8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

August 12, 2003

Date of Report (Date of earliest event reported):

COMMERCIAL NET LEASE REALTY, INC.
(Exact Name of Registrant as specified in its Charter)

Maryland	0-12989	56-1431377
(State or Other Jurisdiction of	(Commission File Number)	(IRS Employer Identification Number)
Incorporation or Organization)

450 South Orange Avenue

Suite 900

Orlando, Florida 32801

(Address of principal executive offices, including zip code)

(407) 650-1000

(Registrant’s telephone number, including area code)

Item 1. Changes in Control of Registrant.

     Not Applicable.

Item 2. Acquisition or Disposition of Assets.

     Not Applicable.

Item 3. Bankruptcy or Receivership.

     Not Applicable.

Item 4. Changes in Registrant’s Certifying Accountant.

     Not Applicable.

Item 5. Other Events

     Concurrently with the filing of this Current Report on Form 8-K, the Registrant filed a Prospectus Supplement to the Registration Statement on Form S-3, File No. 333-105635 (the “Registration Statement”), with respect to the offering by the Registrant of 10,000 shares of the Registrant’s 6.70% Series B Cumulative Convertible Perpetual Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”). The Registration Statement was declared effective by the Securities and Exchange Commission on June 5, 2003.

Item 6. Resignation of Registrant’s Directors.

     Not Applicable.

Item 7. Financial Statements and Exhibits.

     (a)-(b) Not Applicable.

     (c)       Exhibits.

Exhibit No.	Description
1	Form of Placement Agent Agreement, which is being filed pursuant to Regulation S-K, Item 601(b)(1) in lieu of filing the otherwise required exhibit to the Registration Statement, under the Securities Act of 1933, as amended (the “Securities Act”), and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
4.1	First Amended and Restated Articles of Incorporation (filed as Exhibit 3.1 to the Registrant’s Registration Statement on Form S-3 (File No. 333-64511) and incorporated herein by reference).
4.2	Articles Supplementary relating to the Series B Preferred Stock (filed as Exhibit 3 to the Registrant’s Form 8-A filed on August 13, 2003 and incorporated herein by reference).

4.3	Form of Investment Agreement relating to the Series B Preferred Stock (filed as Exhibit 2 to the Registrant’s Form 8-A filed on August 13, 2003 and incorporated herein by reference).
4.4	Specimen Certificate for the Series B Preferred Stock (filed as Exhibit 4 to the Registrant’s Form 8-A filed on August 13, 2003 and incorporated herein by reference).
5	Opinion of Shaw Pittman LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(5) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
8	Opinion of Shaw Pittman LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(8) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
12	Statement of Computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends, which is being filed pursuant to Regulation S-K, Item 601(b)(12) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
23.1	Consents of Shaw Pittman LLP, which are being filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (contained in the opinions filed as Exhibits 5 and 8 hereto).
23.2	Consent of KPMG LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).

Item 8. Change in Fiscal Year.

     Not Applicable.

Item 9. Regulation FD Disclosure.

     Not Applicable.

Item 10. Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.

     Not Applicable.

Item 11. Temporary Suspension of Trading Under Registrant’s Employee Benefit Plans.

     Not Applicable.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	COMMERCIAL NET LEASE REALTY, INC.
Date: August 12, 2003	By:	/s/ Kevin B. Habicht
		Kevin B. Habicht
		Chief Financial Officer

EXHIBITS

Exhibit No.	Document
1	Form of Placement Agent Agreement, which is being filed pursuant to Regulation S-K, Item 601(b)(1) in lieu of filing the otherwise required exhibit to the Registration Statement, under the Securities Act of 1933, as amended (the “Securities Act”), and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
4.1	First Amended and Restated Articles of Incorporation (filed as Exhibit 3.1 to the Registrant’s Registration Statement on Form S-3 (File No. 333-64511) and incorporated herein by reference).
4.2	Articles Supplementary, relating to the Series B Preferred Stock (filed as Exhibit 3 to the Registrant’s Form 8-A filed on August 13, 2003 and incorporated herein by reference).
4.3	Form of Investment Agreement relating to the Series B Preferred Stock (filed as Exhibit 2 to the Registrant’s Form 8-A filed on August 13, 2003 and incorporated herein by reference).
4.4	Specimen Certificate for the Series B Preferred Stock (filed as Exhibit 4 to the Registrant’s Form 8-A filed on August 13, 2003 and incorporated herein by reference).
5	Opinion of Shaw Pittman LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(5) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
8	Opinion of Shaw Pittman LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(8) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
12	Statement of Computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends, which is being filed pursuant to Regulation S-K, Item 601(b)(12) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).
23.1	Consents of Shaw Pittman LLP, which are being filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (contained in the opinions filed as Exhibits 5 and 8 hereto).
23.2	Consent of KPMG LLP, which is being filed pursuant to Regulation S-K, Item 601(b)(23) in lieu of filing the otherwise required exhibit to the Registration Statement under the Securities Act, and which, since this Form 8-K filing is incorporated by reference in such Registration Statement, is set forth in full in such Registration Statement (Filed herewith).

EX-1 3 w89261exv1.htm EXHIBIT 1

EXHIBIT 1

PLACEMENT AGENT AGREEMENT

     THIS AGREEMENT, dated as of August 12, 2003, is made by and between COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation (the “Company”) and CNL SECURITIES CORP., a Florida corporation (the “Placement Agent”).

     WHEREAS, the Company proposes to offer and sell up to an aggregate of 10,000 shares of 6.70% Series B Cumulative Convertible Perpetual Preferred Shares in the Company (the “Shares”) to Cook County Employees Annuity and Benefit Fund (the “Investor”) pursuant to an Investment Agreement between the Company and the Investor (the “Investment Agreement”);

     WHEREAS, the Placement Agent is registered with the National Association of Securities Dealers, Inc. as a broker-dealer, and is presently licensed in all fifty states, the District of Columbia, and the Commonwealth of Puerto Rico as a broker-dealer qualified to offer and sell to the public securities of the type represented by the Shares; and

     WHEREAS, the Company desires to retain the Placement Agent to use its best efforts to sell the Shares and to manage the sale by others of the Shares, and the Placement Agent is willing and desires to serve as the Placement Agent for the Company for the sale of the Shares upon the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the Company and the Placement Agent agree as follows:

SECTION 1
Definitions

     Whenever used in this Agreement, the following terms shall have the following specified meanings.

     1.1 “NASD” means the National Association of Securities Dealers, Inc.

     1.2 “Offering” means the offering of up to 10,000 Shares of 6.70% Series B Cumulative Convertible Perpetual Preferred Shares in the Company pursuant to the terms and conditions of the Registration Statement and the Investment Agreement.

     1.3 “Participating Brokers” mean those broker-dealers engaged by the Placement Agent to participate in the Offering pursuant to Paragraph 3.2.

     1.4 “Prospectus” means the final prospectus included in the Registration Statement (file number 333-105635), pursuant to which the Company will offer Shares to the Investor, as the same may be amended or supplemented from time to time after the effective date of the Registration Statement.

     1.5 “Registration Statement” means the registration statement on Form S-3 (file number 333-105635) pursuant to which the Company has registered the Shares with the SEC as provided in the Securities Act of 1933, as amended, as such registration statement may be amended or supplemented from time to time.

     1.6 “SEC” means the Securities and Exchange Commission.

     1.7 “Shares” mean the 6.70% Series B Cumulative Convertible Perpetual Preferred Shares of the Company, par value $0.01 per share, with a purchase price of $2,500 per share. An aggregate of up to 10,000 Shares will be offered pursuant to the Investment Agreement.

     1.8 “Company” means Commercial Net Lease Realty, Inc., a Maryland corporation.

SECTION 2
Appointment

     2.1 Appointment of Placement Agent. Subject to the terms and conditions set forth in this Agreement, the Company hereby appoints CNL Securities Corp. as the Placement Agent of the Offering to use its best efforts to sell up to 10,000 Shares of the Company and to manage the sale by others of such Shares for the Company’s account. The Placement Agent hereby accepts such appointment.

SECTION 3
Sale of Shares

     3.1 Best Efforts. The Placement Agent shall use its best efforts to sell or cause to be sold the Shares to the Investor in accordance with such terms as are set forth in this Agreement, the Investment Agreement, the Prospectus and the Registration Statement. Notwithstanding anything herein to the contrary, the Placement Agent shall have no obligation under this Agreement to purchase any of the Shares for its own account.

     3.2 Association of Other Broker-Dealers. The Company hereby acknowledges and agrees that the Placement Agent may engage other brokers (“Participating Brokers”) to participate in the Offering, provided that (i) all Participating Brokers are registered with the NASD and are duly licensed by the state securities regulatory authorities in the jurisdictions in which they will offer and sell Shares or exempt from broker-dealer registration with the NASD and the state securities regulatory authorities, and (ii) all such engagements are evidenced by written agreements, the terms and conditions of which substantially conform to the Participating Broker Agreement approved by the Company and attached hereto as Exhibit A (the “Participating Broker Agreement”). The Placement Agent is authorized to reallow so much of the commissions which it receives under Paragraph 4.1 to Participating Brokers as it sees fit.

     3.3 Sales Literature. The Placement Agent shall use and distribute in conjunction with the offer and sale of any Shares only the Prospectus and such sales literature and advertising as shall have been previously approved in writing by the Company.

     3.4 Payment of Purchase Price. The purchase price for the Shares shall be paid directly from the Investor to the Company as set forth in the Investment Agreement.

-2-

SECTION 4
Compensation

     4.1 Commissions. The Company shall pay to the Placement Agent, as compensation for all services to be rendered by the Placement Agent pursuant to this Agreement, a commission equal to $50 per Share issued at the Closing, as that term is defined in the Investment Agreement. Such commission shall be payable by the Company to the Placement Agent on the Closing Date, as that term is defined in the Investment Agreement.

SECTION 5
Term of Agreement

     5.1 Commencement and Expiration. This Agreement shall commence as of the date first set forth above and, unless sooner terminated pursuant to Paragraph 5.2 or by operation of law or otherwise, shall expire on the Closing Date at the time of Closing, as those terms are defined in the Investment Agreement.

     5.2 Termination. Any party may terminate this Agreement at any time and for any reason by giving 30 days prior written notice of intention to terminate to each other party hereto.

SECTION 6
Covenants of the Placement Agent

     The Placement Agent covenants, warrants and represents, during the full term of this Agreement, that:

               (a) it is (i) a corporation duly organized and validly existing under the laws of the State of Florida, (ii) a member of the NASD, and (iii) a broker-dealer registered under the securities laws of all fifty states, the District of Columbia, and the Commonwealth of Puerto Rico.

               (b) it will use its best efforts to assure that all Shares are offered and sold in accordance with (i) the terms of the Registration Statement, the Prospectus, the Investment Agreement and this Agreement, (ii) the requirements of applicable federal and state securities laws and regulations, and (iii) the applicable rules of the NASD, including, without limitation, the NASD’s Conduct Rules;

               (c) it will not use any offering or selling materials other than materials furnished or previously approved in writing by the Company; and

               (c) it either (i) will not purchase Shares for its own account or (ii) will hold all such Shares for investment.

-3-

SECTION 7
Covenants of the Company

     The Company covenants, warrants and represents, during the full term of this Agreement, that:

               (a) it will use its best efforts to maintain the effectiveness of the Registration Statement, and will file, or cause to be filed, such amendments to the Registration Statement as may be reasonably necessary for that purpose;

               (b) it will use its best efforts to (i) prevent the issuance of any order by the SEC, any state securities regulatory authority or any other regulatory authority which prevents the use of the Prospectus or otherwise prevents or suspends the Offering, and (ii) obtain the lifting of any such order if issued;

               (c) it will deliver to the Placement Agent such number of copies of the Prospectus, and any supplements and amendments thereto which are finally approved by the SEC, as the Placement Agent may reasonably request for sale of the Shares, which Prospectus shall not contain any untrue statement of a material fact required to be stated therein or omit any material statement necessary to make the statements therein, in light of the circumstances under which they are made, not misleading;

               (d) if at any time any event occurs and becomes known to the Company prior to the Closing (as that term is defined in the Investment Agreement), as a result of which the Registration Statement or Prospectus would include an untrue statement of a material fact or, in view of the circumstances under which they were made, omit to state any material fact necessary to make the statements therein not misleading, the Company will effect the preparation of an amended or supplemented Registration Statement or Prospectus which will correct such statement or omission;

               (e) it will promptly notify the Placement Agent of any post-effective amendments or supplements to the Registration Statement or Prospectus;

               (f) it will, during the full term of this Agreement, abide by all applicable provisions of its governing instruments, as the same may be amended; and

               (g) it will use its best efforts to cause, at or prior to the time the Registration Statement becomes effective, the qualification or registration of the Shares for offering and sale under the securities laws of such jurisdictions as shall be determined by the Company.

SECTION 8
Payment of Costs and Expenses

     8.1 Placement Agent. The Placement Agent shall pay all costs and expenses incident to the performance of its obligations under this Agreement which are not expressly assumed by the Company under Paragraph 8.2 below.

     8.2 Company. The Company shall pay all costs and expenses related to:

               (a) the registration of the offer and sale of the Shares with the SEC, including the cost of preparation, printing, filing and delivery of the Registration Statement and all copies of the Prospectus used in the Offering, and any amendments or supplements to such documents;

-4-

               (b) the preparation of the Investment Agreement to be used in the sale of the Shares;

               (c) the qualification or registration of the Shares under state securities or “blue sky” laws of states where the Shares are to be offered or sold, if required;

               (d) the filing of the Registration Statement and any related documents, including any amendments or supplements to such documents, with the NASD;

               (e) any filing fees, and fees and disbursements to counsel or accountants which are in any way related to any of the above items; and

               (f) the preparation, printing and filing of all advertising originated by it relating to the sale of Shares.

SECTION 9
Indemnification

     9.1 Indemnification of Company. The Placement Agent agrees to indemnify, defend and hold harmless the Company from all losses, claims, demands, liabilities and expenses, including reasonable legal and other expenses incurred in defending such claims or liabilities, whether or not resulting in any liability to the Company, which the Company may incur in connection with the offer or sale of any Shares, either by the Placement Agent pursuant to this Agreement or any Participating Broker acting on the Placement Agent’s behalf pursuant to the Participating Broker Agreement which arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact, or any omission or alleged omission of a material fact, other than a statement or omission contained in the Prospectus, the Registration Statement, or any state securities filing which was not based on information supplied to the Company by the Placement Agent or a Participating Broker; or (ii) the breach by the Placement Agent or any Participating Broker acting on its behalf of any of the terms and conditions of this Agreement or any Participating Broker Agreement, including, but not limited to, alleged violations of the Securities Act of 1933, as amended.

     9.2 Indemnification of Placement Agent. The Company agrees to indemnify, defend and hold harmless the Placement Agent from all losses, claims, demands, liabilities and expenses, including reasonable legal and other expenses incurred in defending such claims or liabilities, whether or not resulting in any liability to the Placement Agent, which the Placement Agent may incur in connection with the offer or sale of any Shares, either by the Placement Agent pursuant to this Agreement or any Participating Broker acting on the Placement Agent’s behalf pursuant to the Participating Broker Agreement which arise out of or are based upon (i) any untrue statement of a material fact contained in the Prospectus or the Registration Statement, as filed and in effect with the SEC, or in any amendment or supplement thereto, or in any application prepared or approved in writing by counsel to the Company and filed with any state regulatory agency in order to register or qualify the Shares under the securities laws thereof (the “Blue Sky applications”), or (ii) any omission or alleged omission to state therein a material fact required to be stated in the Prospectus or the Registration Statement or the Blue Sky applications, or necessary to make such statements, and any part thereof, not misleading; provided, further, that any such untrue statement, omission or alleged omission is not based on information included in any such document which was supplied to the Company, or any officer of the Company by the Placement Agent.

-5-

SECTION 10
Miscellaneous

     10.1 Notices. Any notice, approval, request, authorization, direction or other communication under this Agreement shall be given in writing and shall be deemed to be delivered when delivered in person or deposited in the United States mail, properly addressed and stamped with the required postage, registered or certified mail, return receipt requested, to the intended recipient as set forth below.

If to the Company:	Commercial Net Lease Realty, Inc.
	CNL Center at City Commons
	450 South Orange Avenue
	Orlando, Florida 32801
	Attention: Kevin B. Habicht, Executive Vice
	President and Chief Financial Officer
If to the Placement Agent:	CNL Securities Corp.
	CNL Center at City Commons
	450 South Orange Avenue
	Orlando, Florida 32801
	Attention: Robert A. Bourne, President

Any party may change its address specified above by giving each other party notice of such change in accordance with this Paragraph 10.1.

     10.2 Invalid Provision. The invalidity or unenforceability of any provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted.

     10.3 No Partnership. Nothing in this Agreement shall be construed or interpreted to constitute the Placement Agent as in association with or in partnership with the Company, and instead, this Agreement only shall constitute the Placement Agent as a dealer authorized by the Company to sell and to manage the sale by others of the Shares according to the terms set forth in the Registration Statement, the Prospectus or this Agreement.

     10.4 No Third Party Beneficiaries. No provision of this Agreement is intended to be for the benefit of any person or entity not a party to this Agreement, and no third party shall be deemed to be a beneficiary of any provision of this Agreement. Further, no third party shall by virtue of any provision of this Agreement have a right of action or an enforceable remedy against either party to this Agreement.

     10.5 Survival. Section 9 and all provisions of this Agreement which may reasonably be interpreted or construed as surviving the expiration or termination of this Agreement shall survive the expiration or termination of this Agreement.

     10.6 Entire Agreement. This Agreement constitutes the complete understanding among the parties hereto, and no variation, modification or amendment to this Agreement shall be deemed valid or effective unless and until it is signed by all parties hereto.

     10.7 Successors and Assigns. No party shall assign (voluntarily, by operation of law or otherwise) this Agreement or any right, interest or benefit under this Agreement without the prior written

-6-

consent of each other party. Subject to the foregoing, this Agreement shall be fully binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns.

     10.8 Nonwaiver. The failure of any party to insist upon or enforce strict performance by any other party of any provision of this Agreement or to exercise any right under this Agreement shall be construed as a waiver or relinquishment to any extent of such party’s right to assert or rely upon any such provision or right in that or any other instance; rather, such provision or right shall be and remain in full force and effect.

     10.9 Applicable Law. This Agreement shall be interpreted, construed and enforced in all respects in accordance with the laws of the State of Florida.

[Signatures appear on next page]

-7-

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Company:	COMMERCIAL NET LEASE REALTY, INC.
	By:	/s/ Kevin B. Habicht KEVIN B. HABICHT, Executive Vice President and Chief Financial Officer
Placement Agent:	CNL SECURITIES CORP.
	By:	/s/ Robert A. Bourne ROBERT A. BOURNE, President

-8- EX-5 4 w89261exv5.htm EXHIBIT 5

Exhibit 5 Opinion of Shaw Pittman LLP

[LETTERHEAD OF SHAW PITTMAN LLP]

August 12, 2003

Commercial Net Lease Realty, Inc.
450 South Orange Avenue
Suite 900
Orlando, Florida 32801

Ladies and Gentlemen:

     We have acted as counsel to Commercial Net Lease Realty, Inc., a Maryland corporation (the “Company”), in connection with the Registration Statement on Form S-3, Registration No. 333-105635 (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and declared effective by the Commission on June 5, 2003. Pursuant to the Registration Statement, the Company proposes to issue and sell 10,000 shares of 6.70% Series B Cumulative Convertible Perpetual Preferred Stock, par value $0.01 per share (the “Preferred Stock”), pursuant to the terms set forth in the prospectus supplement dated August 12, 2003 (the “Prospectus Supplement”) to the prospectus filed as part of the Registration Statement.

     Based upon our examination of the originals or copies of such documents, corporate records, certificates of officers of the Company and other instruments as we have deemed necessary and upon the laws as presently in effect, we are of the opinion that the Preferred Stock has been duly authorized for issuance by the Company, and that upon issuance and delivery in accordance with the Prospectus Supplement, the Preferred Stock will be validly issued, fully paid and nonassessable.

     We hereby consent to the filing of this opinion as an exhibit to the Prospectus Supplement. We also consent to the reference to Shaw Pittman LLP under the caption “Legal Matters” in the Prospectus Supplement.

Very truly yours,

/s/ Shaw Pittman LLP

SHAW PITTMAN LLP

EX-8 5 w89261exv8.htm EXHIBIT 8

Exhibit 8 Opinion of Shaw Pittman LLP

[LETTERHEAD OF SHAW PITTMAN LLP]

August 12, 2003

Commercial Net Lease Realty, Inc.
450 South Orange Avenue
Suite 900
Orlando, Florida 32801

Ladies and Gentlemen:

     Commercial Net Lease Realty, Inc. (the “Company”) has filed a registration statement on Form S-3 (File No. 333-105635) (the “Registration Statement”), with the Securities and Exchange Commission, which was declared effective on June 5, 2003. In connection with the filing of a prospectus supplement dated August 12, 2003, you have asked us to render an opinion with respect to the qualification of the Company as a real estate investment trust (“REIT”) under sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”).

     We have served as special counsel for the Company in connection with the filing of the prospectus and the prospectus supplement and from time to time in the past have represented the Company on specific matters as requested by the Company. Specifically for the purpose of this opinion, we have examined and relied upon the following: copies of the Company’s Articles of Incorporation and any amendments thereto; the Registration Statement; the prospectus; the prospectus supplement; copies of executed leases covering real property owned by the Company; the Form 10-K filed on March 28, 2003; and the Company’s Form S-11 Registration Statement as filed with the Securities and Exchange Commission on August 15, 1984.

     We have not served as general counsel to the Company and have not been involved in decisions regarding the day-to-day operation of the Company and its properties. We have, however, discussed the mode of operation of the Company with its officers with a view to learning information relevant to the opinions expressed herein and have received and relied upon a certificate from the Company with respect to certain matters.

     We have discussed with management of the Company arrangements relating to the management of its properties, the relationships of the Company with tenants of such properties, and certain terms of leases of such properties to tenants, with a view to assuring that (i) at the close of each quarter of the taxable years covered by this opinion, it met the asset composition requirements set forth in section 856(c)(4), (ii) with respect to years covered by this opinion, it satisfied the 95% and 75% gross income tests set forth in sections 856(c)(2) and (3), respectively, and (iii) with respect to tax years prior to 1998, it satisfied the 30% gross income test. We have further reviewed with management of the Company the requirements that the beneficial ownership of a REIT be held by 100 or more persons for at least 335/365ths of each taxable year

Commercial Net Lease Realty, Inc.
August 12, 2003
Page 2

and that a REIT must satisfy the diversity of ownership requirements of section 856(h) as such requirements existed in the years covered by this opinion, and we have been advised by management that at all times during the years covered by this opinion (and specifically on each record date for the payment of dividends during 1984 through the date hereof) the Company has had more than 1,000 shareholders of record, that the Company maintains the records required by section 1.857-8 of the Treasury Regulations, that no later than January 30 of each year it sent the demand required by section 1.857-8(d) of the Treasury Regulations to each shareholder of record owning one percent or more of the outstanding shares of the Company on the appropriate date required by said regulation, and that the actual ownership of the Company shares was such that, to the best knowledge of its management (based upon responses to the aforesaid demands, any filing of a Schedule 13D under the Securities Exchange Act of 1934, as amended, or any other sources of information), the Company satisfied the applicable requirements of section 856(h). Further, we have examined various property leases and lease supplements relating to the properties that the Company owns, and although leases relating to certain properties that the Company owns have not been made available to us, the Company has represented with respect to such leases that they do conform in all material respects to a form of lease agreement provided to us. On the basis of discussions with management of the Company, we are not aware that the Company’s election to be a REIT has been terminated or challenged by the Internal Revenue Service or any other party, or that the Company has revoked its election to be a REIT for any such prior year so as to make the Company ineligible to qualify as a REIT for the years covered by this opinion.

     In rendering the opinions set forth herein, we are assuming that copies of documents examined by us are true copies of originals thereof and that the information concerning the Company set forth in the Company’s federal income tax returns, and in the prospectus supplement, as well as the information provided to us by the Company’s management are true and correct. We have no reason to believe that such assumptions are not warranted.

     Based upon the foregoing, we are of the opinion that the Company was a “real estate investment trust” as defined by section 856(a) for its taxable years ended December 31, 1984 through December 31, 2002, and its current and proposed method of operation will enable it to meet the requirements for qualification and taxation as a REIT for its taxable year ending December 31, 2003, and for all future taxable years. With respect to the 2003 year and all future years, however, we note that the Company’s status as a real estate investment trust at any time is dependent among other things upon its meeting the requirements of section 856 throughout the year and for the year as a whole.

     This opinion is based upon the existing provisions of the Code (or predecessor provisions, as applicable), rules and regulations (including proposed regulations) promulgated thereunder, and reported administrative and judicial interpretations thereof, all of which are subject to change, possibly with retroactive effect. This opinion is limited to the specific matters covered hereby and should not be interpreted to imply that the undersigned has offered its opinion on any other matter.

Commercial Net Lease Realty, Inc.
August 12, 2003
Page 3

     We hereby confirm that the statements set forth in the Registration Statement under the heading “Federal Income Tax Considerations,” and in the prospectus supplement under the heading “Certain Additional Income Tax Considerations,” to the extent that they constitute matters of law or legal conclusions with respect thereto, are correct in all material respects.

     We hereby consent to the filing of this opinion as an exhibit to the prospectus supplement. We also consent to the reference to Shaw Pittman LLP under the caption “Legal Matters” in the prospectus supplement. In giving such consent, we do not consider that we are “experts,” within the meaning of the term used in the Act or the rules and regulations of the Securities and Exchange Commission promulgated thereunder, with respect to any part of the Registration Statement, including this opinion as an exhibit or otherwise.

Very truly yours,

SHAW PITTMAN LLP

By: /s/ Charles B. Temkin

Charles B. Temkin, P.C.

EX-12 6 w89261exv12.htm EXHIBIT 12

EXHIBIT 12

CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

The following table sets forth the Company’s consolidated ratios of earnings to fixed charges for the periods as shown.

			6/30/03			2002			2001			2000			1999			1998
Net Earnings			$	22,498,250		$	48,058,349		$	28,963,548		$	38,250,664		$	35,311,517		$	32,441,198
Fixed Charges:
		Interest on Indebtedness		13,568,591			27,147,412			25,360,505			26,913,436			22,109,567			13,444,646
		Amortization of Discount Relating to Indebtedness		71,665			127,375			107,200			93,600			55,758			15,244
		Amortization of Treasury Lock Gain		(292,899	)		(554,527	)		(515,299	)		(478,846	)		(245,388	)		—
		Amortization of Deferred Charges		595,143			960,447			805,707			804,388			723,310			710,491
				13,942,500			27,680,707			25,758,113			27,332,578			22,643,247			14,170,381
Net Earnings Before Fixed Charges			$	36,440,750		$	75,739,056		$	54,721,661		$	65,583,242		$	57,954,764		$	46,611,579
Divided by Fixed Charges
		Fixed Charges	$	13,942,500		$	27,680,707		$	25,758,113		$	27,332,578		$	22,643,247		$	14,170,381
		Capitalized and Deferred Interest		(143,790	)		(599,902	)		451,624			646,897			1,111,165			1,111,615
			$	13,798,710		$	27,080,805		$	26,209,737		$	27,979,475		$	23,754,412		$	15,281,996
Ratio of Net Earnings to Fixed Charges				2.64			2.80			2.09			2.34			2.44			3.05
	Preferred Stock Dividends		$	2,003,287		$	4,009,554		$	—		$	—		$	—		$	—
	Combined Fixed Charges and Preferred Stock Dividends		$	15,801,997		$	31,090,359		$	26,209,737		$	27,979,475		$	23,754,412		$	15,281,996
Ratio of Net Earnings to Combined Fixed Charges and Preferred Stock Dividends				2.31			2.44			2.09			2.34			2.44			3.05
Advisor Acquisition Costs			$	—		$	—		$	12,581,769		$	1,521,063		$	9,824,172		$	5,501,343
Net Earnings After Advisor Acquisition Costs and Fixed Charges (1)			$	36,440,750		$	75,739,056		$	67,303,430		$	67,104,305		$	67,778,936		$	52,112,922
Ratio of Net Earnings After Advisor Acquisition Costs to Fixed Charges (1)				2.64			2.80			2.57			2.40			2.85			3.41

(1) The Company’s revolving line of credit and notes payable covenants provide for fixed charge coverage ratios to be calculated before Advisor Acquisiton Costs.

EX-23.2 7 w89261exv23w2.htm EXHIBIT 23.2

Exhibit 23.2

[KPMG LLP LETTERHEAD]

Consent of Independent Accountants

The Board of Directors
Commercial Net Lease Realty, Inc.:

     We consent to the incorporation by reference in this registration statement on Form S-3 of Commercial Net Lease Realty, Inc. to be filed with the Securities and Exchange Commission on August 13, 2003 (No. 333-105635) of our reports dated January 10, 2003, except as to the fifth paragraph of Note 20 to the consolidated financial statements, which is as of February 13, 2003, relating to the consolidated balance sheets of Commercial Net Lease Realty, Inc. and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of earnings, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2002, and the related financial statement schedules, which reports appear in the December 31, 2002 annual report on Form 10-K of Commercial Net Lease Realty, Inc. and to the reference to our firm under the heading “Experts” in the prospectus.

/s/ KPMG LLP

Orlando, Florida
August 13, 2003

-----END PRIVACY-ENHANCED MESSAGE-----

EX-1

exv1

EX-5

exv5

EX-8

exv8

EX-12

exv12

EX-23.2

exv23w2