Exhibit 99.2
RECEIVABLES PURCHASE AGREEMENT
between
PARAGON ACCEPTANCE CORPORATION
as Seller
and
PARAGON AUTO RECEIVABLES CORPORATION
as Purchaser
---------------------------
Dated as of ________ __,_____
---------------------------
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions..................................................1
SECTION 1.2. Usage of Terms...............................................2
SECTION 1.3. Section References...........................................2
SECTION 1.4. Action by or Consent of Noteholders..........................2
SECTION 1.5. No Recourse..................................................2
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1. Conveyance of the Receivables and the Other Conveyed
Property.....................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of PAC as Seller..............3
SECTION 3.2. Representations and Warranties of Paragon Auto as
Purchaser....................................................5
SECTION 3.3. Indemnification..............................................7
ARTICLE IV
COVENANTS OF PAC
SECTION 4.1. Protection of Title of Paragon Auto and the Trust............8
SECTION 4.2. Other Liens or Interests.....................................9
SECTION 4.3. Costs and Expenses...........................................9
ARTICLE V
REPURCHASES
SECTION 5.1. Repurchase of Receivables Upon Breach of Warranty............0
SECTION 5.2. Reassignment of Purchased Receivables........................0
SECTION 5.3. Waivers......................................................0
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Liability of PAC.............................................1
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SECTION 6.2. Merger or Consolidation of PAC..............................11
SECTION 6.3. Limitation on Liability of PAC and Others...................11
SECTION 6.4. Conveyance of the Receivables and the Other Conveyed
Property to the Trust.......................................11
SECTION 6.5. Amendment...................................................12
SECTION 6.6. Notices.....................................................13
SECTION 6.7. Merger and Integration......................................13
SECTION 6.8. Severability of Provisions..................................13
SECTION 6.9. GOVERNING LAW...............................................13
SECTION 6.10. Counterparts................................................13
SECTION 6.11. Nonpetition Covenant........................................14
SECTION 6.12. Assignment..................................................14
SECTION 6.13. Third-Party Beneficiaries...................................14
SECTION 6.14. Successors and Assigns......................................14
SCHEDULE A -- Schedule of Receivables
SCHEDULE B -- Representations and Warranties of the Seller
SCHEDULE C -- Legal Proceedings
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RECEIVABLES PURCHASE AGREEMENT, dated as of ________ __, _____ (this
"Agreement"), between Paragon Acceptance Corporation, a Delaware
corporation, as seller ("PAC"), and Paragon Auto Receivables Corporation, a
Delaware corporation, as purchaser ("Paragon Auto").
WHEREAS, Paragon Auto, as Purchaser, has agreed to purchase from
PAC, as Seller, and PAC has agreed to sell and transfer to Paragon Auto,
the Receivables and the Other Conveyed Property.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, Paragon Auto and PAC hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used but not defined
herein shall have the meanings set forth in the Sale and Servicing Agreement
(as defined below). Whenever capitalized and used in this Agreement, the
following words shall have the following meanings:
"Other Conveyed Property" means, with respect to the Receivables:
(1) all of the right, title and interest of PAC in and to all monies
received under the Receivables or in respect thereof after the Cutoff Date
(including all Liquidation Proceeds and recoveries received with respect to
such Receivables); and (2) all of the right, title and interest of PAC in
and to (i) the security interests of PAC in the related Financed Vehicles
and any other interest of PAC in the related Financed Vehicles, including
the certificates of title with respect to such Financed Vehicles, (ii) the
Insurance Policies and any proceeds from any Insurance Policies relating to
the Receivables, the Obligors or the related Financed Vehicles, including
rebates or refunds of premiums relating to the Receivables, (iii) the
rights of PAC against Dealers with respect to the Receivables under the
Dealer Agreements and the Dealer Assignments, (iv) all funds on deposit
from time to time in the Collection Account and the Reserve Account
(including all income thereon and proceeds thereof), and (v) all proceeds
and investments of any of the foregoing, all present and future claims,
demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any of the foregoing.
"PAC Repurchase Event" means the occurrence of a breach of any of
PAC's representations and warranties under Section 3.1(a) or the occurrence
of any other event that requires Paragon Auto to repurchase a Receivable
under Section 2.5 of the Sale and Servicing Agreement.
"Purchase Price" means, with respect to Receivables to be sold by
PAC to the Purchaser on the Closing Date, the net book value of such
Receivables (as reflected on the books of PAC as of the Cutoff Date), after
giving effect to whatever adjustments are necessary, in the judgment of
PAC, to properly record the sale in accordance with generally accepted
accounting principles and the Related Documents.
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"Purchaser" means Paragon Auto Receivables Corporation.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement, dated as of _________ __, _____, between Paragon Acceptance
Corporation, in its individual capacity and as Servicer, Paragon Auto
Receivables Corporation, as Seller, the Trust and Norwest Bank Minnesota,
National Association, as Indenture Trustee and as Backup Servicer, as the
same may be amended or supplemented from time to time.
"Schedule of Representations" means the Schedule of
Representations and Warranties attached hereto as Schedule B.
"Seller" means Paragon Acceptance Corporation
SECTION 1.2. Usage of Terms. With respect to all terms used in
this Agreement, the singular includes the plural and the plural the
singular; words importing one gender include the other gender; references
to "writing" include printing, typing, lithography, and other means of
reproducing words in a visible form; references to agreements and other
contractual instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms and
not prohibited by this Agreement or the Sale and Servicing Agreement;
references to Persons include their permitted successors and assigns; and
the terms "include" or "including" mean "include without limitation" or
"including without limitation."
SECTION 1.3. Section References. All references to Articles, Sections,
paragraphs, subsections, exhibits and schedules shall be to such portions of
this Agreement unless otherwise specified.
SECTION 1.4. Action by or Consent of Noteholders. Whenever any
provision of this Agreement refers to action to be taken or consented to by
Noteholders, such provision shall be deemed to refer to Noteholders of
record as of the Record Date preceding the date on which such action is to
be taken or consent given by Noteholders. Solely for the purposes of any
action to be taken, or consented to by Noteholders, any Note registered in
the name of Paragon Auto, PAC or any Affiliate thereof shall be deemed not
to be outstanding; provided, however, that, solely for the purpose of
determining whether the Indenture Trustee is entitled to rely upon any such
action or consent, only Notes which the Indenture Trustee knows to be so
owned shall be so disregarded.
SECTION 1.5. No Recourse. No recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other writing
delivered in connection herewith or therewith, against any stockholder,
officer or director, as such, of PAC, Paragon Auto or of any predecessor or
successor of PAC or Paragon Auto.
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ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1. Conveyance of the Receivables and the Other Conveyed
Property.
(a) Conveyance. Subject to the terms and conditions of this
Agreement, PAC hereby sells, contributes, transfers, assigns and otherwise
conveys to Paragon Auto, without recourse (but without limitation of its
obligations in this Agreement), and Paragon Auto hereby purchases and
accepts, all right, title and interest of PAC in and to the Receivables and
the Other Conveyed Property with respect thereto. It is the intention of
PAC and Paragon Auto that the transfer and assignment contemplated by this
Agreement shall constitute a sale and/or contribution of the Receivables
and the Other Conveyed Property from PAC to Paragon Auto and the beneficial
interest in and title to the Receivables and the Other Conveyed Property
shall not be part of PAC's estate in the event of the filing of a
bankruptcy petition by or against PAC under any bankruptcy law. If,
notwithstanding the intent of PAC and Paragon Auto, the transfer and
assignment contemplated hereby is held not to be a sale and/or
contribution, PAC hereby grants a first priority security interest to
Paragon Auto in the property conveyed pursuant to this Section 2.1(a), and
this Agreement shall be construed so as to further such intent.
(b) Receivables Purchase Price. Simultaneously with the conveyance
of the Receivables and the Other Conveyed Property with respect thereto by
PAC to Paragon Auto, on the Closing Date, Paragon Auto shall pay to PAC the
Purchase Price of the Receivables sold by PAC to Paragon Auto. An amount
equal to $______________ shall be paid to PAC in cash by federal wire
transfer (same day) funds. An amount equal to $_____________ shall be
deemed paid and returned to Paragon Auto as a contribution to capital from
PAC.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of PAC as Seller. By
its execution of this Agreement, PAC makes the following representations
and warranties on which Paragon Auto relies in purchasing the Receivables
and the Other Conveyed Property with respect thereto and in transferring
the Receivables and the Other Conveyed Property with respect thereto to the
Trust under the Sale and Servicing Agreement. Unless otherwise specified,
such representations and warranties speak as of the Closing Date, but shall
survive the sale, contribution, transfer and assignment of the Receivables
and the Other Conveyed Property hereunder, and the sale, transfer and
assignment thereof by Paragon Auto to the Trust under the Sale and
Servicing Agreement. PAC and Paragon Auto agree that Paragon Auto will
assign to the Trust all of Paragon Auto's rights and interests under the
Agreement and the Trust will pledge all of such interests of Paragon Auto
to the Indenture Trustee, and that the Indenture Trustee will thereafter be
entitled to enforce this Agreement directly against PAC in the Indenture
Trustee's own name on behalf of the Noteholders.
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(a) Schedule of Representations. The representations and
warranties set forth on the Schedule of Representations are true and
correct in all material respects.
(b) Organization and Good Standing. PAC has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware, with power and authority to own its properties and
to conduct its business as such properties are currently owned and such
business is currently conducted.
(c) Due Qualification. PAC is duly qualified to do business and
has obtained all necessary licenses and approvals in all jurisdictions
where the failure to do so would have a material adverse effect on (i)
PAC's ability to originate, own, sell and transfer the Receivables and the
Other Conveyed Property to Paragon Auto pursuant to this Agreement, (ii)
the validity or enforceability of the Receivables or the Other Conveyed
Property or (iii) PAC's ability to perform its obligations hereunder and
under its Related Documents.
(d) Power and Authority. PAC has the power and authority to
execute and deliver this Agreement, the Sale and Servicing Agreement and
its Related Documents and to carry out its terms and their terms,
respectively; PAC has power and authority to sell and assign the
Receivables and Other Conveyed Property to be sold and assigned to and
deposited with Paragon Auto hereunder and has duly authorized such sale and
assignment to Paragon Auto by all necessary corporate action; and the
execution, delivery and performance of this Agreement, the Sale and
Servicing Agreement and its Related Documents have been duly authorized by
PAC by all necessary corporate action.
(e) Binding Obligations. This Agreement, the Sale and Servicing
Agreement and its Related Documents, when duly executed and delivered,
shall constitute legal, valid and binding obligations of PAC enforceable in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(f) No Violation. The execution, delivery and performance by PAC
of its Related Documents, the consummation of the transactions contemplated
by this Agreement, the Sale and Servicing Agreement and the Related
Documents and the fulfillment of the terms hereof and thereof do not (i)
conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of PAC, or any indenture,
agreement, mortgage, deed of trust or other instrument to which PAC is a
party or by which it or its properties are bound, (ii) result in the
creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or
other instrument or (iii) to the best of PAC's knowledge, violate any law,
order, rule or regulation applicable to PAC of any Governmental Authority
having jurisdiction over PAC or any of its properties.
(g) No Proceedings. Other than as set forth on Schedule C hereto,
there are no proceedings or investigations pending or, to the best of PAC's
knowledge, threatened against PAC
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before any Governmental Authority having jurisdiction over PAC or its
properties (A) asserting the invalidity of this Agreement or any of the
Related Documents, (B) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or
any of the Related Documents, (C) seeking any determination or ruling that
would have a material adverse effect on the performance by PAC of its
obligations under, or the validity or enforceability of, this Agreement or
any of the Related Documents, (D) seeking to materially and adversely
affect the federal income tax or other federal, state or local tax
attributes of the Notes or seeking to impose any excise, franchise,
transfer or similar tax upon the Notes or the sale and assignment of the
Receivables and the Other Conveyed Property.
(h) No Consents. No consent, approval, license, authorization or
order of, or declaration, registration or filing with, any Governmental
Authority or other Person, is required to be made by PAC in connection with
the execution, delivery or performance of its Related Documents or the
consummation of the transactions contemplated thereby, except such as have
been duly made, effected or obtained.
(i) Chief Executive Office; Name. The chief executive office of
PAC is located at 00000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx
and there have been no other such locations during the past four months.
PAC has not been known by any name other than Paragon Acceptance
Corporation since July 1, 1996 and is not known by any trade names.
SECTION 3.2. Representations and Warranties of Paragon Auto as
Purchaser. By its execution of this Agreement, Paragon Auto makes the
following representations and warranties on which PAC relies in selling,
assigning, transferring and conveying the Receivables and the Other
Conveyed Property to Paragon Auto hereunder. Unless otherwise specified,
such representations and warranties speak as of the Closing Date, but shall
survive the sale, contribution, transfer and assignment of the Receivables
and the Other Conveyed Property hereunder, and the sale, transfer and
assignment thereof by Paragon Auto to the Trust under the Sale and
Servicing Agreement.
(a) Organization and Good Standing. Paragon Auto has been duly
organized and is validly existing as a corporation under the laws of the
State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is currently conducted.
(b) Due Qualification. Paragon Auto is duly qualified to do
business and has obtained all necessary licenses and approvals in all
jurisdictions where the failure to do so would have a material and adverse
effect on (i) Paragon Auto's ability to acquire the Receivables or the
Other Conveyed Property pursuant to this Agreement, (ii) the validity or
enforceability of the Receivables and the Other Conveyed Property or (iii)
Paragon Auto's ability to perform its obligations hereunder, under the Sale
and Servicing Agreement and under its Related Documents.
(c) Power and Authority. Paragon Auto has the power and authority
to execute and deliver this Agreement and to carry out its terms and their
terms, respectively; Paragon Auto has the power and authority to acquire
the Receivables and the Other Conveyed Property hereunder and to
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sell, transfer or otherwise convey such Receivables and Other Conveyed
Property to the Trust and has duly authorized such acquisition and
conveyance by all necessary corporate action; and the execution, delivery
and performance of this Agreement has been duly authorized by Paragon Auto
by all necessary corporate action.
(d) Binding Obligation. This Agreement, when duly executed and
delivered, shall constitute legal, valid and binding obligation of Paragon
Auto enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance by
Paragon Auto of this Agreement, the consummation of the transactions
contemplated by this Agreement, the Sale and Servicing Agreement and
Paragon Auto's Related Documents, and the fulfillment of the terms of this
Agreement, the Sale and Servicing Agreement and Paragon Auto's Related
Documents, do not (i) conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of
time) a default under, the articles of incorporation or bylaws of Paragon
Auto, or any indenture, agreement, mortgage, deed of trust or other
instrument to which Paragon Auto is a party or by which it or its
properties are bound, (ii) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument or (iii) to the best
of Paragon Auto's knowledge, violate any law, order, rule or regulation
applicable to Paragon Auto of any Governmental Authority having
jurisdiction over Paragon Auto or any of its properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to Paragon Auto's knowledge, threatened against Paragon Auto
before any Governmental Authority having jurisdiction over Paragon Auto or
its properties (A) asserting the invalidity of this Agreement, the Sale and
Servicing Agreement or any of the Related Documents, (B) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement,
the Sale and Servicing Agreement or any of Paragon Auto's Related
Documents, (C) seeking any determination or ruling that would have a
material adverse effect on the performance by Paragon Auto of its
obligations under, or the validity or enforceability of, this Agreement,
the Sale and Servicing Agreement or any of Paragon Auto's Related
Documents, or (D) seeking to materially and adversely affect the federal
income tax or other federal, state or local tax attributes of the Notes or
seeking to impose any excise, franchise, transfer or similar tax upon the
Notes or the transfer and acquisition of the Receivables and the Other
Conveyed Property hereunder, or the transfer by Paragon Auto of the
Receivables and the Other Conveyed Property to the Trust pursuant to the
Sale and Servicing Agreement.
(g) No Consents. No consent, approval, license, authorization or
order of, or declaration, registration or filing with, any Governmental
Authority or other Person is required to be made by Paragon Auto in
connection with the execution, delivery or performance of its Related
Documents or the consummation of the transactions contemplated thereby,
except such as have been duly made, effected or obtained.
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(h) Chief Executive Office. The chief executive office of Paragon
Auto is located at 00000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx.
In the event of any breach of a representation and warranty made by Paragon
Auto hereunder, PAC covenants and agrees that PAC will not take any action
to pursue any remedy that either may have hereunder, in law, in equity or
otherwise, until a year and a day have passed since the date on which all
Notes or other similar securities issued by the Trust, or another trust or
similar vehicle formed by Paragon Auto, or any obligations, notes or other
securities issued by Paragon Auto have been paid in full. PAC and Paragon
Auto agree that damages will not be an adequate remedy for such breach and
that this covenant may be specifically enforced by Paragon Auto or by the
Indenture Trustee on behalf of the Noteholders.
SECTION 3.3. Indemnification. PAC shall defend, indemnify and hold
harmless Paragon Auto, the Indenture Trustee, the Backup Servicer, the Trust
and the Owner Trustee (the "Indemnified Parties"):
(a) for any liability they may incur as a result of the failure of
a Receivable to have been originated in compliance with all requirements of
law and for breach of its representations and warranties contained herein
or failure to perform in all material respects its obligations and duties
contained herein;
(b) from and against any and all costs, expenses, losses, damages,
claims and liabilities, arising out of or resulting from the use, ownership
or operation by PAC or any Affiliate thereof of a Financed Vehicle;
(c) from and against any and all costs (including attorneys' fees
and costs), expenses, losses, damages, claims, penalties, fines,
forfeitures, judgments and liabilities to the extent that such cost,
expense, loss, damage, claim, penalty, fine, forfeiture, judgment or
liability arose out of, or was imposed upon the Indemnified Parties
through, the negligence (other than errors in judgment), misfeasance or bad
faith of PAC in the performance of its duties under this Agreement
(including any violation of law); and
(d) from, and shall pay, taxes that may at any time be asserted
against the Indemnified Parties with respect to the conveyance or ownership
of the Receivables or the Other Conveyed Property hereunder, including any
sales, gross receipts, personal property, tangible or intangible personal
property, privilege or license taxes (but not including any income or
franchise taxes, arising out of the transactions contemplated hereby or
transfer taxes arising in connection with the transfer of the Notes), and
costs and expenses in defending against the same.
Notwithstanding the indemnity provisions contained in Sections
3.3(a) through 3.3(d), PAC shall not be required to indemnify any
Indemnified Party against any taxes, costs, expenses, losses, damages,
claims or liabilities to the extent the same shall arise out of or be based
upon (i) the
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misfeasance, bad faith or gross negligence of such party, or (ii) losses
suffered by reason of uncollectible or uncollected Receivables.
Indemnification under this Section 3.3 shall survive the
termination of this Agreement and shall include fees and expenses of
litigation. These indemnity obligations shall be in addition to any
obligation that PAC may otherwise have.
ARTICLE IV
COVENANTS OF PAC
SECTION 4.1. Protection of Title of Paragon Auto and the Trust.
(a) PAC shall execute, file, record and register such financing
statements and cause to be executed, filed, recorded and registered such
continuation and other statements or documents, all in such manner and in
such places as may be required by law fully to preserve, maintain and
protect the interests of Paragon Auto under this Agreement, and of the
Trust and the Indenture Trustee under the Indenture and the Sale and
Servicing Agreement, in the Receivables and the Other Conveyed Property,
and in the proceeds thereof. PAC shall deliver (or cause to be delivered)
to Paragon Auto, the Owner Trustee and the Indenture Trustee file-stamped
copies of, or filing receipts for, any document recorded, registered or
filed as provided above, as soon as available following such recordation,
registration or filing. If PAC fails to perform its obligations under this
subsection, Paragon Auto, the Owner Trustee or the Indenture Trustee may do
so, at the expense of PAC.
(b) PAC shall not change its name, identity or corporate structure
in any manner that would make any financing statement or continuation
statement filed by PAC (or by Paragon Auto, the Trust or the Indenture
Trustee on behalf of PAC) in accordance with Section 4.1(a) seriously
misleading within the meaning of the applicable provisions of the UCC or
any title statute, unless PAC shall have given Paragon Auto, the Owner
Trustee and the Indenture Trustee at least 30 days prior written notice
thereof, and shall promptly file appropriate amendments to all previously
filed financing statements and continuation statements.
(c) PAC shall give Paragon Auto, the Owner Trustee and the
Indenture Trustee at least 30 days prior written notice of any relocation
of its principal executive office if, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement. PAC shall at all times maintain each office from which
it services Receivables and its principal executive office within the
United States of America.
(d) PAC, so long as PAC is the Servicer, shall maintain accounts
and records as to each Receivable accurately and in sufficient detail to
permit (i) the reader thereof to know at any time the status of such
Receivable, including payments and recoveries made and payments owing (and
the nature of each) and (ii) reconciliation between payments or recoveries
on (or with respect to) each
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Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) PAC shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to Paragon
Auto and the sale of the Receivables by Paragon Auto to the Trust, PAC's
master computer records (including any backup archives) that refer to any
Receivable indicate clearly that such Receivable is owned by the Trust.
Indication of the Trust's ownership of a Receivable shall be deleted from
or modified on PAC's computer systems when, and only when, the Receivable
has been paid in full or purchased.
(f) If at any time PAC proposes to sell, grant a security interest
in, or otherwise transfer any interest in automotive receivables (other
than the Receivables) to any prospective purchaser, lender or other
transferee, PAC shall give to such prospective purchaser, lender or other
transferee computer tapes, records or print-outs (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to
any Receivable, indicate clearly that such Receivable is owned by the Trust
(unless such Receivable has been paid in full or purchased).
(g) Promptly after taking the foregoing actions described in
Sections 4.1(b) or (c), PAC shall deliver to the Indenture Trustee and the
Owner Trustee an Opinion of Counsel either (i) stating that, in the opinion
of such counsel, all financing statements and continuation statements have
been executed and filed that are necessary to preserve and protect the
interest of the Indenture Trustee in the Trust Property, and reciting the
details of such filings or referring to prior Opinions of Counsel in which
such details are given, or (ii) stating that, in the opinion of such
counsel, no such action is necessary to preserve and protect such interest.
SECTION 4.2. Other Liens or Interests. PAC shall not (i) create,
incur or suffer to exist, or agree to create, incur or suffer to exist, or
consent to cause or permit in the future (upon the happening of a
contingency or otherwise) the creation, incurrence or existence of any Lien
on, or restriction on transferability of, the Receivables, except for the
Lien in favor of Paragon Auto, the Lien in favor of the Trust, the Lien in
favor of the Indenture Trustee for the benefit of the Noteholders and the
restrictions on transferability imposed by the Related Documents or (ii)
sign or file under the UCC of any jurisdiction any financing statement that
names PAC or Paragon Auto as a debtor, or sign any security agreement
authorizing any secured party thereunder to file any such financing
statement, with respect to the Receivables, except in each case any such
instrument solely securing the rights and preserving the Lien of Paragon
Auto, the Lien of the Trust and the Lien of the Indenture Trustee, for the
benefit of the Noteholders or as otherwise permitted under this Agreement
or the Related Documents.
SECTION 4.3. Costs and Expenses. PAC shall pay all reasonable costs
and disbursements in connection with the performance of its obligations
hereunder and under the Sale and Servicing Agreement and its Related Documents.
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ARTICLE V
REPURCHASES
SECTION 5.1. Repurchase of Receivables Upon Breach of Warranty.
Upon the occurrence of a PAC Repurchase Event, PAC shall, unless such
breach shall have been cured in all material respects, repurchase the
related Receivable from Paragon Auto as of the second Accounting Date (or
at PAC's election, the first Accounting Date) following its discovery or
its receipt of notice of any such PAC Repurchase Event and, on or before
the Deposit Date following such Accounting Date, PAC shall pay the Purchase
Amount to Paragon Auto and Paragon Auto shall deposit or cause to be
deposited such Purchase Amount into the Collection Account pursuant to
Section 4.4 of the Sale and Servicing Agreement; provided, however, that
the maximum aggregate purchase obligation of PAC with respect to breaches
of the representation and warranty made in clause (C) of paragraph 4 of the
Schedule B hereto shall not exceed an amount equal to 10% of the aggregate
principal balance of all Receivables originated after _______, ____. The
obligation of PAC to repurchase any Receivable as to which a breach has
occurred and is continuing shall, if such obligation is fulfilled,
constitute the sole remedy against PAC for such breach available to Paragon
Auto, the Indenture Trustee on behalf of the Noteholders or the
Noteholders.
SECTION 5.2. Reassignment of Purchased Receivables. Upon deposit
in the Collection Account of the Purchase Amount of any Receivables
repurchased by PAC under Section 5.1, Paragon Auto, the Owner Trustee and
the Indenture Trustee shall take any and all actions reasonably requested
by PAC, at the expense of PAC, to assign, without recourse, representation
or warranty, to PAC all of Paragon Auto's, the Indenture Trustee's and the
Trust's right, title and interest in and to such Receivables, such
assignment being an assignment outright and not for security; and PAC shall
thereupon own such Receivables and all such other Conveyed Property, free
of any further obligation to Paragon Auto, the Trust, the Indenture Trustee
or the Noteholders with respect thereto. Paragon Auto shall take any and
all actions reasonably requested by PAC, at the expense of PAC, to release
its security interest in each such Receivable and in the Other Conveyed
Property with respect thereto. If, following the reassignment of a
Purchased Receivable, in any enforcement suit or legal proceeding, it is
held that PAC may not enforce any such Receivable on the ground that it
shall not be a real party in interest or a holder entitled to enforce the
Receivable, Paragon Auto shall, at the expense of PAC, take such steps as
PAC deems reasonably necessary to enforce the Receivable, including
bringing suit in Paragon Auto's name.
SECTION 5.3. Waivers. No failure or delay on the part of Paragon
Auto or the Trust, as purchaser and assignee of Paragon Auto, in exercising
any power, right or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right
or remedy preclude any other or future exercise thereof or the exercise of
any other power, right or remedy.
10
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Liability of PAC. PAC shall be liable in accordance
herewith only to the extent of the obligations of this Agreement
specifically undertaken by PAC and its representations and warranties.
SECTION 6.2. Merger or Consolidation of PAC. PAC shall not merge
or consolidate with any other Person or permit any other Person to become
the successor to all or substantially all of PAC's business or assets
unless any such successor corporation shall execute an agreement of
assumption of every obligation of PAC under its Related Documents and,
whether or not such assumption agreement is executed, shall be the
successor to PAC under this Agreement without the execution or filing of
any document (or any further act on the part of any of the parties to this
Agreement). PAC shall provide prompt notice of any merger, consolidation or
succession pursuant to this Section 6.2 to the Owner Trustee, the Indenture
Trustee and the Rating Agency. Notwithstanding the foregoing, PAC shall not
merge or consolidate with any other Person or permit any other Person to
become a successor to PAC's business, unless: (i) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 3.5 shall have been breached in any material respect (for purposes
hereof, such representations and warranties shall speak as of the date of
the consummation of such transaction); (ii) PAC shall have delivered to the
Owner Trustee, the Indenture Trustee and the Rating Agency an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this
Section 6.2 and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with; and (iii)
PAC shall have delivered to the Owner Trustee, the Indenture Trustee and
the Rating Agency an Opinion of Counsel, stating, in the opinion of such
counsel, either (A) all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary to
preserve and protect the interests of Paragon Auto, the Trust and the
Indenture Trustee in the Receivables or (B) no such action shall be
necessary to preserve and protect such interest.
SECTION 6.3. Limitation on Liability of PAC and Others. PAC and
any director or officer or employee or agent of PAC may rely in good faith
on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters
arising under this Agreement. PAC shall not be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to
its obligations under this Agreement and that in its opinion may involve it
in any expense or liability.
SECTION 6.4. Conveyance of the Receivables and the Other Conveyed
Property to the Trust. PAC acknowledges that Paragon Auto intends, pursuant
to the Sale and Servicing Agreement, to convey the Receivables and the
Other Conveyed Property, together with its respective rights under this
Agreement, to the Trust on the date hereof. PAC acknowledges and consents
to such conveyance and waives any further notice thereof and covenants and
agrees that the representations and warranties of PAC contained in this
Agreement, and the rights of Paragon Auto hereunder, are intended to
benefit the Indenture Trustee, the Trust and the Noteholders. In
11
furtherance of the foregoing, PAC covenants and agrees to perform its
duties and obligations hereunder in accordance with the terms hereof for
the benefit of the Indenture Trustee, the Trust and the Noteholders and
that, notwithstanding anything to the contrary in this Agreement, PAC shall
be directly liable to the Indenture Trustee and the Trust (notwithstanding
any failure by the Servicer, the Backup Servicer or Paragon Auto to perform
its duties and obligations hereunder or under the Sale and Servicing
Agreement), and that the Owner Trustee and the Indenture Trustee may
enforce the duties and obligations of PAC under this Agreement against PAC
for the benefit of the Trust or the Noteholders, respectively.
SECTION 6.5. Amendment.
(a) This Agreement may be amended by PAC and Paragon Auto without
the consent of any of the Certificateholder or the Noteholders, (i) to cure
any ambiguity, (ii) to correct or supplement any provisions in this
Agreement or (iii) for the purpose of adding any provision to or changing
in any manner or eliminating any provision of this Agreement or of
modifying in any manner the rights of the Noteholders, provided, that any
such action under this clause (iii) shall not, as evidenced by an Opinion
of Counsel delivered to the Owner Trustee, the Indenture Trustee and the
Rating Agency, adversely affect in any material respect the interests of
the Noteholders.
(b) This Agreement may also be amended from time to time by PAC
and Paragon Auto with the consent of a Note Majority (which consent of any
Holder of a Note given pursuant to this Section 6.5(b) or pursuant to any
other provision of this Agreement shall be conclusive and binding on such
Holder and on all future Holders of such Note and of any Note issued upon
the transfer thereof or in exchange thereof or in lieu thereof whether or
not notation of such consent is made upon the Note), for the purpose of
adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement, or of modifying in any manner the rights
of the Noteholders; provided, however, that the Rating Agency Condition
shall have been satisfied with respect to any such amendment prior to the
execution thereof; and provided, further, that no such amendment shall (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables, payments that shall be
required to be made on any Note, the Class A Interest Rate or the Class B
Interest Rate or (ii) reduce the aforesaid percentage required to consent
to any such amendment or any waiver hereunder, without the consent of the
Holders of all Notes then outstanding.
(c) Prior to the execution of any such amendment or consent under
Section 6.5(a) or (b), PAC shall furnish five days prior written
notification of such amendment or consent to the Rating Agency.
(d) Promptly after the execution of any such amendment or consent
under Section 6.5(b), the Indenture Trustee shall furnish a copy of such
amendment or consent to each Noteholder.
(e) It shall not be necessary for the consent of Noteholders
pursuant to Section 6.5(b) to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
12
evidencing the authorization of the execution thereof by Noteholders shall
be subject to such reasonable requirements as the Indenture Trustee may
prescribe.
SECTION 6.6. Notices. All demands, notices and communications
under this agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt (a) in the case of PAC and Paragon Auto, at the
following address: 27405 Puerta Real, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000, Telecopy No.: (000) 000-0000, (b) in the case of the Indenture
Trustee, at the [Corporate Trust Services/Asset- Backed Administration,
Norwest Center, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000-0000, Telecopy No.: (000) 000-0000], (d) in the case of the Rating
Agency, ______________________________________________________________________,
(e) in the case of the Owner Trustee, at [1100 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Administration], or at such other
address as shall be designated by any such party in a written notice to the
other parties. Any notice required or permitted to be mailed to a Noteholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Note Register, and any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Noteholder receives such notice.
SECTION 6.7. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement, the Sale and Servicing Agreement and the
Related Documents set forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement, the Sale and Servicing
Agreement and the Related Documents. This Agreement may not be modified,
amended, waived or supplemented except as provided herein.
SECTION 6.8. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way
affect the validity or enforceability of the other provisions of this
Agreement.
SECTION 6.9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 6.10. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument.
13
SECTION 6.11. Nonpetition Covenant. Until one year and one day
following the payment in full of all amounts due in respect of the Notes,
PAC shall not petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against Paragon Auto under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of Paragon Auto or any
substantial part of its property, or ordering the winding up or liquidation
of the affairs of Paragon Auto.
SECTION 6.12. Assignment. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 6.2, this Agreement
may not be assigned by PAC or Paragon Auto.
SECTION 6.13. Third-Party Beneficiaries. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as otherwise provided
in this Article VI, no other Person shall have any right or obligation
hereunder. Nothing in this Agreement, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder and
permitted assigns, any benefit or any legal or equitable right, remedy or
claim under this Agreement.
SECTION 6.14. Successors and Assigns. This Agreement shall be
binding upon the parties hereof and their respective successors and
assigns, and shall inure to the benefit of and be enforceable by the
parties hereof and their respective successors and assigns permitted
hereunder. All covenants and agreements contained herein shall be binding
upon, and inure to the benefit of the Trust, the Indenture Trustee and the
Noteholders and their respective permitted successors and assigns, if any.
Any request, notice, direction, consent, waiver or other instrument or
action by any Noteholder shall bind its successors and assigns.
14
IN WITNESS WHEREOF, the parties have caused this Receivables
Purchase Agreement to be duly executed by their respective officers,
effective as of the day and year first above written.
PARAGON ACCEPTANCE CORPORATION, as
Seller
By:_______________________________
Name:__________________________
Title:_________________________
PARAGON AUTO RECEIVABLES
CORPORATION, as Purchaser
By:_____________________________
Name:_______________________
Title:______________________
15
SCHEDULE A
SCHEDULE OF RECEIVABLES
On file with the Indenture Trustee.
A-1
SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF PAC
1. Contract Origination Date. Each Receivable has a
contract origination date on or before _______ __, _____.
2. Term of Receivables. Each Receivable has an original
term of at least __ months and not more than __ months and had a
remaining term as of the Cutoff Date of at least __ months and not
more than __ months; the weighted average original contracted term
of the Receivables was __ months as of the Cutoff Date; the
weighted average remaining contracted term of the Receivables was
__ months as of the Cutoff Date.
3. Characteristics of Receivables. (A) Each Receivable
(1) has been originated in the United States of America by a
Dealer for the retail sale of a Financed Vehicle in the ordinary
course of such Dealer's business in accordance in all material
respects with PAC's credit approval guidelines, and, to the best
knowledge of Seller, such Dealer had all necessary licenses and
permits to originate Receivables in the state where such Dealer
was located, (2) was fully and properly executed by the parties
thereto, (3) was purchased by PAC from such Dealer under an
existing Dealer Agreement and Dealer Assignment, (4) contains
customary and enforceable provisions such that the rights and
remedies of the holder or assignee thereof shall be adequate for
realization against the collateral of the benefits of the
security, (5) provides for level monthly payments that fully
amortize the Amount Financed over the original term (except for
the last payment, which may be greater or smaller than the level
payment), provided payments are made on the applicable due dates,
(6) has an Annual Percentage Rate of not less than ____% and not
more than ____%, and (7) provides for, if such contract is
prepaid, a prepayment that fully pays the Principal Balance and
accrued interest at the Annual Percentage Rate; (B) as of the
Cutoff Date, no Receivable has a payment more than 10% of which is
more than 29 days past due; (C) each Receivable has a final
scheduled payment due no later than _________ __, 20__; (D) as of
the Cutoff Date, not more than ___% of the aggregate principal
balance of the Receivables represented financing of used vehicles,
and the remainder of the Receivables represented financing of new
vehicles; (E) as of the Cutoff Date, the average remaining
principal balance of the Receivables was not more than
$__________; and (F) as of the Cutoff Date, the weighted average
Annual Percentage Rate of the Receivables was not more than ___%.
4. Principal Balance; Scheduled Payments. (A) Each
Receivable has an outstanding principal balance as of the Cutoff
Date of not less than $_____ and not more than $__________; (B) each
Receivable originated on or prior to _____ __, had at least one
scheduled payment made prior to the date that is two Business Days
prior to the Closing Date; and (C) each Receivable originated
after _______ __, either (I) has had at least one scheduled
payment made prior to the date that is two Business Days prior to
the Closing Date or (II) will have a first scheduled payment made
within 45 days of the due date thereof.
B-1
5. Characteristics of Obligors. As of the Cutoff Date, no
Obligor on any Receivable (A) was the subject of any federal,
state or other bankruptcy, insolvency or similar proceeding
pending on such date that is not discharged, (B) was currently the
subject of a judgment in favor of PAC or (C) had its related
Financed Vehicle repossessed (or subject to repossession).
6. Billing Addresses for Obligors. Based on the billing
addresses of the Dealers and the Principal Balances as of the
Cutoff Date, the Obligors of approximately ___% of the Receivables
were located in ___________, the Obligors of approximately ____%
of the Receivables were located in ________, the Obligors of
approximately ____% of the Receivables were located in ________,
the Obligors of approximately ____% of the Receivables were
located in __________ and the Obligors of approximately ____% of
the Receivables were located in other states.
7. Location of Receivable Files. There exists a complete
Receivable File with respect to each Receivable that will have
been delivered to the Indenture Trustee on or prior to the Closing
Date and any exceptions set forth in the Indenture Trustee's
certificate will be corrected within 30 days.
8. Schedule of Receivables. The information with respect
to the Receivables set forth in the Schedule of Receivables has
been produced from the Electronic Ledger and is true and correct
in all material respects as of the close of business on the Cutoff
Date.
9. Adverse Selection. No selection procedures having a
material adverse effect on the Trust or the Noteholders have been
utilized in selecting the Receivables from those receivables owned
by PAC that met the selection criteria contained in this
Agreement.
10. Compliance with Law. Neither the Receivables nor the
sale of the related Financed Vehicles at the time the related
Receivable was originated or made, contravened in any material
respect, and, at the execution of this Agreement contravenes in
any material respect, any requirements of applicable federal,
state and local laws, and regulations thereunder including,
without limitation, usury laws, the Federal Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Reporting Act,
the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the Federal
Reserve Board's Regulations B and Z, the Soldiers' and Sailors'
Civil Relief Act of 1940, each applicable state Motor Vehicle
Retail Installment Sales Act, and state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, and
other consumer credit laws and equal credit opportunity and
disclosure laws.
11. No Government Obligor. None of the Receivables is due
from the United States of America or any state or from any other
Governmental Authority.
12. Security Interest in Financed Vehicle. Each
Receivable has created, or will create when all required
procedures are completed by the Servicer, a valid, subsisting and
B-2
enforceable first priority perfected security interest in the
related Financed Vehicle in favor of PAC as secured party, and
such security interest is, or will be upon the completion of all
required procedures by the Servicer, prior to all other liens upon
and security interests in such Financed Vehicle that now exist or
may hereafter arise or be created (except, as to priority, for any
tax liens or mechanics' liens that may arise after the Closing
Date).
13. Binding Obligation; Receivables in Force. Each
Receivable is a binding obligation of its related Obligor and no
Receivable has been satisfied, subordinated or rescinded, nor has
any Financed Vehicle been released from the lien granted by the
related Receivable in whole or in part.
14. No Amendments. As of the Cutoff Date, no Receivable
has been amended, altered or modified and no provision of any
Receivable has been waived, other than any provisions requiring
vendor single interest insurance or late payment fees and those
waivers, alterations or modifications specifically permitted
pursuant to this Agreement or the Sale and Servicing Agreement. As
of the Cutoff Date, no Receivable has been modified as a result of
application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
15. No Defenses. As of the Cutoff Date, no right of
rescission, setoff, counterclaim or defense exists with respect to
any Receivable. The operation of the terms of any Receivable or
the exercise of any right thereunder will not render such
Receivable unenforceable in whole or in part or subject to any
such right of rescission, setoff, counterclaim or defense.
16. No Liens. As of the Cutoff Date, there are no liens
or claims existing or that have been filed for work, labor,
storage or materials relating to any of the related Financed
Vehicles that are liens prior to the security interest in the
related Financed Vehicles granted by the related Receivables.
17. No Fraud or Misrepresentation. Each Receivable was
originated by a Dealer and was sold by the Dealer to PAC without
fraud or misrepresentation on the part of such Dealer in either
case.
18. No Default; Repossession. Except for payment
delinquencies continuing for a period of less than 31 days as of
the Cutoff Date, no default, breach, violation or event permitting
acceleration under the terms of any Receivable has occurred; no
continuing condition that with notice or the lapse of time would
constitute a default, breach, violation, or event permitting
acceleration under the terms of any Receivable has arisen; and no
related Financed Vehicle has been repossessed as of the Cutoff
Date.
19. Insurance; Other. PAC, in accordance with its
customary procedures, has determined (A) that each Obligor, at the
time of origination, had obtained or agreed to obtain insurance
covering the Financed Vehicle as of the execution of the
Receivable insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally
B-3
covered by comprehensive and collision coverage (i) in an amount
at least equal to the lesser of (x) its maximum insurable value or
(y) the principal amount due from the Obligor under the related
Receivable and (ii) naming PAC as loss payee, (B) each Receivable
that finances the cost of premiums for credit life and accident or
health insurance is covered by an insurance policy and certificate
of insurance naming PAC as creditor under each such insurance
policy and certificate of insurance, and (C) as to each Receivable
that includes financing for the cost of a service contract, the
respective Financed Vehicle that secures the Receivable is covered
by a service contract. No Receivable has force-placed insurance.
20. Title. No Receivable has been sold, transferred,
assigned or pledged by PAC to any Person other than the Purchaser
[or CTS (and the CTS Liens shall be released as of the Closing
Date)] or any such pledge has been released on or prior to the
Closing Date. Immediately prior to the transfer and assignment
herein contemplated, PAC had good and marketable title to each
Receivable, and was the sole owner thereof, free and clear of all
Liens and, immediately upon the transfer thereof, the Purchaser
shall have good and marketable title to each such Receivable, and
will be the sole owner thereof, free and clear of all Liens (other
than Permitted Liens), and the transfer has been perfected under
the UCC. No Dealer has a participation in, or other right to
receive, proceeds of any Receivable. PAC has not taken any action
to convey any right to any Person that would result in such Person
having a right to payments received under the related Insurance
Policies or the related Dealer Agreements or Dealer Assignments or
to payments due under such Receivables.
21. Marking of Receivables. On the Closing Date, PAC will
have caused the portions of the Electronic Ledger relating to the
Receivables to be clearly and unambiguously marked to show that
the Receivables have been sold by PAC to Paragon Auto in
accordance with the terms of the Receivables Purchase Agreement
and sold by the Paragon Auto to the Trust in accordance with the
terms of the Sale and Servicing Agreement and pledged to the
Indenture Trustee for the benefit of the Noteholders under the
Indenture.
22. Computer Tape. The Computer Tape made available by
PAC to Paragon Auto on the Closing Date was complete and accurate
in all material respects as of the Cutoff Date and includes a
description of the same Receivables that are described in the
Schedule of Receivables.
23. Lawful Assignment. No Receivable has been originated
in, or is subject to the laws of, any jurisdiction under which the
sale, contribution, transfer and assignment of such Receivable
under this Agreement shall be unlawful, void or voidable. PAC has
not entered into any agreement with any account debtor that
prohibits, restricts or conditions the assignment of any portion
of the Receivables.
24. All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the
Indenture Trustee a first priority perfected ownership interest in
the Receivables and the other Trust Property have been made.
B-4
25. One Original. There is only one original executed
copy of each Receivable.
26. Valid and Binding Obligation of Obligor. Each
Receivable is the legal, valid and binding obligation of the
Obligor thereunder and is enforceable in accordance with its
terms, except only as such enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally; all parties to such contract had
full legal capacity to execute and deliver such contract and all
other documents related thereto and to grant the security interest
purported to be granted thereby.
27. Title Documents. (A) If any Financed Vehicle was
originated in a state in which notation of security interest on
the title document is required or permitted to perfect such
security interest, the title document for such Financed Vehicle
shows, or if a new or replacement title document is being applied
for with respect to such Financed Vehicle the title document will
be received within 180 days and will show, PAC named as the
original secured party under the related Receivables as the Holder
of a first priority security interest in such Financed Vehicle,
and (B) if any Financed Vehicle was originated in a state in which
the filing of a financing statement under the UCC is required to
perfect a security interest in motor vehicles, such filings or
recordings have been duly made and show PAC named as the original
secured party under the related Receivable, and in either case, no
further action is required under the UCC or any titling statute or
act to continue the perfected status of the first priority
security interest in the Financed Vehicle against creditors of and
transferees from the original Obligor.
28. Chattel Paper. Each Receivable constitutes "chattel
paper" under the UCC.
29. Tax Liens. As of the Cutoff Date, there is no Lien
against the related Financed Vehicles for delinquent taxes.
30. No Proceedings. There are no proceedings or
investigations pending, or to the best of PAC's knowledge,
threatened, before any Governmental Authority having jurisdiction
over PAC asserting the invalidity of any Receivable or seeking any
determination or ruling that could reasonably be expected to
materially and adversely affect payment on or enforceability of
any Receivable.
31. Valid Transfer. The conveyance by PAC hereunder
constitutes a valid transfer of all of PAC's right, title and interest
in and to the Receivables and the Other Conveyed Property.
B-5
SCHEDULE C
LEGAL PROCEEDINGS
None.
C-1
