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Exhibit 4.6 THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
CAPITAL AUTOMOTIVE L.P. This Third Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Capital Automotive L.P. (Third Amendment) is entered
into this 27th day of April, 2004, by Capital Automotive REIT, a Maryland real
estate investment trust (the General Partner), as general partner of Capital
Automotive L.P. (the Partnership). WHEREAS, the Second Amended and Restated Agreement of Limited Partnership
of the Partnership was executed on February 2, 1999, a First Amendment thereto
was executed on July 19, 2001, and a Second Amendment thereto was executed on
December 11, 2003 (as amended, the Agreement); WHEREAS, on April 27, 2004, the General Partner issued 2,500,000 shares of
8% Series B Cumulative Redeemable Preferred Shares (the Series B Preferred
Shares, each a Series B Preferred Share) at a gross offering price of $25.00
per Series B Preferred Share and, in connection therewith, the General Partner,
pursuant to Section 4.02(a) of the Agreement, is contributing the proceeds of
such issuance to the Partnership and causing the Partnership to issue to the
General Partner preferred equity ownership interests in the Partnership
(Series B Preferred Partnership Units); and WHEREAS, the General Partner desires to amend the Agreement in order to
reflect the aforementioned issuance of the Series B Preferred Partnership
Units. NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the undersigned
party, intending legally to be bound, hereby agrees as follows: 1. The Agreement is hereby amended by the addition of a new exhibit,
entitled EXHIBIT E, in the form attached hereto, which sets forth the
designations, allocations, preferences and other special rights, powers and
duties of the Series B Preferred Partnership Units and which shall be attached
to and made a part of the Agreement. 2. Pursuant to Section 4.02(a) of the Agreement, effective as of April 27,
2004, the issuance date of the Series B Preferred Shares by the General
Partner, the Partnership hereby issues 2,500,000 Series B Preferred Partnership
Units to the General Partner as provided in EXHIBIT E. The Series B Preferred
Partnership Units have been created and are being issued in conjunction with
the General Partners issuance of the Series B Preferred Shares, and as such,
the Series B Preferred Partnership Units are intended to have designations,
preferences and other rights, all such that the economic interests are
substantially similar to the designations, preferences and other rights of the
Series B Preferred Shares, and the terms of this Amendment, including without
limitation the attached EXHIBIT E, shall be interpreted in a fashion consistent
with this intent. In return for the issuance to the General Partner of the
Series B Preferred Partnership Units, the General Partner has contributed to
the Partnership the funds raised through its issuance of the Series B Preferred
Shares (the General Partners capital contribution shall be




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deemed to equal the amount of the gross proceeds of that share issuance
(i.e., the net proceeds actually contributed, plus any underwriters discount
or other expenses incurred, with any such discount or expense deemed to have
been incurred by the General Partner on behalf of the Partnership). 3. In order to reflect the issuance of the Series B Preferred Partnership
Units, Schedule A to the Agreement is hereby amended by adding to the end of
such Schedule A the following table: Series BPreferred
    
    Capital
    
    IssuanceName
    
    Partnership Units
    
    Contribution
    
    DateCapital Automotive REIT
    
    
    2,500,000
    
    
    $
    62,500,000
    
    
    
    4/27/2004
 4. The foregoing recitals are incorporated in and are part of this Third
Amendment. 5 . Except as specifically defined herein, all capitalized terms shall have
the definition provided in the Agreement. This Third Amendment has been
authorized by the General Partner pursuant to Article 11 of the Agreement and
does not require execution by the Limited Partners. No other changes to the
Agreement are authorized under this Third Amendment. IN WITNESS WHEREOF, the General Partner has executed this Third Amendment
as of the day and year first above written. GENERAL PARTNER
CAPITAL AUTOMOTIVE REIT,
a Maryland real estate investment trustBy:
    /s/ Thomas D. EckertThomas D. EckertPresident and
Chief Executive Officer - 2 -




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EXHIBIT E DESIGNATION OF THE
SERIES B PREFERRED PARTNERSHIP UNITS
OF CAPITAL AUTOMOTIVE L.P. 1. Number of Units and Designation. A class of ownership interests in the Partnership entitled Series B
Preferred Partnership Units is hereby designated and the number of Series B
Preferred Partnership Units constituting such class shall be 2,875,000. 2. Definitions. For purposes of the Series B Preferred Partnership Units, the following
terms shall have the meanings indicated in this Section 2, and capitalized
terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement: Series B Distribution Payment Date means any date on which cash
dividends are paid on all outstanding shares of the Series B Preferred Shares. Series B Liquidation Preference has the meaning set forth in Section 4
of this Exhibit E. Series B Preferred Partnership Units means the preferred equity
ownership interests in the Partnership issued to the General Partner by the
Partnership in connection with the issuance by the General Partner of the
Series B Preferred Shares, having the designations, preferences and rights set
forth in this EXHIBIT E. Series B Preferred Shares means the 8% Series B Cumulative Redeemable
Preferred Shares issued by the General Partner. 3. Distributions. Notwithstanding anything to the contrary contained in Section 5.02 of the
Agreement, on each Series B Distribution Payment Date, the General Partner
shall cause the Partnership to make a cash distribution to the General Partner
with respect to the Series B Preferred Partnership Units in an amount equal to
the amount that is required to be distributed by the General Partner on that
date to the holders of Series B Preferred Shares. The Series B Preferred
Partnership Units shall not be entitled to any distributions, whether payable
in cash, property or stock, except as provided herein. 4. Liquidation Preference. In the event of any liquidation, dissolution or winding up of the
Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital, surplus or otherwise) shall
be made under Section 5.06(a) to any classes of ownership interest in the
Partnership that are junior in priority to the Series B Preferred Partnership
Units, the holders - 3 -




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of the Series B Preferred Partnership Units shall be entitled to a
preference (the Series B Liquidation Preference) equal to the sum of (i)
$25.00 per Series B Preferred Partnership Unit, plus (ii) an amount per Series
B Preferred Partnership Unit equal to any accrued and unpaid dividends on one
Series B Preferred Share to the date of final distribution. Until the Series B
Liquidation Preference with respect to the Series B Preferred Partnership Units
has been paid in full, no payment shall be made under Section 5.06(a) with
respect to any classes of ownership interest in the Partnership that are junior
in priority to the Series B Preferred Partnership Units. If, upon any
liquidation, dissolution or winding up of the Partnership, the assets of the
Partnership, or proceeds thereof, distributable with respect to the Series B
Preferred Partnership Units shall be insufficient to pay in full the Series B
Liquidation Preference, the Liquidation Preference on the Series A Preferred
Partnership Units and the corresponding amounts payable on any other ownership
interests in the Partnership that are on a parity with the Series B Preferred
Partnership Units as to liquidation rights, then such assets, or the proceeds
thereof, shall be distributed among the holders of Series B Preferred
Partnership Units, the Series A Preferred Partnership Units and any such
ownership interests in the Partnership on the same parity as to liquidation
rights as the Series B Preferred Partnership Units, ratably in proportion to
the full, respective, preferential liquidating distributions to which they
would otherwise be entitled. After payment in full of the Series B Liquidation
Preference, the holders of Series B Preferred Partnership Units shall have no
right or claim to any of the remaining assets of the Partnership. For the
purposes of this Section 4, (i) a consolidation or merger of the Partnership
with one or more partnerships, or (ii) a sale or transfer of all or
substantially all of the Partnerships assets shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of the
Partnership. 5. Redemption. Series B Preferred Partnership Units shall be redeemable by the
Partnership as follows: (a) At any time that the General Partner exercises its right to redeem all
or any of the Series B Preferred Shares, the General Partner shall cause the
Partnership to concurrently redeem an equal number of Series B Preferred
Partnership Units, at a redemption price per Series B Preferred Partnership
Unit payable in cash and equal to the same price per share paid by the General
Partner to redeem the Series B Preferred Shares (i.e., a redemption price of
$25.00 per Series B Preferred Share, plus any accrued and unpaid dividends
thereon). No interest shall accrue for the benefit of the Series B Preferred
Partnership Units to be redeemed on any cash set aside by the Partnership. (b) If the Partnership shall redeem Series B Preferred Partnership Units
pursuant to paragraph (a) of this Section 5, from and after the redemption date
(unless the Partnership shall fail to make available the amount of cash
necessary to effect such redemption), (i) except for payment of the redemption
price, the Partnership shall not make any further distributions on the Series B
Preferred Partnership Units so called for redemption, (ii) said units shall no
longer be deemed to be outstanding, and (iii) all rights of the holders thereof
as holders of Series B Preferred Partnership Units of the Partnership shall
cease except the rights to receive the cash payable upon such redemption,
without interest thereon. - 4 -




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(c) If fewer than all the outstanding Series B Preferred Partnership Units
are to be redeemed, units to be redeemed shall be determined pro rata, by lot
or in such other manner from outstanding Series B Preferred Partnership Units
not previously called for redemption by any method determined by the General
Partner in its discretion. Upon any such redemption, the General Partner shall
amend SCHEDULE A to the Agreement as appropriate to reflect such redemption. 6. Status of Reacquired Units. All Series B Preferred Partnership Units which shall have been issued and
reacquired in any manner by the Partnership shall be deemed cancelled. 7. Ranking. The Series B Preferred Partnership Units shall be deemed to rank: (a) senior to all existing Partnership Interests, except for the Series A
Preferred Partnership Units; (b) senior to any class or series of ownership interests in the
Partnership, as to the payment of distributions and as to distributions of
assets upon liquidation, dissolution or winding up, if such class or series is
hereafter issued in connection with the future issuance by the General Partner
of common stock or any other equity securities, the terms of which specifically
provide that such equity securities rank junior to the Series B Preferred
Shares; (c) on a parity with the Series A Preferred Partnership Units and any
other class or series of ownership interests in the Partnership, as to the
payment of distributions and as to distributions of assets upon liquidation,
dissolution or winding up, if such class or series is hereafter issued in
connection with the future authorization or designation by the General Partner
of equity securities, the terms of which specifically provide that such equity
securities rank on a parity with the Series B Preferred Shares; and (d) junior to any class or series of ownership interests in the
Partnership, as to payment of distributions and as to distribution of assets
upon liquidation, dissolution or winding up, if such class or series is
hereafter issued in connection with the future authorization or designation by
the General Partner of equity securities, the terms of which specifically
provide that such class or series ranks senior to the Series B Preferred
Shares. The term ownership interests in the Partnership does not include
convertible debt securities issued in the future by the Partnership, all series
of which shall rank senior to the Series B Preferred Partnership Units prior to
the conversion of such debt securities. All Series B Preferred Partnership
Units shall rank equally with one another and shall be identical in all
respects. 8. Special Allocations. Notwithstanding Section 5.01(a) of the Agreement (but subject to Sections
5.01(b) and (c) of the Agreement), gross income of the Partnership shall be
allocated first to the General - 5 -




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Partner for each fiscal year until the sum of the cumulative amount
allocated under this Section 8 and under Section 8 of EXHIBIT D to the General
Partner for the current year and all prior years is equal to the cumulative
amount for the current year and all prior years of the sum of (A) the
distributions made to the General Partner under Section 3 of EXHIBIT D and
Section 3 of this EXHIBIT E, (B) the portion of the distributions made to the
General Partner under Section 5 of EXHIBIT D (if any) that exceeds $25.00 per
Series A Preferred Partnership Unit, (C) the portion of the distributions made
to the General Partner under Section 5 of this EXHIBIT E (if any) that exceeds
$25.00 per Series B Preferred Partnership Unit, (D) for the year in which a
distribution is to be made to the General Partner under Section 4 of EXHIBIT D,
the portion (if any) of the Liquidation Preference payable to the General
Partner under Section 4 of EXHIBIT D that exceeds $25.00 per Series A Preferred
Partnership Unit, and (E) for the year in which a distribution is to be made to
the General Partner under Section 4 of this EXHIBIT E, the portion (if any) of
the Liquidation Preference payable to the General Partner under Section 4 of
this EXHIBIT E that exceeds $25.00 per Series B Preferred Partnership Unit.
Any remaining Profit or Loss shall be allocated as set forth in Section 5.01(a)
of the Agreement. To the extent of any conflict between the provisions of this
Section 8 and the provisions of Section 8 of EXHIBIT D, the provisions of this
Section 8 shall control. 9. Restrictions on Ownership. The Series B Preferred Partnership Units shall be owned and held solely by
the General Partner. 10. Conversion. The Series B Preferred Partnership Units shall not be convertible into or
exchangeable for any other property or securities of the Partnership or any
other entity. 11. General. (a) The General Partner shall have a zero percent Partnership Interest
with respect to the Series B Partnership Units and shall have no voting rights
with respect to the Series B Preferred Partnership Units other than the right
to vote on an amendment to the Agreement if it would alter the distribution,
redemption or liquidation rights of the Series B Preferred Partnership Units or
any other rights or preferences of the Series B Preferred Partnership Units as
set forth in this EXHIBIT E. (b) The Series B Preferred Partnership Units shall not be entitled to the
benefits of any retirement or sinking fund. (c) The Series B Preferred Partnership Units shall not have any
preferences or relative, participating, optional or other special rights, or
voting powers, restrictions, limitations as to distributions, qualifications or
terms or conditions of redemption other than as expressly set forth in this
EXHIBIT E. (d) No holder of Series B Preferred Partnership Units shall have any
preemptive or preferential right to subscribe for, or to purchase, any
additional ownership - 6 -




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interests in the Partnership of any class or series, or any other security
of the Partnership which the Partnership may issue or sell. (e) The ownership of Series B Preferred Partnership Units may (but need
not, in the sole and absolute discretion of the General Partner) be evidenced
by one or more certificates. The General Partner shall amend SCHEDULE A to the
Agreement from time to time to the extent necessary to reflect accurately the
issuance of, and subsequent redemption, or any other event having an effect on
the ownership of, Series B Preferred Partnership Units. (f) The rights of the General Partner, in its capacity as holder of the
Series B Preferred Partnership Units, are in addition to and not in limitation
of any other rights or authority of the General Partner in any other capacity
under the Agreement or applicable law. In addition, nothing contained herein
shall be deemed to limit or otherwise restrict the authority of the General
Partner under the Agreement, other than in its capacity as holder of the Series
B Preferred Partnership Units. (g) If any preferences or other rights, restrictions, distributions,
qualifications, allocations or terms or conditions of redemption of the Series
B Preferred Partnership Units set forth in this EXHIBIT E are invalid, unlawful
or incapable of being enforced by reason of any rule of law or public policy,
all other preferences or other rights, restrictions, distributions,
qualifications, allocations or terms or conditions of redemption of Series B
Preferred Partnership Units set forth in this EXHIBIT E which can be given
effect without the invalid, unlawful or unenforceable provision thereof shall,
nevertheless, remain in full force and effect and no preferences or other
rights, restrictions, distributions, qualifications, allocations or terms or
conditions of redemption of the Series B Preferred Partnership Units herein set
forth shall be deemed dependent on any other provision thereof unless so
expressed therein. (h) The headings of the various subdivisions of this EXHIBIT E are for
convenience only and shall not affect the interpretation of any of the
provisions hereof. - 7 -