Bank of New York Mellon v. City of Richmond, California et al

Filing 60

Declaration of Brian D. Hershman in Support of 59 Opposition/Response to Motion, for Rule 11 Sanctions filed byU.S. Bank National Association. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G)(Related document(s) 59 ) (Hershman, Brian) (Filed on 11/22/2013)

Exhibit D

ADVISORY SERVICES AGREEMENT

This Advisory Services Agreement ("Agreement") is entered into by and between
Mortgage Resolution Partners LLC, a Delaware limited liability company ("MRP") and the City
of Richmond, a municipal corporation and charter city (the "City") and is effective as of
~k-'1 ~(
, 2013 (the "Effective Date").
RECITALS

A.
MRP is a community advisory finn advising public agencies on ways to
assist the agency in reducing the impact of the mortgage crisis with its communities including, if
necessary, by acquiring mortgage loans through the use of eminent domain, in order to
restructure or refmance the loans and thereby preserving home ownership, restoring homeowner
equity and stabilizing the communities' housing market and economy by allowing many
homeowners to remain in their homes.
B.
America in general and the City in particular are each experiencing an
historic home mortgage crisis and as a result of the home mortgage crisis, many homeowners in
the City have lost significant portions of their disposable income, and some have been unable to
make timely mortgage payments on their homes. This has resulted in unprecedented rates of
default and foreclosure, loss of homeowner equity, loss of family wealth, and even loss of shelter
for some families. The home mortgage crisis bas resulted in other adverse impacts within the
City such as job losses, reductions in income, consumer demand, and investment, a spiraling
reduction in property values, a redu'ction in property and payroll tax revenues, vandalism,
abandoned homes and a general decline in the economy and the quality of life for residents.
Restructuring or refinancing mortgage loans will benefit the City's residents by preserving home
ownership; restoring homeowner equity; and likely also increasing income, property values,
consumer demand, investment, and property and payroll tax revenue.
C.
The City is interested in retaining MRP to act as its advisor to assist the
City in exploring potential solutions to the mortgage crisis; to assist the City by negotiating on
the City's behalf with entities which will provide the necessary funding to the City in order to
allow the City to acquire loans; and to assist the City in negotiating contracts with third parties
including owners of loans, attorneys, lenders, data companies, other government agencies and
others as necessary to implement a program or programs to benefit the City's residents.
NOW THEREFORE, in consideration of the foregoing, MRP and the City agree
as follows:
1.
PURPOSE. The purpose of this Agreement is to enable the City and MRP to work
together to assess and implement a program or programs designed to ease the impacts of the
mortgage crisis on the residents of the City.

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2.
SERVICES. MRP agrees to provide the following services ("Services"), and the City
authorizes MRP to represent the City as described:
(a)
to advise the City on various alternatives in order to provide assistance to its
residents who are burdened with mortgage loans including assessing the possibility and benefits
of the formation of a joint powers authority;

(b)
to identify and negotiate with companies acceptable to the City, in City's sole and
absolute discretion, to lend funds to the City on a fully secured, non-recourse basis if such funds
are required in order to provide the necessary relief;
(c)
to provide extensive legal research acquired by MRP on all aspects of the
acquisition and refinancing of mortgage loans inc1uding each of the legal steps necessary to
implement the necessary programs;
(d)
to identify and negotiate with law firms acceptable to the City, in City's sole and
absolute discretion, to work with the City to implement the programs which the City elects to
implement;
(e)
to negotiate with other local, state and federal governments and agencies as
necessary to implement programs chosen by the City;

(f)
to negotiate on behalf of the City with the holders of mortgage loans secured by
property owned by residents of the City (and with trustees, servicers, investors and other parties
having a relationship with the holders of the loans);
(g)
criteria;

to work with the City to identify mortgage loans to target based upon the City's

(h)
to negotiate on behalf of the City with any other third party as necessary to
implement programs which the City elects to implement; and
(i)
to work with the City to establish education and communication programs to
address residents' questions about a program or programs the City implements.
Provided, however, MRP shall not take action or implement programs or tasks set forth in
subsection (b), (d), (e), (f) and (h) hereof without the express written consent of City in advance,
which consent may be withheld in the City's sole and absolute discretion. Provided further,
however, in no event shall MRP have the authority to enter into any contracts on behalf of the
City.
3.
COMPENSATION. As its sole and exclusive compensation for the performance of the
Services (the "Advisory Fee"), MRP shall receive the sum of $4,500 per loan for each loan
ultimately acquired by the City or otherwise resolved in a manner which results in the
restructuring or refinancing of a loan through a program implemented by the City. The Advisory
Fee shall be paid only through the programs implemented by the City and shall not be paid
directly by the City. City shall not be responsible for any cost or expense arising out of or related
to this Agreement or any program or programs the City implements.

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4.
ASSIGNMENT. MRP shall not have the right to assign and/or delegate its duties
hereunder without the prior written consent of City, which consent may be withheld in the City's
sole and absolute discretion.

5.
COOPERATION. Each party agrees to cooperate to carry out the purpose of this
Agreement and to perform all acts and execute all documents reasonably required to institute the
programs chosen by the City pursuant to the terms of this Agreement or as are or may become
necessary or convenient to effectuate and carry out this Agreement.

6.

RELATIONSHIP OF PARTIES. The relationship ofMRP to the City shall at all times
be that of an independent contractor. MRP expressly acknowledges and agrees that it does not
have the authority to bind the City by contract or otherwise.

7.
TERM. This Agreement shall be in effect for a period of one (I) year from the Effective
Date and will be renewed automatically for successive terms of one (1) year each unless either
party gives notice to the other at least sixty (60) days prior to the termination of any term. Upon
any such termination, this Agreement shall be null and void and of no further force or effect,
except as to those provisions which expressly survive the termination of the Agreement.

8.

INDEMNITY.

(a)
Except to the extent caused by the sole active negligence or willful misconduct of
City, City and City's representatives shall not be liable for any liability, penalties, costs, losses,
damages, expenses, causes of action, claims or judgments, including attorney's fees and other
defense costs (collectively, "Claims"), resulting from injury to or death sustained by any person,
or damage to property of any kind, or any other injury or damage whatsoever, which Claims
arise out of or are in any way connected with this Agreement or any programs or tasks
implemented pursuant to this Agreement.
(b)
Except to the extent caused by the sole active negligence or willful misconduct of
City, MRP shall indemnify, protect, defend and hold the City and its representatives, harmless of
and from any and all Claims arising out of or in any way related to or resulting directly or
indirectly from (i) this Agreement, (ii) the programs or tasks implemented pursuant to this
Agreement, (iii) any failure to comply with any applicable law, and (iv) any default or breach by
MRP in the performance of any obligation ofMRP under this Agreement.
The provisions of this Section 8 shall survive the expiration or sooner termination
(c)
of this Agreement.
9.
INSURANCE. Upon receiving approval from the City to take action or implement
programs or tasks set forth in subsection (b) of Section 2, MRP, at its own cost and expense,
shall provide and maintain insurance coverage as required in Exhibit A, "City of Richmond
Insurance Requirements - Type IT: Professional Services". MRP shall submit current certificates
of insurance for the policies required in this Section 9 before taking action or implementing any
programs or tasks set forth in subsections (b), (d), (e), (f) and (h) of Section 2.

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I0.

GENERAL PROVISIONS.

(a)
Execution. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an. original. A signature transmitted via scanning and emailing or
facsimile shall have the same effect as an original signature.
(b)
Modification of Agreement. This Agreement may be modified only by a writing
signed by MRP and the City.

(c)
Entire Agreement. This Agreement together with any Nondisclosure and/or
Common Interest Agreements entered into between the parties either prior or subsequent to the
Effective Date constitute the entire understanding and agreement between the parties concerning
this subject matter.
(d)
Severability. If a court of competent jurisdiction finds or rules that any provision
of this Agreement is invalid, void, or unenforceable, the provisions of the Agreement not so
adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision
of this Agreement shall not void or affect the validity of any other provision of this Agreement.
(e)
Governing Law. This Agreement is governed by and shall be interpreted
according to the laws of the State of California. This Agreement is made in Contra Costa
County, California, and any action relating to this Agreement shall be instituted and prosecuted
in the courts of Contra Costa County, California.
(f)
Waiver of Breach. No waiver of breach of any term or provision of this
Agreement shall be construed to be, or shall be, a waiver of any other breach of this Agreement.

(g)
Arms-Length Transaction. This Agreement is a product of arms-length
negotiations and each party has had an opportunity to receive independent legal advice from
attorneys of its own choosing. Thus, neither party can claim that any ambiguities in any term of
this Agreement should be construed against any other party.
(h)
No Third Party Beneficiaries. This Agreement will not confer any rights or
remedies upon any person other than the parties hereto and their permitted successors and
permitted assigns.
11.
NOTICES. All notices under this Agreement shall be in writing and shall be transmitted
by personal delivery or reputable overnight courier service such as FedEx to the parties at the
following addresses:

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MRP:
Mortgage Resolution Partners, LLC
33 Pier South Embarcadero, Suite 201
San Francisco, CA 94111
Attn: CEO

The City:
450 Civic Center Plaza
Richmond, CA 94804
Attn: City Manager
With copy to:
450 Civic Center Plaza
Riclnnond, CA 94804
Attn: City Attorney

Such notice shall be deemed given upon personal delivery to the appropriate address or
on the next business day if sent by overnight courier service.

WHEREFORE, the parties indicate by their signatures below their entry into this
legally-binding Agreement.
The City

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(signature)
Name (printed):

(date)

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Mailing address:
Telephone no.:

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Date of Signing:

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Attest '

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E-mail address:

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City Clerk

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Representative:

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(date)
Name (printed):

Graham Williams

Mailing address:

33 Pier South Embarcadero, Suite 201, San Francisco, CA 94111

Telephone no.:
E-mail address:
Date of Signing:

[e-mail]

7-'2-5-

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Exhibit A
Insurance Requirements

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Exhibit A

City of Richmond - Insurance Requirements - Type 2:
Professional Services
In all Instances where CONTRACTOR or Its representatives will provide professional services (architects, engineers,
construction management, counselors, medical professionals, hospitals, clinics, attomeys, consultants,
accountants, etc.) to the Oty of Richmond (City), the City requires the following MINIMUM Insurance requirements
and limits.
CONTRACTOR shall procure and maintain for the duration of the contract, agreement, or other order for work,
services or supplies, Insurance against claims for Injuries to persons or damages to property which may arise from
or In connection with the performance of the work hereunder and the results of that work by the CONTRACTOR, Its
agents, representatives, employees or subcontractors. Maintenance of proper Insurance coverage Is a
material element of the contract. Failure to maintain or renew coverage or to provide evidence of
renewal may be treated by the City as a material breach of contract.
CONTRACTOR agrees that In the event of loss due to any of the perils for which It has agreed to provide
Commercial General Liability Insurance, CONTRACTOR shall look solely to Its insurance for recovery.
CONTRACTOR hereby grants to CITY, on behalf of any Insurer providing Commercial General Liability Insurance to
either CONTRACTOR or CITY with respect to the services of CONSULTANT herein, a waiver of any right to
subrogation which any such Insurer of said CONTRACTOR may acquire against the CITY by virtue of the payment of
any loss under such Insurance.
Original, signed certificates and original, separate policy endorsements, naming the City as an additional Insured
for general liability coverage, as well as a waiver of subrogation for Workers' Compensation Insurance, shall be
received and approved by the City before any work may begin. However, failure to do so shall not operate as a
waiver of these Insurance requirements.
City reserves the right to modify or require additional coverages for specific risk exposures depending on scope of
CONTRACTORS work.
Minimum coverage is detailed below. The policy limits of coverage shall be made available to the full limits of the
policy. The minimum limits stated herein shall not serve to reduce the policy limits of coverage of CONTRACTOR.

Minimum Scope of Insurance - the following forms shall be provided and coverage shall be at least as broad as
the following:
1.

2.
3.
4.
5.
6.

Insurance Services Office Commercial General Liability coverage (ISO Occurrence Form CG 0001}, and
including coverage for bodily and personal Injury, property damage, and products and completed
operations (if applicable).
Insurance Services Office Automobile Liability coverage (ISO Form CA 0001, Code 1, Any Auto).
Original and Separate Additional Insured Endorsement for General Liability {ISO Form CG 20 10 11/85 or
its equivalent) with primary and non-contributory language.
Workers' Compensation Insurance as required by the State of California Including Employer's Liability
coverage.
Original and Separate Waiver of Subrogation for Workers' Compensation Insurance.
Professional Liability or Errors & Omissions Liability Insurance appropriate to the CONTRACTOR's
profession {If required.)

Requ1red Coverage

Minimum Limits

Workers' Compensation and
Employers' Liability

Statutory limits as required by the State of california Including $1 million
Employers' Liability per accident, per employee for bodily Injury or disease.
If CONTRACTOR is self-insured, provide a certificate of Permission to SelfInsure, signed by the California Department of Industrial Relations and SelfInsurance. If contractor is a sole proprietor (has no employees) than
contractor must sign "Contractor Release of Liability" found at:

General Liability
(primary and excess limits
combined)

$2,000,000 per occurrence for bodily injury, personal injury and property
damage. If the policy Includes a general aggregate, either the general
aggregate shall apply separately to this project, service or location or the
minimum required aggregate limit shall be twice the per occurrence
limit ($4 million aggregate limit).
Polley shall be endorsed to name the City of Richmond as an additional
Insured per the conditions detailed below.

httD!//1

Type 2 - Page
Revised: September 2011

""".U&/index.acnv'7nllf:li1,

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_

Exhibit A

City of Richmond - Insurance Requirements - Type 2:
Professional Services
Automobile Liability

$1,000,000 per occurrence for bodily Injury and property damage.

Professional Liability or Errors &
Omissions Liability Required for all professionals
Including architects, engineers,
consultants, construction
management, counselors, medical
professionals, hospitals, clinics,
attorneys and accountants, & other
consultants as may be required by
the City.

$3,000,000 per occurrence

Requrred Policy Conditions

Additional Insured Endorsement

Applicable to General Liability coverage.
The City of Richmond, Its officers, officials, employees, agents and
volunteers are to be named as additional Insureds for all liability arising out
of the operations by or on behalf of the named Insured Including bodily
Injury, deaths and property damage or destruction arising in any respect
directly or Indirectly In the performance of this contract.

:rso form

CG 20 1.0 (11./85) or Its equivalent Is required. If the
Contractor Is supplying their product or providing a service then the
endorsement must nqt exclude products and completed operations
coverage. :Cf it does, then CG 20 37 ( 1.0/01.) is also required.
SAMPLE Endorsements can be found at
htto:l/www.cl.rjchmqnd.ca,us/iadex.aspx7ajd=61 .

Primary and Noncontributory

The contractor's Insurance coverage must be primary coverage as it pertains
to the City, Its officers, officials, employees, agents and volunteers. Any
Insurance or self Insurance maintained by the City Is wholly separate from
the Insurance of the contractor and In no way relieves the contractor from its
responsibility to provide Insurance.

Waiver of Subrogation
Endorsement Form

Contractor's insurer will provide a Waiver of Subrogation in favor of the City
for Workers' Compensation Insurance during the life of this contract.
SAMPLE Endorsements can be found at
htto:/lwww.cj.richmqnd.ca.uslindex.asox?nid=61..

Deductibles and Self-Insured
Retentions

Any deductible or self-insured retention must be declared to and approved
by the City. At the option of the City either the Insurer shall reduce or
eliminate such deductlbles or self-Insured retention as respects the City or
the CONTRACTOR shall procure a financial guarantee in an amount equal to
the deductible or self-Insured retention guaranteeing payment of losses and
related Investigations, claims administration and defense expenses.
Contractor is responsible for satisfaction of the deductible and/or self-Insured
retention for each loss.

A. M. Best Rating

A:VII or Better. If the A.M. Best Rating falls below the required rating,
CONTRACTOR must replace coverage immediately and provide notice to City.

Umbrella/Excess Liability Policies
If an Umbrella or Excess Liability Polley Is used to meet the liability limits, coverage shall be as broad as specified
for underlying coverage's and cover those insured In the underlying policies.

Type 2 - Page
Revised: September 2011

2 of 3

Exhibit A

City of Richmond - Insurance Requirements - Type 2:
Professional Services
Claims-Made Policies
If any Insurance policy Is written on a dalms· made form : 1) the retroactive date must be shown, and must be
before the date of the contract or the beginning of contract work . 2) Insurance must be maintained and evidence
or Insurance must be provided for at feast five (5) years after completion of the contract of work. 3) If coverage Is
canceled or non-renewed, and not replaced with another claims-made policy form with a retroactive date prior to
the contract effective date, the Contractor must purchase an extended period coverage for a minimum of five (5)
years after completion of contract work.
Subcontractors
CONTRACTOR shall Include all subcontractors as Insured under Its policies or shall furnish to the City for review and
approval, separate certificates and endorsements for each subcontractor. All coverage for subcontractors shall be
subject to all of the requirements stated herein.
CONTRACTOR agrees to defend and Indemnify the City of Richmond for any damage resulting to It from failure of
either CONTRACTOR or any subcontractor to take out or maintain the required Insurance policies. The fact that
Insurance Is obtained by CONTRACTOR, and/or CONTRACTOR's subcontractors, will not be deemed to release or
diminish the liability of CONTRACTOR, Including, without limitation, liability under the Indemnity provisions of this
contract. Damages recoverable by CITY from CONTRACTOR or any third party will not be limited by the amount of
the required Insurance coverage.
Verification of Coverage
All orlglnal ·certlflcates and endorsements shall be received and approved by the City before work mav begin.
The City of Richmond reserves the right to require complete, certified copies of all required Insurance policies
Including endorsements affecting the coverage at any time.
Original insurance certificates and required policy endorsements shall be mailed or delivered to the
Designated Project Manager for the City of Richmond.
Insurance certificates and endorsements may be faxed to the Designated Project Manger. However, CONTRACTOR
must mall the original certificates and endorsements to Designated Project Manager once faxed.
Continuous Coverage
CONTRACTOR shall maintain the required Insurance for the life of the contract. Should the CONTRACTOR cease to
have insurance as required during this time, all work by the CONTRACTOR pursuant to this agreement shall cease
until Insurance acceptable to the City Is provided. In the event that CONTRACTOR fails to comply with the City's
insurance requirements, the City may take such action as It deems necessary to protect the City's Interests. Such
action may Include but Is not limited to termination of the contract, withholding of payments, or other actions as
the City deems appropriate .
If services or the scope of work extend beyond the expiration dates of the required Insurance policies lnltl~lly
approved by the City, CONTRACTOR must provide updated certificates and endorsements Indicating that the
required coverage, terms and conditions are still In place. Renewal certificates and updated endorsements
shall be mailed to the Designated Project Manager.
Cancellation
CONTRACTOR shall ensure that coverage shall not be cancelled, reduced or otherwise materially changed except
after thirty (30) days' prior written notice has been given to the City.
Reporting Requirements
Any failure to comply with reporting or other provisions of the policies Including breaches of warranties shall not
affect coverage provided to the City, Its officers, officials, employees or volunteers.
Consistent with Public Polley
The Insuring provisions, Insofar as they may be judged to be against public policy shall be void and unenforceable
only to the minimum extent necessary so that the remaining terms and provisions herein may be consistent with
public policy and thus enforceable.

Type 2 - Page

Revised: September 2011

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