Document:

exv10w11xby

 

	 	 	 
	CONFIDENTIAL TREATMENT REQUESTED

	 	Exhibit 10.11(b) Redacted

ADDENDUM

Dated August 4, 2003

Addendum to the Master Purchase Agreement dated March 14, 2002 between Ericsson
Inc. and Rural Cellular Corporation (the “Agreement”).

WHEREAS the parties wish to extend the term of the Agreement and to add certain
provisions to it with respect to the purchase of CDMA and GSM equipment,
software and related services.

The parties have agreed:

	1.	 	All capitalized terms used in this Addendum will have the meaning set out
in the Agreement, unless otherwise specified. All provisions of the
Agreement remain unchanged except as set forth below.
	 
	2.	 	Section 2 of the Agreement is amended as follows:
	 
	 	 	The words “for a period of four (4) years” in the first and second lines
are replaced by “until August 3, 2008”.
	 
	3.	 	Section 3 of the Agreement is amended by adding the following
subsections:
	 
	 	 	Subsections (g) and (h) are added:
	 
	 	 	(g) A process to manage change with respect to the products, services and
deliverables.
	 
	 	 	(h) With respect to the Eligible Products (as defined below) the
Acceptance Tests that will be applicable.
	 
	4.	 	Section 15 of the Agreement is replaced by the following:

15. Invoicing and Payment: Unless otherwise provided in the
applicable Statement of Work, Ericsson will, with respect to all
the CDMA and GSM equipment, software and related services listed in
Attachment 4 to the proposal (which Attachment 4 is attached hereto
and incorporated herein as Exhibit A), as updated by Ericsson from
time to time to include new CDMA and GSM equipment, software and
related services (all of the CDMA and GSM equipment, software and
related services aforementioned in this sentence hereinafter
collectively referred to as the “Eligible Products”) associated
with the Initial Build Out of a particular market (as such terms
are defined in the applicable Statement of Work), invoice Customer
* of the purchase order value at receipt of the purchase order, *
at delivery and * at Acceptance (as defined below). Support will
be invoiced annually in advance. All other equipment, software and
related services will be invoiced * at delivery or performance.
Each such invoice will be due and payable to Ericsson within
fifteen (15) days from the date of the invoice. Any sum due to
Ericsson hereunder that is not paid when due will bear interest

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*Information omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

 

thereafter until paid at a rate equal to the lesser of 1.5% per
month or the maximum rate allowed by applicable law.

	5.	 	Section 10 of the Agreement is hereby amended and replaced in its
entirety as follows:
	 
	 	 	“10. Products. With respect to each product provided by Ericsson
to Customer hereunder (the “Product”), Ericsson will deliver the
Product to Customer, F.O.B., Customer’s facilities (or such other
facilities contracted by Customer), no later than the date
mutually agreed in writing by the parties. Title and risk of loss
or damage to the Product will pass to Customer upon Ericsson’s
delivery to Customer.”
	 
	6.	 	Section 11 is amended as follows:
	 
	 	 	Subsection (e) is added to Section 11 of the Agreement to read “(e)
Customer may make copies of the Software-related documentation solely for
internal purposes.”
	 
	7.	 	Section 16 of the Agreement is amended as follows:
	 
	 	 	The following words are added after the word “product)” in the ninth
line: “(unless it is an Eligible Product, in which case the warranty
period will be * months following (i) Ericsson’s delivery of the Product
(if Ericsson does not install the Eligible Product) or (ii) Acceptance of
the Eligible Product (if Ericsson installs the Eligible Product))”
	 
	8.	 	The following provisions are added to the Agreement:

27. CDMA and GSM Purchase Commitment: During the term of the
Agreement, which term is defined in Section 2 of the Agreement and
modified by this Addendum, Customer will purchase from Ericsson
both CDMA and GSM equipment, software and related services that are
Eligible Products in the amount of at least * (*) (the “Committed
Amount”). During the term of the Agreement, Customer will satisfy
the Committed Amount by issuing purchase orders for both CDMA and
GSM equipment, software and related services. Customer’s obligation
to purchase the Committed Amount is calculated in Customer’s
pricing as defined in Exhibit A (“Unit Pricing”) prior to the
application of any credits or discounts for which the Customer is
eligible to receive.

28. Discounts: In exchange for Customer’s agreement to purchase the
Committed Amount, Ericsson will provide Customer with discounts
totaling * (*) on Eligible Products, as follows:
Until Customer purchases the Committed Amount hereunder, Customer
will receive a discount of * on the Unit Price of all Eligible
Products.

29. Credits: In addition to discounts described in
Section 28 above, Customer will receive credits totaling *
(*), in exchange for Customer’s agreement to

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*Information omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

 

purchase the Committed Amount. Such credits shall be applied
as follows: Until Customer has purchased the Committed Amount,
it will receive a credit equal to * on the Unit Price of all
Eligible Products purchased, subject to adjustment as set out
below. Credits will be calculated and issued on January 31,
2004 based on all Customer purchases of Eligible Products
during the period ending December 31, 2003. Thereafter,
credits will be calculated and issued to Customer no later than
January 31st for the preceding period of June 30 to December 31
and July 31st for the preceding period of January 1 to June 30.
Credits must be used within * after they are issued and may be
used by Customer against current accounts receivable or against
future purchases of Eligible Products from Ericsson. These
discounts and credits are provided to Customer in lieu of the
incentives referred to in section 8 of the Agreement.

After the Committed Amount has been purchased by Customer, Customer
will be eligible to receive at a minimum the discounts and the
credits set out in Table 1 below.

Table 1 – Discounts and Credits after Committed Amount has been
purchased. This table is presented in a step fashion. Discount
and credit rates are not retroactive.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Millions of Dollars
	 	Discounts
	 	Credits
	 	Total

	*
	 	 	*	 	 	 	*	 	 	 	*	 
	*	 	 	*	 	 	 	*	 	 	 	*	 
	*	 	 	*	 	 	 	*	 	 	 	*	 

30. CDMA and GSM Prices and Fees: Unless otherwise mutually agreed
in writing by the parties in the applicable Statement of Work or
purchase order accepted by Ericsson, the purchase prices of the
Eligible Products are set forth in Exhibit A. The prices set out
in Exhibit A do not include discounts and credits.

31. Preferred Supplier: During the term of this Agreement,
Ericsson shall be the preferred supplier of CDMA and GSM equipment
and software purchased by Customer. For purposes of this
paragraph, “preferred supplier” means that during the term of this
Agreement, Customer shall purchase CDMA and GSM equipment and
software from Ericsson, provided that Ericsson’s rates, terms and
conditions are competitive with the rates, terms and conditions
offered by third parties for substantially similar CDMA and GSM
equipment and software.

32. Acceptance. The following provisions apply with respect to the
acceptance of Eligible Products:

	 	32.1	 	Acceptance Tests set out in the relevant
Statement of Work (the “Acceptance Tests”) will be carried out
in respect of the Eligible Products specified therein that are
installed by Ericsson, to verify that they will

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*Information omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

 

	 	 	 	operate and perform in accordance with the relevant
specifications provided by Ericsson (the “Specifications”).
	 
	 	32.2	 	Ericsson will notify Customer when it determines
that the Eligible Product is ready for Acceptance Tests, such
notice to be given no less than seventy-two (72) hours before
commencement of the Acceptance Tests. Customer and Ericsson
will jointly commence the Acceptance Tests on the date
mutually agreed upon by both parties and specified in
Ericsson’s notice (or other determined date). Representatives
of Ericsson and Customer will sign off on the form provided by
Ericsson for the Acceptance Tests (the “Tests Results Form”)
as to whether each item of the test was passed or failed. If
Customer does not have a representative attend the Acceptance
Tests on the mutually scheduled date, Ericsson will proceed
with those tests and immediately forward the Test Results Form
to Customer. No later than five (5) days after the effective
receipt (in accordance with Section 21 of the Agreement) by
Customer of the Test Results Form, Customer will give Ericsson
a written notice confirming that the Eligible Product is
accepted or refusing acceptance, in which case Customer’s
notice will state the particulars of the alleged deviation.
If Customer fails to notify Ericsson during this period,
Ericsson will, at its discretion but acting reasonably,
determine whether or not the Eligible Product is accepted and
the Eligible Product is deemed to have been accepted on the
date upon which the Acceptance Tests were successfully
completed.
	 
	 	32.3	 	If the Acceptance Tests results indicate that the
Eligible Product does not fulfill the requirements of the
Specifications, Ericsson will diligently correct these defects
at no additional cost to Customer. Acceptance of the Eligible
Product will not be unreasonably refused because of minor
deviations that do not prevent the Eligible Product from being
put into operation, although this will not relieve Ericsson
from its obligation to remedy the deviations without undue
delay. As used in the previous sentence “minor deviation”
means that both parties agree that the defect will not affect
end users quality of service. Upon correction of the defects,
the relevant Acceptance Tests will be repeated on the relevant
Eligible Products in accordance with the procedures set out in
this Article. Upon successful completion of the Acceptance
Tests, the Eligible Product will be deemed accepted by
Customer and Acceptance will be deemed to have taken place as
of that completion.
	 
	 	32.4	 	If the date the Acceptance Tests are successfully
completed is delayed as the result of the failure of Customer
to fulfill its obligations under this Agreement, Acceptance
will be deemed to have occurred on the date it would
reasonably have taken place if Customer had fulfilled those
obligations.

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*Information omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

 

	 	32.5	 	Acceptance of the Eligible Product may involve
testing the Eligible Product itself and interfaces (standard
or agreed) to equipment not supplied by Ericsson under this
Agreement. For this reason, tests of all products not
supplied by Ericsson must be completed by Customer prior to
commencement of Acceptance Tests and in the event that tests
of applicable external products are incomplete, Customer will
allow Ericsson to exclude affected tests, and the Test Results
Form will indicate that tests have been excluded. In the event
the Eligible Product passes the other relevant tests, the
Eligible Product will be deemed accepted. Ericsson will help
co-ordinate integration testing with products not supplied by
Ericsson and may require the participation of the suppliers of
such products in the testing process.
	 
	 	32.6	 	If Customer commences use of the Eligible
Product, other than for the express purpose of training or
testing as agreed between Ericsson and Customer in writing
prior to Acceptance, the Eligible Product will be deemed
accepted by Customer.

33. Late Performance Payment: If and to the extent that there are less
than forty-two (42) GSM sites accepted by Customer on or before December
31, 2003 due to Ericsson’s failure to perform its obligations hereunder,
Ericsson will, as its sole and exclusive liability, pay to Customer a
late performance payment (as liquidated damages) equal to [* (*)] of the
purchase price (net of any and all applicable discounts and credits) of
the equipment and software to be provided by Ericsson to Customer
hereunder for each such delayed GSM site, per week, for each full week of
delay, up to a maximum of * (*) of the purchase price (net of any
applicable discounts and credits) of such equipment and software.
Notwithstanding the foregoing, the late performance payment provided in
this Section 33 will not apply to the extent that the delay is
attributable to any act or omission of Customer or third parties under
Customer’s control (including, without limitation, its agents,
subcontractors or vendors (other than Ericsson)), or force majeure
events.

34. CDMA Commitment: In the event that during the term of the Agreement,
the Chief Executive Office of Ericsson declares in writing that Ericsson
has decided to cease its CDMA infrastructure business in the United
States, then Customer will, within * following such written declaration,
notify Ericsson whether or not Customer will exercise its option to
return the CDMA equipment and software then already purchased from
Ericsson hereunder. If Customer notifies Ericsson in writing within such
* period that Customer will exercise such option (such written notice
hereinafter referred to as the “Exercise Notice”), then Customer will,
within * following Ericsson’s receipt of the Exercise Notice, return the
CDMA equipment, and software to Ericsson, in which event Ericsson will
provide Customer with a refund, as follows:

	 	(i)	 	Upon Ericsson’s receipt of the Exercise Notice, Ericsson will
provide Customer with a refund equal to * of the Net Purchase Price
of such CDMA equipment and software.

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*Information omitted and filed separately with the Securities and Exchange
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	 	(ii)	 	Upon Ericsson’s receipt of the CDMA equipment and software, *
(*) of the Net Purchase Price of such CDMA equipment and software.

For purposes of this Section 34, “Net Purchase Price” is calculated as
follows:

	 	(1)	 	If Ericsson receives the Exercise Notice within the first two
years following the Addendum Effective Date, the Net Purchase Price
will be * (*) of the purchase price (that is net of any applicable
discounts and credits) paid by Customer to Ericsson.
	 
	 	(2)	 	If Ericsson receives the Exercise Notice within the third
year following the Addendum Effective Date, the Net Purchase Price
will be * (*) of the purchase price (that is net of any applicable
discounts and credits) paid by Customer to Ericsson.
	 
	 	(3)	 	If Ericsson receives the Exercise Notice within the fourth
year following the Addendum Effective Date, the Net Purchase Price
will be * (*) of the purchase price (that is net of any applicable
discounts and credits) paid by Customer to Ericsson.
	 
	 	(4)	 	If Ericsson receives the Exercise Notice within the fifth
year following the Addendum Effective Date, the Net Purchase Price
will be * (*) of the purchase price (that is net of any applicable
discounts and credits) paid by Customer to Ericsson.
	 
	 	(5)	 	If Ericsson receives the Exercise Notice after the fifth year
following the Addendum Effective Date, the Net Purchase Price will
be * (*) of the purchase price (that is net of any applicable
discounts and credits) paid by Customer to Ericsson.

35. Product Features: Ericsson represents and warrants that the Eligible
Products, as represented in the RFP response dated July 15, 2003 and as
set forth in Exhibit B will perform as described in these documents. The
RFP response dated July 15, 2003 and Exhibit B are herein incorporated
into this Agreement.

	9.	 	This Addendum will be governed and construed in accordance with the Laws
of the State of New York, other than the choice of law rules.
	 
	10.	 	This Addendum, the Agreement, each Statement of Work, and all exhibits
attached hereto or thereto, each of which is hereby incorporated herein or
therein, as applicable, for all purposes, constitute, as of the Effective
Date or the effective date of the applicable Statement of Work, as
applicable, the entire agreement between Ericsson and Customer with
respect to the subject matter hereof and thereof, and there are no
understandings or agreements relative hereto or thereto that are not fully
expressed herein or therein.
	 
	11.	 	Ericsson hereby acknowledges and agrees that Customer has satisfied the
purchase commitment set forth in Section 5 of the Agreement.

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*Information omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

 

	 	 	 	 	 	 	 
	ERICSSON INC.	 	RURAL CELLULAR CORPORATION
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	

	 	

	 	 	 	

	 
	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	

	 	

	 	 	 	

	 
	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	

	 	

	 	 	 	

	 	 	 
	EXHIBITS:
	 	 
	 
	 	 
	*Exhibit A

	 	Eligible Products
	 
	 	 
	*Exhibit B

	 	Features of Eligible Products

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*Information omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.<PAGE>
                                                                   EXHIBIT 10.33

                        HUMBOLDT BANCORP AND SUBSIDIARIES
                                 CODE OF ETHICS

GENERAL PHILOSOPHY AND OVERVIEW

The honesty, integrity and sound judgment of the officers, employees and
directors of Humboldt Bancorp and its subsidiaries (hereinafter, individually
and collectively, referred to as the "Company") are each essential to the
Company's reputation and success. Our reputation depends upon the conduct of all
of the Company's representatives. Every officer, director and employee of the
Company must play a part in maintaining our reputation for the highest ethical
standards.

All individuals who come in contact with the Company -- whether customers,
employees, agents, vendors or others -- must be treated in a fair and respectful
manner. We have a history of succeeding through honest business competition, and
we do not seek competitive advantages through illegal or unethical business
practices. Each officer and employee should endeavor to deal fairly with the
Company's customers, service providers, suppliers, competitors and employees.
Taking unfair advantage of anyone is prohibited, whether through manipulation,
concealment, abuse of privileged information, misrepresentation of material
facts, or any other unfair dealing practice.

The Company expects each person associated with the Company to comply with all
applicable legal and regulatory requirements, and this Code of Ethics is based
on the Company's policy that all officers, directors and employees comply with
the law. However, while the law prescribes a minimum standard of conduct, this
Code of Ethics requires conduct that often exceeds the legal standard.

In order to engender confidence in independence of judgment and action, every
Company representative must scrupulously avoid any conflict of interest or even
an appearance of conflict that might arise because of economic or personal
self-interest. Therefore, each officer, director and employee must conduct his
or her official and personal affairs in such manner as to give the clear
impression that he or she cannot be improperly influenced in the performance of
his or her official duties, and in private life behave in a manner that does not
bring discredit to or impair the dignity or reputation of the Company. Each
officer, director and employee is expected to conduct and manage his or her
personal and financial affairs in a responsible manner, and may not incur debt
that he or she refuses or is unable to pay.

This Code of Ethics:

     o    Requires the highest standards for honest and ethical conduct,
          including proper and ethical procedures for dealing with actual or
          apparent conflicts of interest between personal and professional
          relationships, and provides guidance for officers, employees and
          directors to communicate such conflicts to the Company.

     o    Requires compliance with all applicable laws, rules and regulations.

     o    Addresses misuse or misapplication of Company property and corporate
          opportunities.

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<PAGE>

     o    Requires the highest level of confidentiality and fair dealing within
          and outside the Company environment.

     o    Requires reporting of any illegal behavior.

THIS CODE PROVIDES GUIDANCE ON SEVERAL ASPECTS OF INTEGRITY AND CONFLICTS BUT
CANNOT AND DOES NOT COVER EVERY SITUATION YOU MAY ENCOUNTER. IF YOU ARE
UNCERTAIN ABOUT WHAT TO DO IN ANY SITUATION, OR IF YOU BECOME AWARE OF A
VIOLATION OF THIS CODE OF ETHICS, GUIDANCE SHOULD BE SOUGHT FROM YOUR IMMEDIATE
SUPERVISOR, THE HUMAN RESOURCES MANAGER OR THE COMPANY'S GENERAL COUNSEL. IF
ANYTHING PRESCRIBED HEREIN WILL CAUSE YOU DIFFICULTY, YOU SHOULD DISCUSS THE
PROBLEM WITH YOUR IMMEDIATE SUPERVISOR.

FAIR DEALING

Each officer, director and employee should undertake to deal fairly with the
Company's customers, potential customers, suppliers, competitors and employees.
No Company representative should take advantage of any other person or company
through manipulation, concealment, abuse of privileged information,
misrepresentation of material facts, or any other unfair-dealing practice.

CONFLICTS OF INTEREST GENERALLY

A "conflict of interest" occurs when the private interest of an officer,
director or employee in any way interferes or appears to interfere with the
interests of the Company. Any position or interest, financial or otherwise,
which could materially conflict with your performance as an officer, director or
employee of the Company, or which affects or could reasonably be expected to
affect your independence or judgment concerning transactions between the
Company, its customers, suppliers or competitors, or which otherwise would
reflect negatively on the Company, should be viewed as a conflict of interest.
You are expected to avoid all situations that might lead to either a real or
apparent material conflict between your self-interest and your duties and
responsibilities as an officer, director or employee of the Company.

CORPORATE OPPORTUNITIES

Officers, directors and employees must ensure that their own business and
personal relationships with the Company are always at arm's length. In addition,
officers, directors and employees may not take business opportunities that the
Company is likely to do, or of a type that the Company is accustomed to doing,
away from the Company or direct them to third parties unless the Company has
already been offered the opportunity and turned it down (this prohibition shall
not apply to customary banking relationships such as having checking accounts
and/or loans with other banks).

No officer, director or employee of the Company, whether before or after a
transaction is discussed or consummated, may solicit, accept or agree to accept,
for him- or herself or for a third party, anything of value (other than normal
Company-authorized compensation) from anyone in return for any business, service
or confidential information of the Company, or which is otherwise connected with
the business of the Company or the performance of his or her employment or
duties at the Company. Furthermore, if any officer or employee, or member of his
or her family, is offered something of value from a customer or other person

HUMBOLDT BANCORP AND SUBSIDIARIES
CODE OF ETHICS

                                        2

<PAGE>

doing or proposing to do business with the Company beyond what is expressly
authorized in this Code, that officer or employee must immediately disclose the
facts of the offer to his or her immediate supervisor, and any supervisor
receiving such a report shall inform the President of the Company immediately.
(If a director or a member of his or her family is approached, the director
should immediately inform the President of the Company.)

Each officer, director and employee is expressly prohibited by this Code from:

     (i)  Improperly deriving, either personally or providing to any third
          party, any benefit from any opportunity discovered through the use of
          Company property, contacts, information or position.

     (ii) Accepting employment or engaging in a business (including consulting
          or similar arrangements) that may conflict with the performance of his
          or her duties, or with an interest of the Company.

     (iii) Acting on behalf of the Company in any transaction in which, directly
          or indirectly, any of the following have had a significant financial
          interest: (A) the officer, director or employee, (B) any member of his
          or her immediate family, or (C) any person or business who has either
          been a source of income to him or her or with whom he or she has had a
          business relationship (other than customary retail trade in the normal
          course of business) within the past 12 months.

There are certain situations in which you may accept a personal benefit from
someone with whom you transact business, such as:

     (i)  Accepting a gift of nominal value in recognition of a commonly
          recognized event or occasion (such as a promotion, new job, wedding,
          retirement, birthday or holiday). An award in recognition of service
          and accomplishment may also be accepted so long as the gift does not
          exceed $100 from any one individual in any calendar year.

     (ii) Accepting a gift, gratuity, amenity or favor based upon an obvious
          family or personal relationship (such as from a parent, child or
          spouse) where the circumstances make it clear that it is the
          relationship rather than the business of the Company which is the
          motivating factor.

    (iii) Accepting meals, refreshments, travel arrangements and accommodations
          and entertainment of reasonable value in the course of a meeting or
          other occasion to conduct business or foster business relations if the
          expense would be reimbursed by the Company as a business expense if
          the other party did not pay for it.

     (iv) Accepting advertising or promotional material of nominal value.

     (v)  Accepting something of value if the benefit is available to the
          general public under the same conditions on which it is available to
          you.

HUMBOLDT BANCORP AND SUBSIDIARIES
CODE OF ETHICS

                                        3
<PAGE>

"Nominal value" in the above examples means that it would be within one's
ability to reciprocate on a personal basis.

An officer, director or employee should not indirectly perform any act that this
policy prohibits directly. For example, it is just as improper to arrange for a
member of your family to receive a gift as it is for you to accept the gift
directly.

CONFIDENTIALITY

Nonpublic information regarding the Company or its business, employees,
customers or suppliers is confidential. Using confidential information about the
Company or its business, employees, officers, directors, customers, consumers or
suppliers for personal benefit, or disclosing such information to others outside
your normal duties, is prohibited.

In the course of performing their duties, Company officers, directors and
employees acquire confidential information considered to be extremely sensitive
by subsidiary bank customers. Under privacy regulations this information
includes (but is not limited to) address, phone number and social security
number as well as financial information. You are to use such confidential
information only for the business purpose intended. You may not share
confidential information with anyone outside of the Company, including family
and friends, or with other employees who do not need the information to carry
out their duties. Information about customers may be released only when
authorized by the customer or when legally mandated (as when subpoenaed), and
the information then released must be accurate and within the confines of a
proper authorizing document.

Confidential information is not limited to information about subsidiary bank
customers but includes proprietary information of the Company. The following is
a nonexclusive list of confidential information of the Company:

     o    Trade secrets, which include business or technical information such as
          any formula, program, method, technique, compilation or other
          information that is valuable because it is not generally known.

     o    All rights to any invention or process developed by an employee using
          Company facilities or trade secret information, resulting from any
          work for the Company or relating to Company business, is considered to
          be "work-for-hire" under the United States copyright laws and shall
          belong to the Company.

     o    Proprietary information such as customer lists and customers'
          confidential information.

You may be required to sign a specific confidentiality agreement in the course
of your employment with the Company. Whether you are or not, however, you remain
under an obligation to keep all customer and Company information confidential
even after your employment with the Company ends.

Public and media communications involving the Company must have prior clearance
for compliance from the Company's General Counsel or Chief Financial Officer.

HUMBOLDT BANCORP AND SUBSIDIARIES
CODE OF ETHICS

                                        4

<PAGE>

INSIDER TRADING

Any material nonpublic information that reflects favorably or adversely on the
investment value of any business enterprise is "insider" information. Insider
information may not under any circumstances be used for personal investment
advantage or provided to others for their investment advantage.

It is both unethical and illegal to buy, sell, trade or otherwise participate in
transactions involving Humboldt Bancorp stock or other equity security while in
possession of material nonpublic information concerning Humboldt Bancorp or a
subsidiary bank. The exercise of stock options may, in certain cases, be
similarly prohibited, and an optionee should check with Humboldt Bancorp's Chief
Financial Officer for guidance prior to exercising any options. It is also
unethical and illegal to buy, sell, trade or otherwise participate in
transactions involving the stock or other equity security of any other company
(such as subsidiary bank customers) while in possession of similar material
nonpublic information concerning such company. Any questions concerning the
propriety of participating in a Humboldt Bancorp or other company stock or other
security transaction should be directed to the Humboldt Bancorp Chief Financial
Officer.

EXTENSIONS OF CREDIT

Humboldt Bank may extend credit to any executive officer, director or principal
shareholder of the Company only on substantially the same terms as those
prevailing for comparable transactions with other persons or that may be
available to bank employees generally, as permitted by and in accordance with
Regulation O of the Board of Governors of the Federal Reserve System.

OUTSIDE BUSINESS RELATIONSHIPS

Any outside employment or participation in the affairs of an outside
organization that potentially may raise a material conflict of interest or
embarrassment to the Company must be approved in advance. Managers will review
outside employment requests for potential conflicts of interest.

Directors should disclose all new directorships or potential directorships to
the chairs of the Board of Directors and of the Governance and Nominating
Committee, respectively, in order to avoid any conflicts of interest and to
maintain independence.

An officer or employee should notify his or her immediate supervisor before
agreeing to act as a director, officer, consultant or advisor for any other
business organization.

The Company encourages civic, charitable, educational and political activities
as long as they do not interfere with the performance of duties at the Company.
Before agreeing to participate in any of these types of activity, an officer or
employee should contact his or her immediate supervisor.

Employees must disclose prior to or at the time of their hire the existence of
any employment agreement, non-compete or non-solicitation agreement,
confidentiality agreement or similar agreement with a former employer that in
any way restricts or prohibits their performance of any duty or responsibility
in a position with the Company. Copies of such agreements should be provided to
the Human Resources Manager to permit evaluation of the agreement in light of

HUMBOLDT BANCORP AND SUBSIDIARIES
CODE OF ETHICS

                                        5

<PAGE>

the employee's position. In no event shall an employee use any trade secret,
proprietary information or other similar property, acquired in the course of his
or her employment with another employer, in the performance of his or her duties
for or on behalf of the Company.

PROTECTION AND PROPER USE OF COMPANY PROPERTY

All officers, directors and employees should protect the Company's property and
assets and ensure their efficient and proper use. Theft, carelessness and waste
can directly affect the Company's profitability, reputation and success.
Permitting Company property (including data transmitted or stored electronically
and computer resources) to be damaged, lost or used in an unauthorized manner is
strictly prohibited. All Company assets should be used only for legitimate
business purposes. Officers, directors and employees may not use Company or
other official stationary for personal purposes.

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

All officers, directors and employees are expected to demonstrate the ability to
properly manage their personal finances, particularly the prudent use of credit.
The Company recognizes that its customers must have faith and confidence in the
honesty and character of its officers, directors and employees. In addition to
the importance of maintaining customer confidence, there are specific laws that
outline the actions a bank must take regarding any known or suspected crime
involving its affairs. With regard to financial affairs, a bank must make a
criminal referral in the case of any known or suspected theft, embezzlement,
check/debit card kiting, misapplication or other defalcation involving bank
funds or bank personnel in any amount.

REPORTING OF ILLEGAL OR UNETHICAL BEHAVIOR

Fraudulent activity on the part of any person can significantly affect the
reputation and success of the Company. The Company requires its officers,
directors and employees to report to and discuss with supervisors, managers or
other appropriate personnel any known or suspected criminal activity involving
the Company or its employees. If, during the course of employment, you become
aware of any suspicious activity or behavior, including concerns regarding
questionable accounting or auditing matters, or suspected violations of laws,
rules, regulations or this Code of Ethics, you must report the same to the
President, the Human Resources Manager or the General Counsel of the Company.
Failure to do so is itself a violation of this Code. Reporting the activity will
not subject you to discipline unless you knowingly file a false report, and the
Company will not allow retaliation for reports made in good faith. ALL REPORTS
OF THIS NATURE ARE CONFIDENTIAL AND MAY BE KEPT ANONYMOUS.

SPECIAL PROVISIONS FOR CERTAIN SENIOR OFFICERS

The Chief Executive Officer, Chief Financial Officer and Controller of the
Company are expected to adhere not only to the Code of Ethics, as set forth in
this policy, but in addition to (1) ensure full, fair, accurate, timely and
understandable disclosure in all public communications made by the Company and
in all reports and documents required to be filed by the Company with, or which
are otherwise submitted to, regulatory and other governmental agencies, and (2)
provide the Board of Directors and colleagues with information that is accurate,
complete, objective, relevant, timely and understandable. Any matter involving
any material transaction or relationship that reasonably could be expected to

HUMBOLDT BANCORP AND SUBSIDIARIES
CODE OF ETHICS

                                        6

<PAGE>

give rise to a conflict of interest in, or any violation of this Code by, the
Chief Financial Officer or the Controller shall be reported to the Chief
Executive Officer; any such matter that involves the Chief Executive Officer
shall be reported to the Chairman of the Board.

ADMINISTRATION AND WAIVER OF CODE OF ETHICS

This Code of Ethics shall be administered and monitored by the Humboldt Bank
Human Resources Department. Any questions and further information on this Code
of Ethics should be directed to that department. Known or suspected violations
of this Code of Ethics will be investigated and may result in disciplinary
action up to and including immediate termination of employment.

All managers and direct supervisors are responsible for reviewing this Code of
Ethics with their subordinates each time a new edition of the Code of Ethics is
published. This Code of Ethics is also available on the Humboldt Bancorp web
site at: http://www.humboldtbancorp.com.

It is also the responsibility of the Human Resources Department to biennially
reaffirm understanding of this Code of Ethics by all officers and employees by
obtaining a signed certificate from each that he or she has read and understands
the guidelines and will comply with them. The provisions of the Code of Ethics
are included in the Company Employee Handbook. The Employee Handbook is issued
to all new officers and employees at the time of employment and is reissued to
existing officers and employees from time to time. Officers and employees are
required to sign a receipt for the Employee Handbook indicating they have read
this Code of Ethics and will comply with its provisions.

Officers, employees and directors of the Company are expected to follow this
Code of Ethics at all times. Generally, there should be no waivers to this Code
of Ethics. However, from time to time, the Company may waive some provisions of
this Code. Waivers will be determined on a case-by-case basis, with the advice
of the Company's General Counsel. Any officer or employee who believes that a
waiver may be called for should contact his or her supervisor or the Director of
Human Resources. Any waiver requested by a director or an executive officer may
only be approved by the Board of Directors, which shall have the sole and
absolute discretionary authority to approve any deviation from or waiver of this
Code of Ethics for such persons. Any such waiver relating to directors or
executive officers, and the grounds therefor, shall be disclosed within five
days on Form 8-K and also disclosed to shareholders in the Humboldt Bancorp
Annual Proxy Statement.

HUMBOLDT BANCORP AND SUBSIDIARIES
CODE OF ETHICS

                                        7

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