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EXHIBIT 99.3
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (as from time to time amended, supplemented or
otherwise modified and in effect, this "Agreement") is made as of this 1st day
of October 1997, by and between FORD MOTOR CREDIT COMPANY, a Delaware
corporation (the "Seller"), having its principal executive office at The
American Road, Dearborn, Michigan 48121, and FORD CREDIT AUTO RECEIVABLES TWO
L.P., a Delaware limited partnership (the "Purchaser"), having its principal
executive office at The American Road, Dearborn, Michigan 48121.
WHEREAS, in the regular course of its business, the Seller purchases
certain motor vehicle retail installment sale contracts secured by new and used
automobiles and light trucks from motor vehicle dealers.
WHEREAS, the Seller and the Purchaser wish to set forth the terms pursuant
to which the Receivables (as hereinafter defined) are to be conveyed by the
Seller to the Purchaser, which Receivables will be transferred by the Purchaser
pursuant to the Sale and Servicing Agreement (as hereinafter defined) to the
Ford Credit Auto Owner Trust 1997-B to be created pursuant to the Trust
Agreement (as hereinafter defined), which Trust will issue notes secured by
such Receivables and certain other property of the Trust, pursuant to the
Indenture (as hereinafter defined), and will issue certificates representing
beneficial interests in such Receivables and certain other property of the
Trust, pursuant to the Trust Agreement.
NOW, THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein. The term "Seller" herein shall mean Ford Motor Credit
Company.
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ARTICLE II
CONVEYANCE AND ACQUISITION OF RECEIVABLES
2.1 Conveyance and Acquisition of Receivables
On the Closing Date, subject to the terms and conditions of this
Agreement, the Seller agrees to convey to the Purchaser, and the Purchaser
agrees to acquire from the Seller, the Receivables and the other property
relating thereto (as defined below).
(a) Conveyance of Receivables. Effective as of the Closing Date and
simultaneously with the transactions pursuant to the Indenture, the Sale and
Servicing Agreement and the Trust Agreement, the Seller hereby transfers,
assigns and otherwise conveys to the Purchaser, without recourse, all right,
title and interest of the Seller, whether now owned or hereafter acquired, in
and to the following: (i) the Receivables; (ii) with respect to Precomputed
Receivables, monies due thereunder on or after the Cutoff Date (including
Payaheads) and, with respect to Simple Interest Receivables, monies due or
received thereunder on or after the Cutoff Date (including in each case any
monies received prior to the Cutoff Date that are due on or after the Cutoff
Date and were not used to reduce the principal balance of the Receivable);
(iii) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables and any other interest of the Seller in the
Financed Vehicles; (iv) rights to receive proceeds with respect to the
Receivables from claims on any physical damage, credit life, credit disability,
or other insurance policies covering Financed Vehicles or Obligors; (v) Dealer
Recourse; (vi) all of the Seller's rights to the Receivable Files; (vii)
payments and proceeds with respect to the Receivables held by the Seller;
(viii) all property (including the right to receive Liquidation Proceeds)
securing a Receivable (other than a Receivable repurchased by the Seller); (ix)
rebates of premiums and other amounts relating to insurance policies and other
items financed under the Receivables in effect as of the Cutoff Date; and (x)
all present and future claims, demands, causes of action 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
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respect of any or all of the foregoing, including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing.
(b) Receivables Purchase Price. In consideration for the Receivables and
other properties described in Section 2.1(a), the Purchaser shall, on the
Closing Date, pay to the Seller the Receivables Purchase Price. An amount
equal to approximately $1,664,790,628 (representing the proceeds from the sale
of the Notes and Certificates offered to the public, plus the amount of the
cash capital contribution by the General Partner to the Purchaser on the
Closing Date, minus the Reserve Initial Deposit) of the Receivables Purchase
Price shall be paid to the Seller in cash. The remaining portion of the
Receivables Purchase Price shall be deemed paid and returned to the Purchaser
and be considered a contribution to capital. The portion of the Receivables
Purchase Price to be paid in cash shall be paid by federal wire transfer (same
day) funds.
2.2 The Closing. The conveyance and acquisition of the Receivables shall
take place at a closing (the "Closing") at the offices of Skadden,
Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York 10022 on the
Closing Date, simultaneously with the closings under: (a) the Sale and
Servicing Agreement pursuant to which the Purchaser will assign all of its
right, title and interest in, to and under the Receivables and certain other
property to the Trust in exchange for the Notes and the Certificates; (b) the
Indenture, pursuant to which the Trust will issue the Notes and pledge all of
its right, title and interest in, to and under the Receivables and certain
other property to secure the Notes; (c) the Trust Agreement, pursuant to which
the Trust will issue the Certificates; (d) the Note Underwriting Agreement,
pursuant to which the Purchaser will sell to the Note Underwriters the
Underwritten Notes; (e) the Class A-4 Note Purchase Agreement, pursuant to
which the Purchaser will sell to the Class A-4
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Note Purchaser the Class A-4 Notes; and (f) the Certificate Underwriting
Agreement, pursuant to which the Purchaser will sell to the Certificate
Underwriter the Certificates.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Warranties of the Purchaser. The Purchaser hereby represents and
warrants to the Seller as of the date hereof and as of the Closing Date:
(a) Organization, etc. The Purchaser has been duly organized and is
validly existing as a limited partnership in good standing under the laws of
the State of Delaware, and has full power and authority to execute and deliver
this Agreement and to perform the terms and provisions hereof and thereof.
(b) Due Authorization and No Violation. This Agreement has been duly
authorized, executed and delivered by the Purchaser, and is the valid, binding
and enforceable obligation of the Purchaser except as the same may be limited
by insolvency, bankruptcy, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general equity principles.
The consummation of the transactions contemplated by this Agreement, and the
fulfillment of the terms hereof, will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under (in each
case material to the Purchaser), or result in the creation or imposition of any
lien, charge or encumbrance (in each case material to the Purchaser) upon any
of the property or assets of the Purchaser pursuant to the terms of, any
indenture, mortgage, deed of trust, loan agreement, guarantee, lease financing
agreement or similar agreement or instrument under which the Purchaser is a
debtor or guarantor, nor will such action result in any violation of the
provisions of the Certificate of Limited Partnership or the Limited Partnership
Agreement of the Purchaser.
(c) No Proceedings. No legal or governmental proceedings are pending to
which the Purchaser is a party or of which any property of the Purchaser is the
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subject, and no such proceedings are threatened or contemplated by governmental
authorities or threatened by others, other than such proceedings which will not
have a material adverse effect upon the general affairs, financial position,
net worth or results of operations (on an annual basis) of the Purchaser and
will not materially and adversely affect the performance by the Purchaser of
its obligations under, or the validity and enforceability of, this Agreement.
3.2 Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the Purchaser as of the
date hereof and as of the Closing Date:
(i) Organization, etc. The Seller has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
the State of Delaware, and is duly qualified to transact business and is
in good standing in each jurisdiction in the United States of America in
which the conduct of its business or the ownership of its property
requires such qualification.
(ii) Power and Authority. The Seller has full power and authority
to convey and assign the property conveyed and assigned to the
Purchaser hereunder and has duly authorized such sale and assignment to
the Purchaser by all necessary corporate action. This Agreement has
been duly authorized, executed and delivered by the Seller and shall
constitute the legal, valid and binding obligation of the Seller except
as the same may be limited by insolvency, bankruptcy, reorganization or
other laws relating to or affecting the enforcement of creditors' rights
or by general equity principles.
(iii) No Violation. The consummation of the transactions
contemplated by this Agreement, and the fulfillment of the terms hereof,
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under (in each case material to
the Seller and its subsidiaries considered as a whole), or result in
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the creation or imposition of any lien, charge or encumbrance (in each
case material to the Seller and its subsidiaries considered as a whole)
upon any of the property or assets of the Seller pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement, guarantee,
lease financing agreement or similar agreement or instrument under which
the Seller is a debtor or guarantor, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or the
By-Laws of the Seller.
(iv) No Proceedings. No legal or governmental proceedings are
pending to which the Seller is a party or of which any property of the
Seller is the subject, and no such proceedings are threatened or
contemplated by governmental authorities or threatened by others, other
than such proceedings which will not have a material adverse effect upon
the general affairs, financial position, net worth or results of
operations (on an annual basis) of the Seller and its subsidiaries
considered as a whole and will not materially and adversely affect the
performance by the Seller of its obligations under, or the validity and
enforceability of, this Agreement.
(b) The Seller makes the following representations and warranties as to
the Receivables on which the Purchaser relies in accepting the Receivables.
Such representations and warranties speak as of the execution and delivery of
this Agreement, but shall survive the transfer, assignment and conveyance of
the Receivables to the Purchaser and the subsequent assignment and transfer to
the Trust pursuant to the Sale and Servicing Agreement and the pledge thereof
to the Indenture Trustee pursuant to the Indenture:
(i) Characteristics of Receivables. Each Receivable (a) shall have
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, shall have been fully and properly executed by the
parties thereto, shall have been purchased by the Seller from such
Dealer under an existing dealer agreement with the Seller, shall have
been validly assigned by such
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Dealer to the Seller, (b) shall have created or shall create a valid,
subsisting, and enforceable first priority security interest in favor of
the Seller in the Financed Vehicle, which security interest shall be
assignable by the Seller to the Purchaser, (c) shall contain customary
and enforceable provisions such that the rights and remedies of the
holder thereof shall be adequate for realization against the collateral
of the benefits of the security, (d) shall provide for level monthly
payments (provided that the payment in the first or last month in the
life of the Receivable may be minimally different from the level
payment) that fully amortize the Amount Financed by maturity and yield
interest at the Annual Percentage Rate, (e) shall provide for, in the
event that such contract is prepaid, a prepayment that fully pays the
Principal Balance, and (f) is a Precomputed Receivable or a Simple
Interest Receivable.
(ii) Schedule of Receivables. The information set forth in the
Schedule of Receivables shall be true and correct in all material
respects as of the opening of business on the Cutoff Date, and no
selection procedures believed to be adverse to the Noteholders or the
Certificateholders shall have been utilized in selecting the Receivables
from those receivables which meet the criteria contained herein. The
computer tape or other listing regarding the Receivables made available
to the Purchaser and its assigns is true and correct in all respects.
(iii) Compliance with Law. Each Receivable and the sale of the
Financed Vehicle shall have complied at the time it was originated or
made and at the execution of this Agreement shall comply in all material
respects with all 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 Magnuson-Moss Warranty Act,
the Federal Reserve Board's Regulations B and Z, and State adaptations
of the National Consumer Act and of the Uniform
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Consumer Credit Code, and other consumer credit laws and equal credit
opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable shall represent the
genuine, legal, valid, and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its terms
subject to the effect of bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights
generally.
(v) No Government Obligor. None of the Receivables shall be due
from the United States of America or any State or from any agency,
department, or instrumentality of the United States of America or any
State.
(vi) Security Interest in Financed Vehicle. Immediately prior
to the transfer, assignment and conveyance thereof, each Receivable
shall be secured by a validly perfected first security interest in the
Financed Vehicle in favor of the Seller as secured party or all
necessary and appropriate actions shall have been commenced that would
result in the valid perfection of a first security interest in the
Financed Vehicle in favor of the Seller as secured party.
(vii) Receivables in Force. No Receivable shall have been
satisfied, subordinated, or rescinded, nor shall any Financed Vehicle
have been released from the lien granted by the related Receivable in
whole or in part.
(viii) No Waiver. No provision of a Receivable shall have been
waived.
(ix) No Defenses. No right of rescission, setoff, counterclaim, or
defense shall have been asserted or threatened with respect to any
Receivable.
(x) No Liens. To the best of the Seller's knowledge, no liens or
claims shall have been filed for work, labor, or materials relating to a
Financed Vehicle that shall be liens prior to, or
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equal or coordinate with, the security interest in the Financed Vehicle
granted by the Receivable.
(xi) No Default. Except for payment defaults continuing for a
period of not more than thirty (30) days as of the Cutoff Date, no
default, breach, violation, or event permitting acceleration under the
terms of any Receivable shall have occurred; and 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 shall have arisen; and the Seller shall not waive any of
the foregoing.
(xii) Insurance. The Seller, in accordance with its customary
procedures, shall have determined that the Obligor has obtained or
agreed to obtain physical damage insurance covering the Financed
Vehicle.
(xiii) Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute an absolute transfer of
the Receivables from the Seller to the Purchaser and that the beneficial
interest in and title to the Receivables not be part of the Seller's
estate in the event of the filing of a bankruptcy petition by or against
the Seller under any bankruptcy law. No Receivable has been
transferred, assigned, or pledged by the Seller to any Person other than
the Purchaser. Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each
Receivable free and clear of all Liens, encumbrances, security
interests, and rights of others and, immediately upon the transfer
thereof, the Purchaser shall have good and marketable title to each
Receivable, free and clear of all Liens, encumbrances, security
interests, and rights of others; and the transfer has been perfected
under the UCC.
(xiv) Valid Assignment. No Receivable shall have been originated
in, or shall be subject to the laws of, any jurisdiction under which the
transfer, assignment and conveyance of such Receivable under this
Agreement or pursuant to transfers of the Notes or the Certificates
shall be
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unlawful, void, or voidable. The Seller has not entered into any
agreement with any account debtor that prohibits, restricts or
conditions the assignment of any portion of the Receivables.
(xv) All Filings Made. All filings (including, without limitation,
UCC filings) necessary in any jurisdiction to give the Purchaser a first
perfected ownership interest in the Receivables shall have been made.
(xvi) Chattel Paper. Each Receivable constitutes "chattel paper"
as defined in the UCC.
(xvii) One Original. There shall be only one original executed
copy of each Receivable.
(xviii) New and Used Vehicles. Approximately 70.0% of the
aggregate Principal Balance of the Receivables, constituting 62.5% of
the number of Receivables, as of the Cutoff Date, represent vehicles
financed at new vehicle rates, and the remainder of the Receivables
represent vehicles financed at used vehicle rates.
(xix) Amortization Type. By aggregate Principal Balance as of the
Cutoff Date, approximately 38.1% of the Receivables constitute
Precomputed Receivables and 61.9% of the Receivables constitute Simple
Interest Receivables.
(xx) Origination. Each Receivable shall have an origination date
on or after January 1, 1996.
(xxi) Maturity of Receivables. Each Receivable shall have an
original maturity of not greater than sixty (60) months.
(xxii) Minimum Annual Percentage Rate. Each Receivable shall have
an Annual Percentage Rate equal to or greater than 7.75%.
(xxiii) Scheduled Payments. Each Receivable shall have a first
Scheduled Payment due, in the case of Precomputed Receivables, or a
first
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scheduled due date, in the case of Simple Interest Receivables, on or
prior to October 31, 1997 and no Receivable shall have a payment that is
more than thirty (30) days overdue as of the Cutoff Date.
(xxiv) Location of Receivable Files. The Receivable Files shall
be kept at one or more of the locations listed in Schedule A hereto.
(xxv) No Extensions. The number of Scheduled Payments, in the
case of Precomputed Receivables, and the number of scheduled due dates,
in the case of Simple Interest Receivables, shall not have been extended
on any Receivable on or before the Cutoff Date.
(xxvi) Other Data. The numerical data relating to the
characteristics of the Receivables contained in the Prospectus are true
and correct in all material respects.
(xxvii) Agreement. The representations and warranties in this
Agreement shall be true.
(xxviii) No Receivables Originated in Alabama or Pennsylvania. No
Receivable shall have been originated in Alabama or Pennsylvania.
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ARTICLE IV
CONDITIONS
4.1 Conditions to Obligation of the Purchaser. The obligation of the
Purchaser to acquire the Receivables is subject to the satisfaction of the
following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Seller hereunder shall be true and correct on the Closing
Date with the same effect as if then made, and the Seller shall have performed
all obligations to be performed by it hereunder on or prior to the Closing
Date.
(b) Computer Files Marked. The Seller shall, at its own expense, on or
prior to the Closing Date, indicate in its computer files that the Receivables
have been conveyed to the Purchaser pursuant to this Agreement and deliver to
the Purchaser the Schedule of Receivables certified by an officer of the Seller
to be true, correct and complete.
(c) Documents to be Delivered by the Seller at the Closing.
(i) The Assignment. At the Closing, the Seller will execute and
deliver the Assignment. The Assignment shall be substantially in the
form of Exhibit A hereto.
(ii) Evidence of UCC Filing. On or prior to the Closing Date, the
Seller shall record and file, at its own expense, a UCC-1 financing
statement in each jurisdiction in which required by applicable law,
executed by the Seller, as seller or debtor, and naming the Purchaser,
as purchaser or secured party, naming the Receivables and the other
property conveyed hereunder as collateral, meeting the requirements of
the laws of each such jurisdiction and in such manner as is necessary to
perfect the transfer, assignment and conveyance of such Receivables to
the Purchaser. The Seller shall deliver a file-stamped copy, or other
evidence satisfactory to the Purchaser of such filing, to the Purchaser
on or prior to the Closing Date.
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(iii) Other Documents. Such other documents as the Purchaser may
reasonably request.
(d) Other Transactions. The transactions contemplated by the Sale and
Servicing Agreement, the Indenture and the Trust Agreement shall be consummated
on the Closing Date.
4.2 Conditions to Obligation of the Seller. The obligation of the Seller
to convey the Receivables to the Purchaser is subject to the satisfaction of
the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Purchaser hereunder shall be true and correct on the Closing
Date with the same effect as if then made, and the Purchaser shall have
performed all obligations to be performed by it hereunder on or prior to the
Closing Date.
(b) Receivables Purchase Price. At the Closing Date, the Purchaser
will deliver to the Seller the Receivables Purchase Price, as provided in
Section 2.1(b).
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ARTICLE V
COVENANTS OF THE SELLER
The Seller covenants and agrees with the Purchaser as follows, provided,
however, that to the extent that any provision of this ARTICLE V conflicts with
any provision of the Sale and Servicing Agreement, the Sale and Servicing
Agreement shall govern:
5.1 Protection of Right, Title and Interest.
(a) The Seller shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in
such manner and in such places as may be required by law fully to preserve,
maintain, and protect the interest of the Purchaser in the Receivables and in
the proceeds thereof. The Seller shall deliver (or cause to be delivered) to
the Purchaser file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) The Seller shall not change its name, identity, or corporate
structure in any manner that would, could, or might make any financing
statement or continuation statement filed by the Seller in accordance with
paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given the Purchaser at least five (5)
days' prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Seller shall give the Purchaser at least sixty (60) 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 and shall promptly
file any such amendment or new financing statement. The Seller shall at all
times maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
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(d) The Seller shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit 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).
(e) The Seller shall maintain its computer systems so that, from and after
the time of conveyance hereunder of the Receivables to the Purchaser, the
Seller's master computer records (including any back-up archives) that refer to
a Receivable shall indicate clearly the interest of the Purchaser in such
Receivable and that such Receivable is owned by the Purchaser. Indication of
the Purchaser's ownership of a Receivable shall be deleted from or modified on
the Seller's computer systems when, and only when, the Receivable shall have
been paid in full or repurchased.
(f) If at any time the Seller shall propose to sell, grant a security
interest in, or otherwise transfer any interest in automotive receivables to
any prospective purchaser, lender, or other transferee, the Seller shall give
to such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from back-up archives) that, if
they shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been conveyed to and is owned by the
Purchaser.
(g) The Seller shall permit the Purchaser and its agents at any time
during normal business hours to inspect, audit, and make copies of and
abstracts from the Seller's records regarding any Receivable.
(h) Upon request, the Seller shall furnish to the Purchaser, within twenty
(20) Business Days, a list of all Receivables (by contract number and name of
Obligor) then owned by the Purchaser, together with a reconciliation of such
list to the Schedule of Receivables.
5.2 Other Liens or Interests. Except for the conveyances hereunder and
pursuant to the other Basic Documents, the Seller will not sell, pledge, assign
or transfer any Receivable to any other Person, or grant, create, incur, assume
or suffer to exist any Lien on any
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interest therein, and the Seller shall defend the right, title, and interest
of the Purchaser in, to and under such Receivables against all claims
of third parties claiming through or under the Seller; provided, however, that
the Seller's obligations under this Section 5.2 shall terminate upon the
termination of the Trust pursuant to the Trust Agreement.
5.3 Costs and Expenses. The Seller agrees to pay all reasonable costs and
disbursements in connection with the perfection, as against all third parties,
of the Purchaser's right, title and interest in and to the Receivables.
5.4 Indemnification.
(a) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the failure of a Receivable to be
originated in compliance with all requirements of law and for any breach of any
of the Seller's representations and warranties contained herein.
(b) The Seller shall defend, indemnify, and hold harmless the Purchaser
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 the Seller or any Affiliate thereof of a Financed Vehicle.
(c) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against any and all taxes that may at any time be asserted
against the Purchaser with respect to the transactions contemplated herein,
including, without limitation, any sales, gross receipts, general corporation,
tangible personal property, privilege, or license taxes and costs and expenses
in defending against the same.
(d) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon the Purchaser through, the
negligence, willful misfeasance, or bad faith of the Seller in the performance
of
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its duties under this Agreement or by reason of reckless disregard of the
Seller's obligations and duties under this Agreement.
(e) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against all costs, expenses, losses, claims, damages, and liabilities
arising out of or incurred in connection with the acceptance or performance of
the Seller's trusts and duties as Servicer under the Sale and Servicing
Agreement, except to the extent that such cost, expense, loss, claim, damage,
or liability shall be due to the willful misfeasance, bad faith, or negligence
(except for errors in judgment) of the Purchaser.
These indemnity obligations shall be in addition to any obligation that
the Seller may otherwise have.
5.5 Treatment. Seller agrees to treat this conveyance as (i) an absolute
transfer for tax purposes and (ii) an sale for all other purposes (including
without limitation financial accounting purposes), in each case on all relevant
books, records, tax returns, financial statements and other applicable
documents.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Obligations of Seller. The obligations of the Seller under this
Agreement shall not be affected by reason of any invalidity, illegality or
irregularity of any Receivable.
6.2 Repurchase Events. The Seller hereby covenants and agrees with the
Purchaser for the benefit of the Purchaser, the Trust, the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholders, that the
occurrence of a breach of any of the Seller's representations and warranties
contained in Section 3.2(b) hereof shall constitute events obligating the
Seller to repurchase Receivables hereunder ("Repurchase Events"), at the
Purchase Amount from the Purchaser or from the Trust. The repurchase
obligation of the Seller shall constitute the sole remedy to the Purchaser, the
Trust, the Owner Trustee, the Indenture Trustee, the Noteholders or the
Certificateholders against the Seller with respect to any Repurchase Event.
6.3 Seller's Assignment of Purchased Receivables. With respect to all
Receivables repurchased by the Seller pursuant to this Agreement, the Purchaser
shall assign, without recourse, representation or warranty, to the Seller all
the Purchaser's right, title and interest in and to such Receivables, and all
security and documents relating thereto.
6.4 Trust. The Seller acknowledges that:
(a) The Purchaser will, pursuant to the Sale and Servicing Agreement,
convey the Receivables to the Trust and assign its rights under this Agreement
to the Owner Trustee for the benefit of the Noteholders and the
Certificateholders, and that the representations and warranties contained in
this Agreement and the rights of the Purchaser under Sections 6.2 and 6.3
hereof are intended to benefit the Trust, the Owner Trustee, the Noteholders
and the Certificateholders. The Seller hereby consents to such conveyance and
assignment.
(b) The Trust will, pursuant to the Indenture, pledge the Receivables and
its rights under this Agree-
18
19
ment to the Indenture Trustee for the benefit of the Noteholders, and
that the representations and warranties contained in this Agreement and the
rights of the Purchaser under this Agreement, including under Sections 6.2 and
6.3 are intended to benefit the Indenture Trustee and the Noteholders. The
Seller hereby consents to such pledge.
6.5 Amendment. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Seller and the Purchaser;
provided, however, that any such amendment that materially adversely affects
the rights of the Noteholders or the Certificateholders under the Indenture,
Sale and Servicing Agreement or Trust Agreement shall be consented to by the
Noteholders of Notes evidencing not less than a majority of the Notes
Outstanding and the Certificateholders of Certificates evidencing not less than
a majority of the Certificate Balance.
6.6 Accountants' Letters.
(a) Coopers & Lybrand L.L.P. will review the characteristics of the
Receivables described in the Schedule of Receivables and will compare those
characteristics to the information with respect to the Receivables contained in
the Prospectus.
(b) Seller will cooperate with the Purchaser and Coopers & Lybrand
L.L.P. in making available all information and taking all steps reasonably
necessary to permit such accountants to complete the review set forth
in Section 6.6(a) above and to deliver the letters required of them under the
Note Underwriting Agreement and the Certificate Underwriting Agreement.
(c) Coopers & Lybrand L.L.P. will deliver to the Purchaser a letter,
dated the Closing Date, in the form previously agreed to by the Seller
and the Purchaser, with respect to the financial and statistical information
contained in the Prospectus under the caption "Delinquencies, Repossessions
and Net Losses" and with respect to such other information as may be agreed in
the form of letter.
6.7 Waivers. No failure or delay on the part of the Purchaser in
exercising any power, right or remedy
19
20
under this Agreement or the Assignment shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or
remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy.
6.8 Notices. All communications and notices pursuant hereto to either
party shall be in writing or by telegraph or telex and addressed or delivered
to it at its address (or in case of telex, at its telex number at such address)
shown in the opening portion of this Agreement or at such other address as may
be designated by it by notice to the other party and, if mailed or sent by
telegraph or telex, shall be deemed given when mailed, communicated to the
telegraph office or transmitted by telex.
6.9 Costs and Expenses. The Seller will pay all expenses incident to the
performance of its obligations under this Agreement and the Seller agrees to
pay all reasonable out-of-pocket costs and expenses of the Purchaser, excluding
fees and expenses of counsel, in connection with the perfection as against
third parties of the Purchaser's right, title and interest in and to the
Receivables and the enforcement of any obligation of the Seller hereunder.
6.10 Representations to the Seller. The respective agreements,
representations, warranties and other statements by the Seller and the
Purchaser set forth in or made pursuant to this Agreement shall remain in full
force and effect and will survive the closing under Section 2.2 hereof.
6.11 Confidential Information. The Purchaser agrees that it will
neither use nor disclose to any Person the names and addresses of the Obligors,
except in connection with the enforcement of the Purchaser's rights hereunder,
under the Receivables, under any Sale and Servicing Agreement or as required by
law.
6.12 Headings and Cross-References. The various headings in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this
Agreement to Section names or numbers are to such Sections of this Agreement.
20
21
6.13 GOVERNING LAW. THIS AGREEMENT AND THE ASSIGNMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
6.14 Counterparts. This Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
21
22
IN WITNESS WHEREOF, the parties hereby have caused this Purchase Agreement
to be executed by their respective officers thereunto duly authorized as of the
date and year first above written.
FORD MOTOR CREDIT COMPANY
By: \s\ R. P. Conrad
-----------------------------
Name: R. P. Conrad
Title: Assistant Secretary
FORD CREDIT AUTO RECEIVABLES
TWO L.P.
By: FORD CREDIT AUTO RECEIVABLES
TWO, INC.,
as General Partner
By: \s\ R. P. Conrad
-----------------------------
Name: R. P. Conrad
Title: Assistant Secretary
23
EXHIBIT A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated as of
October 1, 1997 (the "Purchase Agreement"), between the undersigned and FORD
CREDIT AUTO RECEIVABLES TWO L.P. (the "Purchaser"), the undersigned does hereby
assign, transfer and otherwise convey unto the Purchaser, without recourse, all
right, title and interest of the undersigned, whether now owned or hereafter
acquired, in and to the following: (i) the Receivables; (ii) with respect to
Precomputed Receivables, monies due thereunder on or after the Cutoff Date
(including Payaheads) and, with respect to Simple Interest Receivables, monies
due or received thereunder on or after the Cutoff Date (including in each case
any monies received prior to the Cutoff Date that are due on or after the
Cutoff Date and were not used to reduce the principal balance of the
Receivable); (iii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Seller in
the Financed Vehicles; (iv) rights to receive proceeds with respect to the
Receivables from claims on any physical damage, credit life, credit disability,
or other insurance policies covering Financed Vehicles or Obligors; (v) Dealer
Recourse; (vi) all of the Seller's rights to the Receivable Files; (vii)
payments and proceeds with respect to the Receivables held by the Seller;
(viii) all property (including the right to receive Liquidation Proceeds)
securing a Receivable (other than a Receivable repurchased by the Seller); (ix)
rebates of premiums and other amounts relating to insurance policies and other
items financed under the Receivables in effect as of the Cutoff Date; and (x)
all present and future claims, demands, causes of action 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 or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and
other property which
24
at any time constitute all or part of or are included in the proceeds
of any of the foregoing. The foregoing conveyance does not constitute and is
not intended to result in any assumption by the Purchaser of any obligation of
the undersigned to the Obligors, insurers or any other Person in connection
with the Receivables, Receivable Files, any insurance policies or any agreement
or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement and is to be governed by the Purchase Agreement.
2
25
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of October 1, 1997.
FORD MOTOR CREDIT COMPANY
By: _______________________
Name:
Title:
3
26
Exhibit B
Schedule of Receivables
DELIVERED TO PURCHASER
AT CLOSING
27
Schedule A
Location of Receivable Files
Akron
175 Montrose West Avenue
Crown Pointe Building
Suite 300
Copley, OH 44321
Albany
5 Pine West Plaza
Albany, NY 12205
Albuquerque
6100 Uptown Blvd., N.E.
Suite 300
Albuquerque, NM 87110
Amarillo
1616 S. Kentucky
Bldg. D, Suite 130
Amarillo, TX 79102
Anchorage
3201 C Street
Suite 303
Anchorage, AK 99503
Appleton
54 Park Place
Appleton, WI 54915-8861
Athens
3708 Atlanta Highway
Athens, GA 30604
Atlanta-North
North Park Town Center
Bldg. 400, Suite 180
1000 Abernathy Rd. N.E.
Atlanta, GA 30328
A-1
28
Atlanta-South
1691 Phoenix Blvd.
Suite 300
Atlanta, GA 30349
Atlanta/CL
1117 Perimeter Ctr. W
Suite 404 West
Atlanta, GA 30338
Atlantic Region District Office
14104 Newbrook Drive
Chantilly, VA 22021
Austin
1701 Directors Blvd.
Suite 320
Austin, TX 78744
Baltimore-East
Campbell Corporate
Center One
4940 Campbell Blvd.
Suite 140
Whitemarsh Business Community
Baltimore, MD 21236
Beaumont
2615 Calder
Suite 715
Beaumont, TX 77704
Billings
1643 Lewis Avenue
Suite 201
Billings, MT 59102
Birmingham
3535 Grandview Parkway
Suite 340
Birmingham, AL 35243
Boston-North
One Tech Drive
3rd Floor
Andover, MA 01810-2497
A-2
29
Boston-South
Southboro Place
2nd Floor
352 Turnpike Road
Southboro, MA 01772
Bristol
Landmark Center-
Suite A
113 Landmark Lane
Bristol, TN 37620
Buffalo
95 John Muir Drive
Suite 102
Amherst, NY 14228
Cape Girardeau
1409-C N. Mt. Auburn Rd.
Cape Girardeau, MO 63701
Charleston
Rivergate Center
Suite 150
4975 LaCross Road
North Charleston, SC 29418
Charlotte
6302 Fairview Road
Suite 500
Charlotte, NC 28210
Charlotte/CL
6302 Fairview Road
Suite 510
Charlotte, NC 28210
Chattanooga
6025 Lee Highway
Suite 443
Chattanooga, TN 37421
Cheyenne
6234 Yellowstone Road
Cheyenne, WY 82009
A-3
30
Chicago-East
One River Place
Suite A
Lansing, IL 60438
Chicago-North
9700 Higgins Road
Suite 720
Rosemont, IL 60018
Chicago-South
The Office of Waterfall Glen I
Suite 310
900 South Frontage Road
Woodridge, IL 60517
Chicago-West
2500 W. Higgins Rd.
Suite 280
Hoffman Estates, IL 60195
Chicago/CL
745 McClintock Drive
Suite 300
Burr Ridge, IL 60521
Cincinnati
8805 Governors Hill Dr.
Suite 230
Cincinnati, OH 45249
Cleveland
5700 Lombardo Centre
Suite 101
Seven Hills, OH 44131-2581
Colorado Springs
5575 Tech Center Dr.
Suite 220
Colorado Springs, CO 80919
Columbia
250 Berryhill Road
Suite 201
Columbia, SC 29210
A-4
31
Columbus
Metro V, Suite 470
655 Metro Place S
Dublin, OH 43017
Coral Springs-East
3111 N. University Dr.
Suite 800
Coral Springs, FL 33065
Corpus Christi
5350 South Staples
Suite 225
Corpus Christi, TX 78411
Dallas
Campbell Forum
Suite 600
801 E. Campbell Road
Richardson, TX 75081
Dallas
Campbell Forum
Suite 650
801 E. Campbell Road
Richardson, TX 75081
Davenport
Commerce Exch. Bldg.
2535 Tech Drive
Suite 300
Bettendorf, IA 52722
Decatur
401 Lee Street
Suite 500
Decatur, AL 35602
Denver
6300 S. Syracuse Way
Suite 195
Englewood, CO 80111
A-5
32
Des Moines
4200 Corporate Drive
Suite 107
W. Des Moines, IA 50266
Detroit-North
580 Kirts Boulevard
Suite 300
Troy, MI 48084
Detroit-West
One Parklane Blvd.
Suite 405E
Dearborn, MI 48126
Detroit/CL
One Parklane Blvd.
Suite 301E
Dearborn, MI 48126
Dothan
137 Clinic Drive
Dothan, AL 36303
El Paso
1200 Golden Key Circle
Suite 104
El Paso, TX 79925
Eugene
1600 Valley River Drive
Suite 190
Eugene, OR 97401
Falls Church
1420 Springhill Road
Suite 550
McLean, VA 22102
Fargo
3100 13th Ave. South
Suite 304
Fargo, ND 58103
A-6
33
Fayetteville
4317 Ramsey Street
Suite 300
Fayetteville, NC 28311
Findlay
3500 North Main Street
Findlay, OH 45840-1447
Ft. Myers
11935 Fairway Lakes Dr.
Fort Myers, FL 33913
Ft. Worth
Center Park Tower
Suite 400
2350 West Airport Frwy.
Bedford, TX 76022
Grand Junction
744 Horizon Court
Suite 330
Grand Junction, CO 81506
Grand Rapids
2851 Charlevoix Drive SE
Suite 300
Grand Rapids, MI 49546
Greensboro
1500 Pinecroft Rd.
Suite 220
Greensboro, NC 27407
Harlingen
1916 East Harrison
Harlingen, TX 78550
Harrisburg
4900 Ritter Road
Mechanicsburg, PA 17055
Henderson
618 North Green Street
Henderson, KY 42420
A-7
34
Honolulu
Ala Moano Pacific Center
Suite 922
1585 Kapiolani Blvd.
Honolulu, HI 96814
Houston-North
363 N. Sam Houston Pkwy. E.
Suite 700
Houston, TX 77060
Houston-West
820 Gessner
Suite 700
Houston, TX 77024
Huntington
3425 U.S. Route 60 East
Barboursville, WV 25504
Indianapolis
5875 Castle Creek Pkwy.
North Drive
Suite 240
Indianapolis, IN 46250
Jackson
Highland Village Center
Suite 292
4500 I-55 North
Jackson, MS 39211
Jacksonville
Suite 310
9485 Regency Square Boulevard
Jacksonville, FL 32225
Jefferson City
210 Prodo Drive
Jefferson City, MO 65109
A-8
35
Kansas City
8717 West 110th Street
Bldg. #14, Suite 550
Overland Park, KS 66210
Knoxville
5500 Lonas Drive
Suite 260
Knoxville, TN 37909
Lafayette
Saloom Office Park
Suite 350
100 Asma Boulevard
Lafayette, LA 70508
Lansing
2140 University Park Drive
Okemos, MI 48864
Las Vegas
500 N Rainbow Blvd.
Suite 312
Las Vegas, NV 89107
Little Rock
1701 Centerview Dr.
Suite 301
Little Rock, AR 72211
Long Island
972 Brush Hollow Road
5th Floor
Westbury, NY 11590-1740
Louisville
502 Executive Park
Louisville, KY 40207
Lubbock
4010 82nd Street
Suite 200
Lubbock, TX 79424
A-9
36
Macon
5400 Riverside Drive
Suite 201
Macon, GA 31210
Manchester
4 Bedford Farms
Bedford, NH 03110
Marshall
1408 North Michigan
Marshall, IL 62441
Memphis
6555 Quince Road
Suite 300
Memphis, TN 38119
Miami
6303 Blue Lagoon Drive
Suite 200
Miami, FL 33126
Milwaukee
10850 W. Park Place
Suite 110
Milwaukee, WI 53224
Minneapolis
One Southwest Crossing
Suite 308
11095 Viking Drive
Eden Prairie, MN 55344
Mobile
1201 Montlimar Dr.
Suite 700
Mobile, AL 36609-1718
Nashville
Highland Ridge
Suite 190
565 Marriott Drive
Nashville, TN 37214
A-10
37
New Haven
35 Thorpe Ave.
Wallingford, CT 06492
New Jersey-Central
101 Interchange Plaza
Cranbury, NJ 08512
New Jersey-North
103 Eisenhower Parkway
4th Floor
Roseland, NJ 07068
New Jersey-South
10000 MidAtlantic Dr.
Suite 401 West
Mt. Laurel, NJ 08054
New Orleans
Lakeway III
3838 N. Causeway Blvd.
Suite 3200
Metairie, LA 70002
Norfolk
Greenbrier Pointe
Suite 350
1401 Greenbrier Pkwy.
Chesapeake, VA 23320
Odessa
Ashford Park Office Center
Suite 201A
2626 John B. Sheprd Parkway
Odessa, TX 79762
Oklahoma City
Perimeter Center
Suite 300
4101 Perimeter Ctr Dr.
Oklahoma City, OK 73112
A-11
38
Omaha
10040 Regency Circle
Suite 100
Omaha, NE 68114-3786
Omaha Customer Service Center
12110 Emmet Street
Omaha, NB 68164
Orange
765 The City Drive
Suite 400
Orange, CA 92668
Orange/CL
765 The City Drive
Suite 401
Orange, CA 92668
Orlando
1060 Maitland Ctr Commons
Suite 210
Maitland, FL 32751
Pasadena
225 S. Lake Avenue
Suite 1200
Pasadena, CA 91101
Pensacola
25 W. Cedar Street
Suite 316
Pensacola, Fl 32501
Philadelphia
Bay Colony Executive Park
Suite 100
575 E. Swedesford Rd.
Wayne, PA 19087
Philadelphia/CL
500 N. Gulph Rd.
Suite 110
King of Prussia, PA 19406
A-12
39
Phoenix
4742 North 24th Street
Suite 215
Phoenix, AZ 85016
Pittsburgh
Foster Plaza 9
750 Holiday Drive
4th Floor, Suite 420
Pittsburgh, PA 15220
Portland
2401 Congress Street
Portland, ME 04102
Portland
10220 S.W. Greenburg Blvd.
Suite 415
Portland, OR 97223
Raleigh
3651 Trust Drive
Raleigh, NC 27604
Regional Opers Center
7090 Columbia Gateway Dr.
Columbia, MD 21046
Richmond
300 Arboretum Place
Suite 320
Richmond, VA 23236
Roanoke
5238 Valley Pointe Pkwy.
Suite 6
Roanoke, VA 24019
Sacramento
2720 Gateway Oaks Dr.
Suite 200
Sacramento, CA 95833
Saginaw
4901 Towne Centre Rd.
Suite 200
Saginaw, MI 48605
A-13
40
Salt Lake City
310 E. 4500 S.
Suite 340
Murray, UT 84107
Santa Ana Central Collections
765 The City Drive
Suite 402
Orange. CA 92668
San Antonio
100 N.E. Loop 410
Suite 625
San Antonio, TX 78216-4742
San Bernardino
1615 Orange Tree Lane
Suite 215
Redlands, CA 92374
San Diego
3111 Camino Del Rio N.
Suite 1333
San Diego, CA 92108
San Francisco
4301 Hacienda Dr.
Suite 400
Pleasanton, CA 94588
San Francisco/CL
4900 Hopyard Road
Suite 220
Pleasanton CA 94588
San Jose
1900 McCarthy Blvd.
Suite 400
Milpitas, CA 95035
Savannah
6600 Abercorn Street
Suite 206
Savannah, GA 31405
A-14
41
Seattle
13555 S.E. 36th Street
Suite 350
Bellevue, WA 98006
Shreveport
South Pointe Centre
Suite 200
3007 Knight Street
Shreveport, LA 71105
South Bay
301 E. Ocean Boulevard
Suite 1900
Long Beach, CA 90802
South Bend
4215 Edison Lakes Parkway
Suite 140
Mishawaka, IN 46545
Spokane
901 North Monroe Ct.
Suite 350
Spokane, WA 99201-2148
Springfield
3275 E. Ridgeview
Springfield, MO 65804
St. Louis
4227 Earth City Expressway
Suite 100
Earth City, MO 63045
Syracuse
5788 Widewaters Pkwy.
DeWitt, NY 13214
Tampa
Lincoln Pointe, Suite 800
2502 Rocky Point Drive
Tampa, FL 33607
A-15
42
Tulsa
9820 East 41st St.
Suite 300
Tulsa, OK 74145
Tupelo
One Mississippi Plaza
Tupelo, MS 38801
Tyler
821 East SE Loop 323
Suite 300
Tyler, TX 75701
Ventura
260 Maple Court
Suite 210
Ventura, CA 93003
Washington, D.C.
2440 Research Blvd.
Suite 150
Rockville, MD 20850
Westchester
660 White Plains Road
Tarrytown, NY 10591
Western Carolina
215 Thompson Street
Hendersonville, NC 28792
Wichita
7570 West 21st
Wichita, KS 67212
A-16
43
APPENDIX A
Definitions and Usage
AA-1