EXHIBIT 10.3
INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (" Indemnification Agreement ") is
made as of September 2, 2009 (the " Effective Date "), by
PACIFIC OFFICE PROPERTIES, L.P., a Delaware limited partnership,
whose address is 233 Wilshire Boulevard, Suite 830, Santa Monica,
California 90401 (" Pacific Office "), and SHIDLER EQUITIES
L.P., a Hawaii limited partnership, whose address is 841 Bishop
Street, Suite 1700, Honolulu, Hawaii 96813 (" Shidler
Equities ").
R E C I T A L S
:
1. First
Hawaiian Bank, a Hawaii corporation (the " Lender "), has
agreed to extend a line of credit to Pacific Office in the
principal sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00)
(the " Line of Credit "), which Line of Credit is evidenced
by that certain Promissory Note dated September 2, 2009, executed
by Pacific Office in favor of the Lender. The Line of
Credit is being extended by the Lender to Pacific Office on the
terms and conditions set forth in that certain Credit Agreement
dated September 2, 2009, executed by Pacific Office and the Lender
(the " Loan Agreement ").
2. The
obligation of Pacific Office to repay the Line of Credit, which is
solely the obligation of Pacific Office, is to be secured by the
pledge to the Lender of a certificate of deposit in the principal
amount of $10,000,000.
3. Shidler
Equities has agreed with Pacific Office that Shidler Equities will
provide and pledge to the Lender the required certificate of
deposit in the principal amount of $10,000,000 (such certificate of
deposit in the principal amount of $10,000,000 and/or any
replacement certificate of deposit provided and pledged by Shidler
Equities being referred to hereinafter as the " Certificate of
Deposit "), which pledge will secure the obligation of Pacific
Office to repay the Line of Credit, provided that Pacific Office
(i) agrees to indemnify Shidler Equities from any and all losses,
damages, costs and expenses incurred by Shidler Equities in
connection with the pledge of the Certificate of Deposit, and (ii)
agrees to the other terms and conditions set forth
below.
NOW, THEREFORE,
to induce Shidler Equities to provide and pledge to the Lender the
Certificate of Deposit as security for the obligation of Pacific
Office to repay the Line of Credit, and in consideration of the
foregoing premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Pacific
Office hereby covenants and agrees with Shidler Equities as
follows:
1.
Indemnification of Shidler Equities . Pacific
Office hereby agrees to pay, protect, defend and save Shidler
Equities harmless from and against, and hereby indemnifies Shidler
Equities from and against, any and all losses, damages, costs,
expenses (including, without limitation, reasonable attorneys'
fees), liabilities, obligations, causes of action, suits, claims,
demands and judgments (collectively, " Losses "), which
Losses may at
