exv10w11



 





Exhibit 10.11




SERVICES AGREEMENT




     This Services Agreement (the “Agreement”) is entered into as of the
Effective Date, as that term is defined herein, by and between BWC Mortgage
Services (“BWC”) and Bank of Commerce MortgageSM, an affiliate of Redding Bank
of Commerce, a state chartered commercial bank (“BoC”).



RECITALS




     WHEREAS, BWC is duly licensed as a real estate broker by the State of
California and is engaged in the business of brokering residential mortgage
loans.



     WHEREAS, at all applicable times BoC will be duly qualified to act as a
real estate broker in the State of California and is experienced in providing
residential mortgage loan brokerage and related services to the general public.



     WHEREAS, BWC enjoys established business, correspondent and wholesale
broker relationships with fifty or more lenders.



     WHEREAS, the aforementioned lender relationships are available only to BWC
and its branches.



     WHEREAS, BoC desires to have immediate access to the aforesaid lender
relationships of BWC.



     WHEREAS, establishment of the aforementioned lender relationships is
expensive and can take many months.



     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, BWC and BoC agree as follows:



     1. Establishment of Branch



     The parties agree to establish a branch of BWC at each of the following
locations (the “Branch Offices”) for the purpose of conducting residential
mortgage loan brokerage pursuant to the policies and procedures of BWC and, to
the extent applicable, BoC:



	 	 	 	 	 
	1024 Mistletoe

	 	1951 Churn Creek Road,
	 	1177 Placer St.
	Redding, CA 96002

	 	Redding CA 96002
	 	Redding, CA 96001
	 
	 	 	 	 
	1504 Eureka Rd., Suite

	 	6950 Sunrise Blvd.	 	 
	100 Roseville, CA 9566

	 	Citrus Heights, CA 95610	 	 







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     2. License of BWC and Branch Offices



     a. BWC represents that it is
licensed as a real estate broker by the California
Department of Real Estate (“DRE”), pursuant to the provisions of Business and
Professions Code section 10211, and that it is doing business as a residential
mortgage broker under the name BWC Mortgage Services.



     b. BoC represents that it will at all applicable times be duly qualified
by the California Department of Real Estate to act as a real estate broker, and
will maintain that status in good standing at all times during the term of this
Agreement. On or before the execution of this Agreement, BoC will appoint Scott
Simonich as an officer of BoC for the purpose of his acting as the sponsoring
broker/officer of BoC for the issuance of a corporate broker’s license in the
name of BoC.



     3. Operation of Branch Offices



     a. BWC represents that it has procured a
branch license for each of the Branch
Offices. The parties agree that the Branch Offices shall at all times be
operated under the name Bank of Commerce MortgageSM. The parties agree that the
name Bank of Commerce MortgageSM, its service mark and any and all derivations
thereof, including but not limited to, trade names, trademarks and/or logos
used in the conduct of the business of the Branch Offices are the sole property
of BoC and that, upon termination of this Agreement, BoC will be the only party
that will retain the right to use of this name.



     b. BoC agrees to conduct and supervise, to the maximum extent permitted by
law, the day-to-day operations of the Branch Offices. BoC agrees to keep the
Branch Offices open to the public during normal business hours.



     c. The parties recognize that one or more of the Branch Offices may have
an opportunity to provide loan processing or other services to other mortgage
brokers and/or mortgage bankers. Although not expressly contemplated by this
Agreement, in the event such an opportunity presents itself, the parties agree
to negotiate, in good faith, to agree upon the terms and conditions pursuant to
which such might be included within the business of one or more of the Branch
Offices.



     4. Term



     a. This Agreement is terminable by either party, with or without
cause, at any time
on thirty (30) days notice pursuant to the notice provisions of paragraph 10.



     b. Upon termination of this Agreement for any reason, BoC shall promptly
return to BWC all originals and copies of all Proprietary Information, as that
term is defined below. BoC acknowledges and agrees that all such materials are
the sole and exclusive property of BWC, and agrees not to utilize such
materials for any purpose other than as contemplated by this Agreement, or at
all upon termination.



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     5. Duties of BWC



     BWC shall, during the term of this Agreement:



     a. Maintain the necessary branch license with the California Department of
Real Estate for each of the Branch Offices.



     b. Supervise and control the operations of each of the Branch Offices and
their respective personnel, to the extent required by law and as reasonably
appropriate.



     c. Allow the Branch Offices, and their loan agents, access to BWC’s
business, correspondent and wholesale broker relationships with lenders.



     d. Establish, implement and supervise guidelines and procedures for:




	i.	 	Quality control, including an internal audit plan and review of loan
files;
	 
	ii.	 	HMDA Reporting;
	 
	  iii.	 	Secondary market relationships, including correspondent
relationships, selling of loans, shipping and delivery of loans,
lender changes, communications and daily rate sheets;
	 
	iv.	 	Accounting, including monthly profit and loss statements, bill
paying, processing and payment of appraisal fees, collection and
payment of fees for credit reports, payroll, employee benefits, and
trust accounts, if any; and,
	 
	v.	 	Marketing, including approval of materials prepared by BoC.





     e. Provide underwriting assistance, as and when reasonably required by BoC.



     6. Duties of BoC



     a. Operate and administer the Branch Offices in accordance
with the policies and
procedures of BWC in effect from time to time, including, without limitation,
providing reasonable supervision over the activities of licensed salesperson
associates and
unlicensed assistants and support personnel working at each of the Branch
Offices. “Reasonable supervision,” as used herein, includes, as appropriate,
the establishment of policies, rules, procedures and systems to review,
oversee, inspect and manage:




	i.	 	Transactions requiring a real estate license;
	 
	ii.	 	Documents which may have a material effect upon the rights
or obligations of a party to every such transaction;





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	iii.	 	Filing, storage and maintenance of all documents created in
connection with every such transaction;
	 
	iv.	 	The handling of trust funds, (Branch Manager agrees not to
establish or use a trust fund without the prior written approval of
BWC. In the event BWC approves the use of a trust fund, Branch Manager
shall maintain, record and otherwise handle all trust funds in
compliance with Business and Professions Code Section 10145);
	 
	v.	 	The advertising of any service for which a real estate license is
required, (Branch Manager understands and agrees that all advertising
and promotional copy must comply with all applicable state and federal
laws. Accordingly, Branch Manager agrees to provide BWC with copies of
all advertising, no later than when it is made available to the public.
The term “advertising,” as used herein, shall have that meaning
attributed to it by California Business and Professions Code Section
10132.1.);
	 
	vi.	 	Familiarizing salesperson associates, and unlicenced assistants and
support personnel, with the requirements of federal and state laws
relating to the prohibition of discrimination;
	 
	vii.	 	Familiarizing salesperson associates and unlicenced assistants,
with the requirements of federal and state laws relating to the
disclosures to be given in connection with residential mortgage loan
transactions; and,
	 
	viii.	 	Ensuring that every transaction of a Branch Office, and every
salesperson associate involved in each such transaction, is in
compliance with all affirmative obligations owed to each borrower, as
required by federal law, state law and/or ethical practices, including
but not limited to: the duty of utmost care, integrity, honesty and
loyalty; the duty to disclose all material loan terms or any other
material facts that may affect the decision to borrow and to encumber
real property; the duty to maintain confidentiality, except to the
extent that information must be disclosed to a potential Lender in order
to permit the Lender to make an informed and considered decision to
extend credit; and the duty to recommend a competitive loan product in
the right class of loans (e.g., “A”. “A-”,
“B”, “C”, etc.) when considering the borrower’s income and credit
history, financial standing and net worth (including the capacity to
repay the loan), personal and financial needs, the loan terms requested
at the time of application, the type and location of the proposed real
property security, the purpose for obtaining the loan, and any time
limits the borrower has imposed to receive the loan in question.





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     b. Establish, implement and supervise guidelines and procedures for:




	i.	 	Compliance, including timely provision of appropriate disclosures in
appropriate format, assuring all files are fully documented and
complete, giving of declination notices, as and when legally mandated
and, handling of cancellations;
	 
	ii.	 	Marketing, including design of materials and, once approved by
BWC, distribution of materials;
	 
	iii.	 	Securing and maintenance of
premises, including determination of and arranging for appropriate
locations, furnishings and equipment;
	 
	iv.	 	Processing, including underwriting and preparation of
loan documentation;
	 
	v.	 	Staffing, including recruitment, entering into contracts with loan
agents, negotiating commission splits and conducting training; and,
	 
	vi.	 	Ensuring compliance with all federal, state and local
Predatory Lending Laws.





     7. Compliance with Laws, Regulations and Policies



     BWC and BoC each acknowledge that California real estate law imposes
certain obligations on BWC with regard to the supervision, employment and
compensation of any person who acts on behalf of BWC in furtherance of licensed
activity. BWC shall review and supervise the activities of the Branch Offices
as required by law and BoC shall assist BWC in carrying out its supervisory
obligations. However, nothing in this Agreement shall be construed as
relinquishing BWC’s overall responsibility for the supervision of the acts of
salesperson associates licensed to BWC. BoC agrees to comply with all federal,
state and local laws, rules, regulations, policies and procedures to which BWC
and/or BoC are subject while engaged in licensed mortgage brokerage activity,
at all times during the term of this Agreement. BoC agrees to provide to
borrowers and potential borrowers such disclosures, in such form and in such
manner as BWC, in its sole discretion, shall require from time to time. The
parties understand and agree that changes in federal, state and/or local laws,
rules, regulations, policies and procedures may necessitate, in BWC’s sole
discretion, future amendment of this Agreement in order to maintain full
compliance. Accordingly, such amendments may be made by notice given
in accordance with the provisions of paragraph 10 below. Any such
amendment shall become a part of this Agreement thirty (30) days after notice.



     8. Payment of Compensation



     As compensation for the services to be rendered by it hereunder, BWC shall
retain an Operations Fee equal to ten (10%) of all yield spread premiums,
broker rebates and/or service release premiums received by the Branch Offices.
Thereafter, BWC shall pay one hundred



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percent (100%) of all Net Profits realized from the operation of the Branch
Offices to BoC, in consideration of the services to be provided by BoC
hereunder. The term “Net Profits,” as used herein, shall mean Net Income from
operations after Expenses but before taxes, in conformity with mortgage
industry accounting practices, all as determined according to sound accounting
principles. Net Income shall be determined by deducting Expenses from Gross
Income. The term “Gross Income” shall mean all income earned and derived from
the Branch Offices. The term “Expenses” shall mean all operating expenses of
the Branch Offices, including those items of Expense identified elsewhere in
this Agreement and including but not limited to the following:




     a. the above described Operations Fee equal to ten (10%) of all yield
spread premiums, broker rebates and/or service release premiums received by the
Branch Offices, which sum shall be retained by BWC;



     b. rent, copiers, office supplies, telephone service and utilities;



     c. all costs associated with the acquisition and maintenance of furniture,
fixtures and
equipment reasonably necessary and appropriate to the operation of the Branch
Offices;



     d. all costs associated with obtaining and maintaining appropriate
business licenses for each of the Branch Offices, as required by law;



     e. commissions, salaries, payroll costs and expenses, and benefits of all
employees and loan agents working at the Branch Offices, including premiums for
liability and errors and omissions insurance, and, if appropriate, worker’s
compensation insurance. (The cost of errors and omissions insurance will be
paid by the Branch Offices, as determined by the actual difference between the
premium charged for such insurance to BWC without carrying the Branch Offices’
coverage and BWC’s cost for adding the Branch Offices to the policy).



     f. all costs incurred by BWC in connection with the repurchase, by reason
of fraud, of any loans originated by the Branch Offices. Such costs may
include, without limitation, disputes or settlements involving demands to
repurchase loans;



     g. loss or costs, including reasonable attorneys’ fees arising out of
suits, actions, audits, foreclosures, or legal proceedings of any nature,
arising out of the
activities or operations of the Branch Offices;



     h. all costs incurred by BWC in connection with Early Pay-offs or Early
Payment Defaults, by reason of fraud, of any loans originated by the Branch
Offices;



     i. all costs (including up-front fees) to lock and/or extend locked loans; and,



     j. monthly shortages resulting from, but not limited to, non-collection of fees
paid
for credit reports, appraisals, etc.



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     9. Proprietary Information



     All loan files, records, documents, lists, rate sheets, product
guidelines, investor/secondary market information, databases, trade secrets,
procedure manuals, training manuals, forms, marketing materials, hardware and
software obtained from BWC, and similar items relating to the business of BWC
(collectively “Proprietary Information”) whether prepared by BoC or otherwise,
which comes into the possession of any Branch Office, its personnel and/or BoC
during the term of this Agreement shall be, and remain, the exclusive property
of BWC.



     10. Notices



     Any notice required or permitted under this Agreement shall be in writing,
delivered to the party at the address set forth for such party below, and shall
be deemed effectively delivered upon (i) personal delivery, (ii) one (1) day
after deposit for overnight delivery with Federal Express or a comparable
national express courier, or (iii) five (5) days after deposit in the United
States mail, by first-class mail, postage prepaid. Notices shall be delivered
to the parties at the following addresses:



	 	 	 	 
	 	If to BWC:

	 	If to BoC:
	 	 
	 	 
	 	Scott Simonich

	 	Michael Mayer
	 	BWC Mortgage

	 	Redding Bank of Commerce
	 	3130 Crow Canyon Place, Suite 170

	 	1951 Churn Creek Road
	 	San Ramon, CA 94583

	 	Redding, CA 96002







     A party may designate another address for notice purposes upon written
notice thereof pursuant to the provisions of this paragraph.



     11. Indemnity and Hold Harmless



     a. BoC agrees to indemnify, defend and hold BWC, its officers, directors,
shareholders and employees, and their respective successors and assigns,
harmless from and against all liability, claims, losses, suits, demands, costs,
expenses, penalties, fines, forfeitures, judgments, or damages, including
reasonable attorneys’ fees and court costs arising from its negligent acts
and/or omissions or willful misconduct, including but not limited to matters
arising out of or in connection with the failure of BoC to comply with any
federal or state law, regulation, order, rule, or other legal requirement
related directly or indirectly to the brokering of residential mortgage loans.



     b. BWC agrees to indemnify, defend and hold BoC, its officers, directors,
shareholders and employees, and their respective successors and assigns,
harmless from and against all liability, claims, losses, suits, demands, costs,
expenses, penalties, fines, forfeitures, judgments, or damages, including
reasonable attorneys’ fees and court costs arising from its negligent acts
and/or omissions or willful misconduct, including but not limited to matters
arising out of or in connection with the failure of BWC to comply with any
federal or state law,



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regulation, order, rule, or other legal requirement related directly or
indirectly to the brokering of residential mortgage loans.




     c. The cost of securing and maintaining insurance coverage for some or all
of the matters covered by this paragraph 11, including but not limited to the
payment of any deductible(s), shall be considered an expense of the Branch
Offices.



     12. Authority to Contract




     a. BoC shall have no authority to enter into any agreement in the name of BWC.
BoC agrees to indemnify and hold BWC harmless from and against any and all
liability arising out of any agreement entered into without the prior written
consent of BWC. This covenant of indemnity shall include all costs of defense,
including reasonable attorney’s fees, for any such claim asserted.




     b. BWC shall have no authority to enter into any agreement in the name of
BoC. BWC agrees to indemnify and hold BoC harmless from and against any and all
liability arising out of any agreement entered into without the prior written
consent of BoC. This covenant of indemnity shall include all costs of defense,
including reasonable attorney’s fees, for any such claim asserted.



     13. Status of Loans in Process at Termination



     Except in the case of termination due to fraud or intentional breach of
duty to a client, and subject to any applicable law to the contrary, any
mortgage loans which are in process or which have been originated by the Branch
Offices, up to and including any mortgage loans originated through 5:00 p.m. on
the date of termination of this Agreement, shall be processed, submitted and
closed by BWC. BoC shall receive compensation related thereto in accordance
with the terms of this Agreement, as if such loans had been closed prior to
termination, provided that all loan files and other BWC property have been
returned to BWC. All rights of BoC to compensation under this Agreement shall
immediately terminate in the event of the termination of this Agreement due to
fraud or intentional breach of a fiduciary duty to a borrower.



     14. Arbitration



     Any dispute, claim or controversy arising out of or relating to this
Agreement or the breach, termination, enforcement, interpretation or validity
thereof, including determination of the scope or applicability of this
arbitration provision, shall be determined by binding arbitration in Contra
Costa County, California, before a sole arbitrator, in accordance with the laws
of the State of California for agreements made in and to be performed in that
state. The arbitration shall be administered by JAMS pursuant to its
Comprehensive Arbitration Rules and Procedures. Judgment on the arbitration
award may be entered in any court having jurisdiction.



     The arbitrator shall, in the arbitration award, allocate all of the costs
of the arbitration and the reasonable attorneys’ fees of the prevailing party
against the party who did not prevail.



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     15. Miscellaneous



     a. Effective Date



     The “Effective Date” of this Agreement shall be the date that it is has
been signed by both BWC and BoC.



     b. Assignment



     No party to this Agreement shall assign any of its rights, duties and/or
obligations hereunder, without the prior written consent of the other, which
consent shall not be unreasonably withheld. Any permitted assignee shall be
considered an intended third-party beneficiary of the representations,
warranties, covenants, agreements and remedies contained herein.



     c. Choice of Law



     This Agreement shall be governed by and construed under the laws of the
State of California, without regard to its conflicts of laws principles.



     d. Integration



     This Agreement is the entire agreement between the parties regarding the
subject matter and supersedes any prior oral or written agreement among them
regarding the subject matter contained herein.



     e. Amendment



     This Agreement may not be amended or modified orally and no provision of
this Agreement may be waived or amended except in a writing which makes
reference to this Agreement and which is signed by BWC and BoC.



     f. Severability



     If a court of competent jurisdiction finds any provision in this Agreement
to be invalid, illegal, or otherwise unenforceable, that determination will not
affect any other provision of this Agreement. The invalid provision will be
severed from this Agreement and all remaining provisions will continue to be of
full force and effect.



     g. Interpretation



     Any ambiguities in this Agreement will not be strictly construed against
the drafter of the language concerned but will be resolved by applying the most
reasonable interpretation under the circumstances giving full consideration to
the intentions of the parties at the time of contracting. This Agreement will
not be construed against any party by reason of its preparation.



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     h. No Third Party Beneficiaries



     Except as expressly set forth in subparagraph 15(b), above, this Agreement
has been made by, and is made solely for the benefit of BoC and BWC, their
respective successors and permitted assigns. Except as expressly set forth in
subparagraph 15(b) above, nothing in this Agreement is intended to confer any
rights or remedies under or because of this Agreement on any persons or
entities other than the parties to it and their respective successors and
permitted assigns. Nothing in this Agreement is intended to relieve or
discharge the obligation or liability of any third person or entity to any
party to this Agreement.



     i. Waiver



     No waiver of any provision of this Agreement or consent to any action
shall constitute a waiver of any other provision of this Agreement or consent
to any other action. No waiver or consent shall constitute a continuing waiver
or consent, or commit a party to provide a future waiver.



     j. Further Assurances



     BWC and BoC each covenant and agree to execute and deliver any and all
additional papers, documents and other assurances, and to do any and all acts
and things reasonably necessary in connection with the performance of their
respective obligations hereunder to carry out the intent and purpose of this
Agreement.



     k. Captions



     All captions and headings in this Agreement are for reference only and may
not be used in the interpretation of this Agreement or any related document.



     l. Counterparts



     This Agreement may be executed in counterparts, each of which shall
constitute an original, but all of which together shall constitute one and the
same instrument. The parties agree that a signed copy of this Agreement
transmitted by one party to the other by facsimile transmission shall be
binding upon the sending party to the same extent as a signed original of this
Agreement.



     m. Attorneys’ Fees



     In the event that any action is brought by either party to enforce the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys’ fees and costs.



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     n. Survival Upon Termination



     The representations, warranties, covenants and other obligations and
agreements of BWC and BoC, as contained in this Agreement, including without
limitation indemnification obligations, shall survive any termination of this
Agreement.



     o. Non-exclusive Remedies



     No remedy under this Agreement is exclusive of any other available remedy,
but each remedy is cumulative and is in addition to other remedies given under
this Agreement or existing in law or in equity.



     p. Offset



     Amounts past due and owing by BoC to BWC under this Agreement may, at
BWC’s option and in its sole discretion, be offset by BWC against any payments
or other indebtedness then or thereafter owed by BWC to BoC. Amounts past due
and owing by
BWC to BoC under this Agreement may, at BoC’s option and in its sole
discretion, be offset by BoC against any payments or other indebtedness then or
thereafter owed by BoC to BWC.



     q. Statute of Limitations



     Any action arising under this Agreement or because of its breach must be
commenced within one year after the cause of action accrues.



     r. No Partnership or Joint Venture Intended



     BWC and BoC intend that, to the maximum extent permissible by law, this
Agreement shall not be construed as a partnership and/or joint venture.



     s. Anti-Poaching



     BWC and BoC each agree not to solicit or in any way entice to leave,
interview, hire or contract with, either directly or indirectly, any employees
or independent contractors affiliated with the other, or any of its affiliates,
during the term of this Agreement, and for a period of one
(1) year following termination of this Agreement.



     t. Jury Trial



     BoC and BWC each agree, to the maximum extent permitted by law, to waive
trial by
jury in any action or proceeding arising out of this Agreement.



     Signature Page Follows



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     IN WITNESS WHEREOF, the undersigned
have executed this Agreement at San
Ramon, California.



	 	 	 	 	 
	Dated:

	 	Dated:	 
	 

	
	 	

	BWC

	BoC
	 	 
	 	 	 
	By:

	 	By:	 
	 

	
	 	

	 	Scott Simonich

	Name: Michael Mayer







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