EXHIBIT 10.2
OMNIBUS SERVICES AGREEMENT
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THIS AGREEMENT is entered into by and among Gen-Net Lease Income Trust,
Inc., a Michigan corporation (the "Company") and Genesis Financial Group, Inc.,
a Michigan corporation ("Genesis").
W I T N E S S E T H
WHEREAS, the Company is offering shares of common stock to the public
pursuant to a registered prospectus (the "Prospectus");
WHEREAS, the Prospectus provides that various services will be furnished to
the Company by Genesis and these services and the compensation terms to be paid
by the Company are generally described in the Prospectus; and
WHEREAS, the parties have resolved to enter into this Agreement to describe
in greater detail the services to be provided and the terms of compensation for
such services.
NOW THEREFORE, the parties covenant and agree as follows:
1. Property Acquisition Services.
(a) Genesis shall locate prospective acquisition properties for the
Company that meet the acquisition criteria established in the
Prospectus; investigate the purchase terms and all material
aspects and characteristics of the proposed acquisition property;
negotiate with the seller the proposed acquisition terms; engage
legal counsel; oversee preparation of and review the purchase
documentation and monitor the closing for the purchased property
to insure that all acquisition terms are satisfied and that all
acquisition requirements set forth in the Prospectus have been
met in all material respects. In performing the foregoing
activities, Genesis shall be subject to the direction of the
Company and the Company shall have final approval of all final
actions and agreements.
(b) The compensation to be received by Genesis shall be reasonable
and shall be payable only for services actually rendered directly
or indirectly and subject to the following conditions:
(i) The total of all such compensation paid to everyone involved
in the acquisition transaction by the Company and/or any
other person shall be deemed to be presumptively reasonable
if it does not exceed the lesser of such compensation
customarily charged in arm's length transactions by others
rendering similar circumstances as an on-going public
activity in the same geographical location and for
comparable property or an amount not to exceed 3 percent of
the property purchase price.
(ii) The limitations imposed above shall be complied with at all
times.
(c) Within 30 days after completion of the last acquisition, Genesis
shall cause to be forwarded to the appropriate state securities
commissioners, including California, a schedule, verified by a
duly authorized officer under penalty of perjury, reflecting:
(i) each property acquisition made;
(ii) the purchase price paid; and
(iii) the aggregate of all acquisition fees paid on each
transaction.
2. Property Disposition Services
(a) Genesis shall locate purchasers of the Company properties
pursuant to the disposition criteria established by the Company;
negotiate with the purchaser the proposed sale terms; engage
legal counsel; oversee preparation of sale documentation and
monitor the closing of the transaction. In performing all of the
foregoing activities, Genesis shall be subject to the direction
of the Company and the Company shall have final approval of all
final actions and agreements.
(b) Genesis shall be entitled to receive, in the aggregate, a real
estate commission upon the sale of Company properties if it
provides substantial real estate brokerage services in connection
with such sale, provided the aggregate compensation does not
exceed an amount equal to a competitive real estate commission
but in any event not to exceed 5 percent of the contract price
for the sale of the property.
(c) The total commission paid to all persons for the sale of a
Company property shall be limited to an amount which does not
exceed a competitive real estate commission but in any event not
to exceed six percent (6%) of the contract price for the sale of
the property.
3. Administrative Services.
(a) Genesis or its affiliate may provide administrative services to
the Company necessary for its prudent operation, including
transfer agent support. Such services may include computer,
secretarial, correspondence, reception, copying, telecopying,
similar office functions and activities.
(b) For providing such services, Genesis shall be paid monthly a fee
of 3 percent of the gross rental revenues of the properties, such
fee to be reviewed and approved by a majority of the Company's
directors including a majority of its Independent Directors prior
to becoming effective. In no event shall Genesis be paid a fee
for its services which shall exceed the price that would be
charged by unaffiliated persons rendering similar services in the
same geographic location. Genesis shall also be entitled to be
reimbursed for its actual out-of-pocket costs and expenses
incurred on
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behalf of the Company in performing its services hereunder.
"Costs" may include an allocable share of the administrative
overhead expense incurred by Genesis or its affiliate in
furnishing the said services, provided that such overhead
allocation shall be verified according to the provisions set
forth in paragraph 3(e) above.
(c) In connection with providing such services Genesis represents
that it has currently the key staff personnel and can acquire
supporting staff personnel as may be necessary depending on the
number of Shareholders in the Company to provide the services
referred to in paragraph 3(a) above.
(d) Genesis further represents that it has previously engaged in the
business of rendering such services independently as an ordinary
and ongoing business on behalf of other affiliated companies or
partnerships.
(e) In connection with the annual report to investors the Company
shall cause its independent auditors to verify that general and
administrative overhead incurred by Genesis which is not directly
attributable to the rendering of services authorized by this
paragraph are not being charged to the Company. The method of
verification shall at a minimum provide:
(i) a review of the time records of individual employees, the
cost of whose services were reimbursed; and
(ii) a review of the specific nature of the work performed by
each employee.
4. Property Management.
(a) The Company's properties will be managed by Genesis as is
necessary for the prudent operation of the Company's properties.
Presently, Genesis has an adequate staff to be able to render
such services to the Company which it utilizes in the conduct of
its business.
(b) Property management services will include providing leasing
services, assisting in negotiating leases, providing monthly
property reports, collecting, depositing and accounting for
rents, periodically verifying tenant payments of real estate
taxes and insurance premiums and periodic inspection of
properties and tenants' sales receipts records, where applicable
under the leases.
(c) For providing such services, Genesis shall be paid monthly a fee
of 3 percent of the gross rental revenues of the properties, such
fee to be reviewed and approved by a majority of the Company's
directors including a majority of its Independent Directors prior
to becoming effective. In no event shall Genesis be paid a fee
for its services which shall exceed the price that would be
charged by unaffiliated persons rendering similar services in the
same geographic location. Genesis shall also be entitled to
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be reimbursed for its actual out-of-pocket costs and expenses incurred
on behalf of the Company in performing its services hereunder. "Costs"
may include an allocable share of the administrative overhead expense
incurred by Genesis or its affiliate in furnishing the said services,
provided that such overhead allocation shall be verified according to
the provisions set forth in paragraph 3(e) above.
5. Sale of Goods.
Genesis agrees that under no circumstances will it or any affiliate
sell any goods to the Company. In the event that Genesis or any
Genesis affiliate acquires goods for the Company for which it seeks
reimbursement, such reimbursement shall be for the actual cost of the
goods acquired and only to the extent used by the Company.
6. Contract Term, Amendment and Termination.
(a) This Agreement shall commence on the date it is signed by both
parties and continue for a period of 12 months thereafter. It
will automatically renew for successive 12 month periods unless
terminated pursuant to subparagraph (c) below.
(b) This Agreement shall not be amended or modified in any material
respect except by a majority vote of the Board of Directors of
the Company including a majority of the Company's Independent
Directors.
(c) This Agreement may be terminated by either party without penalty
on 60 days' prior written notice to the other party.
7. Miscellaneous.
(a) This Agreement shall be enforced and construed in accordance with
the laws of the State of Michigan.
(b) At all times while performing its obligations under this
Agreement, Genesis shall be under the direction of the Company,
its officers and/or Directors, who shall have final approval
authority on all of Genesis' activities. Further, nothing in this
Agreement is intended to vest in Genesis the responsibility for
directing or performing the day-to-day business affairs of the
Company, which shall at all times remain the obligation of the
Company's officers and Directors as the case may be. The parties
specifically intend that Genesis shall not be an "Advisor" of the
Company as that term is defined in the NASAA Statement of Policy
Regarding Real Estate Investment Trusts.
(c) If any provision of this Agreement is in conflict with any
provision of the Company's Bylaws or Prospectus dated
_________________, 2002, or the blue sky rules applicable to real
estate programs, such provisions shall be null and void and the
remainder of the Agreement shall remain in full force and effect.
(d) This Agreement shall terminate, unless terminated sooner by a
default hereunder or by other terms of the agreement, at such
time as the Company is liquidated and terminated pursuant to the
terms of the Company's Articles of Incorporation.
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Entered into by and between the parties hereto as of the _____ day of
__________, 2002.
Gen-Net Lease Income Trust, Inc.
By:
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Xxxxx X. Xxxxxxxx, President
Genesis Financial Group, Inc.
By:
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D. Xxxxx Xxxxxx, President
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