Exhibit 10(u)
AMENDMENT TO WRITTEN AGREEMENT ENTERED INTO
WITH THE OFFICE OF THRIFT SUPERVISION
This Amendment to Written Agreement Entered Into With the Office of Thrift
Supervision ("Amendment") is made and is effective this 29th day of October,
1993 (the "Effective Date"), by and between Chevy Chase Savings Bank, FSB of
Chevy Chase, Maryland, OTS No. 8145, a Federally chartered stock institution,
for itself and its wholly owned service corporations and subsidiaries, ("Chevy
Chase" or "Institution"), and the Office of Thrift Supervision ("OTS"), an
agency of the United States Department of the Treasury, acting through its
Southeast Regional Director or his designee ("Regional Director").
WHEREAS, the OTS and Chevy Chase entered into an agreement entitled
"Written Agreement Entered into with the Office of Thrift Supervision" dated
September 30, 1991 ("Agreement"); and
WHEREAS, the OTS and the Chevy Chase have mutually agreed to modify the
September 30, 1991 Agreement as set forth in this Amendment.
NOW THEREFORE, in consideration of the premises stated above, the parties
hereto agree to amend the Agreement as follows:
Paragraph 1 shall remain unchanged and continue to read as follows:
1. As previously agreed, Chevy Chase shall not make, directly or
indirectly, any payments in connection with the Institution's tax liability
to B. F. Saul Real Estate Investment Trust or any of its subsidiaries
("REIT") pursuant to any tax sharing agreement or other arrangement without
the prior written approval of the Regional Director.
Although there is no indication that the Institution has engaged in
any of the following activities with the REIT in the past, Chevy Chase
agrees to the following paragraphs 2 through 6:
Paragraphs 2 and 3 shall remain unchanged and continue to read as follows:
2. Chevy Chase shall not engage, directly or indirectly, in any
transaction with the REIT including, but not limited to, the purchase of
any asset, the assumption of any liability, the extension of any credit,
or the payment of any fee, without the prior written approval of the
Regional Director.
3. Chevy Chase shall not purchase, directly or indirectly, any
assets, assume any liability, make any investment or extend any credit for
the benefit of the REIT without the prior written approval of the Regional
Director.
Paragraph 4 is hereby deleted.
Paragraphs 5 and 6 shall remain unchanged and continue to read as follows:
5. Chevy Chase shall not permit the sale of any note or obligation of
the REIT or any of its subsidiaries on any of the Institution's premises.
6. Chevy Chase shall not permit, directly or indirectly, its name or
identity to be used by the REIT in any public sale of notes or other
obligations of the REIT except in disclosures required by applicable
Securities Laws.
Paragraphs 7 through 14 are hereby deleted.
Paragraphs 15 through 17 shall remain unchanged and continue to read as follows:
15. Chevy Chase, with respect to the four largest real estate
development projects for which the Institution has taken deeds in lieu of
foreclosure, shall not advance any monies, pay any expenses, or make any
additional investments in such projects that would cause the aggregate
dollar amount of its investment in the four projects to increase above the
aggregate book value of such projects as reflected on Chevy Chase's balance
sheet as of the effective date of this Agreement, without the prior written
approval of the Regional Director.
16. Chevy Chase shall continue to make every effort to reduce its
exposure in the projects referred to in Paragraph 15, including, but not
limited to, the bulk sale of such project(s). Chevy Chase shall report
efforts to dispose of and to reduce its exposure in these projects on a
quarterly basis to the Regional Director.
17. Any and all written purchase offers for the projects identified in
Paragraph 15, whether preliminary or final, shall be reported to the Board
of Directors of Chevy Chase. The Board of Directors shall consider all
such offers and shall inform the Regional Director of any
decision to decline any purchase offers fifteen days prior to any formal
rejection of such offers.
Paragraph 18 is hereby deleted.
Paragraph 19 shall remain unchanged and continue to read as follows:
19. Any future "end loans" made to finance the purchase of property
in the projects identified in Paragraph 15 at interest rates or on terms
and conditions that are below prevailing market rates and/or terms shall
be sold in the secondary market and not placed in the portfolio of Chevy
Chase.
Paragraph 20 is hereby amended to read as follows:
20. Chevy Chase shall, as previously agreed, for regulatory purposes,
treat the real estate project known as Brambleton as an equity risk
investment and treat the project's book balance in accordance with
12 C.F.R. Section 67.5(c).
Paragraph 21 is hereby deleted.
Paragraphs 22 through 24 shall remain unchanged and continue to read as follows:
22. The Board of Directors shall form an Asset Review Committee to
review and develop strategies for the collection, disposition or
restructuring of all classified assets with an unpaid balance of $3 million
or more. The Asset Review Committee shall submit periodic reports to the
Board of Directors.
23. Within sixty (60) days after the effective date of this Agreement,
the Asset Review Committee shall submit a report on each classified loan in
excess of $10 million dollars to the Regional Director. Such report shall
be in a form and contain such detail as is satisfactory to the Director.
An updated report outlining the progress made with respect to such assets
shall be submitted to the Director within thirty (30) days following the
close of any calendar quarter following receipt of the first report.
24. The Institution shall, as previously agreed, and as reflected in
the Institution's financial statements as of June 30, 1991, continue to
exclude in its calculation of core capital the $10.9 million which was
reflected on its balance sheet as purchased mortgage servicing rights
attributed to servicing income to be derived from future
anticipated loan production in connection with the Institution's
November 1, 1984, acquisition of B.F. Saul Mortgage Company.
Paragraph 25 is hereby amended to read as follows:
25. In order to preserve the intrinsic value of Chevy Chase, the Board
of Directors shall determine that the proposed sale of any asset in excess
of $20 million is in the best interests of the Institution. Chevy Chase
shall provide the Regional Director with notification 15 days prior to the
sale of any such asset. These requirements shall not apply with respect
to: (i) the securitizations of principal balances and associated financial
charges of assets where Chevy Chase retains ownership of the underlying
credit relationship; or (ii) other similar transactions including assets
transferred to Chevy Chase Automobile Loan Trust 1991-1.
Paragraphs 26 and 27 are hereby deleted.
Paragraph 28 shall remain unchanged and continue to read as follows:
28. Within thirty (30) after the effective date of this Agreement,
the Board of Directors of the Institution shall establish an Oversight
Committee which shall be responsible for ensuring compliance with this
Agreement. The Oversight Committee shall provide a quarterly written
report to the Board of Directors regarding the Institution's compliance
with this Agreement. The first such report shall be submitted to the board
within sixty (60) days of the effective date of this Agreement. Said report
shall be available for review by the OTS.
Paragraph 29 is hereby deleted.
In addition, the paragraph that reads "This Agreement shall remain in
effect until terminated, modified or suspended by mutual agreement of the OTS,
acting through the Regional Director and the Institution. The Regional Director
may suspend, in his sole discretion, any or all provisions of this Agreement,"
shall be amended to read as follows:
The provisions of this Agreement, as well as the provisions of the
Agreement, as revised or deleted by this Amendment, shall remain in effect
until terminated, modified or suspended in writing by the OTS, acting
through the Regional Director. The Regional Director in his sole
discretion may, by written notice, terminate and/or suspend any or all
provisions of the Agreement and this Amendment.
IN WITNESS WHEREOF, the OTS, acting by and through the Regional Director
and the Institution in accordance with a duly adopted resolution of its Board
(copy attached hereto), hereby execute this Amendment as of the Effective Date.
OFFICE OF THRIFT SUPERVISION THE INSTITUTION
By: By:
/s/ John E. Ryan /s/ B. Francis Saul II
_________________________ _________________________
John E Ryan Name:
Regional Director Chief Executive Officer
DIRECTORS OF THE INSTITUTION
/s/ B. Francis Saul II /s/ George M. Rogers, Jr.
_________________________ _________________________
Director Director
/s/ Garland P. Moore, Jr.
_________________________ _________________________
Director Director
/s/ Alexander RM Boyle /s/ Jesse F. Nicholson
_________________________ _________________________
Director Director
/s/ William F. McSweeny /s/ Gilbert M. Grosvenor
_________________________ _________________________
Director Director
/s/ Gavin Malloy Farr /s/ Vincent C. Burke, Jr.
_________________________ _________________________
Director Director
/s/ Donald G. Conrad /s/ Milton R. Drewer, Jr.
_________________________ _________________________
Director Director