Document:

Letter Agreement

 Exhibit 10.38 
 September 5, 2006 
 Barry Buchholtz 
 CEO 
 Orange 21 Inc. 
 2070 Las Palmas
Carlsbad, CA 92009 
  

	RE:	Orange 21 Inc. (“Borrower”) 

 Obligor
Number 7433804894/59/42/34/26/18 
 Dear Barry Buchholtz: 
 Comerica Bank (the “Bank”) has approved the extension of the maturity date of the above referenced credit facility as evidenced by that certain note/agreement, dated October 5, 2001 (as such may be amended, restated,
modified, supplemented or revised from time to time, the “Agreement”) from September 5, 2006 to December 5, 2006. Upon your execution of a counterpart of this letter, the maturity date shall be so amended. 
 The Agreement, as modified and amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed
in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this modification and amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as
in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all promissory notes, guaranties, security agreements, mortgages, deeds of trust, environmental agreements, and all other instruments, documents and
agreements entered into in connection with the Agreement. 
 By execution of a counterpart of this letter, Borrower further represents and warrants that the
representations and warranties contained in the Agreement are true and correct as of the date hereof, and that no event of default has occurred and is continuing under the Agreement or any other document, instrument or agreement entered into in
connection therewith. 
  

			
	 Sincerely,
 Comerica Bank

		
	 By:
	 	 /s/ Tomas Schmidt

		 	 Tomas Schmidt
 Vice-President-Western Market

	
	 Acknowledged and accepted on September 21, 2006:
  
 Orange 21 Inc.

		
	 By:
	 	 /s/ Barry Buchholtz

		 	 Barry Buchholtz
 CEOEX-10.1

CHANGE OF CONTROL/SEVERANCE AGREEMENT

THIS CHANGE OF CONTROL/SEVERANCE AGREEMENT (the “Agreement”) is entered into by and between
EvergreenBank (the “Bank”), a Washington state-chartered bank, and Gordon Browning (the
“Executive”), effective as of  September 21,  2006 (the “Commencement Date”).

WHEREAS, the Executive is currently employed by the Bank in the capacity of Executive Vice
President and Chief Financial Officer; and

WHEREAS, the Bank wishes to ensure that the Executive will be available to assist the Board of
Directors of the Bank in responding to and, if deemed appropriate by the Board, completing any
proposed change of control (as defined herein) of the Bank or of its holding company,
EvergreenBancorp, Inc. (the “Holding Company”);

NOW, THEREFORE, the Bank and the Executive agree as follows:

1. Certain Definitions.

(a) The term “Change of Control,” for purposes of this Agreement, means: (i) any “person,” as
such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than the Holding Company
or any Consolidated Subsidiaries (as hereinafter defined), is or becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act) directly or indirectly of securities of the Bank or
the Holding Company representing 50% or more of the combined voting power of the Bank’s or Holding
Company’s outstanding securities; (ii) individuals who are members of the Board of Directors of the
Holding Company (the “Board”) on the Commencement Date (the “Incumbent Board”) cease for any reason
to constitute at least a majority thereof, provided that any person becoming a director subsequent
to the Commencement Date whose election was approved by a vote of at least one-half (1/2) of the
directors comprising the Incumbent Board or whose nomination for election by the Holding Company’s
stockholders was approved by the nominating committee serving under an incumbent Board or who was
appointed as a result of a change at the direction of the Federal Reserve Board or the Federal
Deposit Insurance Corporation (“FDIC”), shall be considered a member of the Incumbent Board; (iii)
the stockholders of the Holding Company approve a merger, consolidation or acquisition of the
Holding Company or the Bank, with or by any other corporation or entity, other than (1) a merger,
consolidation or acquisition which would result in the voting securities of the Holding Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Holding Company or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Holding Company or the Bank (or similar transaction) in which
no person (as hereinabove defined) acquires more than 50% of the combined voting power of the
Holding Company’s then outstanding securities; or (iv) the

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stockholders of the Holding Company approve a plan of complete liquidation of the Holding Company
or the Bank or an agreement for the sale or disposition by the Holding Company of all or
substantially all of the Holding Company’s or the Bank’s assets (or any transaction having a
similar effect); provided that the term “Change of Control” shall not include an acquisition of
securities by an employee benefit plan of the Bank or the Holding Company or a change in the
composition of the Board at the direction of the Federal Reserve Board or the FDIC. Upon a Change
of Control, the provisions hereof shall become immediately operative.

(b) The term “Consolidated Subsidiaries” means any subsidiary or subsidiaries of the Holding
Company that are part of the affiliated group (as defined in Section 1504 of the Internal Revenue
Code of 1986, as amended (the “Code”), without regard to subsection (b) thereof) that includes the
Bank.

(c) The term “Good Reason” means only any one or more of the following:

	 	(i)	 	material reduction, without Executive’s consent, of Executive’s salary or
material elimination of any compensation or benefit plan benefiting Executive, unless
the reduction or elimination is generally applicable to substantially all Bank
employees (or employees of a successor or controlling entity of the Bank), or, if
applicable, to similarly situated executives of other companies within the same
multiple-employer benefit plan, formerly benefited;

	 	(ii)	 	the assignment to Executive without his consent of any authority or duties
materially lesser than Executive’s responsibilities as of the date of this Agreement;

(d) The term “Termination for Cause” means termination of the employment of the Executive
because of the Executive’s dishonesty, incompetence, willful misconduct, breach of a fiduciary duty
involving personal profit, intentional failure to perform duties or gross negligence in such
performance, insubordination, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material breach of any
provision of this Agreement or any other agreement between Executive and the Bank or the Holding
Company.

2. Other Compensation and Terms of Employment. This Agreement is not an employment agreement
and shall not be construed as such or as providing the Executive any right to be retained in the
employ of the Holding Company or the Bank or any affiliate thereof. Accordingly, except with
respect to the Change of Control severance benefits, this Agreement shall have no effect on the
determination of any compensation payable by the Bank to Executive, or upon any of the terms of
Executive’s employment with the Bank. Nothing in this Agreement shall be deemed to prohibit the
Bank at any time from terminating the Executive’s employment during the term of this Agreement with
or without notice for any reason. The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to Executive upon a termination of employment
with the Bank pursuant to employee benefit plans of the Bank or otherwise.

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3. Termination of the Agreement.

(a) This Agreement may be terminated unilaterally by the Bank, but only as of a prospective
effective date which follows by at least 15 months the date that written notice is given to
Executive that the Bank, by a vote of at least a majority of its directors, has determined to
terminate the Agreement, subject to earlier termination, as provided herein.

(b) This Agreement shall automatically terminate and the Executive shall not be entitled to
any payment or benefit hereunder in the event a termination occurs by reason of a voluntary
retirement, voluntary termination other than for reasons specified in Section 1(c) hereof,
disability, death, or Termination for Cause.

4. Severance Benefits.

(a) In the event the Bank or the Holding Company receives any proposal or offer which could
result in a Change of Control, the Executive will, at the Board’s request, assist the Board in
evaluating such proposal or offer, and the Executive agrees that he will not resign his position
with the Bank during any period from the receipt of such a Change of Control proposal up to the
closing of the transaction contemplated by the proposal, if the contemplated transaction is not
terminated before closing. If after a Change of Control, the Bank terminates the Executive’s
employment other than for Termination for Cause or the Executive terminates employment with the
Bank for Good Reason, and such termination occurs within twelve (12) months following a Change of
Control, the Bank shall: (i) pay the Executive (or in the event of Executive’s subsequent death,
executive’s beneficiary or estate, as the case may be), as severance pay, a sum equal to two (2)
times Executive’s annual compensation. For purposes of this Agreement, “annual compensation” shall
mean the greater of Executive’s W-2 income (before salary deferral) received from the Bank or, if
Executive has been employed by the Bank for less than a full calendar year, Executive’s annualized
monthly salary received from the Bank for the calendar year ending before, or simultaneously with,
the effective date of the Change of Control. Such amount shall be paid to Executive in a lump sum
no later than sixty (60) days after the date of Executive’s termination; and (ii) cause to be
continued for twelve (12) months after the effective date of termination, life, medical, dental,
and disability coverage substantially identical to the coverage maintained by the Bank or the
Holding Company for the Executive immediately prior to the effective date of termination, except to
the extent such coverage may be changed in its application to all Bank or Holding Company employees
on a nondiscriminatory basis.

(b) The Executive shall not be required to mitigate the amount of any payment or benefit
provided for in Section 4(a) of this Agreement by seeking other employment or otherwise, nor shall
the amount of any payment or benefit provided for in Section 4(a) of this Agreement be reduced by
any compensation earned or benefit received by the Executive as the result of employment by another
employer.

5. Assignment.

(a) This Agreement is personal to each of the parties hereto, and neither party may assign or

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delegate any of its rights or obligations hereunder without first obtaining the written consent of
the other party; provided, however, that the Bank shall require any successor or assignee (whether
direct or indirect, by purchase, merger, consolidation, operation of law or otherwise) to all or
substantially all of the business and/or assets of the Bank, to expressly assume and agree to
perform the Bank’s obligations under this Agreement.

(b) This Agreement shall be binding upon and inure to the benefit of the Executive and the
Bank, and their respective successors and assigns.

6. Limitations on Payments Related to Severance Benefits.  The following apply,
notwithstanding any other provision of this Agreement:

    (a) If the severance benefits payable hereunder, together with any other payments made or
to be made to or for the benefit of the Executive, would be a “parachute payment,” then the payment
hereunder shall be reduced so that the total amount of all such payments equals $1 less than the
maximum amount which does not constitute a “parachute payment”. The term “parachute payment” shall
have the meaning defined in Section 280G of the Code; and

    (b) The Bank shall not be obligated to make, and the Executive shall not be entitled to
receive, any payment under this Agreement if such payment would constitute a “golden parachute”
payment prohibited by 12 U.S.C. 1828(k) or 12 CFR §359.0 et seq. The Bank shall have no liability
to the Executive under or in relation to this Agreement for any payment that would be a prohibited
“golden parachute” payment.

7. Confidentiality and Noncompetition.

    (a)  Confidentiality.  From the date of this Agreement the Executive will not, directly or
indirectly, disclose to any third party not affiliated with the Bank, Confidential Information of
the Bank, its Holding Company or subsidiaries and affiliates, except as to any of the Confidential
Information which shall be or become in the public domain or shall be required to be disclosed by
applicable laws or regulations, any judicial or administrative authority or stock exchange rule or
regulation. For the purposes of this Paragraph 7(a), “Confidential Information” shall mean:
(i) internal policies and procedures, (ii) financial information, (iii) marketing strategies,
(iv) customer information, and (v) other non-public information relating to the business or
financial condition of the Bank, its Holding Company or subsidiaries and affiliates.

    (b)  Noncompetition.  During the one (1) year period following a Change of Control or a
termination of Executive’s employment resulting in Executive’s actual receipt of severance benefits
hereunder (“Restricted Period”), the Executive shall not engage in Competition with the Bank, its
Holding Company or subsidiaries and affiliates. For purposes of this Paragraph 7(b), “Competition”
shall mean the Executive engaging in or otherwise being a director, officer, employee, principal,
agent, stockholder, member, owner or partner of, or permitting his name to be used in connection
with the activities in Washington state of any business or organization in the financial services
industry in direct competition with the Bank, its Holding Company or subsidiaries and affiliates,
but shall not preclude the Executive becoming the registered or beneficial owner of up to two
percent (2%) of any class of capital stock of any such corporation which is registered under the
Securities Exchange Act of 1934, as amended, provided the Executive does not actively participate
in the business of such corporation until expiration of the Restricted Period.

8. Delivery of Notices. For the purposes of this Agreement, all notices and other
communications to any party hereto shall be in writing and shall be deemed to have been duly given
when delivered or sent by certified mail, return receipt requested, postage prepaid, to the party’s
address identified herein.

9. Entire Agreement. This Agreement constitutes the entire understanding and agreement
between the parties concerning its subject matter and supersedes all prior agreements,
correspondence, representations, or understandings between the parties relating to its subject
matter.

10. Amendments. No amendments or additions to this Agreement shall be binding unless in
writing and signed by both parties, except as herein otherwise provided.

11. Headings. The headings used in this Agreement are included solely for convenience and
shall not affect, or be used in connection with, the interpretation of this Agreement.

12. Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity of the other
provisions hereof.

13. Governing Law and Venue. To the extent not preempted by federal law, the provisions of
this Agreement shall be construed and enforced in accordance with the laws of the state of
Washington. The parties must bring any legal proceeding arising out of this Agreement in King
County, Washington.

14. Withholding. All payments required to be made by the Bank hereunder to Executive shall be
subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as
the Bank may reasonably determine should be withheld pursuant to any applicable law or regulation.

15. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which together will constitute one and the same
Agreement.

 16. Arbitration. At either party’s request, the parties must submit any
dispute, controversy or claim arising out of or in connection with, or relating to, this Agreement
or any breach or alleged breach of this Agreement, to arbitration under the American Arbitration
Association’s Commercial Arbitration Rules then in effect (or under any other form of arbitration
mutually acceptable to the parties). A single arbitrator agreed on by the parties will conduct the
arbitration. If the parties cannot agree on a single arbitrator, each party must select one
person to choose an arbitrator and those two persons will select a third person to serve as
arbitrator and hear the dispute. The arbitrator’s decision is final (except as otherwise
specifically provided by law) and binds the parties, and either party may request any court having
jurisdiction to enter a judgment and to enforce the arbitrator’s decision. The arbitrator will
provide the parties with a written decision naming the substantially prevailing party in the
action. This prevailing party is entitled to reimbursement from the other party for its costs and
expenses, including reasonable attorneys’ fees. All proceedings will be held at a place designated
by the arbitrator in King County, Washington. The arbitrator, in rendering a decision as to any
state law claims, will apply Washington law.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 
	EVERGREENBANK

	By: /s/ Gerald O. Hatler

	Gerald O. Hatler

	Its: President & CEO

	Address: 301 Eastlake Avenue East

	Seattle, WA 98109

	EXECUTIVE

	/s/ Gordon D. Browning

	Gordon D. Browning

	Address: 301 Eastlake Avenue East

	Seattle, WA 98109

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