AMERICAN RIVER BANKSHARES (Form: 8-K, Received: 12/24/2008 13:54:28)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest reported) December 23, 2008

American River Bankshares

(Exact name of registrant as specified in its chapter)

         California                  0-31525                68-0352144
----------------------------       ------------         -------------------
(State or other jurisdiction       (Commission           (IRS Employer
     Of incorporation)             File Number)         Identification No.)


3100 Zinfandel Drive, Suite 450, Ranch Cordova, California          95670
----------------------------------------------------------       ----------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code (916) 851-0123

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communication pursuant to Rule 425 under the Securities Act

(17 CFR 230.425)

[ ] Solicitation material pursuant to Rule 14a-12 under the Exchange Act

(17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

The Index to Exhibits is on Page 4

Item 1.01. Entry into a Material Definitive Agreement.

On December 23, 2008, the registrant executed a restatement of the Company's
401(k) Plan (the "Plan"). A restatement of the Plan was required to incorporate amendments or changes to the Plan and is required every six years. The registrants Board of Directors approved the Plan at its most recent Board meeting on December 17, 2008 and the registrant's management executed the Plan document on December 23, 2008. The Plan allows eligible employees to elect to defer a portion of their compensation on a tax-free basis, subject to certain limitations. A portion of the funds deferred by the employees may be eligible for matching funds by the Company. The foregoing description is qualified by reference to the American River Bankshares 401(k) Plan Summary Plan Description attached as Exhibit 99.1

Item 1.01. Entry into a Material Definitive Agreement.

On December 23, 2008, the registrant simultaneously executed a sublease (the "Sublease") with Chicago Title Company, a California Corporation and a lease ("New Lease") with 90 E Street, LLC. The Sublease and the New Lease relate to office space to be occupied by one of the registrant's banking divisions, North Coast Bank, a division of American River Bank. The premises related to both the Sublease and the New Lease is located at 90 E Street, Santa Rosa, California. The Sublease term begins on February 1, 2009 and ends on November 11, 2011 and the term of the New Lease begins on November 12, 2011 and ends on January 31, 2019. The combined term of the Sublease and the New Lease is one hundred and twenty (120) months. The 90 E Street location represents a relocation of the existing premises located at 50 Santa Rosa Avenue, Santa Rosa, California ("Former Location"). The lease on the Former Location is scheduled to expire on January 31, 2009 and it will not be renewed. The foregoing description is qualified by reference to the Sublease attached as Exhibit 99.2 and the New Lease attached as Exhibit 99.3.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.

The Company's Executive Officers are eligible to participate in the Company's
401(k) Plan as described above and may also receive matching funds per the Plan. The foregoing description is qualified by reference to the American River Bankshares 401(k) Plan Summary Plan Description attached as Exhibit 99.1

Item 9.01. Financial Statements and Exhibits.

99.1 American River Bankshares 401(k) Plan Summary Plan Description Office.

99.2 Office Sublease between Chicago Title Company, a California Corporation and North Coast Bank, a division of American River Bank.

99.3 Office Lease between 90 E Street, LLC and North Coast Bank, a division of American River Bank.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AMERICAN RIVER BANKSHARES

                                    /s/ Mitchell A. Derenzo
                                    --------------------------------------------
December 23, 2008                   Mitchell A. Derenzo, Chief Financial Officer

INDEX TO EXHIBITS

Exhibit No.                        Description


99.1              American River Bankshares 401(k) Plan Summary
                  Plan Description.

99.2              Office Sublease between Chicago Title Company
                  and North Coast Bank, a division of American
                  River Bank.

99.3              Office Lease between 90 E Street, LLC and North
                  Coast Bank, a division of American River Bank.

EXHIBIT 99.1

AMERICAN RIVER BANKSHARES 401(K) PLAN

SUMMARY PLAN DESCRIPTION

TABLE OF CONTENTS

                           INTRODUCTION TO YOUR PLAN


What kind of Plan is this?.....................................................1

What information does this Summary provide?....................................1

                                   ARTICLE I
                           PARTICIPATION IN THE PLAN

How do I participate in the Plan?..............................................2

What happens if I'm a Participant, terminate employment and then I'm rehired?..3

                                   ARTICLE II
                             EMPLOYEE CONTRIBUTIONS

What are salary deferrals and how do I contribute them to the Plan?............3

What are rollover contributions?...............................................4

                                  ARTICLE III
                             EMPLOYER CONTRIBUTIONS

What is the safe harbor contribution?..........................................4

What is the Employer matching contribution and how is it allocated?............5

What is the Employer profit sharing contribution and how is it allocated?......5

What are forfeitures and how are they allocated?...............................5


                                   ARTICLE IV
                        COMPENSATION AND ACCOUNT BALANCE


What compensation is used to determine my Plan benefits?.......................6

Is there a limit on the amount of compensation which can be considered?........7

Is there a limit on how much can be contributed to my account each year?.......7

How is the money in the Plan invested?.........................................7

Will Plan expenses be deducted from my account balance?........................8


                                   ARTICLE V
                                    VESTING

What is my vested interest in my account?......................................8

How is my service determined for vesting purposes?.............................9

What service is counted for vesting purposes?..................................9

What happens to my non-vested account balance if I'm rehired?.................10

What happens if the Plan becomes a "top-heavy plan"?..........................10

                                       1

                                   ARTICLE VI
                       DISTRIBUTIONS PRIOR TO TERMINATION

Can I withdraw money from my account while working?...........................10

Can I withdraw money from my account in the event of financial hardship?......11

                                  ARTICLE VII
           BENEFITS AND DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT

When can I get money out of the Plan?.........................................12

What happens if I terminate employment before death, disability or
retirement?...................................................................12

What happens if I terminate employment at Normal Retirement Date?.............13

What happens if I terminate employment due to disability?.....................13

How will my benefits be paid to me?...........................................13

                                  ARTICLE VIII
                     BENEFITS AND DISTRIBUTIONS UPON DEATH

What happens if I die while working for the Employer?.........................13

Who is the beneficiary of my death benefit?...................................14

How will the death benefit be paid to my beneficiary?.........................14

When must the last payment be made to my beneficiary?.........................14

What happens if I'm a Participant, terminate employment and die before
receiving all my benefits?................................................... 15

                                   ARTICLE IX
                         TAX TREATMENT OF DISTRIBUTIONS

What are my tax consequences when I receive a distribution from the Plan?.....15

Can I elect a rollover to reduce or defer tax on my distribution?.............15

                                   ARTICLE X
                                     LOANS

Is it possible to borrow money from the Plan? ................................15

What are the loan rules and requirements?.....................................16

                                   ARTICLE XI
                    PROTECTED BENEFITS AND CLAIMS PROCEDURES

Are my benefits protected?....................................................17

Are there any exceptions to the general rule?.................................17

Can the Plan be amended?......................................................17

What happens if the Plan is discontinued or terminated?.......................17

How do I submit a claim for Plan benefits?....................................17

What if my benefits are denied?...............................................17

What is the Claims Review Procedure?..........................................18

                                       2

What are my rights as a Plan Participant?.....................................20

What can I do if I have questions or my rights are violated?..................20


                                  ARTICLE XII
                       GENERAL INFORMATION ABOUT THE PLAN

Plan Name ....................................................................21

Plan Number...................................................................21

Plan Effective Dates..........................................................21

Other Plan Information........................................................21

Employer Information..........................................................21

Plan Administrator Information................................................21

Plan Trustee Information and Plan Funding Medium..............................22

AMERICAN RIVER BANKSHARES 401(K) PLAN

SUMMARY PLAN DESCRIPTION

INTRODUCTION TO YOUR PLAN

What kind of Plan is this?

American River Bankshares 401(k) Plan (the "Plan") has been adopted to provide you with the opportunity to save for retirement on a tax-advantage basis. This Plan is a type of qualified retirement plan commonly referred to as a 401(k) Plan. As a Participant under the Plan, you may elect to contribute a portion of your compensation to the Plan. In addition, your Employer may make contributions to the Plan on your behalf.

Types of Contributions. The following types of contributions may be made under this Plan:

o employee salary deferrals

o employee rollover contributions

o employer safe harbor contributions

o employer matching contributions

o employer profit sharing contributions

What information does this Summary provide?

This Summary Plan Description ("SPD") contains information regarding when you may become eligible to participate in the Plan, your Plan benefits, your distribution options, and many other features of the Plan. You should take the time to read this SPD to get a better understanding of your rights and obligations in the Plan.

In this summary, your Employer has addressed the most common questions you may have regarding the Plan. If this SPD does not answer all of your questions, please contact the Administrator or other plan representative. The Administrator is responsible for responding to questions and making determinations related to the administration, interpretation, and application of the Plan. The name and address of the Administrator can be found at the end of this SPD in the Article entitled "General Information About the Plan."

This SPD describes the Plan's benefits and obligations as contained in the legal Plan document, which governs the operation of the Plan. The Plan document is written in much more technical and precise language and is designed to comply with applicable legal requirements. If the non-technical language in this SPD and the technical, legal language of the Plan document conflict, the Plan document always governs. If you wish to receive a copy of the legal Plan document, please contact the Administrator.

The Plan and your rights under the Plan are subject to federal laws, such as the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code, as well as some state laws. The provisions of the Plan are subject to revision due to a change in laws or due to pronouncements by the Internal Revenue Service (IRS) or Department of Labor (DOL). Your Employer may also amend or terminate this Plan. If the provisions of the Plan that are described in this SPD change, your Employer will notify you.

ARTICLE I
PARTICIPATION IN THE PLAN

How do I participate in the Plan?

Provided you are not an Excluded Employee, you may begin participating under the Plan once you have satisfied the eligibility requirements and reached your "Entry Date." The following describes the eligibility requirements and Entry Dates that apply. You should contact the Administrator if you have questions about the timing of your Plan participation.

Salary Deferrals and Safe Harbor Contributions

Excluded Employees. If you are a member of a class of employees identified below, you are an Excluded Employee and you are not entitled to participate in the Plan for purposes of salary deferrals and safe harbor contributions. The Excluded Employees are:

o union employees whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining

o certain nonresident aliens who have no earned income from sources within the United States

o leased employees

Eligibility Conditions. You will be eligible to participate for purposes of salary deferrals and safe harbor contributions on your date of hire. However, you will actually enter the Plan once you reach the Entry Date as described below.

Entry Date. For purposes of salary deferrals, your Entry Date will be semi-monthly.

Matching Contributions

Excluded Employees. If you re a member of a class of employees identified below, you are an Excluded Employee and you are not entitled to participate in the Plan for purposes of matching contributions. The Excluded Employees are:

o union employees whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining

o certain nonresident aliens who have no earned income from sources within the United States

o leased employees

Eligibility Conditions. You will be eligible to participate for purposes of matching contributions on your date of hire. However, you will actually enter the Plan once you reach the Entry Date as described below.

Entry Date. For purposes of matching contributions, your Entry Date will be semi-monthly.

Profit Sharing Contributions

Excluded Employees. If you are a member of a class of employees identified below, you are an Excluded Employee and you are not entitled to participate in the Plan for purposes of profit sharing contributions. The Excluded Employees are:

o union employees whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining

o certain nonresident aliens who have no earned income from sources within the United States

o leased employees

Eligibility Conditions. You will be eligible to participate for purposes of profit sharing contributions on your date of hire. However, you will actually enter the Plan once you reach the Entry Date as described below.

Entry Date. For purposes of profit sharing contributions, your Entry Date will be semi-monthly.

What happens if I'm a Participant, terminate employment and then I'm rehired?

If you are no longer a Participant because you terminated employment, and you are rehired, then you will be able to participate in the Plan on your date of rehire provided you are otherwise eligible to participate in the Plan.

ARTICLE II
EMPLOYEE CONTRIBUTIONS

What are salary deferrals and how do I contribute them to the Plan?

Salary Deferrals. As a Participant under the Plan, you may elect to reduce your compensation by a specific percentage or dollar amount and have that amount contributed to the Plan on a pre-tax basis as a salary deferral. Your taxable income is reduced by the deferral contribution so you pay less in federal income taxes (however, the amount you defer is still counted as compensation for purposes of Social Security taxes). Later, when the Plan distributes the deferrals and earnings, you will pay the taxes on those deferrals and the earnings. Therefore, federal income taxes on the deferral contributions and on the earnings are only postponed. Eventually, you will have to pay taxes on these amounts.

Deferral procedure. The amount you elect to defer will be deducted from your pay in accordance with a procedure established by the Administrator. The procedure allows you to enter into a salary deferral agreement after you satisfy the Plan's eligibility requirements. You may elect to defer a portion of your salary as of your Entry Date. Such election will become effective as soon as administratively feasible after it is received by the Administrator. Your election will remain in effect until you modify or terminate it.

Deferral modifications. You are permitted to revoke your salary deferral election any time during the Plan Year. You may make any other modification on the first day of any payroll period or in accordance with any other procedure that your Employer provides. Any modification will become effective as soon as administratively feasible after received by the Administrator.

Deferral Limit. As a Participant, you may elect to defer a percentage of your compensation each year instead of receiving that amount in cash. Your total deferrals in any taxable year may not exceed a dollar limit which is set by law. The limit for 2008 is $15,500. After 2008, the dollar limit may increase for cost-of-living adjustments. See the paragraph below called "Annual dollar limit." The Administrator will notify you of the maximum percentage you may defer.

Catch-up contributions. Effective January 1, 2002, if you are age 50 or over (or will attain age 50 before the end of a calendar year), then you may elect to defer additional amounts (called "catch-up contributions") to the Plan as of the January 1st of that year. The additional amounts may be deferred regardless of any other limitations on the amount that you may defer to the Plan. The maximum "catch-up contribution" that you can make in 2008 is $5,000. After 2008, the maximum may increase for cost-of-living adjustments.

Annual dollar limit. You should also be aware that each separately stated annual dollar limit on the amount you may defer (the annual deferral limit and the "catch-up contribution" limit) is a separate aggregate limit that applies to all such similar salary deferral amounts and "catch-up contributions" you may make under this Plan and any other cash or deferred arrangements (including tax-sheltered 403(b) annuity contracts, simplified employee pensions or other 401(k) plans) in which you may be participating. Generally, if an annual dollar limit is exceeded, then the excess must be returned to you in order to avoid adverse tax consequences. For this reason, it is desirable to request in writing that any such excess salary deferral amounts and "catch-up contributions" be returned to you.

If you are in more than one plan, you must decide which plan or arrangement you would like to return the excess. If you decide that the excess should be distributed from this Plan, you must communicate this in writing to the Administrator no later than the March 1st following the close of the calendar year in which such excess deferrals were made. However, if the entire dollar limit is exceeded in this Plan or any other plan your Employer maintains, then you will be deemed to have notified the Administrator of the excess. The Administrator will then return the excess deferral and any earnings to you by April 15th.

Allocation of deferrals. The Administrator will allocate the amount you elect to defer to an account maintained on your behalf. You will always be 100% vested in this account (see the Article in this SPD entitled "Vesting"). This means that you will always be entitled to all amounts that you defer. This money will, however, be affected by any investment gains or losses. If there is an investment gain, then the balance in your account will increase. If there is an investment loss, then the balance in your account will decrease.

Distribution of deferrals. The rules regarding distributions of amounts attributable to your salary deferrals are explained later in this SPD. However, if you are a highly compensated employee (generally more than 5% owners or individuals receiving wages in excess of certain amounts established by law), a distribution of certain amounts attributable to your salary deferrals may have to be returned to you if certain nondiscrimination requirements are not met. The Administrator will notify you when a distribution is required.

What are rollover contributions?

Rollover contributions. At the discretion of the Administrator, once you become a Participant (for so long as you remain employed), or if you are an eligible employee still within the waiting period , you may be permitted to deposit into the Plan distributions you have received from other plans and certain IRAs. Such a deposit is called a "rollover" and may result in tax savings to you. You may ask the administrator or trustee of the other plan or IRA to directly transfer (a "direct rollover") to this Plan all or a portion of any amount that you are entitled to receive as a distribution from such plan. Alternatively, if you received a distribution from a prior plan, you may elect to deposit any amount eligible to be rolled over within 60 days of your receipt of the distribution. You should consult qualified counsel to determine if a rollover is permitted and in your best interest.

Rollover account. Your rollover will be accounted for in a "rollover account." You will always be 100% vested in your "rollover account" (see the Article in this SPD entitled "Vesting"). This means that you will always be entitled to all amounts in your rollover account. Rollover contributions will be affected by any investment gains or losses.

Withdrawal of rollover contributions. You may withdraw the amounts in your "rollover account" at any time.

ARTICLE III
EMPLOYER CONTRIBUTIONS

In addition to any deferrals you elect to make, your Employer may make additional contributions to the Plan on your behalf. This Article describes Employer contributions that may be made to the Plan and how your share of the contributions is determined.

What is the safe harbor contribution?

Safe harbor 401(k) plan. Effective January 1, 2008, this Plan is referred to as a "safe harbor 401(k) plan." If your Employer elects to satisfy the safe harbor rules, then before the beginning of each Plan Year, you will be provided with a comprehensive notice of your rights and obligations under the Plan. However, if you become eligible to participate in the Plan after the beginning of the Plan Year, then the notice will be provided to you on or before the date you are eligible. A safe harbor 401(k) plan is a plan design where your Employer commits to making one of the safe harbor contributions described below. This commitment to make contributions enables your Employer to simplify the administration of the Plan by ensuring that nondiscrimination regulations are met, which is why it is called a "safe harbor" plan. If your Employer elects to satisfy the safe harbor rules, the notice that you will receive will indicate which one of the safe harbor contributions described below will be made to satisfy the safe harbor rules.

Safe Harbor Basic Matching Contribution. In order to maintain safe harbor status, your Employer may make a basic safe harbor matching contribution equal to 100% of your salary deferrals (including catch-up contributions) that do not exceed 3% of your compensation plus 50% of your salary deferrals between 3% and 5% of your compensation. If your Employer decides to make this contribution, then you will receive a notice informing you of this decision and the amount of the contribution. This basic safe harbor matching contribution is 100% vested when made by your Employer (see the Article in this SPD entitled "Vesting").

For purposes of calculating the basic safe harbor matching contribution, your compensation and deferrals will be determined on a payroll period basis.

Safe Harbor Enhanced Matching Contribution. In order to maintain safe harbor status, your Employer may make an enhanced safe harbor matching contribution equal to 100% of your salary deferrals (including catch-up contributions) that do not exceed 4% of your compensation. If your Employer decides to make this contribution, then you will receive a notice informing you of this decision and the amount of the contribution. This enhanced safe harbor matching contribution is 100% vested when made by your Employer (see the Article in this SPD entitled "Vesting").

For purposes of calculating the enhanced safe harbor matching contribution, your compensation and deferrals will be determined on an annual basis. For example, if you defer 6% of compensation for six months and then change your deferral to 0% for the remaining six months of the year, then you will have deferred 3% for the purposes of determining your matching contribution.

Safe Harbor Nonelective Contribution. In order to maintain safe harbor status, your Employer may make a contribution equal to at least 3% of your compensation. If your Employer decides to make this contribution, then you will receive a notice informing you of this decision and the amount of the contribution. This contribution is 100% vested (see the Article in this SPD entitled "Vesting").

What is the Employer matching contribution and how is it allocated?

Matching Contribution. Your Employer may make a discretionary matching contribution equal to a uniform percentage of your salary deferrals. Each year, your Employer will determine the amount of the discretionary percentage.

Limit on matching percentage. In applying this matching percentage, however, salary deferrals for each year that exceed 6% of your compensation for such period will not be considered. For example, if you defer 6% of compensation for six months and then change your deferral to 0% for the remaining six months of the year, then you will have deferred 3% of compensation for the purposes of determining your matching contribution.

Limit on matching contribution. Regardless of the preceding, your matching contribution in any Plan Year will not exceed 4% of your compensation.

Allocation conditions. You will always share in the matching contribution regardless of the amount of service you complete during the Plan Year.

However, the allocation conditions described above will not apply in any Plan Year when the Plan is intended to be an ACP safe harbor plan. For any such year, the amount of matching contributions will be restricted to an amount that does not require any nondiscrimination testing, and will be made to all Participants eligible to make elective deferral contributions.

What is the Employer profit sharing contribution and how is it allocated?

Profit sharing contribution. Each year, your Employer may make a discretionary profit sharing contribution to your account.

Allocation conditions. You will always share in the profit sharing contribution regardless of the amount of service you complete during the Plan Year.

What are forfeitures and how are they allocated?

Definition of forfeitures. In order to reward employees who remain employed with the Employer for a long period of time, the law permits a "vesting schedule" to be applied to certain contributions that your Employer makes to the Plan. This means that you will not be entitled ("vested") in all of the contributions until you have been employed with the Employer for a specified period of time (see the Article entitled "Vesting"). If a Participant terminates employment before being fully vested, then the non-vested portion of the terminated Participant's account balance remains in the Plan and is called a forfeiture. Forfeitures may be used by the Plan for several purposes.

Allocation of forfeitures. Forfeitures will be allocated as follows:

o Forfeitures may first be used to pay any administrative expenses.

o Any remaining forfeitures attributable to amounts other than Employer matching contributions will be allocated to Participants in the same proportion that the compensation for each Participant bears to the total compensation of all Participants.

o Any remaining forfeitures attributable to matching contributions will be allocated to Participants in the same proportion that the compensation for each Participant bears to the total compensation of all Participants.

ARTICLE IV
COMPENSATION AND ACCOUNT BALANCE

What compensation is used to determine my Plan benefits?

Definition of compensation. For the purposes of the Plan, compensation has a special meaning. Compensation is generally defined as your total compensation that is subject to income tax withholding and paid to you by your Employer during the Plan Year. Amounts paid to you after you terminate employment are generally not treated as compensation (except as may be provided below, and then only if paid by the earlier of 2 1/2 months following termination, or if later, the end of the plan year of termination). If you are a self-employed individual, your compensation will be equal to your earned income. The following describes the adjustments to compensation that may apply for the different types of contributions provided under the Plan.

Salary Deferrals

Adjustments to compensation. The following adjustments to compensation will be made for purposes of salary deferrals:

o salary deferrals to this Plan and to any other plan or arrangement (such as a cafeteria plan) will be included

o compensation paid after you terminate employment for services performed during your regular working hours, or for services outside your regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments that would have been made to you had you continued employment will be included

o compensation paid for unused accrued bona fide sick, vacation or other leave, if such amounts would have been included in compensation if paid prior to your termination of employment and you would have been able to use the leave if employment had continued will be included. In addition, compensation will also include nonqualified unfunded deferred compensation if the payment is includible in gross income and would have been paid to you had you continued employment

Matching Contributions

Adjustments to compensation. The following adjustments to compensation will be made for purposes of matching contributions:

o salary deferrals to this Plan and to any other plan or arrangement (such as a cafeteria plan) will be included

Profit Sharing Contributions

Adjustments to compensation. The following adjustments to compensation will be made for purposes of profit sharing contributions:

o salary deferrals to this Plan and to any other plan or arrangement (such as a cafeteria plan) will be included

Safe Harbor Contributions

Adjustments to compensation. The following adjustments to compensation will be made for purposes of safe harbor contributions:

o salary deferrals to this Plan and to any other plan or arrangement (such as a cafeteria plan) will be included

Is there a limit on the amount of compensation which can be considered?

The Plan, by law, cannot recognize annual compensation in excess of a certain dollar limit. The limit for the Plan Year beginning in 2008 is $230,000. After 2008, the dollar limit may increase for cost-of-living adjustments.

Is there a limit on how much can be contributed to my account each year?

Generally, the law imposes a maximum limit on the amount of contributions (excluding catch-up contributions) that may be made to your account and any other amounts allocated to any of your accounts during the Plan Year, excluding earnings. Beginning in 2008, this total cannot exceed the lesser of $46,000 or 100% of your annual compensation. After 2008, the dollar limit may increase for cost-of-living adjustments.

How is the money in the Plan invested?

The Trustee of the Plan has been designated to hold the assets of the Plan for the benefit of Plan Participants and their beneficiaries in accordance with the terms of this Plan. The trust fund established by the Plan's Trustee will be the funding medium used for the accumulation of assets from which Plan benefits will be distributed.

Participant directed investments. You will be able to direct the investment of your entire interest in the Plan. The Administrator will provide you with information on the investment choices available to you, the procedures for making investment elections, the frequency with which you can change your investment choices and other important information. You need to follow the procedures for making investment elections and you should carefully review the information provided to you before you give investment directions. If you do not direct the investment of your applicable Plan accounts, then your accounts will be invested in accordance with the default investment alternatives established under the Plan.

The Plan is intended to comply with Section 404(c) of ERISA (the Employee Retirement Income Security Act). If the Plan complies with this Section, then the fiduciaries of the Plan, including your Employer, the Trustee and the Administrator, will be relieved of any legal liability for any losses which are the direct and necessary result of the investment directions that you give.

Earnings or losses. When you direct investments, your accounts are segregated for purposes of determining the earnings or losses on these investments. Your account does not share in the investment performance of other Participants who have directed their own investments. You should remember that the amount of your benefits under the Plan will depend in part upon your choice of investments. Gains as well as losses can occur and your Employer, the Administrator, and the Trustee will not provide investment advice or guarantee the performance of any investment you choose.

Will Plan expenses be deducted from my account balance?

Expenses allocated to all accounts. The Plan permits the payment of Plan expenses to be made from the Plan's assets. If expenses are paid using the Plan's assets, then the expenses will generally be allocated among the accounts of all Participants in the Plan. These expenses will be allocated either proportionately based on the value of the account balances or as an equal dollar amount based on the number of Participants in the Plan. The method of allocating the expenses depends on the nature of the expense itself. For example, certain administrative (or recordkeeping) expenses would typically be allocated proportionately to each Participant. If the Plan pays $1,000 in expenses and there are 100 Participants, your account balance would be charged $10 ($1,000/100) of the expense.

Expenses allocated to individual accounts. There are certain other expenses that may be paid just from your account. These are expenses that are specifically incurred by, or attributable to, you. For example, if you are married and get divorced, the Plan may incur additional expenses if a court mandates that a portion of your account be paid to your ex-spouse. These additional expenses may be paid directly from your account (and not the accounts of other Participants) because they are directly attributable to you under the Plan. The Administrator will inform you when there will be a charge (or charges) directly to your account.

Your Employer may, from time to time, change the manner in which expenses are allocated.

ARTICLE V
VESTING

What is my vested interest in my account?

In order to reward employees who remain employed with the Employer for a long period of time, the law permits a "vesting schedule" to be applied to certain contributions that your Employer makes to the Plan. This means that you will not be entitled ("vested") in all of the contributions until you have been employed with the Employer for a specified period of time.

100% vested contributions. You are always 100% vested (which means that you are entitled to all of the amounts) in your accounts attributable to the following contributions:

o salary deferrals including catch-up contributions

o rollover contributions

o safe harbor contributions

Vesting schedules. Your "vested percentage" for certain Employer contributions is based on vesting Years of Service. This means at the time you stop working for a reason other than your death, disability, or retirement, your account balance attributable to contributions subject to a vesting schedule is multiplied by your vested percentage. The result, when added to the amounts that are always 100% vested as shown above, is your vested interest in the Plan, which is what you will actually receive from the Plan. You will always, however, be 100% vested if you are employed on or after your Normal Retirement Age, or if you die or become disabled while employed by your Employer.

Your "vested percentage" in your account attributable to profit sharing contributions is determined under the following schedule.

          Vesting Schedule
    Profit Sharing Contributions

Years of Service          Percentage
       1                      20%
       2                      40%
       3                      60%
       4                      80%
       5                     100%

Your "vested percentage" in your account attributable to matching contributions is determined under the following schedule.

          Vesting Schedule
       Matching Contributions

Years of Service          Percentage

       1                      20%
       2                      40%
       3                      60%
       4                      80%
       5                     100%

How is my service determined for vesting purposes?

Year of Service. To earn a Year of Service, you must be credited with at least 1,000 Hours of Service during a Plan Year. The Plan contains specific rules for crediting Hours of Service for vesting purposes. The Administrator will track your service and will credit you with a Year of Service for each Plan Year in which you are credited with the required Hours of Service, in accordance with the terms of the Plan. If you have any questions regarding your vesting service, you should contact the Administrator.

Hour of Service. You will be credited with your actual Hours of Service for:

(a) each hour for which you are directly or indirectly compensated by the Employer for the performance of duties during the Plan Year;

(b) each hour for which you are directly or indirectly compensated by the Employer for reasons other than the performance of duties (such as vacation, holidays, sickness, disability, lay-off, military duty, jury duty or leave of absence during the Plan Year); and

You will not be credited for the same Hours of Service both under (a) or (b), as the case may be, and under (c).

What service is counted for vesting purposes?

Service with the Employer. In calculating your vested percentage, all service you perform for the Employer will generally be counted. However, there are some exceptions to this general rule.

Break in Service rules. If you terminate employment and are rehired, you may lose credit for prior service under the Plan's Break in Service rules.

For vesting purposes, you will have a Break in Service if you complete less than 501 Hours of Service during the computation period used to determine whether you have a Year of Service. However, if you are absent from work for certain leaves of absence such as a maternity or paternity leave, you may be credited with enough Hours of Service to prevent a Break in Service.

Five-year Break in Service rule. The five-year Break in Service rule applies only to Participants who had no vested interest in the Plan when employment had terminated. If you were not vested in any amounts when you terminated employment and you have five 1-Year Breaks in Service (as defined above), all the service you earned before the 5-year period no longer counts for vesting purposes. Thus, if you return to employment after incurring five 1-Year Breaks in Service, you will be treated as a new employee (with no service) for purposes of determining your vested percentage under the Plan.

Military Service. If you are a veteran and are reemployed under the Uniformed Services Employment and Reemployment Rights Act of 1994, your qualified military service may be considered service with the Employer. If you may be affected by this law, ask the Administrator for further details.

What happens to my non-vested account balance if I'm rehired?

If you have no vested interest in the Plan when you leave, your account balance will be forfeited. However, if you are rehired before incurring five 1-Year Breaks in Service, your account balance as of your termination date will be restored, unadjusted for any gains or losses.

If you are partially vested in your account balance when you leave, the non-vested portion of your account balance will be forfeited on the earlier of the date:

(a) of the distribution of your vested account balance, or

(b) when you incur five consecutive 1-year Breaks in Service.

If you received a distribution of your vested account balance and are rehired, you may have the right to repay this distribution. If you repay the entire amount of the distribution, your Employer will restore your account balance with your forfeited amount. You must repay this distribution within five years from your date of reemployment, or, if earlier, before you incur five 1-Year Breaks in Service. If you were 100% vested when you left, you do not have the opportunity to repay your distribution.

What happens if the Plan becomes a "top-heavy plan"?

Top-heavy plan. A retirement plan that primarily benefits "key employees" is called a "top-heavy plan." Key employees are certain owners or officers of your Employer. A plan is generally a "top-heavy plan" when more than 60% of the plan assets are attributable to key employees. Each year, the Administrator is responsible for determining whether the Plan is a "top-heavy plan."

Top-heavy rules. If the Plan becomes top-heavy in any Plan Year, then non-key employees may be entitled to certain "topheavy minimum benefits," and other special rules will apply. These top-heavy rules include the following:

o Your Employer may be required to make a contribution on your behalf in order to provide you with at least "topheavy minimum benefits."

o If you are a Participant in more than one Plan, you may not be entitled to "top-heavy minimum benefits" under both Plans.

ARTICLE VI DISTRIBUTIONS
PRIOR TO TERMINATION

Can I withdraw money from my account while working?

In-service distributions. You may be entitled to receive an in-service distribution. However, this distribution is not in addition to your other benefits and will therefore reduce the value of the benefits you will receive at retirement. This distribution is made at your election and will be made in accordance with the forms of distributions available under the Plan.

Conditions. Generally you may receive a distribution from the Plan prior to your termination of employment provided you satisfy any of the following conditions:

o you have attained age 59 1/2

Also, the law restricts any in-service distributions from certain accounts which are maintained for you under the Plan before you reach age 59 1/2. These accounts are the ones set up to receive your salary deferral contributions and other Employer contributions which are used to satisfy special rules for 401(k) plans (such as safe harbor contributions). Ask the Administrator if you need more details.

Limitations. The following limitations apply to in-service distributions:

o In-service distributions can only be made from accounts which are 100% vested

o rollover accounts

Can I withdraw money from my account in the event of financial hardship?

Hardship distributions. You may withdraw money for financial hardship if you satisfy certain conditions. This hardship distribution is not in addition to your other benefits and will therefore reduce the value of the benefits you will receive at retirement.

Qualifying expenses. A hardship distribution may be made to satisfy certain immediate and heavy financial needs that you have. A hardship distribution may only be made for payment of the following:

o Expenses for medical care (described in Section 213(d) of the Internal Revenue Code) previously incurred by you, your spouse, your dependent or your beneficiary or necessary for you, your spouse, your dependent or your beneficiary to obtain medical care.

o Costs directly related to the purchase of your principal residence (excluding mortgage payments).

o Tuition, related educational fees, and room and board expenses for the next twelve (12) months of post-secondary education for yourself, your spouse, your dependent or your beneficiary.

o Amounts necessary to prevent your eviction from your principal residence or foreclosure on the mortgage of your principal residence.

o Payments for burial or funeral expenses for your deceased parent, spouse, children, other dependents or beneficiaries.

o Expenses for the repair of damage to your principal residence that would qualify for the casualty deduction under the Internal Revenue Code.

Your beneficiary is someone you designate under the Plan to receive your death benefit who is not otherwise your spouse or dependent.

Conditions. If you have any of the above expenses, a hardship distribution can only be made if you certify and agree that all of the following conditions are satisfied:

(a) The distribution is not in excess of the amount of your immediate and heavy financial need. The amount of your immediate and heavy financial need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution;

(b) You have obtained all distributions, other than hardship distributions, and all nontaxable loans currently available under all plans that your Employer maintains; and

(c) That your salary deferrals will be suspended for at least six (6) months after your receipt of the hardship distribution.

Limitations. The following limitations apply to hardship distributions:

o You must be employed with the Employer at the time of the hardship distribution

Account restrictions. You may request a hardship distribution only from the vested portion of the following accounts:

o salary deferral accounts

o account(s) attributable to Employer matching contributions

o rollover accounts

In addition, there are restrictions placed on hardship distributions which are made from certain accounts. These accounts are the ones set up to receive your salary deferral contributions and other Employer contributions which are used to satisfy special rules that apply to 401(k) plans (such as safe harbor contributions). Generally, the only amounts that can be distributed to you on account of a hardship from these accounts are your salary deferrals. The earnings on your salary deferrals and special Employer contributions may not be distributed to you on account of a hardship. Ask the Administrator if you need further details.

In the event you receive a hardship distribution, you will not be allowed to make salary deferrals for a period of six (6) months after you receive the distribution.

ARTICLE VII
BENEFITS AND DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT

When can I get money out of the Plan?

This Plan is designed to provide you with retirement benefits. However, distributions are permitted if you die or become disabled. In addition, certain payments are permitted when you terminate employment for any other reason. The rules under which you can receive a distribution are described in this Article. The rules regarding the payment of death benefits to your beneficiary are described in the Article entitled "Benefits and Distributions Upon Death."

You may receive a distribution of the vested portion of some or all of your accounts in the Plan for the following reasons:

o termination of employment for reasons other than death, disability or retirement

o normal retirement

o disability

You may also receive distributions while you are still employed with the Employer. (See the Article entitled "Distributions Prior to Termination" for a further explanation.)

What happens if I terminate employment before death, disability or retirement?

If your employment terminates for reasons other than death, disability or normal retirement, you will be entitled to receive only the "vested percentage" of your account balance.

You may elect to have your vested account balance distributed to you as soon as administratively feasible following your termination of employment. (See the question entitled "How will my benefits be paid to me?" for additional information.)

Amounts in your rollover account will not be considered as part of your benefit in determining whether the $5,000 threshold for timing of payments described above has been exceeded.

What happens if I terminate employment at Normal Retirement Date?

Normal Retirement Date. You will attain your Normal Retirement Age when you reach your 65th birthday, or your 5th anniversary of joining the Plan, if later. Your Normal Retirement Date is the first day of the month coinciding with or next following your Normal Retirement Age.

Payment of benefits. You will become 100% vested in all of your accounts under the Plan if you retire on or after your Normal Retirement Age. However, the actual payment of benefits generally will not begin until you have terminated employment and reached your Normal Retirement Date. In such event, a distribution will be made, at your election, as soon as administratively feasible. If you remain employed past your Normal Retirement Date, you may generally defer the receipt of benefits until you actually terminate employment. In such event, benefit payments will begin as soon as feasible at your request, but not later than age 70 1/2. (See the question entitled "How will my benefits be paid to me?" for an explanation of how these benefits will be paid.)

What happens if I terminate employment due to disability?

Definition of disability. Under the Plan, disability is defined as a physical or mental condition resulting from bodily injury, disease, or mental disorder which renders you incapable of continuing any gainful occupation and which constitutes total disability under the federal Social Security Act.

Payment of benefits. If you become disabled while a Participant, you will become 100% vested in all of your accounts under the Plan. Payment of your disability benefits will be made to you as if you had retired. However, if the value of your account balance does not exceed $1,000, then a distribution of your account balance will be made to you, regardless of whether you consent to receive it. (See the question entitled "How will my benefits be paid to me?" for an explanation of how these benefits will be paid.)

How will my benefits be paid to me?

Forms of distribution. If your vested account balance does not exceed $5,000, then your vested account balance may only be distributed to you in a single lump-sum payment. In determining whether your vested account balance exceeds the $5,000 dollar threshold, "rollovers" (and any earnings allocable to "rollover" contributions) will not be taken into account. In addition, if your vested account balance exceeds $1,000, you must consent to any distribution before it may be made. If your vested account balance exceeds $5,000, you may elect to receive a distribution of your vested account balance in:

o a single lump-sum payment

o partial withdrawals of at least $1,000

Delaying distributions. You may delay the distribution of your vested account balance unless a distribution is required to be made, as explained earlier, because your vested account balance does not exceed $1,000. However, if you elect to delay the distribution of your vested account balance, there are rules that require that certain minimum distributions be made from the Plan. If you are a 5% owner, distributions are required to begin not later than the April 1st following the end of the year in which you reach age 70 1/2. If you are not a 5% owner, distributions are required to begin not later than the April 1st following the later of the end of the year in which you reach age 70 1/2 or retire. You should see the Administrator if you think you may be affected by these rules.

Medium of payment. Benefits under the Plan will generally be paid to you in cash.

ARTICLE VIII
BENEFITS AND DISTRIBUTIONS UPON DEATH

What happens if I die while working for the Employer?

If you die while still employed by the Employer, then 100% of your account balance will be used to provide your beneficiary with a death benefit.

Who is the beneficiary of my death benefit?

Married Participant. If you are married at the time of your death, your spouse will be the beneficiary of the entire death benefit unless an election is made to change the beneficiary. IF YOU WISH TO DESIGNATE A BENEFICIARY OTHER THAN YOUR SPOUSE, YOUR SPOUSE MUST IRREVOCABLY CONSENT TO WAIVE ANY RIGHT TO THE DEATH BENEFIT. YOUR SPOUSE'S CONSENT MUST BE IN WRITING, BE WITNESSED BY A NOTARY OR A PLAN REPRESENTATIVE AND ACKNOWLEDGE THE SPECIFIC NONSPOUSE BENEFICIARY.

If you are married and you change your designation, then your spouse must again consent to the change. In addition, you may elect a beneficiary other than your spouse without your spouse's consent if your spouse cannot be located.

Unmarried Participant. If you are not married, you may designate a beneficiary on a form to be supplied to you by the Administrator.

No beneficiary designation. At the time of your death, if you have not designated a beneficiary or your beneficiary is also not alive, the death benefit will be paid in the following order of priority to:

(a) your surviving spouse

(b) your children, including adopted children in equal shares (and if a child is not living, that child's share will be distributed to that child's heirs)

(d) your estate

How will the death benefit be paid to my beneficiary?

Form of distribution. If the death benefit payable to a beneficiary does not exceed $5,000, then the benefit may only be paid as a lump sum. If the death benefit exceeds $5,000, your beneficiary may elect to have the death benefit paid in:

o a single lump-sum payment

o partial withdrawals of at least $1,000

When must the last payment be made to my beneficiary?

The law generally restricts the ability of a retirement plan to be used as a method of retaining money for purposes of your death estate. Thus, there are rules that are designed to ensure that death benefits are distributable to beneficiaries within certain time periods.

Regardless of the method of distribution selected, if your designated beneficiary is a person (rather than your estate or some trusts) then minimum distributions of your death benefit will begin by the end of the year following the year of your death ("1-year rule") and must be paid over a period not extending beyond your beneficiary's life expectancy. If your spouse is the beneficiary, then under the "1-year rule," the start of payments will be delayed until the year in which you would have attained age 70 1/2 unless your spouse elects to begin distributions over his or her life expectancy before then. However, instead of the "1-year rule" your beneficiary may elect to have the entire death benefit paid by the end of the fifth year following the year of your death (the "5-year rule"). Generally, if your beneficiary is not a person, your entire death benefit must be paid under the "5-year rule."

Since your spouse has certain rights to the death benefit, you should immediately report any change in your marital status to the Administrator.

What happens if I'm a Participant, terminate employment and die before receiving all my benefits?

If you terminate employment with the Employer and subsequently die, your beneficiary will be entitled to your remaining interest in the Plan at the time of your death. The provision in the Plan providing for full vesting of your benefit upon death does not apply if you die after terminating employment.

ARTICLE IX
TAX TREATMENT OF DISTRIBUTIONS

What are my tax consequences when I receive a distribution from the Plan?

Generally, you must include any Plan distribution in your taxable income in the year in which you receive the distribution. The tax treatment may also depend on your age when you receive the distribution. Certain distributions made to you when you are under age 59 1/2 could be subject to an additional 10% tax.

Can I elect a rollover to reduce or defer tax on my distribution?

Rollover or Direct Transfer. You may reduce, or defer entirely, the tax due on your distribution through use of one of the following methods:

(a) 60-day rollover. The rollover of all or a portion of the distribution to an Individual Retirement Account or Annuity (IRA) or another employer retirement plan willing to accept the rollover. This will result in no tax being due until you begin withdrawing funds from the IRA or other qualified employer plan. The rollover of the distribution, however, MUST be made within strict time frames (normally, within 60 days after you receive your distribution). Under certain circumstances all or a portion of a distribution (such as a hardship distribution) may not qualify for this rollover treatment. In addition, most distributions will be subject to mandatory federal income tax withholding at a rate of 20%. This will reduce the amount you actually receive. For this reason, if you wish to roll over all or a portion of your distribution amount, the direct transfer option described in paragraph (b) below would be the better choice.

(b) Direct rollover. For most distributions, you may request that a direct transfer (sometimes referred to as a direct rollover) of all or a portion of a distribution be made to either an Individual Retirement Account or Annuity (IRA) or another employer retirement plan willing to accept the transfer. A direct transfer will result in no tax being due until you withdraw funds from the IRA or other employer plan. Like the rollover, under certain circumstances all or a portion of the amount to be distributed may not qualify for this direct transfer. If you elect to actually receive the distribution rather than request a direct transfer, then in most cases 20% of the distribution amount will be withheld for federal income tax purposes.

Tax Notice. WHENEVER YOU RECEIVE A DISTRIBUTION, THE ADMINISTRATOR WILL DELIVER TO YOU A MORE DETAILED EXPLANATION OF THESE OPTIONS. HOWEVER, THE RULES WHICH DETERMINE WHETHER YOU QUALIFY FOR FAVORABLE TAX TREATMENT ARE VERY COMPLEX. YOU SHOULD CONSULT WITH QUALIFIED TAX COUNSEL BEFORE MAKING A CHOICE.

ARTICLE X
LOANS

Is it possible to borrow money from the Plan?

Yes, you may request a Participant loan from all your accounts using an application form provided by the Administrator. Your ability to obtain a Participant loan depends on several factors. The Administrator will determine whether you satisfy these factors.

What are the loan rules and requirements?

There are various rules and requirements that apply to any loan, which are outlined in this question. In addition, your Employer has established a written loan program which explains these requirements in more detail. You can request a copy of the loan program from the Administrator. Generally, the rules for loans include the following:

o Loans are available to Participants on a reasonably equivalent basis. Loans will be made to Participants who are creditworthy. The Administrator may request that you provide additional information, such as financial statements, tax returns and credit reports to make this determination.

o All loans must be adequately secured. You must sign a promissory note along with a loan pledge. Generally, you must use your vested interest in the Plan as security for the loan, provided the outstanding balance of all your loans does not exceed 50% of your vested interest in the Plan. In certain cases, the Administrator may require you to provide additional collateral to receive a loan.

o You will be charged a reasonable rate of interest for any loan received from the Plan. The Administrator will determine a reasonable rate of interest by reviewing the interest rates charged for similar types of loans by other lenders.

o If approved, your loan will provide for level amortization with payments to be made not less frequently than quarterly. Generally, the term of your loan may not exceed five (5) years. However, if the loan is for the purchase of your principal residence, the Administrator may permit a longer repayment term. Generally, the Administrator will require that you repay your loan by agreeing to payroll deduction. If you have an unpaid leave of absence or go on military leave while you have an outstanding loan, please contact the Administrator to find out your repayment options.

o All loans will be considered a directed investment of your account under the Plan. All payments of principal and interest by you on a loan will be credited to your account.

o The amount the Plan may loan to you is limited by rules under the Internal Revenue Code. Any new loans, when added to the outstanding balance of all other loans from the Plan, will be limited to the lesser of:

(a) $50,000 reduced by the excess, if any, of your highest outstanding balance of loans from the Plan during the one-year period ending on the day before the date of the new loan over your current outstanding balance of loans as of the date of the new loan; or

(b) 1/2 of your vested interest in the Plan.

o No loan in an amount less than $1,000 will be made.

o The maximum number of Plan loans that you may have outstanding at any one time is one.

o If you fail to make payments when they are due under the terms of the loan, you will be considered to be "in default." The Administrator will consider your loan to be in default if any scheduled loan repayment is not made by the end of the calendar quarter following the calendar quarter in which the missed payment was due. The Plan would then have authority to take all reasonable actions to collect the balance owed on the loan. This could include filing a lawsuit or foreclosing on the security for the loan. Under certain circumstances, a loan that is in default may be considered a distribution from the Plan and could be considered taxable income to you. In any event, your failure to repay a loan will reduce the benefit you would otherwise be entitled to from the Plan.

The Administrator may periodically revise the Plan's loan policy. If you have any questions on Participant loans or the current loan policy, please contact the Administrator.

ARTICLE XI
PROTECTED BENEFITS AND CLAIMS PROCEDURES

Are my benefits protected?

As a general rule, your interest in your account, including your "vested interest," may not be alienated. This means that your interest may not be sold, used as collateral for a loan (other than for a Plan loan), given away or otherwise transferred. In addition, your creditors may not attach, garnish or otherwise interfere with your account.

Are there any exceptions to the general rule?

There are two exceptions to this general rule. The Administrator must honor a "qualified domestic relations order." A "qualified domestic relations order" is defined as a decree or order issued by a court that obligates you to pay child support or alimony, or otherwise allocates a portion of your assets in the Plan to your spouse, former spouse, child or other dependent. If a qualified domestic relations order is received by the Administrator, all or a portion of your benefits may be used to satisfy that obligation. The Administrator will determine the validity of any domestic relations order received. You and your beneficiaries can obtain, without charge, a copy of the QUALIFIED DOMESTIC RELATIONS ORDER PROCEDURE from the Administrator.

The second exception applies if you are involved with the Plan's operation. If you are found liable for any action that adversely affects the Plan, the Administrator can offset your benefits by the amount that you are ordered or required by a court to pay the Plan. All or a portion of your benefits may be used to satisfy any such obligation to the Plan.

Can the Plan be amended?

Your Employer has the right to amend the Plan at any time. In no event, however, will any amendment authorize or permit any part of the Plan assets to be used for purposes other than the exclusive benefit of Participants or their beneficiaries. Additionally, no amendment will cause any reduction in the amount credited to your account.

What happens if the Plan is discontinued or terminated?

Although your Employer intends to maintain the Plan indefinitely, your Employer reserves the right to terminate the Plan at any time. Upon termination, no further contributions will be made to the Plan and all amounts credited to your accounts will become 100% vested. Your Employer will direct the distribution of your accounts in a manner permitted by the Plan as soon as practicable. (See the question entitled "How will my benefits be paid to me?" for a further explanation.) You will be notified if the Plan is terminated.

How do I submit a claim for Plan benefits?

Benefits will be paid to you and your beneficiaries without the necessity for formal claims. However, if you think an error has been made in determining your benefits, then you or your beneficiaries may make a request for any Plan benefits to which you believe you are entitled. Any such request should be in writing and should be made to the Administrator.

If the Administrator determines the claim is valid, then you will receive a statement describing the amount of benefit, the method or methods of payment, the timing of distributions and other information relevant to the payment of the benefit.

What if my benefits are denied?

Your request for Plan benefits will be considered a claim for Plan benefits, and it will be subject to a full and fair review. If your claim is wholly or partially denied, the Administrator will provide you with a written or electronic notification of the Plan's adverse determination. This written or electronic notification must be provided to you within a reasonable period of time, but not later than 90 days after the receipt of your claim by the Administrator, unless the Administrator determines that special circumstances require an extension of time for processing your claim. If the Administrator determines that an extension of time for processing is required, written notice of the extension will be furnished to you prior to the termination of the initial 90-day period. In no event will such extension exceed a period of 90 days from the end of such initial period. The extension notice will indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the benefit determination.

In the case of a claim for disability benefits, if disability is determined by a physician (rather than relying upon a determination of disability for Social Security purposes), then instead of the above, the Administrator will provide you with written or electronic notification of the Plan's adverse benefit determination within a reasonable period of time, but not later than 45 days after receipt of the claim by the Plan. This period may be extended by the Plan for up to 30 days, provided that the Administrator both determines that such an extension is necessary due to matters beyond the control of the Plan and notifies you, prior to the expiration of the initial 45-day period, of the circumstances requiring the extension of time and the date by which the Plan expects to render a decision. If, prior to the end of the first 30-day extension period, the Administrator determines that, due to matters beyond the control of the Plan, a decision cannot be rendered within that extension period, the period for making the determination may be extended for up to an additional 30 days, provided that the Administrator notifies you, prior to the expiration of the first 30-day extension period, of the circumstances requiring the extension and the date as of which the Plan expects to render a decision. In the case of any such extension, the notice of extension will specifically explain the standards on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and you will be afforded at least 45 days within which to provide the specified information.

The Administrator's written or electronic notification of any adverse benefit determination must contain the following information:

(a) The specific reason or reasons for the adverse determination.

(b) Reference to the specific Plan provisions on which the determination is based.

(c) A description of any additional material or information necessary for you to perfect the claim and an explanation of why such material or information is necessary.

(d) Appropriate information as to the steps to be taken if you or your beneficiary want to submit your claim for review.

(e) In the case of disability benefits where disability is determined by a physician:

(i) If an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided to you free of charge upon request.

(ii) If the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to your medical circumstances, or a statement that such explanation will be provided to you free of charge upon request.

If your claim has been denied, and you want to submit your claim for review, you must follow the Claims Review Procedure in the next question.

What is the Claims Review Procedure?

Upon the denial of your claim for benefits, you may file your claim for review, in writing, with the Administrator.

(a) YOU MUST FILE THE CLAIM FOR REVIEW NO LATER THAN 60 DAYS AFTER YOU HAVE RECEIVED WRITTEN NOTIFICATION OF THE DENIAL OF YOUR CLAIM FOR BENEFITS.

HOWEVER, IF YOUR CLAIM IS FOR DISABILITY BENEFITS AND DISABILITY IS DETERMINED BY A PHYSICIAN, THEN INSTEAD OF THE ABOVE, YOU MUST FILE THE CLAIM FOR REVIEW NO LATER THAN 180 DAYS FOLLOWING RECEIPT OF NOTIFICATION OF AN ADVERSE BENEFIT DETERMINATION.

(b) You may submit written comments, documents, records, and other information relating to your claim for benefits.

(c) You may review all pertinent documents relating to the denial of your claim and submit any issues and comments, in writing, to the Administrator.

(d) You will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to your claim for benefits.

(e) Your claim for review must be given a full and fair review. This review will take into account all comments, documents, records, and other information submitted by you relating to your claim, without regard to whether such information was submitted or considered in the initial benefit determination.

In addition to the Claims Review Procedure above, if your claim is for disability benefits and disability is determined by a physician, then the Claims Review Procedure provides that:

(a) Your claim will be reviewed without deference to the initial adverse benefit determination and the review will be conducted by an appropriate named fiduciary of the Plan who is neither the individual who made the adverse benefit determination that is the subject of the appeal, nor the subordinate of such individual.

(b) In deciding an appeal of any adverse benefit determination that is based in whole or part on medical judgment, the appropriate named fiduciary will consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment.

(c) Any medical or vocational experts whose advice was obtained on behalf of the Plan in connection with your adverse benefit determination will be identified, without regard to whether the advice was relied upon in making the benefit determination.

(d) The health care professional engaged for purposes of a consultation under (b) above will be an individual who is neither an individual who was consulted in connection with the adverse benefit determination that is the subject of the appeal, nor the subordinate of any such individual.

The Administrator will provide you with written or electronic notification of the Plan's benefit determination on review. The Administrator must provide you with notification of this denial within 60 days after the Administrator's receipt of your written claim for review, unless the Administrator determines that special circumstances require an extension of time for processing your claim. If the Administrator determines that an extension of time for processing is required, written notice of the extension will be furnished to you prior to the termination of the initial 60-day period. In no event will such extension exceed a period of 60 days from the end of the initial period. The extension notice will indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review. However, if claim relates to disability benefits and disability is determined by a physician, then 45 days will apply instead of 60 days in the preceding sentences. In the case of an adverse benefit determination, the notification will set forth:

(a) The specific reason or reasons for the adverse determination.

(b) Reference to the specific Plan provisions on which the benefit determination is based.

(c) A statement that you are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to your claim for benefits.

(d) In the case of disability benefits where disability is determined by a physician:

If you have a claim for benefits which is denied, then you may file suit in a state or Federal court. However, in order to do so, you must file the suit no later than 180 days after the Administrator makes a final determination to deny your claim.

What are my rights as a Plan Participant?

As a Participant in the Plan you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan Participants are entitled to:

(a) Examine, without charge, at the Administrator's office and at other specified locations, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

(b) Obtain, upon written request to the Administrator, copies of documents governing the operation of the Plan, including insurance contracts and collective bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The Administrator may make a reasonable charge for the copies.

(c) Receive a summary of the Plan's annual financial report. The Administrator is required by law to furnish each Participant with a copy of this summary annual report.

(d) Obtain a statement telling you whether you have a right to receive a pension at Normal Retirement Age and, if so, what your benefits would be at Normal Retirement Age if you stop working under the Plan now. If you do not have a right to a pension benefit, the statement will tell you how many years you have to work to earn a right to a pension. THIS STATEMENT MUST BE REQUESTED IN WRITING AND IS NOT REQUIRED TO BE GIVEN MORE THAN ONCE EVERY TWELVE (12) MONTHS. The Plan must provide this statement free of charge.

In addition to creating rights for Plan Participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan Participants and beneficiaries. No one, including your Employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA.

If your claim for a pension benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Administrator to provide the materials and pay you up to $110.00 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator.

If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. In addition, if you disagree with the Plan's decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may file suit in Federal court. You and your beneficiaries can obtain, without charge, a copy of the qualified domestic relations order ("QDRO") procedures from the Administrator.

If it should happen that the Plan's fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. The court may order you to pay these costs and fees if you lose or if, for example, it finds your claim is frivolous.

What can I do if I have questions or my rights are violated?

If you have any questions about the Plan, you should contact the Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in the telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

ARTICLE XII
GENERAL INFORMATION ABOUT THE PLAN

There is certain general information which you may need to know about the Plan. This information has been summarized for you in this Article.

Plan Name

The full name of the Plan is American River Bankshares 401(k) Plan.

Plan Number

Your Employer has assigned Plan Number 002 to your Plan.

Plan Effective Dates

This Plan was originally effective on January 1, 1993. The amended and restated provisions of the Plan become effective on January 1, 2008. However, this restatement was made to conform the Plan to new tax laws and some provisions may be retroactively effective.

Other Plan Information

Valuations of the Plan assets are generally made annually on the last day of the Plan Year and may include any other date or dates deemed necessary or appropriate by the Administrator for the valuation of the Participants' Accounts during the Plan Year. Certain distributions are based on the Anniversary Date of the Plan. This date is the last day of the Plan Year.

The Plan's records are maintained on a twelve-month period of time. This is known as the Plan Year. The Plan Year begins on January 1 and ends on December 31.

The Plan and Trust will be governed by the laws of California to the extent not governed by federal law.

Benefits provided by the Plan are NOT insured by the Pension Benefit Guaranty Corporation (PBGC) under Title IV of the Employee Retirement Income Security Act of 1974 because the insurance provisions under ERISA are not applicable to this type of Plan.

Service of legal process may be made upon your Employer. Service of legal process may also be made upon the Trustee or Administrator.

Employer Information

Your Employer's name, address and identification number are:

American River Bankshares
3100 Zinfandel Drive, Suite 450 Rancho Cordova, California 95670 68-0352144

Plan Administrator Information

The Plan's Administrator is responsible for the day-to-day administration and operation of the Plan. For example, the Administrator maintains the Plan records, including your account information, provides you with the forms you need to complete for Plan participation, and directs the payment of your account at the appropriate time. The Administrator will also allow you to review the formal Plan document and certain other materials related to the Plan. If you have any questions about the Plan or your participation, you should contact the Administrator. The Administrator may designate other parties to perform some duties of the Administrator.

The Administrator has the complete power, in its sole discretion, to determine all questions arising in connection with the administration, interpretation, and application of the Plan (and any related documents and underlying policies). Any such determination by the Administrator is conclusive and binding upon all persons.

The name, address and business telephone number of the Plan's Administrator are:

American River Bankshares
3100 Zinfandel Drive, Suite 450 Rancho Cordova, California 95670 (916) 851-0123

Plan Trustee Information and Plan Funding Medium

All money that is contributed to the Plan is held in a trust fund. The Trustees are responsible for the safekeeping of the trust fund and must hold and invest Plan assets in a prudent manner and in the best interest of you and your beneficiaries. The trust fund established by the Plan's Trustee(s) will be the funding medium used for the accumulation of assets from which benefits will be distributed. While all the Plan assets are held in a trust fund, the Administrator separately accounts for each Participant's interest in the Plan.

The names and address of the Plan's Trustees are:

David T. Taber
Mitchell A. Derenzo
3100 Zinfandel Drive, Suite 450 Rancho Cordova, California 95670

The Trustees shall collectively be referred to as Trustee throughout this Summary Plan Description.

APPENDIX
PLAN EXPENSE ALLOCATIONS

The Plan will assess against an individual Participant's account the following Plan expenses which are incurred by, or are attributable to, a particular Participant based on use of a particular Plan feature, listed by type and the amount charged (check all that apply, and fill in the charge or method of determining the charge). All fees are subject to change.

[X] Distribution following termination. Distribution of account upon termination of employment, including preparation of required notices and elections, distribution check or transfer of funds by direct rollover, as appropriate, and tax reporting forms. Amount: $ 50 (paid by American River Bankshares)

[X] Administrative processing fee to eliminate certain small account distributions. If the Participant's account is distributable (for example, upon termination of employment) and the distribution process fee equals or exceeds the Participant's account balance, the Plan will charge the processing fee against the vested account balance, resulting in the elimination of the account balance without any distribution to the Participant.

[X] Participant loan. Participant loan application fee (includes processing and document preparation) and annual maintenance fee.

Amount of application fee: $ 75

Amount of annual maintenance fee: $ 0

[X] QDRO. Qualified domestic relations order ("QDRO") review and processing, including notices to parties and preparation of QDRO distribution check. In addition to the amount indicated below, the Plan will charge the Participant's account for actual legal expenses and costs if the Plan consults with legal counsel regarding the qualified status of the order.
Amount: $ 150/per hour

[X] Hardship distribution. Hardship distribution, including application processing and preparation of required notices, elections and distribution check.
Amount: $ 50

[X] In-service distribution. Non-hardship in-service distribution, including application processing and preparation of required notices, elections and distribution check. Amount: $ 50

[X] RMD. Required minimum distributions, including annual calculation of required minimum distribution and preparation of required notices, elections and distribution check. Amount: $ 50

Note: The Plan will charge on a pro rata basis to all Participants all other plan related expenses (not described above) that the Plan pays.

APPENDIX
ROLLOVERS FROM OTHER PLANS

The Plan will accept Participant rollover contributions and/or direct rollovers of distributions from the types of plans specified below:

Direct Rollovers. The Plan will accept a direct rollover of an eligible rollover distribution from:

[X] a qualified plan described in section 401(a) of the Internal Revenue Code (including a 401(k) plan, profit sharing plan, defined benefit plan, stock bonus plan and money purchase plan), excluding after-tax employee contributions.

[ ] a qualified plan described in section 401(a) of the Internal Revenue Code (including a 401(k) plan, profit sharing plan, defined benefit plan, stock bonus plan and money purchase plan), including after-tax employee contributions.

[X] a qualified plan described in section 403(a) of the Internal Revenue Code (an annuity plan), excluding after-tax employee contributions.

[ ] a qualified plan described in section 403(a) of the Internal Revenue Code (an annuity plan), including after-tax employee contributions.

[X] an annuity contract described in section 403(b) of the Internal Revenue Code (a tax-sheltered annuity), excluding after-tax employee contributions.

[ ] an annuity contract described in section 403(b) of the Internal Revenue Code (a tax-sheltered annuity), including after-tax employee contributions.

[ ] a Roth elective deferral account under a qualified plan described in section 401(a) of the Internal Revenue Code (a 401(k) plan).

[ ] a Roth elective deferral account under an annuity contract described in section 403(b) of the Internal Revenue Code (a tax-sheltered annuity).

[X] an eligible plan under IRC ss.457(b) which is maintained by a governmental employer (governmental 457 plan).

Participant Rollover Contributions from Other Plans. The Plan will accept a Participant contribution of an eligible rollover distribution:
(Check each that applies or none.)

[X] a qualified plan described in section 401(a) of the Internal Revenue Code (including a 401(k) plan, profit sharing plan, defined benefit plan, stock bonus plan and money purchase plan).

[X] a qualified plan described in section 403(a) of the Internal Revenue Code (an annuity plan).

[X] an annuity contract described in section 403(b) of the Internal Revenue Code (a tax-sheltered annuity).

[X] an eligible plan under IRC ss.457(b) which is maintained by a governmental employer (governmental 457 plan).

Participant Rollover Contributions from IRAs:

[X] The Plan will accept a Participant rollover contribution of the portion of a distribution from a traditional IRA that is eligible to be rolled over and would otherwise be includible in gross income. Rollovers from Roth IRAs or a Coverdell Education Savings Account (formerly known as an Education IRA) are not permitted because they are not traditional IRAs. A rollover from a SIMPLE IRA is allowed if the amounts are rolled over after the Participant has been in the SIMPLE IRA for at least two years.

AMERICAN RIVER BANKSHARES 401(K) PLAN
COMMON QUESTIONS ABOUT OUR 401(k) PLAN

Introduction

The following questions and answers highlight some of the important parts of our Plan. Remember, these are only highlights. The Summary Plan Description ("SPD") describes the Plan in much greater detail. If you have any questions about these highlights, the SPD, or the Plan, you should ask the Plan Administrator.

Q. Why is your Employer sponsoring a 401(k) Plan?

A. Your Employer is sponsoring this Plan so that you may save for retirement. This Plan is a type of qualified retirement plan commonly referred to as a
401(k) Plan. As a Participant under the Plan, you may elect to contribute a portion of your compensation to the Plan. In addition, your Employer may make contributions to the Plan on your behalf.

Q. How do I participate in the Plan?

A. Provided you are not an Excluded Employee, you may begin participating under the Plan once you have satisfied the eligibility requirements and reached your "Entry Date." The following describes the eligibility requirements and Entry Date that apply.

Salary Deferrals and Safe Harbor Contributions

o union employees whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining

o certain nonresident aliens who have no earned income from sources within the United States

o leased employees

Entry Date. For purposes of salary deferrals, your Entry Date will be semi-monthly.

Matching Contributions

Excluded Employees. If you are a member of a class of employees identified below, you are an Excluded Employee and you are not entitled to participate in the Plan for purposes of matching contributions. The Excluded Employees are:

o union employees whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining

o certain nonresident aliens who have no earned income from sources within the United States

o leased employees

Entry Date. For purposes of matching contributions, your Entry Date will be semi-monthly.

Profit Sharing Contributions

o union employees whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining

o certain nonresident aliens who have no earned income from sources within the United States

o leased employees

Entry Date. For purposes of profit sharing contributions, your Entry Date will be semi-monthly.

Q. What are salary deferrals and how do I contribute them to the Plan?

A. Salary Deferrals. As a Participant under the Plan, you may elect to reduce your compensation by a specific percentage or dollar amount and have that amount contributed to the Plan on a pre-tax basis as a salary deferral. Your taxable income is reduced by the deferral contribution so you pay less in federal income taxes. Later, when the Plan distributes the deferrals and earnings, you will pay the taxes on those deferrals and the earnings. Therefore, federal income taxes on the deferral contributions and on the earnings are only postponed. Eventually, you will have to pay taxes on these amounts. However, the amount you defer is counted as compensation for Social Security taxes.

You may receive additional amounts from your Employer if you do contribute.

Q. When will I receive payments from the Plan?

A. The Plan is designed to encourage you to stay with the Employer until retirement. Payment will generally occur at your Normal Retirement Date, unless you postpone your actual retirement. Your Normal Retirement Date is the first day of the month coinciding with or next following your Normal Retirement Age. You will attain your Normal Retirement Age when you reach your 65th birthday, or your 5th anniversary of joining the Plan, if later.

Q. How much will I be paid when I retire?

A. The amount you are paid when you retire will be based upon the amount of money your Employer has put into the Plan for you (including your salary deferrals), plus or minus any earnings or losses. You should review the Article in the SPD entitled "Employer Contributions" for an explanation of how your Employer makes contributions to the Plan and how they are shared by eligible employees.

Q. How will payments be made when I retire?

A. If your vested account balance does not exceed $5,000, then your vested account balance may only be distributed to you in a single lump-sum payment. In determining whether your vested account balance exceeds the $5,000 dollar threshold, "rollovers" (and any earnings allocable to "rollover" contributions) will not be taken into account.

In addition, if your vested account balance exceeds $1,000, you must consent to any distribution before it may be made. If your vested account balance exceeds $5,000, you may elect to receive a distribution of your vested account balance in:

o a single lump-sum payment

o partial withdrawals of at least $1,000

You should review the Article in the SPD entitled "Benefits and Distributions Upon Termination of Employment" for a further explanation of the rules associated with the payment of benefits.

Q. What if I stop working before I retire?

A. 100% vested contributions. You are always 100% vested (which means that you are entitled to all of the amounts) in your accounts attributable to the following contributions:

o salary deferrals including catch-up contributions

o rollover contributions

o safe harbor contributions

Vesting schedules. Your "vested percentage" for certain Employer contributions is based on vesting Years of Service. This means at the time you stop working, your account balance (attributable to contributions subject to a vesting schedule) is multiplied by your vested percentage. The result, when added to the amounts that are always 100% vested as shown above, is your vested interest in the Plan, which is what you will actually receive from the Plan. You will always, however, be 100% vested if you are employed on or after your Normal Retirement Age, or if you die or become disabled while employed by your Employer.

Your "vested percentage" in your account attributable to profit sharing contributions is determined under the following schedule.

          Vesting Schedule
    Profit Sharing Contributions

Years of Service          Percentage
       1                      20%
       2                      40%
       3                      60%
       4                      80%
       5                     100%

Your "vested percentage" in your account attributable to matching contributions is determined under the following schedule.

          Vesting Schedule
       Matching Contributions

Years of Service          Percentage
       1                      20%
       2                      40%
       3                      60%
       4                      80%
       5                     100%

Q. If I stop working before retirement, when will my vested amount be paid?

A. If your employment terminates for reasons other than death, disability, or normal retirement, you will be entitled to receive only the "vested percentage" of your account balance.

Q. What if I die before I retire?

A. Your beneficiary will be entitled to 100% of your interest in the Plan upon your death. If you are single, you may name anyone you like to be your beneficiary. If you are married, your spouse is your beneficiary with respect to 100% of your death benefit unless you and your spouse name someone else as your beneficiary. You should review the question entitled "Who is the beneficiary of my death benefit?" in the Article entitled "Benefits and Distributions Upon Death".

Q. Can I withdraw money from the Plan while I'm still working?

A. Generally you may receive a distribution from the Plan prior to your termination of employment provided you satisfy any of the following conditions:

o you have attained age 59 1/2.

This distribution is not in addition to your other benefits and will therefore reduce the value of the benefits you will receive at retirement.

In certain instances you may also receive an in-service distribution if you incur a financial hardship. This hardship distribution is not in addition to your other benefits and will therefore reduce the value of the benefits you will receive at retirement.

There are various rules and restrictions regarding withdrawing money from your accounts in the Plan while you are still employed. Please review the SPD for more information on these rules and restrictions.

NOTE: THESE QUESTIONS AND ANSWERS ARE NOT MEANT TO BE A SUBSTITUTE FOR A THOROUGH READING OF THE SUMMARY PLAN DESCRIPTION. THE PROVISIONS OF THE 401(k) PLAN ARE VERY COMPLEX. IT IS NOT POSSIBLE TO FULLY EXPLAIN ALL ASPECTS OF THE PLAN IN THESE SHORT QUESTIONS AND ANSWERS. YOU SHOULD ALWAYS CONSULT THE SUMMARY PLAN DESCRIPTION IF YOU HAVE ANY QUESTIONS ABOUT THE PLAN. IF, AFTER READING THE SUMMARY PLAN DESCRIPTION, YOU STILL HAVE QUESTIONS, YOU SHOULD CONTACT THE PLAN ADMINISTRATOR.

EXHIBIT 99.2

EXHIBIT 99.3


	BASIC LEASE INFORMATION

Date	October 14, 2008

Landlord	90 E Street, LLC

Tenant	North Coast Bank, a division of American River Bank

Building	90 E Street, Santa Rosa, California consisting of approximately 35,250 square feet

Premises	Suite 110 consisting of approximately 3,600 square feet located on the first floor

Type of Lease	Full Service

Use	Bank branch and general office

Term	eighty six (86) months from Lease Commencement Date

Option to extend	One (1), five (5) year option to extend

Parking	Five (5) reserved and two (2) visitor on site spaces in the Building’s parking garage free of charge for the term of the lease and any extensions thereof. Landlord shall be responsible for any costs to mark spaces as reserved. Tenant shall be responsible for managing any unauthorized use of such parking.

Estimated
Commencement Date	Estimated to be November 13, 2011 (See Section 2.b)

Estimated Rent
Commencement	June 1, 2012 (Subject to Section 2.b.)

Initial Base Rent
	Monthly:	$9,360.00
	Annually:	$112,320.00

Annual rental increases	Three Percent (3%) per annum
	See Rent Adjustment Addendum One.

Operating Expenses	Tenant’s Percentage Share: 10.2%
	Base Year:	Calendar Year 2011

Security Deposit	Waived

Real Estate Broker	Tenant:	Orion Partners LTD/ Richard Henderson

	Landlord:	Keegan & Coppin Company/ Danny Jones


Address for Notices	Landlord:	90 E Street, LLC
		C/O Lawrence Commercial Services
		2841 Cleveland Avenue, Suite B
		Santa Rosa, CA 95403

	Tenant:	American River Bankshares
		C/O Mitchell Derenzo
		3100 Zinfandel Drive, suite 450
		Rancho Cordova, CA 95670

Exhibits	Exhibit A – Premises
	Exhibit B – Memorandum of Commencement
	Exhibit C – Rules and Regulations
	Exhibit D – Utilities and Services

Addendum	Addendum One – Paragraph 42 - Rental Adjustments Addendum
	Addendum Two – Standard Lease Conditions Addendum
	Addendum Three – Standard Lease Disclosure Addendum
	Addendum Four – Agency Disclosure

TABLE OF CONTENTS


Section		Page
1.	Premises	1
2.	Term	1
3.	Rent	2
4.	Base Rent	2
5.	Additional Rent -	3
	Annual Rent Adjustments/	3
	Operating Expenses	3
6.	Proration of Rent	5
7.	Tenant Improvements	5
8.	Use of the Premises	5
9.	Alterations	5
10.	Repairs	6
11.	Damage or Destruction	6
12.	Eminent Domain	7
13.	Indemnity and Insurance	7
14.	Assignment or Sublet	8
15.	Default	9
16.	Landlord’s Right to Perform Tenant’s	10
	Covenants	10
17.	Security Deposit	10
18.	Surrender of Premises	10
19.	Holding Over	10
20.	Access to Premises	11
21.	Signs	11
22.	Waiver of Subrogation	11
23.	Subordination	11
24.	Transfer of the Property	12
25.	Estoppel Certificates	12
26.	Mortgagee Protection	12
27.	Attorneys’ Fees	12
28.	Brokers	12
29.	Utilities and Services	13
30.	Tenant Placement	13
31.	Acceptance	13
32.	Use of Building Name	13
33.	Recording	13
34.	Quitclaim	13
35.	Notices	13
36.	Landlord’s Exculpation	14
37.	Exclusivity	14
38.	General	14
	Signatures	15

THIS LEASE, which is effective as of the date set forth in the Basic Lease Information, is entered by Landlord and Tenant, as set forth in the Basic Lease Information. Terms which are capitalized in this Lease shall have the meanings set forth in the Basic Lease Information.


1.	Premises.

	Landlord leases to Tenant, and Tenant leases from Landlord, the Premises described in the Basic Lease Information, together with the right in common to use the Common Areas of the Building and the property (as shown in Exhibit A ). The Common Areas shall mean the areas and facilities within the Building and the property provided and designated by Landlord for the general use, convenience or benefit of Tenant and other tenants and occupants of the Building ( e.g ., restrooms; janitorial, telephone and electrical closets; and unreserved parking areas).

2.	Term.


	a.	Lease Term. The Term of this Lease shall commence on the Commencement Date (as defined in Subsection 2.b.) and, unless terminated on an earlier date in accordance with the terms of this Lease, shall extend for the period ( i.e. , Term) specified in the Basic Lease Information.

	b.	Commencement Date. Landlord and Tenant acknowledge that, prior to the Commencement Date, Tenant will occupy the Premises, or a portion thereof, pursuant to a sublease or assignment of a prior lease between Landlord’s predecessor in interest and Chicago Title Company. This Lease is conditioned upon Landlord’s prior review and approval of the agreement between Tenant and Chicago Title Company pursuant to which Tenant occupies the Premises, and is further conditioned upon Tenant’s and Chicago Title Company’s performance of all their obligations pursuant to the November 10, 2005 Lease between HSG Trust and Billa Management as Landlord and Chicago Title Company as Tenant and the agreement between Tenant and Chicago Title Company. At Landlord’s election, which election shall be made not more than sixty (60) days prior to the Commencement Date, Tenant’s obligation to pay Base Rent shall either: (i) commence June 1, 2012; or, (ii) Landlord may pay to Tenant for the estimated hard and soft costs of tenant improvements installed by Tenant, on or before the Commencement Date, cash equal to ($56,160.00) the Base Rent applicable to the period between the Commencement Date and June 1, 2012, such amount being an incentive Tenant requires to enter into this Lease. Upon Landlord’s election to issue payment to Tenant the first rent payment shall be due on or before December 1, 2012

	c.	Premises Not Delivered. If, for any reason, Landlord cannot deliver possession of the Premises to Tenant within ninety (90) days of lease execution (“Estimated Substantial Completion Date”), (i) Tenant shall not be obligated to pay Rent until the Commencement Date; (ii) the Term shall not be extended; (iii) the failure shall not affect the validity of this Lease, or the obligations of Tenant under this Lease; and (iv) Landlord shall not be subject to any liability.

		Notwithstanding anything contained herein to the contrary, Tenant shall not be obligated to pay Rent or perform it other obligations until it receives possession of the Premises with the Tenant Improvements (hereinafter defined) substantially completed. If possession is not so delivered within sixty (60) days after the Estimated Substantial Completion Date, Tenant may, at its option, by notice in writing within ten (10) days after the end of such sixty (60) day period, cancel this Lease, in which event the parties to this Lease shall be discharged from all obligations hereunder except that Landlord shall immediately return to Tenant any sums paid by Tenant to Landlord in connection with this Lease up to the date of Tenant’s election to terminate. If such written notice is not received by Landlord within said ten (10) day period, Tenant’s right to cancel shall terminate.

	d.	Commencement Date Memorandum. [Intentionally Deleted.].

	e.	Option to Extend. Tenant shall have the option to extend the Lease Term for one (1) period of five (5) years (the “Extension Term”) on the same terms and conditions, except that the monthly Base Rent during the Extension Term shall be ninety-five percent (95%) of the fair market rental value of the Premises at the commencement of the Extension Term for comparable office space in downtown Santa Rosa, but in no event shall it be less than the Base Rent due for the last month of the original lease term. Such option must be exercised, if at all, by written notice from Tenant to Landlord given at least six (6) months prior to the expiration of the original Lease Term. At the time of providing notice of exercise of the option, and at all times between providing notice of exercise and the expiration of the original Lease Term this Lease shall be in full force and effect and there shall exist nor shall there be any default by Tenant which remains uncured beyond any applicable grace period.


	f.	Fair Market Value. The term “fair market rental value” means the prevailing market rental rate in arm’s length transactions for leased premises between a comparable landlord and a tenant of comparable creditworthiness for a comparable use in a comparable building in the immediate area, giving appropriate consideration to annual rental rate (including operating expenses and taxes, if any, being paid by Tenant at the commencement of the renewal term), abatement provisions reflecting free rent and/or no rent, brokerage commissions, if any, length of lease term, size and location of premises being leased, tenant improvement allowances, inducements, moving allowances, and other tenant benefits and concessions.

		Within thirty (30) days after Tenant exercises its option to extend, the parties shall endeavor through good faith negotiations to agree in writing upon the fair market rental value of the Premises as of the commencement date for the Extension Term. If Landlord and Tenant are unable to agree, fair market rental value will be determined by appraisal. Landlord and Tenant each shall give notice to the other setting forth the name and address of an appraiser designated by the party giving such notice. If either party shall fail to give notice of such designation within ten (10) days, then the first appraiser chosen shall make the determination alone. If two appraisers shall have been designated, such two appraisers shall, within thirty (30) days following the designation of the second appraiser, make their determinations of fair market rental value in writing and give notice thereof to each other and to Landlord and Tenant. Such two appraisers shall have twenty (20) days after the receipt of notice of each other’s determinations to confer with each other and to attempt to reach agreement as to the determination of fair market rental value. If such two appraisers shall concur as to the determination of the fair market rental value, such concurrence shall be final and binding upon Landlord and Tenant. If such two appraisers shall fail to concur by the end of said twenty (20) day period, then such two appraisers shall forthwith designate a third appraiser. If the two appraisers shall fail to agree upon the designation of such third appraiser within ten (10) days, then either party may apply to the American Arbitration Association or any successor thereto having jurisdiction for the designation of an arbitrator. All appraisers and arbitrators shall be MAI certified real estate appraisers who shall have had at least ten (10) years continuous experience in the business of appraising or managing Class A office real estate in Santa Rosa, California or similar locations. The third appraiser shall conduct such hearings and investigations as he may deem appropriate and shall, within thirty (30) days after his designation, choose one of the determinations of the two appraisers originally selected by the parties, and that choice by the third appraiser or arbitrator shall be binding upon Landlord and Tenant. Each party shall pay its own counsel fees and expenses, if any, in connection with any appraisal under this Paragraph 2.f, including the expenses and fees of any appraiser selected by it in accordance with the provisions of this Paragraph, and the parties shall share equally all other expenses and fees of any third appraiser or arbitration proceeding. The determination rendered in accordance with the provisions of this Paragraph shall be final and binding in fixing the fair market rental value. The appraisers and/or arbitrator shall not have the power to add to, modify or change any of the provisions of this Lease.

		If for any reason the fair market rental value shall not have been determined prior to the commencement of the Extension Term, then, until the fair market rental value and, accordingly, the Base Rent, shall have been finally determined, the Base Rent payable during the Extension Term, shall be equal to the fair market rental value proposed by Landlord. Upon final determination of the fair market rental value, an appropriate adjustment to the Base Rent shall be made reflecting such final determination, and Landlord or Tenant, as the case may be, shall refund or pay to the other any overpayment or deficiency, as the case may be, in the payment of Base Rent from the commencement of the Extension Term to the date of such final determination.

3.	Rent.

		As used in this Lease, the term “Rent” shall include: (i) the Base Rent; (ii) Tenant’s Percentage Share of the total dollar increase, if any, in the Operating Expenses paid or incurred by Landlord during the calendar year over the Operating Expenses paid or incurred by Landlord during the Base Year (as set forth in the Basic Lease Information) pursuant to Section 5, and (iii) all other amounts which Tenant is obligated to pay under the terms of this Lease. All amounts of money payable by Tenant to Landlord shall be paid without prior notice or demand, deduction or offset. If any installment of Rent is not paid by the tenth (10th) day of the month, Tenant shall pay to Landlord a late payment charge equal to five percent (5%) of the amount of the delinquent installment, in addition to the installment of Rent then owing, regardless of whether a notice of default or notice of termination has been given by Landlord. In addition to the five percent (5%) late charge, any Rent or other amounts owing hereinunder which are not paid within ten (10) days after the date they are due shall thereafter bear interest at the rate (“Interest Rate”) which is the lesser of eighteen percent (18%) per annum or the maximum rate permitted by law.

4.	Base Rent.

	a.	Initial Base Rent. Tenant shall pay Base Rent to Landlord (or other entity designated by Landlord), in advance, on the first day of each calendar month of the Term, at Landlord’s address for notices (as set forth in the Basic Lease Information) or at such other address as Landlord may designate. The Initial Base Rent shall be the amount set forth in the Basic Lease Information. By June 1, 2012, Tenant shall pay an amount equal to the monthly Base Rent stated on the Basic Lease Information, which shall be credited against the Base Rent due at the beginning of the Term. If Landlord chooses to pay the amount outlined in paragraph 2b than tenant shall start rent payment on December 1, 2011.

	b.	Rental Adjustment. The Initial Base Rent shall increase on December 1, 2012, and on each anniversary thereafter, by the amount set forth in the Rent Adjustment Addendum.


5.	Additional Rent - Annual Rent Adjustments/Operating Expenses.

	a.	Increase in Operating Expenses. Beginning with the calendar year 2012, Rent shall include Tenant’s Percentage Share of the total dollar increase, if any, in the Operating Expenses paid or incurred by Land lord during the calendar year over the Operating Expenses paid or incurred by Landlord during the Base Year. If the occupancy of the Building during the Base Year is less than 100%, Landlord shall make an appropriate adjustment of the Operating Expenses for the Base Year, using sound accounting and management principles, to determine the amount of Operating Expenses that would have been incurred had the Building been 100% occupied. This amount shall be considered to have been the amount of Operating Expenses for the Base Year.

	b.	Operating Expenses. The term “Operating Expenses” shall include all reasonable expenses and costs of every kind and nature which Landlord shall pay or become obligated to pay because of or in connection with the ownership and operation of the Building, Common Areas and Premises, surrounding property and supporting facilities. Operating Expenses shall include, without limitation, the following: (i) all impositions relating to the Building, Common Areas and Premises, including the Real Property Taxes (as defined in Section 5.d.); (ii) premiums for insurance relating to the Building, Common Areas and Premises as set forth in Sections 13.b., 13.d. and 13.h.; (iii) wages, salaries and related expenses and benefits of all on-site and off-site employees engaged in operation, maintenance and security; (iv) all supplies, materials and equipment rental used in operations; (v) all maintenance, janitorial, security and service costs; (vi) a management cost recovery; (vii) legal and accounting expenses, including the cost of audits by certified public accountants; (viii) repairs, replacements and general maintenance (excluding those paid for by proceeds of insurance or other parties, and alterations attributable solely to other tenants of the Building); (ix) all maintenance costs relating to the Building and Common Areas, including sidewalks, landscaping, service areas, mechanical rooms, parking areas, Building exterior and driveways; (x) amortization of the capital improvements to the extent the capital improvements reduce other Operating Expenses or to the extent that they are required by governmental authorities; (xi) all other operating, management and other expenses incurred by Landlord in connection with operation of the Building and Common Areas; (xii) all charges for heat, water, gas, electricity and other utilities used or consumed in the Building and Common Areas, entranceways, sidewalks, etc.; and (xiii) ground rent payments, if any.

		Notwithstanding anything contained herein to the contrary, Operating Expenses shall not include the following:


	A. Repairs or other work occasioned by the exercise of right of eminent domain;

	B. Leasing commissions, attorneys’ fees, costs and disbursements and other expenses, all of which are incurred in the connection with negotiations or disputes with tenants, other occupants or prospective tenants;

	C. Renovating or otherwise improving or decorating, painting or redecorating leased space for tenants or other occupants or vacant tenant space, other than ordinary maintenance provided to all tenants,;

	D. Landlord’s costs of electricity and other services sold separately to tenants for which Landlord is entitled to be reimbursed by such tenants as an additional charge over and above the base rent and operating expense or other rental adjustments payable under the Lease with such tenant, and domestic water sub metered and separately billed to tenants of the Building;

	E. Costs of items considered capital repairs, replacements, improvements and equipment under generally accepted accounting principles consistently applied or otherwise (“Capital Items”), except for:

		i. the annual amortization (amortized over the useful life) of costs, including financing costs, if any, incurred by Landlord after the effective date of the Lease for any capital improvements installed or paid for by Landlord and required by any new (or change in) laws, rules or regulations of any governmental or quasi-governmental authority which are enacted after the effective date of the Lease;

		ii. the annual amortization (amortized over the useful life) of costs, including financing costs, if any, or any equipment, device or capital improvement purchased or incurred as a labor-saving measure or to affect other economics in the operation or maintenance of the Building); or

		iii. minor capital improvements, tools, or expenditures to the extent each such improvement or acquisition costs less than Three Thousand ($3,000.00);

	F. Expenses in connection with services or other benefits of a type which Tenant is not entitled to receive under the Lease but which are provided to another tenant or occupant;

	G. Cost incurred due to violation by Landlord or any tenant of the terms and conditions of any lease;

	H. Overhead and profit paid to subsidiaries or affiliates of Landlord for services on or to the Building and/or Premises, to the extent only that the costs of such services exceeds competitive costs or such services were they not so rendered by a subsidiary or affiliate; provided, however, that the property management fee charged by an affiliate of Landlord shall not be in excess of the rates then customarily charged for building management for buildings of like class and character;


	I. Interest on debt or amortization payments on any mortgage or mortgages and under any ground or underlying leases or lease;

	J. Any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord;

	K. Any particular items and services for which Tenant otherwise reimburses Landlord by direct payment over and above base rent and operating expense adjustment;

	L. Advertising and promotional expenditures;

	M. Any expenses for which Landlord is compensated through proceeds of insurance

	N. Any and all costs arising from the release of hazardous materials or substances (as defined by applicable laws in effect on the date the Lease is executed) in or about the Premises, the Building or the land on which the Building is situated in violation of applicable law including, without limitation, hazardous substances in the ground water or soil, not placed by Tenant in the Premises, the Building, or the land on which the Building is situated;

	O. Costs incurred in connection with upgrading the Building to comply with the current interpretation of disability, life, fire and safety codes, ordinances, statutes, or other laws in effect prior to the effective date of the Lease, including, without limitation, the Americans with Disabilities Act (42 U.S.C. 12101 et seq .) and any penalties or damages incurred due to such non-compliance.

	P. Any insurance deductible amount incurred by Landlord in connection with any event for which Landlord is insured.


		Landlord shall not be in default under this Lease, nor be liable for any damages resulting from, nor shall the required Base Rent or Additional Rent be abated because of: (i) the installation, use, or interruption of use of any equipment in connection with owning, operating, or maintaining of the Building, Common Areas and Premises, surrounding property and supporting facilities; (ii) failure to furnish or delay in furnishing these services, when failure or delay is caused by accident or conditions beyond the reasonable control of Landlord or by necessary repairs or improvements to the Premises or to the Building; or, (iii) the limitation curtailment, rationing or restrictions on use of water, electricity, gas, or any other form of energy serving the Premises or the Building. Landlord shall use reasonable efforts to diligently remedy interruptions in the furnishing of these services.

	c.	Monthly Increments; Adjustment. Prior to the commencement of each of calendar year, Landlord shall estimate the amount of the Operating Expenses payable by Tenant for the next calendar year pursuant to this Section. With the exception of the base year Tenant shall pay to Landlord, on the first of each month, in advance, one-twelfth (1/12) of Landlord’s estimate. Within ninety (90) days after (or as soon thereafter as possible) the close of each calendar year, Landlord shall provide Tenant with a statement to account for any difference between the actual and the estimated Operating Expenses for the previous year. If Tenant has overpaid the amount of Operating Expenses owing pursuant to this Section, Landlord shall credit the overpayment against Tenant’s Percentage Share of Operating Expenses within thirty (30) days after Tenant’s receipt of Landlord’s statement. If Tenant has underpaid the amount of Operating Expenses owing pursuant to this Section, Tenant shall pay the amount of the underpayment to Landlord, as Additional Rent, within thirty (30) days after Tenant’s receipt of Landlord’s statement. However no underpayment will be due during the base year. If less than one hundred percent (100%) of the rentable area of the Building is occupied, Operating Expenses shall be adjusted to equal Landlord’s reasonable estimate of Operating Expenses if one hundred percent (100%) of the total rentable area of the Building were occupied.

	d.	Definition of Real Property Taxes. The term “Real Property Taxes” shall mean any ordinary or extraordinary form of assessment or special assessment, license fee, rent tax, levy, penalty (if a result of Tenant’s delinquency), or tax, other than net income, estate, succession, inheritance, transfer or franchise taxes, imposed by any authority having the direct or indirect power to tax, or by any city, county, state or federal government for any maintenance or improvement or other district or division thereof. The term shall include all transit charges, housing fund assessments, real estate taxes and all other taxes relating to the Premises, Building and/or Property, all other taxes which may be levied in lieu of real estate taxes, all assessments, assessment bonds, levies, fees, and other governmental charges (including, but not limited to, charges for traffic facilities, improvements, child care, water services studies and improvements, and fire services studies and improvements) for amounts necessary to be expended because of governmental orders, whether general or special, ordinary or extraordinary, unforeseen as well as foreseen, of any kind and nature for public improvement, services, benefits or any other purposes which are assessed, levied, confirmed, imposed or become a lien upon the Premises, Building or Property or become payable during the Term.

	e.	Acknowledgment of Parties. It is acknowledged by Landlord and Tenant that Proposition 13 was adopted by the voters of the State of California in the June, 1978 election, and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such purposes as fire protection, street, sidewalk, road, utility construction and maintenance, refuse removal and for other governmental services which formerly may have been provided without charge to property owners or occupants. It is the intention of the parties that all new and increased assessments, taxes, fees, levies and charges due to Proposition 13 or any other cause are to be included within the definition of Real Property Taxes for purposes of this Lease.


	f.	Taxes on Tenant Improvements and Personal Property. Notwithstanding any other provision hereof, Tenant shall pay the full amount of any increase in Real Property Taxes during the Term resulting from any and all alterations and tenant improvements of any kind whatsoever placed in, on or about the Premises for the benefit of, at the request of, or by Tenant. Tenant shall pay, prior to delinquency, all taxes assessed or levied against Tenant’s personal property in, on or about the Premises. When possible, Tenant shall cause its personal property to be assessed and billed separately from the real or personal property of Landlord.

	g.	Tenant’s Right to Audit Operating Expenses. Tenant shall have the right, after reasonable notice and at reasonable times during business hours, at Tenant’s sole cost and expense (and, to the extent Tenant retains consultants in connection with the audit, such consultants shall be paid on an hourly basis and not on a contingency basis or a percentage of savings), to inspect and photocopy Landlord’s accounting records relating to Operating Expenses and claimed expenses arising under this Section 5, and to dispute the amount and/or its proportionate share thereof. Tenant must pay in full the assessed charges when due and any agreed upon discrepancy will be adjusted. The audit should be conducted within 60 days of tenant receiving year end operating expense adjustments and can be for only the most current adjustment period. The audit results must be kept confidential. If the Tenant and Landlord do not mutually agree on the findings of the Operating Expense audit then a jointly approved auditor will be appointed. If the jointly appointed auditor finds that the Landlord overstated the Operating Expenses by more than 5%, then the Landlord shall pay all expenses of the auditor. If the jointly appointed auditor finds that the Operating Expenses were not overstated by more than 5%, then the Tenant shall pay all expenses of the auditor and all the reasonable fees incurred by Landlord’s management company or accountant in connection with the audit.

6.	Proration of Rent.

	If the Rent Commencement Date is not the first day of the month, or if the end of the Term is not the last day of the month, Rent shall be prorated on a monthly basis for the fractional month during the month which this Lease commences or terminates. The termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to Subsection 5.c. which are to be performed after the termination.

7.	Tenant Improvements.

	[Intentionally Deleted.]

8.	Use of the Premises.

	a.	Use. The Premises shall be used solely for the use set forth in the Basic Lease Information and for no other use.

	b.	Rules and Regulations. Tenant shall comply with the Rules and Regulations attached hereto as Exhibit C . Landlord shall give Tenant thirty (30) days prior written notice of the adoption of new rules and regulations or any changes or additions to existing rules and regulations. All rules and regulations shall be applied to tenants in a non-discriminatory manner.

	c.	Compliance. Tenant, at its sole cost and expense, shall promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which hereinafter may be in force, with the requirements of any board of fire underwriters or other similar board now or hereafter constituted, with any direction or occupancy certificate issued pursuant to any law by any public officer or officers, as well as the provisions of all recorded documents affecting the Premises, insofar as any thereof relate to or affect the condition, use or occupancy of the Premises.

9.	Alterations.

	a.	Permitted Alterations. Tenant shall give Landlord not less than ten (10) days’ notice of any alteration Tenant desires to make to the Premises. Tenant shall not make any alteration in, on or about the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Tenant shall be allowed to make non-material alterations, additions or improvements to the Premises without Landlord’s consent; provided, however, that Tenant shall provide Landlord with at least ten (10) days notice prior to commencing any such alterations, additions or improvements. For the purpose of this paragraph, the term “non-material” shall mean any alteration, addition or improvement which does not affect the structure of the Building (including its Building systems) or the Premises and which costs less than $5,000.00. Tenant shall comply with all rules, laws, ordinances and requirements at the time Tenant makes any alteration and shall deliver to Landlord a complete set of “as built” plans and specifications for each alteration. Tenant shall be solely responsible for maintenance and repair of all alterations made by Tenant. As used in this Section 9, the term “alteration” shall include any alteration, addition or improvement.


	b.	Liens. If, because of any act or omission of Tenant or anyone claiming by, through, or under Tenant, any mechanic’s lien or other lien is filed against the Premises, the Building, the Property or against other property of Landlord (whether or not the lien is valid or enforceable), Tenant shall, at its own expense, cause it to be discharged of record within a reasonable time, not to exceed thirty (30) days, after the date of the filing. In addition, Tenant shall defend and indemnify Landlord and hold it harmless from any and all claims, losses, damages, judgments, settlements, costs and expenses, including attorneys’ fees, resulting from the lien.

	c.	Ownership of Alterations. Any alteration made by Tenant shall immediately become Landlord’s property. Landlord may require Tenant, in Landlord’s written consent to such alteration, at Tenant’s sole expense and by the end of the Term, to remove any alterations made by Tenant and to restore the Premises to its condition prior to the alteration. Tenant shall be free to leave in place any alteration upon termination or expiration of the term of the Lease unless Landlord specified in its written consent to such alteration that they must be removed prior to the expiration or earlier termination of the Lease.

10.	Repairs.

	Tenant, at all times during the Term and at Tenant’s sole cost and expense, shall keep the Premises and every part thereof in good condition and repair; ordinary wear and tear, damage thereto not caused by Tenant, damage by fire, earthquake, acts of God or the elements excepted. Tenant hereby waives all right to make repairs at the expense of Landlord or in lieu thereof to vacate the Premises as provided in California Civil Code Section 1942 or any other law, statute or ordinance now or hereafter in effect.

	In addition, and subject to reimbursement pursuant to Section 5, Landlord covenants and agrees Landlord will do the following:


		A. Maintain the exterior of the Building containing the Premises, together with all landscaping and parking garage located in said Building, in good order and repair consistent with a Class A office building in downtown Santa Rosa;

		B. Make all repairs (including all subsurface repairs to electric wiring, risers, plumbing, heating, air conditioning and any other Building systems serving the Premises); excluding any Tenant specific cabling, phone lines, wiring, specialized HVAC or other items not installed by Landlord.

		C. Make all structural repairs (including all subsurface repairs) to said Building, including but not limited to, all repairs to the foundation, roof, structure, exterior walls, and common area doors and windows.


	Tenant shall promptly notify Landlord of the necessity of any repairs of which Tenant may have knowledge and for which Landlord may be responsible under the provisions of this paragraph.

11.	Damage or Destruction.

	a.	Landlord’s Obligation to Rebuild. If the Premises are damaged or destroyed, Landlord shall promptly and diligently repair the Premises unless Landlord has the option to terminate this Lease as provided herein, and Landlord elects to terminate.

	b.	Right to Terminate. Landlord and Tenant each shall have the option to terminate this Lease if the Premises or the Building is destroyed or damaged by fire or other casualty, regardless of whether the casualty is insured against under this Lease, if Landlord reasonably determines that the repair of the Premises or the Building cannot be completed within two hundred seventy (270) days after the casualty. If a party desires to exercise the right to terminate this Lease as a result of a casualty, the party shall exercise the right by giving the other party written notice of its election to terminate within thirty (30) days after the damage or destruction, in which event this Lease shall terminate fifteen (15) days after the date of the notice. If neither Landlord nor Tenant exercises the right to terminate this Lease, Landlord shall promptly commence the process of obtaining necessary permits and approvals, and shall commence repair of the Premises or the Building as soon as practicable and thereafter prosecute the repair diligently to completion, in which event this Lease shall continue in full force and effect.

	c.	Limited Obligation to Repair. Landlord’s obligation, should Landlord elect or be obligated to repair or rebuild, shall be limited to the Building warm shell. Tenant, at its option and expense, shall replace or fully repair all trade fixtures, tenant improvements, equipment and other improvements installed by Tenant and existing at the time of the damage or destruction.

	d.	Abatement of Rent. In the event of any damage or destruction to the Premises which does not result in termination of this Lease, the Base Rent shall be temporarily abated proportionately to the degree the Premises are untenantable as a result of the damage or destruction, commencing from the date of the damage or destruction and continuing during the period required by Landlord to substantially complete its repair and restoration of the Premises; provided, however, that nothing herein shall preclude Landlord from being entitled to collect the full amount of any rent loss insurance proceeds. Tenant shall not be entitled to any compensation or damages from Landlord for loss of the use of the Premises, damage to Tenant’s personal property or any inconvenience occasioned by any damage, repair or restoration. Tenant hereby waives the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4, of the California Civil Code, and the provisions of any similar law hereafter enacted.


	e.	Damage Near End of Term and Extensive Damage. In addition to the rights to termination under Sub-section 11.b., Landlord shall have the right to cancel and terminate this Lease as of the date of the occurrence of destruction or damage if the Premises or the Building is substantially destroyed or damaged ( i.e ., there is damage or destruction which Landlord determines would require more than six [6] months to repair) and made untenantable during the last twelve (12) months of the Term. Landlord shall give notice of its election to terminate this Lease under this Subsection 11.e. within thirty (30) days after Landlord determines that the damage or destruction would require more than six (6) months to repair. If Landlord does not elect to terminate this Lease, the repair of the damage shall be governed by Subsection 11.a. or 11.b., as the case may be.

	f.	Insurance Proceeds. If this Lease is terminated, Landlord may keep all the insurance proceeds resulting from the damage, except for those proceeds which specifically insured Tenant’s personal property and trade fixtures.

	g.	Tenant’s Right to Terminate. Tenant shall have the right to terminate the Lease if Landlord shall not have completed the repairs or restoration within two hundred seventy days from the date of casualty, which may be extended due to Acts of God, perils of nature and third party approvals out of the control of Landlord.

12.	Eminent Domain.

	If all or any part of the Premises is taken for public or quasi-public use by a governmental authority under the power of eminent domain or is conveyed to a governmental authority in lieu of such taking, and if the taking or conveyance causes the remaining part of the Premises to be untenantable and inadequate for use by Tenant for the purpose for which they were leased, then Tenant, at its option and by giving notice within thirty (30) days after the taking, may terminate this Lease as of the date Tenant is required to surrender possession of the Premises. If a part of the Premises is taken or conveyed but the remaining part is tenantable and adequate for Tenant’s use, then this Lease shall be terminated as to the part taken or conveyed as of the date Tenant surrenders possession; Landlord shall make such repairs, alterations and improvements as may be necessary to render the part not taken or conveyed tenantable; and the Rent shall be reduced in proportion to the part of the Premises taken or conveyed. All compensation awarded for the taking or conveyance shall be the property of Landlord without any deduction therefrom for any estate of Tenant, and Tenant hereby assigns to Landlord all its right, title and interest in and to the award. Tenant shall have the right, however, to recover from the governmental authority, but not from Landlord, such compensation as may be awarded to Tenant on account of the interruption of Tenant’s business, moving and relocation expenses and removal of Tenant’s trade fixtures and personal property.

13.	Indemnity and Insurance.

	a.	Indemnity. Except if caused by the gross negligence or willful misconduct of Landlord or its agents, Tenant shall be responsible for, shall insure against, and shall indemnify Landlord and its constituent parts and hold them harmless from, any and all liability for any loss, damage or injury to person or property occurring in, on or about the Premises arising out of the use or occupancy of the premises by Tenant, the acts or omission of the Tenant’s invitees and guests, and the conduct of business by Tenant on the premises, and Tenant hereby releases Landlord and its constituent parts from any and all liability for the same except if caused by the gross negligence or willful misconduct of Landlord or its agents. Tenant’s obligation to indemnify Landlord and its constituent parts hereunder shall include the duty to defend against any claims asserted by reason of any loss, damage or injury for which Tenant has indemnified Landlord in Section 13(a), and to pay any judgments, settlements, costs, fees and expenses, including attorneys’ fees, incurred in connection therewith.

	b.	Fire and Extended Coverage. Landlord shall procure and maintain in full force and effect with respect to the Building a policy or policies of all risk insurance in an amount equal to at least ninety percent (90%) of the full insurance replacement value thereof, the expense of which shall be reimbursed under Section 5.

	c.	Public Liability. Tenant, at its own cost and expense, shall keep and maintain in full force and effect during the Term a policy or policies of comprehensive public liability insurance, written by an insurance company approved by Landlord, in the form customary to the locality, insuring Tenant’s activities with respect to the Premises and/or the Building against loss, damage or liability for personal injury or death of any person or loss or damage to property occurring in, upon or about the Premises, covering bodily injury in the amounts of Two Million Dollars ($2,000,000) per person and Two Million Dollars ($2,000,000) per occurrence, and covering property damage in the amount of full replacement value; provided, however, that if, at any time during the Term, Tenant shall have in full force and effect a blanket policy of public liability insurance with the same coverage for the Premises as described above, as well as coverage of other premises and properties of Tenant, or in which Tenant has some interest, the blanket insurance shall satisfy the requirement hereof.


	d.	Rental Abatement Insurance. Landlord may keep and maintain in full force and effect during the Term rental abatement insurance against abatement or loss of Rent in case of fire or other casualty, in an amount at least equal to the amount of Rent payable by Tenant during one (1) year of the Term, as reasonably determined by Landlord, the expense of which shall be reimbursed under Section 5.

	e.	Insurance Certificates. Tenant shall furnish to Landlord, upon the Commencement Date and thereafter within thirty (30) days prior to the expiration of each policy, a certificate of insurance issued by the insurance carrier of each policy of insurance carried by Tenant pursuant to this Section 13. The certificates shall expressly provide that the policies shall not be cancelable or subject to reduction of coverage or otherwise be subject to modification except after thirty (30) days’ prior written notice to the parties named as insured. Landlord, its successors, agents, assigns, and any nominee of Landlord holding any interest in the Premises, including, without limitation, any ground lessor or the holder of any fee or leasehold mortgage, shall be named as an insured under each policy of insurance maintained by Tenant pursuant to this Lease.

	f.	Tenant’s Failure. Tenant’s failure to maintain any insurance required by this Lease, shall be an Event of Default, and Tenant shall be liable for any loss or costs resulting from the failure.

	g.	Tenant’s Property and Fixtures. Tenant shall assume the risk of theft or damage to any furniture, equipment, machinery, goods, supplies or fixtures which are or remain the property of Tenant, or as to which Tenant retains the right of removal from the Premises.

	h.	Earthquake and Flood Insurance. In addition to any other insurance policies carried by Landlord in connection with the Building, Landlord may elect to procure and maintain in full force and effect during the Term with respect to the Building a policy of earthquake/volcanic action and flood and/or surface water insurance, including rental value insurance against abatement or loss of rent in the case of damage or loss covered under the earthquake/volcanic and flood and/or surface water insurance, in an amount equal to one hundred percent (100%) of the full insurance replacement value (including debris removal and demolition) of the Building. All premiums for insurance under this section 13..h. are subject to reimbursement under Section 5

14.	Assignment or Sublet.

	If Tenant desires to assign this Lease or to sublet the Premises, or any part thereof, Tenant shall give to Landlord written notice of its intent at least thirty (30) days in advance of the date on which Tenant desires to assign or sublet the Premises. Landlord shall have thirty (30) days after receipt of Tenant’s written notice within which to notify Tenant in writing that Landlord elects to (i) permit Tenant to assign this Lease or sublet the Premises, subject, however, to written approval of the proposed assignee or subtenant by Landlord, and further subject to the requirement that Tenant enter into written agreements with Landlord and the assignee or subtenant requiring that fifty percent (50%) of the excess moneys due to Tenant under the assignment or sublet over the Rent to be required to be paid by Tenant hereunder shall be paid to Landlord; or (ii) refuse to consent to Tenant’s assignment or sublet and to continue this Lease in full force and effect as to the entire Premises. Landlord’s consent to any Assignment or Sublet shall not be unreasonably witheld . If Landlord fails to notify Tenant in writing of its election within the thirty (30) day period, Landlord shall be deemed to have elected the option set forth in Subsection (i) hereof. No consent by Landlord to any assignment or sublet shall be deemed to be a consent to a use not permitted under this Lease, to any act in violation of this Lease or to any subsequent assignment or sublet. No assignment or sublet by Tenant shall relieve Tenant of any obligation under this Lease. Any attempted assignment or sublet by Tenant in violation of the terms and covenants of this Section shall be void.

	Without limiting other instances in which Landlord may reasonably withhold consent to an assignment or subletting, Landlord and Tenant acknowledge that it shall be reasonable for Landlord to withhold consent in the following instances: (i) if at the time consent is requested or at any time prior to the granting of consent, an Event of Default has occurred under this Lease; (ii) if the proposed assignee or subtenant is a governmental agency; (iii) if, in Landlord’s reasonable judgment, use of the Premises by the proposed assignee or subtenant would not be comparable to the office use by other tenants in the Building, would entail alterations that would materially lessen the value of the leasehold improvements in the Premises (unless Tenant provides adequate security to ensure that the Premises will be restored to their prior condition), would resulting more than a reasonable number of occupants, or would require substantially increased services by Landlord; (iv) if the financial worth of the proposed assignee or subtenant does not meet the credit standards applied by Landlord for other tenants under leases with comparable terms; or, (v) if, in Landlord’s reasonable judgment, the character, reputation, or business of the proposed assignee or subtenants is not consistent with the quality or businesses of the other tenancies in the Building.



	Notwithstanding anything contained herein to the contrary, Tenant shall have the right to assign, hypothecate, or mortgage the Lease, or sublet the Premises or any portion thereof, without the consent of Landlord, including any assignment or sublease: (i) to any corporation with which Tenant may merge or consolidate, which acquires all or substantially all of the shares of stock or assets of Tenant or which is a parent or subsidiary of Tenant, or which is the successor corporation in the event of a corporate reorganization; (ii) to any entity controlled by, controlling, or under common control with American River Bankshares; (iii) to any entity controlled by, controlling, or under common control with Tenant. Any such assignment shall not relieve Tenant of liability under this Lease unless expressly approved in writing by Landlord. “Control” means the direct or indirect possession of the power to direct or cause the direction of the management or policies of an entity. Notwithstanding anything in the Lease to the contrary, no change of control of Tenant shall require the consent of the Landlord.


15.	Default.

	a.	Tenant’s Default. At the option of Landlord, a material breach of this Lease by Tenant shall exist if any of the following events (severally, “Event of Default”; collectively, “Events of Default”) shall occur: (i) if Tenant shall have failed to pay Rent, including Tenant’s Percentage Share of increased Operating Expenses, or any other sum required to be paid hereunder when due, together with interest at the Interest Rate, from the date the amount became due through the date of payment, inclusive and such failure continues for ten (10) days after receipt of written notice thereof from Landlord; (ii) if Tenant shall have failed to perform any term, covenant or condition of this Lease except those requiring the payment of money, and Tenant shall have failed to cure the breach within thirty (30) days after written notice from Landlord if the breach could reasonably be cured within the thirty (30) day period; provided, however, if the failure could not reasonably be cured within the thirty (30) day period, then Tenant shall not be in default unless it has failed to promptly commence and thereafter continue to make diligent and reasonable efforts to cure the failure as soon as practicable as reasonably determined by Landlord; (iii) if Tenant shall have assigned its assets for the benefit of its creditors; (iv) if the sequestration of, attachment of, or execution on, any material part of the property of Tenant or on any property essential to the conduct of Tenant’s business shall have occurred, and Tenant shall have failed to obtain a return or release of the property within thirty (30) days thereafter, or prior to sale pursuant to any sequestration, attachment or levy, whichever is earlier; (v) if a court shall have made or entered any decree or order adjudging Tenant to be insolvent, or approving as properly filed a petition seeking reorganization of Tenant, or directing the winding up or liquidation of Tenant, and the decree or order shall have continued for a period of thirty (30) days; (vi) if Tenant shall make or suffer any transfer which constitutes a fraudulent or otherwise avoidable transfer under any provision of the federal Bankruptcy Laws or any applicable state law; or (vii) if Tenant shall have failed to comply with the provisions of Sections 23 or 25 of this Lease. An Event of Default shall constitute a default under this Lease.

	b.	Remedies Upon Tenant’s Default. Upon an Event of Default, Landlord shall have the following remedies, in addition to all other rights and remedies provided by law, equity, statute or otherwise provided in this Lease, to which Landlord may resort cumulatively or in the alternative:

		(i)	Landlord may continue this Lease in full force and effect, and this Lease shall continue in full force and effect as long as Landlord does not terminate Tenant’s right to possession, and Landlord shall have the right to collect Rent when due. During the period Tenant is in default, Landlord may enter the Premises and relet it, or any part of it, to third parties for Tenant’s account, provided that any Rent in excess of the Rent due hereunder shall be payable to Landlord. Tenant shall be liable immediately to Landlord for all costs Landlord incurs in reletting the Premises, including, without limitation, brokers’ commissions, expenses of cleaning and redecorating the Premises required by the reletting and like costs. Reletting may be for a period shorter or longer than the remaining Term of this Lease. Tenant shall pay to Landlord the Rent and other sums due under this Lease on the dates the Rent is due, less the Rent and other sums Landlord receives from any reletting. No act by Landlord allowed by this Subsection (i) shall terminate this Lease unless Landlord notifies Tenant in writing that Landlord elects to terminate this Lease.

		(ii)	Landlord may terminate Tenant’s right to possession of the Premises at any time by giving written notice to that effect. No act by Landlord other than giving written notice to Tenant shall terminate this Lease. Acts of maintenance, efforts to relet the Premises or the appointment of a receiver on Landlord’s initiative to protect Landlord’s interest under this Lease shall not constitute a termination of Tenant’s right to possession. On termination, Landlord shall have the right to remove all personal property of Tenant and store it at Tenant’s cost and to recover from Tenant as damages: (a) the worth at the time of award of unpaid Rent and other sums due and payable which had been earned at the time of termination; plus (b) the worth at the time of award of the amount by which the unpaid Rent and other sums due and payable which would have been payable after termination until the time of award exceeds the amount of the Rent loss that Tenant proves could have been reasonably avoided; plus (c) the worth at the time of award of the amount by which the unpaid Rent and other sums due and payable for the balance of the Term after the time of award exceeds the amount of the Rent loss that Tenant proves could be reasonably avoided; plus (d) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease, or which, in the ordinary course of things, would be likely to result therefrom, including, without limitation, any costs or expenses incurred by Landlord: (1) in retaking possession of the Premises, including reasonable attorneys’ fees and costs therefor; (2) maintaining or preserving the Premises for reletting to a new tenant, including repairs or alterations to the Premises for the reletting; (3) leasing commissions; (4) any other costs necessary or appropriate to relet the Premises; and (5) at Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by the laws of the State of California.


			The “worth at the time of award” of the amounts referred to in Subsections (ii)(a) and (ii)(b) is computed by allowing interest at the lesser of eighteen percent (18%) per annum or the maximum rate permitted by law, on the unpaid Rent and other sums due and payable from the termination date through the date of award. The “worth at the time of award” of the amount referred to in Subsection (ii)(c) is computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award, plus one percent (1%). Tenant waives redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or under any other present or future law, if Tenant is evicted or Landlord takes possession of the Premises by reason of any default of Tenant hereunder.

	c.	Landlord’s Default. Landlord shall not be deemed to be in default in the performance of any obligation required to be performed by Landlord hereunder unless and until Landlord has failed to perform the obligation within thirty (30) days after receipt of written notice by Tenant to Landlord specifying wherein Landlord has failed to perform the obligation; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be deemed to be in default if Landlord shall commence the performance within the thirty (30) day period and thereafter shall diligently prosecute the same to completion.

16.	Landlord’s Right to Perform Tenant’s Covenants.

	If Tenant shall at any time fail to make any payment or perform any other act on its part to be made or performed under this Lease, Landlord may, but shall not be obligated to, make the payment or perform any other act to the extent Landlord may deem desirable and, in connection therewith, pay expenses and employ counsel. Any payment or performance by Landlord shall not waive or release Tenant from any obligations of Tenant under this Lease. All sums so paid by Landlord, and all penalties, interest and costs in connection therewith, shall be due and payable by Tenant on the next day after any payment by Landlord, together with interest thereon at the Interest Rate, from that date to the date of payment thereof by Tenant to Landlord, plus collection costs and attorneys’ fees. Landlord shall have the same rights and remedies for the nonpayment thereof as in the case of default in the payment of Rent.

17.	Security Deposit.

	Intentionally omitted

18.	Surrender of Premises.

	On the expiration or early termination of this Lease, Tenant shall surrender the Premises to Landlord in its condition as of the Commencement Date, normal wear and tear excepted. Tenant shall remove from the Premises all of Tenant’s personal property, trade fixtures and any alterations required to be removed pursuant to Section 9 of this Lease. Tenant shall repair damage or perform any restoration work required by the removal. If Tenant fails to remove any personal property, trade fixtures or alterations after the end of the Term, Landlord may remove the property and store it at Tenant’s expense, including interest at the Interest Rate. If the Premises are not so surrendered at the termination of this Lease, Tenant shall indemnify Landlord against all loss or liability resulting from delay by Tenant in so surrendering the Premises, including, without limitation, any claims made by any succeeding tenant, losses to Landlord due to lost opportunities to lease to succeeding tenants, and attorneys’ fees and costs. Should Tenant surrender the premises Landlord shall not allow another bank branch to open for business prior to forty five (45) days after the date of Tenants last day of occupancy.

19.	Holding Over.

	If Tenant remains in possession of all or any part of the Premises after the expiration of the Term or the termination of this Lease without the consent of the landlord, the tenancy shall be month-to-month only and shall not constitute a renewal or extension for any further term. In such event, Base Rent shall be increased in an amount equal to one hundred fifty percent (150%) of the Base Rent during the last month of the Term (including any extensions), and any other sums due under this Lease shall be payable in the amount, and at the times, specified in this Lease. The month-to-month tenancy shall be subject to every other term, condition, covenant and agreement contained in this Lease and Tenant shall vacate the Premises immediately upon Landlord’s request


20.	Access to Premises.

	Tenant shall permit Landlord and its agents to enter the Premises at all reasonable times upon twenty-four (24) hours prior notice, except in an emergency, to inspect the Premises; to post Notices of Nonresponsibility and similar notices and to show the Premises to interested parties such as prospective mortgagors, purchasers and tenants; to make necessary alterations, additions, improvements or repairs either to the Premises, the Building, or other premises within the Building; and to discharge Tenant’s obligations hereunder when Tenant has failed to do so within a reasonable time after written notice from Landlord. The above rights are subject to reasonable security regulations of Tenant, and to the requirement that Landlord shall at all times act in a manner to cause the least possible interference with Tenant’s operations. In a non emergency situation Landlord and Landlord’s agents shall be accompanied by the Tenant.

21.	Signs.

	The size, design, color, location and other physical aspects of any sign in or on the Building shall be subject to Landlord’s approval prior to installation which approval shall not be unreasonably withheld, or delayed, and to any appropriate municipal or other governmental approvals. Landlord, at Landlord’s sole cost and expense shall provide lobby directory board signage to Tenant. Tenant, at its sole cost and expense, shall be allowed to install suite entry signage and Building top signage with Landlord’s approval which shall not be unreasonably withheld or delayed. Tenant shall give Landlord written notice no later than one hundred eighty (180) days after the Commencement Date of Tenant’s intention to proceed to install building top signage. If Landlord does not receive written notice within the time specified, or if Tenant shall thereafter fail to proceed without undue delay to install the building top signage, Landlord shall have the right to offer the signage area to another tenant with no further liability to Tenant. The costs of any permitted sign, and the costs of its installation, maintenance and removal shall be at Tenant’s sole expense. Tenant, at its sole cost and expense, shall also be responsible to repair any damage caused by such removal and shall restore the area to the condition prior the installation of such signage.

22.	Waiver of Subrogation.

	Anything in this Lease to the contrary notwithstanding, Landlord and Tenant each hereby waives and releases the other of and from any and all rights of recovery, claim, action or cause of action against the other, its subsidiaries, directors, agents, officers and employees, for any loss or damage that may occur in the Premises, the Building or the Property; to improvements to the Building or personal property (building contents) within the Building; or to any furniture, equipment, machinery, goods and supplies not covered by this Lease which Tenant may bring or obtain upon the Premises or any additional improvements which Tenant may construct on the Premises by reason of fire, the elements or any other cause which is required to be insured against under this Lease, regardless of cause or origin, including negligence of Landlord or Tenant and their agents, subsidiaries, directors, officers and employees, to the extent insured against under the terms of any insurance policies carried by Landlord or Tenant and in force at the time of any such damage, except Worker’s Compensation insurance in situations where Landlord is at fault, but only if the insurance in question permits such a partial release in connection with obtaining a waiver of subrogation from the insurer. Because this Section 22 will preclude the assignment of any claim mentioned in it by way of subrogation or otherwise to an insurance company or any other person, each party to this Lease agrees immediately to give to each of its insurance companies written notice of the terms of the mutual waivers contained in this Section 22 and to have the insurance policies properly endorsed, if necessary, to prevent the invalidation of the insurance coverages by reason of the mutual waivers contained in this Section 22.

23.	Subordination.

	a.	Subordinate Nature. Except as provided in Subsection b., this Lease is subject and subordinate to all ground and underlying leases, mortgages and deeds of trust which now or may hereafter affect the Property, the Building or the Premises, to the CC&R’s, and to all renewals, modifications, consolidations, replacements and extensions thereof. Within fifteen (15) days after Landlord’s written request, Tenant shall execute any and all documents required by Landlord, the lessor under any ground or underlying lease (“Lessor”), or the holder or holders of any mortgage or deed of trust (“Holder”) to make this Lease subordinate to the lien of any lease, mortgage or deed of trust, as the case may be.

	b.	Possible Priority of Lease. If a Lessor or a Holder advises Landlord that it desires or requires this Lease to be prior and superior to a lease, mortgage or deed of trust, Landlord may notify Tenant. Within fifteen (15) days of Landlord’s notice, Tenant shall execute, have acknowledged and deliver to Landlord any and all documents or instruments, in the form presented to Tenant, which Landlord, Lessor or Holder deems necessary or desirable to make this Lease prior and superior to the lease, mortgage or deed of trust.


	c.	Recognition or Attornment Agreement. If Landlord or Holder requests Tenant to execute a document subordinating this Lease, the document shall provide that, so long as Tenant is not in default, Lessor or Holder shall agree to enter into either a recognition or attornment agreement with Tenant, or a new lease with Tenant upon the same terms and conditions as to possession of the Premises, which shall provide that Tenant may continue to occupy the Premises so long as Tenant shall pay the Rent and observe and perform all the provisions of this Lease to be observed and performed by Tenant.

24.	Transfer of the Property.

	Upon transfer of the Property and assignment of this Lease, Landlord shall be entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease occurring after the consummation of the transfer and assignment, and from all liability for the Security Deposit. Tenant shall attorn to any entity purchasing or otherwise acquiring the Premises at any sale or other proceeding.

25.	Estoppel Certificates.

	Within fifteen (15) days following written request by Landlord, Tenant shall execute and deliver to Landlord an estoppel certificate, in the form prepared by Landlord. The certificate shall: (i) certify that this Lease is unmodified and in full force and effect or, if modified, state the nature of the modification and certify that this Lease, as so modified, is in full force and effect, and the date to which the Rent and other charges are paid in advance, if any; (ii) acknowledge that there are not, to Tenant’s knowledge, any uncured defaults on the part of Landlord hereunder, or if there are uncured defaults on the part of the Landlord, state the nature of the uncured defaults; (iii) evidence the status of this Lease as may be required either by a lender making a loan to Landlord to be secured by deed of trust or mortgage covering the Premises or a purchaser of the Property from Landlord; and, (iv) other matters as may reasonably be requested by Landlord.

26.	Mortgagee Protection.

	In the event of any default on the part of Landlord, Tenant will give notice by registered or certified mail to any beneficiary of a deed of trust or mortgagee of a mortgage covering the Property and shall offer the beneficiary or mortgagee a reasonable opportunity to cure the default, including time to obtain possession of the Property or the Premises by power of sale or a judicial foreclosure, if such should prove necessary to effect a cure.

27.	Attorneys’ Fees.

	If either party shall bring any action or legal proceeding for damages for an alleged breach of any provision of this Lease, to recover rent or other sums due, to terminate the tenancy of the Premises or to enforce, protect or establish any term, condition or covenant of this Lease or right of either party, the prevailing party shall be entitled to recover, as a part of the action or proceedings, or in a separate action brought for that purpose, reasonable attorneys’ fees and court costs as may be fixed by the court or jury. The prevailing party shall be the party which secures a final judgment in its favor.

28.	Brokers.

	Tenant warrants and represents that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease, except for any brokers(s) specified in the Basic Lease Information, and that it knows of no other real estate broker or agent who is or might be entitled to a commission in connection with this Lease. Tenant shall indemnify and hold harmless Landlord from and against any and all liabilities or expenses arising out of claims made by any other broker or individual for commissions or fees resulting from this Lease. The leasing commission shall be payable as follows: (i) one-half (1/2) upon execution of this Lease; and, (ii) one-half (1/2) upon Tenant’s occupancy after the Lease Commencement Date. The commission shall be calculated based upon Base Rent during the initial Lease Term based on the initial Base Rent and shall be equal to the schedule as outlined in the listing agreement.


29.	Utilities and Services.

	Provided that there has been no Event of Default, Landlord agrees to furnish, or cause to be furnished, to the Premises the utilities and services described in the standards for Utilities and Services, set forth in Exhibit D , subject to the conditions and in accordance with the standards set forth therein. Landlord shall not be liable for, and Tenant shall not be entitled to any abatement or reduction of Rent by reason of, no eviction of Tenant shall result from and, further, Tenant shall not be relieved from the performance of any covenant or agreement in this Lease because of, Landlord’s failure to furnish any of the foregoing when the failure is caused by accident, breakage, or repairs, strikes, lockouts or other labor disturbance or labor dispute of any character, governmental regulation, moratorium or other governmental action, inability despite the exercise of reasonable diligence to obtain electricity, water or fuel, or by any other cause beyond Landlord’s reasonable control. In the event of any failure, stoppage or interruption thereof, Landlord shall diligently attempt to resume service.

30.	Intentionally Omitted.

	If the Premises are needed for use in conjunction with another suite or for other reasons connected with Landlord’s Building planning requirements, upon notifying Tenant in writing (“Relocation Notice”), Landlord shall have the right to move Tenant to other space in the Building. If Landlord moves Tenant, Landlord shall pay Tenant’s reasonable moving expenses and the terms and conditions of this Lease shall remain in full force and effect, except that a revised Exhibit A shall become part of this Lease and shall reflect the location of the new space, and the Basic Lease Information shall be amended to include and state all correct data as to the new space. Neither Landlord nor its subsidiaries, agents, directors or employees shall be liable for any consequential damages of Tenant caused by a relocation.

31.	Acceptance.

	Delivery of this Lease, duly executed by Tenant, constitutes an offer to lease the Premises as set forth herein, and under no circumstances shall such delivery be deemed to create an option or reservation to lease the Premises for the benefit of Tenant. This Lease shall become effective and binding only upon execution hereof by Landlord and delivery of a signed copy to Tenant. Upon acceptance of Tenant’s offer to lease under the terms hereof and receipt by Landlord of the Rent for the first month of the Term and the Security Deposit in connection with Tenant’s submission of the offer, Landlord shall be entitled to retain the sums and apply them to damages, costs and expenses incurred by Landlord if Tenant fails to occupy the Premises. If Landlord rejects the offer, the sums shall be returned to Tenant.

32.	Use of Building Name.

	Tenant shall not employ the name of the Building in the name or title of its business or occupation without Landlord’s prior written consent, which consent Landlord may withhold in its sole discretion. Landlord reserves the right to change the name of the Building without Tenant’s consent and without any liability to Landlord.

33.	Recording.

	Neither Landlord nor Tenant shall record this Lease, nor a short form memorandum of this Lease, without the prior written consent of the other. Landlord acknowledges that Tenant may be required to file the lease as an exhibit on a Form 8-K.

34.	Quitclaim.

	Upon any termination or expiration of this Lease pursuant to its terms, Tenant, at Landlord’s request, shall execute, have acknowledged and deliver to Landlord a quitclaim deed of all Tenant’s interest in the Premises, Building and Property created by this Lease.

35.	Notices.

	Any notice or demand required or desired to be given under this Lease shall be in writing and shall be given by hand delivery, electronic mail ( e.g ., telecopy), the United States mail or reputable overnight delivery service (for example, FedEx or UPS). Notices which are sent by electronic mail shall be deemed to have been given upon receipt. Notices which are mailed shall be deemed to have been given when seventy-two (72) hours have elapsed after the notice was deposited in the United States mail, registered or certified, the postage prepaid, addressed to the party to be served. As of the date of execution of this Lease, the addresses of Landlord and Tenant are as specified in the Basic Lease Information. Either party may change its address by giving notice of the change in accordance with this Section.


36.	Landlord’s Exculpation.

	In the event of default, breach or violation by Landlord (which term includes Landlord’s partners, co-venturers and co-tenants, and officers, directors, employees, agents and representatives of Landlord and Landlord’s partners, co-venturers and co-tenants) of any of Landlord’s obligations under this Lease, Landlord’s liability to Tenant shall be limited to its ownership interest in the Building and Property or the proceeds of a public sale of the ownership interest pursuant to the foreclosure of a judgment against Landlord. Landlord shall not be personally liable, or liable in any event, for any deficiency beyond its ownership interest in the Building and Property.

37.	General.

	a. Captions. The captions and headings used in this Lease are for the purpose of convenience only and shall not be construed to limit or extend the meaning of any part of this Lease.

	b. Time. Time is of the essence for the performance of each term, condition and covenant of this Lease.

	c. Severability. If any provision of this Lease is held to be invalid, illegal or unenforceable, the invalidity, illegality, or unenforceability shall not affect any other provision of this Lease, but this Lease shall be construed as if the invalid, illegal or unenforceable provision had not been contained herein.

	d. Choice of Law; Construction. This Lease shall be construed and enforced in accordance with the laws of the State of California. The language in all parts of this Lease shall in all cases be construed as a whole according to its fair meaning and not strictly for or against either Landlord or Tenant.

	e. Gender; Singular, Plural. When the context of this Lease requires, the neuter gender includes the masculine, the feminine, a partnership or corporation or joint venture, and the singular includes the plural.

	f. Binding Effect. The covenants and agreements contained in this Lease shall be binding on the parties hereto and on their respective successors and assigns (to the extent this Lease is assignable).

	g. Waiver. The waiver of Landlord of any breach of any term, condition or covenant of this Lease shall not be deemed to be a waiver of the provision or any subsequent breach of the same or any other term, condition or covenant of this Lease. The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach at the time of acceptance of the payment. No covenant, term or condition of this Lease shall be deemed to have been waived by Landlord unless the waiver is in writing signed by Landlord.

	h. Entire Agreement. This Lease is the entire agreement between the parties, and there are no agreements or representations between the parties except as expressed herein. Except as otherwise provided herein, no subsequent change or addition to this Lease shall be binding unless in writing and signed by the parties hereto.

	i. Counterparts. This Lease may be executed in counterparts, each of which shall be an original, but all counterparts shall constitute one (1) instrument.

	j. Exhibits. The Basic Lease Information and all exhibits attached hereto are hereby incorporated herein and made an integral part hereof.

	k. Addendum. The Addendum, if any, attached hereto is hereby incorporated herein and made an integral part hereof.

38.	Representations.

	Landlord represents and warrants to Tenant that it is the owner of the Premises with full power and authority to enter into this Lease. The party signing on behalf of Tenant represents and warrants that it has the power and authority to enter into this Lease and sign on behalf of the corporation.


39.	Quiet Enjoyment.

	The Landlord covenants and agrees that so long as the Tenant shall perform its obligations under this Lease, the Tenant shall have quiet enjoyment of the Premises and all appurtenances thereto, and the Landlord shall defend, and save harmless, the Tenant from any and all costs, expenses, losses and damages by any third party contesting the Tenant’s right of possession under this Lease or interfering with Tenant’s quiet enjoyment hereunder. Landlord shall not, during the term of this Lease, in any manner interfere with, or disturb, the quiet enjoyment and use by the Tenant, or any Premises occupants under this Lease. Landlord’s right to enter upon the Premises to repair or to exercise or perform any other right or obligation under the terms of this Lease shall be exercised in a manner consistent with the Tenant’s right of quiet enjoyment as set forth herein.

40.	Americans With Disability Act.

	Landlord covenants that as of the Commencement Date of this Lease, the Building and its common areas shall comply with all applicable provisions of the Americans With Disabilities Act of 1990 (the “ADA”). Any expenses of bringing the Building and/or its common areas into ADA compliance for pre-existing violations as of the Commencement Date shall be borne by Landlord exclusively. In the event that Landlord performs improvements or alterations in the Building or to the common areas that trigger the Building or the common areas to be updated to bring it into compliance with any ADA laws passed after the Commencement Date, Landlord will perform the obligations required to bring the Building or the common areas up to the then current codes, and such expense shall be subject to reimbursement under Section 5. Tenant shall be responsible for compliance with the ADA as it relates to the Premises specifically, including Tenant’s permitted use thereof. Within ten (10) days after receipt, Landlord and Tenant shall advise the other party in writing, and provide the other with copies of (as applicable), any notices alleging violation of the ADA relating to any portion of the Building or of the Premises; any claims made or threatened in writing regarding noncompliance with the ADA and relating to any portion of the Building or of the Premises; or any governmental or regulatory actions or investigations instituted or threatened regarding noncompliance with the ADA and relating to any portion of the Building or the Premises.

IN WITNESS WHEREOF, the parties have executed this Lease on the dates set forth below, effective as of the date first above written.


	LANDLORD:

	90 E Street, LLC, a Delaware limited liability company

	By:	Billa Management, LLC, a Delaware limited liability company

	Its:	Manager

	By:	/s/ Ajaib S. Bhadare

		Ajaib S. Bhadare, Manager

	TENANT:

	North Coast Bank, a division of American River Bank
Date
Executed: 12-23-08		By	/s/ Mitchell A. Derenzo


	P rint Name		Mitchell A. Derenzo


		Its	Chief Financial Officer