1
EXHIBIT 99.2
STOCKHOLDERS' AGREEMENT AND IRREVOCABLE PROXY
THIS STOCKHOLDERS' AGREEMENT AND IRREVOCABLE PROXY, dated as of July 1,
2001 (this "Agreement"), among Commercial Net Lease Realty, Inc., a Maryland
corporation ("Buyer"), and those stockholders of Captec Net Lease Realty, Inc.,
a Delaware corporation (the "Company"), that are parties hereto (each, a
"Stockholder" and, collectively, the "Stockholders"). Capitalized terms used
without definition herein having the meanings assigned to them in the Merger
Agreement (as hereinafter defined).
WHEREAS, Buyer and the Company, concurrently with the execution and
delivery of this Agreement, are entering into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), pursuant to which the
Company will merge with and into Buyer (the "Merger");
WHEREAS, as of the date hereof, each Stockholder is the record and
beneficial owner of the number of shares of Company Common Stock set forth on
the signature page hereof beneath such Stockholder's name (with respect to each
Stockholder, such Stockholder's "Existing Shares" and, together with any shares
of Company Common Stock acquired by such stockholder after the date hereof,
whether upon the exercise of warrants, options, conversion of convertible
securities or otherwise, such Stockholder's "Shares") and the record and
beneficial owner of options or warrants to purchase the number of shares of
Company Common Stock set forth on the signature page hereof beneath such
Stockholder's name;
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Buyer has required that the Stockholders agree, and the Stockholders
have agreed, to enter into this Agreement; and,
WHEREAS, among other things, the Stockholders and Buyer desire to set
forth their agreement with respect to the voting of the Shares in connection
with the Merger, upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. VOTING.
1.1. Agreement to Vote. With respect to such Stockholder's Shares over
which such Stockholder has voting power, each Stockholder hereby agrees,
severally and not jointly, that he shall, from time to time, after the date
hereof, at the request of Buyer, at any meeting (whether annual or special and
whether or not an adjourned or postponed meeting) of stockholders of the
Company, however called, or in connection with any action to be taken by the
written consent of the holders of Company Common Stock, (a) if a meeting is
held, appear at such meeting or otherwise cause the Shares to be counted as
present thereat for purposes of establishing a quorum, and (b) vote or consent
(or cause to be voted or consented), in person or by proxy, all Shares, and any
other voting securities of the Company (whether acquired heretofore or
hereafter) that are beneficially owned within the meaning of Rule 13d-3 under
the Exchange Act
2
or held of record by such Stockholder or as to which such Stockholder has,
directly or indirectly, the right to vote or direct the voting thereof (i) in
favor of the Merger Agreement, the execution and delivery by the Company of the
Merger Agreement and the approval of the terms thereof and each of the other
actions contemplated by the Merger Agreement and this Agreement and the actions
required in furtherance thereof or hereof, (ii) against any proposal related to
a Superior Proposal and (iii) against any proposal, action or agreement that
would impede, frustrate, prevent or nullify the Merger Agreement, or result in a
breach in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement or result in
any of the conditions set forth in Article VII of the Merger Agreement not being
fulfilled; provided, however, that such Stockholder shall not be required to
vote for, or provide a consent with respect to, any action that would reduce the
number of the shares of the Buyer Common Stock or of the Buyer Preferred Stock
or the Cash Consideration to be received by such Stockholder in respect of such
Stockholder's Shares in the Merger or take any action that, in the opinion of
counsel to each Stockholder, is otherwise prohibited by Delaware law or court
order.
1.2. Grant of Proxy. In furtherance of the agreements contained in
Section 1.1 of this Agreement, each Stockholder hereby irrevocably appoints and
constitutes Buyer and each of Xxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx, in their
respective capacities as officers of Buyer, agents, attorneys and proxies of the
undersigned, with full power of substitution and resubstitution, to the full
extent of such Stockholder's rights with respect to such Stockholder's Shares,
to vote such Stockholder's Shares as follows: the agents and proxies named above
are empowered at any time prior to termination of this proxy to exercise all
voting and other rights (including, without limitation, the power to execute and
deliver written consents with respect to the Shares) of the undersigned at every
annual, special or adjourned meeting of Company stockholders solely for the
purposes set forth in Section 1.1 above.
1.3. No Ownership Interest. Nothing contained in this Agreement shall
be deemed to vest in Buyer any direct or indirect ownership or incidence of
ownership of or with respect to any Shares. All rights, ownership and economic
benefits of and relating to the Shares shall remain vested in and belong to the
Stockholders, and Buyer shall have no authority to manage, direct, superintend,
restrict, regulate, govern, or administer any of the policies or operations of
the Company or exercise any power or authority to direct the Stockholders (i) in
the voting of any of the Shares, except as otherwise provided herein, or (ii) in
the performance of the Stockholders' duties or responsibilities as stockholders
of the Company or in any other capacity (including as an employee or officer or
a director of the Company).
1.4. No Inconsistent Agreements. Each Stockholder hereby covenants
and agrees that, except as contemplated by this Agreement and the Merger
Agreement or as otherwise provided in Schedule A attached hereto, the
Stockholder (a) has not entered, and shall not enter at any time while this
Agreement remains in effect, into any voting agreement or voting trust with
respect to such Stockholder's Shares and (b) has not granted, and shall not
grant at any time while this Agreement remains in effect, a proxy or power of
attorney with respect to such Stockholder's Shares, in either case, which is
inconsistent with such Stockholder's obligations pursuant to this Agreement.
-2-
3
2. REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER. Each Stockholder
hereby, severally and not jointly, represents and warrants to Buyer as follows:
2.1. Authorization; Validity of Agreement; Necessary Action. Such
Stockholder has full power and authority to execute and deliver this Agreement,
to perform such Stockholder's obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Stockholder, and, assuming this Agreement constitutes a valid
and binding obligation of Buyer, constitutes a valid and binding obligation of
such Stockholder, enforceable against him in accordance with its terms, except
to the extent limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by general principles of
equity.
2.2. Consents and Approvals; No Violations. Except as otherwise
provided in Schedule A attached hereto, neither the execution, delivery or
performance of this Agreement by such Stockholder, the consummation by him of
the transactions contemplated hereby nor compliance by him with any of the
provisions hereof will (i) require any filing with, or consent, approval,
license, permit, order or authorization of, any Governmental Entity, (ii) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract or other
agreement, instrument or obligation to which such Stockholder is a party or by
which he or any of his properties or assets may be bound or (iii) violate any
permit, concession, franchise, license, judgment, injunction, order, decree,
statute, law, ordinance, rule or regulation applicable to him or any of his
properties or assets.
2.3. Shares. Such Stockholder's Existing Shares are, and all of his
Shares on the Closing Date shall be, owned beneficially by such Stockholder. As
of the date hereof, such Stockholder's Existing Shares constitute all of the
shares of Company Common Stock owned of record or beneficially by such
Stockholder. All of such Stockholder's Existing Shares are issued and
outstanding, and, except as set forth on the signature pages hereto, such
Stockholder does not own, of record or beneficially, any warrants, options or
other rights to acquire any shares of Company Common Stock or any other capital
stock of the Company. Except as otherwise provided in Schedule A, such
Stockholder has sole voting power, sole power of disposition, sole power to
issue instructions with respect to the matters set forth in Article I hereof,
and sole power to agree to all of the matters set forth in this Agreement, in
each case with respect to all of such Stockholder's Existing Shares and will
have sole voting power, sole power of disposition, sole power to issue
instructions with respect to the matters set forth in Article I hereof, and sole
power to agree to all of the matters set forth in this Agreement, in each case
with respect to all of such Stockholder's Shares on the Closing Date, with no
limitations, qualifications or restrictions on such rights, subject to
applicable state and federal securities laws, applicable Delaware law, terms of
this Agreement. Except as otherwise provided in Schedule A attached hereto, such
Stockholder has good and marketable title to his Existing Shares and at all
times during the term hereof and on the Closing Date will have good and
marketable title to his Shares, free and clear of all Encumbrances, and, upon
delivery thereof to Buyer against delivery of the consideration therefor
pursuant to the Merger Agreement, good and marketable title thereto, free and
clear of all Encumbrances (other than any arising as a result of actions taken
or omitted by Buyer or other
-3-
4
than those restrictions on transferability imposed by state and federal
securities laws), will pass to Buyer.
2.4. No Finder's Fees. Except as previously disclosed to Buyer in
writing, no broker, investment banker, financial advisor or other Person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated hereby or the Merger
based upon arrangements made by or on behalf of such Stockholder.
2.5. No Group. Each Stockholder is acting individually and not as
part of a "group" as defined in the Exchange Act.
3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to each Stockholder as follows:
3.1. Authorization; Validity of Agreement; Necessary Action. Buyer has
full power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance by Buyer of this Agreement and the
consummation by it of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of Buyer and no other corporate
proceedings on the part of Buyer are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Buyer, and, assuming this Agreement constitutes a
valid and binding obligation of each Stockholder, constitutes a valid and
binding obligation of Buyer, enforceable against it in accordance with its
terms, except to the extent limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by general
principles of equity.
4. MISCELLANEOUS.
4.1. Further Agreements of Stockholders.
(a) Except as otherwise provided in Schedule A attached hereto
or, with respect to Xxxxxxx X. Beach only, as provided in the Letter Agreement
dated as of the date hereof between Buyer and Mr. Beach, each Stockholder,
severally and not jointly, hereby agrees, while this Agreement is in effect, and
except as contemplated hereby, not to sell, transfer, pledge, encumber, assign
or otherwise dispose of, enforce or permit the execution of the provisions of
any redemption, share purchase or sale, recapitalization or other agreement with
the Company or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, transfer,
pledge, encumbrance, assignment or other disposition of, any of his Existing
Shares, any Shares acquired after the date hereof, any securities exercisable
for or convertible into Company Common Stock or any interest in any of the
foregoing.
(b) Each Stockholder shall not request that the Company or
its transfer agent register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of such Stockholder's
Shares, and hereby consents to the entry of stop transfer
-4-
5
instructions by the Company of any transfer of such Stockholder's Shares, unless
such transfer is made in compliance with this Agreement.
(c) In the event of a stock dividend or distribution, or any
change in the Company Common Stock by reason of any stock dividend or
distribution, or any change in the Company Common Stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged. Each Stockholder
shall be entitled to receive any cash dividend paid by the Company during the
term of this Agreement until the Shares are canceled in the Merger or purchased
hereunder.
(d) Each Stockholder shall not, nor shall it authorize or
permit any Affiliate, director, officer, employee, or any investment banker,
attorney or other advisor, agent or representative of, such Stockholder
(collectively, the "Representatives") to, directly or indirectly, engage in any
act or activity prohibited by Section 6.1(a) of the Merger Agreement. Except for
communications made solely in the course of his duties as an officer and/or
director of the Company, from and after the date hereof, each Stockholder shall
and shall cause its Representatives to, immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any Persons
conducted heretofore with respect to any of the foregoing (including, without
limitation, any Acquisition Proposal).
4.2. Termination. This Agreement shall terminate and no party shall
have any rights, obligations or duties hereunder upon the earlier of (a) the
Effective Time or (b) nine (9) months following the termination of the Merger
Agreement in accordance with its terms. Nothing in this Section 4.2 shall
relieve or otherwise limit any party of liability for breach of this Agreement.
4.3. Several Obligations; Capacity.
(a) The representations, warranties, covenants, agreements and
conditions of this Agreement applicable to the Stockholders are several and not
joint.
(b) The covenants and agreements of the Stockholders herein
are made only in their capacity as stockholders of the Company and not as
employees, officers or directors.
4.4. Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate the transactions contemplated by this
Agreement.
4.5. Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by nationally recognized overnight courier or by registered
or certified mail, postage prepaid, return receipt requested, or by electronic
mail, with a copy thereof to be delivered or sent as provided above or by
facsimile or telecopier, as follows:
-5-
6
(a) If to Buyer:
Commercial Net Lease Realty
000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
with a copy to:
Xxxx Xxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. XxXxxxxx, Esq.
Fax: (000) 000-0000
(b) If to any of the Stockholders, to him at the address set
forth under his name on the signature pages hereto or to such other address as
the party to whom notice is to be given may have furnished to the other party in
writing in accordance herewith,
with a copy to
Xxxxxxxx, Loop & Xxxxxxxx, LLP
North Courthouse Square
1000 Xxxxxxx
Xxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx, Xx., Esq.
Fax: (000) 000-0000
All such notices or communications shall be deemed to be received (i) in the
case of personal delivery, nationally recognized overnight courier or registered
or certified mail, on the date of such delivery and (ii) in the case of
facsimile or telecopier or electronic mail, upon confirmed receipt.
4.6. Interpretation. When a reference is made in this Agreement to
Sections, subsections, Schedules or Exhibits, such reference shall be to a
Section, subsection, Schedule or Exhibit to this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The word "herein" and similar references mean, except where a specific Section
or Article reference is expressly indicated, the entire Agreement rather than
any specific Section or Article. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
4.7. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the
-6-
7
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the extent possible.
4.8. Entire Agreement; No Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and is not intended to confer upon any Person other than
the parties hereto any rights or remedies hereunder.
4.9. Amendments; Assignment. This Agreement may not be amended except
by written agreement by all the parties. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by any
of the parties without the prior written consent of the other parties, and any
purported assignment without such consent shall be void; provided that Buyer
may, after notice to the Stockholders and the Company, assign its rights and
obligations hereunder to any direct or indirect wholly owned subsidiary of Buyer
without such consent.
4.10. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of any party hereto in the exercise of any right hereunder
will impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor will any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive to, and not exclusive of, any
rights or remedies otherwise available.
4.11. Governing Law; Enforcement. This Agreement and the rights and
duties of the parties hereunder shall be governed by, and construed in
accordance with, the laws of the State of Delaware. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the Court of
Chancery of the State of Delaware or the Federal District Court for the District
of Delaware, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the parties hereto, (a)
consents to submit itself to the personal jurisdiction of the Court of Chancery
of the State of Delaware or the Federal District Court for the District of
Delaware in the event any dispute arises out of this Agreement or any
transaction contemplated hereby, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (c) agrees that it will not bring any action relating to this
Agreement or any transaction contemplated hereby in any court other than the
Court of Chancery of the State of Delaware or the Federal District Court for the
District of Delaware and (d) waives any right to trial by jury with respect to
any action related to or arising out of this Agreement or any transaction
contemplated hereby.
-7-
8
4.12. Stockholder Capacity. No Stockholder executing this Agreement who
is or becomes during the term hereof a director or an officer of the Company
makes any agreement or understanding herein in such Stockholders' capacity as
such director or officer. Each Stockholder is executing this Agreement solely in
such Stockholders' capacity as the record holder and/or beneficial owner of the
Existing Shares and/or Shares, and nothing herein shall limit or affect any
actions taken or omitted to be taken by a Stockholder in such Stockholder's
capacity as an officer or a director of the Company to the extent specifically
permitted by the Merger Agreement.
4.13. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Signatures Next Page]
-8-
9
IN WITNESS WHEREOF, Buyer has caused this Agreement to be signed by its
duly authorized officer and each of the Stockholders have signed this Agreement,
all as of the date first written above.
COMMERCIAL NET LEASE REALTY, INC.
By: /s/ XXXX X. XXXXXXX
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
XXXXXXX X. BEACH
/s/ XXXXXXX X. BEACH
-----------------------------------
Number of Existing Shares: 486,266
Shares subject to options or warrants: 460,000
Notices Address: 24 Xxxxx Xxxxx Xxxxxx Drive
Lobby L, 4th Floor
Xxx Xxxxx, XX 00000
W. XXXX XXXXXX
/s/ W. XXXX XXXXXX
-----------------------------------
Number of Existing Shares: 241,286
Shares subject to options or warrants: 230,001
Notices Address: 24 Xxxxx Xxxxx Xxxxxx Drive
Lobby L, 4th Floor
Xxx Xxxxx, XX 00000
-9-
10
Schedule A
All of the Shares subject to the terms of this Agreement are held in
brokerage accounts with UBS PaineWebber (Account No. 0000000-D) with respect to
Mr. Beach and Xxxxxx Xxxxxxx Xxxx Xxxxxx (Account No. 312-020224-016) with
respect to Xx. Xxxxxx (the "Broker-Dealers"). The agreements governing these
brokerage accounts provide, among other things, that, the Shares are subject to
a conditional pledge in favor of the Broker-Dealers maintaining such account,
which pledge permits and/or requires the Broker-Dealers, under certain
circumstances, to sell all or a portion of the Shares held in any such account
in order to satisfy a margin call. In the event of any such margin call, the
Stockholder subject to such call could be required to dispose of all or a
portion of such Stockholder's Shares irrespective of any provision in this
Agreement to the contrary.
-10-
