**EXHIBIT 10.1**

 

**SECOND AMENDMENT TO REVOLVINGCREDIT AGREEMENT**

 

**THISSECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT**(this“Amendment”) made as of the 16th day of March, 2004 by and among **AMERIVESTPROPERTIES INC.,** a Maryland corporation (“Borrower”), **AMERIVESTCHATEAU INC.,**a Texas corporation (“Chateau”), **AMERIVEST CAMELBACK INC.**, anArizona corporation (“Camelback”) and **AMERIVEST GREENHILL INC.,**a Texascorporation (“Greenhill”; Chateau, Camelback and Greenhill are sometimeshereinafter referred to individually as “Guarantor” and collectively as“Guarantors”)  **FLEET NATIONAL BANK**, anational banking association****(“Fleet”), **U.S. BANK NATIONAL ASSOCIATION**(“US Bank”;  Fleet, US Bankand the other lenders which may hereafter become a party to the Loan Agreement (ashereinafter defined) are hereinafter referred to collectively as the “Lenders”)and **FLEETNATIONAL BANK,** as Administrative Agent (the “Agent”).

 

**W I T N E S S E T H:**

 

**WHEREAS,**Borrower, Fleet and Agent entered into that certain Revolving Credit Agreementdated November 12, 2002, as amended by that certain First Amendment toRevolving Credit Agreement dated February 6, 2003 (as amended, the “LoanAgreement”); and

 

**WHEREAS,**Chateau executed and delivered to Agent a Guaranty dated as ofNovember 25, 2002 (the “Chateau Guaranty”); and

 

**WHEREAS,**Greenhill executed and delivered to Agent a Guaranty dated December 3,2003 (the “Greenhill Guaranty”)

 

**WHEREAS,**Camelback executed and delivered to Agent a Guaranty dated March 16, 2004(the “Camelback Guaranty”; the Chateau Guaranty, the Greenhill Guaranty and theCamelback Guaranty are hereinafter referred to collectively as the“Guaranties”); and

 

**WHEREAS,**Borrower, the Lenders and Agent have agreed to modifycertain provisions of the Loan Agreement; and

 

**WHEREAS,**as a condition to such modification, Agent and theLenders have required that Borrower and the Guarantors execute this Amendment;and

 

**NOW,THEREFORE,** for and in consideration of the sum of TENand NO/100 DOLLARS ($10.00), and other good and valuable consideration, thereceipt and sufficiency of which is hereby acknowledged, the parties hereto dohereby covenant and agree as follows:

 

1.                                       Definitions.  All the terms used herein which are nototherwise defined herein shall have the meanings set forth in the LoanAgreement.

 

2.                                       ModificationFee.  Borrower hereby agrees to payto the Agent for the account of each Lender a non-refundable cash fee (the“Modification Fee”) in an amount equal to 0.125%

 

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(or 12.5 basis points) of the amount of each suchLender’s Commitment, which Modification Fee shall be fully earned when paid andnon-refundable under any circumstances.

 

3.                                       Modificationof the Loan Agreement.  Borrower,Agent and the Lenders do hereby modify and amend the Loan Agreement as follows:

 

(a)                                  Bydeleting in its entirety the definition of the term “Funds from Operation”appearing in § 1.1 of the Loan Agreement and inserting in lieu thereof thefollowing:

 

Funds FromOperations.  Withrespect to any fiscal period of the Borrower, an amount equal to net income(computed in accordance with Generally Accepted Accounting Principles) from theoperation of Real Estate Assets, excluding gains (or losses) from debtrestructuring and sales of property, plus real estate depreciation andamortization, and after adjustments for unconsolidated partnerships and jointventures; provided, however, in the event that Borrower shall not have owned aReal Estate Asset for the entire previous four fiscal quarters, then for thepurpose of determining the Funds From Operation with respect to such RealEstate Asset, the net income (computed in accordance with Generally AcceptedAccounting Principles) for such Real Estate Asset shall be annualized in amanner reasonably acceptable to Agent.  Adjustmentsfor unconsolidated partnerships and joint ventures will be calculated toreflect funds from operations on the same basis.

 

(b)                                 Bydeleting §8.7 and of the Loan Agreement in its entirety and inserting in lieuthereof the following new §8.7:

 

“§8.7 Distributions.  Beginning with the period of fourconsecutive fiscal quarters ending March 31, 2005, Borrower shall notpermit the total Distributions by it during any period of four consecutivefiscal quarters calculated as of the end of each fiscal quarter to exceedninety percent (90%) of Funds From Operations during such period.  Such limitations on Distributions may beexceeded to the extent necessary for the Borrower to maintain its REIT statusprovided that the Borrower provides the Agent with a letter from itsaccountants or attorneys setting forth the basis for computation of the amountof such necessary excess Distributions. During any period, including without limitation, at any time prior toMarch 31, 2005 when any Default or Event of Default has occurred and iscontinuing the total Distributions by the Borrower will not exceed the minimumamount necessary for the Borrower to maintain its REIT status.”

 

(c)                                  Bydeleting §§9.4 and 9.5 of the Loan Agreement in their entirety and inserting inlieu thereof the following new §§9.4 and 9.5:

 

“§9.4 AdjustedEBITDA to Interest Expense.  TheBorrower will not permit the ratio of its Adjusted EBITDA to Interest Expenseto be less than 1.5 to 1.0 for any period of two fiscal quarters annualized,calculated as of the end of each fiscal quarter through and including thefiscal quarter ending March 31, 2004. Beginning with the fiscal quarterending June 30, 2004, the Borrower will not

 

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permit the ratioof its Adjusted EBITDA to Interest Expense to be less than 1.75 to 1.0 for anyperiod of two fiscal quarters annualized, calculated as of the end of eachfiscal quarter through and including the fiscal quarter endingDecember 31, 2004.  Beginning withthe fiscal quarter ending March 31, 2005, the Borrower will not permit theratio of its Adjusted EBITDA to Interest Expense to be less than 2.0 to 1.0 forany period of two fiscal quarters annualized, calculated as of the end of eachfiscal quarter.

 

§9.5 EBITDA toFixed Charges.  The Borrower willnot permit the ratio of its EBITDA to Fixed Charges to be less than 1.35 to 1.0for any period of two fiscal quarters annualized, calculated as of the end ofeach fiscal quarter through and including the fiscal quarter endingMarch 31, 2004.  Beginning with thefiscal quarter ending June 30, 2004, the Borrower will not permit theratio of its EBITDA to Fixed Charges to be less than 1.5 to 1.0 for any periodof two fiscal quarters annualized, calculated as of the end of each fiscalquarter through and including the fiscal quarter ending December 31,2004.  Beginning with the fiscal quarterending March 31, 2005, the Borrower will not permit the ratio of itsEBITDA to Fixed Charges to be less than 1.75 to 1.0 for any period of twofiscal quarters annualized, calculated as of the end of each fiscal quarter.”

 

(d)                                 Bydeleting Appendix I of Exhibit C of the Credit Agreement in its entirety andinserting in lieu thereof the new Appendix I attached hereto.

 

4.                                       Waiver.  The Agent and the Lender do hereby waive theDefault by Borrower of compliance with the covenants set forth in §8.7 of theLoan Agreement for the fiscal quarter ending December 31, 2003.  The Agent and the Lenders have made noagreement, and are in no way obligated, to grant any future extension, waiver,indulgence or consent.

 

5.                                       Referencesto Loan Agreement.  All referencesin the Loan Documents to the Loan Agreement shall be deemed a reference to theLoan Agreement as modified and amended herein.

 

6.                                       Consentof Guarantors.  By execution of thisAmendment, each Guarantor hereby expressly consents to the modification andamendment to the Loan Agreement as set forth herein, and the Borrower and theGuarantors hereby acknowledge, represent and agree that the Loan Documents(including without limitation the Guaranties) remain in full force and effectand constitute the valid and legally binding obligations of the Borrower andthe Guarantors enforceable against such Persons in accordance with theirrespective terms, and that the execution and delivery of this Amendment and anyother modification documents do not constitute, and shall not be deemed toconstitute, a release, waiver or satisfaction of Borrower’s or the Guarantors’obligations under the Loan Documents (including, without limitation, theGuaranties).

 

7.                                       Representations.  Borrower and each Guarantor represents andwarrants to Agent and the Lenders as follows:

 

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(a)                                  Authorization.  The execution, delivery and performance ofthis Amendment and the transactions contemplated hereby (i) are within theauthority of Borrower and the Guarantors, (ii) have been duly authorized by allnecessary proceedings on the part of such Persons, (iii) do not and will notconflict with or result in any breach or contravention of any provision of law,statute, rule or regulation to which any of such Persons is subject or anyjudgment, order, writ, injunction, license or permit applicable to suchPersons, (iv) do not and will not conflict with or constitute a default(whether with the passage of time or the giving of notice, or both) under anyprovision of the partnership agreement or certificate, certificate offormation, operating agreement, articles of incorporation or other charterdocuments or bylaws of, or any mortgage, indenture, agreement, contract orother instrument binding upon, any of such Persons or any of its properties orto which any of such Persons is subject (v) do not and will not result inor require the imposition of any lien or other encumbrance on any of theproperties, assets or rights of such Persons, other than the liens andencumbrances created by the Loan Documents.

 

(b)                                 Enforceability.  The execution and delivery of this Amendmentare valid and legally binding obligations of Borrower and the Guarantorsenforceable in accordance with the respective terms and provisions hereof,except as enforceability is limited by bankruptcy, insolvency, reorganization,moratorium or other laws relating to or affecting generally the enforcement ofcreditors’ rights and the effect of general principles of equity.

 

(c)                                  Approvals.  The execution, delivery and performance ofthis Amendment and the transactions contemplated hereby do not require theapproval or consent of any Person or the authorization, consent, approval of orany license or permit issued by, or any filing or registration with, or thegiving of any notice to, any court, department, board, commission or othergovernmental agency or authority other than those already obtained.

 

8.                                       NoDefault.  By execution hereof, theBorrower and each of the Guarantors certifies that each such Person is and willbe in compliance with all covenants under the Loan Documents after theexecution and delivery of this Amendment, and that no Default or Event ofDefault has occurred and is continuing.

 

9.                                       Waiverof Claims.  Borrower and eachGuarantor acknowledges, represents and agrees that none of such Persons has anydefenses, setoffs, claims, counterclaims or causes of action of any kind ornature whatsoever with respect to the Loan Documents, the administration orfunding of the Loans or with respect to any acts or omissions of Agent or theLenders, or any past or present officers, agents or employees of Agent or theLenders, and each of such Persons does hereby expressly waive, release andrelinquish any and all such defenses, setoffs, claims, counterclaims and causesof action, if any.

 

10.                                 Ratification.  Except as hereinabove set forth, all terms,covenants and provisions of the Loan Documents, including, without limitation,the Loan Agreement, remain unaltered and in full force and effect, and theparties hereto do hereby expressly ratify and confirm, the Loan Documents andthe Loan Agreement as modified and amended herein.  Nothing in this Amendment shall be deemed or construed toconstitute, and there has not otherwise occurred, a novation, cancellation,satisfaction, release, extinguishment or substitution of the indebtedness

 

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evidenced by the Notes or the other obligations of Borrowerand the Guarantors under the Loan Documents.

 

11.                                 EffectiveDate.  This Amendment shall bedeemed effective and in full force and effect upon the execution and deliveryof this Amendment by Borrower, Guarantors, Agent and the Lenders.

 

12.                                 Amendmentas Loan Document.  This Amendmentshall constitute a Loan Document.

 

13.                                 Counterparts.  This Amendment may be executed in any numberof counterparts which shall together constitute but one and the same agreement.

 

14.                                 Miscellaneous.  This Amendment shall be construed andenforced in accordance with the laws of The Commonwealth of Massachusetts.  This Amendment shall be binding upon andshall inure to the benefit of the parties hereto and their respective permittedsuccessors, successors-in-title and assigns as provided in the Loan Agreementand the Guaranties.

 

**[Remainder ofPage Intentionally Left Blank; Signatures on Following Page]**

 

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**IN WITNESS WHEREOF**,the parties hereto have hereto set their hands and affixed their seals as ofthe day and year first above written.

 
|   | **BORROWER:**                                         |
|--------|-------------------------------------------------------|
|   |                                                  |
|   | **AMERIVEST PROPERTIES, INC.**                        |
|   |                                                  |
|   | By:                                                   | John B. Greenman |
|   | Name:                                                 | John B. Greenman |
|   | Title:                                                | Vice President |
|   |                                                  |
|   | [CORPORATE  SEAL]                                     |
|   |                                                  |
|   |                                                  |
|   | **GUARANTORS:**                                       |
|   |                                                  |
|   | **AMERIVEST CHATEAU INC.**, a Texas  corporation      |
|   |                                                  |
|   | By:                                                   | John B. Greenman |
|   | Name:                                                 | John B. Greenman |
|   | Title:                                                | Vice President |
|   |                                                  |
|   | [CORPORATE  SEAL]                                     |
|   |                                                  |
|   |                                                  |
|   | **AMERIVEST GREENHILL INC.**, a Texas  corporation    |
|   |                                                  |
|   | By:                                                   | John B. Greenman |
|   | Name:                                                 | John B. Greenman |
|   | Title:                                                | Vice President |
|   |                                                  |
|   | [CORPORATE  SEAL]                                     |
|   |                                                  |
|   |                                                  |
|   | **AMERIVEST CAMELBACK INC.**, an Arizona  corporation |
|   |                                                  |
|   | By:                                                   | John B. Greenman |
|   | Name:                                                 | John B. Greenman |
|   | Title:                                                | Vice President |
|   |                                                  |
|   | [CORPORATE  SEAL]                                     |
|        |                                                       |  |  |  |

 

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|   | **LENDERS:**                                                                       |
|--------|------------------------------------------------------------------------------------|
|   |                                                                               |
|   | **FLEET NATIONAL BANK,** a national banking  association                           |
|   |                                                                               |
|   | By:                                                                                | George A. Ojanuga |
|   | Name:                                                                              | George A. Ojanuga |
|   | Title:                                                                             | Director |
|   |                                                                               |
|   |                                                                               |
|   | **U.S. BANK NATIONAL ASSOCIATION**                                                 |
|   |                                                                               |
|   | By:                                                                                | Peter F.C. Armstrong, Jr. |
|   | Name:                                                                              | Peter F.C. Armstrong, Jr. |
|   | Title:                                                                             | Vice President |
|   |                                                                               |
|   |                                                                               |
|   | **AGENT:**                                                                         |
|   |                                                                               |
|   | **FLEET NATIONAL  BANK,** a national banking  association, as Administrative Agent |
|   |                                                                               |
|   | By:                                                                                | George A. Ojanuga |
|   | Name:                                                                              | George A. Ojanuga |
|   | Title:                                                                             | Director |
|        |                                                                                    |  |  |  |

 

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