Document:

Administration Agreement among CarMax Business Services

 Exhibit 10.3 
 EXECUTION COPY 
 CARMAX AUTO OWNER TRUST 2012-3, 

as Issuer, 

CARMAX BUSINESS SERVICES, LLC, 
 as Administrator, 
 and 

WELLS FARGO BANK, NATIONAL ASSOCIATION, 
 as Indenture Trustee 
  

 
 ADMINISTRATION
AGREEMENT 
 Dated as of October 1, 2012 

 
  

 ADMINISTRATION AGREEMENT, dated as of October 1, 2012 (as amended, supplemented or
otherwise modified and in effect from time to time, this “Agreement”), by and among CARMAX AUTO OWNER TRUST 2012-3, a Delaware statutory trust (the “Issuer”), CARMAX BUSINESS SERVICES, LLC, a Delaware limited
liability company, as administrator (in such capacity, the “Administrator”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as indenture trustee (in such
capacity, the “Indenture Trustee”). 
 WHEREAS, the Issuer is issuing 0.23000% Class A-1 Asset-Backed
Notes, 0.43% Class A-2 Asset-Backed Notes, 0.52% Class A-3 Asset-Backed Notes, 0.79% Class A-4 Asset-Backed Notes, 1.10% Class B Asset-Backed Notes, 1.50% Class C Asset-Backed Notes and 2.29% Class D Asset-Backed Notes (collectively,
the “Notes”) pursuant to the Indenture, dated as of October 1, 2012 (as amended, supplemented or otherwise modified and in effect from time to time, the “Indenture”), between the Issuer and the Indenture
Trustee; 
 WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Notes and the
issuance of certain beneficial interests in the Issuer, including (i) a Sale and Servicing Agreement, dated as of October 1, 2012 (as amended, supplemented or otherwise modified and in effect from time to time, the “Sale and
Servicing Agreement”), by and among the Issuer, CarMax Auto Funding LLC, a Delaware limited liability company, as depositor (in such capacity, the “Depositor”), CarMax Business Services, LLC, as Servicer, and Wells Fargo
Bank, National Association, a national banking association, as Backup Servicer, (ii) a Letter of Representations, dated October 11, 2012 (as amended, supplemented or otherwise modified and in effect from time to time, the “Note
Depository Agreement”), by and between the Issuer and The Depository Trust Company relating to the Notes, and (iii) the Indenture (collectively with the Sale and Servicing Agreement and the Note Depository Agreement, the
“Related Agreements”); 
 WHEREAS, pursuant to the Related Agreements, the Issuer and U.S. Bank Trust National
Association, a national banking association, not in its individual capacity but solely as owner trustee (in such capacity, the “Owner Trustee”), are required to perform certain duties in connection with (i) the Notes and the
collateral pledged to secure the Notes pursuant to the Indenture (the “Collateral”) and (ii) the beneficial interests in the Issuer; 
 WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator perform certain of the duties of the Issuer and the Owner Trustee referred to in the preceding clause and to provide such
additional services consistent with the terms of this Agreement and the Related Agreements as the Issuer and the Owner Trustee may from time to time request; and 
 WHEREAS, the Administrator has the capacity to provide the services required hereby and is willing to perform such services for the Issuer and the Owner Trustee on the terms set forth herein; 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 SECTION 1. Definitions. All
capitalized terms used but not defined in this Agreement shall have the respective meanings set forth in the Indenture. 

 SECTION 2. Duties of the Administrator. 

(a) Duties with Respect to the Related Agreements. 

(i) The Administrator shall perform all its duties as Administrator under the Note Depository Agreement. In addition, the
Administrator shall consult with the Owner Trustee regarding the duties of the Issuer or the Owner Trustee under the Related Agreements. The Administrator shall monitor the performance of the Issuer and shall advise the Owner Trustee when action is
necessary to comply with the Issuer’s or the Owner Trustee’s duties under the Related Agreements. The Administrator shall prepare for execution by the Issuer or the Owner Trustee, or shall cause the preparation by other appropriate persons
of, all such documents, reports, filings, instruments, certificates and opinions that it shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the Related Agreements. In furtherance of the foregoing, the
Administrator shall take all appropriate action that the Issuer or the Owner Trustee is obligated to take pursuant to the Indenture, including, without limitation, such of the foregoing as are required with respect to the following matters under the
Indenture (references are to sections of the Indenture): 
 (A) the duty to cause the Note Register to be kept
and to give the Indenture Trustee notice of any appointment of a new Note Registrar and the location, or change in location, of the Note Register (Section 2.5); 
 (B) the notification of Noteholders of the final principal payment on their Notes (Section 2.8(e)); 
 (C) the preparation of or obtaining of the documents and instruments required for authentication of the Notes and delivery of the same to the Indenture Trustee (Section 2.2, 2.3, 2.6 and 2.13);

 (D) the preparation of Definitive Notes in accordance with the instructions of the Clearing Agency (Section
2.13); 
 (E) the preparation, obtaining or filing of the instruments, opinions, certificates and other documents
required for the release of collateral (Section 2.10); 
 (F) the maintenance of an office or agency in the
Borough of Manhattan, The City of New York, where Notes may be surrendered for registration of transfer or exchange (Section 3.2); 
 (G) the duty to cause newly appointed Paying Agents, if any, to deliver to the Indenture Trustee the instrument specified in the Indenture regarding funds held in trust (Section 3.3); 

  
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 (H) the direction to the Indenture Trustee to deposit monies with Paying
Agents, if any, other than the Indenture Trustee (Section 3.3); 
 (I) the obtaining and preservation of the
Issuer’s existence and qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Indenture, the Notes, the Collateral and each other instrument or
agreement included in the Trust Estate (Section 3.4); 
 (J) the preparation of all supplements and amendments to
the Indenture and all financing statements, continuation statements, instruments of further assurance and other instruments and the taking of such other action as is necessary or advisable to protect the Trust Estate (Section 3.5); 

(K) the duty to use best efforts not to permit any action to be taken by others that would release any Person from any of
such Person’s material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument or agreement, except as expressly provided in the Indenture and the other Transaction Documents (Section 3.7(a)); 
 (L) the delivery of the Opinion of Counsel on the Closing Date and the annual delivery of Opinions of Counsel as to the Trust Estate, and the annual delivery of the Officer’s Certificate and certain
other statements as to compliance with the Indenture (Sections 3.6 and 3.9); 
 (M) the identification to the
Indenture Trustee in an Officer’s Certificate of a Person with whom the Issuer has contracted to perform its duties under the Indenture (Section 3.7(b)); 
 (N) the preparation and delivery of written notice to the Indenture Trustee, the Backup Servicer and the Rating Agencies of an Event of Servicing Termination under the Sale and Servicing Agreement and, if
such Event of Servicing Termination arises from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Receivables, the taking of all reasonable steps available to remedy
such failure (Section 3.7(d)); 
 (O) the preparation and delivery of written notice to the Depositor, the
Indenture Trustee, the Backup Servicer and the Rating Agencies of any termination of the Servicer’s rights and powers under the Sale and Servicing Agreement and the preparation and delivery of written notice to the Depositor, the Indenture
Trustee and the Rating Agencies of the Backup Servicer becoming the Servicer or any appointment of a Successor Servicer under the Sale and Servicing Agreement (Section 3.7(f)); 

  
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 (P) the duty to cause the Servicer to comply with Sections 3.7, 3.9, 3.10,
3.11, 3.12, 3.13 and 3.14 and Article VII of the Sale and Servicing Agreement (Section 3.14); 
 (Q) the
preparation and obtaining of documents and instruments required for the consolidation or merger of the Issuer (Section 3.10(a)(vi)) or the conveyance or transfer by the Issuer of its properties or assets (Section 3.10(b)); 

(R) the preparation and delivery of written notice to the Indenture Trustee, the Backup Servicer, the Depositor and the
Rating Agencies of each Event of Default under the Indenture, each default by the Depositor, the Servicer or the Backup Servicer under the Sale and Servicing Agreement and each default by the Seller or the Depositor under the Receivables Purchase
Agreement (Section 3.18); 
 (S) upon the request of the Indenture Trustee, the duty to execute and deliver such
further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of the Indenture (Section 3.20); 

(T) the monitoring of the Issuer’s obligations as to the satisfaction and discharge of the Indenture and the
preparation of an Officer’s Certificate and the obtaining of the Opinion of Counsel and the Independent Certificate (if required) relating thereto (Section 4.1); 

(U) the compliance with any written directive of the Indenture Trustee with respect to the sale of the Trust Estate at one
or more public or private sales called and conducted in any manner permitted by law if an Event of Default shall have occurred and be continuing under the Indenture (Section 5.4); 

(V) the duty to take various lawful actions upon the request of the Indenture Trustee in connection with compelling or
securing the performance and observance by the Depositor and the Servicer of their respective obligations to the Issuer under or in connection with the Sale and Servicing Agreement or by the Seller of its obligations under or in connection with the
Receivables Purchase Agreement (Section 5.16); 
 (W) the preparation and delivery of written notice to the
Noteholders of the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee (Section 6.8); 
 (X) the preparation of any written instruments required to confirm more fully the authority of any co-trustee or separate trustee and any written instruments necessary in connection with the resignation
or removal of any co-trustee or separate trustee (Section 6.10); 

  
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 (Y) the maintenance of the effectiveness of the sales finance company
licenses required under the Maryland Code and the Pennsylvania Motor Vehicle Sales Finance Company Act (Section 3.21); 
 (Z) the furnishing or causing to be furnished to the Indenture Trustee of the names and addresses of Noteholders during any period when the Indenture Trustee is not the Note Registrar (Section 7.1);

 (AA) the preparation and, after execution by the Issuer, filing with the Commission, any applicable state
agencies and the Indenture Trustee of documents required to be filed on a periodic basis with, and summaries thereof as may be required by the rules and regulations of, the Commission and any applicable state agencies and the transmission of such
summaries, as necessary, to the Noteholders (Section 7.3); 
 (BB) the opening of one or more accounts in the
Indenture Trustee’s name, the preparation and delivery of Issuer Orders, Officer’s Certificates and Opinions of Counsel and all other actions necessary with respect to the investment and reinvestment of funds in the Collection Account and
the Reserve Account (Sections 8.2 and 8.3); 
 (CC) the preparation and delivery of an Issuer Request and
Officer’s Certificate and the obtaining of an Opinion of Counsel and Independent Certificates, if necessary, for the release of the Trust Estate (Sections 8.4 and 8.5); 

(DD) the preparation and delivery of Issuer Orders and the obtaining of an Opinion of Counsel with respect to the
execution of supplemental indentures and the mailing to the Noteholders and the Rating Agencies, as applicable, of notices with respect to such supplemental indentures (Sections 9.1, 9.2 and 9.3); 

(EE) the execution and delivery of new Notes conforming to any supplemental indenture (Section 9.6); 

(FF) the duty to notify Noteholders of redemption of the Notes or to cause the Indenture Trustee to provide such
notification (Section 10.2); 
 (GG) the preparation and delivery of Officer’s Certificates and the
obtaining of an Opinion of Counsel and Independent Certificates, if necessary, with respect to any requests by the Issuer to the Indenture Trustee to take any action under the Indenture (Section 11.1(a), (c), (d) and (e)); 

(HH) the preparation and delivery of Officer’s Certificates and the obtaining of Opinions of Counsel and Independent
Certificates, if necessary, for the release of property from the lien of the Indenture (Section 11.1(b)); 

  
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 (II) the preparation and delivery of written notice to the Rating Agencies,
upon the failure of the Indenture Trustee to give such notification, of the information required pursuant to the Indenture (Section 11.4); 
 (JJ) the preparation and delivery to the Indenture Trustee of any agreements with respect to alternate payment and notice provisions (Section 11.6); and 

(KK) the recording of the Indenture, if applicable (Section 11.15). 

(ii) The Administrator (but not the Indenture Trustee if it is then acting as successor Administrator) shall: 

(A) pay the Indenture Trustee from time to time such compensation and fees for all services rendered by the Indenture
Trustee under the Indenture as have been agreed to in a separate fee schedule between the Administrator and the Indenture Trustee (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an
express trust); 
 (B) except as otherwise expressly provided in the Indenture, reimburse the Indenture Trustee
upon its request for all reasonable expenses, disbursements and advances incurred or made by the Indenture Trustee in accordance with any provision of the Indenture (including the reasonable compensation, expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; 
 (C) indemnify the Indenture Trustee and its agents for, and hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part arising out of or in
connection with the acceptance or administration of the transactions contemplated by the Indenture, including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of
any of their powers or duties under the Indenture; and 
 (D) indemnify the Owner Trustee and its agents for, and
hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part arising out of or in connection with the acceptance or administration of the transactions contemplated by the Trust Agreement,
including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under the Trust Agreement. 

  
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 (b) Additional Duties. 

(i) In addition to the duties of the Administrator set forth above, the Administrator (A) shall perform such
calculations and shall prepare or shall cause the preparation by other appropriate persons of, and shall execute on behalf of the Issuer or the Owner Trustee, all such documents, reports, filings, instruments, certificates and opinions that the
Issuer or the Owner Trustee is obligated to prepare pursuant to the Related Agreements or Section 5.5(i), (ii), (iii) or (iv) of the Trust Agreement and (B) at the request of the Owner Trustee, shall take all appropriate action
that the Issuer or the Owner Trustee is obligated to take pursuant to the Related Agreements. In furtherance of the foregoing, the Owner Trustee shall, on behalf of itself and the Issuer, execute and deliver to the Administrator and to each
successor Administrator appointed pursuant to the terms hereof, one or more powers of attorney substantially in the form of Exhibit A hereto, appointing the Administrator the attorney-in-fact of the Owner Trustee and the Issuer for the purpose of
executing on behalf of the Owner Trustee and the Issuer all such documents, reports, filings, instruments, certificates and opinions. Subject to Section 6 of this Agreement, and in accordance with the directions of the Owner Trustee, the
Administrator shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Related Agreements) as are not covered by any of the foregoing provisions and as are expressly requested
by the Owner Trustee and are reasonably within the capability of the Administrator. 
 (ii) Notwithstanding
anything in this Agreement or the Related Agreements to the contrary, the Administrator shall be responsible for promptly notifying the Owner Trustee in the event that any withholding tax is imposed on the Issuer’s payments (or allocations of
income) to a registered holder of the beneficial interests in the Issuer as contemplated in Section 5.2(c) of the Trust Agreement. Any such notice shall specify the amount of any withholding tax required to be withheld by the Owner Trustee
pursuant to such provision. 
 (iii) Notwithstanding anything in this Agreement or the Transaction Documents to
the contrary, the Administrator shall be responsible for performance of the duties of the Issuer or the Owner Trustee set forth in Section 5.5(i), (ii), (iii) and (iv) and Section 5.6(a) of the Trust Agreement with respect to,
among other things, accounting and reports to the beneficial owners of the interests in the Issuer. 
 (iv) To
the extent that any tax withholding is required, the Administrator shall deliver to the Owner Trustee and the Indenture Trustee, on or before February 15, 2013, a certificate of an Authorized Officer in form and substance satisfactory to the
Owner Trustee as to such tax withholding and the procedures to be followed with respect thereto to comply with the requirements of the Code. The Administrator shall update such certificate if any additional tax withholding is subsequently required
or any previously required tax withholding shall no longer be required. 
 (v) The Administrator shall perform
the duties of the Administrator specified in Section 10.2 of the Trust Agreement required to be performed in connection 

  
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with the resignation or removal of the Owner Trustee, and any other duties expressly required to be performed by the Administrator under the Trust Agreement or any other Related Agreement.

 (vi) In carrying out the foregoing duties or any of its other obligations under this Agreement, the
Administrator may enter into transactions or otherwise deal with any of its affiliates; provided, however, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer and
shall be, in the Administrator’s opinion, no less favorable to the Issuer than would be available from unaffiliated parties. 
 (vii) The Administrator shall give notice to each Rating Agency of (A) any merger or consolidation of the Owner Trustee pursuant to Section 10.4 of the Trust Agreement; (B) any merger or
consolidation of the Indenture Trustee pursuant to Section 6.9 of the Indenture; (C) any resignation or removal of the Indenture Trustee pursuant to Section 6.8 of the Indenture; (D) the termination of, and/or appointment of a
successor to, the Servicer pursuant to Sections 8.1 or 8.2 of the Sale and Servicing Agreement; (E) any declaration of acceleration of the Notes or rescission and annulment thereof pursuant to Section 5.2 of the Indenture; (F) any
redemption of the Notes pursuant to Section 10.1 of the Indenture; (G) any proposed action pursuant to Section 4.1 of the Trust Agreement; and (H) any amendment or supplement to the Trust Agreement pursuant to Section 11.1
of the Trust Agreement; in the case of each of (A) through (H), promptly upon the Administrator being notified thereof by the Owner Trustee, the Indenture Trustee, the Servicer or the Noteholders, as applicable. 

(c) Non-Ministerial Matters. 
 (i) The Administrator shall not take any action with respect to matters that, in the reasonable judgment of the Administrator, are non-ministerial unless within a reasonable time before the taking of such
action the Administrator shall have notified the Issuer of the proposed action and the Issuer shall not have withheld consent, which consent shall not be unreasonably withheld or delayed, or provided an alternative direction. For the purpose of the
preceding sentence, “non-ministerial” matters shall include, without limitation: 
 (A) the amendment
of or any supplement to the Indenture; 
 (B) the initiation of any claim or lawsuit by the Issuer or the
compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Receivables or Permitted Investments); 

(C) the amendment, change or modification of the Related Agreements; 

(D) the appointment of successor Note Registrars, successor Paying Agents or successor Indenture Trustees pursuant to the
Indenture, the appointment of successor Administrators or Successor Servicers or the consent to the assignment by the Note Registrar, the Paying Agent or the Indenture Trustee of its obligations under the Indenture; and 

  
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 (E) the removal of the Indenture Trustee. 

(ii) Notwithstanding anything to the contrary in this Agreement, the Administrator shall not be obligated to, and shall
not, (A) make any payments to the Noteholders under the Related Agreements or (B) take any other action that the Issuer directs the Administrator not to take on its behalf. 

SECTION 3. Records. The Administrator shall maintain appropriate books of account and records relating to services performed
hereunder, which books of account and records shall be accessible for inspection by the Issuer and the Company at any time during normal business hours. 
 SECTION 4. Compensation. As compensation for the performance of the Administrator’s obligations under this Agreement, and as reimbursement for its expenses related thereto, the Administrator
shall be entitled to $500 per month, which compensation shall be solely an obligation of the Servicer. 
 SECTION 5.
Additional Information to be Furnished to the Issuer. The Administrator shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer may reasonably request. 

SECTION 6. Independence of the Administrator. For all purposes of this Agreement, the Administrator shall be an independent
contractor and shall not be subject to the supervision of the Issuer or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator
shall have no authority to act for or represent the Issuer or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee. 
 SECTION 7. No Joint Venture. Nothing contained in this Agreement (i) shall constitute the Administrator and either the Issuer or the Owner Trustee as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority
to incur any obligation or liability on behalf of the others. 
 SECTION 8. Other Activities of Administrator. Nothing
contained in this Agreement shall prevent the Administrator or its affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an administrator for any other person or entity even though such person
or entity may engage in business activities similar to those of the Issuer, the Owner Trustee or the Indenture Trustee. 

  
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 SECTION 9. Term of Agreement; Resignation and Removal of Administrator. 

(a) This Agreement shall continue in full force and effect until the dissolution of the Issuer, upon which event this Agreement shall
automatically terminate. 
 (b) Subject to Sections 9(e) and 9(f), the Administrator may resign its duties hereunder by
providing the Issuer with at least sixty (60) days’ prior written notice. 
 (c) Subject to Sections 9(e) and 9(f),
the Issuer may remove the Administrator without cause by providing the Administrator with at least sixty (60) days’ prior written notice; provided, however, that in the event the Servicer is removed as the Servicer pursuant
to Section 8.1 of the Sale and Servicing Agreement following the occurrence of an Event of Servicing Termination, the Servicer shall be simultaneously removed as Administrator hereunder. 

(d) Subject to Sections 9(e) and 9(f), at the sole option of the Issuer, the Issuer may remove the Administrator immediately upon written
notice of termination from the Issuer to the Administrator if any of the following events shall occur and be continuing: 
 (i) the Administrator shall default in the performance of any of its duties under this Agreement and, after notice of such default, shall not cure such default within ten (10) days (or, if such
default cannot be cured in such time, shall not give within ten (10) days such assurance of cure as shall be reasonably satisfactory to the Issuer); 
 (ii) a court having jurisdiction in the premises shall enter a decree or order for relief, and such decree or order shall not have been vacated within sixty (60) days, in respect of the Administrator
in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect or appoint a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official for the Administrator or any
substantial part of its property or order the winding-up or liquidation of its affairs; or 
 (iii) the
Administrator shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, shall consent to
the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official for the Administrator or any substantial part of its property, shall consent to the taking of possession by any such official of any
substantial part of its property, shall make any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due. 
 If any of the events specified in clauses (ii) or (iii) of this Section 9(d) shall occur, the Administrator shall give written notice thereof to the Issuer and the Indenture Trustee within
seven (7) days after the occurrence of such event. 
 (e) No resignation or removal of the Administrator pursuant to
Section 9(d) shall be effective until (i) a successor Administrator shall have been appointed by the Issuer and (ii) such successor Administrator shall have agreed in writing to be bound by the terms of this

  
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Agreement in the same manner as the Administrator is bound hereunder. In the event that the Indenture Trustee is the successor Administrator, CarMax’s payment obligations pursuant to
Sections 5.16(a) and 6.7(a) of the Indenture shall survive any termination, resignation or removal of CarMax as Administrator. 

(f) The appointment of any successor Administrator shall be effective only after satisfaction of the Rating Agency Condition with respect
to such appointment. 
 (g) Subject to Sections 9(e), 9(f) and 20, the Administrator acknowledges that upon the appointment of a
Successor Servicer pursuant to the Sale and Servicing Agreement the Administrator shall immediately resign and such Successor Servicer shall automatically become the Administrator under this Agreement. 

SECTION 10. Action upon Termination, Resignation or Removal. Promptly upon the effective date of termination of this Agreement
pursuant to Section 9(a), the resignation of the Administrator pursuant to Section 9(b) or the removal of the Administrator pursuant to Section 9(c) or (d), the Administrator shall be entitled to be paid all fees and reimbursable
expenses accruing to it to the date of such termination, resignation or removal. The Administrator shall forthwith upon such termination pursuant to Section 9(a) deliver to the Issuer all property and documents of or relating to the Collateral
then in the custody of the Administrator. In the event of the resignation of the Administrator pursuant to Section 9(b) or the removal of the Administrator pursuant to Section 9(c) or (d), the Administrator shall cooperate with the Issuer
and take all reasonable steps requested by the Issuer to assist the Issuer in making an orderly transfer of the duties of the Administrator. 
 SECTION 11. Notices. All demands, notices and other communications under this Agreement shall be in writing, personally delivered, sent by telecopier, overnight courier or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon receipt (i) in the case of the Issuer, to CarMax Auto Owner Trust 2012-3 c/o the Owner Trustee at the following address: 190 South LaSalle Street, Chicago, Illinois
60603, (ii) in the case of the Administrator, at the following address: 12800 Tuckahoe Creek Parkway, Richmond, Virginia 23238, Attention: Treasury Department, and (iii) in the case of the Indenture Trustee, at the following address: Wells
Fargo Center, MAC N9311-161, Sixth and Marquette, Minneapolis, Minnesota 55479, or, in each case, to such other address as any party shall have provided to the other parties in writing. If CarMax is no longer the Administrator, the successor
Administrator shall provide any notices required to be given to the Rating Agencies to the Depositor, who shall promptly provide such notices to the Rating Agencies. 
 SECTION 12. Amendments. This Agreement may be amended from time to time by the Issuer, the Administrator and the Indenture Trustee, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any provision herein that may be inconsistent with any other provision herein or for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement which will not be inconsistent with other provisions of this Agreement; provided, however, that no such amendment may materially adversely affect the interests of any Noteholder or any Certificateholder. This Agreement
may also be amended from time to time by the Issuer, the Administrator and the Indenture Trustee, with the consent of the Holders of Notes 

  
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evidencing not less than 51% of the Note Balance of the Controlling Class or, if the Notes have been paid in full, the Holders of Certificates evidencing not less than 51% of the aggregate
Certificate Percentage Interest, for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Agreement or modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that no such amendment may: 
 (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on or in respect of the Receivables or distributions that are required to be made for the benefit of the Noteholders or the Certificateholders without the consent of all Noteholders and
Certificateholders adversely affected by such amendment; or 
 (ii) reduce the percentage of the Note Balance or
the percentage of the aggregate Certificate Percentage Interest the consent of the Holders of which is required for any amendment to this Agreement without the consent of all the Noteholders and Certificateholders adversely affected by such
amendment. 
 An amendment to this Agreement shall be deemed not to materially adversely affect the interests of any Noteholder
or Certificateholder if the Person requesting such amendment obtains and delivers to the Owner Trustee and the Indenture Trustee an Opinion of Counsel to that effect or the Rating Agency Condition is satisfied. Notwithstanding the foregoing, the
Administrator may not amend this Agreement without the consent of the Depositor, which consent shall not be unreasonably withheld. Any amendment to this Agreement that affects the Owner Trustee’s rights, duties, liabilities or immunities under
this Agreement, if any, shall require the prior written consent of the Owner Trustee, which consent shall not be unreasonably withheld. Promptly after the execution of any such amendment, the Administrator shall furnish a copy of such amendment to
the Owner Trustee, the Indenture Trustee and the Rating Agencies. 
 SECTION 13. Successors and Assigns. This Agreement
may not be assigned by the Administrator unless such assignment is previously consented to in writing by the Issuer and the Owner Trustee and the Rating Agency Condition has been satisfied with respect to such assignment. An assignment with such
consent and satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Agreement may be assigned by the Administrator without the
consent of the Issuer or the Owner Trustee to a corporation or other organization that is a successor (by merger, consolidation or purchase of assets) to the Administrator; provided, however, that such successor organization executes and delivers to
the Issuer, the Owner Trustee and the Indenture Trustee an agreement in which such corporation or other organization agrees to be bound hereunder by the terms of such assignment in the same manner as the Administrator is bound hereunder. Subject to
the foregoing, this Agreement shall bind any successors or assigns of the parties hereto. 
 SECTION 14. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS 

  
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AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF WHICH MAY REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 
 SECTION 15. 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 but one and the same instrument. 

SECTION 16. Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. 

SECTION 17. Not Applicable to CarMax Business Services, LLC in Other Capacities. Nothing in this Agreement shall affect any
obligation CarMax Business Services, LLC may have in any other capacity. 
 SECTION 18. Limitation of Liability of Owner
Trustee and Indenture Trustee. 
 (a) Notwithstanding anything contained herein to the contrary, this Agreement has been
countersigned by the Owner Trustee not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer, and in no event shall the Owner Trustee in its individual capacity have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this
Agreement, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement. 

(b) Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by the Indenture Trustee not in its
individual capacity but solely as Indenture Trustee, and in no event shall the Indenture Trustee in its individual capacity have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or
in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. 
 SECTION 19. Third-Party Beneficiary. The Owner Trustee is a third-party beneficiary of this Agreement and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as
if it were a party hereto. 
 SECTION 20. Successor Servicer and Administrator. The Administrator shall undertake, as
promptly as possible after the giving of notice of termination to the Servicer of the Servicer’s rights and powers pursuant to Section 8.1 of the Sale and Servicing Agreement, to enforce the provisions of such Section 8.1 or
Section 8.2 of the Sale and Servicing Agreement, as applicable, with respect to the appointment of a successor Servicer. Such successor Servicer shall, upon compliance with the last sentence of Section 8.2(a) of the Sale and Servicing
Agreement, become the successor Administrator hereunder; provided, however, that if the 

  
 13 

 
Indenture Trustee shall become such successor Administrator, the Indenture Trustee shall not be required to perform any obligations or duties or conduct any activities as successor Administrator
that would be prohibited by law and not within the banking and trust powers of the Indenture Trustee; and, provided further, that the Indenture Trustee as successor Administrator shall not assume any of the obligations specified in
Section 2(a)(ii). In such event, the Indenture Trustee may appoint a sub-administrator to perform such obligations and duties. Any transfer of servicing pursuant to Section 8.2 of the Sale and Servicing Agreement and related succession as
Administrator hereunder shall not constitute an assumption by the related successor Administrator of any liability of the related outgoing Administrator arising out of any breach by such outgoing Administrator of such outgoing Administrator’s
duties hereunder prior to such transfer. 
 SECTION 21. Nonpetition Covenants. 

(a) Notwithstanding any prior termination of this Agreement, the Depositor, the Administrator, the Owner Trustee and the Indenture
Trustee shall not at any time acquiesce, petition or otherwise invoke, or cooperate with or encourage others to acquiesce, petition or otherwise invoke, or cause the Issuer to invoke the process of any court or government authority for the purpose
of commencing or sustaining a case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer. 
 (b) Notwithstanding
any prior termination of this Agreement, the Issuer, the Administrator, the Owner Trustee and the Indenture Trustee shall not at any time acquiesce, petition or otherwise invoke, or cooperate with or encourage others to acquiesce, petition or
otherwise invoke, or cause the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Depositor under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Depositor. 

SECTION 22. Regulation AB. The Administrator shall cooperate in good faith with the Issuer, the Indenture Trustee and the
Depositor to ensure compliance by the Depositor with the provisions of Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such regulation may be amended, clarified or interpreted from time to
time by the Commission or its staff, and related rules and regulations of the Commission (“Regulation AB”). The Administrator acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to
interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel or otherwise. The Administrator shall deliver to the Depositor (including any of its assignees or
designees) upon request any and all reports, statements, certifications, records and other information necessary in the good faith determination of the Depositor to permit the Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Administrator and the Receivables, or the performance of the Administrator’s duties pursuant to this Agreement, reasonably believed by the Depositor to be necessary in order

  
 14 

 
to effect such compliance. Neither the Issuer, the Indenture Trustee nor the Depositor shall request information or disclosures pursuant to this Section 22 other than in good faith, or for
purposes other than compliance with the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act or the rules and regulations of the Commission under the Securities Act or the Exchange Act. 

[SIGNATURE PAGE FOLLOWS] 

  
 15 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective officers, thereunto duly authorized, all as of the day and year first above written. 
  

					
	CARMAX AUTO OWNER TRUST 2012-3
	
	 U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely

as Owner Trustee

		
	By:	 	 /s/ Julia Linian

		 	Name:	 	Julia Linian
		 	Title:	 	Assistant Vice President
	
	 WELLS FARGO BANK,

NATIONAL ASSOCIATION,
 not in its individual
capacity but solely
 as Indenture Trustee

		
	By:	 	 /s/ Kristen Puttin

		 	Name:	 	Kristen Puttin
		 	Title:	 	Vice President
	
	 CARMAX BUSINESS SERVICES, LLC,
 as Administrator

		
	By:	 	 /s/ Thomas W. Reedy

		 	Name:	 	Thomas W. Reedy
		 	Title:	 	Chief Financial Officer

  
 S-1

 EXHIBIT A 
 POWER OF ATTORNEY 
  

							
	STATE OF                     	 	)	 		 	
		 	)	 		 	
	COUNTY OF                 	 	)	 		 	

 KNOW ALL MEN BY THESE PRESENTS, that U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as owner trustee (the “Owner Trustee”) for CarMax Auto Owner Trust 2012-3, a Delaware statutory trust (the “Issuer”), does hereby make, constitute and appoint
CARMAX BUSINESS SERVICES, LLC, a Delaware limited liability company (the “Administrator”), as administrator under the Administration Agreement dated as of October 1, 2012 (the “Administration Agreement”), among
the Issuer, the Administrator and Wells Fargo Bank, National Association, a national banking association, as Indenture Trustee, as the same may be amended from time to time, and its agents and attorneys, as attorneys-in-fact to execute on behalf of
the Owner Trustee or the Issuer all such documents, reports, filings, instruments, certificates and opinions as the Owner Trustee or the Issuer is obligated to prepare, file or deliver pursuant to the Related Agreements or pursuant to
Section 5.5(i), (ii), (iii) or (iv) of the Trust Agreement, including, without limitation, to appear for and represent the Owner Trustee and the Issuer in connection with the preparation, filing and audit of federal, state and local
tax returns pertaining to the Issuer, and with full power to perform any and all acts associated with such returns and audits that the Owner Trustee could perform, including without limitation, the right to distribute and receive confidential
information, defend and assert positions in response to audits, initiate and defend litigation, and to execute waivers of restrictions on assessments of deficiencies, consents to the extension of any statutory or regulatory time limit and
settlements. All powers of attorney for this purpose heretofore filed or executed by the Owner Trustee are hereby revoked. All capitalized terms used but not defined in this power of attorney shall have the respective meanings set forth in the
Administration Agreement. 

  
 Ex. A-1

 EXECUTED this 11th day of October, 2012. 

 

			
	U.S. BANK TRUST NATIONAL ASSOCIATION,
	not in its individual capacity but solely as Owner Trustee
		
	By:	 	  

		 	Name:
		 	Title:

  

							
	STATE OF                     	 	)	 		 	
		 	) ss. :	 		 	
	COUNTY OF                 	 	)	 		 	

 BEFORE ME, the undersigned authority, a Notary Public in and for said county and state, on this day
personally appeared
                                        , known
to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, and that said person executed the same
for the purpose and consideration therein expressed, and in the capacities therein stated. 
 GIVEN UNDER MY HAND AND SEAL OF
OFFICE, this 11th day of October, 2012. 
  

	
	  

	Notary Public in and for the State of                     

 [SEAL] 

My commission expires:
                         

  
 Ex. A-2Second Addendum to First Amended and Restated Agreement of Limited Partnership

 Exhibit 10.1 
 ADOPTION OF SECOND ADDENDUM TO 
 FIRST AMENDED AND RESTATED

 AGREEMENT OF LIMITED PARTNERSHIP 
 OF 
 PREIT ASSOCIATES, L.P. 

DESIGNATING THE RIGHTS, OBLIGATIONS, DUTIES AND PREFERENCES OF SERIES B PREFERRED UNITS 

October 11, 2012 
 Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust (the “Company” or the “General Partner”), as sole general partner of PREIT
Associates, L.P., a Delaware limited partnership (the “Partnership”), hereby adopts this designation of units pursuant to Section 4.3.B of the First Amended and Restated Agreement of Limited Partnership of PREIT
Associates, L.P., dated as of September 30, 1997, as amended (the “Partnership Agreement”), effective as of October 11, 2012. Capitalized terms used and not defined in this Addendum to the Partnership Agreement
(this “Addendum”) shall have the meanings set forth in the Partnership Agreement. 
 WHEREAS, a Pricing
Committee of the Board of Trustees (the “Board”) of the Company adopted resolutions on October 1, 2012 classifying and designating 3,450,000 Preferred Shares (as defined in the Trust Agreement as Amended and Restated
December 18, 2008 of the Company, as amended (the “Trust Agreement”)) as 7.375% Series B Cumulative Redeemable Perpetual Preferred Shares (the “Series B Preferred Shares”); 

WHEREAS, the Company filed an amendment to the Trust Agreement with the Department of State Corporation Bureau of the Commonwealth of
Pennsylvania, effective on October 11, 2012 (the “Series B Designating Amendment”), establishing the Series B Preferred Shares, with such rights, preferences, privileges, qualifications, limitations and restrictions as
described in the Series B Designating Amendment, and classifying and establishing 3,450,000 preferred shares of beneficial interest of the Company as Series B Preferred Shares; 

WHEREAS, on October 11, 2012, the Company issued 3,450,000 Series B Preferred Shares, and, pursuant to Section 5.4 of the
Partnership Agreement, the Company will contribute the proceeds of the issuance and sale of such Series B Preferred Shares to the Partnership in exchange for an equal number of Series B Preferred Units (as defined below) to be issued to the Company;

 WHEREAS, the Company has determined that, in connection with the issuance of the Series B Preferred Shares, and pursuant to
Section 4.3B of the Partnership Agreement, it is necessary and desirable to amend the Partnership Agreement to create and authorize a class of preferred partnership units in the Partnership with the rights, obligations, duties and preferences
as provided in this Addendum; 
 WHEREAS, Pursuant to Sections 16.15(A) and 16.15(C) of the Partnership Agreement, the Company
is authorized to amend certain sections of the Partnership Agreement in its sole discretion and without the consent of any other partner of the Partnership, unless a partner in the Partnership would be adversely affected by such amendment;

 WHEREAS, the Company has determined in its capacity as general partner that this Amendment
will not adversely affect any partner of the Partnership; and 
 WHEREAS, capitalized terms used and not defined herein shall
have the meanings set forth in the Partnership Agreement. 
 NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Company, acting as the sole general partner of the Partnership, hereby amends the Partnership Agreement by adding the following addendum thereto:

 Section 1. Creation, Designation and Number of Series B Preferred Units. 

There is hereby created and authorized a class of preferred partnership units in the Partnership which shall be designated the 7.375%
Series B Preferred Partner Units, and the rights, obligations, duties and preferences of such Series B Preferred Units are as provided in this Addendum (the “Series B Preferred Units”). The number of Series B Preferred Units
shall be 3,450,000. The Series B Preferred Units shall be issued to the Company and shall constitute Preferred Partner Interests as defined in the Partnership Agreement. 
 Section 2. Distributions. 
 A. Payment of
Distributions. Subject to the rights of holders of any other Preferred Partner Interests of the Partnership, now or hereafter issued and outstanding, including the Series A Preferred Units, other than Series B Preferred Units
(“Parity Units”), as to the payment of distributions, pursuant to Article VI of the Partnership Agreement, the General Partner, as holder of the Series B Preferred Units, will be entitled to receive, when, as and if declared
by the Partnership acting through the General Partner, out of funds legally available for payment of distributions, cumulative cash distributions at the rate of 7.375% per annum of the $25.00 liquidation preference of each Series B Preferred
Unit (equivalent to $1.84375 per annum per Series B Preferred Unit). 
 B. Distributions on each outstanding Series B Preferred
Unit shall be cumulative from and including October 11, 2012 and shall be payable (i) for the period from and including October 11, 2012 (the “Original Issue Date”) to December 14, 2012, on
December 17, 2012 (because December 15, 2012 is not a Business Day), and (ii) for each quarterly distribution period thereafter, quarterly in equal amounts in arrears on the 15th day of each March, June, September and December
commencing on December 15, 2012 (each such day being hereinafter called a “Distribution Payment Date”) at the then applicable annual rate; provided, however, that if any Distribution Payment Date falls on any day other
than a Business Day, the distribution that would otherwise have been payable on such Distribution Payment Date may be paid on the next succeeding Business Day with the same force and effect as if paid on such Distribution Payment Date, and no
interest, additional distributions or other sums shall accrue on the amount so payable from such Distribution Payment Date to such next succeeding Business Day. The period from and including the Original Issue Date to but excluding the first
Distribution Payment Date, and each subsequent period from and including a Distribution Payment Date to but excluding the next succeeding Distribution Payment Date, is hereafter called a “Distribution Period.” Distributions shall
accumulate from October 11, 2012 or the most recent Distribution Payment Date to which full cumulative distributions have been paid, whether or not in any such Distribution Period or Periods there shall be funds legally available for the
payment of such distributions, whether the Partnership has earnings or whether such distributions are authorized. No interest, or sum of money in lieu of interest, shall be payable in respect of any distribution payment or payments on the Series B
Preferred Units that may be in 

  
 2 

 
arrears. The General Partner, as the holder of the Series B Preferred Units, shall not be entitled to any distributions, whether payable in cash, property or shares, in excess of full cumulative
distributions, as herein provided, on the Series B Preferred Units. Distributions payable on the Series B Preferred Units for any period greater or less than a full Distribution Period will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Distributions payable on the Series B Preferred Units for each full Distribution Period will be computed by dividing the applicable annual distribution rate by four. After full cumulative distributions on the Series B Preferred
Units have been paid, the General Partner, as the holder of Series B Preferred Units, will not be entitled to any further distributions with respect to that Distribution Period. 

C. So long as any Series B Preferred Units are outstanding, no distributions, except as described in the immediately following sentence,
shall be authorized and declared or paid or set apart for payment on any series or class or classes of Parity Units for any period unless full cumulative distributions have been declared and paid or are contemporaneously declared and paid or
declared and a sum sufficient for the payment thereof set apart for such payment on the Series B Preferred Units for all prior Distribution Periods. When distributions are not paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all distributions authorized and declared upon the Series B Preferred Units and all distributions authorized and declared upon any other series or class or classes of Parity Units shall be authorized and declared ratably in proportion to
the respective amounts of distributions accumulated and unpaid on the Series B Preferred Units and such Parity Units. 
 D. So
long as any Series B Preferred Units are outstanding, no distributions (other than distributions or distributions paid solely in any other class of Units of the Partnership, now or hereafter issued and outstanding, the terms of which provide that
such Units rank, as to the payment of distributions or amounts upon liquidation, dissolution or winding up of the Partnership, junior to such Series B Preferred Units (“Junior Units”), of, or in options, warrants or rights to
subscribe for or purchase, Junior Units) shall be authorized and declared or paid or set apart for payment or other distribution authorized and declared or made upon Junior Units, nor shall any Junior Units be redeemed, purchased or otherwise
acquired (other than a redemption, purchase or other acquisition of Partner Units made for purposes of and in compliance with the terms of an employee incentive or benefit plan of the General Partner or any subsidiary, or a conversion into or
exchange for Junior Units or redemptions for the purpose of preserving the General Partner’s qualification as a REIT (as defined in the Trust Agreement) or redemptions of Class A and Class B Units pursuant to Section 9.5.A of the
Partnership Agreement)), for any consideration (or any monies to be paid to or made available for a sinking fund for the redemption of any such shares) by the Partnership, directly or indirectly (except by conversion into or exchange for Junior
Units), unless in each case full cumulative distributions on all outstanding Series B Preferred Units and any Parity Units at the time such distributions are payable shall have been paid or set apart for payment for all past Distribution Periods
with respect to the Series B Preferred Units and all past distribution periods with respect to such Parity Units. 
 E. Any
distribution payment made on the Series B Preferred Units, including any capital gains distributions, shall first be credited against the earliest accrued but unpaid distribution due with respect to such Series B Preferred Units which remains
payable. 
 F. Except as provided herein, the Series B Preferred Units shall not be entitled to participate in the earnings or
assets of the Partnership. 
 G. As used herein, the term “distribution” does not include distributions payable solely
in Junior Units on Junior Units, or in options, warrants or rights to holders of Junior Units to subscribe for or purchase any Junior Units. 

  
 3 

 Section 3. Liquidation Preference. 

A. In the event of any liquidation, dissolution or winding up of the Partnership, whether voluntary or involuntary, before any payment or
distribution of the assets of the Partnership shall be made to or set apart for the holders of Junior Units, the holders of the Series B Preferred Units shall be entitled to receive $25.00 per share (the “Liquidation
Preference”) plus an amount per Series B Preferred Unit equal to all accrued and unpaid distributions (whether or not earned or declared) thereon to, but not including, the date of final distribution to such holders; but such holders of
the Series B Preferred Units shall not be entitled to any further payment. If, upon any such liquidation, dissolution or winding up of the Partnership, the assets of the Partnership, or proceeds thereof, distributable among the holders of the Series
B Preferred Units shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any other Parity Units, then such assets, or the proceeds thereof, shall be distributed among the holders of such Series B Preferred
Units and any such other Parity Units ratably in accordance with the respective amounts that would be payable on such Series B Preferred Units and any such other Parity Units if all amounts payable thereon were paid in full. For the purposes of this
Section 3, none of (i) a consolidation or merger of the Partnership with one or more entities, (ii) a statutory Unit exchange by the Partnership or (iii) a sale or transfer of all or substantially all of the Partnership’s
assets shall be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Partnership. 
 B. Until
payment shall have been made in full to the holders of the Series B Preferred Units, as provided in this Section 3, and to the holders of Parity Units, subject to any terms and provisions applying thereto, no payment will be made to any holder
of Junior Units upon the liquidation, dissolution or winding up of the Partnership. Subject to the rights of the holders of Parity Units, upon any liquidation, dissolution or winding up of the Partnership, after payment shall have been made in full
to the holders of the Series B Preferred Units, as provided in this Section 3, any series or class or classes of Junior Units shall, subject to any respective terms and provisions applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed, and the holders of the Series B Preferred Units shall not be entitled to share therein. 

Section 4. Redemption. 
 A. If the General Partner elects to redeem any of the Series B Preferred Shares in accordance with the terms of the Series B Designating Amendment, the Partnership shall, on the date set for redemption of
such Series B Preferred Shares, redeem the number of Series B Preferred Units equal to the number of Series B Preferred Shares for which the General Partner has given notice of redemption pursuant to the Series B Designating Amendment, at a
redemption price of $25.00 per Series B Preferred Unit, plus accrued and unpaid distributions thereon (whether or not declared), to but excluding the date fixed for redemption. 

B. The following provisions set forth the procedures for redemption: 

(i) Notice of redemption will be given by the General Partner to the Partnership concurrently with the notice of the General Partner
sent to the holders of its Series B Preferred Shares in connection with such redemption. Such notice shall state: (a) the redemption date; (b) the number of Series B Preferred Units to be redeemed; (c) the redemption price and whether
or not accrued and unpaid distributions will be payable; (d) the place or places where the Series B Preferred Units are to be surrendered for payment of the redemption price; (e) the procedures that the General Partner must follow to
surrender the certificates for redemption, including whether the certificates shall be properly endorsed or assigned for transfer; (f) that distributions on the Series B Preferred Units to be redeemed will cease to accumulate on such redemption
date; and (g) whether such redemption is being 

  
 4 

 
made pursuant to Section 5(a) or 5(b) of the Series B Designating Amendment. If less than all of the Series B Preferred Units are to be redeemed, the notice shall also specify the
number of Series B Preferred Units to be redeemed. 
 (ii) On or after the redemption date, the General Partner shall present
and surrender the certificates, if any, representing the Series B Preferred Units to the Partnership at the place designated in the notice of redemption and thereupon the redemption price of such Series B Preferred Units (including all accumulated
and unpaid distributions to but excluding the redemption date) shall be paid to the General Partner and each surrendered Series B Preferred Unit certificate, if any, shall be canceled. If less than all the Series B Preferred Units represented
by any such certificate representing Series B Preferred Units are to be redeemed, a new certificate shall be issued representing the unredeemed Series B Preferred Units. 
 (iii) From and after the redemption date (unless the Partnership defaults in payment of the redemption price plus accrued and unpaid distributions, if any, payable upon redemption), all distributions on
the Series B Preferred Units designated for redemption in such notice shall cease to accrue, such Series B Preferred Units shall no longer be deemed outstanding and all rights of the General Partner will terminate, except the right to receive the
redemption price plus accrued and unpaid distributions, if any, payable upon redemption. At its election, the Partnership, prior to a redemption date, may irrevocably deposit the redemption price (including accumulated and unpaid distributions to
but excluding the redemption date) of the Series B Preferred Units so called for redemption in trust for the General Partner with a bank or trust company, in which case the redemption notice to the General Partner shall (a) state the date of
such deposit, (b) specify the office of such bank or trust company as the place of payment of the redemption price and (c) require the General Partner to surrender the certificates, if any, representing such Series B Preferred Units at
such place on or about the date fixed in such redemption notice (which may not be later than the redemption date) against payment of the redemption price (including all accumulated and unpaid distributions to the redemption date). Any monies so
deposited which remain unclaimed by the General Partner at the end of two years after the redemption date shall be returned by such bank or trust company to the Partnership. 
 Section 5. Ranking. 
 The Series B Preferred Units will, with
respect to rights to receive distributions and to participate in distributions or payments upon liquidation, dissolution or winding up of the Partnership, rank (a) senior to any Junior Shares, (b) equally with the Series A Preferred Units
and any other Parity Shares; and (c) junior to any Units the Partnership may authorize or issue in the future that, pursuant to the terms thereof, rank senior to the Series B Preferred Units with respect to the payment of distributions and the
distribution of assets in the event of the liquidation, dissolution or winding up of the Partnership (“Senior Units”). 
 Section 6. Voting Rights. 
 The General Partner shall not have
any voting or consent rights in respect of its partnership interest represented by the Series B Preferred Units. 

Section 7. Restrictions on Transfer. 
 The Series B Preferred Units shall not be transferable. 

  
 5 

 Section 8. Conversion. 

In the event of a conversion of Series B Preferred Shares into shares of Common Stock of the General Partner at the option of the holders
of Series B Preferred Shares pursuant to the terms of the Series B Designating Amendment, then, upon conversion of such Series B Preferred Shares, the General Partner shall convert a number of Series B Preferred Units equal to the number of Series B
Preferred Shares so converted into a number of Common Limited Partner Interests equal to the number of shares of Common Stock issued on conversion of such Series B Preferred Shares. In the event of a conversion of any Series B Preferred Shares into
consideration other than shares of Common Stock in accordance with the Series B Designating Amendment, the Partnership shall retire a number of Series B Preferred Units equal to the number of Series B Preferred Shares converted into such other form
of consideration. In the event of a conversion of Series B Preferred Shares into shares of Common Stock, to the extent the General Partner is required to pay cash in lieu of fractional shares of Common Stock pursuant to the Series B Designating
Amendment in connection with such conversion, the Partnership shall distribute an equal amount of cash to the General Partner. 

Section 9. No Sinking Fund. 
 No sinking fund shall be established for the retirement or redemption of Series B Preferred Units. 
 Section 10. Voting Rights. 
 Except as required by applicable law or
the Partnership Agreement, the holder of the Series B Preferred Units, as such, shall have no voting rights. 
 Section 11.
Priority of this Designation. 
 The provisions of this Addendum shall take precedence over and control any other
provisions of the Partnership Agreement that may conflict with the terms of this Addendum. Accordingly, the other provisions of the Partnership Agreement shall be construed whenever appropriate to give full force and effect to this Addendum.

 Section 12. This Addendum shall be construed and enforced in accordance with and governed by the laws of the
Commonwealth of Pennsylvania, without regard to conflicts of law. 
 Section 13. If any provision of this Addendum is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. 
 [Signature Page to Second Addendum to the First Amended and Restated Agreement of Limited Partnership of PREIT Associates, L.P. follows] 

  
 6 

 IN WITNESS WHEREOF, the Company, in its capacity as general partner of the Partnership, has
caused this Addendum to be executed by its duly authorized representative as of the date first written above. 
  

			
	PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
	
	As sole general partner of PREIT Associates, L.P.
		
	By:	 	 /s/ Bruce Goldman

		 	Name: Bruce Goldman
		 	Title: Executive Vice President, General Counsel and Secretary

 [Signature Page to Second Addendum to the First Amended and Restated Agreement of Limited
Partnership of PREIT Associates, L.P.]

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