AMENDMENT TO INDEMNIFICATION AGREEMENT
Exhibit
10.3
AMENDMENT
TO INDEMNIFICATION AGREEMENT
THIS AMENDMENT TO INDEMNIFICATION
AGREEMENT ("Amendment")
is made as of December 31, 2009 (the "Effective Date"), by PACIFIC
OFFICE PROPERTIES, L.P., a Delaware limited partnership, whose address is 000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxxxx 00000 ("Pacific Office"), and XXXXXXX
EQUITIES L.P., a Hawaii limited partnership, whose address is 000 Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxx, Xxxxxx 00000 ("Xxxxxxx
Equities").
R E C I T A L S
:
1. First
Hawaiian Bank, a Hawaii corporation (the "Lender"), extended a line of
credit to Pacific Office in the principal sum of $10,000,000.00, which line of
credit was extended on the terms and conditions set forth in that certain Credit
Agreement dated September 2, 2009, executed by Pacific Office and the
Lender.
2. The
obligation of Pacific Office to repay the $10,000,000 line of credit was secured
by the pledge to the Lender of a certificate of deposit in the principal amount
of $10,000,000, which certificate of deposit was provided and pledged to the
Lender by Xxxxxxx Equities on the condition that Pacific Office indemnify
Xxxxxxx Equities from any and all losses and expenses incurred by Xxxxxxx
Equities in connection with the pledge of the certificate of deposit, which
indemnification of Xxxxxxx Equities is set forth in that certain Indemnification
Agreement dated September 2, 2009, executed by Pacific Office in favor of
Xxxxxxx Equities (the "Indemnification
Agreement").
3. At
the request of Pacific Office, the Lender has agreed to increase the principal
amount of the line of credit from $10,000,000 to $15,000,000 on the terms of
that certain Amendment to Loan Documents dated December 31, 2009, executed by
the Lender, Pacific Office and Xxxxxxx Equities (the "Amendment to Loan Documents"),
which terms require the principal amount of the certificate of deposit to be
increased from $10,000,000 to $15,000,000.
4. Xxxxxxx
Equities has agreed with Pacific Office that Xxxxxxx Equities will provide and
pledge to the Lender the required funds to increase the principal amount of the
certificate of deposit from $10,000,000 to $15,000,000 (such certificate of
deposit in the original principal amount of $10,000,000, as increased to
$15,000,000, and/or any replacement or additional certificate of deposit
provided and pledged by Xxxxxxx Equities to the Lender being referred to
hereinafter as the "Certificate
of Deposit") on the condition that the Indemnification Agreement is
amended, in its entirety, as set forth below.
NOW, THEREFORE, to induce Xxxxxxx
Equities to provide and pledge to the Lender the required funds to increase the
principal amount of the Certificate of Deposit from $10,000,000 to $15,000,000
as security for the obligation of Pacific Office to repay the line of credit, as
increased from $10,000,000 to $15,000,000 (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 and Xxxxxxx Equities hereby agree that as of the Effective Date,
the Indemnification Agreement is amended, in its entirety, to provide as
follows:
1. Indemnification of Xxxxxxx
Equities. Pacific Office hereby agrees to pay, protect, defend
and save Xxxxxxx Equities harmless from and against, and hereby indemnifies
Xxxxxxx 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
any time be incurred by, imposed upon or awarded against Xxxxxxx Equities as a
result of:
(a) the
failure by Pacific Office to cause the entire $15,000,000 principal amount of
the Certificate of Deposit and all accrued interest to be disbursed to Xxxxxxx
Equities upon the Maturity Date of the Line of Credit, the term Maturity Date
being defined in the Credit Agreement described in recital 1 above, which Credit
Agreement and other documents evidencing and/or securing the Line of Credit are
being amended by the Amendment to Loan Documents (the Credit Agreement, as
amended by the Amendment to Loan Documents, being referred to hereinafter as the
"Loan
Agreement");
(b) any
Event of Default or failure to perform by Pacific Office under any of the Loan
Documents (as such terms are defined in the Loan Agreement), it being agreed by
Pacific Office and Xxxxxxx Equities that if all or any portion of the
Certificate of Deposit is withdrawn by the Lender and applied to the payment of
principal, interest and/or charges under the Line of Credit then, in addition to
any other right or remedy that Xxxxxxx Equities may have under the
Indemnification Agreement, as amended, and/or under the law, interest shall
accrue on any such amount that is withdrawn and be due and payable to Xxxxxxx
Equities at the rate of seven percent (7%) per annum from the date of the
withdrawal until paid by Pacific Office to Xxxxxxx Equities in
full;
(c) any
bankruptcy or similar proceeding affecting Pacific Office;
(d) any
cost or expense being incurred by Xxxxxxx Equities in connection with the pledge
to the Lender of the Certificate of Deposit, including, without limitation,
reasonable attorneys' fees; and
(e) any
cost or expense being incurred by Xxxxxxx Equities in connection with the
enforcement of the Indemnification Agreement, as amended, including, without
limitation, reasonable attorneys' fees.
The liability of Pacific Office under
the Indemnification Agreement, as amended, shall be direct and
immediate. Losses incurred by Xxxxxxx Equities shall be payable by
Pacific Office upon demand. Xxxxxxx Equities shall also be entitled
to appear in any action or proceeding to defend itself against any claim in
connection with the Line of Credit and/or the Certificate of Deposit, and all
costs and expenses incurred by Xxxxxxx Equities in so doing, including, without
limitation, reasonable attorneys' fees, shall be paid by Pacific Office on
demand.
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2. Fee to be Paid to Xxxxxxx
Equities. In consideration of Xxxxxxx Equities providing and
pledging to the Lender the Certificate of Deposit as described above, Pacific
Office agrees to pay to Xxxxxxx Equities an annual fee of two percent (2%) of
the entire $15,000,000 principal amount of the Certificate of Deposit, which
annual fee shall accrue, and shall be paid by Pacific Office to Xxxxxxx Equities
on a quarterly basis in arrears on the first day of January, the first day of
April, the first day of July and the first day of October of each year, until
the entire $15,000,000 principal amount of the Certificate of Deposit and all
accrued interest are disbursed to Xxxxxxx Equities.
3. Repayment of the Line of
Credit. Pacific Office and Xxxxxxx Equities hereby acknowledge
that the Line of Credit is to be repaid by Pacific Office and that Xxxxxxx
Equities has no obligation to the Lender and/or to Pacific Office to repay the
Line of Credit, in whole or in part.
4. Binding
Effect. The Indemnification Agreement, as amended, shall be
binding upon and inure to the benefit of Pacific Office, Xxxxxxx Equities and
their respective successors and assigns.
5. Enforcement. The
Indemnification Agreement, as amended, may be enforced in any federal or state
court in the City and County of Honolulu, State of Hawaii.
6. Hawaii
Law. The Indemnification Agreement, as amended, shall be
construed in accordance with the laws of the State of Hawaii."
Pacific Office and Xxxxxxx Equities
further agree that this Amendment may be executed in counterparts, all of which
taken together shall constitute one and the same instrument.
[REMAINDER
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IN
WITNESS WHEREOF, Pacific Office and Xxxxxxx Equities have executed this
Amendment as of the Effective Date.
PACIFIC
OFFICE PROPERTIES, L.P.,
a
Delaware limited partnership
a Maryland corporation
Its General Partner
By: /s/Xxxxx X.
Xxxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxxx
Title: Executive Vice
President
Pacific
Office
XXXXXXX
EQUITIES L.P.,
a Hawaii
limited partnership
By: Xxxxxxx
Equities Corp.,
a Hawaii corporation
Its General Partner
By: /s/Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: President
Xxxxxxx
Equities
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