Document:

Exhibit to Form 8 - K - Amendment No. 1 to Credit Agreement and Joinder Agreement

    
      
        

      

      EXECUTION
        COPY

      

      

      AMENDMENT
        NO. 1 TO CREDIT AGREEMENT 

      AND
        JOINDER AGREEMENT

       

      This
        Amendment No. 1 to Credit Agreement and Joinder Agreement (this “Amendment”)
        dated
        as of December 8, 2006, is made by and among CARMAX AUTO SUPERSTORES, INC.,
        a
        Virginia corporation (the “Revolving
        Borrower”),
        the
        Subsidiaries of the Company (other than the Revolving Borrower) listed as
        “Borrowers” on the signature pages hereto (each a “Designated
        Borrower”
and,
        together with the Revolving Borrower, the “Borrowers”
and,
        each a “Borrower”),
        CARMAX, INC., a Virginia corporation (the “Company”),
        the
        Subsidiaries of the Company listed as “Subsidiary Guarantors” on the signature
        pages hereto (each a “Subsidiary
        Guarantor”
        and
        collectively, the “Subsidiary
        Guarantors”),
        BANK
        OF AMERICA, N.A., a national banking association organized and existing under
        the laws of the United States (“Bank
        of America”),
        in
        its capacity as administrative agent for the Lenders (as defined in the Credit
        Agreement described below) (in such capacity, the “Administrative
        Agent”),
        each
        of the existing Lenders under such Credit Agreement (collectively, the
“Existing
        Lenders”),
        and
        each of the Persons becoming Lenders by the execution of this Amendment (the
        “Joining
        Lenders”).

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        the
        Borrowers, the Company, the Administrative Agent, Bank of America, as Swing
        Line
        Lender, New Vehicle Swing Line Lender and L/C Issuer, and the Existing Lenders
        have entered into that certain Credit Agreement dated as of August 24, 2005
        (the
“Credit
        Agreement”;
        capitalized terms used in this Amendment not otherwise defined herein shall
        have
        the respective meanings given thereto in the Credit Agreement), pursuant
        to
        which the Existing Lenders have made available to the Borrowers a revolving
        credit facility with letter of credit and swing line subfacilities;
        and

       

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

       

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

       

      WHEREAS,
        the
        Company and the Borrowers have advised the Administrative Agent and the Existing
        Lenders that they desire to amend certain provisions of the Credit Agreement
        to,
        among other things, (i) amend the definition of the Applicable Rate, (ii)
        extend
        the Maturity Date, (iii) increase the Aggregate Commitments from $450,000,000
        to
        $500,000,000 (such increase to be allocated among the Joining Lenders and
        certain of the Existing Lenders), (iv) add an option to further increase
        the
        Aggregate Commitments in an amount up to $100,000,000, and 

       

      
        
          
             

           

        

        
           

          
            

          

        

        
           

        

      

      (v)
        increase the Swing Line Sublimit from $25,000,000 to $35,000,000, in each
        case
        as more particularly set forth below, and the Administrative Agent, the Existing
        Lenders and the Joining Lenders are willing to effect such amendments on
        the
        terms and conditions contained in this Amendment;

       

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

       

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

       

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

            

       

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

       

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

       

      (b) with
        respect to Eurodollar Rate Loans, 0.875%;

       

      (c) with
        respect to Letter of Credit Fees, 0.875%; and

       

      (d) with
        respect to the Commitment Fee, 0.15%.

       

      	(b)  	
              The
                existing definition of “Swing
                Line Sublimit”
                in Section
                1.01
                is
                deleted in its entirety and the following is inserted in lieu thereof:
                

            

       

      “Swing
        Line Sublimit”
means
        an amount equal to the lesser of (a) $35,000,000 and (b) the Aggregate
        Commitments. The Swing Line Sublimit is part of, and not in addition to,
        the
        Aggregate Commitments.

       

      	(c)  	
              The
                existing definition of “Maturity
                Date”
                in Section
                1.01
                is
                deleted in its entirety and the following is inserted in lieu thereof:
                

            

       

      “Maturity
        Date”
means
        December 8, 2011.

       

      	(d)  	
              The
                existing definitions of “Consolidated
                Current Assets”,
                “Consolidated
                Current Liabilities”
                and “Consolidated
                Current Ratio”
                in Section
                1.01
                are deleted in their entirety.

            

       

      	(e)  	
              The
                existing definition of “Consolidated
                EBITDA”
                in Section
                1.01
                is
                deleted in its entirety and the following is inserted in lieu thereof
                :

            

       

      
        
          
             

           

        

        
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      “Consolidated
        EBITDA”
means,
        for any period, for the Company and its Subsidiaries on a consolidated basis,
        an
        amount equal to Consolidated Net Income for such period plus
        (a) the
        following to the extent deducted in calculating such Consolidated Net Income:
        (i) Consolidated Interest Charges for such period, (ii) the provision for
        Federal, state, local and foreign income taxes payable by the Company and
        its
        Subsidiaries for such period, (iii) depreciation and amortization expense, (iv)
        share-based compensation expense reducing such Consolidated Net Income which
        does not represent a cash item in such period or any future period, and (v)
        other non-recurring expenses of the Company and its Subsidiaries reducing
        such
        Consolidated Net Income which do not represent a cash item in such period
        or any
        future period and minus
        (b) the
        following to the extent included in calculating such Consolidated Net Income:
        (i) Federal, state, local and foreign income tax credits of the Company and
        its
        Subsidiaries for such period and (ii) all non-cash items increasing such
        Consolidated Net Income. 

       

      	(f)  	
              The
                existing definition of “Consolidated
                Fixed Charges”
                in Section
                1.01
                is
                deleted in its entirety and the following is inserted in lieu
                thereof:

            

       

      “Consolidated
        Fixed Charges”
means,
        for any period (the “Calculation Period”), the sum of (a) Consolidated Interest
        Charges for such period plus
        (b)
        Consolidated Rental Obligations for such period, plus
        (c)
        Federal, state, local and foreign income taxes paid in cash by the Company
        and
        its Subsidiaries on a consolidated basis for such period, plus
        (d)
        Consolidated Scheduled Principal Payments (excluding any scheduled payments
        of
        principal that were (i) paid during the Calculation Period with the proceeds
        of
        replacement Indebtedness or (ii) deferred to a later period by an appropriate
        written amendment, but including payments of principal that were deferred
        to
        such Calculation Period from a prior period) of the Company and its Subsidiaries
        on a consolidated basis for such period. For purposes of clarity (and without
        limiting the generality of clause (b) of the definition of “Subsidiary”), the
        parties acknowledge that any reference to Subsidiary in this definition of
        Consolidated Fixed Charges shall exclude those Subsidiaries which would not
        otherwise qualify as a Subsidiary under clause (b) of the definition of
“Subsidiary.” 

       

      	(g)  	
              Section
                1.01
                is
                amended by adding the following
                definition:

            

       

      “Increase
        Effective Date”
has
        the
        meaning specified in Section
        2.16(d).

       

      	(h)  	
              The
                Consolidated Current Ratio covenant set forth in Section
                7.09(a)
                is
                deleted in its entirety and the following is inserted in lieu thereof:
                [RESERVED].

            

       

      	(i)  	
              The
                Consolidated Tangible Net Worth covenant set forth in Section
                7.09(d)
                is
                deleted in its entirety and the following is inserted in lieu thereof:
                [RESERVED].

            

       

       

      
        
           

        

        
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      	(j)  	
              The
                following new Section
                2.16
                is
                hereby inserted and added to the Credit Agreement immediately following
                Section
                2.15:

            

       

      2.16 Increase
        in Commitments. 

       

      (a) Request
        for Increase.
        Provided there exists no Default and there has been no prior reduction of
        the
        Aggregate Commitments, upon notice to the Administrative Agent (which shall
        promptly notify the Lenders), the Company may, from time to time, request
        an
        increase in the Aggregate Commitments by an amount (for all such requests)
        not
        exceeding $100,000,000; provided
        that (i)
        any such request for an increase shall be in a minimum amount of $25,000,000,
        (ii) no such increase shall result in any increase in the Letter of Credit
        Sublimit, Swing Line Sublimit or the New Vehicle Swing Line Sublimit,
        and
        (iii) the Company may make a maximum of three such requests.
        At the
        time of sending such notice, the Company (in consultation with the
        Administrative Agent) shall specify the time period within which each Lender
        is
        requested to respond (which shall in no event be less than ten Business Days
        from the date of delivery of such notice to the Lenders). 

       

      (b) Lender
        Elections to Increase.
        Each
        Lender shall notify the Administrative Agent within such time period whether
        or
        not it agrees to increase its Commitment and, if so, whether by an amount
        equal
        to, greater than, or less than its Applicable Percentage of such requested
        increase. Any Lender not responding within such time period shall be deemed
        to
        have declined to increase its Commitment. No Lender shall be obligated to
        increase its Commitment upon the Company’s request pursuant to this Section
        2.16.

       

      (c) Notification
        by Administrative Agent; Additional Lenders.
        The
        Administrative Agent shall notify the Company and each Lender of the Lenders’
responses to each request made hereunder. To the extent (i) one or more Lenders
        have declined to increase their respective Commitments or have agreed to
        increase their respective Commitments by an amount less than their respective
        Applicable Percentages of a requested increase and (ii) one or more Lenders
        have
        agreed to increase their respective Commitments by an amount greater than
        their
        respective Applicable Percentages of such requested increase, the Company
        shall,
        in its sole discretion, allocate the Commitments that would otherwise have
        been
        allocated to the Lenders described in clause (i) above to one or more of
        the
        Lenders described in clause (ii) above. To the extent the Lenders have not
        agreed to increase their respective Commitments in an amount sufficient to
        provide the full amount of a requested increase, subject to the approval
        of the
        Administrative Agent and the L/C Issuer (which approvals shall not be
        unreasonably withheld), the Company may also invite additional Eligible
        Assignees to become Lenders in order to provide, together with the existing
        Lenders increasing their Commitments, the aggregate requested additional
        Commitments. In order to become a Lender, each such additional Eligible Assignee
        shall execute and deliver to the Administrative Agent a joinder agreement
        in
        form and substance satisfactory to the Administrative Agent and its
        counsel.

       

      
        
          

           

        

        
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      (d) Effective
        Date and Allocations.
        If the
        Aggregate Commitments are increased in accordance with this Section, the
        Administrative Agent and the Company shall determine the effective date (the
        “Increase
        Effective Date”)
        and
        the final allocation of such increase. The Administrative Agent shall promptly
        notify the Company and the Lenders of the final allocation of such increase
        and
        the Increase Effective Date. 

       

      (e) Conditions
        to Effectiveness of Increase.
        As a
        condition precedent to such increase, the Company shall deliver to the
        Administrative Agent a certificate of each Loan Party dated as of the Increase
        Effective Date (in sufficient copies for each Lender) signed by a Responsible
        Officer of such Loan Party (i) certifying and attaching the resolutions adopted
        by such Loan Party approving or consenting to such increase, and (ii) in
        the
        case of the Company and the Borrowers, certifying that, before and after
        giving
        effect to such increase, (A) the representations and warranties of the Company
        and the Borrowers contained in Article
        V
        and the
        representations and warranties of each Loan Party contained in each other
        Loan
        Document are true and correct on and as of the Increase Effective Date, except
        to the extent that such representations and warranties specifically refer
        to an
        earlier date, in which case they are true and correct as of such earlier
        date,
        and except that for purposes of this Section
        2.16,
        the
        representations and warranties contained in subsections (a) and (b) of
Section
        5.05
        shall be
        deemed to refer to the most recent statements furnished pursuant to clauses
        (a)
        and (b), respectively, of Section
        6.01,
        and (B)
        no Default exists. On each Increase Effective Date, (i) each relevant Lender
        that is increasing its Commitment shall make available to the Administrative
        Agent such amounts in immediately available funds as the Administrative Agent
        shall determine, for the benefit of the other relevant Lenders, as being
        required in order to cause, after giving effect to such increase and the
        application of such amounts to make payments to such other relevant Lenders,
        the
        outstanding Committed Loans (and risk participations in outstanding Swing
        Line
        Loans, New Vehicle Swing Line Loans and L/C Obligations) to be held ratably
        by
        all Lenders in accordance with their respective revised Applicable Percentages,
        and (ii) the Revolving Borrower shall be deemed to have prepaid and reborrowed
        the outstanding Committed Loans as of such Increase Effective Date to the
        extent
        necessary to keep the outstanding Committed Loans ratable with any revised
        Applicable Percentages arising from any nonratable increase in the Commitments
        under this Section.

       

      (f) Conflicting
        Provisions.
        This
        Section shall supersede any provisions in Sections
        2.14
        or
10.01
        to the
        contrary.

       

      	(k)  	
              The
                existing definition of “Eligible
                Vehicle Inventory”
                in Section
                1.01
                is
                deleted in its entirety and the following is inserted in lieu
                thereof:

            

       

      “Eligible
        Vehicle Inventory”
means
        Vehicles of any Grantor that (a) in the case of all such Vehicles, are subject
        to a perfected, first priority Lien in favor of the Administrative Agent
        for the
        benefit of the Secured Parties pursuant to the Security Instruments, free
        from
        any Lien other than (i) any Lien permitted under 

       

      
        
          
             

           

        

        
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      Section
        7.01(j)
        or
7.01(n)
        (provided, in each case, that the applicable Grantor has remitted all payments
        necessary for the obligation secured by such Lien to be irrevocably paid
        in
        full, including, without limitation, through the authorization of a bank
        draft
        or electronic debit entry in the amount of such secured obligation) (it being
        understood that, until such payment is made, any Lien described in this clause
        (i) may be a first priority Lien) or (ii) any other Lien to which the
        Administrative Agent consents in writing in its sole discretion, (b) in the
        case
        of Used Vehicles, are properly titled in such Grantor’s name or the certificates
        of title for such Vehicles are endorsed in blank by the prior owners and
        such
        Grantor physically holds such certificates of title (or such Grantor has,
        in
        accordance with its standard policies and procedures, initiated the process
        by
        which the requirements of this clause (b) will be satisfied) and (c) in the
        case
        of all such Vehicles, are located at such Grantor’s facilities (except as set
        forth in Section
        6.14).
        

       

      	(l)  	
              The
                existing definition of “Vehicle”
                in Section
                1.01
                is
                deleted in its entirety and the following is inserted in lieu
                thereof:

            

       

      “Vehicle”
means
        an automobile or truck with a gross vehicle weight of less than 16,000 pounds
        which satisfies the following requirements: (a) the vehicle is owned by a
        Grantor free of any title defects or any liens or interests of others except
        the
        security interest in favor of the Administrative Agent for the benefit of
        the
        Secured Parties, Liens on vehicles permitted under Section
        7.01(j)
        or
7.01(n)
        and
        other Liens to which the Administrative Agent consents in writing in its
        sole
        discretion; (b) except as set forth in Section
        6.14,
        the
        vehicle is located at one of the locations identified in Schedule
        6.14;
        and (c)
        the vehicle is held for sale in the ordinary course of a Grantor’s business and
        is of good and merchantable quality.

       

      	(m)  	
              Clause
                (j) of Section
                7.01
                is
                deleted in its entirety and the following is inserted in lieu
                thereof:

            

       

      (j) Liens
        securing Indebtedness in respect of capital leases, Synthetic Lease Obligations
        and purchase money obligations for fixed or capital assets or for Vehicles
        acquired at auction; provided
        that (i)
        such Liens do not at any time encumber any property other than the property
        financed by such Indebtedness, and (ii) the Indebtedness secured thereby
        does
        not exceed the cost or fair market value, whichever is lower, of the property
        being acquired on the date of acquisition; 

       

      	(n)  	
              Clause
                (n) of Section
                7.01
                is
                deleted in its entirety and the following is inserted in lieu
                thereof:

            

       

      (n) Liens
        on
        Vehicles purchased directly from consumers or on specific property acquired
        pursuant to an Acquisition permitted by Section
        7.10,
        provided
        that (i)
        such Liens were in existence at the time of such purchase or Acquisition,
        (ii)
        no such Lien extends to any property other than the property purchased or
        

       

      
        
          

           

        

        
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      acquired,
        and (iii) no Lien on property acquired pursuant to a permitted Acquisition
        attaches to any Collateral, and provided
        further
        that the
        aggregate fair market value of all properties acquired pursuant to permitted
        Acquisitions and subject to Liens permitted by this clause (n) does not exceed
        $15,000,000 at any time; 

       

      	(o)  	
              The
                existing Schedule
                2.01
                is
                deleted it in its entirety and Schedule
                2.01
                attached hereto is inserted in lieu thereof;

            

       

      	(p)  	
              The
                form of Borrowing Base Certificate attached as Exhibit F to the Credit
                Agreement is hereby deleted and the attached Exhibit F inserted in
                place
                thereof and in substitution therefor; and

            

       

      	(q)  	
              The
                form of Borrowing Base Schedule attached as Exhibit G to the Credit
                Agreement is hereby deleted and the attached Exhibit G inserted in
                place
                thereof and in substitution therefor.

            

       

      	(r)  	
              The
                form of Schedule 2 to Exhibit E attached to the Credit Agreement
                is hereby
                deleted and the attached Schedule 2 inserted in place thereof and
                in
                substitution therefor.

            

       

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

       

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

       

       

      
        
           

        

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

       

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

       

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

       

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

       

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

       

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

       

      (b)  the
        Company shall have paid the fees in the amounts and at the times specified
        in
        the letter agreement, dated as of November 9, 2006, among the Company, the
        Administrative Agent and BAS (the “Amendment
        Fee Letter”);
        and

       

      
        
          
             

           

        

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
             

           

        

        
          9

          
            

          

        

        
           

        

      

      

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

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

       

      

      [Signature
        pages follow]

      
        
          
             

           

        

        
          11

          
            

          

        

        
           

        

      

      
        

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

           

          COMPANY:

           

           

          CARMAX,
            INC.

           

          By:/s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            Executive Vice President 

           

           

          BORROWERS:

           

           

          CARMAX
            AUTO SUPERSTORES, INC.

           

          By
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning 

          Title:
            Executive Vice President 

           

           

          CARMAX
            OF LAUREL, LLC

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            President 

           

           

          CARMAX
            AUTO MALL, LLC

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            President

           

           

          CARMAX
            AUTO SUPERSTORES CALIFORNIA, LLC

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            Executive Vice President 

           

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

           

          COMPANY
            GUARANTOR:

           

          CARMAX,
            INC.

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            Executive Vice President 

           

           

          SUBSIDIARY
            GUARANTORS:

           

          CARMAX
            OF LAUREL, LLC

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            President

          

          

          CARMAX
            AUTO MALL, LLC

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            President

          

          

          CARMAX
            AUTO SUPERSTORES CALIFORNIA, LLC

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            Executive Vice President

          

          

          CARMAX
            BUSINESS SERVICES, LLC

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            Executive Vice President

          

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          

          CARMAX
            AUTO SUPERSTORES WEST COAST, INC.

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            Executive Vice President

          

          

          CARMAX
            PROPERTIES, LLC

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            President

          

          

          CARMAX
            AUTO SUPERSTORES SERVICES, INC.

           

          By:
            /s/
            Keith D. Browning 

          Name:
            Keith D. Browning

          Title:
            Executive Vice President

           

          

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

           

          ADMINISTRATIVE
            AGENT:

           

          BANK
            OF AMERICA, N.A., as
            

          Administrative
            Agent

           

          By:
            /s/
            Kristine Thennes 

          Name:
            Kristine Thennes

          Title:
            Vice President

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          EXISTING
            LENDERS:

           

           

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

           

          By:
            /s/
            M.
            Patricia Kay 

          Name:
            M.
            Patricia Kay

          Title:
            Senior Vice President

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

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

           

          By:
            /s/
            H.
            David Jones 

          Name:
            H.
            David Jones

          Title:
            Vice President 

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          WACHOVIA
            BANK, NATIONAL ASSOCIATION, as
            a
            Lender

           

          By:
            /s/
            Mark S. Supple 

          Name:
            Mark S. Supple

          Title:
            Vice President

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          SUNTRUST
            BANK,
            as a
            Lender

           

          By:
            /s/
            Mark A. Flatin 

          Name:
            Mark A. Flatin

          Title:
            Managing Director

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          TOYOTA
            MOTOR CREDIT CORPORATION, as
            a
            Lender

           

          By:
            /s/
            William Shiao 

          Name:
            William Shiao

          Title:
            National Dealer Credit Manager

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

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

           

          By:
            /s/
            Peter W. Clark 

          Name:
            Peter W. Clark

          Title:
            Vice President

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          SCOTIABANC,
            INC., as
            a
            Lender

           

          By:
            /s/
            William E. Zarrett 

          Name:
            William E. Zarrett

          Title:
            Managing Director

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          CREDIT
            SUISSE, CAYMAN ISLAND BRANCH, as
            a
            Lender

           

          By:
            /s/
            Cassandra Droogan 

          Name:
            Cassandra Droogan

          Title:
            Vice President

          

           

          By:
            /s/
            Mikhail Faybusovich 

          Name:
            Mikhail Faybusovich

          Title:
            Associate

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          ROYAL
            BANK OF CANADA, as
            a
            Lender

           

          By:
            /s/
            Scott Umbs 

          Name:
            Scott Umbs

          Title:
            Authorized Signatory

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          U.S.
            BANK NATIONAL ASSOCIATION, as
            

          a
            Lender

           

          By:
            /s/
            Scott E. Mitchell 

          Name:
            Scott E. Mitchell

          Title:
            Vice President

          

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          FIFTH
            THIRD BANK, as
            a
            Lender

           

          By:
            /s/
            Mark Olson 

          Name:
            Mark Olson

          Title:
            Vice President

          

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          JOINING
            LENDERS:

          

           

          COMERICA
            BANK, as
            a
            Joining Lender

          By:
            /s/
            Joseph M. Davignon 

          Name:
            Joseph M. Davignon

          Title:
            First Vice President

          
            
              
                Signature
                  Page to Amendment No. 1 

                to
                  Credit Agreement and Joinder Agreement

              

               

            

            
               

              
                

              

            

            
               

            

          

          SCHEDULES
            AND EXHIBITS

          

          The
            schedules and exhibits have been omitted from the Amendment as filed.
            CarMax
            agrees to furnish supplementally to the Commission upon request a copy
            of such
            schedules and exhibits.Exhibit 4.1

    
      
        

      

    

    Exhibit
      4.1

     

    

      COMMON
        STOCK                                                                                     COMMON
        STOCK

      CERTIFICATE
        NO.                                                                                     SHARES
        

      

      

      DELANCO
        BANCORP, INC.

      ORGANIZED
        UNDER THE LAWS OF THE UNITED STATES

      

      

      THIS
        CERTIFIES THAT                                            SPECIMEN

      

      is
        the
        owner of:      

      

      

      FULLY
        PAID AND NONASSESSABLE SHARES OF COMMON STOCK $0.01 PAR
        VALUE

      PER
        SHARE OF DELANCO BANCORP, INC.

      a
        subsidiary stock holding company organized under the laws of the United
        States.

      

      The
        shares represented by this certificate are transferable only on the stock
        transfer books of Delanco Bancorp, Inc. (the “Company”) by the holder of record
        hereof, or by his duly authorized attorney or legal representative, upon
        the
        surrender of this certificate properly endorsed. This certificate and the
        shares
        represented hereby are issued and shall be held subject to all the provisions
        of
        the Charter of the Company and any amendments thereto (copies of which are
        on
        file with the Corporate Secretary of the Company), to all of which provisions
        the holder by acceptance hereof, assents. The shares evidenced by this
        certificate are not of an insurable type and are not insured by the Federal
        Deposit Insurance Corporation.

      

      IN
        WITNESS WHEREOF, DELANCO BANCORP, INC.
        has
        caused this certificate to be executed by the signatures of its duly authorized
        officers and has caused its corporate seal to be hereunto affixed.

      

      Dated:                                                          
        [SEAL]

          Chief
        Executive Officer                                           Corporate
        Secretary

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        shares represented by this Certificate are subject to a limitation contained
        in
        the Company’s Charter to the effect that for a period of five years from the
        date of the initial issuance of securities in no event shall any person,
        other
        than Delanco MHC, directly or indirectly, offer to acquire or acquire the
        beneficial ownership of more than 10% of the outstanding shares of common
        stock.
        Shares beneficially owned in excess of this limitation shall not be counted
        as
        shares entitled to vote and shall not be voted by any person or counted as
        voting shares.

      

      The
        Board
        of Directors of the Company is authorized by resolution(s), from time to
        time
        adopted, to provide for the issuance of serial preferred stock in series
        and to
        fix and state the voting powers, designations, preferences and relative,
        participating, optional, or other special rights of the shares of each such
        series and the qualifications, limitations and restrictions thereof. The
        Company
        will furnish to any shareholder upon request and without charge a full
        description of each class of stock and any series thereof.

      

      The
        shares represented by this Certificate may not be cumulatively voted on any
        matter. 

      

      The
        following abbreviations, when used in the inscription on the face of this
        certificate, shall be construed as though they were written out in full
        according to applicable laws or regulations:

      

      TEN
        COM -
        as tenants in common                    UNIF
        GIFTS MIN ACT - __________ custodian __________

                                                                  (Cust)          (Minor)

      

      TEN
        ENT -
        as tenants by the entireties                                  under
        Uniform Gifts to Minors Act

                                                                      ____________________

              (State)

      

      JT
        TEN -
        as joint tenants with right of

      survivorship
        and not as tenants

      in
        common

      

      Additional
        abbreviations may also be used though not in the above list.

      

      For
        value
        received __________ hereby sell, assign and transfer unto

      

      PLEASE
        INSERT SOCIAL SECURITY OR OTHER

         
        IDENTIFICATION NUMBER OF ASSIGNEE

       

      
        
          

        

      

      Please
        print or typewrite name and address including postal zip code of
        assignee.

      

      

      __________________________________________________
        shares of the common stock represented by this certificate and do hereby
        irrevocably constitute and appoint
        ______________________________________________________________________________,
        attorney, to transfer the said stock on the books of the within-named bank
        with
        full power of substitution in the premises.

      

      

      DATED
        ______________________                                                                                                                                                                                                              

      NOTICE:
        The signature to this assignment must correspond with the name as written
        upon
        the face of the certificate in every particular without alteration or
        enlargement or any change whatever.

      

      

      

      SIGNATURE
        GUARANTEED:                                                                                                                                                                                                                                                                                

      THE
        SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (BANKS,
        STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
        IN
        AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
        17Ad-15

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