by applicable
law.

         7.15     Preliminary Environmental Reports. Seller shall, within 45
days of the date of this Agreement and at its expense provide to Purchaser a
copy of a Phase I preliminary environmental report covering each parcel of
Branch Real Estate. Each such report shall have been based on an inspection
completed within three years of the date hereof.

         7.16     Employment Solicitation. From the date hereof until the
Closing Date and for an additional 12 months following the Closing Date (or such
shorter period as such persons may continue to be employed at the Branches
following the Closing Date), neither Seller nor any Affiliate shall solicit the
employment of any persons that were Employees prior to the Closing Date,
provided, however, that nothing herein shall prevent Seller or its Affiliates
from (a) advertising generally any employment opportunities, (b) hiring any
persons who were Employees on the Closing Date who seek employment without
inducement from Seller, or (c) soliciting the employment of or hiring any person
listed on Schedule 7.16.

                                   ARTICLE 8

                           TAXES AND EMPLOYEE BENEFITS

         8.1      Tax Representations. Seller represents and warrants to
Purchaser as follows:

         (a)      Except as set forth in Schedule 8.1, all Tax Returns with
respect to the Assets or income therefrom, the Liabilities or payments in
respect thereof or the operation of the Branches, that are required to be filed
have been duly filed, and all Taxes shown to be due on such Tax Returns have
been paid in full.

         (b)      With respect to the Assumed Deposits, Seller is in compliance
with the law and IRS regulations relative to obtaining from depositors of the
Assumed Deposits executed IRS Forms W-8 and W-9. With respect to the Assumed
Deposits opened after December 31, 1993, Seller has either obtained a properly
completed Form W-8 or W-9 or is back up withholding on such account.

         8.2      Proration of Taxes. Except as otherwise agreed to by the
parties, whenever it is necessary to determine the liability for Taxes for a
portion of a taxable year or period that begins

Execution Copy

                                      -25-

<PAGE>

before and ends after the Closing Date, the determination of the Taxes for the
portion of the year or period ending on, and the portion of the year or period
beginning after, the Closing Date shall be determined by assuming that the
taxable year or period ended at the close of business on the Closing Date.

         8.3      Sales and Transfer Taxes. All excise, sales, use and transfer
taxes that are payable or that arise as a result of the consummation of the
purchase and sale contemplated by this Agreement shall be paid by Seller and
Seller shall indemnify and hold Purchaser harmless from and against any such
taxes.

         8.4      Information Returns. At the Closing or as soon thereafter as
is practicable, Seller shall provide Purchaser with a list of all Assumed
Deposits for which Seller has not received a properly completed Form W-8 and W-9
or one which Seller is back up withholding as of the Closing Date, and such list
shall include the date that each such Assumed Deposit was opened. Seller agrees
to indemnify Purchaser in an amount equal to any penalty and interest imposed
upon Purchaser by the IRS or self-assessed by Purchaser which Purchaser is
thereafter required to and does, pay to the IRS where such penalty and interest
arises out of actions taken or omitted to be taken by Purchaser in reliance upon
information provided under this Section 8.4, and such penalty and interest does
not result from an act or omission of Purchaser not made in reliance upon such
information. The term "interest" for purposes of this Section 8.4 means interest
accrued prior to the receipt by Purchaser of a notice of penalty from the IRS
regarding Forms W-8 or W-9 for the Assumed Deposits.

         8.5      Payment of Amount Due under Article 8. Any payment by Seller
to Purchaser, or to Seller from Purchaser under this Article 8 (other than
payments required by Section 8.3) to the extent due at the Closing may be offset
against any payment due the other party at the Closing. All subsequent payments
under this Article 8 shall be made as soon as determinable and shall be made and
bear interest from the date due to the date of payment as provided in Section
10.2(e).

         8.6      Assistance and Cooperation. After the Closing Date, each of
Seller and Purchaser shall:

         (a)      Make available to the other and to any taxing authority as
reasonably requested all relevant information, records, and documents relating
to Taxes with respect to the Assets or income therefrom, the Liabilities or
payments in respect thereof, or the operation of the Branches;

         (b)      Provide timely notice to the other in writing of any pending
or proposed tax audits (with copies of all relevant correspondence received from
any Taxing authority in connection with any Tax audit or information request) or
assessments with respect to the Assets or the income therefrom, the Liabilities
or payments in respect thereof, or the operation of the Branches for taxable
periods for which the other may have a liability under this Article 8; and

         (c)      The party requesting assistance or cooperation shall bear the
other party's out-of-pocket expenses in complying with such request to the
extent that those expenses are attributable to fees and other costs of
unaffiliated third-party service providers.

         8.7      Employee Benefits. (a)      Purchaser or an Affiliate thereof
shall offer employment to all Employees at the Loyalton and Kings Beach
Branches; provided, however, that Purchaser shall not be required to offer
employment to Employees on leave on the Closing Date who do not return within
six months of such date. All such Employees shall be offered a

Execution Copy

                                      -26-

<PAGE>

compensation package similar in total value to those of Purchaser. Purchaser
shall have no obligation to offer employment to any of the other Employees,
except at Purchaser's election and sole discretion. Purchaser shall,
contemporaneously with the signing of this Agreement, notify Seller of other
employees to whom Purchaser intends to offer employment or does not intend to
offer employment. Purchaser may elect to offer employment to any of the other
Employees by giving Seller notice of such election with the name(s) of such
other Employees no later than 10 days prior to Closing. Seller shall be
responsible for any of the employee benefits provided by this Section 8.7 with
respect to any Employee that is not offered employment and hired by Purchaser.

         (b)      All Employees who accept employment with Purchaser as of the
Closing Date shall be eligible to participate in the employee benefit plans and
other fringe benefits of Purchaser on the same basis as such plans and benefits
are offered to employees of Purchaser with comparable positions with Purchaser.
Purchaser shall credit such Employees for their length of service with Seller or
its Affiliates for all purposes under each employee benefit and fringe benefit
plan to be provided by Purchaser to such Employees to the same extent such
service was recognized under similar plans of Seller and limited only to
Purchaser's plans in effect on the Closing Date or adopted within one year
thereof. Such service, however, need only be counted for purposes of vesting,
eligibility and the rate of prospective benefit accrual under any pension
benefit plan. For purposes of this Section 8.7(b), "employee benefit plans and
other fringe benefits" includes, without limitation, pension and profit sharing
plans, retirement and post retirement welfare benefits, health insurance
benefits (medical and dental), disability, life and accident insurance, sickness
benefit, vacation, employees' loans and banking privileges.

         (c)      Seller agrees to remain responsible for the payment of all
accrued benefits to such participants or retirees in accordance with the terms
of the Seller's retirement plans. Purchaser shall not at any time assume any
liability for the benefits of any active or any terminated, vested or retired
participants in the Seller's retirement plans.

         (d)      Seller shall be responsible for payments for accrued vacation
not taken by an Employee offered employment and hired by Purchaser prior to the
Closing Date and for bonuses, if any, with respect to service completed prior to
the Closing Date.

         (e)      Seller shall retain the responsibility for payment of all
medical, dental, health and disability premiums on behalf of any Employee
offered employment and hired by Purchaser and in accordance with the terms and
conditions of Seller's such plans prior to the Closing Date, and Purchaser shall
not assume any liability with respect to such claims. Purchaser assumes
responsibility for payment of all medical, dental, health and disability claims
incurred by Employees offered employment and in Purchaser's employ on or after
the Closing Date in accordance with the terms and conditions of its health
plans.

         (f)      Seller shall be responsible for providing any Employee offered
employment and hired by Purchaser whose "qualifying event," within the meaning
of Section 4980b(f) of the Code, occurs prior to the Closing Date (and such
Employee's "qualified beneficiaries" within the meaning of Section 4980b(f) of
the Code) with the continuation of group health coverage required by Section
4980b(f) of the Code ("Continuation Coverage") under the terms of the health
plan maintained by Seller. Seller shall be responsible for Continuation Coverage
to any Employee (and each Employee's qualified beneficiaries) whose qualifying
event occurs prior to the Closing Date to the extent required by law.

Execution Copy

                                      -27-

<PAGE>

         (g)      Seller agrees that it shall retain, consistent with its normal
employment practices, all liability and obligation, if any, (including, without
limitation, the liability and obligation for all wages, salary, vacation pay and
unemployment, medical, dental, health and disability benefits) for those former
employees of the Branches who retired or terminated employment prior to the
Closing Date or otherwise do not become Employees.

         (h)      Effective as of the Closing Date, Purchaser shall assume
liability for severance pay and similar obligations payable to any Employee
offered employment and hired by Purchaser who is terminated by Purchaser after
the Closing Date. Such payment shall be made pursuant to Purchaser's normal
severance policy and Purchaser shall compute severance pay by giving all
Employees full credit for all years of service with Seller in accordance with
Section 8.7(b).

                                   ARTICLE 9

                              CONDITIONS TO CLOSING

         9.1      Conditions to Obligations of Purchaser. Unless waived in
writing by Purchaser, the obligation of Purchaser to consummate the transactions
contemplated by this Agreement to be consummated at the Closing is conditioned
upon fulfillment, at or before the Closing, of each of the following conditions:

                  (a)      Governmental and Regulatory Consents. All consents,
         approvals and authorizations required to be obtained prior to the
         Closing from governmental and regulatory authorities in connection with
         the execution and delivery of this Agreement and the consummation of
         the transactions contemplated hereby to be consummated at the Closing,
         including the Regulatory Approvals, shall have been made or obtained,
         and shall remain in full force and effect, all waiting periods
         applicable to the consummation of the transactions contemplated hereby
         shall have expired or been terminated and all required regulatory
         filings shall have been made; provided, however, that no Regulatory
         Approval shall have imposed any condition or requirement (an
         "Unacceptable Condition") that would (i) result in any Material Adverse
         Effect or (ii) require Purchaser to effect any divestiture that would
         constitute a substantial portion of the business or properties of the
         Branches, taken as a whole.

                  (b)      Litigation. No court or governmental or regulatory
         authority of competent jurisdiction shall have enacted, issued,
         promulgated, enforced or entered any statute, rule, regulation,
         judgment, decree, injunction or other order (whether temporary,
         preliminary or permanent) (any of the foregoing, an "Order") which is
         in effect and imposes any Unacceptable Condition or which would result
         in a Material Adverse Effect.

                  (c)      Representations and Warranties. Each of the
         representations and warranties of Seller contained in this Agreement
         shall be true in all material respects when made and as of the Closing
         Date, with the same effect as though such representations and
         warranties had been made on and as of the Closing Date (except that
         representations and warranties that are made as of a specific date need
         be true in all material respects only as of such date and except that

Execution Copy

                                      -28-

<PAGE>

         representations and warranties relating to Assets and Liabilities
         transferred at the Closing Date shall only be made, and need only be
         true in all material respects, on and as of the Closing Date); each of
         the covenants and agreements of Seller to be performed on or prior to
         the Closing Date shall have been performed in all material respects;
         and Purchaser shall have received at Closing a certificate to that
         effect dated as of the Closing Date and executed by the President or
         any Executive Vice President of Seller.

         Notwithstanding any other provision of this Agreement, in the event
that, at the Closing, there shall be a failure of any condition specified in
this Section 9.1 to the obligations of Purchaser in respect of the acquisition
of any specific Branch or Branches the aggregate Deposits of which as of the
date hereof shall constitute less than 25% of the Deposits in all of the
Branches as of the date hereof, Purchaser nevertheless shall be obligated to
consummate the transactions contemplated by this Agreement upon the Closing
Date, but may, upon written notice to Seller, exclude from the transaction the
Branch or Branches in respect of which the failure of condition shall exist, in
which case, appropriate adjustment shall be made in the schedules hereto, the
Statement and Final Statement, and the other documents to be delivered pursuant
hereto so as to duly reflect the deletion of such Branch or Branches from the
transactions contemplated hereby. If any Branch is excluded from this Agreement
or if any Branch remains subject hereto and is transferred to Purchaser at the
Closing (subject to Purchaser's rights under Section 12.1(a)), any breach of
warranty or failure of condition in respect of such Branch arising from or
relating to the subject circumstances shall be deemed waived.

         9.2      Conditions to Obligations of Seller. Unless waived in writing
by Seller, the obligation of Seller to consummate the transactions contemplated
by this Agreement to be consummated at the Closing, is conditioned upon
fulfillment, at or before the Closing, of each of the following conditions:

                  (a)      Governmental Consents. All consents, approvals,
         permits and authorizations required to be obtained prior to the Closing
         from governmental and regulatory authorities in connection with the
         execution and delivery of this Agreement and the consummation of the
         transactions contemplated hereby shall have been made or obtained and
         shall remain in full force and effect; and all waiting periods
         applicable to the consummation of the transactions contemplated hereby
         shall have expired or been terminated and all required regulatory
         filings shall have been made.

                  (b)      Representations and Warranties. Each of the
         representations and warranties of Purchaser contained in this Agreement
         shall be true in all material respects when made and as of the Closing
         Date, with the same effect as though such representations and
         warranties had been made on and as of the Closing Date (except that
         representations and warranties that are made as of a specific date need
         be true in all material respects only as of such date). Each of the
         covenants and agreements of Purchaser to be performed on or prior to
         the Closing Date shall have been duly performed in all material
         respects and Seller shall have received at

Execution Copy

                                      -29-

<PAGE>

         the Closing a certificate to that effect dated as of such Closing Date
         and executed by the President or any Executive Vice President of
         Purchaser.

                  (c)      Litigation. As to Purchaser, there is no Order which
         is in effect and imposes any Unacceptable Condition or which would
         result in a Material Adverse Effect.

                  9.3      Consent of Lessors. Seller shall have obtained all
         consents of Lessors for Leases for Branch Real Estate for those
         Branches which are to be purchased by Purchaser.

                                   ARTICLE 10

                                CLOSING PROCEDURE

         10.1     Closing Date and Place; Notifications. (a)      The closing
for the transactions provided for herein (the "Closing") will be held at the
offices of Seller in Auburn, California at a date and time (the "Closing Date")
as may be designated by Seller pursuant to Section 10.1(b).

         (b)      Seller shall notify Purchaser no later than five Business Days
prior thereto of the date and time of a proposed Closing, which shall be no
later than 30 Business Days after satisfaction of the conditions set forth in
Sections 9.1(a) and 9.2(a) hereof. Notwithstanding the foregoing, Seller may,
for any proper business reason, adjourn the date and time of the Closing upon
written notice to Purchaser, from day to day for up to 20 Business Days from the
date previously noticed; provided, however, that Seller shall use all reasonable
efforts to reschedule the Closing to take place at a time agreeable to
Purchaser, which agreement shall not be unreasonably withheld; provided further,
however, that the parties shall agree in any event upon a date for the Closing
which shall be on or prior to December 31, 2003.

         10.2     Procedure at the Closing; Adjustments.

         (a)      At the Closing, any Settlement Payment relating to the Closing
shall be made pursuant to Article 2.

         (b)      Except for the payments made pursuant to paragraph (a) of this
Section, the sales, purchases, transfers, assumptions, leases and other acts
made or taken at the Closing will be made or taken to be effective as of the
close of business of each Branch being transferred on the Closing Date. Seller
shall be responsible for each Branch being transferred at the Closing and the
operation thereof until the close of business on the Closing Date.

         (c)      Within 90 days after the Closing, Seller shall deliver the
Final Statement. Any Settlement Payment and the Deposit Premium shall be
recalculated based on such Final Statement (hereinafter referred to as the
"Final Settlement Payment" and the "Final Deposit Premium"). Seller shall pay to
Purchaser an amount equal to the excess, if any, of the Deposit Premium
applicable to the Closing over the Final Deposit Premium applicable to the
Closing, and Purchaser shall pay to Seller an amount equal to the excess, if
any, of the Final Deposit Premium over the Deposit Premium applicable to the
Closing, in either case in cash as provided in paragraph (e) of this Section. A
Final Statement shall become final and binding on Purchaser

Execution Copy

                                      -30-

<PAGE>

and Seller 20 days after its delivery to Purchaser, unless Purchaser gives
notice to Seller of its disagreement with respect to any item included in such
Final Statement. Seller and Purchaser shall use their best efforts to resolve
the disagreement during the ten day period following receipt by Seller of such
notice. If the disagreement is not resolved during such ten day period, the firm
of accountants listed on Schedule 10.2(c) hereto will resolve such dispute, such
Final Statement shall be modified by any such resolution and thereupon such
Final Statement shall become final and binding. Purchaser and Seller shall share
equally in the cost of any accountant used to resolve such dispute.

         (d)      A supplemental closing will be held within four Business Days
after the Final Statement becomes final and binding pursuant to subsection (c)
of this Section. At such supplemental closing, the responsible party will pay to
the other such amount as may be due hereunder. The amount of any such payment
made by one party to the other after the Closing shall be made with interest
thereon, at the then prevailing Federal Funds Rate, from the Closing Date to the
date of such payment.

         (e)      All cash payments to be made hereunder by one party to the
other shall be made by wire transfer on or before 11:00 A.M. on the date of
payment. If any payment to be made hereunder on the Closing Date shall not be
made on or before 11:00 A.M. on such date, and the amount thereof shall have
been agreed to in writing by the parties at the Closing Date, the party
responsible therefor may make such payment on or before 11:00 A.M. on the next
Business Day together with interest thereon at the then prevailing Federal Funds
Rate from the Closing Date to the date of such payment.

         (f)      If any instrument of transfer contemplated herein shall be
recorded in any public record before the Closing and thereafter the Closing is
not completed, then at the request of the transferring party the other party
will deliver (or execute and deliver) such instruments and take such other
action as such transferring party shall reasonably request to revoke of record
such purported transfer.

         10.3     Deliveries by Seller. At the Closing, Seller will deliver to
Purchaser:

         (a)      Possession of the Branches (subject to Section 7.4) and the
Assets being transferred on such Closing Date (as of the close of business of
each Branch on the Closing Date);

         (b)      Such instruments of transfer as shall be necessary to vest in
Purchaser good and marketable title, free and clear of all Encumbrances except
as set forth in Schedule 5.4 or as described in Section 5.4, to the Assets being
transferred on the Closing Date and executed endorsements of notes without
recourse and assignments of real property security instruments in recordable
form; and

         (c)      If applicable, a Settlement Payment.

         10.4     Deliveries by Purchaser. At the Closing, Purchaser will
deliver to Seller:

         (a)      Such instruments of assumption as to the Liabilities to be
assumed by Purchaser at the Closing as shall be necessary to effect the
assumption by Purchaser of such Liabilities in accordance with the terms hereof;
and

         (b)      If applicable, a Settlement Payment.

Execution Copy

                                      -31-

<PAGE>

         10.5     Filing. On or prior to the Closing Date, Seller shall file or
record or cause to be filed or recorded, at Seller's expense, any and all
documents (including, without limitation, deeds and mortgage recordations)
necessary in order that, at the Closing, the full legal and equitable title to
all Branch Real Estate, the Other Real Estate and, to the extent necessary to
transfer title to the Other Loans, the Other Loans, free and clear of all
Encumbrances, except as set forth in Schedule 5.4 or as described in Section
5.4, shall be duly vested in Purchaser. Prior to the Closing Date Seller will
cooperate with Purchaser in assisting Purchaser to obtain (at Purchaser s
expense) policies of title insurance with respect to any such real property or
interests therein if Purchaser shall determine to obtain such insurance.

                                   ARTICLE 11

                                   TERMINATION

         11.1     Termination. This Agreement may be terminated at any time
prior to the Closing Date:

         (a)      By the mutual consent of Purchaser and Seller;

         (b)      By Seller or Purchaser, in the event of a material breach by
the other of any representation, warranty or agreement contained herein which is
not cured or cannot be cured within 30 days after notice of such termination has
been delivered to the breaching party; provided, however, that termination
pursuant to this Section 11.1(b) shall not relieve the breaching party of
liability for such breach or otherwise;

         (c)      By Seller or Purchaser, in the event that the Closing has not
occurred by 11:59 P.M., Pacific Time, December 31, 2003 unless the failure to so
consummate by such time is due to a breach of this Agreement by the party
seeking to terminate;

         (d)      By Seller or Purchaser at any time after the denial or
revocation of any Regulatory Approval or by Purchaser if any such approval has
been obtained which contains an Unacceptable Condition;

         (e)      By Seller if, at any time prior to the Closing Date, (i) the
applicable governmental and regulatory authorities whose consents, approvals and
authorizations are required in order for Purchaser to consummate the
transactions contemplated hereby shall have advised that such authorities will
not grant such consents, approvals and authorizations or will grant the same
only subject to an Unacceptable Condition (unless Purchaser shall have waived
the condition provided for in the proviso to Section 9.1(a)); (ii) where there
shall be in effect any Order against Purchaser; (iii) if there shall exist any
proceeding which, in Seller's judgment, reasonably exercised, could result in an
Order against Seller; (iv) Purchaser shall have failed to perform each of the
covenants and agreements of Purchaser to be performed by Purchaser on or prior
to the Closing Date as contemplated by this Agreement; or (v) the
representations and warranties of Purchaser contained in this Agreement shall
not be true in all material respects when made; provided that Purchaser shall
have 15 days following receipt of notice from Seller of any of the foregoing to
cure any such matter or to provide assurances reasonably acceptable to Seller
that such matter will be remedied by the Closing Date.

Execution Copy

                                      -32-

<PAGE>

         (f)      By Purchaser if, at any time prior to the Closing Date, (i)
the applicable governmental and regulatory authorities whose consents, approvals
and authorizations are required in order for Purchaser to consummate the
transactions contemplated hereby shall have advised that such authorities will
not grant such consents, approvals and authorizations or will grant the same
only subject to an Unacceptable Condition; (ii) where there shall be in effect
any Order against Seller; (iii) if there shall exist any proceeding which, in
Purchaser's judgment, reasonably exercised, could result in an Order against
Seller; (iv) Seller shall have failed to perform each of the covenants and
agreements of Seller to be performed by Seller on or prior to the Closing Date
as contemplated by this Agreement; or (v) the representations and warranties of
Seller contained in this Agreement shall not be true in all material respects
when made; provided that Seller shall have 15 days following receipt of notice
from Purchaser of any of the foregoing to cure any such matter or to provide
assurances reasonably acceptable to Purchaser that such matter will be remedied
by the Closing Date.

         11.2     Effect of Termination. In the event of termination of this
Agreement and abandonment of the transactions contemplated hereby pursuant to
Section 11.1, no party hereto (or any of its directors, officers, employees,
agents or Affiliates) shall have any liability or further obligation to any
other party, except as provided in Section 7.2 and except that nothing herein
will relieve any party from liability for any breach of this Agreement.

                                   ARTICLE 12

                                 INDEMNIFICATION

         12.1     Indemnification. (a)      Seller shall indemnify Purchaser and
hold Purchaser harmless from and against any and all Losses which Purchaser may
suffer, incur or sustain arising out of or attributable to (i) any
misrepresentation or any breach of any representation or warranty made by Seller
in or pursuant to this Agreement, (ii) any breach of any agreement to be
performed by Seller pursuant to this Agreement, (iii) any claim, penalty
asserted, legal action or administrative proceeding based upon any action taken
or omitted to be taken by Seller or resulting from any transaction or event
occurring prior to the Closing, relating in any such case to the operation of
the Branches, the Assets, the Assumed Deposits, the Assumed Contracts or
Employees or participants or their beneficiaries in any of the Plans listed in
Schedule 5.7, (iv) any liability, obligation or duty of Seller, that are not
Liabilities or (v) any liability, obligation or duty of Seller, relating to the
operation of the businesses of Seller that are not being transferred at the
Closing (including branches other than the Branches).

         (b)      Purchaser shall indemnify Seller and hold it harmless from and
against any and all Losses which Seller may suffer, incur or sustain arising out
of (i) any misrepresentation or breach of any representation or warranty made by
Purchaser in or pursuant to this Agreement, (ii) any breach of any agreement to
be performed by Purchaser pursuant to this Agreement, (iii) any claim, penalty
asserted, legal action or administrative proceeding based upon any action taken
or omitted to be taken by Purchaser or resulting from any transaction or event
occurring after the Closing, relating in any such case to the operation of the
Branches, the Assets, the Assumed Deposits, the Assumed Contracts or Purchaser's
dealings with Employees or (iv) any of the Liabilities assumed by Purchaser at
the Closing.

Execution Copy

                                      -33-

<PAGE>

         (c)      To exercise its indemnification rights under this Section 12.1
as the result of the assertion against it of any claim or potential liability
for which indemnification is provided, the indemnified party shall promptly
notify the indemnifying party of the assertion of such claim, discovery of any
such potential liability or the commencement of any action or proceeding in
respect of which indemnity may be sought hereunder (including, with respect to
claims arising from a breach of representation or warranty made in Article 8,
the commencement of an audit, administrative investigation or judicial
proceeding by any governmental authority), provided, however, that notice of
original claim for indemnification under clause (i), (iii) or (iv) of paragraph
(a) or (b) of this Section 12.1 shall have been given prior to the expiration of
one year from the Closing Date; provided further, that notice of any claim for
indemnification with respect to any loss relating to the matters referred to in
Section 5.11 shall have been given prior to the expiration of two years from the
Closing Date and Purchaser's right to indemnification in respect of such matters
shall be subject to the further terms and provisions of Schedule 12.1(c) hereto.
The indemnified party shall advise the indemnifying party of all facts relating
to such assertion within the knowledge of the indemnified party, and shall
afford the indemnifying party the opportunity, at the indemnifying party's sole
cost and expense, to defend against such claims for liability. In any such
action or proceeding the indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at its own
expense unless (i) the indemnifying party and the indemnified party mutually
agree to the retention of such counsel or (ii) the named parties to any such
suit, action, or proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party, and in the reasonable judgment of
the indemnified party, representation of the indemnifying party and the
indemnified party by the same counsel would be inadvisable due to actual or
potential differing or conflicts of interests between them.

         (d)      The indemnified party shall have the right to settle or
compromise any claim or liability subject to indemnification under this Section,
and to be indemnified from and against all Losses resulting therefrom, unless
the indemnifying party, within 90 calendar days after receiving written notice
of the claim or liability in accordance with Section 12.1(c) above, notifies the
indemnified party that it intends to defend against such claim or liability and
undertakes such defense, or, if required in a shorter time than 90 calendar
days, the indemnifying party makes the requisite response to such claim or
liability asserted.

         (e)      Notwithstanding any other provision hereof, an indemnifying
party shall not be liable under this Section 12.1 for any Losses sustained by
the indemnified party unless and until the aggregate amount of all such Losses
sustained by the indemnified party shall exceed $25,000, in which event the
indemnifying party shall be liable for all such Losses. An indemnifying party
shall not be liable under this Section 12.1 for any settlement effected, without
its consent, of any claim or liability or proceeding for which indemnity may be
sought hereunder except in the case of a settlement in an amount which does not
exceed $25,000.

         (f)      Notwithstanding the protection afforded by this Section 12.1,
no investigation by an indemnified party at or prior to the Closing shall
relieve any indemnifying party of any liability hereunder.

Execution Copy

                                      -34-

<PAGE>

                                   ARTICLE 13

                                  MISCELLANEOUS

         13.1     Survival. The parties' respective representations and
warranties contained in this Agreement shall survive until the first anniversary
of the Closing (except for the representations and warranties in Section 5.11,
which shall survive until the second anniversary), and thereafter neither party
may claim any damage for breach thereof.

         13.2     Assignment. Neither this Agreement nor any of the rights,
interests or obligations of either party hereunder may be assigned by either of
the parties hereto without the prior written consent of the other party.

         13.3     Binding Effect. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.

         13.4     Public Notice. Prior to the Closing Date, neither Purchaser
nor Seller shall directly or indirectly, make, or cause to be made, any press
release for general circulation, public announcement or disclosure or issue any
notice or general communication to employees with respect to any of the
transactions contemplated hereby without the prior written consent of the other
party, which consent shall not be unreasonably withheld. Purchaser agrees that,
without Seller's prior written consent, it shall not release or disclose any of
the terms or conditions of the transactions contemplated herein to any other
person. Notwithstanding the foregoing, each party may make such public
disclosure as may be required by law or necessary to obtain the Regulatory
Approvals.

         13.5     Notices. All notices, requests, demands, consents and other
communications given or required to be given under this Agreement and under the
related documents shall be in writing (as provided below) and delivered to the
applicable party at the address indicated below:

                 If to Seller:          Placer Sierra Bank
                                        649 Lincoln Way
                                        Auburn, CA 95603
                                        Attention: Harvey Ferguson
                                                   President and Chief Executive
                                                   Officer

                                        (530) 823-7777
                                        (530) 887-2731 (facsimile)

                 With a copy to:        First California Bancshares
                                        525 "J" Street
                                        Sacramento, CA 95814
                                        Attention: Ronald W. Bachli
                                                   Chairman of the Board
                                        (916) 554-4820
                                        (916) 329-9236 (facsimile)

Execution Copy

                                      -35-

<PAGE>

                 With a copy to:        Nixon Peabody LLP
                                        Two Embarcadero
                                        Suite 2700
                                        San Francisco, CA 94111-3996
                                        Attention: Steven M. Plevin, Esq.
                                        (415) 984-8462
                                        (866) 741-1466 (facsimile

                 If to Purchaser:       Plumas Bank
                                        35 South Lindan Avenue
                                        Quincy, CA 95971
                                        Attention: William E. Elliott
                                        (530) 283-7305
                                        (530) 283-3557 (facsimile)

                 With a copy to:        Gary Findley & Associates
                                        1470 N. Hundley Street
                                        Anaheim, CA 92806
                                        Attention: Gary S. Findley, Esq.
                                        (714) 630-7136
                                        (714) 630-7910 (facsimile)

or, as to each party at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section. Any notices shall be in writing, including facsimile
communication, and may be sent by registered or certified mail, return receipt
requested, postage prepaid, or by facsimile, or by overnight delivery service.
Notice shall be effective upon actual receipt thereof.

         13.6     Incorporation. All Exhibits and Schedules attached hereto and
to which reference is made herein are incorporated by reference as if fully set
forth herein.

         13.7     Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California (excluding
its choice of law rules).

         13.8     Entire Agreement. This Agreement contains the entire
understanding of and all agreements between the parties hereto with respect to
the subject matter hereof and supersedes any prior or contemporaneous agreement
or understanding, oral or written, pertaining to any such matters which
agreements or understandings shall be of no force or effect for any purpose;
provided, however, that the terms of any confidentiality agreement between the
parties hereto previously entered into, to the extent not inconsistent with any
provisions of this Agreement, shall continue to apply. This Agreement may not be
amended or supplemented in any manner except by mutual agreement of the parties
and as set forth in a writing signed by the parties hereto or their respective
successors in interest.

Execution Copy

                                      -36-

<PAGE>

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

         13.10    Headings. The headings used in this Agreement are inserted for
purposes of convenience of reference only and shall not limit or define the
meaning of any provisions of this Agreement.

         13.11    Waiver. The waiver of any breach of any provision under this
Agreement by any party shall not be deemed to be a waiver of any preceding or
subsequent breach under this Agreement. No such waiver shall be effective unless
in writing.

         13.12    Expenses. Unless specifically provided otherwise in this
Agreement, each party shall bear and pay all costs and expenses which it incurs,
or which may be incurred on its behalf in connection with the preparation of
this Agreement and consummation of the transactions described herein, and the
expenses, fees, and costs necessary for any approvals of the appropriate
regulatory authorities.

         13.13    Arbitration.

         (a)      Any controversy or claim between Purchaser and Seller arising
out of or relating to this Agreement or any agreements or instruments relating
hereto or delivered in connection herewith, including, but not limited to a
claim based on or arising from an alleged tort, will, at the request of any
party be determined by arbitration. The arbitration shall be conducted in
accordance with the United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision in this Agreement, and under the
Commercial Rules of the American Arbitration Association. The arbitrator(s)
shall give effect to statutes of limitation in determining any claim. Any
controversy concerning whether an issue is arbitrable shall be determined by the
arbitrator(s). The award rendered by the arbitrator(s) shall set forth findings
of the facts and conclusions of law and shall be final, and the judgment may be
entered in any court having jurisdiction thereof. A failure by the arbitrator(s)
to make findings of fact and conclusions of law shall be grounds for overturning
the award. The institution and maintenance of an action for judicial relief or
pursuit of a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for judicial
relief.

         (b)      In any arbitration proceeding, the arbitrator(s) is (are)
authorized to apportion costs and expenses, including investigation, legal and
other expense, which will include, if applicable, a reasonable estimate of
allocated costs and expense or in-house legal counsel and legal staff. Such
costs and expenses are to be awarded only after the conclusion of the
arbitration and will not be advanced during the course of such arbitration.

         13.14    Computation of Interest. All computation of interest in
respect of payments required hereunder shall be made on the basis of a year of
365 days for the actual number of days (including the first day, but excluding
the last day) occurring in the period for which such interest is payable.

         13.15    Third Party Beneficiaries. Except as expressly provided in
this Agreement, the parties hereto intend that this Agreement shall not benefit
or create any right or cause of action in or on behalf of any person other than
the parties hereto.

Execution Copy

                                      -37-

<PAGE>

         13.16    Severability. If any provision of this Agreement, as applied
to any party or circumstance, shall be adjudged by a court of competent
jurisdiction to be void, invalid or unenforceable the same shall in no way
effect any other provision of this Agreement, the application of any such
provision and any other circumstances or the validity or enforceability of the
other provisions of this Agreement.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.

                                             PLACER SIERRA BANK

                                             By /s/ Harvey Ferguson
                                                -------------------
                                                Its President & CEO

                                             PLUMAS BANK

                                             By /s/ W. E. Elliott
                                                -----------------
                                                Its President & CEO

Execution Copy

                                      -38-<PAGE>
                                                                    EXHIBIT 10.1

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

                          MASTER DISTRIBUTOR AGREEMENT

THIS AGREEMENT (hereinafter "Agreement"), is made as of the 27th day of January,
2003, by and between U.S. Foodservice, Inc., d/b/a U.S. Foodservice(TM), a
Delaware corporation with its principal place of business located at 9755
Patuxent Woods Drive, Columbia, MD 21046, on its own behalf and on behalf of its
subsidiaries and affiliates (hereinafter, "USF") and Rubio's Restaurant, Inc., a
California corporation with its principal place of business located at 1902
Wright Place, Suite 300 - Carlsbad, CA 92008 (hereinafter, "Rubio's" or
"Customer").

                                    RECITALS

A.       Customer is the owner, operator, agent, or manager of certain
         facilities; and

B.       Customer desires to designate a Master Distributor to perform a
         substantial portion of the purchasing, warehousing, and distribution
         functions for food and related non-food products for Customer; and

C.       USF carries or is willing to carry certain products required by
         Customer; and

D.       USF desires to perform the functions of purchasing, warehousing, and
         distributing certain products for and to Customer.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the agreements and promises herein
contained, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:

1.       SUBJECT MATTER OF AGREEMENT. Customer hereby appoints USF as its Master
Distributor and USF hereby accepts such appointment. In connection therewith,
Customer agrees to purchase from USF, and USF agrees to purchase, warehouse,
sell and distribute to Customer certain products in accordance with the terms
and conditions contained herein. A summary of program assumptions
("Assumptions") used to create the Master Distributor Program as described
herein and a list of Customer units to be serviced by USF are outlined on
ATTACHMENT A. The service benefits defined for this program are automatically
extended within the geographic distribution area of any USF distribution center
outlined on Attachment A, provided all parameters and requirements of the
program are met.

2.       PRODUCTS.

         a.       Product Categories. Distributor shall supply Customer with
items ordered by Customer which are within the categories of products listed
below, and such additional categories of products as the parties may agree to in
writing (collectively, "Specified Products"). With respect to the categories of
products to be distributed to Customer, USF offers a wide variety of Private and
Signature Brand Products that offer quality and value.

         b.       Specified Products. USF will maintain an appropriate inventory
of all Specified Products, including Proprietary Products (as defined below),
under the following conditions:

                                       1
<PAGE>

                           i.       Customer purchases from USF a minimum of
                                    [***] cases per week or [***] turns per
                                    year, per Distribution Center.

                           ii.      A minimum of [***] days written notice is
                                    required for new products to be brought into
                                    USF inventory for distribution.

                           iii.     Customer will notify USF at least [***] days
                                    in advance of special promotions that may
                                    cause unusual or excessive demand on
                                    inventory.

                           iv.      If USF does not presently transact business
                                    with a supplier/packer designated by
                                    Customer, a complete Seller's Agreement from
                                    that supplier/packer is required before any
                                    product is brought into inventory. This
                                    process may take up to [***] days. The
                                    current insurance requirement under the
                                    Seller's Agreement of $[***] is intended to
                                    protect Customer and USF from costs
                                    associated with product defect and other
                                    third party acts or omissions.

                           v.       Customer's national contracts with
                                    manufacturers and manufacturer
                                    representatives will be honored by USF. As
                                    more specifically set forth in Section 4(f)
                                    below, under no circumstances will USF
                                    implement manufacturer deviated pricing
                                    without written confirmation from the
                                    specific manufacturer. If Customer has
                                    contracts with a given manufacturer for
                                    products not stocked by USF, Customer will
                                    give consideration to similar products
                                    stocked by USF, provided that the stocking
                                    manufacturer will equalize the pricing.
                                    Notwithstanding the foregoing, when the cost
                                    of products has been negotiated directly
                                    between Customer and vendors, such vendors
                                    may attempt to place specific performance
                                    parameters on USF. These may include, but
                                    are not limited to, payment terms, purchase
                                    quantity minimums, pick-up minimums and
                                    reporting requirements. As USF must manage
                                    its own negotiations with vendors to control
                                    inventories, warehouse and receiving
                                    efficiencies, USF will not accept, and shall
                                    in no event be required to accept, such
                                    conditions established by Customer specified
                                    vendors. USF retains exclusive
                                    responsibility for all in-bound logistics.

         c.       Proprietary Products. For purposes of this Agreement,
"Proprietary Products" are products that USF has in inventory, in transit or for
which non-cancelable orders have been placed, that have been ordered, purchased,
transferred or consigned for Customer's account, including without limitation,
special order products, test products, menu special products, seasonal products,
Customer label and non-Customer label products and other products brought into
stock especially to service Customer's account, including requests from Customer
units.

                           i.       USF recognizes Customer's need to
                                    differentiate, among other things, in theme,
                                    menu and products. While it is USF's desire
                                    to support Customer's needs in the product
                                    area, the combination of warehouse capacity
                                    restraints, freight scheduling, receiving
                                    dock congestion and other issues requires
                                    USF to charge the fee described below for
                                    any Proprietary Products beyond those items
                                    set forth below, carried for Customer's
                                    account:

<TABLE>
<CAPTION>
Category                           # of Slots
--------                           -----------
<S>                                <C>
Dry                                   [***]
Frozen                                [***]
Refrigerated                          [***]
</TABLE>

                                       2
<PAGE>

                           Proprietary Products requiring USF to allocate
                           warehouse slots in any USF distribution center in
                           excess of those listed above will mutually agreed
                           upon between Rubio's and USF.

                           ii.      Customer and USF will mutually agree upon
                                    the disposition of Proprietary Products
                                    showing no movement for [***] days ("Dead
                                    Inventory") and Customer will be responsible
                                    for the disposition of the Proprietary
                                    Products that we agree to. If such Dead
                                    Inventory is not distributed within [***]
                                    days thereafter, at Customer's option (1)
                                    Customer shall purchase all such Dead
                                    Inventory or (2) advise USF how to dispose
                                    of such products with USF being reimbursed
                                    for any loss on the cost of said product
                                    that is returned to vendors or disposed of
                                    in any manner other than distribution
                                    through normal channels. If said product is
                                    distributed through normal channels, the
                                    normal mark-up will apply. Customer will be
                                    responsible for re-stocking charges or
                                    freight cost incurred in connection with
                                    Dead Inventory. If Dead Inventory is not
                                    disposed of within [***] days of being
                                    designated as such, USF will move the Dead
                                    Inventory to outside storage, with the cost
                                    of the outside storage being the
                                    responsibility of Customer.

                           iii.     USF and Rubio's will mutually agree to
                                    Proprietary Products moving less than [***]
                                    cases per week ("Slow Inventory"). Customer
                                    shall have [***] days to increase movement
                                    of such Slow Inventory to [***] cases per
                                    week. If such movement does not occur, USF
                                    shall have the right not to stock any such
                                    Slow Inventory and Customer may use an
                                    alternative item stocked by USF or consider
                                    an alternative procurement option (e.g.,
                                    Next Day Gourmet, direct shipping from
                                    manufacturer, etc.).

                           iv.      In the event this Agreement is terminated
                                    for any reason, Customer agrees to purchase,
                                    or cause a third party to purchase, at full
                                    selling price, including the applicable fee
                                    per case and any additional surcharges
                                    incurred by USF, all Proprietary Products.
                                    The pick-up of these products, either by
                                    Customer or a third party (acceptable to
                                    USF) at Customer's direction, shall be
                                    within [***] days of termination date for
                                    all frozen and refrigerated products and
                                    within [***] days of termination date for
                                    all other products. Customer assumes
                                    responsibility for full payment to USF for
                                    all such products. Payment must be received
                                    by USF within [***] days of Agreement
                                    termination. USF may, at its option, elect
                                    to subtract payment from credits or
                                    allowance payments due to Customer from USF.
                                    In the event such product is not removed
                                    from USF within the prescribed time frames,
                                    Customer understands and agrees that USF
                                    will have the right to move such products to
                                    outside storage, with the cost of the
                                    outside storage being the responsibility of
                                    Customer, and Customer will continue to be
                                    responsible for the full payment for such
                                    product as stated above.

                  Customer will be required to complete the New Product/Special
                  Order Notification and Agreement attached hereto as ATTACHMENT
                  B for all Proprietary Products.

                                       3
<PAGE>

         d.       Substitutions. In the event a Specified Product is out of
stock or otherwise cannot be delivered to Customer as ordered, the following
procedures shall be followed:

                           i.       All substitutions will be priced in
                                    accordance with the applicable fee per case
                                    and be of acceptable quality reasonably
                                    determined by Customer.

         e.       Title and Risk of Loss. Title to all goods shall pass to
Customer upon delivery to the receiving dock of Customer and acceptance by
authorized signature, subject to rejection of certain items by notation on the
invoice. All deliveries may be checked in jointly by the driver of the delivery
vehicle and an authorized representative of Customer, both of whom shall note on
the invoice any shortages and damaged or rejected goods. Customer shall have
[***] from the time of delivery to notify USF (i) of any concealed damage or
rejected goods or (ii) with respect to products not jointly checked in, of any
shortages, damages, or rejected goods. USF shall ensure that all billings
reflect all shortages and damaged or rejected goods noted on the invoice.
Customer shall make arrangements through USF order department for any goods to
be returned to USF. USF shall issue a receipt to Customer for any goods picked
up for return to ensure that Customer receives a proper credit therefore. USF
shall bear all risk of loss, damage, or destruction until title passes to
Customer pursuant to this Section 2(e).

3.       SERVICE ARRANGEMENTS

         a.       Deliveries. While USF's goal is to accommodate Customer's
needs and preferences regarding delivery days and hours, the pricing of this
Agreement and/or certain market transportation conditions may dictate USF's need
to route deliveries for utmost efficiency. As such, while USF will review
Customer's delivery preference, USF reserves the option to assign specific
delivery days and/or maintain open delivery windows to Customer's locations. All
such delivery designations shall be reviewed with Customer prior to the
initiation of the program. USF agrees regular deliveries will not be made
between the hours of 11:00 am and 2:00 pm with the exception of recoveries and
off-cycles.

         b.       On-Line Electronic Order Entry System. The financial
evaluation of this Agreement included the efficiencies that Customer's use of
USF's electronic ordering system would generate. USF's order entry system
provides complete order information, including confirmation. Wherever possible,
USF encourages its customers to use electronic means of ordering. The USF
website is intended to provide Customer with real time visibility to Customer's
standard Order Guide, the ability to order online, information on outstanding
orders and historical information on past purchases. Additionally, the website
is intended to allow users to search the USF catalog of products and gain access
to real time pricing of items, even those not on Customer's standard Order
Guide. USF agrees to provide Customer at no additional charge, use of USF's web
based order entry system. However, requests to integrate USF's internet
infrastructure to Customer's own or third party provided ordering system may
carry additional costs not covered in this Agreement.

         While electronic ordering is a necessary economic component of this
Agreement, USF recognizes that a transition period to begin ordering
electronically may be necessary. Therefore, Rubio's units that are currently not
utilizing USF's web based ordering system may place orders using the Customer
Service department of the USF distribution center(s) assigned to your account,
without any additional charge. After May 31, 2003, all orders routinely placed
to USF by Rubio's outside of the USF web based system will be assessed a charge
of $[***] per invoice; provided, however, that no such charge will be assessed
in the event that USF's web based system is inoperable.

         c.       Order/Delivery Schedule. A next day or skip-day order delivery
schedule will be mutually determined to achieve optimum service levels.

         d.       Special Arrangements. Should Customer request the use of a
"loaner" truck, USF will make reasonable efforts to accommodate supplying a
truck for special occasions. The cost associated

                                       4
<PAGE>

with use of the truck, the condition of the truck and driver wages will be the
responsibility of the Customer. Customer will be required to sign USF's standard
hold harmless agreement prior to it use of the truck.

         e.       Split Case Surcharge. USF, at Customer's request, may choose
in its sole discretion, to make available products sold in units less than
manufacturer's standard containers, in which case USF will upcharge an
additional [***] per unit to help defray additional handling expenses and
increased damage loss experience.

         f.       Restocking Fee. USF may, at its option, agree to accept
product returns from Customer for reasons other than USF delivery error. Such
product must be unopened, full case non-perishable product, in good condition
with adequate shelf life remaining to allow for resale. To defray USF's
additional handling expenses for the return of such products, USF reserves the
right to charge a restocking fee of [***] of the selling price. Customer returns
of certain products, including but not limited to, seasonal, special order,
discontinued or promotional products will not be accepted unless Customer or the
vendor of such products agrees to reimburse USF for selling price and other
expenses involved with such returns.

4.       PRICING STRUCTURE.

         a.       Cost. The price of product to Customer shall equal USF's
invoice cost (as hereinafter defined) plus the agreed upon fee per case on cost
as outlined below. USF's invoice cost is defined as the manufacturer's
(supplier, packer or any other vendor) delivered cost or f.o.b. unit price plus
standard freight (as hereinafter defined) to USF's distribution center, less
off-invoice discounts or off-invoice allowances (such off-invoice discounts or
off-invoice allowances to mean manufacturer generated discounts or allowances on
particular items for set periods of time and which are specifically reflected on
the invoice). Invoice cost shall not be adjusted for, and Customer shall not be
entitled to, promotional allowances, cash discounts, prompt pay discounts,
growth programs or any other supplier incentives received by USF. Unless
in-bound freight is included in vendor's delivered pricing, standard freight
charges will be based on market conditions and will not exceed the freight rate
normally payable by the USF distribution center for inbound shipments of regular
quantity requirements of such products. Freight charges may include common or
contract carrier charges by the product vendor or a carrier, and/or charges
billed by USF for its freight management service. It is expressly acknowledged
and agreed that USF may utilize its internal logistics or branch generated
back-haul program, provided that freight cost charged to Customer does not
exceed standard freight. USF retains sole responsibility for all in bound
logistics activity.

         b.       Price Structure. The price structure for this Agreement on the
following product categories shall be:

<TABLE>
<CAPTION>
   CATEGORY                             FEE PER CASE
   --------                             ------------
<S>                                     <C>
-        [***]                          $[***] flat
-        [***]                          $[***] flat
-        [***]                          $[***] flat
</TABLE>

                           Exceptions to Above
                           Equipment and supply shall be handled as a separate
                           contract.

The above pricing structure was generated on the basis of system wide average
deliveries of $[***], as set forth on ATTACHMENT A.

                                       5
<PAGE>

         c.       Price Guarantees and Adjustments. Pricing will be guaranteed
for [***]. Regardless of the normal pricing cycle assigned to a product, USF
reserves the right, with prior notice and as mutually agreed upon by Rubio's to
immediately adjust the selling price of products when the replacement cost
increases by [***] or more. Selling price will be re-established by applying the
applicable fee per case amount to the increased cost.

         d.       Rounding. To simplify pricing, receiving and inventory
valuation, USF rounds all prices with calculated penny fractions to the next
highest penny per unit of sale.

         e.       Joint Buying Decisions. Will be mutually agreed upon between
Rubio's and USF.

         f.       Deviated Cost Programs. USF agrees to maintain deviated
costing programs in its contract pricing system when deviated cost(s) has been
negotiated directly between Customer and vendors. USF may impose a charge upon
vendors providing deviated costing in part to help defray additional
administrative, systems, financing and other costs incurred by USF in handling
products subject to cost deviations. USF will only maintain those deviated cost
programs documented by the vendor and communicated to USF via notice on vendor
letterhead, via electronic file or by completion of a USF "Deviated Cost
Program" form. The communication shall, at a minimum, contain:

                  Adequate lead time of [***] working days prior to the month
to be implemented

                           i.       Program start/end dates

                           ii.      Information pertaining to deviated cost type
                                    (delivered to distributor, allowance, f.o.b.
                                    origin)

                           iii.     Information on specific products covered,
                                    including manufacturer product code

                           iv.      Signature of vendor representative
                                    authorized to offer program

                           v.       Vendor contact

USF will not be responsible for collection, payment or any reimbursement of
monies due to Customer as a result of vendors supplying inadequate information,
communication received after program start date, predated or retroactive
programs. As USF acts as an administrator regarding negotiated deviated cost
programs, USF will not be held liable for any vendor omissions or errors in
maintaining the programs and all such related recoveries shall be from the
involved vendor. Upon reaching the stated end date of a deviated costing
program, based on the vendor documentation described above, USF's pricing to
Customer will revert to the regular price structure as described in Section 4
above. The vendor will be responsible for supplying updates/extensions on
existing programs based on the description and timing set forth above.

5.       FINANCIAL. Customer payment terms are set at [***] days, subject to
prior and ongoing corporate credit approval. Acceptable forms of payment include
cash, wire transfer or bank draft only. Customer shall be primarily responsible
for all financial obligations hereunder, irrespective of the entity to which
Customer may direct that products be delivered. USF reserves the right to charge
interest on all monies due beyond the agreed upon payment terms. Interest will
be charged at the lower of [***]% per month or the highest rate permissible by
law.

         a.       Prompt Pay Incentive. Your payment terms are [***] days. If
you elect to pay prior to the net due date, then USF will pay you an incentive
amount based upon the following schedule:

<TABLE>
<CAPTION>
Average Days Paid               Incentive
-----------------               ---------
<S>                             <C>
Less than [***] days              [***]%
</TABLE>

                                       6
<PAGE>

The incentive will be paid on invoices that average less than [***] days paid
allowing for the processing time of the wire transfer and for the Monday banking
holidays. The amount due is based on a USF electronic file transmitted each
Monday for the sales of the previous Monday through Sunday (the "Applicable
Sales Period"). Customer shall make weekly payments via wire transfer on the
following Thursday, for the sales of the Applicable Sales Period that ended
approximately one-week prior. The incentive, which will be paid within [***]
days following the close of each of USF's respective monthly accounting periods,
will be calculated by multiplying the incentive amount by the amount of payments
received by USF that averaged less than [***] days paid during the respective
monthly period. No invoice deductions will be permitted. The incentive will be
paid by check.

         b.       Incentives.

                           i.       [***]

                           ii.      [***]

         c.       Indemnity. Customer shall indemnify, defend and hold USF
harmless from any and all claims, demands, actions, causes of action,
liabilities, damages, costs and expenses (including reasonable attorneys' fees)
arising from any Customer unit in any way related to the payment to Customer of
any of the incentives set forth above.

         d.       EDI. Rubio's shall update their EDI transmission requirements
to the industry standard by May 31, 2003.

         e.       Uniform Sales & Tax Certificate. Customer agrees to complete
the Uniform Sales & Tax Certificate where applicable. Customer agrees to provide
full and continuing disclosure to USF of the identity and legal structure of all
subsidiary, affiliated and managed entities to which the provisions above are to
be applied.

Notwithstanding anything contained herein or in any other agreement to the
contrary, to the extent there is any change in Customer's creditworthiness or
financial capabilities (which shall include Customer's failure to pay invoices
within payment terms and a reasonable period of time thereafter), or to the
extent Customer experiences other circumstances which affect its ability to meet
the payment terms established hereunder, USF shall have the right to change the
terms outlined herein including, but not limited to, Customer's payment terms
and service arrangements.

6.       ACCOUNT MANAGEMENT.

         a.       Personnel.

                           i.       USF will assign a Corporate Account Manager
                           to coordinate the management of Customer's needs.

                           ii.      USF will also appoint a Distribution Center
                           Chain Account Manager to coordinate activities and
                           ensure program integrity at the unit level.

                           iii.     Each participating Distribution Center will
                           assign a non-commissioned telephone Customer Service
                           Representative to Customer.

                           iv.      USF's corporate headquarters in Columbia,
                           Maryland will serve as a resource for all
                           Distribution Centers involved in this program.

                                       7
<PAGE>

         b.       Program Review. The parties shall conduct quarterly,
semi-annual or annual review as agreed by the parties to discuss and monitor the
implementation of this program and evaluate ways of improving its day to day
operation and achieving additional operational and cost efficiencies.
Participants in such reviews shall include Customer's designated representative
and USF's National Account representatives, together with other representatives
of both parties as mutually agreed. Should the results of the review reveal that
the parameters of the Program are significantly different than those outlined on
Attachment A, USF reserves the right to propose a new program, including mark-up
structure, service arrangements and credit terms, or terminate the Agreement
pursuant to the terms of Section 8(d).

         c.       MIS Capabilities. Various computer generated reports are
available to Customer upon request utilizing USF's data programs and formats.
Reports may be printed or supplied electronically on a monthly and/or quarterly
basis. Reports consisting of product usage, sales volume, delivery size, and
vendor allocation are considered industry standard and may be provided upon
Customer request.

         7.       PRICE VERIFICATION. Upon no less than [***] weeks written
notice and during regular business hours, but no more frequently than once every
[***] months, Customer may examine documentation to support pricing of products
sold to Customer pursuant to this Agreement; provided, however, that any such
verification shall be limited to no more than [***] items with [***] per item.
If such documentation is unavailable at the distribution center office, USF's
computer generated reports will be made available at the distribution center
office or the audit may be conducted at USF's headquarters, at USF's option. The
invoice date to be verified shall be limited to a date within the [***] weeks
immediately preceding such verification. Certain vendors/suppliers provide USF
with electronic statements as the billing mechanism. In such instance, these
vendor electronic files will be considered valid audit tools.

         a.       Only USF and Customer management personnel will participate in
the price verification process set forth in this Section 7. Customer shall take
all reasonable steps to maintain the confidentiality of information provided by
USF. In the rare circumstance where Customer and USF agree that Customer may
utilize the services of an outside consultant to aid Customer in the price
verification, said consultant shall be required to execute a confidentiality
agreement in favor of USF containing terms reasonably acceptable to USF as a
condition to the consultant's participation in the price verification. USF
reserves the right of final approval for the use of any outside consultant, such
approval not to be unreasonably withheld.

         b.       Credit or debit memos for any uncontested adjustments
determined by a price verification process will be processed at Customer's
direction within one (1) week. c. Price verification audits will not be
scheduled at a time which would interfere with USF year end accounting
activities.

         d.       Any monies due Customer from the price verification process
will be offset by all monies due USF that are beyond the agreed upon credit
terms.

         e.       Pricing discrepancies found outside of the audit process will
be handled separately. Additionally, pricing verification shall be limited to a
date within the [***] weeks immediately preceding such verification.

8.       TERM AND TERMINATION.

         a.       The term of this Agreement shall commence on January 27, 2003
and shall continue for a period of five (5) years through January 27, 2008 and
shall be renewably each year thereafter, unless sooner terminated in accordance
with the provisions hereof.

                                       8
<PAGE>

         b.       Upon the occurrence of a Breach (as defined below) of this
Agreement, the non-breaching party may terminate this Agreement, at its option
and upon written notice of termination to the breaching party, and except as
provided herein, may seek any and all remedies available at law or in equity in
connection with the Breach.

         c.       A Breach of this Agreement is defined as:

                           (i)      USF's or Customer's, as the case may be,
                                    failure to perform any material term,
                                    covenant or agreement contained herein or in
                                    any document or instrument delivered
                                    pursuant to or in connection with this
                                    Agreement, which failure continues uncured
                                    for [***] days after written notice of such
                                    failure has been delivered by the
                                    non-breaching party; provided, however, that
                                    if written notice of a similar failure has
                                    previously been provided during the
                                    preceding [***] months, the cure period
                                    shall be [***] days; provided, further, that
                                    there shall be [***] days to cure failure by
                                    Customer to make timely payments in
                                    accordance with the payment terms
                                    established in Section 5 above; or

                           (ii)     USF's or Customer's, as the case may be,
                                    application for or consent to the
                                    appointment of a receiver, custodian,
                                    trustee or liquidator; inability to pay its
                                    debts as such debts become due; general
                                    assignment for the benefit of its creditors;
                                    commencement of a voluntary case under the
                                    United States Bankruptcy Code; filing of a
                                    petition seeking to take advantage of any
                                    other law of any jurisdiction relating to
                                    bankruptcy, insolvency, reorganization,
                                    winding-up, or composition or readjustment
                                    of debts or commencement by a third party of
                                    a proceeding seeking any similar relief
                                    under any law of any jurisdiction relating
                                    to bankruptcy, insolvency, reorganization,
                                    winding-up, or readjustment of its debts,
                                    and such proceeding shall continue
                                    undismissed for a period of sixty (60) days.

         d.       Notwithstanding anything contained herein to the contrary,
either party may terminate this Agreement without cause upon [***] days prior
written notice.

9.       CONFIDENTIALITY. USF and Customer agree that all information as to
source, quantity, and price of goods and services disclosed or obtained in
connection with this Agreement and the performance of this Agreement shall be
maintained in confidence and shall not be released to any private third party
for any reason whatsoever other than pursuant to a validly issued subpoena from
a court or governmental authority having jurisdiction over the party, pursuant
to the rules, regulations or requirements of any state or federal agency or
department or pursuant to a discovery request made under applicable court rules
and to which the party is required to respond.

10.      WARRANTY AND LIMITATION OF LIABILITY. USF shall use reasonable efforts
to obtain warranties or representations from its suppliers that the goods to be
furnished hereunder are pure, unadulterated, and of first rate quality and that
they shall be merchantable and fit for the ordinary purpose for which they are
intended. EXCEPT AS SPECIFICALLY SET FORTH IN THIS SECTION 10, ALL WARRANTIES,
GUARANTEES, AND REPRESENTATIONS, EITHER EXPRESSED OR IMPLIED, WHETHER ARISING
UNDER ANY STATUTE, COMMON LAW, USAGE OF TRADE, COURSE OF DEALING OR OTHERWISE,
INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, ARE HEREBY EXCLUDED. USF SHALL IN NO WAY BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR RELIANCE DAMAGES, EVEN IF USF
IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

                                       9
<PAGE>

11.      NOTICE. All notices required or permitted to be given hereunder shall
be in writing and sent by an overnight delivery service, or by United States
registered or certified mail, postage prepaid, return receipt requested,
addressed to the parties as follows:

         TO CUSTOMER:                                 TO USF:
         _______________________                      _______________________
         _______________________                      _______________________
         _______________________                      _______________________
         Attn:___________________                     Attn:__________________

                                                      With Copy to:
                                                      U.S. Foodservice
                                                      9755 Patuxent Woods Drive
                                                      Columbia, MD  21046
                                                      Attn: Mr. Mark Natale
                                                      Senior Vice President -
                                                      Business Development

Or to such other addresses as the parties may direct by notice given as herein
above provided. Notice shall be deemed given when received as evidenced by the
return receipt or the date such notice is first refused, if that be the case.

12.      MISCELLANEOUS.

         a.       Entire Agreement. This Agreement constitutes the entire
agreement between the parties and may not be modified except by an agreement in
writing executed by the party hereto against whom the modification is sought to
be enforced. This Agreement supersedes all prior agreements between the parties
hereto governing the supply of products to the Customer and the Customer units
to be supplied hereunder, and all purchase orders submitted after the effective
date hereof shall be subject to the terms of this Agreement, conflicting terms
contained in any invoice to the contrary notwithstanding.

         b.       Force Majeure. Neither party will be in default in the
performance of its obligations under this Agreement if such performance is
prevented or delayed because of war, hostilities, revolution, civil commotion,
strike, labor dispute, epidemic, shortage in supply, fire, wind, earthquake or
flood, use of any law, order, proclamation, regulation or ordinance of any
government, or of any subdivision thereof, because of Acts of God or for any
other cause, whether similar or dissimilar to those enumerated, that is beyond
the reasonable control and without the fault or negligence of the party whose
performance is affected. If a force majeure event prevents USF from supplying
all of the product needs of its customers, USF shall allocate such product as is
available to USF among its customers in such manner as USF reasonably
determines. No force majeure event shall excuse Customer from its payment
obligations contained herein.

         c.       Choice of Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Maryland
without reference to the conflicts of laws principles thereof.

         d.       Attorney's Fees. In the event this Agreement is breached, the
breaching party shall pay any and all reasonable attorney's fees and relevant
costs incurred by the non-breaching party as a result of the breach.

                                       10
<PAGE>

         e.       Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other, which consent shall not be
unreasonably withheld; provided, however, that USF may assign this Agreement to
any current or after-acquired affiliate without the consent of Customer if such
assignment has no operational affect with respect to the distribution centers
servicing this Agreement. In the event this Agreement is assigned, the assignor
shall in no event be relieved of or be released from its obligations contained
herein. USF may assign any accounts receivable due from Customer hereunder to
any third party.

         f.       No Agency. Nothing contained in this Agreement shall be
construed or interpreted as creating an agency, partnership, co-partnership or
joint venture relationship between the parties.

         g.       Non-Discrimination. USF is an equal opportunity employer. It
is the policy of USF to comply with all applicable state and federal laws
prohibiting discrimination in employment based on race, age, color, sex,
national origin, disability, religion or other protected classification.
Customer acknowledges that it is also an equal opportunity employer and that it
will comply with all applicable state and federal laws prohibiting
discrimination in employment based on race, age, color, sex, national origin,
disability, religion or other protected classification.

As evidence of this Agreement:

CUSTOMER

By: /s/ Sheri L. Miksa                            Date: March 14, 2003
   -------------------------------------
Name: Sheri L. Miksa

Title:   President and COO
Company:   Rubio's Restaurants, Inc.

U.S. FOODSERVICE, INC.

By: /s/ Dean Baldwin                              Date: March 14, 2003
   -------------------------------------
Name: Dean Baldwin

Title: Regional Vice President

                                       11
<PAGE>

                                                                  ATTACHMENT "A"

SUMMARY OF ASSUMPTIONS

Minimum of [***]% of purchases to be directed to USF
Average dollar per delivery: $[***]
Annual purchases: $[***]
Deliveries per unit per week: [***]
Number of units: [***]
Servicing divisions: [***]
Number of proprietary items: [***]
Credit terms: [***]
CIS requirements:__________________________

Should on-going performance review reveal significant differences from our
assumptions, the specific cause of the difference will be identified and the
parties will agree on a plan of action to either correct the cause or modify the
program, as necessary.

List of Customer units

                                       12
<PAGE>

                                                                  ATTACHMENT "B"

                          [U.S. FOODSERVICE (TM) LOGO]

NEW PRODUCT/SPECIAL ORDER NOTIFICATION AND AGREEMENT

________________________________________________("Customer") requests U.S.
Foodservice, Inc., d/b/a U.S. Foodservice ("USF") to stock on a regular basis
the following product which is not presently in inventory at USF's distribution
center:

Product:________________________________Pack Size:______________________________

Mfg. ID Code:_____________________________Cost:_________________________________

Minimum Shipment:______________________Case Cube:_______________________________

Case Gross Wgt.:________________________Net Wgt.:_______________________________

Date Product Needed:__________________Sequence No.:_____________________________

Initial Order:___________________Estimated Monthly Usage:_______________________

If replacing another product, what item:____________________Code #______________

Is this product restricted to selective units?_____If so, please identify:______

USF Division Involved:____________________Representative:_______________________

Order Guides Affected: Hotels______F.S.M.______Hospital______Education__________

Additional Instructions:________________________________________________________

Customer will be responsible for the disposition of items showing no movement
for [***] days ("Dead Inventory"). If such Dead Inventory is not distributed
within [***] days thereafter, at Customer's option (1) Customer shall purchase
all such Dead Inventory or (2) advise USF how to dispose of such products with
USF being reimbursed for any loss on the cost of said product that is returned
to vendors or disposed of in any manner other than distribution through normal
channels. If said product is distributed through normal channels, the normal
mark-up will apply. Customer will be responsible for re-stocking charges or
freight cost incurred in connection with Dead Inventory.

In the event the Master Distributor Agreement is terminated for any reason,
Customer will remain liable for the products specified above and purchased at
its direction. In such instance, Customer will coordinate the transfer of such
products to the new distributor in the time frames provided for in the
Agreement, or make full payment to USF for such products, within [***] days of
Agreement termination.

                                                  ______________________________
                                                  By:
                                                  Its:

                                       13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}]]