**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 ofCapital Securities for $10,000,000 each, which was issued in two differentindependent transactions from two different subsidiary trusts (Western SierraCapital Trust III for the Sandler transaction, and Western Sierra Capital TrustIV for the Bear Stearns transaction (together, the “Trusts”)).  The Company established the Trusts for thesole purpose of issuing Capital Securities pursuant to an Amended and RestatedDeclaration of Trust (the “Declaration”). The proceeds from the sale of the Capital Securities were loaned to theCompany under 30 year deeply subordinated debentures (the “Debentures”) issuedto the Trust pursuant to an Indenture (the “Indenture”).  The terms of the Capital Securities issuedto Bear Stearns and Sandler are identical to the terms set forth in therespective Indentures.

 

The material terms of thetransaction agreements are as follows:

 

Payment of Distributions andInterest:  Distributions on the Capital Securities arecumulative and payable quarterly at a floating rate of LIBOR plus 2.90%. LIBORwill be recalculated quarterly on the 15thof each January, April, July andOctober while the Capital Securities remain outstanding.  Interest payments are made quarterly on the7th of each January, April, July and October while the capitalSecurities remain outstanding.  Thedistribution rate and payment dates on the Capital Securities coincide with theinterest rate and the payment dates on the Debentures.

 

Early Redemption: Unless earlier redeemed, the Capital Securities and Debentures matureOctober 7, 2033.  The CapitalSecurities 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) thereceipt by the Company of an opinion of counsel to the effect that there ismore than an insubstantial risk that (a) the Trust is or will be subject tofederal income tax with respect to the income received or accrued on theDebentures, (b) interest payable by the Company on the Debentures is not orwill 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 ofother taxes, duties or other governmental charges; (ii) the receipt by theCompany of an opinion of counsel to the effect that, as a result of theoccurrence of a change in law or regulation, there is more than aninsubstantial risk that the Trust is or will be considered as an “investmentcompany” that is required to be registered under the Investment Company Act of1940; or (iii) the receipt by the Company of an opinion of counsel to theeffect that there is more than an insubstantial risk that the Company will notbe entitled to treat an amount equal to the aggregate liquidation amount of theCapital Securities as “Tier 1 Capital” for purposes of the capital adequacyguidelines of the Federal Reserve.  Early redemption of the Capital Securities or the Debentures is subjectto approval by the Federal Reserve if then required under applicable capitalguidelines or policies of the Federal Reserve.

 

Extension Periods. Interest payments on the Debentures (and the corresponding distributionson the Capital Securities) may be deferred at any time at the election of theCompany for up to 20 consecutive quarterly periods (5 years).  There is no limitation on the number ofextension periods the Company may elect. Interest on the Debentures (and the corresponding distributions on theCapital Securities) will accrue during the extension period, and all accruedprincipal and interest must be paid at the end of each extension period.  During an extension period, the Company maynot (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 orany Company affiliate’s capital stock (other than payments of dividends ordistributions to the Company) or make any guarantee payments with respect tothe 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 orany affiliate of the Company that rank pari passu in all respects with orjunior in interest to the Debentures (other than, with respect to clauses (i)or (ii) above, (a) repurchases, redemptions or other acquisitions of shares ofcapital stock of the Company in connection with any employment contract,benefit plan or other similar arrangement with or for the benefit of one ormore employees, officers, directors or consultants, in connection with adividend reinvestment or stockholder stock purchase plan or in connection withthe issuance of capital stock of the Company (or securities convertible into orexercisable for such capital stock) as consideration in an acquisitiontransaction entered into prior to the applicable extension period, (b) as aresult of any exchange or conversion of any class or series of the Company’scapital stock (or any capital stock of a subsidiary of the Company) for anyclass or series of the Company’s capital stock or of any class or series of theCompany’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 capitalstock pursuant to the conversion or exchange provisions of such capital stockor the security being converted or exchanged, (d) any declaration of a dividendin connection with any stockholder’s rights plan, or the issuance of rights,stock or other property under any stockholder’s rights plan, or the redemptionor repurchase of rights pursuant thereto, (e) any dividend in the form ofstock, warrants, options or other rights where the dividend stock or the stock

 

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

 

Subordination of theDebentures.  The Company’s obligations under theDebentures are subordinated to all Senior Indebtedness of the Company.  “Senior Indebtedness” is defined as (i) theprincipal, premium, if any, and interest in respect of (A) indebtedness of the Companyfor money borrowed and (B) indebtedness evidenced by securities, debentures,notes, bonds or other similar instruments issued by the Company; (ii) allcapital lease obligations of the Company; (iii) all obligations of the Companyissued or assumed as the deferred purchase price of property, all conditionalsale obligations of the Company and all obligations of the Company under anytitle retention agreement; (iv) all obligations of the Company for thereimbursement of any letter of credit, any banker’s acceptance, any securitypurchase facility, any repurchase agreement or similar arrangement, anyinterest rate swap, any other hedging arrangement, any obligation under optionsor any similar credit or other transaction; (v) all obligations of the typereferred to in clauses (i) through (iv) above of other Persons for the paymentof which the Company is responsible or liable as obligor, guarantor orotherwise; 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 assetof the Company (whether or not such obligation is assumed by the Company),whether incurred on or prior to the date of this Indenture or thereafterincurred.

 

Guarantee of Company.  TheCompany will irrevocably and unconditionally guarantee, with respect to theCapital Securities and to the extent not paid by the Trust, accrued and unpaiddistributions on the Capital Securities and the redemption price payable to theholders of the Capital Securities, in each case to the extent the Trust hasfunds available.

 

Nothingin the transaction agreements prevents the Company from acquiring, beingacquired or merging with another entity. Furthermore, there is no restriction on the Company’s use of theproceeds received upon issuance of the Capital Securities and the correspondingDebentures.

 

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