EXHIBIT 10.2
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.
(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 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 five percent (5%) 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.
(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 vote of a majority in interest of
the Shareholders of the Company at a regular or special
meeting called for such purpose.
(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) If any provision of this Agreement is in conflict with any
provision of the Company's Bylaws or Prospectus dated
_________________, 2001, 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.
(c) 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
__________, 2001.
Gen-Net Lease Income Trust, Inc.
By:___________________________________
Xxxxx X. Xxxxxxxx, President
Genesis Financial Group, Inc.
By:___________________________________
D. Xxxxx Xxxxxx, President
