exv10w11



 


Exhibit 10.11


THIS AFFILIATED BUSINESS ARRANGEMENT AGREEMENT (the “Agreement”) is made this
17th day of December, 2002 (the “Effective Date”) by and between BWC MORTGAGE
SERVICES, a Partnership filed in California (“BWC”) and REDDING SERVICE
CORPORATION, a California corporation (“Redding”).


RECITALS


     A.     WHEREAS, BWC and Redding currently have a relationship wherein Redding
performs services for BWC and receives reasonable compensation in connection
with the performance of mortgage services for the clients of Redding; and,


     B.     WHEREAS, the parties wish to establish and mutually own a Division of
BWC (“the Division”) to operate several branches (“the Branches”) dedicated to
provide mortgage services to Redding’s clients at the Branches.


AGREEMENT


     NOW, THEREFORE, in consideration of the covenants contained herein, and
such other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:


     1.     Establishment of the Division and the Branches.


            The parties agree to form the Division to be operated for the benefit of
BWC and Redding as partners therein. Although the Division will technically be
within the structure of BWC, Redding shall have a fifty-one percent (51%)
equitable interest therein with all rights and responsibilities as if it were a
partner of BWC only as to the Division and its operations. BWC’s interest in
the Division shall be as to a forty-nine percent (49%) equitable interest
therein.


            The Division shall establish the Branches at the offices of Redding at the
premises of the Redding’s branch office in Redding, 1951 Churn Creek Road,
Redding, California 96002, and in Roseville, 1504 Eureka Road, Suite 100,
Roseville, California 95661, for the purpose of conducting mortgage business to
service the clients of Redding Bank. The parties shall mutually agree on space
and facilities issues as to these Branches and as to the opening of additional
Branches in the future.


     2.     License and Operation of Branches.


             A.     BWC agrees to keep its California Department of Real Estate (“DRE”)
real estate broker license current during the term of this Agreement and to act
as the broker of record, and add the Branches as branch offices of BWC. The


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Branches shall be operated under the name “RBC MORTGAGE SERVICES.” The parties agree
that the name “BWC MORTGAGE” is the sole property of BWC, and in the event of
the termination of this Agreement, BWC will retain all rights of use of that
name. The parties further agree that the name “RBC MORTGAGE SERVICES” is the
sole property of Redding Service Corporation, and in case of the termination of
this Agreement, Redding will retain all rights of use of that name.


             B.     The parties will mutually designate the loan officers for the Branches,
which persons shall be licensed under BWC. BWC will make its loan processors
available to the Branches for processing at the principal office of BWC. The
cost of such processors will be charged to and paid promptly by the Branches on
the basis of Three Hundred Ninety Five Dollars ($395.00) per closed loan
application. The parties may later determine to employ one or more loan
processors to be dedicated solely to performing services for a Branch, in which
case the respective Branch will be charged by BWC for such employment costs and
will be credited for the processing fees from its loans.


     3.     Duties of the Parties as to the Division and the Branches.


             BWC shall manage the Division and shall do the following in managing each
Branch during the term of this Agreement:


             A.     Manage all Division and Branch personnel and assure that all persons
performing acts requiring a DRE license be duly licensed under BWC.


            B.     Operate the Division and the Branch in accordance with the policies and
procedures of BWC.


            C.     Maintain separate internal accounts for the Division.


            D.     Keep separate books and records of the Division based on the operation
of the Branches.


            E.      Provide equal priority with other loan processing done by BWC for the
loan processing of the Division.


            F.     Conduct the Division and the Branch with the highest ethical standards,
in full compliance with all applicable federal, state and local laws and
regulations, including the requirements of the DRE and the Real Estate
Settlement Procedures Act, 12 USC 2601 et. seq. All trust funds arising from
the business of a Branch shall be maintained in compliance with Business and
Professions Code Section 10145.


            The parties shall mutually determine any initial capital needed to start
the Division and the Branches and the credit that they may have for capital
already invested


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towards this from their existing relationship. Upon the
request of BWC, the parties will contribute, in proportion to their ownership, additional capital for the
operation of the Division if BWC determines that the revenues from the Division
or the Branches will be insufficient to cover the costs of operation thereof.
The parties shall mutually agree on the basis for all charges and allocations
to the Division or the Branches to be made by either party. The parties shall
also mutually establish a budget for the Division, and BWC shall then provide
monthly reports on the financial performance of the Division. BWC, on behalf
of the parties and subject to reimbursement, shall pay promptly all overhead
and operating expenses of the Division and the Branches, including any rent,
utilities, taxes, salaries for Division and Branch staff and compensation for
agents (including employee benefits). Net profits from the Division shall be
distributed proportionate to ownership on a monthly basis.


     4.     Term.


     This Agreement shall commence upon the Effective Date and shall continue
for a one-year period. If neither party gives written notice of termination
within 30 days of the end of the one-year term, then this Agreement shall
remain in effect for a subsequent year, subject to termination by written
notice within 30 days of the end of the subsequent term. Notwithstanding the
foregoing, it is expressly agreed that either party to this Agreement may
terminate this Agreement at any time during the initial or extended term by
giving the other party a written notice of termination, which notice shall
provide for termination of this Agreement not less than 120 days following the
date of such written notice.


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     5.     Proprietary Information and Files.


     All files pertaining to the transactions conducted by the Division and the
Branches during the term of this Agreement are the property of BWC, subject to
the rights of the parties arising from this Agreement, and shall be owned by
and delivered to BWC immediately upon request, or upon termination of this
Agreement.


     6.     Indemnity and Hold Harmless.


     Each party agrees to indemnify and hold harmless the other party from all
claims, demands, liabilities, judgments, and arbitration awards, including
costs and attorney’s fees, to which either party is subjected, which arises or
pertains to the failure of the other party to perform its obligations under
this Agreement.


     7.     Miscellaneous.


            A.     Construction: Governing Law.


                     This Agreement shall be interpreted, construed and governed by the law of
the State of California.


            B.     Attorney’s Fees.


                     In the event of any litigation or dispute resolution proceeding to
construe, interpret or enforce this Agreement, or any of the other agreements
and documents executed pursuant hereto or incorporated herein, the prevailing
party shall be entitled to recover reasonable attorney’s fees in addition to
such other relief as the court or arbitrator may award.


            C.     Negotiation
- Mediation. The parties will attempt in good faith to
resolve promptly any dispute, controversy, or claim arising out of or relating
to this Agreement or any claimed breach thereof by direct negotiation between
principals of the parties who have authority to settle the controversy. To
facilitate such negotiations, it is agreed that a disputing party shall give
the other party written notice of the dispute providing reasonable
particularity with respect to all issues deemed to be controverted or disputed.
Within ten (10) days after such notice is given, the principals of the parties
shall meet at a mutually acceptable time and place, and thereafter as often as
those individuals reasonably deem necessary to exchange relevant information
and attempt to resolve all disputes.


                     If the disputes have not been resolved within thirty (30) days after the
disputing party gives notice, or if the party receiving notice declines to
meet, either party may initiate mediation of the controversy, claim or dispute
in accordance with the following mediation provisions. Upon failure of the
negotiations as set forth above, the


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parties to this Agreement agree to mediate
any dispute, controversy or claim arising out
of this Agreement prior to resorting to arbitration as hereinafter provided.
Mediation is a process in which parties attempt to resolve a dispute by
submitting it to an impartial, neutral mediator who is authorized to facilitate
the resolution of the dispute, but who is not empowered to impose a settlement
on the parties. The parties shall attempt to mutually agree upon an impartial
mediator, which mediator shall be appointed jointly and compensated equally by
the parties. In the event the parties are unable to agree on an impartial
mediator, then and in that event each party shall submit to the other a list
with five (5) names of attorneys who practice in Shasta County, and have no
ongoing professional or business relationship with either of the parties. From
the lists, the parties shall, beginning with BWC, cross unacceptable names from
the list until such time as two (2) potential mediators remain. The potential
remaining mediators shall then be contacted to determine if they are available
and willing to act as mediator. In the event that both are willing and able to
act as mediator, the mediator shall be chosen alphabetically, with the
mediator’s last name serving as the alphabetical basis for choice. Should none
of the original list of mediators be available, new lists shall be prepared and
the process again undertaken.


                     Following mediation or in the event that for any reason no mediation has
been held, all disputes, controversies or claims shall be resolved by binding
arbitration as hereinafter set forth.


                     If a party commences an arbitration or court action based on a dispute or
claim as to which this section applies, without first attempting to resolve the
matter through mediation, then and in that event, such party shall not be
entitled to recover attorney’s fees, costs or expert fees, even if they would
otherwise be available to that party in any such arbitration or court action.


            D.     Arbitration.


                     Any controversy among parties arising from or relating to the performance
or interpretation of this Agreement is subject to arbitration. The parties
therefore agree that any dispute, controversy or claim, in law or equity,
arising between themselves out of this Agreement which is not settled through
mediation must be decided by neutral binding arbitration and not by court
action, except as provided by California Law for Judicial Review of Arbitration
Proceedings.


                     Arbitration shall be conducted under and pursuant to the provisions of
California Code of Civil Procedure § 1280, et seq., including the provisions of
§ 1283.05, as are in effect at the time of the arbitration, and judgment may
be entered on the award as therein provided.


                     If any party refuses or neglects to appear at or participate in
arbitration after reasonable notice, the arbitrator may decide the controversy
in accordance with whatever evidence is presented by the party or parties who
do


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participate. The arbitrator may award any remedy that is just and equitable
in the arbitrator’s opinion. The arbitrator will award to the prevailing party
or parties such
sums as are proper to compensate for the time, expense, and trouble of
arbitration, including arbitration fees, attorney fees and costs, and expert
fees. The arbitrator will retain jurisdiction of a controversy even if a party
or parties to the dispute will not or cannot be joined in the arbitration
proceedings.


            E.     Binding.


                    This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.




           F.      Notices.


                    Any notice, demand or request required hereunder shall be given in writing
(at the addresses set forth below) by any of the follow means: (i) personal
services, (ii) electronic communication, whether by telex, telegram, or
telecopying, (iii) overnight courier, or (iv) first class mail.



	 	 	 	 
	 	To BWC:	 	
BWC Mortgage Services

Attn: Scott Simonich

3130 Crow Canyon Place, Suite 240

San Ramon, CA 94583

Fax: (925) 806-0918




	 	 	 	 
	 	To Redding:	 	
Redding Service Corporation

Attn: Michael Mayer

1951 Churn Creek Road

Redding, CA 96002

Fax: (530) 224-2220



     IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below.



	 	 	 
		 	
	DATED: 	
	
BWC MORTGAGE SERVICES
		 	
	 	By  	

		 	
	DATED: 	
	
REDDING SERVICE CORPORATION




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