Exhibit
10.2


 


AMENDED CHANGE IN CONTROL
AND TERM EMPLOYMENT AGREEMENT


 


This AMENDED CHANGE IN CONTROL AND TERM EMPLOYMENT AGREEMENT (“Agreement”)
is entered into by and between AmeriVest Properties Inc., a Maryland
corporation (the “Company”), with offices at 1780 South Bellaire Street, Suite
100, Denver, Colorado 80222, and Kathryn L. Hale (the “Executive”), an
individual residing in the State of Colorado, dated as of this 16th day of
December, 2005.  For convenience, at
times the Company and Executive shall be referred to herein as the “Parties.”


WHEREAS, the Company recognizes that the current business environment
makes it difficult to attract and retain highly qualified executives unless a
certain degree of security can be offered to such individuals against
organizational and personnel changes which frequently follow changes in control
of a corporation; and


WHEREAS, even rumors of acquisitions or mergers may cause executives to
consider major career changes in an effort to assure financial security for themselves
and their families; and


WHEREAS, the Company desires to assure fair treatment of Executive
during her employment with the Company and in the event of a Change in Control
(as defined below) and to allow her to make critical career decisions without
undue time pressure and financial uncertainty, thereby increasing her
willingness to remain with the Company notwithstanding the outcome of a
possible Change in Control transaction; and


WHEREAS, the Company recognizes that Executive will be involved in evaluating
or negotiating any offers, proposals or other transactions which could result
in Changes in Control of the Company and believes that it is in the best
interest of the Company and its stockholders for Executive to be in a position,
free from personal financial and employment considerations, to be able to
assess objectively and pursue aggressively the interests of the Company’s
stockholders in making these evaluations and carrying on such negotiations; and


WHEREAS, the Board of Directors (the “Board”) of the Company believes
it is essential to provide Executive with compensation arrangements during her
employment with the Company and upon a Change in Control to provide Executive
with individual financial security in a manner competitive with other corporations,
and in order to accomplish these objectives, the Board has caused the Company
to enter into this Agreement.


NOW THEREFORE, the Parties, for good and valuable consideration, the
legal sufficiency of which is hereby acknowledged, and intending to be legally
bound, agree as follows:


1.             Employment.  Upon and subject to the terms provided
herein, the Company agrees to employ Executive, and Executive agrees to be
employed by the Company, as the Company’s Chief Financial Officer as set forth
in Section 4 of this Agreement.


2.             Operation and Term of
Agreement.  This Agreement
shall be effective immediately upon its execution.  This Agreement may be terminated by the
Company upon 24 months’ advance written notice to Executive, except as
otherwise provided in Section 4 of this Agreement; and provided, however, that
after a Change in Control of the Company during


 





















the term of this Agreement, this Agreement shall
remain in effect until all of the obligations of the Parties under this
Agreement are satisfied and the Protection Period has expired.  Prior to a Change in Control, this Agreement
shall immediately terminate upon termination of Executive’s employment or upon
Executive’s ceasing to be an elected officer of the Company.


3.             Certain Definitions.  For purposes of this Agreement, the following
words and phrases shall have the following meanings:


(a)           “Cause” shall mean (i) the
continued failure by Executive to perform her material responsibilities and
duties toward the Company (other than any such failure resulting from Executive’s
incapacity due to physical or mental illness), (ii) the engaging by
Executive in willful or reckless conduct that is demonstrably injurious to the
Company monetarily or otherwise, (iii) the conviction of Executive of a
felony, or (iv) the commission or omission of any act by Executive that is
materially inimical to the best interests of the Company and that constitutes
on the part of Executive common law fraud or malfeasance, misfeasance, or
nonfeasance of duty; provided, however, that “cause” shall not include
Executive’s lack of professional qualifications.  For purposes of this Agreement, an act, or
failure to act, on Executive’s part shall be considered “willful” or “reckless”
only if done, or omitted, by her not in good faith and without reasonable
belief that her action or omission was in the best interest of the
Company.  The Executive’s employment
shall not be deemed to have been terminated for “cause” unless the Company
shall have given or delivered to Executive (A) reasonable notice setting
forth the reasons for the Company’s intention to terminate Executive’s
employment for “cause,” (B) a reasonable opportunity, at any time during
the 30-day period after Executive’s receipt of such notice, for
Executive, together with her counsel, to be heard before the Board, and
(C) a Notice of Termination (as defined in Section 13 below) stating
that, in the good faith opinion of not less than a majority of the entire
membership of the Board, Executive was guilty of the conduct set forth in
clauses (i), (ii), (iii) or (iv) of the first sentence of this
Section 3(a).


(b)           “Change in Control” shall mean a
change in control under Code Section 409A(a)(2).  As provided in Internal Revenue Service
Notice 2005-1 and Proposed Regulations Sections 1.409A-3(g)(5), a change of
control would include (A) any person (or more than one person acting as a
group) becoming the beneficial owner, directly or indirectly, of securities of
the Company representing 35 percent or more of the combined voting power of the
Company’s then outstanding securities; or (B) during any 12-month period,
the following persons cease for any reason to constitute a majority of the
Board:  individuals who at the beginning
of such period constitute the Board and new Directors each of whose election to
the Board or nomination for election to the Board by the Company’s security
holders was approved by a vote of more than 50 percent of the Directors then
still in office who either were Directors at the beginning of the period or
whose election or nomination for election was previously so approved; or
(C) the security holders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
that would result in the voting securities of the Company outstanding
immediately before the merger or consolidation continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
Company or of such surviving entity) at least eighty percent (80%) of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation.  A Change of Control will
be deemed to have occurred if the security holders of the Company approve
a plan of complete liquidation of the


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Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company’s assets.


(c)           “Code” shall mean the Internal Revenue
Code of 1986, as amended.


(d)           “Disability,” for purposes of this
Agreement, shall mean total disability as defined in any long-term disability
plan sponsored by the Company in which Executive participates, or, if there is
no such plan or it does not define such term, then it shall mean the physical
or mental incapacity of Executive that prevents her from substantially
performing the duties of the office or position to which she was elected or
appointed by the Board for a period of at least 180 days and the incapacity is
expected to be permanent and continuous through Executive’s 65th birthday.


(e)           The “Change in Control Date” shall be
any date during the term of this Agreement on which a Change in Control
occurs.  Anything in this Agreement to
the contrary notwithstanding, if Executive’s employment or status as an elected
officer with the Company is terminated within six (6) months before the date on
which a Change in Control occurs, and it is reasonably demonstrated that such
termination (i) was at the request of a third party who has taken steps
reasonably calculated or intended to effect a Change in Control or
(ii) otherwise arose in connection with or anticipation of a Change in
Control, then for all purposes of this Agreement the “Change in Control Date”
shall mean the date immediately before the date of such termination.


(f)            “Good Reason” means:


(i)            the assignment to Executive within
the Protection Period of any duties inconsistent in any respect with Executive’s
position (including status, offices, titles and reporting requirements,
authority, duties or responsibilities), or any other action that results in a
diminution in such position, authority, duties, or responsibilities excluding
for this purpose an isolated, insubstantial, and inadvertent action not taken
in bad faith and that is remedied by the Company promptly after receipt of
notice given by Executive;


(ii)           a reduction by the Company in
Executive’s base salary in effect immediately before the beginning of the
Protection Period or as increased from time to time after the beginning of the
Protection Period;


(iii)          a failure by the Company to maintain
plans providing benefits at least as beneficial as those provided by any
benefit or compensation plan (including, without limitation, any incentive compensation
plan, bonus plan or program, retirement, pension or savings plan, life
insurance plan, health and dental plan or disability plan) in which Executive
is participating immediately before the beginning of the Protection Period, or
any action taken by the Company that would adversely affect Executive’s
participation in or reduce Executive’s opportunity to benefit under any of such
plans or deprive Executive of any material fringe benefit enjoyed by her
immediately before the beginning of the Protection Period; provided, however,
that a reduction in benefits under the Company’s tax-qualified retirement,
pension, or savings plans or its life insurance plan, health and dental plan,
disability plans or other insurance plans, which reduction applies generally to
participants in the plans and has a de minimis effect on Executive shall not
constitute “Good Reason” for termination by Executive;


 


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(iv)          the Company’s requiring Executive,
without Executive’s written consent, to be based at any office or location in
excess of 50 miles from her office location immediately before the beginning of
the Protection Period, except for travel reasonably required in the performance
of Executive’s responsibilities;


(v)           any purported termination by the
Company of Executive’s employment for Cause other than as referred to in
Section 13 of this Agreement;


(vi)          any failure by the Company to obtain
the assumption of the obligations contained in this Agreement by any successor
as contemplated in Section 12(c) of this Agreement;


(vii)         a change in the location of Executive’s
office or the Company’s principal executive office to a place that is more than
fifty (50) miles from the present location; or


(viii)        any material breach of this Agreement by
the Company.


(g)           “Parent” means any entity that
directly or indirectly through one or more other entities owns or controls more
than 50 percent of the common stock and any other voting securities of the
Company.


(h)           “Protection Period” means the period
beginning on the Change in Control Date and ending on the last day of the 30th
full calendar month following the Change in Control Date.


(i)            “Subsidiary” means a company 50
percent or more of the voting securities of which are owned, directly or indirectly,
by the Company.


4.             Term
Employment Compensation.


(a)           Term
of Employment.  Subject to the
provisions set forth in this Agreement, the Company agrees to employ Executive
and Executive agrees to be employed by Company as its Chief Financial Officer,
as of the date hereof through May 31, 2006 (“Employment Period”).


(b)           Base
Salary.  As compensation for
the employment services rendered pursuant to this Agreement, from the date of
this Agreement until December 31, 2005, Company agrees to pay Executive a base
salary at an annual rate of $160,000.00, and thereafter at an annual rate to be
determined by the Board of Directors (in each case, the “Annual Base Salary”),
payable in installments in accordance with the Company’s standard payroll
practices, subject to such payroll and withholdings deductions as are required
by law or authorized by Executive. 
Executive shall be entitled to participate in all benefit plans in which
she is currently eligible to participate as of the date hereof.


(c)           Bonus.  Executive shall be eligible for a bonus
payable in cash in an amount of up to $50,000.00 during the Employment Period,
and thereafter at an amount to be determined by the Board of Directors, based
on Executive’s successful completion of various criteria as determined by the
Chief Executive Officer (“Bonus”, and collectively with the Annual Base


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Salary, the “Annual Salary,” provided that if a Bonus
has not yet been determined for a particular period, the prior period Bonus
shall apply).


(d)           Office
and Duties.  Executive shall
continue to work under the direction of the Chief Executive Officer and shall
perform such tasks commensurate with her position as may from time to time be
assigned by the Board and the Company. 
Executive shall devote all business time, labor, skill, undivided
attention, and best ability to the performance of Executive’s duties hereunder
in a manner that will faithfully and diligently further the business and
interests of the Company.  Executive
shall not directly or indirectly pursue any other business activity that she is
not otherwise involved in as of the date of this Agreement without the prior
written consent of the Company, through its Chief Executive Officer and/or
Board, with the exception of passive personal investments not in breach of any
other term or provision hereof.


(e)(i)        Benefits
Upon Expiration of Employment Period.  In the event that Executive gives notice, on
or before April 1, 2006, of her intent to terminate Executive’s employment
effective on any date on or after the expiration of the Employment Period, and
given Executive’s competent satisfaction of the duties of the office of Chief
Financial Officer, and full satisfaction of all obligations set forth in this
Agreement, including all obligations set forth at Sections 1, 4(a), 4(d) and
this Section 4(e), and provided Executive executes on the date of her
termination of employment an Addendum to this Agreement wherein she ratifies
all the provisions of this Agreement and agrees that she shall be legally bound
by all releases and all other terms set forth in this Agreement as of the date
of Executive’s termination of employment, and provided Executive is not
terminated prior to the expiration of her Employment Period for Cause, Company
shall pay to Executive:


(A) Monthly payments in
an amount equal to one-twelfth of the Annual Salary then in effect, less all
applicable payroll and withholdings deductions as are required by law or
authorized by Executive, (“Severance”) for a period of seven (7) months
beginning on June 1, 2006 and ending on December 31, 2006 (“Severance Period”),
payable on a semi-monthly basis in accordance with regular Company pay periods;
and


(B) During the Severance
Period, Executive shall also receive the same insurance and other benefits that
are payable by Company to other corporate executives, including health, dental
and vision insurance.


Provided, however, in the
event Executive receives benefits pursuant to Section 6 or Section 7 of this
Agreement, Executive shall automatically forfeit any benefits otherwise due and
payable under this Section 4(e)(i).


                (e)(ii)       Additional
Benefits Payable upon Extension of
Employment Period.  Given
Executive’s satisfaction of all obligations set forth in Section 4(e)(i), for
every full month Executive elects to continue her employment with the Company
beyond the Employment Period (“Additional Severance Period”) and, provided that
she has not been otherwise terminated pursuant to Section 4(e)(iii) or 4(h) of
this Agreement, Executive shall be entitled to receive the following, in
addition to Severance received pursuant to Section 4(e)(i):


(A) An additional payment
equal to one-twelfth of the Annual Salary then in effect, less all applicable
payroll and withholdings deductions as are required by law or authorized by
Executive (“Additional Severance”), payable on a semi-monthly basis in


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accordance with regular
Company pay periods, commencing during the month immediately following Executive’s
termination, until such time as Executive has received an Additional Severance
payment for each month of employment beyond the Employment Period; and


(B) During the Additional
Severance Period, Executive shall also receive the same insurance and other
benefits that are payable by Company to other corporate executives, including
health, dental and vision insurance.


Provided, however, in the event Executive receives
benefits pursuant to Section 6 or Section 7 of this Agreement, Executive shall
automatically forfeit any benefits otherwise due and payable under this Section
4(e)(ii).


(e)(iii)  Benefits
Upon Termination Without Cause. 
If in the discretion of the Company, the Company terminates Executive’s
employment prior to the expiration of Executive’s Employment Period and for
reasons not for Cause, the Company shall pay to Executive:


(A) Monthly payments in
an amount equal to one-twelfth of the Annual Salary then in effect (“Severance”),
less all applicable payroll and withholdings deductions as are required by law
or authorized by Executive, for a period of seven (7) months payable on a
semi-monthly basis in accordance with regular Company pay periods, commencing
during the month immediately following Executive’s termination (“Severance
Period”); and


(B) During the Severance
Period, Executive shall also receive the same insurance and other benefits that
are payable by Company to other corporate executives, including health, dental
and vision insurance.


Provided, however, in the
event Executive receives benefits pursuant to Section 6 or Section 7 of this
Agreement, Executive shall automatically forfeit any benefits otherwise due and
payable under this Section 4(e)(iii).


(e)(iv)     Consulting
Services.  In the event
Executive receives benefits pursuant to this Section 4(e), Executive shall
provide telecommuting consulting services to the Company of up to 5 hours per
week or 20 hours per month, for a period of six (6) months, and shall attend
in-person meetings as mutually agreed upon by the Parties.


(f)            Releases
in Exchange for Benefits Upon Expiration of Employment Period.  In exchange for the benefits payable to
Executive as set forth in Section 4(e) of this Agreement, Executive does hereby
voluntarily and knowingly release and discharge the Company and its successors,
subrogees, assigns, principals, agents, partners, heirs, employees,
shareholders, officers, directors, subsidiaries, affiliates, divisions,
associates and attorneys (collectively the “Released Parties”) from any and all
claims, actions, causes of action, liabilities, demands, rights, damages,
costs, attorneys’ fees, expenses and controversies of every kind and
description through the date of this Agreement. 
These releases shall include, by way of example and not limitation, all
claims which arise out of, relate to, or are based on (i) Executive’s
employment and/or association with the Released Parties and the termination
thereof, (ii) any and all contracts, binding promises and statements to, from
or between the Parties, (iii) the common laws of any state, (iv) Title VII of
the Civil Rights Act of 1964, as amended, (v) claims under the


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Civil Rights Act of 1991, (vi) claims under 42 U.S.C.
§ 1981, § 1981a, § 1983, § 1985, or § 1988, (vii) the Age Discrimination in
Employment Act of 1967, as amended, (viii) the Employee’s Income Retirement
Security Act of 1974, as amended, (ix) claims under the Older Workers Benefit
Protection Act of 1990, and (x) claims under all other local, state and federal
statutes, any of which could be raised, filed and/or brought in any court of
competent jurisdiction and/or in any local, state and federal administration
agency or administration.  However,
Executive does not release any claims she may have under any stock option or
warrant agreements.


(i)            Nothing
contained herein shall be construed as a release of any claim Executive may
have to unemployment benefits.  Executive
may make a claim for such benefits, and the Released Parties will provide
truthful information in response to questions from the responsible State
agency.


(ii)           Notwithstanding
the recitation of the claims set forth in this Section 4(f), or whether quoted
herein or not, and for the purpose of effectuating a full and final release
herein between the Parties, Executive expressly acknowledges that all releases
agreed to by Executive in this Section 4(f) are intended to include and
contemplate the extinguishment, without limitation, of all claims which she now
has or does not know or suspect to exist in her favor at the time of the
execution hereof.


(g)           Executive
Warranties.  Executive warrants and represents as follows:


(i)            Executive has full and complete legal
capacity to enter into this Agreement, has read this Agreement, has had a
reasonable time to consider its terms, and agrees to the conditions and
obligations set forth in it.


(ii)           Executive has had twenty-one (21)
days to consider the Agreement, and, if Executive executes this Agreement
within less than twenty-one (21) days from the date of receipt, it is with the
express understanding that Executive had the full twenty-one (21) days
available if so desired.  Further,
Executive waives all rights to a twenty-one (21) day period to consider the
terms of Employee’s release of claims under the Age Discrimination in
Employment Act (“ADEA”) if Executive signs this Agreement prior to the
expiration of the twenty-one (21) day period.


(iii)          Executive has not relied on any
statement made by the Company, its agents or representatives, either express or
implied, or by statement or omission, in making her decision to enter into this
Agreement.  Executive voluntarily
executes this Agreement after having been advised by the Company to seek legal
counsel, and has had full opportunity to consult with legal counsel, and
without being pressured or influenced by any person, or by any statement or
representation of any person acting on behalf of another Party, including the
officers, agents and attorneys for any other Party.


(iv)          Executive has been informed and
understands that (i) to the extent that this Agreement waives or releases any
claims Executive might have under the ADEA, Executive may rescind such waiver
and release within seven (7) calendar days of the execution of this Agreement,
and (ii) any such rescission must be in writing and hand delivered to the
Company, or, if sent by mail, postmarked within the seven (7) day


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period, sent only by
certified mail, return receipt requested, and addressed to the Company.


(v)           This Agreement is subject to the
terms of the Older Workers Benefit Protection Act of 1990 (“OWBPA”).  Executive acknowledges and agrees that she
is, voluntarily and with full knowledge of the consequences of such release,
releasing all claims, including any claims Executive has or could have brought
under the OWBPA and any claim(s) under the ADEA.


(vi)          Executive acknowledges and agrees that
this Agreement is written in a manner intended to be understood, and that
Executive understands this Agreement.


(vii)         Executive has had a full and fair
opportunity to investigate the facts underlying any claims that Executive
believes she may have against the Company. 
Executive enters into this Agreement acknowledging that there may be
facts of which she is not aware; but nonetheless enters into this Agreement
with the intent of providing the Company, and its affiliates, with a full and
final release of all known and unknown, suspected or unsuspected, foreseen or
unforeseen, matured or unmatured, liquidated or unliquidated, claims, based on
all known and unknown facts.


(h)           Termination
of Employment. 
Notwithstanding any other provision of this Agreement, Executive’s
employment may be terminated by the Company or Executive, as applicable, as
follows:  (i) expiration of the Employment
Period; (ii) termination for Cause; (iii) termination for Disability; (iv)
termination upon a Change in Control; (v) termination for Good Reason; (vi)
termination because of the death of Executive; (vii) termination without Cause;
and (viii) resignation.  The Executive
and the Company shall be bound by all provisions of this Agreement specifically
related to any benefit or obligation of Executive or the Company under any of
these circumstances.


(i)            Code
Section 409A Savings Provision. 
Notwithstanding anything in this Agreement to the contrary, the
following provisions related to payments treated as deferred compensation under
Code Section 409A shall apply:


                                (a)           If, on the date of Executive’s “separation
from service,” Executive is a “specified person,” within the meaning of
Sections 409A(a)(2)(A)(i) and 409A(a)(2)(B)(i) of the Code, and as a result of
such separation from service Executive would receive any payment that, absent
the application of these provisions, would be subject to the constructive
receipt, interest, and additional tax provisions of Code Section 409A(a), then
any such payment shall be made on the date that is the earliest of: (i) six (6)
months after Executive’s separation from service, (ii) Executive’s date of
death, or (iii) such other earliest date for which such payment will not be
subject to such constructive receipt, interest, and additional tax.


                (b)           It
is the intention of the parties that all amounts payable under this Agreement
not be subject to the constructive receipt, interest, and additional tax
resulting from the application of Code Section 409A.  To the extent such amounts could become
subject to such constructive receipt, interest, and additional tax, the parties
shall cooperate to amend this Agreement with the goal of giving Executive the
same or equivalent value of the benefits described in this Agreement in a
manner that does not result in such constructive receipt, interest, and
additional tax.  In the event the Company
does not so cooperate, the Company shall


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indemnify Executive for any interest and additional
tax arising from the application of Code Section 409A, grossed-up for any other
income tax incurred by Executive related to the indemnification (i.e., indemnification
of such additional income tax), assuming the highest marginal income tax rates
apply to any taxable indemnification.


5.             Vesting
Upon Change of Control.  Upon
a Change of Control, any and all Common Shares, options, or other forms of
securities issued by the Company and beneficially owned by Executive (whether
granted before or after the date of this Agreement) that are unvested,
restricted, or subject to any similar restriction that would otherwise require
continued ownership by Executive beyond the Change of Control Date in order to
be vested in the hands of Executive shall vest automatically.


6.             Benefits Upon
Termination Within a Protection Period.  If, during a Protection Period, Executive’s
employment is terminated by the Company other than for Cause or Disability or
other than as a result of Executive’s death or if Executive terminates her
employment for Good Reason, the Company shall, subject to Section 10, pay
to Executive in a lump sum in cash, within 10 days after the date of
termination, the aggregate of the following amounts:


(a)           all earned and determinable, but
unpaid, wages and all earned and determinable, but unused, vacation through the
date of Executive’s termination, payable at the rate in effect at the time of
Executive’s termination;


(b)           a severance amount equal to 1.0 times
Executive’s “Annual Compensation.”  For
purposes of  Section 6 and Section 7 of
this Agreement, “Annual Compensation” shall be an amount equal to the sum of
(i) Executive’s annual base salary from the Company and its Subsidiaries
(including scheduled base salary increases or increases that are budgeted and
approved either by the Compensation Committee of the Board of Directors or by
the Board of Directors of the Company in advance of the Change of Control Date),
annualized for any partial year, and calculated based on the average for the
three year period ending on the December 31 after the Change in Control
Date (or of such shorter period if Executive has not been employed since the
commencement of the full three year period); and (ii) the amount of annual
bonus accrued by the Company for Executive for the year before the Change of
Control occurs; and


(c)           upon surrender by Executive of her
outstanding options to purchase common shares of the Company (“Common Shares”)
granted to Executive by the Company (the “Outstanding Options”) and any stock
appreciation rights (“SARs”), an amount in respect of each Outstanding Option
and SAR (whether vested or not) equal to the difference between the exercise
price of such Outstanding Options and SARs and the higher of (x) the fair
market value of the Common Shares at the time of such termination (but not less
than the closing price for the Common Shares on the New York Stock Exchange, or
such other national stock exchange on which such shares may be listed, on the
last trading day such shares traded prior to the date of termination), and
(y) the highest price paid for Common Shares or, in the cases of
securities convertible into Common Shares or carrying a right to acquire Common
Shares, the highest effective price (based on the prices paid for such
securities) at which such securities are convertible into Common Shares or at
which Common Shares may be acquired, by any person or group whose acquisition
of voting securities has resulted in a Change in Control of the


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Company; provided, however, that this
Section 6(c) shall not apply to the surrender of any Outstanding Option
that is an incentive stock option (within the meaning of section 422 of the
Code).


(d)           However, in the event Executive
receives benefits pursuant to Section 4(e) or Section 7 of this Agreement,
Executive shall automatically forfeit any benefits otherwise due and payable
under this Section 6 of this Agreement.


If Executive is
terminated pursuant to this Section 6 and, in connection therewith, Executive
and the Company enter into a noncompetition agreement or a nonsolicitation
agreement, unless otherwise agreed by Executive and the Company, the amount
payable to Executive under the preceding provisions of this Section 6 shall be
reduced by the amount payable to Executive under such agreement(s).


7.             Executive’s Right to
Leave Employment.  At any time
during the six month period following a Change in Control Date, Executive shall
have the right to terminate Executive’s employment with the Company at
Executive’s sole discretion (the “Executive Termination Right”).  In the event Executive exercises Executive
Termination Right, the Company shall pay Executive in a lump sum in cash within
10 days after the date of termination the aggregate of the following amounts:


(a)           The amounts set forth in
Sections 6(a) and 6(c); and


(b)           1.0 times Executive’s Annual
Compensation.


(c)           However, in the event Executive
receives benefits pursuant to Section 4(e) or Section 6 of this Agreement,
Executive shall automatically forfeit any benefits otherwise due and payable
under this Section 7 of this Agreement.


If Executive exercises
Executive Termination Right and, in connection therewith, Executive and the
Company enter into a noncompetition agreement or a nonsolicitation agreement,
unless otherwise agreed by Executive and the Company, the amount payable to
Executive under the preceding provisions of this Section 7 shall be reduced by
the amount payable to Executive under such agreement(s).


8.             Non-exclusivity of
Rights.  Nothing in this
Agreement shall prevent or limit Executive’s continuing or future participation
in any benefit, bonus, incentive, or other plans, practices, policies, or
programs provided by the Company or any of its Subsidiaries and for which
Executive may qualify, nor shall anything in this Agreement limit or otherwise
affect such rights as Executive may have under any stock option or other
agreements with the Company or any of its Subsidiaries, except as otherwise
specified in this Agreement.  Amounts
that are vested benefits or that Executive is otherwise entitled to receive
under any plan, practice, policy, or program of the Company or any of its
Subsidiaries at or subsequent to the date of termination of employment shall be
payable in accordance with such plan, practice, policy, or program; provided,
however, that Executive shall not be entitled to severance pay, or benefits
similar to severance pay, except as otherwise set forth in this Agreement,
under any plan, practice, policy, or program generally applicable to employees
of the Company or any of its Subsidiaries.


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9.             Full Settlement; No
Obligation to Seek Other Employment; Legal Expenses.  The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations under
this Agreement shall not be affected by any set-off, counterclaim, recoupment,
defense, or other claim, right, or action that the Company may have against
Executive or others, except as otherwise specified in this Agreement.  The Executive shall not be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement.  The Company agrees to pay, upon written
demand by Executive, all legal fees and expenses Executive may reasonably incur
as a result of any dispute or contest (regardless of outcome) by or with the
Company or others regarding the validity or enforceability of, or liability
under, any provision of this Agreement, except with respect to the provisions
set forth in Sections 1 and 4 and any provision in this Agreement defining any
term or terms referenced in Sections 1 and 4. 
In any such action brought by Executive for damages or to enforce any
provisions of this Agreement, she shall be entitled to seek both legal and
equitable relief and remedies, including, without limitation, specific
performance of the Company’s obligations under this Agreement, in her sole
discretion.


10.           Cut
Back in Benefits. 
Notwithstanding any other provision of this Agreement, the cash lump sum
or other payment(s) and other benefits otherwise to be provided pursuant to
Sections 4, 5, 6 and 7 of this Agreement (the “Severance Benefit”) shall
be reduced as described below if 
independent accountants for the Company (the “Accountants”) determine
(A) that Executive would, by reason of section 4999 of the Code, be required to
pay an excise tax on any  part of the
Severance Benefit or any part of any other payment or benefit to which
Executive is entitled under any plan, practice, policy, or program, and (B) the
amount of the Severance Benefit that Executive would retain on an after-tax
basis, present value basis would be increased as a result of such reduction by
an amount of at least $5,000.  If the
Severance Benefit is required to be reduced, it shall be reduced only to the
extent required, in the opinion of the Accountants, to prevent the imposition
upon Executive of the tax imposed under section 4999 of the Code.  The Company shall determine which elements of
the Severance Benefit shall be reduced to conform to the provisions of this
Section.  Any determination made by the
Accountants pursuant to this Section shall be conclusive and binding on
Executive.  The Executive shall promptly
provide to the Company such information regarding Executive tax situation as
the Company shall reasonably request in order to allow the Accountants to
perform calculations required by this Section 10.


11.           Confidential
Information.  The Executive
shall hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge, or data relating to the Company or any of
its Subsidiaries, and their respective businesses, obtained by Executive during
Executive’s employment with the Company or any of its Subsidiaries and that has
not become public knowledge (other than by acts of Executive or her
representatives in violation of this Agreement).  After the date of termination of Executive’s
employment with the Company, Executive shall not, without the prior written
consent of the Company, communicate or divulge any such information, knowledge,
or data to anyone other than the Company and those designated by it.  In no event shall an asserted violation of
the provisions of this Section constitute a basis for deferring or withholding
any amounts otherwise payable to Executive under this Agreement.


12.           Successors.


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(a)           This Agreement is personal to
Executive and without the prior written consent of the Company shall not be
assignable by Executive otherwise than by will or the laws of descent and
distribution.  This Agreement shall inure
to the benefit of and be enforceable by Executive’s legal representatives or
successor(s) in interest.  The Executive
may designate a successor (or successors) in interest to receive any and all
amounts due Executive in accordance with this Agreement should Executive be
deceased at any time of payment.  Such
designation of successor(s) in interest shall be made in writing and signed by
Executive, and delivered to the Company pursuant to Section 16(b).  This Section 12(a) shall not supersede
any designation of beneficiary or successor in interest made by Executive, or
separately covered, under any other plan, practice, policy, or program of the
Company.


(b)           This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns.


(c)           The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business or assets of the Company
and any Parent of the Company or any successor and without regard to the form
of transaction utilized to acquire the business or assets of the Company, to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession or parentage had taken place. 
As used in this Agreement, “Company” shall mean the Company as defined
above and any successor to its business or assets as aforesaid (and any Parent
of the Company or any successor) that is required by this clause to assume and
agree to perform this Agreement or which otherwise assumes and agrees to
perform this Agreement.


13.           Notice
of Termination.  Any
termination of Executive’s employment by the Company for Cause or by Executive
for Good Reason shall be communicated by Notice of Termination to the other
party given in accordance with Section 16(b) of this Agreement.  For purposes of this Agreement, a “Notice of
Termination” means a written notice that (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated, and
(iii) if the date of termination is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than 15
days after the giving of such notice). 
The failure by Executive to set forth in the Notice of Termination any
fact or circumstance that contributes to a showing of Good Reason shall not
waive any right of Executive under this Agreement or preclude Executive from
asserting such fact or circumstance in enforcing her rights.


14.           Requirements
and Benefits if Executive Is Employee of Subsidiary of Company.  If Executive is an employee of any Subsidiary
of the Company, she shall be entitled to all of the rights and benefits of this
Agreement as though she were an employee of the Company and the term “Company”
shall be deemed to include the Subsidiary by whom Executive is employed.  The Company guarantees the performance of its
Subsidiary under this Agreement.


15.           Arbitration.  The Company and Executive shall attempt to
resolve between them any dispute that arises under this Agreement.  If they cannot agree within ten days after
either party submits a demand for arbitration to the other party, then the
issue shall be submitted to


12





















arbitration with each party having the right to
appoint one arbitrator and those two arbitrators mutually selecting a third
arbitrator.  The rules of the American
Arbitration Association for the arbitration of commercial disputes shall apply
and the decision of two of the three arbitrators shall be final.  The arbitrators must reach a decision within
60 days after the selection of the third arbitrator.  The arbitration shall take place in Denver,
Colorado.  The arbitrators shall apply
Colorado law.


16.           Miscellaneous.


(a)           This Agreement shall be governed by
and construed in accordance with the laws of the State of Colorado, without
reference to principles of conflict of laws. 
The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect.  This
Agreement is the entire agreement between the Parties.  This Agreement supersedes all prior oral or
written promises or agreements between the Parties.  This Agreement may not be amended or modified
other than by a written agreement executed by the Parties or their respective
successors and legal representatives.


(b)           All notices and other communications
under this Agreement shall be in writing and shall be given by hand delivery to
the other Party or by registered or certified mail, return receipt requested,
postage prepaid, to the addresses for each Party as first written above or to
such other address as either Party shall have furnished to the other in writing
in accordance with this Section.  Notices
and communications to the Company shall be addressed to the attention of the
Company’s Corporate Secretary.  Notice
and communications shall be effective when actually received by the addressee.


(c)           Whenever reference is made in this
Agreement to any specific plan or program of the Company, to the extent that
Executive is not a participant in the plan or program or has no benefit accrued
under it, whether vested or contingent, as set forth in Section 4 of this
Agreement or as of any Change in Control Date, then such reference shall be
null and void, and Executive shall acquire no additional benefit as a result of
such reference.


(d)           The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.


(e)           The Company may withhold from any
amounts payable under this Agreement such Federal, state, or local taxes as
shall be required to be withheld pursuant to any applicable law or regulation.


(f)            The Executive’s failure to insist
upon strict compliance with any provision of this Agreement shall not be deemed
to be a waiver of such provision or any other provision.


(g)           Except as otherwise set forth herein,
upon a termination of Executive’s employment or upon Executive’s ceasing to be
an elected officer of the Company, in each case, prior to the Change in Control
Date, there shall be no further rights under this Agreement.


(h)           On or before the expiration of
Executive’s Employment Period, Employee shall return all Company property,
including all Company documents and records, in any form, and copies of all
Company documents and records, in any form, obtained or maintained during the
course of her/her employment with the Company.


13





















(i)            The Parties agree not to make to any
person any statement that disparages the other Party, including, but not
limited to, statements regarding other Party’s work ethic, performance,
financial fitness, business practices, or business condition and/or similar
disparaging statements concerning the Company’s officers, directors, board
members, employees, and affiliates.


(j)            Executive covenants that she will
not initiate any lawsuit or proceeding, legal, administrative or other, or
otherwise assert any claim, action, cause of action, demand, right, or
controversy of any kind which she has herein released.  Executive will not provide any material assistance
in any currently pending or subsequent litigation against the Released Parties;
provided, however, that this restriction shall not prevent Executive from
responding to compulsory process.  In the
event Executive is subject to a compulsory disclosure, Executive shall first
give the Released Parties seventy-two (72) hours advance notice before she
makes any disclosure to allow the Released Parties to obtain appropriate
Protective Orders or other injunctive relief.


14





















IN WITNESS WHEREOF,
Executive has set her hand to this Agreement and, pursuant to the authorization
from the Board, the Company has caused this Agreement to be executed as of the
day and year first above written.


 


	
   

  	
  AMERIVEST PROPERTIES INC.

  
	
   

  	
   

  
	
   

  	
  /s/
  Charles K. Knight

  
	
   

  	
  Charles
  K. Knight, President

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/
  Kathryn L. Hale

  
	
   

  	
  Kathryn
  L. Hale

  
	
   

  	
   

  



 


 


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