Chief Executive Officer Employment Agreement

EMPLOYMENT AGREEMENT
BETWEEN
THOMAS D. PESCHIO
AND
GOVERNMENT PROPERTIES TRUST, INC.


This Employment Agreement (the "Agreement"), dated as of September 30, 2003 ("Effective Date"), between Government Properties Trust, Inc., a Maryland corporation (the "Company"), and Thomas D. Peschio, a resident of Nebraska (the "Executive"):


WHEREAS, the Executive has extensive experience in owning and operating real estate companies which acquire, broker, lease and manage commercial real estate and real estate investment entities and has previously served as the President and as a Director of the Company's predecessor, Gen-Net Lease Income Trust, Inc. ("Gen-Net"); and


WHEREAS, the Company wishes to continue to employ the Executive in the capacities and on the terms and conditions set out below, and the Executive desires to continue such employment, in the capacities and on the terms and conditions set forth below.


NOW, THEREFORE, the Company and the Executive, in consideration of the respective covenants set out below, hereby agree as follows:


1. EMPLOYMENT.


(a) POSITIONS. The Executive shall be employed by the Company
as its President and Chief Executive Officer ("CEO"). The Executive
shall also serve as a member of the Company's initial Board of
Directors and thereafter as elected.


(b) DUTIES. The Executive's principal employment duties and
responsibilities shall be those duties and responsibilities customary
for the positions of President and CEO and such other executive duties
and responsibilities as the Board of Directors ("Board") shall from
time to time reasonably assign to the Executive and as are set forth in
the Company's Bylaws applying to the President and CEO. The Executive
shall be responsible for and have authority over the day-to-day
operational management of the Company. The Executive shall report
directly to the Board. All other officers of the Company shall report
to the Executive or such person(s) as the Executive may designate from
time to time.


(c) EXTENT OF SERVICES. Except for illnesses and vacation
periods, the Executive shall devote a substantial majority of his time,
attention and best efforts to the performance of his business duties
and responsibilities under this Agreement. Notwithstanding the
foregoing, Executive (i) may make any passive investment where he is
not obligated or required to, and shall not in fact, devote any
managerial efforts, (ii) may participate in charitable, academic,
political or community activities and boards, and in trade or
professional organizations, and (iii) may hold directorships in other
companies consistent with the Company's conflict of interest policies
and corporate governance guidelines as in effect from time to time.


2. TERM. This Agreement shall be effective as of the Effective Date and shall continue in full force and effect thereafter for a term of five (5) years following the Effective Date. At the end of the five (5) year term this Agreement shall be automatically extended for an additional one (1) year on each anniversary of the Effective Date thereafter (the last day of each such term is referred to herein as a "Term Date"), unless either party terminates this Agreement not later than ninety (90) days prior to a Term Date by providing written notice to the other party of such party's intent not to renew, or it is sooner terminated pursuant to Section 7. For purposes of this Agreement, "Term" shall mean the period of five (5) years following the Effective Date hereof plus any extensions pursuant to this Section 2.


3. BASE SALARY. The Company shall pay the Executive a base salary annually (the "Base Salary"), which shall be payable in periodic installments according to the Company's normal payroll practices. The initial Base Salary shall be $350,000.00. The Board or the Compensation and Human Resources Committee of the Company (the "Compensation Committee") shall review the Base Salary at least once a year to determine whether the Base Salary should be increased effective January 1 of any year during the Term. For purposes of this Agreement, the term "Base Salary" shall mean the amount established and adjusted from time to time pursuant to this Section 3. The Base Salary shall be increased for each calendar year during the Term by a percentage equal to the percentage increase, if any, in the level of the CPI (as hereinafter defined) last published prior to January 1 of the year in question over the level of the CPI published in 2003. The Base Salary for any year, as increased under this Section, shall not be subsequently reduced notwithstanding any reduction in the level of the CPI.


The term "CPI" means the Consumer Price Index now known as the U.S. Bureau of Labor and Statistics Consumer Price Index for Urban Wage Earners and Clerical Workers, all Items for the Omaha, Nebraska SMSA. If the CPI shall be discontinued, the foregoing calculation shall be made using a reasonably equivalent successor or comparable measure of increase in the cost of living in Omaha, Nebraska.


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4. ANNUAL INCENTIVE BONUS. The Executive shall be entitled to receive an annual cash incentive bonus for each fiscal year during the Term of this Agreement consistent with a bonus policy ("Bonus Policy") adopted by the Compensation Committee.


The Bonus Policy shall be applied under the following conditions: 1) the first year the Bonus Policy shall be in effect is 2004; 2) For 2004 and thereafter, the Compensation Committee and the Executive shall mutually agree, by no later than March 31, on three (3) sets of financial performance goals for the Company, based on Funds from Operations or Total Return to Shareholders and the Company's audited financials for the prior year. If the first or threshold set of goals is met by the Company, the Compensation Committee shall award the Executive a cash bonus equal to forty percent (40%) of his Base Salary for the prior year, as adjusted in Section 3 if applicable. If the second or target set of goals is met by the Company, the Compensation Committee shall alternatively award the Executive a cash bonus equal to sixty percent (60%) of his Base Salary for the prior year, as adjusted in Section 3 if applicable. If the third or maximum set of goals is met by the Company, the Compensation Committee shall alternatively award the Executive a cash bonus equal to eighty percent (80%) of his Base Salary for the prior year, as adjusted in Section 3 if applicable; and 3) A bonus shall be awarded and paid not more than thirty (30) days after the Compensation Committee has received the final audited financial statements for the Company for the prior year. All Bonus Policy award calculations shall be based on the Company's most recent audited financial statements. If the Company fails to achieve the threshold performance goals applicable for the year in question, nothing herein shall be construed to prevent the Compensation Committee from recommending to the Board of Directors and the Board thereafter approving a cash bonus to the Executive based on terms determined to be fair, reasonable and equitable by a majority of disinterested Board members.


5. STOCK GRANT. The Executive shall receive, not later than March 31, 2004, a one-time grant of restricted and unregistered shares of the Company's voting common stock in a numerical amount equal to 0.625% of the number of shares issued pursuant to the Company's public offering of its voting common stock (rounded to the next whole share) which is anticipated to occur in late 2003. In no event shall the stock grant to the Executive provided for in this Section 5 exceed an amount worth in excess of one million dollars ($1,000,000.00) based on the Issue Price of the Common Stock on the Effective Date of the Company's Secondary Offering, assuming the shares issued pursuant to the grant have the same value as the Company's trading shares. The shares of common stock granted to the Executive pursuant to this Section 5 shall be issued and shall vest to him at the rate of twenty percent (20%) per annum until fully issued and vested, said issue date or dates to be set by agreement between the Compensation Committee and the Executive. Notwithstanding anything to the contrary, the Company shall pay either the dividends themselves or, in lieu thereof, an amount equal to the


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Executive's dividends declared based on the total number of shares granted to the Executive under this Section 5, rather than the number of shares vested.


6. BENEFITS.


(a) VACATION. The Executive shall be entitled to twenty (20)
business days of vacation per full calendar year. Upon termination, the
Executive shall be entitled to cash in lieu of any unused vacation
time. Vacation time shall accrue in whole from year-to-year.


(b) SICK AND PERSONAL DAYS. The Executive shall be entitled to
sick and personal days on an as needed basis.


(c) BENEFIT PLANS.


(i) PARTICIPATION IN EMPLOYEE BENEFIT PLANS. The
Executive and his spouse and eligible dependents, if any, and
their respective designated beneficiaries where applicable,
will be eligible for and entitled to participate in any
Company sponsored employee benefit plans, including but not
limited to benefits such as group health, dental, accident,
disability insurance, group life insurance, and a 401(k) plan,
as such benefits may be offered from time to time, on a basis
no less favorable than that applicable to any other executive
of the Company.


(ii) DEFERRED COMPENSATION PLAN. The Company may
adopt a deferred compensation plan for the benefit of the
Executive. The terms and conditions of the plan will be
negotiated between the Compensation Committee and the
Executive. The plan shall, at a minimum, provide for full
vesting of all benefits in not more than five (5) years.


(d) OTHER BENEFITS.


(i) CAR ALLOWANCE. The Company shall pay Executive a
monthly car allowance of $1,200.00 (or lease a car of his
selection for his exclusive use), plus related operating
expenses, taxes, insurance and fees which shall be reconciled
at the end of each fiscal year.


(ii) TAX PREPARATION AND FINANCIAL PLANNING. The
Company shall pay or promptly reimburse the Executive for
costs incurred by him in connection with tax preparation and
financial planning assistance, to be furnished by such
advisors as chosen by the Executive, up to a maximum aggregate
of $7,500.00 annually.


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(iii) DIRECTORS AND OFFICERS INSURANCE. During the
Term and thereafter for a period sufficient to include any
claims made within applicable statute of limitations, the
Executive shall be entitled to director and officer insurance
coverage for his acts and omissions while an officer and
director of the Company on a basis no less favorable to him
than the coverage provided to any other current officers and
directors.


(iv) DISABILITY INSURANCE. By June 30, 2004, the
Company shall acquire and maintain, at its cost, supplemental
renewable long-term disability insurance for the benefit of
the Executive as agreed to by the Company and the Executive.


(v) LIFE INSURANCE. By June 30, 2004, the Company
shall purchase on the life of the Executive a whole life
insurance policy with a death benefit of $500,000.00 with the
Executive (or his assignee) as the owner of the policy and
with the right to designate the beneficiary of the death
benefit, provided that the Executive's health and other
underwriting conditions are satisfactory (or in lieu thereof,
at the Executive's election, the Company may assume the
payment of premiums for insurance policies in a like amount
currently in existence, all other provisions of Section
6(d)(v) applying). The premiums paid on this policy shall be
imputed as income to the Executive, and the Company will pay
to the Executive such additional amount as necessary to have
no federal, state or local tax effect on the Executive (the
"Executive Life Insurance Program"). The Executive Life
Insurance Program shall be issued by an AA or better rated (by
AM Best) insurer. The Company will obtain bids for this
program and review the final program with the Executive and
the Compensation Committee for approval.


(vi) EXPENSES, OFFICE AND SUPPORT. The Executive
shall be entitled to reimbursement of all reasonable expenses,
in accordance with the Company's policy as in effect from time
to time and on a basis no less favorable than that applicable
to any other executive of the Company, including, without
limitation, telephone, reasonable travel and reasonable
entertainment expenses incurred by the Executive in connection
with the business of the Company, promptly upon the
presentation by the Executive of appropriate documentation.
The Executive shall also be entitled to appropriate office
space, administrative and technological support, and such
other facilities and services as are suitable to the
Executive's positions and adequate for the performance of the
Executive's duties.


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(vii) GENERAL. Subject to the provisions of each of
the respective plans, the Company shall provide to the
Executive all benefits which other employees of the Company
are entitled to receive, in accordance with the terms and
conditions of any policies or plans applicable to such
benefits. The Executive shall likewise participate in any
additional benefit as may be established during the term of
this Agreement, by standard written policy of the Company.
Notwithstanding anything herein to the contrary, the Company
shall not be obligated to institute, maintain, or refrain from
changing perquisite, so long as such changes applicable to the
Executive are equally applicable to other executives of the
Company (i.e., the benefits of the Executive will not be
singled out for reduction or modification in a manner
inconsistent to that provided to other executives of the
Company).


7. EMPLOYMENT TERMINATION.


(a) VOLUNTARY TERMINATION DUE TO RETIREMENT OR OTHERWISE. In
the event the Executive's employment is terminated, while this
Agreement is in force, by reason of voluntary retirement by the
Executive or other voluntary reasons, the Executive's benefits shall be
determined in accordance with the Company's defined benefit, deferred
compensation, health, disability and life insurance plans or policies,
then in effect.


Upon the effective date of such termination, the Company shall
pay to the Executive his full Base Salary (at the amount then in effect
as provided in Section 3 herein), accrued vacation pay, unreimbursed
business expenses, and all other items earned by and owed to the
Executive through and including the Effective Date of Termination. The
Executive also shall receive a pro rata bonus payment under the Bonus
Policy, based upon the level of achievement of the pre-established
performance goals up through and including the Effective Date of
Termination, as determined in good faith by the Board, plus all other
benefits to which the Executive has a vested right to at that time. The
Company's obligation to pay and provide to the Executive Base Salary,
annual bonus and any unvested shares reserved pursuant to the stock
grant (as provided in Sections 3, 4 and 5 herein, respectively), shall
immediately thereafter expire and the Company and the Executive
thereafter shall have no further obligations under this Agreement.


(b) TERMINATION DUE TO DEATH OR TOTAL DISABILITY. In the event
of the death or Total Disability (defined below), of the Executive
during the term of this Agreement, the Company shall pay, according to
the terms established by the Executive or his authorized
representative, to the Executive or the Executive's surviving spouse,
other authorized representative or other beneficiary as so designated
by the Executive during his lifetime, or to the


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Executive's estate, as appropriate, the Executive's Base Salary, as
adjusted for the CPI, accrued vacation pay, unreimbursed business
expenses, and all other items earned by and owed to the Executive
through and including the Effective Date of Termination and the annual
cash bonus equal to the prior year's bonus or $150,000.00, whichever is
greater, for the remainder of the Term of this agreement or for a
period of three (3) years, whichever is greater. In addition, any
unvested portion of the stock granted under Section 5 shall immediately
vest for the Executive's benefit and be promptly distributed to the
same recipient receiving Executive's Base Salary.


The Company's obligation to provide to or for the Executive
his Base Salary, annual bonus, and stock grant (as provided in Sections
3, 4 and 5 herein, respectively), shall immediately thereafter expire
and, the Company shall have no further obligations under this
Agreement.


In the event that the Executive is unable to perform his
duties herein for a period of more than one hundred eighty (180)
calendar days in the aggregate, whether or not consecutive, during any
period of twelve (12) consecutive months, or in event of the Board's
reasonable expectation that the Executive's Disability will exist for
more than a period of one hundred eighty (180) calendar days during any
period of twelve (12) consecutive months based on the medical opinions
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