Document:

ADMINISTRATION AGREEMENT

 EXHIBIT 10.2 – ADMINISTRATION AGREEMENT 
  
 [EXECUTION COPY] 
  
 CARMAX AUTO OWNER TRUST 2004-1, 
 as Issuer, 
  
 CARMAX AUTO
SUPERSTORES, INC., 
 as Administrator, 
  
 and 
  
 WELLS FARGO BANK, NATIONAL ASSOCIATION, 
 as Indenture Trustee 
  

  
 ADMINISTRATION AGREEMENT 
 Dated as of May 1, 2004 
  

 ADMINISTRATION AGREEMENT, dated as of May 1, 2004 (as amended, supplemented or otherwise modified and in
effect from time to time, this “Agreement”), by and among CARMAX AUTO OWNER TRUST 2004-1, a Delaware statutory trust (the “Issuer”), CARMAX AUTO SUPERSTORES, INC., a Virginia corporation, as administrator (in such
capacity, the “Administrator”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as indenture trustee (in such capacity, the “Indenture Trustee”).

  
 WHEREAS, the Issuer is issuing 1.176% Class A-1 Asset-Backed
Notes, 1.87% Class A-2 Asset-Backed Notes, 2.66% Class A-3 Asset-Backed Notes, 3.41% Class A-4 Asset-Backed Notes, 2.72% Class B Asset-Backed Notes, 3.02% Class C Asset-Backed Notes and 3.52% Class D Asset-Backed Notes (collectively, the
“Notes”) pursuant to the Indenture, dated as of May 1, 2004 (as amended, supplemented or otherwise modified and in effect from time to time, the “Indenture”), between the Issuer and the Indenture Trustee;

  
 WHEREAS, the Issuer has entered into certain agreements in
connection with the issuance of the Notes and the issuance of certain beneficial interests in the Issuer, including (i) a Sale and Servicing Agreement, dated as of May 1, 2004 (as amended, supplemented or otherwise modified and in effect from time
to time, the “Sale and Servicing Agreement”), by and among the Issuer, CarMax Auto Funding LLC, a Delaware limited liability company, as depositor (in such capacity, the “Depositor”), and CarMax Auto Superstores,
Inc., as servicer, (ii) a Letter of Representations, dated May 6, 2004 (as amended, supplemented or otherwise modified and in effect from time to time, the “Note Depository Agreement”), by and among the Issuer, the Indenture Trustee
and The Depository Trust Company relating to the Notes and (iii) the Indenture (collectively with the Sale and Servicing Agreement and the Note Depository Agreement, the “Related Agreements”); 
  
 WHEREAS, pursuant to the Related Agreements, the Issuer and The Bank of New
York, a New York banking corporation, not in its individual capacity but solely as owner trustee (in such capacity, the “Owner Trustee”), are required to perform certain duties in connection with (i) the Notes and the collateral
pledged to secure the Notes pursuant to the Indenture (the “Collateral”) and (ii) the beneficial interests in the Issuer; 
  
 WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator perform certain of the duties of the Issuer and the Owner Trustee referred to
in the preceding clause and to provide such additional services consistent with the terms of this Agreement and the Related Agreements as the Issuer and the Owner Trustee may from time to time request; and 
  
 WHEREAS, the Administrator has the capacity to provide the services required
hereby and is willing to perform such services for the Issuer and the Owner Trustee on the terms set forth herein; 
  
 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: 
  
 SECTION 1. Definitions. All capitalized terms used but not defined in this Agreement shall have the respective meanings set forth in the Indenture. 
  

 SECTION 2. Duties of the Administrator. 
  
 (a) Duties with Respect to the Related Agreements. 
  
 (i) The Administrator shall perform all its duties as
Administrator under the Note Depository Agreement. In addition, the Administrator shall consult with the Owner Trustee regarding the duties of the Issuer or the Owner Trustee under the Related Agreements. The Administrator shall monitor the
performance of the Issuer and shall advise the Owner Trustee when action is necessary to comply with the Issuer’s or the Owner Trustee’s duties under the Related Agreements. The Administrator shall prepare for execution by the Issuer or
the Owner Trustee, or shall cause the preparation by other appropriate persons of, all such documents, reports, filings, instruments, certificates and opinions that it shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to the Related Agreements. In furtherance of the foregoing, the Administrator shall take all appropriate action that the Issuer or the Owner Trustee is obligated to take pursuant to the Indenture, including, without limitation, such of the
foregoing as are required with respect to the following matters under the Indenture (references are to sections of the Indenture): 
  
 (A) the duty to cause the Note Register to be kept and to give the Indenture Trustee notice of any appointment of a new Note Registrar and
the location, or change in location, of the Note Register (Section 2.5); 
  
 (B) the notification of Noteholders of the final principal payment on their Notes (Section 2.8(e)); 
  
 (C) the preparation of or obtaining of the documents and instruments required for authentication of the Notes and delivery of the same to
the Indenture Trustee (Section 2.2, 2.3, 2.6 and 2.13); 
  
 (D) the preparation, obtaining or filing of the instruments, opinions, certificates and other documents required for the release of collateral (Section 2.10); 
  
 (E) the maintenance of an office or agency in the Borough of
Manhattan, The City of New York, where Notes may be surrendered for registration of transfer or exchange (Section 3.2); 
  
 (F) the duty to cause newly appointed Paying Agents, if any, to deliver to the Indenture Trustee the instrument specified in the Indenture
regarding funds held in trust (Section 3.3); 
  
 (G) the direction to the Indenture Trustee to deposit monies with Paying Agents, if any, other than the Indenture Trustee (Section 3.3); 
  

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 (H) the obtaining and preservation of the Issuer’s qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Estate (Section 3.4);

  
 (I) the preparation of all supplements and
amendments to the Indenture and all financing statements, continuation statements, instruments of further assurance and other instruments and the taking of such other action as is necessary or advisable to protect the Trust Estate (Section 3.5);

  
 (J) the delivery of the Opinion of Counsel on
the Closing Date and the annual delivery of Opinions of Counsel as to the Trust Estate, and the annual delivery of the Officer’s Certificate and certain other statements as to compliance with the Indenture (Sections 3.6 and 3.9); 
  
 (K) the identification to the Indenture Trustee in an
Officer’s Certificate of a Person with whom the Issuer has contracted to perform its duties under the Indenture (Section 3.7(b)); 
  
 (L) the preparation and delivery of written notice to the Indenture Trustee and the Rating Agencies of an Event of Servicing Termination
under the Sale and Servicing Agreement and, if such Event of Servicing Termination arises from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Receivables, the taking
of all reasonable steps available to remedy such failure (Section 3.7(d)); 
  
 (M) the duty to cause the Servicer to comply with Sections 3.7, 3.9, 3.10, 3.11, 3.12, 3.13 and 3.14 and Article VII of the Sale and Servicing Agreement (Section 3.14); 
  
 (N) the preparation and obtaining of documents and
instruments required for the conveyance or transfer by the Issuer of its properties or assets (Section 3.10(b)); 
  
 (O) the preparation and delivery of written notice to the Indenture Trustee and the Rating Agencies of each Event of Default under the
Indenture and each default by the Depositor or the Servicer under the Sale and Servicing Agreement or by the Seller or the Depositor under the Receivables Purchase Agreement (Section 3.18); 
  
 (P) the monitoring of the Issuer’s obligations as to
the satisfaction and discharge of the Indenture and the preparation of an Officer’s Certificate and the obtaining of the Opinion of Counsel and the Independent Certificate relating thereto (Section 4.1); 
  

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 (Q) the compliance with any written directive of the Indenture Trustee with respect to
the sale of the Trust Estate at one or more public or private sales called and conducted in any manner permitted by law if an Event of Default shall have occurred and be continuing under the Indenture (Section 5.4); 
  
 (R) the preparation and delivery of written notice to the
Noteholders of the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee (Section 6.8); 
  
 (S) the preparation of any written instruments required to confirm more fully the authority of any co-trustee or separate trustee and any
written instruments necessary in connection with the resignation or removal of any co-trustee or separate trustee (Section 6.10); 
  
 (T) the furnishing to the Indenture Trustee of the names and addresses of Noteholders during any period when the Indenture Trustee is not
the Note Registrar (Section 7.1); 
  
 (U) the
preparation and, after execution by the Issuer, filing with the Commission, any applicable state agencies and the Indenture Trustee of documents required to be filed on a periodic basis with, and summaries thereof as may be required by the rules and
regulations of, the Commission and any applicable state agencies and the transmission of such summaries, as necessary, to the Noteholders (Section 7.3); 
  
 (V) the opening of one or more accounts in the Issuer’s name, the preparation and delivery of Issuer Orders, Officer’s
Certificates and Opinions of Counsel and all other actions necessary with respect to the investment and reinvestment of funds in the Collection Account and the Reserve Account (Sections 8.2 and 8.3); 
  
 (W) the preparation and delivery of an Issuer Request and
Officer’s Certificate and the obtaining of an Opinion of Counsel and Independent Certificates, if necessary, for the release of the Trust Estate (Sections 8.4 and 8.5); 
  
 (X) the preparation and delivery of Issuer Orders and the obtaining of an Opinion of Counsel with respect to
the execution of supplemental indentures and the mailing to the Noteholders and the Rating Agencies, as applicable, of notices with respect to such supplemental indentures (Sections 9.1, 9.2 and 9.3); 
  
 (Y) the execution and delivery of new Notes conforming to
any supplemental indenture (Section 9.6); 
  
 (Z)
the duty to notify Noteholders of redemption of the Notes or to cause the Indenture Trustee to provide such notification (Section 10.2); 
  

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 (AA) the preparation and delivery of Officer’s Certificates and the obtaining of an
Opinion of Counsel and Independent Certificates, if necessary, with respect to any requests by the Issuer to the Indenture Trustee to take any action under the Indenture (Section 11.1(a)); 
  
 (BB) the preparation and delivery of Officer’s
Certificates and the obtaining of Opinions of Counsel and Independent Certificates, if necessary, for the release of property from the lien of the Indenture (Section 11.1(b)); 
  
 (CC) the preparation and delivery of written notice to the Rating Agencies, upon the failure of the
Indenture Trustee to give such notification, of the information required pursuant to the Indenture (Section 11.4); 
  
 (DD) the preparation and delivery to the Noteholders and the Indenture Trustee of any agreements with respect to alternate payment and
notice provisions (Section 11.6); 
  
 (EE) the
recording of the Indenture, if applicable (Section 11.15); 
  
 (FF) the preparation of Definitive Notes in accordance with the instructions of the Clearing Agency (Section 2.13); and 
  
 (GG) the maintenance of the effectiveness of the sales finance company licenses required under the Maryland Code and the Pennsylvania
Motor Vehicle Sales Finance Company Act (Section 6.13). 
  
 (ii) The Administrator (but not the Indenture Trustee if it is then acting as successor Administrator) shall: 
  
 (A) pay the Indenture Trustee from time to time such compensation and fees for all services rendered by the Indenture Trustee under the
Indenture as have been agreed to in a separate fee schedule between the Administrator and the Indenture Trustee (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

  
 (B) except as otherwise expressly provided in
the Indenture, reimburse the Indenture Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Indenture Trustee in accordance with any provision of the Indenture (including the reasonable
compensation, expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; 
  
 (C) indemnify the Indenture Trustee and its agents for, and hold them harmless against, any loss, liability
or expense incurred without negligence or bad faith on their part arising out of or in connection with the 

  

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acceptance or administration of the transactions contemplated by the Indenture, including the reasonable costs and expenses of defending themselves against
any claim or liability in connection with the exercise or performance of any of their powers or duties under the Indenture; and 
  
 (D) indemnify the Owner Trustee and its agents for, and hold them harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part arising out of or in connection with the acceptance or administration of the transactions contemplated by the Trust Agreement, including the reasonable costs and expenses of defending themselves against any
claim or liability in connection with the exercise or performance of any of their powers or duties under the Trust Agreement. 
  
 (b) Additional Duties. 
  
 (i) In addition to the duties of the Administrator set forth above, the Administrator shall perform such calculations and shall prepare or
shall cause the preparation by other appropriate persons of, and shall execute on behalf of the Issuer or the Owner Trustee, all such documents, reports, filings, instruments, certificates and opinions that the Issuer or the Owner Trustee is
obligated to prepare pursuant to the Related Agreements or Section 5.5(i), (ii), (iii) or (iv) of the Trust Agreement, and at the request of the Owner Trustee shall take all appropriate action that the Issuer or the Owner Trustee is obligated to
take pursuant to the Related Agreements. In furtherance of the foregoing, the Owner Trustee shall, on behalf of itself and the Issuer, execute and deliver to the Administrator and to each successor Administrator appointed pursuant to the terms
hereof, one or more powers of attorney substantially in the form of Exhibit A hereto, appointing the Administrator the attorney-in-fact of the Owner Trustee and the Issuer for the purpose of executing on behalf of the Owner Trustee and the Issuer
all such documents, reports, filings, instruments, certificates and opinions. Subject to Section 6 of this Agreement, and in accordance with the directions of the Owner Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral (including the Related Agreements) as are not covered by any of the foregoing provisions and as are expressly requested by the Owner Trustee and are reasonably within the
capability of the Administrator. 
  
 (ii)
Notwithstanding anything in this Agreement or the Related Agreements to the contrary, the Administrator shall be responsible for promptly notifying the Owner Trustee in the event that any withholding tax is imposed on the Issuer’s payments (or
allocations of income) to a registered holder of the beneficial interests in the Issuer as contemplated in Section 5.2(c) of the Trust Agreement. Any such notice shall specify the amount of any withholding tax required to be withheld by the Owner
Trustee pursuant to such provision. 
  
 (iii)
Notwithstanding anything in this Agreement or the Transaction Documents to the contrary, the Administrator shall be responsible for performance of the duties of the Issuer or the Owner Trustee set forth in Section 5.5(i), (ii), (iii) and (iv) and

  

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Section 5.6(a) of the Trust Agreement with respect to, among other things, accounting and reports to the beneficial owners of the interests in the Issuer.

  
 (iv) The Administrator shall deliver to the
Owner Trustee and the Indenture Trustee, on or before February 15, 2005, a certificate of an Authorized Officer in form and substance satisfactory to the Owner Trustee as to whether any tax withholding is then required and, if required, the
procedures to be followed with respect thereto to comply with the requirements of the Code. The Administrator shall update such certificate if any additional tax withholding is subsequently required or any previously required tax withholding shall
no longer be required. 
  
 (v) The Administrator
shall perform the duties of the Administrator specified in Section 10.2 of the Trust Agreement required to be performed in connection with the resignation or removal of the Owner Trustee, and any other duties expressly required to be performed by
the Administrator under the Trust Agreement or any other Related Agreement. 
  
 (vi) In carrying out the foregoing duties or any of its other obligations under this Agreement, the Administrator may enter into transactions or otherwise deal with any of its affiliates; provided,
however, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer and shall be, in the Administrator’s opinion, no less favorable to the Issuer than would be available from
unaffiliated parties. 
  
 (c) Non-Ministerial Matters. 

 
 (i) The Administrator shall not take any action with
respect to matters that, in the reasonable judgment of the Administrator, are non-ministerial unless within a reasonable time before the taking of such action the Administrator shall have notified the Issuer of the proposed action and the Issuer
shall not have withheld consent, which consent shall not be unreasonably withheld or delayed, or provided an alternative direction. For the purpose of the preceding sentence, “non-ministerial” matters shall include, without limitation:

  
 (A) the amendment of or any supplement to the
Indenture; 
  
 (B) the initiation of any claim or
lawsuit by the Issuer or the compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Receivables or Permitted Investments); 
  
 (C) the amendment, change or modification of the Related
Agreements; 
  
 (D) the appointment of successor
Note Registrars, successor Paying Agents or successor Indenture Trustees pursuant to the Indenture, the appointment of successor Administrators or Successor Servicers or the consent to 

  

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the assignment by the Note Registrar, the Paying Agent or the Indenture Trustee of its obligations under the Indenture; and 
  
 (E) the removal of the Indenture Trustee. 
  
 (ii) Notwithstanding anything to the contrary in this
Agreement, the Administrator shall not be obligated to, and shall not, (A) make any payments to the Noteholders under the Related Agreements or (B) take any other action that the Issuer directs the Administrator not to take on its behalf.

  
 SECTION 3. Records. The Administrator shall maintain
appropriate books of account and records relating to services performed hereunder, which books of account and records shall be accessible for inspection by the Issuer and the Company at any time during normal business hours. 
  
 SECTION 4. Compensation. As compensation for the performance of the
Administrator’s obligations under this Agreement, and as reimbursement for its expenses related thereto, the Administrator shall be entitled to $500 per month, which compensation shall be solely an obligation of the Servicer. 
  
 SECTION 5. Additional Information to be Furnished to the Issuer. The
Administrator shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer may reasonably request. 
  
 SECTION 6. Independence of the Administrator. For all purposes of this Agreement, the Administrator shall be an independent contractor and shall
not be subject to the supervision of the Issuer or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee. 
  
 SECTION 7. No Joint Venture. Nothing contained in this Agreement (i) shall constitute the Administrator and either the Issuer or the Owner Trustee
as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any
express, implied or apparent authority to incur any obligation or liability on behalf of the others. 
  
 SECTION 8. Other Activities of Administrator. Nothing contained in this Agreement shall prevent the Administrator or its affiliates from engaging
in other businesses or, in its sole discretion, from acting in a similar capacity as an administrator for any other person or entity even though such person or entity may engage in business activities similar to those of the Issuer, the Owner
Trustee or the Indenture Trustee. 
  

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 SECTION 9. Term of Agreement; Resignation and Removal of Administrator. 
  
 (a) This Agreement shall continue in full force and effect until the
dissolution of the Issuer, upon which event this Agreement shall automatically terminate. 
  
 (b) Subject to Sections 9(e) and 9(f), the Administrator may resign its duties hereunder by providing the Issuer with at least sixty (60) days’ prior written notice. 
  
 (c) Subject to Sections 9(e) and 9(f), the Issuer may remove the
Administrator without cause by providing the Administrator with at least sixty (60) days’ prior written notice; provided, however, that in the event the Servicer is removed as the Servicer pursuant to Section 8.1 of the Sale and
Servicing Agreement following the occurrence of an Event of Servicing Termination, the Servicer shall be simultaneously removed as Administrator hereunder. 
  
 (d) Subject to Sections 9(e) and 9(f), at the sole option of the Issuer, the Issuer may remove the Administrator immediately upon written notice of
termination from the Issuer to the Administrator if any of the following events shall occur and be continuing: 
  
 (i) the Administrator shall default in the performance of any of its duties under this Agreement and, after notice of such default, shall
not cure such default within ten (10) days (or, if such default cannot be cured in such time, shall not give within ten (10) days such assurance of cure as shall be reasonably satisfactory to the Issuer); 
  
 (ii) a court having jurisdiction in the premises shall enter
a decree or order for relief, and such decree or order shall not have been vacated within sixty (60) days, in respect of the Administrator in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect or appoint a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official for the Administrator or any substantial part of its property or order the winding-up or liquidation of its affairs; or 
  
 (iii) the Administrator shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, shall consent to the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official for the Administrator or any substantial part of its property, shall consent to the taking of possession by any such official of any substantial part of its property, shall make
any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due. 
  
 If any of the events specified in clauses (ii) or (iii) of this Section 9(d) shall occur, the Administrator shall give written notice thereof to the
Issuer and the Indenture Trustee within seven (7) days after the occurrence of such event. 
  
 (e) No resignation or removal of the Administrator pursuant to Section 9(d) shall be effective until (i) a successor Administrator shall have been appointed by the Issuer and 

  

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(ii) such successor Administrator shall have agreed in writing to be bound by the terms of this Agreement in the same manner as the Administrator is bound
hereunder. In the event that the Indenture Trustee is the successor Administrator, CarMax’s payment obligations pursuant to Sections 5.16(a) and 6.7(a) of the Indenture shall survive any termination, resignation or removal of CarMax as
Administrator. 
  
 (f) The appointment of any successor
Administrator shall be effective only after satisfaction of the Rating Agency Condition with respect to such appointment. 
  
 (g) Subject to Sections 9(e), 9(f) and 20, the Administrator acknowledges that upon the appointment of a Successor Servicer pursuant to the Sale and
Servicing Agreement the Administrator shall immediately resign and such Successor Servicer shall automatically become the Administrator under this Agreement. 
  
 SECTION 10. Action upon Termination, Resignation or Removal. Promptly upon the effective date of termination of this Agreement pursuant to Section
9(a), the resignation of the Administrator pursuant to Section 9(b) or the removal of the Administrator pursuant to Section 9(c) or (d), the Administrator shall be entitled to be paid all fees and reimbursable expenses accruing to it to the date of
such termination, resignation or removal. The Administrator shall forthwith upon such termination pursuant to Section 9(a) deliver to the Issuer all property and documents of or relating to the Collateral then in the custody of the Administrator. In
the event of the resignation of the Administrator pursuant to Section 9(b) or the removal of the Administrator pursuant to Section 9(c) or (d), the Administrator shall cooperate with the Issuer and take all reasonable steps requested by the Issuer
to assist the Issuer in making an orderly transfer of the duties of the Administrator. 
  
 SECTION 11. 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 Issuer, to CarMax Auto Owner Trust 2004-1 c/o the Owner Trustee at the following address: 101 Barclay Street, 8W, New York, New York 10286, Attention:
Corporate Trust Division, Asset Backed Securities Group, (ii) in the case of the Administrator, at the following address: 4900 Cox Road, Glen Allen, Virginia 23060, Attention: Treasury Department, and (iii) in the case of the Indenture Trustee, at
the following address: Wells Fargo Center, MAC #9311-161, Sixth and Marquette, Minneapolis, Minnesota 55479, or, in each case, to such other address as any party shall have provided to the other parties in writing. 
  
 SECTION 12. Amendments. This Agreement may be amended from time to
time by the Issuer, the Administrator and the Indenture Trustee, without the consent of any of the Noteholders or the Certificateholders, to cure any ambiguity, to correct or supplement any provision herein that may be inconsistent with any other
provision herein or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement which will not be inconsistent with other provisions of this Agreement; provided, however,
that no such amendment may materially adversely affect the interests of any Noteholder or Certificateholder. This Agreement may also be amended from time to time by the Issuer, the Administrator and the Indenture Trustee, with the consent of the
Holders of Notes 

  

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evidencing not less than 51% of the Note Balance of the Controlling Class or, if the Notes have been paid in full, the Holders of Certificates evidencing not
less than 51% of the aggregate Certificate Percentage Interest, for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Agreement or modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that no such amendment may: 
  
 (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on or in respect of the
Receivables or distributions that are required to be made for the benefit of the Noteholders or the Certificateholders without the consent of all Noteholders and Certificateholders adversely affected by such amendment; or 
  
 (ii) reduce the percentage of the Note Balance or the
percentage of the aggregate Certificate Percentage Interest the consent of the Holders of which is required for any amendment to this Agreement without the consent of all the Noteholders and Certificateholders adversely affected by such amendment.

  
 An amendment to this Agreement shall be deemed not to
materially adversely affect the interests of any Noteholder or Certificateholder if the Person requesting such amendment obtains and delivers to the Owner Trustee and the Indenture Trustee an Opinion of Counsel to that effect or the Rating Agency
Condition is satisfied. Notwithstanding the foregoing, the Administrator may not amend this Agreement without the consent of the Depositor, which consent shall not be unreasonably withheld. 
  
 SECTION 13. Successors and Assigns. This Agreement may not be assigned
by the Administrator unless such assignment is previously consented to in writing by the Issuer and the Owner Trustee and the Rating Agency Condition has been satisfied with respect to such assignment. An assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Agreement may be assigned by the Administrator without the consent of the
Issuer or the Owner Trustee to a corporation or other organization that is a successor (by merger, consolidation or purchase of assets) to the Administrator; provided, however, that such successor organization executes and delivers to
the Issuer, the Owner Trustee and the Indenture Trustee an agreement in which such corporation or other organization agrees to be bound hereunder by the terms of such assignment in the same manner as the Administrator is bound hereunder. Subject to
the foregoing, this Agreement shall bind any successors or assigns of the parties hereto. 
  
 SECTION 14. 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 WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF WHICH MAY REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

  

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 SECTION 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 but one and the same instrument. 
  
 SECTION 16. Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality, and enforceability
of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. 
  
 SECTION 17. Not Applicable to CarMax Auto Superstores, Inc. in Other Capacities. Nothing in this Agreement shall affect any obligation CarMax Auto
Superstores, Inc. may have in any other capacity. 
  
 SECTION 18.
Limitation of Liability of Owner Trustee and Indenture Trustee. 
  
 (a) Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by the Owner Trustee not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer, and
in no event shall the Owner Trustee in its individual capacity have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement. 
  
 (b) Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by the Indenture Trustee not in its
individual capacity but solely as Indenture Trustee, and in no event shall the Indenture Trustee in its individual capacity have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or
in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. 
  
 SECTION 19. Third-Party Beneficiary. The Owner Trustee is a third-party beneficiary of this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto. 
  
 SECTION 20. Successor Servicer and Administrator. The Administrator shall undertake, as promptly as possible after the giving of notice of termination to the Servicer of the Servicer’s rights and powers
pursuant to Section 8.2 of the Sale and Servicing Agreement, to enforce the provisions of such Section 8.2 with respect to the appointment of a successor Servicer. Such successor Servicer shall, upon compliance with the second to last sentence of
Section 8.2 of the Sale and Servicing Agreement, become the successor Administrator hereunder; provided, however, that if the Indenture Trustee shall become such successor Administrator, the Indenture Trustee shall not be required to
perform any obligations or duties or conduct any activities as successor Administrator that would be prohibited by law and not within the banking and trust powers of the Indenture Trustee; and, provided further, that the Indenture
Trustee as successor Administrator shall not assume any of the obligations specified in Section 2(a)(ii). In such event, the Indenture Trustee may appoint a sub-administrator to perform such 

  

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obligations and duties. Any transfer of servicing pursuant to Section 8.2 of the Sale and Servicing Agreement and related succession as Administrator
hereunder shall not constitute an assumption by the related successor Administrator of any liability of the related outgoing Administrator arising out of any breach by such outgoing Administrator of such outgoing Administrator’s duties
hereunder prior to such transfer. 
  
 SECTION 21. Nonpetition
Covenants. 
  
 (a) Notwithstanding any prior termination of
this Agreement, the Depositor, the Administrator, the Owner Trustee and the Indenture Trustee shall not at any time acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer
or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer. 
  
 (b) Notwithstanding any prior termination of this Agreement, the Issuer, the Administrator, the Owner Trustee and the Indenture Trustee shall not at any
time acquiesce, petition or otherwise invoke or cause the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Depositor under any federal or state bankruptcy, insolvency
or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the
Depositor. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 13 

 IN WITNESS WHEREOF, the parties hereto 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 OWNER TRUST 2004-1
		
	 By:
	 	 THE BANK OF NEW YORK,
 not in its individual capacity
but solely as Owner Trustee

		
	By:	 	 /s/ Anna Bourtman

	 	 	

	 	 	 Name: Anna Bourtman

	 	 	 Title: Assistant Treasurer

  

			
	 WELLS FARGO BANK,
 NATIONAL
ASSOCIATION,
 not in its individual capacity but solely
 as
Indenture Trustee

		
	By:	 	 /s/ Marianna C. Stershic

	 	 	

	 	 	 Name: Marianna C. Stershic

	 	 	 Title: Vice President

  

			
	 CARMAX AUTO SUPERSTORES, INC.,
 as
Administrator

		
	By:	 	 /s/ Keith D. Browning

	 	 	

	 	 	 Name: Keith D. Browning

	 	 	 Title: Chief Financial Officer

  

 S-1 

 EXHIBIT A 
  
 POWER OF ATTORNEY 
  

			
	 STATE OF NEW YORK
	  	 )

	 	  	 )

	 COUNTY OF NEW YORK
	  	 )

  
 KNOW ALL MEN BY THESE
PRESENTS, that THE BANK OF NEW YORK, a New York banking corporation, not in its individual capacity but solely as owner trustee (the “Owner Trustee”) for CarMax Auto Owner Trust 2004-1, a Delaware statutory trust (the
“Issuer”), does hereby make, constitute and appoint CARMAX AUTO SUPERSTORES, INC., a Virginia corporation (the “Administrator”), as administrator under the Administration Agreement dated as of May 1, 2004 (the
“Administration Agreement”), among the Issuer, the Administrator and Wells Fargo Bank, National Association, a national banking association, as Indenture Trustee, as the same may be amended from time to time, and its agents and
attorneys, as attorneys-in-fact to execute on behalf of the Owner Trustee or the Issuer all such documents, reports, filings, instruments, certificates and opinions as the Owner Trustee or the Issuer is obligated to prepare, file or deliver pursuant
to the Related Agreements or pursuant to Section 5.5(i), (ii), (iii) or (iv) of the Trust Agreement, including, without limitation, to appear for and represent the Owner Trustee and the Issuer in connection with the preparation, filing and audit of
federal, state and local tax returns pertaining to the Issuer, and with full power to perform any and all acts associated with such returns and audits that the Owner Trustee could perform, including without limitation, the right to distribute and
receive confidential information, defend and assert positions in response to audits, initiate and defend litigation, and to execute waivers of restrictions on assessments of deficiencies, consents to the extension of any statutory or regulatory time
limit and settlements. All powers of attorney for this purpose heretofore filed or executed by the Owner Trustee are hereby revoked. All capitalized terms used but not defined in this power of attorney shall have the respective meanings set forth in
the Administration Agreement. 
  

 A-1 

 EXECUTED this 6th day of May, 2004. 
  

			
	 THE BANK OF NEW YORK,
 not in its individual
capacity but solely as Owner Trustee

		
	By:	 	 
	 	 	

	 	 	 Name:

	 	 	 Title:

  

			
	 STATE OF NEW YORK
	  	 )

	 	  	 ) ss. :

	 COUNTY OF __________
	  	 )

  
 BEFORE ME, the
undersigned authority, a Notary Public in and for said county and state, on this day personally appeared                     , known to me to
be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of The Bank of New York, a New York banking corporation, and that said person executed the same for the purpose and
consideration therein expressed, and in the capacities therein stated. 
  
 GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 6th day of May, 2004. 
  

	
	
	 
	

	 Notary Public in and for
 the State of New
York

  
 [SEAL] 
  
 My commission expires:
                     
  

 A-2RECEIVABLES PURCHASE AGREEMENT

 EXHIBIT 10.3 – RECEIVABLES PURCHASE AGREEMENT 
  
 [EXECUTION COPY] 
  
 CARMAX AUTO SUPERSTORES, INC., 
 as Seller, 
  
 and 
  
 CARMAX AUTO FUNDING LLC, 
 as Purchaser 
  

  
 RECEIVABLES PURCHASE AGREEMENT 
 Dated as of May 1, 2004 
  

  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	ARTICLE I	  	 
	DEFINITIONS	  	 
			
	 SECTION 1.1
	  	 Definitions
	  	1
	 SECTION 1.2
	  	 Other Definitional Provisions
	  	3
		
	ARTICLE II	  	 
	CONVEYANCE OF RECEIVABLES	  	 
			
	 SECTION 2.1
	  	 Sale and Conveyance of Receivables
	  	4
	 SECTION 2.2
	  	 Receivables Purchase Price; Payments on the Receivables
	  	5
	 SECTION 2.3
	  	 Transfer of Receivables
	  	5
	 SECTION 2.4
	  	 Examination of Receivable Files
	  	6
	 SECTION 2.5
	  	 Expenses
	  	6
		
	ARTICLE III	  	 
	REPRESENTATIONS AND WARRANTIES	  	 
			
	 SECTION 3.1
	  	 Representations and Warranties of the Purchaser
	  	6
	 SECTION 3.2
	  	 Representations and Warranties of the Seller
	  	7
		
	ARTICLE IV	  	 
	CONDITIONS	  	 
			
	 SECTION 4.1
	  	 Conditions to Obligation of the Purchaser
	  	13
	 SECTION 4.2
	  	 Conditions to Obligation of the Seller
	  	14
		
	ARTICLE V	  	 
	COVENANTS OF THE SELLER	  	 
			
	 SECTION 5.1
	  	 Protection of Right, Title and Interest in, to and Under the Receivables
	  	15
	 SECTION 5.2
	  	 Security Interests
	  	16
	 SECTION 5.3
	  	 Delivery of Payments
	  	16
	 SECTION 5.4
	  	 No Impairment
	  	17
	 SECTION 5.5
	  	 Costs and Expenses
	  	17
	 SECTION 5.6
	  	 Hold Harmless
	  	17
		
	ARTICLE VI	  	 
	MISCELLANEOUS PROVISIONS	  	 
			
	 SECTION 6.1
	  	 Amendment
	  	17
	 SECTION 6.2
	  	 Termination
	  	18
	 SECTION 6.3
	  	 Governing Law
	  	18
	 SECTION 6.4
	  	 Notices
	  	18
	 SECTION 6.5
	  	 Severability of Provisions
	  	18

  

 i 

					
	 	  	 	  	Page

	 SECTION 6.6
	  	 Further Assurances
	  	18
	 SECTION 6.7
	  	 No Waiver; Cumulative Remedies
	  	18
	 SECTION 6.8
	  	 Counterparts
	  	19
	 SECTION 6.9
	  	 Third-Party Beneficiaries
	  	19
	 SECTION 6.10
	  	 Headings and Table of Contents
	  	19
	 SECTION 6.11
	  	 Representations, Warranties and Agreements to Survive
	  	19
	 SECTION 6.12
	  	 No Proceedings
	  	19
	 SECTION 6.13
	  	 Accountant’s Letters
	  	19
	 SECTION 6.14
	  	 Obligations of Purchaser
	  	19
		
	SCHEDULES	  	 
			
	 SCHEDULE A
	  	 Receivables schedule
	  	 
		
	EXHIBITS	  	 
			
	 EXHIBIT A
	  	 Bill of sale and assignment
	  	 
	 EXHIBIT B
	  	 Form of retail installment sale contract
	  	 

  
  

 ii 

 RECEIVABLES PURCHASE AGREEMENT 
  
 This Receivables Purchase Agreement, dated as of May 1, 2004, is between CarMax Auto Superstores, Inc., a Virginia
corporation (“CarMax”), as seller (the “Seller”), and CarMax Auto Funding LLC, a Delaware limited liability company (“CarMax Funding”), as purchaser (the “Purchaser”). 

 
 WHEREAS, in the regular course of business, the Seller and certain
affiliates of the Seller originate motor vehicle retail installment sale contracts secured by new and used motor vehicles; 
  
 WHEREAS, the Seller intends to convey all of its right, title and interest in and to contracts having an aggregate outstanding principal balance of
$600,000,002.26 as of the close of business on April 30, 2004 (the “Receivables”) to the Purchaser and, concurrently with its purchase of the Receivables, the Purchaser intends to convey all of its right, title and interest in and
to the Receivables to CarMax Auto Owner Trust 2004-1, as issuer (the “Issuer”), pursuant to a Sale and Servicing Agreement, dated as of May 1, 2004 (the “Sale and Servicing Agreement”), among the Issuer, CarMax
Funding, as depositor, and CarMax, as servicer; and 
  
 WHEREAS,
the Seller and the Purchaser wish to set forth the terms pursuant to which the Receivables are to be sold by the Seller to the Purchaser; 
  
 NOW, THEREFORE, in consideration of the mutual terms and 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. Whenever used in this Agreement, the following words and phrases shall have the following meanings: 
  
 “Agreement” shall mean this Receivables Purchase Agreement
and all amendments hereof and supplements hereto. 
  
 “Base Prospectus” shall mean the prospectus, dated April 27, 2004, of the Purchaser relating to the public offering by the Purchaser of the Notes. 
  
 “Bill of Sale” shall mean the Bill of Sale and Assignment, substantially in the form attached as Exhibit A.

  
 “CarMax” shall mean CarMax Auto Superstores,
Inc., a Virginia corporation, and its successors. 
  
 “CarMax Funding” shall mean CarMax Auto Funding LLC, a Delaware limited liability company, and its successors. 
  

 “Class A Notes” shall mean the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes
and the Class A-4 Notes issued pursuant to the Indenture. 
  
 “Class B Notes” shall mean the Class B Notes issued pursuant to the Indenture. 
  
 “Class C Notes” shall mean the Class C Notes issued pursuant to the Indenture. 
  
 “Class D Notes” shall mean the Class D Notes issued pursuant
to the Indenture. 
  
 “Closing Date” shall mean
May 6, 2004. 
  
 “Cutoff Date” shall mean April
30, 2004. 
  
 “Delaware Trustee” shall mean The
Bank of New York (Delaware), a Delaware banking corporation, as Delaware trustee under the Trust Agreement, and its successors in such capacity. 
  
 “Depositor” shall mean CarMax Auto Funding LLC, a Delaware limited liability company, as Depositor under the Trust Agreement, and its
successors in such capacity. 
  
 “Indenture”
shall mean the Indenture, dated as of May 1, 2004, between the Issuer and the Indenture Trustee, as amended, supplemented or otherwise modified and in effect from time to time. 
  
 “Indenture Trustee” shall mean Wells Fargo Bank, National Association, a national banking association, as
indenture trustee under the Indenture, and its successors in such capacity. 
  
 “Initial Reserve Account Deposit” shall mean $3,000,000. 
  
 “Issuer” shall mean CarMax Auto Owner Trust 2004-1, a Delaware statutory trust, and its successors. 
  
 “Noteholders” shall mean the registered holders of the
Notes. 
  
 “Notes” shall mean the Class A Notes,
the Class B Notes, the Class C Notes and the Class D Notes. 
  
 “Owner Trustee” shall mean The Bank of New York, a New York banking corporation, as owner trustee under the Trust Agreement, and its successors in such capacity. 
  
 “Prospectus Supplement” shall mean the final prospectus supplement, dated April 28, 2004, of the Purchaser
relating to the public offering by the Purchaser of the Notes. 
  
 “Prospectus” shall mean the Prospectus Supplement and the Base Prospectus. 
  
 “Purchaser” shall mean CarMax Funding, in its capacity as purchaser of the Receivables under this Agreement, and its successors in such
capacity. 
  

 2 

 “Receivables” shall mean the motor vehicle retail installment sale contracts sold by the
Seller to the Purchaser pursuant to this Agreement and identified on the Receivables Schedule. 
  
 “Receivables Purchase Price” shall mean $618,000,000. 
  
 “Receivables Schedule” shall mean the schedule of receivables attached as Schedule A, as amended, supplemented or otherwise modified and
in effect from time to time. 
  
 “Representative”
shall mean Wachovia Capital Markets, LLC, a Delaware limited liability company, as representative of the Underwriters. 
  
 “Sale and Servicing Agreement” shall have the meaning specified in the recitals. 
  
 “Seller” shall mean CarMax, in its capacity as seller of the
Receivables under this Agreement, and its successors in such capacity. 
  
 “State” shall mean any of the 50 states of the United States or the District of Columbia. 
  
 “Transaction Documents” shall mean this Agreement, the Trust Agreement, the Sale and Servicing Agreement, the Indenture, the
Administration Agreement and the other documents and certificates delivered in connection therewith, in each case as amended, supplemented or otherwise modified and in effect from time to time. 
  
 “Trust Agreement” shall mean the Trust Agreement, dated as
of March 30, 2004, 2004, among CarMax Funding, the Delaware Trustee and the Owner Trustee, as amended and restated by the Amended and Restated Trust Agreement, dated as of May 1, 2004, among CarMax Funding, the Delaware Trustee and the Owner
Trustee. 
  
 “Trustee” shall mean either the
Owner Trustee or the Indenture Trustee, as the context requires. 
  
 “UCC” shall mean the Uniform Commercial Code as in effect in the applicable jurisdiction. 
  
 “Underwriters” shall mean the underwriters named in Schedule A to the Underwriting Agreement. 
  
 “Underwriting Agreement” shall mean the Underwriting
Agreement, dated April 28, 2004, among CarMax Funding, CarMax and the Representative, relating to the purchase of the Notes by the Underwriters from CarMax Funding. 
  
 SECTION 1.2 Other Definitional Provisions. 
  
 (a) Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Sale and
Servicing Agreement. 
  

 3 

 (b) The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, subsection, Schedule and Exhibit references contained in this Agreement are references to Sections,
subsections, Schedules and Exhibits in or to this Agreement unless otherwise specified; the term “proceeds” shall have the meaning set forth in the applicable UCC; and the word “including” shall mean including without limitation.

  
 ARTICLE II 
 CONVEYANCE OF RECEIVABLES 
  
 SECTION 2.1 Sale and Conveyance of Receivables. 
  
 (a) On the Closing Date, subject to the terms and conditions of this Agreement, the Seller hereby agrees to sell, transfer, assign, set over and otherwise
convey to the Purchaser, and the Purchaser hereby agrees to purchase from the Seller, without recourse (subject to the Seller’s obligations hereunder and the satisfaction of the conditions set forth in Section 4.1), all of the right, title and
interest of the Seller, whether now owned or hereafter acquired, in, to and under the following: 
  
 (i) the Receivables; 
  
 (ii) all amounts received on or in respect of the Receivables (including proceeds of the repurchase of Receivables by the Seller pursuant
to Section 3.2(f)) after the Cutoff Date; 
  
 (iii) the security interests in the Financed Vehicles granted by the Obligors pursuant to the Receivables and any other interest of the Seller in such Financed Vehicles; 
  
 (iv) all proceeds from claims on or refunds of premiums of any physical damage or theft insurance policies
covering the Financed Vehicles and any proceeds or refunds of premiums of any credit life or credit disability insurance policies relating to the Financed Vehicles or the Obligors; 
  
 (v) the Receivable Files; 
  
 (vi) the right to realize upon any property (including the right to receive future Liquidation Proceeds)
that shall have secured a Receivable and have been repossessed by or on behalf of the Issuer; and 
  
 (vii) 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 accounts,
general intangibles, chattel paper, instruments, documents, money, investment property, deposit accounts, letters of credit, letter-of-credit rights, insurance proceeds, condemnation awards, rights to payment of any and 

  

 4 

	 	 
every kind and other forms of obligations; and all other property which at any time constitutes all or part of or is included in the proceeds of any of the
foregoing. 

  
 (b) The parties hereto intend
that the conveyance of the Receivables and related property hereunder be a sale and not a loan. In the event that the conveyance hereunder is not for any reason considered a sale, the Seller hereby grants to the Purchaser a first priority perfected
security interest in all of the Seller’s right, title and interest in, to and under the Receivables and all other property conveyed hereunder and listed in this Section and all proceeds of any of the foregoing. The parties intend that this
Agreement constitute a security agreement under applicable law. Such grant is made to secure the payment of all amounts payable hereunder, including the Receivables Purchase Price. If such conveyance is for any reason considered to be a loan and not
a sale, the Seller consents to the Purchaser transferring such security interest in favor of the Indenture Trustee and transferring the obligations secured thereby to the Indenture Trustee. 
  
 (c) The Seller agrees to treat the transfer of the Receivables and the
related property contemplated by this Section for all purposes (including tax and financial accounting purposes) as an absolute transfer on all relevant books, records, tax returns, financial statements and other applicable documents. 
  
 SECTION 2.2 Receivables Purchase Price; Payments on the Receivables.

  
 (a) On the Closing Date, in exchange for the Receivables and
other assets described in Section 2.1, the Purchaser shall pay to the Seller the Receivables Purchase Price. An amount equal to $595,629,686.40 of the Receivables Purchase Price shall be paid by the Purchaser to the Seller in cash or immediately
available funds. The remainder of the Receivables Purchase Price shall be paid by crediting the Seller with a contribution to the capital of the Purchaser. The Purchaser shall deposit, from funds it receives from the issuance of the Notes, an amount
equal to the Initial Reserve Account Deposit into the Reserve Account, which amount shall be an asset of the Trust. 
  
 (b) The Purchaser shall be entitled to, and shall convey such right to the Owner Trustee pursuant to the Sale and Servicing Agreement, all payments of
principal and interest on or in respect of the Receivables received after the Cutoff Date. 
  
 SECTION 2.3 Transfer of Receivables. Pursuant to the Sale and Servicing Agreement, the Purchaser will assign all of its right, title and interest in, to and under the Receivables and other assets described in
Section 2.1 to the Issuer. The parties hereto acknowledge that the Issuer will pledge its rights in, to and under the Receivables and other assets described in Section 2.1 to the Indenture Trustee pursuant to the Indenture. The Purchaser has the
right to assign its interest under this Agreement as may be required to effect the purposes of the Sale and Servicing Agreement, without the consent of the Seller, and the Owner Trustee as assignee shall succeed to the rights and obligations
hereunder of the Purchaser. 
  

 5 

 SECTION 2.4 Examination of Receivable Files. The Seller will make the Receivable Files available
to the Purchaser or its agent for examination during normal business hours at the Seller’s offices or such other location as otherwise shall be agreed upon by the Purchaser and the Seller. 
  
 SECTION 2.5 Expenses. The Seller will reimburse the Purchaser for
expenses of the Purchaser in connection with the sale of the Notes, including expenses which are reimbursable to the Underwriters by the Purchaser pursuant to the Underwriting Agreement. 
  
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
  
 SECTION 3.1
Representations and Warranties of the Purchaser. The Purchaser hereby makes the following representations and warranties to the Seller as of the date of this Agreement and as of the Closing Date: 
  
 (a) Organization and Good Standing. The Purchaser is a limited
liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has power and authority to own its properties and to conduct its business as such properties are currently owned and such business
is presently conducted, and had at all relevant times, and shall have, power, authority and legal right to acquire, own and sell the Receivables. 
  
 (b) Power and Authority; Binding Obligation. The Purchaser has the power and authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery and performance of this Agreement has been duly authorized by the Purchaser by all necessary action. 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. 
  
 (c) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the limited liability company
agreement or certificate of formation of the Purchaser, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to
which the Purchaser is a party or by which it may be bound. 
  
 (d) 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 

  

 6 

 
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 or the Receivables. 
  
 SECTION
3.2 Representations and Warranties of the Seller. 
  
 (a)
The Seller hereby makes the following representations and warranties to the Purchaser as of the date of this Agreement and as of the Closing Date: 
  
 (i) Organization and Good Standing. The Seller is a corporation duly organized, validly existing and in good standing under the
laws of the Commonwealth of Virginia, and has power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and shall have,
power, authority and legal right to acquire, own and sell the Receivables. 
  
 (ii) Power and Authority; Binding Obligation. The Seller has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this
Agreement has been duly authorized by the Seller by all necessary action. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller 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. 
  
 (iii) No Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Seller, or conflict with or breach any of
the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which the Seller is a party or by which it may be bound. 
  
 (iv) 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, (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 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 Receivables. 
  
 (v) No Tax Liens. The Seller is not aware of any material judgment or tax lien filings against the
Seller. 
  
 (b) The Seller hereby makes the following
representations and warranties to the Purchaser as of the date of this Agreement and as of the Closing Date, which representations 

  

 7 

 
and warranties shall remain operative and in full force and effect, shall survive the transfer and conveyance of the Receivables and other assets described
in Section 2.1 by the Seller to the Purchaser and by the Purchaser to the Issuer and shall inure to the benefit of the Purchaser, the Trustees and the Noteholders: 
  
 (i) Characteristics of Receivables. Each Receivable (i) has been originated by the Seller or an
Affiliate of 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, (ii) 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, (iii) provides for level monthly payments that fully amortize the Amount Financed by maturity (except that the period
between the date of such Receivable and the date of 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, (iv) provides for, in the event that such Receivable is prepaid, a prepayment that fully pays the Principal Balance of such Receivable with interest at the related APR through the date of payment, (v) is a retail
installment sale contract substantially in the form of Exhibit B, (vi) is secured by a new or used motor vehicle that had not been repossessed as of the Cutoff Date, (vii) is a Simple Interest Receivable, (viii) relates to an Obligor who has made at
least one payment under such Receivable as of the Cutoff Date and (ix) relates to an Obligor whose mailing address is located in any State. 
  
 (ii) Receivable Schedule. The information set forth in the Receivable 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 Depositor and/or the Noteholders were utilized in selecting the Receivables from those retail installment sale contracts which met the criteria
contained in this Agreement. The information set forth in the compact disk or other listing regarding the Receivables made available to the Depositor 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. 
  
 (iii) Compliance with Law. Each Receivable and the sale of the related Financed Vehicle complied, at the time such Receivable 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 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, the Servicemembers Civil Relief Act, state adaptations of the National Consumer Act and the Uniform Consumer Credit Code and any other consumer
credit, equal opportunity and disclosure laws applicable to such Receivable and sale. 
  
 (iv) Binding Obligation. Each Receivable represents the genuine, legal, valid and binding payment obligation in writing of the
related Obligor, enforceable by the holder thereof in all material respects in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation or 

  

 8 

 
other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity. 
  
 (v) No Government Obligor. No Receivable is due from
the United States or any State or from any agency, department or instrumentality of the United States or any State. 
  
 (vi) Security Interest in Financed Vehicles. Immediately prior to the transfer of the Receivables by the Seller to the Depositor,
each Receivable was secured by a valid, binding and enforceable first priority perfected security interest in favor of the Seller in the related Financed Vehicle, which security interest has been validly assigned by the Seller to the Depositor. The
Servicer has received, or will receive within 180 days after the Closing Date, the original certificate of title for each Financed Vehicle (other than any Financed Vehicle that is subject to a certificate of title statute or motor vehicle
registration law that does not require that the original certificate of title for such Financed Vehicle be delivered to the Seller). 
  
 (vii) Receivables in Force. No Receivable 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 Receivable. 
  
 (viii) No Waiver. No provision of any Receivable has been waived in such a manner that such Receivable fails to meet all of the representations and warranties made by the Seller in this Section 3.2(b) with
respect thereto. 
  
 (ix) No Defenses. No
Receivable is subject to any right of rescission, setoff, counterclaim or defense, including the defense of usury, and the operation of any of the terms of any Receivable, or the exercise of any right thereunder, will not render such Receivable
unenforceable in whole or in part or subject to any right of rescission, setoff, counterclaim or defense, including the defense of usury, and the Seller has no knowledge of any such right of rescission, setoff, counterclaim or defense being asserted
or threatened with respect to any Receivable. 
  
 (x) No Liens. The Seller has no knowledge of any liens or claims that have been filed, including liens for work, labor or materials or for unpaid state or federal taxes, 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 Receivable. 
  
 (xi) No Default. Except for payment defaults continuing for a period of not more than 30 days, the Seller has no knowledge that any
default, breach, violation or event permitting acceleration under the terms of any Receivable has occurred or that any 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 Receivable has arisen, and the Seller has not waived any such event or condition. 
  
 (xii) Title. The Seller intends that the transfer of the Receivables contemplated by Section 2.1 constitute a sale of the
Receivables from the Seller to the Depositor and that the beneficial interest in, and title to, the Receivables not be part of the 

  

 9 

 
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 Receivable to any Person other than the Depositor. Immediately prior to the transfer of the Receivables contemplated by Section 2.1, the Seller had good and marketable title to the Receivables free and clear of
any Lien, claim or encumbrance of any Person and, immediately upon such transfer, the Depositor shall have good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person. 
  
 (xiii) Security Interest Matters. This Agreement
creates a valid and continuing “security interest” (as defined in the Relevant UCC) in the Receivables in favor of the Depositor, which security interest is prior to all other Liens and is enforceable as such as against creditors of and
purchasers from the Seller. With respect to each Receivable, the Seller has taken all steps necessary to perfect its security interest against the related Obligor in the related Financed Vehicle. The Receivables constitute “tangible chattel
paper” (as defined in the Relevant UCC). The Seller has caused or will cause prior to the Closing Date the filing of all appropriate financing statements in the proper filing offices in the appropriate jurisdictions under applicable law
necessary to perfect the security interest in the Receivables granted to the Depositor under this Agreement. Other than the security interest granted to the Depositor under this Agreement, the Seller has not pledged, assigned, sold, granted a
security interest in or otherwise conveyed any of the Receivables. The Seller has not authorized the filing of and is not aware of any financing statements against the Seller that include a description of collateral covering the Receivables other
than any financing statement relating to the security interest granted to the Depositor under the Sale and Servicing Agreement or that has been terminated. The motor vehicle retail installment sale contracts that constitute or evidence the
Receivables do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Depositor, the Trust or the Indenture Trustee. The Seller is not aware of any judgment or tax lien
filings against the Seller. 
  
 (xiv)
Financing Statements. All financing statements filed or to be filed against the Seller in favor of the Trust (as assignee of the Depositor) contain a statement substantially to the following effect: “A purchase of or security interest in
any collateral described in this financing statement will violate the rights of the Trust.” All financing statements filed or to be filed against the Seller in favor of the Indenture Trustee (as assignee of the Trust) contain a statement
substantially to the following effect: “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Indenture Trustee.” 
  
 (xv) Valid Assignment. No Receivable has been
originated in, or is subject to the laws of, any jurisdiction under which the sale, transfer, assignment and conveyance of such Receivable under this Agreement or the Sale and Servicing Agreement or the pledge of such Receivable under the Indenture
is unlawful, void or voidable or under which such Receivable would be rendered void or voidable as a result of any such sale, transfer, assignment, conveyance or pledge. The Seller has not entered into any agreement with any account debtor that
prohibits, restricts or conditions the assignment of the Receivables. 
  

 10 

 (xvi) One Original. There is only one original executed copy of each Receivable.

  
 (xvii) Principal Balance. Each
Receivable had an original Principal Balance of not more than $60,000 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 Receivable 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 4.53% of the Pool Balance related to Receivables secured by new Financed Vehicles and approximately 95.47% of the Pool Balance related to
Receivables secured by used Financed Vehicles. 
  
 (xx) Origination. Each Receivable was originated after October 20, 1998. 
  
 (xxi) Term to Maturity. Each Receivable 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 71 months and not less than three months. 
  
 (xxii) Weighted Average Remaining Term to Maturity. As of the Cutoff Date, the weighted average remaining term to maturity of the
Receivables was approximately 56.3 months. 
  
 (xxiii) Annual Percentage Rate. Each Receivable has an APR of at least 4.95% and not more than 25.00%. 
  
 (xxiv) Location of Receivable Files. The Receivable Files are maintained at the location listed in Schedule 2 to the Sale and
Servicing Agreement. 
  
 (xxv) Simple Interest
Method. All payments with respect to the Receivables have been allocated consistently in accordance with the Simple Interest Method. 
  
 (xxvi) No Delinquent Receivables. As of the Cutoff Date, no payment due under any Receivable was more than 30 days past due.

  
 (xxvii) Insurance. Each Obligor has
obtained or agreed to obtain physical damage insurance (which insurance shall not be force placed insurance) covering the related Financed Vehicle in accordance with the Seller’s normal requirements. 
  
 (xxviii) Fair Market Value. The Receivables Purchase
Price represents the fair market value of the Receivables. 
  
 (xxix) Custodial Agreements. Immediately prior to the transfer of the Receivables by the Seller to the Depositor, the Seller or an Affiliate of the Seller had possession of the Receivable Files and there were
no, and there will not be any, custodial 

  

 11 

 
agreements in effect materially adversely affecting the right or ability of the Seller to make, or cause to be made, any delivery required under this
Agreement. 
  
 (xxx) Bulk Transfer Laws.
The transfer of the Receivables and the Receivable Files by the Seller to the Depositor pursuant to this Agreement is not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction. 
  
 (c) The Seller shall indemnify the Purchaser and hold the Purchaser harmless
against any losses, penalties, fines, forfeitures, legal fees and related costs, judgments and other costs and expenses resulting from any third party claim, demand, defense or assertion based on or grounded upon, or resulting from, a breach of the
Seller’s representations and warranties set forth in Section 3.2(b). The Trustees shall also have the remedies provided in the Sale and Servicing Agreement. 
  
 (d) Any cause of action against the Seller relating to or arising out of the breach of any of its representations and
warranties set forth in Section 3.2(b) shall accrue as to any Receivable upon (i) discovery of such breach by the Purchaser or either Trustee or notice thereof by the Seller to the Purchaser, (ii) failure by the Seller to cure such breach and (iii)
demand upon the Seller by the Purchaser for all amounts payable in respect of such Receivable under this Agreement. 
  
 (e) The Purchaser or the Seller, as the case may be, shall inform the other parties promptly, in writing, upon discovery of any breach of the
Seller’s representations and warranties set forth in Section 3.2(b) which materially and adversely affects the interests of the Noteholders in any Receivable. 
  
 (f) If a breach of any representation or warranty set forth in Section 3.2(b) which materially and adversely affects the
interests of the Purchaser, the Trust or the Noteholders in any Receivable shall not have been cured by the close of business on the last day of the Collection Period which includes the thirtieth day after the date on which the Seller becomes aware
of, or receives written notice from the Servicer, the Purchaser or the Owner Trustee of, such breach or failure, the Seller shall repurchase such Receivable from the Purchaser on the Distribution Date following such Collection Period. In
consideration for the repurchase of any such Receivable, the Seller shall remit the Purchase Amount of such Receivable to the Purchaser. Upon any such repurchase, the Purchaser shall, without further action, be deemed to transfer, assign, set-over
and otherwise convey to the Seller, without recourse, representation or warranty, all the right, title and interest of the Purchaser in, to and under such repurchased Receivable and all other related assets described in Section 2.1. The Purchaser
shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by the Seller to effect the conveyance of such Receivable pursuant to this Section. The sole remedy of the Purchaser
with respect to a breach of the Seller’s representations and warranties set forth in Section 3.2(b) shall be to require the Seller to repurchase the related Receivables pursuant to this Section. 
  

 12 

 ARTICLE IV 
 CONDITIONS 
  
 SECTION 4.1
Conditions to Obligation of the Purchaser. The obligation of the Purchaser to purchase the Receivables from the Seller on the Closing Date is subject to the satisfaction of the following conditions: 
  
 (a) Representations and Warranties True. The representations and
warranties of the Seller contained herein and in the other Transaction Documents shall be true and correct on the Closing Date with the same effect as if made on the Closing Date, and each of the Seller and the Servicer shall have performed all
obligations to be performed by it hereunder and under the other Transaction Documents on or before the Closing Date. 
  
 (b) Computer Files Marked. The Seller shall, at its own expense, on or before the Closing Date, indicate in its computer files that the Receivables
have been sold to the Purchaser pursuant to this Agreement and deliver to the Purchaser the Receivables Schedule, certified by an officer of the Seller to be true, correct and complete. 
  
 (c) Release of Lenders. The Seller shall obtain executed release agreements and UCC partial releases with respect to
the Receivables from Bank of America, N.A. (and certain other parties) and CarMax Funding, LLC, in each case in form and substance satisfactory to the Purchaser. 
  
 (d) Documents to be Delivered. The Purchaser shall have received the following, all of which shall be dated as of the
Closing Date or such other date as specified: 
  
 (i) the Receivables Schedule; 
  
 (ii)
an Officer’s Certificate of the Seller, in form and substance previously approved by the Purchaser and its counsel, as to, among other things, the representations and warranties of the Seller and satisfaction of conditions precedent;

  
 (iii) an opinion or opinions of counsel for
the Seller, in form and substance previously approved by the Purchaser and its counsel, addressed to the Purchaser; 
  
 (iv) [RESERVED]; 
  
 (v) copies of resolutions of the board of directors of the Seller approving the execution, delivery and performance of the Transaction
Documents to which the Seller is a party, and the performance of the transactions contemplated hereunder and thereunder, certified by the Secretary or an Assistant Secretary of the Seller; 
  
 (vi) copies of the articles of incorporation of the Seller,
together with all amendments, revisions and supplements thereto, certified by the Virginia State 

  

 13 

 
Corporation Commission as of a recent date, and a certificate of fact from the Virginia State Corporation Commission, dated as of a recent date, to the
effect that the Seller has been duly incorporated, is in good standing and has a legal corporate existence; 
  
 (vii) UCC search reports from the appropriate offices in Virginia as to the Seller; 
  
 (viii) reliance letters to each opinion of counsel to the
Seller or the Servicer delivered to Standard & Poor’s or Moody’s in connection with the purchase of the Receivables hereunder or the issuance or sale of the Notes; 
  
 (ix) a financing statement to be filed with the Virginia State Corporation Commission, naming the Seller, as
seller or debtor, the Purchaser, as purchaser or secured party, and the Trust, as assignee, naming the Receivables and the related property described in Section 2.1 as collateral and 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 Receivables to the Purchaser; 
  
 (x) the Bill of Sale; and 
  
 (xi) such other documents, certificates and opinions as may be reasonably requested by the Purchaser or its counsel. 
  
 (e) Execution of Transaction Documents. The Transaction Documents
shall have been executed and delivered by the parties thereto. 
  
 (f) Rating of the Notes. Moody’s and Standard & Poor’s, respectively, shall have assigned ratings of (i) “Prime-1” and “A-1+” to the Class A-1 Notes, (ii) “Aaa” and “AAA” to the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, (iii) “Aa1” and “AA” to the Class B Notes, (iv) “A1” and “A” to the Class C Notes and (v) “Baa3” and “BBB” to the Class D
Notes. 
  
 (g) No Unsolicited Ratings. There shall not have
been issued an unsolicited rating of any Class of Notes by any nationally recognized statistical rating agency at a level that is lower than the ratings for such Class of Notes from Moody’s or Standard & Poor’s specified in Section
4.1(f). 
  
 (h) Other Transactions. The transactions
contemplated by the Transaction Documents 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 Receivables to the Purchaser on the Closing Date is
subject to the satisfaction of the following conditions: 
  
 (a)
Representations and Warranties True. The representations and warranties of the Purchaser contained herein and in the other Transaction Documents shall be true 

  

 14 

 
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
and under the other Transaction Documents on or before the Closing Date. 
  
 (b) Payment of Receivables Purchase Price. In consideration of the sale of the Receivables from the Seller to the Purchaser as provided in Section 2.1, on the Closing Date the Purchaser shall have paid to the
Seller the Receivables Purchase Price. 
  
 (c) Opinions of
Purchaser. An opinion or opinions of counsel for the Purchaser addressed to the Seller and the Underwriters shall have been delivered. 
  
 ARTICLE V 
 COVENANTS OF THE SELLER 

 
 SECTION 5.1 Protection of Right, Title and Interest in, to and Under
the Receivables. 
  
 (a) The Seller, at its expense, shall
cause all financing statements and continuation statements and any other necessary documents covering the Purchaser’s right, title and interest in, to and under the Receivables and other property conveyed by the Seller to the Purchaser
hereunder to be promptly authorized, recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the right, title and
interest of the Purchaser hereunder to the Receivables and such other property. The Seller shall deliver to the Purchaser file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing. The Purchaser shall cooperate fully with the Seller in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of
this subsection. 
  
 (b) Within five days after the Seller makes
any change in its name, identity or organizational structure which would make any financing statement or continuation statement filed in accordance with Section 4.1(d) seriously misleading within the meaning of the UCC as in effect in the applicable
state, the Seller shall give the Purchaser notice of any such change and, within 30 days after such change, shall authorize and file such financing statements or amendments as may be necessary to continue the perfection of the Purchaser’s
security interest in the Receivables and the proceeds thereof. 
  
 (c) The Seller shall give the Purchaser written notice within five days of any relocation of the state of organization of the Seller or any office in which the Seller keeps records concerning the Receivables and whether, 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, within 30 days after such relocation, shall authorize and
file such financing statements or amendments as may be necessary to continue the perfection of the interest of the Purchaser in the Receivables and the proceeds thereof. The Seller shall at all times maintain its state of organization, its principal
place of business and its chief executive office and the location of the office where the Receivables Files and any accounts and records relating to the Receivables are kept within the United States. 
  

 15 

 (d) The Seller shall maintain accounts and records as to each Receivable accurately and in sufficient
detail to permit (i) the reader thereof to know at any time the status of such Receivable, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on (or with respect
to) each Receivable. 
  
 (e) The Seller shall maintain its
computer systems so that, from and after the time of the transfer of the Receivables to the Purchaser pursuant to this Agreement, the Seller’s master computer records (including any back-up archives) that refer to a Receivable shall indicate
clearly and unambiguously that such Receivable is owned by the Purchaser (or, upon transfer of the Receivables to the Issuer, by the Issuer). 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, such Receivable 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 Receivable, shall indicate clearly and unambiguously that such Receivable has been sold and is owned by the Purchaser (or, upon transfer of the Receivables to the Issuer,
the Issuer), unless such Receivable has been paid in full or repurchased by the Seller. 
  
 (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) If the Seller has repurchased one or more Receivables from the
Purchaser or the Issuer pursuant to Section 3.2(f), the Seller shall, upon request, furnish to the Purchaser, within ten days, a list of all Receivables (by receivable number and name of Obligor) then owned by the Purchaser, together with a
reconciliation of such list to the Receivables Schedule. 
  
 SECTION 5.2 Security Interests. Except for the conveyances hereunder, the Seller covenants that it will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on any
Receivable, whether now existing or hereafter created, or any interest therein; the Seller will immediately notify the Purchaser of the existence of any Lien on any Receivable and, in the event that the interests of the Noteholders in such
Receivable are materially and adversely affected, such Receivable shall be repurchased from the Purchaser by the Seller in the manner and with the effect specified in Section 3.2(f), and the Seller shall defend the right, title and interest of the
Purchaser in, to and under the Receivables, whether now existing or hereafter created, against all claims of third parties claiming through or under the Seller. 
  

SECTION 5.3 Delivery of Payments. The Seller covenants and agrees to deliver in kind upon receipt to the Servicer under the Sale and Servicing
Agreement all payments received by the Seller in respect of the Receivables as soon as practicable after receipt thereof by the Seller. 
  

 16 

 SECTION 5.4 No Impairment. The Seller covenants that it shall take no action, nor omit to take any
action, which would impair the rights of the Purchaser in any Receivable, nor shall it, except as otherwise provided in this Agreement or the Sale and Servicing Agreement, reschedule, revise or defer payments due on any Receivable. 
  
 SECTION 5.5 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 Receivables. 
  
 SECTION 5.6 Hold Harmless. The Seller shall protect, defend, indemnify and hold the Purchaser and the Issuer and their respective assigns and their
attorneys, accountants, employees, officers and directors harmless from and against all losses, costs, liabilities, claims, damages and expenses of every kind and character, as incurred, resulting from or relating to or arising out of (i) the
inaccuracy, nonfulfillment or breach of any representation, warranty, covenant or agreement made by the Seller in this Agreement, (ii) any legal action, including any counterclaim, that has either been settled by the litigants (which settlement, if
the Seller is not a party thereto shall be with the consent of the Seller) or has proceeded to judgment by a court of competent jurisdiction, in either case to the extent it is based upon alleged facts that, if true, would constitute a breach of any
representation, warranty, covenant or agreement made by the Seller in this Agreement, (iii) any actions or omissions of the Seller or any employee or agent of the Seller occurring prior to the Closing Date with respect to any Receivable or Financed
Vehicle or (iv) any failure of a Receivable to be originated in compliance with all requirements of law. These indemnity obligations shall be in addition to any obligation that the Seller may otherwise have. 
  
 ARTICLE VI 
 MISCELLANEOUS PROVISIONS 
  
 SECTION 6.1 Amendment. 
  
 (a) This Agreement may be amended from time to time by a written amendment duly executed and delivered by the Purchaser and the Seller, without the consent of any Noteholder, to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or to add any other provision with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement or the Sale and
Servicing Agreement; provided, however, that any such amendment shall not, as evidenced by an Opinion of Counsel to the Seller delivered to the Indenture Trustee, adversely affect in any material respect the interests of the
Noteholders. 
  
 (b) This Agreement may also be amended from time
to time for any other purpose by a written amendment duly executed and delivered by the Seller and by the Purchaser; provided, however, that any such amendment that materially adversely affects the interests of the Noteholders 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 of the Controlling Class. 
  

 17 

 (c) Promptly after the execution of any amendment to this Agreement, the Seller shall furnish written
notification of the substance of such amendment to the Owner Trustee, the Indenture Trustee and the Rating Agencies. 
  
 SECTION 6.2 Termination. The respective obligations and responsibilities of the Seller and the Purchaser created hereby shall terminate, except for
the indemnity obligations of the Seller as provided herein, upon the termination of the Issuer as provided in the Trust Agreement. 
  
 SECTION 6.3 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
  
 SECTION 6.4 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally delivered at or sent by telecopier, overnight courier or mailed by registered mail, return receipt requested, in the case of (i) the Purchaser, to CarMax Auto Funding LLC,
4900 Cox Road, Suite 200, Glen Allen, Virginia 23060, Attention: Treasurer and (ii) the Seller, to CarMax Auto Superstores, Inc., 4900 Cox Road, Glen Allen, Virginia 23060, Attention: Treasury Department; or, as to either of such Persons, at such
other address as shall be designated by such Person in a written notice to the other Person. 
  
 SECTION 6.5 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement and shall in no way affect the validity or enforceability of the other covenants, agreements, provisions and terms of this
Agreement or any amendment or supplement hereto. 
  
 SECTION 6.6
Further Assurances. The Seller and the Purchaser agree to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the other party hereto or by the Issuer or the
Indenture Trustee more fully to effect the purposes of this Agreement, including the execution of any financing statements, amendments, continuation statements or releases relating to the Receivables for filing under the provisions of the UCC or
other law of any applicable jurisdiction. 
  
 SECTION 6.7 No
Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Purchaser, the Issuer or the Seller, 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 herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law. 
  

 18 

 SECTION 6.8 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. 
  
 SECTION 6.9 Third-Party Beneficiaries. This Agreement will inure to the benefit of and be binding upon the parties hereto, the Issuer and the
Indenture Trustee for the benefit of the Noteholders, who shall be considered to be third-party beneficiaries hereof. Except as otherwise provided in this Agreement, no other Person will have any right or obligation hereunder. 
  
 SECTION 6.10 Headings and Table of Contents. The Table of Contents and
headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. 
  
 SECTION 6.11 Representations, Warranties and Agreements to Survive. The respective agreements, representations, warranties and other statements by
the Seller and by the Purchaser set forth in or made pursuant to this Agreement shall remain in full force and effect and will survive the closing hereunder of the transfers and assignments by the Seller to the Purchaser and by the Purchaser to the
Issuer and shall inure to the benefit of the Purchaser, the Trustees and the Noteholders. 
  
 SECTION 6.12 No Proceedings. The Seller covenants and agrees that so long as this Agreement is in effect, and for one year plus one day following its termination, it will not file any involuntary petition or
otherwise institute any bankruptcy, reorganization arrangement, insolvency or liquidation proceeding or other proceedings under any federal or state bankruptcy law or similar law against the Issuer or the Owner Trustee. 
  
 SECTION 6.13 Accountant’s 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 Receivables described in the Receivables Schedule and to compare those characteristics to the information with respect to the
Receivables 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 May 6, 2004, 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 “CarMax—Delinquency, Credit Loss and Recovery Information” and with respect to such other information as may be agreed
in the forms of such letters. 
  
 SECTION 6.14 Obligations of
Purchaser. The obligations of the Purchaser under this Agreement shall not be affected by reason of any invalidity, illegality or irregularity of any Receivable. 
  

 19 

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

			
	 CARMAX AUTO SUPERSTORES, INC.,
as Seller

		
	 By:
	 	 /s/ Keith D. Browning

	 	 	

	 	 	 Name: Keith D. Browning

	 	 	 Title: Chief Financial Officer

  

			
	 CARMAX AUTO FUNDING LLC,
as Purchaser

		
	 By:
	 	 /s/ Thomas W. Reedy

	 	 	

	 	 	 Name: Thomas W. Reedy

	 	 	 Title: Treasurer

  

 S-1 

 SCHEDULE A 
  
 RECEIVABLES SCHEDULE 
  
 [ON FILE WITH THE SERVICER] 
  

 SA-1 

 EXHIBIT A 
  
 BILL OF SALE AND ASSIGNMENT 
  
 For value received, in accordance with the receivables purchase agreement, dated as of May 1, 2004 (the “Receivables Purchase
Agreement”), between the undersigned and CarMax Auto Funding LLC (the “Purchaser”), the undersigned does hereby sell, assign, transfer and otherwise convey unto the Purchaser, without recourse, all right, title and interest
of the undersigned in and to (i) the Receivables listed on Schedule A hereto (the “Receivables”); (ii) all amounts received on or in respect of the Receivables (including proceeds of the repurchase of Receivables by the Seller
pursuant to the Receivables Purchase Agreement) after the Cutoff Date; (iii) the security interests in the Financed Vehicles granted by the Obligors pursuant to the Receivables and any other interest of the undersigned in such Financed Vehicles;
(iv) all proceeds from claims on or refunds of premiums of any physical damage or theft insurance policies covering the Financed Vehicles and any proceeds or refunds of premiums of any credit life or credit disability insurance policies relating to
the Financed Vehicles or the Obligors; (v) the Receivable Files; (vi) the right to realize upon any property (including the right to receive future Liquidation Proceeds) that shall have secured a Receivable and have been repossessed by or on behalf
of the Issuer; and (vii) 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. 
  
 This Bill of Sale and Assignment is made
pursuant to and upon the representations, warranties and agreements on the part of the undersigned contained in the Receivables Purchase Agreement and is to be governed by the Receivables Purchase Agreement. 
  
 Capitalized terms used and not otherwise defined herein shall have the
meaning assigned to them in the Receivables Purchase Agreement. 
  
 IN WITNESS WHEREOF, the undersigned has caused this Bill of Sale and Assignment to be duly executed as of May 6, 2004. 
  

			
	 CARMAX AUTO SUPERSTORES, INC.

		
	 By:
	 	 
	 	 	

	 	 	 Name:

	 	 	 Title:

  

 A-1

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