Document:

Receivables Purchase Agreement

 EXHIBIT 10.3 – RECEIVABLES PURCHASE AGREEMENT 
 [EXECUTION COPY] 
 CARMAX BUSINESS SERVICES, LLC, 
 as Seller, 
 and 
 CARMAX AUTO FUNDING LLC, 
 as Purchaser

  
  
 RECEIVABLES PURCHASE AGREEMENT 
 Dated as of
April 1, 2009 
  
  
  

 TABLE OF CONTENTS 
  

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

					
	 	  	 	  	Page
	SECTION 6.6	  	Further Assurances	  	18
	SECTION 6.7	  	No Waiver; Cumulative Remedies	  	19
	SECTION 6.8	  	Counterparts	  	19
	SECTION 6.9	  	Third-Party Beneficiaries	  	19
	SECTION 6.10	  	Headings and Table of Contents	  	19
	SECTION 6.11	  	Representations, Warranties and Agreements to Survive	  	19
	SECTION 6.12	  	No Proceedings	  	19
	SECTION 6.13	  	Accountant’s Letters	  	19
	SECTION 6.14	  	Obligations of Purchaser	  	20
	SCHEDULES	  	
	SCHEDULE A	  	Receivables Schedule	  	
	EXHIBITS	  	
	EXHIBIT A	  	Bill of Sale and Assignment	  	
	EXHIBIT B	  	Form of Retail Installment Sale Contract	  	

 RECEIVABLES PURCHASE AGREEMENT 
 This Receivables Purchase Agreement, dated as of April 1, 2009, is between CarMax Business Services, LLC, a Delaware limited liability company
(“CarMax”), as seller (the “Seller”), and CarMax Auto Funding LLC, a Delaware limited liability company (“CarMax Funding”), as purchaser (the “Purchaser”). 
 WHEREAS, in the regular course of business, CarMax Auto Superstores, Inc., a Virginia corporation (“CarMax Auto”), and certain
affiliates of CarMax Auto originate motor vehicle retail installment sale contracts secured by new and used motor vehicles; 
 WHEREAS, the
Seller intends to convey all of its right, title and interest in and to contracts having an aggregate outstanding principal balance of $1,000,000,059.29 as of the close of business on March 31, 2009 (the “Receivables”) to the
Purchaser and, concurrently with its purchase of the Receivables, the Purchaser intends to convey all of its right, title and interest in and to the Receivables to CarMax Auto Owner Trust 2009-1, as issuer (the “Issuer”), pursuant
to a Sale and Servicing Agreement, dated as of April 1, 2009 (the “Sale and Servicing Agreement”), among the Issuer, CarMax Funding, as depositor, CarMax, as servicer, and Wells Fargo Bank, National Association, as backup
servicer; and 
 WHEREAS, the Seller and the Purchaser wish to set forth the terms pursuant to which the Receivables are to be sold by the
Seller to the Purchaser; 
 NOW, THEREFORE, in consideration of the mutual terms and covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 SECTION 1.1 Definitions.
Whenever used in this Agreement, the following words and phrases shall have the following meanings: 
 “Agreement” shall
mean this Receivables Purchase Agreement and all amendments hereof and supplements hereto. 
 “Base Prospectus” shall mean
the prospectus, dated April 1, 2009, of the Purchaser relating to the public offering by the Purchaser of the Class A Notes. 
 “Bill of Sale” shall mean the Bill of Sale and Assignment, substantially in the form attached as Exhibit A. 
 “CarMax” shall mean CarMax Business Services, LLC, a Delaware limited liability company, and its successors. 
 “CarMax Auto” shall mean CarMax Auto Superstores, Inc., a Virginia corporation, and its successors. 

 “CarMax Funding” shall mean CarMax Auto Funding LLC, a Delaware limited liability
company, and its successors. 
 “CarMax Funding II” shall mean CarMax Funding II, LLC, a Delaware limited liability company,
and its successors. 
 “Class A Notes” shall mean the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes issued pursuant to the Indenture. 
 “Class B Notes” shall mean the Class B Notes issued
pursuant to the Indenture. 
 “Class C Notes” shall mean the Class C Notes issued pursuant to the Indenture. 
 “Closing Date” shall mean April 14, 2009. 
 “Cutoff Date” shall mean March 31, 2009. 
 “Delaware Trustee” shall
mean BNY Mellon Trust of Delaware, a Delaware banking corporation, as Delaware trustee under the Trust Agreement, and its successors in such capacity. 
 “Depositor” shall mean CarMax Funding, in its capacity as Depositor under the Trust Agreement, and its successors in such capacity. 
 “Indenture” shall mean the Indenture, dated as of April 1, 2009, between the Issuer and the Indenture Trustee, as amended,
supplemented or otherwise modified and in effect from time to time. 
 “Indenture Trustee” shall mean Wells Fargo Bank,
National Association, a national banking association, as indenture trustee under the Indenture, and its successors in such capacity. 
 “Initial Reserve Account Deposit” shall mean $5,000,000. 
 “Issuer” shall mean CarMax Auto Owner
Trust 2009-1, a Delaware statutory trust, and its successors. 
 “Noteholders” shall mean the registered holders of the
Notes. 
 “Notes” shall mean the Class A Notes, the Class B Notes and the Class C Notes. 
 “Owner Trustee” shall mean The Bank of New York Mellon, a New York banking corporation, as owner trustee under the Trust Agreement, and
its successors in such capacity. 
 “Prospectus Supplement” shall mean the final prospectus supplement, dated April 7,
2009, of the Purchaser relating to the public offering by the Purchaser of the Class A Notes. 
 “Prospectus” shall
mean the Prospectus Supplement and the Base Prospectus. 
  

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 “Purchaser” shall mean CarMax Funding, in its capacity as purchaser of the Receivables
under this Agreement, and its successors in such capacity. 
 “Receivables” shall mean the motor vehicle retail installment
sale contracts sold by the Seller to the Purchaser pursuant to this Agreement and identified on the Receivables Schedule. 
 “Receivables Purchase Price” shall mean $1,030,000,061.07. 
 “Receivables Schedule” shall mean
the schedule of receivables attached as Schedule A, as amended, supplemented or otherwise modified and in effect from time to time. 
 “Representative” shall mean Banc of America Securities LLC, a Delaware corporation, as representative of the Underwriters. 
 “Sale and Servicing Agreement” shall have the meaning specified in the recitals. 
 “Seller” shall mean CarMax, in its capacity as seller of the Receivables under this Agreement, and its successors in such capacity. 
 “State” shall mean any of the 50 states of the United States or the District of Columbia. 
 “Transaction Documents” shall mean this Agreement, the Trust Agreement, the Sale and Servicing Agreement, the Indenture, the Administration Agreement and the other documents and certificates delivered in connection
therewith, in each case as amended, supplemented or otherwise modified and in effect from time to time. 
 “Trust Agreement”
shall mean the Trust Agreement, dated as of July 22, 2008, among CarMax Funding, the Delaware Trustee and the Owner Trustee, as amended and restated by the Amended and Restated Trust Agreement, dated as of January 23, 2009, among CarMax
Funding, the Delaware Trustee and the Owner Trustee, and as amended and restated by the Amended and Restated Trust Agreement, dated as of April 1, 2009, among CarMax Funding, the Delaware Trustee and the Owner Trustee . 
 “Trustee” shall mean either the Owner Trustee or the Indenture Trustee, as the context requires. 
 “UCC” shall mean the Uniform Commercial Code as in effect in the applicable jurisdiction. 
 “Underwriters” shall mean the underwriters named in Schedule A to the Underwriting Agreement. 
 “Underwriting Agreement” shall mean the Underwriting Agreement, dated April 7, 2009, among CarMax Funding, CarMax and the
Representative, relating to the purchase of the Notes by the Underwriters from CarMax Funding. 
  

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 SECTION 1.2 Other Definitional Provisions. 
 (a) Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Sale and Servicing Agreement.

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

 SECTION 2.1 Sale and Conveyance of Receivables. 
 (a) On the Closing Date, subject to the terms and conditions of this Agreement, the Seller hereby agrees to sell, transfer, assign, set over and otherwise convey to the Purchaser, and the Purchaser hereby agrees to
purchase from the Seller, without recourse (subject to the Seller’s obligations hereunder and the satisfaction of the conditions set forth in Section 4.1), all of the right, title and interest of the Seller, whether now owned or hereafter
acquired, in, to and under the following: 
 (i) the Receivables; 
 (ii) all amounts received on or in respect of the Receivables (including proceeds of the repurchase of Receivables by the Seller pursuant
to Section 3.2(f)) after the Cutoff Date; 
 (iii) the security interests in the Financed Vehicles granted by the
Obligors pursuant to the Receivables and any other interest of the Seller in such Financed Vehicles; 
 (iv) all proceeds from
claims on or refunds of premiums of any physical damage or theft insurance policies covering the Financed Vehicles and any proceeds or refunds of premiums of any credit life or credit disability insurance policies relating to the Financed Vehicles
or the Obligors; 
 (v) the Receivable Files; 
 (vi) the right to realize upon any property (including the right to receive future Liquidation Proceeds) that shall have secured a
Receivable and have been repossessed by or on behalf of the Issuer; and 
 (vii) all present and future claims, demands,
causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, 

  

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including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property; all accounts, general intangibles, chattel
paper, instruments, documents, money, investment property, deposit accounts, letters of credit, letter-of-credit rights, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations; and all other
property which at any time constitutes all or part of or is included in the proceeds of any of the foregoing. 
 (b) The parties hereto
intend that the conveyance of the Receivables and related property hereunder be a sale and not a loan. In the event that the conveyance hereunder is not for any reason considered a sale, the Seller hereby grants to the Purchaser a first priority
perfected security interest in all of the Seller’s right, title and interest in, to and under the Receivables and all other property conveyed hereunder and listed in this Section and all proceeds of any of the foregoing. The parties intend
that this Agreement constitute a security agreement under applicable law. Such grant is made to secure the payment of all amounts payable hereunder, including the Receivables Purchase Price. If such conveyance is for any reason considered to be a
loan and not a sale, the Seller consents to the Purchaser transferring such security interest in favor of the Indenture Trustee and transferring the obligations secured thereby to the Indenture Trustee. 
 (c) The Seller agrees to treat the transfer of the Receivables and the related property contemplated by this Section for all purposes (including tax
and financial accounting purposes) as an absolute transfer on all relevant books, records, tax returns, financial statements and other applicable documents. 
 SECTION 2.2 Receivables Purchase Price; Payments on the Receivables. 
 (a) On the Closing Date, in
exchange for the Receivables and other assets described in Section 2.1, the Purchaser shall pay to the Seller the Receivables Purchase Price. An amount equal to $832,769,491.00 of the Receivables Purchase Price shall be paid by the Purchaser to
the Seller in cash or immediately available funds. The remainder of the Receivables Purchase Price shall be paid by crediting the Seller with a contribution to the capital of the Purchaser. The Purchaser shall deposit, from funds it receives from
the issuance of the Notes, an amount equal to the Initial Reserve Account Deposit into the Reserve Account, which amount shall be an asset of the Issuer. 
 (b) The Purchaser shall be entitled to, and shall convey such right to the Owner Trustee pursuant to the Sale and Servicing Agreement, all payments of principal and interest on or in respect of the Receivables
received after the Cutoff Date. 
 SECTION 2.3 Transfer of Receivables. Pursuant to the Sale and Servicing Agreement, the Purchaser
will assign all of its right, title and interest in, to and under the Receivables and other assets described in Section 2.1 to the Issuer. The parties hereto acknowledge that the Issuer will pledge its rights in, to and under the Receivables
and other assets described in Section 2.1 to the Indenture Trustee pursuant to the Indenture. The Purchaser has the right to assign its interest under this Agreement as may be required to effect the purposes of the Sale and Servicing Agreement,
without the consent of the Seller, and the Owner Trustee as assignee shall succeed to the rights and obligations hereunder of the Purchaser. 
  

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 SECTION 2.4 Examination of Receivable Files. The Seller will make the Receivable Files available
to the Purchaser or its agent for examination during normal business hours at the Seller’s offices or such other location as otherwise shall be agreed upon by the Purchaser and the Seller. 
 SECTION 2.5 Expenses. The Seller will reimburse the Purchaser for expenses of the Purchaser in connection with the sale of the Notes, including
expenses which are reimbursable to the Underwriters by the Purchaser pursuant to the Underwriting Agreement. 
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
 SECTION 3.1
Representations and Warranties of the Purchaser. The Purchaser hereby makes the following representations and warranties to the Seller as of the date of this Agreement and as of the Closing Date: 
 (a) Organization and Good Standing. The Purchaser is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and shall
have, power, authority and legal right to acquire, own and sell the Receivables. 
 (b) Power and Authority; Binding
Obligation. The Purchaser has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement has been duly authorized by the Purchaser by all necessary
action. This Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws and to general equitable principles. 
 (c) No
Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or
lapse of time) a default under, the limited liability company agreement or certificate of formation of the Purchaser, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument to which the Purchaser is a party or by which it may be bound. 
 (d) No Proceedings. There are no proceedings or investigations pending, or, to the knowledge of the Purchaser, threatened, against the Purchaser before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the Purchaser or its properties (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or
(iii) seeking any determination or ruling that, in the 

  

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reasonable judgment of the Purchaser would materially and adversely affect the performance by the Purchaser of its obligations under, or the validity or
enforceability of, this Agreement or the Receivables. 
 SECTION 3.2 Representations and Warranties of the Seller. 
 (a) The Seller hereby makes the following representations and warranties to the Purchaser as of the date of this Agreement and as of the Closing Date:

 (i) Organization and Good Standing. The Seller is a 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. 
 (ii) Power and Authority;
Binding Obligation. The Seller has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement has been duly authorized by the Seller by all necessary
action. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws and to general equitable principles. 
 (iii) No
Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or
lapse of time) a default under, the certificate of formation or limited liability company agreement of the Seller, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument to which the Seller is a party or by which it may be bound. 
 (iv) No Proceedings. There are no proceedings or investigations pending, or, to the knowledge of the Seller, threatened, against the Seller before any court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) seeking
any determination or ruling that, in the reasonable judgment of the Seller would materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, this Agreement or the Receivables.

 (v) No Tax Liens. The Seller is not aware of any material judgment or tax lien filings against the Seller.

  

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 (b) The Seller hereby makes the following representations and warranties to the Purchaser as of the date
of this Agreement and as of the Closing Date, which representations and warranties shall remain operative and in full force and effect, shall survive the transfer and conveyance of the Receivables and other assets described in Section 2.1 by
the Seller to the Purchaser and by the Purchaser to the Issuer and shall inure to the benefit of the Purchaser, the Trustees and the Noteholders: 
 (i) Characteristics of Receivables. Each Receivable (i) has been originated by CarMax Auto or an Affiliate of CarMax Auto in the ordinary course of business in connection with the sale of a new or used
motor vehicle and has been fully and properly executed by the parties thereto, (ii) contains customary and enforceable provisions such that the rights and remedies of the holder thereof are adequate for realization against the collateral of the
benefits of the security, (iii) provides for level monthly payments that fully amortize the Amount Financed by maturity (except that the period between the date of such Receivable and the date of the first Scheduled Payment may be less than or
greater than one month and the amount of the first and last Scheduled Payments may be less than or greater than the level payments) and yield interest at the related APR, (iv) provides for, in the event that such Receivable is prepaid, a
prepayment that fully pays the Principal Balance of such Receivable with interest at the related APR through the date of payment, (v) is a retail installment sale contract substantially in the form of Exhibit B, (vi) is secured by a new or
used motor vehicle that had not been repossessed as of the Cutoff Date, (vii) is a Simple Interest Receivable, (viii) relates to an Obligor who has made at least one payment under such Receivable as of the Cutoff Date and (ix) relates
to an Obligor whose mailing address is located in any State. 
 (ii) Receivable Schedule. The information set forth in
the Receivable Schedule was true and correct in all material respects as of the opening of business on the Cutoff Date, and no selection procedures believed to be adverse to the Depositor and/or the Noteholders were utilized in selecting the
Receivables from those retail installment sale contracts which met the criteria contained in this Agreement. The information set forth in the compact disk or other listing regarding the Receivables made available to the Depositor and its assigns
(which compact disk or other listing is required to be delivered as specified herein) is true and correct in all material respects. 
 (iii) Compliance with Law. Each Receivable and the sale of the related Financed Vehicle complied, at the time such Receivable was originated and complies, as of the Closing Date, in all material respects with all requirements of
applicable federal, State and local laws, and regulations thereunder, including usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations B and Z, the Servicemembers Civil Relief Act, State adaptations of the National Consumer Act and the Uniform Consumer Credit Code and any other consumer
credit, equal opportunity and disclosure laws applicable to such Receivable and sale. 
  

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 (iv) Binding Obligation. Each Receivable represents the genuine, legal, valid and
binding payment obligation in writing of the related Obligor, enforceable by the holder thereof in all material respects in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation or
other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity. 
 (v)
No Government Obligor. No Receivable is due from the United States or any State or from any agency, department or instrumentality of the United States or any State. 
 (vi) Security Interest in Financed Vehicles. Immediately prior to the transfer of the Receivables by the Seller to the Depositor,
each Receivable was secured by a valid, binding and enforceable first priority perfected security interest in favor of the Seller in the related Financed Vehicle, which security interest has been validly assigned by the Seller to the Depositor. The
Servicer has received, or will receive within 180 days after the Closing Date, the original certificate of title for each Financed Vehicle (other than any Financed Vehicle that is subject to a certificate of title statute or motor vehicle
registration law that does not require that the original certificate of title for such Financed Vehicle be delivered to the Seller). 
 (vii) Receivables in Force. No Receivable has been satisfied, subordinated or rescinded, nor has any Financed Vehicle been released in whole or in part from the Lien granted by the related Receivable. 
 (viii) No Waiver. No provision of any Receivable has been waived in such a manner that such Receivable fails to meet all of the
representations and warranties made by the Seller in this Section 3.2(b) with respect thereto. 
 (ix) No
Defenses. No Receivable is subject to any right of rescission, setoff, counterclaim or defense, including the defense of usury, and the operation of any of the terms of any Receivable, or the exercise of any right thereunder, will not render
such Receivable unenforceable in whole or in part or subject to any right of rescission, setoff, counterclaim or defense, including the defense of usury, and the Seller has no knowledge of any such right of rescission, setoff, counterclaim or
defense being asserted or threatened with respect to any Receivable. 
 (x) No Liens. The Seller has no knowledge of
any liens or claims that have been filed, including liens for work, labor or materials or for unpaid State or federal taxes, relating to any Financed Vehicle that are prior to, or equal or coordinate with, the security interest in such Financed
Vehicle created by the related Receivable. 
 (xi) No Default. Except for payment defaults continuing for a period of
not more than 30 days, the Seller has no knowledge that any default, breach, violation or event permitting acceleration under the terms of any Receivable has occurred or that any continuing condition that with notice or the lapse of time or both
would constitute a default, breach, violation or event permitting acceleration under the terms of any Receivable has arisen, and the Seller has not waived any such event or condition. 
  

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

  

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

 (xvii) Principal Balance. Each Receivable had an original Principal Balance of not more than $65,000 and a remaining
Principal Balance as of the Cutoff Date of not less than $500. 
 (xviii) No Bankrupt Obligors. As of the Cutoff Date,
no Receivable was due from an Obligor that was the subject of a proceeding under the Bankruptcy Code of the United States or was bankrupt. 
 (xix) New and Used Vehicles. As of the Cutoff Date, approximately 1.75% of the Pool Balance related to Receivables secured by new Financed Vehicles and approximately 98.25% of the Pool Balance related to
Receivables secured by used Financed Vehicles. 
 (xx) Origination. Each Receivable was originated after
August 14, 2003. 
 (xxi) Term to Maturity. Each Receivable had an original term to maturity of not more than 72
months and not less than 12 months and a remaining term to maturity as of the Cutoff Date of not more than 71 months and not less than three months. 
 (xxii) Weighted Average Remaining Term to Maturity. As of the Cutoff Date, the weighted average remaining term to maturity of the Receivables was approximately 57.22 months. 
 (xxiii) Annual Percentage Rate. Each Receivable has an APR of at least 4.45% and not more than 25.00%. 
 (xxiv) Location of Receivable Files. The Receivable Files are maintained at the location listed in Schedule 2 to the Sale and
Servicing Agreement. 
 (xxv) Simple Interest Method. All payments with respect to the Receivables have been allocated
consistently in accordance with the Simple Interest Method. 
 (xxvi) No Delinquent Receivables. As of the Cutoff Date,
no payment due under any Receivable was more than 30 days past due. 
 (xxvii) Insurance. Each Obligor has obtained or
agreed to obtain physical damage insurance (which insurance shall not be force placed insurance) covering the related Financed Vehicle in accordance with the Seller’s normal requirements. 
 (xxviii) Fair Market Value. The Receivables Purchase Price represents the fair market value of the Receivables. 
  

 11 

 (xxix) Custodial Agreements. Immediately prior to the transfer of the Receivables
by the Seller to the Depositor, the Seller or an Affiliate of the Seller had possession of the Receivable Files and there were no, and there will not be any, custodial agreements in effect materially adversely affecting the right or ability of the
Seller to make, or cause to be made, any delivery required under this Agreement. 
 (xxx) Bulk Transfer Laws. The
transfer of the Receivables and the Receivable Files by the Seller to the Depositor pursuant to this Agreement is not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction. 
 (c) The Seller shall indemnify the Purchaser and hold the Purchaser harmless against any losses, penalties, fines, forfeitures, legal fees and related
costs, judgments and other costs and expenses resulting from any third party claim, demand, defense or assertion based on or grounded upon, or resulting from, a breach of the Seller’s representations and warranties set forth in
Section 3.2(b). The Trustees shall also have the remedies provided in the Sale and Servicing Agreement. 
 (d) Any cause of action
against the Seller relating to or arising out of the breach of any of its representations and warranties set forth in Section 3.2(b) shall accrue as to any Receivable upon (i) discovery of such breach by the Purchaser or either
Trustee or notice thereof by the Seller to the Purchaser, (ii) failure by the Seller to cure such breach and (iii) demand upon the Seller by the Purchaser for all amounts payable in respect of such Receivable under this Agreement.

 (e) The Purchaser or the Seller, as the case may be, shall inform the other parties promptly, in writing, upon discovery of any breach of
the Seller’s representations and warranties set forth in Section 3.2(b) which materially and adversely affects the interests of the Noteholders in any Receivable. 
 (f) If a breach of any representation or warranty set forth in Section 3.2(b) which materially and adversely affects the interests of the Purchaser,
the Issuer or the Noteholders in any Receivable shall not have been cured by the close of business on the last day of the Collection Period which includes the thirtieth day after the date on which the Seller becomes aware of, or receives written
notice from the Servicer, the Purchaser or the Owner Trustee of, such breach or failure, the Seller shall repurchase such Receivable from the Purchaser on the Distribution Date following such Collection Period. In consideration for the repurchase of
any such Receivable, the Seller shall remit the Purchase Amount of such Receivable to the Purchaser. Upon any such repurchase, the Purchaser shall, without further action, be deemed to transfer, assign, set-over and otherwise convey to the Seller,
without recourse, representation or warranty, all the right, title and interest of the Purchaser in, to and under such repurchased Receivable and all other related assets described in Section 2.1. The Purchaser shall execute such documents and
instruments of transfer or assignment and take such other actions as shall reasonably be requested by the Seller to effect the conveyance of such Receivable pursuant to this Section. The sole remedy of the Purchaser with respect to a breach of the
Seller’s representations and warranties set forth in Section 3.2(b) shall be to require the Seller to repurchase the related Receivables pursuant to this Section. 
  

 12 

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

 13 

 (vi) copies of the certificate of formation of the Seller, together with all amendments,
revisions and supplements thereto, certified by the Delaware Secretary of State as of a recent date, and a certificate of good standing from the Delaware Secretary of State, dated as of a recent date, to the effect that the Seller has been duly
formed, is in good standing and has a legal existence; 
 (vii) UCC search reports from the appropriate offices in Delaware as
to the Seller; 
 (viii) reliance letters to each opinion of counsel to the Seller or the Servicer delivered to
Standard & Poor’s, Fitch or Moody’s in connection with the purchase of the Receivables hereunder or the issuance or sale of the Notes; 
 (ix) a financing statement to be filed with the Delaware Secretary of State, naming the Seller, as seller or debtor, the Purchaser, as purchaser or secured party, and the Issuer as assignee, naming the Receivables and
the related property described in Section 2.1 as collateral and meeting the requirements of the laws of each such jurisdiction and in such manner as is necessary to perfect the sale, transfer, assignment and conveyance of the Receivables to the
Purchaser; 
 (x) the Bill of Sale; and 
 (xi) such other documents, certificates and opinions as may be reasonably requested by the Purchaser or its counsel. 
 (e) Execution of Transaction Documents. The Transaction Documents shall have been executed and delivered by the parties thereto.

 (f) Rating of the Notes. Fitch, Moody’s and Standard & Poor’s, respectively, shall have assigned
ratings of (i) “F-1+”, “Prime-1” and “A-1+” to the Class A-1 Notes and (ii) “AAA”, “Aaa” and “AAA” to the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes. 
 (g) No Unsolicited Ratings. There shall not have been issued an unsolicited rating of any
Class of Notes by any nationally recognized statistical rating agency at a level that is lower than the ratings for such Class of Notes from Fitch, Moody’s or Standard & Poor’s specified in Section 4.1(f). 
 (h) Other Transactions. The transactions contemplated by the Transaction Documents and the Underwriting Agreement shall be
consummated on the Closing Date. 
 SECTION 4.2 Conditions to Obligation of the Seller. The obligation of the Seller to sell the
Receivables to the Purchaser on the Closing Date is subject to the satisfaction of the following conditions: 
 (a)
Representations and Warranties True. The representations and warranties of the Purchaser contained herein and in the other Transaction Documents shall be true and correct on the Closing Date with the same effect as if then made, and the
Purchaser shall have performed all obligations to be performed by it hereunder and under the other Transaction Documents on or before the Closing Date. 
  

 14 

 (b) Payment of Receivables Purchase Price. In consideration of the sale of the
Receivables from the Seller to the Purchaser as provided in Section 2.1, on the Closing Date the Purchaser shall have paid to the Seller the Receivables Purchase Price. 
 (c) Opinions of Purchaser. An opinion or opinions of counsel for the Purchaser addressed to the Seller and the Underwriters shall
have been delivered. 
 ARTICLE V 
 COVENANTS OF THE SELLER 
 SECTION 5.1 Protection of Right, Title and Interest in, to and Under the Receivables. 

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

  

 15 

 
place of business and its chief executive office and the location of the office where the Receivables Files and any accounts and records relating to the
Receivables are kept within the United States. 
 (d) The Seller shall maintain accounts and records as to each Receivable accurately and in
sufficient detail to permit (i) the reader thereof to know at any time the status of such Receivable, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries
on (or with respect to) each Receivable. 
 (e) The Seller shall maintain its computer systems so that, from and after the time of the
transfer of the Receivables to the Purchaser pursuant to this Agreement, the Seller’s master computer records (including any back-up archives) that refer to a Receivable shall indicate clearly and unambiguously that such Receivable is owned by
the Purchaser (or, upon transfer of the Receivables to the Issuer, by the Issuer). Indication of the Purchaser’s ownership of a Receivable shall be deleted from or modified on the Seller’s computer systems when, and only when, such
Receivable shall have been paid in full or repurchased by the Seller. 
 (f) If at any time the Seller shall propose to sell, grant a
security interest in or otherwise transfer any interest in any motor vehicle retail installment sale contract to any prospective purchaser, lender or other transferee, the Seller shall give to such prospective purchaser, lender or other transferee
computer tapes, compact disks, records or print-outs (including any restored from back-up archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly and unambiguously that such Receivable has been sold and
is owned by the Purchaser (or, upon transfer of the Receivables to the Issuer, the Issuer), unless such Receivable has been paid in full or repurchased by the Seller. 
 (g) The Seller shall permit the Purchaser and its agents at any time during normal business hours to inspect, audit and make copies of and abstracts from the Seller’s records regarding any Receivable. 

(h) If the Seller has repurchased one or more Receivables from the Purchaser or the Issuer pursuant to Section 3.2(f), the Seller shall, upon
request, furnish to the Purchaser, within ten days, a list of all Receivables (by receivable number and name of Obligor) then owned by the Purchaser, together with a reconciliation of such list to the Receivables Schedule. 
 SECTION 5.2 Security Interests. Except for the conveyances hereunder, the Seller covenants that it will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on any Receivable, whether now existing or hereafter created, or any interest therein; the Seller will immediately notify the Purchaser of the existence of any Lien on any
Receivable and, in the event that the interests of the Noteholders in such Receivable are materially and adversely affected, such Receivable shall be repurchased from the Purchaser by the Seller in the manner and with the effect specified in
Section 3.2(f), and the Seller shall defend the right, title and interest of the Purchaser in, to and under the Receivables, whether now existing or hereafter created, against all claims of third parties claiming through or under the Seller.

  

 16 

 SECTION 5.3 Delivery of Payments. The Seller covenants and agrees to deliver in kind upon receipt
to the Servicer under the Sale and Servicing Agreement all payments received by the Seller in respect of the Receivables as soon as practicable after receipt thereof by the Seller. 
 SECTION 5.4 No Impairment. The Seller covenants that it shall take no action, nor omit to take any action, which would impair the rights of the
Purchaser in any Receivable, nor shall it, except as otherwise provided in this Agreement or the Sale and Servicing Agreement, reschedule, revise or defer payments due on any Receivable. 
 SECTION 5.5 Costs and Expenses. The Seller shall pay all reasonable costs and expenses incurred in connection with the perfection of the
Purchaser’s right, title and interest in, to and under the Receivables. 
 SECTION 5.6 Hold Harmless. The Seller shall protect,
defend, indemnify and hold the Purchaser and the Issuer and their respective assigns and their attorneys, accountants, employees, officers and directors harmless from and against all losses, costs, liabilities, claims, damages and expenses of every
kind and character, as incurred, resulting from or relating to or arising out of (i) the inaccuracy, nonfulfillment or breach of any representation, warranty, covenant or agreement made by the Seller in this Agreement, (ii) any legal
action, including any counterclaim, that has either been settled by the litigants (which settlement, if the Seller is not a party thereto shall be with the consent of the Seller) or has proceeded to judgment by a court of competent jurisdiction, in
either case to the extent it is based upon alleged facts that, if true, would constitute a breach of any representation, warranty, covenant or agreement made by the Seller in this Agreement, (iii) any actions or omissions of the Seller or any
employee or agent of the Seller occurring prior to the Closing Date with respect to any Receivable or Financed Vehicle or (iv) any failure of a Receivable to be originated in compliance with all requirements of law. These indemnity obligations
shall be in addition to any obligation that the Seller may otherwise have. 
 ARTICLE VI 
 MISCELLANEOUS PROVISIONS 
 SECTION 6.1
Amendment. 
 (a) This Agreement may be amended from time to time by a written amendment duly executed and delivered by the Purchaser
and the Seller, without the consent of any Noteholder, to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein or to add any other provision with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions of this Agreement or the Sale and Servicing Agreement; provided, however, that any such amendment shall not, as evidenced by an Opinion of Counsel to the
Seller delivered to the Indenture Trustee, adversely affect in any material respect the interests of the Noteholders. 
  

 17 

 (b) This Agreement may also be amended from time to time for any other purpose by a written amendment
duly executed and delivered by the Seller and by the Purchaser; provided, however, that any such amendment that materially adversely affects the interests of the Noteholders under the Indenture, the Sale and Servicing Agreement or the
Trust Agreement must be consented to by the Holders of Notes evidencing not less than 51% of the Note Balance of the Controlling Class. 
 (c) Promptly after the execution of any amendment to this Agreement, the Seller shall furnish written notification of the substance of such amendment to the Owner Trustee, the Indenture Trustee and the Rating Agencies. 
 SECTION 6.2 Termination. The respective obligations and responsibilities of the Seller and the Purchaser created hereby shall terminate, except
for the indemnity obligations of the Seller as provided herein, upon the termination of the Issuer as provided in the Trust Agreement. 
 SECTION 6.3 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW),
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
 SECTION 6.4
Notices. All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or sent by telecopier, overnight courier or mailed by registered mail, return receipt
requested, in the case of (i) the Purchaser, to CarMax Auto Funding LLC, 12800 Tuckahoe Creek Parkway, Suite 400, Richmond, Virginia 23238, Attention: Treasurer, and (ii) the Seller, to CarMax Business Services, LLC, 12800 Tuckahoe Creek
Parkway, Richmond, Virginia 23238, Attention: Treasury Department; or, as to either of such Persons, at such other address as shall be designated by such Person in a written notice to the other Person. 
 SECTION 6.5 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions and terms of this Agreement or any amendment or supplement hereto. 
 SECTION
6.6 Further Assurances. The Seller and the Purchaser agree to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the other party hereto or by the Issuer or
the Indenture Trustee more fully to effect the purposes of this Agreement, including the execution of any financing statements, amendments, continuation statements or releases relating to the Receivables for filing under the provisions of the UCC or
other law of any applicable jurisdiction. 
  

 18 

 SECTION 6.7 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on
the part of the Purchaser, the Issuer or the Seller, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.

 SECTION 6.8 Counterparts. This Agreement may be executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument. 
 SECTION 6.9
Third-Party Beneficiaries. This Agreement will inure to the benefit of and be binding upon the parties hereto, the Issuer and the Indenture Trustee for the benefit of the Noteholders, who shall be considered to be third-party beneficiaries
hereof. Except as otherwise provided in this Agreement, no other Person will have any right or obligation hereunder. 
 SECTION 6.10
Headings and Table of Contents. The Table of Contents and headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. 
 SECTION 6.11 Representations, Warranties and Agreements to Survive. The respective agreements, representations, warranties and other statements by
the Seller and by the Purchaser set forth in or made pursuant to this Agreement shall remain in full force and effect and will survive the closing hereunder of the transfers and assignments by the Seller to the Purchaser and by the Purchaser to the
Issuer and shall inure to the benefit of the Purchaser, the Trustees and the Noteholders. 
 SECTION 6.12 No Proceedings. The Seller
covenants and agrees that so long as this Agreement is in effect, and for one year plus one day following its termination, it will not file any involuntary petition or otherwise institute any bankruptcy, reorganization arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or State bankruptcy law or similar law against the Issuer or the Owner Trustee. 
 SECTION 6.13 Accountant’s Letters. 
 (a) The Seller shall cause a firm of independent certified public accountants (who
may also render other services to the Seller) to perform certain procedures regarding the characteristics of the Receivables described in the Receivables Schedule and to compare those characteristics to the information with respect to the
Receivables contained in the Prospectus. The Seller shall cooperate with the Purchaser and such accountants in making available all information and taking all steps reasonably necessary to permit such accountants to complete such procedures and to
deliver the letters required of them under the Underwriting Agreement. 
 (b) The Seller shall cause a firm of independent certified public
accountants (who may also render other services to the Seller) to deliver to the Purchaser a letter dated April 8, 2009 in the form previously agreed to by the Seller and the Purchaser, with respect to the 

  

 19 

 
financial and statistical information contained in the Prospectus under the caption “CarMax—Delinquency, Credit Loss and Recovery Information”
and with respect to such other information as may be agreed in the forms of such letters. 
 SECTION 6.14 Obligations of Purchaser.
The obligations of the Purchaser under this Agreement shall not be affected by reason of any invalidity, illegality or irregularity of any Receivable. 
 [SIGNATURE PAGE FOLLOWS] 
  

 20 

 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 BUSINESS SERVICES, LLC,
 as Seller

		
	By:	 	 /s/ Keith D. Browning

		 	Name: Keith D. Browning
		 	Title: Chief Financial Officer
	
	 CARMAX AUTO FUNDING LLC,
 as
Purchaser

		
	By:	 	 /s/ Thomas W. Reedy

		 	Name: Thomas W. Reedy
		 	Title: Treasurer

  

					
		 	S-1	 	Receivables Purchase AgreementOperating Agreement

 Exhibit 4.1 
 APPENDIX B 
 WELLS MID-HORIZON VALUE-ADDED FUND I, LLC 
 OPERATING AGREEMENT 
 AMONG

 WELLS MANAGEMENT COMPANY, INC. 
 WELLS INVESTMENT MANAGEMENT COMPANY, LLC 
 AND 
 THE SEVERAL INVESTOR MEMBERS AS REFLECTED ON EXHIBIT A 
 FROM TIME TO TIME 
  
 September 1, 2005 

  
 (This page intentionally left
blank) 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	ARTICLE 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION	  	B-1
	 1.1.
	  	Definitions	  	B-1
	 1.2.
	  	Principles of Construction	  	B-9
		
	ARTICLE 2. FORMATION, PURPOSE AND OTHER GENERAL MATTERS	  	B-9
	 2.1.
	  	Formation	  	B-9
	 2.2.
	  	Name	  	B-10
	 2.3.
	  	Principal Place of Business	  	B-10
	 2.4.
	  	Term	  	B-10
	 2.5.
	  	Filings; Agent for Service of Process	  	B-10
	 2.6.
	  	Purpose; Powers; Investment Objectives	  	B-10
	 2.7.
	  	Title to Fund Assets	  	B-11
	 2.8.
	  	Payments of Individual Obligations	  	B-11
		
	ARTICLE 3. CAPITALIZATION OF FUND	  	B-11
	 3.1.
	  	Capitalization	  	B-11
	 3.2.
	  	No Other Equity Interests	  	B-12
		
	ARTICLE 4. MEMBERS AND MEMBERS’ CAPITAL CONTRIBUTIONS	  	B-12
	 4.1.
	  	Initial Members	  	B-12
	 4.2.
	  	Admission of Additional Members	  	B-12
	 4.3.
	  	Issuance of Shares for Cash	  	B-12
		
	ARTICLE 5. ALLOCATIONS	  	B-12
	 5.1.
	  	Profits and Losses	  	B-12
	 5.2.
	  	Regulatory Allocations	  	B-12
	 5.3.
	  	Curative Allocations	  	B-14
	 5.4.
	  	Loss Limitation	  	B-14
	 5.5.
	  	Other Allocation Rules	  	B-14
	 5.6.
	  	Tax Allocations — Code Section 704(c)	  	B-14
	 5.7.
	  	Determination of Fair Market Value	  	B-15
		
	ARTICLE 6. DISTRIBUTIONS	  	B-15
	 6.1.
	  	Distributable Proceeds; Distribution Dates	  	B-15
	 6.2.
	  	Distributions; Guaranteed Payments	  	B-15
	 6.3.
	  	Distributions upon Dissolution	  	B-16
	 6.4.
	  	Withholding from Distributions	  	B-16
	 6.5.
	  	Liability of Manager	  	B-16
	 6.6.
	  	Limitations on Distributions	  	B-16
	 6.7.
	  	Nature of Distributions	  	B-16
	 6.8.
	  	Guaranteed Payments	  	B-17

					
	 	  	Page
	 ARTICLE 7. MANAGEMENT AND OPERATION OF FUND
	  	B-17
	 7.1.
	  	Sponsoring Member and Delegation to Manager	  	B-17
	 7.2.
	  	Duties of Manager	  	B-18
	 7.3.
	  	Investment Committee	  	B-19
	 7.4.
	  	Expenses of the Manager	  	B-19
	 7.5.
	  	Reliance by Third Parties	  	B-19
	 7.6.
	  	Limitations on Authority of Manager	  	B-20
	 7.7.
	  	Additional Obligations of Manager	  	B-20
	 7.8.
	  	Other Matters Concerning Manager	  	B-20
	 7.9.
	  	Liability of Manager	  	B-21
	 7.10.
	  	Indemnification	  	B-21
		
	ARTICLE 8. RIGHTS AND OBLIGATIONS OF MEMBERS	  	B-22
	 8.1.
	  	Limitation of Liability	  	B-22
	 8.2.
	  	Management of Business	  	B-22
	 8.3.
	  	Meetings	  	B-23
	 8.4.
	  	Return of Capital	  	B-23
	 8.5.
	  	Liquidation Vote	  	B-23
	 8.6.
	  	Merger or Consolidation	  	B-23
	 8.7.
	  	Resignation by Investor Members; Resignation or Transfer by Sponsoring Member	  	B-23
	 8.8.
	  	Removal of Manager	  	B-24
	 8.9.
	  	Other Business Ventures	  	B-24
	 8.10.
	  	Transactions Between a Member and the Fund	  	B-24
	 8.11.
	  	Other Instruments	  	B-24
		
	ARTICLE 9. ACCOUNTING, BOOKS AND RECORDS	  	B-24
	 9.1.
	  	Accounting, Books and Records	  	B-24
	 9.2.
	  	Reports	  	B-25
	 9.3.
	  	Tax Matters	  	B-25
		
	ARTICLE 10. AMENDMENTS	  	B-26
	 10.1.
	  	Amendments	  	B-26
	 10.2.
	  	Power of Attorney	  	B-26
		
	ARTICLE 11. TRANSFERS	  	B-26
	 11.1.
	  	Conditions of Transfer	  	B-26
	 11.2.
	  	Prohibited Transfers	  	B-27
	 11.3.
	  	Rights of Unadmitted Assignees	  	B-27
	 11.4.
	  	Admission of Substituted Members	  	B-27
	 11.5.
	  	Representations Regarding Transfers; Legend	  	B-28
	 11.6.
	  	Distributions and Allocations in Respect of Transferred Shares	  	B-28

					
	 	  	Page
	ARTICLE 12. DISSOLUTION AND WINDING UP	  	B-29
	 12.1.
	  	Dissolution Events	  	B-29
	 12.2.
	  	Winding Up	  	B-29
	 12.3.
	  	Compliance With Certain Requirements of Regulations; Deficit Capital Accounts	  	B-30
	 12.4.
	  	Rights of Members	  	B-31
	 12.5.
	  	Notice of Dissolution/Termination	  	B-31
	 12.6.
	  	Allocations During Period of Liquidation	  	B-31
	 12.7.
	  	Form of Liquidating Distributions	  	B-31
		
	ARTICLE 13. MISCELLANEOUS	  	B-31
	 13.1.
	  	Notices	  	B-31
	 13.2.
	  	Integration	  	B-32
	 13.3.
	  	Binding Effect	  	B-32
	 13.4.
	  	Construction	  	B-32
	 13.5.
	  	Creditors; No Third-Party Beneficiaries	  	B-32
	 13.6.
	  	Waiver	  	B-32
	 13.7.
	  	Time	  	B-32
	 13.8.
	  	Headings	  	B-32
	 13.9.
	  	Severability	  	B-32
	 13.10.
	  	Acceptance of Prior Acts by New Member	  	B-33
	 13.11.
	  	Governing Law; Choice of Forum	  	B-33
	 13.12.
	  	Waiver of Jury Trial	  	B-33
	 13.13.
	  	Counterpart Execution	  	B-33
	 13.14.
	  	Specific Performance	  	B-33

  
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blank) 

 WELLS MID-HORIZON VALUE-ADDED FUND I, LLC 
 OPERATING AGREEMENT 
 This OPERATING AGREEMENT (this
“Agreement”) is entered into and shall be effective as of the 1st day of September, 2005, by and among Wells Management Company, a Georgia corporation (the “Sponsoring
Member”), all Persons who may hereafter be admitted as Members of Wells Mid-Horizon Value-Added Fund I, LLC (the “Fund”) pursuant to the provisions of the Act and this
Agreement, and Wells Investment Management Company, LLC, a Georgia limited liability company who will be engaged to serve as manager of the Fund (the “Manager”), on the following terms and conditions:

 ARTICLE 1. 
 DEFINITIONS AND
PRINCIPLES OF CONSTRUCTION 
 1.1.    Definitions.    Capitalized words and
phrases used in this Agreement have the following meanings: 
 “Act” means the Georgia Limited Liability
Company Act, O.C.G.A. § 14-11-100, et seq., as amended from time to time (or any successor statute). 
 “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Allocation Period, after giving effect to the following
adjustments: 
 (i)   Credit to such Capital Account any amounts which such Member is deemed
to be obligated to restore pursuant to the penultimate sentences in Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and 
 (ii)  Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the Regulations. 
 The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the
Regulations and shall be interpreted consistently therewith. 
 “Affiliate” means, with respect to any
Person: (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any officer, director, general partner, manager (in the case of a limited liability company) or trustee of such Person
or (iii) any Person who is an officer, director, general partner, manager (in the case of a limited liability company) or trustee of any Person described in clauses (i) or (ii) of this sentence. 
 “Agreement” means this Operating Agreement of the Fund, as amended from time to time, which Agreement shall constitute
the “limited liability company agreement” of the Fund under the Act. 
 “Allocation
Period” means (i) the period commencing on September 1, 2005 and ending on December 31, 2005, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on December 31 or
(iii) any portion of the period described in clauses (i) or (ii) for which the Fund is required to allocate Profits, Losses and other items of Fund income, gain, loss or deduction pursuant to Section 5. 
 “APY” (Annual Percentage Yield) means the effective annual rate of return taking into account the effect of the
Fund’s compounding of such return on a quarterly basis. The Fund shall calculate the APY by using the following formula: 
 (1 + Periodic Rate)X – 1 
 The X in the foregoing formula represents the number of compounding periods per annum. The Members acknowledge that, unless the Manager determines that another compounding period is
appropriate, the Fund will use four compounding periods per year. 
  

 B-1 

 “Articles” means the articles of organization filed with the Secretary
of State of the State of Georgia pursuant to the Act to form the Fund, as originally executed and as amended, modified, supplemented or restated from time to time, as the context requires. 
 “Business Day” means a day of the year other than a Saturday, Sunday or other day on which banks are required or
authorized by law to close in Atlanta, Georgia. 
 “Capital Account” means, with respect to any Member, the
Capital Account maintained for such Member in accordance with the following provisions: 
 (i)    To each Member’s Capital Account there shall be credited (A) such Member’s Capital Contributions, (B) such Member’s distributive share of Profits and any items in the nature of income or
gain that are specially allocated pursuant to Section 5.2 or Section 5.3, and (C) with respect to any Fund Assets distributed to such Member, the amount of any Fund liabilities assumed by such Member or secured by such
Fund Assets. 
 (ii)   From each Member’s Capital Account there shall be debited
(A) the amount of money and the Gross Asset Value of any Fund Assets distributed to such Member pursuant to any provision of this Agreement, (B) such Member’s distributive share of Losses and any items in the nature of expenses or
losses that are specially allocated pursuant to Section 5.2 or Section 5.3, and (C) with respect to any Fund Assets contributed by such Member, the amount of any liabilities of such Member assumed by the Fund or secured
by such Fund Assets. 
 (iii)  If Shares are transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Transferred Shares. 
 (iv)  In determining the amount of any liability for purposes of clauses (i) and (ii) above there shall be taken into account Code Section 752(c) and any other applicable provisions of the
Code. 
 The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts
are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. If the Manager shall determine that it is prudent to modify or adjust the manner in which the Capital
Accounts, or any debits or credits thereto (including debits or credits relating to liabilities that are secured by, contributed or distributed property or that are assumed by the Fund or any Members), are computed in order to comply with such
Regulations, the Manager may make such modification or adjustment. The Manager also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of Members and the amount of capital
reflected on the Fund’s balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications if unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b). 
 “Capital Contributions” means, with
respect to any Member or Members, the amount of money contributed to the Fund as capital, whether as payment on account of the Shares held by such Member or Members or otherwise, in each case as set forth opposite such Member’s name on Exhibit
A as updated from time to time. 
 “Capital Proceeds” means the (i) Net Proceeds from a sale or other
disposition of a Real Estate Asset; (ii) Net Proceeds resulting from payments to the Fund because of the loss of a Real Estate Asset in a catastrophe, an eminent domain condemnation proceeding or a similar event; and (iii) Net Proceeds
from the sale or other dispositions of Fund Assets (other than Real Estate Assets) as part of a liquidating disposition of the Fund. 
 “Certificate of Termination” means a certificate filed in accordance with Section 14-11-610 of the Act. 
 “Code” means the United States Internal Revenue Code of 1986, as amended from time to time, or any successor statute and the Regulations. 
 “Cumulative Return” shall mean for each Investor Member a cumulative 10% APY return as calculated on a $1,000 base
amount per Share. 
  

 B-2 

 “Debt” means (i) any indebtedness for borrowed money or the
deferred purchase price of property as evidenced by a note, bond, or other instrument; (ii) any obligation as lessee under a capital lease; (iii) any reimbursement obligation in respect of any letter of credit, bond or similar instrument;
(iv) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any Real Estate Asset owned or held by the Fund whether or not the Fund has assumed or become liable for the obligations
secured thereby; (v) any obligation under any interest rate swap agreement; (vi) accounts payable and (vii) obligations under a direct or indirect guarantee of (including obligations (contingent or otherwise) to assure a creditor
against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i) through (vii) above; provided, however, that Debt shall not include obligations in respect of any accounts payable that are incurred in
the ordinary course of the Fund’s business and are not delinquent or are being contested in good faith by appropriate proceedings. 
 “Depreciation” means, for each Allocation Period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such Allocation Period,
except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Allocation Period, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization or other cost recovery deduction for such Allocation Period bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes
of an asset at the beginning of such Allocation Period is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Manager. 
 “Disposition Fee” means an amount equal to twenty-five hundredths of a percent (.25%) of the gross proceeds generated
from any disposition of a Real Estate Asset. 
 “Dissolution Event” has the meaning set forth in
Section 12.1. 
 “Distributable Proceeds” means, for any period, the sum of Capital Proceeds for
such period and the Operating Proceeds for such period. 
 “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and any successor statute. 
 “ERISA Investor” means an
investor whose assets are Plan Assets. 
 “Final Closing” means the final admission (subject to
Section 11.4) of Members into the Fund pursuant to the acceptance by the Fund of effective Subscription Agreements for Shares in the Offering. 
 “Fiscal Year” of the Fund means the calendar year; provided, however, that the first Fiscal Year shall commence on the date upon which the Articles are filed and shall end on the
December 31 following the date of such filing. 
 “Foundation Member” means a Member that is a
“private foundation” as defined in Section 509 of the Code. 
 “Fund” means Wells Mid-Horizon
Value-Added Fund I, LLC, a Georgia limited liability company formed pursuant to the Articles and subject to this Agreement. 
 “Fund Assets” means all property or assets acquired or otherwise owned by the Fund, whether real or personal, tangible or intangible, including Real Estate Assets. 
 “Fund Minimum Gain” has the same meaning as “partnership minimum gain” in Section 1.704-2(d) of the
Regulations. 
 “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for
federal income tax purposes, except as follows: 
 (i)  The Gross Asset Values of all Fund Assets
shall be adjusted to equal their respective gross fair market values (taking Code Section 7701(g) into account), as determined by the Manager as of the following times: (A) the acquisition of an additional interest in the Fund by any new
or existing Member 

  

 B-3 

 
(after the Final Closing) in exchange for more than a de minimis Capital Contribution, (B) the distribution by the Fund to a Member of more than
a de minimis amount of Fund Assets as consideration for an interest in the Fund, and (C) the liquidation of the Fund within the meaning of Regulations Section 1.704-1 (b)(2)(ii)(g), provided that an adjustment described in clauses
(A) and (B) of this paragraph shall be made only if the Manager reasonably determines that such adjustment is necessary to reflect the relative economic interests of Members in the Fund; 
 (ii)   The Gross Asset Value of any item of Fund Assets distributed to any Member shall be adjusted to
equal the gross fair market value (taking Code Section 7701(g) into account) of such asset on the date of distribution as determined by the Manager; and 
 (iii)  The Gross Asset Values of Fund Assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or
Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and clause (vi) of the definition of
“Profits” and “Losses”; provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (iii) to the extent that such adjustment would be duplicative
of any adjustment made pursuant to clause (i) in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iii). 
 Notwithstanding anything in the foregoing to the contrary, the Fund shall not adjust the Gross Asset Value upon an admission of a Member prior to the Final Closing. Such Gross Asset Value shall be adjusted by the
Depreciation taken into account with respect to such asset, for purposes of computing Profits and Losses and subsequent adjustments to Members’ Capital Accounts. 
 “Indemnitee” means each of the Manager, the Sponsoring Member, members of the Investment Committee, and the Liquidator, if any, and their respective directors, managers,
officers, shareholders, members, partners, trustees and employees, and any Person (including a Member) who is or was serving at the request or on behalf of the Fund as a manager, officer, employee or agent of the Fund or as a director, manager,
officer, shareholder, member, partner, trustee, employee or agent of another Person if such service was related to the business of the Fund. 
 “Initial Closing” means the date the Fund first accepts effective Subscription Agreements from Persons pursuant to the Offering for an aggregate amount of not less than 10,000 Shares. 
 “Initial Investment Committee Members” shall have the meaning set forth in Section 7.3(a). 
 “Interim Investments” means investments in United States government securities of not more than twelve months’
maturity at the time of purchase, securities of United States governmental agencies of not more than twelve months’ maturity at the time of purchase, commercial paper having a rating of “A-1” or better with Standard &
Poor’s Corporation or a rating of “P-1” or better with Moody’s Investors Service, Inc., money market funds which invest exclusively in such securities or commercial paper, and bankers’ acceptances and certificates of deposit
having ratings of A-1 or P-1 or better (collectively, “Cash Equivalents”), pending investment or disbursement by the Fund in accordance with this Agreement or to provide a source from which to meet
contingencies. 
 “Investment Committee” has the meaning set forth in Section 7.3(a). 
 “Investment Company Act” means the Investment Company Act of 1940, as amended from time to time (or any successor
statute). 
 “Investor Member” shall mean any holder of Shares who has been admitted as a “member”
of the Fund in accordance with the provisions of this Agreement. 
 “Liquidating Distributions” shall have
the meaning set forth in Section 6.3. 
 “Liquidation Period” has the meaning set forth in
Section 12.6. 
 “Liquidator” means a Person appointed to oversee the liquidation of the Fund
pursuant to Section 12.2. 
  

 B-4 

 “Losses” has the meaning set forth in the definition of
“Profits” and “Losses” below. 
 “Manager” means Wells
Investment Management Company, LLC, a Georgia limited liability company, in its capacity as the Manager of the Fund pursuant to its appointment as such by the Sponsoring Member in this Agreement, or any Person who succeeds Wells Investment
Management Company, LLC, in such capacity pursuant to the terms of this Agreement. 
 “Member” means the
Sponsoring Member and each Investor Member. Except as otherwise provided herein, each Member shall have the rights and obligations of a “member” as provided in the Act. A Member who has assigned all of its Shares and Rights to one or more
assignees shall cease to be a Member, but no such assignee shall become a Member until admitted as a Substituted Member pursuant to Section 11.4. 
 “Member Closing Date” shall mean, with respect to each Investor Member, the date the Investor Member becomes a Member of the Fund pursuant to Section 4.2. 
 “Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in
Section 1.704-2(b) (4) of the Regulations. 
 “Member Nonrecourse Debt Minimum Gain” means an
amount, with respect to each Member Nonrecourse Debt, equal to the Fund Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i) (3) of the
Regulations. 
 “Member Nonrecourse Deductions”   has   the   same
  meaning   as   the   term   “partner   nonrecourse   deductions”   in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations. 
 “Net Proceeds” means gross proceeds from the sale or other disposition of a Fund Asset less: 
 (i)    Payment, to the extent applicable, of all amounts required to be disbursed in connection with
such disposition, which shall include in the case of any disposition of a Real Estate Asset, the Disposition Fee, and any related sales or other commissions payable to any person; 
 (ii)   Payment of all debts and obligations of the Fund then due related to such disposition, or required
by any agreement to which the Fund is a party; 
 (iii)  Creation of reasonable cash reserves
considered appropriate by the Manager to provide for payment of taxes, debt service, insurance, repairs, replacements or renewals and/or other costs, expenses and liabilities, contingent or otherwise, payment of which is not then due and for which
other cash receipts are not expected by the Manager to be received prior to the time such payments are required to be made; and 
 (iv)  Payments of all other debts and obligations of the Fund then due, other than to any Member. 
 “New Members” has the meaning set forth in Section 4.2(b). 
 “Non-Member Transferee” has the meaning set forth in Section 11.3. 
 “Nonrecourse Deductions” has the meaning set forth in Section 1.704-2(b) (1) of the Regulations. 
 “Nonrecourse Liability” has the meaning set forth in Section 1.704-2(b) (3) of the Regulations. 
 “Offering Period” means the offering, issuance and sale by the Fund of the Shares ending on the Final Closing. 
 “Offering Period Cumulative Return Balance” with respect to any Investor Member, as of any time and from time to time, shall be a sum that represents a cumulative, compounded
return computed at a rate equal to 10% per annum which shall be computed as follows: 
 (i)  From the Member Closing Date until the earlier of (a) the date of the Final Closing or (b) a date on which the Fund makes an Offering Period Cumulative Return Distribution, the Offering Period Cumulative Return
Balance shall be increased by an amount equal to a return on such Investor Member’s Par Value Balance, calculated from the Member Closing Date until the date for which the determination is being made at an APY equal to the Periodic Rate.

  

 B-5 

 (ii)   If the Fund makes an Offering Period Cumulative
Return Distribution or multiple Offering Period Cumulative Return Distributions prior to the date of the Final Closing, each Investor Member’s Offering Period Cumulative Return Balance shall be reduced by the amount of such Offering Period
Cumulative Return Distribution. The Investor Member’s Offering Period Cumulative Return Balance shall subsequently be increased by an amount equal to a return on the sum of the Investor Member’s Par Value Balance plus the Offering Period
Cumulative Return Balance as reduced pursuant to the preceding sentence, calculated from the date immediately after the Offering Period Cumulative Return Distribution is made through the earlier of (A) the date of the Final Closing or
(B) a date on which the Fund makes a subsequent Offering Period Cumulative Return Distribution at an APY equal to the Periodic Rate. 
 (iii)  From the date immediately after the Final Closing until a date on which the Fund makes an Offering Period Cumulative Return Distribution, the Offering Period Cumulative Return Balance shall be
increased by an amount equal to a return on such Investor Member’s Offering Period Cumulative Return Balance as of the date of the Final Closing, calculated from the date of the Final Closing until the date for which the determination is being
made at an APY equal to the Periodic Rate. 
 (iv)  After the date of the Final Closing, if the
Fund makes an Offering Period Cumulative Return Distribution or multiple Offering Period Cumulative Return Distributions, each Investor Member’s Offering Period Cumulative Return Balance shall be reduced by the amount of such Offering Period
Cumulative Return Distribution. The Investor Member’s Offering Period Cumulative Return Balance shall subsequently be increased by an amount equal to a return on the Investor Member’s Offering Period Cumulative Return Balance as reduced
pursuant to the preceding sentence, calculated from the date immediately after the Offering Period Cumulative Return Distribution is made until a date on which the Fund makes a subsequent Offering Period Cumulative Return Distribution, at an APY
equal to the Periodic Rate. 
 “Offering Period Cumulative Return Distribution” shall have the meaning
described in Section 6.2(a)(i). 
 “Operating Proceeds” means, for any period, all cash received in
such period by the Fund (other than Capital Contributions, the proceeds of Fund Debt and Capital Proceeds), plus any cash that becomes available from reserves, after deducting therefrom the following items for such period: 
 (i)    The sum of all cash operating expenses of the Fund, as determined in accordance with sound
accounting principles and procedures, including without limitation, interest on all Fund Debt; 
 (ii)   All amounts paid by the fund for capital expenditures that are not deductible on a current basis; 
 (iii)  All payments of principal on Fund Debt; and 
 (iv)  An amount the Manager shall reasonably determine to be a reasonable reserve for needs not otherwise provided for, including without limitation, expenses incurred that are not paid or presently payable, and working capital.

 “Par Value” means a base amount per Share of $1,000. 
 “Par Value Balance” shall mean, for any Investor Member, the Par Value per share for each Share owned by the Member less
any amounts distributed to such Member as a Par Value Distribution. In no event shall any Investor Member’s Par Value Balance be less than zero ($0). 
 “Par Value Distribution” has the meaning set forth in Section 6.2(d). 
 “Percentage Interest” means, with respect to any Member as of any date, the ratio (expressed as a percentage) of the number of Shares held by such Member on such date to the aggregate number of Shares held by all Members on
such date. 
 “Periodic Rate” shall be equal to a rate, which compounded quarterly, will provide an APY
equal to 10%. 
  

 B-6 

 “Person” means any individual, partnership (whether general or limited),
joint venture, limited liability company, corporation, trust, estate, association, government, nominee or other entity. 
 “Plan Assets” means the assets of any entity that are subject to the fiduciary provisions of Title I of ERISA pursuant to any provision of ERISA, the Plan Asset Regulation, or any other regulation issued by the U.S.
Department of Labor. 
 “Plan Asset Regulation” means U.S. Department of Labor regulation 29 C.F.R. §
2510.3-101, as amended and as interpreted by the U.S. Department of Labor from time to time. 
 “Pledge”
means, as a noun, any voluntary or involuntary pledge, hypothecation, mortgage, lien, security interest or other encumbrance, and as a verb, voluntarily or involuntarily, to grant or suffer the creation of any of the foregoing. 
 “Post-Offering Period Cumulative Return Balance” with respect to any Investor Member, as of any time after the Final
Closing and from time to time, shall be a sum that represents a cumulative, compounded return computed at a rate equal to 10% per annum which shall be computed as follows: 
 (i)    After the date of the Final Closing until a date on which the Fund makes a Post-Offering
Period Cumulative Return Distribution, the Post-Offering Period Cumulative Return Balance shall be increased by an amount equal to a return on such Investor Member’s Par Value Balance, calculated from the date immediately after the Final
Closing until the date for which the determination is being made at an APY equal to the Periodic Rate. 
 (ii)   If the Fund makes a Post-Offering Period Cumulative Return Distribution or multiple Post-Offering Period Cumulative Return Distributions, each Investor Member’s Post-Offering Period Cumulative Return Balance shall
be reduced by the amount of such Post-Offering Period Cumulative Return Distribution. The Investor Member’s Post-Offering Period Cumulative Return Balance shall subsequently be increased by an amount equal to a return on the sum of the Investor
Member’s Par Value Balance plus the Post-Offering Period Cumulative Return Balance as reduced pursuant to the preceding sentence, calculated from the date immediately after the Post-Offering Period Cumulative Return Distribution is made through
the date on which the Fund makes a subsequent Post-Offering Period Cumulative Return Distribution at an APY equal to the Periodic Rate. 
 “Post-Offering Period Cumulative Return Distribution” shall have the meaning set forth in Section 6.2(a) (ii). 
 “Profits” and “Losses” mean, for each Allocation Period, an amount equal to the Fund’s taxable income or loss for such Allocation Period, determined in
accordance with Code Section 703 (a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703 (a)(1) shall be included in taxable income or loss), with the
following adjustments (without duplication): 
 (i)    Any income of the Fund that is
exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be added to such taxable income or loss; 
 (ii)   Any expenditures of the Fund described in Code Section 705(a)(2)(B) or treated as Code
Section 705 (a) (2) (B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and
“Losses” shall be subtracted from such taxable income or loss; 
 (iii)  If the Gross
Asset Value of any Fund Asset is adjusted pursuant to clauses (i) or (ii) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the
asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; 
 (iv)  Gain or loss resulting from any disposition of Fund Assets with respect to which gain or loss is
recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Fund Asset disposed of, notwithstanding that the adjusted tax basis of such Fund Asset differs from its Gross Asset Value; 
  

 B-7 

 (v)   In lieu of the depreciation, amortization and other
cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Period, computed in accordance with the definition of Depreciation; 
 (vi)  To the extent an adjustment to the adjusted tax basis of any Fund Asset pursuant to Code
Section 734(b) is required, pursuant to Regulations Section 1.704- (b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Fund,
the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes
of computing Profits or Losses; and 
 (vii)  Notwithstanding any other provision of this
definition, any items that are specially allocated pursuant to Section 5.2 or Section 5.3 shall not be taken into account in computing Profits or Losses. 
 The amounts of the items of Fund income, gain, loss or deduction available to be specially allocated pursuant to Sections 5.2 and 5.3 shall be determined by applying rules analogous to
those set forth in clauses (i) through (vi) above. 
 “Properties” means, in general, all
interests in parcels or related groups of parcels (and “Property” means any or each interest individually, as the context requires) of improved and unimproved, office, industrial, retail, hotel, multifamily residential or
single-family residential real property, whether held in fee simple, absolute, leasehold, co tenancy or otherwise. 
 “Real Estate Assets” means, in general, all interests (and “Real Estate Asset” means any or each interest individually, as the context requires) of the Fund (i) in or relating to real property
of whatever nature and personal property, both tangible and intangible, relating thereto, including (A) Properties, (B) Undeveloped Properties, and (C) Real Estate Mortgages, and (ii) in partnerships, limited liability companies,
corporations, real estate investment trusts, operating companies and other entities having direct or indirect interests in any such class or classes of assets described in clause (i) above. 
 “Real Estate Mortgages” means any and all of the following: promissory notes or other evidences of senior or
subordinated indebtedness secured primarily by mortgages, deeds of trust, deeds to secure debt or other similar pledges, assignments or collateral interests in Properties or similar real estate-related investments that may have both debt and equity
features, including convertible or equity participation mortgage loans. 
 “Regulations” means the
regulations, including temporary regulations, promulgated under the Code, as such regulations are amended from time to time. 
 “Regulatory Allocations” has the meaning set forth in Section 5.3. 
 “Rights” has the meaning set forth in Section 11.1. 
 “Securities Act”
means the Securities Act of 1933, as amended. 
 “Share” means a limited liability company interest in the
Fund representing a fractional part of the aggregate limited liability company interests in the Fund, including the right to a distributive share of the capital, profits and losses of the Fund, and the right to receive distributions from the Fund.

 “Sponsoring Member” means Wells Management Company, in its capacity as a Member of the Fund, and any
successor thereof in accordance with the provisions of this Agreement. 
 “Sponsoring Member Capital
Contribution” means the amount of Capital Contribution made by the Sponsoring Member as set forth on Exhibit A hereto, which amount shall be equal to the amount of cash actually paid to the Fund and which is contemplated to be an aggregate
of $1,000,000. 
  

 B-8 

 “Sponsoring Member Cumulative Return Balance” with respect to the
Sponsoring Member, as of any time and from time to time, shall be a sum that represents a cumulative, compounded return computed at a rate equal to 10% per annum which shall be computed as follows: 
 (i)    From the Initial Closing Date until a date on which the Fund makes a Sponsoring Member
Cumulative Return Distribution, the Sponsoring Member Cumulative Return Balance shall be increased by an amount equal to a return on the Sponsoring Member’s Capital Contribution, calculated from the Initial Closing Date until the date for which
the determination is being made at an APY equal to the Periodic Rate. 
 (ii)   If the Fund
makes a Sponsoring Member Cumulative Return Distribution or multiple Sponsoring Member Cumulative Return Distributions, the Sponsoring Member’s Cumulative Return Balance shall be reduced by the amount of such Sponsoring Member Cumulative Return
Distribution. The Sponsoring Member’s Cumulative Return Balance shall subsequently be increased by an amount equal to a return on the sum of Sponsoring Member’s unreturned Capital Contribution plus the Sponsoring Member Cumulative Return
Balance as reduced pursuant to the preceding sentence, calculated from the date immediately after the Sponsoring Member Cumulative Return Distribution is made through the date on which the Fund makes a subsequent Sponsoring Member Cumulative Return
Distribution at an APY equal to the Periodic Rate. 
 “Sponsoring Member’s Cumulative Return
Distribution” shall have the meaning set forth in Section 6.2(a) (iii). 
 “Subscription
Agreement” means a written agreement, in form and substance satisfactory to the Manager, pursuant to which a Person has agreed (subject to acceptance by the Fund) to purchase Shares and become a Member of the Fund. 
 “Substituted Member” means a Person admitted to the Fund as a Member pursuant to Section 11.4. 

“Tax Matters Partner” has the meaning set forth in Section 9.3(a). 
 “Transfer” means, as a noun, any voluntary or involuntary transfer, sale or other disposition (including any transfer,
sale or disposition by operation of law) and, as a verb, voluntarily or involuntarily to do or suffer the doing of any of the foregoing. 
 “Undeveloped Properties” means, in general, all interests (and “Undeveloped Property” means any or each interest individually, as the context requires) of substantially or
entirely undeveloped Property (in each case on substantially entitled land). 
 “Valuation Opinion” has the
meaning set forth in Section 5.7(c). 
 1.2.    Principles of
Construction.    The meanings set forth for defined terms in this Agreement shall be equally applicable to both the singular and plural forms of the terms defined and the masculine, feminine or neuter gender shall include all
genders. All references in this Agreement to clauses, sections, schedules and exhibits are to clauses, sections, schedules and exhibits in or to this Agreement unless otherwise specified herein. When used in this Agreement, (i) the words
“hereof,” “herein” and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and (ii) the word “including” shall mean
“including, without limitation.” A reference to an agreement, instrument or document shall, unless otherwise specified, include such agreement, instrument or document as the same may be amended, modified or supplemented from time to time
in accordance with its terms. 
 ARTICLE 2. 
 FORMATION, PURPOSE AND OTHER GENERAL MATTERS 
 2.1.    Formation.    The Members acknowledge that the Fund was formed as a limited liability company under and pursuant to the Act by the filing of the Articles in the office of the Secretary
of State of the State of Georgia, on July 15, 2005. The Fund shall be treated as a partnership for tax purposes under United States 

  

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federal, state and local income tax laws, and no Member shall take any position or any action or make any election in a tax return or otherwise inconsistent
herewith. The rights and liabilities of the Members shall be as provided under the Act, except to the extent modified by the terms of the Articles and this Agreement. 
 2.2.    Name.    The name of the Fund shall be Wells Mid-Horizon Value-Added Fund I, LLC, and all business of the Fund shall be conducted in such
name. The Manager may change the name of the Fund upon ten (10) Business Days’ notice to the Members. 
 2.3.    Principal Place of Business.    The principal place of business of the Fund shall be at 6200 The Corners Parkway, Norcross, Georgia 30092-3365. The Manager may change the principal
place of business of the Fund to any other place within or without the State of Georgia upon ten (10) Business Days’ notice to the Members. 
 2.4.    Term.    The term of the Fund commenced on September 1, 2005 and shall continue until the earlier of (a) December 31, 2020 or
(b) the filing of a Certificate of Termination as contemplated by Section 2.5(c). 
 2.5.    Filings; Agent for Service of Process. 
 (a)  The actions of the
Manager and its counsel in preparing the Articles and causing them to be filed in the office of the Secretary of State of the State of Georgia in accordance with the Act, and the contents of the Articles, are hereby ratified and approved. The
Manager shall take any and all other actions reasonably necessary to perfect and maintain the status of the Fund as a limited liability company under the laws of the State of Georgia, including the preparation and filing of such amendments to the
Articles and such other assumed name certificates, documents, instruments and publications as may be required by law, including actions to reflect (i) a change in the Fund name; or (ii) a correction of false or erroneous statements in the
Articles or the desire of the Members to make a change in any statement therein in order that it shall more accurately represent the agreement among the Members. 
 (b)  The Members and the Manager shall execute and cause to be filed original or amended certificates and shall take any and all other actions as may be reasonably necessary to perfect
and maintain the status of the Fund as a limited liability company or similar type of entity under the laws of any other jurisdictions in which the Fund engages in business. 
 (c)  Upon the dissolution and completion of the winding up and liquidation of the Fund in accordance with Section 12, the Manager shall promptly execute and cause to be
filed a Certificate of Termination in accordance with the Act and any certificate or filing under the laws of any other jurisdictions in which the Manager deems such filing necessary or advisable. 
 (d)  The Manager is hereby designated as an authorized person, within the meaning of the Act, with full power of substitution,
to execute, deliver and file, or cause the execution, delivery and filing of, all certificates (and any amendments and/or restatements thereof) required or permitted by the Act to be filed in the office of the Secretary of State of the State of
Georgia and any other certificates (and any amendments and/or restatements thereof) necessary for the Fund to qualify to do business in any jurisdiction in which the Fund may wish to conduct business. 
 2.6.    Purpose; Powers; Investment Objectives. 
 (a)  The purpose of the Fund shall be to acquire, own, manage, operate, hold, finance and sell Real Estate Assets of any
nature, either directly or indirectly. The Fund shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the conduct, furtherance, promotion or attainment of the purposes, business and
activities described above, including acts relating to (i) construction, operation, maintenance, management, improvement, rental and sale or other realization of Real Estate Assets; (ii) the origination, analysis, financing, closing and
refinancing of acquisitions of and transactions with respect to, and the monitoring and ultimate divestiture of, Real Estate Assets; and (iii) the investment of funds in Interim Investments. 
  

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 (b)  The Fund may engage in such other activities and businesses as may be
necessary or desirable, in the opinion of the Manager, to promote and carry out the purposes of the Fund as set forth above; provided, however, that, without the written consent of Members owing more than fifty percent (50%) of the
outstanding Shares in accordance with Section 7.6(a) (ii) hereof, the Fund shall not engage in any business endeavors other than those consistent with the purpose of the Fund, as set forth above, or incidental thereto; and
notwithstanding the foregoing, the Fund (without such Member consent) cannot: 
 (i)    Invest as a limited partner in a limited partnership; 
 (ii)   Make investments in Real Estate Mortgages except in connection with the sale of other disposition of a property; 
 (iii)  Make loans to any person, including the Manager, the Sponsoring Member, or any of their Affiliates; or 
 (iv)  Invest in or underwrite the securities of other issuers, except for permitted temporary investments
pending utilization of Fund Assets to acquire Real Estate Assets. 
 (c)  The investment objectives of the Fund
(the “Investment Objectives”) are (i) to invest primarily in commercial office and industrial real estate properties, principally Class A type assets in primary and secondary markets in the United
States, that provide opportunities to enhance their value through operations, re-leasing, property improvements or other means; (ii) to operate such Real Estate Assets in a manner to enhance the value of such Real Estate Assets through
development, operations, re-leasing, property improvement and other means; and (iii) to dispose of such Real Estate Assets in a manner that seeks to achieve greater returns on appreciation than through current distributions of income. The
foregoing sentence shall not be deemed to limit the authority of the Manager to take any action otherwise authorized by this Agreement. 
 2.7.    Title to Fund Assets.    Subject to the following sentence, all money or Fund Assets shall be owned by and held in the name of the Fund as an entity (or by an
entity directly or indirectly owned by the Fund in whole or in part), and no Member shall have any ownership interest in such money or Fund Assets in its individual name, and each Member’s interest in the Fund shall be personal property for all
purposes. Notwithstanding any other provision of this Agreement, the Manager may cause the Fund to invest in any Real Estate Asset with one or more co-investors. The preceding sentence shall not be construed, however, to authorize the Fund to, and
the Fund shall not invest in, another private equity fund. 
 2.8.    Payments of Individual
Obligations.    The Fund’s credit and assets shall be used solely for the benefit of the Fund, and no asset of the Fund shall be transferred or encumbered for, or in payment of, any individual obligation of any Member.

 ARTICLE 3. 
 CAPITALIZATION OF
FUND 
 3.1.    Capitalization. 
 (a)  The interests of the Investor Members in the Fund shall be represented by the Shares, of which an aggregate of 150,000 is
hereby authorized. The Shares shall have the respective rights and privileges set forth in this Agreement. No other Shares shall be issued by the Fund. 
 (b)  The execution and delivery of a Subscription Agreement by any Person subscribing for Shares shall, subject to the satisfaction or waiver prior to or at the Closing of the conditions precedent contained
therein, constitute acceptance of this Agreement as well, although admission as a Member shall be subject to the Fund’s acceptance of such Subscription Agreement and, if determined to be desirable by the Manager, execution and delivery by such
Person of a counterpart to this Agreement. 
 (c)  No Person (other than the Manager or an Affiliate of the
Manager) may hold, directly or indirectly, fifty percent (50%) or more of the outstanding Shares. 
  

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 (d)  Unless otherwise
agreed by the Members owning greater than two-thirds (2/3) of the outstanding Shares, all contributions to the capital of the Fund by any Person shall be made solely in cash. 
 3.2.    No Other Equity Interests.    Except for the Shares and the Sponsoring Member’s interest in the Fund, the Fund shall not, and shall have no authority to, issue any equity interests
in the Fund or any warrants or other rights to acquire, or securities or other instruments convertible into, any such equity interests. The foregoing sentence shall not be construed to prohibit or limit the authority and right of the Sponsoring
Member to subdivide its economic interest in the Fund and to sell or otherwise distribute such subdivisions to other Persons, subject only to the provisions of Section 8.7(b) of this Agreement. 
 ARTICLE 4. 
 MEMBERS AND MEMBERS’ CAPITAL
CONTRIBUTIONS 
 4.1.    Initial Members.    At the
Initial Closing, pursuant to the Fund’s acceptance of effective Subscription Agreements from such Persons that constitute their respective executions of this Agreement, each of the Persons then identified on Exhibit A hereto, as a result
thereof, shall be admitted to the Fund as a Member with respect to the number of Shares and the amount of Capital Contribution set forth opposite each such Person’s name on such Exhibit A. 
 4.2.    Admission of Additional Members. 
 (a)  Each Person who, after the Initial Closing, has entered into an effective Subscription Agreement agreeing to purchase
Shares and become a Member of the Fund shall be admitted to the Fund as a Member, if and to the extent such Subscription Agreement is accepted by the Fund (each a “Closing Date”), in each case without the
necessity of any further action. Except as provided in Section 11.4, no Person shall be admitted as a Member of the Fund after the Final Closing. 
 (b)  Upon admission of any additional Member(s) to the Fund in accordance with this Agreement after the Initial Closing, whether pursuant to Section 4.2(a) or as
contemplated by Section 11.4 (“New Member”), the Manager may execute an amendment to this Agreement pursuant to Section 10.1 revising Exhibit A hereto to reflect the Capital
Contribution of, and the number of Shares held by, such Member. 
 4.3.    Issuance of Shares for
Cash.    Subject to Section 3.1(d), all Shares of the Fund shall be issued for cash, and the Fund shall not issue any Shares to any Person in exchange for property. 
 ARTICLE 5. 
 ALLOCATIONS 
 5.1.    Profits and Losses.    After giving effect to the allocations set forth in
Sections 5.2, 5.3 and 5.4, the Fund shall allocate Profits or Losses for each Allocation Period to the Investor Members in proportion to their respective Percentage Interests. 
 5.2.    Regulatory Allocations.    The Members acknowledge and agree that it is their
intent that the Fund allocate all items of Profits, Losses, income, gain, loss and deduction to the Members in accordance with Section 5.1 to the extent such allocations are consistent with the provisions of Code section 704(b). The
Members acknowledge that the Fund intends to determine and allocate each Member’s distributive interest of income, gain, loss, deduction, or credit (or item thereof) consistently with the provisions of Code section 704(b). Accordingly, prior to
making any allocation pursuant to Section 5.1 or Section 5.3, the Fund shall make the allocations set forth in this Section 5.2 in the following order and priority: 
 (a)  Minimum Gain Chargeback.    Except as otherwise provided in Section 1.704-2(f) of the
Regulations, notwithstanding any other provision of this Section 5, if there is a net decrease in Fund Minimum Gain during any Allocation Period, each Member shall be specially allocated items of Fund income and gain for such Allocation
Period (and, if necessary, subsequent Allocation Periods) in an amount equal to such Member’s share of the net decrease in Fund Minimum Gain, determined in accordance with Regulations 

  

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Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each
Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Section 5.2(a) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith. 
 (b)  Member Minimum Gain Chargeback.    Except as otherwise provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of this Section 5, if there is a net
decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Allocation Period, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined
in accordance with Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of Fund income and gain for such Allocation Period (and, if necessary, subsequent Allocation Periods) in an amount equal to such Member’s share
of the net decrease in Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i) (4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to
each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section 5.2(b) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith. 
 (c)  Nonrecourse Deductions.    Nonrecourse Deductions for any Allocation Period shall be specially allocated to Members in proportion to their relative holdings of Shares. 
 (d)  Code Section 470 Allocations.    To the extent permitted by the Code and applicable
Regulations, any “tax-exempt losses” (as defined by Code section 470) incurred by the Fund as a result of an Investor Member’s being a tax-exempt entity (as defined in Code section 168(h)(2), shall be allocated to such Investor Member
to the extent of such Investor Member’s share of Fund Losses for such Fiscal Year. 
 (e)  Member
Nonrecourse Deductions.    Any Member Nonrecourse Deductions for any Allocation Period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such
Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1). 
 (f)  Qualified Income Offset.    In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of Fund income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account
Deficit of the Member as quickly as possible, provided that an allocation pursuant to this Section 5.2(e) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Section 5 have been tentatively made as if this Section 5.2(e) were not in the Agreement. 
 (g)  Gross Income Allocation.    If any Member has a deficit Capital Account at the end of any Allocation Period which is in excess of the sum of the amount such Member is
obligated to restore pursuant to the penultimate sentence of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Fund income and gain in the amount of such excess as quickly as possible,
provided that an allocation pursuant to this Section 5.2(f) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this
Section 5 have been made as if Section 5.2(e) and this Section 5.2(f) were not in the Agreement. 
 (h)  Section 754 Adjustments.    To the extent an adjustment to the tax basis of any Fund asset pursuant to Code Section 734(b) or Code Section 743(b) is required to be taken into account,
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), in determining Capital Accounts, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the tax basis of the asset), and such gain
shall be specially allocated to Members in accordance with the manner in which their Capital Accounts are required to be adjusted pursuant to Regulations Section 1.704-1(b)(2)(iv)(m). 
  

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 (i)  Varying Admission Dates.    If additional
Members are admitted to the Fund on different dates pursuant to the provisions of Section 4, (i) all “syndication expenses” (as defined in Section 1.709-2(b) of the Regulations) of the Fund shall be divided among
Members who own Shares from time to time, so that, to the extent possible, the cumulative syndication expenses allocated with respect to each Share at any time is the same amount, and (ii) all items of income, gain, loss and deduction shall be
allocated among Members, as determined by the Manager, in a manner such that the quotient of (x) the Capital Account balances of each Member, divided by (y) the number of such Member’s Shares, is equal to such quotient for each other
Member. 
 (j)  Liquidation of In-Kind Distribution.    Any expenses incurred by the
Fund in connection with the sale or disposition of any Fund Assets that would otherwise have been distributed in-kind in accordance herewith, will be specially allocated to the Member or Members electing to receive such distribution in cash pursuant
to this Agreement, pro rata in accordance with their relative holdings of Shares. 
 5.3.    Curative
Allocations.    The allocations set forth in Sections 5.2(a), 5.2(b), 5.2(c), 5.2(d), 5.2(e), 5.2(f), 5.2(g) and 5.4 (the “Regulatory Allocations”) are
intended to comply with certain requirements of the Regulations.   It is the intent of the Members that,   to the extent possible,   all Regulatory Allocations shall be offset either with other Regulatory Allocations or
with special allocations of other items of Fund income, gain,   loss or deduction pursuant to this Section 5.3.   Therefore,   notwithstanding any other provision of this   Article 5 (other
than the Regulatory Allocations),   the Manager shall make such offsetting special allocations of Fund income, gain,   loss or deduction in whatever manner it determines appropriate so that,   after such offsetting
allocations are made,   each Member’s Capital Account balance is,   to the extent possible,   equal to the Capital Account balance such Member would have had if the Regulatory  Allocations were not part of the
Agreement  and all Fund items were allocated pursuant to Sections  5.1, 5.2(h)  and  5.2(i). 
 5.4.    Loss Limitation.    Losses allocated pursuant to Section 5.1 shall not exceed the maximum amount of Losses that can be allocated without causing any Member to have an
Adjusted Capital Account Deficit at the end of any Allocation Period. If some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 5.1, the limitation set
forth in this Section 5.4 shall be applied on a Member-by-Member basis and Losses not allocable to any Member as a result of such limitation shall be allocated (a) first, to the other Members in accordance with the positive balances
in such Members’ Capital Accounts so as to allocate the maximum permissible Losses to each Member under Section 1.704-1(b)(2)(ii)(d) of the Regulations (until the Capital Account balances of all Members shall be reduced to zero), and
(b) thereafter, in the same manner as Nonrecourse Deductions. 
 5.5.    Other Allocation
Rules. 
 (a)  For purposes of determining the Profits, Losses or any other items allocable to any period,
Profits, Losses and any such other items shall be determined on a daily, monthly or other basis as determined by the Manager using any permissible method under Code Section 706 and the Regulations thereunder. 
 (b)  Members are aware of the income tax consequences of the allocations made by this Article 5 and hereby agree to be
bound by the provisions of this Article 5 in reporting their shares of Fund income and loss for income tax purposes. 
 (c)  For purposes of determining a Member’s proportionate share of the “excess nonrecourse liabilities” of the Fund within the meaning of Regulations Section 1.752-3(a)(3), Members’ interests in Fund
profits are in proportion to their relative holdings of Shares. 
 (d)  To the extent permitted by
Section 1.704-2(h)(3) of the Regulations, the Manager shall endeavor to treat distributions to Members of Net Distributable Proceeds as having been made from the proceeds of a Nonrecourse Liability or a Member Nonrecourse Debt only to the
extent that such distributions would cause or increase an Adjusted Capital Account Deficit for any Member. 
 5.6.    Tax Allocations — Code Section 704(c). 
 (a)  In accordance
with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any Fund Asset contributed to the capital of the Fund shall, solely for tax purposes, 

  

 B-14 

 
be allocated among Members so as to take account of any variation between the adjusted basis of such Fund Asset to the Fund for federal income tax purposes
and its initial Gross Asset Value (computed in accordance with the definition of Gross Asset Value), as determined by the Manager using any permissible method under Code Section 704(c) and the Regulations thereunder. If the Gross Asset Value of
any Fund Asset is adjusted pursuant to clause (i) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder. 
 (b)  Any elections or other decisions relating to such allocations shall be made by the Manager in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to
this Section 5.6 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items or
distributions pursuant to any provision of this Agreement. 
 5.7.    Determination of Fair Market
Value. 
 (a)  If the fair market value of any asset or property is to be determined for the purpose of making
distributions or allocations pursuant to this Agreement or for any other Fund purpose, such determination shall be made by the Manager, except as otherwise provided by this Section 5.7. The Manager shall consider in good faith all
relevant data that may affect such fair market value. 
 (b)  For purposes of determining the fair market value of
any security, real estate or other property, the Manager may obtain the opinion of a regionally or nationally recognized investment banking or appraisal firm (a “Valuation Opinion”) and shall be entitled to rely
on any such Valuation Opinion in determining fair market value. If the Manager obtains any such Valuation Opinion, it will promptly give the Members notice thereof. Such Valuation Opinion, if obtained by the Manager, shall be final and binding on
the Fund and all Members. 
 ARTICLE 6. 
 DISTRIBUTIONS 
 6.1.    Distributable Proceeds; Distribution
Dates.    The Fund intends to distribute its Distributable Proceeds, if any (each date of a distribution being hereinafter referred to as a “Distribution Date”), as determined by the Manager in
its sole and absolute discretion. 
 6.2.    Distributions; Guaranteed
Payments.    Distributions of Distributable Proceeds will be made in the order and priority of the following subsections (a) through (d): 
 (a)  First, the Fund shall make payments with respect to the use of capital by the Members in the following
order and priority: 
 (i)  First, 100% to the Investor Members in proportion to their respective
Offering Period Cumulative Return Balances until each Investor Member’s Offering Period Cumulative Return Balance has been reduced to zero ($0) (“Offering Period Cumulative Return
Distribution”); 
 (ii)  Next, 100% to the Investor
Members in proportion to their respective Percentage Interests until each Investor Member’s Post-Offering Period Cumulative Return Balance has been reduced to zero ($0) (“Post-Offering Period Cumulative Return
Distribution”); and 
 (iii)  Then, 100% to the Sponsoring Member until
the Sponsoring Member’s Cumulative Return Balance has been reduced to zero ($0) (“Sponsoring Member Cumulative Return Distribution”). 
 (b)  Second, the Fund shall make payments to Investor Members in proportion to their respective Percentage
Interests until each Investor Member’s Par Value Balance has been reduced to zero ($0) (“Par Value Distribution”). 
  

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 (c)  Third, the Fund shall make payments to the Sponsoring
Member until it receives additional distributions in an amount equal to the amount of the Sponsoring Member Capital Contribution. 
 (d)  Thereafter, the Fund shall make simultaneous payments of the following: (i) a payment to the Sponsoring Member with respect to services provided by the Sponsoring Member equal to the excess of (A)
20% of all Distributable Proceeds (determined without regard to this Section 6.2(d)), minus (B) any payments of Disposition Fees previously made to the Sponsoring Member and not previously taken into account; and (ii) the
remainder to all Investor Members in proportion to their respective Percentage Interests. 
 6.3.    Distributions upon Dissolution.    Upon the occurrence of a Dissolution Event, the Fund shall distribute its assets, including the proceeds
from the liquidation of its assets pursuant to Section 12.2 of this Agreement, after payment or provision for amounts described in Section 12.2(a) and
Section 12.2(b) of this Agreement, to the Members in proportion to their respective positive Capital Account balances (“Liquidating
Distributions”). 
 6.4.    Withholding from
Distributions.    The Fund may withhold from distributions or with respect to allocations and pay over to any federal, state or local government any amount required to be withheld pursuant to the Code or any provision of any
other federal, state or local law and may allocate any such amounts among the Members in any manner that is in accordance with applicable law. All amounts withheld pursuant to the Code or any provision of any other federal, state or local tax law
with respect to any payment, distribution or allocation to the Fund or to the Members shall be treated as amounts distributed to the Members pursuant to this Article 6 or Article 12 for all purposes of the Agreement. 
 6.5.    Liability of Manager.    Upon the reasonable determination in good faith to make
any distribution under this Article 6 in the manner herein provided, the Manager shall incur no liability on account of such distribution, even though such distribution may result in the Fund retaining insufficient funds for the operation of
the Fund, which insufficiency results in loss to the Fund or the borrowing of funds by the Fund. 
 6.6.    Limitations on Distributions. 
 (a)  The Fund shall make no
distributions to Members except as provided in this Article 6 and Article 12. Upon the commencement of the winding up of the Fund in accordance with Article 12, distributions thereafter shall solely be made in accordance
with Article 12. 
 (b)  Notwithstanding any provision to the contrary contained in this Agreement, the Fund
shall not make a distribution to any Member on account of its interest in the Fund if such distribution would violate Section 14-11-407 of the Act or other applicable law. 
 6.7.    Nature of Distributions. 
 (a)  The Manager will use commercially reasonable efforts to make distributions in cash. Except upon liquidation of the Fund pursuant to Section 12.2, the Fund shall not make in-kind distributions. The Manager shall
not discriminate among the Members in any such distribution in-kind, but shall, to the extent feasible, in any such distribution: (i) distribute to the Members entitled to participate therein assets of approximately the same type and in
approximately the same proportions, and (ii) if cash and other assets are to be distributed simultaneously in respect of a single investment, distribute cash and other assets in approximately the same proportion to each such Member. 

(b)  Notwithstanding anything to the contrary in Section 6.7(a), the Manager will not make any distribution
in-kind to any Member if such Member notifies the Manager in writing that such Member has concluded in good faith that such distribution: (i) would result in a violation of applicable law, rule or regulation (including a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code); or (ii) likely cause a Foundation Member to be subject to excise taxes imposed by Chapter 42, Subchapter A of the Code (other than Sections 4940, 4947 and 4948 of the Code),
such notice to set forth in reasonable detail the bases for such conclusion. In the event of any such notice, the Manager will use its reasonable commercial efforts to sell, on behalf of such Member or Foundation Member, as the case may be, any
assets that would otherwise have been distributed to such Member in-kind at the best price available to the Manager and shall distribute to such Member the proceeds of such sale, net of the expenses related thereto. 
  

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 6.8.    Guaranteed Payments.    Payments
of cash made to Investor Members and the Sponsoring Member pursuant to Section 6.2(a) and Section 12.2(b) and payments made to the Sponsoring Member pursuant to Section 6.2(d) herein are intended to be
“guaranteed payments” governed by Code Section 707(c) and shall not be treated as distributions for purposes of determining a Member’s Capital Account. 
 ARTICLE 7. 
 MANAGEMENT AND OPERATION OF FUND 
 7.1.    Sponsoring Member and Delegation to Manager. 
 (a)  The full power and all authority to conduct the business and manage the affairs of the Fund are vested in the Sponsoring
Member, subject only to the specific matters provided in Sections 7.6 and 10.1 and Article 8 on which Investor Members are granted certain rights to participate and to such other specific matters that might be prescribed by the
Act. The Sponsoring Member hereby delegates to the Manager, and the Manager hereby accepts, the authority and duties set forth in the remaining provisions of this Article 7 or otherwise indicated or contemplated by this Agreement, and the
Sponsoring Member and the Manager contemplate the execution of an advisory or other agreement to further evidence and effectuate certain aspects of such delegation and acceptance and to provide for certain specific services by the Manager on behalf
of the Fund. Notwithstanding any other provision of this Agreement, the Sponsoring Member retains the rights to terminate and/or replace the Manager, or to limit the scope of its delegation to the Manager, at any time, in the sole discretion of the
Sponsoring Member. 
 (b)  The Sponsoring Member hereby intends to delegate to the Manager such authority to serve
as the “manager” of the Fund as permitted by the Act, so that the Manager may conduct, direct and exercise full control over all activities of the Fund. All management powers over the business and affairs of the Fund shall, as a result, be
exclusively vested in the Manager and, except as otherwise provided in this Agreement or required by the Act, no Member shall take part in the operation, control or management of the business or affairs of the Fund, shall have the right to vote on
or approve any matter, shall transact any business in the name of the Fund or shall have the power to sign documents for or otherwise bind the Fund. 
 (c)  Without limiting any other authority of the Manager under this Agreement or the Act, each Member hereby agrees that the Manager shall be authorized to execute, deliver and perform any agreements, acts,
transactions and matters on behalf of the Fund without any further approval or other act of the Members or the Fund. Without limitation of the foregoing, the Fund, and the Manager on behalf of the Fund, are hereby authorized to enter into, accept
and perform or cause to be performed, the Subscription Agreements and any other agreements, instruments, certificates or other documents necessary or desirable in connection with the transactions contemplated hereby or thereby, as determined in the
discretion of the Manager, in each case without any further act, vote or approval of any Member and notwithstanding any other provision of this Agreement. The participation by the Manager (or any Affiliate thereof) in any agreement authorized or
permitted hereunder shall not constitute a breach by the Manager of any duty that it may owe the Fund or Members (or any of them) hereunder or under applicable law. 
 (d)  Subject to approval by the Sponsoring Member, the Manager shall have the power and authority to delegate its rights and powers to manage and control the business and affairs of the
Fund, hereunder or otherwise; provided, however, that the foregoing delegation shall not relieve the Manager of any of its obligations under this Agreement. 
  

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 7.2.    Duties of Manager. 
 (a)  The Manager shall devote its diligent efforts to the business and affairs of the Fund, including such time as shall be
required for the proper conduct of the business of the Fund. Without limiting the foregoing, but subject to the other provisions of this Agreement, the Manager shall, and shall have full discretion and authority to: 
 (i)  develop and oversee the overall investment strategy and operating financial policies of the Fund; select,
acquire, finance, refinance, retain, monitor and divest Real Estate Assets and any other investments contemplated hereunder on behalf and in the name of the Fund, including the power to issue commitments to make investments for the Fund and to cause
the Fund to invest in any Real Estate Assets with co-investors; perform preliminary matters associated with the acquisition of Real Estate Assets or other assets contemplated hereunder in the name and on behalf of the Fund; negotiate, execute,
consent to, amend, modify or terminate instruments and agreements (including notes, guarantees, loan agreements, leases and consulting contracts) with respect to investments and the operations of the Fund and its subsidiaries, give and receive
notices, requests, directions, consents, refusals and demands thereunder, and otherwise manage such investments and operations; and enter into option or other agreements to purchase, sell, finance or refinance Real Estate Assets or other assets
contemplated hereunder by or on behalf of the Fund or any subsidiary thereof; 
 (ii)  maintain or
cause to be maintained, in the name and for the benefit of the Fund (or for any subsidiary thereof), such escrow, investment and operating accounts as the Manager may deem advisable in connection with the investments and other activities of the
Fund; deposit therein such income and other receipts as may be generated from such investments and activities; determine amounts to be held in such accounts as cash reserves as the Manager deems necessary or appropriate for working capital, for
follow-on investments in Real Estate Assets, and to pay contingent liabilities or costs and expenses incurred by the Fund directly or indirectly with respect to its investments; cause any portion of the Fund’s assets to be held in cash or
Interim Investments for any period pending commitment or distribution; and disburse from such accounts such amounts as shall be necessary to pay the Fund’s expenses and obligations; 
 (iii)  make distributions to the Members pursuant to this Agreement; 
 (iv)  make all payments of interest and required payments of principal on Debt of the Fund, and to the extent
determined by the Manager, make optional prepayments of any Debt of the Fund; 
 (v)  make payment
of any fees and other amounts due and owing to the Manager under this Agreement; 
 (vi)  cause the
Fund or any Real Estate Asset to incur indebtedness; cause the Fund to lend money to any Real Estate Asset; cause or permit any subsidiary of the Fund or Real Estate Asset to incur indebtedness of any nature, whether secured or unsecured; and cause
the Fund to guaranty such indebtedness or other obligations of such subsidiary or Real Estate Asset or cause the Fund to provide indemnities in respect of their businesses and operations (including acquisition indemnities) or pay contingent earn-out
consideration in connection with any acquisition, wherever, in each such case, the Manager determines that such obligations are prudent; 
 (vii)  hire such advisors, consultants or other professionals as may be reasonably required to conduct the business of the Fund; and commence and defend litigation and arbitration, whether on behalf of the
Fund or on its own behalf, arising out of assets or activities of the Fund, as well as cause the Fund to have such insurance coverage as the Manager determines to be necessary or advisable; 
 (viii)  liquidate all assets of the Fund in contemplation of the termination of the Fund as may be required by
this Agreement, and take all actions determined by the Manager to be necessary or desirable in connection therewith; 
 (ix)  pay expenses or satisfy other liabilities of the Fund; 
 (x)  use its commercially reasonable efforts to avoid the Fund having to register as an “investment company” under the Investment Company Act; 
  

 B-18 

 (xi)  conduct its own affairs and the affairs of the Fund in a
manner reasonably calculated to avoid personal liability on the part of the Members; and 
 (xii)  subject to Section 7.6, take such actions and execute such instruments and agreements as the Manager may deem advisable or appropriate in connection with the conduct of the affairs of the Fund or the
transactions contemplated hereby. 
 (b)  Notwithstanding Section 7.2(a), but subject to
Section 7.2(c), the Members acknowledge that the Manager is and may in the future become associated with other businesses, and agree that the Manager and its Affiliates may engage, directly or indirectly, in other business ventures of
any nature or description, independently or with others, without regard to whether such business is or may be competitive with the business of the Fund, including the organization, analysis, financing, closing, acquisition, refinancing, monitoring,
and divestiture of investments of various types, some of which may meet the Fund’s investment criteria, for its or their own account and for the accounts of others, either on their own or through ventures or partnerships with other persons or
entities. Neither the Fund nor any of the Members shall have any rights by virtue of this Agreement in or to such independent investments or to the income or profits derived therefrom. The foregoing acknowledgment of the activities of the Manager
and its Affiliates and the conflicts of interests such activities may create shall not relieve the Manager of any fiduciary obligation which it may have hereunder to the Fund and to the Members to act reasonably and in good faith with respect to the
Fund and the Members in connection with such other activities and conflicts of interests. 
 (c)  Notwithstanding
any other provision hereof, the Manager shall not cause the Fund to acquire real property from, or sell Real Estate Assets to, the Manager or any of its Affiliates, except as may be required by the terms of any joint venture agreement which the Fund
is a party to or in any instance where an Affiliate has purchased a property on behalf of the Fund. 
 7.3.    Investment Committee. 
 (a)  As a condition of its appointment and
service hereunder, the Manager shall have a board of directors as its ultimate governing body, and the members of the Manager’s board of directors shall constitute and act as the investment committee of the Fund (the “Investment
Committee”) that will provide financial, investment, business and other advice and assistance with respect to existing and prospective investments by the Fund, including in the evaluation of the proposed terms of any
investment opportunity in light of the Fund’s purpose and investment objectives. In addition to such advice and assistance, the Investment Committee will be responsible, as provided in Section 7.6(b), for approving or disapproving
any proposed (i) investments by the Fund in any Real Estate Asset and (ii) divestments by the Fund of any Real Estate Asset. 
 (b)  The members of the Investment Committee as of September 1, 2005 are: Leo F. Wells, Robert E. Bowers, Randall D. Fretz, M. Scott Meadows, Donald A. Miller, Douglas P. Williams, Donald R. Henry, F.
Parker Hudson and David H. Steinwedell (the “Initial Investment Committee Members”). Prior to the admission of any such Person as an Investor Member of the Fund, the Fund shall furnish to such Person
biographical information on the then-current members of the Investment Committee. Thereafter, the Manager shall provide to the Fund and furnish to all Investor Members similar information with respect to any future members of the Investment
Committee as soon as practicable after such future members agree to serve on the Investment Committee. 
 7.4.    Expenses of the Manager.    The Fund shall reimburse the Manager for actual out-of-pocket expenses reasonably paid or incurred by it in the management of the Fund, including, but not
limited to, reasonable allocations to the Fund of personnel and general and administrative expenses of the Manager, and payments made by the Manager to third parties for services provided by them to the Fund, such as services provided by
accountants, appraisers, architects, attorneys, bookkeepers, custodians of securities, engineers, property maintenance and security personnel and third-party real estate brokers. 
 7.5.    Reliance by Third Parties.    Each contract, agreement, certification, promissory
note or other instrument or document executed by the Manager with respect to any business or assets of the Fund shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (a) at the time of the
execution and delivery thereof this Agreement was in full force and effect, (b) such instrument or 

  

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document was duly executed in accordance with the terms and provisions of this Agreement and is binding upon the Fund, and (c) the Manager was duly
authorized and empowered to execute and deliver, and to cause the Fund to perform any and every such instrument or document for and on behalf of the Fund. 
 7.6.    Limitations on Authority of Manager. 
 (a)  Notwithstanding anything to the contrary set forth in this Agreement, without the written consent or ratification of the specific act by Members owning more than fifty percent (50%) of the outstanding Shares, the Manager
shall have no authority to: 
 (i)  Change the purpose or investment objective of the Fund;

 (ii)  Resign or designate a substitute Manager, unless approved by the Sponsoring Member;

 (iii)  Sell or exchange all, or substantially all of the Fund Assets (except this
Section 7.6(a) (iii) shall not be intended to limit the Manager’s authority to sell individual Real Estate Assets as the Manager deems appropriate), other than in connection with the winding up of the Fund approved as provided
in Section 12.2 of this Agreement; or 
 (iv)  Do any act, except as set forth in this
Agreement, which it is prohibited from doing under the Act without such consent or ratification. 
 (b)  The Fund
shall not invest in or divest of any Real Estate Asset unless such investment or divestiture is approved by the Investment Committee. 
 7.7.    Additional Obligations of Manager.    In addition to its other obligations and duties hereunder, the Manager shall: 
 (i)  not voluntarily dissolve; 
 (ii)  conduct its own affairs and the affairs of the Fund in a manner reasonably calculated to avoid personal
liability on the part of the Members; 
 (iii)  maintain the Fund’s status as a partnership
for federal income tax purposes and not take any position or action or make any election, in a tax return or otherwise, inconsistent therewith; 
 (iv)  if and to the extent necessary to avoid the assets of the Fund being deemed to be Plan Assets, take whatever steps it considers necessary to cause the Fund to be an
“operating company” within the meaning of the Plan Asset Regulation; 
 (v)  use its
reasonable best efforts to avoid the Fund’s having to register as an investment company under the Investment Company Act; and 
 (vi)  not commingle the funds of the Fund with those of any other Person. 
 7.8.    Other Matters Concerning Manager. 
 (a)  Whenever in this Agreement or
any other agreement contemplated herein the Manager is permitted or required to make a decision (i) in its “discretion” or “sole discretion,” with “complete discretion” or under a grant of similar authority or
latitude, the Manager shall be entitled to consider only such interests and factors as it desires and shall have no duty or obligation to consider any interest of or factors affecting some or all of the Members, so long as the Manager acts in
accordance with this Agreement, in good faith and in a manner that it reasonably believes is in the best interest of the Fund, or (ii) in its “good faith” or under another express standard, the Manager shall be subject to only such
express standard and shall not be subject to any other or different standards imposed by this Agreement or any other agreement contemplated hereby. Each Member hereby agrees that any standard of care or duty imposed in this Agreement or any other
agreement contemplated hereby or under the Act or any other applicable law shall be modified, waived or limited in each case as required to permit the Manager to act under this Agreement or any other agreement contemplated hereby and to make any
decision pursuant to the authority prescribed in this Section 7.8(a), so long as such action or decision does not constitute gross negligence, willful misconduct, bad faith, willful violation of securities laws or a willful and material
breach of this Agreement, and is reasonably believed by the Manager to be in accordance with this Agreement and in the best interest of the Fund. 
  

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 (b)  The Manager may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers and such other consultants and advisors as it may deem necessary or advisable. The opinion of such Persons as to matters that the Manager reasonably believes to be within such Person’s professional or
expert competence shall constitute full and complete authorization and protection in respect of any action taken or suffered or omitted by the Manager in good faith and in accordance with such opinion, provided that the Manager acted
reasonably and in good faith in the selection of such Person or in reliance on such opinion. 
 (c)  The Manager
will promptly invest, to the extent reasonably practicable, (i) any funds received by or on behalf of the Fund prior to their investment in Real Estate Assets and (ii) any proceeds from the disposition of Real Estate Assets that have not
been distributed, in Interim Investments. The Manager shall not be liable to any Member for the failure to earn any interest, or to earn any particular rate of interest, on such funds, provided such funds earn a rate of interest that is greater than
or equal to the interest rate available for overnight investments in a national bank selected by the Manager. 
 (d)  The Manager may in its discretion establish such reasonable cash reserves as it deems necessary or appropriate for working capital and to pay contingent liabilities or costs and expenses directly or indirectly incurred by the
Fund with respect to its activities. 
 (e)  Subject to the provisions of Section 7.2(c), unless
otherwise expressly provided herein, (i) whenever a conflict of interests exists or arises between the Manager or any of its Affiliates, on the one hand, and the Fund, on the other hand, or (ii) whenever this Agreement or any other
agreement contemplated herein provides that the Manager shall act in a manner that is, or provide terms that are, fair and reasonable to the Fund or any Member, the Manager shall resolve such conflict of interests, take such action or provide such
terms considering, in each case, (A) the relative interests of each party to such conflict, agreement, transaction or situation, (B) the benefits and burdens relating to such interests, (C) any customary or accepted industry
practices, and (D) any applicable generally accepted accounting principles. Subject to the foregoing provisions of this Section 7.8(e), in the absence of bad faith by the Manager, the resolution, action or terms so made, taken or
provided by the Manager shall be conclusive and binding on the Fund and the Members and shall not constitute a breach of this Agreement or any other agreement contemplated herein or a breach of any standard of care or duty imposed herein or therein
or under the Act or any other applicable law. 
 7.9.    Liability of
Manager.    The Manager shall be liable to the Fund and the Members only in respect to its acts or omissions that constitute gross negligence, willful misconduct, bad faith, willful violation of securities laws or a willful
and material breach of this Agreement, and shall not be liable to the Fund, any Member or any Person who has acquired any interest in any Shares, whether as a Member, assignee or otherwise, for errors in judgment or for any acts or omissions made,
taken or omitted in good faith and that the Manager (or, if applicable, any of its directors, officers, employees or agents acting on its behalf) reasonably believed were in or not opposed to the best interest of the Fund, unless such errors in
judgment or acts or omissions constitute gross negligence, willful misconduct, bad faith, willful violation of securities laws or a willful and material breach of this Agreement, in each case by the Manager. The members, directors, officers,
employees and agents of the Manager (including members of the Investment Committee) shall be afforded the same exculpation as provided to the Manager under this Section 7.9. Nothing contained in this Section 7.9 shall give rise to any
claim or form a basis for the legal liability of any Person where such claim or liability would not exist at law or in equity in the absence of this Section. 
 7.10.    Indemnification. 
 (a)  To the fullest extent permitted by applicable law, the Fund shall indemnify and hold harmless each Indemnitee from and against any and all losses, damages, claims or liabilities, and actions in respect thereof (but excluding
any diminution in the value of such Indemnitee’s interest in the Fund), joint or several, to which such Indemnitee may be subject insofar as such losses, claims, damages or liabilities, or actions in 

  

 B-21 

 
respect thereof, arise by virtue of such Indemnitee’s performance of services for the Fund under this Agreement, provided that the
Indemnitee’s conduct shall not have constituted gross negligence, willful misconduct, bad faith, a willful violation of securities laws or a willful and material breach of this Agreement, and provided, further, that before seeking a
claim for indemnification under this Section 7.10, the Indemnitee filed a claim for recovery under any available insurance policy maintained by such Indemnitee. 
 (b)  To the fullest extent permitted by law, reasonable out-of-pocket expenses (including reasonable attorneys’ fees and
expenses) incurred in defending any action, suit or proceeding subject to indemnification under Section 7.10(a) shall be paid by the Fund as incurred, provided, in each case, the Indemnitee undertakes in writing to repay such
amounts if it is ultimately determined that the Indemnitee is not entitled to indemnification with respect thereto and provides reasonable evidence of such Indemnitee’s ability to repay such amounts, provided further, however,
that the obligations of the Fund under this Section 7.10(b) shall not apply with respect to actions brought against any Indemnitee in the name and on behalf of the Fund. 
 (c)  The indemnification provided by this Section 7.10 shall be in addition to any other rights to which an
Indemnitee may be entitled under any agreement of the Members as a matter of law or otherwise, regardless of the capacity in which Indemnitee is entitled to, or the legal basis of, such other rights. Such indemnification shall continue as to an
Indemnitee who has ceased to serve in any such capacity and shall inure to the benefit of the heirs, successors, permitted assigns, administrators and personal representatives of such Indemnitee. 
 (d)  The Fund may purchase and maintain insurance on behalf of any one or more Indemnitees, and such other Persons as the
Manager shall deem appropriate, against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with the activities of the Fund, whether or not the Fund would have the power to indemnify such Person
against such liability hereunder. 
 (e)  The indemnification obligations created by this Section 7.10
are obligations of the Fund, and no Member (in its capacity as a Member) shall have any obligation to indemnify any Indemnitee by reason of this Section 7.10. 
 (f)  An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.10 because such Indemnitee had an interest in the transaction with respect to
which indemnification applies if the transaction was otherwise permitted (or not prohibited) by the terms hereof. 
 (g)  The provisions of this Section 7.10 are for the benefit of the Indemnitees and their heirs, successors, permitted assigns, administrators and personal representatives only and shall not be deemed to create any
rights for the benefit of any other Person. 
 (h)  The Manager shall use its commercially reasonable efforts on
behalf of the Fund to enforce any indemnity or insurance available from any entity in which it has invested, to the extent applicable, and to assert any rights under any insurance maintained by or on behalf of the Fund, to the extent coverage is
available with respect to an indemnification claim asserted by an Indemnitee. 
 ARTICLE 8. 
 RIGHTS AND OBLIGATIONS OF MEMBERS 
 8.1.    Limitation of Liability.    No Member shall have any liability for debts (including any Fund Debt), obligations or liabilities of the Fund, whether arising in contract, tort or
otherwise, except as expressly provided herein or by the Act. 
 8.2.    Management of
Business.    Except for the exercise of rights and powers specifically set forth in this Agreement, no Investor Member (other than, if applicable because they also own Shares, the Manager or its directors, officers, employees
or agents, but not in such capacity as the owner of Shares) shall take part in the operation, management or control of the business or operations of the Fund, shall vote on any matter, shall transact any business in the name of the Fund or shall
have the power to sign documents for or otherwise bind the Fund. 
  

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 8.3.    Meetings.    No annual meetings of
the Members will be held by the Fund. However, the Manager is required to call a meeting of the Members upon the written request of Investor Members holding at least twenty-five percent (25%) of the outstanding Shares, or otherwise at the
request of the Sponsoring Member. In such event, a detailed statement of any action proposed to be taken, and the wording of any resolution proposed for adoption, is required to be included with the notice of the meeting. 
 8.4.    Return of Capital.    No Member shall be entitled to the
withdrawal or return of its Capital Contributions, except to the extent, if any, that distributions made pursuant to this Agreement or upon dissolution of the Fund may be considered as such by law, and then only to the extent provided for herein.
Prior to the dissolution and winding up of the Fund pursuant to Article 12, the Members’ rights to receive distributions from the Fund shall be limited to the rights set forth in Article 6. 
 8.5.    Liquidation Vote.    At any time commencing eight (8) years after the Initial
Closing Date, Members holding at least twenty-five percent (25%) of the outstanding Shares may direct in writing that the Fund solicit the vote of the Members through a formal proxy solicitation process to determine whether the Fund Assets
should be liquidated. In such event, the Fund shall send a proxy to each Member to vote on the proposed liquidation. If Members owning greater than fifty percent (50%) of the outstanding Shares vote in favor of a liquidation of the Fund, the
Manager shall cause the Fund to fully liquidate the Fund Assets within twenty-four (24) months after such vote of the Members. 
 8.6.    Merger or Consolidation. 
 (a)  Notwithstanding
Section 14-11-308(b)(2) of the Act, only the approval of Members holding greater than fifty percent (50%) of the outstanding Shares shall be required to approve the merger of the Fund pursuant to Section 14-11-903 of the Act.

 (b)  Upon the consummation of a merger or consolidation of the Fund approval pursuant to
Section 8.6(a), any Member who did not affirmatively vote for a proposed merger or consolidation of the Fund shall have the option of: (i) accepting the securities offered in the proposed merger or consolidation; or
(ii) one of the following: (A) remaining as a Member and preserving its interest in the Fund; or (B) receiving cash in an amount equal to such Member’s pro-rata share of the appraised value of the net assets of the Fund.

 8.7.    Resignation by Investor Members; Resignation or Transfer by Sponsoring Member.

 (a)  Except as otherwise provided in Section 11.4, no Investor Member shall resign from the Fund
prior to the dissolution and winding up of the Fund pursuant to Article 12 without the prior consent of all of the other Members. Upon any resignation of a Member with the consent of all the Members as permitted pursuant to this
Section 8.7, such resigning Member shall be entitled to receive only the fair market value of its Shares as of the date of such resignation, as determined pursuant to Section 5.7, such fair market value to be paid to such
resigning Member by the Fund within a reasonable time after such resignation; provided, however, that (i) any such payment may be delayed, in the sole discretion of the Manager, if and to the extent the Manager shall determine that is not in
the best interest of the Fund to make such payment and (ii) in such event, the resigning Member shall continue to be entitled to receive allocations pursuant to Article 5 and distributions pursuant to Article 6 and Article 12
with respect to such resigning Member’s Shares, in each case subject to Section 11.4, as if a Member and on the same basis as the Members, but shall have no right to any information or, to the fullest extent permitted by
applicable law, accounting of the affairs of the Fund, shall not be entitled to inspect the books or records of the Fund, and shall not have any other rights of a member under the Act or a Member under this Agreement. 
 (b)  Unless approved by Investor Members owning more than fifty percent (50%) of the outstanding Shares, the Sponsoring
Member shall not have the right to: 
 (i)  designate a successor or additional Sponsoring Member;

 (ii)  resign or voluntarily withdraw as a Member of the Fund; or 
 (iii)  transfer or assign a majority of its interest in rights to receive payments pursuant to
Section 6.2(d). 
  

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 8.8.    Removal of Manager. 
 (a)  Investor Members holding greater than two-thirds ( 2/3) of the outstanding Shares may elect to remove the Manager (the “Removed Manager”).
Upon the removal of the Manager in accordance with Section 8.8(a), the management of the Fund will revert back to the Sponsoring Member until such time as the Investor Members instruct the Sponsoring Member to appoint a new Manager in
accordance with Section 8.8(b) below. 
 (b)  Within 90 days of the removal of the Manager in accordance with Section 8.8(a), the Investor Members shall, by a vote of Investor Members owning greater than two-thirds (2/3) of the outstanding Shares, instruct the Sponsoring Member to appoint a new Manager. The Manager shall take all actions necessary to appoint such Person as Manager within
thirty (30) days. In the event that the Investor Members do not elect a new Manager pursuant to this Section 8.8(b), the Sponsoring Member shall have the right, in its sole discretion to appoint a new Manager, provided that the
Sponsoring Member may not appoint the Removed Manager or any Affiliate of the Removed Manager as the Manager of the Fund. 
 8.9.    Other Business Ventures.    Subject to Section 7.2(c), any Member, any Affiliate of a Member, and any officer, director, employee, shareholder or other Person holding a
legal or beneficial interest in any entity that is a Member or Affiliate of a Member, may engage in, or possess an interest in, other business ventures of every nature and description, independently or with others, whether or not such other
enterprises shall be in competition with or operating the same or similar businesses or in the same geographic locale as the Fund. 
 8.10.    Transactions Between a Member and the Fund. 
 (a)  Except as
otherwise provided herein or by applicable law, at the request of the Fund, a Member or an Affiliate of such Member may lend money to the Fund on a recourse basis, provided that, unless waived by the Manager, such Member delivers to
the Manager an opinion of counsel that, for federal income tax purposes, such indebtedness will be characterized as such and not as equity and will not cause any other indebtedness of the Fund to be characterized as equity. Any Member who lends
money to the Fund hereunder shall be deemed a general creditor of the Fund and not a Member for the purpose of paying interest and principal on any such loan, and such loans from a Member to the Fund shall not be considered Capital Contributions.

 (b)  Except as otherwise provided herein or by applicable law, any Member may, but shall not be obligated to,
act as surety for the Fund and transact other business with the Fund and shall have the same rights and obligations when transacting business with the Fund as a Person who is not a Member. A Member, any Affiliate thereof or an employee, stockholder,
agent, director or officer of a Member or any Affiliate thereof, may be retained as an agent of the Fund. 
 8.11.    Other Instruments.    Each Member hereby agrees to execute and deliver to the Fund, within ten (10) Business Days after receipt of a written request therefor, such statements of
interest and holdings in the Fund, designations and acknowledgments, and powers of attorney consistent with this Agreement, as the Manager deems reasonably necessary and appropriate to comply with any agreements, laws, rules or regulations as may be
necessary to enable the Fund to effect any transaction permitted under this Agreement, it being understood that, without limitation of any other provision of this Agreement, this Section 8.8 shall not be construed to require any Member to
deliver financial disclosures about itself other than statements of, or directly relating to, its Capital Contributions and Shares in the Fund. 
 ARTICLE 9. 
 ACCOUNTING, BOOKS AND RECORDS 
 9.1.    Accounting, Books and Records. 
 (a)  The Manager shall maintain at its principal place of business, all books of account and other Fund records required to be maintained under the Act or other applicable laws. The Manager shall allow all books of account and
other Fund records to be inspected by any Member or its duly-appointed agents during regular 

  

 B-24 

 
business hours and on reasonable advance notice for any purpose reasonably related to such Member’s interest in the Fund. The copying by a Member, or
its designated agent, of all or any part of such records for any purpose reasonably related to such Member’s interest in the Fund, at the personal expense of that Member, is specifically authorized. The rights granted to a Member pursuant to
this Section 9.1 are expressly subject to any safety, security and confidentiality procedures and guidelines of the Fund (including any confidentiality obligations to which the Fund, the Manager or any of their respective Affiliates may
be subject), as such procedures and guidelines may be established by the Manager from time to time. 
 (b)  The
Fund shall use the accrual method of accounting in preparation of its financial reports and for tax purposes and shall keep its books and records accordingly. However, the Manager shall be empowered to make any changes of accounting method permitted
under the Code that it shall deem advisable. 
 9.2.    Reports. 
 (a)  The Manager shall be responsible for causing the preparation of financial reports of the Fund and the coordination of
financial matters of the Fund with the Fund’s accountants. 
 (b)  The Manager shall cause a certified public
accounting firm of recognized regional or national standing, selected by the Manager, to take and conduct such general accounting and audit of the affairs of the Fund as to enable such accountant (s) to issue a report on the financial
statements of the Fund for each Fiscal Year. The Manager shall also cause the Fund’s income tax returns to be timely prepared and filed. The Manager shall deliver Schedule K-1s and copies of such financial statements to Members as soon as they
are completed after the end of each Fiscal Year. If the Manager anticipates that such Schedule K- 1s and copies of the annual financial statements of the Fund will not be delivered within ninety (90) days after the end of any Fiscal Year, the
Manager shall give Members prompt notice of such fact. Such financial statements shall be accompanied by a certification by the Manager as to the Fund’s status as an “operating company” within the meaning of the Plan Asset Regulation
as of the end of the most recent annual valuation period. 
 9.3.    Tax Matters. 
 (a)  Tax Elections.    The Sponsoring Member is hereby designated and authorized to act as the
“Tax Matters Partner” under the Code and in any similar capacity under state or local law. Pursuant to such instructions, the Tax Matters Partner shall make or refrain from making any and all elections for
federal, state, local, and foreign tax purposes, including any election, if permitted by applicable law: (i) to adjust the basis of Fund Assets pursuant to Code Sections 754, 734(b) and 743(b), or comparable provisions of state, local or
foreign law, in connection with Transfers of Shares and Fund distributions, (ii) to extend the statute of limitations for assessment of tax deficiencies against the Members with respect to adjustments to the Fund’s federal, state, local or
foreign tax returns, and (iii) to the extent provided in Code Sections 6221 through 6231 and similar provisions of federal, state, local, or foreign law, to represent the Fund and the Members before taxing authorities or courts of competent
jurisdiction in tax matters affecting the Fund or the Members in their capacities as Members, and to file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other
documents that bind the Members with respect to such tax matters or otherwise affect the rights of the Fund and the Members. 
 (b)  Tax Information.    The Sponsoring Member shall promptly provide to the Manager copies of all notices or other communications received by such Person from the Internal Revenue Service or any state,
local or foreign taxing authority in its capacity as Tax Matters Partner. Necessary tax information shall be delivered to each Member as soon as practicable after the end of each Fiscal Year of the Fund. 
 (c)  Tax Classification.    The Members hereby agree that the Fund shall be treated as a partnership
for tax purposes under United States federal, state and local income tax laws, and further agree not to take any position or any action or to make any election, in a tax return or otherwise, inconsistent herewith. 
  

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 ARTICLE 10. 
 AMENDMENTS 
 10.1.    Amendments. 
 (a)  The Manager, without the consent of any Member, may amend any provision of this Agreement, and may execute, swear to,
acknowledge, deliver, file and record such documents as may be required in connection therewith, to reflect: (i) a change in the name of the Fund or the location of the principal place of business or registered office or agent of the Fund, or
(ii) the admission, substitution, resignation, withdrawal or removal of any Member in accordance with this Agreement. 
 (b)  Any amendment to this Agreement, other than those described in Section 10.1(a), may be proposed by the Manager, the Sponsoring Member or any Member or Members holding at least twenty-five percent (25%) of the
outstanding Shares. Following such proposal, the Fund shall submit to the Members a verbatim statement of any proposed amendment, provided that counsel for the Fund shall have approved of the same in writing as to form, and the Fund shall
include in any such submission a recommendation as to the proposed amendment. The Fund shall seek the written consent of the Members to the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may
deem appropriate. A proposed amendment shall be adopted and be effective as an amendment hereto and binding on all of the Members if it receives the affirmative vote or written consent of Members holding at least fifty percent (50%) of the
outstanding Shares, unless a greater percentage is required by this Agreement. 
 (c)  Notwithstanding Sections
10.1 (a) and 10.1(b), (i) no provision of this Agreement that establishes a percentage of Members required to take any action shall be amended, altered, changed, repealed or rescinded in any respect that would reduce such
percentage, unless such amendment is approved by written consent or the affirmative vote of the Manager and Members holding Percentage Interests equal to or greater than the percentage sought to be reduced. 
 (d)  In addition to any other approval required by this Section 10.1, this Agreement shall not be amended in any
manner that would expressly, materially and adversely affect the limited liability or other rights or obligations hereunder of any Member, without the affirmative vote of all Members. 
 10.2.    Power of Attorney.    Each Member hereby makes, constitutes, and appoints the
Manager, with full power of substitution and resubstitution, its true and lawful attorney-in-fact, for it and in its name, place, and stead and for its use and benefit, to sign, execute, certify, acknowledge, swear to, deliver, file, publish and
record: (i) any and all amendments, restatements or changes to this Agreement as now or hereafter amended, which the Manager may deem necessary to effect a change or modification of the Fund in accordance with the terms of this Agreement,
including amendments, restatements or changes to reflect any amendments adopted by the Investor Members pursuant to the terms of this Agreement. 
 ARTICLE 11. 
 TRANSFERS 
 11.1.    Conditions of Transfer.    No Transfer of all or any portion of any Shares, or assignment of any rights or delegation of any obligations under this Agreement or
any Subscription Agreement (collectively, “Rights”), shall be permitted unless all of the following conditions are met: 
 (a)  Such Transfer is registered under the Securities Act and the applicable securities law of any state or other jurisdiction, or an exemption from registration thereunder is available; 
 (b)  The proposed transferee of such Shares qualifies as an “accredited investor” as defined in the
Securities Act; 
 (c)  Immediately after such Transfer, both the transferor and the transferee
shall own at least fifty (50) Shares, unless (i) such Transfer is made by a Member that is a Benefit Plan Investor, (ii) such Transfer is by gift, inheritance or divorce, (iii) the transferee is an Affiliate of the transferor, or
(iv) the Transfer involves all the Shares owned by the transferor; 
  

 B-26 

 (d)  The transferor or the transferee shall pay or reimburse
the Fund for all costs incurred by the Fund to effect such Transfer; 
 (e)  The Transfer shall be
effected pursuant to documentation satisfactory to the Manager including, without limitation, confirmation by the transferee that the transferee has been informed of all pertinent facts relating to the liquidity and marketability of the Shares;

 (f)  Such Transfer would not, in the opinion of counsel to the Fund, result in a termination of
the Fund as a partnership pursuant to Code section 708, or the Fund receives a ruling from the Internal Revenue Service that such Transfer would not cause a termination; and 
 (g)  The Fund shall receive an opinion of counsel in form and substance satisfactory to the Manager that such
Transfer would not cause the Fund to be treated as a “publicly traded partnership” within the meaning of Section 7704 of the Code and the regulations promulgated thereunder. 
 11.2.    Prohibited Transfers. 
 (a)  In the case of a Transfer or Pledge (or attempt to do any of the same) of Shares or Rights not in compliance with Section 11.1 hereof, the parties engaging or
attempting to engage in such Transfer or Pledge shall indemnify and hold harmless the Fund and the other Members from all cost, liability and damage that any of the Fund or such Members may incur (including incremental tax liabilities,
attorneys’ fees and expenses) as a result of such Transfer or Pledge (or attempt), and any efforts to enforce the indemnity granted hereby. 
 (b)  Any purported Transfer or Pledge of Shares or Rights not in compliance with Section 11.1 hereof shall be null and void and of no force or effect whatsoever; provided that, if
notwithstanding the terms of this Agreement, the Fund is required by a court of competent jurisdiction to recognize any such Transfer or Pledge (or if the Manager, in its sole discretion, elects to recognize any such Transfer or Pledge), the Shares
or Rights so transferred or pledged shall be governed by Section 11.3 hereof, and any allocations and distributions with respect thereto may be applied (without limiting any other legal or equitable rights of the Fund) to satisfy any
debts, obligations or liabilities for damages that the transferor or transferee of such Shares or Rights may have to the Fund. 
 11.3.    Rights of Unadmitted Assignees.    A Person who acquires Shares but who is not admitted as a Substituted Member pursuant to Section 11.4 (a “Non-Member
Transferee”) shall not be a Member but shall be entitled only to allocations pursuant to Article 5 and distributions pursuant to Article 6 and Article 12 with respect to such Shares, in each case subject to
Section 11.6, as if a Member and on the same basis as the Members. Any such Non-Member Transferee shall have no right to any information or, to the fullest extent permitted by applicable law, accounting of the affairs of the Fund, shall
not be entitled to inspect the books or records of the Fund, and shall not have any other rights of a member under the Act or a Member under this Agreement. 
 11.4.    Admission of Substituted Members.    Subject to the other provisions of this Article 11, a transferee of Shares or Rights shall be
admitted to the Fund as a Substituted Member upon satisfaction of the following conditions of this Section 11.4: 
 (a)  The Shares or Rights with respect to which the transferee is being admitted shall be acquired by means of a Transfer that meets the requirements of Section 11.1; 
 (b)  The transferee of Shares or Rights shall, by written instrument in form and substance reasonably satisfactory to the
Manager (and, in the case of clause (ii) below, the transferor Member), (i) accept and adopt the terms and provisions of this Agreement, including this Section 11, and (ii) assume the obligations of the transferor Member
under this Agreement with respect to the transferred Shares and associated Rights. The transferor Member shall be released from all such assumed obligations except (iii) those obligations or liabilities of the transferor Member arising out of a
breach of this Agreement, (iv) those obligations or 

  

 B-27 

 
liabilities of the transferor Member based on events occurring, arising or maturing prior to the Transfer, and (v) in the case of a Transfer to any of
its Affiliates, any Capital Contribution or other financing obligation of the transferor Member under this Agreement; 
 (c)    The transferee pays or reimburses the Fund for all costs incurred by the Fund in connection with the transferee becoming a Substituted Member; and 
 (d)  The transferee shall deliver to the Fund evidence of the authority of such Person to become a Member and to be bound by
all of the terms and conditions of this Agreement, and the transferee and transferor shall each execute and deliver such other instruments as the Manager reasonably deems necessary or appropriate to effect, and as a condition to, such Transfer,
including amendments to the Articles, or any other instrument filed with the State of Georgia or any other state or governmental authority. 
 11.5.    Representations Regarding Transfers; Legend. 
 (a)  Each Member hereby covenants and agrees with the Fund for the benefit of the Fund and all other Members, that (i) it is not currently making a market in Shares and will not in the future make a market in Shares,
(ii) it will not Transfer its Shares on an established securities market, a secondary market (or the substantial equivalent thereof) within the meaning of Code Section 7704(b) (and any Regulations, proposed Regulations, revenue rulings, or
other official pronouncements of the Internal Revenue Service or Treasury Department that may be promulgated or published thereunder), and (iii) in the event such Regulations, revenue rulings or other pronouncements treat any or all
arrangements that facilitate the selling of Fund interests and that are commonly referred to as “matching services” as being a secondary market or substantial equivalent thereof, it will not Transfer any Shares through a matching service
that is not approved in advance by the Fund. Each Member further agrees that it will not Transfer any Shares or Rights to any Person unless such Person agrees to be bound by this Section 11.5(a) and that it will Transfer Shares or Rights
only to Persons who agree to be similarly bound. 
 (b)  Each Member hereby represents and warrants to the Fund and
all other Members that such Member’s acquisition of Shares hereunder is made as principal for such Member’s own account and not for resale or distribution of such Shares. Each Member further hereby agrees that the following (or a
substantially similar) legend, appropriately completed as to date, may be placed upon any counterpart of this Agreement, the Articles, or any other document or instrument evidencing ownership of Shares: 
 THE SHARES REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED UNDER ANY FEDERAL OR STATE SECURITIES LAWS AND THE
TRANSFERABILITY OF SUCH SHARES IS RESTRICTED BY SUCH LAWS. SUCH SHARES MAY NOT BE SOLD, ASSIGNED, OR TRANSFERRED, NOR WILL ANY ASSIGNEE, VENDEE, TRANSFEREE, OR ENDORSEE THEREOF BE RECOGNIZED AS HAVING ACQUIRED ANY SUCH SHARES BY THE ISSUER FOR ANY
PURPOSES, UNLESS (1) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO SUCH SHARES SHALL THEN BE IN EFFECT AND SUCH TRANSFER HAS BEEN QUALIFIED UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (2) THE
AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION SHALL BE ESTABLISHED TO THE SATISFACTION OF COUNSEL TO THE FUND. 
 THE SHARES REPRESENTED BY THIS DOCUMENT ARE SUBJECT TO FURTHER RESTRICTION AS TO THEIR RIGHTS AND POWERS, SALE, TRANSFER, HYPOTHECATION, OR ASSIGNMENT AS SET FORTH IN THAT CERTAIN LIMITED LIABILITY COMPANY
AGREEMENT, AS HERETOFORE AMENDED, RESTATED OR SUPPLEMENTED, AMONG THE MEMBERS OF WELLS MID-HORIZON VALUE-ADDED FUND I, LLC. 
 11.6.    Distributions and Allocations in Respect to Transferred Shares.    If any Shares are transferred during any Allocation Period in compliance with the provisions of this
Section 11, Profits, Losses, each item thereof, and all other items attributable to such transferred Shares for such Allocation Period shall be divided and allocated between the transferor and the transferee by taking into account their
varying relative holdings of Shares during the Fiscal Year in accordance with Code Section 706(d), using any conventions permitted by 

  

 B-28 

 
law and selected by the Manager. All distributions on or before the date of such Transfer shall be made to the transferor, and all distributions thereafter
shall be made to the transferee. Solely for purposes of making such allocations and distributions, the Fund shall recognize such Transfer not later than the first day of the calendar quarter following the calendar quarter during which notice that
such Transfer has occurred is received by the Manager. 
 ARTICLE 12. 
 DISSOLUTION AND WINDING UP 
 12.1.    Dissolution Events. 
 (a)  The Fund shall dissolve and shall commence
winding up and liquidating upon the first to occur of any of the following (each a “Dissolution Event”): 
 (i)  the expiration of the term of the Fund as provided in Section 2.4; 
 (ii)  the affirmative vote of two-thirds (2/3) of the Board of Directors of the Manager; 
 (iii)  the affirmative vote or written consent of Members holding greater than fifty percent (50%) of the Shares to dissolve and wind up the Fund; 
 (iv)  the removal of the last remaining Manager without the appointment of a substitute unless, within one
hundred twenty (120) days from such removal, the Members owning more than fifty percent (50%) of the Shares elect to continue the Fund; 
 (v)  the final disposition by the Fund of all of the Fund Assets; 
 (vi)  the entry of a decree of judicial dissolution under Section 14-11-603 of the Act; or 
 (vii)  at the election of the Manager, if either (a) the Fund Assets are determined to constitute Plan Assets or (b) any transactions contemplated in this Agreement constitute “prohibited
transactions” as defined in ERISA; 
 (b)  The Members hereby agree that, notwithstanding any provision of the
Act, the Fund shall not dissolve prior to the occurrence of a Dissolution Event. The death, incapacity, retirement, resignation, expulsion, adjudication of bankruptcy or dissolution of any Member or the occurrence of any other event that terminates
the continued membership of a Member in the Fund shall not, in and of itself, cause the dissolution of the Fund; in such event, the business of the Fund shall be continued by the remaining Members. 
 12.2.    Winding Up. 
 (a)  Upon the occurrence of a Dissolution Event, the Fund shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying
the claims of its creditors and the Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Fund’s business and affairs, provided that all covenants contained
in this Agreement and obligations provided for in this Agreement shall continue to be fully binding upon the Members until such time as all assets of the Fund have been distributed pursuant to this Section 12.2 and the Certificate of
Termination has been filed pursuant to the Act. The Manager shall appoint a Liquidator to oversee the winding up of the Fund; provided, however, that if the Fund has dissolved pursuant to Section 12.1(a) (iv), Members owning at
least ninety percent (90%) of the Shares shall be entitled to designate the Liquidator, and further provided, that if such Members fail to designate a Liquidator within ten (10) days after the occurrence of such Dissolution Event,
then any Member may petition a court of competent jurisdiction in Georgia to appoint a Liquidator. 
  

 B-29 

 (b)  The Liquidator shall take full account of the Fund’s liabilities and
assets and shall cause the assets or the proceeds from the sale thereof (as determined pursuant to Section 12.7), to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the
following order: 
 (i)  first, to creditors (including the Members and the Manager who are
creditors, to the extent permitted by law) in satisfaction of all of the Fund’s Debts and other liabilities (whether by payment or the making of reasonable provision for payment thereof); and 
 (ii)  second, the balance, if any, 100% to the Investor Members, as a “guaranteed payment,” in
proportion to their respective Offering Period Cumulative Return Balances until each Investor Member’s Offering Period Cumulative Return Balance has been reduced to zero ($0); 
 (iii)  third, the balance, if any, 100% to the Investor Members, as a “guaranteed payment,” in
proportion to their respective Percentage Interests until each Investor Member’s Post-Offering Period Cumulative Return Balance has been reduced to zero ($0); 
 (iv)  fourth, the balance, if any, 100% to the Sponsoring Member, as a “guaranteed payment” until the
Sponsoring Member’s Cumulative Return Balance has been reduced to zero ($0); 
 (v)  fifth,
the balance, if any, to the Investor Members in proportion to their respective Percentage Interests, until each Investor Member’s Par Value Balance has been reduced to zero ($0); but in no event shall such amount to any Investor Member exceed
the positive balance of the Investor Member’s Capital Account, after giving effect to all contributions, distributions and allocations for all periods; 
 (vi)  sixth, the balance, if any, to the Sponsoring Member until the Sponsoring Member’s unreturned Capital Contribution has been reduced to zero ($0); but in no event shall such
amount to the Sponsoring Member exceed the positive balance in the Sponsoring Member’s Capital Account, after giving effect to all contributions, distributions and allocations for all periods; 
 (vii)  seventh, to the Sponsoring Member, as a “guaranteed payment,” with respect to services
provided by the Sponsoring Member equal to the excess of (A) 20% of the balance, if any, minus (B) any payments of Disposition Fees previously made to the Sponsoring Member and not previously taken into account; and 
 (viii)  Thereafter, the balance, if any, to the Investor Members in proportion to the positive balances in
their Capital Accounts, after giving effect to all contributions, distributions and allocations for all periods. 
 (c)  In the discretion of the Liquidator, a pro-rata portion of the distributions that would otherwise be made to the Members pursuant to this Article 12 may be: 
 (i)  distributed to a trust established for the benefit of the Members for the purposes of liquidating Fund
assets, collecting amounts owed to the Fund, and paying any liabilities or obligations of the Fund, in which case the assets of any such trust shall be distributed to the Members from time-to-time, in the reasonable discretion of the Liquidator, in
the same proportions as the amount distributed to such trust by the Fund would otherwise have been distributed to the Members pursuant to subsections (a) and (b) of this Section 12.2; or 
 (ii)  withheld to provide a reasonable reserve for Fund liabilities (contingent or otherwise) and to reflect
the unrealized portion of any installment obligations owed to the Fund, provided that such withheld amounts shall be distributed to the Members as soon as practicable. 
 (d)  The Fund is authorized to pay a reasonable fee to the Liquidator for its services performed pursuant to this Article 12 and to reimburse the Liquidator for its reasonable
costs and expenses incurred in performing those services, provided that if the Manager is designated as the Liquidator, it shall be entitled to receive fees and expenses determined solely in accordance with this Agreement. 
 12.3.    Compliance With Certain Requirements of Regulations; Deficit Capital
Accounts.    If the Fund is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions that would 

  

 B-30 

 
otherwise be made to the Members pursuant to this Article 12 shall be made to the Members who have positive Capital Accounts in compliance with
Regulations Section 1.704-1(b) (2) (ii) (b) (2). If any Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all Allocation Periods, including the
Allocation Period during which such liquidation occurs), such Member shall have no obligation to make any contribution to the capital of the Fund with respect to such deficit, and such deficit shall not be considered a debt owed to the Fund or to
any other Person for any purpose whatsoever. 
 12.4.    Rights of
Members.    Except as otherwise provided in this Agreement, upon liquidation of the Fund, each Member (and any other Person having acquired an interest in any Shares) shall look solely to the assets of the Fund for the return
of its Capital Contributions and shall have no right or power to demand or receive Fund Assets other than cash from the Fund. (The foregoing sentence shall not restrict the Liquidator’s right, in its discretion, to distribute assets in-kind
upon liquidation of the Fund pursuant to Section 12.7.) If the assets of the Fund remaining after payment, provision or discharge of the Debts or liabilities of the Fund are insufficient to return such Capital Contributions, no Member
(or any other Person having acquired an interest in any Shares) shall have any recourse against the Fund, any other Member or the Manager. 
 12.5.    Notice of Dissolution/Termination. 
 (a)  If a
Dissolution Event occurs or an event occurs that would, but for the provisions of Section 12.1, result in a dissolution of the Fund, the Manager shall, within thirty (30) days thereafter, provide written notice thereof to all
Members and to all other parties with whom the Fund regularly conducts business (as determined at the discretion of the Manager) and shall publish notice thereof in a newspaper of general circulation in each place in which the Fund regularly
conducts business (as determined at the discretion of the Manager). 
 (b)  Upon completion of the distribution of
the Fund’s assets as provided in this Article 12, the Fund shall be terminated, and the Liquidator shall cause the filing of the Certificate of Termination pursuant to Section 14-11-610 of the Act and shall take all such other
actions as may be necessary to terminate the Fund. 
 12.6.    Allocations During Period of
Liquidation.    During the period commencing on the first day of the Fiscal Year during which a Dissolution Event occurs and ending on the date on which all of the assets of the Fund have been distributed to the Members
pursuant to Section 12.2 (the “Liquidation Period”), the Members shall continue to share Profits, Losses, gain, loss and other items of Fund income, gain, loss or deduction in the
manner provided in Article 5. 
 12.7.    Form of Liquidating
Distributions.    For purposes of making distributions required by Section 12.2 and subject to the priorities set forth therein and subject to Section 6.7 (which shall apply to the Liquidator to the
same extent it would have applied to the Manager), the Liquidator may determine whether to distribute all or any portion of the Fund Assets in-kind or to sell all or any portion of the Fund Assets and distribute the proceeds therefrom. 

ARTICLE 13. 
 MISCELLANEOUS 
 13.1.    Notices.    Any notice, payment, demand or communication required or permitted to
be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered, given and received for all purposes (a) when delivered to the Person or to an officer of the Person to whom the same is directed or
(b) (i) three (3) Business Days after the same is sent, if sent either by registered or certified mail or overnight courier, postage and charges prepaid, (ii) one (1) Business Day after the same is sent, if sent by fax and
if such fax is followed by a hard copy of the fax communication sent promptly thereafter by registered or certified mail or overnight courier, postage and charges prepaid, or (iii) if the Member sets forth an email address in such Member’s
Subscription Agreement and consents to the receipt of electronic transmissions by so indicating in such Subscription Agreement, one (1) Business Day after the same is sent by electronic transmission, in any case addressed as follows, or to such
other address as such Person may from time-to-time specify by notice to the other Members and the Manager on behalf of the Fund: 
 (A)  If to the Fund, to the principal place of business address determined pursuant to Section 2.3, to the attention of the President, with a copy to Wells Management Company, 6200 The Corners
Parkway, Norcross, Georgia, 30092-3365, to the attention of the General Counsel; 
  

 B-31 

 (B)  If to the Manager, to the address or telecopier number set
forth in Exhibit A hereto, with a copy to Wells Management Company, 6200 The Corners Parkway, Norcross, Georgia 30092-3365, to the attention of the General Counsel; and 
 (C)  If to a Member, to the address, telecopier number or e-mail address (if an e-mail address is set forth in
such Member’s Subscription Agreement and such Member has consented to the receipt of electronic transmissions) set forth in such Member’s Subscription Agreement or to any other address designated by such Member in writing to the Manager.

 13.2.    Integration.    This Agreement sets forth the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings, oral or written, relating thereto, provided that nothing herein shall be deemed to supersede any Subscription
Agreement between the Fund and any Member, and such Subscription Agreements shall survive the execution and delivery hereof and remain in full force and effect in accordance with their respective terms. No representation, promise, inducement or
statement of intention has been made by any of the parties hereto that is not embodied in this Agreement, and none of the parties hereto shall be bound by or liable for any alleged representation, promise, inducement or statement of intention not so
set forth. 
 13.3.    Binding Effect.    Except as otherwise provided in this
Agreement, every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, transferees and permitted assigns. 
 13.4.    Construction.    Every covenant, term and provision of this Agreement shall be
construed according to its fair meaning and not strictly for or against any Member. 
 13.5.    Creditors; No Third-Party Beneficiaries.    None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Fund. This Agreement is entered
into for the exclusive benefit of the parties hereto, and there shall be no other beneficiaries hereof, except as expressly provided herein. 
 13.6.    Waiver.    No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right
or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition. 
 13.7.    Time.    Time is of the essence of this Agreement. In computing any period of time pursuant to this Agreement, the day of the act, event or default from which
the designated period of time begins to run shall not be included, but the time shall begin to run on the next succeeding day. The last day of the period so computed shall be included, unless it is not a Business Day, in which event the period shall
run until the end of the next day which is a Business Day. 
 13.8.    Headings.    The table of contents and article, section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any provision hereof. 
 13.9.    Severability.    Except as otherwise provided in the next sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is
illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The preceding sentence shall not apply if the consequence of enforcing the remainder of this
Agreement without such illegal or invalid term or provision would be to cause any Member to lose the material benefit of its economic bargain. 
  

 B-32 

 13.10.    Acceptance of Prior Acts by New
Member.    Each Person hereafter admitted as a Member, by becoming a Member, ratifies, affirms, confirms and agrees to be bound by all actions duly taken by the Fund, pursuant to the terms of this Agreement, prior to the date
such Person became a Member. 
 13.11.    Governing Law; Choice of
Forum.    This Agreement and the rights and obligations of the parties hereunder shall be governed by and interpreted, construed and enforced in accordance with, the laws of the State of Georgia, without regard to the choice
of law principles thereof. Each Person who hereafter becomes a Member of the Fund or a transferee of any Shares or Rights agrees that any action or proceeding arising out of or related to this Agreement, the breach, validity or enforceability of any
provision hereof, or the rights or obligations of any Person hereunder, may be brought in the courts of the State of Georgia, or, if it has or can acquire subject-matter jurisdiction thereof, in the United States District Court for the Northern
District of Georgia, and each such Member or transferee irrevocably consents, to the fullest extent allowed by law, to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding, and waives any
objection to venue laid therein. Process in any action or proceeding referred to in this Section may be served on any Member or transferee anywhere in the world. 
 13.12.    Waiver of Jury Trial.    EACH MEMBER OR TRANSFEREE OF SHARES OR RIGHTS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL
RIGHTS TO TRIAL BY JURY AND ALL RIGHTS TO IMMUNITY BY SOVEREIGNTY OR OTHERWISE IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY SHARES OR RIGHTS. 
 13.13.    Counterpart Execution.    This Agreement may be executed in any number of
counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement. 
 13.14.    Specific Performance.    Each party agrees that the other parties would be irreparably damaged if any of the provisions of this Agreement
are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the Fund or any non-breaching party may
be entitled, at law or in equity, the Fund or such non-breaching party shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having jurisdiction. 
 [Signatures Begin on Following Page]

  

 B-33 

 IN WITNESS WHEREOF, the parties have executed and entered into this Agreement of
the Fund as of the day first above set forth. 
  

													
	“Sponsoring Member”
	
	WELLS MANAGEMENT COMPANY, INC.
		
	 By:
	 	 /s/    LEO F. WELLS,
III

		 	 Leo F. Wells, III

		 	 President
	 	
		
	 Address:
	 	 6200 The Corners Parkway

		 		 	 Norcross, GA 30092

		 		 	 Facsimile: 770-243-8198
	 	
	
	“Manager”
	
	WELLS INVESTMENT MANAGEMENT COMPANY, LLC, a Georgia Limited Liability Company
		
	 By:
	 	 /s/    KEVIN A.
HOOVER

		 	 Kevin A. Hoover

		 	 President
	 	
		
	 Address:
	 	 6200 The Corners Parkway

		 		 	 Norcross, GA 30092

		 		 	 Facsimile: 770-243-8198
	 	

 [Signatures of Additional Members Follow on Separate Signature Pages] 
  

 B-34 

 Exhibit A 
 MEMBERS 
  

					
	 Name/Address
	 	 Capital Contribution
	 	 Shares

			
	 Wells Management Company
6200 The Corners Parkway
Norcross, Georgia 30092-3365
	 	$1,000,000	 	Not Applicable

  

 B-35 

 WELLS MID-HORIZON
VALUE-ADDED FUND I, LLC 
 Amendment No. 1 
 to 
 Operating Agreement

 This Amendment No. 1 to the Operating Agreement dated as of September 1, 2005 (the “Agreement”) of
Wells Mid-Horizon Value-Added Fund I, LLC (the “Fund”) is entered into and shall be effective as of the 7th day of June, 2006, by and among Wells Management Company, a Georgia corporation (the “Sponsoring Member”), Wells
Investment Management Company, LLC, a Georgia limited liability company (the “Manager”), and the Manager for and on behalf of all Persons who may hereafter be admitted as Members of the Fund pursuant to provisions of the Act and the
Agreement. 
 1.        Capitalized terms used in this Amendment No. 1 and not
otherwise defined herein shall have the respective meanings ascribed to them in the Agreement, of which this Amendment No. 1 is hereby made an integral part. 
 2.        There is hereby added to the Agreement, in Section 1.1 thereof, for subsequent reference (and presentation in the event of a reproduction of
the Agreement as a unitary amended document) in the alphabetical order in which they would appear as parts of the other definitions included in Section 1.1, the following two defined terms: 
 “Initial Closing Date Member” means each Investor Member who is admitted as part of the Initial
Closing. 
 “Subscription Receipt/Payment Date” means the date during the Offering Period
on which a Person’s Subscription Agreement to purchase Shares, along with the related payment for the Shares, is received and determined to be in good order. 
 3.        The existing definition of “Offering Period Cumulative Return Balance” in Section 1.1 is hereby amended to added the following
parenthetical to clause (i) thereof after the phrase “the Member Closing Date” in the two locations that it appears in clause (i): 
 “(or, in the case of an Initial Closing Date Member, from the Subscription Receipt/Payment Date for such Investor Member)” 
 so that, as a result of such added parenthetical language, the definition as amended shall read as follows: 
 “Offering Period Cumulative Return Balance” with respect to any Investor Member, as of any time and from time to time, shall be a sum that represents a cumulative, compounded
return computed at a rate equal to 10% per annum which shall be computed as follows: 
 (i)    From the Member Closing Date (or, in the case of an Initial Closing Date Member, from the Subscription Receipt/Payment Date for such Investor Member) until the earlier of (a) the date of the Final Closing or
(b) a date on which 

 
the Fund makes an Offering Period Cumulative Return Distribution, the Offering Period Cumulative Return Balance shall be increased by an amount equal to a
return on such Investor Member’s Par Value Balance, calculated from the Member Closing Date (or, in the case of an Initial Closing Date Member, from the Subscription Receipt/Payment Date for such Investor Member) until the date for which the
determination is being made at an APY equal to the Periodic Rate. 
 (ii)    If the Fund
makes an Offering Period Cumulative Return Distribution or multiple Offering Period Cumulative Return Distributions prior to the date of the Final Closing, each Investor Member’s Offering Period Cumulative Return Balance shall be reduced by the
amount of such Offering Period Cumulative Return Distribution. The Investor Member’s Offering Period Cumulative Return Balance shall subsequently be increased by an amount equal to a return on the sum of the Investor Member’s Par Value
Balance plus the Offering Period Cumulative Return Balance as reduced pursuant to the preceding sentence, calculated from the date immediately after the Offering Period Cumulative Return Distribution is made through the earlier of (A) the date
of the Final Closing or (B) a date on which the Fund makes a subsequent Offering Period Cumulative Return Distribution at an APY equal to the Periodic Rate. 
 (iii)    From the date immediately after the Final Closing until a date on which the Fund makes an
Offering Period Cumulative Return Distribution, the Offering Period Cumulative Return Balance shall be increased by an amount equal to a return on such Investor Member’s Offering Period Cumulative Return Balance as of the date of the Final
Closing, calculated from the date of the Final Closing until the date for which the determination is being made at an APY equal to the Periodic Rate. 
 (iv)    After the date of the Final Closing, if the Fund makes an Offering Period Cumulative Return Distribution or multiple Offering Period Cumulative Return Distributions,
each Investor Member’s Offering Period Cumulative Return Balance shall be reduced by the amount of such Offering Period Cumulative Return Distribution. The Investor Member’s Offering Period Cumulative Return Balance shall subsequently be
increased by an amount equal to a return on the Investor Member’s Offering Period Cumulative Return Balance as reduced pursuant to the preceding sentence, calculated from the date immediately after the Offering Period Cumulative Return
Distribution is made until a date on which the Fund makes a subsequent Offering Period Cumulative Return Distribution, at an APY equal to the Periodic Rate. 
  

 2 

 4.        To the extent applicable, these
amendments shall be given effect and shall operate from the original effective date of the Agreement. 
 5.
        All other terms and provisions of the Agreement are unchanged and remain in full force and effect. 
 6.        The validity and effect of this Amendment No. 1 to the Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of
Georgia, without regard to the choice of law principles thereof. 
 IN WITNESS WHEREOF, the parties have executed and entered
into this Amendment No. I to the Agreement of the Fund as of the date set forth above in the preamble. 
  

			
	“Sponsoring Member”
	
	 WELLS MANAGEMENT COMPANY, INC.

		
	 By:
	 	 

		 	 Leo F. Wells, III

		 	 President

	
	“Manager”
	
	 WELLS INVESTMENT MANAGEMENT COMPANY, LLC*

		
	 By:
	 	 

		 	 Kevin A. Hoover

		 	 President

  
  
  

	*	 For itself as Manager and also for and on behalf all Persons who may hereafter be admitted as Members of the Fund. 

  

 3

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