This Amended and Restated Master Service Agreement
is made as of March 31, 2006 (the
“Agreement”) between Xxxxxxx Bank, National Association (the “Servicer”), a national banking
association, and Xxxxxxx Preferred Capital Corporation, a corporation organized under the laws of
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
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
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
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
(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
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.
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,.
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
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
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:
||Xxxxxxx Xxxxxxx Xxxxx
||Executive Vice President, General Counsel and Secretary
||Xxxxxxx Bank, National Association
||000 Xxxx Xxxxxx
||Xxxxxxxxx, XX 00000
If to WPCC:
||Xxxxxxx X. Xxxxxxx
||Xxxxxxx Preferred Capital Corporation
||000 Xxxx Xxxxxx
||Xxxxxxxxx, XX 00000
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.
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,
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]
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.
||XXXXXXX BANK, NATIONAL ASSOCIATION
Xxxxx X. Xxxxx
||Xxxxx X. Xxxxx
||Chairman and Chief Executive Officer
||XXXXXXX PREFERRED CAPITAL CORPORATION
Xxxxxxx X. Xxxxxxx
||Xxxxxxx X. Xxxxxxx
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
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.
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 Xxxxxxx Bank in the name of Xxxxxxx 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.
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.
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
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
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.
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
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.
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.
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
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.
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.