exv4w1



 





Exhibit 4.1




COMMERCIAL NET LEASE REALTY, INC.




as Issuer




to




WACHOVIA BANK, NATIONAL ASSOCIATION




as Trustee




Supplemental Indenture No. 5




Dated as of June 18, 2004










Supplementing the Indenture dated as of March 25, 1998










$150,000,000




of




6.25% Notes due 2014




 









 








               SUPPLEMENTAL INDENTURE NO. 5, dated as of June 18, 2004 (the “Supplemental
Indenture No. 5”), between COMMERCIAL NET LEASE REALTY, INC., a corporation
duly organized and existing under the laws of the State of Maryland (herein
called the “Company”), and WACHOVIA BANK, NATIONAL ASSOCIATION (as successor
trustee to First Union National Bank), a national banking association duly
organized and existing under the laws of the United States of America, as
Trustee (herein called the “Trustee”).



RECITALS OF THE COMPANY




               The Company and the Trustee are parties to an Indenture, dated as of March
25, 1998 (the “Original Indenture”), as supplemented by Supplemental Indenture
No. 1 dated as of March 25, 1998, Supplemental Indenture No. 2 dated as of June
21, 1999, Supplemental Indenture No. 3 dated as of September 20, 2000 and
Supplemental Indenture No. 4 dated as of May 30, 2002 (together with the
Original Indenture, Supplemental Indentures 1 through 4 and this Supplemental
Indenture No. 5, the “Indenture”) a form of which has been filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, as an exhibit to the Company’s Registration Statement on Form S-3
(Registration No. 333-105635), providing for the issuance from time to time of
Debt Securities of the Company (the “Securities”).



               The Company has heretofore issued, pursuant to the Indenture, (a)
$100,000,000 aggregate principal amount of 7-1/8% Notes due 2008, (b)
$100,000,000 aggregate principal amount of 8.125% notes due 2004, (c)
$20,000,000 aggregate principal amount of 8.50% notes due 2010, and (d)
$50,000,000 aggregate principal amount of 7.75% Notes due 2012.



               The Company has commenced an offering of 6.25% Notes due 2014 (the “6.25%
Notes”).



               Section 3.1 of the Original Indenture provides for various matters with
respect to any series of Securities issued under the Indenture to be
established in an indenture supplemental to the Indenture.



               Section 9.1(7) of the Original Indenture provides for the Company and the
Trustee to enter into an indenture supplemental to the Original Indenture to
establish the form or terms of Securities of any series as provided by Sections
2.1 and 3.1 of the Original Indenture.



               The Board of Directors of the Company has duly adopted resolutions
authorizing the Company to execute and deliver this Supplemental Indenture No.
5.



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               All the conditions and requirements necessary to make this Supplemental
Indenture No. 5, when duly executed and delivered, a valid and legally binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.



               NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 5 WITNESSETH:



               For and in consideration of the premises and the purchase of each of the
series of Securities provided for herein by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders
of the Securities, as follows:



ARTICLE ONE




RELATION TO INDENTURE; DEFINITIONS




               SECTION 1.1. Relation to Indenture.



               This Supplemental Indenture No. 5 constitutes an integral part of the
Indenture.



               SECTION 1.2. Definitions.



               For all purposes of this Supplemental Indenture No. 5, the following terms
shall have the meanings specified except as otherwise expressly provided for or
unless the context otherwise requires. Capitalized terms used but not defined
herein shall have the respective meanings assigned to them in the Indenture.
All references herein to Articles and Sections, unless otherwise specified,
refer to the corresponding Articles and
Sections of this Supplemental Indenture No. 5.



               “6.25% Notes” has the meaning given in the Recitals of the Company.



               “Acquired Indebtedness” means Indebtedness of a Person (i) existing at the
time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to be
incurred on the date of the related acquisition of assets from any Person or
the date the acquired Person becomes a Subsidiary.




               “Annual Debt Service Charge” for any period means the aggregate interest
expense for such period in respect of, and the amortization during such period
of any original issue discount of, Indebtedness of the Company and its
Subsidiaries and the



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amount of dividends which are payable during such period in respect of any
Disqualified Stock.




               “Business Day” means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in the City of
New York or in the City of Charlotte are authorized or required by law,
regulation or executive order to close.



               “Capital Stock” means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.



               “Consolidated Income Available for Debt Service” for any period means
Earnings from Operations of the Company and its Subsidiaries plus amounts which
have been deducted, and minus amounts which have been added, for the following
(without duplication): (i) interest on Indebtedness of the Company and its
Subsidiaries, (ii) provision for taxes of the Company and its Subsidiaries
based on income, (iii) amortization of debt discount, (iv) provisions for gains
and losses on properties and property depreciation and amortization, (v) the
effect of any noncash charge resulting from a change in accounting principles
in determining Earnings from Operations for such period and (vi) amortization
of deferred charges.



               “Corporate Trust Office” means the office of the Trustee at which, at any
particular time, its corporate trust business for this transaction shall be
principally administered, which office at the date hereof is located at 225
Water Street, Third Floor, Jacksonville, Florida 32202, and for purposes of
the Place of Payment provisions of Sections 3.5 and 10.2 of the Original
Indenture, is located at 1525 West W.T. Harris Blvd., Charlotte, North Carolina
28288-1153.



               “Disqualified Stock” means, with respect to any Person, any Capital Stock
of such Person which by the terms of such Capital Stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock), (ii) is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part (other than Capital Stock which is
redeemable solely in exchange for Capital Stock which is not Disqualified Stock
or the redemption price of which may, at the option of such Person, be paid in
Capital Stock which is not Disqualified Stock), in each case on or prior to the
Stated Maturity of the Notes.



               “Earnings from Operations” for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items and property
valuation



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losses, net as reflected in the financial statements of the Company and its
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP.




               “Encumbrance” means any mortgage, lien, charge, pledge or security
interest of any kind.



               “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder by the Commission.



               “GAAP” means generally accepted accounting principles as used in the
United States applied on a consistent basis as in effect from time to time;
provided that solely for purposes of any calculation required by the financial
covenants contained herein, “GAAP” shall mean generally accepted accounting
principles as used in the United States on the date hereof, applied on a
consistent basis.



               “Indebtedness” of the Company or any Subsidiary means any indebtedness of
the Company or any Subsidiary, whether or not contingent, in respect of (i)
borrowed money or evidenced by bonds, notes, debentures or similar instruments
whether or not such indebtedness is secured by any Encumbrance existing on
property owned by the Company or any Subsidiary, (ii) indebtedness for borrowed
money of a Person other than the Company or a Subsidiary which is secured by
any Encumbrance existing on property owned by the Company or any Subsidiary, to
the extent of the lesser of (x) the amount of indebtedness so secured and (y)
the fair market value (as determined in good faith by the Board of Directors of
the Company) of the property subject to such Encumbrance, (iii) the
reimbursement obligations, contingent or otherwise, in connection with any
letters of credit actually issued or amounts representing the balance deferred
and unpaid of the purchase price of any property or services, except any such
balance that constitutes an accrued expense or trade payable, or all
conditional sale obligations or obligations under any title retention
agreement, (iv) the principal amount of all obligations of the Company or any
Subsidiary with respect to redemption, repayment or other repurchase of any
Disqualified Stock, or (v) any lease of property by the Company or any
Subsidiary as lessee which is reflected on the Company’s consolidated balance
sheet as a capitalized lease in accordance with GAAP, and also includes, to the
extent not otherwise included, any obligation by the Company or any Subsidiary
to be liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), Indebtedness of
another Person (other than the Company or any Subsidiary) (it being understood
that Indebtedness shall be deemed to be incurred by the Company or any
Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).



               “Make-Whole Amount” means, in connection with any optional redemption or
accelerated payment of any Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest
(exclusive of interest accrued to the date of redemption or accelerated
payment) that would have been payable in



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respect of such dollar if such redemption or accelerated payment had not been
made, determined by discounting, on a semi-annual basis, such principal and
interest at the Reinvestment Rate (determined on the third Business Day
preceding the date such notice of Redemption is given or declaration of
acceleration is made) from the respective dates on which such principal and
interest would have been payable if such redemption or accelerated payment had
not been made, over (ii) the aggregate principal amount of the Notes being
redeemed or paid.




               “Redemption Price” has the meaning specified in Section 2.5 hereof.



               “Reinvestment Rate” means 0.25 percent (twenty-five one hundredths of one
percent) plus the arithmetic mean of the yields under the respective headings
“This Week” and “Last Week” published in the Statistical Release under the
caption “Treasury constant maturities” for the maturity (rounded to the nearest
month) corresponding to the remaining life to maturity, as of the payment date
of the principal being redeemed or paid. If no maturity exactly corresponds to
such maturity, yields for the two published maturities most closely
corresponding to such maturity shall be calculated pursuant to the immediately
preceding sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For such purposes of calculating
the Reinvestment Rate, the most recent Statistical Release published prior to
the date of determination of the Make-Whole Amount shall be used.



               “Statistical Release” means the statistical release designated “H.15(519)”
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States government
securities adjusted to constant maturities or, if such statistical release is
not published at the time of any determination of the Make-Whole Amount, then
such other reasonably comparable index which shall be designated by the
Company.



               “Subsidiary” means, with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests of which are owned,
directly or indirectly, by such Person. For the purposes of this definition,
“voting equity securities” means equity securities having voting power for the
election of directors, whether at all times or only so long as no senior class
of security has such voting power by reason of any contingency.



               “Total Assets” as of any date means the sum of (i) the Undepreciated Real
Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP (but excluding
accounts receivable and intangibles).



               “Total Unencumbered Assets” means the sum of (i) those Undepreciated Real
Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed



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money, all determined on a consolidated basis in accordance with GAAP (but
excluding accounts receivable and intangibles).




               “Undepreciated Real Estate Assets” as of any date means the cost (original
cost plus capital improvements) of real estate assets of the Company and its
Subsidiaries on such date, before depreciation and amortization, determined on
a consolidated basis in accordance with GAAP.



               “Unsecured Indebtedness” means Indebtedness which is not secured by any
Encumbrance upon any of the properties of the Company or any Subsidiary.



ARTICLE TWO




THE SERIES OF NOTES





SECTION 2.1. Title of the Securities.




               There shall be a series of Securities designated the “6.25% Notes due
2014.”




SECTION 2.2. Limitation on Aggregate Principal Amount.



               (a) The aggregate principal amount of the 6.25% Notes shall be limited to
$150,000,000, provided that the Company may, without the consent of the Holders
of the Outstanding 6.25% Notes, “reopen” this series of Securities so as to
increase the aggregate principal amount of 6.25% Notes Outstanding in
compliance with the procedures set forth in the Indenture, including Sections
3.1 and 3.3 thereof, so long as any such additional Notes have the same tenor
and terms (including, without limitation, rights to receive accrued and unpaid
interest) as the 6.25% Notes then Outstanding.



               (b) Nothing contained in this Section 2.2 or elsewhere in this
Supplemental Indenture No. 5, or in the 6.25% Notes, is intended to or shall
limit execution by the Company or authentication or delivery by the Trustee of
6.25% Notes under the circumstances contemplated by Sections 3.3, 3.4, 3.5,
3.6, 9.6, 11.7 and 13.5 of the Original Indenture.




SECTION 2.3. Interest and Interest Rates; Maturity Date of 6.25% Notes.



               (a) The 6.25% Notes will bear interest at a rate of 6.25% per annum, from
June 18, 2004 or from the immediately preceding Interest Payment Date to which
interest has been paid or duly provided for, payable semi-annually in arrears
on June 15 and December 15 of each year, commencing December 15, 2004 (each, an
“Interest



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Payment Date”), to the Person in whose name such 6.25% Note is registered
at the close of business on June 1 or December 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date (each, a
“Regular Record Date”). Interest on the 6.25% Notes will be computed on the
basis of a 360-day year comprised of twelve 30-day months.




               (b) The interest so payable on any 6.25% Note which is not punctually paid
or duly provided for on any Interest Payment Date (“Defaulted Interest”) shall
forthwith cease to be payable to the Person in whose name such 6.25% Note is
registered on the relevant Regular Record Date, and such Defaulted Interest
shall instead be payable either (i) to the Person in whose name such 6.25% Note
is registered on the Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice of which shall be given to the
Holder of such 6.25% Note not less than 10 days prior to such Special Record
Date or (ii) may be paid at any time in any other lawful manner in accordance
with the Indenture.



               (c) If any Interest Payment Date or Stated Maturity falls on a day that is
not a Business Day, the required payment shall be made on the next Business Day
as if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or Stated Maturity, as the case may be.



               (d) The 6.25% Notes will mature on June 15, 2014.




SECTION 2.4. Limitations on Incurrence of Indebtedness.



               (a) The Company will not, and will not permit any Subsidiary to, incur any
Indebtedness if, immediately after giving effect to the incurrence of such
additional Indebtedness and the application of the proceeds thereof, the
aggregate principal amount of all outstanding Indebtedness of the Company and
its Subsidiaries (determined on a consolidated basis in accordance with GAAP)
is greater than 60% of the sum of (without duplication) (i) the Total Assets of
the Company and its Subsidiaries as of the end of the calendar quarter covered
in the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
as the case may be, most recently filed with the Commission (or, if such filing
is not permitted under the Exchange Act, with the Trustee) prior to the
incurrence of such additional Indebtedness and (ii) the purchase price of any
real estate assets or mortgages receivable acquired, and the amount of any
securities offering proceeds received (to the extent such proceeds were not
used to acquire real estate assets or mortgages receivable or used to reduce
Indebtedness), by the Company or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the incurrence of
such additional Indebtedness.



               (b) In addition to the limitation set forth in subsection (a) of this
Section 2.4, the Company will not, and will not permit any Subsidiary to, incur
any Indebtedness if the ratio of Consolidated Income Available for Debt Service
to the



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Annual Debt Service Charge for the four consecutive fiscal quarters most
recently ended prior to the date on which such additional Indebtedness is to be
incurred shall have been less than 1.5:1, on a pro forma basis after giving
effect thereto and to the application of the proceeds therefrom, and calculated
on the assumption that (i) such Indebtedness and any other Indebtedness
incurred by the Company and its Subsidiaries since the first day of such
four-quarter period and the application of the proceeds therefrom, including to
refinance other Indebtedness, had occurred at the beginning of such period;
(ii) the repayment or retirement of any other Indebtedness by the Company and
its Subsidiaries since the first day of such four-quarter period had been
repaid or retired at the beginning of such period (except that, in making such
computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average daily balance of such Indebtedness
during such period); (iii) in the case of Acquired Indebtedness or Indebtedness
incurred in connection with any acquisition since the first day of such
four-quarter period, the related acquisition had occurred as of the first day
of such period with the appropriate adjustments with respect to such
acquisition being included in such pro forma calculation; and (iv) in the case
of any acquisition or disposition by the Company or its Subsidiaries of any
asset or group of assets since the first day of such four-quarter period,
whether by merger, stock purchase or sale, or asset purchase or sale, such
acquisition or disposition or any related repayment of Indebtedness had
occurred as of the first day of such period with the appropriate adjustments
with respect to such acquisition or disposition being included in such pro
forma calculation.




               (c) In addition to the limitations set forth in subsections (a) and (b) of
this Section 2.4, the Company will not, and will not permit any Subsidiary to,
incur any Indebtedness secured by any Encumbrance upon any of the property of
the Company or any Subsidiary if, immediately after giving effect to the
incurrence of such additional Indebtedness and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Indebtedness of the
Company and its Subsidiaries (determined on a consolidated basis in accordance
with GAAP) which is secured by any Encumbrance on property of the Company or
any Subsidiary is greater than 40% of the sum of (without duplication) (i) the
Total Assets of the Company and its Subsidiaries as of the end of the calendar
quarter covered in the Company’s Annual Report on Form 10-K or Quarterly Report
on Form 10-Q, as the case may be, most recently filed with the Commission (or,
if such filing is not permitted under the Exchange Act, with the Trustee) prior
to the incurrence of such additional Indebtedness and (ii) the purchase price
of any real estate assets or mortgages receivable acquired, and the amount of
any securities offering proceeds received (to the extent that such proceeds
were not used to acquire real estate assets or mortgages receivable or used to
reduce Indebtedness), by the Company or any Subsidiary since the end of such
calendar quarter, including those proceeds obtained in connection with the
incurrence of such additional Indebtedness.



               (d) The Company and its Subsidiaries may not at any time own Total
Unencumbered Assets equal to less than 150% of the aggregate outstanding
principal



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amount of the Unsecured Indebtedness of the Company and its Subsidiaries on a
consolidated basis.




               (e) For purposes of this Section 2.4, Indebtedness shall be deemed to be
“incurred” by the Company or a Subsidiary whenever the Company or such
Subsidiary shall create, assume, guarantee or otherwise become liable in
respect thereof.



               SECTION 2.5. Redemption.



               The 6.25% Notes may be redeemed at any time at the option of the Company,
in whole or in part, at a redemption price equal to the sum of (i) the
principal amount of the Notes being redeemed plus accrued interest thereon to
the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to
such 6.25% Notes (the “Redemption Price”).



               SECTION 2.6. Place of Payment.



               The Place of Payment where the 6.25% Notes may be presented or surrendered
for payment, where the 6.25% Notes may be surrendered for registration of
transfer or exchange and where notices and demands to and upon the Company in
respect of the 6.25% Notes and the Indenture may be served shall be in the City
of Charlotte, North Carolina, and the office or agency for such purpose shall
initially be located at Wachovia Bank, National Association, 1525 West W.T.
Harris Blvd., Charlotte, North Carolina 28288-1153.



               SECTION 2.7. Method of Payment.



               Payment of the principal of and interest on the 6.25% Notes will be made
at the office or agency of the Company maintained for that purpose (which shall
initially be an office or agency of the Trustee), in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that, at the option of
the Company, payments of principal and interest on the Notes (other than
payments of principal and interest due at Stated Maturity) may be made (i) by
check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto located within the United States,
provided, that such Person owns 6.25% Notes in an aggregate principal amount of
at least $1,000,000 and such Person makes a written request therefor for the
appropriate Interest Payment Date.



               SECTION 2.8. Currency.



               Principal and interest on the 6.25% Notes shall be payable in Dollars.



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               SECTION 2.9. Registered Securities; Global Form.



               The 6.25% Notes shall be issuable and transferable in fully registered
form as Registered Securities, without coupons. The 6.25% Notes shall each be
issued in the form of one or more permanent Global Securities. The depository
for the 6.25% Notes shall initially be The Depository Trust Company (“DTC”).
The 6.25% Notes shall not be issuable in definitive form except as provided in
Section 3.5 of the Original Indenture.



               SECTION 2.10. Form of Notes.



               The 6.25% Notes shall be substantially in the form attached as Exhibit A
hereto.



               SECTION 2.11. Registrar and Paying Agent.



               The Trustee shall initially serve as Registrar and Paying Agent for the
Notes.



               SECTION 2.12. Defeasance.



               The provisions of Sections 14.2 and 14.3 of the Original Indenture,
together with the other provisions of Article XIV of the Original Indenture,
shall be applicable to the 6.25% Notes. The provisions of Section 14.3 of the
Original Indenture shall apply to the covenants set forth in Section 2.4 of
this Supplemental Indenture No. 5 and to those covenants specified in Section
14.3 of the Original Indenture.



               SECTION 2.13. Waiver of Certain Covenants.



               Notwithstanding the provisions of Section 10.11 of the Original Indenture,
the Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 10.4 to 10.8, inclusive, of the
Original Indenture, with Section 2.4 of this Supplemental Indenture No. 5 and
with any other term, provision or condition with respect to the 6.25% Notes
(except any such term, provision or condition which could not be amended
without the consent of all Holders of the 6.25% Notes), if before or after the
time for such compliance the Holders of at least a majority in principal amount
of all outstanding 6.25% Notes or such series thereof, as applicable, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition. Except to the extent so expressly
waived, and until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.



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               SECTION 2.14. Acceleration of Maturity; Recission and Annulment.



               If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal of, and the Make-Whole
Amount, if any, on, all the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by the Holders), and upon any such declaration such principal or specified
portion thereof shall become immediately due and payable. If an Event of
Default with respect to the Securities of any series set forth in Sections
5.1(1), 5.1(2) and 5.1(6) of the Original Indenture occurs and is continuing,
then in every such case all the Securities of that series shall become
immediately due and payable, without notice to the Company, at the principal
amount thereof plus accrued interest to the date the Securities of that series
are paid plus the Make-Whole Amount, if any, on the Securities of that series.



               SECTION 2.15. Provision of Financial Information.



               Whether or not the Company is subject to Section 13 or 15(d) of the
Exchange Act, the Company will, to the extent permitted under the Exchange Act,
file with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the
Commission pursuant to such Section 13 or 15(d) if the Company were so subject,
such documents to be filed with the Commission on or prior to the respective
dates (the “Required Filing Dates”) by which the Company would have been
required to file such documents if the Company were so subject.



               The Company will also in any event (x) within 15 days of each Required
Filing Date (i) if the Company is not then subject to such Section 13 or 15(d),
transmit by mail to all Holders of Notes, as their names and addresses appear
in the Security Register, without cost to such Holders, copies of the annual
reports and quarterly reports and other documents that the Company would have
been required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act if the Company were subject to such Sections and (ii) file
with the Trustee copies of the annual reports, quarterly reports and other
documents that the Company would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act if the Company were subject
to such Sections and (y) if filing such documents by the Company with the
Commission is not permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective Holder.



               SECTION 2.16. Event of Default.



               If an Event of Default pursuant to Section 5.1(6) or (7) of the Original
Indenture shall have occurred, the principal amount of and the Make-Whole
Amount on



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all outstanding notes shall become due and payable without any declaration
or other act on the part of the Trustee or of the Holders.




ARTICLE THREE




MISCELLANEOUS PROVISIONS





SECTION 3.1. Ratification of Original Indenture.



               Except as expressly modified or amended hereby, the Original Indenture
continues in full force and effect and is in all respects confirmed and
preserved.




SECTION 3.2. Fiscal Year.



               The Company shall notify the Trustee of its fiscal year and any change
thereof.




SECTION 3.3. Governing Law.



               This Supplemental Indenture No. 5 and each Note shall be governed by and
construed in accordance with the laws of the State of New York. This
Supplemental Indenture No. 5 is subject to the provisions of the Trust
Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions.




SECTION 3.4. Counterparts.



               This Supplemental Indenture No. 5 may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.



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     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 5 to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.



    	 	 
	 	COMMERCIAL
            NET LEASE REALTY, INC.,

	 	as Issuer

	 	 

	 	By:

	 	

           

	 	Name:
            Kevin Habicht

	 	Title:
            Executive Vice President,

	 	          Chief
            Financial Officer, Assistant Secretary and

                      Treasurer

	 	 

	 	WACHOVIA
            BANK, NATIONAL ASSOCIATION

	 	as Trustee

	 	 

	 	By:

	 	

           

	 	Name:
            John C. Stephens, III

	 	Title:   Vice
            President








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Exhibit A




Form of 6.25% Notes





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