LOAN AGREEMENT

THIS LOAN AGREEMENT (hereinafter called “Agreement”) made and entered into this ____ day of March, 2006, by and between VINEYARD NATIONAL BANCORP , a California corporation, (hereinafter called “Borrower”) and FIRST TENNESSEE BANK NATIONAL ASSOCIATION , a national banking association having its principal office located in Memphis, Tennessee (“Lender”).

    WHEREAS, the Borrower desires to borrow from Lender Seventy Million Dollars ($70,000,000.00). NOW, THEREFORE, in consideration of the premises and the mutual agreements, covenants and conditions herein contained, the parties hereto hereby agree as follows:

1.1   The Commitment. Subject to the terms and conditions herein set out, Lender agrees and commits to make a revolving loan (the “Loan”) to Borrower in the amount of Seventy Million Dollars ($70,000,000.00). Such borrowing shall be evidenced by, and shall be payable in accordance with the terms and provisions of the Note (as hereinafter defined).

1.2   Funding . The advance of Loan proceeds hereunder shall be made, upon Borrower’s request, by depositing the same into a demand deposit account with Lender or wire transfer to Borrower’s account. The Loan to Borrower may be made, at Borrower’s request, in one or more advances, each of which shall be subject to the terms and conditions of this Agreement, including but not limited to Sections 2.1 and 2.2 hereof. Advances under the Loan may be requested either orally or in writing by Borrower as provided in this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender’s office set forth below. The following persons, acting individually, currently are authorized to request advances and authorize payments under the Loan until Lender receives from Borrower, at Lender’s address set forth below, written notice of revocation of their authority: Norman Morales, President & Chief Executive Officer of Borrower, Gordon Fong, Chief Financial Officer of Borrower, or Terry Snavely, Senior Vice President of Borrower.

1.3   Prepayments . The Borrower may, at its option, at any time and from time to time, without prepayment penalty or premium, prepay the Loan in whole or in part; provided, however, that any such prepayment of principal shall be accompanied by the payment of accrued interest on the amount of such prepayment to the date thereof. Any such prepayment shall be applied to reduce the principal installments under the Note in the inverse order of their maturities, and shall not have the effect of suspending or deferring payments thereunder. Principal amounts repaid by Borrower under the Loan may be re-borrowed from time to time commencing on the date of execution of the promissory note (the “Closing Date”) through the Maturity Date in accordance with this Agreement and the other Loan Documents (defined below).

1.4   Interest Rate . The Loan indebtedness evidenced by the Note shall bear interest from date at the variable rate determined in accordance with the terms and provisions of the Note which will be 90-day LIBOR (as defined in the Note) plus 225 basis points.

1.5 Maturity . The line of credit will expire 364 days from the Closing Date (the “Maturity Date”).

2.1   Loan Documents . The obligation of Lender to fund the Loan is subject to the condition precedent that Lender shall have received at or before the execution of this Agreement all of the following in form and substance satisfactory to Lender.

a)   A promissory note evidencing the Loan, in a form and substance acceptable to Borrower and Lender, executed by Borrower, as maker (such promissory note together with any renewals, modifications and extensions thereof is herein referred to as the “Note”);

The Note, this Loan Agreement, and any other documents executed by Borrower in connection herewith shall be referred to hereinafter as the “Loan Documents”.

2.2   Other Conditions . The obligation of the Lender to fund the Loan is subject to each of the following further terms and conditions:

a)   At the time of funding, each of the Loan advances hereunder and each of Borrower’s warranties and representations contained herein shall be and remain true and correct in all material respects. In addition, no Event of Default (as defined in Section 6 hereof) shall have occurred and be continuing, and, if requested by Lender, Borrower shall execute a certificate verifying each of such matters to be true in all respects, if such be the case.

b) At the time the loan is funded hereunder, there shall have occurred, in the reasonable opinion of Lender, no material adverse changes in the condition, financial or otherwise, of Borrower or its Bank from that reflected in the financial statements furnished pursuant to Section 2.1 hereof, including without limitation any such material adverse change resulting from or following the Conversion or a Merger, as defined below.

In order to induce the Lender to enter into this Agreement and to make the Loan, the Borrower represents and warrants to the Lender (which representations and warranties shall survive the delivery of the Loan Documents and the funding of the Loan) that:

3.1   Corporate Status . Borrower is a corporation duly organized and existing under the laws of the State of California, is duly qualified to do business and is in good standing under the laws of the State of California, and has the corporate power and authority to own its properties and assets and conduct its affairs and business. Lender acknowledges that Borrower has notified Lender of its intent to convert the Bank to a national bank and/or convert the Borrower to a financial holding company (collectively, the “Conversion”). Concurrently with such Conversion, Borrower shall execute, deliver, provide and perform any documents and instruments reasonably required by Lender to ensure the continuing validity, priority and enforceability of the Loan, the Loan Documents and the liens created thereunder notwithstanding such Conversion.

3.2   Corporate Power and Authority . Borrower has full power and authority to enter into this Agreement, to borrow funds contemplated herein, to execute and deliver this Agreement, the Note and other Loan Documents executed and delivered by it, and to incur the obligations provided for herein, all of which have been duly authorized by all proper and necessary corporate action; and the officer executing each of the Loan Documents is duly authorized to do so by all necessary corporate action. Any consents or approval of shareholders or directors of Borrower required as a condition to the validity of any Loan Document have been obtained; and each of said Loan Documents is the valid, legal, and binding obligation of Borrower enforceable in accordance with its terms.

3.3   No Violation of Agreements or Law . To Borrower’s knowledge, neither Borrower nor Bank is in default under any indenture, agreement or instrument to which it is a party or by which it may be bound, nor in violation of any state or federal statute, rule, ruling, or regulation governing its operations and the conduct of its business, operations or financial condition of Borrower or Bank. Neither the execution and delivery of the Loan Documents nor the consummation of the transactions herein contemplated, or compliance with the provisions hereof will conflict with, or result in the breach of, or constitute a default under, any indenture, agreement or other instrument to which Borrower is a party or by which it may be bound, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property of Borrower except for the security interest in Borrower’s common stock of the Bank as set forth herein, or violate or be in conflict with any provision of the charter or bylaws of Borrower.

3.4   Compliance With Law; Government Approvals .

(a) To Borrower’s knowledge, Borrower has complied and is complying with all requirements, made all applications, and submitted all reports required by The Bank Holding Company Act of 1956, as amended, and any regulations or rulings issued in connection therewith, and the transaction contemplated hereby will not violate any such statutes, rules, rulings, or regulations nor will the consummation of said actions and transactions cause Borrower to be in violation thereof. Borrower has, if required, received all governmental approvals necessary for the consummation of the transactions described herein.

(b)   To Borrower’s knowledge, Borrower has complied and is complying with all other applicable state or federal statutes, rules, rulings and regulations. To Borrower’s knowledge, the borrowing of money as described herein and said actions and transactions will not violate any of such statutes, rules, rulings, or regulations. Borrower has, if required, made all filings and received all governmental or regulatory approvals necessary for the consummation of the transactions described herein.

3.5   Litigation . There are no actions, suits or proceedings pending or, to the knowledge of the Borrower, threatened against before any court, arbitrator or governmental or administrative body or agency which, if adversely determined, would result in any material and adverse change in the financial condition, business operation, or properties or assets of the Borrower or Bank. Without limiting the generality of the foregoing, neither Borrower nor Bank is subject to any Supervisory Action (herein defined) by any federal or state bank regulatory authority. As used herein, “Supervisory Action” shall mean and include the issuance by any bank regulatory authority of a letter agreement or memorandum of understanding (regardless of whether consented or agreed to by the party to whom it is addressed); or the issuance by or at the behest of any bank regulatory authority of a cease and desist order, injunction, directive, restraining order, notice of charges, or civil money penalties, against Borrower, Bank or the directors or officers of either of them, whether temporary or permanent.

3.6   Financial Condition . The balance sheets and the related statements of income of Borrower and Bank, which have been delivered to the Lender pursuant to Section 2.1 hereof and the financial reports of Borrower and Bank which will be delivered to Lender pursuant to Section 4.5 hereof are, or will be as of their respective dates and for the respective periods stated therein, complete and correctly and fairly present the financial condition of Borrower and Bank, and the results of their operations, respectively, as of the dates and for the periods stated therein, and have been, or will be as of their respective dates and for the respective periods stated therein, prepared in accordance with generally accepted accounting principles consistently applied throughout the period involved. There has been no material adverse change in the business, properties or condition of Borrower or Bank since the date of the financial statement furnished to Lender pursuant to Section 2.1 hereof.

3.7   Tax Liability . Borrower and Bank have filed all tax returns which are required to be filed by them, and have paid all taxes which have become due pursuant to such returns or pursuant to any assessments received by them.

3.8   Subsidiaries . As of the date first above written, Borrower has no subsidiaries and owns stock in no corporation or banking association other than Bank; and, other than Vineyard Service Corporation, Inc., a California corporation, Bank has no subsidiaries and owns no stock in any other corporation.

3.9   Bank Stock . The Pledged Shares are duly authorized and validly issued by the Bank and include all of Borrower’s common stock in the Bank. The total number of shares of common stock of the Bank issued and outstanding as of the date hereof is 1,218,700 shares, of which all 1,218,700 shares are being pledged for this transaction. The Pledged Shares are free and clear of all liens, encumbrances, security interests or pledges except the pledge to Lender described herein; said Pledged Shares are fully paid and non-assessable; the Bank stock certificates delivered to Lender pursuant to the Pledge Agreement will be genuine and comply with applicable laws concerning form, content, and manner of preparation and execution; there are no outstanding warrants or options to acquire any common stock of the Bank; there are no outstanding securities convertible or exchangeable into shares of common stock of the Bank; there are no restrictions on the transfer or pledge of any shares of common stock of the Bank; Borrower has the right to pledge and transfer the Pledged Shares and assign the income therefrom without obtaining the consent of any other person or entity; and the Pledge Agreement creates for the benefit of Lender a first security interest in the Pledged Shares, subject to no other interests or claims.

4.0   AFFIRMATIVE COVENANTS . Borrower covenants and agrees that, until the Note together with interest thereon is paid in full, unless specifically waived by the Lender in writing, Borrower will, or will cause Borrower and Bank to:

4.1   Business and Existence . Both preceding and following any Conversion, perform all things necessary to preserve and keep in full force and effect the existence, rights and franchises of Borrower and Bank and to comply with all laws and regulations then applicable to Borrower and Bank, including, but not limited to, laws and regulations of state and federal authorities applicable to banks, bank holding companies and/or financial holding companies.

4.2   Maintain Property . Maintain, preserve, and protect all properties used or useful in the conduct of Borrower’s and Bank’s business and keep the same in good repair, working order and condition.

4.3   Insurance . At all times keep the insurable properties of Borrower and Bank adequately insured and maintain in force (i) insurance, to such an extent and against such risks, including fire, as is customary with companies in the same or similar business, (ii) necessary workmen’s compensation insurance, fidelity bonds and directors’ and officers’ insurance coverage in amounts reasonably satisfactory to Lender, and (iii) such other insurance as may be required by law; and if reas