$321,422,908.82
XXXXX CHASE AUTO RECEIVABLES TRUST 1996-2
_____% Auto Receivables Backed Certificates
UNDERWRITING AGREEMENT
December ___, 1996
CS FIRST BOSTON CORPORATION
Park Avenue Plaza
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X. XXXXXX SECURITIES INC.
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
XXXXX XXXXXX INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTION. Chevy Chase Bank, F.S.B., a federally chartered stock
savings bank ("Chevy Chase"), has authorized the issuance and sale of ___%
Auto Receivables Backed Certificates (the "Certificates"), evidencing
interests in a trust (the "Trust") consisting, among other things, of (i) a
combination of simple interest retail installment sales contracts and
installment loans (the "Receivables") secured by new and used automobiles,
light duty trucks and vans (the "Vehicles") financed thereby, (ii) amounts
due or received thereunder on or after December 1, 1996, (the "Cut-Off
Date") , and (iii) security interests in the Vehicles financed thereby. The
Certificates will be issued under a Pooling and Servicing Agreement dated as
of December 1, 1996 (the "Pooling Agreement") between Chevy Chase as seller
and as servicer and First Bank National Association, as trustee (the
"Trustee").
The Certificates will evidence fractional undivided interests in
the Trust. The Trustee, on behalf of the holders of the Certificates (the
"Certificateholders"), will have the benefit
of a financial guaranty insurance policy (the "Certificate Insurance
Policy") from MBIA Insurance Corporation (the "Certificate Insurer"). The
Trustee will also have access to a Reserve Account to be established for the
benefit of the holders of the Certificates and the Certificate Insurer. Each
Certificateholder will also purchase the right to receive a pro rata share of
amounts payable under the Yield Maintenance Account established pursuant to
the Pooling Agreement. The Certificates will be issued in an aggregate
principal amount of $321,422,908.82, which is equal to the original pool
balance of the Receivables, exclusive of accrued interest, as of the opening
of business on the Cut-Off Date. The forms of the Pooling Agreement, the
Certificate Insurance Policy and the Indemnification Agreement (as such term
is hereinafter defined) have been timely filed as exhibits to the
Registration Statement (as such term is hereinafter defined). Capitalized
terms used but not defined herein shall have the meanings given to them in
the Pooling Agreement.
Xxxxx Xxxxx hereby agrees with the several Underwriters named in
Schedule 1 hereto (the "Underwriters") as follows:
2. REPRESENTATIONS AND WARRANTIES OF CHEVY CHASE. Xxxxx Xxxxx
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A Registration Statement on Form S-3 (Nos. 333-15885 and
333-15885-01) relating to the Certificates, including a form of Prospectus,
has been filed with the Securities and Exchange Commission (the "Commission")
and either (i) has been declared effective under the Act of 1933 (the "Act")
and is not proposed to be amended or (ii) is proposed to be amended by
amendment or post-effective amendment. If Xxxxx Xxxxx does not propose to
amend such Registration Statement or if any post-effective amendment to such
Registration Statement has been filed with the Commission prior to the
execution and delivery of this Agreement, such Registration Statement or such
post-effective amendment, as the case may be, has been declared effective by
the Commission. For purposes of this Agreement, "Effective Time" means (i)
if Xxxxx Xxxxx has advised CS First Boston Corporation ("First Boston"), as
representative of the Underwriters (the "Representative"), that it does not
propose to amend such Registration Statement, the date and time as of which
such Registration Statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this Agreement,
was declared effective by the Commission, or (ii) if Xxxxx Xxxxx has advised
the Representative that it proposes to file an amendment or post-effective
amendment to such Registration Statement, the date and time as of which such
Registration Statement, as amended by such amendment or post-effective
amendment, as the case may be, is declared effective by the Commission.
"Effective Date" means the date of the Effective Time. Such Registration
Statement, as amended at the Effective Time, including all material
incorporated by reference therein and including all information, if any,
deemed to be a part of such Registration Statement as of the Effective Time
pursuant to Rule 430A(b) under the Act, is referred to herein as the
"Registration Statement", and the form of prospectus relating to the
Certificates, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) under the Act or, if no such filing is required,
as included in the Registration Statement, including all material
incorporated by reference in such prospectus, is herein-after referred to as
the "Prospectus."
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(b) If the Effective Time is prior to the execution and delivery of this
Agreement: (i) on the Effective Date, the Registration Statement conformed, and
on the date of this Agreement the Registration Statement conforms, in all
material respects with the requirements of the Act and the rules and regulations
of the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(ii) on the date of this Agreement, the Prospectus conforms, and at the time of
filing of the Prospectus pursuant to Rule 424(b) and at the Closing Date, the
Prospectus will conform, in all material respects to the requirements of the Act
and the Rules and Regulations, and the Prospectus does not include and does not
omit, and will not include, any untrue statement of a material fact, and does
not omit, to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If the Effective Time is subsequent to the execution and delivery
of this Agreement: on the Effective Date, the Registration Statement and the
Prospectus will conform in all material respects to the requirements of the Act
and the Rules and Regulations, and (i) the Registration Statement will not
include any untrue statement of a material fact or will not omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (ii) the Prospectus will not include an untrue
statement of a material fact or will not omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The two preceding sentences do not apply
to statements in or omissions from the Registration Statement or Prospectus
based upon written information furnished to Chevy Chase by any Underwriters
through the Representative specifically for use therein, it being understood the
only such information is that described as such in Section 8(b). The conditions
to the use by Xxxxx Xxxxx of a Registration Statement on Form S-3 under the Act,
as set forth in the General Instructions to Form S-3, have been satisfied with
respect to the Registration Statement and the Prospectus. There are no
contracts or documents which are required to be filed as exhibits to the
Registration Statement pursuant to the Act or the Rules and Regulations which
have not been so filed on or prior to the Effective Date.
(c) Since the respective dates as of which information is given in the
Prospectus, or the Prospectus as amended and supplemented, there has not been
any material adverse change in the general affairs, management, or results of
operations of Chevy Chase or of its subsidiaries otherwise than as set forth or
contemplated in the Prospectus or the Prospectus as amended and supplemented,
nor has there been any adverse change in the general affairs, management, or
results of operations of any other affiliate of Chevy Chase which could have a
material adverse effect on the general affairs, management or results of opera-
tions of Chevy Chase or its subsidiaries, otherwise than as set forth or contem-
plated in the Prospectus or the Prospectus as amended and supplemented.
(d) Chevy Chase is a federally chartered stock savings bank duly organized
and validly existing under the laws of the United States of America, and has
full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its obligations under
this Agreement, the Pooling Agreement, the Indemnification Agreement, and to
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cause the Certificates to be issued. Chevy Chase has conducted and is
conducting its business so as to comply in all material respects with all
applicable statutes and regulations, including, without limitation, all
regulations, decisions, directives and orders of the Office of Thrift Supervi-
sion. Chevy Chase is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification.
(e) (i) There are no legal, governmental or regulatory proceedings pending
to which Chevy Chase is a party or to which any of its property is the subject,
which, if determined adversely to Chevy Chase, would individually or in the
aggregate have a material adverse effect on the performance by Xxxxx Xxxxx of
this Agreement, the Pooling Agreement, the Indemnification Agreement or the
consummation of the transactions contemplated hereunder or thereunder and (ii)
to the best of its knowledge, no such proceedings are threatened or contemplated
by governmental or regulatory authorities or threatened by others.
(f) This Agreement has been duly authorized and validly executed and
delivered by Chevy Chase and constitutes a valid and binding agreement of Chevy
Chase, enforceable against Chevy Chase in accordance with its terms, except to
the extent that (i) the enforceability hereof may be subject to insolvency,
reorganization, moratorium, receivership, conservatorship, or other similar
laws, regulations or procedures of general applicability now or hereafter in
effect relating to or affecting creditors' or other obligees' rights generally
or the rights of creditors or obligees of federally chartered stock savings
banks, the deposits of which are insured by the Federal Deposit Insurance
Corporation (the "FDIC"), (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought
and (iii) rights to indemnification and contribution under this Agreement may be
limited by state or federal securities laws or the policies underlying such
laws.
(g) The Pooling Agreement and the Indemnification Agreement have been duly
authorized by Xxxxx Xxxxx and, when executed and delivered by Xxxxx Xxxxx and
assuming the due authorization, execution and delivery of the Pooling Agreement
and the Indemnification Agreement by the other parties thereto, will constitute
valid and binding obligations of Chevy Chase enforceable against Chevy Chase in
accordance with their respective terms, except to the extent that (i) the
enforceability thereof may be subject to insolvency, reorganization, moratorium,
receivership, conservatorship, or other similar laws, regulations or procedures
of general applicability now or hereafter in effect relating to or affecting
creditors' or obligees' rights generally or the rights of creditors or obligees
of federally chartered stock savings banks, the deposits of which are insured by
the FDIC, and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(h) The issuance and delivery of the Certificates, the consummation of any
other of the transactions contemplated herein in the Pooling Agreement and the
Indemnification Agreement or the fulfillment of the terms of this Agreement, the
Pooling Agreement or the
4
Indemnification Agreement, do not and will not conflict with or violate any term
or provision of the Charter or By-Laws of Chevy Chase, any statute, order or
regulation applicable to Chevy Chase of any court, regulatory body,
administrative agency or governmental body having jurisdiction over Chevy Chase
and do not and will not conflict with, result in a breach or violation or the
acceleration of or constitute a default under or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or assets
of Chevy Chase pursuant to the terms of, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which Chevy Chase is a party
or by which Xxxxx Xxxxx may be bound or to which any of the property or assets
of Chevy Chase may be subject except for conflicts, violations, breaches,
accelerations and defaults which would not, individually or in the aggregate, be
materially adverse to Chevy Chase or materially adverse to the transactions
contemplated by this Agreement.
(i) Xxxxxx Xxxxxxxx LLP is an independent public accountant with respect
to Xxxxx Xxxxx as required by the Act and the Rules and Regulations.
(j) The direction by Xxxxx Xxxxx to the Trustee to execute, countersign,
issue and deliver the Certificates has been duly authorized by Xxxxx Xxxxx, and,
assuming the Trustee has been duly authorized to do so, when executed, counter-
signed, issued and delivered by the Trustee in accordance with the Pooling
Agreement, the Certificates will be validly issued and outstanding and will be
entitled to the benefits of the Pooling Agreement.
(k) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance and sale of the Certificates, or the consum-
mation by Xxxxx Xxxxx of the other transactions contemplated by this Agreement,
the Pooling Agreement or the Indemnification Agreement, except the registration
under the Act of the certificates and such consents, approvals, authorizations,
registrations or qualifications as may have been obtained or effected or as may
be required under securities or Blue Sky laws in connection with the purchase
and distribution of the Certificates by the Underwriters.
(l) Chevy Chase possesses all material licenses, certificates,
authorizations or permits issued by the appropriate state, Federal or foreign
regulatory agencies or bodies necessary to conduct the business now conducted by
it and as described in the Prospectus and Xxxxx Xxxxx has not received notice of
proceedings relating to the revocation or modification of any such license,
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially and
adversely affect the conduct of its business, operations, financial condition or
income.
(m) At the time of execution and delivery of the Pooling Agreement, Chevy
Chase (i) will not have assigned to any person any of its right, title or
interest in the Receivables or in the Pooling Agreement or the Certificates and
(ii) will have the power and authority to sell the Receivables to the Trustee
and to sell the Certificates to the Underwriters, and upon execution and
delivery of the Pooling Agreement by the Trustee, the Trustee will have acquired
beneficial ownership of all of Xxxxx Xxxxx'x right, title and interest in and to
the Receivables, and upon delivery
5
to the Underwriters of the Certificates the Underwriters will have good and
marketable title to the Certificates.
(n) As of the Cut-Off Date, the Receivables will meet the eligibility
criteria described in the Prospectus.
(o) The Trust created by the Pooling Agreement is not, and immediately
following the issuance and sale of the Certificates will not be, required to be
registered as an "investment company" under the Investment Company Act of 1940,
as amended (the "1940 Act"), as in effect on the date hereof.
(p) Chevy Chase has authorized the conveyance of the Receivables to the
Trust, and Chevy Chase has authorized the Trust to issue the Certificates.
(q) Each of the Certificates, the Pooling Agreement and the Certificate
Insurance Policy conforms in all material respects to the descriptions thereof
contained in the Prospectus.
(r) Any taxes, fees and other governmental charges in connection with the
execution, delivery and issuance of this Agreement, the Pooling Agreement, the
Indemnification Agreement, the Certificate Insurance Policy and the Certificates
that are required to be paid by Chevy Chase at or prior to the Closing Date have
been paid or will be paid at or prior to the Closing Date.
(s) Chevy Chase will not apply the proceeds of the sale of the
Certificates pursuant to this Agreement to purchase securities (which term does
not include the Receivables) within the meaning of Regulation T promulgated by
the Federal Reserve Board.
(t) As of the Closing Date, the representations and warranties of Chevy
Chase in the Pooling Agreement and the Indemnification Agreement will be true
and correct.
Any certificate signed by an officer of Xxxxx Xxxxx and delivered to
the Underwriters or the Underwriters' counsel in connection with an offering of
the Certificates shall be deemed, and shall state that it is, a representation
and warranty as to the matters covered thereby to each person to whom the
representations and warranties in this Section 2 are made.
3. PURCHASE, SALE, DELIVERY AND PAYMENTS. The Underwriters commitment
to purchase the Certificates pursuant to this Agreement shall be deemed to
have been made on the basis of the representations and warranties herein
contained and shall be subject to the terms and conditions herein set forth.
Xxxxx Xxxxx agrees to instruct the Trustee to issue and agrees to sell to the
Underwriters, and the Underwriters, severally and not jointly, agree, to
purchase from Chevy Chase at the purchase price for the Certificates set
forth opposite the names of the Underwriters on Schedule 1 hereto, the
respective principal amount of Certificates set forth on Schedule 1 hereto.
Payment of the purchase price for, and delivery of, any Certificates to be
purchased by the Underwriters shall be made at the office of Shaw, Pittman,
Xxxxx & Xxxxxxxxxx, 0000 X Xx., X.X., Xxxxxxxxxx, X.X., or at such other
place as shall be agreed upon by the Underwriters and Chevy Chase, at 10:00
a.m. New York City time
6
on December _________, 1996 (the "Closing Date"), or at such other time or
date or time as shall be agreed upon in writing by the Representative and
Xxxxx Xxxxx. On the Closing Date, payment shall be made to Chevy Chase by
wire transfer of same day funds payable to the account of Chevy Chase against
delivery to the Trustee as custodian for The Depository Trust Company ("DTC")
of the Certificates in the form of one or more global securities in
definitive form (the "Global Certificates") and registered in the name of
Cede & Co., as nominee for DTC. The Global Certificates will be made
available for checking at Shaw, Pittman, Xxxxx & Xxxxxxxxxx at least 24 hours
prior to the Closing Date.
4. OFFERING BY UNDERWRITERS. It is understood that the Underwriters
propose to offer the Certificates for sale to the public (which may include
selected dealers) as set forth in the Prospectus.
5. COVENANTS OF CHEVY CHASE. Chevy Chase covenants with the Underwriters
as follows:
(a) To prepare a Prospectus setting forth any price related information
previously omitted from the effective Registration Statement pursuant to Rule
430A under the Act within the time period prescribed by Rule 430A, and to
transmit such Prospectus to the Commission for filing pursuant to Rule 424(b)
under the Act within the prescribed time period, and prior to the Closing Date
to provide evidence satisfactory to the Underwriters of such timely filing, or
to prepare and timely file a post-effective amendment to the Registration
Statement providing such information, which post-effective amendment shall have
been declared effective in accordance with the requirements of Rule 430A under
the Act and to provide evidence satisfactory to the Underwriters of the effec-
tiveness thereof.
(b) If at any time when the Prospectus as amended or supplemented is
required by the Act to be delivered in connection with sales of the Certificates
by the Underwriters, any event shall occur or condition exist as a result of
which it is necessary, in the opinion of the Underwriters' counsel or counsel
for Chevy Chase, further to amend or supplement the Prospectus as then amended
or supplemented in order that the Prospectus as amended or supplemented will not
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of circumstances
existing at the time it is delivered to a purchaser, not misleading or if it
shall be necessary, in the opinion of any such counsel, at any such time to
amend or supplement the Registration Statement or the Prospectus as then amended
or supplemented in order to comply with the requirements of the Act or the Rules
and Regulations, or if required by such Rules and Regulations, including Rule
430A thereunder, to file a post-effective amendment to such Registration State-
ment (including an amended Prospectus), Chevy Chase will promptly notify the
Representative of such event and will prepare and file with the Commission
(subject to the Representative's prior review), at its own expense, such amend-
ment or supplement as may be necessary to correct such untrue statement or
omission or to make the Registration Statement comply with such requirements,
and within two Business Days will furnish to the Underwriters as many copies of
the Prospectus, as amended or supplemented, as the Underwriters shall reasonably
request. Neither the Representative's consent to, nor the
7
Underwriters, delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6 of this Agreement.
(c) Chevy Chase will give the Underwriters reasonable notice of its
intention to file any amendment to the Registration Statement, the Prospectus or
the Prospectus as amended or supplemented, pursuant to the Act, and will furnish
the Underwriters with copies of any such amendment or supplement proposed to be
filed a reasonable time in advance of filing, and will not file any such amend-
ment or supplement to which the Underwriters or the Underwriters, counsel shall
object.
(d) Chevy Chase will notify the Underwriters immediately, and confirm the
notice in writing, (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the mailing or the delivery to the Commission for filing of
any supplement to the Prospectus or the Prospectus as amended or supplemented,
(iii) of the receipt and contents of any comments from the Commission with
respect to the Registration Statement or the Prospectus or the Prospectus as
amended or supplemented, (iv) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
or for additional information and (v) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. Xxxxx Xxxxx will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(e) Chevy Chase will deliver to the Underwriters as many signed and as
many conformed copies of the Registration Statement (as originally filed) and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated by reference in the Prospectus),
each related preliminary prospectus, and so long as delivery of a Prospectus
relating to the Certificates is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Underwriters may reasonably request. Xxxxx Xxxxx
will also furnish to the Representative copies of any report on Form SR required
by Rule 463 under the Act.
(f) Chevy Chase will make generally available to holders of the
Certificates as soon as practicable, but in any event not later than the Avail-
ability Date (as defined below), earning statements of the Trust (which need not
be audited) complying with Section 11 (a) of the Act and the Rules and Regula-
tions (including Rule 158) and covering a period of at least twelve consecutive
months beginning after the Effective Date which will satisfy the provisions of
Section 11(a) of the Act. For the purposes of the preceding sentence, the
"Availability Date" means the 45th day after the end of the Trust's fourth
fiscal quarter following the fiscal quarter that includes the Effective Date,
except that, if such fourth fiscal quarter is the last quarter of the Trust's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(g) Chevy Chase will endeavor, in cooperation with the Underwriters, to
qualify the Certificates for sale and the determination of their eligibility for
investment under the applicable
8
securities laws of such states and other jurisdictions of the United States as
the Representative may designate, and will maintain or cause to be maintained
such qualifications in effect for as long as may be required for the
distribution of the Certificates. Chevy Chase will file or cause the filing of
such statements and reports as may be required by the laws of each jurisdiction
in which the Certificates have been qualified as above provided.
(h) Chevy Chase will not, directly or indirectly, without the
Underwriters' prior consent, publicly offer or sell or contract to sell or
attempt to offer, sell or dispose of any certificates or other similar securi-
ties representing interests in or secured by the Receivables for a period of 30
days following the commencement of the offering of the Certificates to the
public.
(i) For a period from the date of this agreement until the retirement of
the Certificates, Chevy Chase, as Servicer, will deliver to the Representative
and, upon request, to each of the other Underwriters, as soon as practicable,
copies of each certificate, report or notice and the annual statements of
compliance delivered by Xxxxx Xxxxx, as Servicer, to the Trustee pursuant to
Section 4.10 of the Pooling Agreement, the annual statement of a firm of
independent public accountants furnished to the Trustee pursuant to Section 4.11
of the Pooling Agreement and such other information concerning the Receivables,
Chevy Chase (including in its capacities as the Seller and Servicer) or the
Certificates, as the Representative may from time to time reasonably request.
(j) On or before the Closing Date, Chevy Chase shall furnish or make
available to the Underwriters or its counsel such additional documents and
information regarding Chevy Chase (including in its capacities as the Seller and
Servicer) and its affairs as the Underwriters may from time to time reasonably
request, including any and all documentation reasonably requested in connection
with their due diligence efforts regarding information in the Prospectus and in
order to evidence the accuracy or completeness of any of the conditions con-
tained in this Agreement.
(k) So long as any Certificate is outstanding, Chevy Chase shall furnish
to the Representative by first-class mail as soon as practicable, all documents
(A) distributed, or caused to be distributed, by Chevy Chase to
Certificateholders, (B) filed, or caused to be filed, by Chevy Chase with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (C) any order of the Commission under the Exchange Act or
pursuant to a "no-action" letter from the staff of the Commission and (D) from
time to time, such other information in the possession of Xxxxx Xxxxx concerning
the Trust as the Representative may reasonably request.
(l) Chevy Chase shall apply the net proceeds from the sale of the
Certificates in the manner set forth in the Prospectus.
(m) If, between the date hereof or, if earlier, the dates as of which
information is given in the Prospectus and the Closing Date, to the knowledge of
Chevy Chase there shall have been any material change, or any development
involving a prospective material change in or
9
affecting the general affairs, management, financial position, shareholders'
equity or results of operations of Xxxxx Xxxxx, Xxxxx Xxxxx will give prompt
written notice thereof to the Underwriters.
(n) To the extent, if any, that any rating provided with respect to the
Certificates set forth in Section 6(j) hereof is conditional upon the furnishing
of documents reasonably available to Chevy Chase or the taking of any other
reasonable actions by Xxxxx Xxxxx, Xxxxx Xxxxx shall furnish such documents or
take any such other actions.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Certificates pursuant to this Agreement are
subject to the accuracy on and as of the Closing Date of the representations and
warranties on the part of Chevy Chase herein contained, to the accuracy of the
statements of officers of Xxxxx Xxxxx made pursuant hereto, to the performance
by Xxxxx Xxxxx of all of its obligations hereunder and to the following
conditions at the Closing Date:
(a) The Representative shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time is prior to the execution and
delivery of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the Registration Statement to be filed shortly prior to the Effec-
tive Time), from Xxxxxx Xxxxxxxx LLP, in form and substance satisfactory to the
Underwriters and counsel for the Underwriters, confirming that they are indepen-
dent public accountants within the meaning of the Act and the applicable pub-
lished Rules and Regulations thereunder and stating in effect that (i) they have
performed certain specified procedures as a result of which they have determined
that certain information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical information derived
from the general accounting records of the Trust and Chevy Chase set forth in
the Registration Statement and the Prospectus), agrees with the accounting
records of the Trust and Chevy Chase, excluding any questions of legal interpre-
tation, and (ii) they have performed certain specified procedures with respect
to the computer programs used to select the Receivables and to generate informa-
tion with respect to the Receivables set forth in the Registration Statement and
the Prospectus.
For purposes of this subsection (a), if the Effective Time is subse-
quent to the execution and delivery of this Agreement, "Registration Statement"
shall mean the registration statement as proposed to be amended by the amendment
or post-effective amendment to be filed shortly prior to the Effective Time, and
"Prospectus" shall mean the prospectus included in such Registration Statement.
All financial statements included in material incorporated by reference into the
Prospectus shall be deemed included in the Registration Statement for purposes
of this subsection (a).
(b) If the Effective Time is not prior to the execution and delivery of
this Agreement, the Effective Time shall have occurred not later than 10:00
p.m., New York time, on the date of this Agreement or such later date as shall
have been consented to by the Representative. If the
10
Effective Time is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5 (a) of this Agreement.
(c) The Registration Statement shall have been declared effective by the
Commission and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Act or proceedings therefor initiated
or threatened by the Commission, any price-related information previously
omitted from the effective Registration Statement pursuant to Rule 430A under
the Act shall have been included in the Prospectus and transmitted to the
Commission for filing pursuant to Rule 424 under the Act within the prescribed
time period, and Chevy Chase shall have provided evidence satisfactory to the
Underwriters of such timely filing, or a post-effective amendment to the
Registration Statement providing such information shall have been promptly filed
with the Commission and declared effective in accordance with the requirements
of Rule 430A under the Act, and prior to the Closing Date, Chevy Chase shall
have provided evidence satisfactory to the Underwriters of such effectiveness
and there shall not have come to the attention of the Underwriters facts that
would cause the Underwriters to believe that the Prospectus, at the time it was
required to be delivered to a purchaser of the Certificates, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances existing
at such time, not misleading.
(d) The Underwriters shall have received the favorable opinion, dated the
Closing Date, of Xxxx, Xxxxxxx, Xxxxx & Xxxxxxxxxx, counsel to Xxxxx Xxxxx, or
other counsel to Xxxxx Xxxxx, acceptable to the Underwriters and their counsel,
addressed to the Underwriters and in form and scope satisfactory to the Under-
writers counsel, to the effect that:
i) Chevy Chase has been duly chartered and is validly existing as
a federally chartered stock savings bank under the laws of the United States of
America and has full corporate power and authority to own its properties and
conduct its business as described in the Prospectus; Xxxxx Xxxxx has full
corporate power and authority to execute, deliver, and perform its obligations
under this Agreement, the Pooling Agreement, the Indemnification Agreement and
the Insurance Agreement and to cause the Certificates to be issued and to
consummate the transactions contemplated hereby and thereby.
ii) Chevy Chase has duly authorized and executed this Agreement,
the Pooling Agreement and the Indemnification Agreement, and each such agreement
constitutes the valid, legal and binding obligation of Chevy Chase enforceable
against Chevy Chase in accordance with its terms.
iii) The execution, delivery and performance of this Agreement, the
Pooling Agreement and the Indemnification Agreement the transfer of the
Receivables to the Trust, the issuance and sale of the Certificates and
consummation of any other of the transactions contemplated herein or in the
Pooling Agreement do not conflict with or result in a violation of (a) any law
or regulation of the United States of America or the State of New York or
Maryland (b) the Charter or By-laws of Chevy Chase, (c) any order, writ,
11
judgment or decree known to such counsel to which Chevy Chase is a party or is
subject or (d) result in any lien, charge or encumbrance upon any of the proper-
ties or assets of Chevy Chase.
iv) The Certificates have been duly authorized and, when executed
and authenticated in accordance with the terms of the Pooling Agreement and
delivered to and paid for by the Underwriters pursuant to this Agreement, will
be duly and validly issued and outstanding and will be entitled to the benefits
of the Pooling Agreement.
v) No consent, approval or authorization of, or registration,
declaration or filing with, any court or governmental agency or body of the
United States of America is required for the issuance of the Certificates and
the sale of the Certificates to the Underwriters or the consummation of the
other transactions contemplated by this Agreement, the Pooling Agreement or the
Indemnification Agreement, except for (x) the filing of a Uniform Commercial
Code financing statement in the State of Maryland with respect to the transfer
of the Receivables to the Trust, (y) such as have been obtained and made under
the Act and (z) such as may be required under state securities laws.
vi) The Registration Statement was declared effective under the
Act as of the date and time specified in such opinion, the Prospectus either was
filed with the Commission pursuant to the subparagraph of Rule 424 (b) specified
in such opinion on the date specified therein or was included in the
Registration Statement (as the case may be), and, to the best of the knowledge
of such counsel, no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been instituted or is pending or contemplated
under the Act, and the Registration Statement and the Prospectus, and each
amendment or supplement thereof, as of their respective effective or issue
dates, complies as to form in all material respects with the requirements of the
Act and the Rules and Regulations; such counsel have no reason to believe that
the Registration Statement or any amendment thereto, as of its Effective Date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Registration Statement as of the Closing
Date, or the Prospectus, as of its issue date or as of such Closing Date,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; it being under-
stood that such counsel need express no opinion as to the financial statements
or other financial data contained in the Registration Statement or the Prospec-
tus.
vii) The conditions to the use by Xxxxx Xxxxx of a registration
statement on Form S-3 under the Act, as set forth in the General Instructions to
Form S-3, have been satisfied with respect to the Registration Statement and the
Prospectus. There are no contracts or documents of Chevy Chase which are
required to be filed as exhibits to the Registration Statement pursuant to the
Act or the Rules and Regulations thereunder which have not been so filed.
12
viii) There are no actions, proceedings or investigations pending or
threatened before any court, administrative agency or other tribunal to which
Chevy Chase is a named party or to which its assets are subject (A) asserting
the invalidity of the Pooling Agreement, the Indemnification Agreement, this
Agreement or the Certificates, (B) seeking to prevent the issuance of the
Certificates or the consummation by Chevy Chase of any of is the transactions
contemplated by the Pooling Agreement, the Indemnification Agreement, or this
Agreement, (C) that might adversely affect the validity or enforceability of the
Pooling Agreement, the Indemnification Agreement, this Agreement or the
Certificates, or (D) seeking to adversely affect the federal income tax attrib-
utes of the Certificates as described in the Prospectus under the heading
"Certain Federal Income Tax Consequences."
ix) The Registration Statement at the time it became effective,
and any amendment thereto at the time such amendment became effective, complied
as to form in all material respects with the applicable requirements of the Act
and the Rules and Regulations.
x) The Pooling Agreement is not required to be qualified under
the Trust Indenture Act of 1939, as amended.
xi) The Trust is not required to be registered under the 1940 Act,
and immediately following the issuance and sale of the Certificates in the
manner contemplated by the Pooling Agreement and this Agreement, the Trust will
not be required to be so registered.
xii) The Certificates, this Agreement, the Pooling Agreement and
the Certificate Insurance Policy conform in all material respects to the
respective descriptions thereof in the Registration Statement and the Prospec-
tus.
xiii) The statements in the Prospectus under the heading "Certain
Legal Aspects of the Receivables," "SUMMARY OF TERMS -- Certain Legal Aspects of
the Receivables," "SUMMARY OF TERMS -- Certain Federal Tax Considerations,"
"Certain Federal Income Tax Consequences," "ERISA Considerations," and "SPECIAL
CONSIDERATIONS -- Certain Legal Aspects," to the extent that they constitute
matters of law or legal conclusions with respect thereto, have been prepared or
reviewed by such counsel and are correct in all material respects.
xiv) No filing or other action, except the filing of a Uniform
Commercial Code financing statement on Form UCC-1 with the Maryland State
Department of Assessments and Taxation naming Chevy Chase as "debtor" and the
Trustee as "secured party," is necessary to perfect the transfer of the
Receivables and proceeds (as defined in Section 9-306 of the Maryland Uniform
Commercial Code) thereof against the claims of creditors of, and transferees
from, Chevy Chase. Such security interest would be enforceable notwithstanding
the insolvency of Xxxxx Xxxxx or a receivership or conservatorship of Chevy
Chase in which the Federal Deposit insurance Corporation ("FDIC") or the Resolu-
tion Trust Corporation ("RTC") is appointed a receiver or conservator for Xxxxx
Xxxxx.
13
xv) The Receivables constitute "chattel paper" as defined in
Section 9-105 of the Uniform Commercial Code as in effect in the State of
Maryland.
In addition, such counsel shall state that nothing has come to their
attention that would lead them to believe that the Registration Statement, at
the time it became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus, as of its
date and as of the Closing Date, contains an untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(e) The Underwriters shall have received the favorable opinion of counsel
to the Trustee, dated the Closing Date, addressed to the Underwriters and in
form and scope satisfactory to the Underwriters, counsel, to the effect that:
i) The Trustee has duly authorized, executed and delivered the
Pooling Agreement.
ii) The Trustee has been duly organized and is validly existing as
a national banking corporation in good standing under the laws of the United
States of America and has full power and authority to execute and deliver the
Pooling Agreement and to perform its obligations thereunder and each such
Agreement constitutes the valid, legal and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms.
iii) The Certificates have been duly executed and countersigned by
the Trustee.
iv) The execution and delivery by the Trustee of the Pooling
Agreement and the performance by the Trustee of its duties thereunder do not
conflict with or result in a violation of (a) any law or regulation of the
United States of America or the State of Minnesota, (b) the charter or by-laws
of the Trustee, (c) any order, writ, judgment or decree or (d) any agreement,
instrument, order, writ, judgment or decree known to such counsel to which the
Trustee is a party or is subject.
v) No consent, approval or authorization of, or registration,
declaration or filing with, any court or governmental agency or body of the
United States of America or any state thereof is required for the execution,
delivery or performance by the Trustee of the Pooling Agreement.
(f) The Underwriters shall have received the favorable opinion or
opinions, dated the Closing Date, of the Underwriters' counsel, Xxxx, Pittman,
Xxxxx & Xxxxxxxxxx, with respect to the issuance and sale of the Certificates,
the Registration Statement, this Agreement, the Prospectus and such other
related matters as the Underwriters may require.
14
(g) The Underwriters shall have received an opinion, dated the Closing
Date, of Xxxx, Xxxxxxx, Xxxxx & Xxxxxxxxxx, counsel to Xxxxx Xxxxx, addressed
to, and satisfactory to, Standard & Poor's Corporation ("S&P"), Xxxxx'x
Investors Service, Inc. ("Moody's"), Fitch Investors Service, Inc. ("Fitch") and
the Underwriters' counsel, relating to the sale of the Receivables to the
Trustee, and such counsel to Xxxxx Xxxxx shall have consented to reliance by the
Underwriters on such opinion as though such opinion had been addressed to the
Underwriters.
(h) Xxxxx Xxxxx shall have furnished to the Underwriters a certificate
signed on behalf of Xxxxx Xxxxx by any two of the chairman of the board, the
president, any vice chairman of the board, any executive vice president, any
senior vice president, any vice president, the treasurer, or the controller of
the Seller or the Servicer, as appropriate, dated the Closing Date, as to (i)
the accuracy of the representations and warranties of Xxxxx Xxxxx herein and in
the Pooling Agreement at and as of the Closing Date, (ii) the performance by
Xxxxx Xxxxx of all of its obligations hereunder to be performed at or prior to
the Closing Date and (iii) such other matters as the Underwriters may reasonably
request.
(i) The Trustee shall have furnished to the Underwriters a certificate of
the Trustee, signed by one or more duly authorized officers of the Trustee,
dated the Closing Date, as to the due acceptance of the Pooling Agreement by the
Trustee and the due execution and delivery of the Certificates by the Trustee
thereunder and such other matters as the Underwriters shall reasonably request.
(j) The Certificates shall have been rated "AAA" by S&P, ""Aaa" by
Xxxxx'x and "AAA" by Fitch, and such ratings shall not have been rescinded.
(k) The Underwriters shall have received from Xxxxxx Xxxxxxxx LLP, or
other independent certified public accountants acceptable to the Underwriters, a
letter, dated as of the date of the Closing Date, delivered at such time in form
satisfactory to the Underwriters.
(l) Prior to the Closing Date the Underwriters' counsel, Xxxx, Pittman,
Xxxxx & Xxxxxxxxxx, shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Certificates as herein contemplated and related
proceedings or in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by Xxxxx Xxxxx in connection with
the issuance and sale of the Certificates as herein contemplated shall be
satisfactory in form and substance to the Underwriters and Shaw, Pittman, Xxxxx
& Xxxxxxxxxx.
(m) Since the respective dates as of which information is given in the
Prospectus, there shall not have been any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, shareholders, equity or results of operations of Chevy Chase or the
Certificate Insurer otherwise than as set forth in the Prospectus, the effect of
which is in the Underwriters, judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Certificates on the
15
terms and in the manner contemplated in the Prospectus or which, in the judgment
of the Underwriters, materially impairs the investment quality of the
Certificates or the ability of the Servicer to service the Receivables.
(n) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of Chevy Chase or its automobile loan business or the
Certificate Insurer which, in the judgment of the Underwriters, is material and
adverse and makes it impracticable or inadvisable to proceed with the completion
of the public offering or the sale of and payment for the Certificates, (ii) any
banking moratorium declared by Federal, New York, Minnesota or Maryland authori-
ties; or (iii) any downgrading in the rating of any securities of Chevy Chase or
the Certificate Insurer by any nationally recognized statistical rating organi-
zation (as defined for purposes of Rule 436 (g) under the Act) or any public
announcement that any such organization has under surveillance or review its
rating of any securities of Chevy Chase or the Certificate Insurer (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); or (iv) any suspension
or limitation of trading in securities generally on the New York Stock Exchange,
or any setting of minimum prices for trading on such exchange; or (v) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity, emergency or change in financial markets if, in the
Representative's judgment, the effect of any such outbreak, escalation, declara-
tion, calamity, emergency or change makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Certificates.
(o) The Underwriters shall have received evidence satisfactory to the
Underwriters and its counsel that (i) on or before the Closing Date, UCC-1
financing statements have been filed in the offices of the Maryland State
Department of Assessments and Taxation, reflecting the interest of the Trust in
the Receivables and the proceeds thereof and (ii) the Trust will have a first
priority perfected security interest in the amounts on deposit from time to time
in the Reserve Account and the Yield Maintenance Account.
(p) Chevy Chase will provide or cause to be provided to the Representative
such conformed copies of such opinions, certificates, letters and documents
being provided pursuant hereto and such further information, certificates and
documents as the Representative may reasonably request. First Boston may in its
sole discretion waive on behalf of the Underwriters compliance with any
conditions to the obligations of the Underwriters hereunder.
(q) The Certificate Insurance Policy shall have been duly executed and
issued at or prior to the Closing Date and shall conform in all material
respects to the description thereof in the Prospectus.
(r) The Underwriters shall have received the favorable opinion, dated the
Closing Date, of counsel for the Certificate Insurer, in form and scope
satisfactory to your counsel, to the effect that:
16
i) The Certificate Insurer is duly organized as a New York stock
insurance corporation and is validly existing under the laws of New York, and
has the full power and authority (corporate and other) to issue, and to take all
action required of it under, the Certificate Insurance Policy.
ii) The execution, delivery and performance by the Certificate
Insurer of the Certificate Insurance Policy and the Indemnification Agreement
dated as of December __, 1996 (the "Indemnification Agreement") among the
Certificate Insurer, Chevy Chase and the Underwriters have been duly
authorized by all necessary corporate action on the part of the Certificate
Insurer.
iii) The execution, delivery and performance by the Certificate
Insurer of the Certificate Insurance Policy and the Indemnification Agreement
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of any state
or other governmental agency or authority which has not previously been
effected.
iv) The Certificate Insurance Policy and the Indemnification
Agreement have been duly authorized, executed and delivered by the Certificate
Insurer and constitute legal, valid and binding obligations of the Certificate
Insurer, enforceable against the Certificate Insurer in accordance with their
terms (subject, as to enforcement, to bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors, rights generally and to general
equity principles).
v) The Certificate Insurance Policy is not required to be
registered under the Securities Act.
vi) The information set forth under the captions "The Certificate
Insurance Policy" and "The Certificate Insurer" in the Prospectus, insofar as
such statements constitute a description of the Certificate Insurance Policy,
accurately summarizes the Certificate Insurance Policy.
In rendering this opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Certificate Insurer and
public officials. Such opinion may assume the due authorization, execution and
delivery of the instruments and documents referred to therein by the parties
thereto other than the Certificate Insurer.
The Certificate Insurer shall have furnished to you and Chevy Chase
a certificate of the Certificate Insurer, signed by one or more duly
authorized officers of the Certificate Insurer, dated the Closing Date,
certifying (i) the information relating to the Certificate Insurer in the
Prospectus is true and correct in all material respects as of the dates
specified therein, (ii) there has been no change in the financial condition
of the Certificate Insurer since September 30, 1996 which could have a
material adverse effect on the Certificate Insurer's ability to meet its
17
obligations under the Certificate Insurance Policy and (iii) such other
matters as you may reasonably request.
(s) The Certificate Insurance Policy shall have been issued by the
Certificate Insurer pursuant to the Insurance Agreement.
If any condition specified in this Section 6 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to Chevy Chase at any time at or
prior to the Closing Date, and such termination shall be without liability of
any party to any other party except as provided in Section 7.
7. PAYMENT OF EXPENSES. Xxxxx Xxxxx agrees to pay all expenses
incident to the performance of its obligations under this Agreement, and will
reimburse the Underwriters (if and to the extent incurred by them) for any
filing fees and other expenses (including fees and disbursements of counsel),
including without limitation those related to (i) the filing of the
Registration Statement and all amendments thereto, (ii) the duplication and
delivery to the Underwriters, in such quantities as the Underwriters may
reasonably request, of copies of this Agreement, (iii) the preparation,
issuance and delivery of the Certificates and the determination of their
eligibility for investment under the laws of such jurisdictions as the
Representative designates, (iv) 50% of the fees and disbursements of Xxxx,
Pittman, Xxxxx & Xxxxxxxxxx, and the fees and disbursements of Xxxxxx
Xxxxxxxx LLP, accountants of Xxxxx Xxxxx, (v) the qualification of the
Certificates under securities and Blue Sky laws and the determination of the
eligibility of the Certificates for investment in accordance with the
provisions of Section 5(g), including filing fees and disbursements and 50%
of the fees of Shaw, Pittman, Xxxxx & Xxxxxxxxxx, in connection therewith and
in connection with the preparation of any Blue Sky Survey, (vi) the printing
and delivery to the Underwriters, in such quantities as the Underwriters may
reasonably request, hereinabove stated, of copies of the Registration
Statement and Prospectus and all amendments and supplements thereto, and of
any Blue Sky Survey, (vii) for the filing fee of the National Association of
Securities Dealers, Inc., (viii) the duplication and delivery to the
Underwriters in such quantities as the Underwriters may reasonably request,
of copies of the Pooling Agreement, (ix) the fees charged by nationally
recognized statistical rating agencies for rating the Certificates, (x) the
fees and expenses of the Trustee and its counsel, and (xi) the fees and
expenses of the Certificate Insurer and its counsel. The Underwriters agree
to pay (i) 50% of the fees and disbursements of Xxxx, Pittman, Xxxxx &
Xxxxxxxxxx and (ii) other expenses of Xxxxx Xxxxx relating to the
transactions contemplated hereby in an amount equal to $85,395.00.
8. INDEMNIFICATION. Xxxxx Xxxxx agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls each Underwriter
within the meaning of the Act or the Exchange Act, as follows:
(a) Chevy Chase will indemnify and hold harmless the Underwriters
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriters may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are
18
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading (in the case of the Prospectus or any amendment or supplement there-
to, in the light of the circumstances under which they were made) and will
reimburse the Underwriters for any legal or other expenses reasonably incurred
by such Underwriters in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred; provid-
ed, however, that Chevy Chase will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to Chevy Chase by any Underwriters through the Representa-
tive specifically for use therein, it being understood and agreed that the only
such information furnished by any Underwriters consists of the information
described as such in subsection (b) below.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless Chevy Chase against any losses, claims, damages or liabilities to which
Chevy Chase may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading (in the case of the Prospectus, in the light of the
circumstances under which they were made), in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to Chevy Chase by such Underwriter through the
Representative specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by Xxxxx Xxxxx in connection with investigat-
ing or defending any such loss, claim, damage, liability or action as such
expenses are incurred, it being understood and agreed that the only such infor-
mation furnished by any Underwriters consists of the following information in
the Prospectus furnished on behalf of the Underwriters: the last paragraph at
the bottom of the cover page concerning the terms of the offering by the Under-
writers, the legend concerning overallotments and stabilizing on the inside
front cover page and the concession and reallowance figures appearing in the
third paragraph under the caption "Underwriting."
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the
19
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such indemni-
fied party from all liability on any claims that are the subject matter of such
action.
9. CONTRIBUTION. (a) If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of Section 8 above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in such subsection (a)
or (b) (i) in such proportion as is appropriate to reflect the relative benefits
received by Chevy Chase on the one hand and each of the Underwriters on the
other from the offering of the Certificates or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of Chevy Chase on the one hand and each of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by Xxxxx
Xxxxx on the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before deduct-
ing expenses) received by Xxxxx Xxxxx bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by Xxxxx Xxxxx or the Underwrit-
ers and the parties, relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this Section 9 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this Section 9. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to contribu-
tion from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations in this Section 9 to contribute are several in
proportion to their respective underwriting obligations and not joint.
(b) The obligations of Chevy Chase under this Section 9 shall be in
addition to any liability which Chevy Chase may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the Underwrit-
ers under this Section 9 shall be in addition to any liability which the respec-
tive Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of Xxxxx Xxxxx, to each officer of Xxxxx Xxxxx who
has signed the
20
Registration Statement and to each person, if any, who controls Chevy Chase
within the meaning of the Act.
Each Underwriter, with respect to the Certificates, agrees that it
will not prepare or distribute to any proposed purchaser of any Certificates any
Derived Information (as such term is hereinafter defined) , unless it shall have
provided to the Servicer a copy of such Derived Information a sufficient time
prior to its proposed distribution to permit the Servicer to review and comment
upon such Derived Information, and such Underwriters shall have obtained the
prior written consent of the Servicer thereto following its review. In addi-
tion, such Underwriters agree to provide the Servicer, no later than the date on
which the Prospectus is required to be filed pursuant to Rule 424, with a
definitive copy of its Derived Information with respect to such Certificates
provided by the Underwriters for filing with the Commission on Form 8-K.
The Underwriters agree, assuming all Companies-provided Information
(as such term is hereinafter defined) provided by Chevy Chase is accurate and
complete in all material respects, to indemnify and hold harmless Chevy Chase,
each of Xxxxx Xxxxx'x officers and directors and each person who controls Chevy
Chase within the meaning of the Act against any and all losses, claims, damages
or liabilities, joint or several, to which they may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement of a
material fact contained in the Derived Information provided by such Underwrit-
ers, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party for
any legal or other expenses reasonably incurred by him, her or it in connection
with investigating or defending or preparing to defend any such loss, claim,
damage, liability or action as such expenses are incurred. The obligations of
the Underwriters under this Section 9 shall be in addition to any liability
which the Underwriters may otherwise have.
For purposes of this Section 9, the term "Derived Information" means
such portion, if any, of the information delivered to Chevy Chase for filing
with the Commission on Form 8-K as:
i) is not contained in the Prospectus without taking into account
information incorporated therein by reference;
ii) does not constitute Companies-Provided Information; and
iii) is not information provided by the Certificate Insurer.
"Companies-Provided Information" means any computer tape furnished to the
Underwriters by Xxxxx Xxxxx concerning the Receivables assigned to the Trust.
21
Notwithstanding the provisions of Sections 8 and 9, the Underwriters
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Certificates underwritten by the Underwriters and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriters have otherwise been required to pay in respect of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section 9, each person, if any, who controls the Underwriters within the meaning
of the Act or the Exchange Act shall have the same rights to contribution as
each of the Underwriters and each director of Xxxxx Xxxxx, each officer of Xxxxx
Xxxxx who signed the Registration Statement, and each person, if any, who
controls Chevy Chase within the meaning of the Act or the Exchange Act shall
have the same rights to contribution as Chevy Chase.
10. DEFAULT OF UNDERWRITERS. If any Underwriter defaults in its
obligations to purchase Certificates hereunder on the Closing Date and the
aggregate principal amount of Certificates that such defaulting Underwriter or
Underwriters have agreed but failed to purchase does not exceed 10% of the total
principal amount of Certificates that the Underwriters are obligated to purchase
on such Closing Date, the Representative may make arrangements satisfactory to
Chevy Chase for the purchase of such Certificates by other persons, including
any of the Underwriters, but if no such arrangements are made by such Closing
Date, the nondefaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the Certificates that
such defaulting Underwriters agreed but failed to purchase on such Closing Date.
If any Underwriters so default and the aggregate principal amount of
Certificates with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Certificates that the Underwriters are obligated
to purchase on such Closing Date and arrangements satisfactory to the
Representative and Chevy Chase for the purchase of such Certificates by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or
Chevy Chase, except as provided in Section 11. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section 10. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
11. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of
Chevy Chase or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, Xxxxx Xxxxx or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Certificates. If this Agreement is terminated or if for any
reason the purchase of the Certificates by the Underwriters is not consummated,
Chevy Chase shall remain responsible for the expenses to be paid or reimbursed
by it pursuant to Section 7 and the respective obligations of Chevy Chase and
the Underwriters pursuant to Section 8 and 9 shall remain in effect, and if any
Certificates have been purchased hereunder the representations and warranties in
Section 2 and all obligations under Section 5 and 6 shall also remain in effect.
If the purchase of the Certificates by the Underwriters is not consummated for
any reason other than solely because of the termination of this Agreement
pursuant to Section 10 or the occurrence of any event specified in clause (ii),
(iv) or (v) of Section
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6(n), Xxxxx Xxxxx will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of Xxxx, Pittman, Xxxxx & Xxxxxxxxxx, Underwr-
iters' counsel) reasonably incurred by them in connection with the offering of
the Certificates.
12. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunications Notices to First
Boston shall be directed to the address set forth on the first page hereof,
or sent by facsimile machine which produces an electronic confirmation of
receipt to 212/648-5909, attention: Syndicate Desk. Notices to Chevy Chase
shall be directed to Chevy Chase Bank, F.S.B., 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx
Xxxxx, Xxxxxxxx 00000, or sent by facsimile machine which produces an
electronic confirmation of receipt to 301/986-7401, attention: Xxxxxxx X.
Xxxxxx, Xx.
13. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and Xxxxx Xxxxx, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended nor
shall it be construed to give any person, firm or corporation, other than the
parties hereto or thereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 8 and 9 and their
heirs and legal representatives, any legal or equitable right, remedy or
claim under or with respect to this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties and their
respective successors and such controlling persons and officers and directors
and their heirs and legal representatives (to the extent of their rights as
specified herein and therein) and except as provided above for the benefit of
no other person, firm or corporation. No purchaser of Certificates from the
Underwriters shall be deemed to be a successor by reason merely of such
purchase.
14. REPRESENTATIONS OF UNDERWRITERS. The Representative will act for
the several Underwriters in connection with the transactions contemplated by
this Agreement, and any action under this Agreement taken by the
Representative will be binding upon all the Underwriters.
15. GOVERNING LAW AND TIME; CONSENT TO JURISDICTION. THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED
IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS. XXXXX CHASE HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
FEDERAL AND STATE COURTS IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but together they shall
constitute but one instrument.
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and Chevy Chase in accordance with its terms.
Very truly yours,
CHEVY CHASE BANK, F.S.B.
By:_________________________________
Xxxx X. Xxxxxx
Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
CS FIRST BOSTON CORPORATION,
acting on behalf of itself
and as the Representative of
the Underwriters.
By: ________________________________
Name: ______________
Title: ______________
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Schedule 1
--------------------------------
Proceeds to
Purchase Chevy Chase
Price Principal (includes accrued
Underwriters Percentage Amount interest)
------------ ---------- ------ ---------
CS First Boston Corporation ___________% $___________ $___________
X.X. Xxxxxx Securities Inc. ___________% $___________ $___________
Xxxxx Xxxxxx Inc. ___________% $___________ $___________
25
