Document:

<PAGE>

                                                                    EXHIBIT 10.3

                                                                  EXECUTION COPY

================================================================================

                        CARMAX AUTO SUPERSTORES, INC.,
                                  as Seller,

                                      and

                       POOLED AUTO SECURITIES SHELF LLC,
                                 as Purchaser

                        ______________________________

                        RECEIVABLES PURCHASE AGREEMENT

                          Dated as of January 1, 2001

                        ______________________________

================================================================================
<PAGE>

                               TABLE OF CONTENTS

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                                                                                               ----

                                  ARTICLE ONE

                                  DEFINITIONS
<S>                                                                                            <C>
Section 1.01. Definitions...................................................................     1
Section 1.02. Other Definitional Provisions.................................................     4

                                  ARTICLE TWO

                           CONVEYANCE OF RECEIVABLES

Section 2.01. Sale and Conveyance of Receivables............................................     5
Section 2.02. Receivables Purchase Price; Payments on the Receivables.......................     6
Section 2.03. Transfer of Receivables.......................................................     6
Section 2.04. Examination of Receivable Files...............................................     6
Section 2.05. Expenses......................................................................     6

                                 ARTICLE THREE

                         REPRESENTATIONS AND WARRANTIES

Section 3.01. Representations and Warranties of the Purchaser...............................     7
Section 3.02. Representations and Warranties of CarMax......................................     7

                                  ARTICLE FOUR

                                   CONDITIONS

Section 4.01. Conditions to Obligation of the Purchaser.....................................     9
Section 4.02. Conditions to Obligation of the Seller........................................    11

                                  ARTICLE FIVE

                            COVENANTS OF THE SELLER

Section 5.01. Protection of Right, Title and Interest in, to and under the Receivables......    13
Section 5.02. Security Interests............................................................    14
Section 5.03. Delivery of Payments..........................................................    14
Section 5.04. No Impairment.................................................................    14
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Section 5.05. Costs and Expenses............................................................    14
Section 5.06. Hold Harmless.................................................................    14
Section 5.07. Merger, Consolidation or Assumption of the Obligations of the Seller..........    15
Section 5.08. Sale..........................................................................    15

                                  ARTICLE SIX

                                INDEMNIFICATION

Section 6.01. Indemnification...............................................................    16

                                 ARTICLE SEVEN

                            MISCELLANEOUS PROVISIONS

Section 7.01. Amendment.....................................................................    18
Section 7.02. Termination...................................................................    18
Section 7.03. Governing Law.................................................................    18
Section 7.04. Notices.......................................................................    18
Section 7.05. Severability of Provisions....................................................    18
Section 7.06. Further Assurances............................................................    19
Section 7.07. No Waiver; Cumulative Remedies................................................    19
Section 7.08. Counterparts..................................................................    19
Section 7.09. Third-Party Beneficiaries.....................................................    19
Section 7.10. Headings......................................................................    19
Section 7.11. Representations of the Seller and of the Purchaser............................    19
Section 7.12. No Proceedings................................................................    19
Section 7.13. Accountant's Letters..........................................................    20
Section 7.14. Obligations of Purchaser......................................................    20

                                   SCHEDULES

Schedule A - Receivables Schedule...........................................................  SA-1

                                    EXHIBITS

Exhibit A - Bill of Sale and Assignment.....................................................   A-1
Exhibit B - Secretary's Certificate of the Seller...........................................   B-1
Exhibit C - Opinions of Counsel for the Seller..............................................   C-1
Exhibit D - Secretary's Certificate of Circuit City.........................................   D-1
Exhibit E - Opinion of Counsel for Circuit City.............................................   E-1
Exhibit F - Representations and Warranties of Seller........................................   F-1
Exhibit G - Form of Retail Installment Sale Contract........................................   G-1
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                                      ii
<PAGE>

                         RECEIVABLES PURCHASE AGREEMENT

     This Receivables Purchase Agreement, dated as of January 1, 2001, is
between CarMax Auto Superstores, Inc., a Virginia corporation ("CarMax"), as
seller (the "Seller" or, in its capacity as servicer, the "Servicer"), and
Pooled Auto Securities Shelf LLC, a Delaware limited liability company ("PASS"),
as purchaser (in such capacity, the "Purchaser").

     WHEREAS, in the regular course of its business, the Seller has originated
certain 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
$655,418,212.88 as of the close of business on November 30, 2000 (the
"Receivables") to the Purchaser and, concurrently with its purchase of the
Receivables, the Purchaser shall convey all of its right, title and interest in
and to the Receivables to CarMax Auto Owner Trust 2001-1 (the "Issuer") pursuant
to a Sale and Servicing Agreement, dated as of January 1, 2001 (the "Sale and
Servicing Agreement"), among the Issuer, PASS, as depositor, and CarMax, as
seller and 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 ONE

                                  DEFINITIONS

     Section 1.01.   Definitions.  Whenever used in this Agreement, the
                     -----------
following words and phrases shall have the following meanings:

     "Agreement" means this Receivables Purchase Agreement and all amendments
      ---------
hereof and supplements hereto.

     "Basic Documents" means this Agreement, the Sale and Servicing Agreement,
      ---------------
the Administration Agreement, the Indenture, the Trust Agreement, the
Performance Guaranty, the Insurance Agreement, the Indemnification Agreement and
any other documents or certificates delivered in connection therewith as the
same may be amended, supplemented or otherwise modified and in effect.

     "Bill of Sale" means the Bill of Sale and Assignment substantially in the
      ------------
form attached hereto as Exhibit A.

     "CarMax" means CarMax Auto Superstores, Inc., and its successors.
      ------

     "Circuit City" means Circuit City Stores, Inc., and its successors.
      ------------

<PAGE>

     "Closing Date" means January 25, 2001.
      ------------

     "Cutoff Date" means November 30, 2000.
      -----------

     "DTC" means The Depository Trust Company, and its successors.
      ---

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.
      ------------

     "Indemnification Agreement" means the Indemnification Agreement, dated as
      -------------------------
of January 18, 2001, among the Insurer, the Seller, the Purchaser, First Union
Corporation and the Representative, as amended or supplemented from time to
time.

     "Indenture" means the Indenture, dated as of January 1, 2001, between the
      ---------
Issuer and the Indenture Trustee, as amended or supplemented from time to time.

     "Indenture Trustee" means Bankers Trust Company, as indenture trustee under
      -----------------
the Indenture, and its successors.

     "Initial Reserve Account Deposit" means $8,192,727.66.
      -------------------------------

     "Insurance Agreement" means the Insurance and Reimbursement Agreement,
      -------------------
dated as of the Closing Date, among the Insurer, the Issuer, the Indenture
Trustee, the Purchaser and CarMax, as amended or supplemented from time to time.

     "Insurance Policy" means the financial guaranty insurance policy, dated the
      ----------------
Closing Date, issued by the Insurer relating to the Securities.

     "Insurer" means MBIA Insurance Corporation, and its successors.
      -------

     "Issuer" has the meaning given in the recitals.
      ------

     "Owner Trustee" means Wilmington Trust Company, as owner trustee under the
      -------------
Trust Agreement, and its successors.

     "PASS" means Pooled Auto Securities Shelf LLC, and its successors.
      ----

     "Performance Guaranty" means the Performance Guaranty of Circuit City,
      --------------------
dated as of January 1, 2001, as amended or supplemented from time to time.

     "Preliminary Prospectus" means the preliminary prospectus supplement, dated
      ----------------------
January 12, 2001, and the preliminary prospectus, dated January 12, 2001, of the
Purchaser relating to the public offering by the Purchaser of the Securities.

     "Prospectus" means the Prospectus Supplement, dated January 18, 2001, and
      ----------
the Prospectus, dated January 18, 2001, of the Purchaser relating to the public
offering by the Purchaser of the Securities.

     "Purchaser" means PASS, in its capacity as purchaser of the Receivables
      ---------
under this Agreement, and its successors.

                                       2
<PAGE>

     "Receivables" means 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" means $647,225,485.22.
      --------------------------

     "Receivables Schedule" means the schedule of receivables attached as
      --------------------
Schedule A hereto, as amended, supplemented or otherwise modified and in effect
from time to time.

     "Representation Date" means each of the date of the Prospectus and the
      -------------------
Closing Date.

     "Representative" means First Union Securities, Inc., as representative of
      --------------
the Underwriters.

     "Sale and Servicing Agreement" has the meaning given in the recitals.
      ----------------------------

     "SEC" means the Securities and Exchange Commission, and its successors.
      ---

     "Securities" means the Notes and the Certificates.
      ----------

     "Securities Act" means the Securities Act of 1933, as amended.
      --------------

     "Securityholders" means the Noteholders and the Certificateholders.
      ---------------

     "Seller" means CarMax, in its capacity as seller of the Receivables under
      ------
this Agreement, and its successors and assigns.

     "Seller Information" means the information in the Preliminary Prospectus
      ------------------
and the Prospectus under the headings "Summary--Seller and Servicer", "Risk
Factors--Geographic Concentration May Result in More Risk to You", "The
Receivables Pool", "The Seller" and "Material Legal Issues Relating to the
Receivables".

     "Trust Agreement" means the trust agreement, dated as of October 11, 2000,
      ---------------
as amended and restated by the amended and restated trust agreement, dated as of
January 1, 2001, between PASS and the Owner Trustee, as amended or supplemented
from time to time.

     "Trustee" means either the Owner Trustee or the Indenture Trustee, as the
      -------
context requires.

     "UCC" means Uniform Commercial Code as in effect in the respective
      ---
jurisdiction.

     "Underwriters" means the underwriters named in Schedule A to the
      ------------
Underwriting Agreement.

     "Underwriting Agreement" means the Underwriting Agreement, dated January
      ----------------------
18, 2001, between PASS and the Representative, relating to the purchase of the
Securities by the Underwriters from PASS.

                                       3
<PAGE>

     Section 1.02.   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.

     (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" means including without limitation.

                                       4
<PAGE>

                                  ARTICLE TWO

                           CONVEYANCE OF RECEIVABLES

     Section 2.01.   Sale and Conveyance of Receivables.
                     ----------------------------------

     (a) The Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to the Purchaser, and the Purchaser hereby purchases from the Seller,
without recourse (subject to the Seller's obligations hereunder), all of the
right, title and interest of the Seller 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 3.02(g)) after the Cutoff Date;

          (iii) the security interests in the Financed Vehicles granted by the
     Obligors pursuant to the Receivables;

          (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.

     (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,

                                       5
<PAGE>

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 obligation secured thereby to the Indenture Trustee.

     Section 2.02.   Receivables Purchase Price; Payments on the Receivables.
                     -------------------------------------------------------

     (a) On the Closing Date, in exchange for the Receivables and other assets
described in Section 2.01(a), the Purchaser shall pay the Seller, in immediately
available funds, the Receivables Purchase Price.  The Purchaser shall deposit,
from funds it receives from the issuance of the Securities, 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 2.03.   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
2.01(a) to the Issuer.  The parties hereto acknowledge that the Issuer will
pledge its rights to and under the Receivables and other assets described in
Section 2.01(a) to the Indenture Trustee pursuant to the Trust Agreement.  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.

     Section 2.04.   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 2.05.   Expenses.  The Seller will reimburse the Purchaser for
                     --------
certain of the expenses of the Purchaser in connection with the sale of the
Securities, including (i) expenses incident to the printing, reproducing and
distributing of the Preliminary Prospectus and the Prospectus, (ii) any fees
charged by Moody's and Standard & Poor's in connection with the rating of the
Securities, (iii) the fees of DTC in connection with the book-entry registration
of the Securities, (iv) the reasonable expenses incurred by the Purchaser in
connection with the initial qualification of the Securities for sale under the
laws of such jurisdictions in the United States as the Purchaser may designate,
including fees of counsel and disbursements incurred by such counsel in
connection therewith and (v) the fees, which shall not exceed the amount
previously agreed upon between the Purchaser and the Seller, and disbursements
of Brown & Wood LLP, counsel to the Purchaser and to the Underwriters, in
connection with the purchase of the Receivables hereunder and the issuance and
sale of the Securities.

                                       6
<PAGE>

                                 ARTICLE THREE

                        REPRESENTATIONS AND WARRANTIES

     Section 3.01.   Representations and Warranties of the Purchaser.  The
                     -----------------------------------------------
Purchaser hereby represents and warrants to the Seller as of the date of this
Agreement and as of the Closing Date that:

        (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.  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.

        (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.

     Section 3.02.   Representations and Warranties of CarMax.
                     ----------------------------------------

     (a) The Seller makes the representations and warranties contained in
Exhibit F attached hereto and incorporated herein by reference on which the
Purchaser relies in accepting the Receivables. The representations and
warranties of CarMax contained in Section 7.1 of the Sale and Servicing
Agreement are incorporated herein as if set forth herein and as if made to the
Purchaser on the date hereof.

     (b) As of each Representation Date, the Seller Information is true and
accurate in all material respects and did not or does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.

     (c) It is understood and agreed that the representations and warranties
incorporated by reference in Section 3.02(a) or set forth in Section 3.02(b)
shall remain operative and in full force and effect, shall survive the transfer
and conveyance of the Receivables and other assets described in Section 2.01(a)
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 Securityholders.

                                       7
<PAGE>

     (d) The Seller shall indemnify the Purchaser and hold the Purchaser
harmless against any loss, 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 incorporated by
reference in Section 3.02(a) or set forth in Section 3.02(b). The Trustees shall
also have the remedies provided in the Sale and Servicing Agreement.

     (e) Any cause of action against the Seller relating to or arising out of
the breach of any of its representations and warranties made or incorporated by
reference in this Section 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 the Receivable under this Agreement.

     (f) 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 pursuant to this Section which materially and
adversely affects the interests of the Securityholders in any Receivable.

     (g) If a breach of any representation or warranty incorporated by reference
in Section 3.02(a) which materially and adversely affects the interests of the
Purchaser, the Trust or the Securityholders 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, the Owner
Trustee or the Insurer of such breach or failure, the Seller shall repurchase
such Receivable from the Trust on the Distribution Date immediately 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
Trust. 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 2.01(a). The Purchaser, the Issuer, the Owner
Trustee or the Indenture Trustee, as applicable, 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, the
Issuer, the Trustees or the Securityholders with respect to a breach of the
Seller's representations and warranties pursuant to Section 3.02(a) or with
respect to the existence of any such Liens or claims shall be to require the
Seller to repurchase the related Receivables pursuant to this Section.

                                       8
<PAGE>

                                 ARTICLE FOUR

                                  CONDITIONS

     Section 4.01.   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 CarMax contained herein and in the other Basic 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 Basic 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, substantially in
        the form of Exhibit B hereto;

              (iii)  an opinion or opinions of counsel for the Seller, in the
        aggregate substantially in the form of Exhibit C hereto, addressed to
        the Purchaser, the Insurer and the Underwriters;

              (iv)   a letter, dated the date of the Prospectus Supplement, from
        KPMG LLP as to certain financial and statistical information in the
        Seller Information, which letter shall be acceptable in form and
        substance to the Purchaser;

              (v)    copies of resolutions of the board of directors of the
        Seller approving the execution, delivery and performance of the Basic
        Documents to which it is a party, and the performance of the
        transactions contemplated hereunder and thereunder, certified by the
        Secretary or an Assistant Secretary of the Seller;

                                       9
<PAGE>

              (vi)   copies of the articles of incorporation of the Seller,
        together with all amendments, revisions and supplements thereto,
        certified by the Virginia State 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
        and in Georgia as to the Seller;

              (viii) an Officer's Certificate of Circuit City, substantially in
        the form of Exhibit D hereto;

              (ix)   an opinion of counsel for Circuit City, substantially in
        the form of Exhibit E hereto, addressed to the Purchaser and to the
        Underwriters;

              (x)    copies of resolutions of the executive committee of the
        board of directors of Circuit City approving the execution, delivery and
        performance of the Performance Guaranty, and the performance of the
        transactions contemplated thereunder, certified by the Secretary or an
        Assistant Secretary of Circuit City;

              (xi)   copies of the articles of incorporation of Circuit City,
        together with all amendments, revisions and supplements thereto,
        certified by the Virginia State 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 Circuit City
        has been duly incorporated, is in good standing and has a legal
        corporate existence;

              (xii)  reliance letters to each opinion of counsel to the Seller,
        the Servicer or Circuit City delivered to Standard & Poor's, Moody's or
        the Insurer in connection with the purchase of the Receivables hereunder
        or the issuance or sale of the Securities;

              (xiii) a financing statement to be filed with each of the Henrico
        County Circuit Court and the Virginia State Corporation Commission,
        executed by the Seller, as seller or debtor, and naming the Purchaser,
        as purchaser or secured party, and the Trust, as assignee, naming the
        Receivables and the related property described in Section 2.01(a) 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;

              (xiv)  the Bill of Sale; and

              (xv)   such other documents, certificates and opinions as may be
        reasonably requested by the Purchaser or its counsel.

        (e) Execution of Basic Documents.  The Basic Documents shall have been
            ----------------------------
     executed and delivered by the parties thereto.

                                       10
<PAGE>

               (f)      Insurance Policy Issued. The Insurance Policy shall have
                        -----------------------
          been issued and delivered by the Insurer.

               (g)      Rating of the Securities. Moody's and Standard & Poor's,
                        ------------------------
          respectively, shall have assigned ratings of (i) "P-1" and "A-1+" to
          the Class A-1 Notes and (ii) "Aaa" and "AAA" to the Class A-2 Notes,
          the Class A-3 Notes, the Class A-4 Notes and the Certificates.

               (h)      No Unsolicited Ratings. There shall not have been issued
                        ----------------------
          an unsolicited rating of the Securities by any nationally recognized
          statistical rating agency at a level that is lower than the ratings
          for the Securities from Moody's or Standard & Poor's specified in
          Section 4.01(g).

               (i)      Other Transactions. The transactions contemplated by the
                        ------------------
          Basic Documents shall be consummated on the Closing Date.

               (j)      No Termination of the Underwriting Agreement. The
                        --------------------------------------------
          Purchaser may terminate this Agreement at any time at or prior to the
          Closing Date (i) if there has been, since the respective dates as of
          which information is given in the Prospectus, any material adverse
          change in the condition, financial or otherwise, or in the earnings,
          business affairs or business prospects of the Purchaser or CarMax,
          whether or not arising in the ordinary course of business, (ii) if
          there has occurred any material adverse change in the financial
          markets in the United States, any outbreak of hostilities or
          escalation thereof or other calamity or crisis or any change or
          development involving a prospective change in national or
          international political, financial or economic conditions, in each
          case the effect of which is such as to make it, in the judgment of the
          Representative, impracticable to market the Securities or to enforce
          contracts for the sale of the Securities, (iii) if trading in any
          securities of CarMax or any of its respective Affiliates has been
          suspended or materially limited by the SEC or if trading generally on
          the American Stock Exchange or the New York Stock Exchange or in the
          Nasdaq National Market has been suspended or materially limited, or
          minimum or maximum prices for trading have been fixed, or maximum
          ranges for prices have been required, by any of said exchanges or by
          such system or by order of the SEC, the National Association of
          Securities Dealers, Inc. or any other governmental authority or (iv)
          if a banking moratorium has been declared by either Federal, Virginia,
          North Carolina or New York authorities.

          Section 4.02. 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
          Basic Documents shall be true and correct on the Closing Date with the
          same effect as if then made, and the Purchaser shall have performed
          all obligations to be performed by it hereunder and under the other
          Basic Documents on or before the Closing Date.

                                       11
<PAGE>

        (b) Payment of Receivables Purchase Price. In consideration of the sale
            -------------------------------------
     of the Receivables from the Seller to the Purchaser as provided in Section
     2.01, on the Closing Date the Purchaser shall have paid the Seller an
     amount equal to the Receivables Purchase Price.

        (c) Opinions of Purchaser. An opinion or opinions of counsel for the
            ---------------------
     Purchaser addressed to the Seller, the Insurer and the Underwriters.

                                       12
<PAGE>

                                 ARTICLE FIVE

                            COVENANTS OF THE SELLER

     Section 5.01. 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
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 corporate structure which would make any financing statement or
continuation statement filed in accordance with Section 4.01(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 execute 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 any office from which the Seller keeps records concerning the
Receivables or of its principal executive office 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
execute 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.

     (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

                                       13
<PAGE>

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 3.02(g), 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 5.02. 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 Securityholders 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 3.02(g), 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 5.03. 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.

     Section 5.04. 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 5.05. 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 5.06. 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

                                       14
<PAGE>

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 CarMax 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.

     Section 5.07. Merger, Consolidation or Assumption of the Obligations of the
                   -------------------------------------------------------------
Seller. The Seller shall not transfer or otherwise assign its obligations as
------
Servicer under the Sale and Servicing Agreement nor enter into any merger,
conversion or consolidation to which the Servicer is a party, unless the Insurer
shall otherwise consent in writing to any such transfer, assignment or
succession; provided, however, that the consent of the Insurer shall not be
required if (i) the Servicer shall be the surviving entity in any such merger,
conversion or consolidation or (ii) Circuit City Stores, Inc. shall, in
connection with such transfer or other assignment or such merger, conversion or
consolidation, execute and deliver to the Insurer an agreement under which
Circuit City Stores, Inc. assumes the obligations of the Servicer under the Sale
and Servicing Agreement and agrees to perform those obligations in accordance
with the standard of performance set forth in Section 3.1 of the Sale and
Servicing Agreement.

     Section 5.08. Sale. The Seller agrees to treat the transfer of the
                   ----
Receivables and the related property contemplated by Section 2.01(a) 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.

                                       15
<PAGE>

                                  ARTICLE SIX

                                INDEMNIFICATION

     Section 6.01. Indemnification.
                   ---------------

     (a)  The Seller agrees to indemnify and hold harmless the Purchaser, each
Underwriter and each person, if any, who controls the Purchaser or any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act as follows:

          (i)   against any and all loss, liability, claim, damage and expense
     whatsoever, as incurred, arising out of any untrue statement or alleged
     untrue statement of a material fact included in the Seller Information or
     any similar information contained in the Preliminary Prospectus or the
     Prospectus or any amendment or supplement thereto, or the omission or
     alleged omission from the Seller Information or such similar information of
     a material fact necessary in order to make the statements therein, in the
     light of the circumstances under which they were made, not misleading;

          (ii)  against any and all loss, liability, claim, damage and expense
     whatsoever, as incurred, to the extent of the aggregate amount paid in
     settlement of any litigation, or any investigation or proceeding by any
     governmental agency or body, commenced or threatened, or of any claim
     whatsoever, based upon any such untrue statement or omission, or any such
     alleged untrue statement or omission; provided that (subject to Section
     6.01(c)) any such settlement is effected with the written consent of the
     Seller; and

          (iii) against any and all expense whatsoever, as incurred (including
     the fees and disbursements of counsel chosen by the Purchaser or the
     Representative), reasonably incurred in investigating, preparing or
     defending against any litigation, or any investigation or proceeding by any
     governmental agency or body, commenced or threatened, or any claim
     whatsoever, based upon any such untrue statement or omission, or any such
     alleged untrue statement or omission, to the extent that any such expense
     is not paid under clause (i) or (ii) above.

     (b)  Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. Counsel to the indemnified parties
shall be selected by the Purchaser or the Representative, subject to the consent
of the indemnifying party (which consent shall not be unreasonably withheld). An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or

                                       16
<PAGE>

circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

     (c)  If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6.01(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement; provided,
however, that such indemnifying party shall not be liable for such settlement if
it has notified the indemnified party in writing that it objects to the terms of
such settlement within 30 days after receipt of the notice described in clause
(ii) above or that it objects to the requested fees and expenses within 45 days
after receipt of such request.

     (d)  If recovery is not available under the provisions of this Section for
any reason other than as specified herein, the parties entitled to
indemnification by the terms hereof shall be entitled to contribution to
liabilities and expenses, except to the extent that contribution is not
permitted under Section 11(f) of the Securities Act. In determining the amount
of contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by each party, the parties' relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate under the
circumstances. The parties hereto agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever, based upon any such untrue or alleged
untrue statement or omission or alleged omission.

     Notwithstanding the provisions of this Section, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
underwriting discounts and commissions received by it in connection with the
Securities underwritten by it and distributed to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.

                                       17
<PAGE>

     No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

                                       18
<PAGE>

                                 ARTICLE SEVEN

                           MISCELLANEOUS PROVISIONS

     Section 7.01. 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 the Securityholders, 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 such action 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
Securityholders or of the Insurer.

     (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 Securityholders under the Indenture, the
Sale and Servicing Agreement or the Trust Agreement must be consented to by the
Holders of Notes evidencing not less than 51% of the Note Balance and the
Holders of Certificates evidencing not less than 51% of the Certificate Balance;
and, provided further, that no such amendment shall be effective without the
consent of the Insurer, if such proposed amendment would reasonably be expected
to have a material adverse effect on the interests of the Insurer.

     (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 7.02. 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 7.03. 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 hereunder shall be determined in accordance with
such laws.

     Section 7.04. 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 Pooled Auto
Securities Shelf LLC, One First Union Center, TW-9, Charlotte, North Carolina
28288, Attention: General Counsel 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 Persons.

                                       19
<PAGE>

     Section 7.05. 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 or terms of
this Agreement or any amendment or supplement hereto.

     Section 7.06. 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 7.07. 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.

     Section 7.08. 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 7.09. 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 Insurer and the Noteholders, both of which 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 7.10. Headings. The headings herein are for purposes of reference
                   --------
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.

     Section 7.11. Representations of the Seller and of the Purchaser. 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 Securityholders.

     Section 7.12. 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.

                                       20
<PAGE>

     Section 7.13.   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 the date of the Prospectus, in the form previously
agreed to by the Seller and the Purchaser, with respect to the financial and
statistical information contained in the Prospectus under the caption "The
Seller-Delinquency, Credit Loss and Recovery Information" and with respect to
such other information as may be agreed in the forms of such letters.

     Section 7.14.   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.

                                       21
<PAGE>

     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/ Philip J. Dunn
                                            ------------------------------------
                                                            Philip J. Dunn
                                                              Treasurer

                                        POOLED AUTO SECURITIES SHELF LLC,
                                          as Purchaser

                                        By: /s/ John A. Foxgrover
                                            ------------------------------------
                                                            John A. Foxgrover
                                                              Vice President

                                       22
<PAGE>

                                                                      SCHEDULE A

                             RECEIVABLES SCHEDULE

                   [Original on file at Servicer's office.]

                                     SA-1
<PAGE>

                                                                       EXHIBIT A

                          BILL OF SALE AND ASSIGNMENT

     For value received, in accordance with the receivables purchase agreement,
dated as of January 1, 2001 (the "Receivables Purchase Agreement"), between the
undersigned and Pooled Auto Securities Shelf 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; (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 January 1, 2001.

                                   CARMAX AUTO SUPERSTORES, INC.

                                   By: ____________________________________
                                       Name:
                                       Title:

                                      A-1
<PAGE>

                                                                       EXHIBIT B

                     SECRETARY'S CERTIFICATE OF THE SELLER

                                      B-1
<PAGE>

                                                                       EXHIBIT C

                       OPINIONS OF COUNSEL FOR THE SELLER

                                      C-1
<PAGE>

                                                                       EXHIBIT D

                    SECRETARY'S CERTIFICATE OF CIRCUIT CITY

                                      D-1
<PAGE>

                                                                       EXHIBIT E

                      OPINION OF COUNSEL FOR CIRCUIT CITY

                                      E-1
<PAGE>

                                                                       EXHIBIT F

                    REPRESENTATIONS AND WARRANTIES OF SELLER

     CarMax Auto Superstores, Inc., a Virginia corporation (the "Seller"), makes
the following representations and warranties in the Receivables Purchase
Agreement dated as of January 1, 2001 (the "Receivables Purchase Agreement")
between the Seller and Pooled Auto Securities Shelf LLC, a Delaware limited
liability company (the "Depositor").  All capitalized terms used in these
representations and warranties have the respective meanings assigned to them in
the Receivables Purchase Agreement.

     (a)  Characteristics of Receivables.  Each Receivable (i) has been
          ------------------------------
originated by the Seller in the ordinary course of business in connection with
the sale of a new or used motor vehicle and has been fully and properly executed
by the parties thereto, (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 G to the Receivables Purchase Agreement, (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 (1) payment under such Receivable as of the Cutoff Date and (ix) relates to
an Obligor whose mailing address is located in any state of the United States of
America or in the District of Columbia.

     (b)  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, the Noteholders and/or the Certificateholders were utilized in
selecting the Receivables from those retail installment sale contracts which met
the criteria contained in the Receivables Purchase 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.

     (c)  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 Credit Billing Act, the
Fair Debt Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B, M and Z,
the Soldiers' and Sailors' Civil Relief Act of 1940 and state adaptations of the
National Consumer Act and the Uniform Consumer Credit Code.

                                      F-1
<PAGE>

     (d)  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 accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
liquidation or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.

     (e)  No Government Obligor.  No Receivable is due from the United States of
          ---------------------
America or any state thereof or from any agency, department or instrumentality
of the United States of America or any state thereof.

     (f)  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.

     (g)  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.

     (h)  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 Exhibit A with respect thereto.

     (i)  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 not received written notice of the
assertion with respect to any Receivable of any such right of rescission,
setoff, counterclaim or defense.

     (j)  No Liens.  To the best of the Seller's knowledge, no liens or claims
          --------
have been filed 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.

     (k)  No Default; Repossession.  To the best of the Seller's knowledge, no
          ------------------------
default, breach, violation or event permitting acceleration under the terms of
any Receivable has occurred and no continuing condition that with notice or the
lapse of time or both would constitute a default, breach, violation or event
permitting acceleration under the terms of any Receivable has arisen, and the
Seller has not waived any such event or condition.

     (l)  Title.  The Seller intends that the transfer of the Receivables
          -----
contemplated by Section 2.01(a) of the Receivables Purchase Agreement 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
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

                                      F-2
<PAGE>

Receivables contemplated by Section 2.01(a) of the Receivables Purchase
Agreement, the Seller had good and marketable title to the Receivables free and
clear of all Liens, encumbrances, security interests and rights of others and,
immediately upon such transfer, the Depositor shall have good and marketable
title to the Receivables, free and clear of all Liens, encumbrances, security
interests and rights of others. The transfer of the Receivables contemplated by
Section 2.01(a) of the Receivables Purchase Agreement has been perfected by all
necessary action under the Relevant UCC.

     (m)  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 the Receivables Purchase 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.

     (n)  All Filings Made.  All filings (including filings under the Relevant
          ----------------
UCC) necessary in any jurisdiction to give the Depositor a first priority
perfected security interest in the Receivables have been made or will be made on
or prior to the Closing Date.

     (o)  Chattel Paper.  Each Receivable constitutes "chattel paper" as defined
          -------------
in the Relevant UCC.

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

     (q)  Principal Balance.  Each Receivable had an original Principal Balance
          -----------------
of not more than $50,000 and a remaining Principal Balance as of the Cutoff Date
of not less than $500.

     (r)  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.

     (s)  New and Used Vehicles.  As of the Cutoff Date, approximately 6.56% of
          ---------------------
the Pool Balance related to Receivables secured by new Financed Vehicles and
approximately 93.44% of the Pool Balance related to Receivables secured by used
Financed Vehicles.

     (t)  Origination.  Each Receivable was originated after May 10, 1995.
          -----------

     (u)  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 (3) months.

     (v)  Weighted Average Maturity. As of the Cutoff Date, the weighted average
          -------------------------
remaining term to maturity of the Receivables was approximately 51.74 months.

     (w)  Annual Percentage Rate. Each Receivable has an APR of at least 5.00%
          ----------------------
and not more than 25.00%.

                                      F-3
<PAGE>

     (x)   Location of Receivable Files. The Receivable Files are maintained at
           ----------------------------
the location listed in Schedule 2 to the Sale and Servicing Agreement.

     (y)   Simple Interest Method. All payments with respect to the Receivables
           ----------------------
have been allocated consistently in accordance with the Simple Interest Method.

     (z)   No Delinquent Receivables. As of the Cutoff Date, no payment due
           -------------------------
under any Receivable was more than 30 days past due.

     (aa)  Prospectus Data.  The tabular and numerical data contained in the
           ---------------
Prospectus relating to the characteristics of the Receivables is true and
correct in all material respects.

     (bb)  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.

     (cc)  Fair Market Value.  The Receivables Purchase Price and the value of
           -----------------
the Residual Interest represent the fair market value of the Receivables.

     (dd)  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 agreements in effect materially adversely affecting the
right or ability of the Seller to make, or cause to be made, any delivery
required under the Receivables Purchase Agreement.

     (ee)  Bulk Transfer Laws. The transfer of the Receivables and the
           ------------------
Receivable Files by the Seller to the Depositor pursuant to the Receivables
Purchase Agreement is not subject to the bulk transfer laws or any similar
statutory provisions in effect in any applicable jurisdiction.

                                      F-4
<PAGE>

                                                                       EXHIBIT G

                    FORM OF RETAIL INSTALLMENT SALE CONTRACT

                                      G-1<PAGE>

                                                                    Exhibit 10.4

                          MBIA INSURANCE CORPORATION

                      FINANCIAL GUARANTY INSURANCE POLICY

                               January 25, 2001

                                                                Policy No. 34115

Re:                        CarMax Auto Owner Trust 2001-1, Class A-1, Class A-2,
---                        Class A-3 and Class A-4 Asset-Backed Notes
                           (collectively, the "Notes") and Asset-Backed
                                               -----
                           Certificates (the "Certificates" and together with
                                              ------------
                           the Notes, the "Securities");
                                           ----------

Insured                    Obligation of CarMax Auto Owner Trust 2001-1 (the
-------
Obligation:                "Trust") to pay servicing fees and interest on and
----------                  -----
                           the principal of the Securities.

Beneficiary:               Bankers Trust Company, as indenture trustee under the
-----------
                           Agreement (as defined below) (together with any
                           successor trustee duly appointed and qualified under
                           the Agreement) (the "Indenture Trustee") on behalf of
                                                --------- -------
                           the Noteholders and the Certificateholders.

     MBIA INSURANCE CORPORATION ("MBIA"), for consideration received, hereby
                                  ----
unconditionally and irrevocably guarantees to the Beneficiary, subject only to
the terms of this Policy (the "Policy"), payment of the Insured Obligation.
                               ------
MBIA agrees to pay to the Beneficiary:

     (x)  with respect to any Distribution Date, the sum of (i) Total Servicing
Fee for the preceding Collection Period, (ii) Total Note Interest for such
Distribution Date, and (iii) Total Certificate Interest for such Distribution
Date (in each case, after giving effect to any distributions of Available
Collections and any funds withdrawn from the Reserve Account to pay such amounts
with respect to such Distribution Date); and

     (y)  with respect to any Distribution Date, the lesser of (i) the sum of
(a) Monthly Note Principal for such Distribution Date and (b) Monthly
Certificate Principal for such Distribution Date (in each case, after giving
effect to any distributions of Available Collections and any funds withdrawn
from the Reserve Account to pay such principal with respect to such Distribution
Date) and (ii) the Net Principal Policy Amount (after giving effect to any funds
withdrawn from the Reserve Account to pay principal to the Noteholders and the
Certificateholders with respect to such Distribution Date); and

provided, however, that no payment under this Policy with respect to any
--------  -------
Distribution Date shall exceed the Policy Amount for such Distribution Date, and

provided further, that with respect to an Avoided Payment, the Policy Amount
-------- -------
shall be calculated without regard to clause (x)(A)(i) of
<PAGE>

the definition thereof. This Policy does not cover shortfalls, if any,
attributable to the liability of the Trust or the Indenture Trustee for
withholding taxes, if any (including interest and penalties in respect of such
liability).

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Indenture dated as of January 1, 2001
between the Trust and the Indenture Trustee (the "Agreement"). As used herein,
                                                  ---------
the term "Policy Amount" shall mean, with respect to any Distribution Date,
          -------------

     (x)  the sum of (A) the lesser of (i) the Note Balance on such Distribution
     Date plus the Certificate Balance on such Distribution Date (after giving
          ----
     effect to any distribution of Available Collections and any funds withdrawn
     from the Reserve Account to pay principal to the Noteholders or the
     Certificateholders with respect to such Distribution Date) and (ii) the Net
     Principal Policy Amount on such Distribution Date (after giving effect to
     any funds withdrawn from the Reserve Account to pay principal to the
     Noteholders or the Certificateholders with respect to such Distribution
     Date), plus (B) Total Note Interest for such Distribution Date, plus (C)
            ----                                                     ----
     Total Certificate Interest for such Distribution Date, plus (D) Total
                                                            ----
     Servicing Fee for the preceding Collection Period; less
                                                        ----

     (y)  all amounts on deposit in and available for withdrawal from the
     Reserve Account on such Distribution Date after giving effect to any funds
     withdrawn from the Reserve Account to pay principal to the Noteholders or
     the Certificateholders with respect to such Distribution Date.

     As used herein, the term "Net Principal Policy Amount" shall mean, on any
                               ---------------------------
Distribution Date, the sum of the Note Balance as of the Closing Date plus the
                                                                      ----
Certificate Balance as of the Closing Date, minus all amounts previously drawn
                                            -----
on the Policy or withdrawn from the Reserve Account in either case with respect
to Monthly Note Principal or Monthly Certificate Principal.

     As used herein, the term "Insurance Agreement" shall mean the Insurance and
                               -------------------
Reimbursement Agreement, dated as of January 25, 2001 among Pooled Auto
Securities Shelf LLC (the "Depositor"), CarMax Auto Superstores, Inc.,
                           ---------
individually, as seller (the "Seller") and as servicer (the "Servicer"), the
                              ------                         --------
Trust, the Indenture Trustee and MBIA.

     As used herein, the term "Insolvency Proceeding" means (i) the
                               ---------------------
commencement, after the date hereof, of any bankruptcy, insolvency, readjustment
of debt, reorganization, marshalling of assets and liabilities or similar
proceedings by or against the Seller, the Servicer, the Depositor or the Trust,
or (ii) the commencement, after the date hereof, of any proceedings by or
against the Seller, the Servicer, the Depositor or the Trust for the winding up
or liquidation of its affairs or (iii) the consent, after the date hereof, to
the appointment of a trustee, conservator, receiver, or liquidator in any
bankruptcy, insolvency, readjustment of debt, reorganization, marshalling of
assets and liabilities or similar proceedings of or relating to the Seller, the
Servicer, the Depositor or the Trust.

     Subject to the foregoing, if any amount paid or required to be paid in
respect of the Insured Obligation is voided (a "Preference Event") under any
                                                ----------------
applicable bankruptcy, insolvency, receivership or similar law in an Insolvency
Proceeding, and, as a result of such a

                                       2
<PAGE>

Preference Event, the Beneficiary, the Noteholders or the Certificateholders are
required to return such voided payment, or any portion of such voided payment
made or to be made in respect of the Notes or the Certificates, respectively (an
"Avoided Payment"), MBIA will pay an amount equal to each such Avoided Payment,
 ---------------
irrevocably, absolutely and unconditionally and without the assertion of any
defenses to payment, including fraud in inducement or fact or any other
circumstances that would have the effect of discharging a surety in law or in
equity, upon receipt by MBIA from the Beneficiary, the Noteholders or the
Certificateholders of (x) a certified copy of a final order of a court
exercising jurisdiction in such Insolvency Proceeding to the effect that the
Beneficiary, the Noteholders or the Certificateholders are required to return
any such payment or portion thereof prior to the Termination Date (as defined
below) of this Policy because such payment was voided under applicable law, with
respect to which order the appeal period has expired without an appeal having
been filed (the "Final Order"), (y) an assignment, in the form of Exhibit D
                 -----------                                      ---------
hereto, irrevocably assigning to MBIA all rights and claims of the Beneficiary,
------
the Noteholders or the Certificateholders relating to or arising under such
Avoided Payment and (z) a Notice for Payment in the form of Exhibit A hereto
                                                            ---------
appropriately completed and executed by the Beneficiary, the Noteholders or the
Certificateholders. Such payment shall be disbursed to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Final
Order and not to the Beneficiary, the Noteholders or the Certificateholders
directly unless such Noteholder or such Certificateholder (as the case may be)
has returned principal and interest paid on the Notes or the Certificates (as
the case may be) to such receiver, conservator, debtor-in-possession or trustee
in bankruptcy, in which case such payment shall be disbursed to such Noteholder
or such Certificateholder (as the case may be).

     Notwithstanding the foregoing, in no event shall MBIA be obligated to make
any payment in respect of any Avoided Payment, which payment represents a
payment of interest or the principal amount of the Notes or the Certificates,
prior to the time MBIA would have been required to make a payment in respect of
such interest or principal pursuant to the first paragraph of this Policy.

     Payment of amounts hereunder shall be made in immediately available funds
(x) pursuant to the first paragraph of this Policy on the later of (a) 12:00
noon, New York City time, on the Distribution Date or (b) 12:00 noon, New York
City time, on the Business Day next succeeding presentation to MBIA and State
Street Bank and Trust Company, N.A., as Fiscal Agent for MBIA or any successor
fiscal agent appointed by MBIA (the "Fiscal Agent") (as hereinafter provided) of
                                     ------------
a notice for payment in the form of Exhibit A hereto ("Notice for Payment"),
                                    ---------          ------------------
appropriately completed and executed by the Beneficiary, and (y) in respect of
Avoided Payments prior to 12:00 noon New York City time, on the second Business
Day following MBIA's receipt of the documents required under clauses (x) through
(z) of the second preceding paragraph. Any such documents received by MBIA or
the Fiscal Agent after 12:00 noon New York City time on any Business Day or on
any day that is not a Business Day shall be deemed to have been received by MBIA
or the Fiscal Agent, as applicable, prior to 12:00 noon on the next succeeding
Business Day.  All payments made by MBIA hereunder will be made with MBIA's own
funds. A Notice for Payment under this Policy may be presented to the Fiscal
Agent and MBIA on any Business Day following the Determination Date in respect
of which the Notice for Payment is being presented, by (a) delivery of the
original Notice for Payment to the Fiscal Agent and MBIA at its respective
addresses set forth below, or (b) facsimile transmission of the original Notice
for Payment to the Fiscal Agent and MBIA at its respective facsimile numbers

                                       3
<PAGE>

set forth below. If presentation is made by facsimile transmission, the
Beneficiary shall (i) simultaneously confirm transmission by telephone to the
Fiscal Agent and MBIA at its respective telephone numbers set forth below, and
(ii) as soon as reasonably practicable, deliver the original Notice for Payment
to the Fiscal Agent and MBIA at its respective addresses set forth below.

     If any Notice for Payment received by the Fiscal Agent is not in proper
form or is otherwise insufficient for the purpose of making a claim hereunder,
it shall be deemed not to have been received by the Fiscal Agent and MBIA, and
MBIA or the Fiscal Agent, shall promptly so advise the Indenture Trustee, and
the Indenture Trustee may submit an amended Notice for Payment.

     Payments due hereunder unless otherwise stated herein will be disbursed by
the Fiscal Agent or MBIA to the Indenture Trustee on behalf of the Noteholders
and the Certificateholders by wire transfer of immediately available funds in
the amount of such payment.

     The Fiscal Agent is the agent of MBIA only, and the Fiscal Agent shall in
no event be liable to the Noteholders or the Certificateholders for any acts of
the Fiscal Agent or any failure of MBIA to deposit or cause to be deposited
sufficient funds to make payments due under this Policy.

     MBIA hereby waives and agrees not to assert any and all rights to require
the Beneficiary to make demand on or to proceed against any person, party or
security prior to the Beneficiary demanding payment under this Policy.

     No defenses, set-offs and counterclaims of any kind available to MBIA so as
to deny payment of any amount due in respect of this Policy will be valid and
MBIA hereby waives and agrees not to assert any and all such defenses, set-offs
and counterclaims, including, without limitation, any such rights acquired by
subrogation, assignment or otherwise.

     MBIA shall be subrogated to the rights of the Noteholders and the
Certificateholders to receive payments under the Notes and the Certificates to
the extent of any payment by MBIA hereunder.

     Any rights of subrogation acquired by MBIA as a result of any payment made
under this Policy shall, in all respects, be subordinate and junior in right of
payment to the prior indefeasible payment in full of all amounts due the
Noteholders and the Certificateholders under the Notes and the Certificates.
MBIA's obligations under this Policy shall be discharged to the extent funds to
pay the Insured Obligation are deposited into the Collection Account, the Note
Payment Account or the Certificate Payment Account by the Servicer or the
Indenture Trustee, as applicable, in accordance with the Sale and Servicing
Agreement (except to the extent such payment is thereafter returned as an
Avoided Payment) or disbursed by MBIA as provided in this Policy, whether or not
such funds are properly applied by the Beneficiary.

     This Policy is neither transferable nor assignable, in whole or in part,
except to a successor trustee duly appointed and qualified under the Agreement.
Such transfer and assignment shall be effective upon receipt by MBIA of a copy
of the instrument effecting such transfer and assignment signed by the
transferor and by the transferee, and a certificate, properly

                                       4
<PAGE>

completed and signed by the transferor and the transferee, in the form of
Exhibit B hereto (which shall be conclusive evidence of such transfer and
---------
assignment), and, in such case, the transferee instead of the transferor shall,
without the necessity of further action, be entitled to all the benefits of and
rights under this Policy in the transferor's place, provided that, in such case,
the Notice for Payment presented hereunder shall be a certificate of the
transferee and shall be signed by one who states therein that he is a duly
authorized officer of the transferee.

     All notices, presentations, transmissions, deliveries and communications
made by the Beneficiary to MBIA with respect to this Policy shall specifically
refer to the number of this Policy and shall be made to MBIA at:

          MBIA Insurance Corporation
          113 King Street
          Armonk, N.Y. 10504
          Attention: Insured Portfolio Management,
                         Structured Finance
          Telephone: (914) 273-4545
          Facsimile: (914) 765-3810

or such other address, telephone number or facsimile number as MBIA may
designate to the Beneficiary in writing from time to time. Each such notice,
presentation, transmission, delivery and communication shall be effective only
upon actual receipt by MBIA.

     Any notice hereunder delivered to the Fiscal Agent may be made at the
address listed below for the Fiscal Agent or such other address as MBIA shall
specify in writing to the Indenture Trustee, the Seller and the Depositor.

     The notice address of the Fiscal Agent is 61 Broadway, 15th Floor, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency,
Facsimile: (212) 612-3201, Telephone: (212) 612-3458 or such other address as
the Fiscal Agent shall specify in writing to the Indenture Trustee, the Seller
and the Depositor.

     The obligations of MBIA under this Policy are irrevocable, primary,
absolute and unconditional (except as expressly provided herein) and neither the
failure of the Indenture Trustee, the Depositor, the Seller, the Servicer, the
Trust or any other person to perform any covenant or obligation in favor of MBIA
(or otherwise), nor the failure or omission to make a demand permitted
hereunder, nor the commencement of any bankruptcy, debtor or other insolvency
proceeding by or against the Indenture Trustee, the Depositor, the Seller, the
Servicer, the Trust or any other person shall in any way affect or limit MBIA's
obligations under this Policy. If an action or proceeding to enforce this Policy
is brought by the Beneficiary, the Beneficiary shall be entitled to recover from
MBIA costs and expenses reasonably incurred, including without limitation
reasonable fees and expenses of counsel.

     There shall be no acceleration payment due under this Policy unless such
acceleration is at the sole option of MBIA.

     This Policy and the obligations of MBIA hereunder shall terminate on the
day (the "Termination Date") on which the earliest of the following occurs:  (i)
          ----------------
MBIA receives written

                                       5
<PAGE>

notice, signed by the Beneficiary, substantially in the form of Exhibit C
                                                                ---------
hereto, stating that the Agreement has been terminated pursuant to its terms,
(ii) the date which is one year and one day following the Distribution Date
occurring on February 15, 2007 and (iii) the date which is one year and one day
following the Distribution Date upon which the later of the final distribution
on the Notes or the Certificates is made.

     The foregoing notwithstanding, if an Insolvency Proceeding is existing
during the one year and one day period set forth in clauses (ii) or (iii) above,
then this Policy and MBIA's obligations hereunder shall terminate on (and the
"Termination Date" shall be) the later of (i) the date of the conclusion or
dismissal of such Insolvency Proceeding without continuing jurisdiction by the
court in such Insolvency Proceeding, and (ii) the date on which MBIA has made
all payments required to be made under the terms of this Policy in respect of
Avoided Payments.

     This Policy is not covered by the property/casualty insurance fund
specified in Article Seventy-Six of the New York State insurance law.

     This Policy sets forth in full the undertaking of MBIA, and shall not be
modified, altered or affected by any other agreement or instrument, including
any modification or amendment to any other agreement or instrument, or by the
merger, consolidation or dissolution of the Trust or any other Person and may
not be canceled or revoked by MBIA prior to the time it is terminated in
accordance with the express terms hereof. The Premium on this Policy is not
refundable for any reason.

     This Policy shall be returned to MBIA upon expiration.

                                       6
<PAGE>

     THIS POLICY SHALL BE CONSTRUED, AND THE

     OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES OR THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.

     IN WITNESS WHEREOF, MBIA has caused this Policy to be duly executed on the
date first written above.

                            MBIA INSURANCE CORPORATION

                             By:   /s/ Gary C. Dunton
                                 --------------------

                                  Gary C. Dunton
                                  Vice President

                             By:   /s/ Amy R. Gonch
                                   ----------------

                                   Amy R. Gonch
                                   Assistant Secretary

                                       7
<PAGE>

                                                Exhibit A to Policy Number 34115

MBIA Insurance Corporation
113 King Street
Armonk, New York  10504
Attention: Insured Portfolio Management,
           Structured Finance

                              NOTICE FOR PAYMENT

                           UNDER POLICY NUMBER 34115

     ______________, as indenture trustee (the "Indenture Trustee"), hereby
                                                -----------------
certifies to MBIA Insurance Corporation ("MBIA") with reference to that certain
                                          ----
Policy, Number 34115 dated January 25, 2001 (the "Policy"), issued by MBIA in
                                                  ------
favor of the Indenture Trustee under the Indenture, dated as of January 1, 2001
(the "Agreement") between CarMax Auto Owner Trust 2001-1 and Bankers Trust
      ---------
Company, as indenture trustee, as follows:

     1.   The Indenture Trustee is the Beneficiary under the Policy.

     2.   The Indenture Trustee is entitled to make a demand under the Policy
[pursuant to Section 4.6(c) of the Sale and Servicing Agreement][as a result of
the occurrence of a Preference Event as defined in the Policy].

[For a Notice for Payment in respect of a Distribution Date use the following
paragraphs 3,4, and 5.]

     3.   This notice relates to the [insert date] Distribution Date.  The
Policy Amount, as specified to the Indenture Trustee by the Servicer, for such
Distribution Date is $________.  The amount demanded by this notice for the
benefit of the Noteholders and the Certificateholders does not exceed such
Policy Amount.

     4.   The Indenture Trustee demands payment of $_______ which consists of
[Total Servicing Fee in the amount of $_______]; [Total Note Interest  in the
amount of $___________]; [Total Certificate Interest in the amount of
$____________]; [Monthly Note Principal in the amount of $___________]; [and
Monthly Certificate Principal in the amount of $_____________].

     5.   The amount demanded is to be paid in immediately available funds to
the Collection Account at             , account number                 [except
that $_____ of such amount is to be paid to the Certificate Payment Account at
____________, account number ____________].

[For a Notice for Payment in respect of an Avoided Payment use the following
paragraphs 3, 4, and 5.]
<PAGE>

     3.   The Indenture Trustee hereby represents and warrants, based upon
information available to it, that (i) the amount entitled to be drawn under the
Policy on the date hereof in respect of Avoided Payments is [$               ],
(ii) each Noteholder and Certificateholder with respect to which the drawing is
being made under the Policy has paid or simultaneously with such draw on the
Policy will pay such Avoided Payment, and (iii) the documents required by the
Policy to be delivered in connection with such Avoided Payment have previously
been presented to MBIA or are attached hereto.

     4.   The Indenture Trustee hereby demands payment of the Avoided Payment in
the amount of [$          ] and the Indenture Trustee hereby represents and
warrants, based upon information available to it, that such amount is not in
excess of the sum of (i) the Policy Amount calculated without regard to clause
(A)(i) of the definition thereof, as of the date hereof, and (ii) interest
thereon (which interest is the amount paid to the Noteholders or the
Certificateholders on the date the Trust made the payment that has been voided).

     5.   The amount demanded is to be paid in immediately available funds by
wire transfer to [                  ].

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Agreement.

     Any Person Who Knowingly And With Intent To Defraud Any Insurance Company
Or Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading Information Concerning Any Fact Material Thereof, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The Claim
For Each Such Violation.

     IN WITNESS WHEREOF, this notice has been executed this _____ day
of______________________ , ___.

__________________, as Indenture Trustee

By:________________________

   Authorized Officer

                                       2
<PAGE>

                                                Exhibit B to Policy Number 34115

MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention:  Insured Portfolio Management,
        Structured Finance

Dear Sirs:

     Reference is made to that certain Policy, Number 34115 dated January 25,
2001 (the "Policy") which has been issued by MBIA Insurance Corporation in favor
           ------
of Bankers Trust Company, as Indenture Trustee.

     The undersigned [Name of Transferor] has transferred and assigned (and
hereby confirms to you said transfer and assignment) all of its rights in and
under said Policy to [Name of Transferee] and confirms that [Name of Transferor]
no longer has any rights under or interest in said Policy.

     Transferor and Transferee have indicated on the face of said Policy that it
has been transferred and assigned to Transferee.

     Transferee hereby certifies that it is a duly authorized transferee under
the terms of said Policy and is accordingly entitled, upon presentation of the
document(s) called for therein, to receive payment thereunder.

_________________________
[Name of Transferor]

By:______________________
  [Name and Title of
  Authorized Officer of
  Transferor

_________________________
[Name of Transferee]

By:______________________
  [Name and Title of
  Authorized Officer of
  Transferee]

                                       2
<PAGE>

                                                Exhibit C to Policy Number 34115

MBIA Insurance Corporation
113 King Street
Armonk, New York  10504
Attention: Insured Portfolio Management,
           Structured Finance

Dear Sirs:

     Reference is made to that certain Policy, Number 34115 dated January 25,
2001 (the "Policy"), issued by MBIA in favor of the Indenture Trustee under the
           ------
Indenture dated as of January 1, 2001 between CarMax Auto Owner Trust 2001-1 and
Bankers Trust Company, as indenture trustee (the "Indenture Trustee") (the
                                                  -----------------
"Agreement").
----------

     The undersigned hereby certifies and confirms that the Agreement and the
Trust have  been terminated, with respect to the Noteholders and the
Certificateholders, pursuant to their terms and that the Collection Account
contains sufficient funds after taking into account all payments [      ] to pay
in full all payments due under presently outstanding Notes and Certificates
(referred to in said Policy) and to pay in full all payments due to MBIA under
the Agreement and the Insurance and Reimbursement Agreement dated as of January
25, 2001 among CarMax Auto Superstores, Inc., individually, as Seller and as
Servicer, Pooled Auto Securities Shelf LLC, CarMax Auto Owner Trust 2001-1, the
Indenture Trustee and MBIA.  Accordingly, said Policy is hereby terminated in
accordance with its terms.  The Indenture Trustee hereby surrenders the Policy
to MBIA for cancellation and hereby instructs MBIA to cancel the same, effective
on the date of its receipt of this certificate.

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Agreement.

     IN WITNESS WHEREOF, this notice has been executed this _____ day

of______________________ , ____.

__________________, as Indenture Trustee

By:________________________
     Authorized Officer

                                       2

<PAGE>

                                                Exhibit D to Policy Number 34115

                              Form of Assignment

     Reference is made to that certain Policy No. 34115, dated January 25, 2001
(the "Policy") issued by MBIA Insurance Corporation ("MBIA") relating to the
      ------                                          ----
CarMax Auto Owner Trust 2001-1.  Unless otherwise defined herein, capitalized
terms used in this Assignment shall have the meanings assigned thereto in the
Policy or as incorporated by reference therein.  In connection with the Avoided
Payment of [$            ] [paid on _________] [which is being paid on the date
hereof]  by the undersigned (the "Holder") and the payment by MBIA in respect of
                                  ------
such Avoided Payment pursuant to the Policy, the Holder hereby irrevocably and
unconditionally, without recourse, representation or warranty (except as
provided below), sells, assigns, transfers, conveys and delivers all of such
Holder's rights, title and interest in and to any rights or claims, whether
accrued, contingent or otherwise, which the Holder now has or may hereafter
acquire, against any person relating to, arising out of or in connection with
such Avoided Payment. The Holder represents and warrants that such claims and
rights are free and clear of any lien or encumbrance created or incurred by such
Holder./1/

____________________________
Holder of Note or Certificate

_____________________________
     /1/  In the event that the terms of this form of assignment are reasonably
determined to be insufficient solely as a result of a change of law or
applicable rules after the date of the Policy to fully vest all of the Holder's
right, title and interest in such rights and claims, the Holder and MBIA shall
agree on such other form as is reasonably necessary to effect such assignment,
which assignment shall be without recourse, representation or warranty except as
provided above.

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