EXHIBIT 10.5
PROPERTY ACQUISITION SERVICES AGREEMENT
This Agreement, entered into as of September 30, 2003, by and between
Gen-Net Lease Income Trust, Inc., a Michigan corporation ("Gen-Net"), and
Genesis Financial Group, Inc., a Michigan corporation ("Genesis").
WHEREAS, Gen-Net is a publicly registered real estate investment trust
that specializes in acquiring and holding government leased properties as well
as other single user properties net leased to credit-worthy tenants;
WHEREAS, Gen-Net is actively engaged in raising capital to acquire
properties as described in its publicly registered prospectus(es) ("Qualified
Properties");
WHEREAS, Gen-Net utilizes the services of property acquisition
specialists in order to identify Qualified Properties and to assist in
negotiating acceptable acquisition terms with potential sellers;
WHEREAS, Genesis has approximately ten years of experience in acquiring
properties similar to the Qualified Properties and has developed close
relationships with developers and real estate brokers engaged in marketing such
properties;
WHEREAS, the Gen-Net Board of Directors has unanimously determined that
it would considerably benefit Gen-Net's interests to engage Genesis as a
property acquisition agent in connection with its property acquisition program,
as to be described in the prospectus that will be part of a registration
statement of Gen-Net's successor to be filed with the Securities and Exchange
Commission (the "Secondary Offering"); and
WHEREAS, Genesis has the knowledge, experience and resources to perform
these property acquisition services on behalf of Gen-Net.
NOW, THEREFORE, the parties agree as follows:
1. Gen-Net hereby engages Genesis on a non-exclusive basis to perform
property acquisition services by identifying Qualified Properties,
assisting Gen-Net management in negotiating acquisition terms
acceptable to Gen-Net with respect to the Qualified Properties,
coordinating acquisition financing in conjunction with other Gen-Net
service providers and closing the acquisition and financing. The term
of this engagement shall commence with the completion of the Secondary
Offering and shall terminate upon the earlier of one year from the date
of the Secondary Offering or applying the last of the net proceeds from
the Secondary Offering scheduled to be used to acquire Qualified
Properties for that
purpose (recognizing that there may be remaining some portion of the
scheduled net proceeds that are not sufficient enough to permit another
Qualified Property acquisition). By mutual agreement between the
parties, Gen-Net may engage Genesis to provide acquisition services in
follow-on offerings, if any, on the same or similar terms and
conditions as contained herein.
2. Genesis shall first offer, to the exclusion of all other, all those
Qualified Properties identified by it or its subagents to Gen-Net.
Gen-Net shall identify to Genesis within ten (10) business days those
Qualified Properties in which Gen-Net has no interest.
3. Genesis shall be deemed to have earned and be entitled to its fee,
described below, as to each acquisition of Qualified Property by
Gen-Net in which:
a) Genesis performs services described in paragraph 1 and 2
above; and
b) the Qualified Property acquired was purchased from a seller or
through a real estate broker listed as a "registered seller or
broker" on a list of such parties agreed to between Genesis
and Gen-Net, which shall be attached to this Agreement and
incorporated herein by reference. It is agreed and understood
that the parties may, by further written and dated
agreement(s), amend the list of registered sellers and brokers
at any time during the course of this engagement.
4. The parties agree that Gen-Net shall pay to Genesis at each closing
of a Qualified Property purchased by Gen-Net a sum in cash equal to one
percent (1%) of the total purchase price of the Qualified Property.
Further, is understood by the parties that on occasion Genesis may
participate in a portion of fees paid the listing brokers or finders by
the seller of a Qualified Property. Genesis shall make a full
disclosure of any additional compensation paid to Genesis and shall
reduce the fee cost to Gen-Net by 50% thereof.
5. Gen-Net shall reimburse Genesis for reasonable expenses incurred in
connection with Genesis' performance of this engagement including but
not limited to travel, meals, entertainment and related miscellaneous
expenses. Such reimbursable expenses shall not exceed 2.0% of the
aggregate acquisition fee then earned, paid up to date at the closing
of each Qualified Property.
6. This Agreement cannot be assigned by either party without the
express prior written consent of the other party. This Agreement shall
continue to apply in full force and effect as to any corporate
successor to Gen-Net. Further, this Agreement supercedes and replaces
those portion of a certain agreement by and
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between the parties for professional services, entitled Second Amended
and Restated Omnibus Services Agreement effective June 2, 2003
(Services Agreement), relating to the Property Acquisition Services. It
is understood by the parties that the remainder of the Services
Agreement shall be terminated in accordance with the terms thereof upon
successful completion of the Secondary Offering.
7. For purposes of this Agreement, Gen-Net shall also mean its
successor entity, Government Properties Trust, Inc., as the context may
require.
8. This Agreement shall be construed and enforced under the laws of the
State of Michigan.
Effective as of the date set forth above.
GEN-NET LEASE INCOME TRUST, INC.
Attest: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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President
GENESIS FINANCIAL GROUP, INC.
Attest: /s/ Xxxx X. Xxxxx By: /s/ D. Xxxxx Xxxxxx
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President
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