EXHIBIT 10.1
--------------------------------------------------------------------------------
CARMAX AUTO SUPERSTORES, INC.,
as Seller,
and
CARMAX AUTO RECEIVABLES LLC,
as Purchaser
------------------------------
PURCHASE AGREEMENT
Dated as of September [__], 1999
------------------------------
--------------------------------------------------------------------------------
PURCHASE AGREEMENT, dated as of September [__], 1999 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement"), by and between CARMAX AUTO SUPERSTORES, INC., a Virginia
corporation (the "Seller"), and CARMAX AUTO RECEIVABLES LLC, a Virginia limited
liability company (the "Purchaser").
WHEREAS, in the regular course of its business, the Seller originates
motor vehicle retail installment sale contracts;
WHEREAS, the Seller wishes to sell to the Purchaser, and the Purchaser
wishes to purchase from the Seller, certain of such contracts and certain
related property;
WHEREAS, the Purchaser intends to transfer such contracts and such
related property to the CarMax Auto Owner Trust 1999-1, a Delaware business
trust (the "Trust"), pursuant to a Sale and Servicing Agreement dated as of
September [__], 1999 among the Owner Trustee, the Seller, as servicer, and the
Purchaser (as amended, supplemented or otherwise modified and in effect from
time to time, the "Sale and Servicing Agreement"); and
WHEREAS, the Seller agrees that all covenants and agreements made by
the Seller herein with respect to such contracts and such related property shall
also be for the benefit of the Trust;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All capitalized terms used but not defined
in this Agreement shall have the respective meanings set forth in the Sale and
Servicing Agreement or, if not defined therein, in the Indenture. Except as
otherwise specified herein or as the context may otherwise require, the
following terms shall have the respective meanings set forth below for all
purposes of this Agreement.
"Assignment" shall mean a written assignment substantially in the form
attached as Exhibit A to this Agreement.
"Closing" shall have the meaning specified in Section 2.3.
"Contract" shall mean a motor vehicle retail installment sale contract
identified on the Contract Schedule (as such contract may be amended,
supplemented or otherwise modified and in effect from time to time).
"Contract Schedule" shall mean the list identifying the Contracts
attached as Schedule 1 to this Agreement (which list may be in the form of
microfiche or compact disk).
"Indenture" shall mean the Indenture, dated as of September [__],
1999, between the Trust and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Indenture Trustee" shall mean Bankers Trust Company, a New York
banking corporation, not in its individual capacity but solely as Indenture
Trustee under the Indenture, its successors in interest and any successor
trustee under the Indenture.
"Officer's Certificate" shall mean a certificate signed by the
chairman, the president, any executive vice president, vice president or the
treasurer of the Seller and delivered to the Purchaser.
"Owner Trustee" shall mean First Union Trust Company, National
Association, a national banking association, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, its successors in interest
and any successor trustee under the Trust Agreement.
"Prospectus" shall have the meaning specified in the Underwriting
Agreement.
"Purchase Price" shall mean $[____________].
"Purchaser" shall mean CarMax Auto Receivables LLC, a Virginia limited
liability company, in its capacity as purchaser of the Contracts under this
Agreement, and its successors in such capacity.
"Relevant UCC" shall mean the Uniform Commercial Code as in effect
from time to time in any relevant jurisdiction.
"Seller" shall mean CarMax Auto Superstores, Inc., a Virginia
corporation, in its capacity as seller of the Contracts under this Agreement,
and its successors in such capacity.
"Trust Agreement" shall mean the Trust Agreement, dated as of
September [__], 1999, between the Purchaser and the Owner Trustee, as the same
may be amended, supplemented or otherwise modified and in effect from time to
time.
-2-
"Underwriting Agreement" shall mean the Underwriting Agreement, dated
as of September [__], 1999, between Banc of America Securities LLC, as
representative of the several underwriters named therein, and the Purchaser, as
the same may be amended, supplemented or otherwise modified and in effect from
time to time.
ARTICLE II
PURCHASE AND SALE OF CONTRACTS
SECTION 2.1. Purchase and Sale of Contracts.
(a) On the Closing Date, and simultaneously with the transactions to
be consummated pursuant to the Trust Agreement, the Sale and Servicing Agreement
and the Indenture, the Seller shall irrevocably sell, transfer, assign and
otherwise convey to the Purchaser, without recourse (subject to the obligations
herein), all right, title and interest of the Seller, whether now owned or
hereafter acquired, in, to and under the following:
(i) the Contracts;
(ii) all amounts received on or in respect of the Contracts after
the Cutoff Date;
(iii) the security interests in the Financed Vehicles;
(iv) any proceeds from claims on or refunds of premiums with
respect to physical damage, theft, credit life and credit disability
insurance policies relating to the Financed Vehicles or the related
Obligors;
(v) the Contract Files; and
(vi) 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 at any
time constitute all or part of or are included in the proceeds of any of
the foregoing.
-3-
(b) The Seller and the Purchaser intend that the transfer of the
Contracts and the related property contemplated by Section 2.1(a) constitute a
sale of the Contracts and such related property, conveying good title to the
Contracts and such related property, from the Seller to the Purchaser and that
the Contracts and such related property 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. If such transfer is deemed to be a pledge to secure the
payment of the Purchase Price, however, the Seller hereby grants to the
Purchaser a first priority security interest in all of the Seller's right, title
and interest in, to and under the Contracts and such related property, and all
proceeds thereof, to secure the payment of the Purchase Price, and in such
event, this Agreement shall constitute a security agreement under applicable
law.
SECTION 2.2. Payment of Purchase Price. In consideration for the
Contracts and the related property described in Section 2.1(a), the Purchaser
shall, on or before the Closing Date, pay to or upon the order of the Seller the
Purchase Price. An amount equal to $[____________] of the Purchase Price shall
be paid to the Seller in cash. The remainder of the Purchase Price shall be paid
by crediting the Seller with a contribution to the capital of the Purchaser.
SECTION 2.3. The Closing. The sale and purchase of the Contracts shall
take place at a closing (the "Closing") at the offices of McGuire, Woods, Battle
& ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on the Closing
Date, simultaneously with the closings under:
(i) the Sale and Servicing Agreement, pursuant to which the
Purchaser will transfer all of its right, title and interest in, to and
under the Contracts and the related property described in Section 2.1(a) to
the Trust in exchange for the Notes and the Certificates;
(ii) 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
Trust Property to secure the Notes;
(iii) the Trust Agreement, pursuant to which the Trust will issue
the Certificates; and
(iv) the Underwriting Agreement, pursuant to which the Purchaser
will sell to the underwriters named therein the Notes and the Certificates.
-4-
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and 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 and Good Standing. The Purchaser has been duly
organized and is validly existing as a limited liability company in good
standing under the laws of the Commonwealth of Virginia, has the power,
authority and legal right to own its properties and to conduct its business as
such properties are currently owned and such business is currently conducted and
has the power, authority and legal right to acquire and own the Contracts.
(b) Due Qualification. The Purchaser is duly qualified to do business
as a foreign limited liability company in good standing and has obtained all
necessary licenses and approvals in each jurisdiction in which the failure to so
qualify or to obtain such licenses and approvals would, in the reasonable
judgment of the Purchaser, materially and adversely affect the performance by
the Purchaser of its obligations under, or the validity or enforceability of,
this Agreement.
(c) Power and Authority. The Purchaser has the power and authority to
execute, deliver and perform its obligations under this Agreement, and the
execution, delivery and performance of this Agreement have been duly authorized
by the Purchaser by all necessary limited liability company action.
(d) Binding Obligation. This Agreement constitutes the legal, valid
and binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(e) No Violation. The execution, delivery and performance by the
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof will not conflict
with, result in a breach of any of the material terms and provisions of or
constitute (with or without notice or lapse of time or both) a default under the
articles of organization or operating agreement of the Purchaser or any material
indenture, agreement, mortgage, deed of trust or other instrument to which the
Purchaser is a party or by which the Purchaser is bound or to which any of its
properties are subject, or result in the creation or imposition of any lien upon
any of its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument (other than pursuant to this
Agreement), or violate any law, order, rule or regulation applicable to the
Purchaser or its properties of any federal or state regulatory body, court,
administrative agency or other governmental instrumentality having jurisdiction
over the Purchaser or any of its properties.
-5-
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of the Purchaser, threatened, against the
Purchaser before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over the Purchaser
or its properties (i) asserting the invalidity of this Agreement, (ii) seeking
to prevent the consummation of any of the transactions contemplated by this
Agreement or (iii) seeking any determination or ruling that, in the reasonable
judgment of the Purchaser, would materially and adversely affect the performance
by the Purchaser of its obligations under, or the validity or enforceability of,
this Agreement.
SECTION 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 and Good Standing. The Seller has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Virginia, has the power, authority
and legal right to own its properties and to conduct its business as such
properties are currently owned and such business is currently conducted and
has the power, authority and legal right to acquire and own the Contracts.
(ii) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing and has obtained all
necessary licenses and approvals in each jurisdiction in which the failure
to so qualify or to obtain such licenses and approvals would, in the
reasonable judgment of the Seller, materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement.
(iii) Power and Authority. The Seller has the power and authority
to execute, deliver and perform its obligations under this Agreement and
the Assignment, and the execution, delivery and performance of this
Agreement and the Assignment have been duly authorized by the Seller by all
necessary corporate action. The Seller has the power and authority to sell,
assign, transfer and convey the Contracts to the Purchaser and has duly
authorized such transfer by all necessary corporate action.
-6-
(iv) Valid Transfer; Binding Obligation. This Agreement and the
Assignment effect a valid sale, transfer, assignment and conveyance to the
Purchaser of the Contracts enforceable against creditors of and purchasers
from the Seller. This Agreement and the Assignment constitute legal, valid
and binding obligations of the Seller, enforceable against the Seller in
accordance with their terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(v) No Violation. The execution, delivery and performance by the
Seller of this Agreement and the Assignment, the consummation of the
transactions contemplated hereby and thereby and the fulfillment of the
terms hereof and thereof will not conflict with, result in a breach of any
of the material terms and provisions of or constitute (with or without
notice or lapse of time or both) a default under the articles of
incorporation or bylaws of the Seller or any material indenture, agreement,
mortgage, deed of trust or other instrument to which the Seller is a party
or by which the Seller is bound or to which any of its properties are
subject, or result in the creation or imposition of any lien upon any of
its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument (other than pursuant to this
Agreement), or violate any law, order, rule or regulation applicable to the
Seller or its properties of any federal or state regulatory body, court,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or any of its properties.
(vi) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of the Seller, threatened, against the Seller
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over the Seller or its
properties (i) asserting the invalidity of this Agreement or the
Assignment, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or the Assignment or (iii)
seeking any determination or ruling that, in the reasonable judgment of the
Seller, would materially and adversely affect the performance by the Seller
of its obligations under, or the validity or enforceability of, this
Agreement or the Assignment.
-7-
(b) The Seller makes the following representations and warranties as
to the Contracts on which the Purchaser shall be deemed to have relied in
accepting the Contracts. The representations and warranties speak as of the
execution and delivery of this Agreement, except to the extent otherwise
provided, but shall survive the sale, transfer, assignment and conveyance of the
Contracts to the Purchaser pursuant to this Agreement, the sale, transfer,
assignment and conveyance of the Contracts to the Trust pursuant to the Sale and
Servicing Agreement and the pledge of the Contracts to the Indenture Trustee
pursuant to the Indenture.
(i) Characteristics of Contracts. Each Contract (A)has been
originated by the Seller in the ordinary course of business in connection
with the sale of a new or used motor vehicle and has been fully and
properly executed by the parties thereto, (B) has created a valid, binding
and enforceable security interest in favor of the Seller in the related
Financed Vehicle, (C) contains customary and enforceable provisions such
that the rights and remedies of the holder thereof are adequate for
realization against the collateral of the benefits of the security, (D)
provides for level monthly payments that fully amortize the Amount Financed
by maturity (except that the period between the date of such Contract and
the first Scheduled Payment may be less than or greater than one month and
the amount of the first and last Scheduled Payments may be less than or
greater than the level payments) and yield interest at the related APR, (E)
provides for, in the event that such Contract is prepaid, a prepayment that
fully pays the Principal Balance of such Contract with interest at the
related APR through the date of payment, (F) is a retail installment sale
contract, (G) is secured by a new or used motor vehicle, (H) is a Simple
Interest Contract and (I) relates to an Obligor who has made at least two
payments under such Contract as of the Cutoff Date.
(ii) Contract Schedule. The information set forth in the Contract
Schedule was 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 Purchaser were utilized in selecting the Contracts from
those retail installment sale contracts which met the criteria contained
herein. The information set forth in the compact disk or other listing
regarding the Contracts made available to the Purchaser and its assigns
(which compact disk or other listing is required to be delivered as
specified herein) is true and correct in all material respects.
-8-
(iii) Compliance with Law. Each Contract and the sale of the
related Financed Vehicle complied, at the time such Contract was originated
and complies, as of the Closing Date, 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 Credit Billing Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty
Act, the Federal Reserve Board's Regulations B, M and Z, the Soldiers' and
Sailors' Civil Relief Act of 1940 and state adaptations of the Uniform
Consumer Credit Code.
(iv) Binding Obligation. Each Contract represents the genuine,
legal, valid and binding payment obligation in writing of the related
Obligor, enforceable by the holder thereof in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
(v) No Government Obligor. No Contract is due from the United
States of America or any state thereof or from any agency, department or
instrumentality of the United States of America or any state thereof.
(vi) Security Interest in Financed Vehicles. Immediately prior to
the transfer of the Contracts by the Seller to the Purchaser, each Contract
was secured by a valid, binding and enforceable first priority perfected
security interest in favor of the Seller in the related Financed Vehicle
and, at such time as enforcement of such security interest is sought, there
shall exist a valid, binding and enforceable first priority perfected
security interest in such Financed Vehicle for the benefit of the Purchaser
or its assigns (subject to any statutory or other lien arising by operation
of law after the Closing Date which may be prior to such security
interest).
(vii) Contracts in Force. No Contract has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released in
whole or in part from the Lien granted by the related Contract.
(viii) No Waiver. No provision of a Contract has been waived in
such a manner that such Contract fails to meet all of the representations
and warranties made by the Seller in this Section 3.2(b) with respect
thereto.
-9-
(ix) No Defenses. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Contract.
(x) No Liens. To the best of the Seller's knowledge, no liens or
claims have been filed for work, labor or materials relating to any
Financed Vehicle that are prior to, or equal or coordinate with, the
security interest in such Financed Vehicle created by the related Contract.
(xi) No Default; Repossession. No default, breach, violation or
event permitting acceleration under the terms of any Contract has occurred,
no continuing condition that with notice or the lapse of time or both would
constitute a default, breach, violation or event permitting acceleration
under the terms of any Contract has arisen and no Financed Vehicle has been
repossessed as of the Cutoff Date.
(xii) Title. The Seller intends that the transfer of the
Contracts contemplated by Section 2.1(a) constitute a sale of the Contracts
from the Seller to the Purchaser and that the beneficial interest in, and
title to, the Contracts 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. The Seller has not sold, transferred, assigned or pledged
any Contract to any Person other than the Purchaser. Immediately prior to
the transfer of the Contracts contemplated by Section 2.1(a), the Seller
had good and marketable title to the Contracts free and clear of all Liens,
encumbrances, security interests and rights of others and, immediately upon
such transfer, the Purchaser shall have good and marketable title to the
Contracts, free and clear of all Liens, encumbrances, security interests
and rights of others. The transfer of the Contracts contemplated by Section
2.1(a) has been perfected by all necessary action under the Relevant UCC.
(xiii) Valid Assignment. No Contract has been originated in, or
is subject to the laws of, any jurisdiction under which the sale, transfer,
assignment and conveyance of such Contract under this Agreement or the
pledge of such Contract under the Indenture is unlawful, void or voidable.
The Seller has not entered into any agreement with any account debtor that
prohibits, restricts or conditions the assignment of the Contracts.
-10-
(xiv) All Filings Made. All filings (including, without
limitation, filings under the Relevant UCC) necessary in any jurisdiction
to give the Purchaser a first priority perfected security interest in the
Contracts have been made or will be made on or prior to the Closing Date.
(xv) Chattel Paper. Each Contract constitutes "chattel paper" as
defined in the Relevant UCC.
(xvi) One Original. There is only one original executed copy of
each Contract.
(xvii) Principal Balance. Each Contract had an original Principal
Balance of not more than $50,000 and a remaining Principal Balance as of
the Cutoff Date of not less than $500.
(xviii) No Bankrupt Obligors. As of the Cutoff Date, no Contract
was due from an Obligor that was the subject of a proceeding under the
Bankruptcy Code of the United States or was bankrupt.
(xix) New and Used Vehicles. As of the Cutoff Date, approximately
[__]% of the Pool Balance related to Contracts secured by new Financed
Vehicles and approximately [__]% of the Pool Balance related to Contracts
secured by used Financed Vehicles.
(xx) Origination. Each Contract was originated after
[___________], 19[__].
(xxi) Term to Maturity. Each Contract had an original term to
maturity of not more than 72 months and not less than 12 months and a
remaining term to maturity as of the Cutoff Date of not more than 70 months
and not less than three months.
(xxii) Weighted Average Maturity. The weighted average remaining
term to maturity of the Contracts as of the Cutoff Date was [____] months.
(xxiii) Annual Percentage Rate. Each Contract has an APR of at
least 5% and not more than 25%.
(xxiv) Location of Contract Files. The Contract Files are
maintained at the location listed in Schedule 2 to this Agreement.
(xxv) Simple Interest Method. All payments with respect to the
Contracts have been allocated consistently in accordance with the Simple
Interest Method.
-11-
(xxvi) No Delinquent Contracts. As of the Cutoff Date, no
Contract was 30 or more days past due.
(xxvii) Prospectus Data. The tabular and numerical data contained
in the Prospectus relating to the characteristics of the Contracts is true
and correct in all material respects.
(xxviii) Insurance. The Seller, in accordance with its customary
procedures, has determined whether or not each Obligor has obtained
physical damage insurance (which insurance shall not be force placed
insurance) covering the related Financed Vehicle.
ARTICLE IV
CONDITIONS
SECTION 4.1. Conditions to Obligation of the Purchaser. The obligation
of the Purchaser to purchase the Contracts for the Seller on the Closing Date is
subject to the satisfaction of the following conditions:
(i) Representations and Warranties True. The representations and
warranties of the Seller contained herein 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 before
the Closing Date.
(ii) Computer Files Marked. The Seller shall, at its own expense,
on or before the Closing Date, indicate in its computer files that the
Contracts have been sold to the Purchaser pursuant to this Agreement and
deliver to the Purchaser the Contract Schedule certified by an officer of
the Seller to be true, correct and complete.
(iii) Execution of Assignment. The Seller shall, on or before the
Closing Date, execute and deliver the Assignment.
(iv) Evidence of UCC Filing. The Seller shall record and file, at
its own expense, on or within ten (10) days after the Closing Date, a UCC-1
financing statement in each jurisdiction in which such filing is required
by applicable law, executed by the Seller, as seller or debtor, and naming
the Purchaser, as purchaser or secured party, naming the Contracts and the
related property described in Section 2.1(a) as collateral, meeting the
requirements of the laws of each such jurisdiction and in such manner as is
necessary to perfect the sale, transfer, assignment and conveyance of the
Contracts to the Purchaser. The Seller shall deliver a file-stamped copy,
or other evidence satisfactory to the Purchaser of such filing, to the
Purchaser within ten (10) days after the Closing Date.
-12-
(v) Other Documents. The Seller shall have delivered to the
Purchaser such other documents as the Purchaser may reasonably request.
(iv) Other Transactions. The transactions contemplated by the
Sale and Servicing Agreement, the Indenture, the Trust Agreement and the
Underwriting Agreement shall be consummated on the Closing Date.
SECTION 4.2. Conditions to Obligation of the Seller. The obligation of
the Seller to sell the Contracts to the Purchaser on the Closing Date is subject
to the satisfaction of the following conditions:
(i) Representations and Warranties True. The representations and
warranties of the Purchaser contained herein 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
before the Closing Date.
(ii) Purchase Price. The Purchaser shall have delivered to the
Seller, on or before the Closing Date, the Purchase Price as provided in
Section 2.2.
ARTICLE V
COVENANTS OF THE SELLER
The Seller agrees with the Purchaser as follows; provided, 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:
SECTION 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 Contracts and 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.
-13-
(b) The Seller shall not change its name, identity or corporate
structure in any manner that would make any financing statement or continuation
statement filed by the Seller in accordance with Section 5.1(a) seriously
misleading within the meaning of Section 9-402(7) of the Relevant UCC, unless it
shall have given the Purchaser at least sixty (60) days' prior written notice
thereof and shall have promptly filed such amendments to previously filed
financing statements or continuation statements or such new financing statements
as may be necessary to continue the perfection of the interest of the Purchaser
in the Contracts and the proceeds thereof.
(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 Relevant UCC would
require the filing of any amendment to any previously filed financing statement
or continuation statement or of any new financing statement and shall promptly
file any such amendment, continuation statement or any new financing statement.
The Seller shall at all times maintain each office from which it shall service
Contracts, and its principal executive office, within the United States of
America.
(d) The Seller shall maintain accounts and records as to each Contract
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Contract, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Contract.
(e) The Seller shall maintain its computer systems so that, from and
after the time of the transfer of the Contracts to the Purchaser pursuant to
this Agreement, the Seller's master computer records (including any back-up
archives) that refer to a Contract shall indicate clearly that such Contract is
owned by the Purchaser (or, upon transfer of the Contracts to the Trust, by the
Trust). Indication of the Purchaser's ownership of a Contract shall be deleted
from or modified on the Seller's computer systems when, and only when, such
Contract shall have been paid in full or repurchased by the Seller.
(f) If at any time the Seller shall propose to sell, grant a security
interest in or otherwise transfer any interest in any motor vehicle retail
installment sale contract to any prospective purchaser, lender or other
transferee, the Seller shall give to such prospective purchaser, lender or other
transferee computer tapes, compact disks, records or print-outs (including any
restored from back-up archives) that, if they shall refer in any manner
whatsoever to any Contract, shall indicate clearly that such Contract has been
sold and is owned by the Purchaser (or, upon transfer of the Contracts to the
Trust, the Trust), unless such Contract has been paid in full or repurchased by
the Seller.
-14-
(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 Contract.
(h) Upon request, the Seller shall furnish to the Purchaser, within
ten (10) Business Days, a list of all Contracts (by contract number and name of
Obligor) then owned by the Purchaser, together with a reconciliation of such
list to the Contract Schedule.
SECTION 5.2. Other Liens or Interests. Except for the conveyances
hereunder, the Seller shall not sell, pledge, assign or transfer any Contract to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on
any interest therein, and the Seller shall defend the right, title, and interest
of the Purchaser in, to and under the Contracts against all claims of third
parties claiming through or under the Seller.
SECTION 5.3. Costs and Expenses. The Seller shall pay all reasonable
costs and expenses incurred in connection with the perfection of the Purchaser's
right, title and interest in, to and under the Contracts.
SECTION 5.4. Indemnification.
(a) The Seller shall indemnify, defend and hold harmless the Purchaser
from and against all costs, expenses, losses, claims, damages and liabilities
arising out of or resulting from the failure of a Contract 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 indemnify, defend and hold harmless the Purchaser
from and against all costs, expenses, losses, claims, damages and liabilities
arising out of or resulting from the use, ownership or operation by the Seller
or any Affiliate of the Seller of a Financed Vehicle.
(c) The Seller shall indemnify, defend and hold harmless the Purchaser
from and against any taxes that may at any time be asserted against the
Purchaser with respect to, and as of the date of, the transfer of the Contracts
pursuant to this Agreement, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but not
including any taxes asserted with respect to ownership of the Contracts or
federal or other Applicable Tax State income taxes arising out of the
transactions contemplated by this Agreement), and all costs and expenses in
defending against such taxes.
-15-
(d) The Seller shall indemnify, defend and hold harmless the Purchaser
from and against any loss, liability or expense incurred by reason of the
Seller's willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of a reckless disregard of its
obligations and duties under this Agreement.
(e) The Seller shall indemnify, defend 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 by
the Seller, in its capacity as servicer, of its obligations and duties under the
Sale and Servicing Agreement, except to the extent that such cost, expense,
loss, claim, damage or liability shall be due to the Purchaser's willful
misfeasance, bad faith or gross negligence (other than errors in judgment).
SECTION 5.5. Sale. The Seller agrees to treat the transfer of the
Contracts and the related property contemplated by Section 2.1(a) for all
purposes (including, without limitation, tax and financial accounting purposes)
as an absolute transfer on all relevant books, records, tax returns, financial
statements and other applicable documents.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 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 Contract.
SECTION 6.2. Repurchase of Contracts. If any representation or
warranty of the Seller contained in Section 3.2(b) shall be breached or shall
fail to be true, and such breach or failure shall not have been cured by the
close of business on the last day of the Collection Period which includes the
thirtieth (30th) day after the date on which the Seller becomes aware of, or
receives written notice from the Purchaser, the Indenture Trustee, the Owner
Trustee, the Noteholders or the Certificateholders of, such breach or failure,
and such breach or failure materially and adversely affects the interest of the
Purchaser or the Trust in a Contract, the Seller shall repurchase such Contract
from the Purchaser or the Trust on the Payment Date immediately following such
Collection Period. In consideration of the repurchase of a Contract hereunder,
the Seller shall remit the Purchase Amount of such Contract to the Purchaser or
the Trust, as applicable. The sole remedy of the Purchaser, the Trust, the
Indenture Trustee, the Owner Trustee, the Noteholders and the Certificateholders
with respect to a breach or failure to be true of the representations and
warranties made by the Seller pursuant to Section 3.2(b) shall be to require the
Seller to repurchase Contracts pursuant to this Section 6.2.
-16-
SECTION 6.3. Purchaser's Assignment of Repurchased Contracts. If the
Seller repurchases a Contract pursuant to Section 6.2, the Purchaser shall
assign, without recourse, representation or warranty, to the Seller all the
Purchaser's right, title and interest in, to and under such Contract and all
security and documents relating thereto.
SECTION 6.4. Related Transactions.
(a) The Seller acknowledges that the Purchaser will, pursuant to the
Sale and Servicing Agreement, sell, transfer, assign and convey the Contracts to
the Trust on the Closing Date and assign its rights under this Agreement to the
Owner Trustee for the benefit of the Noteholders, the Certificateholders and the
Insurer. The Seller acknowledges that the representations and warranties
contained in this Agreement and the rights of the Purchaser under this
Agreement, including, without limitation, under Sections 6.2 and 6.3, are
intended to benefit the Trust, the Noteholders, the Certificateholders and the
Insurer. The Seller hereby consents to such transfer and assignment.
(b) The Seller acknowledges that the Trust will, pursuant to the
Indenture, pledge the Contracts and its rights under this Agreement to the
Indenture Trustee for the benefit of the Noteholders and the Insurer. The Seller
acknowledges that the representations and warranties contained in this Agreement
and the rights of the Purchaser under this Agreement, including, without
limitation, under Sections 6.2 and 6.3, are intended to benefit the Noteholders
and the Insurer. The Seller hereby consents to such pledge.
SECTION 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, the Sale and Servicing Agreement or the Trust Agreement must be
consented to by the Holders of Notes evidencing not less than 51% of the Note
Balance and the Holders of Certificates evidencing not less than 51% of the
Certificate Balance; and, provided further, that no amendment to this Agreement
shall be effective without the consent of the Insurer, unless an Insurer Default
shall have occurred and be continuing, if such proposed amendment would
reasonably be expected to have a material adverse effect on the rights of the
Insurer.
-17-
SECTION 6.6. Accountants' Letters.
(a) The Seller shall cause a firm of independent certified public
accountants (who may also render other services to the Seller) to perform
certain procedures regarding the characteristics of the Contracts described in
the Contract Schedule and to compare those characteristics to the information
with respect to the Contracts contained in the Prospectus. The Seller shall
cooperate with the Purchaser and such accountants in making available all
information and taking all steps reasonably necessary to permit such accountants
to complete such procedures and to deliver the letters required of them under
the Underwriting Agreement.
(b) The Seller shall cause a firm of independent certified public
accountants (who may also render other services to the Seller) to deliver to the
Purchaser a letter, dated the date of the Prospectus, 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 captions
"Delinquency Experience" and "Credit Loss Experience" and with respect to such
other information as may be agreed in the forms of such letters.
SECTION 6.7. Notices. All demands, notices and other communications
under this Agreement shall be in writing, personally delivered, sent by
telecopier, overnight courier or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (i) in the
case of the Seller, at the following address: ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasury Department, and (ii) in the case of the
Purchaser, at the following address: ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Treasury Department.
SECTION 6.8. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Purchaser, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
provided in this Agreement are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
SECTION 6.9. Costs and Expenses. The Seller shall pay all expenses
incident to the performance of its obligations under this Agreement and 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, to and under the Contracts and
the enforcement of any obligation of the Seller hereunder.
-18-
SECTION 6.10. Representations of Seller and Purchaser. 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 shall survive the Closing.
SECTION 6.11. Confidential Information. The Purchaser shall not use or
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
Contracts, under the Sale and Servicing Agreement or as required by law.
SECTION 6.12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
SECTION 6.13. Agreements of Purchaser.
(a) The Purchaser will not commingle any of its assets with those of
the Seller or the ultimate parent of the Purchaser.
(b) The Purchaser will maintain separate limited liability company
records and books of account from those of the Seller or the ultimate parent of
the Purchaser.
(c) The Purchaser will conduct its business from an office separate
from the Seller or the ultimate parent of the Purchaser.
SECTION 6.14. No Bankruptcy Petition. The Seller covenants and agrees
that, prior to the date which is one year and one day after the payment in full
of all securities issued by the Purchaser or by a trust for which the Purchaser
was the depositor, which securities were rated by any nationally recognized
statistical rating organization, it will not institute against, or join any
other Person in instituting against, the Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or any other
proceeding under any federal or state bankruptcy or similar law.
SECTION 6.15. 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.
-19-
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
CARMAX AUTO SUPERSTORES, INC.,
as Seller
By:________________________________
Name:
Title:
CARMAX AUTO RECEIVABLES LLC,
as Purchaser
By:________________________________
Name:
Title:
-20-
EXHIBIT A
FORM OF ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated as
of September [__], 1999, between the undersigned and CARMAX AUTO RECEIVABLES LLC
(the "Purchaser") (as amended, supplemented or otherwise modified and in effect
from time to time, the "Purchase Agreement"), the undersigned does hereby sell,
assign, transfer and otherwise convey unto the Purchaser, without recourse
(subject to the obligations in the Purchase Agreement), all right, title and
interest of the undersigned, whether now owned or hereafter acquired, in, to and
under the following:
(i) the Contracts;
(ii) all amounts received on or in respect of the Contracts after
the Cutoff Date;
(iii) the security interests in the Financed Vehicles;
(iv) any proceeds from claims on or refunds of premiums with
respect to physical damage, theft, credit life and credit disability
insurance policies relating to the Financed Vehicles or the related
Obligors;
(v) the Contract Files; and
(vi) 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 at any
time constitute all or part of or are included in the proceeds of any of
the foregoing.
The foregoing sale 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 Contracts, the
related Contract 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. All capitalized terms used but not defined in this Assignment shall
have the respective meanings set forth in, or incorporated by reference into,
the Purchase Agreement.
-21-
IN WITNESS WHEREOF, the undersigned has caused this Assignment
to be duly executed as of September [__], 1999.
CARMAX AUTO SUPERSTORES, INC.
By:________________________________
Name:
Title:
-22-
Schedule 1
Contract Schedule
-----------------
-23-
Schedule 2
Location of Contract Files
--------------------------
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
-24-