EXHIBIT 1.2
CHEVY CHASE AUTO RECEIVABLES TRUST 1998-2
5.91% Auto Receivables Backed Certificates
UNDERWRITING AGREEMENT
June 15, 1998
X.X. Xxxxxx Securities Inc.
as Representative of the Underwriters
identified on Schedule 1
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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
5.91% Auto Receivables Backed Certificates (the "Certificates"), evidencing
interests in a trust (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 June 1, 1998 (the "Cut-Off Date"), and (iii) security interests in the
Vehicles financed thereby. The Certificates will be issued under a Pooling and
Servicing Agreement dated as of June 1, 1998 (the "Trust Agreement") between
Chevy Chase as seller and as servicer and U.S. Bank National Association, as
trustee (the "Trustee").
The Certificates will evidence fractional undivided interests in 100% of the
Trust. The Trustee, on behalf of the holders of the Certificates (the
"Certificateholders"), will have the benefit of a financial guaranty insurance
policy (the "Certificate Insurance Policy") from MBIA Insurance Corporation (the
"Certificate Insurer"). The Trustee will also have access to a Reserve Account
to be established for the benefit of the Certificateholders and the Certificate
Insurer. Each Certificateholder will also purchase the right to receive a pro
rata share of the applicable portion of the amounts payable under the Yield
Maintenance Account established pursuant to the Trust Agreement. The
Certificates will be issued in an aggregate principal amount of $153,615,935.94,
which is equal to the original pool balance of the Receivables, exclusive of
accrued interest, as of the opening of business on the Cut-Off Date. The forms
of the Trust Agreement and the Certificate Insurance Policy have been timely
filed as exhibits to the Registration Statement (as such term is hereinafter
defined). Capitalized terms used but not defined herein shall have the meanings
given to them in the Trust Agreement. Chevy Chase hereby agrees with the several
Underwriters named in Schedule 1 hereto (the "Underwriters") as follows:
2. 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. 333-21707) relating
to the Certificates, including a form of Prospectus, has been filed with
the Securities and Exchange Commission (the "Commission") and either (i)
has been declared effective under the 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 X.X. Xxxxxx Securities 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 June 10, 1998 and the prospectus
supplement dated June 15, 1998, both specifically relating to the
Certificates, 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, any untrue statement of a material fact, and does not omit to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If the Effective Time is subsequent to the execution and
delivery of this Agreement, on the Effective Date the Registration
Statement and the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and
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Regulations, and (i) the Registration Statement will not include any untrue
statement of a material fact or will not omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and (ii) the Prospectus will not include an untrue statement
of a material fact or will not omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The two preceding sentences do
not apply to statements in or omissions from the Registration Statement or
Prospectus based upon written information furnished to Chevy Chase by any
Underwriters through the Representative specifically for use therein, it
being understood the only such information is that described as such in
Section 8(b). The conditions to the use by 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 Trust Agreement and the
Indemnification Agreement, and to cause the Certificates to be issued.
Chevy Chase has conducted and is conducting its business so as to comply in
all material respects with all applicable statutes and regulations,
including, without limitation, all regulations, decisions, directives and
orders of the Office of Thrift 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 Trust Agreement and the Indemnification
Agreement or the consummation of the transactions contemplated hereunder or
thereunder and (ii) to the best of its knowledge, no such
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proceedings are threatened or contemplated by governmental or regulatory
authorities or threatened by others.
(f) This Agreement has been duly authorized and validly executed
and delivered by Chevy Chase and constitutes a valid and binding agreement
of Chevy Chase, enforceable against Chevy Chase in accordance with its
terms, except to the extent that (i) the enforceability hereof may be
subject to insolvency, reorganization, moratorium, receivership,
conservatorship, or other similar laws, regulations or procedures of
general applicability now or hereafter in effect relating to or affecting
creditors' or other obligees' rights generally or the rights of creditors
or obligees of federally chartered stock savings banks, the deposits of
which are insured by the Federal Deposit Insurance Corporation (the
"FDIC"), (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought
and (iii) rights to indemnification and contribution under this Agreement
may be limited by state or federal securities laws or the policies
underlying such laws.
(g) The Trust Agreement and the Indemnification 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 Trust Agreement and the Indemnification Agreement by the other parties
thereto, will constitute valid and binding obligations of Chevy Chase
enforceable against Chevy Chase in accordance with their respective terms,
except to the extent that (i) the enforceability thereof may be subject to
insolvency, reorganization, moratorium, receivership, conservatorship, or
other similar laws, regulations or procedures of general applicability now
or hereafter in effect relating to or affecting creditors' or obligees'
rights generally or the rights of creditors or obligees of federally
chartered stock savings banks, the deposits of which are insured by the
FDIC, (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 Certificates, the
consummation of any other of the transactions contemplated herein, in the
Trust Agreement and the Indemnification Agreement or the fulfillment of the
terms of this Agreement, the Trust Agreement or the Indemnification
Agreement, do not and will not conflict with or violate any term or
provision of the Charter or By-laws of Chevy Chase, any statute, order or
regulation applicable to Chevy Chase of any court, regulatory body,
administrative agency or governmental body having jurisdiction over Chevy
Chase and do not and will not conflict with, result in a breach or
violation or the acceleration of or constitute a default under or result in
the creation or imposition of any lien, charge or encumbrance upon any of
the property or assets of Chevy Chase pursuant to the terms of, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which Chevy Chase is a party or by which 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) Xxxxxx Xxxxxxxx LLP is an independent public accountant with
respect to Chevy Chase as required by the Act and the Rules and
Regulations.
(j) The direction by Chevy Chase to the Trustee to execute,
countersign, issue and deliver the Certificates has been duly authorized by
Chevy Chase, and, assuming the Trustee has been duly authorized to do so,
when executed, countersigned, issued and delivered by the Trustee in
accordance with the Trust Agreement, the Certificates will be validly
issued and outstanding and will be entitled to the benefits of the Trust
Agreement.
(k) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the
United States is required for the issuance and sale of the Certificates, or
the consummation by Chevy Chase of the other transactions contemplated by
this Agreement, the Trust Agreement or the Indemnification Agreement,
except the registration under the Act of the Certificates and such
consents, approvals, authorizations, registrations or qualifications as may
have been obtained or effected or as may be required under securities or
Blue Sky laws in connection with the purchase and distribution of the
Certificates by the Underwriters.
(l) Chevy Chase possesses all material licenses, certificates,
authorizations or permits issued by the appropriate state, Federal or
foreign regulatory agencies or bodies necessary to conduct the business now
conducted by it and as described in the Prospectus and 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 Trust Agreement,
Chevy Chase (i) will not have assigned to any person any of its right,
title or interest in the Receivables or in the Trust Agreement or the
Certificates and (ii) will have the power and authority to sell the
Receivables to the Trustee and to sell the Certificates to the
Underwriters, and upon execution and delivery of the Trust Agreement by the
Trustee, the Trustee will have acquired beneficial ownership of all of
Xxxxx Xxxxx'x right, title and interest in and to the Receivables, and upon
delivery to the Underwriters of the Certificates the Underwriters will have
good and marketable title to the Certificates.
(n) As of the Cut-Off Date, the Receivables will meet the
eligibility criteria described in the Prospectus.
(o) The Trust created by the Trust Agreement is not, and
immediately following the issuance and sale of the Certificates will not
be, required to be registered as an "investment company" under the
Investment Company Act of 1940, as amended (the "1940 Act"), as in effect
on the date hereof.
(p) Chevy Chase has authorized the conveyance of the Receivables
to the Trust, and Chevy Chase has authorized the Trust to issue the
Certificates.
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(q) Each of the Certificates, the Trust Agreement and the
Certificate Insurance Policy conforms in all material respects to the
descriptions thereof contained in the Prospectus.
(r) Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of this Agreement, the Trust
Agreement, the Indemnification Agreement, the Certificate Insurance Policy
and the Certificates that are required to be paid by Chevy Chase at or
prior to the Closing Date have been paid or will be paid at or prior to the
Closing Date.
(s) Chevy Chase will not apply the proceeds of the sale of the
Certificates pursuant to this Agreement to purchase securities (which term
does not include the Receivables) within the meaning of Regulation T
promulgated by the Federal Reserve Board.
(t) As of the Closing Date, the representations and warranties of
Chevy Chase in the Trust Agreement and the Indemnification 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 Certificates shall be deemed, and shall state that it is, a representation
and warranty as to the matters covered thereby to each person to whom the
representations and warranties in this Section 2 are made.
3. PURCHASE, SALE, DELIVERY AND PAYMENTS. The Underwriters'
commitment to purchase the Certificates pursuant to this Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth. Chevy Chase agrees to instruct the Trustee to issue and agrees to sell to
the Underwriters, and the Underwriters, severally and not jointly, agree, to
purchase from Chevy Chase at the purchase price for the Certificates set forth
opposite the names of the Underwriters on Schedule 1 hereto, the respective
principal amount of Certificates set forth on Schedule 1 hereto. Payment of the
purchase price for, and delivery of, any Certificates to be purchased by the
Underwriters shall be made at the offices of Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx,
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 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
June 23, 1998 (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 Trustee as
custodian for The Depository Trust Company ("DTC") of the Certificates in the
form of one or more global certificates in definitive form (the "Global
Certificates") and registered in the name of Cede & Co., as nominee for DTC. The
Global Certificates will be made available for checking at the offices of Xxxx
Xxxxxxx Xxxxx & Xxxxxxxxxx at least 24 hours prior to the Closing Date.
4. OFFERING BY UNDERWRITERS. It is understood that the Underwriters
propose to offer the Certificates for sale to the public (which may include
selected dealers) as set forth in the Prospectus.
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5. COVENANTS OF CHEVY CHASE. Chevy Chase covenants with the
Underwriters as follows:
(a) To prepare a Prospectus setting forth any price related
information previously omitted from the effective Registration Statement
pursuant to Rule 430A under the Act within the time period prescribed by
Rule 430A, and to transmit such Prospectus to the Commission for filing
pursuant to Rule 424(b) under the Act within the prescribed time period,
and prior to the Closing Date to provide evidence satisfactory to the
Underwriters of such timely filing, or to prepare and timely file a post-
effective amendment to the Registration Statement providing such
information, which post-effective amendment shall have been declared
effective in accordance with the requirements of Rule 430A under the Act
and to provide evidence satisfactory to the Underwriters of the
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
Certificates by the Underwriters, any event shall occur or condition exist
as a result of which it is necessary, in the opinion of the Underwriters'
counsel or counsel for Chevy Chase, further to amend or supplement the
Prospectus as then amended or supplemented in order that the Prospectus as
amended or supplemented will not include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of circumstances existing at the time it is delivered
to a purchaser, not misleading or if it shall be necessary, in the opinion
of any such counsel, at any such time to amend or supplement the
Registration Statement or the Prospectus as then amended or supplemented in
order to comply with the requirements of the Act or the Rules and
Regulations, or if required by such Rules and Regulations, including Rule
430A thereunder, to file a post-effective amendment to such Registration
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 6 of this Agreement.
(c) Chevy Chase will give the Underwriters reasonable notice of
its intention to file any amendment to the Registration Statement, the
Prospectus or the Prospectus as amended or supplemented, pursuant to the
Act, and will furnish the Underwriters with copies of any such amendment or
supplement proposed to be filed a reasonable time in advance of filing, and
will not file any such amendment or supplement to which the Underwriters or
the Underwriters' counsel shall object.
(d) Chevy Chase will notify the Underwriters immediately, and
confirm the notice in writing, (i) of the effectiveness of any amendment to
the Registration Statement, (ii) of the mailing or the delivery to the
Commission for filing of any supplement to the Prospectus or the Prospectus
as amended or supplemented, (iii) of the receipt and contents of any
comments from the Commission with respect to the Registration Statement or
the
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Prospectus or the Prospectus as amended or supplemented, (iv) of any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information and
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of, or threat
of, any proceedings for that purpose or (vi) the suspension of qualification
of the Certificates 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 Certificates is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each case
as soon as available and in such quantities as the Underwriters may
reasonably request. 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
Certificates 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 Certificates 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
Certificates. Chevy Chase will file or cause the filing of such statements
and reports as may be required by the laws of each jurisdiction in which the
Certificates have been qualified as above provided.
(h) Chevy Chase will not, directly or indirectly, without the
Underwriters' prior consent, publicly offer or sell or contract to sell or
attempt to offer, sell or dispose of any securities representing interests in
or secured by the Receivables for a period of 30 days following the
commencement of the offering of the Certificates to the public; provided,
--------
however, that Chevy Chase may contract to sell or attempt to offer, sell or
-------
dispose of securities in public transactions secured by first mortgage loans
or credit card receivables.
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(i) For a period from the date of this Agreement until the
retirement of the Certificates, Chevy Chase, as Servicer, will deliver to the
Representative and, upon request, to each of the other Underwriters, as soon
as practicable, copies of each certificate, report or notice and the annual
statements of compliance delivered by Chevy Chase, as Servicer, to the
Trustee pursuant to Section 4.10 of the Trust Agreement, the annual statement
of a firm of independent public accountants furnished to the Trustee pursuant
to Section 4.11 of the Trust Agreement and such other information concerning
the Receivables, Chevy Chase (including in its capacities as the Seller and
Servicer) or the Certificates, as the Representative may from time to time
reasonably request.
(j) On or before the Closing Date, Chevy Chase shall furnish or
make available to the Underwriters or its counsel such additional documents
and information regarding Chevy Chase (including in its capacities as the
Seller and Servicer) and its affairs as the Underwriters may from time to
time reasonably request, including any and all documentation reasonably
requested in connection with their due diligence efforts regarding
information in the Prospectus and in order to evidence the accuracy or
completeness of any of the conditions contained in this Agreement.
(k) So long as any Certificate is outstanding, Chevy Chase shall
furnish to the Representative by first class mail as soon as practicable, (A)
all documents distributed, or caused to be distributed, by Chevy Chase to
Certificateholders, (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) Chevy Chase shall apply the net proceeds from the sale of the
Certificates 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 Xxxxx, Xxxxx Xxxxx will give prompt written
notice thereof to the Underwriters.
(n) To the extent, if any, that any rating provided with respect
to the Certificates set forth in Section 6(i) hereof is conditional upon the
furnishing of documents reasonably available to Chevy Chase or the taking of
any other reasonable actions by Chevy Xxxxx, Xxxxx Xxxxx shall furnish such
documents or take any such other actions.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Certificates pursuant to this
Agreement are subject to the accuracy on and as of the Closing Date of the
representations and warranties on the part of Chevy Chase herein contained, to
the accuracy of the statements of officers of Chevy
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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 Xxxxxx Xxxxxxxx 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 5 (a) of this Agreement.
(c) The Registration Statement shall have been declared effective
by the Commission and no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
therefor initiated or threatened by the Commission, any price related
information previously omitted from the effective Registration Statement
pursuant to Rule 430A under the Act shall have been included in the
Prospectus and transmitted to the Commission for filing pursuant to Rule 424
under the Act within the prescribed time period, and Chevy Chase shall have
provided evidence satisfactory to the Underwriters of such timely filing, or
a post-effective amendment to the Registration Statement providing such
information shall have been promptly filed with the Commission and declared
effective in accordance with the requirements of Rule 430A under the Act, and
prior to the Closing Date, Chevy Chase shall have provided evidence
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satisfactory to the Underwriters of such effectiveness and there shall not
have come to the attention of the Underwriters facts that would cause the
Underwriters to believe that the Prospectus, at the time it was required to
be delivered to a purchaser of the Certificates, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The Underwriters shall have received the favorable opinion,
dated the Closing Date, of Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx, 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 Trust Agreement and the
Indemnification Agreement and to cause the Certificates to be issued and to
consummate the transactions contemplated hereby and thereby.
(ii) Chevy Chase has duly authorized and executed this
Agreement, the Trust Agreement and the Indemnification Agreement.
(iii) The execution, delivery and performance of this
Agreement, the Trust Agreement and the Indemnification Agreement, the
transfer of the Receivables to the Trust, the issuance and sale of the
Certificates and the consummation of any other of the transactions
contemplated herein 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
pending or threatened before any court, administrative agency or other
tribunal to which Chevy Chase is a named party or to which its assets are
subject (A) asserting the invalidity of the Trust Agreement, the
Indemnification Agreement, this Agreement or the Certificates, (B) seeking to
prevent the issuance of the Certificates or the consummation by Chevy Chase
of any of the transactions contemplated by the Trust Agreement, the
Indemnification Agreement, or this Agreement, (C) that might adversely affect
the validity or enforceability of the Trust Agreement, the Indemnification
Agreement, this Agreement or the Certificates, or (D) seeking to adversely
affect the federal income tax attributes of the Certificates as described in
the Prospectus Supplement under the heading "Certain Federal Income Tax
Consequences."
11
(v) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body of the United States is required for the issuance and sale of the
Certificates, or the consummation by Chevy Chase of the other transactions
contemplated by this Agreement, the Trust Agreement or the Indemnification
Agreement, except the registration under the Act of the Certificates and such
consents, approvals, authorizations, registrations or qualifications as may
have been obtained or effected or as may be required under securities or Blue
Sky laws in connection with the purchase and distribution of the Certificates
by the Underwriters.
(vi) Each of this Agreement, the Trust Agreement and the
Indemnification Agreement, constitutes the valid, legal and binding
obligation of Chevy Chase enforceable against Chevy Chase in accordance with
its terms.
(vii) The Certificates have been duly authorized and, when
executed and authenticated in accordance with the terms of the Trust
Agreement and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be duly and validly issued and outstanding and will be
entitled to the benefits of the Trust Agreement.
(viii) 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.
(xi) 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.
(x) The Registration Statement at the time it became
effective, and any amendment thereto at the time such amendment became
effective, complied as to form
12
in all material respects with the applicable requirements of the Act and the
Rules and Regulations.
(xi) The Trust Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended.
(xii) The Trust is not required to be registered under the
1940 Act, and immediately following the issuance and sale of the Certificates
in the manner contemplated by the Trust Agreement and this Agreement, the
Trust will not be required to be so registered.
(xiii) The Certificates, this Agreement, the Trust Agreement
and the Certificate Insurance Policy conform in all material respects to the
respective descriptions thereof in the Registration Statement and the
Prospectus.
(xiv) The statements in the Base Prospectus under the
headings "RISK FACTORS -- Financial Institution Insolvency Risks," and
"CERTAIN LEGAL ASPECTS OF THE RECEIVABLES," and in the Prospectus Supplement
under the headings "SUMMARY OF TERMS -- Certain Legal Aspects of the
Receivables," "SUMMARY OF TERMS -- Certain Federal Tax Considerations,"
"CERTAIN FEDERAL INCOME TAX CONSEQUENCES," 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.
(xv) No filing or other action, except the filing of a
Uniform Commercial Code financing statement on Form UCC-1 with the Maryland
State Department of Assessments and Taxation naming Chevy Chase as "debtor"
and the Trustee as "secured party," is necessary to perfect the transfer of
the Receivables and proceeds (as defined in Section 9-306 of the Maryland
Uniform Commercial Code) thereof against the claims of creditors of, and
transferees from, Chevy Chase. Such security interest would be enforceable
notwithstanding the insolvency of Chevy Chase or a receivership or
conservatorship of Chevy Chase in which the FDIC is appointed a receiver or
conservator for Chevy Chase.
(xvi) The Receivables constitute "chattel paper" as defined
in Section 9-105 of the Uniform Commercial Code as in effect in the State of
Maryland.
In addition, such counsel shall state that nothing has come to their
attention that would lead them to believe that the Registration Statement, at
the time it became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus, as of its
date and as of the Closing Date, contains an untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(e) The Underwriters shall have received the favorable opinion of
counsel to the Trustee, dated the Closing Date, addressed to the Underwriters
and in form and scope satisfactory to the Underwriters' counsel, to the
effect that:
13
(i) The Trustee has duly authorized, executed and delivered
the Trust Agreement.
(ii) The Trustee has been duly organized and is validly
existing as a national banking corporation in good standing under the laws of
the United States of America and has full power and authority to execute and
deliver the Trust Agreement and to perform its obligations thereunder and
such Agreement constitutes the valid, legal and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms.
(iii) The Certificates have been duly executed and
countersigned by the Trustee.
(iv) The execution and delivery by the Trustee of the Trust
Agreement and the performance by the Trustee of its duties thereunder do not
conflict with or result in a violation of (a) any law or regulation of the
United States of America or the State of Minnesota, (b) the charter or by-
laws of the Trustee, (c) any order, writ, judgment or decree or (d) any
agreement, instrument, order, writ, judgment or decree known to such counsel
to which the Trustee is a party or is subject.
(v) No consent, approval or authorization of, or
registration, declaration or filing with, any court or governmental agency or
body of the United States of America or any state thereof is required for the
execution, delivery or performance by the Trustee of the Trust Agreement.
(f) The Underwriters shall have received an opinion, dated the
Closing Date, of Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx, counsel to Chevy Chase,
addressed to, and satisfactory to, Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. ("S&P"), Xxxxx'x Investors
Service, Inc. ("Xxxxx'x") Xxxxx IBCA, Inc. ("Fitch") and the Underwriters,
relating to the sale of the Receivables to the Trustee.
(g) Chevy Chase shall have furnished to the Underwriters a
certificate signed on behalf of Chevy Chase by any two of the chairman of the
board, the president, any vice chairman of the board, any executive vice
president, any senior vice president, any vice president, the treasurer, or
the controller of the Seller or the Servicer, as appropriate, dated the
Closing Date, as to (i) the accuracy of the representations and warranties of
Chevy Chase herein and in the Trust 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 Trustee shall have furnished to the Underwriters a
certificate of the Trustee, signed by one or more duly authorized officers of
the Trustee, dated the Closing Date, as to the due acceptance of the Trust
Agreement by the Trustee and the due execution and delivery of the
Certificates by the Trustee thereunder and such other matters as the
Underwriters shall reasonably request.
(i) The Certificates shall have been rated "AAA" by S&P, "Aaa" by
Moody's and "AAA" by Fitch, and such ratings shall not have been rescinded.
14
(j) The Underwriters shall have received from Xxxxxx Xxxxxxxx
LLP, or other independent certified public accountants acceptable to the
Underwriters, a letter, dated as of the 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
Certificates as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by Chevy Chase in connection with the issuance and
sale of the Certificates 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 or the Certificate Insurer otherwise than as set forth in the
Prospectus, the effect of which is in the Underwriters' judgment so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Certificates on the terms and in the
manner contemplated in the Prospectus or which, in the judgment of the
Underwriters, materially impairs the investment quality of the Certificates
or the ability of the Servicer to service the Receivables.
(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 or the Certificate Insurer which, in the judgment of the
Underwriters, is material and adverse and makes it impracticable or
inadvisable to proceed with the completion of the public offering or the sale
of and payment for the Certificates; (ii) any banking moratorium declared by
Federal, New York, Minnesota or Maryland authorities; or (iii) any
downgrading in the rating of any securities of Chevy Chase or the Certificate
Insurer 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 or the Certificate Insurer (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); or (iv) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange; or (v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any other
substantial national or international calamity, emergency or change in
financial markets if, in the Representative's judgment, the effect of any
such outbreak, escalation, declaration, calamity, emergency or change makes
it impractical or inadvisable to proceed with completion of the sale of and
payment for the Certificates.
(n) The Underwriters shall have received evidence satisfactory to
the Underwriters that (i) on or before the Closing Date, UCC-1 financing
statements have been
15
filed in the offices of the Maryland State Department of Assessments and
Taxation, reflecting the interest of the Trust in the Receivables and the
proceeds thereof and (ii) the Trust will have a first priority perfected
security interest in the amounts on deposit from time to time in the Reserve
Account and the Yield Maintenance Account.
(o) 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.
(p) The Certificate Insurance Policy shall have been duly
executed and issued at or prior to the Closing Date and shall conform in all
material respects to the description thereof in the Prospectus.
(q) The Underwriters shall have received the favorable opinion,
dated the Closing Date, of counsel for the Certificate Insurer, in form and
scope satisfactory to the Underwriters, to the effect that:
(i) The Certificate Insurer is duly organized as a New
York stock insurance corporation and is validly existing under the laws of
New York, and has the full power and authority (corporate and other) to
issue, and to take all action required of it under, the Certificate Insurance
Policy.
(ii) The execution, delivery and performance by the
Certificate Insurer of the Certificate Insurance Policy has been duly
authorized by all necessary corporate action on the part of the Certificate
Insurer.
(iii) The execution, delivery and performance by the
Certificate Insurer of the Certificate Insurance Policy does not require the
consent or approval of, the giving of notice to, the registration with, or
the taking of any other action in respect of any state or other governmental
agency or authority which has not previously been effected.
(iv) The Certificate Insurance Policy has been duly
authorized, executed and delivered by the Certificate Insurer and constitutes
a legal, valid and binding obligation of the Certificate Insurer, enforceable
against the Certificate Insurer in accordance with its terms (subject, as to
enforcement, to bankruptcy, reorganization, insolvency, moratorium and other
laws affecting creditors' rights generally and to general equity principles).
(v) The Certificate Insurance Policy is not required to
be registered under the Act.
(vi) The information set forth under the caption "The
Certificate Insurance Policy" in the Prospectus, insofar as such statements
constitute a description of the Certificate Insurance Policy, accurately
summarizes the Certificate Insurance Policy.
16
In rendering this opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Certificate Insurer and
public officials. Such opinion may assume the due authorization, execution and
delivery of the instruments and documents referred to therein by the parties
thereto other than the Certificate Insurer.
The Certificate Insurer shall have furnished to you and Chevy Chase a
certificate of the Certificate Insurer, signed by one or more duly authorized
officers of the Certificate Insurer, dated the Closing Date, certifying (i) the
information relating to the Certificate Insurer in the Prospectus is true and
correct in all material respects as of the dates specified therein, (ii) there
has been no change in the financial condition of the Certificate Insurer since
March 31, 1998 which could have a material adverse effect on the Certificate
Insurer's ability to meet its obligations under the Certificate Insurance Policy
and (iii) such other matters as the Underwriters may reasonably request.
If any condition specified in this Section 6 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriters by notice to Chevy Chase at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except as provided in Section 7.
7. PAYMENT OF EXPENSES. 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 Certificates and the determination of their eligibility for
investment under the laws of such jurisdictions as the Representative
designates, (iv) 50% of the fees and disbursements of Xxxx Xxxxxxx Xxxxx &
Xxxxxxxxxx, counsel for Chevy Chase, (v) 50% of the fees and disbursements of
Xxxxxxx & Xxxxxxx, LLC and Xxxxx Xxxxx Xxxxxx & Xxxxx, LLP, not to exceed
$3,500.00, (vi) the fees and disbursements of Xxxxxx Xxxxxxxx LLP, accountants
of Chevy Chase, (vii) the qualification of the Certificates under securities and
Blue Sky laws and the determination of the eligibility of the Certificates for
investment in accordance with the provisions of Section 5(g), including filing
fees and disbursements and 50% of the fees of Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx in
connection therewith and in connection with the preparation of any Blue Sky
Survey, (viii) 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, (ix) the filing fee of the National Association of Securities
Dealers, Inc., (x) the duplication and delivery to the Underwriters in such
quantities as the Underwriters may reasonably request, of copies of the Trust
Agreement, (xi) the fees charged by nationally recognized statistical rating
agencies for rating the Certificates, (xii) the fees and expenses of the Trustee
and its counsel, and (xiii) the fees and expenses of the Certificate Insurer and
its counsel. The Underwriters agree to pay (i) 50% of the fees and disbursements
of Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx, including, without limitation, 50% of the
fees of Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx in connection with the qualification of
the Certificates under Securities and Blue Sky laws, including the preparation
of any Blue Sky Survey, (ii) 50% of the fees and
17
disbursements of Xxxxxxx & Weddell, LLC and Xxxxx Xxxxx Xxxxxx & Xxxxx, LLP, not
to exceed $3,500.00 and (iii) other expenses of Chevy Chase relating to the
transactions contemplated hereby in an amount equal to $38,404.00.
8. 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, or 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 or any related Preliminary Prospectus, in the
light of the circumstances under which they were made), in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to Chevy Chase by such
Underwriter through the Representative specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by 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 last paragraph at
18
the bottom of the cover page of the Prospectus Supplement concerning the
terms of the offering by the Underwriters, the legend concerning
overallotments and stabilizing on the inside front cover page of the
Prospectus Supplement and the information under the caption "Underwriting" in
the Prospectus Supplement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the 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.
9. CONTRIBUTION. If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of Section 8 above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in such subsection (a)
or (b) (i) in such proportion as is appropriate to reflect the relative benefits
received by Chevy Chase on the one hand and each of the Underwriters on the
other from the offering of the Certificates or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of Chevy Chase on the one hand and each of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by 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
19
sentence of this Section 9 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
Section 9. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this Section 9 to contribute are several in proportion to their
respective underwriting obligations and not joint.
The obligations of Chevy Chase under Section 8 and this Section 9
shall be in addition to any liability which Chevy Chase may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under Section 8 and this Section 9 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.
Each Underwriter, with respect to the Certificates, agrees that it
will not prepare or distribute to any proposed purchaser of any Certificates any
Derived Information (as such term is hereinafter defined), unless it shall have
provided to the Servicer a copy of such Derived Information and a sufficient
time prior to its proposed distribution to permit the Servicer to review and
comment upon such Derived Information, and such Underwriters shall have obtained
the prior written consent of the Servicer thereto following its review. In
addition, such Underwriters agree to provide the Servicer, no later than the
date on which the Prospectus is required to be filed pursuant to Rule 424, with
a definitive copy of its Derived Information with respect to such Certificates
provided by the Underwriters for filing with the Commission on Form 8-K.
Each Underwriter agrees, severally and not jointly, assuming all
Companies-Provided Information (as such term is hereinafter defined) provided by
Chevy Chase is accurate and complete in all material respects, to indemnify and
hold harmless Chevy Chase, each of Xxxxx Xxxxx'x officers and directors and each
person who controls Chevy Chase within the meaning of the Act against any and
all losses, claims, damages or liabilities, joint or several, to which they may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement of a material fact contained in the Derived
Information provided by such Underwriters, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by him, her or it in connection with investigating or defending or
preparing to defend any such loss, claim, damage, liability or action as such
expenses are incurred. The obligations of the Underwriters under this Section 9
shall be in addition to any liability which the Underwriters may otherwise have.
For purposes of this Section 9, the term "Derived Information" means
such portion, if any, of the information delivered to Chevy Chase for filing
with the Commission on Form 8-K as:
20
(i) is not contained in the Prospectus without taking into
account information incorporated therein by reference;
(ii) does not constitute Companies-Provided Information;
and
(iii) is not information provided by the Certificate
Insurer.
"Companies-Provided Information" means any computer tape furnished to the
Underwriters by Chevy Chase concerning the Receivables assigned to the Trust.
Notwithstanding the provisions of Sections 8 and 9, the Underwriters
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Certificates underwritten by the Underwriters and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriters have otherwise been required to pay in respect of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section 9, each person, if any, who controls the Underwriters within the meaning
of the Act or the Exchange Act shall have the same rights to contribution as
each of the Underwriters, and each director of 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.
10. DEFAULT OF UNDERWRITERS. If any Underwriter defaults in its
obligations to purchase Certificates hereunder on the Closing Date and the
aggregate principal amount of Certificates that such defaulting Underwriter or
Underwriters have agreed but failed to purchase does not exceed 10% of the total
principal amount of Certificates that the Underwriters are obligated to purchase
on such Closing Date, the Representative may make arrangements satisfactory to
Chevy Chase for the purchase of such Certificates by other persons, including
any of the Underwriters, but if no such arrangements are made by such Closing
Date, the nondefaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the Certificates that
such defaulting Underwriters agreed but failed to purchase on such Closing Date.
If any Underwriters so default and the aggregate principal amount of
Certificates with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Certificates that the Underwriters are obligated
to purchase on such Closing Date and arrangements satisfactory to the
Representative and Chevy Chase for the purchase of such Certificates by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or
Chevy Chase, except as provided in Section 11. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section 10. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
11. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties and other
statements of Chevy Chase or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, Chevy Chase or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Certificates. If this Agreement is
terminated or if for any reason
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the purchase of the Certificates 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 7 and the respective obligations of
Chevy Chase and the Underwriters pursuant to Section 8 and 9 shall remain in
effect, and if any Certificates have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
and 6 shall also remain in effect. If the purchase of the Certificates by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 10 or the occurrence of any
event specified in clause (ii), (iv) or (v) of Section 6(m), Chevy Chase will
reimburse the Underwriters for all out-of-pocket expenses reasonably incurred by
them in connection with the offering of the Certificates.
12. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of 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 (212)
648-5251 attention: Xxxxx X. Xxxxx. Notices to Chevy Chase shall be directed to
Chevy Chase Bank, F.S.B., 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxx 00000,
or sent by facsimile machine which produces an electronic confirmation of
receipt to (000) 000-0000, attention: Xxxxxxx X. Xxxxxx, Xx.
13. 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 8 and 9 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or with
respect to this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties and their respective successors and such
controlling persons and officers and directors and their heirs and legal
representatives (to the extent of their rights as specified herein and therein)
and except as provided above for the benefit of no other person, firm or
corporation. No purchaser of Certificates from the Underwriters shall be deemed
to be a successor by reason merely of such purchase.
14. REPRESENTATIONS OF UNDERWRITERS. The Representative will act for
the several Underwriters in connection with the transactions contemplated by
this Agreement, and any action under this Agreement taken by the Representative
will be binding upon all the Underwriters.
15. GOVERNING LAW AND TIME; CONSENT TO JURISDICTION. THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
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
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THE TRANSACTIONS CONTEMPLATED HEREBY. SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but together they shall constitute
but one instrument.
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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: /s/ Xxxx X. Xxxxxx
------------------
Xxxx X. Xxxxxx
Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
X.X. Xxxxxx Securities Inc.
By: /s/ Xxxxx X. Xxxxx
------------------
Xxxxx X. Xxxxx
Vice President
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Schedule 1
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Underwriters Purchase Price Principal Proceeds to Chevy
Percentage Amount Chase (includes
accrued interest)
-------------------------------------------------------------------------------------
X.X. Xxxxxx Securities Inc. 99.939167% 76,815,935.94 76,819,648.97
-------------------------------------------------------------------------------------
Salomon Brothers Inc 99.939167% 76,800,000.00 76,803,712.26
-------------------------------------------------------------------------------------
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