EXHIBIT 10.2
AMENDED AND RESTATED OMNIBUS SERVICES AGREEMENT
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 4 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.
(d) In the event that an investment opportunity becomes
available which is suitable for both the Company and a
public or private entity with which Genesis or its
affiliates are affiliated for which both entities have
sufficient uninvested funds, then the entity which has had
the longer period of time elapse since it was offered an
investment opportunity will first be offered the
investment opportunity. In determining whether or not an
investment opportunity is suitable for more than one
program, Genesis will examine such factors, among others,
as the cash requirements of each program, the effect of
the acquisition both on diversification of each program's
investments by types of properties and geographic area,
and on diversification of the tenants of its properties
(which also may affect the need for one of the programs to
prepare or produce audited financial statements for a
property or a tenant), the anticipated cash flow of each
program, the size of the investment, the amount of funds
available to each program, and the length of time such
funds have been available for investment. If a subsequent
development, such as a delay in the closing of a property
or a delay in the construction of a property, causes any
such investment, in the opinion of Genesis and its
affiliates, to be more appropriate for an entity other
than the entity which committed to make the investment,
however, Genesis has the right to agree that the other
entity affiliated with Genesis or its affiliates may make
the investment.
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 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 3 percent of the contract price for the sale of the
property.
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(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 four percent (4%) 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 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.
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(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 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.
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(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 of 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
October 10, 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.
Entered into by and between the parties hereto as of the _____ day of
December, 2002.
Gen-Net Lease Income Trust, Inc.
By:__________________________________
Xxxxx X. Xxxxxxxx, President
Genesis Financial Group, Inc.
By:__________________________________
D. Xxxxx Xxxxxx, President
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