Document:

EX-10.1

 

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

 

 

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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Exhibit 10.2

AMENDED AND RESTATED ADVISORY SERVICE AGREEMENT

     This Amended and Restated Advisory Service Agreement (“Agreement”) is made as of this
31st day of March, 2006, by and between Webster Bank, National Association (the
“Advisor”), a national banking association, and Webster Preferred Capital Corporation (“WPCC”), a
Connecticut corporation, both in Waterbury, Connecticut.

WITNESSETH THAT:

     WHEREAS, WPCC is a “real estate investment trust” (“REIT”) under the Internal Revenue Code of
1986, as amended (the “Code”);

     WHEREAS, WPCC desires to obtain from the Advisor various advisory and management services to
avail itself of the experience and assistance of the Advisor and to have the Advisor undertake, on
WPCC’s behalf, the duties and responsibilities hereinafter set forth, subject to the control and
supervision of the Board of Directors of WPCC as provided for herein; and

     WHEREAS, the Advisor desires to render such advisory and management services to the Company
subject to the control and supervision of the Board of Directors of WPCC, on the terms and
conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth
and other good and valuable consideration, the parties hereby agree as follows:

	1.	 	TERM.

     The term of this Agreement shall commence as of March 31, 2006 and shall continue until March
31, 2008. Unless a notice to terminate this Agreement is sent by either party to the other party
at least ninety (90) days prior to March 31, 2008, this Agreement shall be automatically renewed
for a one-year period. Thereafter, the Agreement shall continue to be automatically renewed for
successive one-year periods unless a termination notice is sent by either party to the other party
at least ninety (90) days prior to the end of the then existing renewal term.

	2.	 	ADVISORY SERVICES.

     The Advisor shall consult with the Board of Directors and the officers of WPCC and shall, at
the request of the Board of Directors and/or the officers of WPCC, furnish advice and
recommendations with respect to all aspects of the business and affairs of WPCC. Subject to the
control and discretion and at the request of the Board of Directors of WPCC, the Advisor shall

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provide the following services (together with the services set forth in Section 6 and Section 7
hereof, the “Services”):

	 	(a)	 	administer the day-to-day operations and affairs of WPCC, including, without
limitation, the performance or supervision of the functions described in this Section 2;
	 
	 	(b)	 	monitor the credit quality of the real estate mortgage assets held by WPCC;
	 
	 	(c)	 	advise WPCC with respect to the acquisition, management, financing and
disposition of WPCC’s real estate mortgage assets;
	 
	 	(d)	 	establish and provide necessary services for WPCC, including executive,
administrative, human resource, accounting and control, technical support, secretarial,
recordkeeping, copying, mailing and distribution facilities;
	 
	 	(e)	 	provide WPCC with office space pursuant to a lease, conference room facilities,
office equipment and supplies (including computers, copy machines and fax machines) and
personnel necessary for the Services to be performed by the Advisor hereunder and to
perform the daily business of WPCC;
	 
	 	(f)	 	arrange for the investment and management of any short-term investments of WPCC
and provide any investment and fund management services in a manner consistent with
Exhibit D to the Master Service Agreement, dated March 31, 2006, between the Advisor and
WPCC;
	 
	 	(g)	 	monitor and supervise the performance of all parties who have contracts to
perform services for WPCC, provided that the Advisor shall have no duty to assume the
obligations or guarantee the performance of such parties under such contracts;
	 
	 	(h)	 	establish and maintain such bank accounts in the name of WPCC as may be required
by WPCC and approved by the Board of Directors of WPCC and ensure that all funds
collected by the Advisor in the name of or on behalf of WPCC shall be held in trust and
shall not be commingled with the Advisor’s own funds or accounts;
	 
	 	(i)	 	arrange for the execution and delivery of such documents and instruments by the
officers of WPCC as may be required in order to perform the functions herein described
and to take any other required action contemplated by the terms of this Agreement;
	 
	 	(j)	 	arrange for insurance for WPCC, including liability insurance, errors and
omissions policies and officers and directors policies, which shall cover and insure
WPCC, members of the Board of Directors and the officers of WPCC in amounts and with
deductibles and insurers approved by the Board of Directors of WPCC;

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	 	(k)	 	maintain proper books and records of WPCC’s affairs and furnish or cause to be
furnished to the Board of Directors such periodic reports and accounting information as
may be required from time to time by the Board of Directors of WPCC, including, but not
limited to, quarterly reports of all income, expenses and distributions of WPCC;
	 
	 	(l)	 	consult and work with legal counsel for WPCC in implementing WPCC decisions and
undertaking measures consistent with all pertinent federal, state and local laws and
rules or regulations of governmental or quasi-governmental agencies, including, but not
limited to, federal and state securities laws, the Code (as it relates to WPCC’s
qualification as a REIT), and the regulations promulgated under or by each of the
foregoing;
	 
	 	(m)	 	consult and work with independent accountants for WPCC in connection with the
preparation of financial statements, annual reports and tax returns;
	 
	 	(n)	 	prepare and distribute in consultation with the independent accountants for WPCC,
annual reports to stockholders which contain audited financial statements;
	 
	 	(o)	 	furnish reports to the Board of Directors of WPCC, including reports concerning
WPCC’s investments;
	 
	 	(p)	 	maintain custody of the documents related to WPCC’s mortgage assets; and
	 
	 	(q)	 	as reasonably requested by WPCC, make reports to WPCC regarding the provision of
the foregoing Services and furnish advice and recommendations with respect to other
aspects of the business of WPCC.

	3.	 	OPERATING EXPENSES; EXPENSES OF THE ADVISOR.

     (a) “Operating Expenses” for any period means all of the operating expenses of WPCC (with the
exception of those expenses to be borne by the Advisor in accordance with Section 3(b) hereof),
including, without limitation, the following:

	 	(i)	 	interest, taxes and other expenses incurred in connection with the
real estate mortgage assets of WPCC;
	 
	 	(ii)	 	expenses related to the officers, directors and employees of WPCC,
including, without limitation, any fees or expenses of the directors;
	 
	 	(iii)	 	fees and expenses payable to accountants, appraisers, external
auditors, consultants, attorneys, collection and paying agents and all other
persons who contract with or are retained by WPCC or by the Advisor on behalf of
WPCC;

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	 	(iv)	 	legal and other expenses incurred in connection with advice
concerning obtaining or maintaining WPCC’s status as a REIT, the determination of
WPCC’s taxable income, any formal or informal administrative action or legal
proceedings which involve a challenge to the REIT status of WPCC or any claim
that the activities of WPCC, any member of the Board of Directors or any
officer of WPCC were impermissible or otherwise improper;
	 
	 	(v)	 	expenses relating to communications with and reports to
stockholders of WPCC, including, without limitation, the costs of preparing,
printing, duplicating and mailing the certificates for the stock of WPCC, proxy
solicitation materials and reports to stockholders, and the costs of arranging
meetings of stockholders;
	 
	 	(vi)	 	the costs of insurance described in Section 2 hereof, including,
without limitation, directors and officers liability insurance covering the
directors and officers of WPCC;
	 
	 	(vii)	 	expenses relating to the acquisition, disposition and ownership of
the real estate mortgage assets of WPCC, including, without limitation and to the
extent not paid by others, legal fees and other expenses for professional
services and fees;
	 
	 	(viii)	 	expenses connected with the payments of dividends or interest, or distributions
in cash or any other form, made or caused to be made by the Board of Directors to
the stockholders of WPCC;
	 
	 	(ix)	 	expenses connected with any office or office facilities that are
maintained by WPCC separate from the office of the Advisor, including, without
limitation, rent, telephone, utilities, office furniture and equipment and
machinery; and
	 
	 	(x)	 	other miscellaneous expenses of WPCC which are not expenses of the
Advisor under Section 3(b) hereof.

     (b) Without regard to the compensation received pursuant to Section 4 hereof, the Advisor
shall bear the following expenses:

	 	(i)	 	employment expenses of the personnel employed by the Advisor,
including, without limitation, salaries, wages, payroll taxes and the cost of
employee benefit plans; and
	 
	 	(ii)	 	rent, telephone equipment, utilities, office furniture and
equipment and machinery and other office expenses of the Advisor incurred in
connection with the maintenance of any office facility of the Advisor.

     (c) WPCC shall reimburse the Advisor within 30 days of a written request by the Advisor for
any Operating Expenses paid or incurred by the Advisor on behalf of WPCC.

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	4.	 	FEES.

     (a) An
annual advisory fee of
$195,000 shall be payable by WPCC to the Advisor for Services
rendered by the Advisor hereunder. Payment by WPCC is due and payable monthly upon receipt of an
invoice from the Advisor.

     (b) The Advisor may revise the rate set forth in Paragraph 4(a) above to reflect changes in
the actual costs incurred by the Advisor in providing the Services to WPCC or to reflect the market
price, in the aggregate, for the Services provided by the Advisor pursuant to this Agreement.

	5.	 	PERFORMANCE OF SERVICES; CHANGES.

     (a) In performing Services under this Agreement, the scope of work undertaken by the Advisor
and the manner of its performance shall be substantially the same as for similar work performed by
the Advisor for transactions on its own behalf, with such modifications as may be appropriate in
order to accomplish the purposes of this Agreement.

     (b) The Advisor shall give WPCC reasonable notice of all changes affecting WPCC’s activities
as these changes pertain to the Services. If a change referred to in Paragraph 5(a) above
(including a revision of the annual advisory fee pursuant to Section 4(b) hereof) is not acceptable
to WPCC, WPCC may terminate this Agreement upon thirty (30) days’ notice, provided such notice is
given within ten (10) days after WPCC has received notice of the change.

	6.	 	MAINTENANCE OF RECORDS; EXAMINATIONS.

     The Advisor shall at all times, establish and maintain appropriate books of account, records
and accounting practices related to the Services performed hereunder and permit such examinations
as may be required by relevant state and federal agencies. Such books and records shall be
accessible for inspection by the Board of Directors of WPCC and representatives of WPCC at all
times. It is understood and agreed that the performance of the Services may be subject to
regulation and examination by authorized representatives of state and federal agencies, including,
but not limited to, the Office of the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System and the Federal Deposit Insurance Corporation, or state regulatory agencies,
to the extent their authority is not preempted by federal law or regulation. 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 WPCC.

	7.	 	REIT QUALIFICATION AND COMPLIANCE.

     The Advisor shall consult and work with WPCC’s legal counsel in maintaining WPCC’s
qualification as a REIT. Notwithstanding any other provisions of this Agreement to the

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contrary, the Advisor shall refrain from any action which, in its reasonable judgment or in the
judgment of the Board of Directors of WPCC (of which the Advisor has received written notice),
would adversely affect the qualification of WPCC as a REIT or which would violate any law, rule or
regulation of any governmental body or agency having jurisdiction over WPCC or its securities, or
which would otherwise not be permitted by the amended and restated certificate of incorporation or
by-laws of WPCC. Furthermore, the Advisor shall take any action which, in its judgment or the
judgment of the Board of Directors of WPCC (of which the Advisor has received written notice), may
be necessary to maintain the qualification of WPCC as a REIT or prevent the violation of any law or
regulation of any governmental body or agency having jurisdiction over WPCC or its securities.

	8.	 	SUBCONTRACTING.

     The Advisor may at any time subcontract all or a portion of its obligations under this
Agreement to one or more affiliates of the Advisor that are involved in the business of managing
real estate mortgage assets without the consent of WPCC. If no affiliate of the Advisor is engaged
in the business of managing real estate mortgage assets, the Advisor may, with the approval of a
majority of the Board of Directors of WPCC, subcontract all or a portion of its obligations under
this Agreement to unrelated third parties. Notwithstanding the foregoing, the Advisor will not, in
connection with subcontracting any of its obligations under this Agreement, be discharged or
relieved in any respect from its obligations under this Agreement.

	9.	 	OTHER ACTIVITIES OF THE ADVISOR.

     (a) Nothing contained herein shall prevent the Advisor, an affiliate of the Advisor or an
officer, director, employee or stockholder of the Advisor from engaging in any activity, including,
without limitation, originating, purchasing and managing real estate mortgage assets, rendering of
services and investment advice with respect to real estate investment opportunities to any other
person (including other REITs) and managing other investments (including the investments of the
Advisor and its affiliates).

     (b) Officers, directors, employees, stockholders and agents of the Advisor or of any affiliate
of the Advisor may serve as officers, directors, employees or agents of WPCC, but shall receive no
compensation (other than reimbursement for expenses) from WPCC for such service.

	10.	 	LIMITATIONS OF LIABILITY.

     The Advisor shall use its best efforts to provide competent personnel and reliable equipment
for the purpose of performing Services for WPCC under this Agreement. The liability of the Advisor
to WPCC for any loss due to the Advisor’s performing or failing to perform the Services shall be
limited to those losses sustained by WPCC which are a direct result of the Advisor’s gross
negligence or willful misconduct. Because of the nature of the Services to be performed hereunder
and because of the impracticability, difficulty or impossibility of ascertaining and measuring the
Advisor’s liability to WPCC for any loss or damage by reason of any error caused by the Advisor’s
negligence or otherwise, the parties hereby agree that under no

6

 

circumstances shall the Advisor be liable for any consequential or special damages, and in no event shall the Advisor’s total combined
liability to WPCC for all claims arising under or in
connection with this Agreement be more than the total amount of all fees payable by WPCC to the
Advisor under this Agreement during the year immediately preceding the year in which the first
claim giving rise to any such liability arises. For purposes of this Section 10, a “year” shall be
deemed to begin on October 20th and run until October 19th of the ensuing calendar year. If the
Advisor carries insurance against the type of loss incurred, WPCC agrees to cooperate in furnishing
proof of loss in a form satisfactory to the Advisor’s insurance company and to assist the Advisor
and its insurance company in settlement of this claim.

	11.	 	FORCE MAJEURE.

     Neither party shall be responsible for any resulting loss if fulfillment of any term or
provision of this Agreement is delayed or prevented by fire, flood, earthquake, act of God, labor
difficulties or by any other cause not within the control of the party whose performance is delayed
or prevented. If the foregoing shall occur and such situations shall continue to prevent
performance for a continuous period of sixty (60) days, then either party may notify the other
party of its intention to terminate this Agreement and this Agreement shall terminate upon receipt
of such notice.

	12.	 	DEFAULT; REMEDIES.

     (a) The occurrence of any of the following shall be an event of default (“Event of Default”)
hereunder:

	 	(i)	 	the failure of WPCC to pay any fee or charge within 30 days after
its receipt of an invoice or written request for reimbursement from the Advisor
for fees or expenses reimbursable hereunder;
	 
	 	(ii)	 	the filing of a petition in bankruptcy by or against either party
or the appointment of a receiver for either party which petition or appointment
is not discharged within thirty (30) days; or
	 
	 	(iii)	 	a material breach by either party of any of its obligations
hereunder.

     (b) In the event of any Event of Default, the non-breaching party shall provide a written
notice of such Event of Default and a demand that such Event of Default be cured. In the event
that the breaching party fails in good faith to cure such Event of Default within fifteen (15) days
following receipt of such notice and demand, the non-defaulting party may terminate this Agreement
by notice to the defaulting party.

     (c) In the event of a termination by either party pursuant to this Section 12(b), WPCC shall
nonetheless remain liable for the payment to the Advisor of all reasonable outstanding fees and
charges as of the date of such termination.

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	13.	 	INDEPENDENT CONTRACTOR.

     In performing the Services, the Advisor shall be deemed to have an independent contractual
relationship with WPCC and shall not be deemed to have any contractual or other relationship with
WPCC’s mortgagors. Nothing in this Agreement shall be deemed to create a joint venture or
partnership between the parties. In no event shall any of WPCC’s mortgagors be considered a third
party beneficiary of this Agreement. To the extent that third parties may make claims against the
Advisor arising out of the Services provided hereunder, WPCC agrees to indemnify and hold harmless
the Advisor from and against all loss, liability, claim, action, demand, or suits, including
attorney’s fees arising therefrom.

	14.	 	RELATIONSHIP OF PARTIES; ASSIGNMENT.

     Each of the parties hereto hereby acknowledges that it is an affiliate of the other party
hereto. WPCC shall not assign this Agreement nor any of its rights or obligations hereunder
without the prior written consent of the Advisor. The Advisor may assign this Agreement and any of
its rights and obligations (including, without limitation, its obligation to provide Services) to
any affiliate of WPCC. In the event WPCC is no longer an affiliate of the Advisor or its
successors or assigns, this Agreement shall automatically terminate.

	15.	 	SEVERABILITY.

     Whenever possible, each provision of the Agreement shall 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 the provisions of this
Agreement.

	16.	 	CONFIDENTIALITY.

     The Advisor shall regard and preserve as confidential all data of a proprietary and/or
confidential nature related to the business of WPCC. The Advisor will take the same precautions to
preserve such confidential information as it takes with respect to the Advisor’s own confidential
information.

	17.	 	NOTICES.

     All notices to be sent under this Agreement shall be mailed by first class mail, postage
prepaid and addressed as follows:

8

 

	 	 	 
	If to the Advisor:

	 	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

Either party may give written notice to the other to change the place of the mailing of such
notices.

	18.	 	ENTIRE AGREEMENT.

     This Agreement constitutes the entire agreement of the parties hereto. It shall supersede any
and all other previous writings and communications between the parties, including the Advisory
Service Agreement dated October 20, 1997.

	19.	 	COUNTERPARTS.

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

	20.	 	AMENDMENT.

     No modification or amendment of this Agreement shall be valid unless such modification or
amendment is in writing and executed by both parties.

	21.	 	GOVERNING LAW.

     This Agreement shall be governed by, and construed and enforced in accordance with, the laws
of the State of Connecticut.

	22.	 	HEADINGS.

     The section headings herein have been inserted for convenience of reference only and shall not
be construed to affect the meaning, construction or effect of this Agreement.

[Signatures on following page]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
authorized representatives 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 	 
	 

10

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