EXHIBIT 1.1
$[ ]
CARMAX AUTO OWNER TRUST 1999-1
$[ ] [ ]% CLASS A-1 ASSET-BACKED NOTES
$[ ] [ ]% CLASS A-2 ASSET-BACKED NOTES
$[ ] [ ]% CLASS A-3 ASSET-BACKED NOTES
$[ ] [ ]% CLASS A-4 ASSET-BACKED NOTES
$[ ] [ ]% ASSET-BACKED CERTIFICATES
CARMAX AUTO RECEIVABLES, LLC
UNDERWRITING AGREEMENT
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[ ], 1999
Banc of America Securities LLC
As Representative
(the "Representative") of the
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Several Underwriters
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
1. Introductory. Carmax Auto Receivables LLC, a Virginia limited
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liability company (the "Company"), proposes, subject to the terms and conditions
stated herein, to cause Carmax Auto Owner Trust 1999-1 (the "Trust") to issue
and sell $[ ] aggregate principal amount of [ ]% Class A-1
Asset Backed Notes (the "Class A-1 Notes"), $[ ]
aggregate principal amount of [ ]% Class A-2 Asset Backed Notes (the "Class
A-2 Notes"), $[ ] aggregate principal amount of [ ]%
Class A-3 Asset Backed Notes (the "Class A-3 Notes") and $[ ] aggregate
principal amount of [ ]% Class A-4 Asset Backed Notes (the "Class A-4
Notes"). The Notes will be issued pursuant to the indenture dated as of
[ ], 1999
(the "Indenture"), between the Trust and Bankers Trust Company (the "Indenture
Trustee").
Concurrently with the issuance and sale of the Notes as contemplated
herein, the Trust will issue $[ ] aggregate principal amount of [
]% certificates of beneficial interest in the Trust (the "Certificates"), each
representing an interest in the property of the Trust. The Certificates will be
issued pursuant to the Trust Agreement, dated as of [ ], 1999 (the
"Trust Agreement"), between the Company and First Union Trust Company, National
Association, (the "Owner Trustee"). The Certificates will be subordinated to
the Notes.
Pursuant to an Insurance and Reimbursement Agreement dated as of [____],
1999, among the Company, the Servicer and MBIA Insurance Corporation (the
"Insurer"), the Insurer will issue a financial guaranty insurance policy (the
"Policy") which guarantees the timely payment of Monthly Note Principal, Monthly
Note Interest, Monthly Certificate Principal, Monthly Certificate Interest and
the payment of certain other amounts.
The assets of the Trust will include, among other things, (i) a pool of
motor vehicle retail installment sale contracts secured by new and used motor
vehicles to be conveyed to the Trust on the Closing Date (the "Contracts"), (ii)
amounts received on or in respect of the Contracts on or after the Cutoff Date,
and (iii) certain other property described in the Trust Agreement as part of the
Owner Trust Estate. The Contracts will be sold to the Trust by the Company and
be serviced for the Trust by Carmax Auto Superstores, Inc., a Virginia
corporation ("Carmax" or, in its capacity as servicer, the "Servicer") pursuant
to a Sale and Servicing Agreement, dated as of [ ], 1999
(the "Sale and Servicing Agreement"), among the Trust, the Company and the
Servicer. Capitalized terms used but not defined herein shall have the meanings
ascribed thereto in the Sale and Servicing Agreement or, if not defined therein,
in the Indenture, the Trust Agreement or in the Purchase Agreement between the
Company and Carmax, dated as of [ ], 1999 (the "Purchase
Agreement"), the Administration Agreement among the Trust, Carmax and the
Indenture trustee (the "Administration Agreement", and together with the
Indenture, the Trust Agreement, the Sale and Servicing Agreement and the
Purchase Agreement, the "Basic Documents"). The Company hereby agrees with the
several Underwriters named in Schedule A hereto (the "Underwriters") as follows:
2. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, the several Underwriters that:
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(1) a Registration Statement on Form S-3 (File No. 333-79087),
including a prospectus and such amendments thereto as may have been
required to the date hereof, relating to the Notes and the Certificates has
been filed with the Securities and Exchange Commission (the "Commission").
Such Registration Statement, as amended, has become effective under the
Securities Act of 1933, as amended (the "Act"). No stop orders suspending
the effectiveness of the Registration Statement have been issued and no
procedures for that purpose have been instituted or, to the Company's
knowledge, threatened by the Commission. A prospectus setting forth the
terms of the offering, sale and plan of distribution of the Notes and the
Certificates and additional information concerning the Notes and the
Certificates, including the terms thereof, and the Contracts and other
property of the Trust has been prepared and will be filed timely pursuant
to Rule 424(b) of the Rules and Regulations of the Commission (the "Rules
and Regulations") following the execution of this Agreement. Such
Registration Statement, as from time to time amended and supplemented, is
referred to as the "Registration Statement" and the final form of
Prospectus included in the Registration Statement, as supplemented by the
form of Prospectus to be filed with the Commission pursuant to Rule 424(b),
is referred to as the "Prospectus" (the "Prospectus"). The conditions to
the use of a registration statement on Form S-3 under the Act, as set forth
in the General Instructions to Form S-3, and the conditions of Rule 415
under the Act, have been satisfied with respect to the Registration
Statement;
(2) as of the date of execution of this Agreement, the Registration
Statement and the Prospectus, except with respect to any modifications as
to which the Representative has agreed in writing, shall be in all
substantive respects in the form furnished to the Representative prior to
such date or, to the extent not completed on such date, shall contain only
such specific additional information and other changes which the Company
advised the Representative prior to such time, will be included or made
therein;
(3) on the effective date of the Registration Statement, the
Registration Statement and the Prospectus complied in all material respects
with the applicable requirements of the Act and the Rules and Regulations,
and did not include any untrue statement of a material fact or, in the case
of the Registration Statement, omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading and,
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in the case of the Prospectus, omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, and on the date hereof and on the
Closing Date (as defined in Section 3 hereof), the Registration Statement
and the Prospectus will comply in all material respects with the applicable
requirements of the Act and the Rules and Regulations, and neither of such
documents included or will include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; provided,
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however, that the foregoing does not apply to information contained in or
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omitted from either of the documents based upon written information
furnished to the Company by any Underwriter specifically for use in
connection with the preparation of the Registration Statement or the
Prospectus;
(4) the Company has been duly organized and is an existing limited
liability company in good standing under the laws of the Commonwealth of
Virginia, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation and is in
good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, and
has obtained all necessary licenses and approvals (except with respect to
the state securities or "Blue Sky" laws of various jurisdictions) in each
jurisdiction in which failure to so qualify or obtain such licenses and
approvals would have a material adverse effect on the interests of
Noteholders or the Certificateholders under any of the Basic Documents or
under the Prospectus;
(5) the execution, delivery and performance by the Company of its
obligations under this Agreement, each of the Basic Documents, the Notes
and the Certificates, and the consummation by the Company of the
transactions provided for herein and therein, have been, or will have been
as of the Closing Date, duly authorized by the Company by all necessary
action on the part of the Company; and neither the execution and delivery
by the Company of such instruments, nor the performance by the Company of
the transactions herein or therein contemplated, nor the compliance by the
Company with the provisions hereof or thereof, will (i) conflict with or
result in a breach of any of the terms and provisions of, or constitute a
default under, any of the provisions of the Articles of Organization or
Operating Agreement of the Company, or (ii) conflict with any of the
provisions of any law, government rule, regulation,
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judgment, decree or order binding on the Company or its properties or (iii)
conflict with any of the provisions of any indenture, mortgage, contract or
other instrument to which the Company is a party or by which it is bound or
(iv) result in the creation or imposition of any lien, charge or
encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, contract or other instrument other than pursuant to
the Basic Documents;
(6) no consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required to be obtained or
made by the Company for the consummation of the transactions contemplated
by this Agreement or any of the Basic Documents in connection with the
issuance of the Notes or the Certificates and the sale by the Company of
Notes or the Certificates, except such as have been obtained and made under
the Act, such as may be required under state securities laws and the filing
of any financing statements required to perfect the interest of any of the
Company, the Trust or the Indenture Trustee in the Contracts and other
property conveyed to the Trust or pledged to secure obligations under any
of the Basic Documents, which financing statements will be filed in the
appropriate offices on or prior to the Closing Date;
(7) on the Closing Date, the Company will have directed the Owner
Trustee to execute and the Indenture Trustee to authenticate and issue the
Notes and when delivered and paid for pursuant to the Indenture and this
Agreement, the Notes will have been duly executed, authenticated, issued
and delivered and will constitute the valid and legally binding obligations
of the Trust, entitled to the benefits of the Indenture and be enforceable
in accordance with their terms;
(8) on the Closing Date, the Company will have directed the Owner
Trustee to execute and authenticate the Certificates and, when delivered
and paid for pursuant to the Trust Agreement and this Agreement, the
Certificates will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of the
Trust, entitled to the benefits provided in the Trust Agreement and be
enforceable in accordance with their terms;
(9) the Company possesses adequate certificates, authorities and
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business, as now operated by it or to be operated by it as
described in the Prospectus and has not received any notice of proceedings
relating to the
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revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company, would individually or in the
aggregate have a material adverse effect on the Company or on the Company's
ability to perform its obligations hereunder or under the Basic Agreements
to which it may be a party;
(10) except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company or any of
its properties that, if determined adversely to the Company, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business or results of operations of the
Company, or would materially and adversely affect the ability of the
Company to perform its obligations under this Agreement or any Basic
Documents to which it may be a party, or which are otherwise material in
the context of the issuance and sale of the Notes or the Certificates; and
no such actions, suits or proceedings are threatened or, to the Company's
knowledge, contemplated.
(11) as of the Closing Date, the representations and warranties of the
Company contained in the Basic Documents will be true and correct;
(12) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (i) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business and (ii) there have been no transactions entered into by the
Company, other than those in the ordinary course of business, which are
material with respect to the Company;
(13) this Agreement and each of the Basic Documents to which the
Company is a party, has been duly authorized by the Company and, when duly
executed and delivered by the Company and the other parties thereto, will
constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law);
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(14) this Agreement has been duly authorized, executed and delivered
by the Company;
(15) the Company's sale and delivery of the Contracts and other
property to the Trust will vest in the Trust all of the Company's right,
title and interest therein, subject to no prior lien, mortgage, security
interest, pledge, adverse claim, charge or other encumbrance;
(16) the Trust's pledge of the Collateral (as defined in the
Indenture) to the Indenture Trustee pursuant to the Indenture will vest in
the Indenture Trustee, for the benefit of the Noteholders, a first priority
perfected security interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance
except for any tax lien, mechanics' lien or other lien encumbrance arising
after the Closing Date that attaches by operation of law;
(17) the Contract Schedule created as of the Cut-off Date and made
available by the Servicer, will be complete and accurate as of the date
thereof and will include identifying descriptions of the Contracts listed
on Schedule I to the Purchase Agreement;
(18) the Notes and the Certificates conform, and will conform as of
the Closing Date, in all material respects to the descriptions thereof in
the Registration Statement and the Prospectus;
(19) any taxes, fees and other governmental charges in connection with
the execution, delivery and performance by the Company of this Agreement,
any of the Basic Documents, the Notes or the Certificates (except for
transfer, income or other taxes due upon the sale of the Notes or the
Certificates by the Underwriters or any subsequent purchasers) shall have
been paid or will be paid by or on behalf of the Company at or prior to the
Closing Date to the extent then due;
(20) the Company is not and, after giving effect to the offering and
sale of the Notes and the Certificates and the application of the proceeds
thereof as described in the Prospectus, neither the Company nor the Trust
will be required to be, registered as an "investment company" as defined in
the
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Investment Company Act of 1940, as amended (the "Investment Company Act").
3. Purchase, Sale and Delivery of Notes. On the basis of the
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representations warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company the respective principal amounts of each Class of the Notes set
forth opposite the names of the Underwriters on Schedule A hereto, at a purchase
price of, in the case of (i) the Class A-1 Notes, [ ]% of the principal
amount thereof; (ii) the Class A-2 Notes, [ ]% of the principal amount
thereof; (iii) the Class A-3 Notes, [ ]% of the principal amount thereof; [in
each case plus the accrued interest at the applicable Note Interest Rate from
___, 1999] and (iv) the Class A-4 Notes, [ ]% of the principal amount
thereof, plus in each case, accrual interest at the applicable Note Interest
Rate from [ ], 1999. On the basis of the representations warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company also agrees to sell and the Representative agrees to purchase
from the Company, the aggregate principal amount of the Certificates set forth
on Schedule A hereto at a purchase price of [ ]% of the principal amount
thereof.
The Company will deliver against payment of the purchase price, the Notes
of each Class and the Certificates, each in the form of one or more permanent
global securities in definitive form (the "Global Notes" or "Global
Certificates," as the case may be) [deposited with the Indenture Trustee] as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent Global Notes or
Global Certificates will be held only in book-entry form through DTC, except in
the limited circumstances described in the Prospectus. Payment for the Notes
and the Certificates shall be made by the Underwriters in Federal (same day)
funds by official check or checks at the offices of Mc-Guire, Woods, Battle &
Xxxxxx LLP, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000 or by wire transfer
to an account in New York previously designated to the Representative by the
Company at 10:00 a.m., New York time, on [ ], 1999, or at
such other time not later than seven full business days thereafter as the
Representative and the Company determine, such time being herein referred to as
the "Closing Date", against delivery to [the Indenture Trustee] as custodian for
DTC of the Global Notes and the Global Certificates representing all of the
Notes and the Certificates. The Global Notes and the Global Certificates will
be made available for checking at the above office of XxXxxxx Xxxxx, Battle &
Xxxxxx LLP at least 24 hours prior to the Closing Date.
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4. Certain Agreements of the Company. The Company agrees with the
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several Underwriters that:
(1) so long as any Note or Certificate is outstanding, the Company
will furnish to the Representative by telecopier, overnight carrier service
or first-class mail as soon as practicable, (i) all documents distributed,
or caused to be distributed, by or on behalf of the Company or the Trust to
Noteholders or the Certificateholders (ii) all documents filed, or caused
to be filed, by or on behalf of the Company or the Trust with the
Commission pursuant to the 1934 Act, (iii) copies of any order or other
communication received from the Commission with respect to the Company, the
Notes or the Certificates and (iv) such other information in the possession
of the Company concerning the Trust or the Company as the Representative
from time to time may reasonably request.
(2) except as otherwise specified in this Agreement, the Company will
pay all expenses incident to the performance of its obligations under this
Agreement and will reimburse the Underwriters for any expenses reasonably
incurred by them in connection with qualification of the Notes or the
Certificates and determination of their eligibility for investment under
the laws of such jurisdictions as the Representative may designate and the
reproduction of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of such Notes or the
Certificates, for all reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Representative and, to
the extent previously agreed upon with the Representative, for reasonable
expenses incurred in distributing the Prospectus (including any amendments
and supplements thereto) to the Underwriters and the reasonable fees and
disbursements of the Underwriter's counsel;
(3) The Company will advise the Representative promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus, and will not effect such amendment or supplementation without
the Representative's consent; the Company will also advise the
Representative promptly of the institution by the Commission of any stop
order proceedings in respect of the Registration Statement and will use its
best efforts to prevent the issuance of any such stop order and to obtain
as son as possible its lifting, if issued
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(4) If, at any time when the prospectus relating to the Notes or the
Certificates is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company will
promptly notify the Representative of such event and will promptly prepare
and file with the Commission (subject to the Representative's prior
review), at its own expense, an amendment or supplement which will correct
such statement or omission, or an amendment which will effect such
compliance.
(5) The company will furnish to the Representative copies of the
Registration Statement (two of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as delivery of
a prospectus relating to the Certificates or the Notes is required to be
delivered under the Act in connection with sales by any Underwriter or
dealer, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as the
Representative requests. (The Prospectus shall be so furnished on or prior
to 3:00 p.m., New York time, on the business day following the execution
and delivery of this Agreement.) All other such documents shall be so
furnished as soon as available. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(6) The Company will arrange for the qualification of the Notes for
offering and sale and the determination of their eligibility for investment
under the laws of such jurisdictions as the Representation designates and
will continue such qualifications in effect so long as required for the
distribution of the Notes.
(7) For a period from the date of this Agreement until the retirement
of the Notes (i) the Company will furnish to the Representative and, upon
request, to each of the other Underwriters, copies of each certificate and
the annual statements of compliance delivered to the Indenture Trustee or
the Insurer pursuant to Section 3.9 of the Indenture and Sections 3.9 and
3.10 of the Sale and Servicing Agreement and the annual independent
certified public accountant's servicing reports furnished to the Indenture
Trustee pursuant to
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Section 3.11 of the Sale and Servicing Agreement, by first -class mail as
soon as practicable after such statements and reports are furnished to the
Indenture Trustee, and (ii) such other forms of periodic certificates or
reports as may be delivered to the Indenture Trustee, the Owner Trustee,
the Insurer, the Noteholders or the Certificate-holders under the
Indenture, the Sale and Servicing Agreement or the Other Basic Documents.
(8) to the extent, if any, that (i) the ratings provided with respect
to the Notes or the Certificates by Xxxxx'x Investors Service, Inc.
("Moody's") and Standard & Poor's, a division of The XxXxxx-Xxxx Companies
("Standard & Poor's" and, together with Xxxxx'x, the "Rating Agencies") or
(ii) the issuance of the Policy by the Insurer, is conditional upon the
furnishing of documents or the taking of any other action by the Company,
the Company shall furnish such documents and take any such other action.
(9) on or before the related Closing Date, the Company shall cause the
computer records of the Company and Carmax relating to the Contracts to be
marked to show the Trust's absolute ownership of the Contracts and the
proceeds thereof, and from and after the Closing Date, neither the Company
nor Carmax shall take any action inconsistent with the Trust's ownership of
such Contracts, other than as permitted by the Sale and Servicing
Agreement.
5. Conditions of the Obligations of the Underwriters. The obligations of
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the several Underwriters to purchase and pay for the Notes and the Certificates
on the Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of the Company's officers made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(1) the Representative shall have received a letter, dated the date of
delivery thereof, of [KPMG Peat Marwick], in form and substance
satisfactory to the Representative and counsel for the Underwriters,
confirming that they are independent public accountants within the meaning
of the 1933 Act and the applicable Rules and Regulations and stating in
effect that (i) they have performed certain specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature set forth in the Registration Statement and
the Prospectus (and any supplements thereto), agrees with the accounting
records of Carmax and the Company, excluding any
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questions of legal interpretation, and (ii) they have performed certain
specified procedures with respect to the Receivables;
(2) all actions required to be taken and all filings required to be
made by the Company under the Act prior to the Closing Date for the Notes
or the Certificates shall have been duly taken or made; and prior to the
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Company,
threatened by the Commission;
(3) the Representative shall have received a copy of the
indemnification agreement, dated the date hereof, between the
Representative and the Servicer (the "Indemnification Agreement"), executed
by the Servicer and delivered to the Representative;
(4) the Policy, in form and substance satisfactory to the
Representative, shall have been issued by the Insurer and delivered to the
Indenture Trustee;
(5) the Representative shall have received an opinion of XxXxxxx,
Woods, Battle & Xxxxxx LLP, special counsel to the Company, dated the
Closing Date and satisfactory in form and substance to the Representative
and counsel for the Underwriters, to the effect that:
(1) the Company has been duly organized and is an existing
limited liability company in good standing under the laws of the
Commonwealth of Virginia, with full power and authority to own its
properties and conduct its business as described in the Prospectus;
the Company is duly qualified to do business and is in good standing
in each jurisdiction in which its ownership or lease of property or
the conduct of its business requires such qualification; and the
Company has full power and authority to enter into and perform its
obligations under this Agreement and the Basic Documents to which it
is a party, to direct the Owner Trustee to execute the Notes and the
Certificates and, the Indenture Trustee to authenticate the Notes, to
consummate the transactions contemplated hereby and thereby, and had
at all times, and at the Closing Date has, the power, authority and
legal right to acquire, own and sell the Contracts;
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(2) Carmax has been duly incorporated and is an existing
corporation in good standing under the laws of the Commonwealth of
Virginia, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus; Carmax is duly
qualified to do business and is in good standing in each jurisdiction
in which its ownership or lease of property or the conduct of its
business requires such qualification; and Carmax has full power and
authority to enter into and perform its obligations under the
Indemnification Agreement and the Basic Documents to which it is a
party and to consummate the transactions contemplated hereby and
thereby, and had at all times, and now has, the power, authority and
legal right to acquire, own, sell and service the Contracts;
(3) the direction by the Company to the Owner Trustee to execute
the Notes, and to the Indenture Trustee to authenticate the Notes, has
been duly authorized by the Company and, when the Notes have been duly
executed and authenticated by the Indenture Trustee in accordance with
the terms of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, the Notes will be duly and
validly issued and outstanding and will be entitled to the benefits of
the Indenture;
(4) the direction by the Company to the Owner Trustee to execute
and authenticate the Certificates has been duly authorized by the
Company and, when the Certificates have been duly executed and
authenticated by the Owner Trustee in accordance with the terms of the
Trust Agreement and delivered to and paid for by the Representative
pursuant to this Agreement, the Certificates will be duly and validly
issued and outstanding and will be entitled to the benefits of the
Trust Agreement;
(5) this Agreement, the Indemnification Agreement and each Basic
Document to which the Company or Carmax is a party has been duly
authorized, executed and delivered by the Company or Carmax, as the
case may be, and constitutes the valid and binding obligation of the
Company or Carmax, as appropriate, subject, as to enforcement to (A)
bankruptcy, reorganization, insolvency, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally, (B) general principles of equity (regardless of whether
enforcement is
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sought in a proceeding in equity or at law), and the discretion of the
court before which any proceeding for such enforcement may be brought
and (C) possible judicial action giving effect to governmental actions
or foreign laws affecting creditors' rights;
(6) no consent, approval, authorization or order of, or filing
with any governmental agency or body or any court is required for the
execution, delivery and performance by the Company of this Agreement
and the Basic Documents to which it is a party, for the execution,
delivery and performance by Carmax of the Indemnification Agreement
and the Basic Documents to which it is a party or for the consummation
of the transactions contemplated by this Agreement, the
Indemnification Agreement or the Basic Documents, except for (i) the
filing of Uniform Commercial Code financing statements in Virginia
with respect to the sale of the Contracts from Carmax to the Company
pursuant to the Purchase Agreement and the filing of Uniform
Commercial Code financing statements in Virginia with respect to the
sale of the Trust property to the Trust pursuant to the Sale and
Servicing Agreement and the filing of a Uniform Commercial Code
financing statement in Delaware with respect to the grant by the Trust
of a security interest in the Collateral to the Indenture Trustee
pursuant to the Indenture, which financing statements will be filed in
the appropriate offices on or prior to the Closing Date; (ii) such as
have been obtained and made under the Act; and (iii) such as may be
required under state securities laws;
(7) the execution, delivery and performance of this Agreement
and the Basic Documents by the Company, the execution, delivery and
performance of the Indemnification Agreement and the Basic Documents
by Carmax and the consummation of any of the transactions contemplated
herein, in the Indemnification Agreement or the Basic Documents will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of
the property or assets of Carmax or the Company pursuant to the terms
of the Certificate of Incorporation or the By-Laws of Carmax or the
Articles of Organization or Operating Agreement of the Company or any
statute, rule, regulation or order of any governmental agency or body,
on any court having jurisdiction over Carmax or the Company or their
respective properties, or any agreement or instrument known to
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such counsel after due investigation to which Carmax or the Company is
a party or by which Carmax or the Company or any of their respective
properties is bound;
(8) such counsel has no reason to believe that any part of the
Registration Statement or any amendment thereto, as of its effective
date and as of such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading or that the Prospectus and any amendment or supplement
thereto, as of its issue date and as of the Closing Date, contained
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; the descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents are accurate and fairly present the information
required to be shown; and such counsel does not know of any legal or
governmental proceedings required to be described in the Registration
Statement or the Prospectus which are not described as required or of
any contracts or documents of a character required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described and
filed as required; it being understood that such counsel need express
no opinion as to the financial statements or other financial data
contained in the Registration Statement or the Prospectus or as to the
statement, under the heading "DESCRIPTION OF THE INSURER";
(9) to the best knowledge of such counsel, after due inquiry,
there are no actions, proceedings or investigations pending to which
the Company or Carmax is a party or threatened before any court,
administrative agency or other tribunal having jurisdiction over
Carmax or the Company, (i) that are required to be disclosed in the
Registration Statement, (ii) asserting the invalidity of this
Agreement, the Indemnification Agreement, any Basic Document, the
Notes or the Certificates, (iii) seeking to prevent the issuance of
the Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indemnification
Agreement or the Basic Documents, (iv) which might materially and
adversely affect the
15
performance by the Company or Carmax of its obligations under, or the
validity or enforceability of, this Agreement, the Indemnification
Agreement, any Basic Document, the Notes or the Certificates, or (v)
seeking adversely to affect the federal income tax attributes of the
Notes or the Certificates as described in the Prospectus under the
heading "MATERIAL FEDERAL INCOME TAX CONSEQUENCES";
(10) each of Carmax and the Company has obtained all necessary
licenses and approvals in each jurisdiction in which failure to
qualify or to obtain such license or approval would render any
Contract unenforceable by the Company, the Trust, the Owner Trustee or
the Indenture Trustee;
(11) this Agreement has been duly authorized, executed and
delivered by the Company; and the Indemnification Agreement has been
duly authorized, executed and delivered by Carmax;
(12) each Contract is a motor vehicle retail installment sales
contract that constitutes "chattel paper" as defined in Section 9-105
of the UCC in effect in the States of New York, and Delaware and in
the Commonwealth of Virginia;
(13) the provisions of the Sale and Servicing Agreement are
effective to create, in favor of the Owner Trustee, a valid security
interest (as such term is defined in Section 1-201 of the New York
UCC) in the Company's rights in the Contracts and proceeds thereof,
which security interest, if characterized as a transfer for security,
will secure a loan deemed to have been made to the Company in an
amount equal to all principal and interest due on the Notes and the
Certificates;
(14) the financing statement naming the Company as debtor and the
Trust as secured party is in appropriate form for filing in the
relevant filing office under the Virginia UCC. The Virginia UCC
governs the effect of perfection or non-perfection of the security
interest granted to the Trust pursuant to the Sale and Servicing
Agreement. Upon the filing of the Financing Statement in the relevant
filing office, the security interest in favor of the Owner Trustee in
the Contracts and proceeds thereof will be perfected, and no other
security interest of any other creditor of or purchaser from the
Company will be equal or prior
16
to the security interest of the Owner Trustee in the Contracts and
proceeds thereof;
(15) the provisions of the Purchase Agreement are effective to
create, in favor of the Company, a valid security interest (as such
term is defined in Section 1-201 of the New York UCC) in Carmax's
rights in the Contracts and proceeds thereof, which security interest,
if characterized as a transfer for security, will secure a loan deemed
to have been made to Carmax in an amount equal to the principal and
interest due on the Notes and the Certificates;
(16) the financing statement naming Carmax as debtor and the
Company as secured party is in appropriate form for filing in the
relevant filing office under the Virginia UCC. The Virginia UCC
governs the effect of perfection or non-perfection of the security
interest granted to the Company pursuant to the Purchase Agreement.
Upon the filing of the Financing Statement in the relevant filing
office, the security interest in favor of the Company in the Contracts
and proceeds thereof will be perfected, and no other security interest
of any other creditor of, or purchaser from Carmax will be equal or
prior to the security interest of the Company in the Contracts and
proceeds thereof;
(17) the financing statement naming the Trust as debtor and the
Indenture Trustee as secured party is in appropriate form for filing
in the relevant filing office under the Delaware UCC. The Delaware
UCC governs the effect of perfection or non-perfection of the security
interest granted to the Indenture Trustee pursuant to the Indenture.
Upon the filing of the Financing Statement in the relevant filing
office, the security interest in favor of the Indenture Trustee in the
Collateral will be perfected, and no other security interest of any
other creditor of or purchaser from the Trust will be equal or prior
to the security interest of the Indenture Trustee in the Collateral;
(18) the provisions of the Indenture are effective to create in
favor of the Indenture Trustee, a valid security interest (as such
term is defined in Section 1-201 of the New York UCCs) in the
Collateral and proceeds thereof to secure payment of the Notes;
17
(19) the statements in the Prospectus under the caption "MATERIAL
LEGAL ASPECTS OF THE TRANSACTION", to the extent they constitute
matters of law or legal conclusions, are correct in all material
respects;
(20) the Trust Agreement is not required to be qualified under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act");
(21) the Indenture has been duly qualified under the Trust
Indenture Act;
(22) the Registration Statement was declared effective under the
Act [as of the date specified in such opinion,] the Prospectus was
filed with the Commission pursuant to the subparagraph of Rule 424(b)
[specified in such opinion] on the date specified therein, and, to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has
been issued and no proceedings for that purpose have been instituted
or are pending or contemplated under the Act;
(23) assuming due authorization, execution and delivery by the
Indenture Trustee and the Owner Trustee, the Indenture constitutes the
legal, valid and binding agreement of the Trust enforceable against
the Trust in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws affecting creditors' rights
generally from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at
law);
(24) neither the Trust nor the Company is and, after giving
effect to the issuance and sale of the Notes and the Certificates and
the application of the proceeds thereof, as described in the
Prospectus, neither the Trust nor the Company will be, an "investment
company" as defined in the Investment Company Act; and
(25) the Notes, the Certificates, the Purchase Agreement, the
Sale and Servicing Agreement, the Trust Agreement, the
18
Administration Agreement and the Indenture each conform in all
material respects with the descriptions thereof contained in the
Registration Statement and the Prospectus.
(6) The Representative shall have received an opinion of XxXxxxx,
Woods, Battle & Xxxxxx LLP, as special tax counsel for the Company, dated
the Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect that for
federal income tax purposes (i) the Notes will be characterized as
indebtedness of the Trust, (ii) the Trust will not be classified as an
association or a publicly traded partnership taxable as a corporation and
(iii) the statements set forth in the Prospectus under the headings
"PROSPECTUS SUMMARY--ERISA CONSIDERATIONS", "ERISA CONSIDERATIONS",
"PROSPECTUS SUMMARY--Tax Status" and "MATERIAL FEDERAL INCOME TAX
CONSEQUENCES", to the extent such statements constitute matters of law or
legal conclusions with respect thereto, are correct in all material
respects.
(7) the Representative shall have received an opinion of XxXxxxx,
Woods, Battle and Xxxxxx LLP, as special tax counsel for the Company, dated
the Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect that (i) for
the franchise and income tax purposes of the Commonwealth of Virginia and
the State of Delaware, (A) the Trust will not be subject to entity level
taxation and (B) the Notes will be treated as indebtedness and (ii) holders
of the Certificates, who are not otherwise subject to taxation in the
Commonwealth of Virginia or the State of Delaware, will not be subject to
taxation on income from the Certificates solely by virtue of their
ownership of the Certificates.
(8) The Representative shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the validity of the Notes, the
Certificates, the Registration Statement, the Prospectus and other related
matters as the Representative may require, and the Company shall have
furnished to such counsel such documents as it may request for the purpose
of enabling it to pass upon such matters.
(9) The Representative shall have received a certificate, dated the
Closing Date, of the Chairman of the Board, the President or any Vice-
President and a principal financial or accounting officer of each of the
19
Company and Carmax in which such officers, to the best of their knowledge
after reasonable investigation, shall state that: the representations and
warranties of the Company in this Agreement are true and correct; the
Company or Carmax, as applicable, has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date; the representations and warranties of the
Company or Carmax, as applicable, in the Basic Documents are true and
correct as of the dates specified in such agreements; the Company or
Carmax, as applicable, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied under such agreements
at or prior to the Closing Date; no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission; and,
subsequent to the date of the Prospectus, there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company or Carmax,
whether or not arising in the ordinary course of business.
(10) The Representative shall have received an opinion of [
], counsel to the Indenture Trustee, dated the Closing Date and
satisfactory in form and substance to the Representative and counsel for
the Underwriters, to the effect that:
(1) the Indenture Trustee is a New York banking corporation duly
incorporated and validly existing under the laws of the State of New
York;
(2) the Indenture Trustee has the full corporate trust power to
accept the office of Indenture Trustee under the Indenture and to
enter into and perform its obligations under the Indenture the Sale
and Servicing Agreement and the Administration Agreement;
(3) the execution and delivery of the Indenture and the
Administration Agreement and the acceptance of the Sale and Servicing
Agreement and the performance by the Indenture Trustee of its
obligations under the Indenture, the Sale and Servicing Agreement and
the Administration Agreement have been duly authorized by all
necessary corporate action of the Indenture Trustee and each has been
duly executed and delivered on behalf of the Indenture Trustee;
20
(4) the execution, delivery and performance by the Indenture
Trustee of the Indenture and, on behalf of the Noteholder, of the
other Basic Documents to which it is a party does not require any
consent, approval or authorization of, or any registration or filing
with, any Delaware or United States federal governmental authority
having jurisdiction over the Indenture Trustee other than those
consents, approvals or authorizations as have been obtained.
(5) the Indenture, the Sale and Servicing Agreement and the
Administration Agreement constitute valid and binding obligations of
the Indenture Trustee enforceable against the Indenture Trustee in
accordance with their terms under the laws of the State of New York
and the federal law of the United States;
(6) the execution and delivery by the Indenture Trustee of the
Indenture and the Administration Agreement and the acceptance of the
Sale and Servicing Agreement do not require any consent, approval or
authorization of, or any registration or filing with, any Virginia,
New York or United States federal governmental authority, other than
the qualification of the Indenture Trustee under the Trust Indenture
Act;
(7) each of the Notes has been duly authenticated by the
Indenture Trustee;
(8) neither the consummation by the Indenture Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture or the Administration Agreement nor the fulfillment of the
terms thereof by the Indenture Trustee will conflict with, result in a
breach or violation of, or constitute a default under any law or the
charter, By-laws or other organizational documents of the Indenture
Trustee or the terms of any indenture or other agreement or instrument
known to such counsel and to which the Indenture Trustee or any of its
subsidiaries is a party or is bound or any judgement, order or decree
known to such counsel to be applicable to the Indenture Trustee or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Indenture Trustee or any of its subsidiaries;
21
(9) to such counsel's knowledge there is no action, suit or
proceeding pending or threatened against the Indenture Trustee (as
trustee under the Indenture or in its individual capacity) before or
by any governmental authority that if adversely decided, would
materially adversely affect the ability of the Indenture Trustee to
perform its obligations under the Indenture, the Sale and Servicing
Agreement or the Administration Agreement; and
(10) the execution, delivery and performance by the Indenture
Trustee of the Sale and Servicing Agreement, the Indenture and the
Administration Agreement will not subject any of the property or
assets of the Trust or any portion thereof, to any lien created by or
arising with respect the Indenture Trustee that are unrelated to the
transactions contemplated in such Agreements.
(11) The Representative shall have received an opinion of [ ],
counsel to the Owner Trustee, dated the Closing Date and satisfactory in
form and substance to the Representative and counsel for the Underwriters,
to the effect that:
(1) the Owner Trustee has been duly incorporated and is validly
existing as a national banking association in good standing under the
laws of the United States;
(2) the Owner Trustee has full corporate trust power and
authority to enter into and perform its obligations under the Trust
Agreement and, on behalf of the Trust, under the other Basic Documents
to which it is a party and has duly authorized, executed and delivered
such Basic Documents and such Basic Documents constitute the legal,
valid and binding agreements of the Owner Trustee, enforceable in
accordance with their terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
similar laws affecting creditors' rights generally form time to time
in effect, and subjects, as to enforceability, to general principles
of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law);
(3) the Certificates have been duly executed, authenticated and
delivered by the Owner Trustee as owner trustee and authenticating
22
agent; each of the Notes has been duly executed and delivered by the
Owner Trustee, on behalf of the Trust;
(4) the execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the other Basic Documents to
which it is a party and the performance by the Owner Trustee of its
obligations thereunder do not conflict with, result in a breach or
violation of, or constitute a default under the [Articles of
Association or By-laws] of the Owner Trustee; and
(5) the execution, delivery and performance by the Indenture
Trustee of the Indenture and, on behalf of the Noteholder, of the
other Basic Documents to which it is a party does not require any
consent, approval or authorization of, or any registration or filing
with, any Delaware or United States federal governmental authority
having jurisdiction over the Indenture Trustee other than those
consents, approvals or authorizations as have been obtained.
(12) The Representative shall have received an opinion of XxXxxxx,
Woods, Battle & Booth LLP, special counsel to the Company, dated the
Closing Date and satisfactory in form and substance to the Representative
and counsel for the Underwriters, to the effect that:
(1) the Trust has been duly formed and is validly existing as a
business trust under the Delaware Business Trust Act, 12 Del.C.
------
(S)3801 et seq. (the "Delaware Act");
-- ---
(2) the Trust has the power and authority under the Delaware Act
and the Trust Agreement to, and the Trust Agreement authorizes the
Owner Trustee to, execute, deliver and perform its obligations under
the Sale and Servicing Agreement, the Indenture, the Administration
Agreement, the Notes and the Certificates, and the Trust Act
authorizes the Owner Trustee to execute (and if appropriate
authenticate such documents;
(3) assuming that the Certificates have been duly authorized,
executed and authenticated by the Owner Trustee on behalf of the
Trust, when the Certificates have been issued and delivered in
accordance with
23
the instructions of the Company, the Certificates will be validly
issued and entitled to the benefits of the Trust Agreement; and
(4) under 12 Del. C. (S)3805(b), no creditor of any
------
Certificateholder (including creditors of the company in its capacity
as Certificateholder) shall have any right to obtain possession of, or
otherwise exercises legal or equitable remedies with respect to, the
property of the Trust except in accordance with the terms of the Trust
Agreement.
(13) The Representative shall have received an opinion of XxXxxxx,
Woods, Battle & Xxxxxx LLP, counsel to the Company, dated the Closing Date
and satisfactory in form and substance to the Representative and counsel
for the Underwriters, (i) with respect to the characterization of the
transfer of the Contracts by Carmax to the Company and (ii) to the effect
that should Carmax become the debtor in a case under the Bankruptcy Code,
and the Company would not otherwise properly be a debtor in a case under
the Bankruptcy Code, and if the matter were properly briefed and presented
to a court exercising bankruptcy jurisdiction, the court, exercising
reasonable judgment after full consideration of all relevant factors, would
not order, over the objection of the Certificateholders or the Noteholders,
the substantive consolidation of the assets and liabilities of the Company
with those of Carmax and such opinion shall be in substantially the form
previously discussed with the Representative and counsel for the
Underwriters and in any event satisfactory in form and in substance to the
Representative and counsel for the Underwriters.
(14) The Representative shall have received evidence satisfactory to
it and its counsel that, on or prior to the Closing Date, UCC-1 financing
statements have been or are being filed in the office of the (i) Virginia
State Corporation Commission of Commonwealth of Virginia reflecting the
transfer of the interest of Carmax in the Contracts and the proceeds
thereof to the Company and the transfer of the interest of the Company in
the Contracts and the proceeds thereof to the Trust and (ii) Secretary of
State of the State of Delaware reflecting the grant of the security
interest by the Trust in the Contracts and the proceeds thereof to the
Indenture Trustee.
(15) The Representative shall have receive an opinion of XxXxxxx,
Woods, Battle & Xxxxxx LLP, special counsel to the Company, dated the
Closing Date and satisfactory in form and substance to the Representative
and
24
the counsel for the Underwriters to the effect that (i) the provisions
of the Indenture are effective to create a valid security interest in favor
of the Indenture Trustee, to secure payment of the Notes, in all
"securities entitlements" (as defined in Section 8-102(a)(17) of the New
York UCC) with respect to "financial assets" (as defined in Section
8-102(a)(9) of the New York UCC) now or hereafter credited to the Reserve
Account (such securities entitlements, the "Securities Entitlements"), (ii)
the provisions of the control agreement for purposes of Article 8 of the
New York UCC are effective to perfect the security interest of the
Indenture Trustee in the Securities Entitlements and (iii) no security
interest of any other creditor of the Trust will be prior to the security
interest of the Indenture Trustee in such Securities Entitlements.
(16) Xxxxx'x and Standard & Poor's shall have rated (i) the Class A-1
Notes P-1 and A-1+, respectively, (ii) each of the Class A-2 Notes, Class
A-3 Notes, Class A-4 Notes Aaa and AAA, respectively, and (iii) the
Certificates Aaa and AAA, respectively.
(17) The Representative shall have received from XxXxxxx, Woods,
Battle & Xxxxxx LLP and each other counsel for the Company, a letter dated
the Closing Date to the effect that the Underwriters may rely upon each
opinion, rendered by such counsel to either Standard & Poor's or Xxxxx'x in
connection with the rating of any Class of the Notes or the Certificates as
if each such opinion were addressed to the Underwriters.
(18) The Representative shall have received from Xxxx, Xxxxxxx, Xxxxx
& Xxxxxxxxxx, counsel to the Insurer, to the effect that:
(1) the Insurer is a corporation validly existing, in good
standing and licensed to transact the business of surety and financial
guaranty insurance under the laws of the State of New York;
(2) the Insurer has the corporate power to execute and deliver,
and to take all action required of it under the indemnification
agreement between the Insurer and the Representative on behalf of the
Underwriters, dated as of [ ], 1999 (the "Indemnification
Agreements"), [the insurance and reimbursement agreement] [list other
relevant insurance documents];
25
(3) except as have already been obtained, no authorization,
consent, approval, license, formal exemption or declaration from, nor
any registration or filing with, any court or governmental agency or
body of the United States of America or the State of New York, which
if not obtained would affect or impair the validity or enforceability
of the [insurance and reimbursement agreement, the Indemnification
Agreement] [list other relevant insurance documents] against the
Insurer, is required in connection with the execution and delivery by
the Insurer of the [insurance and reimbursement agreement, the
Indemnification Agreement] [list other relevant insurance documents]
or in connection with the Insurer's performance of its obligations
thereunder;
(4) [insurance and reimbursement agreement, the Indemnification
Agreement] [list other relevant insurance documents] have been duly
authorized, executed and delivered by the Insurer, and assuming due
authorization, execution and delivery of the [insurance and
reimbursement agreement, the Indemnification Agreement] [list other
relevant insurance documents] by the parties thereto (other than the
Insurer), constitute the legally valid and binding obligations of the
Insurer, enforceable in accordance with their respective terms
subject, as to enforcement, to (1) bankruptcy, reorganization,
insolvency, moratorium and other similar laws relating to or affecting
the enforcement of creditors' rights generally, including, without
limitation, laws relating to fraudulent transfers or conveyances,
preferential transfers and equitable subordination, presently or from
time to time in effect and general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law), as such laws may be applied in any such proceeding with respect
to the Insurer and (2) the qualification that the remedy of specific
performance may be subject to equitable defenses and to the discretion
of the court before which any proceedings with respect thereto may be
brought; and
[ the guarantee is not required to be registered under the Securities
Act of 1933, as amended.]
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent deemed proper and as stated therein, on certificates of
responsible officers of the Insurer and public officials.
26
The Company will furnish the Representative with such conformed copies of
such opinions, certificates, letters and documents as the Representative may
reasonably request.
The Representative may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder.
5. Indemnification and Contribution
--------------------------------
(19) The Company will indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of the
Act or the Exchange Act and the respective officers, directors and
employees of each such person, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such
controlling person may become subject, under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
in order to make the statements therein not misleading; and will reimburse
each Underwriter and each such officer, director, employee or controlling
person for any legal or other expenses reasonably incurred by such
Underwriter and each such officer, director, employee or controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action, subject to the following proviso, as such expenses are
incurred; provided, however, that (i) the Company will not be liable in any
-------- -------
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement in or omission or alleged omission made in any such documents in
reliance upon and in conformity with written information furnished to the
Company by an Underwriter specifically for use therein and (ii) such
indemnity with respect to any untrue statement or alleged untrue statement
or omission or alleged omission in the preliminary Prospectus shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Notes or the Certificates which are the subject
thereof, if
27
such person was not given or sent a copy of the Prospectus (excluding
documents incorporated therein by reference), at or prior to the
confirmation of the sale of such Notes or Certificates to such person in
any case where such delivery is required by the Act and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in the preliminary Prospectus and forming the basis
for the related cause of action was corrected in the final Prospectus. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(20) Each Underwriter severally, and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Act or the Exchange Act and
the respective officers, directors and employees of each such person
against any losses, claims, damages or liabilities to which the Company or
any such director, officer or controlling person may become subject, under
the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter specifically for
use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred. This indemnity
agreement will be in addition to any liability that such Underwriter may
otherwise have.
(21) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party of the commencement
thereof; but the omission and/or delay so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than in this Section unless such omission caused actual
prejudice to
28
the party not notified; in case any such action is brought against any
indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent that it may elect by written notice
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with defense thereof other than reasonable costs of
investigation. If the defendants in any action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to local counsel, if
any) for all such indemnified parties. No indemnifying party may avoid its
duty to indemnify under this Section 5 if such indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of any judgement in,
any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on all
claims that are the subject matter of such action. An indemnifying party
shall not be liable for any settlement of any claim effected without its
written consent.
(22) If recovery is not available under the foregoing indemnification
provisions of this Section for any reason other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be
entitled to contribution for liabilities and expenses, except to the extent
that contribution is not permitted under Section 11(f) of the Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered (i) the relative benefit received by
the Company on the one hand
29
and the Underwriters on the other hand from the offering of the Notes and
the Certificates or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand
and the Underwriters on the other hand in connection with the statement or
omission that resulted in such liabilities and expenses as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other hand shall be
deemed to be in the same proportion as the total net proceeds of the
offering of the Notes or the Certificates (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters in connection with the offering of
the Notes and the Certificates. The relative fault of the parties shall be
determined by reference to, among other things, 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 Company and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined
by pro rata or per capita allocation (even if the Underwriters were treated
as one entity for such purpose). Notwithstanding the provisions of this
Section 5, no Underwriter shall be required to contribute any amount in
excess of the underwriting discount received by it.
6. Default of Underwriters. If any Underwriter or Underwriters
-----------------------
participating in an offering of Notes or Certificates default in their
obligations to purchase Notes or Certificates hereunder and the aggregate
principal amount of such Notes or the Certificates which such defaulting
Underwriter or Underwriters agreed, but failed, to purchase does not exceed 10%
of the total principal amount of the Notes or the Certificates, as the case may
be, the Representative may make arrangements satisfactory to the Company for the
purchase of such Notes or Certificates by other persons, including any of the
other Underwriters participating in such offering, but if no such arrangements
are made within a period of 36 hours after the Closing Date, the non-defaulting
Underwriters participating in such offering shall be obligated severally, in
proportion to their respective total commitments hereunder, to purchase the
Notes or the Certificates which such defaulting Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of Notes or the Certificates with respect to which such default
or defaults occur is more than 10% of the total principal amount of the Notes or
the Certificates and arrangements satisfactory to the Representative and the
Company for the purchase of
30
such Notes or the Certificates by other persons are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company, except as provided in Section
4(b). As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
7. Termination of the Obligations of the Underwriters. The obligations
--------------------------------------------------
of the Underwriters to purchase the Notes or the Certificates on the Closing
Date shall be terminable by the Underwriters by written notice delivered to the
Company if at any time on or prior to the Closing Date (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ National market shall have been suspended or materially limited, or there
shall have been any setting of minimum prices for trading on such exchange of
the securities of Circuit City Stores, Inc. or any suspension of trading of the
securities of Circuit City Stores, Inc. on any exchange or in the over-the-
counter market, (ii) a general moratorium on commercial banking activities shall
have been declared by any applicable Federal or State authorities, (iii) there
shall have occurred any material outbreak or escalation of hostilities or other
calamity or crisis, the effect of which on the financial markets of the United
States is such as to make it, in the reasonable judgment of the Representative,
as representative of the Underwriters, impracticable to market the Notes or the
Certificates on the terms and in the manner contemplated in the Prospectus, (iv)
any public announcement that any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities Act)
has under surveillance or review its rating of the debt securities of any of
Circuit City Stores, Inc., the Company or the Servicer (other than an
announcement with positive implications of a possible upgrading and no
implication of a possible downgrading or such rating), or (v) any change or any
development involving a prospective change, materially and adversely affecting
(A) the Owner Trust Estate or the Collateral taken as whole or (B) the business
or properties of Circuit City Stores, Inc. the Company or Carmax occurs, which,
in the reasonable judgment of the Representative, as representative of the
Underwriters, in the case of either (A) or (B), makes it impracticable to market
the Notes or the Certificates on the terms and in the manner contemplated in the
Prospectus. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party.
8. Survival of Certain Representations and Obligations. The respective
---------------------------------------------------
indemnities, agreements, representations, warranties and other statements by the
Company or its officers and of the several Underwriters set forth in or made
pursuant
31
to this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriters, the Company or any of their respective officers or directors
or any controlling person, and will survive delivery of and payment for the
Notes or the Certificates.
If this Agreement is terminated pursuant to Sections 6 or 7 or if for
any reason the purchase of the Notes or the Certificates by the Underwriters is
not consummated, the Company shall remain responsible for the expenses to be
paid or reimbursed by it pursuant to Section 4, and the obligations of the
Company and the Underwriters pursuant to Section 5 shall remain in effect.
9. Representation of the Underwriters. Each of the Underwriters
----------------------------------
represents and warrants to, and agrees with, the Company that (w) it has only
issued or passed on and shall only issue or pass on in the United Kingdom any
document received by it in connection with the issue of the Certificates to a
person who is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1996 or who is a person to
whom the document may otherwise lawfully be issued or passed on, (x) it has
complied and shall comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the
Certificates in, from or otherwise involving the United Kingdom and (y) if that
Underwriter is an authorized person under the Financial Services Act 1986, it
has only promoted and shall only promote (as that term is defined in Regulation
1.02 of the Financial Services (Promotion of Unregulated Schemes) Regulations
1991) to any person in the United Kingdom the scheme described in the Prospectus
if that person is of a kind described either in Section 76(2) of the Financial
Services Act 1986 or in Regulation 1.04 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991.
10. Notices. All communications hereunder will be in writing and, if sent
-------
to an Underwriter, will be mailed, delivered or telecopied to Banc of America
Securities LLC, Bank of America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Xxxxxxx X. Xxxxx, facsimile
number 704-[ ], or to such other address as the Representative may
designate in writing to the Company, or if sent to the Company, will be mailed,
delivered or telecopied to Carmax Auto Superstores, Inc., c/o Circuit City
Stores, Inc., 0000 Xxxxxxxx Xxxxx, Xxxxxxxx 00000 Attention: [ ],
or to such other address specified by the Company; provided, however, that any
-------- -------
notice to an Underwriter pursuant to Section 5 will be mailed, delivered or
telecopied to such Underwriter at the address furnished by such Underwriter.
32
11. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 5 hereof, and
their successors and assigns, and no other person will have any right or
obligation hereunder.
12. Severability of Provisions. Any covenant, provision, agreement or
--------------------------
term of this Agreement that is prohibited or is held to be void or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof.
13. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall constitute an original, but all of which shall together constitute
one instrument.
14. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN
--------------
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
33
If the foregoing is in accordance with your understanding of this
agreement, please sign and return to us a counterpart hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters in
accordance with its terms. Alternatively, the execution of this Agreement by
the Company and its acceptance by or on behalf of the Underwriters may be
evidenced by an exchange of telecopied or other written communications.
Very truly yours,
CARMAX AUTO RECEIVABLES, LLC
as Company
By ____________________________________________
Name: [ ]
Title: [ ]
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
BANC OF AMERICA SECURITIES LLC
as Representative of the
Several Underwriters
By ________________________________________________
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
34
Schedule I
----------
Principal Amount
Banc of America Securities LLC of [ ]% Class A-1 Notes
-------------------------
First Union Capital Markets Corp. Xxxxxxx, Xxxxx & Co.
-------------------------
$[ ]
Total............................
Principal Amount
Banc of America Securities LLC of [ ]% Class A-3 Notes
-------------------------
First Union Capital Markets Corp. Xxxxxxx, Xxxxx & Co.
-------------------------
$[ ]
Total............................
Principal Amount
Banc of America Securities LLC of [ ]% Class A-4 Notes
-------------------------
First Union Capital Markets Corp. Xxxxxxx, Xxxxx & Co.
-------------------------
$[ ]
Total............................
I-1
Schedule II
-----------
Banc of America Securities LLC Principal Amount
of [ ]% Certificates
----------------------
Total............................
----------------------
$[ ]
II-1
