EXHIBIT 10.1
CHEVY CHASE AUTO RECEIVABLES TRUST 1997-2
6.35% Auto Receivables Backed Certificates
UNDERWRITING AGREEMENT
June 6, 1997
Xxxxx Xxxxxx Inc.
as Representative of the Underwriters
identified on Schedule 1
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
1. INTRODUCTION. Chevy Chase Bank, F.S.B., a federally chartered stock
savings bank ("Chevy Chase"), has authorized the issuance and sale of 6.35% Auto
Receivables Backed Certificates (the "Certificates"), evidencing interests in a
trust (the "Trust") consisting, among other things, of (i) a combination of
simple interest retail installment sales contracts and installment loans (the
"Receivables") secured by new and used automobiles, light duty trucks and vans
(the "Vehicles") financed thereby, (ii) amounts due or received thereunder on or
after June 1, 1997 (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, 1997 (the "Trust Agreement") between
Chevy Chase as seller and as servicer and First Bank National Association, as
trustee (the "Trustee").
The Certificates will evidence fractional undivided interests in the Trust.
The Trustee, on behalf of the holders of the Certificates (the
"Certificateholders"), will have the benefit of a financial guaranty insurance
policy (the Certificate Insurance Policy") from MBIA Insurance Corporation (the
"Certificate Insurer"). The Trustee will also have access to a Reserve Account
to be established for the benefit of the Certificateholders of the Certificates
and the Certificate Insurer. Each Certificateholder will also purchase the
right to receive a pro rata share of amounts payable under the Yield Maintenance
Account established pursuant to Trust Agreement. The Certificates will be
issued in an aggregate principal amount of $214,068,614.01, 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, the Certificate Insurance Policy and the Indemnification Agreement
(as such term is hereinafter defined) have been timely filed
as exhibits to the Registration Statement (as such term is hereinafter defined).
Capitalized terms used but not defined herein shall have the meanings given to
them in the 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 Xxxxx Xxxxxx 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. The term
"Prospectus Supplement" means the preliminary prospectus supplement dated June
5, 1997 and the prospectus supplement dated the date hereof, 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,
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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 does not
omit, and will not include, any untrue statement of a material fact, and does
not omit, to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If the Effective Time is subsequent to the execution and delivery
of this Agreement on the Effective Date, the Registration Statement and the
Prospectus will conform in all material respects to the requirements of the Act
and the Rules and Regulations, and (i) the Registration Statement will not
include any untrue statement of a material fact or will not omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (ii) the Prospectus will not include an untrue
statement of a material fact or will not omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The two preceding sentences do not apply
to statements in or omissions from the Registration Statement or Prospectus
based upon written information furnished to Chevy Chase by any Underwriters
through the Representative specifically for use therein, it being understood the
only such information is that described as such in Section 8(b). The conditions
to the use by 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 are required to be filed as exhibits to the
Registration Statement pursuant to the Act or the Rules and Regulations which
have not been so filed on or prior to the Effective Date.
(c) Since the respective dates as of which information is given in the
Prospectus, or the Prospectus as
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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, 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 the 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, the Indemnification Agreement or the
consummation of the transactions contemplated hereunder or thereunder and (ii)
to the best of its knowledge, no such proceedings are threatened or contemplated
by governmental or regulatory authorities or threatened by others.
(f) This Agreement has been duly authorized and validly executed and
delivered by Chevy Chase and constitutes a valid and binding agreement of Chevy
Chase, enforceable against Chevy Chase in accordance with its terms, except to
the extent that (i) the enforceability hereof may be subject to insolvency,
reorganization, moratorium, receivership, conservatorship, or other similar
laws, regulations or procedures of general applicability now or hereafter in
effect relating to or affecting creditors' or other obligees' rights generally
or the rights of creditors or obligees of federally chartered stock savings
banks, the deposits of which are
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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.
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(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.
(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
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delivery of, any Certificates to be purchased by the Underwriters shall be made
at the offices of Xxxxx Xxxxxxxxxx, 1301 Avenue of the Americas, New York, New
York, or at such other place as shall be agreed upon by the Underwriters and
Chevy Chase, at 10:00 a.m. New York City time on June 17, 1997 (the "Closing
Date"), or at such other time or 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 Xxxxx Xxxxxxxxxx at least 24 hours
prior to the Closing Date.
4. OFFERING BY UNDERWRITERS. It is understood that the Underwriters
propose to offer the Certificates for sale to the public (which may include
selected dealers) as set forth in the Prospectus.
5. COVENANTS OF CHEVY CHASE. Chevy Chase covenants with the Underwriters
as follows:
(a) To prepare a Prospectus setting forth any price related information
previously omitted from the effective Registration Statement pursuant to Rule
430A under the Act within the time period prescribed by Rule 430A, and to
transmit such Prospectus to the Commission for filing pursuant to Rule 424(b)
under the Act within the prescribed time period, and prior to the Closing Date
to provide evidence satisfactory to the Underwriters of such timely filing, or
to prepare and timely file a post-effective amendment to the Registration
Statement providing such information, which post-effective amendment shall have
been declared effective in accordance with the requirements of Rule 430A under
the Act and to provide evidence satisfactory to the Underwriters of the
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
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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 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.
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(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 on Form SR required
by Rule 463 under the Act.
(f) Chevy Chase will make generally available to holders of the
Certificates as soon as practicable, but in any event not later than the
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.
(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
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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 pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (C) any order of the Commission under the Exchange Act or
pursuant to a "no action" letter from the staff of the Commission and (D) from
time to time, such other information in the possession of 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(k) hereof is conditional upon the furnishing
of documents reasonably available to Chevy Chase or the taking of any other
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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 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.
All financial statements included in material incorporated by reference into the
Prospectus shall be deemed included in the Registration Statement for purposes
of this subsection (a).
(b) If the Effective Time is not prior to the execution and delivery of
this Agreement, the Effective Time
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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 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 Shaw, Pittman, 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.
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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 law or
regulation of the United States of America or the State of New York or Maryland
(b) the Charter or By-laws of Chevy Chase, (c) any order, writ, judgment or
decree known to such counsel to which Chevy Chase is a party or is subject or
(d) result in any lien, charge or encumbrance upon any of the 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."
v) 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.
vi) The Receivables constitute "chattel paper" as defined in Section
9-105 of the Uniform Commercial Code as in effect in the State of Maryland.
(e) The Underwriters shall have received the favorable opinions of
Xxxxx Xxxxxxxxxx, special counsel to the
14
Underwriters, dated the Closing Date, addressed to the Underwriters and in form
and scope satisfactory to the Underwriters, to the effect that:
i) Assuming the due authorization and execution by Chevy Chase of
this Agreement, the Trust Agreement and the Indemnification Agreement, each such
agreement constitutes the valid, legal and binding obligation of Chevy Chase
enforceable against Chevy Chase in accordance with its terms.
ii) 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.
iii) 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.
iv) 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
15
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.
v) 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.
vi) The Trust Agreement is not required to be qualified under the
Trust Indenture Act of 1939, as amended.
vii) 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.
viii) 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.
ix) The statements in the Base Prospectus under the headings "RISK
FACTORS -- Financial Institution Insolvency Risks," "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.
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.
(f) 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:
16
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.
(g) The Underwriters shall have received the favorable opinion or
opinions, dated the Closing Date, of the Underwriters' counsel, Xxxxx
Xxxxxxxxxx, with respect to the issuance and sale of the Certificates, the
Registration Statement, this Agreement, the Prospectus and such other related
matters as the Underwriters may require.
(h) The Underwriters shall have received an opinion, dated the Closing
Date, of Shaw, Pittman, Xxxxx & Xxxxxxxxxx, counsel to Chevy Chase, addressed
to, and satisfactory to, Standard & Poor's Corporation ("S&P"), Xxxxx'x
Investors Service, Inc. ("Xxxxx'x"), Fitch Investors Service, Inc. ("Fitch"),
the Underwriters and the Underwriters' counsel, relating to the sale of the
Receivables to the Trustee.
(i) 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,
17
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.
(j) 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.
(k) The Certificates shall have been rated "AAA" by S&P, "Aaa" by
Xxxxx'x and "AAA" by Fitch, and such ratings shall not have been rescinded.
(l) The Underwriters shall have received from Xxxxxx Xxxxxxxx, or
other independent certified public accountants acceptable to the Underwriters, a
letter, dated as of the date of the Closing Date, delivered at such time in form
satisfactory to the Underwriters.
(m) Prior to the Closing Date the Underwriters' counsel, Xxxxx
Xxxxxxxxxx, shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Certificates as herein contemplated and related
proceedings or in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by 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 and Xxxxx Xxxxxxxxxx.
(n) 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.
18
(o) 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.
(p) The Underwriters shall have received evidence satisfactory to the
Underwriters and its counsel that (i) on or before the Closing Date, UCC-1
financing statements have been filed in the offices of the Maryland State
Department of Assessments and Taxation, reflecting the interest of the Trust in
the Receivables and the proceeds thereof and (ii) the Trust will have a first
priority perfected security interest in the amounts on deposit from time to time
in the Reserve Account and the Yield Maintenance Account.
(q) 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.
(r) The Certificate Insurance Policy shall have been duly executed and
issued at or prior to the Closing Date
19
and shall conform in all material respects to the description thereof in the
Prospectus.
(s) The Underwriters shall have received the favorable opinion, dated
the Closing Date, of counsel for the Certificate Insurer, in form and scope
satisfactory to your counsel, to the effect that:
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 Securities 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.
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,
20
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 December 31, 1996 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 you may reasonably request.
(t) The Certificate Insurance Policy shall have been issued by the
Certificate Insurer.
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 Shaw, Pittman, Xxxxx &
Xxxxxxxxxx, counsel for Chevy Chase, 50% of the fees of Xxxxx Xxxxxxxxxx,
special counsel for Chevy Chase, and the fees and disbursements of Xxxxxx
Xxxxxxxx, accountants of Chevy Chase, (v) the qualification of the Securities
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 Xxxxx
Xxxxxxxxxx in connection therewith and in connection with the preparation of any
Blue Sky Survey, (vi) the printing and delivery to the Underwriters, in such
quantities as the Underwriters may reasonably request, of copies of the
Registration Statement and Prospectus and all amendments and supplements
thereto, and of any Blue Sky Survey, (vii) the filing fee of the National
Association of Securities Dealers, Inc., (viii) the duplication and delivery to
the Underwriters in such quantities as the Underwriters may reasonably request,
of copies of the Trust Agreement, (ix) the fees charged by nationally recognized
statistical rating
21
agencies for rating the Certificates, (x) the fees and expenses of the Trustee
and its counsel, and (xi) the fees and expenses of the Certificate Insurer and
its counsel. The Underwriters agree to pay (i) 50% of the fees and
disbursements of Xxxxx Xxxxxxxxxx and Shaw, Pittman, Xxxxx & Xxxxxxxxxx and (ii)
other expenses of Chevy Chase relating to the transactions contemplated hereby
in an amount equal to $53,517.
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 Underwriters through the
Representative specifically for use therein, it being understood and agreed that
the only such information furnished by any Underwriters consists of the
information described as such in subsection (b) below.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless Chevy Chase against any losses, claims, damages or liabilities to which
Chevy Chase may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or
22
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 Underwriters consists of
the following information in the Prospectus furnished on behalf of the
Underwriters: the last paragraph at the bottom of the cover page 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 concession and reallowance figures
appearing in the third paragraph 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
23
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. (a) If the indemnification provided for in Section
8 is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of Section 8 above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in such subsection (a)
or (b) (i) in such proportion as is appropriate to reflect the relative benefits
received by Chevy Chase on the one hand and each of the Underwriters on the
other from the offering of the Certificates or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of Chevy Chase on the one hand and each of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by 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 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.
(b) 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
24
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
25
delivered to Chevy Chase for filing with the Commission on Form 8-K as:
i) is not contained in the Prospectus without taking into
account information incorporated therein by reference;
ii) does not constitute Companies-Provided Information; and
iii) is not information provided by the Certificate Insurer.
"Companies-Provided Information" means any computer tape furnished to the
Underwriters by 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
26
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 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(o), Chevy Chase will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of Xxxxx Xxxxxxxxxx, Underwriters' counsel)
reasonably incurred by them in connection with the offering of the Certificates.
12. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of 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)
723-8855 attention: Xxxx XxXxxxxxxx. 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.
27
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 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:
Xxxxx Xxxxxx Inc.
By: /s/Xxxx XxXxxxxxxx
----------------------
Name: Xxxx XxXxxxxxxx
Title: Managing Director
29
Schedule 1
Purchase Proceeds to Chevy
Price Principal Chase (includes
Underwriters Percentage Amount accrued interest)
------------ ---------- ------ ----------------
Xxxxx Xxxxxx Inc. 99.9375% $71,356,614.01 $71,312,016.13
Credit Suisse First Boston Corporation 99.9375% $71,356,000.00 $71,311,402.50
X.X. Xxxxxx Securities Inc. 99.9375% $71,356,000.00 $71,311,402.50
30
