exhibit101.htm


     

     

      
        

      

    

    
 

     

     

    
      EXECUTION
VERSION



     

     

     

    AMENDMENT
NO. 2 TO CREDIT AGREEMENT

    AND
JOINDER AGREEMENT

     

    This
Amendment No. 2 to Credit Agreement and Joinder Agreement (this “Amendment”)
dated as of July 17, 2008, is made by and among CARMAX AUTO SUPERSTORES, INC., a
Virginia corporation (the “Revolving
Borrower”), the Subsidiaries of the Company (other than the Revolving Borrower) listed as “Borrowers” on the signature pages hereto
(each a “Designated
Borrower” and, together with the Revolving Borrower, the “Borrowers”
and, each a “Borrower”),
CARMAX, INC., a Virginia corporation (the “Company”),
the Subsidiaries of the Company listed as “Subsidiary Guarantors” on the signature pages
hereto (each a “Subsidiary Guarantor” and collectively,
the “Subsidiary Guarantors”), BANK OF
AMERICA, N.A., a national banking association organized and existing under the
laws of the United States (“Bank of
America”), in its capacity as administrative agent for the Lenders (as
defined in the Credit Agreement described below) (in such capacity, the “Administrative
Agent”), each of the existing Lenders under such Credit Agreement
(collectively, the “Existing
Lenders”), and each of the Persons becoming Lenders by the execution of
this Amendment (the “Joining
Lenders”).

     

    W
I T N E S S E T H:

     

    WHEREAS, the Borrowers, the
Company, the Administrative Agent, Bank of America, as Swing Line Lender, New
Vehicle Swing Line Lender and L/C Issuer, and the Existing Lenders have entered
into that certain Credit Agreement dated as of August 24, 2005, as amended by
Amendment No. 1 to Credit Agreement and Joinder Agreement dated as of December
8, 2006 (the “Credit
Agreement”; capitalized terms used in this Amendment not otherwise
defined herein shall have the respective meanings given thereto in the Credit
Agreement), pursuant to which the Existing Lenders have made available to the
Borrowers a revolving credit facility with letter of credit and swing line
subfacilities; and

     

    WHEREAS, the Subsidiary
Guarantors and the Administrative Agent have entered into that certain
Subsidiary Guaranty Agreement dated as of August 24, 2005 pursuant to which the
Subsidiary Guarantors have guaranteed the payment and performance of the
obligations of the Borrowers under the Credit Agreement and the other Loan
Documents; and

     

    WHEREAS, the Company and the
Administrative Agent have entered into that certain Company Guaranty Agreement
dated as of August 24, 2005 pursuant to which the Company has guaranteed the
payment and performance of the obligations of the Borrowers under the Credit
Agreement and the other Loan Documents; and

     

    WHEREAS, the Company and the
Borrowers have advised the Administrative Agent and the Existing Lenders that
they desire to amend certain provisions of the Credit Agreement
to,

     

    


    
      
        
          
          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    among
other things, (i) amend the definition of the Applicable Rate, (ii) amend the
timing for payments of Swing Line Loans and New Vehicle Swing Line Loans, and
(iii) increase the Aggregate Commitments from $500,000,000 to $700,000,000 (such
increase to be allocated among the Joining Lenders and certain of the Existing
Lenders), in each case as more particularly set forth below, and the
Administrative Agent, the Existing Lenders and the Joining Lenders are willing
to effect such amendments on the terms and conditions contained in this
Amendment;

     

    NOW, THEREFORE, in
consideration of the premises and further valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

     

    1. Amendments
to Credit Agreement.  Subject to the terms and conditions set
forth herein, the Credit Agreement is hereby amended as
follows:

     

    
      	
              (a)  

            	
              The
      existing definition of “Applicable
      Rate” in Section
      1.01 is deleted in its entirety and the following is inserted in
      lieu thereof:

            


    

     

    “Applicable
Rate” means a per annum rate equal to:

     

    (a)            with
respect to Base Rate Loans, 0.00%;

     

    (b)            with
respect to Eurodollar Rate Loans, 1.25%;

     

    (c)            with
respect to Letter of Credit Fees, 1.25%; and

     

    (d)            with
respect to the Commitment Fee, 0.20%.

     

    
      	
              (b)  

            	
              Sections
      2.08(b) and 2.08(c) of the Credit Agreement are amended, so that,
      as amended, such sections shall read as
      follows

            


    

     

    (b)            The
Revolving Borrower shall repay each Swing Line Loan (i) on at least one Business
Day of each month (other than Swing Line Loans advanced on such day), (ii) at
any time on demand by the Swing Line Lender and (iii) on the Maturity
Date.

     

    (c)            The
Borrowers (jointly and severally) shall repay each New Vehicle Swing Line Loan
(i) on at least one Business Day of each month (other than New Vehicle Swing
Line Loans advanced on such day), (ii) at any time on demand by the New Vehicle
Swing Line Lender and (iii) on the Maturity Date.

     

    
      	
              (c)  

            	
              The
      existing Schedule
      2.01 is deleted it in its entirety and Schedule
      2.01 attached hereto is inserted in lieu
  thereof.

            


    

     

    


    
      
        
          
          

           


        

        
          2

          
            

          

        

        
           


        

      

    

    


     

     

    2. Joinder
of the Joining Lenders; Funding of Loans with Incremental
Commitments.

     

    (a) By
its execution of this Amendment, each Joining Lender hereby confirms and agrees
that, on and after the date this Amendment becomes effective (the “Amendment
Effective Date”), it shall be and become a party to the Credit Agreement
as a Lender, and shall have all of the rights and be obligated to perform all of
the obligations of a Lender thereunder with the Commitment applicable to such
Lender identified on Schedule
2.01 attached hereto.  Each Joining Lender further (i)
acknowledges that it has received a copy of the Credit Agreement and the
schedules and exhibits thereto and such other documents and information as it
has deemed appropriate to make its own credit and legal analysis and decision to
enter into this Amendment; (ii) acknowledges that it has independently and
without reliance upon the Administrative Agent, the L/C Issuer, or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Amendment and to
become a Lender, and (iii) agrees that it will, independently and without
reliance upon the Administrative Agent, the L/C Issuer or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit and legal decisions in taking or not
taking action under the Credit Agreement and the other Loan
Documents.  On and after the Amendment Effective Date, all references
to the “Lenders” in the Credit Agreement shall be deemed to include the Joining
Lenders.

     

    (b) On
the Amendment Effective Date, (i) each Existing Lender that is increasing its
Commitment and each Joining Lender shall make available to the Administrative
Agent such amounts in immediately available funds as the Administrative Agent
shall determine, for the benefit of the other relevant Lenders, as being
required in order to cause, after giving effect to such increase and joinder and
the application of such amounts to make payments to such other relevant Existing
Lenders, the outstanding Committed Loans (and risk participations in outstanding
Swing Line Loans, New Vehicle Swing Line Loans and L/C Obligations) to be held
ratably by all Lenders in accordance with their respective Applicable
Percentages (as revised by this Amendment), and (ii) the Revolving Borrower
shall be deemed to have prepaid and reborrowed the outstanding Committed Loans
as of the Amendment Effective Date to the extent necessary to keep the
outstanding Committed Loans ratable with any revised Applicable Percentages
arising from any nonratable increase in the Commitments under this Amendment and
the joinder of the Joining Lenders.

     

    (c) Upon
the Amendment Effective Date, the Commitment of each Lender will be as set forth
on Schedule
2.01 attached hereto.

     

    (d) The
parties hereto acknowledge that, notwithstanding the increase in the Commitments
provided herein, Section
2.16 of the Credit Agreement shall remain in full force and effect after
giving effect to the amendments and joinders provided herein and the amount of
any additional increase in Commitments made after the date hereof in accordance
with Section
2.16 of the Credit Agreement shall not exceed
$100,000,000.

     

    


    
      
        
          
          

           


        

        
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    3. Effectiveness;
Conditions Precedent.  The effectiveness of this Amendment and
the amendments to the Credit Agreement herein provided are subject to the
satisfaction of the following conditions precedent:

     

    (a) the
Administrative Agent shall have received each of the following documents or
instruments in form and substance reasonably acceptable to the Administrative
Agent:

     

    (i) counterparts
of this Amendment, duly executed by the Company, the Administrative Agent, the
Borrowers, the Subsidiary Guarantors, the Required Lenders, each of the Existing
Lenders that is increasing any Commitment pursuant to this Amendment, and each
of the Joining Lenders (which Joining Lenders are listed on Schedule
2.01 attached hereto);

     

    (ii) evidence
of the existence, good standing, authority and capacity of the Company, the
Borrowers and the Subsidiary Guarantors to execute, deliver and perform its
obligations under the Credit Agreement as amended hereby, including, (x) a true
and complete copy of resolutions for each of the Borrowers, the Company and the
Subsidiary Guarantors approving the amendments contemplated hereby, and (y) a
certification that the certificate of incorporation, articles of organization,
by-laws or operating agreement, as applicable, of each of the Borrowers, the
Company and the Subsidiary Guarantors have not been amended or otherwise
modified since the effective date of the Credit Agreement or, in the
alternative, attaching true and complete copies of all amendments and
modifications thereto;

     

    (iii) a
certificate signed by a Responsible Officer of the Company certifying (A) as to
the representations and warranties set forth in Section
6(a), and (B) as to the absence of any action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened in any court
or before any arbitrator or governmental authority that could reasonably be
expected have a Material Adverse Effect; and

     

    (iv) such
other documents, instruments, opinions, certifications, undertakings, further
assurances and other matters as the Administrative Agent, the L/C Issuer or any
Lender shall reasonably request;

     

    (b) the
Company shall have paid the fees, including fees for the benefit of the Joining
Lenders and those Existing Lenders that are increasing any commitments pursuant
to Section
2(a) hereof, in the amounts and at the times specified in the letter
agreement, dated as of May 20, 2008, among the Company, the Administrative Agent
and BAS (the “Amendment Fee
Letter”); and

     

    (c) unless
waived by the Administrative Agent, all fees and expenses payable to the
Administrative Agent and the Lenders (including the fees and expenses of counsel
to the Administrative Agent to the extent invoiced prior to the date hereof)
estimated to date shall have been paid in full (without prejudice to final
settling of accounts for such fees and expenses).

     

    


    
      
        
          
          

           


        

        
          4

          
            

          

        

        
           


        

      

    

    


     

     

    4. Consent
of the Subsidiary Guarantors.  Each of the Subsidiary
Guarantors hereby consents, acknowledges and agrees to the amendments set forth
herein and hereby confirms and ratifies in all respects the Subsidiary Guaranty
Agreement (including without limitation the continuation of such Subsidiary
Guarantor’s payment and performance obligations thereunder upon and after the
effectiveness of this Amendment and the amendments contemplated hereby) and the
enforceability of the Subsidiary Guaranty Agreement against such Subsidiary
Guarantor in accordance with its terms.

     

    5. Consent
of the Company.  The Company hereby consents, acknowledges and
agrees to the amendments set forth herein and hereby confirms and ratifies in
all respects the Company Guaranty Agreement (including without limitation the
continuation of the Company’s payment and performance obligations thereunder
upon and after the effectiveness of this Amendment and the amendments
contemplated hereby) and the enforceability of the Company Guaranty Agreement
against the Company in accordance with its terms.

     

    6. Representations
and Warranties.  In order to induce the Administrative Agent,
the Existing Lenders and the Joining Lenders to enter into this Amendment, each
of the Company and the Borrowers represent and warrant to the Administrative
Agent, the Existing Lenders and the Joining Lenders as
follows:

     

    (a) Before
and after giving effect to this Amendment, (A) the representations and
warranties of the Company and the Borrowers contained in Article
V of the Credit Agreement and the representations and warranties of each
Loan Party contained in each other Loan Document are true and correct on and as
of the Amendment Effective Date, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date, and except that the representations
and warranties contained in subsections (a) and (b) of Section
5.05 of the Credit Agreement shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of Section
6.01 of the Credit Agreement, and (B) no Default
exists;

     

    (b) Since
the date of the most recent financial reports of the Company and its
Subsidiaries delivered pursuant to Section
6.01(a) of the Credit Agreement, there has been no event or circumstance,
either individually or in the aggregate, that has had or would reasonably be
expected to have a Material Adverse Effect;

     

    (c) The
Subsidiary Guarantors are the only Persons that are required to be a party to
the Subsidiary Guaranty Agreement pursuant to the terms of the Credit Agreement;
and

     

    


    
      
        
          
          

           


        

        
          5

          
            

          

        

        
           


        

      

    

    


     

     

    (d) This
Amendment has been duly authorized, executed and delivered by the Company, each
of the Borrowers and each of the Subsidiary Guarantors and constitutes a legal,
valid and binding obligation of such parties, except as may be limited by
general principles of equity or by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditors’
rights generally.

     

    7. Entire
Agreement.  This Amendment, together with the Amendment Fee
Letter and the Loan Documents (collectively, the “Relevant
Documents”), sets forth the entire understanding and agreement of the
parties hereto in relation to the subject matter hereof and supersedes any prior
negotiations and agreements among the parties relating to such subject
matter.  No promise, condition, representation or warranty, express or
implied, not set forth in the Relevant Documents shall bind any party hereto,
and no such party has relied on any such promise, condition, representation or
warranty.  Each of the parties hereto acknowledges that, except as
otherwise expressly stated in the Relevant Documents, no representations,
warranties or commitments, express or implied, have been made by any party to
any other party in relation to the subject matter hereof or
thereof.  None of the terms or conditions of this Amendment may be
changed, modified, waived or canceled orally or otherwise, except in writing and
in accordance with Section
10.01 of the Credit Agreement.

     

    8. Full
Force and Effect of Agreement.  Except as hereby specifically
amended, modified or supplemented, the Credit Agreement and all other Loan
Documents are hereby confirmed and ratified in all respects and shall be and
remain in full force and effect according to their respective
terms.

     

    9. Counterparts.  This
Amendment may be executed in any number of counterparts, each of which shall be
deemed an original as against any party whose signature appears thereon, and all
of which shall together constitute one and the same
instrument.  Delivery of an executed counterpart of a signature page
of this Amendment by telecopy shall be effective as a manually executed
counterpart of this Amendment.

     

    10. Governing
Law.  This Amendment shall in all respects be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed and to be performed entirely within such State, and shall be
further subject to the provisions of Sections
10.14 and 10.15
of the Credit Agreement.

     

    11. Enforceability.  Should
any one or more of the provisions of this Amendment be determined to be illegal
or unenforceable as to one or more of the parties hereto, all other provisions
nevertheless shall remain effective and binding on the parties
hereto.

     

    12. References.  All
references in any of the Loan Documents to the “Credit Agreement” shall mean the
Credit Agreement, as amended hereby, and as otherwise amended, modified,
supplemented or restated from time to time by any other instrument in accordance
with the terms thereof.

     

    


    
      
        
          
             

          

           


        

        
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    13. Successors
and Assigns.  This Amendment shall be binding upon and inure to
the benefit of the Company, the Administrative Agent, the Borrowers, the
Subsidiary Guarantors, the Lenders and their respective successors, legal
representatives, and assignees to the extent such assignees are permitted
assignees as provided in Section
10.06 of the Credit Agreement.

     

    [Signature
pages follow.]

    


    
      
        
          
          

           


        

        
          7 


          
            

          

        

        
           


        

      

    

    


    IN WITNESS WHEREOF, the
parties hereto have caused this instrument to be made, executed and delivered by
their duly authorized officers as of the day and year first above
written.

    COMPANY:

     

    CARMAX,
INC.

     

     

    By:              /s/  Keith
D.
Browning                                                             

    Name:         Keith
D. Browning

    Title:           Executive
Vice President and Chief 

    Financial
Officer                                                             

     

    BORROWERS:

     

    CARMAX
AUTO SUPERSTORES, INC.

    CARMAX
OF LAUREL, LLC

    CARMAX
AUTO MALL, LLC

    CARMAX
AUTO SUPERSTORES CALIFORNIA, LLC

     

    By:              /s/  Keith
D.
Browning                                                             

    Name:         Keith
D. Browning

    Title:           Executive
Vice President and Chief

    Financial
Officer                                                             

     

    SUBSIDIARY
GUARANTORS:

     

    CARMAX
OF LAUREL, LLC

    CARMAX
AUTO MALL, LLC

    CARMAX
AUTO SUPERSTORES CALIFORNIA, LLC

    CARMAX
BUSINESS SERVICES, LLC

    CARMAX
AUTO SUPERSTORES WEST COAST, INC.

    CARMAX
AUTO SUPERSTORES SERVICES, INC.

     

    By:              /s/  Keith
D.
Browning                                                             

    Name:         Keith
D. Browning

    Title:           Executive
Vice President and Chief

    Financial
Officer                                                             

     

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
       

      CARMAX PROPERTIES,
LLC

       

      By:               /s/  Keith
D. Browning

      Name:          Keith
D. Browning

      Title:            President
and Chief Financial Officer

       

       

       

    

    
      
        
          Signature
Page to Amendment No. 2

          to
Credit Agreement and Joinder Agreement

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    ADMINISTRATIVE
AGENT:

     

    BANK OF AMERICA, N.A., as

    Administrative
Agent

     

    By:               /s/  Anne
M.
Zeschke                                                            

    Name:          Anne M.
Zeschke

    Title:            Vice
President                                                

     

     

                

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    EXISTING
LENDERS:

     

     

    BANK OF AMERICA, N.A., as a Lender, L/C Issuer, Swing Line Lender and


    New Vehicle Swing Line
Lender

     

    By:               /s/  M.
Patricia
Kay                                                            

    Name:          M.
Patricia Kay

    Title:            Senior
Vice
President          

     

     

                                                      

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    JPMORGAN CHASE BANK, N.A.,
as a Lender

     

    By:               /s/  H.
David
Jones                                                            

    Name:          H.
David Jones

    Title:            Senior
Vice
President                                            

     

     

                    

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    WACHOVIA BANK, NATIONAL ASSOCIATION,
as a
Lender

     

    By:               /s/  Mark
S.
Supple                                                            

    Name:         
Mark S.
Supple

    Title:            Vice
President                       

     

     

     

     

                                         

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    SUNTRUST BANK, as a Lender

     

    By:               /s/  Mark
A.
Flatin                                                            

    Name:          Mark A.
Flatin

    Title:            Managing
Director                     

     

     

     

                                           

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


     

    TOYOTA MOTOR CREDIT CORPORATION,
as a Lender

     

    By:               /s/  Mark
Doi                                                            

    Name:         
Mark
Doi

    Title:            National
Dealer Credit Manager

     

     

     

     

     

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    WELLS
FARGO BANK, N.A., as a
Lender

     

    By:               /s/  Penelope
Pilcher                                                            

    Name:          Penelope
Pilcher

    Title:            Vice
President                             

     

     

     

     

                                   

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    SCOTIABANC INC., as a Lender

     

    By:               /s/  J.
F.
Todd                                                            

    Name:          J. F.
Todd

    Title:            Managing
Director                           

     

     

     

     

     

                                     

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    CREDIT SUISSE, CAYMAN ISLAND BRANCH,
as a Lender

     

    By:               /s/  Doreen
Barr                                                            

    Name:          Doreen
Barr

    Title:            Vice
President                                                            

     

     

    By:               /s/  Shaheen
Malik                                                            

    Name:          Shaheen
Malik

    Title:            Associate               

     

     

                                                 

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    ROYAL
BANK OF CANADA, as a
Lender

     

    By:               /s/  Scott
Umbs                                                            

    Name:        
 Scott
Umbs

    Title:          
 Authorized
Signatory      

     

     

                                                          

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    U.S.
BANK NATIONAL ASSOCIATION, as
a
Lender

     

    By:               /s/  Jonathan
Horton                                                            

    Name:          Jonathan
Horton

    Title:            Senior
Vice
President                                                            

     

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    COMERICA BANK, as a Lender

     

    By:               /s/  Joseph
M.
Davignon                                                            

    Name:         
Joseph
M. Davignon

    Title:            Senior
Vice
President                                          

     

     

                      

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    JOINING
LENDERS:

     

     

    BANK
OF THE WEST, as a Joining
Lender

     

    By:               /s/  Michael
Lax                                                            

    Name:          Michael
Lax

    Title:            Senior
Vice
President                                                            

     

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    JOINING
LENDERS:

     

     

    BARCLAYS BANK PLC, as a Joining
Lender

     

    By:               /s/  Nicholas
A.
Bell                                                            

    Name:          Nicholas
A. Bell

    Title:            Director                                                            

     

     

     

    


    
      
        
          
            Signature Page to Amendment No.
2

            to
Credit Agreement and Joinder Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    SCHEDULES

     

    A
schedule has been omitted from the Amendment as filed. CarMax agrees to furnish
supplementally to the Commission upon request a copy of such
schedule.