Exhibit 10.1
AMENDED AND RESTATED MASTER SERVICE AGREEMENT
     This Amended and Restated Master Service Agreement is made as of March 31,
2006 (the “Agreement”) between Webster Bank, National Association (the
“Servicer”), a national banking association, and Webster Preferred Capital
Corporation, a corporation organized under the laws of Connecticut (the
“Customer”).
     WHEREAS, the Servicer desires to provide and the Customer desires to obtain
certain services (the “Services” or individually a “Service”), including, but
not limited to, the following:
     (1) data processing services as described in Exhibit A annexed hereto,
including the preparation of reports and other back office operations support
services as necessary to provide said data processing services;
     (2) loan servicing for all mortgage loans held by the Customer as described
in Exhibit B annexed hereto;
     (3) nonperforming loan servicing and foreclosure services as described in
Exhibit C annexed hereto; and
     (4) investment and funds management services as described in Exhibit D
annexed hereto.
     In addition, the Customer and Servicer desire to establish an intercompany
financing arrangement as described in Exhibit E annexed hereto, to facilitate
performance of all of their duties, obligations and responsibilities pursuant to
the terms of this Agreement, to provide for working capital and for any other
purpose deemed necessary by the Customer and Servicer in a manner consistent
with the terms of the Agreement.
     NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions set forth herein, the parties hereto agree as follows:
     1. The Servicer hereby agrees to provide the Services described in Exhibits
A through D annexed hereto for the Customer at the rates set forth in Exhibit F
annexed hereto.
     2. The Servicer and Customer hereby agrees to enter into an intercompany
financing arrangement, as described in Exhibit E annexed hereto. Interest shall
be due on balance at the rate set forth in Exhibit F annexed hereto.
     3. The Servicer shall revise Exhibit F to modify the rates set forth on
Exhibit F from time to time during the Initial Term and each Renewal Term to
reflect changes in the actual costs incurred or estimated costs to be incurred
by the Servicer in providing the Services to the

 

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Customer. Such revised Exhibit F shall be substituted for the Exhibit F then in
effect and shall become effective upon the date set forth in such a revised
Exhibit F.
     4. (a) The Customer represents that Exhibits A through D contain a general
description of the Services to be furnished by the Servicer to the Customer. In
performing these Services, the scope of the work undertaken and the manner of
its performance shall be substantially the same as for similar work performed by
the Servicer for transactions on its own behalf, with such modifications as may
be appropriate in order to accomplish the purposes of this Agreement. The
Servicer shall give the Customer reasonable notice of all information technology
system changes affecting the Customer’s procedures or reports as these changes
pertain to the Services.
          (b) The Servicer reserves the right to alter the contents of reports,
eliminate reports, add reports or change the frequency of delivery of reports
described in Exhibits A through D.
          (c) If the changes referred to in paragraph (a) or (b) are not
acceptable to the Customer, the Customer may terminate this Agreement on thirty
(30) days’ notice, provided such notice is given within ten (10) days after the
Customer has received notice of such change.
     5. It is understood and agreed that the performance of the Services may be
subject to regulation and examination by authorized representatives of the
federal banking regulatory agencies, or state regulatory agencies to the extent
not preempted by applicable federal laws or regulations, and that each party is
and shall be authorized to submit or furnish to any such regulatory agency
reports, information, assurances and other data as may be required by, or
reasonably requested of, it under applicable laws and regulations, including,
without limitation, any appropriate notifications concerning the initiation or
termination of this Agreement or any of the Services provided to the Customer.
Each party shall afford the other party or any examiners or authorized
representatives of federal banking regulatory agencies (or state regulatory
agencies, to the extent applicable) or either of the parties’ independent
auditors or legal counsel access to loan documentation or any other data
governed by this Agreement.
     6. The Servicer shall, with appropriate charge, promptly make any and all
modifications to the Customer’s forms, documents or reporting methods that are
required to comply with any statute, regulation, administrative rule or other
legal requirement, or any applicable supervisory guidance. The Servicer, subject
to Customer providing reasonable notice as established by Servicer, shall make
and implement these modifications by such time as the modifications may be
necessary or required.
     7. After the end of each calendar month that this Agreement is in effect,
the Servicer shall invoice the Customer for all fees and charges due the
Servicer and the Customer shall pay each such invoice upon receipt thereof. The
rates set forth in Exhibit F are exclusive of all taxes, however designated,
imposed on any amount payable hereunder for the Services or their provision to
the Customer. Any sales and use taxes, however designated, and if applicable,
shall be the responsibility of and shall be paid by the Customer.

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     8. In performing the Services, the Servicer shall be deemed to have an
independent contractual relationship with the Customer. It is agreed that the
Servicer and the Customer are not partners or parties to a joint venture, and
that the Servicer is not to act as agent for the Customer, but is to act as an
independent contractor. The Servicer shall not be deemed to have any contractual
or other relationship with the Customer’s customers. In no event shall any of
the Customer’s customers be considered a third party beneficiary of this
Agreement. To the extent that third parties may make claims against the Servicer
arising out of the Services, the Customer agrees to indemnify and hold harmless
the Servicer from and against all loss, liability, claim, action, demand or
suits, including attorneys’ fees arising therefrom.
     9. All programs, whether standard Servicer programs or programs developed
specifically for the Customer, files and documentation are the property of the
Servicer, unless otherwise specified in this Agreement. Upon termination of the
Services, the Servicer will make available to the Customer all data contained in
all master files and transaction files then available that are relevant to the
Services. Any expense incurred by the Servicer in providing such information
shall be paid for by the Customer at the Servicer’s then prevailing rates.
     10. Each party shall indemnify and hold the other party harmless against
any loss, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and other reasonable costs and expenses resulting from
any claim, demand, defense or assertion to the extent that it results from a
breach of the covenants, representations and warranties contained in this
Agreement. Upon receipt of notice of any such claim, demand, defense or
assertion, the party seeking indemnification shall promptly give written notice
thereof to the other party. The parties agree to cooperate in defense or
prosecution of any claim, demand, defense or assertion, based on or grounded
upon, or resulting from, a breach of the covenants, representations and
warranties contained in this Agreement.
     11. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, THE SERVICER MAKES NO
WARRANTIES OR REPRESENTATIONS AS TO THE SERVICES, EXPRESS OR IMPLIED, IN FACT OR
IN LAW, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
     12. The liability of the Servicer to the Customer for any loss due to the
Servicer’s performing, or failing to perform, the Services shall be contingent
upon the Customer’s compliance with its obligations herein and shall be limited
to those losses sustained by the Customer which are a direct result of the
Servicer’s gross negligence or willful misconduct; provided, however, that the
Servicer’s only liability to the Customer arising from any interruptions in, or
delay or unavailability of, the Services or any errors or omissions in the
Services or any loss of data, shall be to restore any Service which is
interrupted or is delayed or becomes unavailable, as promptly as reasonably
practicable and, in the case of any error or omission with respect to a Service
or loss of data, to correct such error or omission or regenerate any lost data;
provided, further, that the Servicer shall not be obligated hereunder to correct
any error or omission in the Services if it would not ordinarily correct such
error or omission for transactions on its own behalf,.

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     13. The Servicer shall not be responsible or liable for its failure or
delay in performance of the Services when such failure or delay arises out of,
results from, or is caused by any act or omission of the Customer or by any
event beyond the control of the Servicer, including, but not limited to, fire,
flood or other catastrophe, legal acts of a public authority, strikes, riots,
failure of communications or power supply.
     14. Notwithstanding anything contained herein to the contrary, the
aggregate amount of any money damages to which the Customer and any and all
other parties claiming by, through or under the Customer, may be entitled as the
result of any claim against the Servicer (regardless of whether such claims are
based on contract, tort (including negligence and strict liability), warranty or
other legal or equitable grounds) shall be limited to an amount equal to the
lesser of (a) the actual amount of such losses, damages, injuries, claims, costs
or expenses or (b) the aggregate annual amount payable by the Customer to the
Servicer for the Service affected, as stated on Exhibit F.
     15. Notwithstanding anything contained herein to the contrary, the Servicer
shall not incur any liability or obligation under this Agreement by reason of
any loss or damage to the Customer caused by an error or omission of the
Servicer unless the Customer shall have informed the Servicer of such error or
omission within two business days after the discovery thereof. The Customer
agrees to use diligent efforts to reconstruct any lost data, records or
materials, and, if appropriate, to charge back to the Customer’s depositors’
accounts and the forwarding banks’ accounts, and to obtain refunds from its
depositors’ forwarding banks and endorsers’ banks. If the Servicer carries
insurance against the type of loss incurred, the Customer agrees to cooperate in
furnishing proof of loss in a form satisfactory to the Servicer’s insurance
company and to assist the Servicer and its insurance company in settlement of
the claim.
     16. In the event of any material breach of a party’s obligations under this
Agreement (an “Event of Default”), the other party shall provide a written
notice of such Event of Default and a demand that such Event of Default be
cured. In the event the breaching party fails in good faith to cure such Event
of Default within ten days following receipt of such notice and demand, the
non-defaulting party may terminate this Agreement or take legal action to obtain
specific performance, injunction or other equitable relief, as well as any other
remedies as may be available at law subject to the limitations set forth in this
Agreement.
     17. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IT IS HEREBY AGREED
THAT IN NO EVENT WILL THE SERVICER BE LIABLE FOR ANY LOST PROFIT OR OTHER
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES THAT THE CUSTOMER MAY
INCUR OR EXPERIENCE BY REASON OF HAVING ENTERED INTO OR RELIED ON THIS AGREEMENT
OR ARISING OUT OF OR IN CONNECTION WITH THE SERVICES, EVEN IF THE SERVICER HAS
BEEN ADVISED OR IS OTHERWISE AWARE OF THE POSSIBILITY OF SUCH DAMAGES; NOR SHALL
THE SERVICER BE LIABLE FOR ACTS OF GOD, MACHINE OR COMPUTER BREAKDOWN OR
MALFUNCTION, INTERRUPTION OR MALFUNCTION OF

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COMMUNICATIONS OR POWER SUPPLY, LABOR DIFFICULTIES OR ANY OTHER SIMILAR CAUSE OR
CATASTROPHE BEYOND THE SERVICER’S CONTROL.
     18. The Customer may not assign this Agreement nor any of its rights or
obligations hereunder without the written consent of the Servicer. The Servicer
may assign this Agreement and any of its rights and obligations (including,
without limitation, its obligation to provide the Services) to any affiliate of
the Customer. In the event the Customer is no longer an affiliate of the
Servicer (or its successors or assigns), this Agreement shall automatically
terminate.
     19. This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of Connecticut.
     20. The Servicer will regard and preserve as confidential all data of a
confidential nature related to the business of the Customer and provided by the
Customer to the Servicer. The Servicer will take the same precautions to
preserve such confidential information as the Servicer takes with respect to its
own confidential information.
     21. This Agreement may be terminated at any time by a written agreement
between the parties and at any time by either party upon ten days prior written
notice to the other party.
     22. No waiver of any of the terms or conditions of this Agreement shall be
effective or binding unless such waiver is in writing and is signed by both of
the parties hereto, nor shall this Agreement be changed, modified, discharged or
terminated other than in accordance with its terms, in whole or in part, except
by a writing signed by both parties.
     23. All communications and notices relating to this Agreement are to be
sent:

     
If to the Servicer:
  Harriet Munrett Wolfe
 
  Executive Vice President, General Counsel and Secretary
 
  Webster Bank, National Association
 
  Webster Plaza
 
  145 Bank Street
 
  Waterbury, CT 06702
 
   
If to WPCC:
  William T. Bromage
 
  President
 
  Webster Preferred Capital Corporation
 
  145 Bank Street
 
  Waterbury, CT 06702

or to such other address as a party may designate to the other. Such notices
shall be deemed duly given three days after they are mailed or upon delivery if
they are hand delivered.

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     24. Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be in effect only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
     25. This Agreement constitutes the entire agreement of the parties hereto.
It shall supersede the Master Service Agreement between the two parties dated
March 17, 1997. There are no further or other agreements or understandings,
written or oral, in effect between the parties relating to the subject matter of
this Agreement, except the Amended and Restated Service Agreement dated
March 31, 2006.
     26. This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
     27. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same Agreement.
[Signatures on following page]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto authorized, as of the date first
written above.

            WEBSTER BANK, NATIONAL ASSOCIATION
      By:   /s/ James C. Smith       James C. Smith        Chairman and Chief
Executive Officer     

            WEBSTER PREFERRED CAPITAL CORPORATION
      By:   /s/ William T. Bromage       William T. Bromage        President   
 

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EXHIBIT A
DATA PROCESSING SERVICES
     Data processing services to be provided pursuant to this Agreement shall
include, but not necessarily be limited to, the following specific computer
services:
     1. All Customer application processing, regardless of where actually
processed, that presently exists or is established in the future for the conduct
of customer transactions and management information. The above includes
host-based activity, as well as input/output to and from such activity.
     2. Maintaining or enhancing existing, or developing new, data processing
services for the benefit of the Customer through all necessary actions.
     3. Transporting documents.
     4. Document encoding, capturing, preparing cash letters, reject handling
and bulk filing.
     The Servicer shall receive fees from the Customer as consideration for the
performance of the above data processing services pursuant to the terms of the
Agreement and in accordance with the schedule set forth below at Exhibit F.

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EXHIBIT B
LOAN SERVICING
     Loan servicing to be provided pursuant to this Agreement shall include, but
not necessarily be limited to, the following specific services:
     1. Making diligent effort to collect all sums due and payable from
borrowers under the terms of each loan.
     2. Preparing and processing month-end Delinquency Reports for nonperforming
loans. Such reports should break down delinquency in thirty (30) days, sixty
(60) days, ninety (90) days, and ninety plus (90+) days non-accrual and
foreclosure increments.
     3. Depositing all payments, including late charges and other ancillary
fees, required to be made by a borrower pursuant to the terms of the loan as
follows:
          (a) Principal and interest payments and maintenance charges shall be
deposited in separate trust accounts at Webster Bank in the name of Webster
Preferred Capital Corporation.
          (b) “Escrow Payments” shall be deposited in trust accounts. For these
purposes, the term “Escrow Payments” means all payments for whatever purpose
except, for principal and interest payments, late charges or other ancillary
fees required by the terms of each loan or otherwise to be made under the terms
of the loans. When payments are received by the Servicer, Servicer shall
determine the portion of such payments that are deemed to be Escrow Payments in
accordance with the terms of each loan, any applicable contract of insurance and
any relevant service agreements, including this Agreement. The Servicer shall
keep funds received as Escrow Payments its possession segregated from its
general corporate funds pursuant to the terms of this Agreement. The Servicer
shall pay, when due, hazard insurance premiums and shall obtain, when available,
and pay the official statements for taxes and assessments or other special
charges due against any premises secured by a mortgage securing a loan and any
manufactured home secured by a mortgage or any other security instrument or
agreement. Servicer shall pay interest on accounts holding Escrow Payments to
borrowers as required by law and the applicable loan documents.
     4. Taking all reasonable and necessary steps to cause any premises secured
by a mortgage securing a loan or a mortgage or any other security interest or
agreement securing a manufactured home loan to be kept insured against loss or
damage by fife or other hazards and for such amounts required by any servicing
agreements in effect. The Servicer shall secure and retain copies of any
insurance policies so in effect for the benefit of the Customer.
     6. Maintaining detailed records for each loan and collections thereon. The
Customer or its authorized representative may examine such records at such time
or times as it may elect during the Servicer’s normal business hours.

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     7. Taking all reasonable and necessary steps to comply with and using its
best efforts to cause the Customer to comply with any and all applicable federal
and state statutes or regulations or private mortgage insurance company
requirements, while servicing all loans pursuant to the terms of this Agreement.
     8. In the event that foreclosure proceedings are instituted, foreclosing
upon, managing and protecting the mortgaged premises in the manner and to the
extent required pursuant to the terms of Exhibit C of the Agreement.
     9. Entering all new loans and related information which may be required
from time to time onto the data processing software used by the Servicer to
service loans for the Customer.
     10. Ensuring the maintenance of perfected collateral positions securing
loans serviced pursuant to the terms of the Agreement.
     The Servicer shall receive fees from the Customer as consideration for the
performance of services pursuant to the terms of the Agreement and in accordance
with the schedule set forth below at Exhibit F.
     The Servicer shall compute, notify the borrowers of, and effect any
adjustments to the interest rate and payment terms of a serviced loan in
accordance with applicable law.

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EXHIBIT C
NONPERFORMING LOAN SERVICING AND FORECLOSURE SERVICES
     Nonperforming loan servicing and foreclosure services to be provided by the
Servicer for the Customer pursuant to the Agreement shall include, but not
necessarily be limited to, the following specific services:
     1. Instituting foreclosure proceedings in the appropriate federal or state
court as deemed necessary by the Servicer.
     2. Removing nonperforming loans from the Servicer’s loan processing system
at the time of foreclosure.
     3. Removing nonperforming manufactured home loans from the Servicer’s
processing system at the time of foreclosure.
     4. Repurchasing nonperforming loans at the outstanding principal balance at
the time of foreclosure and/or repossession.
     The Servicer shall be paid a fee by the Customer as consideration for the
performance of foreclosure services pursuant to the terms of the Agreement in
accordance with the schedule set forth below at Exhibit F.

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EXHIBIT D
INVESTMENT AND FUNDS MANAGEMENT SERVICES
     Investment and funds management services to be provided by the Servicer for
the Customer pursuant to the Agreement shall be in accordance with applicable
federal banking law, or state banking law, to the extent not preempted, and may
include, but not necessarily be limited to, the following specific services:
     1. Acting as investment agent for the Customer with respect to investment
and funds management activities. These include, but are not limited to,
investment of surplus funds into securities, money market instruments and/or
other assets that are qualified real estate assets as described in paragraph 1
of Exhibit D below; sale and/or securitization of loans; other secondary market
activities; and other permissible activities as provided for in paragraph 1 of
Exhibit D below.
     The investment and funds management activities performed by the Servicer on
behalf of the Customer shall be made in a prudent manner within the laws,
statutes and appropriate regulations pertaining to such investments. These
activities are further governed and limited by the Servicer’s approved
investment and funds management policies as amended from time to time. Policy
exceptions may be granted by the Board of Directors of the Customer or by the
written instructions signed by two authorized executive officers of the
Customer.
     The Servicer will conduct investment and funds management activities on
behalf of the Customer so as to ensure that the Customer complies at all times
with all provisions of the Internal Revenue Code applicable to Real Estate
Investment Trusts (“REIT”). Particularly, the Servicer will exercise proper
judgment and discretion to ensure that the Customer receives income only from
qualified real estate investments and invests only in qualified real estate
assets as defined in and limited by the Internal Revenue Code and regulations
and rulings thereunder. To the extent that investment and funds management
activities are permissible under the Internal Revenue Code and regulations and
rulings thereunder, but nevertheless would cause the Customer to incur
REIT-level taxation, the Servicer further will conduct investment and funds
management activities on behalf of the Customer so as to ensure that the
Customer does not incur federal or state tax in connection with these
activities.
     4. Making monthly reports of all investment and funds management activities
performed by the Servicer on behalf of the Customer available to the Customer as
required by the officers or Board of Directors of the Customer. Reporting for
regulatory or policy requirements shall be provided by the Servicer to the
Customer as required.
     5. Taking necessary steps to ensure that the investments and funds
management-related assets and liabilities of the Customer that are managed by
the Servicer are properly segregated from those of the Servicer. The proper
accounting entries which are clearly marked and identified as those of the
Customer shall be made and entered by authorized personnel of the Servicer.

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     The Servicer shall receive fees from the Customer as consideration for the
performance of investment and funds management services pursuant to the terms of
the Agreement in accordance with the schedule set forth below at Exhibit F.

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EXHIBIT E
INTERCOMPANY FINANCING
     The Customer and Servicer agree to lend available funds to one another as
may be deemed necessary from time to time in order to facilitate performance of
all of their duties, obligations and responsibilities pursuant to the terms of
the Agreement, to provide for working capital and for any other purpose deemed
necessary by the Customer and Servicer in a manner consistent with the terms of
the Agreement. Such loans by Servicer are to be extended consistent with safe
and sound banking practices.
     The Servicer shall act to ensure that any funds advanced to it by the
Customer will not exceed an amount that would cause the Customer to violate any
and all provisions of the Internal Revenue Code applicable to REITs.
Particularly, the Servicer shall exercise proper judgment and discretion to
ensure that interest paid from the Servicer to the Customer shall not exceed an
amount that would cause the Customer to violate the income and asset limitation
tests of Internal Revenue Code Section 856(c) and regulations and rulings
thereunder.
     Interest shall be due on any outstanding balances advanced pursuant to
Exhibit F of the Agreement at the rate set forth for such loans in Exhibit F
annexed hereto.

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EXHIBIT F
SCHEDULE OF FEES FOR SERVICES
PERFORMED PURSUANT TO SERVICE AGREEMENT
     For consideration of services provided by the Servicer on behalf of the
Customer pursuant to the terms and conditions of the Agreement, the Customer
shall pay the Servicer the following fees:
     (1) 8 Basis Points for fixed rate loan servicing and collection work.
     (2) 8 Basis Points for variable rate loan servicing and collection work.
     (3) 5 Basis Points for all other services to be provided.
     All fees are calculated based on the daily outstanding balance of all of
the loans in Customer’s portfolio for which Servicer is responsible.
     Interest due on outstanding balances advanced as set forth in Exhibit E of
the Agreement shall be at the Prime Rate as published in the Wall Street Journal
from time to time with the rate to change as changes are published in the Wall
Street Journal.

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