EXECUTION COPY
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Exhibit 1.1
CHEVY CHASE AUTO RECEIVABLES TRUST 2001-1
Auto Receivables Backed Notes
UNDERWRITING AGREEMENT
March 15, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
as Representative of the Underwriters
identified on Schedule 1
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. INTRODUCTION. Chevy Chase Bank, F.S.B., a federally chartered stock savings
bank ("Chevy Chase"), has authorized the issuance and sale of the Class A-1
4.87125% Asset Backed Notes (the "Class A-1 Notes"), Class A-2 4.77% Asset
Backed Notes (the "Class A-2 Notes"), Class A-3 5.02% Asset Backed Notes (the
"Class A-3 Notes"), Class A-4 5.41% Asset Backed Notes (the "Class A-4 Notes",
and collectively with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "Class A Notes") and Class B 6.01% Asset Backed Notes (the "Class B
Notes", and together with the Class A Notes, the "Notes") issued by Chevy Chase
Auto Receivables Trust 2001-1 (the "Trust").
2. THE NOTES. The Notes will represent obligations of the Trust, and will be
secured by the pledge of assets of the Trust, consisting, among other things, of
(i) 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 March 1, 2001 (the "Cut-Off Date"), and (iii) security interests in
the Vehicles financed thereby. The Notes will be issued pursuant to an
Indenture, dated as of March 1, 2001 (the "Indenture") between the Trust and
U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"),
and a Sale and Servicing Agreement, dated as of March 1, 2001 (the "Sale and
Servicing Agreement") among the Trust, Chevy Chase, as seller and as servicer,
and the Indenture Trustee. The Indenture Trustee will have access to a Reserve
Account to be established for the benefit of the holders of the Notes. The
Notes will be issued in an aggregate principal amount of $401,529,000.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture and the Sale and Servicing Agreement.
Chevy Chase hereby agrees with the Underwriters named in Schedule 1 hereto (the
"Underwriters") as follows:
3. REPRESENTATIONS AND WARRANTIES OF CHEVY CHASE. Chevy Chase represents and
warrants to, and agrees with, each of the Underwriters that:
(a) A Registration Statement on Form S-3 (No. 333-36242) relating to the Notes,
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 Securities 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 Chevy Chase 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 Chevy Chase has advised ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., 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 Chevy Chase
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". The term "Base Prospectus" means
the prospectus included in the Registration Statement, as such Base
Prospectus has been amended or supplemented subsequent to the Effective
Time by any Prospectus filed with the Commission pursuant to Rule
424(b)(2), (3), (4) or (5). The term "Prospectus Supplement" means the
preliminary prospectus supplement dated March 9, 2001 and the prospectus
supplement dated March 15, 2001, both specifically relating to the Notes,
as both were filed with the Commission pursuant to Rule 424 under the Act
(together the "Prospectus Supplement"). The Base Prospectus and the
Prospectus Supplement, together with all material incorporated by reference
in such Base Prospectus or such Prospectus Supplement, is hereinafter
referred to as the "Prospectus."
(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 will not include, as
of the date of this Agreement and at the Closing Date, respectively, 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
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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 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
9(b). The conditions to the use by Chevy Chase 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 were required to be
filed as exhibits to the Registration Statement pursuant to the Act or the
Rules and Regulations on or prior to the Effective Date which have not been
so filed on or prior to the Effective Date or that were required to be
filed as exhibits to the Registration Statement pursuant to the Act or the
Rules and Regulations which have not been filed as exhibits to reports
filed under the Exchange Act that are incorporated by reference into the
Registration Statement.
(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 operations of Chevy Chase or its
subsidiaries, otherwise than as set forth or contemplated 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 Sale and Servicing Agreement and the
Trust Agreement dated as of March 1, 2001, as amended and restated by the
Amended and Restated Trust Agreement, dated as of March 22, 2001 (as
amended and restated, the "Trust Agreement"), and to cause the Notes 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 Supervision. 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 subject,
which, if determined adversely to Chevy Chase, would individually or in the
aggregate have a material adverse effect on the performance by Chevy Chase
of this Agreement, the Sale and Servicing Agreement or the
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Trust 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, assuming the due authorization, execution and delivery
by the other parties hereto, 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 Sale and Servicing Agreement and the Trust Agreement have been duly
authorized by Chevy Chase and, when executed and delivered by Chevy Chase
and assuming the due authorization, execution and delivery of the Sale and
Servicing Agreement and the Trust 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 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 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 may be limited
by state or federal securities laws or the policies underlying such laws.
(h) The issuance and delivery of the Notes, the consummation of any other of
the transactions contemplated herein, in the Sale and Servicing Agreement
and the Trust Agreement or the fulfillment of the terms of this Agreement,
the Sale and Servicing Agreement and the Trust 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
Chevy Chase 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.
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(i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP is an independent public accountant with respect to
Chevy Chase as required by the Act and the Rules and Regulations.
(j) The Notes have been duly authorized, and when the Notes are issued and
delivered pursuant to the Indenture, the Notes will have been duly issued
and delivered and will be entitled to the benefits provided by the
Indenture and the Sale and Servicing Agreement, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the rights of creditors
generally, and to general principles of equity (regardless of whether the
entitlement to such benefits is considered in a proceeding in equity or at
law), and will conform in substance to the description thereof contained in
the Registration Statement and the Prospectus, and will in all material
respects be in the form contemplated by the Indenture and the Sale and
Servicing 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 Notes, or the consummation by
Chevy Chase of the other transactions contemplated by this Agreement, the
Indenture, the Sale and Servicing Agreement or the Trust Agreement, except
the registration under the Act of the Notes 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 Notes 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 Chevy Chase 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 Sale and Servicing Agreement,
Chevy Chase (i) will not have assigned to any person any of its right,
title or interest in the Receivables or in the Sale and Servicing Agreement
or the Notes and (ii) will have the power and authority to sell the
Receivables to the Trust and to sell the Notes to the Underwriters, and
upon execution and delivery of the Sale and Servicing Agreement by the
Trust and the Indenture Trustee and payment of the consideration set forth
therein, the Trust will have acquired beneficial ownership of all of ▇▇▇▇▇
▇▇▇▇▇'▇ right, title and interest in and to the Receivables, and upon
delivery to the Underwriters of the Notes the Underwriters will have good
and marketable title to the Notes.
(n) As of the Cut-Off Date, the Receivables will meet the eligibility criteria
described in the Prospectus.
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(o) The Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended, and the Trust is not, and immediately following the
issuance and sale of the Notes 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 caused the Trust to issue the Notes.
(q) Each of the Notes, the Sale and Servicing Agreement, the Indenture and the
Trust Agreement 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 Sale and Servicing
Agreement, the Indenture, the Trust Agreement and the Notes 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 Notes 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 Sale and Servicing Agreement will be true and correct.
Any certificate signed by an officer of Chevy Chase and delivered to
the Underwriters or the Underwriters' counsel in connection with an offering of
the Notes 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 3 are made.
4. PURCHASE, SALE, DELIVERY AND PAYMENTS. The Underwriters' commitment to
purchase the Notes 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. Chevy Chase agrees to
instruct the Indenture Trustee to issue and agrees to sell to the Underwriters,
and the Underwriters, severally and not jointly, agree, to purchase from Chevy
Chase, the Notes at a purchase price for the Notes of each class calculated by
multiplying the purchase price percentage set forth on Schedule 1 hereto by the
respective principal amount of Notes of each class, to be purchased by the
Underwriters, respectively, as set forth on Schedule 1 hereto. Payment of the
purchase price for, and delivery of, any Notes to be purchased by the
Underwriters shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, 1301 Avenue
of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or at such other place as shall be
agreed upon by the Underwriters and Chevy Chase, at 10:00 a.m. New York time on
March 22, 2001 (the "Closing Date"), or at such other date or time as shall be
agreed upon in writing by the Representative and Chevy Chase. 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 Indenture Trustee
as custodian for The Depository Trust Company ("DTC") of the Notes in the form
of one or more global Notes in definitive form (the "Global Notes") and
registered in the name of Cede & Co., as nominee for DTC. The Global Notes will
be made available for checking at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP at least
24 hours prior to the Closing Date.
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5. OFFERING BY UNDERWRITERS. It is understood that the Underwriters propose to
offer the Notes for sale to the public (which may include selected dealers) as
set forth in the Prospectus.
6. 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 effectiveness 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 Notes 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 Statement (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 amendment 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
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 7 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 amendment or supplement to which the Underwriters or the
Underwriters' counsel shall object.
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(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 (including
electronic 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, (v) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation of, or threat of, any proceedings for that purpose or (vi)
the suspension of qualification of the Notes for offering or sale in any
jurisdiction or the initiation of any proceeding for that purpose. Chevy
Chase 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 Notes 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. Chevy Chase will also furnish to the Representative copies of any
report required by Rule 463 under the Act.
(f) Chevy Chase will make generally available to holders of the Notes as soon
as practicable, but in any event not later than the Availability 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 Regulations
(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 Notes for sale and the determination of their eligibility for
investment under the applicable 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 Notes. 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 Notes 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 securities representing interests in or
secured by the Receivables for a period of 30 days following the
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commencement of the offering of the Notes to the public; provided, however,
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that Chevy Chase may, without the Underwriters' prior consent, contract to
sell or attempt to offer, sell or dispose of securities in public
transactions secured by first or second mortgage loans, home equity lines
of credit, home improvement loans and "sub-prime" auto loans (but not
"prime" auto loans); provided further, however, that Chevy Chase may,
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without the Underwriters' prior consent, contract to sell or attempt to
offer, sell or dispose of in public or private transactions the Class B
Certificates from the Chevy Chase Auto Receivables Trust, Series 1997-3 and
the Class B Certificates from the Chevy Chase Auto Receivables Trust,
Series 1997-4.
(i) For so long as any of the Notes remain outstanding, 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 Chevy
Chase, as Servicer, to the Indenture Trustee pursuant to Section 4.10 of
the Sale and Servicing Agreement, the annual statement of a firm of
independent public accountants furnished to the Indenture Trustee pursuant
to Section 4.11 of the Sale and Servicing Agreement and such other
information concerning the Receivables, Chevy Chase (including in its
capacities as the Seller and Servicer) or the Notes, 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 contained in this Agreement.
(k) So long as any of the Notes is outstanding, Chevy Chase shall furnish to
the Representative by first class mail as soon as practicable, (A) all
documents distributed, or caused to be distributed, by Chevy Chase to
Noteholders, (B) all documents filed, or caused to be filed, by Chevy Chase
with the Commission relating to the Trust 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 relating to the Trust and (D) from time to
time, such other information in the possession of Chevy Chase concerning
the Trust as the Representative may reasonably request.
(l) The net proceeds from the sale of the Notes shall be applied in the manner
set forth in the Prospectus Supplement.
(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 affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of Chevy ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ will give prompt written
notice thereof to the Underwriters.
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(n) To the extent, if any, that any rating provided with respect to the Notes
set forth in Section 7(i) hereof is conditional upon the furnishing of
documents reasonably available to Chevy Chase or the taking of any other
reasonable actions by Chevy ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ shall furnish such documents
or take any such other actions.
7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of the
Underwriters to purchase the Notes 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 Chevy Chase made pursuant hereto, to the performance by Chevy Chase
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 Effective Time), from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, in form and
substance satisfactory to the Underwriters and counsel for the
Underwriters, confirming that they are independent public accountants
within the meaning of the Act and the applicable published 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 interpretation, and (ii) they have performed certain
specified procedures with respect to the computer programs used to select
the Receivables and to generate information 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
subsequent 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. 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 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 6 (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
10
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 Notes, 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 under which they were made, not misleading.
(d) The Underwriters shall have received the favorable opinion, dated the
Closing Date, of ▇▇▇▇ ▇▇▇▇▇▇▇, special counsel to Chevy Chase, or other
counsel to Chevy Chase, acceptable to the Underwriters and their counsel,
addressed to the Underwriters and in form and scope satisfactory to the
Underwriters' 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; Chevy Chase has full corporate power and authority to
execute, deliver, and perform its obligations under this Agreement,
the Sale and Servicing Agreement and the Trust Agreement and to cause
the Notes to be issued and to consummate the transactions contemplated
hereby and thereby.
(ii) Chevy Chase has duly authorized and executed this Agreement, the Sale
and Servicing Agreement and the Trust Agreement.
(iii) The execution, delivery and performance of this Agreement, the Sale
and Servicing Agreement and the Trust Agreement, the transfer of the
Receivables to the Trust, the issuance and sale of the Notes and the
consummation of any other of the transactions contemplated herein, in
the Sale and Servicing Agreement or in the Trust Agreement do not
conflict with or result in a violation of (a) any applicable law or
regulation of the United States of America or the State of New York or
Maryland to which Chevy Chase is subject, (b) the Charter or By-laws
of Chevy Chase or (c) any order, writ, judgment or decree known to
such counsel to which Chevy Chase is a party or is subject, or result
in any lien, charge or encumbrance upon any of the properties or
assets of Chevy Chase.
(iv) There are no actions, proceedings or investigations, to the knowledge
of such counsel, pending or threatened before any court,
administrative agency or other tribunal to which Chevy Chase is a
named party or to which its assets
11
are subject (A) asserting the invalidity of the Trust Agreement, the
Sale and Servicing Agreement, this Agreement or the Notes, (B) seeking
to prevent the issuance of the Notes or the consummation by Chevy
Chase of any of the transactions contemplated by the Trust Agreement,
the Sale and Servicing Agreement or this Agreement, (C) that might
adversely affect the validity or enforceability of the Trust
Agreement, this Agreement, the Sale and Servicing Agreement or the
Notes, or (D) seeking to adversely affect the federal income tax
attributes of the Notes as described in the Prospectus Supplement
under the heading "Material Federal Income Tax Considerations."
(v) Each of this Agreement, the Sale and Servicing Agreement and the Trust
Agreement, constitutes the valid, legal and binding obligation of
Chevy Chase enforceable against Chevy Chase in accordance with its
terms.
(vi) 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 Trust 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 a receivership or
conservatorship of Chevy Chase in which the FDIC is appointed a
receiver or conservator for Chevy Chase.
(vii) 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 concerning Chevy Chase that would lead them to believe that the
information set forth in the Prospectus Supplement under the caption "THE BANK-
General" and "THE BANK-Litigation", 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 Indenture 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 Indenture Trustee has duly authorized, executed and delivered the
Indenture and the Sale and Servicing Agreement.
(ii) The Indenture 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 Indenture and the Sale and Servicing Agreement
and to perform its obligations thereunder and each such Agreement
constitutes the valid, legal and binding obligation of the Indenture
Trustee, enforceable against the Indenture Trustee in accordance with
its terms.
12
(iii) The Notes have been duly executed, authenticated and delivered by the
Indenture Trustee.
(iv) The execution and delivery by the Indenture Trustee of the Sale and
Servicing Agreement and the Indenture and the performance by the
Indenture 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 Indenture 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 Indenture 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 Indenture Trustee of the Sale and
Servicing Agreement or the Indenture.
(f) The Underwriters shall have received an opinion, dated the Closing Date, of
▇▇▇▇ ▇▇▇▇▇▇▇, special counsel to Chevy Chase, addressed to, and
satisfactory to, Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"), ▇▇▇▇▇'▇ Investors Service, Inc.
("▇▇▇▇▇'▇"), ▇▇▇▇▇, Inc. ("Fitch"), and the Underwriters, relating to the
transfer of the Receivables to the Trust.
(g) Chevy Chase shall have furnished to the Underwriters a certificate signed
on behalf of Chevy Chase by one or more of the chairman of the board, the
president, any vice chairman of the board, any executive vice president,
any senior vice president, any group vice president, any vice president,
the treasurer, or the controller of Chevy Chase, dated the Closing Date, as
to (i) the accuracy of the representations and warranties of Chevy Chase
herein and in the Sale and Servicing Agreement at and as of the Closing
Date, (ii) the performance by Chevy Chase 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.
(h) The Indenture Trustee shall have furnished to the Underwriters a
certificate of the Indenture Trustee, signed by one or more duly authorized
officers of the Indenture Trustee, dated the Closing Date, as to the due
execution of the Sale and Servicing Agreement and the Indenture by the
Indenture Trustee and the due execution and delivery of the Notes by the
Indenture Trustee thereunder and such other matters as the Underwriters
shall reasonably request.
(i) The Class A-1 Notes shall have been rated "A-1+" by S&P, "Prime -1" by
Moody's and "F- 1+" by Fitch, the other Class A Notes shall have been rated
"AAA" by S&P, "Aaa" by Moody's and "AAA" by Fitch and the Class B Notes
shall have been rated "A" by S&P, "A3" by Moody's and "A+" by Fitch, and
such ratings shall not have been rescinded.
13
(j) The Underwriters and Chevy Chase shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, or other independent certified public accountants acceptable to the
Underwriters, a letter, dated as of the Closing Date, delivered at such
time in form satisfactory to the Underwriters.
(k) Prior to the Closing Date the Underwriters 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 Notes 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 Chevy Chase in connection with the issuance and sale of the Notes
as herein contemplated shall be satisfactory in form and substance to the
Underwriters.
(l) 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 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 Notes on the terms and in the manner
contemplated in the Prospectus or which, in the judgment of the
Underwriters, materially impairs the investment quality of the Notes or the
ability of the Servicer to service the Receivables.
(m) 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 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 Notes; (ii) any banking
moratorium declared by Federal, New York, Minnesota or Maryland
authorities; or (iii) any downgrading in the rating of any securities of
Chevy Chase by any nationally recognized statistical rating organization
(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 (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,
declaration, calamity, emergency or change makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the
Notes.
(n) The Underwriters shall have received evidence satisfactory to the
Underwriters that on or before the Closing Date, UCC-1 financing statements
have been filed (i) 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) in the offices of the
Secretaries of State of the States of Delaware and of Minnesota, reflecting
the security interest of the Indenture Trustee in the Trust Estate and the
proceeds thereof.
14
(o) The Underwriters and Chevy Chase shall have received the favorable opinion,
dated the Closing Date, of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, in form and scope satisfactory to the Underwriters, to the
effect that:
(i) 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 understood that such counsel need express no
opinion as to the financial statements or other financial data
contained in the Registration Statement or the Prospectus.
(ii) The conditions to the use by Chevy Chase 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.
(iii) 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.
(iv) The Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended.
(v) The Trust is not required to be registered under the 1940 Act, and
immediately following the issuance and sale of the Notes in the manner
contemplated by the Sale and Servicing Agreement, the Indenture and
this Agreement, the Trust will not be required to be so registered.
15
(vi) The Notes, this Agreement, the Trust Agreement, the Sale and Servicing
Agreement and the Indenture conform in all material respects to the
respective descriptions thereof in the Registration Statement and the
Prospectus.
(vii) The Notes have been duly authorized and, when executed and
authenticated in accordance with the terms of the Sale and Servicing
Agreement and the Indenture 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
Sale and Servicing Agreement and the Indenture.
(viii) 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 Notes,
or the consummation by Chevy Chase of the other transactions
contemplated by this Agreement, the Sale and Servicing Agreement or
the Trust Agreement, except the registration under the Act of the
Notes 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 Notes by the Underwriters.
(ix) The statements in the Base Prospectus under the headings "RISK
FACTORS -- Insolvency of either of the lenders may reduce or delay
payments to the securityholders," and "LEGAL ASPECTS OF THE AUTO
LOANS," and in the Prospectus Supplement under the headings "SUMMARY
-- Federal Income Tax Considerations," "MATERIAL FEDERAL INCOME TAX
CONSIDERATIONS," and "ERISA CONSIDERATIONS," 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.
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.
(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. The
Representative may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder.
16
If any condition specified in this Section 7 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 8.
8. PAYMENT OF EXPENSES. Chevy Chase 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 Notes 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 ▇▇▇▇ ▇▇▇▇▇▇▇, counsel for Chevy Chase, (v) 50% of the fees and
disbursements of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC and of Jenkens & ▇▇▇▇▇▇▇▇▇, a
professional corporation, (vi) 50% of the fees and disbursements of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, (vii) 50% of the fees and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
accountants of Chevy Chase, (viii) 50% of the fees relating to the qualification
of the Notes under securities and Blue Sky laws and the determination of the
eligibility of the Notes for investment in accordance with the provisions of
Section 6(g), including filing fees and disbursements and the fees of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP in connection therewith and in connection with the preparation of
any Blue Sky Survey, (ix) the printing and delivery to the Underwriters, in such
quantities as the Underwriters may reasonably request, of copies of the
Registration Statement and Prospectus and all amendments and supplements
thereto, and of any Blue Sky Survey, (x) the filing fee of the National
Association of Securities Dealers, Inc., if any, (xi) the duplication and
delivery to the Underwriters in such quantities as the Underwriters may
reasonably request, of copies of the Sale and Servicing Agreement and the
Indenture, (xii) the fees charged by nationally recognized statistical rating
agencies for rating the Notes and (xiii) the fees and expenses of the Indenture
Trustee and its counsel. The Underwriters agree to pay (i) 50% of the fees and
disbursements of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, (ii) 50% of the fees and disbursements of
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC and of Jenkens & ▇▇▇▇▇▇▇▇▇, a professional corporation,
(iii) 50% of the fees relating to the qualification of the Notes under
securities and Blue Sky laws and the determination of the eligibility of the
Notes for investment in accordance with the provisions of Section 6(g),
including filing fees and disbursements and the fees of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP in
connection therewith and in connection with the preparation of any Blue Sky
Survey, (iv) 50% of the fees and expenses of ▇▇▇▇ ▇▇▇▇▇▇▇, counsel for Chevy
Chase and (v) 50% of the fees and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
accountants of Chevy Chase.
17
9. INDEMNIFICATION. Chevy Chase 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, any amendment or supplement thereto, or any related preliminary
prospectus, 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 not misleading (in the case of the
Prospectus, any related preliminary prospectus or any amendment or
supplement thereto, 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; provided, 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 Underwriter through the Representative
specifically for use therein, it being understood and agreed that the only
such information furnished by any Underwriter 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, any related preliminary prospectus or any amendment
or supplement thereto, 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 Chevy Chase in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed that
the only such information furnished by any Underwriter consists of the
following information in the Prospectus furnished on behalf of the
Underwriters: the table at the bottom of the cover page of the Prospectus
Supplement concerning the terms of the offering by the Underwriters and the
information under the caption "Underwriting" in the Prospectus Supplement.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b)
above 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
18
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 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 indemnified party from all liability on any claims that are the
subject matter of such action.
10. CONTRIBUTION. If the indemnification provided for in Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of Section 9 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 Notes 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 Chevy
Chase 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
deducting expenses) received by Chevy Chase 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 Chevy Chase or the
Underwriters 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 10 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 10. 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. The Underwriters' obligations in this Section 10 to
contribute are several in proportion to their respective underwriting
obligations and not joint.
The obligations of Chevy Chase under Section 9 and this Section 10
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
19
the Act; and the obligations of the Underwriters under Section 9 and this
Section 10 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of Chevy Chase, to each officer of Chevy Chase who
has signed the Registration Statement and to each person, if any, who controls
Chevy Chase within the meaning of the Act.
Notwithstanding the provisions of Sections 9 and 10, the Underwriters
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Notes 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 10, 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 Chevy Chase, each
officer of Chevy Chase 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.
11. DEFAULT OF UNDERWRITERS. If any Underwriter defaults in its obligations to
purchase Notes hereunder on the Closing Date and the aggregate principal amount
of Notes that such defaulting Underwriter or Underwriters have agreed but failed
to purchase does not exceed 10% of the total principal amount of Notes 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 Notes
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 Notes that such defaulting Underwriters agreed but failed to purchase on
such Closing Date. If any Underwriters so default and the aggregate principal
amount of Notes with respect to which such default or defaults occur exceeds 10%
of the total principal amount of Notes 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 Notes 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 12. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 11. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
12. 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, Chevy Chase or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Notes. If this Agreement is terminated or if for any reason
the purchase of the Notes by the Underwriters is not consummated, Chevy Chase
and the Underwriters shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 8 and the respective obligations of Chevy
Chase and the Underwriters pursuant to Section 9 and 10 shall
20
remain in effect, and if any Notes have been purchased hereunder the
representations and warranties in Section 3 and all obligations under Section 6
and 7 shall also remain in effect. If the purchase of the Notes by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 11 or the occurrence of any
event specified in clause (ii), (iv) or (v) of Section 7(m), Chevy Chase will
reimburse the Underwriters for all out-of-pocket expenses reasonably incurred by
them in connection with the offering of the Notes.
13. 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 telecommunication. Notices to the Representative 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 (▇▇▇) ▇▇▇-▇▇▇▇
attention: Asset-Backed Group. Notices to Chevy Chase shall be directed to
Chevy Chase Bank, F.S.B., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or sent by facsimile machine which produces an electronic confirmation of
receipt to (▇▇▇) ▇▇▇-▇▇▇▇, attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
14. PARTIES. This Agreement shall inure to the benefit of and be binding upon
the Underwriters and Chevy Chase, 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 9 and 10 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 Notes from the Underwriters shall be deemed to be
a successor by reason merely of such purchase.
15. 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.
16. 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.
CHEVY 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.
17. 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.
21
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:
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Group Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By:
----------------------------
Name:
Title:
Schedule 1
Class A-1; Purchase Price Percentage: 99.87000%
Underwriters Principal Amount
----------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. $42,500,000
----------------------------------------------------------
Deutsche Banc Alex. ▇▇▇▇▇ Inc. $42,500,000
----------------------------------------------------------
Class A-2; Purchase Price Percentage: 99.84599%
Underwriters Principal Amount
----------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. $47,500,000
----------------------------------------------------------
Deutsche Banc Alex. ▇▇▇▇▇ Inc. $47,500,000
----------------------------------------------------------
Class A-3; Purchase Price Percentage: 99.76805%
Underwriters Principal Amount
----------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. $62,500,000
----------------------------------------------------------
Deutsche Banc Alex. ▇▇▇▇▇ Inc. $62,500,000
----------------------------------------------------------
Class A-4; Purchase Price Percentage: 99.74824%
Underwriters Principal Amount
----------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. $42,250,000
----------------------------------------------------------
Deutsche Banc Alex. ▇▇▇▇▇ Inc. $42,250,000
----------------------------------------------------------
Class B; Purchase Price Percentage: 99.56838%
Underwriters Principal Amount
----------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. $12,029,000
----------------------------------------------------------
