EXECUTION COPY
CHEVY CHASE AUTO RECEIVABLES TRUST 2000-2
Auto Receivables Backed Notes
UNDERWRITING AGREEMENT
September 13, 2000
X.X. Xxxxxx Securities Inc.
as Representative of the Underwriters
identified on Schedule 1
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
1. INTRODUCTION. Chevy Chase Bank, F.S.B., a federally chartered stock savings
bank ("Chevy Chase"), has authorized the issuance and sale of the Class A-1
6.66% Asset Backed Notes (the "Class A-1 Notes"), Class A-2 6.80% Asset
Backed Notes (the "Class A-2 Notes"), Class A-3 6.85% Asset Backed Notes
(the "Class A-3 Notes"), Class A-4 6.95% Asset Backed Notes (the "Class A-4
Notes", and collectively with the Class A-1 Notes, the Class A-2 Notes and
the Class A-3 Notes, the "Class A Notes"), Class B 7.30% Asset Backed Notes
(the "Class B Notes") and Class C 7.70% Asset Backed Notes (the "Class C
Notes", and together with the Class A Notes and the Class B Notes, the
"Notes") issued by Chevy Chase Auto Receivables Trust 2000-2 (the "Trust").
2. THE NOTES. The Notes will represent obligations of the Trust, and will be
secured by the pledge of assets of the Trust, consisting, among other
things, of (i) simple interest retail installment sales contracts and
installment loans (the "Receivables") secured by new and used automobiles,
light duty trucks and vans (the "Vehicles") financed thereby, (ii) amounts
due or received thereunder on or after September 1, 2000 (the "Cut-Off
Date"), and (iii) security interests in the Vehicles financed thereby. The
Notes will be issued pursuant to an Indenture, dated as of September 1, 2000
(the "Indenture") between the Trust and U.S. Bank National Association, as
indenture trustee (the "Indenture Trustee"), and a Sale and Servicing
Agreement, dated as of September 1, 2000 (the "Sale and Servicing
Agreement") among the Trust, Chevy Chase, as seller and as servicer, and the
Indenture Trustee. The Indenture Trustee will have access to a Reserve
Account to be established for the benefit of the holders of the Notes. The
Notes will be issued in an aggregate principal amount of $318,684,000.
Capitalized terms used but not defined herein shall have the meanings given
to them in the Indenture and the Sale and Servicing Agreement.
Chevy Chase hereby agrees with the Underwriters named in Schedule 1 hereto
(the "Underwriters") as follows:
3. REPRESENTATIONS AND WARRANTIES OF CHEVY CHASE. Chevy Chase represents and
warrants to, and agrees with, each of the Underwriters that:
(a) A Registration Statement on Form S-3 (No. 333-36242) relating to the
Notes, including a form of Prospectus, has been filed with the
Securities and Exchange Commission (the "Commission") and either (i)
has been declared effective under the Securities Act of 1933 (the
"Act") and is not proposed to be amended or (ii) is proposed to be
amended by amendment or post-effective amendment. If Chevy Chase does
not propose to amend such Registration Statement or if any post-
effective amendment to such Registration Statement has been filed with
the Commission prior to the execution and delivery of this Agreement,
such Registration Statement or such post-effective amendment, as the
case may be, has been declared effective by the Commission. For
purposes of this Agreement, "Effective Time" means (i) if Chevy Chase
has advised 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 September 8, 2000 and the prospectus supplement dated
September 13, 2000, both specifically relating to the Notes, as both
were filed with the Commission pursuant to Rule 424 under the Act
(together the "Prospectus Supplement"). The Base Prospectus and the
Prospectus Supplement, together with all material incorporated by
reference in such Base Prospectus or such Prospectus Supplement, is
hereinafter referred to as the "Prospectus."
(b) If the Effective Time is prior to the execution and delivery of this
Agreement: (i) on the Effective Date, the Registration Statement
conformed, and on the date of this Agreement the Registration Statement
conforms, in all material respects with the requirements of the Act and
the rules and regulations of the Commission ("Rules and Regulations")
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and (ii) on the date of
this Agreement, the Prospectus conforms, and at the time of filing of
the Prospectus pursuant to Rule 424(b) and at the Closing Date, the
Prospectus will conform, in all material respects to the requirements
of the Act and the Rules and Regulations and the Prospectus does not
include, and will not include, as of the date of this Agreement and at
the Closing Date, respectively, any untrue statement of a material
fact, and does not omit to state any material fact necessary in order
to make the statements therein, in the light of the
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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 omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The two preceding sentences do not apply to
statements in or omissions from the Registration Statement or
Prospectus based upon written information furnished to Chevy Chase by
any Underwriters through the Representative specifically for use
therein, it being understood the only such information is that
described as such in Section 9(b). The conditions to the use by Chevy
Chase of a Registration Statement on Form S-3 under the Act, as set
forth in the General Instructions to Form S-3, have been satisfied with
respect to the Registration Statement and the Prospectus. There are no
contracts or documents which were required to be filed as exhibits to
the Registration Statement pursuant to the Act or the Rules and
Regulations on or prior to the Effective Date which have not been so
filed on or prior to the Effective Date or that were required to be
filed as exhibits to the Registration Statement pursuant to the Act or
the Rules and Regulations which have not been filed as exhibits to
reports filed under the Exchange Act that are incorporated by reference
into the Registration Statement.
(c) Since the respective dates as of which information is given in the
Prospectus, or the Prospectus as amended and supplemented, there has
not been any material adverse change in the general affairs,
management, or results of operations of Chevy Chase or of its
subsidiaries otherwise than as set forth or contemplated in the
Prospectus or the Prospectus as amended and supplemented, nor has there
been any adverse change in the general affairs, management, or results
of operations of any other affiliate of Chevy Chase which could have a
material adverse effect on the general affairs, management or results
of operations of Chevy Chase or its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus or the Prospectus as amended
and supplemented.
(d) Chevy Chase is a federally chartered stock savings bank duly organized
and validly existing under the laws of the United States of America,
and has full corporate power, authority and legal right to own its
properties and conduct its business as such properties are presently
owned and such business is presently conducted, and to execute, deliver
and perform its obligations under this Agreement, the Sale and
Servicing Agreement and the Trust Agreement dated as of September 1,
2000, as amended and restated by the Amended and Restated Trust
Agreement, dated as of September 20, 2000 (as amended and restated, the
"Trust Agreement"), and to cause the Notes to be issued. Chevy Chase
has conducted and is conducting its business so as to comply in all
material respects with all applicable statutes and regulations,
including, without limitation, all regulations, decisions, directives
and orders of the Office of Thrift Supervision. Chevy Chase is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification.
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(e) (i) There are no legal, governmental or regulatory proceedings pending
to which Chevy Chase is a party or to which any of its property is
subject, which, if determined adversely to Chevy Chase, would
individually or in the aggregate have a material adverse effect on the
performance by Chevy Chase of this Agreement, the Sale and Servicing
Agreement or the Trust Agreement or the consummation of the
transactions contemplated hereunder or thereunder and (ii) to the best
of its knowledge, no such proceedings are threatened or contemplated by
governmental or regulatory authorities or threatened by others.
(f) This Agreement has been duly authorized and validly executed and
delivered by Chevy Chase and constitutes a valid and binding agreement
of Chevy Chase, enforceable against Chevy Chase in accordance with its
terms, except to the extent that (i) the enforceability hereof may be
subject to insolvency, reorganization, moratorium, receivership,
conservatorship, or other similar laws, regulations or procedures of
general applicability now or hereafter in effect relating to or
affecting creditors' or other obligees' rights generally or the rights
of creditors or obligees of federally chartered stock savings banks,
the deposits of which are insured by the Federal Deposit Insurance
Corporation (the "FDIC"), (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought and (iii) rights to indemnification
and contribution under this Agreement may be limited by state or
federal securities laws or the policies underlying such laws.
(g) The Sale and Servicing Agreement and the Trust Agreement have been duly
authorized by Chevy Chase and, when executed and delivered by Chevy
Chase and assuming the due authorization, execution and delivery of the
Sale and Servicing Agreement and the Trust Agreement by the other
parties thereto, will constitute valid and binding obligations of Chevy
Chase enforceable against Chevy Chase in accordance with their
respective terms, except to the extent that (i) the enforceability
thereof may be subject to insolvency, reorganization, moratorium,
receivership, conservatorship, or other similar laws, regulations or
procedures of general applicability now or hereafter in effect relating
to or affecting creditors' or other obligees' rights generally or the
rights of creditors or obligees of federally chartered stock savings
banks, the deposits of which are insured by the FDIC, (ii) the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought and (iii)
rights to indemnification and contribution may be limited by state or
federal securities laws or the policies underlying such laws.
(h) The issuance and delivery of the Notes, the consummation of any other
of the transactions contemplated herein, in the Sale and Servicing
Agreement and the Trust Agreement or the fulfillment of the terms of
this Agreement, the Sale and Servicing Agreement and the Trust
Agreement, do not and will not conflict with or violate any term or
provision of the Charter or By-laws of Chevy Chase, any statute, order
or regulation applicable to Chevy Chase of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Chevy Chase and do not and will not conflict with, result in a breach
or violation or the acceleration of or constitute a default under or
result in the creation or imposition of any lien, charge or encumbrance
upon any of the property or assets of Chevy Chase pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement or other
agreement or
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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.
(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 Notes have been duly authorized, and when the Notes are issued and
delivered pursuant to the Indenture, the Notes will have been duly
issued and delivered and will be entitled to the benefits provided by
the Indenture and the Sale and Servicing Agreement, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the rights of creditors
generally, and to general principles of equity (regardless of whether
the entitlement to such benefits is considered in a proceeding in
equity or at law), and will conform in substance to the description
thereof contained in the Registration Statement and the Prospectus, and
will in all material respects be in the form contemplated by the
Indenture and the Sale and Servicing Agreement.
(k) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of
the United States is required for the issuance and sale of the Notes,
or the consummation by Chevy Chase of the other transactions
contemplated by this Agreement, the Indenture, the Sale and Servicing
Agreement or the Trust Agreement, except the registration under the Act
of the Notes and such consents, approvals, authorizations,
registrations or qualifications as may have been obtained or effected
or as may be required under securities or Blue Sky laws in connection
with the purchase and distribution of the Notes by the Underwriters.
(l) Chevy Chase possesses all material licenses, certificates,
authorizations or permits issued by the appropriate state, Federal or
foreign regulatory agencies or bodies necessary to conduct the business
now conducted by it and as described in the Prospectus and Chevy Chase
has not received notice of proceedings relating to the revocation or
modification of any such license, certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
conduct of its business, operations, financial condition or income.
(m) At the time of execution and delivery of the Sale and Servicing
Agreement, Chevy Chase (i) will not have assigned to any person any of
its right, title or interest in the Receivables or in the Sale and
Servicing Agreement or the Notes and (ii) will have the power and
authority to sell the Receivables to the Trust and to sell the Notes to
the Underwriters, and upon execution and delivery of the Sale and
Servicing Agreement by the Trust and the Indenture Trustee, the Trust
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 Notes the Underwriters will have good and
marketable title to the Notes.
(n) As of the Cut-Off Date, the Receivables will meet the eligibility
criteria described in the Prospectus.
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(o) The Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended, and the Trust is not, and immediately following the
issuance and sale of the Notes will not be, required to be registered
as an "investment company" under the Investment Company Act of 1940, as
amended (the "1940 Act"), as in effect on the date hereof.
(p) Chevy Chase has authorized the conveyance of the Receivables to the
Trust, and Chevy Chase has caused the Trust to issue the Notes.
(q) Each of the Notes, the Sale and Servicing Agreement, the Indenture and
the Trust Agreement conforms in all material respects to the
descriptions thereof contained in the Prospectus.
(r) Any taxes, fees and other governmental charges in connection with the
execution, delivery and issuance of this Agreement, the Sale and
Servicing Agreement, the Indenture, the Trust Agreement and the Notes
that are required to be paid by Chevy Chase at or prior to the Closing
Date have been paid or will be paid at or prior to the Closing Date.
(s) Chevy Chase will not apply the proceeds of the sale of the Notes
pursuant to this Agreement to purchase securities (which term does not
include the Receivables) within the meaning of Regulation T promulgated
by the Federal Reserve Board.
(t) As of the Closing Date, the representations and warranties of Chevy
Chase in the Sale and Servicing Agreement will be true and correct.
Any certificate signed by an officer of Chevy Chase and delivered
to the as Underwriters or the Underwriters' counsel in connection with an
offering of the Notes shall be deemed, and shall state that it is, a
representation and warranty as to the matters covered thereby to each person
to whom the representations and warranties in this section 3 are made.
4. PURCHASE, SALE, DELIVERY AND PAYMENTS. The Underwriters' commitment to
purchase the Notes pursuant to this Agreement shall be deemed to have been
made on the basis of the representations and warranties herein contained and
shall be subject to the terms and conditions herein set forth. Chevy Chase
agrees to instruct the Indenture Trustee to issue and agrees to sell to the
Underwriters, and the Underwriters, severally and not jointly, agree, to
purchase from Chevy Chase, the Notes at a purchase price for the Notes of
each class calculated by multiplying the purchase price percentage set forth
on Schedule 1 hereto by the respective principal amount of Notes of each
class, to be purchased by the Underwriters, respectively, as set forth on
Schedule 1 hereto. Payment of the purchase price for, and delivery of, any
Notes to be purchased by the Underwriters shall be made at the offices of
Xxxxx Xxxxxxxxxx LLP, 1301 Avenue of the Americas, 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 September 20, 2000 (the "Closing
Date"), or at such other date or time as shall be agreed upon in writing by
the Representative and Chevy Chase. On the Closing Date, payment shall be
made to Chevy Chase by wire transfer of same day funds payable to the
account of Chevy Chase against delivery to the Indenture Trustee as
custodian for The Depository Trust Company ("DTC") of the Notes in the form
of one or more global Notes in definitive form (the "Global Notes") and
registered in the
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name of Cede & Co., as nominee for DTC. The Global Notes will be made
available for checking at the offices of Xxxxx Xxxxxxxxxx LLP at least 24
hours prior to the Closing Date.
5. OFFERING BY UNDERWRITERS. It is understood that the Underwriters propose to
offer the Notes for sale to the public (which may include selected dealers)
as set forth in the Prospectus.
6. COVENANTS OF CHEVY CHASE. Chevy Chase covenants with the Underwriters as
follows:
(a) To prepare a Prospectus setting forth any price related information
previously omitted from the effective Registration Statement pursuant
to Rule 430A under the Act within the time period prescribed by Rule
430A, and to transmit such Prospectus to the Commission for filing
pursuant to Rule 424(b) under the Act within the prescribed time
period, and prior to the Closing Date to provide evidence satisfactory
to the Underwriters of such timely filing, or to prepare and timely
file a post-effective amendment to the Registration Statement providing
such information, which post-effective amendment shall have been
declared effective in accordance with the requirements of Rule 430A
under the Act and to provide evidence satisfactory to the Underwriters
of the effectiveness thereof.
(b) If at any time when the Prospectus as amended or supplemented is
required by the Act to be delivered in connection with sales of the
Notes by the Underwriters, any event shall occur or condition exist as
a result of which it is necessary, in the opinion of the Underwriters'
counsel or counsel for Chevy Chase, further to amend or supplement the
Prospectus as then amended or supplemented in order that the Prospectus
as amended or supplemented will not include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of circumstances existing at the time
it is delivered to a purchaser, not misleading or if it shall be
necessary, in the opinion of any such counsel, at any such time to
amend or supplement the Registration Statement or the Prospectus as
then amended or supplemented in order to comply with the requirements
of the Act or the Rules and Regulations, or if required by such Rules
and Regulations, including Rule 430A thereunder, to file a post-
effective amendment to such Registration Statement (including an
amended Prospectus), Chevy Chase will promptly notify the
Representative of such event and will prepare and file with the
Commission (subject to the Representative's prior review), at its own
expense, such amendment or supplement as may be necessary to correct
such untrue statement or omission or to make the Registration Statement
comply with such requirements, and within two Business Days will
furnish to the Underwriters as many copies of the Prospectus, as
amended or supplemented, as the Underwriters shall reasonably request.
Neither the Representative's consent to, nor the Underwriters' delivery
of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 7 of this Agreement.
(c) Chevy Chase will give the Underwriters reasonable notice of its
intention to file any amendment to the Registration Statement, the
Prospectus or the Prospectus as amended or supplemented, pursuant to
the Act, and will furnish the Underwriters with copies of any such
amendment or supplement proposed to be filed a reasonable time in
advance of filing, and will not file any such amendment or supplement
to which the Underwriters or the Underwriters' counsel shall object.
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(d) Chevy Chase will notify the Underwriters immediately, and confirm the
notice in writing, (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the mailing or the delivery to the
Commission for filing of any supplement to the Prospectus or the Prospectus
as amended or supplemented, (iii) of the receipt and contents of any
comments from the Commission with respect to the Registration Statement or
the Prospectus or the Prospectus as amended or supplemented, (iv) of any
request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of, or threat of, any proceedings for that purpose or (vi) the
suspension of qualification of the Notes for offering or sale in any
jurisdiction or the initiation of any proceeding for that purpose. Chevy
Chase will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(e) Chevy Chase will deliver to the Underwriters as many signed and as many
conformed copies of the Registration Statement (as originally filed) and of
each amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated by reference in the
Prospectus), each related preliminary prospectus, and so long as delivery
of a Prospectus relating to the Notes is required to be delivered under the
Act in connection with sales by any Underwriter or dealer, the Prospectus
and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Underwriters may reasonably
request. Chevy Chase will also furnish to the Representative copies of any
report required by Rule 463 under the Act.
(f) Chevy Chase will make generally available to holders of the Notes as soon
as practicable, but in any event not later than the Availability Date (as
defined below), earning statements of the Trust (which need not be audited)
complying with Section 11(a) of the Act and the Rules and Regulations
(including Rule 158) and covering a period of at least twelve consecutive
months beginning after the Effective Date which will satisfy the provisions
of Section 11(a) of the Act. For the purposes of the preceding sentence,
the "Availability Date" means the 45th day after the end of the Trust's
fourth fiscal quarter following the fiscal quarter that includes the
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Trust's fiscal year, "Availability Date" means the 90th day
after the end of such fourth fiscal quarter.
(g) Chevy Chase will endeavor, in cooperation with the Underwriters, to qualify
the Notes for sale and the determination of their eligibility for
investment under the applicable securities laws of such states and other
jurisdictions of the United States as the Representative may designate, and
will maintain or cause to be maintained such qualifications in effect for
as long as may be required for the distribution of the Notes. Chevy Chase
will file or cause the filing of such statements and reports as may be
required by the laws of each jurisdiction in which the Notes have been
qualified as above provided.
(h) Chevy Chase will not, directly or indirectly, without the Underwriters'
prior consent, publicly offer or sell or contract to sell or attempt to
offer, sell or dispose of any securities representing interests in or
secured by the Receivables for a period of 30 days following the
commencement of the offering of the Notes to the public; provided, however,
-------- -------
that Chevy
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Chase may, without the Underwriters' prior consent, contract to sell or
attempt to offer, sell or dispose of securities in public transactions
secured by first or second mortgage loans, home equity lines of credit,
home improvement loans and "sub-prime" auto loans (but not "prime" auto
loans).
(i) For so long as any of the Notes remain outstanding, Chevy Chase, as
Servicer, will deliver to the Representative and, upon request, to each of
the other Underwriters, as soon as practicable, copies of each certificate,
report or notice and the annual statements of compliance delivered by Chevy
Chase, as Servicer, to the Indenture Trustee pursuant to Section 4.10 of
the Sale and Servicing Agreement, the annual statement of a firm of
independent public accountants furnished to the Indenture Trustee pursuant
to Section 4.11 of the Sale and Servicing Agreement and such other
information concerning the Receivables, Chevy Chase (including in its
capacities as the Seller and Servicer) or the Notes, as the Representative
may from time to time reasonably request.
(j) On or before the Closing Date, Chevy Chase shall furnish or make available
to the Underwriters or its counsel such additional documents and
information regarding Chevy Chase (including in its capacities as the
Seller and Servicer) and its affairs as the Underwriters may from time to
time reasonably request, including any and all documentation reasonably
requested in connection with their due diligence efforts regarding
information in the Prospectus and in order to evidence the accuracy or
completeness of any of the conditions contained in this Agreement.
(k) So long as any of the Notes is outstanding, Chevy Chase shall furnish to
the Representative by first class mail as soon as practicable, (A) all
documents distributed, or caused to be distributed, by Chevy Chase to
Noteholders, (B) all documents filed, or caused to be filed, by Chevy Chase
with the Commission relating to the Trust pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (C) any order of the
Commission under the Exchange Act or pursuant to a "no action" letter from
the staff of the Commission relating to the Trust and (D) from time to
time, such other information in the possession of Chevy Chase concerning
the Trust as the Representative may reasonably request.
(l) The net proceeds from the sale of the Notes shall be applied in the manner
set forth in the Prospectus Supplement.
(m) If, between the date hereof or, if earlier, the dates as of which
information is given in the Prospectus and the Closing Date, to the
knowledge of Chevy Chase there shall have been any material change, or any
development involving a prospective material change in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of Chevy 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 Notes
set forth in Section 7(i) hereof is conditional upon the furnishing of
documents reasonably available to Chevy Chase or the taking of any other
reasonable actions by Chevy Xxxxx, Xxxxx Xxxxx shall furnish such documents
or take any such other actions.
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7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of the
Underwriters to purchase the Notes pursuant to this Agreement are subject to
the accuracy on and as of the Closing Date of the representations and
warranties on the part of Chevy Chase herein contained, to the accuracy of
the statements of officers of Chevy Chase made pursuant hereto, to the
performance by Chevy Chase of all of its obligations hereunder and to the
following conditions at the Closing Date:
(a) The Representative shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time is prior to the
execution and delivery of this Agreement, shall be on or prior to the
date of this Agreement or, if the Effective Time is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing
of the amendment or post-effective amendment to the Registration
Statement to be filed shortly prior to the Effective Time), from 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 6 (a) of this
Agreement.
(c) The Registration Statement shall have been declared effective by the
Commission and no stop order suspending the effectiveness of the
Registration Statement shall have been issued 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
10
timely filing, or a post-effective amendment to the Registration
Statement providing such information shall have been promptly filed
with the Commission and declared effective in accordance with the
requirements of Rule 430A under the Act, and prior to the Closing Date,
Chevy Chase shall have provided evidence satisfactory to the
Underwriters of such effectiveness and there shall not have come to the
attention of the Underwriters facts that would cause the Underwriters
to believe that the Prospectus, at the time it was required to be
delivered to a purchaser of the Notes, contained an untrue statement of
a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The Underwriters shall have received the favorable opinion, dated the
Closing Date, of Xxxx Xxxxxxx, special counsel to Chevy Chase, or other
counsel to Chevy Chase, acceptable to the Underwriters and their
counsel, addressed to the Underwriters and in form and scope
satisfactory to the Underwriters' counsel, to the effect that:
(i) Chevy Chase has been duly chartered and is validly existing
as a federally chartered stock savings bank under the laws
of the United States of America and has full corporate power
and authority to own its properties and conduct its business
as described in the Prospectus; Chevy Chase has full
corporate power and authority to execute, deliver, and
perform its obligations under this Agreement, the Sale and
Servicing Agreement and the Trust Agreement and to cause the
Notes to be issued and to consummate the transactions
contemplated hereby and thereby.
(ii) Chevy Chase has duly authorized and executed this Agreement,
the Sale and Servicing Agreement and the Trust Agreement.
(iii) The execution, delivery and performance of this Agreement,
the Sale and Servicing Agreement and the Trust Agreement,
the transfer of the Receivables to the Trust, the issuance
and sale of the Notes and the consummation of any other of
the transactions contemplated herein, in the Sale and
Servicing Agreement or in the Trust Agreement do not
conflict with or result in a violation of (a) any applicable
law or regulation of the United States of America or the
State of New York or Maryland to which Chevy Chase is
subject, (b) the Charter or By-laws of Chevy Chase or (c)
any order, writ, judgment or decree known to such counsel to
which Chevy Chase is a party or is subject, or result in any
lien, charge or encumbrance upon any of the properties or
assets of Chevy Chase.
(iv) There are no actions, proceedings or investigations, to the
knowledge of such counsel, pending or threatened before any
court, administrative agency or other tribunal to which
Chevy Chase is a named party or to which its assets are
subject (A) asserting the invalidity of the Trust Agreement,
the Sale and Servicing Agreement, this Agreement or the
Notes, (B) seeking to prevent the issuance of the Notes or
the consummation by Chevy Chase of any of the transactions
contemplated by the Trust Agreement, the Sale and Servicing
Agreement or this Agreement, (C) that might adversely affect
the validity or
11
enforceability of the Trust Agreement, this Agreement, the
Sale and Servicing Agreement or the Notes, or (D) seeking to
adversely affect the federal income tax attributes of the
Notes as described in the Prospectus Supplement under the
heading "Material Federal Income Tax Consequences."
(v) Each of this Agreement, the Sale and Servicing Agreement and
the Trust Agreement, constitutes the valid, legal and
binding obligation of Chevy Chase enforceable against Chevy
Chase in accordance with its terms.
(vi) No filing or other action, except the filing of a Uniform
Commercial Code financing statement on Form UCC-1 with the
Maryland State Department of Assessments and Taxation naming
Chevy Chase as "debtor" and the Trust as "secured party," is
necessary to perfect the transfer of the Receivables and
proceeds (as defined in Section 9-306 of the Maryland
Uniform Commercial Code) thereof against the claims of
creditors of, and transferees from, Chevy Chase. Such
security interest would be enforceable notwithstanding 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.
(vii) The Receivables constitute "chattel paper" as defined in
Section 9-105 of the Uniform Commercial Code as in effect in
the State of Maryland.
In addition, such counsel shall state that nothing has come to
their attention concerning Chevy Chase that would lead them to believe that the
information set forth in the Prospectus Supplement under the caption "THE BANK-
General" AND "THE BANK-Litigation", as of its date and as of the Closing Date,
contains an untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) The Underwriters shall have received the favorable opinion of counsel to
the Indenture Trustee, dated the Closing Date, addressed to the
Underwriters and in form and scope satisfactory to the Underwriters'
counsel, to the effect that:
(i) The Indenture Trustee has duly authorized, executed and
delivered the Indenture and the Sale and Servicing Agreement.
(ii) The Indenture Trustee has been duly organized and is validly
existing as a national banking corporation in good standing
under the laws of the United States of America and has full
power and authority to execute and deliver the Indenture and
the Sale and Servicing Agreement and to perform its obligations
thereunder and each such Agreement constitutes the valid, legal
and binding obligation of the Indenture Trustee, enforceable
against the Indenture Trustee in accordance with its terms.
(iii) The Notes have been duly executed, authenticated and delivered
by the Indenture Trustee.
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(iv) The execution and delivery by the Indenture Trustee of the Sale
and Servicing Agreement and the Indenture and the performance
by the Indenture Trustee of its duties thereunder do not
conflict with or result in a violation of (a) any law or
regulation of the United States of America or the State of
Minnesota, (b) the charter or by-laws of the Indenture Trustee,
(c) any order, writ, judgment or decree or (d) any agreement,
instrument, order, writ, judgment or decree known to such
counsel to which the Indenture Trustee is a party or is
subject.
(v) No consent, approval or authorization of, or registration,
declaration or filing with, any court or governmental agency or
body of the United States of America or any state thereof is
required for the execution, delivery or performance by the
Indenture Trustee of the Sale and Servicing Agreement or the
Indenture.
(f) The Underwriters shall have received an opinion, dated the Closing Date, of
Xxxx Xxxxxxx, special 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, Inc. ("Fitch"), and the Underwriters, relating to the
transfer of the Receivables to the Trust.
(g) Chevy Chase shall have furnished to the Underwriters a certificate signed
on behalf of Chevy Chase by one or more of the chairman of the board, the
president, any vice chairman of the board, any executive vice president,
any senior vice president, any group vice president, any vice president,
the treasurer, or the controller of Chevy Chase, dated the Closing Date, as
to (i) the accuracy of the representations and warranties of Chevy Chase
herein and in the Sale and Servicing Agreement at and as of the Closing
Date, (ii) the performance by Chevy Chase of all of its obligations
hereunder to be performed at or prior to the Closing Date and (iii) such
other matters as the Underwriters may reasonably request.
(h) The Indenture Trustee shall have furnished to the Underwriters a
certificate of the Indenture Trustee, signed by one or more duly authorized
officers of the Indenture Trustee, dated the Closing Date, as to the due
execution of the Sale and Servicing Agreement and the Indenture by the
Indenture Trustee and the due execution and delivery of the Notes by the
Indenture Trustee thereunder and such other matters as the Underwriters
shall reasonably request.
(i) The Class A-1 Notes shall have been rated "A-1+" by S&P, "Prime -1" by
Moody's and "F- 1+" by Fitch, the other Class A Notes shall have been rated
"AAA" by S&P, "Aaa" by Moody's and "AAA" by Fitch, the Class B Notes shall
have been rated "A" by S&P, "A1" by Moody's and "A" by Fitch and the Class
C Notes shall have been rated "BBB+" by S&P, "Baa2" by Moody's and "BBB+"
by Fitch, and such ratings shall not have been rescinded.
(j) The Underwriters and Chevy Chase 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.
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(k) Prior to the Closing Date the Underwriters shall have been furnished with
such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Notes as herein
contemplated and related proceedings or in order to evidence the accuracy
and completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by Chevy Chase in connection with the issuance and sale of the Notes
as herein contemplated shall be satisfactory in form and substance to the
Underwriters.
(l) Since the respective dates as of which information is given in the
Prospectus, there shall not have been any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of Chevy Chase otherwise than as set forth in the Prospectus,
the effect of which is in the Underwriters' judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Notes on the terms and in the manner
contemplated in the Prospectus or which, in the judgment of the
Underwriters, materially impairs the investment quality of the Notes or the
ability of the Servicer to service the Receivables.
(m) Subsequent to the execution and delivery of this Agreement, there shall not
have occurred (i) any change, development or event involving a prospective
change, in the condition (financial or other), business, properties or
results of operations of Chevy Chase or its automobile loan business which,
in the judgment of the Underwriters, is material and adverse and makes it
impracticable or inadvisable to proceed with the completion of the public
offering or the sale of and payment for the Notes; (ii) any banking
moratorium declared by Federal, New York, Minnesota or Maryland
authorities; or (iii) any downgrading in the rating of any securities of
Chevy Chase by any nationally recognized statistical rating organization
(as defined for purposes of Rule 436(g) under the Act) or any public
announcement that any such organization has under surveillance or review
its rating of any securities of Chevy Chase (other than an announcement
with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); or (iv) any suspension or limitation
of trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange; or (v) any outbreak
or escalation of major hostilities in which the United States is involved,
any declaration of war by Congress or any other substantial national or
international calamity, emergency or change in financial markets if, in the
Representative's judgment, the effect of any such outbreak, escalation,
declaration, calamity, emergency or change makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the
Notes.
(n) The Underwriters shall have received evidence satisfactory to the
Underwriters that on or before the Closing Date, UCC-1 financing statements
have been filed (i) in the offices of the Maryland State Department of
Assessments and Taxation, reflecting the interest of the Trust in the
Receivables and the proceeds thereof and (ii) in the offices of the
Secretaries of State of the States of Delaware and of Minnesota, reflecting
the security interest of the Indenture Trustee in the Trust Estate and the
proceeds thereof.
14
(o) The Underwriters and Chevy Chase shall have received the favorable opinion,
dated the Closing Date, of Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters, in form and scope satisfactory to the Underwriters, to the
effect that:
(i) The Registration Statement was declared effective under the Act
as of the date and time specified in such opinion, the Prospectus
either was filed with the Commission pursuant to the subparagraph
of Rule 424(b) specified in such opinion on the date specified
therein or was included in the Registration Statement (as the
case may be), and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been instituted or is pending
or contemplated under the Act, and the Registration Statement and
the Prospectus, and each amendment or supplement thereof, as of
their respective effective or issue dates, complies as to form in
all material respects with the requirements of the Act and the
Rules and Regulations; such counsel have no reason to believe
that the Registration Statement or any amendment thereto, as of
its Effective Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Registration Statement as of the Closing
Date, or the Prospectus, as of its issue date or as of such
Closing Date, contained any untrue statement of a material fact
or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; it being understood that
such counsel need express no opinion as to the financial
statements or other financial data contained in the Registration
Statement or the Prospectus.
(ii) The conditions to the use by Chevy Chase of a registration
statement on Form S-3 under the Act, as set forth in the General
Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus. There are no contracts
or documents of Chevy Chase which are required to be filed as
exhibits to the Registration Statement pursuant to the Act or the
Rules and Regulations thereunder which have not been so filed.
(iii) The Registration Statement at the time it became effective, and
any amendment thereto at the time such amendment became
effective, complied as to form in all material respects with the
applicable requirements of the Act and the Rules and Regulations.
(iv) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended.
(v) The Trust is not required to be registered under the 1940 Act,
and immediately following the issuance and sale of the Notes in
the manner contemplated by the Sale and Servicing Agreement, the
Indenture and this Agreement, the Trust will not be required to
be so registered.
15
(vi) The Notes, this Agreement, the Trust Agreement, the Sale and
Servicing Agreement and the Indenture conform in all material
respects to the respective descriptions thereof in the
Registration Statement and the Prospectus.
(vii) The Notes have been duly authorized and, when executed and
authenticated in accordance with the terms of the Sale and
Servicing Agreement and the Indenture and delivered to and paid
for by the Underwriters pursuant to this Agreement, will be duly
and validly issued and outstanding and will be entitled to the
benefits of the Sale and Servicing Agreement and the Indenture.
(viii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
of the United States is required for the issuance and sale of the
Notes, or the consummation by Chevy Chase of the other
transactions contemplated by this Agreement, the Sale and
Servicing Agreement or the Trust Agreement, except the
registration under the Act of the Notes and such consents,
approvals, authorizations, registrations or qualifications as may
have been obtained or effected or as may be required under
securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Underwriters.
(ix) The statements in the Base Prospectus under the headings "RISK
FACTORS --Insolvency of either of the lenders may reduce or delay
payments to the securityholders," and "LEGAL ASPECTS OF THE AUTO
LOANS," and in the Prospectus Supplement under the headings
"SUMMARY -- Federal Income Tax Consequences," "MATERIAL 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.
(p) Chevy Chase will provide or cause to be provided to the Representative such
conformed copies of such opinions, certificates, letters and documents
being provided pursuant hereto and such further information, certificates
and documents as the Representative may reasonably request. The
Representative may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder.
16
If any condition specified in this Section 7 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriters by notice to Chevy Chase at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except as provided in Section 8.
8. PAYMENT OF EXPENSES. Chevy Chase agrees to pay all expenses incident to the
performance of its obligations under this Agreement, and will reimburse the
Underwriters (if and to the extent incurred by them) for any filing fees
and other expenses (including fees and disbursements of counsel),
including, without limitation, those related to (i) the filing of the
Registration Statement and all amendments thereto, (ii) the duplication and
delivery to the Underwriters, in such quantities as the Underwriters may
reasonably request, of copies of this Agreement, (iii) the preparation,
issuance and delivery of the Notes and the determination of their
eligibility for investment under the laws of such jurisdictions as the
Representative designates, (iv) 50% of the fees and disbursements of Xxxx
Xxxxxxx, counsel for Chevy Chase, (v) 50% of the fees and disbursements of
Xxxxxxx & Xxxxxxx, LLC and of Jenkens & Xxxxxxxxx, a professional
corporation, (vi) 50% of the fees and disbursements of Xxxxx Xxxxxxxxxx
LLP, (vii) the fees and disbursements of Xxxxxx Xxxxxxxx LLP, accountants
of Chevy Chase, (viii) 50% of the fees relating to the qualification of the
Notes under securities and Blue Sky laws and the determination of the
eligibility of the Notes for investment in accordance with the provisions
of Section 6(g), including filing fees and disbursements and the fees of
Xxxxx Xxxxxxxxxx LLP in connection therewith and in connection with the
preparation of any Blue Sky Survey, (ix) the printing and delivery to the
Underwriters, in such quantities as the Underwriters may reasonably
request, of copies of the Registration Statement and Prospectus and all
amendments and supplements thereto, and of any Blue Sky Survey, (x) the
filing fee of the National Association of Securities Dealers, Inc., if any,
(xi) the duplication and delivery to the Underwriters in such quantities as
the Underwriters may reasonably request, of copies of the Sale and
Servicing Agreement and the Indenture, (xii) the fees charged by nationally
recognized statistical rating agencies for rating the Notes and (xiii) the
fees and expenses of the Indenture Trustee and its counsel. The
Underwriters agree to pay (i) 50% of the fees and disbursements of Xxxxx
Xxxxxxxxxx LLP, including fees and disbursements relating to the new shelf
registration filing, (ii) 50% of the fees and disbursements of Xxxxxxx &
Weddell, LLC and of Jenkens & Xxxxxxxxx, a professional corporation, (iii)
50% of the fees relating to the qualification of the Notes under securities
and Blue Sky laws and the determination of the eligibility of the Notes for
investment in accordance with the provisions of Section 6(g), including
filing fees and disbursements and the fees of Xxxxx Xxxxxxxxxx LLP in
connection therewith and in connection with the preparation of any Blue Sky
Survey, and (iv) 50% of the fees and expenses of Xxxx Xxxxxxx, counsel for
Chevy Chase.
9. INDEMNIFICATION. Chevy Chase agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls each Underwriter within
the meaning of the Act or the Exchange Act, as follows:
(a) Chevy Chase will indemnify and hold harmless the Underwriters against
any losses, claims, damages or liabilities, joint or several, to which
such Underwriters may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement
or alleged untrue
17
statement of any material fact contained in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading (in the case of the Prospectus, any related preliminary
prospectus or any amendment or supplement thereto, in the light of the
circumstances under which they were made) and will reimburse the
Underwriters for any legal or other expenses reasonably incurred by
such Underwriters in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that Chevy Chase will not be liable in
-------- -------
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any
of such documents in reliance upon and in conformity with written
information furnished to Chevy Chase by any Underwriter through the
Representative specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter
consists of the information described as such in subsection (b) below.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless Chevy Chase against any losses, claims, damages or
liabilities to which Chevy Chase may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading (in the case of the
Prospectus, any related Preliminary Prospectus or any amendment or
supplement thereto, in the light of the circumstances under which they
were made), in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished to Chevy Chase by such Underwriter
through the Representative specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by Chevy
Chase in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred, it
being understood and agreed that the only such information furnished
by any Underwriter consists of the following information in the
Prospectus furnished on behalf of the Underwriters: the table at the
bottom of the cover page of the Prospectus Supplement concerning the
terms of the offering by the Underwriters and the information under
the caption "Underwriting" in the Prospectus Supplement.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under subsection (a) or (b) above,
notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any 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
18
assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on
any claims that are the subject matter of such action.
10. CONTRIBUTION. If the indemnification provided for in Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of Section 9 above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as
a result of the losses, claims, damages or liabilities referred to in such
subsection (a) or (b) (i) in such proportion as is appropriate to reflect
the relative benefits received by Chevy Chase on the one hand and each of
the Underwriters on the other from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
Chevy Chase on the one hand and each of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by Chevy Chase on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by Chevy Chase bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by Chevy
Chase or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first
sentence of this Section 10 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
Section 10. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this Section 10 to contribute are several in
proportion to their respective underwriting obligations and not joint.
The obligations of Chevy Chase under Section 9 and this Section 10
shall be in addition to any liability which Chevy Chase may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under Section 9 and this Section 10 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each director of Chevy Chase, to each
officer of Chevy
19
Chase who has signed the Registration Statement and to each person, if any, who
controls Chevy Chase within the meaning of the Act.
Notwithstanding the provisions of Sections 9 and 10, the Underwriters
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Notes underwritten by the Underwriters and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriters have otherwise been required to pay in respect of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section 10, each person, if any, who controls the Underwriters within the
meaning of the Act or the Exchange Act shall have the same rights to
contribution as each of the Underwriters, and each director of Chevy Chase, each
officer of Chevy Chase who signed the Registration Statement, and each person,
if any, who controls Chevy Chase within the meaning of the Act or the Exchange
Act shall have the same rights to contribution as Chevy Chase.
11. DEFAULT OF UNDERWRITERS. If any Underwriter defaults in its obligations to
purchase Notes hereunder on the Closing Date and the aggregate principal
amount of Notes that such defaulting Underwriter or Underwriters have
agreed but failed to purchase does not exceed 10% of the total principal
amount of Notes that the Underwriters are obligated to purchase on such
Closing Date, the Representative may make arrangements satisfactory to
Chevy Chase for the purchase of such Notes by other persons, including any
of the Underwriters, but if no such arrangements are made by such Closing
Date, the nondefaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Notes
that such defaulting Underwriters agreed but failed to purchase on such
Closing Date. If any Underwriters so default and the aggregate principal
amount of Notes with respect to which such default or defaults occur
exceeds 10% of the total principal amount of Notes that the Underwriters
are obligated to purchase on such Closing Date and arrangements
satisfactory to the Representative and Chevy Chase for the purchase of such
Notes by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any non-
defaulting Underwriter or Chevy Chase, except as provided in Section 12. As
used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 11. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
12. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements
of Chevy Chase or its officers and of the several Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, Chevy Chase or any of their
respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Notes. If this
Agreement is terminated or if for any reason the purchase of the Notes by
the Underwriters is not consummated, Chevy Chase and the Underwriters shall
remain responsible for the expenses to be paid or reimbursed by it pursuant
to Section 8 and the respective obligations of Chevy Chase and the
Underwriters pursuant to Section 9 and 10 shall remain in effect, and if
any Notes have been purchased hereunder the representations and warranties
in Section 3 and all obligations under Section 6 and 7 shall also remain in
effect. If the purchase of the Notes by the Underwriters is not consummated
for any reason other than
20
solely because of the termination of this Agreement pursuant to Section 11
or the occurrence of any event specified in clause (ii), (iv) or (v) of
Section 7(m), Chevy Chase will reimburse the Underwriters for all out-of-
pocket expenses reasonably incurred by them in connection with the offering
of the Notes.
13. NOTICES. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Representative shall be
directed to the address set forth on the first page hereof, or sent by
facsimile machine which produces an electronic confirmation of receipt to
(000) 000-0000 attention: Asset-Backed Group. 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.
14. PARTIES. This Agreement shall inure to the benefit of and be binding upon
the Underwriters and Chevy Chase, and their respective successors. Nothing
expressed or mentioned in this Agreement is intended nor shall it be
construed to give any person, firm or corporation, other than the parties
hereto or thereto and their respective successors and the controlling
persons and officers and directors referred to in Sections 9 and 10 and
their heirs and legal representatives, any legal or equitable right, remedy
or claim under or with respect to this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties and their
respective successors and such controlling persons and officers and
directors and their heirs and legal representatives (to the extent of their
rights as specified herein and therein) and except as provided above for
the benefit of no other person, firm or corporation. No purchaser of Notes
from the Underwriters shall be deemed to be a successor by reason merely of
such purchase.
15. REPRESENTATIONS OF UNDERWRITERS. The Representative will act for the
several Underwriters in connection with the transactions contemplated by
this Agreement, and any action under this Agreement taken by the
Representative will be binding upon all the Underwriters.
16. GOVERNING LAW AND TIME; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS. CHEVY CHASE HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
FEDERAL AND STATE COURTS IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY. SPECIFIED TIMES OF DAY REFER TO
NEW YORK CITY TIME.
17. COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but together they shall constitute but
one instrument.
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and Chevy Chase in accordance with its terms.
Very truly yours,
CHEVY CHASE BANK, F.S.B.
By:/s/ Xxxx X. Xxxxxx
------------------------
Name: Xxxx X. Xxxxxx
Title: Group Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
X.X. XXXXXX SECURITIES INC.
By:/s/ Xxxxxxx Xxxxxxxx
----------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Schedule 1
Class A-1; Purchase Price Percentage: 99.8850000%
----------------------------------------------------------
Underwriters Principal
Amount
----------------------------------------------------------
X.X. Xxxxxx Securities Inc. $16,334,000
----------------------------------------------------------
Credit Suisse First Boston Corporation $16,333,000
----------------------------------------------------------
Xxxxxxx Xxxxx Xxxxxx Inc. $16,333,000
----------------------------------------------------------
Class A-2; Purchase Price Percentage: 99.8041430%
----------------------------------------------------------
Underwriters Principal
Amount
----------------------------------------------------------
X.X. Xxxxxx Securities Inc. $37,000,000
----------------------------------------------------------
Credit Suisse First Boston Corporation $37,000,000
----------------------------------------------------------
Xxxxxxx Xxxxx Xxxxxx Inc. $37,000,000
----------------------------------------------------------
Class A-3; Purchase Price Percentage: 99.7304670%
----------------------------------------------------------
Underwriters Principal
Amount
----------------------------------------------------------
X.X. Xxxxxx Securities Inc. $20,000,000
----------------------------------------------------------
Credit Suisse First Boston Corporation $20,000,000
----------------------------------------------------------
Xxxxxxx Xxxxx Xxxxxx Inc. $20,000,000
----------------------------------------------------------
Class A-4; Purchase Price Percentage: 99.7132890%
----------------------------------------------------------
Underwriters Principal
Amount
----------------------------------------------------------
X.X. Xxxxxx Securities Inc. $28,067,000
----------------------------------------------------------
Credit Suisse First Boston Corporation $28,066,000
----------------------------------------------------------
Xxxxxxx Xxxxx Xxxxxx Inc. $28,066,000
----------------------------------------------------------
Class B; Purchase Price Percentage: 99.5216880%
----------------------------------------------------------
Underwriters Principal
----------------------------------------------------------
----------------------------------------------------------
Amount
----------------------------------------------------------
X.X. Xxxxxx Securities Inc. $6,438,000
----------------------------------------------------------
Class C; Purchase Price Percentage: 99.4651400%
----------------------------------------------------------
Underwriters Principal
Amount
----------------------------------------------------------
X.X. Xxxxxx Securities Inc. $8,047,000
----------------------------------------------------------
