Exhibit 10.1
INDEMNIFICATION AGREEMENT
This Agreement, dated as of September 18, 1997, is by and among MBIA
Insurance Corporation, a New York stock insurance corporation (the "Certificate
Insurer"), as the Certificate Insurer under the certificate guaranty insurance
policy (the "Policy") to be issued in connection with the Certificates described
below, Chevy Chase Bank, F.S.B. (the "Bank") and Credit Suisse First Boston
Corporation, as Representative (the "Representative") of itself, X.X. Xxxxxx
Securities Inc. and Xxxxx Xxxxxx Inc. (collectively, the "Underwriters").
1. Definitions. As used in this Agreement, the following terms shall
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have the respective meanings stated below:
"Act" means the Securities Act of 1933, as amended, together with all
related rules and regulations.
"Agreement" means this Indemnification Agreement by and among the
Certificate Insurer, the Bank and the Representative.
"Bank Party" means the Bank, its parents, subsidiaries and affiliates
and any shareholder, director, officer, employee, agent or any "controlling
person" (as such term is used in the Act) of any of the foregoing.
"Certificates" means the Auto Receivables Backed Certificates, Class
A, issued by the Chevy Chase Auto Receivables Trust 1997-3 pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
dated as of September 1, 1997 between the Bank, as seller and servicer, and
U.S. Bank National Association, doing business as First Bank National
Association, as trustee.
"Indemnified Party" means any party entitled to any indemnification
pursuant to Section 5 below, as the context requires.
"Indemnifying Party" means any party required to provide
indemnification pursuant to Section 5 below, as the context requires.
"Insurer Party" means the Certificate Insurer, its parents,
subsidiaries and affiliates and any shareholder, director, officer,
employee, agent or any "controlling person" (as such term is used in the
Act) of any of the foregoing.
"Losses" means (i) any actual out-of-pocket loss paid by the party
entitled to indemnification or contribution hereunder, and (ii) any actual
out-of-pocket costs and expenses paid by such party, including reasonable
fees and expenses of its counsel, to the extent not paid, satisfied or
reimbursed from funds provided by any other Person
(provided that the foregoing shall not create or imply any obligation
to pursue recourse against any such other Person).
"Person" means any individual, partnership, joint venture,
corporation, limited liability company, trust or unincorporated
organization or any government or agency or political subdivision thereof.
"Prospectus" means the form of final Prospectus Supplement, dated
September 18, 1997 to the Prospectus dated September 17, 1997, included in
the Registration Statement.
"Registration Statement" means the registration statement on Form S-3
of the Bank on behalf of the Chevy Chase Auto Receivables Trust 1997-3
(Registration No. 333-21707) relating to the Certificates in the form
in which it has become effective, as supplemented by the Prospectus.
"State Securities Law" means any state, local or foreign statute, and
any rule or regulation thereunder, regulating (i) transactions and dealings
in securities, (ii) any person or entity engaging in such transactions or
advising with respect to securities or (iii) investment companies.
"Underwriting Agreement" means the Underwriting Agreement by and
between the Bank and the Representative, dated September 18, 1997.
"Underwriter Party" means each of the Underwriters, its respective
parents, subsidiaries and affiliates and any shareholder, director,
officer, employee, agent or "controlling person" (as such term is used in
the Act) of any of the foregoing.
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2. Representations and Warranties of the Certificate Insurer. The
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Certificate Insurer represents and warrants to the Underwriters and the Bank as
follows:
(a) Organization and Licensing. The Certificate Insurer is a duly
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incorporated and existing New York stock insurance corporation licensed to
do business in the State of New York.
(b) Corporate Power. The Certificate Insurer has the corporate
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power and authority to issue the Policy and execute and deliver this
Agreement and to perform all of its obligations hereunder and thereunder.
(c) Authorization; Approvals. The issuance of the Policy and the
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execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate proceedings. No further approvals or
filings of any kind, including, without limitation, any further approvals
of or further filing with any governmental agency or other governmental
authority, or any approval of the Certificate Insurer's board of directors
or stockholders, are necessary for the Policy and this Agreement to
constitute the legal, valid and binding obligations of the Certificate
Insurer.
(d) No Conflicts. The execution and delivery of this Agreement and
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consummation of the transactions contemplated hereunder will not result in
the breach of any terms or provisions of the certificate of incorporation
or by-laws of the Certificate Insurer, or result in the breach of a term or
provision of, or conflict with or constitute a default under or result in
the acceleration of any obligation under, any material agreement or other
material instrument to which the Certificate Insurer or its property is
subject, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Certificate Insurer or any of its property
is subject or result in the creation of any lien on any of the Certificate
Insurer's assets or property (other than pursuant to this Agreement).
(e) Enforceability. The Policy, when issued, and this Agreement
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will each constitute a legal, valid and binding obligation of the
Certificate Insurer, enforceable in accordance with its terms subject, as
to enforcement of remedies, to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforceability of creditors'
rights generally applicable in the event of the bankruptcy, insolvency or
reorganization of the Certificate Insurer and to general principles of
equity.
(f) Financial Information. The consolidated financial statements
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of the Certificate Insurer as of December 31, 1996 and December 31, 1995
and for the three years in the period ended December 31, 1996 incorporated
by referenced in the Prospectus (the "Insurer Audited Financial
Statements"), fairly present in all material respects the financial
condition of the Certificate Insurer as of such dates and for the period
covered by such statements in accordance with generally accepted accounting
principles consistently applied. The consolidated financial
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statements of the Certificate Insurer and its subsidiaries for the six
months ended June 30, 1997 and for the periods ending June 30, 1997 and
June 30, 1996 incorporated by reference in the Prospectus (the "Insurer
Unaudited Financial Statements") present fairly in all material respects
the financial condition of the Certificate Insurer as of such date and for
the periods covered by such statements in accordance with generally
accepted accounting principles applied in a manner consistent with the
accounting principles used in preparing the Insurer Audited Financial
Statements, and, since June 30, 1997 there has been no material change in
such financial condition of the Insurer which would materially and
adversely affect its ability to perform its obligations under the Policy.
(g) Insurer Information. The information in the Prospectus as of
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the date hereof under the captions "The Certificate Insurer" and "The
Certificate Insurance Policy" (collectively, the "Insurer Information") is
true and correct in all material respects and does not contain any untrue
statement of a fact that is material to the Certificate Insurer's ability
to perform its obligations under the Policy.
(h) Limitations. Nothing in this Agreement shall be construed as a
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representation or undertaking by the Certificate Insurer concerning
maintenance of the rating currently assigned to its claims-paying ability
by Xxxxx'x Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc. ("S&P"), Fitch
Investors Service, L.P. ("Fitch") or any other nationally recognized
statistical rating organization (collectively, the "Rating Agencies"). The
Rating Agencies, in assigning such rating, may take into account facts and
assumptions not described in the Prospectus, and the facts and assumptions
which are considered by the Rating Agencies are subject to change over
time. The Certificate Insurer has not attempted to disclose all facts and
assumptions which the Rating Agencies deem relevant in assigning a rating
within a particular rating category to the Certificate Insurer's claims-
paying ability. Notwithstanding the foregoing, the Certificate Insurer is
not aware of any facts that, if disclosed to Moody's, S&P or Fitch, would
be reasonably expected to result in a downgrade of the rating of the
claims-paying ability of the Certificate Insurer by any of such Rating
Agencies.
(i) No Litigation. There are no actions, suits, proceedings or
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investigations pending, or to the best of the Certificate Insurer's
knowledge, threatened against it at law or in equity or before or by any
court, governmental agency, board or commission or any arbitrator which, if
decided adversely, would materially and adversely affect its condition
(financial or otherwise) or operations or would materially and adversely
affect its ability to perform its obligations under this Agreement or the
Policy.
(j) 1933 Act Registration. The Policy is exempt from registration
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under the Act.
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3. Agreements, Representations and Warranties of the Underwriters. The
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Underwriters represent and warrant to and agree with the Bank and the
Certificate Insurer that the statements contained in the Prospectus under the
caption "Underwriting" (referred to herein as the "Underwriters Information")
are true and correct in all material respects.
4. Agreements, Representations and Warranties of the Bank. The Bank
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represents and warrants to and agrees with the Certificate Insurer and the
Underwriters as follows:
(a) Registration Statement. The information in the Registration
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Statement, other than the Certificate Insurer Information and the
Underwriters Information, is true and correct in all material respects and
does not contain any untrue statement of a fact that is material or omit to
state a fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) Organization. The Bank is a federally chartered stock savings
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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 presently conducted. The
Bank 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.
(c) Corporate Power. The Bank has the corporate power and
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authority to execute and deliver this Agreement, the Underwriting Agreement
and the Pooling and Servicing Agreement and to perform all of its
obligations hereunder and thereunder.
(d) Authorization; Approvals. The issuance and delivery of the
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Certificates and the execution, delivery and performance of this Agreement,
the Underwriting Agreement and the Pooling and Servicing Agreement by the
Bank have been duly authorized by all necessary corporate proceedings. No
further approvals or filings of any kind, including, without limitation,
any further approvals of or further filing with any governmental agency or
other governmental authority, or any further approval of the Bank's board
of directors or stockholders, are necessary for this Agreement, the
Underwriting Agreement and the Pooling and Servicing Agreement to
constitute the legal, valid and binding obligations of the Bank.
(e) No Conflicts. The issuance and delivery of the Certificates,
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the consummation of any other of the transactions contemplated herein or in
the Pooling and Servicing Agreement or the Underwriting Agreement, or the
fulfillment of the terms of this Agreement, the Underwriting Agreement or
the Pooling and Servicing Agreement, do not and will not conflict with or
violate any term or provision of the Charter or By-Laws of the Bank, any
statute, order or
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regulation applicable to the Bank of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Bank 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 the Bank pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Bank is a party or by which the Bank may be bound or to which any
of the property or assets of the Bank may be subject except for conflicts,
violations, breaches, accelerations and defaults which would not,
individually or in the aggregate, materially and adversely affect its
ability to perform its obligations under this Agreement, the Underwriting
Agreement or the Pooling and Servicing Agreement.
(f) Enforceability. This Agreement, the Pooling and Servicing
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Agreement and the Underwriting Agreement have been duly authorized by the
Bank, and, when executed and delivered by the Bank and assuming the due
authorization, execution and delivery of the Pooling and Servicing
Agreement and the Underwriting Agreement by the other parties thereto, will
constitute valid and binding obligations of the Bank, enforceable against
the Bank 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 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. When executed,
authenticated and delivered in accordance with the terms of the Pooling and
Servicing Agreement and paid for by the Underwriters pursuant to the
Underwriting Agreement, the Certificates will be duly and validly issued
and outstanding and will be entitled to the benefits of the Pooling and
Servicing Agreement.
(g) No Litigation. There are no actions, suits, proceedings or
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investigations pending or, to the best of the Bank's knowledge, threatened
against it at law or in equity or before any court, governmental agency,
board or commission or any arbitrator which, if decided adversely, would
materially and adversely affect its condition (financial or otherwise) or
operations or would materially and adversely affect its ability to perform
its obligations under this Agreement, the Underwriting Agreement or the
Pooling and Servicing Agreement.
5. Indemnification.
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(a) The Certificate Insurer hereby agrees, upon the terms and
subject to the conditions of this Agreement, to indemnify, defend and hold
harmless each Bank Party and each Underwriter Party against any and all
Losses incurred by such Bank Party or Underwriter Party, as applicable,
with respect to the offer and sale of the Certificates and resulting from
the Certificate Insurer's breach of any of its representations and
warranties set forth in Section 2 of this Agreement.
(b) The Underwriters hereby agree, upon the terms and subject to the
conditions of this Agreement, to indemnify, defend and hold harmless each
Insurer Party against any and all Losses incurred by such Insurer Party
which arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact in the Underwriters Information or (ii)
the omission or alleged omission to state in the Underwriters Information 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.
(c) The Bank hereby agrees, upon the terms and subject to the
conditions of this Agreement, to indemnify, defend and hold harmless each
Insurer Party against any and all losses incurred by such Insurer Party
with respect to the offer and sale of the Certificates and resulting from
the Bank's breach of any of its representations and warranties set forth in
Section 4 of this Agreement.
(d) Upon the incurrence of any Losses entitling a party to
indemnification hereunder, the Indemnifying Party shall reimburse the
Indemnified Party promptly upon establishment by written notice from the
Indemnified Party to the Indemnifying Party of the Losses incurred.
6. Certificate Insurer Undertaking. The Certificate Insurer hereby
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agrees that, for so long as the Underwriters are required under the Act to
deliver a Prospectus in connection with the sale of the Certificates, the
Certificate Insurer will furnish to either the Representative or the Bank, or
both, upon written request of such party or parties and at the expense of the
requesting party, copies of the Certificate Insurer's most recent financial
statements (annual or interim, as the case may be) prepared in accordance with
generally accepted accounting principles (subject, as to interim statements, to
normal year-end adjustments and to the absence of footnotes) within a reasonable
time after they are available.
7. Notice to be Given to the Certificate Insurer. Except as provided
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below in Section 10 with respect to contribution, the indemnification provided
herein by the Certificate Insurer shall be the exclusive remedy of any
Underwriter Party or Bank Party for the Losses resulting from the Certificate
Insurer's breach of a representation, warranty or agreement hereunder; provided,
however, that any Underwriter Party or Bank Party shall be entitled to pursue
any other remedy at law or in equity for any such breach so long as the damages
sought to be recovered shall not exceed the Losses incurred thereby resulting
from such breach. In the event that any action or regulatory proceeding shall be
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commenced or claim asserted which may entitle an Underwriter Party or Bank Party
to be indemnified under this Agreement, such party shall give the Certificate
Insurer written notice of such action or claim reasonably promptly after receipt
of written notice thereof. The Certificate Insurer shall be entitled to
participate in the defense of any such action or claim in reasonable cooperation
with, and with the reasonable cooperation of, the Underwriter Party or the Bank
Party, as the case may be. The Indemnified Party will have the right to employ
its own counsel in any such action in addition to counsel for the Certificate
Insurer, but the fees and expenses of the Indemnified Party's own counsel will
be at the expense of such Indemnified Party unless (1) the employment of such
counsel by the Indemnified Party at the Certificate Insurer's expense has been
authorized in writing by the Certificate Insurer, or (2) the Certificate Insurer
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, or (3)
the named parties to any such action include the Certificate Insurer and the
Indemnified Party, and such Indemnified Party shall have been advised by counsel
in writing that there may be one or more legal defenses available to it which
are different from or additional to those available to the Certificate Insurer
(in which case, if such Indemnified Party notifies the Certificate Insurer in
writing that it elects to employ separate counsel at the expense of the
Certificate Insurer, the Certificate Insurer shall not have the right to assume
the defense of such action or proceeding on such Indemnified Party's behalf), in
each of which cases the reasonable fees and expenses of counsel (including local
counsel) will be at the expense of the Certificate Insurer and all such fees and
expenses will be reimbursed promptly as they are incurred (provided, that the
party seeking reimbursement must provide documentation of expenses). In no event
will the Certificate Insurer be liable for the fees and expenses of more than
one counsel for all Bank Parties and more than one counsel for all Underwriter
Parties in connection with any one action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. The Underwriter Parties and Bank Parties shall
cooperate with the Certificate Insurer in resolving any event which would give
rise to an indemnity obligation pursuant to Section 5(a) hereof in the most
efficient manner. No settlement of any such claim or action shall be entered
into without the consent of the Bank Party or Underwriter Party, as the case may
be, who is subject to such claim or action and the Certificate Insurer;
provided, however, that the consent of such Bank Party or such Underwriter
Party, as applicable, shall not be required if such settlement fully discharges,
with prejudice against the plaintiff, the claim or action against such Bank
Party or Underwriter Party. Any failure by a Bank Party or Underwriter Party, as
the case may be, to comply with the provisions of this Section shall relieve the
Certificate Insurer of liability only if such failure is materially prejudicial
to any legal pleadings, grounds, defenses or remedies in respect thereof or the
Certificate Insurer's liability hereunder and then only to the extent of such
prejudice.
8. Notice to be Given to the Representative. Except as provided below
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in Section 10 with respect to contribution, the indemnification provided herein
by the Underwriters shall be the exclusive remedy of any Insurer Party for the
Losses resulting from matters specified in Section 5(b) hereof; provided,
however, that the Insurer Party
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shall be entitled to pursue any other remedy at law or in equity for any such
breach so long as the damages sought to be recovered shall not exceed the Losses
incurred thereby resulting from such breach. In the event that any action or
regulatory proceeding shall be commenced or claim asserted which may entitle an
Insurer Party to be indemnified under this Agreement, such party shall give the
Representative written notice of such action or claim reasonably promptly after
receipt of written notice thereof. The Underwriters shall be entitled to
participate in the defense of any such action or claim in reasonable cooperation
with, and with the reasonable cooperation of, the Insurer Party. The Indemnified
Party will have the right to employ its own counsel in any such action in
addition to counsel for the Underwriters, but the fees and expenses of the
Indemnified Party's counsel will be at the expense of such Indemnified Party
unless (1) the employment of counsel by the Indemnified Party at the
Underwriters' expense has been authorized in writing by the Representative, or
(2) the Underwriters have not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, or (3) the named parties to any such action include the
Underwriters and the Indemnified Party, and such Indemnified Party shall have
been advised by counsel in writing that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Underwriters (in which case, if such Indemnified Party notifies the Underwriters
in writing that it elects to employ separate counsel at the expense of the
Underwriters, the Underwriters shall not have the right to assume the defense of
such action or proceeding on such Indemnified Party's behalf), in each of which
cases the reasonable fees and expenses of counsel will be at the expense of the
Underwriters and all such fees and expenses will be reimbursed promptly as they
are incurred (provided, that the party seeking reimbursement must provide
documentation of expenses). In no event will the Underwriters be liable for the
fees and expenses of more than one counsel for all Insurer Parties in connection
with any one action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. The Insurer Party shall cooperate with the Underwriters in
resolving any event which would give rise to an indemnification obligation
pursuant to Section 5(b) hereof in the most efficient manner. No settlement of
any such claim or action shall be entered into without the consent of the
Insurer Party who is subject to such claim or action and the Underwriters;
provided, however, that the consent of such Insurer Party shall not be required
if such settlement fully discharges, with prejudice against the plaintiff, the
claim or action against such Insurer Party. Any failure by an Insurer Party to
comply with the provisions of this Section shall relieve the Underwriters of
liability only if such failure is materially prejudicial to any legal pleadings,
grounds, defenses or remedies in respect thereof or the Underwriters' liability
hereunder and then only to the extent of such prejudice.
9. Notice to be Given to the Bank. Except as provided below in Section
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10 with respect to contribution, the indemnification provided herein by the Bank
shall be the exclusive remedy of any Insurer Party for the Losses resulting from
the Bank's breach of a representation, warranty or agreement hereunder;
provided, however, that the Insurer Party shall be entitled to pursue any other
remedy at law or in equity for any such breach
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so long as the damages sought to be recovered shall not exceed the Losses
incurred thereby resulting from such breach. In the event that any action or
regulatory proceeding shall be commenced or claim asserted which may entitle an
Insurer Party to be indemnified under this Agreement, such party shall give the
Bank written notice of such action or claim reasonably promptly after receipt of
written notice thereof. The Bank shall be entitled to participate in the defense
of any such action or claim in reasonable cooperation with, and with the
reasonable cooperation of, the Insurer Party. The Indemnified Party will have
the right to employ its own counsel in any such action in addition to counsel
for the Bank, but the fees and expenses of the Indemnified Party's counsel will
be at the expense of such Indemnified Party unless (1) the employment of counsel
(including local counsel) by the Indemnified Party at the Bank's expense has
been authorized in writing by the Bank, or (2) the Bank has not in fact employed
counsel to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, or (3) the named parties to
any such action include the Bank and the Indemnified Party, and such Indemnified
Party shall have been advised by counsel in writing that there may be one or
more legal defenses available to it which are different from or additional to
those available to the Bank (in which case, if such Indemnified Party notifies
the Bank in writing that it elects to employ separate counsel at the expense of
the Bank, the Bank shall not have the right to assume the defense of such action
or proceeding on such Indemnified Party's behalf), in each of which cases the
reasonable fees and expenses of counsel (including local counsel) will be at the
expense of the Bank and all such fees and expenses will be reimbursed promptly
as they are incurred (provided, that the party seeking reimbursement must
provide documentation of expenses). In no event will the Bank be liable for the
fees and expenses of more than one counsel for all Insurer Parties in connection
with any one action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. The Insurer Party shall cooperate with the Bank in resolving any
event which would give rise to an indemnification obligation pursuant to Section
5(c) hereof in the most efficient manner. No settlement of any such claim or
action shall be entered into without the consent of the Insurer Party, who is
subject to such claim or action and the Bank; provided, however, that the
consent of such Insurer Party shall not be required if such settlement fully
discharges, with prejudice against the plaintiff, the claim or action against
such Insurer Party. Any failure by an Insurer Party to comply with the
provisions of this Section shall relieve the Bank of liability only if such
failure is materially prejudicial to any legal pleadings, grounds, defenses or
remedies in respect thereof or the Bank's liability hereunder and then only to
the extent of such prejudice.
10. Contribution.
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(a) To provide for just and equitable contribution if the
indemnification provided by the Certificate Insurer is determined to be
unavailable for any Underwriter Party or Bank Party (other than pursuant to
Sections 5 or 7 of this Agreement), the Certificate Insurer shall
contribute to the aggregate costs of liabilities arising from any breach of
a representation or
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warranty set forth in this Agreement on the basis of the relative fault of
all Underwriter Parties, all Bank Parties and all Insurer Parties,
respectively.
(b) To provide for just and equitable contribution if the
indemnification provided by the Bank is determined to be unavailable for
any Insurer Party (other than pursuant to Sections 5 or 9 of this
Agreement), the Bank shall contribute to the aggregate costs of liabilities
arising from any breach of a representation or warranty set forth in this
Agreement on the basis of the relative fault of all Underwriter Parties,
all Bank Parties and all Insurer Parties, respectively.
(c) To provide for just and equitable contribution if the
indemnification provided by the Underwriters is determined to be
unavailable for any Insurer Party (other than pursuant to Sections 5 or 8
of this Agreement), the Underwriters shall contribute to the aggregate
costs of liabilities arising from (i) any untrue statement or alleged
untrue statement of a material fact in the Underwriters Information or (ii)
the omission or alleged omission to state in the Underwriters Information 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, on the basis of the relative fault of all Underwriter
Parties, all Bank Parties and all Insurer Parties, respectively; provided,
however, that the Underwriters shall not be liable for any amount in excess
of (i) the excess of the sales prices of the Certificates to the public
over the prices paid therefor by the Underwriters over (ii) the aggregate
amount of any damages which the Underwriters have been otherwise required
to pay in respect of the same or any substantially similar claim.
(d) The relative fault of each Indemnifying Party, on the one hand,
and of each Indemnified Party, on the other, shall be determined by
reference to, among other things, whether the breach of, or alleged breach
of, any of its representations and warranties set forth in Sections 2, 3 or
4 of this Agreement relates to information supplied by, or action within
the control of, the Indemnifying Party or the Indemnified Party and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such breach.
(e) The parties agree that the Insurer shall be solely responsible
for the Insurer Information and for the Insurer Financial Statements, that
the Underwriters shall be solely responsible for the Underwriters
Information and that the Bank shall be responsible solely for all other
information in the Registration Statement and in the Prospectus.
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(f) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(g) The indemnity and contribution agreements contained in this
Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Underwriter Party, any
Bank Party or any Insurer Party, (ii) the issuance of the Certificates or
the Policy or (iii) any termination of this Agreement.
(h) Upon the occurrence of any Losses entitling a party to
contribution hereunder, the contributor shall reimburse the party entitled
to contribution promptly upon establishment by the party entitled to
contribution of the Losses incurred.
It is understood and agreed that the indemnities set forth in this
Agreement shall survive the execution and delivery of this Agreement and the
issuance, sale and delivery of the Certificates.
11. Notices. All notices and other communications provided for under
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this Agreement shall be addressed to the address set forth below as to each
party or at such other address as shall be designated by a party in a written
notice to the other parties.
If to the Insurer: MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: General Counsel
If to Bank: Chevy Chase Bank, F.S.B.
0000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Attention: General Counsel
If to the Representative: Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
12. Governing Law. This Agreement shall be deemed to be a contract
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under the laws of the State of New York and shall be governed by and construed
in accordance with the laws of the State of New York without regard to its
conflicts of laws provisions. This Agreement may not be assigned by any party
without the express written consent of each other party. Amendments of this
Agreement shall be in writing
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signed by each party. This Agreement shall not be effective until executed by
the Certificate Insurer, the Bank and the Underwriters.
13. Underwriting Agreement; Pooling and Servicing Agreement. This
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Agreement in no way limits or otherwise affects the indemnification obligations
of (a) the Bank or the Underwriters under the Underwriting Agreement or (b) the
Bank under the Pooling and Servicing Agreement.
14. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized, all as of the date first above written.
MBIA INSURANCE CORPORATION
By: /s/ Xxx X. XxXxxxx
------------------------
Xxx X. XxXxxxx
Assistant Secretary
CHEVY CHASE BANK, F.S.B.
By: /s/ Xxxx X. Xxxxxx
------------------------
Xxxx X. Xxxxxx
Vice President
CREDIT SUISSE FIRST BOSTON
CORPORATION, as Representative
By: /s/ Xxxx Xxx Xxxxxx
------------------------
Xxxx Xxx Xxxxxx
Director
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