Construction Credit Agreement

Exhibit 10.19

CONSTRUCTION CREDIT AGREEMENT

Dated as of June 23, 2003

among

GENERAL MOTORS ACCEPTANCE CORPORATION , as Lender,

and

CAPITAL AUTOMOTIVE L.P.,

and

CERTAIN REAL ESTATE SUBSIDIARIES , as Borrowers


Table of Contents Page ARTICLE I DEFINITIONS 1 Section 1.01 Definitions 1 Section 1.02 Certain UCC and Accounting Terms 6 ARTICLE II LOANS 7 Section 2.01 Amount and Term of Loans 7 Section 2.02 Notes 7 Section 2.03 Making the Loans 7 Section 2.04 Extension, Termination and Reduction of the Credit Commitment 9 Section 2.05 Payment; Interest Rate; Default Rate 9 Section 2.06 Payment on Non-Business Days 10 Section 2.07 Inability to Ascertain the LIBOR Rate 10 Section 2.08 Use of Proceeds 10 Section 2.09 Effect of Full Payment 10 ARTICLE III CONDITIONS OF LENDING 11 Section 3.01 Conditions Precedent to Loans 11 Section 3.02 Additional Conditions Precedent To Each Construction Draw 15 Section 3.03 Conditions Precedent to All Loans 17 Section 3.04 Conversion of an Acquisition Loan into a Construction Loan 18 ARTICLE IV REPRESENTATIONS AND WARRANTIES 18 Section 4.01 Capacity and Power 18 Section 4.02 Authorization of Borrowing: No Conflict as to Law or Agreements 18 Section 4.03 Legal Agreements 18 Section 4.04 Subsidiaries 19 Section 4.05 Financial Condition 19 Section 4.06 Adverse Change 19 Section 4.07 Litigation 19 Section 4.08 Taxes 19 Section 4.09 Titles and Liens 19 Section 4.10 Real Property Collateral Documents 19 Section 4.11 Other Security Interests 19 Section 4.12 Compliance with Laws 19 Section 4.13 Other Agreements 20 Section 4.14 Solvency 20 Section 4.15 Accuracy of Information 20 Section 4.16 Wetlands 20 Section 4.17 Environmental Matters 20

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Table of Contents
(continued) Page ARTICLE V AFFIRMATIVE COVENANTS 21 Section 5.01 Financial Statements 22 Section 5.02 Books and Records; Inspection and Examination 23 Section 5.03 Compliance with Laws 23 Section 5.04 Payment of Taxes and Other Claims 24 Section 5.05 Maintenance of Properties 24 Section 5.06 Insurance 24 Section 5.07 Restoration Following Casualty 26 Section 5.08 Application of Proceeds 27 Section 5.09 Financial Covenants 28 Section 5.10 Use of Mortgaged Property 28 Section 5.11 Condemnation- General 28 Section 5.12 Leases 30 Section 5.13 Construction Responsibilities 31 Section 5.14 Completion of Improvements 31 Section 5.15 Payment of Costs 31 Section 5.16 Additional Advances 32 ARTICLE VI NEGATIVE COVENANTS 32 Section 6.01 Consolidation and Merger 32 Section 6.02 Restrictions on Further Encumbrances or Indebtedness on Real Estate 32 Section 6.03 Management Fees 32 ARTICLE VII EVENTS OF DEFAULT, RIGHTS AND REMEDIES 33 Section 7.01 Events of Default 33 Section 7.02 Rights and Remedies 34 ARTICLE VIII MISCELLANEOUS 35 Section 8.01 No Waiver; Cumulative Remedies 35 Section 8.02 Amendments, Etc. 35 Section 8.03 Addresses for Notices, Etc. 35 Section 8.04 Costs and Expenses 36 Section 8.05 Execution in Counterparts 36 Section 8.06 Binding Effect; Assignment 36 Section 8.07 Governing Law 36 Section 8.08 Severability of Provisions 36 Section 8.09 Headings 37 Section 8.10 Venue and Waiver of Jury Trial 37 Section 8.11 Indemnification by Loan Parties 37 Section 8.12 Joint and Several Liability 37 Section 8.13 Reimbursement Among Borrowers 38 Section 8.14 Appointment of Capital as Representative 38

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SHEDULES: Schedule 4.04 Subsidiaries Schedule 4.17 Environmental Matters EXHIBITS: Exhibit A Form of Note Exhibit B Form of Draw Certificate Exhibit C Form of Joinder Agreement Exhibit D Form of Guaranty Exhibit E Form of Assignment of Interest In Construction Documents Exhibit F Form of Contractor Consent and Agreement Exhibit G Form of Agreement of Subordination of Lien By Contractor Exhibit H Form of Opinion of Borrower' s Counsel Exhibit I Form of Subordination Agreement


CONSTRUCTION CREDIT AGREEMENT

This Construction Credit Agreement (this " Credit Agreement" ) is made and entered into as of June 23, 2003 by and among Capital Automotive L.P., a Delaware limited partnership (" Capital" ), and certain subsidiaries of Capital from time to time party hereto (collectively, the " Real Estate Subsidiaries" ; Capital and its Real Estate Subsidiaries are collectively referred to as the " Borrowers" ), jointly and severally; and General Motors Acceptance Corporation, a Delaware corporation (" GMAC" ).

W I T N E S S E T H:

WHEREAS, Borrowers desire GMAC to provide certain extensions of credit, loans or other financial accommodations to Borrowers in a maximum aggregate principal amount not to exceed One Hundred Million and no/100 Dollars ($100,000,000) for the purpose of (i) acquiring certain parcels of improved and unimproved real property and (ii) financing improvements made by tenants on certain parcels of real property owned by the Borrowers or certain Affiliates thereof from time to time; and

WHEREAS, GMAC is willing to provide the financial accommodations provided for herein to Borrowers, but solely on the terms and subject to the conditions set forth in this Credit Agreement and the other documents, instruments and agreements executed and delivered pursuant to this Credit Agreement or referenced herein.

NOW, THEREFORE, in consideration of the financial accommodations provided for herein, the mutual promises and understandings of GMAC and the Borrowers set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, GMAC and the Borrowers hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions . The following words, terms and/or phrases shall have the meanings set forth thereafter and such meanings shall be applicable to the singular and plural form thereof, giving effect to the numerical difference.

" Acquisition" means the acquisition by Capital and/or its Real Estate Subsidiaries of the fee interest in a Project Property to be operated in accordance with Section 5.10 .

" Acquisition Loan" shall have the meaning specified in Section 2.01.

" Affiliate" means any Person (a) that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with any other Person or one or more Affiliates, (b) that directly or beneficially owns or holds 20% or more of any equity interest in any other Person or one or more Affiliates or (c) 20% or more of whose voting stock (or in the case of a person that is not a corporation, 20% or more of any equity interest) is owned directly or beneficially or held by any other Person or one or more Affiliates. For purposes of this definition and this Agreement, the term " control" shall mean, directly or indirectly, the


power to direct or cause the direction of the management or policies of a Person, whether through ownership interest or otherwise, including without limitation the power to elect or appoint, directly or indirectly, a majority of the members of its governing board or body.

" Borrowers' Liabilities" means all obligations and liabilities of each Borrower in the aggregate to GMAC (including, without limitation, all debts, claims, reimbursement obligations and indebtedness) whether primary, secondary, direct, contingent, fixed or otherwise, theretofore, now and/or from time to time hereafter owing, due or payable, however evidenced, created, incurred, acquired or owing and however arising, whether under this Agreement or the Other Agreements, or by oral agreement or operation of law or otherwise.

" Business Day" means any day on which GMAC is open for the transaction of business in Detroit, Michigan other than a Saturday or Sunday.

" CARS" means Capital Automotive REIT, a Maryland real estate investment trust.

" Construction Contract" has the meaning specified in Section 3.01(b)(vii) .

" Construction Loan" shall have the meaning specified in Section 2.01 .

" Construction Project" means each construction project and all improvements related thereto which are financed with the proceeds of a Construction Loan.

" Contractor" has the meaning specified in Section 3.01(b)(vii) .

" Cost Analysis" has the meaning specified in Section 3.01(b)(v) .

" Credit Commitment" means One Hundred Million Dollars ($100,000,000), unless said amount is reduced in accordance with Section 2.04 , in which event it means the amount to which said amount is reduced.

" Debt Service Coverage Ratio" means, with respect to CARS measured as of December 31 of each year, the ratio expressed as a fraction, the numerator of which is consolidated EBITDA and the denominator of which is the scheduled principal paid during such year plus interest expense during the year.

" Debt to Total Assets Ratio" means, with respect to CARS measured as of December 31 of each year, the ratio expressed as a fraction, the numerator of which is the consolidated long-term Indebtedness (less payments due within one year) of CARS and the denominator of which is Total Assets plus accumulated depreciation and amortization (less goodwill) reflected on CARS' audited financial statements.

" Draw Certificate" has the meaning set forth in Section 2.03 .

" EBITDA" means, for any period, operating income for CARS (determined on a consolidated basis without duplication in accordance with GAAP) for such period (calculated before taxes, interest expense, depreciation and amortization) excluding any extraordinary or unusual gains or losses during such period.

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" Environmental Assessment" has the meaning set forth in Section 3.01(a)(xiv) .

" Environmental Laws" means any federal, state or local statute, law, ordinance, code, rule, regulation, order, decree, permit or license regulating, relating to, or imposing liability or standards of conduct concerning, environmental matters or conditions, environmental protection or conservation, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; the Superfund Amendments and Reauthorization Act of 1986, as amended; the Resource Conservation and Recovery Act, as amended; the Toxic Substances Control Act, as amended; the Clean Air Act, as amended; the Clean Water Act, as amended; together with all regulations promulgated thereunder, and any other " Superfund" or " Superlien" law.

" Event of Default" has the meaning specified in Section 7.01 .

" GAAP" means United States generally accepted accounting principles, as in effect from time to time.

" Guarantor" means an Affiliate of any Borrower guaranteeing Borrowers' Liabilities.

" Hazardous Material" means any pollutant, contaminant, or hazardous, toxic or dangerous waste, substance or material (including, without limitation, petroleum products, asbestos-containing materials and lead), the generation, handling, storage, transportation, disposal, treatment, release, discharge or emission of which is subject to any Environmental Law.

" Indebtedness" means all of a Person' s liabilities, obligations and indebtedness to any Person of any and every kind and nature, whether primary, secondary, direct, indirect, absolute, contingent, fixed or otherwise, heretofore, now and/or from time to time hereafter owing, due or payable, however evidenced, created, incurred, acquired or owing and however arising, whether under written or oral agreement, by operation of law or otherwise. Without in any way limiting the generality of the foregoing, Indebtedness specifically includes (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services, (iv) obligations as lessee under leases which shall have been or should be, in accordance with GAAP, recorded as capital leases, (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above which shall have been or should have been recorded as indebtedness under GAAP, and (vi) liabilities in respect of unfunded vested benefits under plans and multiemployer plans covered by Title IV of ERISA.

" Interest Rate" shall have the meaning specified in Section 2.05 .

" Leases" means any and all leases, licenses, concessions or other agreements (written or verbal, now or hereafter in effect) through which Borrowers directly or indirectly grant a possessory interest in and to, or the right to occupy and use, all or any portion of the Mortgaged Property that constitutes real property, together with any renewals or extensions thereof and all leases, subleases, licenses, concessions or other agreements in substitution therefor.

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" LIBOR Rate" means, with respect to any Loan, a rate per annum equal to the offered rate for 30-day deposits in Dollars for each day of a monthly billing period that appears on Telerate Page 3750 as of approximately 11:00 A.M. (London time). " Telerate Page 3750" means the display designated as " Page 3750" on the Telerate Service (or such other page as may replace page 3750 on that service or such other service as may be nominated by the British Lenders' Association as the information vendor for the purpose of displaying British Lenders' Association Interest Settlement Rates for Dollar deposits). The LIBOR Rate applicable to any day on which no rate so appears or is published will be the rate last quoted prior to such day.

" Lien" means, with respect to any asset of any Borrower, any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof and the filing of or agreement to give any financing statement under the Uniform Commercial Code in effect in any jurisdiction).

" Loan" or " Loans" means and includes all Acquisition Loans and Construction Loans issued under this Credit Agreement.

" Loan Documents" means each of the documents set forth in Section 3.1 (a) and (b) .

" Loan Party" or " Loan Parties" means and includes each Borrower and each Guarantor.

" Maturity Date" means June 23, 2004, unless otherwise extended in accordance with Section 2.04 .

" Maximum Advance Rate for Acquisition Loans" means, with respect to each Acquisition Loan, eighty five percent (85%) of the lesser of (a) the cash purchase price (excluding commissions, transaction fees and other expenses associated with such purchase) for the Mortgaged Property securing such Acquisition Loan and (b) the appraised value for the Mortgaged Property securing such Acquisition Loan (as determined by GMAC in its sole discretion).

" Maximum Advance Rate for Construction Loans" means, with respect to each Construction Loan, ninety percent (90%) of the lesser of (a) the cash purchase price (excluding commissions, transaction fees and other expenses associated with such purchase) for the Mortgaged Property securing such Construction Loan and (b) the appraised value for the Mortgaged Property securing such Construction Loan (as determined by GMAC in its sole discretion), plus, in instances where the Project Property is the Mortgaged Property, an additional amount equal to ninety percent (90%) of the lesser of (x) the cost of the improvements to be constructed on the Mortgaged Property, and (y) the appraised value of the improvements (excluding the value of the land and all existing improvements thereon) to be constructed on the Mortgaged Property, in each case as determined by GMAC in its sole discretion.

" Mortgage" means each Deed of Trust, Mortgage, Leasehold Mortgage, Leasehold Deed of Trust, Security Agreement, Fixture Filing, Assignment of Leases and Rents and Financing Statement or substantially similar document, instrument or agreement executed by any Borrower or any Guarantor from time to time in favor of GMAC, as each may be amended, modified or supplemented from time to time.

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" Mortgaged Property" means each parcel of real property which secures the Loans.

" Note" or " Notes" has the meaning specified in Section 2.02 .

" Operating Documents" shall mean with respect to any corporation, limited liability company, partnership, limited partnership, limited liability partnership or other legally authorized incorporated or unincorporated entity, the bylaws, operating agreement, partnership agreement, limited partnership agreement or other applicable documents relating to the operation, governance or management of such entity.

" Organizational Documents" shall mean with respect to any corporation, limited liability company, partnership, limited partnership, limited liability partnership or other legally authorized incorporated or unincorporated entity, the articles of incorporation, certificate of incorporation, articles of organization, certificate of limited partnership or other applicable organizational or charter documents relating to the creation of such entity.

" Other Agreements" means all agreements, instruments and documents, including, without limitation, letters of credit, guaranties, mortgages, deeds of trust, pledges, powers of attorney, consents, assignments, contracts, notices, security agreements, subordination agreements, financing statements and all other written matter heretofore, now and/or from time to time hereafter executed by any Borrower or any Guarantor relating to any Loan and delivered to GMAC including, without limitation, each of the Loan Documents.

" Person" means and includes an individual, a partnership, a joint venture, a corporation (whether or not for profit), a limited liability company, a trust, an unincorporated organization, a government or any department or agency thereof or any other entity or organization.

" Plan" means, at any time, any single-employer plan, as defined in Section 4001(a) and subject to Title IV of ERISA, which is maintained, or at any time during the five calendar years preceding the time in question was maintained, for employees of any Borrower or any Subsidiary.

" Prime Rate" shall mean a variable rate of interest per annum equal to the higher of (a) the rate of interest from time to time published by the Board of Governors of the Federal Reserve System as the " Bank Prime Loan" rate in Federal Reserve Statistical Release H.15(519) entitled " Selected Interest Rates" or any successor publication of the Federal Reserve System reporting the Bank Prime Loan rate or its equivalent, or (b) the Federal Funds Rate. The statistical release generally sets forth a Bank Prime Loan rate for each Business Day. In the event the Board of Governors of the Federal Reserve System ceases to publish a Bank Prime Loan rate or its equivalent, the term " Base Rate" shall mean a variable rate of interest per annum equal to the highest of the " prime rate," " reference rate," " base rate," or other similar rate published from time to time by The Wall Street Journal, Central Edition, or its successors, with the understanding that any such rate may merely be a reference rate and may not necessarily represent the lowest or best rate actually charged to any customer by any financial institution.

" Project Property" means each parcel of real estate which is or will become the subject of the improvements financed with the proceeds of a Construction Loan.

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" Revolving Credit Agreement" means that certain Credit Agreement dated as of March 22, 2000 by and among GMAC, Capital and certain Subsidiaries of Capital from time to time party thereto, as amended by that certain First Amendment to Credit Agreement dated as of March 20, 2002 and that certain Second Amendment to Credit Agreement of even date herewith, as further amended, modified or restated from time to time.

" Reportable Event" means a " Reportable Event" described in Section 4.03 of the Employee Income Retirement Security Act of 1974, as the same may be amended from time to time, and any successor statute.

" Representative" has the meaning specified in Section 8.14 .

" Subsidiary" shall mean, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person and/or its other Subsidiaries own, directly or indirectly, such number of outstanding shares or other ownership interests as have more than fifty percent (50%) of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company or other entity. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Borrowers.

" Title Company" means, with respect to a particular Loan, such title insurance company as agreed upon by Representative and GMAC.

" Total Assets" means the aggregate book value of all assets of CARS reflected on its audited financial statements for the relevant period.

" Trustee" means the Individual Trustees (as defined in the applicable Mortgage for any Mortgaged Property), as applicable, or such title insurance company as agreed to by GMAC and Representative.

Section 1.02 Certain UCC and Accounting Terms . Except as otherwise defined in this Agreement or the Other Agreements, all words, terms and/or phrases used herein and therein shall be defined by the applicable definition therefor (if any) in the Uniform Commercial Code as then in effect in the State of Michigan. Notwithstanding the foregoing, any accounting terms used in this Agreement which are not specifically defined herein shall have the meanings customarily given to them in accordance with GAAP. All financing computations hereunder shall be computed, unless otherwise specifically provided herein, in accordance with GAAP as consistently applied.

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ARTICLE II

LOANS

Section 2.01 Amount and Term of Loans .

(a) Amount . GMAC agrees, on the terms and subject to the conditions hereinafter set forth, to make Loans to the Borrowers for the purpose of (i) financing certain improvements to parcels of real property (the proceeds of which may or may not be used for improvements to Mortgaged Property) from time to time (referred to herein as " Construction Loans" ) and (ii) purchasing the fee interest in certain improved or unimproved parcels of Project Property (the proceeds of which may or may not be used for purchasing Mortgaged Property) from time to time (referred to herein as " Acquisition Loans" ) until the Maturity Date or the earlier date of termination in whole of the Credit Commitment pursuant to Section 7.02 , in such aggregate amounts as Borrowers may from time to time request but in no event shall (x) the aggregate amount of all outstanding Loans exceed the amount of the Credit Commitment at any time; (y) the aggregate amount of any Construction Loan exceed the Maximum Advance Rate for Construction Loans at any time; or (z) the amount of any Acquisition Loan exceed the Maximum Advance Rate for Acquisition Loans at any time. Further, if any Mortgaged Property secures more than one (1) Loan, the applicable advance rate shall account for all Loans in the aggregate secured by such Mortgaged Property.

(b) Term . Loans under the Credit Commitment shall be available to Borrowers by means of individual Loans, it being understood that Loans advanced to acquire or to make improvements to a particular parcel of Project Property which are repaid may not be reborrowed under the applicable Note. Each Construction Loan made by GMAC shall have a maturity date which is eighteen (18) months from the date of the original advance of such Loan as set forth in the applicable Note and each Acquisition Loan made by GMAC shall have a maturity date which is twelve (12) months from the date of the original advance of such Loan as set forth in the applicable Note, unless otherwise extended by GMAC in its sole discretion.

Section 2.02 Notes . Each Loan made by GMAC pursuant to Section 2.01 shall be evidenced by and repayable with interest in accordance with a promissory note executed, jointly and severally, by Capital and each applicable Borrower (each referred to herein as a " Note" and collectively as the " Notes" ) payable to the order of GMAC, substantially in the form of Exhibit A attached hereto, dated the date of the Loan hereunder. Each Person that owns the Mortgaged Property securing a Loan shall be an " applicable" Borrower for purposes of the preceding sentence and this Agreement or shall be a Guarantor, with the applicable Guaranty secured by the Mortgage. The unpaid principal amount of each Loan shall bear interest and be due and payable as provided in this Agreement and each Note. Each Note shall bear interest on the unpaid principal amount thereof from the date thereof until paid at the Interest Rate.

Section 2.03 Making the Loans .

(a) Loan Requests . The Representative may in writing request a Loan from GMAC, which request shall specify and/or include, as the case may be, (i) a statement as to what the proceeds of the Loan will be utilized for, including a description of the existing

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improvements and the improvements to be constructed with the proceeds of each Construction Loan, (ii) the date of the requested Loan, (iii) the amount of such advance, (iv) the address of the Project Property which is to be acquired and/or improved with the proceeds of the Loan, (v) the address and owner of the Mortgaged Property securing the Loan and the land to be acquired with the Loan, as applicable, (vi) the purchase price of the Mortgaged Property securing the Loan and the land to be acquired with the Loan, as applicable, (vii) each of the documents specified in Section 3.01 , as applicable, and (viii) such other documents, certificates and opinions as GMAC may request, in each case in form and substance acceptable to GMAC.

(b) Procedures for Construction Loans . Once the conditions described below and in Section 3.01 for a particular Construction Loan have been met, such Construction Loan shall be made pursuant to various construction disbursements made in accordance with the progress of construction as determined by GMAC and in accordance with the other terms hereof. If the Project Property is also the Mortgaged Property securing the applicable Construction Loan or if GMAC has made other loans which are secured by the Project Property, such construction disbursements shall be made to the applicable Borrower by deposit into a construction escrow established with the Title Company, in form and substance satisfactory to GMAC in its sole discretion. The amount of each Construction Loan disbursement so determined by GMAC may be subject to a retainage to be determined by GMAC and GMAC at all times shall have the right to retain sufficient funds which it reasonably determines are adequate to assure completion of the work to be performed under the Construction Contract, which shall not exceed ten percent (10%) of the cost of the Construction Project unless GMAC reasonably determines that a larger retention is necessary. Unless otherwise waived by GMAC, all disbursements of a Construction Loan for construction and installation of the improvements will be made monthly by GMAC to Borrowers. Unless otherwise waived by GMAC, GMAC shall not be required to make more than one disbursement under any Construction Loan in any calendar month. GMAC must be furnished with a complete application for payment at least five (5) business days prior to the proposed date of any disbursement under a Construction Loan (" Draw Certificate" ). Such Draw Certificate shall be in form of Exhibit B attached hereto and made a part hereof and executed by an executive officer of Capital. GMAC shall be entitled to accept and rely upon a signature on the Dra ...