Exhibit 10.4
GUARANTY
THIS GUARANTY dated as of May 17, 2002 is executed in favor of
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC
("DCSNA"), as Agent, and the Lender
Parties referred to below.
W I T N E S S E T H:
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WHEREAS, CarMax Auto Superstores, Inc. (the "Borrower"), Carmax,
Inc.
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(the "Company"), various financial
institutions and DCSNA, as agent (in its
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capacity as agent, together with any
successor in such capacity, the "Agent"),
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have entered into a Credit Agreement dated
as of the date hereof (as amended or
otherwise modified from time to time, the
"Credit Agreement"; capitalized terms
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used but not defined herein are used as
defined in the Credit Agreement),
pursuant to which such financial
institutions have agreed to make extensions of
credit to the Borrower; and
WHEREAS, each of the undersigned will benefit from the extensions
of
credit pursuant to the Credit Agreement and
is willing to guaranty the
Liabilities (as defined below) as
hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt
and
sufficiency of which are hereby
acknowledged, each of the undersigned hereby
jointly and severally, unconditionally and
irrevocably, as primary obligor and
not merely as surety, guarantees the full
and prompt payment when due, whether
by acceleration or otherwise, and at all
times thereafter, of all obligations
(monetary or otherwise) of the Borrower and
the Company to each of the Agent and
each Lender Party (as defined below) under
or in connection with the Credit
Agreement, the Notes, any other Loan
Document and any other document or
instrument executed in connection
therewith, in each case howsoever created,
arising or evidenced, whether direct or
indirect, absolute or contingent, now or
hereafter existing, or due or to become due
(all such obligations being herein
collectively called the "Liabilities");
provided that the liability of each of
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the undersigned hereunder shall be limited
to the maximum amount of the
Liabilities which such undersigned may
guaranty without violating any fraudulent
conveyance or fraudulent transfer law (plus
all reasonable costs and expenses
paid or incurred by the Agent or any Lender
Party in enforcing this Guaranty
against such undersigned). As used herein,
"Lender Party" means each Lender
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under and as defined in the Credit
Agreement and DCSNA.
Each of the undersigned agrees that if any Event of Default shall
occur
under Section 11.1.4 of the Credit
Agreement, and if such event shall occur at a
time when any of the Liabilities may not
then be due and payable, such
undersigned will pay to the Agent for the
account of the Lender Parties
forthwith the full amount which would be
payable hereunder by such undersigned
if all Liabilities were then due and
payable.
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To secure all obligations of each of the undersigned hereunder,
the
Agent and each Lender Party shall have a
lien on and security interest in and
may, without demand or notice of any kind,
at any time and from time to time
when any Event of Default exists,
appropriate and apply toward the payment of
such amount, in such order of application
as the Agent and the Lender Parties
may elect, any and all balances, credits,
deposits, accounts or moneys of or in
the name of such undersigned now or
hereafter with the Agent or such Lender
Party. The Agent or the Lender Party
exercising the set-off rights it has under
this paragraph shall promptly notify such
undersigned thereof after making such
exercise; provided that failure to give
such notice shall not affect the
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validity of the set-off.
This Guaranty shall in all respects be a continuing,
irrevocable,
absolute and unconditional guaranty, and
shall remain in full force and effect
(notwithstanding, without limitation, the
dissolution of any of the undersigned
or that at any time or from time to time no
Liabilities are outstanding) until
all Commitments have terminated and all
Liabilities have been paid in full.
The undersigned further agree that if at any time all or any part
of
any payment theretofore applied by the
Agent or any Lender Party to any of the
Liabilities is or must be rescinded or
returned by the Agent or such Lender
Party for any reason whatsoever (including
the insolvency, bankruptcy or
reorganization of the Borrower, the Company
or any of the undersigned), such
Liabilities shall, for the purposes of this
Guaranty, to the extent that such
payment is or must be rescinded or
returned, be deemed to have continued in
existence, notwithstanding such application
by the Agent or such Lender Party,
and this Guaranty shall continue to be
effective or be reinstated, as the case
may be, as to such Liabilities, all as
though such application by the Agent or
such Lender Party had not been made.
The Agent or any Lender Party may, from time to time, at its
sole
discretion and without notice to the
undersigned (or any of them), take any or
all of the following actions: (a) retain or
obtain a security interest in any
property to secure any of the Liabilities
or any obligation hereunder, (b)
retain or obtain the primary or secondary
obligation of any obligor or obligors,
in addition to the undersigned, with
respect to any of the Liabilities, (c)
extend or renew any of the Liabilities for
one or more periods (whether or not
longer than the original period), alter or
exchange any of the Liabilities, or
release or compromise any obligation of any
of the undersigned hereunder or any
obligation of any nature of any other
obligor with respect to any of the
Liabilities, (d) release its security
interest in, or surrender, release or
permit any substitution or exchange for,
all or any part of any property
securing any of the Liabilities or any
obligation hereunder, or extend or renew
for one or more periods (whether or not
longer than the original period) or
release, compromise, alter or exchange any
obligations of any nature of any
obligor with respect to any such property
and (e) resort to the undersigned (or
any of them) for payment of any of the
Liabilities when due, whether or not the
Agent or such Lender Party shall have
resorted to any property securing any of
the Liabilities or any obligation hereunder
or shall have proceeded against any
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other of the undersigned or any other
obligor primarily or secondarily obligated
with respect to any of the Liabilities.
Each of the undersigned hereby expressly waives: (a) notice of
the
acceptance by the Agent or any Lender Party
of this Guaranty, (b) notice of the
existence or creation or non-payment of all
or any of the Liabilities, (c)
presentment, demand, notice of dishonor,
protest, and all other notices
whatsoever, and (d) all diligence in
collection or protection of or realization
upon any Liabilities or any security for or
guaranty of any Liabilities.
Notwithstanding any payment made by or for the account of any of
the
undersigned pursuant to this Guaranty, the
undersigned shall not be subrogated
to any right of the Agent or any Lender
Party until such time as the Agent and
the Lender Parties shall have received
final payment in cash of the full amount
of all Liabilities.
Each of the undersigned further agrees to pay all reasonable
expenses
(including Attorney Costs) paid or incurred
by the Agent or any Lender Party in
endeavoring to collect the Liabilities of
such undersigned, or any part thereof,
and in enforcing this Guaranty against such
undersigned.
The creation or existence from time to time of additional
Liabilities
to the Agent or the Lender Parties or any
of them is hereby authorized, without
notice to the undersigned (or any of them),
and shall in no way affect or impair
the rights of the Agent or the Lender
Parties or the obligations of the
undersigned under this
