8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 16, 2005

AmeriVest Properties Inc.

(Exact name of small business issuer as specified in its charter)

Maryland	1-14462	84-1240264
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

1780 South Bellaire Street, Suite 100, Denver, Colorado 80222

(Address of principal executive offices)

(303) 297-1800

(Registrant’s telephone number)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 1.01.Entry into a Material Definitive Agreement.

Contract to Sell Financial Plaza

On December 16, 2005, AmeriVest Properties Inc. (“AmeriVest”) announced that it had entered into a definitive agreement to sell Financial Plaza in Mesa, Arizona to Crescent Real Estate Equities Limited Partnership.  The total sale price for Financial Plaza is $55 million ($177 per square foot) which includes an assumption of existing debt of approximately $23.7 million plus additional debt provided to buyer by the lender.  The estimated net cash proceeds to AmeriVest are expected to be approximately $29 million after repayment of first mortgage debt and approximately $2 million in closing costs and adjustments.  All proceeds from the sale will be used to repay indebtedness under AmeriVest’s unsecured credit facility.  The transaction is expected to close in January 2006 and is subject to customary closing conditions, including the lender’s approval of the buyer’s assumption of the debt. Based on current book values and estimated closing costs, AmeriVest expects to record a gain on the sale of approximately $16 million for financial reporting purposes.  A copy of AmeriVest’s press release is filed with this Current Report as Exhibit 99.1 and incorporated by reference herein.

Amended Change in Control and Term Employment Agreement

On December 16, 2005, AmeriVest entered into an Amended Change in Control and Term Employment Agreement with its Chief Financial Officer, Kathryn L. Hale.  Under the terms of the agreement, which amends the Change in Control Agreement entered into by and between Ms. Hale and AmeriVest on December 7, 2004, Ms. Hale will receive an annual base salary of $160,000 through December 31, 2005 and thereafter as determined by AmeriVest’s Board of Directors.  In addition, Ms. Hale will be eligible to receive a bonus of up to $50,000.  If Ms. Hale remains employed by AmeriVest until May 31, 2006, she will be eligible to receive a seven-month severance package, including payments of one-twelfth of her then-applicable annual salary per month and continuing health benefits. In addition, for each full month that Ms. Hale remains employed by AmeriVest after May 31, 2006, she will be entitled to receive an additional month of severance on the same terms. Ms. Hale will be ineligible to receive such severance package in the event that she is also entitled to receive severance pursuant to the change of control provisions in the agreement, which severance is reduced in this agreement from 1.5 to 1.0 times her annual base salary. Prior to entering into this agreement, Ms. Hale was entitled to receive in 2005 an annual base salary of $160,000 and would have been eligible to receive an annual bonus of $50,000.

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Item 8.01.Other Events.

Sale of Chateau Plaza

On December 12, 2005, AmeriVest completed the sale of Chateau Plaza in Dallas Texas.  Chateau Plaza, a 171,294 square-foot Class A office property located in the Uptown submarket of Dallas, was sold for $31,300,000, or $183 per square foot, to a pension fund.

AmeriVest expects to record a net gain on the sale of approximately $9. million.  The estimated cash proceeds of approximately $29 million, after closing costs including lease commissions, rent pro-rations, security deposits, taxes payable and tenant finish costs of $845,000 in connection with the Dean Foods Company lease renewal, were used to repay indebtedness under AmeriVest’s secured credit facility.  In addition, the tenant finish and lease commission escrow held by the lender was reduced to $1,250,000 and the remaining funds were applied to the secured facility, paying it off in full.  This balance has been transferred to the unsecured facility (which is now partially secured by Greenhill Park) and is now available for costs related to Greenhill Park in accordance with the amended loan documents.

Sale of Inverness

On December 15, 2005, AmeriVest completed the sale of AmeriVest Plaza at Inverness in Englewood, Colorado.  AmeriVest Plaza, a 118,720 square-foot Class A office property located in the Inverness Business Park in the southeast suburban submarket of Denver, was sold for $15,525,000, or $131 per square foot, to a pension fund advisor.  The property was approximately 74% leased at the time of sale.

AmeriVest recorded an impairment loss of $2.3 million on this property in the third quarter of 2005 and anticipates recording a minimal gain on the sale in the fourth quarter for financial reporting purposes.  The net cash proceeds of approximately $363,000, after repayment of approximately $14.3 million in first mortgage debt and approximately $1 million in closing costs, including taxes payable and transfer of security deposits, will be used to repay indebtedness under AmeriVest’s unsecured credit facility.  AmeriVest also received approximately $380,000 from the first mortgage lender in release of tenant finish and leasing escrow deposits which will also be used to repay indebtedness under the unsecured credit facility.

The sales prices realized in these sales are a reflection of the quality and occupancy of these specific assets and their specific locations in these markets and submarkets and should not be considered representative of the sales prices that other properties owned by AmeriVest could command.

New Director of Asset Management Hired

On December 14, 2005, AmeriVest hired Mr. James Walter as its Director of Asset Management.

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Item 9.01.Financial Statements and Exhibits.

(c)Exhibits.

Exhibit 10.1.	Agreement of Purchase and Sale, dated December 16, 2005, between AmeriVest Properties Inc. and Crescent Real Estate Equities Limited Partnership.
Exhibit 10.2.	Amended Change in Control and Term Employment Agreement, dated December 16, 2005, between AmeriVest Properties Inc. and Kathryn L. Hale.
Exhibit 99.1.	Press Release, dated December 16, 2005.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated:  December 21, 2005	AMERIVEST PROPERTIES INC.
	By:	/s/ Charles K. Knight
	Name:		Charles K. Knight
	Title:		President and CEO

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Agreement of Purchase and Sale, dated December 16, 2005, between AmeriVest Properties Inc. and Crescent Real Estate Equities Limited Partnership.
10.2	Amended Change in Control and Term Employment Agreement, dated December 16, 2005, between AmeriVest Properties Inc. and Kathryn L. Hale.
99.1	Press Release, dated December 16, 2005.

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EX-10.1

Exhibit 10.1

AGREEMENT OF PURCHASE AND SALE

1201 S. Alma School Road

Mesa, Arizona

                This Agreement of Purchase and Sale (“Agreement”) is made and entered into by and between Purchaser and Seller.

RECITALS

A.Defined terms are indicated by initial capital letters.  Defined terms shall have the meaning set forth herein, whether or not such terms are used before or after the definitions are set forth.

B.Purchaser desires to purchase the Property and Seller desires to sell the Property, all upon the terms and conditions set forth in this Agreement.

                NOW, THEREFORE, in consideration of the mutual terms, provisions, covenants and agreements set forth herein, as well as the sums to be paid by Purchaser to Seller, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Purchaser and Seller agree as follows:

ARTICLE 1.  Basic Information

1.1          Certain Basic Terms.  The following defined terms shall have the meanings set forth below:

1.1.1       Seller:       AmeriVest Mesa Inc., an Arizona corporation.

1.1.2       Purchaser:  Crescent Real Estate Equities Limited Partnership, a Delaware limited partnership.

1.1.3       Purchase Price:  Fifty-Five Million and No/100 Dollars ($55,000,000.00).

1.1.4       Earnest Money:  Three Million and No/100 Dollars ($3,000,000.00) (the “Earnest Money”), including interest thereon, to be deposited in accordance with Section 3.1 below.

G-1

	1.1.5	Title Company:	First American Title Insurance Company
			2425 E. Camelback Road, Suite 300
			Phoenix, Arizona  85016
			Attn:  Carol Peterson
			Telephone:  (602) 567-8109
			Facsimile:  (602) 567-8101
		Escrow Agent:	First American Title Insurance Company
			2425 E. Camelback Road, Suite 300
			Phoenix, Arizona  85016
			Attn::  Carol Peterson
			Telephone:  (602) 567-8109
			Facsimile:  (602) 567-8101
	1.1.6	Seller’s Broker:  Cushman & Wakefield of Arizona, Inc.
	1.1.7	Purchaser’s Broker:  N/A
	1.1.8	Effective Date:  The date on which this Agreement is executed
by the latter to sign of Purchaser or Seller, as indicated on the signature page of this Agreement.
	1.1.9	Property Information Delivery Date:  Intentionally deleted].
	1.1.10	Title Commitment Delivery Date:  [Intentionally deleted].
	1.1.11	Survey Delivery Date:  [Intentionally deleted].
	1.1.12	Title and Survey Review Period:  [Intentionally deleted].
	1.1.13	Inspection Period:  [Intentionally deleted].
	1.1.14	Closing Date:  The date which is fifteen (15) days after the later
to occur of (i) the Effective Date and (ii) Purchaser’s receipt of written unconditional approval from Lender (defined herein) of Purchaser’s assumption of the Existing Loan (defined herein) pursuant to Section 12.17 hereof.

1.2          Closing Costs.  Closing costs shall be allocated and paid as follows:

Cost	Responsible Party
Title Commitment required to be delivered pursuant to Section 5.1	Seller
Premium for standard form Title Policy required to be delivered pursuant to Section 5.4	Seller
Premium for any upgrade of Title Policy for extended or additional coverage and any endorsements desired by Purchaser, any inspection fee charged by the Title Company, tax certificates, municipal and utility lien certificates, and any other Title Company charges relating to the issuance of the Title Policy	Purchaser
Costs of existing ALTA/ACSM Land Title Survey (with visible utilities only)	Seller
Any revisions, modifications or recertifications to Survey	Purchaser
Costs for UCC Searches	Purchaser
Recording fees	Seller
Any deed taxes, documentary stamps, transfer taxes, intangible taxes, mortgage taxes or other similar taxes, fees or assessments	Seller
Any escrow fee charged by Escrow Agent for holding the Earnest Money or conducting the Closing	Purchaser ½ Seller ½
Real Estate Sales Commission to Seller’s Broker	Seller
Existing Loan Assumption Fee	Purchaser
All other closing costs, expenses, charges and fees as otherwise indicated below (Seller and Purchaser each pays its own legal fees and expenses)	Purchaser/Seller

1.3          Notice Addresses.

Purchaser:	Crescent Real Estate Equities 777 Main Street, Suite 2100 Ft. Worth, TX 76102 Attention: Dan Smith & Tom Miller Telephone: (817) 321-2100 Facsimile: (817) 321-2015	Copy to:	Jackson Walker L.L.P. 1401 McKinney St., Suite 1900 Houston, TX 77010 Attention: Kurt Nondorf Telephone: (713) 752-4402 Facsimile: (713) 308-4142
Seller:	AmeriVest Mesa Inc. c/o AmeriVest Properties Inc. 1780 South Bellaire Street, Suite 100 Denver, Colorado 80222 Attention: John B. Greenman Telephone: (303) 297-1800 Facsimile: (303) 296-7353	Copy to:	Jenkens & Gilchrist, P.C. 1445 Ross Avenue, Suite 3200 Dallas, Texas 75202 Attention: Stephen R. Voelker, Esq. Telephone: (214) 855-4722 Facsimile: (214) 855-4300

1.4          Index of Certain Additional Defined Terms.

Additional Property Information	Section 4.2
Assignment	Subsection 7.3.2
Casualty Notice	Section 6.2
CERCLA	Section 11.3
Claims	Section 11.4
Closing	Section 7.1
Deed	Subsection 7.3.1
Due Diligence Termination Notice	Section 4.4
Existing Loan	Section 7.6
Hazardous Materials	Section 11.3
Improvements	Subsection 2.1.1
Independent Consideration	Section 3.2
Intangible Personal Property	Subsection 2.1.4
Land	Subsection 2.1.1
Lease Files	Section 7.8
Leases	Subsection 2.1.2
Leasing Costs	Section 8.2
Lender	Section 7.6
Lender Consent	Section 12.17
License Agreements	Section 2.1.5
Material Damage	Subsection 6.2.1
Note	Section 7.6
Permitted Exceptions	Section 5.3
Permitted Outside Parties	Section 4.7
Processing Fee	Section 7.6
Property	Section 2.1
Return of Property Documents	Section 4.5
Property Documents	Section 4.1
Real Property	Subsection 2.1.1
Reports	Section 4.5
Service Contracts	Subsection 4.6
Survey	Section 5.2
Survival Period	Section 9.3
Tangible Personal Property	Subsection 2.1.3
Taxes	Section 8.1
Tenant Estoppel Certificates	Section 4.3
Tenant Receivables	Subsection 8.1.3
Title Commitment	Section 5.1
Title Policy	Section 5.4
Unbilled Tenant Receivables	Subsection 8.1.3(a)
Uncollected Delinquent Tenant Receivables	Subsection 8.1.3(a)

ARTICLE 2.  Property

2.1          Subject to the terms and conditions of this Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, the following property (collectively, the “Property”):

2.1.1       Real Property.  The land described in Exhibit “A” attached hereto (the “Land”), together with (i) all improvements located thereon (“Improvements”), (ii) all and singular the rights, benefits, privileges, easements, tenements, hereditaments, and appurtenances thereon or in anywise appertaining thereto, (iii) all strips and gores and any land lying in the bed of any street, road or alley, open or proposed, adjoining such Land, (iv) all development rights, air rights, sewer rights and permits, water, water rights, riparian rights and water stock relating to the Land and (v) all licenses, permits, covenants and other rights-of-way, appurtenances or entitlements used in connection with the beneficial use and enjoyment of the Land (collectively, the “Real Property”).

2.1.2       Leases.  All leases of the Real Property (other than License Agreements), including leases which may be made by Seller after the Effective Date and prior to Closing as permitted by this Agreement (the “Leases”), and the Uncollected Delinquent Tenant Receivables (defined herein).

2.1.3       Tangible Personal Property.  All equipment, machinery, furniture, furnishings, supplies and other tangible personal property, if any, owned by Seller and now or hereafter located in and used in connection with the operation, ownership or management of the Real Property, but specifically excluding any items of personal property owned by tenants at or on the Real Property and further excluding any items of personal property owned by third parties and leased to Seller, and all deposits or escrows made in connection with the Existing Loan (collectively, the “Tangible Personal Property”).

2.1.4       Intangible Personal Property.  All intangible personal property related to the Real Property and the Improvements, including, without limitation: all trade names and trade marks associated with the Real Property and the Improvements, including Seller’s rights and interests, if any, in the name of the Real Property; the plans and specifications and other architectural and engineering drawings for the Improvements (including CAD drawings), if any; contract rights related to the operation, ownership or management of the Real Property, including maintenance, service, construction, supply and equipment rental contracts, if any, but not including Leases or License Agreements (collectively, the “Service Contracts”) (but only to the extent Seller’s obligations thereunder are expressly assumed by Purchaser pursuant to this Agreement); warranties; governmental permits, approvals and licenses, if any; and telephone exchange numbers and phone system (to the extent assignable) (all of the items described in this Section 2.1.4 collectively referred to as the “Intangible Personal Property”).

2.1.5       License Agreements. All agreements (other than Leases), if any, for the leasing or licensing of rooftop space or equipment, telecommunications equipment, cable

access and other space, equipment and facilities that are located on or within the Real Property and generate income to Seller as the owner of the Real Property, including agreements which may be made by Seller after the Effective Date and prior to Closing as permitted by this Agreement (the “License Agreements”).

ARTICLE 3.  Earnest Money

3.1          Deposit and Investment of Earnest Money.  Within three (3) business days after the Effective Date, Purchaser shall deposit the Earnest Money with Escrow Agent.  Escrow Agent shall invest the Earnest Money in federally insured interest-bearing accounts satisfactory to Seller and Purchaser, shall not commingle the Earnest Money with any funds of Escrow Agent or others, and shall promptly provide Purchaser and Seller with confirmation of the investments made.  Such account shall have no penalty for early withdrawal, and Purchaser accepts all investment risks with regard to such account.  All interest earned on the Earnest Money shall be deemed to be part of the Earnest Money for all purposes hereunder.

3.2          Independent Consideration.  Notwithstanding the terms of this Agreement, Seller shall retain One Hundred and No/100 Dollars ($100.00) as independent consideration for Seller’s performance hereunder (“Independent Consideration”) from the proceeds of the Earnest Money delivered to the Escrow Agent by the Purchaser in the event this Agreement is terminated pursuant to Section 7.2 hereof.

3.3          Form; Failure to Deposit.  The Earnest Money shall be in the form of a certified or cashier’s check or the wire transfer to Escrow Agent of immediately available U.S. federal funds.  If Purchaser fails to timely deposit any portion of the Earnest Money within the time period required, Seller may terminate this Agreement by written notice to Purchaser, in which event any Earnest Money that has previously been deposited by Purchaser with Escrow Agent shall be delivered to Seller and thereafter the parties hereto shall have no further rights or obligations hereunder, except for rights and obligations which, by their terms, survive the termination hereof.

3.4          Disposition of Earnest Money.  The Earnest Money shall be applied as a credit to the Purchase Price at Closing.  In the event of a termination of this Agreement by either Seller or Purchaser for any reason, Escrow Agent is authorized to deliver the Earnest Money to the party hereto entitled to same pursuant to the terms hereof on or before the tenth (10th) business day following receipt by Escrow Agent and the non-terminating party of written notice of such termination from the terminating party, unless the other party hereto notifies Escrow Agent that it disputes the right of the other party to receive the Earnest Money.  In such event, Escrow Agent may interplead the Earnest Money into a court of competent jurisdiction in the county in which the Earnest Money has been deposited.  All reasonable attorneys’ fees and costs and Escrow Agent’s costs and expenses incurred in connection with such interpleader shall be assessed against the party that is not awarded the Earnest Money or, if the Earnest Money is distributed in part to both parties, then in the inverse proportion of such distribution.

ARTICLE 4.   Due Diligence

4.1          Due Diligence Materials To Be Delivered. Purchaser acknowledges receipt of all items listed on Exhibit “C” attached hereto (collectively, the “Property Documents”).

4.2          Physical Due Diligence.  Commencing on the Effective Date and continuing until the Closing, Purchaser shall have reasonable access to the Property at all reasonable times during  normal business hours, upon reasonable notice to Seller with a representative of Seller present at the Property, and upon appropriate notice to tenants as permitted or required under the Leases, for the purpose of conducting reasonably necessary tests, including surveys and architectural, engineering, geotechnical and environmental inspections and tests, provided that (i) Purchaser must give Seller twenty-four (24) hours’ prior telephone or written notice of any such inspection or test, and with respect to any intrusive inspection or test (i.e., core sampling) must obtain Seller’s prior written consent (which consent may be given, withheld or conditioned in Seller’s reasonable discretion), and (ii) all such tests shall be conducted by Purchaser in compliance with Purchaser’s responsibilities set forth in Section 4.9 below.  Purchaser shall bear the cost of all such inspections or tests and shall be responsible for and act as the generator with respect to any wastes generated by those tests.  Subject to the provisions of Section 4.7 hereof, Purchaser or Purchaser’s representatives may meet with any tenant; provided, however, Purchaser must contact Seller at least twenty-four (24) hours in advance by telephone or fax to inform Seller of Purchaser’s intended meeting and to allow Seller the opportunity to attend such meeting if Seller desires.  Subject to the provisions of Section 4.7 hereof, Purchaser or Purchaser’s representatives may meet with any governmental authority for any good faith, reasonable purpose in connection with the transaction contemplated by this Agreement; provided, however, Purchaser must contact Seller at least twenty-four (24) hours in advance by telephone or fax to inform Seller of Purchaser’s intended meeting and to allow Seller the opportunity to attend such meeting if Seller desires.

4.3          Estoppel Certificates.  Seller shall deliver to Purchaser as received, but no later than five (5) days prior to the Closing Date, tenant estoppel certificates for no less than eighty-five percent (85%) of the occupied net rentable square feet in the building, including one hundred percent (100%) of all tenants leasing more than 15,000 square feet of the net rentable square feet in the building, and for Legacy Restaurants, Inc., Metropolitan Life Insurance Company, and Bank of America, all in the form of Exhibit ”E” attached hereto or such other form as provided in the Leases (“Tenant Estoppel Certificates”).  In the event (i) Seller is unable to obtain such Tenant Estoppel Certificates, (ii) Purchaser is not satisfied, in Purchaser’s sole and absolute discretion, with the number of Tenant Estoppel Certificates delivered, or (iii) the form or content of any such Tenant Estoppel Certificate, in Purchaser’s reasonable judgment, materially differs from that set forth at Exhibit “E” or provided for in any Lease, Purchaser may elect either to terminate this Agreement or proceed to Closing as provided for in Section 7.2 of the Agreement. Seller shall not be obligated to expend any funds in connection with obtaining any such Tenant Estoppel Certificates, and the failure of Seller to obtain any such Tenant Estoppel Certificates shall not be a breach or default hereunder so long as Seller makes good faith efforts to obtain them.

4.4          Waiver of Due Diligence/Termination Right.  Purchaser acknowledges that it has received or had access to all Property Documents and conducted all inspections and tests of

the Property that it considers important.  Purchaser hereby accepts the condition of the Property as suitable for its purposes and agrees that Purchaser has no right to terminate this Agreement except as specifically set forth herein.

4.5          Return of Documents and Reports.  If this Agreement terminates for any reason other than Seller’s default hereunder, Purchaser shall promptly return and/or deliver to Seller all Property Documents and copies thereof.  Additionally, if this Agreement terminates for any reason other than Seller’s default, then Purchaser must deliver to Seller, upon Seller’s request and at Seller’s sole cost and expense, copies of all third party reports, investigations and studies, other than economic analyses (collectively, the “Reports” and, individually, a “Report”) prepared for Purchaser in connection with its due diligence review of the Property.  The Reports shall be delivered to Seller without any representation or warranty as to the completeness or accuracy of the Reports or any other matter relating thereto, and Seller shall have no right to rely on any Report without the written consent of the party preparing same.  Purchaser’s obligation to deliver the Property Documents and the Reports to Seller shall survive the termination of this Agreement.

4.6          Service Contracts.  Concurrently with the execution and delivery of this Agreement by Purchaser, Purchaser will advise Seller in writing of which Service Contracts it will assume and for which Service Contracts Purchaser requests that Seller deliver written termination at or prior to Closing.  Seller shall deliver at Closing notices of termination of all Service Contracts that are not so assumed.  Purchaser must assume the obligations arising and accruing from and after the Closing Date under those Service Contracts that Purchaser has agreed to assume.  Seller shall pay on or before their due date any termination payments or monthly fees arising subsequent to Closing for any Service Contracts that are not assumed by Purchaser

4.7          Proprietary Information; Confidentiality.  Purchaser acknowledges that the Property Documents are proprietary and confidential and have been delivered to Purchaser solely to assist Purchaser in determining the feasibility of purchasing the Property.  Purchaser shall not use the Property Documents for any purpose other than as set forth in the preceding sentence.  Purchaser shall not disclose the contents to any person other than to those persons who are responsible for determining the feasibility of Purchaser’s acquisition of the Property, including, without limitation, Purchaser’s attorneys, prospective lenders, accountants, agents, consultants, partners, shareholders or as otherwise may be required by law, rule, regulation or court order (collectively, “Permitted Outside Parties”).  Purchaser shall not divulge the contents of the Property Documents and other information except in strict accordance with the confidentiality standards set forth in this Section 4.7.  In permitting Purchaser to review the Property Documents or any other information, Seller has not waived any privilege or claim of confidentiality with respect thereto, and no third party benefits or relationships of any kind, either express or implied, have been offered, intended or created.

4.8          Limited Representation and Warranty by Seller.  Purchaser acknowledges that, except as expressly set forth in this Agreement, Seller has not made and does not make any warranty or representation regarding the truth, accuracy or completeness of the Property Documents or the source(s) thereof.  Purchaser further acknowledges that some if not all of the Property Documents were prepared by third parties other than Seller.  Except as expressly set

forth in this Agreement, Seller expressly disclaims any and all liability for representations or warranties, express or implied, statements of fact and other matters contained in such information, or for omissions from the Property Documents, or in any other written or oral communications transmitted or made available to Purchaser.  Except as expressly set forth in this Agreement, Purchaser shall rely solely upon its own investigation with respect to the Property, including, without limitation, the Property’s physical, environmental or economic condition, compliance or lack of compliance with any ordinance, order, permit or regulation or any other attribute or matter relating thereto.  Except as expressly set forth in this Agreement, Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of the Property Documents and is providing the Property Documents solely as an accommodation to Purchaser.

4.9          Purchaser’s Responsibilities.  In conducting any inspections, investigations or tests of the Property and/or Property Documents, Purchaser and its agents and representatives shall:  (i) not unreasonably disturb the tenants or materially interfere with their use of the Property pursuant to their respective Leases; (ii) not materially interfere with the operation and maintenance of the Property; (iii) not damage any part of the Property or any personal property owned or held by any tenant or any third party; (iv) not injure or otherwise cause bodily harm to Seller, or its agents, guests, invitees, contractors and employees or any tenants or their guests or invitees; (v) comply with all applicable laws; (vi) promptly pay when due the costs of all tests, investigations, and examinations done by or at Purchaser’s direction with regard to the Property; (vii) not permit any liens to attach to the Real Property by reason of the exercise of its rights hereunder; (viii) repair any damage to the Real Property resulting directly or indirectly from any such inspection or tests; and (ix) not reveal or disclose prior to Closing any information obtained concerning the Property and the Property Documents to anyone other than the Permitted Outside Parties, in accordance with the confidentiality standards set forth in Section 4.7 above, or except as may be otherwise required by law.

4.10        Purchaser’s Agreement to Indemnify.  Purchaser indemnifies and holds Seller harmless from and against any and all liens, claims, causes of action, damages, liabilities and expenses (including reasonable attorneys’ fees) arising out of Purchaser’s inspections or tests permitted under this Agreement or any violation of the provisions of Sections 4.2, 4.7 and 4.9; provided, however, the indemnity shall not extend to protect Seller from any (i) pre-existing liabilities for matters merely discovered by Purchaser (e.g., latent environmental contamination) except to the extent Purchaser’s actions materially aggravate any pre-existing liability of Seller, (ii) any liabilities arising as a result of the willful misconduct or negligence of Seller, its agents, representatives or employees, or (iii) any disclosures required to be made by applicable law, rule, regulation or court order.  Purchaser’s obligations under this Section 4.10 shall survive the termination of this Agreement and shall survive the Closing.

ARTICLE 5.  Title and Survey

5.1          Title Commitment.  Seller has caused to be prepared and delivered to Purchaser: (i) a current commitment for title insurance or preliminary title report (the “Title Commitment”) issued by the Title Company, in the amount of the Purchase Price and for the issuance of an ALTA extended Owner’s Policy of Title Insurance (Form Revised 10/17/92), with Purchaser as

the proposed insured, and (ii) copies of all documents of record referred to in the Title Commitment as exceptions to title to the Property.

5.2          Updated Survey.  Seller has provided an existing as-built ALTA compliant survey current to within six (6) months (“Survey”) of the Real Property and Improvements. Purchaser may, at Purchaser’s sole cost and expense, elect to obtain a new survey or revise, modify, or re-certify the Survey to otherwise satisfy Purchaser’s objectives.

5.3          Title and Survey Review.  Purchaser has reviewed title to the Property as disclosed by the Title Commitment and the Survey, and Purchaser has made objections thereto in writing to Seller.  Seller has no obligation to cure title objections except liens of an ascertainable monetary amount created by, under or through Seller, which liens Seller shall cause to be released at or prior to Closing (with Seller having the right to apply the Purchase Price or a portion thereof for such purpose), and Seller shall deliver the Property free and clear of any such liens (with the exception of the liens encumbering the Property and securing the repayment of the Existing Loan).  Seller further agrees to remove any exceptions or encumbrances to title which are voluntarily created by, under or through Seller after the Effective Date without Purchaser’s consent.  Except as specifically set forth herein, all other objections to the Title Commitment and the Survey are hereby waived.  The term “Permitted Exceptions” shall mean: the specific exceptions (excluding standard exceptions that are part of the promulgated title insurance form for the Title Policy) in the Title Commitment dated December 6, at 7:30 a.m., other than those that the Title Company has indicated will be cured (or endorsed over) or that Seller is required to remove as provided above; matters created by, through or under Purchaser; items shown on the Survey, other than those that the surveyor has agreed to cure; the liens encumbering the Property and securing the repayment of the Existing Loan; real estate taxes for the year in which the Closing occurs which are not yet due and payable; and rights of tenants under the Leases.

5.4          Delivery of Title Policy at Closing.  In the event that the Title Company does not issue at Closing, or unconditionally commit at Closing to issue, to Purchaser, an owner’s title policy in accordance with the Title Commitment, insuring Purchaser’s title to the Property in the amount of the Purchase Price, subject only to the standard exceptions and exclusions from coverage contained in such policy and the Permitted Exceptions (the “Title Policy”), Purchaser shall have the right to terminate this Agreement, in which case the Earnest Money shall be immediately returned to Purchaser and the parties hereto shall have no further rights or obligations, other than those that by their terms survive the termination of this Agreement.

ARTICLE 6.   Operations and Risk of Loss

6.1          Ongoing Operations.  From the Effective Date through Closing:

6.1.1       Leases, Service Contracts and License Agreements.  Seller will timely perform its material obligations under the Leases, Service Contracts and License Agreements.

6.1.2       New Contracts.  Except as provided in Subsection 6.1.4, Seller will not enter into any contract that will be an obligation affecting the Property subsequent to the

Closing, except contracts entered into in the ordinary course of business that are terminable without cause and without the payment of any termination penalty on not more than thirty (30) days’ prior notice.

6.1.3       Maintenance of Improvements; Removal of Personal Property.  Subject to Sections 6.2 and 6.3, Seller shall maintain all Improvements substantially in their present condition (ordinary wear and tear and casualty excepted) and in a manner consistent with Seller’s maintenance of the Improvements during Seller’s period of ownership, including keeping appropriate insurance in force and effect.  Seller will not remove any Tangible Personal Property except as may be required for necessary repair or replacement, and replacement shall be of substantially similar quality and quantity as the removed item of Tangible Personal Property.

(a)           Leasing; License Agreements.  Seller will not amend or terminate any existing Lease or License Agreement or enter into any new Lease or new License Agreement without (i) providing Purchaser all relevant supporting documentation, as reasonably determined by Seller, including, without limitation, tenant financial information to the extent in Seller’s possession, and (ii) obtaining Purchaser’s approval, unless the new Lease or amendment to existing Lease is for a month-to-month tenancy.  Purchaser agrees to give Seller written notice of approval or disapproval of a proposed amendment or termination of a Lease or License Agreement or new Lease or new License Agreement within five (5) business days after Purchaser’s receipt of the items in (i) of this Subsection 6.1.4.  If Purchaser does not respond to Seller’s request within such time period, then Purchaser will be deemed to have approved such amendment, termination or new Lease or new License Agreement.  Purchaser may withhold its consent at its sole discretion, and Seller may not amend or terminate a Lease or License Agreement or enter into a new Lease or new License Agreement without Purchaser’s written consent, other than for a month-to-month tenancy.

6.2          Damage.  If prior to Closing the Property is damaged by fire or other casualty,  Seller shall estimate the cost to repair and the time required to complete repairs and will provide Purchaser written notice of Seller’s estimation (the “Casualty Notice”) as soon as reasonably possible after the occurrence of the casualty.

6.2.1       Material.  In the event of any Material Damage to or destruction of the Property or any portion thereof prior to Closing, Purchaser may, at its option, terminate this Agreement by delivering written notice to Seller on or before the expiration of thirty (30) days after the date Seller delivers the Casualty Notice to Purchaser (and if necessary, the Closing Date shall be extended to give Purchaser the full thirty-day period to make such election and to obtain insurance settlement agreements with Seller’s insurers).  Upon any such termination, the Earnest Money shall be immediately returned to Purchaser, and the parties hereto shall have no further rights or obligations hereunder, other than those that by their terms survive the termination of this Agreement.  If Purchaser does not so terminate this Agreement within said thirty (30) day period, then the parties shall proceed under this Agreement and close on schedule (subject to extension of Closing as provided above), and as of Closing Seller shall assign to

Purchaser, without representation or warranty by or recourse against Seller, all of Seller’s rights in and to any insurance proceeds (including any rent loss insurance applicable to any period on and after the Closing Date) payable to Seller as a result of such damage or destruction and Purchaser shall assume full responsibility for all needed repairs, and Purchaser shall receive a credit at Closing for any deductible amount under such insurance policies.  For the purposes of this Agreement, “Material Damage” and “Materially Damaged” means damage which, in Seller’s reasonable estimation, exceeds one percent (1%) of the Purchase Price to repair or which will take longer than ninety (90) days to repair.

6.2.2       Not Material.  If the Property is not Materially Damaged, then neither Purchaser nor Seller shall have the right to terminate this Agreement, and Seller shall, at its option, either (i) repair the damage before the Closing in a manner reasonably satisfactory to Purchaser, or (ii) credit Purchaser at Closing for the reasonable cost to complete the repair (in which case Seller shall retain all insurance proceeds and Purchaser shall assume full responsibility for all needed repairs).

6.3          Condemnation.  If proceedings in eminent domain are instituted with respect to the Property or any portion thereof, Purchaser may, at its option, by written notice to Seller given within thirty (30) days after Seller notifies Purchaser of such proceedings (and if necessary the Closing Date shall be automatically extended to give Purchaser the full thirty-day period to make such election), either:  (i) terminate this Agreement, in which case the Earnest Money shall be immediately returned to Purchaser and the parties hereto shall have no further rights or obligations, other than those that by their terms survive the termination of this Agreement, or (ii) proceed under this Agreement, in which event Seller shall, at the Closing, assign to Purchaser its entire right, title and interest in and to any condemnation award, and Purchaser shall have the sole right after the Closing to negotiate and otherwise deal with the condemning authority in respect of such matter.  If Purchaser does not give Seller written notice of its election within the time required above, then Purchaser shall be deemed to have elected option (i) above.

ARTICLE 7.  Closing

7.1          Closing.  The consummation of the transaction contemplated herein (“Closing”) shall occur on the Closing Date at the offices of Escrow Agent (or such other location as may be mutually agreed upon by Seller and Purchaser).  Funds shall be deposited into and held by Escrow Agent in a closing escrow account with a bank satisfactory to Purchaser and Seller.  Upon satisfaction or completion of all closing conditions and deliveries, the parties shall direct Escrow Agent to immediately record and deliver the closing documents to the appropriate parties and make disbursements according to the closing statements executed by Seller and Purchaser.

7.2          Conditions to Parties’ Obligation to Close.  In addition to all other conditions set forth herein, the obligation of Seller, on the one hand, and Purchaser, on the other hand, to consummate the transactions contemplated hereunder are conditioned upon the following:

7.2.1       Representations and Warranties.  The other party’s representations and warranties contained herein shall be true and correct in all material respects as of the Effective Date and the Closing Date;

7.2.2       Deliveries.  As of the Closing Date, the other party shall have tendered all deliveries to be made at Closing; and

7.2.3       Actions, Suits, etc.  There shall exist no pending or threatened actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings, against the other party that would materially and adversely affect the operation or value of the Property or the other party’s ability to perform its obligations under this Agreement.

So long as a party is not in default hereunder, if any condition to such party’s obligation to proceed with the Closing hereunder has not been satisfied as of the Closing Date (or such earlier date as is provided herein), such party may, in its sole discretion, terminate this Agreement by delivering written notice to the other party on or before the Closing Date (or such earlier date as is provided herein), or elect to close (or to permit any such earlier termination deadline to pass) notwithstanding the non-satisfaction of such condition, in which event such party shall be deemed to have waived any such condition.  In the event such party elects to close (or to permit any such earlier termination deadline to pass), notwithstanding the non-satisfaction of such condition, said party shall be deemed to have waived said condition, and there shall be no liability on the part of any other party hereto for breaches of representations and warranties of which the party electing to close had knowledge at the Closing.

7.3          Seller’s Deliveries in Escrow.  As of or prior to the Closing Date, Seller shall deliver in escrow to Escrow Agent the following:

7.3.1       Deed.  A special warranty deed in the form attached hereto as Exhibit “A-1” in form acceptable for recordation under the law of the state where the Property is located and including a list of Permitted Exceptions to which the conveyance shall be subject, executed and acknowledged by Seller, conveying to Purchaser the Real Property (the “Deed”), together with an affidavit of real property value in the form required by applicable law, executed and acknowledged by Seller or its agent;

7.3.2       Bill of Sale, Assignment and Assumption.  A Bill of Sale, Assignment and Assumption of Leases and Contracts in the form of Exhibit ”B” attached hereto (the “Assignment”), executed and acknowledged by Seller, vesting in Purchaser the property described therein free of any claims, except for the Permitted Exceptions to the extent applicable;

7.3.3       Conveyancing or Transfer Tax Forms or Returns.  Such conveyancing or transfer tax forms or returns, if any, including an affidavit of property value executed and acknowledged by Seller or its agent, as are required to be delivered or signed by Seller by applicable state and local law in connection with the conveyance of the Real Property;

7.3.4       FIRPTA.  A Foreign Investment in Real Property Tax Act affidavit executed by Seller;

7.3.5       Authority.  Evidence of the existence, organization and authority of Seller and of the authority of the persons executing documents on behalf of Seller reasonably satisfactory to Purchaser and the underwriter for the Title Policy;

7.3.6       Certified Rent Roll.  A current Rent Roll for the Property, certified by Seller to be true and correct in all material respects as of the Closing Date;

7.3.7       Tax Certificates.  Certificates from the State of Arizona and the City of Mesa certifying that all transaction privilege tax filings for the Property through the month prior to the Closing Date have been properly filed and all transaction privilege taxes have been paid, and copies of the state and local transaction privilege tax filings for the Property made in the month in which the Closing occurs (if the Closing occurs after the twentieth day of the month);

7.3.8       Loan Assumption Documents.  Such documents as may be reasonably required by Lender for Purchaser to be able to assume the Existing Loan;

7.3.9       Additional Documents.  Any additional documents that Purchaser, Escrow Agent or the Title Company may reasonably require for the proper consummation of the transaction contemplated by this Agreement (provided, however, no such additional document shall expand any obligation, covenant, representation or warranty of Seller or result in any new or additional obligation, covenant, representation or warranty of Seller under this Agreement beyond those expressly set forth in this Agreement); and

7.3.10     Tenant Estoppel Certificates.  To the extent available, the original Tenant Estoppel Certificates in the form and content provided in Section 4.3.

7.4          Purchaser’s Deliveries in Escrow.  As of or prior to the Closing Date, Purchaser shall deliver in escrow to Escrow Agent the following:

7.4.1       Bill of Sale, Assignment and Assumption.  The Assignment, executed and acknowledged by Purchaser;

7.4.2       Conveyancing or Transfer Tax Forms or Returns.  Such conveyancing or transfer tax forms or returns, if any, including an affidavit of property value executed and acknowledged by Purchaser or its agent, as are required to be delivered or signed by Purchaser by applicable state and local law in connection with the conveyance of Real Property;

7.4.3       Loan Assumption Documents.  Such documents as may be reasonably required by Lender to evidence Purchaser’s assumption of the Existing Loan;

7.4.4       Additional Documents.  Any additional documents that Seller, Escrow Agent or the Title Company may reasonably require for the proper consummation of the transaction contemplated by this Agreement (provided, however, no such additional document shall expand any obligation, covenant, representation or warranty of Purchaser

or result in any new or additional obligation, covenant, representation or warranty of Purchaser under this Agreement beyond those expressly set forth in this Agreement); and

7.4.5       Authority.  Evidence of the existence, organization, and authority of Purchaser and of the authority of the persons executing documents on behalf of Purchaser reasonably satisfactory to Seller.

7.5          Closing Statements.  As of or prior to the Closing Date, Seller and Purchaser shall deposit with Escrow Agent executed closing statements consistent with this Agreement in the form required by Escrow Agent.

7.6          Purchase Price.  At or before 1:00 p.m. local time on the Closing Date, Purchaser shall deliver to Escrow Agent the Purchase Price as follows: (a) Purchaser shall assume the unpaid principal balance of and accrued and unpaid interest under that certain promissory note (the “Note”) executed by Seller and payable to the order of Allstate Life Insurance Company (“Lender”), in the original principal amount of $24,750,000, dated September 8, 2003, secured by, among other things, a deed of trust dated September 8, 2003, to First American Title Insurance Company, Trustee, for the benefit of Lender, recorded in the real property records of Maricopa, Arizona and all documents executed in connection therewith (collectively, the “Existing Loan”),  (b) Purchaser’s payment of cash or current funds in an amount equal to (i) the Purchase Price plus Five Thousand and No/100 Dollars ($5,000.00) (the “Processing Fee”) (as a reimbursement to Seller for the non-refundable loan assumption and processing fee charged by Lender in connection with the assumption of the Existing Loan), minus (ii) the Earnest Money, minus (iii) the Outstanding Balance of the Note as of the Closing Date, subject to such adjustments and prorations as set forth herein, in immediate, same-day U.S. federal funds wired for credit into Escrow Agent’s escrow account, which funds must be delivered in a manner to permit Escrow Agent to deliver good funds to Seller on the Closing Date (and, if requested by Seller, by wire transfer).

7.7          Possession.  Seller shall deliver possession of the Property to Purchaser at the Closing subject only to the Permitted Exceptions.

7.8          Delivery of Books and Records.  After the Closing, Seller shall deliver to the offices of Purchaser’s property manager or to the Real Property, to the extent in Seller’s or its property manager’s possession or control, original copies of the following: all files for the Leases, including amendments, guaranties, letter agreements and assignments which are then in effect, and correspondence to and from the tenants (collectively, the “Lease Files”); License Agreements; maintenance records and warranties; plans and specifications; licenses, permits and certificates of occupancy; copies or originals of all books and records of account, contracts, and copies of correspondence with tenants and suppliers; receipts for deposits, unpaid bills and other papers or documents which pertain to the Property; all advertising materials; booklets; keys; and other items, if any, used in the operation of the Property.  Purchaser agrees to allow Seller commercially reasonable access to all such materials, and to make copies of same after Closing, for all lawful purposes for a period of three (3) years following the Closing Date, including the preparation of tax returns by Seller and for supporting documentation, if needed.

7.9          Notice to Tenants.  Seller and Purchaser shall each execute, and Purchaser shall deliver to each tenant immediately after the Closing, a notice regarding the sale in substantially the form of Exhibit ”D” attached hereto, or such other form as may be required by applicable state law.  This obligation on the part of Purchaser shall survive the Closing.

ARTICLE 8.   Prorations, Deposits, Commissions

8.1          Prorations.  At Closing, the following items shall be prorated as of the date of Closing with all items of income and expense for the Property being borne by Purchaser from and after (but including) the date of Closing:  Tenant Receivables (defined below) and other income and rents that have been collected by Seller as of Closing; fees and assessments; prepaid expenses and obligations under Service Contracts assumed by Purchaser; accrued operating expenses; real and personal ad valorem taxes (“Taxes”); and any assessments by private covenant for the then-current calendar year of Closing.  Specifically, the following shall apply to such prorations and to post-Closing collections of Tenant Receivables:

8.1.1       Taxes.  If Taxes for the year of Closing are not known or cannot be reasonably estimated, Taxes shall be prorated based on Taxes for the year prior to Closing and shall be reconciled between Seller and Purchaser when actual Taxes are known.  Any additional Taxes relating to the year of Closing or prior years arising out of a change in the use of the Real Property or a change in ownership shall be paid by Seller when due and payable, and Seller shall indemnify Purchaser from and against any and all such Taxes, which indemnification obligation shall survive the Closing.

8.1.2       Utilities.  Purchaser shall take all steps necessary to effectuate the transfer of all utilities to its name as of the Closing Date, and where necessary, post deposits with the utility companies.  Seller shall ensure that all utility meters are read as of the Closing Date.  Seller shall be entitled to recover any and all deposits held by any utility company as of the Closing Date.

8.1.3       Tenant Receivables.  Rents due from tenants under Leases and from tenants or licensees under License Agreements and operating expenses and/or taxes payable by tenants under Leases (collectively, “Tenant Receivables”) and not collected by Seller as of Closing shall not be prorated between Seller and Purchaser at Closing but shall be apportioned on the basis of the period for which the same is payable and if, as and when collected, as follows:

(a)           Tenant Receivables and other income received from tenants under Leases and/or tenants or licensees under License Agreements after Closing shall be applied in the following order of priority: (i) first, to Tenant Receivables first coming due after Closing and applicable to the period of time after Closing, which amount shall be retained by Purchaser; (ii) second, to Uncollected Delinquent Tenant Receivables (hereinafter defined); (iii) third, to payment of Tenant Receivables first coming due after Closing but applicable to the period of time before Closing, including, without limitation, the Tenant Receivables described in Subsection 8.1.3(b) below (collectively, “Unbilled Tenant Receivables”), which amount shall be delivered to Seller; and (iv) fourth, to payment of the current

Tenant Receivables then due for the month in which the Closing Date occurs, which amount shall be apportioned between Purchaser and Seller as of the Closing Date as set forth in Section 8.1 hereof (with Seller’s portion thereof to be delivered to Seller).  All Tenant Receivables which were due and payable as of Closing for more than thirty (30) days but not collected by Seller as of Closing, and all promissory notes and payment plans for the payment of delinquent rents, and other obligations to pay delinquent rents no matter how evidenced, plus any rents due but unpaid in the month of Closing if the Tenant responsible for such rents is also delinquent for any regularly scheduled monthly rent payment due in a month prior to the month of Closing (collectively, “Uncollected Delinquent Tenant Receivables”) shall be assigned to Purchaser at Closing.  Purchaser shall remit to Seller any such sums received by Purchaser to which Seller is entitled within ten (10) business days after receipt thereof less reasonable, actual costs and expenses of collection, including reasonable attorneys’ fees, court costs and disbursements, if any.  Seller expressly agrees that if Seller receives any amounts after the Closing Date which are attributable, in whole or in part, to any period after the Closing Date or to any Uncollected Delinquent Tenant Receivables, Seller shall remit to Purchaser that portion of the monies so received by Seller to which Purchaser is entitled within ten (10) business days after receipt thereof.  With respect to Unbilled Tenant Receivables, Purchaser covenants and agrees to (A) bill the same when billable and (B) cooperate with Seller to determine the correct amount of operating expenses and/or taxes due.  The provisions of this Subsection 8.1.3(a) shall survive the Closing.

(b)           If the final reconciliation of operating expenses and/or taxes due under the Leases shows that a net amount is owed by Seller to Purchaser, said amount shall be paid by Seller to Purchaser within ten (10) business days of such final reconciliation under the Leases.  If the final reconciliation of operating expenses and/or taxes due under the Leases shows that a net amount is owed by Purchaser to Seller, Purchaser shall, within ten (10) business days of receipt of such funds from the tenants under the Leases, remit said amount to Seller except to the extent such amount would be due to a tenant with Uncollected Delinquent Tenant Receivables outstanding.  Purchaser agrees to receive and hold any monies received on account of such past due expenses and/or taxes for Seller and to pay same promptly to Seller as aforesaid.  The provisions of this Subsection 8.1.3(b) shall survive the Closing.

(c)           Seller will not modify, amend, waive, renegotiate or settle any Tenant Receivable or any promissory note or payment plan for the payment of delinquent rents or any other obligations to pay delinquent rents no matter how evidenced (“Delinquent Rent Obligations”) without (i) providing Purchaser all relevant supporting documentation, as reasonably determined by Seller, including, without limitation, tenant financial information to the extent in Seller’s possession, and (ii) obtaining Purchaser’s approval, which approval may be withheld in Purchaser’s sole discretion.  The existing Delinquent Rent Obligations are reflected in Schedule 8.1.3.

8.2          Leasing Costs.  Seller agrees to pay or discharge at or prior to Closing all leasing commissions, costs for tenant improvements, lease buyout costs, moving allowances, design allowances, legal fees and other costs, expenses and allowances incurred in order to induce a tenant to enter into a Lease or Lease renewal or extension (collectively, “Leasing Costs”) that are due prior to Closing with respect to Leases and License Agreements in force as of or prior to the Effective Date and will also pay or discharge at or prior to Closing all Leasing Costs in the amounts set forth and for the tenants named on Exhibit “G” attached hereto; provided, however, that Seller shall have no obligation to pay, and Purchaser shall assume the obligation to pay, all Leasing Costs that become due and payable after the Closing Date (other than the Leasing Costs set forth on Exhibit “G” attached hereto), including any Leasing Costs payable with respect to any option to renew or option to expand that has not been exercised prior to the Effective Date, which obligation shall survive the Closing.  As of Closing, Purchaser shall assume Seller’s obligations for Leasing Costs incurred with respect to Leases and Lease renewals and extensions and License Agreements and License Agreement renewals and extensions executed subsequent to the Effective Date.

8.3          Closing Costs.  Closing costs shall be allocated between Seller and Purchaser in accordance with Section 1.2.

8.4          Final Adjustment After Closing.  If final bills are not available or cannot be issued prior to Closing for any item being prorated under Section 8.1, then Purchaser and Seller agree to allocate such items on a fair and equitable basis as soon as such bills are available, final adjustment to be made as soon as reasonably possible after the Closing.  Payments in connection with the final adjustment shall be due within thirty (30) days of delivery of written notice.  All such rights and obligations shall survive the Closing.

8.5          Deposits.  All tenant and licensee security deposits collected and not applied by Seller shall be transferred or credited to Purchaser at Closing.  As of the Closing, Purchaser shall assume Seller’s obligations related to tenant and licensee security deposits, but only to the extent they are credited or transferred to Purchaser.

8.6          Commissions.  Seller and Purchaser each represent and warrant to the other that no real estate brokerage commission is payable to any person or entity in connection with the transaction contemplated hereby, other than the Seller’s Broker, and each agrees to and does hereby indemnify and hold the other harmless against the payment of any commission to any other person or entity claiming by, through or under Seller or Purchaser, as applicable.  This indemnification shall extend to any and all claims, liabilities, costs and expenses (including reasonable attorneys’ fees and litigation costs) arising as a result of such claims and shall survive the Closing.

8.7          Loan Reserves and Escrows.  At Closing, Seller shall assign to Purchaser any loan reserves or escrows held by Lender in connection with the Existing Loan, and Seller shall receive a credit on the settlement statement for the transferred reserves and escrows to the extent actually assignable to Purchaser.

ARTICLE 9.  Representations and Warranties

9.1          Seller’s Representations and Warranties.  Seller represents and warrants to Purchaser that as of the Effective Date and as of the date of Closing:

9.1.1       Organization and Authority. Seller has been duly organized, is validly existing as an Arizona corporation, and is in good standing in the State of Arizona.  Seller has the full right and authority and has obtained any and all consents required to enter into this Agreement and to consummate or cause to be consummated the transactions contemplated hereby.  This Agreement has been, and all of the documents to be delivered by Seller at the Closing will be, authorized and executed and constitute, or will constitute, as appropriate, the valid and binding obligation of Seller, enforceable in accordance with their terms.

9.1.2       Conflicts and Pending Actions.  There is no agreement to which Seller is a party or, to Seller’s knowledge, that is binding on Seller which is in conflict with this Agreement, which challenges or impairs Seller’s ability to execute or perform its obligations under this Agreement.  To Seller’s knowledge, there is no action or proceeding or litigation pending or threatened against Seller or relating to the Property.

9.1.3       Rent Roll.  Exhibit ”F” is a true, correct and complete rent roll in all material respects listing all tenants of the Property.

9.1.4       Service Contracts and License Agreements.  To Seller’s knowledge, the list and copies of Service Contracts and License Agreements to be delivered to Purchaser pursuant to this Agreement will be correct and complete in all material respects as of the date of delivery.

9.1.5       Notices from Governmental Authorities.  To Seller’s knowledge, Seller has not received notice of any material violation of any laws (including, but not limited to, environmental laws)  applicable (or alleged to be applicable) to the Real Property, or any part thereof, that has not been corrected, except as may be disclosed by the Property Documents or otherwise disclosed in writing to Purchaser prior to the date hereof.

9.1.6       Seller’s Actions.  Seller has not deposited or released any Hazardous Materials (as defined below) on the Property in violation of any applicable laws, rule or regulations in existence as of the Effective Date.

9.1.7       Zoning.  To Seller’s current actual knowledge, the Property is properly zoned for its current use and is free from any use or occupancy restrictions which prevent the continued present use of the Property.

9.1.8       Leases and Personal Property.  Seller has delivered to Purchaser true, correct and complete copies of the documents evidencing the Leases.  The Leases are in full force and effect and, to Seller’s knowledge, neither the landlord nor the tenant is in default under any Lease.  Except for any provisions contained in the documents creating, evidencing or securing the Existing Loan:

(a)           Seller has the sole right to collect the rents under the Leases and neither such right, nor any of the Leases, have been assigned, pledged, hypothecated, or otherwise encumbered by Seller; and

(b)           The Personal Property to be conveyed herein is otherwise free from any encumbrance.

9.1.9       Litigation.  Seller knows of no litigation or threatened litigation affecting the Property or Seller’s ability to sell the Property.

9.1.10     Seller’s Knowledge.  Seller represents and warrants that John Greenman and Monica Dean are the persons most knowledgeable with respect to the Property and the representations and warranties contained herein.

9.1.11     Existing Loan.

(a)           The unpaid principal balance of and accrued and unpaid interest under the Existing Loan is Twenty-Three Million Seven Hundred Thirty-Nine Thousand Two Hundred Ninety-Two and 09/100 Dollars ($23,739,292.09) as of October 31, 2005.

(b)           To Seller’s knowledge, Seller is not in default under any of the instruments creating or evidencing the Existing Loan or the security thereof and, to Seller’s knowledge, no event has occurred which, with the passage of time or the giving of notice, or both, would constitute a default or event of default thereunder.

9.1.12     Privilege Taxes.  Seller has paid, or will pay on or before their due date, all transaction privilege taxes, including sales, use or rental taxes (collectively, “Privilege Taxes”), due on or before the Closing Date with respect to the Property and has reserved, or will reserve before the Closing, amounts necessary to pay Privilege Taxes due after the Closing Date in respect of periods ending on or before the Closing Date.  Seller has filed, or will timely file on or before their due date, all tax returns required in connection with any Privilege Taxes.

9.2          Purchaser’s Representations and Warranties.  Purchaser represents and warrants to Seller that:

9.2.1       Organization and Authority.  Purchaser has been duly organized and is validly existing as a partnership in good standing in the State of Delaware and is qualified to do business in the state in which the Real Property is located.  Purchaser has the full right and authority and has obtained any and all consents required to enter into this Agreement and to consummate or cause to be consummated the transactions contemplated hereby.  This Agreement has been, and all of the documents to be delivered by Purchaser at the Closing will be, authorized and properly executed and constitute, or will constitute, as appropriate, the valid and binding obligation of Purchaser, enforceable in accordance with their terms.

9.2.2       Conflicts and Pending Action.  There is no agreement to which Purchaser is a party or to Purchaser’s knowledge binding on Purchaser which is in conflict with this Agreement and impairs Purchaser’s ability to perform its obligations under this Agreement.  There is no action or proceeding pending or, to Purchaser’s knowledge, threatened against Purchaser which challenges or impairs Purchaser’s ability to execute or perform its obligations under this Agreement.

9.3          Survival of Representations and Warranties.  The representations and warranties set forth in this Article 9 are made as of the Effective Date and, except in the case of Subsection 9.1.5, are remade as of the Closing Date and shall not be deemed to be merged into or waived by the instruments of Closing, but shall survive the Closing for a period of nine (9) months (the “Survival Period”).  Notwithstanding any provision in this Agreement to the contrary, Seller’s maximum liability for the breach of any or all representations or warranties contained herein shall be limited to $1,500,000.  Terms such as “to Seller’s knowledge,” “to the best of Seller’s knowledge” or like phrases mean the actual knowledge of John Greenman and Monica Dean, after reasonable inquiry and investigation.  No broker, agent, or party other than Seller is authorized to make any representation or warranty for or on behalf of Seller.  Neither party shall have any liability after Closing for the breach of a representation or warranty hereunder of which the other party hereto had actual knowledge as of Closing.  The provisions of this Section 9.3 shall survive the Closing.  Any breach of a representation or warranty that occurs prior to Closing shall be governed by Article 10.

ARTICLE 10.   Default and Remedies

10.1        Seller’s Remedies.  If Purchaser fails to perform its obligations pursuant to this Agreement at or prior to Closing for any reason except failure by Seller to perform hereunder or a permitted termination hereunder, or if prior to Closing any one or more of Purchaser’s representations or warranties are breached in any material respect, Seller shall be entitled, as its sole remedy (except as provided in Sections 4.10, 8.6, 10.3 and 10.4 hereof), to terminate this Agreement and recover the Earnest Money as liquidated damages and not as penalty, in full satisfaction of claims against Purchaser hereunder.  Seller hereby waives all other remedies, whether at law or in equity.  Seller and Purchaser agree that Seller’s damages resulting from Purchaser’s default are difficult, if not impossible, to determine and the Earnest Money is a fair estimate of those damages which has been agreed to in an effort to cause the amount of such damages to be certain.  Notwithstanding anything in this Section 10.1 to the contrary, in the event of Purchaser’s default or a termination of this Agreement, Seller shall have all remedies available at law or in equity in the event Purchaser or any party related to or affiliated with Purchaser is asserting any claims or right to the Property that would unreasonably delay or prevent Seller from having clear, indefeasible and marketable title to the Property or if Purchaser has breached Section 12.13.  In all other events Seller’s remedies shall be limited to those described in this Section 10.1 and Sections 4.10, 8.6, 10.3 and 10.4 hereof.  If Closing is consummated, Seller shall have all remedies available at law or in equity in the event Purchaser fails to perform any obligation that survives the Closing of this Agreement.

10.2        Purchaser’s Remedies.  If Seller fails to perform its obligations pursuant to this Agreement for any reason except failure by Purchaser to perform hereunder or a permitted termination hereunder, or if prior to Closing any one or more of Seller’s representations or

warranties are breached in any material respect, Purchaser shall elect, as its sole remedy, either to (i) terminate this Agreement by giving Seller timely written notice of such election prior to or at Closing and recover the Earnest Money, (ii) enforce specific performance, or (iii) waive said failure or breach and proceed to Closing.  Notwithstanding anything herein to the contrary, Purchaser shall be deemed to have elected to terminate this Agreement if Purchaser fails to file a lawsuit asserting such claim or cause of action in the county in which the Property is located within two (2) months following the scheduled Closing Date.  Purchaser’s remedies shall be limited to those described in this Section 10.2 and Sections 10.3 and 10.4 hereof.  If, however, the equitable remedy of specific performance is not available, Purchaser may seek any other right or remedy available at law or in equity.  If Closing is consummated, Purchaser shall have all remedies available at law or in equity in the event Seller fails to perform any obligation that survives the Closing of this Agreement.

10.3        Attorneys’ Fees.  In the event either party hereto employs an attorney in connection with claims by one party against the other arising from an alleged default under this Agreement, the non-prevailing party shall pay the prevailing party all reasonable fees and expenses, including attorneys’ fees, incurred in connection with such transaction.

10.4        Other Expenses.  If this Agreement is terminated due to the default of a party, then the defaulting party shall pay any fees or charges due to Escrow Agent for holding the Earnest Money as well as any escrow cancellation fees or charges and any fees or charges due to the Title Company for preparation and/or cancellation of the Title Commitment.

ARTICLE 11.  Disclaimers, Release and Indemnity

11.1        Disclaimers By Seller.  Except as expressly set forth in this Agreement and any document executed by Seller and delivered to Purchaser at Closing, it is understood and agreed that Seller has not at any time made and is not now making, and it specifically disclaims, any warranties or representations of any kind or character, express or implied, with respect to the Property, including, but not limited to, warranties or representations as to (i) matters of title, (ii) environmental matters relating to the Property or any portion thereof, including, without limitation, the presence of Hazardous Materials in, on, under or in the vicinity of the Property, (iii) geological conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water, and geologic faults and the resulting damage of past and/or future faulting, (iv) whether, and to the extent to which the Property or any portion thereof is affected by any stream (surface or underground), body of water, wetlands, flood prone area, flood plain, floodway or special flood hazard, (v) drainage, (vi) soil conditions, including the existence of instability, past soil repairs, soil additions or conditions of soil fill, or susceptibility to landslides, or the sufficiency of any undershoring, (vii) the presence of endangered species or any environmentally sensitive or protected areas, (viii) zoning or building entitlements to which the Property or any portion thereof may be subject, (ix) the availability of any utilities to the Property or any portion thereof including, without limitation, water, sewage, gas and electric, (x) usages of adjoining property, (xi) access to the Property or any portion thereof, (xii) the value, compliance with the plans and specifications, size, location, age, use, design, quality, description, suitability, structural integrity, operation, title to, or physical or financial condition of the Property or any portion thereof, or any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to

the Property or any part thereof, (xiii) the condition or use of the Property or compliance of the Property with any or all past, present or future federal, state or local ordinances, rules, regulations or laws, building, fire or zoning ordinances, codes or other similar laws, (xiv) the existence or non-existence of underground storage tanks, surface impoundments, or landfills, (xv) the merchantability of the Property or fitness of the Property for any particular purpose, (xvi) the truth, accuracy or completeness of the Property Documents, (xvii) tax consequences, or (xviii) any other matter or thing with respect to the Property.

11.2        Sale “As Is, Where Is.”  Purchaser acknowledges and agrees that upon Closing, Seller shall sell and convey to Purchaser and Purchaser shall accept the Property “AS IS, WHERE IS, WITH ALL FAULTS,” except to the extent expressly provided otherwise in this Agreement and any document executed by Seller and delivered to Purchaser at Closing.  Except as expressly set forth in this Agreement, Purchaser has not relied and will not rely on, and Seller has not made and is not liable for or bound by, any express or implied warranties, guarantees, statements, representations or information pertaining to the Property or relating thereto (including specifically, without limitation, Property information packages distributed with respect to the Property) made or furnished by Seller or any real estate broker, agent or third party representing or purporting to represent Seller, to whomever made or given, directly or indirectly, orally or in writing.  Purchaser will conduct such inspections and investigations of the Property as Purchaser deems necessary, including, but not limited to, the physical and environmental conditions thereof, and shall rely upon same.  Purchaser acknowledges that Seller has afforded Purchaser a full opportunity to conduct such investigations of the Property as Purchaser deemed necessary to satisfy itself as to the condition of the Property and the existence or non-existence or curative action to be taken with respect to any Hazardous Materials on or discharged from the Property, and will rely solely upon same and not upon any information provided by or on behalf of Seller or its agents or employees with respect thereto, other than such representations, warranties and covenants of Seller as are expressly set forth in this Agreement.

Purchaser’s Initials   _______

11.3        “Hazardous Materials” Defined.  For purposes hereof, “Hazardous Materials” means “Hazardous Material,” “Hazardous Substance,” “Pollutant or Contaminant,” and “Petroleum” and “Natural Gas Liquids,” as those terms are defined or used in Section 101 of CERCLA, and any other substances regulated because of their effect or potential effect on public health and the environment, including, without limitation, PCBs, lead paint, asbestos, urea formaldehyde, radioactive materials, putrescible materials, and infectious materials.

11.4        Hazardous Materials Indemnity.  Purchaser agrees to indemnify and hold Seller harmless of and from any and all liabilities, claims, demands, and expenses of any kind or nature (collectively “Claims”) which arise or accrue after Closing, and which are in any way related to the ownership, maintenance, or operation of the Property by Purchaser or its affiliates, including, without limitation, in connection with Hazardous Materials. Seller agrees to indemnify and hold Purchaser harmless of and from any and all Claims which arise or accrue after Closing, and which are in any way related to the ownership, maintenance, or operation of the Property prior to Closing by Seller or its affiliates including, without limitation, in connection with Hazardous Materials.

11.5        Survival.  The terms and conditions of this Article 11 shall expressly survive the Closing, and shall not merge with the provisions of any closing documents.

                                Purchaser acknowledges and agrees that the disclaimers and other agreements set forth herein are an integral part of this Agreement and that Seller would not have agreed to sell the Property to Purchaser for the Purchase Price without the disclaimers and other agreements set forth above.

ARTICLE 12.  Miscellaneous

12.1        Parties Bound; Assignment.  This Agreement, and the terms, covenants, and conditions herein contained, shall inure to the benefit of and be binding upon the heirs, personal representatives, successors, and assigns of each of the parties hereto.  Purchaser may assign its rights under this Agreement only upon the following conditions:  (i) the assignee of Purchaser must be an affiliate of Purchaser or an entity controlling, controlled by, or under common control with Purchaser, (ii) the assignee of Purchaser shall assume all obligations of Purchaser hereunder, but Purchaser shall remain primarily liable prior to Closing (and in the event of any termination of this Agreement) for the performance of Purchaser’s obligations, and (iii) a copy of the fully executed written assignment and assumption agreement shall be delivered to Seller at least five (5) days prior to Closing. Seller’s prior written consent will be required for any other assignment of this Agreement, and may be withheld at Seller’s discretion.

12.2        Headings.  The article, section, subsection, paragraph and/or other headings of this Agreement are for convenience only and in no way limit or enlarge the scope or meaning of the language hereof.

12.3        Invalidity and Waiver.  If any portion of this Agreement is held invalid or inoperative, then so far as is reasonable and possible the remainder of this Agreement shall be deemed valid and operative, and, to the greatest extent legally possible, effect shall be given to the intent manifested by the portion held invalid or inoperative.  The failure by either party to enforce against the other any term or provision of this Agreement shall not be deemed to be a waiver of such party’s right to enforce against the other party the same or any other such term or provision in the future.

12.4        Governing Law.  This Agreement shall, in all respects, be governed, construed, applied, and enforced in accordance with the law of the State of Arizona.

12.5        Survival.  Subject to Section 9.3 hereof, the provisions of this Agreement that contemplate performance after the Closing and the obligations of the parties not fully performed at the Closing shall survive the Closing and shall not be deemed to be merged into or waived by the instruments of Closing.

12.6        Entirety and Amendments.  This Agreement embodies the entire agreement between the parties and supersedes all prior agreements and understandings of the parties relating to the Property.  This Agreement may be amended or supplemented only by an instrument in writing executed by the party against whom enforcement is sought.

12.7        Time.  Time is of the essence in the performance of this Agreement.

12.8        Confidentiality.  Purchaser shall make no public announcement or disclosure of any information related to this Agreement to outside brokers or third parties, except as may be required by law, before the Closing, without the prior written specific consent of Seller; provided, however, that Purchaser may, subject to the provisions of Section 4.7, make disclosure of this Agreement to its Permitted Outside Parties as necessary to perform its obligations hereunder and as may be required under laws or regulations applicable to Purchaser.

12.9        Notices.  All notices required or permitted hereunder shall be in writing and shall be served on the parties at the addresses set forth in Section 1.3.  Any such notices shall, unless otherwise provided herein, be given or served (i) by depositing the same in the United States mail, postage paid, certified and addressed to the party to be notified, with return receipt requested, (ii) by overnight delivery using a nationally recognized overnight courier, (iii) by personal delivery, or (iv) by facsimile, evidenced by confirmed receipt.  Notice deposited in the mail or by overnight delivery in the manner hereinabove described shall be effective upon deposit.  Notice given in any other manner shall be effective when received by the party to be notified, as evidenced by a verified confirmation (for facsimile) or by signed delivery slip (for personal delivery).  A party’s address may be changed by written notice to the other party; provided, however, that no notice of a change of address shall be effective until actual receipt of such notice.  Copies of notices are for informational purposes only, and a failure to give or receive copies of any notice shall not be deemed a failure to give notice.  Notices given by counsel to the Purchaser shall be deemed given by Purchaser and notices given by counsel to the Seller shall be deemed given by Seller.

12.10      Construction.  The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and agree that the normal rule of construction — to the effect that any ambiguities are to be resolved against the drafting party — shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.

12.11      Calculation of Time Periods.  Unless otherwise specified, in computing any period of time described herein, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday for national banks in the location where the Property is located, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday, or legal holiday.  The last day of any period of time described herein shall be deemed to end at 5:00 p.m. local time in the State of Arizona.

12.12      Execution in Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of such counterparts shall constitute one Agreement.  To facilitate execution of this Agreement, the parties may execute and exchange facsimile counterparts of the signature pages, provided that executed originals thereof are forwarded to the other party on the same day by any of the delivery methods set forth in Section 12.9 other than facsimile.

12.13      No Recordation.  Without the prior written consent of Seller, Purchaser shall not record or cause the recordation of either this Agreement or any memorandum hereof, or any affidavit pertaining hereto, without the prior written consent of Seller, which consent may be arbitrarily withheld at Seller’s discretion.  Any such recordation shall constitute a default

hereunder by Purchaser, whereupon Seller shall have the remedies set forth in Section 10.1 hereof, as well as the right to take appropriate action to remove any such cloud on the title to the Real Property.

12.14      Further Assurances.  In addition to the acts and deeds recited herein and contemplated to be performed, executed and/or delivered by either party at Closing, each party agrees to perform, execute and deliver, but without any obligation to incur any additional liability or expense, on or after the Closing any further deliveries and assurances as may be reasonably necessary to consummate the transactions contemplated hereby or to further perfect the conveyance, transfer and assignment of the Property to Purchaser.

12.15      Discharge of Obligations.  The acceptance of the Deed by Purchaser shall be deemed to be a full performance and discharge of every representation and warranty made by Seller herein and every agreement and obligation on the part of Seller to be performed pursuant to the provisions of this Agreement, except those which are herein specifically stated either to survive or to be performed after Closing.

12.16      No Third Party Beneficiary.  The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Purchaser only and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing.

12.17      Assumption of Existing Loan.  Seller (at no third party cost, expense or liability to Seller) agrees to assist Purchaser in attempting to obtain the consent of Lender to allow Purchaser to assume the Existing Loan (the “Lender Consent”).  The Lender Consent must include, to the extent permitted by the Existing Loan, Lender’s written agreement to release Seller and its constituent members of and from any loss, expense, liability or other obligations arising subsequent to the assumption of the Existing Loan by Purchaser, except that Seller will remain liable for claims, causes of action and liabilities arising as a result of facts or circumstances which existed prior to the date of assumption of the Existing Loan by Purchaser. Seller makes no representation or warranty that Purchaser will be successful in securing such Lender Consent.  At the Closing, Purchaser shall pay the assumption fees arising under the Existing Loan (including the beneficiary’s legal fees).  At any time on or before the expiration of fifty (50) days following the Effective Date, if Purchaser is unable for any reason to obtain Lender Consent for Purchaser’s assumption of the Existing Loan on terms and conditions acceptable to Purchaser, in its sole and absolute discretion, then Purchaser may terminate this Agreement by written notice to Seller on or before the expiration of fifty (50) days following the Effective Date, in which event this Agreement shall terminate, the Earnest Money (minus the Independent Consideration and the Processing Fee) shall be refunded to Purchaser and neither Party shall have any further rights, liabilities or obligations hereunder except as expressly set forth to the contrary in this Agreement.  If Lender Consent has not been obtained on or before the date which is sixty-five (65) days following the Effective Date, then either Seller or Purchaser may terminate this Agreement by written notice to the other party on or before the expiration of sixty-five (65) days following the Effective Date, in which event this Agreement shall terminate, the Earnest Money (minus the Independent Consideration and the Processing Fee) shall be refunded to Purchaser and neither Party shall have any further rights, liabilities or obligations hereunder except as expressly set

forth to the contrary in this Agreement.  If this Agreement is terminated pursuant to this Section 12.17, Purchaser shall pay to Lender its commercially reasonable third-party costs, fees and expenses (including legal fees and expenses), if any, incurred up to such date of termination for the approval process; provided, however, that if this Agreement is terminated due to a default by Seller under this Agreement, then Purchaser shall have no liability for Lender’s third-party costs, fees and expenses, and Seller shall reimburse Lender for such costs, fees and expenses.  Purchaser shall pay such third party fees, expenses and costs within ten days of Purchaser’s termination of this Agreement.  The obligations contained in this Section 12.17 shall survive the termination of this Agreement.

[SIGNATURE PAGES AND EXHIBITS TO FOLLOW]

SIGNATURE PAGE TO AGREEMENT OF

PURCHASE AND SALE

BY AND BETWEEN

AMERIVEST MESA INC.

AND

CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP

                IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year written below.

	SELLER:
	AMERIVEST MESA INC.,
	an Arizona corporation
Date executed by Seller:
December 16, 2005	By:	/s/ John B. Greenman
	Name:		John B. Greenman
	Title:		Vice President

	PURCHASER:
	CRESCENT REAL ESTATE EQUITIES
	LIMITED PARTNERSHIP,
	a Delaware limited partnership
Date executed by Purchaser:	By:	Crescent Real Estate Equities, Ltd.,
December 16, 2005		a Delaware corporation,
		its general partner
		By:	/s/ Thomas G. Miller
		Name:		Thomas G. Miller
		Title:		Managing Director, Investments

EX-10.2

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

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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.

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(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.

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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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EX-99.1

Exhibit 99.1

	NEWS RELEASE
CONTACT:
Kim P. Boswood	1780 South Bellaire Street	Listed:  AMEX
Investor Relations (Ext. 118)	Suite 100	Trading Symbol:  AMV
kimb@amvproperties.com	Denver, CO  80222	www.amvproperties.com
	Fax:  (303) 296-7353

AMERIVEST PROPERTIES ANNOUNCES AGREEMENT TO SELL FINANCIAL PLAZA IN MESA, ARIZONA

                DENVER, CO, December 16, 2005 — AmeriVest Properties Inc. (AMEX: AMV) announced today that it has entered into a definitive agreement to sell Financial Plaza in Mesa, Arizona to a public real estate investment trust.  Financial Plaza totals approximately 311,000 square feet and is approximately 85% leased.  The total sale price for Financial Plaza is $55 million ($177 psf) which includes an assumption of existing debt to AmeriVest Properties of approximately $23.7 million plus additional debt provided to buyer by the lender.  The estimated net cash proceeds to AmeriVest are expected to be approximately $29 million after repayment of first mortgage debt and approximately $2 million in closing costs and adjustments.  All proceeds from the sale will be used to repay indebtedness under AmeriVest’s unsecured credit facility.  The transaction is expected to close in January 2006, and is subject to customary closing conditions, including the lender’s approval of the buyer’s assumption of the debt. Based on current book values and estimated closing costs, AmeriVest expects to record a gain on sale of approximately $16 million for financial reporting purposes.  There can be no assurance that the transaction will be completed on the terms in the time frame described above.

Company Information

AmeriVest Properties Inc., with its principal office in Denver, Colorado, provides Smart Space for Small Business® in Denver, Phoenix, Dallas, and Indianapolis through the acquisition, repositioning and operation of multi-tenant office buildings in those markets.  To receive AmeriVest’s latest news and information, visit our website at www.amvproperties.com.

In addition to historical information, this press release contains forward-looking statements and information under federal securities laws.  These statements are based on expectations, estimates and projections about the industry and markets in which AmeriVest operates, management’s beliefs and assumptions made by management.  While AmeriVest management believes the assumptions underlying its forward-looking statements and information are reasonable, such information is necessarily subject to uncertainties and may involve certain risks, many of which are difficult to predict and are beyond management’s control.  As such, these statements and information are not guarantees of future performance, and actual operating results may differ materially from what is expressed or forecasted in this press release.  In particular, the factors that could cause actual operating results to differ materially include, without limitation, continued qualification as a real estate investment trust, the effects of general and local economic and market conditions, competition, regulatory changes, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development and acquisition activity, development and construction costs, insurance risks, the costs and availability of financing, potential liability relating to environmental matters and liquidity of real estate investments and other risks and uncertainties detailed in AmeriVest’s 2004 Annual Report on Form 10-K and from time to time in the Company’s filings with the Securities and Exchange Commission.