EXHIBIT 10.73

 

The Company issued $20,000,000 in 30 year trust preferred securities (“Capital
Securities”) through two Delaware business trusts.  Bear, Stearns & Co. Inc.
(“Bear Stearns”) and Sandler O’Neill & Partners, L.P. (“Sandler”) acted as the
placement agents in the issuance of Capital Securities for $10,000,000 each,
which was issued in two different independent transactions from two different
subsidiary trusts (Western Sierra Capital Trust III for the Sandler transaction,
and Western Sierra Capital Trust IV for the Bear Stearns transaction (together,
the “Trusts”)).  The Company established the Trusts for the sole purpose of
issuing Capital Securities pursuant to an Amended and Restated Declaration of
Trust (the “Declaration”).  The proceeds from the sale of the Capital Securities
were loaned to the Company under 30 year deeply subordinated debentures (the
“Debentures”) issued to the Trust pursuant to an Indenture (the “Indenture”). 
The terms of the Capital Securities issued to Bear Stearns and Sandler are
identical to the terms set forth in the respective Indentures.

 

The material terms of the transaction agreements are as follows:

 

Payment of Distributions and Interest:  Distributions on the Capital Securities
are cumulative and payable quarterly at a floating rate of LIBOR plus 2.90%.
LIBOR will be recalculated quarterly on the 15thof each January, April, July and
October while the Capital Securities remain outstanding.  Interest payments are
made quarterly on the 7th of each January, April, July and October while the
capital Securities remain outstanding.  The distribution rate and payment dates
on the Capital Securities coincide with the interest rate and the payment dates
on the Debentures.

 

Early Redemption:  Unless earlier redeemed, the Capital Securities and
Debentures mature October 7, 2033.  The Capital Securities and Debentures are
redeemable at any time commencing in 2008 at par, and may be redeemed earlier
following the occurrence of a Special Event.  “Special Event” is defined as
either (i) the receipt by the Company of an opinion of counsel to the effect
that there is more than an insubstantial risk that (a) the Trust is or will be
subject to federal income tax with respect to the income received or accrued on
the Debentures, (b) interest payable by the Company on the Debentures is not or
will not be deductible, in whole or in part, for federal income tax purposes, or
(c) the Trust is or will be subject to more than a de minimis amount of other
taxes, duties or other governmental charges; (ii) the receipt by the Company of
an opinion of counsel to the effect that, as a result of the occurrence of a
change in law or regulation, there is more than an insubstantial risk that the
Trust is or will be considered as an “investment company” that is required to be
registered under the Investment Company Act of 1940; or (iii) the receipt by the
Company of an opinion of counsel to the effect that there is more than an
insubstantial risk that the Company will not be entitled to treat an amount
equal to the aggregate liquidation amount of the Capital Securities as “Tier 1
Capital” for purposes of the capital adequacy guidelines of the Federal
Reserve.   Early redemption of the Capital Securities or the Debentures is
subject to approval by the Federal Reserve if then required under applicable
capital guidelines or policies of the Federal Reserve.

 

Extension Periods.  Interest payments on the Debentures (and the corresponding
distributions on the Capital Securities) may be deferred at any time at the
election of the Company for up to 20 consecutive quarterly periods (5 years). 
There is no limitation on the number of extension periods the Company may
elect.  Interest on the Debentures (and the corresponding distributions on the
Capital Securities) will accrue during the extension period, and all accrued
principal and interest must be paid at the end of each extension period.  During
an extension period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company’s or any Company affiliate’s capital stock
(other than payments of dividends or distributions to the Company) or make any
guarantee payments with respect to the foregoing or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company or any affiliate of the Company that rank
pari passu in all respects with or junior in interest to the Debentures (other
than, with respect to clauses (i) or (ii) above, (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Company in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable extension period,
(b) as a result of any exchange or conversion of any class or series of the
Company’s capital stock (or any capital stock of a subsidiary of the Company)
for any class or series of the Company’s capital stock or of any class or series
of the Company’s indebtedness for any class or series of the Company’s capital
stock, (c) the purchase of fractional interests in shares of the Company’s
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any stockholder’s rights plan, or the issuance of
rights, stock or other property under any stockholder’s rights plan, or the
redemption or repurchase of rights pursuant thereto, (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock

 

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issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock and any cash payments in lieu of fractional shares issued
in connection therewith, or (f) payments under the Guarantee).

 

Subordination of the Debentures.  The Company’s obligations under the Debentures
are subordinated to all Senior Indebtedness of the Company.  “Senior
Indebtedness” is defined as (i) the principal, premium, if any, and interest in
respect of (A) indebtedness of the Company for money borrowed and (B)
indebtedness evidenced by securities, debentures, notes, bonds or other similar
instruments issued by the Company; (ii) all capital lease obligations of the
Company; (iii) all obligations of the Company issued or assumed as the deferred
purchase price of property, all conditional sale obligations of the Company and
all obligations of the Company under any title retention agreement; (iv) all
obligations of the Company for the reimbursement of any letter of credit, any
banker’s acceptance, any security purchase facility, any repurchase agreement or
similar arrangement, any interest rate swap, any other hedging arrangement, any
obligation under options or any similar credit or other transaction; (v) all
obligations of the type referred to in clauses (i) through (iv) above of other
Persons for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise; and (vi) all obligations of the type referred
to in clauses (i) through (v) above of other Persons secured by any lien on any
property or asset of the Company (whether or not such obligation is assumed by
the Company), whether incurred on or prior to the date of this Indenture or
thereafter incurred.

 

Guarantee of Company.  The Company will irrevocably and unconditionally
guarantee, with respect to the Capital Securities and to the extent not paid by
the Trust, accrued and unpaid distributions on the Capital Securities and the
redemption price payable to the holders of the Capital Securities, in each case
to the extent the Trust has funds available.

 

Nothing in the transaction agreements prevents the Company from acquiring, being
acquired or merging with another entity.  Furthermore, there is no restriction
on the Company’s use of the proceeds received upon issuance of the Capital
Securities and the corresponding Debentures.

 

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