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


 

















 


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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