Exhibit 1.1
CHEVY CHASE AUTO RECEIVABLES TRUST 1997-3
6.20% Auto Receivables Backed Certificates, Class A
UNDERWRITING AGREEMENT
September 18, 1997
Credit Suisse First Boston Corporation
as Representative of the Underwriters
identified on Schedule 0
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
INTRODUCTION. Chevy Chase Bank, F.S.B., a federally chartered stock
savings bank ("Chevy Chase"), has authorized the issuance and sale of 6.20% Auto
Receivables Backed Certificates, Class A (the "Certificates"), evidencing
interests in a trust (the "Trust") consisting, among other things, of (i) simple
interest retail installment sales contracts and installment loans (the
"Receivables") secured by new and used automobiles, light duty trucks and vans
(the "Vehicles") financed thereby, (ii) amounts due or received thereunder on or
after September 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 September 1, 1997 (the "Trust Agreement")
between Chevy Chase as seller and as servicer and U.S. Bank National
Association, doing business as First Bank National Association, as trustee (the
"Trustee").
The Certificates will evidence fractional undivided interests in 96% of the
Trust. A class of subordinated 9.00% Auto Receivables Backed Certificates,
Class B (the "Class B Certificates") will evidence fractional undivided
interests in 4% of the Trust. The Trustee, on behalf of the holders of the
Certificates (the "Certificateholders"), will have the benefit of a financial
guaranty insurance policy (the "Certificate Insurance Policy") from MBIA
Insurance Corporation (the "Certificate Insurer"). The Trustee will also have
access to a Reserve Account to be established for the benefit of the
Certificateholders, the holders of the Class B Certificates and the Certificate
Insurer. Each Certificateholder and each holder of Class B Certificates will
also purchase the right to receive a pro rata share of the applicable portion of
the amounts payable under the Yield Maintenance Account established pursuant to
the Trust Agreement. The Certificates will be issued in an aggregate principal
amount of $193,949,671.10, which, together with the $8,081,236.30 aggregate
principal amount of the Class B Certificates, is equal to the original pool
balance of the Receivables, exclusive of accrued interest, as of the opening of
business on the Cut-Off Date. The forms of the Trust Agreement and the
Certificate Insurance
Policy have been timely filed as exhibits to the Registration Statement (as such
term is hereinafter defined). Capitalized terms used but not defined herein
shall have the meanings given to them in the Trust Agreement.
Chevy Chase hereby agrees with the several Underwriters named in Schedule 1
hereto (the "Underwriters") as follows:
REPRESENTATIONS AND WARRANTIES OF CHEVY CHASE. Chevy Chase represents and
warrants to, and agrees with, each of the Underwriters that:
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 Credit Suisse First Boston
Corporation, 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 17, 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 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."
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
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the rules and regulations of the Commission ("Rules and Regulations") and did
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) on the date of this Agreement, the Prospectus
conforms, and at the time of filing of the Prospectus pursuant to Rule 424(b)
and at the Closing Date, the Prospectus will conform, in all material respects
to the requirements of the Act and the Rules and Regulations and the Prospectus
does not include, and will not include, any untrue statement of a material fact,
and does not omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If the Effective Time is subsequent to the execution and
delivery of this Agreement, on the Effective Date the Registration Statement and
the Prospectus will conform in all material respects to the requirements of the
Act and the Rules and Regulations, and (i) the Registration Statement will not
include any untrue statement of a material fact or will not omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (ii) the Prospectus will not include an untrue
statement of a material fact or will not omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The two preceding sentences do not apply
to statements in or omissions from the Registration Statement or Prospectus
based upon written information furnished to Chevy Chase by any Underwriters
through the Representative specifically for use therein, it being understood the
only such information is that described as such in Section 8(b). The conditions
to the use by Chevy Chase of a Registration Statement on Form S-3 under the Act,
as set forth in the General Instructions to Form S-3, have been satisfied with
respect to the Registration Statement and the Prospectus. There are no contracts
or documents which were required to be filed as exhibits to the Registration
Statement pursuant to the Act or the Rules and Regulations on or prior to the
Effective Date which have not been so filed on or prior to the Effective Date or
that were required to be filed as exhibits to the Registration Statement
pursuant to the Act or the Rules and Regulations which have not been filed as
exhibits to reports filed under the Exchange Act that are incorporated by
reference into the Registration Statement.
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.
Chevy Chase is a federally chartered stock savings bank duly organized and
validly existing under the laws of the United States of America, and has full
corporate power, authority and legal right to own its properties and conduct its
business as such properties are presently owned and such business is presently
conducted, and to execute, deliver and perform its obligations under this
Agreement, the Trust Agreement and the Indemnification Agreement, and
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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.
(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 and 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.
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.
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.
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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.
Xxxxxx Xxxxxxxx LLP is an independent public accountant with respect to
Chevy Chase as required by the Act and the Rules and Regulations.
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.
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.
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.
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
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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.
As of the Cut-Off Date, the Receivables will meet the eligibility criteria
described in the Prospectus.
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.
Chevy Chase has authorized the conveyance of the Receivables to the Trust,
and Chevy Chase has authorized the Trust to issue the Certificates.
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.
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.
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.
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.
PURCHASE, SALE, DELIVERY AND PAYMENTS. The Underwriters' commitment to
purchase the Certificates pursuant to this Agreement shall be deemed to have
been made on the basis of the representations and warranties herein contained
and shall be subject to the terms and conditions herein set forth. Chevy Chase
agrees to instruct the Trustee to issue and agrees to sell to the Underwriters,
and the Underwriters, severally and not jointly, agree, to purchase from Chevy
Chase at the purchase price for the Certificates set forth opposite the names of
the Underwriters on Schedule 1 hereto, the respective principal amount of
Certificates set forth on Schedule 1 hereto. Payment of the purchase price
for, and delivery of, any Certificates to be
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purchased by the Underwriters shall be made at the offices of Shaw, Pittman,
Xxxxx & Xxxxxxxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 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 September 26, 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 Shaw, Pittman, Xxxxx & Xxxxxxxxxx at least 24 hours prior to the
Closing Date.
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.
COVENANTS OF CHEVY CHASE. Chevy Chase covenants with the Underwriters as
follows:
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.
If at any time when the Prospectus as amended or supplemented is required
by the Act to be delivered in connection with sales of the Certificates by the
Underwriters, any event shall occur or condition exist as a result of which it
is necessary, in the opinion of the Underwriters' counsel or counsel for Chevy
Chase, further to amend or supplement the Prospectus as then amended or
supplemented in order that the Prospectus as amended or supplemented will not
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of circumstances
existing at the time it is delivered to a purchaser, not misleading or if it
shall be necessary, in the opinion of any such counsel, at any such time to
amend or supplement the Registration Statement or the Prospectus as then amended
or supplemented in order to comply with the requirements of the Act or the Rules
and Regulations, or if required by such Rules and Regulations, including Rule
430A thereunder, to file a post-effective amendment to such Registration
Statement (including an amended Prospectus), Chevy Chase will promptly notify
the Representative of such event and will prepare and file with the Commission
(subject to the Representative's prior review), at its own expense, such
amendment or supplement as may be necessary to correct such untrue statement or
omission
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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.
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.
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.
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.
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
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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.
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.
Chevy Chase will not, directly or indirectly, without the Underwriters'
prior consent, publicly offer or sell or contract to sell or attempt to offer,
sell or dispose of any securities representing interests in or secured by the
Receivables for a period of 30 days following the commencement of the offering
of the Certificates to the public; provided, however, that Chevy Chase may
contract to sell or attempt to offer, sell or dispose of the Class B
Certificates.
For a period from the date of this Agreement until the retirement of the
Certificates, Chevy Chase, as Servicer, will deliver to the Representative and,
upon request, to each of the other Underwriters, as soon as practicable, copies
of each certificate, report or notice and the annual statements of compliance
delivered by Chevy Chase, as Servicer, to the Trustee pursuant to Section 4.10
of the Trust Agreement, the annual statement of a firm of independent public
accountants furnished to the Trustee pursuant to Section 4.11 of the Trust
Agreement and such other information concerning the Receivables, Chevy Chase
(including in its capacities as the Seller and Servicer) or the Certificates, as
the Representative may from time to time reasonably request.
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.
So long as any Certificate is outstanding, Chevy Chase shall furnish to the
Representative by first class mail as soon as practicable, (A) all documents
distributed, or caused to be distributed, by Chevy Chase to Certificateholders,
(B) all documents filed, or caused to be filed, by Chevy Chase with the
Commission relating to the Trust pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), (C) any order of the Commission under the
Exchange Act or pursuant to a "no action" letter from the staff of the
Commission relating to the Trust and (D) from time to time, such other
information in the possession of Chevy Chase concerning the Trust as the
Representative may reasonably request.
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Chevy Chase shall apply the net proceeds from the sale of the Certificates
in the manner set forth in the Prospectus Supplement.
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.
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
reasonable actions by Chevy Xxxxx, Xxxxx Xxxxx shall furnish such documents or
take any such other actions.
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:
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
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Prospectus shall be deemed included in the Registration Statement for purposes
of this subsection (a).
If the Effective Time is not prior to the execution and delivery of this
Agreement, the Effective Time shall have occurred not later than 10:00 p.m., New
York time, on the date of this Agreement or such later date as shall have been
consented to by the Representative. If the Effective Time is prior to the
execution and delivery of this Agreement, the Prospectus shall have been filed
with the Commission in accordance with the Rules and Regulations and Section 5
(a) of this Agreement.
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.
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:
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.
Chevy Chase has duly authorized and executed this Agreement, the Trust
Agreement and the Indemnification Agreement.
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
11
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.
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."
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.
The Receivables constitute "chattel paper" as defined in Section 9-105 of
the Uniform Commercial Code as in effect in the State of Maryland.
The Underwriters shall have received the favorable opinions of Xxxxx
Xxxxxxxxxx, special counsel to the Underwriters, dated the Closing Date,
addressed to the Underwriters and in form and scope satisfactory to the
Underwriters, to the effect that:
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.
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.
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
12
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.
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.
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.
The Trust Agreement is not required to be qualified under the Trust
Indenture Act of 1939, as amended.
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.
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.
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
13
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.
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:
The Trustee has duly authorized, executed and delivered the Trust
Agreement.
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.
The Certificates have been duly executed and countersigned by the Trustee.
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.
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.
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.
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
14
Investors Service, Inc. ("Fitch"), the Underwriters and the Underwriters'
counsel, relating to the sale of the Receivables to the Trustee.
Chevy Chase shall have furnished to the Underwriters a certificate signed
on behalf of Chevy Chase by any two of the chairman of the board, the president,
any vice chairman of the board, any executive vice president, any senior vice
president, any vice president, the treasurer, or the controller of the Seller or
the Servicer, as appropriate, dated the Closing Date, as to (i) the accuracy of
the representations and warranties of Chevy Chase herein and in the Trust
Agreement at and as of the Closing Date, (ii) the performance by Chevy Chase of
all of its obligations hereunder to be performed at or prior to the Closing Date
and (iii) such other matters as the Underwriters may reasonably request.
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.
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.
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.
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.
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.
15
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.
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.
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.
The Certificate Insurance Policy shall have been duly executed and issued
at or prior to the Closing Date and shall conform in all material respects to
the description thereof in the Prospectus.
The Underwriters shall have received the favorable opinion, dated the
Closing Date, of counsel for the Certificate Insurer, in form and scope
satisfactory to their counsel, to the effect that:
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.
16
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.
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.
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).
The Certificate Insurance Policy is not required to be registered under the
Securities Act.
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, 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
June 30, 1997 which could have a material adverse effect on the Certificate
Insurer's ability to meet its obligations under the Certificate Insurance Policy
and (iii) such other matters as the Underwriters may reasonably request.
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.
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
17
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 and
disbursements of Xxxxx Xxxxxxxxxx, counsel for the Underwriters 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 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 $48,487.42.
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:
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
18
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.
Each Underwriter will severally and not jointly indemnify and hold harmless
Chevy Chase against any losses, claims, damages or liabilities to which Chevy
Chase may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading (in the case of the Prospectus or any related Preliminary
Prospectus, in the light of the circumstances under which they were made), in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to Chevy Chase by such
Underwriter through the Representative specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by Chevy Chase in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any 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.
Promptly after receipt by an indemnified party under this Section of notice
of the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under subsection
(a) or (b) above, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an
19
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
CONTRIBUTION. If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of Section 8 above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in such subsection (a)
or (b) (i) in such proportion as is appropriate to reflect the relative benefits
received by Chevy Chase on the one hand and each of the Underwriters on the
other from the offering of the Certificates or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of Chevy Chase on the one hand and each of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by Chevy Chase
on the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by Chevy Chase bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by Chevy Chase or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this Section 9 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this Section 9. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 9 to contribute
are several in proportion to their respective underwriting obligations and not
joint.
The obligations of Chevy Chase under Section 8 and this Section 9 shall be
in addition to any liability which Chevy Chase may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under Section 8 and this Section 9 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each director of Chevy Chase, to each
officer of Chevy Chase who has signed the Registration Statement and to each
person, if any, who controls Chevy Chase within the meaning of the Act.
Each Underwriter, with respect to the Certificates, agrees that it will not
prepare or distribute to any proposed purchaser of any Certificates any Derived
Information (as such term is hereinafter defined), unless it shall have provided
to the Servicer a copy of such Derived Information and a sufficient time prior
to its proposed distribution to permit the Servicer to
20
review and comment upon such Derived Information, and such Underwriters shall
have obtained the prior written consent of the Servicer thereto following its
review. In addition, such Underwriters agree to provide the Servicer, no later
than the date on which the Prospectus is required to be filed pursuant to Rule
424, with a definitive copy of its Derived Information with respect to such
Certificates provided by the Underwriters for filing with the Commission on Form
8-K.
Each Underwriter agrees, severally and not jointly, assuming all Companies-
Provided Information (as such term is hereinafter defined) provided by Chevy
Chase is accurate and complete in all material respects, to indemnify and hold
harmless Chevy Chase, each of Xxxxx Xxxxx'x officers and directors and each
person who controls Chevy Chase within the meaning of the Act against any and
all losses, claims, damages or liabilities, joint or several, to which they
may become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement of a material fact contained in the Derived
Information provided by such Underwriters, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by him, her or it in connection with investigating or defending or
preparing to defend any such loss, claim, damage, liability or action as such
expenses are incurred. The obligations of the Underwriters under this Section 9
shall be in addition to any liability which the Underwriters may otherwise have.
For purposes of this Section 9, the term "Derived Information" means such
portion, if any, of the information delivered to Chevy Chase for filing with the
Commission on Form 8-K as:
. is not contained in the Prospectus without taking into account
information incorporated therein by reference;
. does not constitute Companies-Provided Information; and
. 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
21
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.
DEFAULT OF UNDERWRITERS. If any Underwriter defaults in its obligations to
purchase Certificates hereunder on the Closing Date and the aggregate principal
amount of Certificates that such defaulting Underwriter or Underwriters have
agreed but failed to purchase does not exceed 10% of the total principal amount
of Certificates that the Underwriters are obligated to purchase on such Closing
Date, the Representative may make arrangements satisfactory to Chevy Chase for
the purchase of such Certificates by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
nondefaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Certificates that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriters so default and the aggregate principal amount of Certificates
with respect to which such default or defaults occur exceeds 10% of the total
principal amount of Certificates that the Underwriters are obligated to purchase
on such Closing Date and arrangements satisfactory to the Representative and
Chevy Chase for the purchase of such Certificates by other persons are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or Chevy Chase, except
as provided in Section 11. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
Nothing herein will relieve a defaulting Underwriter from liability for its
default.
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.
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
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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: Xxxx
Xxx Xxxxxx. 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 (301)
986-7401, attention: Xxxxxxx X. Xxxxxx, Xx.
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.
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.
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.
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:
Credit Suisse First Boston Corporation
By: /s/ Xxxx Xxx Xxxxxx
------------------------------
Xxxx Xxx Xxxxxx
Director
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Schedule 1
Principal
Underwriters Purchase Price Percentage Amount
Proceeds to Chevy Chase (includes
accrued interest)
Credit Suisse First Boston Corporation 99.7500 64,651,671.10 64,556,848.65
Xxxxx Xxxxxx Inc. 99.7500 64,649,000.00 64,554,181.47
X.X. Xxxxxx Securities Inc. 99.7500 64,649,000.00 64,554,181.47
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