Exclusive Client Agency Agreement

Exhibit 10.6


EXCLUSIVE CLIENT AGENCY AGREEMENT


This EXCLUSIVE CLIENT AGENCY AGREEMENT ("Agreement") is made and entered into and declared effective as of this 9th day of May, 2005,


BY AND BETWEEN ADVISORS REIT I, INC.
a Maryland Corporation
hereinafter referred to as "CLIENT",


AND JOHN T. ARNOLD ASSOCIATES, INC,
a Kansas Corporation
hereinafter referred to as
"REPRESENTATIVE".


W I T N E S S E T H:


WHEREAS, Representative is a real estate agency licensed in the state of Kansas possessing certain expertise in the acquisition, sale and leasing of commercial real estate (the "Expertise"); and


WHEREAS, Client intends to operate as a real estate investment trust in the business of purchasing, leasing selling and otherwise investing in commercial real estate; and


WHEREAS Client desires to retain Representative respecting its Expertise for services related to the acquisition, leasing and sale of commercial real estate.


NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Client and Representative agree as follows:


1. REAL PROPERTY. From time to time, Client desires to purchase commercial real estate (referred to herein as the "Property" or "Properties") generally located in the Midwestern and Southwestern United States for up to an approximate aggregate purchase price of $25,000,000.00 as further described in that certain Form S-11 Registration Statement filed by Client with the Securities and Exchange Commission on or about May 12, 2005 (the "Registration Statement") and consistent with the criteria established hereunder.


2. CLIENT'S AGENT. Client hereby grants to Representative and Representative hereby accepts the exclusive right to (a) locate and assist Client in locating appropriate Properties for Client to purchase or otherwise acquire an interest in; (b) offer Client's Properties for sale to third party buyers; (c) negotiate the purchase or exchange sale of


Properties on behalf of Client and (d) engage local agents, brokers and other real estate professionals to assist in Representative's performance of its obligations hereunder (the "Co-Brokers"). Representative may be offered the opportunity to act as Client's leasing agent on a case-by- case basis at the sole discretion of Client.


3. TERM. This Agreement shall be in effect commencing on the closing date of the "minimum offering" of the shares as described in the Registration Statement and continue thereafter for a period of twelve (12) months, unless sooner terminated or extended in accordance with the provisions of this Agreement (the "Term"). If Representative is the "Procuring Cause" of any transaction involving Client which closes within six (6) months following the termination or expiration of this Agreement, Client shall nevertheless pay to Representative its Commission, if any, due under SECTION 4 herein. Representative shall not receive any Commission from Client for any transaction closing more than six (6) months after the expiration or termination of this Agreement.


4. REPRESENTATIVE'S FEE. Representative shall receive payment in the form of a commission (the "Commission") for its services as follows:


(a) GENERAL. In transactions when a Commission is being offered to Representative pursuant to a lessor or seller's listing agreement or is being offered from a cooperating agency or Representative, Client shall not be responsible for paying any Commission to Representative and Representative shall look only to such lessor, seller or cooperating agency or Representative for its Commission, except as herein expressly provided to the contrary.


(b) PURCHASE OR SALE. In any other transaction for the purchase or sale of a Property where Representative is unable to obtain its Commission in accordance with SUBSECTION 4 (a) above, Client shall pay to Representative a Commission equal to the following percentages of the final negotiated purchase price of the Property which shall not include any administrative, closing, insurance or professional costs associated with the transaction (the "Purchase Price"): six percent (6%) of the Purchase Price up to $1,000,000; four percent (4%) of the portion between $1,000,000 and $2,000,000; and two percent (2%) for that portion of the Purchase Price above $2,000,000 (the "Standard REIT Commission Rate"). Provided, in any situation in which Representative is acting as Client's purchaser representative and the commission payable to Representatives from any cooperating seller's broker is less than one half (1/2) of the amount that Representative would receive if the Standard REIT Commission Rate had applied, then Client shall at closing pay Representative the difference between such amounts.


(c) (Notwithstanding any of the foregoing in this SECTION 4, no commission shall be due or payable in a given transaction unless and until all of the following events have occurred:


i. Representative has procured a ready, willing and able buyer, seller,


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lessee, or tenant (i.e., tenant in a municipally-financed project), as the case may be;


ii. Client and the applicable seller, buyer, lessor or lessee have executed and delivered a contract of sale, purchase or lease, as the case may be, the terms and conditions of which are acceptable to Client, in Client's sole discretion; and


iii. The closing of the sale, purchase or lease including Seller's receipt of any cash due at closing has occurred.


(d) Representative's Commission shall be the sole compensation due and owing to Representative. Representative shall not be entitled to reimbursement for any expenses or any other costs Representative incurs related to or involving the performance of its obligations hereunder unless approved by Client.


(e) Payment of any commission, referral fee or other compensation to any Co-Brokers shall be the responsibility of Representative.


5. OTHER BUYERS/TENANTS. Client acknowledges that other potential buyers/tenants may consider, make offers on, or purchase through Representative similar properties as Client seeks. Client consents to Representative's representation of such potential buyers/tenants during the term of this Agreement and after its expiration. Provided, Representative shall not disclose to anyone other than the proposed seller, buyer, or lessee Client's identity, Client's interest in any Property, or the material terms of any offer made by Client without Client's prior written consent.


6. DUTIES AND RESPONSIBILITIES. Representative shall perform the terms of this Agreement, promote the interests of Client with the utmost good faith, loyalty and fidelity and shall present all written offers, counter-offers and backup offers to Client in a timely manner. In satisfaction of his obligations under this Agreement and the Kansas brokerage relationships in real estate transaction act, Representative shall provide all information requested by Client in the form and manner requested by Client. Representative shall advise Client to obtain expert advice as to material matters about which Representative knows but the specifics of which are beyond Representative's Expertise. Representative shall disclose to Client all adverse material information actually known by Representative, inc ...