Exhibit 1.1
PARAGON AUTO RECEIVABLES OWNER TRUST ____-_
$______________ Class A-1 __% Asset Backed Notes
$______________ Class A-2 __% Asset Backed Notes
$______________ Class B __% Asset Backed Notes
[$_______________ __% Certificates]
PARAGON AUTO RECEIVABLES CORPORATION
(Seller)
PARAGON ACCEPTANCE CORPORATION
(Servicer)
UNDERWRITING AGREEMENT
--------- --, ----
----------------
---------------,
As Representative of the
Underwriters Listed in
Schedule I
(the "Representative")
-------------------------
-------------------------
Ladies and Gentlemen:
Paragon Auto Receivables Corporation, a Delaware corporation (the
"Seller") and a wholly owned special purpose subsidiary of Paragon
Acceptance Corporation, a Delaware corporation ("Paragon"), proposes to
sell to the Underwriters listed in Schedule I (the "Underwriters")
$__________ aggregate principal amount of Class A-1 ___% Asset Backed Notes
(the "Class A-1 Notes"), $_________ aggregate principal amount of Class A-2
__% Asset Backed Notes (the "Class A-2 Notes") and $________ aggregate
principal amount of Class B ___% Asset Backed Notes (the "Class B Notes"
and, together with the Class A-1 Notes and the Class A-2 Notes, the
"Notes"). The Notes are issued by the Paragon Auto Receivables Owner Trust
____-_ (the "Trust"). The Trust also will issue $___________ aggregate
principal amount of certificates (the "Certificates" and, together with the
Notes, the "Securities"). Each Certificate will represent a fractional
undivided interest in the Trust. Each Note will be secured by the assets of
the Trust pursuant to the Indenture (as defined below).
The assets of the Trust will include, among other things, a pool
of motor vehicle retail installment contracts sold and assigned by the
Seller to the Trust on the Closing Date (the "Receivables"), secured by new
and used automobiles, light trucks and sports utility vehicles (and all
accessories thereto) (the "Financed Vehicles"), and all monies due or
received thereunder or in respect thereof after __________ __, ____ (the
"Cutoff Date"). The receivables will be serviced for the Trust by Paragon
in its capacity as servicer (in such capacity, the "Servicer").
The Receivables will be sold to the Seller by Paragon pursuant to
a Receivables Purchase Agreement, to be dated as of the Closing Date
("Receivables Purchase Agreement"), between the Seller and Paragon. The
Receivables will be conveyed by the Seller to the Trust pursuant to a [Sale
and Servicing Agreement] [Pooling and Servicing Agreement], to be dated as
of the Closing Date, between the Seller, the Servicer, Norwest Bank
Minnesota, National Association, as indenture trustee (the "Indenture
Trustee"), and Wilmington Trust Company, as owner trustee (the "Trustee")
(the ["Sale and Servicing Agreement"] ["Pooling and Servicing Agreement"]).
The Notes will be issued pursuant to an Indenture, to be dated as
of the Closing Date (the "Indenture"), between the Trust and the Indenture
Trustee. The Certificates will be issued pursuant to a Trust Agreement, to
be dated as of the Closing Date (the "Trust Agreement"), between the Seller
and the Trustee.
The Seller has prepared in conformity in all material respects
with the provisions of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations of the Commission thereunder (the "Rules and
Regulations"), and filed with the Securities and Exchange Commission (the
"Commission") a registration statement (Reg. No. 333-63697), including a
prospectus, relating to the Securities. [The Seller has also prepared an
ABS term sheet for the Notes (the "ABS Note Term Sheet") in conformity in
all material respects with the Act, the Rules and Regulations and all
requirements applicable to ABS term sheets and computational materials set
forth in no-action letters issued by the Commission.] The registration
statement as amended at the time it became effective, or, if any
post-effective amendment has been filed with respect thereto, as amended by
the most recent post-effective amendment at the time of its effectiveness,
is referred to as the "Registration Statement." The form of base prospectus
included in the Registration Statement as most recently filed with the
Commission is referred to as the "Base Prospectus." The form of the
prospectus which includes the Base Prospectus and a prospectus supplement
describing the Notes and the offering thereof (the "Prospectus
Supplement"), which prospectus is filed on or after the date of this
Agreement in accordance with Rule 424(b), is referred to in this Agreement
as the "Prospectus."
The terms which follow, when used in this Agreement, shall have
the meanings indicated. "Effective Date" shall mean the latest of the dates
that the Registration Statement or the most recent post-effective amendment
thereto became effective. "Execution Time" shall mean the date and time
that this Agreement is executed and delivered by the parties hereto. "Rule
424" refers to such rule under the Act. "Transaction Documents" shall mean
the Receivables Purchase Agreement, the [Sale and Servicing Agreement]
[Pooling and Servicing Agreement], the Indenture, the Trust Agreement, this
Agreement, the Securities and each Depository Agreement. "Securityholder"
means any Noteholder [and any Certificateholder] and "Security Owner" means
the beneficial owner of any
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Note [or Certificate]. To the extent not defined herein, capitalized terms
used herein have the meanings assigned to such terms in the [Sale and
Servicing Agreement] [Pooling and Servicing Agreement].
Paragon and the Seller agree, severally and not jointly, with the
Underwriters as follows:
1. The Seller agrees to sell and deliver to the Underwriters as
hereinafter provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not
jointly, from the Seller, the respective aggregate principal amounts and
classes of Notes set forth opposite such Underwriter's name in Schedule I.
The purchase price for Notes of any class will be the applicable percentage
set forth on Schedule I of the aggregate principal amount of such class
purchased.
2. (a) The Seller understands that the Underwriters intend (i) to
make a public offering of the Notes purchased by the Underwriters
hereunder as soon after the Registration Statement and this
Agreement have become effective as in the judgment of the Seller
and the Representative is advisable and (ii) initially to offer
the Notes purchased by the Underwriters hereunder upon the terms
set forth in the Prospectus.
[(b) The Seller understands that each Underwriter may
deliver to potential investors in the Notes (each, a "Potential
Investor") ABS Note Term Sheets in connection with its offering of
the Notes, subject to the following conditions to be satisfied by
such Underwriter:
(1) Such Underwriter shall make no substantive
changes to the ABS Note Term Sheets and, for purposes of
filing the to-be-delivered ABS Note Term Sheet with the
Securities and Exchange Commission on Form 8-K, such
Underwriter shall deliver to the Seller's counsel a copy
of the ABS Note Term Sheet that it intends to deliver to
any Potential Investor;
(2) Such Underwriter shall ensure that the ABS
Note Term Sheet contains a legend stating that the
information contained therein will be superseded by the
final prospectus supplement and that the information
contained therein supersedes any prior or similar term
sheet;
(3) Unless the ABS Note Term Sheet is an exact
duplicate of the ABS Note Term Sheet prepared by the
Seller, such Underwriter shall obtain authorization to
make delivery of such ABS Note Term Sheet from the
General Counsel of Paragon;
(4) Such Underwriter shall deliver the ABS Note
Term Sheet to any Potential Investor solely in paper form
or by facsimile, shall take reasonable precautions to
ensure the integrity and security of the information in
the ABS Note
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Term Sheet and shall ensure that the information
contained in the delivered ABS Note Term Sheet is the
information that is intended to be delivered;
[(5) Such Underwriter recognizes that the
Trust's issuance of asset-backed securities is a
"Prefunding Transaction" as such term is used in the
December 18, 1995 no-action letter issued by staff of the
Securities and Exchange Commission to the Public
Securities Association (the "No-Action Letter"), and
consequently that in the staff's view, as expressed in
the No-Action Letter, the final prospectus for this
transaction must be delivered at least 48 hours prior to
sending a confirmation, and such Underwriter agrees to
comply with that requirement;]
(6) If any of Paragon, the Seller, the Trust or
the Seller's counsel so instruct such Underwriter, such
Underwriter shall: (i) immediately stop delivering the
ABS Note Term Sheets to Potential Investors, (ii) revise
the ABS Note Term Sheet and/or (iii) distribute
supplemental materials to all Potential Investors;
[(7) Such Underwriter shall not send a
confirmation of the type described in Rule 10b-10 under
the Securities Exchange Act of 1934, as amended, to any
Potential Investor until such Underwriter has been
informed that the ABS Note Term Sheet has been filed with
the Securities and Exchange Commission and such filing
has become effective;] and
(8) Such Underwriter shall not deliver any
copies of the ABS Note Term Sheet to any Potential
Investor after the Securities to be issued by the Trust
have been priced.
(c) If such Underwriter: (a) transmits to Potential
Investors an ABS Note Term Sheet that contains information other
than the information provided by the Seller, or (b) materially
changes the context in which such information is presented to
Potential Investors, then such Underwriter agrees to indemnify and
hold harmless Paragon, the Seller, and the Trust (and each of
their respective affiliates, officers, directors, employees,
counsel and agents) from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal
fees and other expenses reasonably incurred in connection with
investigating, preparing or defending any suit, action or
proceeding or any claim asserted), (irrespective of whether any
such indemnified person is a party to the action for which
indemnification hereunder is sought) incurred by any such
indemnified person(s) as a result of, arising out of or relating
to any such failure, transmission or change.]
3. Payment for the Notes purchased by the Underwriters hereunder
shall be made to the Seller or to its order by wire transfer of same day
funds to the following account of the Seller: ______________. The closing
of the purchase hereunder shall occur at the office of Xxxxx Xxxxx & Xxxxx,
000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 at 10:00 A.M., Chicago,
Illinois time on __________ __, ____, or at such other time on the same or
such other date, not later than the ______ Business Day thereafter, as the
Representative and the Seller may agree upon in writing (the
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"Closing Date"). As used herein, the term "Business Day" means any day other
than a Saturday, Sunday or other day on which commercial banking institutions
or trust companies in St. Louis, Missouri, Los Angeles, California, New York,
New York and Minneapolis, Minnesota are authorized or obligated by law or
order to be closed.
Payment for the Notes purchased by the Underwriters hereunder
shall be made against delivery to the Representative for the respective
accounts of the Underwriters on the Closing Date of such Notes in
definitive form registered in the name of Cede & Co., as nominee of The
Depository Trust Company, and in such denominations, as permitted by the
Transaction Documents, as the Representative shall request in writing not
later than a reasonable time prior to the Closing Date. The Seller shall
make such definitive certificates representing the Notes available for
inspection by the Representative at the office of Xxxxx, Brown & Xxxxx, 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 not later than 1:00 P.M.,
Chicago, Illinois time, on the Business Day prior to the Closing Date.
4. Paragon and the Seller represent and warrant (severally and not
jointly) to, and agree with, each Underwriter that:
(a) The Registration Statement, including amendments
thereto as may have been required on or prior to the date hereof,
relating to the Notes, has been filed with the Commission and such
Registration Statement as amended [has][will] become effective.
The conditions to the use by the Seller 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.
(b) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to its knowledge, threatened by
the Commission, and (i) on the Effective Date of the Registration
Statement, the Registration Statement conformed in all material
respects to the requirements of the Act and the 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, in
light of the circumstances under which they were made, not
misleading, (ii) on the date of this Agreement, the Prospectus
conforms in all material respects to the requirements of the Act
and the Rules and Regulations, and does 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, in light of the circumstances under which they were made,
not misleading, and (iii) at the time of filing of the Prospectus
pursuant to Rule 424(b) and on the Closing 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
neither of such documents will 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, in
light of the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished
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to it in writing by any Underwriter through the Representative
expressly for use in the Registration Statement or the Prospectus
(collectively, the "Underwriter Information").
(c) The computer tapes with respect to the Receivables to
be sold to the Trust created as of the Cutoff Date (the "Computer
Tapes"), and made available to the Representative by Xxxxxxx, were
complete and accurate in all material respects as of the date
thereof.
(d) It is a corporation that is duly organized, validly
existing and in good standing under the laws of its jurisdiction
of organization, with power and authority to own its properties
and conduct its business as now conducted by it and has full power
and authority to acquire, own and sell the Receivables and the
other Trust Property. It has the power and authority to execute,
deliver and perform this Agreement and each of the other
Transaction Documents to which it is a party and to carry out
their respective terms and to sell and assign the respective
property to be sold and assigned to and deposited with the Trustee
as Trust Property.
(e) The Securities have been duly authorized, and, when
issued and delivered pursuant to the Transaction Documents and
duly executed and authenticated by the Trustee and the Indenture
Trustee, as applicable, will be duly and validly issued,
authenticated and delivered and entitled to the benefits provided
by the Transaction Documents. The execution, delivery and
performance by it of each of the Transaction Documents to which it
is a party and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by it by all
necessary corporate action. The Transaction Documents to which it
is a party have been duly executed and delivered by it and, when
executed and delivered by it and the other parties thereto, each
of such Transaction Documents will constitute a legal, valid and
binding obligation of it, enforceable against it in accordance
with its respective terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership, liquidation and other similar laws
affecting enforcement of the rights of creditors generally and to
equitable limitations on the availability of specific remedies.
The Securities and the Transaction Documents conform in all
material respects to the descriptions thereof in the Prospectus.
The Notes and the Indenture have been duly executed and delivered
by the Trust and, when the Indenture is executed and the Notes are
authenticated by the Indenture Trustee, the Indenture and the
Notes will constitute legal, valid and binding obligations of the
Trust, enforceable in accordance with their respective terms,
subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, moratorium, conservatorship,
receivership, liquidation and other similar laws affecting
enforcement of the rights of creditors generally and to equitable
limitations on the availability of specific remedies.
(f) No consent, approval, license, authorization, or
order of, or declaration, or registration or filing with, any
court or governmental authority, is required to be made in
connection with the execution, delivery or performance by it of
any of the Transaction Documents to which it is a party or the
consummation of the transactions contemplated
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hereby or thereby, except such as have been obtained and made
under the Act and the Rules and Regulations or state securities
laws and any filings of UCC financing statements.
(g) The execution, delivery and performance by it of the
Transaction Documents to which it is a party, the consummation of
the transactions contemplated hereby and thereby and the
fulfillment of the terms 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
certificate of incorporation or bylaws of it, or any indenture,
agreement, mortgage, deed of trust or other instrument to which it
is a party or by which it or its properties are found, (ii) result
in the creation or imposition of any lien (other than permitted
liens) upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other
instrument or (iii) to its knowledge, violate any law, order, rule
or regulation applicable to it of any governmental authority
having jurisdiction over it or any of its properties.
(h) There are no proceedings or investigations pending,
or to its knowledge, threatened against it, before any
governmental authority having jurisdiction over it or its
properties (i) asserting the invalidity of the Agreement or any of
the Transaction Documents to which it is a party, (ii) seeking to
prevent the issuance of the Securities or the consummation of any
of the transactions contemplated by any of the Transaction
Documents to which it is a party, (iii) seeking any determination
or ruling that would have a material adverse effect on the
performance by it of its obligations under, or the validity or
enforceability of, any of the Transaction Documents to which it is
a party, (iv) seeking to materially and adversely affect the
federal income tax or other federal, state or local tax attributes
of the Securities or seeking to impose any excise, franchise,
transfer or similar tax upon the Securities or the sale and
assignment of the Receivables and the other Trust Property, or (v)
which, if determined adversely, could individually or in the
aggregate reasonably be expected to materially adversely affect
the interests of the holders of any of the Securities or the
marketability of any of the Securities.
(i) There are no contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration
Statement or the Prospectus pursuant to the Act and the Rules and
Regulations that are not filed or described as required.
(j) The representations and warranties of Paragon
contained in Section 3.6 of the Sale and Servicing Agreement and
Section 3.1 of the Receivables Purchase Agreement and of the
Seller in Section 3.2 of the Receivables Purchase Agreement are
true and correct in all material respects as of the dates of the
respective Transaction Documents.
(k) By assignment and delivery of the Receivables to the
Seller as of the Closing Date, Paragon will transfer title in such
Receivables to the Seller, subject to no Lien prior or equal to
the ownership interest granted to the Seller. By assignment and
delivery of each of the Receivables to the Trust as of the Closing
Date, the Seller will transfer title in the
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Receivables to the Trust, subject to no Lien prior or equal to the
ownership or security interest granted to the Trust.
(l) KPMG Peat Marwick LLP are independent public
accountants with respect to Paragon and the Seller within the
meaning of the Act and the Rules and Regulations.
5. Paragon and the Seller covenant and agree, severally and not
jointly, with the Underwriters that:
(a) Prior to the termination of the offering of the
Notes, the Seller will not file or cause to be filed any amendment
of the Registration Statement or supplement to the Prospectus
without first furnishing to the Representative a copy of the
proposed amendment or supplement and giving the Representative a
reasonable opportunity to review the same. Subject to the
foregoing sentence, the Seller will cause the Prospectus, and any
supplement thereto, to be filed with the Commission pursuant to
the applicable paragraph of Rule 424(b) within the time period
prescribed [and the Seller will cause the ABS Note Term Sheet to
be filed with the Commission pursuant to a Current Report on Form
8-K within the second business day following the first day the ABS
Note Term Sheet has been sent to a prospective investor in the
Notes]. The Seller will promptly advise the Underwriters (i) when
the Prospectus, and any supplement thereto, shall have been filed
with the Commission pursuant to Rule 424(b) [and the ABS Note Term
Sheet shall have been filed pursuant to a Current Report on Form
8-K], (ii) when any amendment to the Registration Statement shall
have become effective, (iii) of any request by the Commission for
any amendment of the Registration Statement or supplement to the
Prospectus or for any additional information, (iv) of the receipt
by the Seller of notification with respect to the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any
proceeding for that purpose and (v) of the receipt by the Seller
of notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose.
The Seller will use its reasonable efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) The Seller will deliver, at its expense, to the
Representative, two copies of the signed Registration Statement
(as originally filed) and each amendment thereto, in each case
including exhibits, and, during the period mentioned in Section
5(e), to each Underwriter as many copies of the Prospectus
(including all amendments and supplements thereto) as the
Representative may reasonably request.
(c) If during such period of time after the first date of
the public offering of the Notes as in the opinion of counsel for
the Underwriters a prospectus relating to the Notes is required by
law to be delivered in connection with sales by an Underwriter or
a dealer, any event shall occur as a result of which it is
necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not materially misleading,
or it is necessary to amend or
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supplement the Prospectus to comply with applicable law, the
Seller will forthwith prepare and furnish, at its own expense, to
the Underwriters and to the dealers (whose names and addresses the
Underwriters will furnish to the Seller) to which Notes may have
been sold by the Underwriters and upon request by the
Representative to any other dealers identified by the
Representative, such amendments or supplements to the Prospectus
as may be necessary so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
materially misleading or so that the Prospectus will comply with
applicable law.
(d) The Seller will endeavor to qualify the Notes for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representative shall reasonably request and
will continue such qualification in effect so long as reasonably
required for distribution of the Notes and will pay all reasonable
fees and expenses (including fees and disbursements of counsel to
the Representative to the extent provided in Section 6(iii))
incurred in connection with such qualification and in connection
with the determination of the eligibility of the Notes for
investment under the laws of such jurisdictions as the
Representative may designate; provided, however, that the Seller
shall not be obligated to qualify to do business in any
jurisdiction in which it is not currently so qualified; and
provided, further, that the Seller shall not be required to file a
general consent to service of process in any jurisdiction.
(e) For the period from the date of this Agreement until
the retirement of all of the Securities, the Servicer will furnish
to the Representative (i) copies of each Servicer's Certificate
and the annual statements of compliance delivered to the Trustee
or the Indenture Trustee pursuant to the Transaction Documents and
the annual independent certified public accountant's servicing
reports furnished to the Trustee or the Indenture Trustee pursuant
to the Transaction Documents, by first-class mail at the same time
such statements and reports are furnished to the Trustee or the
Indenture Trustee, (ii) copies of each amendment to any of the
Transaction Documents, and (iii) such other information concerning
the Trust, Paragon or the Seller as the Representative may
reasonably request.
(f) To the extent, if any, that the ratings provided with
respect to the Notes by the Rating Agencies are conditional upon
the furnishing of documents or the taking of any other action by
it, it shall furnish or cause to be furnished such documents and
use reasonable efforts to take any such other action.
6. Paragon and the Seller will pay all costs and expenses incident
to the performance of their respective obligations under this Agreement,
including, without limitation, all costs and expenses (i) incident to the
preparation, issuance, execution, authentication and delivery of the Notes,
(ii) incident to the preparation, printing (or otherwise reproducing),
filing and delivery under the Act of the Registration Statement, the
Prospectus [and the ABS Note Term Sheet] (including in each case all
exhibits, amendments and supplements thereto), (iii) incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Notes under the laws of such jurisdictions as the
Representative may designate (including fees and disbursements
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of counsel for the Underwriters with respect thereto up to $__________),
(iv) related to any filing with the National Association of Securities
Dealers, Inc., (v) in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, the other
Transaction Documents and any Blue Sky Memorandum and the furnishing to the
Underwriters and dealers of copies of the Registration Statement, [the ABS
Note Term Sheet] and the Prospectus (including exhibits, amendments and
supplements thereto) as herein provided, (vi) any fees and expenses payable
to the Rating Agencies in connection with the rating of the Notes and (vii)
any fees and expenses of the Trustee and the Indenture Trustee.
7. The obligations of the Underwriters to purchase and pay for the
Notes will be subject to the accuracy in all material respects, as of the
date hereof and as of the Closing Date, of the representations and
warranties contained herein, to the accuracy of the statements of officers
of Paragon and the Seller made in any writing delivered at the Closing
pursuant to the provisions hereof, to the performance in all material
respects by each of Paragon and the Seller of its obligations hereunder and
to the following additional conditions precedent:
(a) KPMG shall have furnished to the Representative
letters dated, respectively, as of the date of the Prospectus and
as of the Closing Date, substantially in the forms of the drafts
to which the Representative previously agreed and otherwise in
form and substance reasonably satisfactory to the Representative.
(b) The form of prospectus used to confirm sales of Notes
shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by
the Rules and Regulations and in accordance with Section 5(a) of
this Agreement;[ the ABS Note Term Sheet shall have been filed
with the Commission pursuant to a Current Report on Form 8-K
within two business days following the first day the ABS Note Term
Sheet is first sent to prospective investors in the Notes]; and no
stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose
shall be pending before or, to the knowledge of Paragon or the
Seller, contemplated by the Commission.
(c) The Representative shall have received officer's
certificates, dated the Closing Date, signed by any Vice President
or more senior officer of Paragon and the Seller, representing and
warranting that, as of the Closing Date, its representations and
warranties in this Agreement and the other Transaction Documents
are true and correct in all material respects, that it has
complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder or under the other
Transaction Documents at or prior to the Closing Date, that no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been instituted or, to the best of such officer's knowledge,
contemplated by the Commission, and that since ____________ __,
____, there has been no material adverse change, or any
development involving a material adverse change, in or affecting
the Receivables or the business or properties of the Trust or
either Paragon or the Seller which materially impairs the
investment quality of the Notes.
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(d) After the execution and delivery of this Agreement,
there shall not have occurred (i) any material adverse change, or
any development involving a material adverse change, in or
affecting the business, operations, financial condition or
properties of the Trust or either Paragon or the Seller which, in
the reasonable judgment of the Representative, materially impairs
the investment quality of the Notes or makes it impractical or
inadvisable to proceed with completion of the sale of and payment
for the Notes, (ii) any downgrading in the rating of any debt
securities of Paragon or the Seller 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
such debt securities (other than an announcement with no
implication of a possible downgrading, of such rating).
(e) The Representative shall have received the opinion of
Xxxxx X. Xxxxxxxx, General Counsel of Paragon, dated as of the
Closing Date and reasonably satisfactory in form and substance to
the Representative as to certain corporate matters, including,
without limitation, as to the due authorization, execution and
delivery by, and the enforceability against, Paragon and the
Seller of each of the Transaction Documents to which it is a
party.
(f) The Representative shall have received from Xxxxx,
Xxxxx & Xxxxx, special counsel to Paragon and the Seller,
opinions, dated as of the Closing Date, and reasonably
satisfactory in form and substance to the Representative, as to
certain corporate matters, tax matters, securities law matters and
security interest matters, including, without limitation, as to
the due authorization, execution and delivery by, and
enforceability against, Paragon and the Seller of each Transaction
Document to which Paragon or the Seller is a party.
(g) Xxxxx, Xxxxx & Xxxxx, special counsel to Paragon and
the Seller, shall have furnished opinions, dated as of the Closing
Date, with respect to (i) nonconsolidation under the Bankruptcy
Code of the assets and liabilities of the Seller on the one hand,
and those of Paragon, on the other, if Paragon were to become
subject of a case under the Bankruptcy Code, and (ii) the
characterization of the transfer of the Receivables from Paragon
to the Seller and from the Seller to the Trust and perfection of
the Trust's and the Indenture Trustee's interest in the
Receivables, satisfactory in form and substance to the
Representative.
[(h) The Representative shall have received from local
counsel in each jurisdiction in which the outstanding Principal
Balance of the Receivables as of the Cutoff Date equals or exceeds
20% of the Cutoff Date Pool Balance, an opinion, dated as of the
Closing Date, and reasonably satisfactory in form and substance to
the Representative, as to the validity and perfection of Paragon's
security interest in the Financed Vehicles located in such
jurisdiction and the effectiveness of the assignment of such
security interest to the Indenture Trustee.]
(i) The Representative shall have received from counsel
for the Trustee, an opinion, dated as of the Closing Date, and
reasonably satisfactory in form and substance to
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the Representative, as to the due authorization, execution and
delivery of each Transaction Document to which the Trustee is a
party.
(j) The Representative shall have received from counsel
for the Indenture Trustee an opinion, dated as of the Closing Date
and reasonably satisfactory in form and substance to the
Representative, as to the due authorization, execution and
delivery of each Transaction Document to which the Indenture
Trustee is a party;
(k) If any Rating Agency shall have requested any legal
opinion, officer's certificate or other document not required by
this Agreement, the Representative also shall have received such
legal opinion, officer's certificate or other document together
with a letter from the party delivering such opinion, certificate
or document allowing the Underwriters to rely on such opinion,
certificate or document as if it were addressed to the
Underwriters.
(l) The Class A-1 Notes and Class A-2 Notes shall have
been rated "____" and "____", respectively, or its equivalent by at
least [two] Rating Agencies and the Class B Notes shall have been
rated at least "____" or its equivalent by at least [two] Rating
Agencies.
(m) The Seller shall have made or caused to be made a
deposit in the Reserve Account in the amount of the initial
Reserve Account Required Amount.
8. Paragon and the Seller, jointly and severally (except as
otherwise set forth at the conclusion of this Section 8), agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls each Underwriter within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, the legal
fees and other expenses reasonably incurred in connection with
investigating, preparing or defending any suit, action or proceeding or any
claim asserted), incurred by such Underwriter or such controlling person
and caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Seller shall have furnished such amendments
or supplements thereto) [or the ABS Note Term Sheet], or caused by any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with the Underwriter Information[;
provided that the foregoing indemnity with respect to any untrue statement
or omission in the ABS Note Term Sheet shall not inure to the benefit of
any Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any losses, claims or damages
purchased Securities if such untrue statement or omission or alleged untrue
statement or omission made in the ABS Note Term Sheet is eliminated or
remedied in the Prospectus (as amended or supplemented if the Seller shall
have furnished any amendments or supplements thereto) and a copy of the
Prospectus (as so amended or supplemented) shall not have been furnished to
such person at or prior to the written confirmation of the sale of such
Securities to such person to the extent required by law].
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Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless Paragon and the Seller, and each of their respective
directors and officers and each person who controls either of them within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from Paragon and the Seller to
each Underwriter, but only with reference to Underwriter Information
delivered by such Underwriter.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnity may
be sought (the "Indemnifying Person") in writing, and the Indemnifying
Person shall retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others the Indemnifying
Person may designate in such proceeding and shall pay the reasonable fees
and expenses of such counsel related to such proceeding; provided that the
failure of the Indemnified Person to give notice shall not relieve the
Indemnifying Person of its obligations under this Section 8 except to the
extent that the Indemnifying Person shall have been prejudiced thereby. In
any such proceeding, any Indemnified Person shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person unless (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named
parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be
reimbursed as they are incurred promptly following submission of a
documented request for such reimbursement. Any such separate firm for the
Underwriters and such control persons of the Underwriters shall be
designated in writing by the Representative. Any such separate firm for
Paragon and the Seller and their directors, officers and control persons
shall be designated in writing by Paragon. The Indemnifying Person shall
not be liable for any settlement of any claim or proceeding effected
without its written consent. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on
claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second
paragraphs of this Section 8 is determined by a court to be unavailable to
an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person
as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by
Xxxxxxx and the Seller
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on the one hand and the Underwriters on the other hand from the offering of
the Securities 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 Paragon and the Seller on the one hand and the
Underwriters on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits received
by Xxxxxxx and the Seller on the one hand and the Underwriters on the other
shall be deemed to be in the same respective proportions as the net
proceeds from the offering (before deducting expenses) received by Paragon
and the Seller and the total underwriting discounts and the commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Securities. The relative fault of Paragon and the Seller on the one hand
and the Underwriters on the other 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 Paragon and the Seller or by any of the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
Paragon and the Seller and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in the
preceding paragraph. The amount paid or payable by an Indemnified Person as
a result of the losses, claims, damages and liabilities referred to in the
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses incurred by such Indemnified
Person in connection with investigating or defending any such action or
claim. 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 to contribute pursuant to this Section 8 are
several in proportion to the respective aggregate principal amount of
Securities set forth opposite their names in Schedule I, and not joint.
The indemnity and contribution agreements contained in this
Section 8 are in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of Paragon and the Seller
set forth in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of any Participating Entity
or any of their officers or directors or any other person controlling any
Participating Entity and (iii) acceptance of and payment for any of the
Securities.
9. Notwithstanding anything herein contained, this Agreement may
be terminated by the Representative, by written notice given to the Seller,
if after the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or
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materially limited on the New York Stock Exchange or there shall have been
any setting of minimum prices for trading on such exchange; (ii) trading of
any securities of or guaranteed by Paragon or the Seller, if any, shall
have been suspended on any exchange or in any over-the-counter market;
(iii) a moratorium on commercial banking activities in New York or Delaware
shall have been declared by either federal, New York or Delaware
authorities; or (iv) there shall have occurred 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
reasonable judgment of the Representative, the effect of any such outbreak,
escalation, declaration, calamity, emergency or change makes it impractical
or inadvisable to market the Notes on the terms and in the manner
contemplated in the Prospectus.
10. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
11. If on the Closing Date (i) any Underwriter shall fail or
refuse to purchase any Notes which it has agreed to purchase hereunder on
such date, (ii) such failure or refusal shall constitute a default in the
performance of such Underwriter's obligations hereunder, and (iii) the
aggregate principal amount of Notes which such defaulting Underwriter
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Notes to be purchased by the Underwriters
on such date, the other Underwriters shall be obligated to purchase Notes
which such defaulting Underwriter agreed but failed or refused to purchase
on such date. If on the Closing Date (i) any Underwriter shall fail or
refuse to purchase Notes which it has agreed to purchase hereunder on such
date, (ii) such failure or refusal shall constitute a default in the
performance of such Underwriter's obligations hereunder, (iii) the
aggregate principal amount of Notes with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Notes to
be purchased by the Underwriters on such date, and (iv) arrangements
satisfactory to the non-defaulting Underwriters and the Seller for the
purchase of such Notes are not made within [72] hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or Paragon and the Seller. In any such case
either the Representative or the Seller shall have the right to postpone
the Closing Date, but in no event for longer than seven business days, in
order that the required changes, if any, in the Registration Statement and
in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
12. If this Agreement shall be terminated by the Underwriters, or
any one of them, because of any failure or refusal on the part of Paragon
or the Seller to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason Paragon or the Seller shall be
unable to perform its obligations under this Agreement or any condition of
the Underwriters' obligations cannot be fulfilled, in each case other than
in connection with a termination under Section 9 or any default by the
Underwriters under Section 11, Paragon and the Seller agree to reimburse
the Underwriters, severally, or such Underwriter which has so terminated
this Agreement with respect to itself, for all out-of-pocket expenses
(including the reasonable fees and expenses of
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their counsel) reasonably incurred by such Underwriter(s) in connection
with this Agreement or the offering contemplated thereunder.
13. Any action by the Underwriters hereunder may be taken by the
Representative alone on behalf of the Underwriters, and any such action
taken by the Representative alone shall be binding upon the Underwriters.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed, delivered by hand or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given to the Representative, c/o
______________________________________________________________ (Facsimile
No: (___) ________), Attention: __________________________. Notices to
Paragon shall be given to them at 00000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000, (Facsimile No.: (000) 000-0000), Attention: Xxxxxx
X. Xxxxxx, with a copy to 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
(Facsimile No.: (000)000-0000), Attention: Xxxxx X. Xxxxxxxx. Notices to the
Seller shall be given to them at 00000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000, (Facsimile No.: (000) 000-0000), Attention: Xxxxxx
X. Xxxxxx, President, with a copy to 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX
00000 (Facsimile No.: (000)000-0000), Attention: Xxxxx X. Xxxxxxxx, General
Counsel.
14. This Agreement shall inure to the benefit of and be binding
upon Paragon and the Seller, the Underwriters, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed
to give any other person or entity, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein
contained. No purchaser of Notes from any Underwriter shall be deemed to be
a successor by reason merely of such purchase.
15. This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the
same instrument. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will become a binding agreement between Paragon and the Seller
and the Underwriters in accordance with its terms.
Very truly yours,
PARAGON AUTO RECEIVABLES CORPORATION
By:______________________________________
Name:
Title:
PARAGON ACCEPTANCE CORPORATION
By:______________________________________
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted as of
the date first above written.
_____________________________,
As Representative
of the Underwriter
By:__________________________
Name:
Title:
S-1
SCHEDULE I
Initial Initial Initial
Principal Amount Principal Amount Principal Amount
of Class A-1 of Class A-2 of Class B
Asset-Backed Asset-Backed Asset-Backed
Notes Notes Notes Total
---------------- ---------------- ---------------- -------
-----------------
-----------------
Total:
Purchase Price:
II-1