Document:

Exhibit

Exhibit 10.1

CONSENT AGREEMENT AND AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT
This Consent Agreement and Amendment No. 3 to Amended and Restated Credit Agreement (this “Agreement”) dated as of February 27, 2018 (the “Effective Date”), is among Extraction Oil & Gas, Inc., a Delaware corporation (the “Borrower”), 7N, LLC, a Delaware limited liability company (“7N”), 8 North, LLC, a Delaware limited liability company (“8 North”), Bison Exploration, LLC, a Delaware limited liability company (“Bison”), Extraction Finance Corp., a Delaware corporation (“Finance Corp.”), Mountaintop Minerals, LLC, a Delaware limited liability company (“MTM”), Table Mountain Resources, LLC, a Delaware limited liability company (“TMR”), XOG Services, Inc., a Colorado corporation (“XOG Inc.”), XOG Services, LLC, a Delaware limited liability company (“XOG LLC”), XTR Midstream, LLC, a Delaware limited liability company (“XTR,” and together with 7N, 8 North, Bison, Finance Corp., MTM, TMR, XOG Inc., and XOG LLC, collectively, the “Guarantors”), the undersigned Lenders (as defined below), and Wells Fargo Bank, National Association, as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”), and as Issuing Lender (the “Issuing Lender”).
RECITALS
A.The Borrower, the financial institutions party thereto as Lenders (the “Lenders”), the Issuing Lender, and the Administrative Agent have entered into the Amended and Restated Credit Agreement dated as of August 16, 2017, as amended by the Increase Agreement, Joinder and Amendment No. 1 to Amended and Restated Credit Agreement dated as of October 11, 2017, and the Master Assignment, Increase Agreement and Amendment No. 2 to Amended and Restated Credit Agreement dated as of January 5, 2018 (as so amended and modified and as may be otherwise amended, restated, or modified from time to time, the “Credit Agreement”).
B.    The Guarantors and Elevation Midstream, LLC, a Delaware limited liability company (“Elevation”) have entered into the Amended and Restated Guaranty Agreement dated as of August 16, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”) in favor of the Administrative Agent for the benefit of the Secured Parties (as defined in the Credit Agreement). 
C.    The Borrower, the Guarantors and Elevation have entered into the Amended and Restated Pledge and Security Agreement dated as of August 16, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”) in favor of the Administrative Agent for the benefit of the Secured Parties.
D.    (i) The Borrower desires to designate Elevation as an Unrestricted Subsidiary (the “Designation”), and (ii) the Borrower and XTR (A) have as of the date hereof, contributed certain assets and cash to Elevation and (B) desire to contribute certain additional assets, in the case of clauses (A) and (B), as further described in Exhibit A to this Agreement (such contributions being referred to herein as the “Transfers” and such contributed assets being referred to herein as the “Contributed Assets”). 

E.    The Borrower has requested that the Lenders (i) agree to make certain amendments to the Credit Agreement, as further provided herein and (ii) consent to the Designation and Transfers and provide certain consents and waivers in connection therewith, in each case, subject to the terms and conditions set forth herein.
THEREFORE, in fulfillment of the foregoing, the Borrower, the Guarantors, the Administrative Agent, the Issuing Lender, and the undersigned Lenders hereby agree as follows:
Section 1.    Definitions; References.  Unless otherwise defined in this Agreement, each term used in this Agreement which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement.
Section 2.    Consent.
(a)    Subject to the terms of this Agreement, and upon satisfaction of the conditions specified in Section 7 of this Agreement, the Lenders hereby consent to the Designation for purposes of Sections 5.6(b)(v) and 5.6(b)(vi) of the Credit Agreement only and waive the requirements of such Sections solely in regards to the Designation (it being understood, for the avoidance of doubt, that the certificate referenced in Section 7(b) below shall not require a certification with respect to such Sections).  The consent and waiver by the Lenders described in this Section 2(a) is strictly limited to the Designation.  Such consent and waiver shall not be construed to be a consent to, or a waiver of, non-compliance with any terms, provisions, covenants, warranties or agreements contained in the Credit Agreement or in any of the other Loan Documents other than in Sections 5.6(b)(v) and 5.6(b)(vi) of the Credit Agreement solely as to the Designation as expressly set forth herein. 
(b)    Subject to the terms of this Agreement (including the requirements set forth below) and upon satisfaction of the conditions specified in Section 7 of this Agreement, the Lenders hereby consent to the Transfers for purposes of Sections 6.3, 6.8 and 6.10 of the Credit Agreement only, and waive the requirements of such Sections solely in regards to the Transfers; subject to the following requirements: (i) the Transfers shall be consummated substantially simultaneously with the closing of this Agreement or within 45 days of the Effective Date (or such later date as may be agreed to by the Administrative Agent in its sole discretion), (ii) the Transfers shall be limited to the Contributed Assets, (iii) none of the Loan Parties shall assume any Debt or other liabilities as a result of the Transfers, (iv) there is no consideration for the Transfers other than the existing Elevation Equity (as defined below), (v) the Transfers shall be evidenced by usual and customary documentation reasonably acceptable to the Administrative Agent, and (vi) after giving effect to the consent and waiver in this Section 2, no Default shall have occurred and be continuing both before and after giving effect to the Transfers.  The consents and waivers by the Lenders described in this Section 2(b) are strictly limited to the Transfers.  Such consents and waivers shall not be construed to be a consent to, or a waiver of, non-compliance with any terms, provisions, covenants, warranties or agreements contained in the Credit Agreement or in any of the other Loan Documents other than Sections 6.3, 6.8 and 6.10 of the Credit Agreement solely as to the Transfers as expressly set forth herein.  Notwithstanding anything to the contrary herein, no Loan Party shall make or hold any additional direct or indirect investments in Elevation, including capital contributions to Elevation, investments in or the acquisition of the debt or equity securities of Elevation or any loans, 

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guaranties, trade credit, or other extensions of credit to Elevation, other than investments permitted to be made pursuant to Section 6.3 of the Credit Agreement.
(c)    Subject to the terms of this Agreement and upon the Designation, the Lenders hereby consent, in accordance with Section 8.10 of the Credit Agreement, to the release of the security interest and Lien granted by XTR to the Administrative Agent pursuant to the Security Agreement covering the Equity Interests issued by Elevation to XTR (the “Elevation Equity”).  The consent by the Lenders described in this Section 2(c) is strictly limited to the Elevation Equity.  Such consent shall not be construed to be a consent to, or a waiver of, non-compliance with any terms, provisions, covenants, warranties or agreements contained in the Credit Agreement or in any of the other Loan Documents other than Section 8.10 of the Credit Agreement solely as to the Lien on the Elevation Equity.  In connection with the foregoing, the Lenders hereby acknowledge and agree that (i) upon the Designation, the Security Agreement shall not create a Lien or security interest in the Elevation Equity until such time as Elevation is no longer designated as an Unrestricted Subsidiary and such Equity Interests are required to be pledged pursuant to the Credit Agreement or other Loan Documents, and (ii) upon the Designation, pursuant to and consistent with Section 8.10 of the Credit Agreement and Section 8.14(b) of the Security Agreement (as applicable), Elevation shall automatically be released from its obligations under the Guaranty and the Security Agreement and the security interest granted in the Collateral of Elevation shall be automatically released.  In furtherance of the foregoing, pursuant to Section 8.14(b) of the Security Agreement, the Administrative Agent shall execute and deliver to the Borrower or the Borrower’s designee, at the Borrower’s expense, all UCC termination statements and similar documents that the Borrower shall reasonably request from time to time to evidence such termination and release. Any execution and delivery of termination statements or documents pursuant to this Section 2(c) shall be without recourse to or warranty by the Administrative Agent.
(d)    The consents, waivers and agreements described herein are contingent upon the satisfaction of the conditions precedent set forth in Section 7 below. The consents, waivers and agreements by the Lenders contained in this Section 2 are limited to the extent described herein and shall not be construed to be a consent to or a permanent waiver of any terms, provisions, covenants, warranties or agreements contained in the Credit Agreement, or any other Loan Documents or waiver of any Default or Event of Default that may hereafter occur. The Lenders and the Administrative Agent reserve the right to exercise any rights and remedies available to them in connection with any future defaults or non-compliance with respect to Sections 5.6, 6.3, 6.8, 6.10 and 8.10 of the Credit Agreement and any other provision of any other Loan Document.
Section 3.    Amendments to Credit Agreement.  Upon the satisfaction of the conditions specified in Section 7 of this Agreement, and effective as of the Effective Date:
(a)    Section 5.6(b) of the Credit Agreement is hereby amended by replacing the second reference to clause “(v)” with clause “(vii)”.
(b)    Section 6.1 of the Credit Agreement is hereby amended by deleting clause (l) in its entirety and replacing it with the following:

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“(l)    Debt under (a) Approved Transportation Agreements, (b) transportation service agreements between the Borrower or any other Loan Party, as shipper, and Elevation or one of its joint venture parties, as counterparty; provided that, such agreements must be on terms substantially similar to those transportation agreement terms described in (i) the Letter of Intent between the Borrower, XTR, Discovery DJ Services LLC and DJ Discovery Holdings, LLC dated as of January 17, 2018 and (ii) the Letter Agreement between the Borrower, XTR, PRH and ARB Platte River LLC dated as of January 18, 2018, in each case, without giving effect to any amendments, modifications or other changes other than such amendments, modifications and changes as the Administrative Agent reasonably approves and (c) other take-or-pay arrangements in an aggregate maximum amount under this clause (c) not to exceed $50,000,000 for the life of such take-or-pay arrangements (excluding from such calculation the amount of any Debt of the type described in clause (j) of the definition thereof under the Approved Transportation Agreements); and”
Section 4.    Reaffirmation of Liens.  
(a)    Each of the Borrower and each Guarantor (i) is party to certain Security Documents securing and supporting the Borrower's and Guarantors’ obligations under the Loan Documents, (ii) represents and warrants that it has no defenses to the enforcement of the Security Documents and that according to their terms the Security Documents will continue in full force and effect to secure the Borrower’s and Guarantors’ obligations under the Loan Documents, as the same may be amended, supplemented, or otherwise modified, and (iii) acknowledges, represents, and warrants that the liens and security interests created by the Security Documents are valid and subsisting and create a first and prior Lien (subject only to Permitted Liens) in the Collateral to secure the Secured Obligations. 
(b)    The delivery of this Agreement does not indicate or establish a requirement that any Loan Document requires any Guarantor's approval of amendments to the Credit Agreement.
Section 5.    Reaffirmation of Guaranty.  Each Guarantor hereby ratifies, confirms, and acknowledges that its obligations under the Guaranty and the other Loan Documents are in full force and effect and that such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, of all of the Guaranteed Obligations (as defined in the Guaranty), as such Guaranteed Obligations may have been amended by this Agreement.  Each Guarantor hereby acknowledges that its execution and delivery of this Agreement do not indicate or establish an approval or consent requirement by such Guarantor under the Credit Agreement in connection with the execution and delivery of amendments, modifications or waivers to the Credit Agreement, the Notes or any of the other Loan Documents.
Section 6.    Representations and Warranties.  Each of the Borrower and each Guarantor represents and warrants to the Administrative Agent and the Lenders that, after giving effect to this Agreement:
(a)    the representations and warranties set forth in the Credit Agreement and in the other Loan Documents are true and correct in all material respects as of the date of this Agreement (except to the extent such representations and warranties relate to an earlier date, in which case such 

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representations and warranties shall be true and correct in all material respects as of such earlier date); provided that such materiality qualifier shall not apply to any representation or warranty that is already subject to a materiality qualifier in the Credit Agreement or such other Loan Document; 
(b)    (i) the execution, delivery, and performance of this Agreement are within the corporate, limited partnership or limited liability company power, as appropriate, and authority of the Borrower and Guarantors and have been duly authorized by appropriate proceedings and (ii) this Agreement constitutes a legal, valid, and binding obligation of the Borrower and Guarantors, enforceable against the Borrower and Guarantors in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity whether applied by a court of law or equity; 
(c)    as of the date of this Agreement, after giving effect to the Transfers, Elevation will not own, lease, have title to, or otherwise have any rights to any Property or assets, other than (i) the Contributed Assets and (ii) any equity interests acquired pursuant to the consummation and effectiveness of the joint venture transactions described in (A) the Letter of Intent between the Borrower, XTR, Discovery DJ Services LLC and DJ Discovery Holdings, LLC dated as of January 17, 2018 and (B) the Letter Agreement between the Borrower, XTR, PRH and ARB Platte River LLC dated as of January 18, 2018; and 
(d)    upon the effectiveness of this Agreement, no Default or Event of Default has occurred and is continuing.
Section 7.    Effectiveness.  This Agreement shall become effective as of the Effective Date upon the occurrence of all of the following: 
(a)    Documentation. The Administrative Agent shall have received this Agreement, duly and validly executed by the Borrower, the Guarantors, the Administrative Agent and the Majority Lenders, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders executing this Agreement. 
(b)    Officer’s Certificate. The Administrative Agent shall have received a certificate of a Responsible Officer in connection with the Designation as required pursuant to Section 5.6(b)(vii) of the Credit Agreement (subject in all respects to the consents, waivers and amendments contained herein).
(c)    Officer’s Certificate.  The Administrative Agent shall have received a certificate of a Responsible Officer of Elevation, certifying that the representation in Section 6(c) is true and correct after giving effect to this Agreement.
(d)    Representations and Warranties.  The representations and warranties in this Agreement being true and correct in all material respects before and after giving effect to this Agreement (except to the extent such representations and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); provided that such materiality qualifier shall not apply to any representation 

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or warranty that is already subject to a materiality qualifier in the Credit Agreement or such other Loan Document.
(e)    No Default or Event of Default. After giving effect to this Agreement, there being no Default or Event of Default which has occurred and is continuing.
(f)    Expenses.  The Borrower having paid all costs, expenses, and fees which have been invoiced and are payable pursuant to Section 9.1 of the Credit Agreement or any other agreement.
Section 8.    Effect on Loan Documents.  Except as consented to, waived, amended or otherwise modified hereby, the Credit Agreement and the Loan Documents remain in full force and effect as originally executed and are hereby ratified and confirmed, and nothing herein shall act as a waiver of any of the Administrative Agent's or Lenders' rights under the Loan Documents.  This Agreement is a Loan Document for the purposes of the provisions of the other Loan Documents.  Without limiting the foregoing, any breach of representations, warranties, and covenants under this Agreement is a Default or Event of Default under other Loan Documents.
Section 9.    Choice of Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York without regard to conflicts of laws principles (other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York).
Section 10.    Counterparts.  This Agreement may be signed in any number of counterparts, each of which shall be an original.
THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS, AS DEFINED IN THE CREDIT AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 
[Remainder of page intentionally left blank; Signature pages follow.]

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EXECUTED as of the date first set forth above.
	
					
	 
	 
	BORROWER:

	 
	 
	 

	 
	 
	EXTRACTION OIL & GAS, INC.

	 
	 
	By:
	/s/ Rusty Kelley

	 
	 
	Name:
	Rusty Kelley

	 
	 
	Title:
	Chief Financial Officer

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	GUARANTORS:

	 
	 
	 
	 
	 

	 
	 
	7N, LLC
	 
	 

	 
	 
	8 NORTH, LLC
	 

	 
	 
	EXTRACTION FINANCE CORP.

	 
	 
	MOUNTAINTOP MINERALS, LLC

	 
	 
	XOG SERVICES, INC.
	 

	 
	 
	XOG SERVICES, LLC

	 
	 
	XTR MIDSTREAM, LLC

	 
	 
	BISON EXPLORATION, LLC

	 
	 
	TABLE MOUNTAIN RESOURCES, LLC

	 
	 
	 
	 
	 

	 
	 
	Each By:
	/s/ Rusty Kelley

	 
	 
	Name: 
	Rusty Kelley

	 
	 
	Title:
	Chief Financial Officer

	 
	 
	 
	 
	 

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	ADMINISTRATIVE AGENT/ISSUING

	 
	 
	LENDER/LENDER:

	 
	 
	WELLS FARGO BANK, NATIONAL

	 
	 
	ASSOCIATION,

	 
	 
	as Administrative Agent, Issuing Lender, and a

	 
	 
	Lender
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/ Joseph T. Rottinghaus

	 
	 
	Name:
	Joseph T. Rottinghaus

	 
	 
	Title:
	Director

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	LENDERS:

	 
	 
	 
	 
	 

	 
	 
	BARCLAYS BANK PLC,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Jake Lam

	 
	 
	Name:
	Jake Lam
	 

	 
	 
	Title:
	Assistant Vice President

	 
	 
	 
	 
	 

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	CREDIT SUISSE AG,

	 
	 
	CAYMAN ISLANDS BRANCH

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Nupur Kumar

	 
	 
	Name:
	Nupur Kumar

	 
	 
	Title:
	Authorized Signatory

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Christopher Zybrick

	 
	 
	Name:
	Christopher Zybrick

	 
	 
	Title:
	Authorized Signatory

[EXHIBIT A TO CONSENT – EXTRACTION]

	
					
	 
	 
	SUNTRUST BANK,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Arize Agumadu

	 
	 
	Name:
	Arize Agumadu

	 
	 
	Title:
	Vice President

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	ABN AMRO CAPITAL USA LLC,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Darrell Holley

	 
	 
	Name:
	Darrell Holley

	 
	 
	Title:
	Managing Director

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Michaela Braun

	 
	 
	Name:
	Michaela Braun

	 
	 
	Title:
	Director
	 

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	KEYBANK NATIONAL ASSOCIATION,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ George E. McKean

	 
	 
	Name:
	George E. McKean

	 
	 
	Title:
	Senior Vice President

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	CITIBANK, N.A.,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Cliff Vaz

	 
	 
	Name:
	Cliff Vaz

	 
	 
	Title:
	Vice President

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	GOLDMAN SACHS BANK USA,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Chris Lam

	 
	 
	Name:
	Chris Lam

	 
	 
	Title:
	Authorized Signatory

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	ROYAL BANK OF CANADA,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Kristan Spivey

	 
	 
	Name:
	Kristan Spivey

	 
	 
	Title:
	Authorized Signatory

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	BANK OF AMERICA, N.A.,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Ronald E. McKaig

	 
	 
	Name:
	Ronald E. McKaig

	 
	 
	Title:
	Managing Director

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	MERCURIA EASTERN US HOLDINGS LLC,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Marty Bredehoft

	 
	 
	Name:
	Marty Bredehoft

	 
	 
	Title:
	Treasurer

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	THE HUNTINGTON NATIONAL BANK,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Jason A. Zilewicz

	 
	 
	Name:
	Jason A. Zilewicz

	 
	 
	Title:
	Vice President

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	PNC BANK, NATIONAL ASSOCIATION,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Jonathan Luchansky

	 
	 
	Name:
	Jonathan Luchansky

	 
	 
	Title:
	Director

[SIGNATURE PAGE TO CONSENT – EXTRACTION]

	
					
	 
	 
	CAPITAL ONE, NATIONAL ASSOCIATION,

	 
	 
	as a Lender
	 

	 
	 
	By:
	/s/ Lyle Levy Jr.

	 
	 
	Name:
	Lyle Levy Jr.

	 
	 
	Title:
	Vice President

[SIGNATURE PAGE TO CONSENT – EXTRACTION]Exhibit

Exhibit 10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (this “Agreement”) is made on this _________ day of ____, 2015, between United Security Bank (the “Bank”), having a principal place of business at 2126 Inyo Street, Fresno, CA 93721, and Dennis R. Woods (“Executive”), to which United Security Bancshares is a party, with reference to the following:

RECITALS

WHEREAS, the Bank is a California banking corporation duly organized, validly existing, and in good standing under the laws of the state of California, with power to own property and carry on its business as it is now being conducted;

WHEREAS, the Bank is a wholly-owned subsidiary of United Security Bancshares, a California corporation (the “Parent”);

WHEREAS, the Bank desires to continue to avail itself of the skill, knowledge and experience of Executive in order to insure the successful management of its business; and

WHEREAS, the parties hereto desire to specify the terms of Executive’s continued employment by the Bank;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, it is agreed that, effective January 1, 2015 (the “Effective Date”), the following terms and conditions shall apply to Executive’s employment:

AGREEMENT

		
	A.
	Term of Employment

1.Term. The Bank hereby agrees to employ Executive and Executive  hereby accepts employment with the Bank for the period commencing with the Effective Date and terminating on December 31, 2017; provided, however, unless notice is given by either party to the other party of nonrenewal prior to each January 1st during the Term, effective each January  1st during the Term the termination date shall be extended by one (1) calendar year; subject, however, to prior termination of this Agreement and Executive’s employment as hereinafter provided. Thus, for example, unless notice to the contrary is delivered prior to January 1, 2016, effective January 1, 2016, the Term will be extended to December 31, 2018. Where used herein, “Term” shall refer to the entire period of employment of Executive by the Bank hereunder, whether for the period provided above, including any extensions thereof, or whether terminated earlier as hereinafter provided.

		
	B.
	Duties of Executive

1.Duties. Executive shall perform the duties and responsibilities of President and Chief Executive Officer of the Bank, which include, but are not limited to those duties and responsibilities specified on the Bank’s Job Description for the positions of President and Chief Executive Officer, attached as Exhibit A hereto, and Executive shall have such authority and power as are inherent in his positions (and the undertakings applicable to his positions) and as are necessary to carry out the duties and responsibilities required of him hereunder, subject to the powers by law vested in the Board of Directors of the Bank and in the Parent, as the Bank's sole shareholder.

2.Faithful Performance. Executive shall perform exclusively the services herein contemplated to be performed by Executive faithfully, diligently and to the best of Executive’s ability, consistent with the highest and best standards of the banking industry and in compliance with all applicable laws and Bank’s Articles of Incorporation and Bylaws.

3.Code of Ethics. Executive shall conduct himself at all times with due regard to public conventions and morals and shall abide by and reflect those conventions and morals in his personal actions for the Bank. Executive further agrees not to do or commit any act that will reasonably tend to degrade him or to bring him into public hatred, contempt or ridicule, or that will reasonably tend to shock or offend any community in which the Parent, the Bank, or any of their affiliates engages in business, or to reflect poorly on the Parent, the Bank, any other affiliate, or the banking industry in general.

4.Conflicts of Interests. Executive shall devote substantially all of Executive’s full business time, ability and attention to the business of the Bank during the Term.  Notwithstanding the foregoing, Executive may pursue other appropriate civic, charitable or religious activities so long as such activities do not interfere with Executive’s performance of his duties hereunder. In addition, Executive shall be permitted to make passive investments in other business ventures provided such investments are not in businesses that compete with the Parent or the Bank and which are fully disclosed to the Board of Directors of the Bank prior to the time of such investment (other than investments representing less than five percent (5.0%) of the securities of companies that are regularly traded on a national securities exchange (as that term is used in the Securities Exchange Act of 1934, as amended)). Executive shall also be permitted to serve on the board of directors (but not as an officer) of any non-profit entity, subject to prior full disclosure to the Board of Directors of the Bank. Executive may not serve on the board of directors (or as an officer) of any for-profit entity without the express written prior approval of the Board of Directors of the Bank. Executive shall report to the Board of Directors of the Bank, on an annual basis, all positions held with other business, civic or charitable organizations.

5.Board Appointment. With the advance approval of the Bank’s Board of Directors and for so long as Executive is employed by the Bank under this Agreement, Executive shall serve on the Board of Directors of the Bank. Executive shall fulfill all duties required of a member of the Board of Directors and shall be entitled to earn any directors’ fees for his service as may be approved by the Bank’s Board of Directors.

6.Place of Performance. In connection with his employment with the Bank, Executive will be based at the principal executive offices of the Bank, located in Fresno, 

California.

		
	C.
	Compensation

1.Base Salary. For Executive’s services hereunder, the Bank shall pay or cause to be paid as base salary to Executive the amount of not less than Forty-One Thousand Six Hundred Sixteen Dollars and no Cents ($41,616.00) per month. Said base salary shall be payable in conformity with the Bank’s normal payroll periods, less federal and state income tax withholding and other applicable payroll withholdings. The Board of Directors of the Bank from time to time may review Executive’s base salary, at its discretion, and Executive shall receive such base salary increases, if any, as the Board of Directors, in its sole discretion (or as may be recommended by the Compensation Committee), shall determine.

2.Incentive Bonus. During the Term Executive shall be eligible to earn an incentive bonus through any executive incentive bonus program that may be developed and implemented by the Board of Directors from time to time.

3.Discretionary Bonus. During the Term, Executive may receive such discretionary bonuses, if any, as the Board of Directors, in its sole discretion, shall determine.

4.Claw Back. If the Compensation Committee or the Board of Directors of either the Bank or the Parent determines, in good faith and within three (3) years of the date the incentive or discretionary bonus was paid, that any fraud, negligence or intentional misconduct by Executive was a significant contributing factor to the Parent having to restate all or a portion of its financial statements, the Compensation Committee or the Board of Directors may require reimbursement of the incentive or discretionary bonus to the extent the payout would have been reduced due to such restatement. The reimbursement shall be net of taxes, to the extent the claw back is not tax deductible by Executive, and shall be paid by Executive within sixty (60) days after demand.

		
	D.
	Executive Benefits

1.Vacation. Executive shall accrue thirty-five (35) days of paid vacation at Executive’s regular base pay rate during each year of the Term, in accordance with the Bank’s vacation policies; provided, however, that during each year of the Term Executive is required to and shall take at least ten
(10) days of the vacation (the “Mandatory Vacation”), which shall be taken consecutively. Executive  shall not be entitled to pay in lieu of the Mandatory Vacation. Executive’s entitlement to the  accumulation of vacation not used that is in excess of the Mandatory Vacation and Executive’s entitlement to pay for vacation in lieu of accumulating vacation shall be governed by the Bank’s Employee Handbook. In scheduling vacations, Executive shall take into consideration the needs and activities of the Bank.

2.Sick Leave, Group Medical and Other Benefits. The Bank shall provide for Executive’s participation in all benefit plans or programs sponsored by the Bank or Parent, including, without limitation, participation in any group health, medical reimbursement, dental, disability, accidental death  or dismemberment or life insurance plan (the costs, including premiums, of which shall by paid exclusively by the Bank), and sick leave; provided that the plan and programs shall be maintained by the Bank or Parent on terms no less favorable to Executive than those plans and programs in effect on the date hereof. Notwithstanding the foregoing, if Executive shall be unable to render the services required hereunder on account of personal injuries or physical or mental illness that do not result in total disability, he shall continue to receive all payments provided in this Agreement (subject 

to early termination as provided elsewhere herein); provided, however, that any such payments may, at the sole option of the Bank, be reduced by any amount that the Executive receives for the period covered by such payments as disability compensation under insurance policies, if any, maintained by the Bank or under government programs.

3.Club Membership. The Bank shall pay for all fees and membership dues and reimburse Executive for all business-related expenses at the Tehama Country Club.

4.Bank Automobile. During the term, the Bank shall provide Executive with the use of a Bank leased or owned automobile. The Bank shall pay for all operating expenses of any nature whatsoever with regard to the automobile. The Bank shall maintain such insurance on the automobile including, without limitation, liability for personal injury and property damage, as the Bank shall from time to time reasonably require to protect the Bank against any loss which may arise from Executive’s use of the automobile while working for the Bank. Executive shall keep a log detailing the personal and business use of the automobile and shall furnish to the Bank adequate records and other documentary evidence required by federal and state statutes and regulations issued by the appropriate taxing authorities for the substantiation of the business expenditures as deductible expenses of the Bank. Executive shall have included in his Form 1099 the value of his personal use of the automobile.
5.Key Man and Disability Insurance. The Bank or Parent shall have the right to obtain and hold a “key man” life insurance policy on the life of Executive and/or a disability insurance policy with the Bank or Parent as the beneficiary of the policy. Executive agrees to provide any information required for the issuance of such policy and submit himself to any physical examination required for such policy.

6.Indemnification. The Bank and the Parent will, to the maximum extent permitted by law, defend, indemnify and hold harmless Executive and his heirs, estate, executors and administrators against any costs, losses, claims, suits, proceedings, damages or liabilities to which Executive may become subject which arise out of, are based upon or relate to Executive’s employment by the Bank, or the Executive’s service as an officer or member of the Board of Directors of the Bank or the Parent, including without limitation the advance of legal or other expenses reasonably incurred by Executive in connection with investigation and defending against any such costs, losses, claims, suits, proceedings, damages or liabilities, provided that any reimbursement provided by this Paragraph D.6 to Executive for costs or legal fees arising out of claims made against Executive shall be subject to compliance with Section 409A of the Internal Revenue Code. The Bank or the Parent shall maintain directors and officers liability insurance in commercially reasonable amounts (as reasonably determined by the Board), and Executive shall be covered under such insurance to the same extent as other senior management employees of the Bank or the Parent.

		
	E.
	Business Expenses and Reimbursement

1.Business Expenses. Executive shall be entitled to reimbursement by the Bank for any ordinary and necessary business expenses incurred by Executive in the performance of Executive’s duties and in acting for the Bank during the Term, which types of expenditures shall be determined by the Board of Directors of the Bank but shall include, but not be limited to entertainment, meals, travel, cellular phone, and expenses associated with participation on the Board of Directors, provided that:

(a)Each such expenditure is of a nature qualifying it as a proper deduction on the federal and state income tax returns of the Parent or the Bank as a business expense and not as deductible compensation to Executive; and

(b)Executive furnishes to the Bank adequate records, including receipts 

for expenditures and other documentary evidence required by federal and state statutes and regulations issued by the appropriate taxing authority for the substantiation of such expenditures as deductible business expenses of the Parent or the Bank and not as deductible compensation to Executive.

2.Reimbursement. Executive agrees to submit his expense reimbursement requests to the CFO for approval. Executive agrees that, if at any time payment made to Executive by the Bank for business expense reimbursement shall be disallowed in whole or in part as a deductible business expense by the appropriate taxing authorities, the amount so disallowed shall be treated as taxable compensation to Executive.

		
	F.
	Termination

1.Termination for Cause. The Bank may terminate this Agreement and Executive’s employment at any time without further obligation or liability to Executive, by action of its Board of Directors:

(a)If Executive commits an act or acts or an omission to act which constitutes: (i) willful misconduct or a willful breach of a material duty in the course of Executive’s employment; (ii) a habitual neglect of a material duty; (iii) a willful violation of any applicable banking law or regulation; or (iv) a willful violation of any material policy, procedure, practice, method of operation or specific mode of conduct established by the Board of Directors or as set forth in any Bank policy;

(b)If Executive engages in any activity which materially and adversely affects the Parent’s or the Bank’s reputation in the community, as determined by the Board of Directors in good faith;

(c)If Executive has committed any act which would cause termination of coverage under the Bank’s Bankers Blanket Bond, as to Executive or as to the Bank as a whole;

		
	(d)
	If Executive is deceased; or

(e)If Executive is found to be physically or mentally incapable of performing Executive’s duties for a period of at least six (6) months by the Board of Directors, in good faith.

Such termination shall not prejudice any remedy that the Bank may have at law, in equity, or under this Agreement. Termination pursuant to this Paragraph F.1 shall become effective upon written notice of termination.

2.Action by Supervisory Authority. This Agreement and Executive’s employment shall terminate immediately without further liability or obligation to Executive:

(a)If the Bank is closed or taken over by the Department of Business Oversight’s Division of Financial Institutions or other supervisory authority, including the Federal Deposit Insurance Corporation; or

(b)If such supervisory authority should exercise its statutory cease and desist powers to remove Executive from office.

3.Merger or Transfer of Assets. This Agreement and Executive’s employment shall not 

be terminated due to: (a) a merger where the Parent or the Bank is not the surviving corporation; (b) a consolidation; (c) a transfer of all or substantially all of the assets of the Parent or the Bank; or a “Change in Control” (as defined below). The Bank shall take all actions necessary to insure that the surviving or resulting corporation, if other than the Parent or the Bank, or a transferee of the Parent’s or the Bank’s assets, is bound by and shall have the benefit of the provisions of this Agreement. In the case of dissolution, this Agreement and Executive’s employment shall be terminated.

4.Termination without Cause. Notwithstanding anything to the contrary herein, this Agreement and Executive’s employment may be terminated at any time without cause by the Bank upon seven (7) days’ written notice of termination to Executive and by Executive upon three (3) months’ written notice of termination to the Bank.

		
	5.
	Effect of Termination.

(a)In the event of termination of this Agreement and Executive’s employment prior to the completion of the Term for any of the reasons specified in Paragraphs F.1 through F.4, or in the event of the termination of this Agreement and Executive’s employment upon expiration of the Term due to non-renewal, or in the event Executive elects to terminate this Agreement and Executive’s employment pursuant to the provisions of Paragraph F.4 other than for “Good Cause” (as defined below) after a “Change in Control” (as defined below), Executive shall be entitled to the salary and other benefits earned by Executive prior to the date of termination as provided for in this Agreement, including accrued but unpaid vacation, computed pro rata up to and including that date, and Executive’s incentive bonus, if any and prorated for any partial computation period; but Executive shall be entitled to no further compensation for services rendered after the date of termination.

(b)In the event the Bank elects to terminate this Agreement and Executive’s employment pursuant to the provisions of Paragraph F.4, or in the event Executive elects to terminate this Agreement for Good Cause, in addition to the items in Subparagraph F.5(a), Executive shall be entitled to: (i) severance compensation equal to twenty-four
(24) months’ then current base salary, payable in equal installments over a twenty-four
(24) month period in conformity with the Bank’s normal payroll periods; and (ii) continuation of Executive’s group medical insurance benefits or payment of COBRA continuation benefits for twenty-four (24) months after which he will be entitled to self- pay COBRA continuation benefits for as long as legally available; provided, however, in the event the Bank or its successor elects to terminate Executive’s employment pursuant to the provisions hereof and there has been a Change in Control within the prior twelve
(12) months, or in the event Executive elects to terminate his employment for Good Cause within twelve (12) months after a Change in Control, Executive shall be entitled to: (i) severance compensation equal to thirty-six (36) months’ then current base salary, payable in a lump sum; and (ii) continuation of group medical insurance benefits or payment of COBRA continuation benefits for thirty-six (36) months after which he will be entitled to self-pay COBRA continuation benefits for as long as legally available.

(c)For purposes of this Agreement, a “Change in Control” shall be 

deemed to have occurred: (i) in the event of a merger or consolidation where the Parent and/or the Bank is not the surviving corporation, except where the Parent’s or the Bank’s shareholders, as applicable, exchange their interests in the Parent or the Bank, as applicable, for more than fifty percent (50.0%) control of the surviving corporation; (ii)  in the event of the Parent’s sale, transfer or other disposition of more than forty percent (40%) control of the Bank; (iii) in the event of a transfer of at least forty percent (40%) of the assets of the Parent or the Bank to a transferee that does not control, is not controlled by, or is not under common control with, the Parent or the Bank; (iv) in the event of any other corporate reorganization of the Parent or the Bank where there is a change in ownership of more than fifty percent (50.0%), except as may result from a transfer of shares to another corporation in exchange for more than fifty percent (50.0%) control of that corporation, and except as may result from a transfer of shares of the Bank to another corporation controlling, controlled by, or under common control with the Parent; (v) in the event a majority of the members of the Bank’s or the Parent’s Board of Directors is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors prior to the date of their appointment or election; or (vi) in the event there shall have occurred a transaction or series of transactions of a nature such that disclosure would be required in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended.

(d)For purposes of this Agreement, the following shall constitute “Good Cause”: (i) subsequent to a Change in Control of the Parent or the Bank, and without Executive’s express written consent, the assignment to Executive of any duties substantially inconsistent with Executive’s positions, duties, responsibilities and status with the Bank immediately prior to the Change in Control, or a substantial change in Executive’s reporting responsibilities, titles or offices as in effect immediately prior to  the Change in Control, or any removal of Executive from or any failure to re-elect Executive to any of such positions, except in connection with the termination of Executive’s employment pursuant to Paragraphs F.1 or F.2, or as a result of Executive’s retirement, or by Executive other than for “Good Cause”; (ii) subsequent to a Change in Control of the Parent or the Bank, a five percent (5.0%) or greater reduction by the Bank in Executive’s base salary and benefits as in effect on the Effective Date or as the same may be increased from time to time; (iii) subsequent to a Change in Control of the Parent or the Bank and without Executive’s express written consent, the Bank’s requiring Executive to be based anywhere other than within ten (10) miles of the Bank’s present main office location, exclusive of required travel on the Bank’s business; or (iv) subsequent to a Change in Control of the Parent or the Bank, the failure by the Bank to obtain the assumption of the agreement to perform this Agreement by any successor as contemplated in Paragraph G.4 hereof.

		
	(e)
	Section 280G Excess Parachute Payments.

(i)If any payment or benefit received or to be received by Executive, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Bank or Parent (the “Total Payments”), constitutes an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), that would be subject to the excise tax imposed by Section 4999 of the Code or any similar federal or state law (an “Excise Tax”), the Bank will reduce such Total Payments to 

Executive until such Total Payments are no longer subject to any tax under Section 4999 of the Code.

(ii)All calculations under this Subparagraph are to be made initially by the Bank and the Bank’s tax advisor and the Bank will provide prompt written notice thereof to Executive. Upon request of Executive, the Bank will provide Executive with sufficient tax and compensation data to enable Executive or his tax advisor to independently make the calculations described in Subparagraph F.5(e)(i) above, and the Bank will reimburse Executive for reasonable fees and expenses incurred for any such verification.

(iii)If Executive provides written notice to the Bank of any objection to the results of the Bank’s calculations within sixty (60) days after Executive’s receipt of written notice thereof, the Bank will refer that dispute for determination to tax counsel selected by the independent auditors of the Bank, and the Bank will pay all fees and expenses of that tax counsel.

(f)Regulatory Prohibition. Notwithstanding anything to the contrary contained herein, Executive shall not be entitled to the payment of any severance benefit to the extent that such payment shall be deemed a “golden parachute payment” as defined in Section 359.l(f) of the Federal Deposit Insurance Corporation’s Rules and Regulations.

(g)Mitigation. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. The Bank shall not be entitled to set off against the amounts payable to Executive under this Agreement with the Bank any amounts earned by Executive in other employment after termination of his employment with the Bank, or any amounts which might have been earned by Employee in other employment had he sought such other employment.

6.Restriction on Timing of Distributions. In the event that Code Section 409A applies to any compensation with respect to a separation from service, payment of that compensation shall be delayed if Executive is a “specified employee,” as defined in Section 409A(a)(2)(B)(i), and such delayed payment is required by Section 409A. Such delay shall last six (6) months from the date of separation from service (or as otherwise required by Section 409A). On the day following the end of such six (6)- month period, the Bank shall make a catch-up payment to Executive equal to the total amount of such payments that would have been made during the six (6)-month period but for this Paragraph F.6.

7.Resignation From the Board of Directors. In the event Executive’s employment is terminated in accordance with this Agreement or Executive resigns as President and Chief Executive Officer of the Bank or the Parent, or otherwise becomes unaffiliated with the Bank and the Parent, Executive shall, and does hereby agree to, tender his written resignation to the Boards of Directors of the Bank and the Parent effective on the date of termination, resignation or non-affiliation.
8.Release of All Claims. As a condition for receiving any severance pay hereunder, Executive hereby agrees to execute a full and complete release of any and all claims against the Parent and the Bank and their respective officers, agents, directors, attorneys, insurers, employees and successors in interest arising from or in any way related to Executive’s employment with the Bank or the termination thereof, which release shall include reasonable protection from improper use of confidential information, as provided in Paragraph G.1.

		
	G.
	General Provisions

1.Trade Secrets. Executive agrees that, during the Term, Executive will have access to, and become acquainted with, confidential, trade secret, and proprietary information concerning the Parent and the Bank, including any subsidiaries, successors and assigns, which may include, without limitation, information on their operations and financial condition and financial needs, information concerning customer lists, products, procedures, operations, investments, financing, costs, employees, accounting, marketing, salaries, pricing, profits and plans for future development, the identity, requirements, preferences, practices and methods of doing business of specific parties with whom the Bank or Parent transact business, and all other information which is related to any product, service or business of the Bank, other than information which is generally known in the industry in which the Bank transacts business or is acquired from public sources, and information regarding the Bank’s customers, including knowledge of their financial condition and financial needs, as well as such customers’ methods of doing business, all of which information is valuable property of the Bank (“Trade Secrets”). Executive shall  not, without the prior written consent of the Board of Directors in each instance, disclose or use in any way, during the term of his employment by the Bank and for one (1) year thereafter (or longer if required by law), except as required in the course of such employment, any such Trade Secrets acquired in the course of such employment, whether or not patentable, copyrightable or otherwise protected by law, and whether or not conceived of or prepared by him; provided, however, that, following termination of employment, Employee shall be entitled to retain a copy of any rolodex or other compilation maintained by him of the names of business contacts with their addresses, telephone numbers and similar information.

2.Return of Documents. Executive expressly agrees that all manuals, documents, files, reports, studies, instruments or other materials used and/or developed by Executive during Executive’s employment with the Bank, are solely the property of the Parent or the Bank, as applicable, that Executive has no right, title or interest therein, and that Executive shall not remove such documents, whether in physical or electronic form, from the premises of the Bank, except as required in the course of employment by the Bank, without the prior written consent of the Board of Directors in each instance. Upon termination of Executive’s employment or upon demand by the Bank, Executive or Executive’s representative shall promptly deliver possession of all of said property to the Bank in good condition.

3.Notices. Any notice, request, demand or other communication required or permitted hereunder shall be deemed to be properly given when personally served in writing or by facsimile, one (1) week after having been deposited in the United States mail, registered or certified, postage prepaid, or when communicated to a public telegraph company for transmittal and the appropriate answerback confirmation is received. Either party may change its address by written notice in the manner set forth herein.

4.Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective executors, administrators, successors and assigns. Notwithstanding the foregoing, neither this Agreement nor any rights hereunder shall be assigned, pledged, hypothecated or otherwise transferred by Executive without the prior written consent of the Board of Directors in each instance. Nothing in the Agreement, expressed or implied, is intended to confer upon any person other than the Bank, Parent or the Executive any rights or remedies under or by reason of this Agreement.

5.Applicable Law; Venue. This Agreement is to be governed by and construed under the laws of the State of California applicable to contracts made and to be performed with that state. Subject  to Paragraph G.8, each party hereto, to the fullest extent it may effectively do so under applicable law, irrevocably (i) submits to the exclusive jurisdiction of any court of the State of California 

or the United States of America sitting in the City of Fresno over any suit, action or proceeding arising out of or  relating to this Agreement and (ii) waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the establishment of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum

6.Captions and Paragraph Headings. Captions and paragraph headings used herein are for convenience only and are not a part of this Agreement and shall not be used in construing it.

7.Invalid Provisions. Should any provisions of this Agreement for any reason be declared invalid, void, or unenforceable by a court of competent jurisdiction, the validity and binding effect of any remaining portions shall not be affected, and the remaining portions of this Agreement shall remain in full force and effect as if this Agreement had been executed with said provision eliminated.

8.Arbitration. Any dispute, controversy or claim arising out of or relating to this Agreement (or its validity, interpretation or enforcement), the employment relationship or the subject matter hereof shall, at the request of either party, be settled by binding arbitration in Fresno County, California, in accordance with the Commercial Arbitration Rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration of such issues, including the determination of any amounts of damages suffered, shall be final and binding upon the parties to the maximum extent permitted by law. The parties shall have rights to discovery as provided in Section 1283.05 of the California Code of Civil Procedure, including without limitation Section 1283.1 thereof. Except as otherwise required by law, each party shall bear its own attorneys’ fees, costs and expenses; provided, however, the Bank shall bear the costs of the arbitrator(s). The provisions of this Paragraph G.8 shall not affect or limit the rights and remedies available to the parties under the laws of the State of California relating to injunctive or other equitable relief to enforce the covenants contained herein or the agreements made pursuant hereto or in furtherance hereof. Neither party shall institute a proceeding hereunder until that party has furnished to the other party at least thirty
(30) days’ prior written notice of its intent to do so.

9.Injunctive Relief. Executive hereby acknowledges and agrees that it would be difficult to fully compensate the Bank for damages resulting from the breach or threatened breach of certain provisions of this Agreement, including but not limited to Paragraphs G.1 and G.2, and that, accordingly, the Bank shall be entitled to seek temporary and injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, to enforce such provisions without the necessity of proving actual damages and without the necessity of posting any bond or other undertaking in connection therewith. This provision with respect to injunctive relief shall not, however, diminish the Bank’s right to claim and recover damages.

10.Attorneys’ Fees. In the event either party takes legal action to enforce any of the terms of this Agreement, the unsuccessful party to such action shall pay the successful party’s expenses, including attorneys’ fees, incurred in such action.

11.Entire Agreement. Except for stock option agreements and participation in other compensation, bonus, salary continuation or severance plans and agreements which may be entered into by and between the Bank and Executive, this Agreement contains the entire agreement of the 

parties and supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by the Bank. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement, or in any stock option agreement or other compensation, bonus, salary continuation or severance agreement, shall be valid or binding.

12.Amendments and Waivers. This Agreement may not be modified or amended by oral agreement, but only by an agreement in writing signed by the Bank and Executive. Any waiver of any provision of this Agreement shall be effective only if in writing and signed by the parties hereto. Any waiver of a breach of any provision hereof shall not operate as or be construed as a waiver of any subsequent breach of the same provision or any other provision hereof.

13.Interpretation. If any claim is made by any party hereto relating to any conflict, omission or ambiguity of this Agreement, no presumption or burden of proof or persuasion shall be implied by reason of the fact that this Agreement was prepared by or at the request of any particular party hereto or such party’s counsel. Each party hereto acknowledges that no party was in a superior bargaining position regarding the substantive terms of this Agreement.

14.Employee Acknowledgment. Executive acknowledges that he has had the opportunity to consult legal counsel in regard to this Agreement, that he has read and understands this Agreement, that he is fully aware of its legal effect, and that he has entered into it freely and voluntarily and based on his own judgment and not on any representations or promises other than those contained in this Agreement.

15.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

______________________________
Dennis R. Woods
                            

United Security Bank

______________________________
By: Kenneth L. Donahue
Its: EVP/CAO

United Security Bancshares

______________________________
By: Kenneth L. Donahue
Its: EVP/CAO

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