Exhibit 10.1

 
EXCHANGE AGREEMENT

THIS EXCHANGE AGREEMENT (this “Agreement”) dated as of September 23, 2009, is
made by and among the undersigned holders of promissory notes issued by Pacific
Office Properties, L.P., a Delaware limited partnership (the “Partnership”), and
the Partnership.

RECITALS

A.           Each of the undersigned (collectively, the “Transferors”) is or
will be, as of the Closing (as defined below), the holder of the promissory
notes, issued by the Partnership, described opposite their respective names on
Exhibit A hereto (the “Notes”).

B.           Subject to fulfillment of the terms and conditions set forth below,
each of the Transferors desires to transfer to the Partnership the Notes held by
such Transferor in exchange for the number of shares of common stock, par value
$0.0001 per share (“Company Common Stock”), of Pacific Office Properties Trust,
Inc., a Maryland corporation (the “Company”), that is the sole general partner
of the Partnership, set forth opposite their respective names on Exhibit A
hereto (the “Shares”), which Shares have been contributed by the Company to the
Partnership in connection with the transactions contemplated by this Agreement.

AGREEMENTS
 
In consideration of the mutual covenants contained herein, the parties hereto
agree as follows:
 
Section 1.                      Exchange.  Subject to and upon the terms and
conditions of this Agreement, each of the Transferors agrees to sell, transfer
and exchange at the Closing (as defined below) the Notes held by such Transferor
and set forth opposite such Transferor’s name on Exhibit A hereto for the number
of Shares set forth opposite such Transferor’s name on Exhibit A hereto, without
any further consideration to be exchanged by the parties (the “Exchange”).  Such
number of Shares has been calculated by dividing the indebtedness represented by
each Note (including principal and accrued interest through the Closing Date) by
$3.82, which represents the volume-weighted average closing market price per
share of the Company Common Stock on the NYSE Amex Equities exchange (the “NYSE
Amex”) for the thirty trading days preceding the date of this Agreement.  Each
of the Transferors agrees to deliver to the Partnership all of such Transferor’s
right, title and interest in and to the Notes held by such Transferor and all
documentation related thereto, and whatever documents of assignment, conveyance
and transfer may be necessary or desirable with respect thereto.  Such Notes
shall be cancelled, and the indebtedness represented thereby discharged, upon
consummation of the Exchange.  In return, the Partnership agrees to deliver to
each of the Transferors the number of Shares set forth opposite his name on
Exhibit A hereto.
 
 
 

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Section 2.                      Closing.  The closing of the Exchange (the
“Closing”) shall be effective as of the close of business on September 25, 2009,
or such other date as may be agreed between the Partnership and the Transferors
(the “Closing Date”).

Section 3.                      Conditions to Closing.

(a)           Conditions to Closing of the Partnership.  The Partnership’s
obligations at the Closing are subject to the fulfillment, on or prior to the
Closing Date, of all of the following conditions, any of which may be waived in
whole or part by all of the Transferors:

(i)           The representations and warranties made by each of the Transferors
in Section 4 of this Agreement shall be true and correct on the Closing Date;

(ii)           All required approvals of the Exchange by the NYSE Amex shall
have been received;

(iii)           The Company shall have received an opinion from Duff & Phelps as
to the valuation of its outstanding share of proportionate voting preferred
stock; and

(iv)           The Mutual Release and Cancellation of Note, to be entered into
as of the Closing Date between the Partnership and the Holder (as defined
therein), shall have been executed and delivered by each of the parties thereto.

(b)           Conditions to Closing of the Transferors.  Each Transferor’s
obligations at the Closing are subject to the fulfillment, on or prior to the
Closing Date, of all of the following conditions, any of which may be waived in
whole or part by the Partnership:

(i)            All required approvals of the Exchange by the NYSE Amex shall
have been received; and

(ii)           The Mutual Release and Cancellation of Note, to be entered into
as of the Closing Date between the Partnership and the Holder, shall have been
fully executed and delivered by each of the parties thereto.

Section 4.                      Representations of Transferors.  Each of the
Transferors hereby individually represents and warrants that:

(a)            Authority; Enforceability.  The Transferor has full power and
authority to enter into, execute, deliver and perform this Agreement and all
other agreements and instruments to be executed by the Transferor in connection
herewith.  All of such actions have been duly authorized and approved by all
persons or entities authorized to take such required action.  This Agreement
constitutes the legal, valid and binding obligation of the Transferor
enforceable against the Transferor in accordance with its terms except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
laws and subject to general principles of equity.
 
 
 

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(b)            Ownership of Notes.  As of the Closing, the Transferor is or will
be the sole legal owner of the Notes set forth opposite his name on Exhibit A
hereto.  Such Notes are free and clear of any mortgage, lien, pledge, charge,
security interest, encumbrance, title retention agreement, option, equity or
similar adverse claim thereto.  The Transferor has not, in whole or in part,
given any person or entity any transfer order, power of attorney or other
authority of any nature whatsoever with respect to such Notes which has not been
revoked or which is otherwise outstanding and effective as of the Closing.  No
action is pending or, to the Transferor’s knowledge, threatened, which would
contest the Transferor’s ownership of, or right to transfer, such Notes.
 
(c)            No Conflicts.  The execution and delivery of this Agreement, the
consummation of the Exchange and all of the other transactions contemplated
hereby will not result:

(i)            in a breach of any of the terms and provisions of or constitute a
default under any indenture, mortgage, deed or trust, or other agreement or
instrument to which the Transferor is a party; or

(ii)            in a violation of or default under any state or federal statute
or any of the rules or regulations applicable to the Transferor of any court or
of any federal and state regulatory body or administrative agency.

(d)            Sophistication and Affluence of Transferors.  Each Transferor is
either (i) an accredited investor as defined in the Securities Act of 1933, as
amended; (ii) a knowledgeable and experienced investor capable of evaluating the
merits and risks of the Exchange; or (iii) has retained a person who is
knowledgeable and experienced to represent him in this Exchange.  In any case,
the Transferor can afford the financial risk of an investment in shares of
Company Common Stock.

Section 5.                      Transferability of Shares.

(a)           No Registration.  The Shares to be issued to the Transferors as a
result of the Exchange will not be registered under the Securities Act of 1933,
as amended, nor is it currently contemplated that the Shares will be registered
at any time in the future.  By the execution of this Agreement and by acceptance
of certificates for the Shares pursuant to the terms of this Agreement, the
Transferors represent and warrant that each of them is acquiring the Shares for
investment only and not with a view to the further distribution or resale of
such Shares.

(b)           Legend.  Each certificate, if any, representing the Shares will
bear the following legend, which legend will further restrict the sale or
transfer of such Shares:

“The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended, or any applicable state law, and such shares
may not be sold or offered for sale in the absence of an effective registration
statement as to securities under the Securities Act of 1933, as amended, or an
opinion from counsel satisfactory to the company that such registration is not
required.”
 
 
 

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Section 6.                      Termination.  This Agreement may be terminated
at any time before the Closing at the election of the Partnership by giving
written notice to the Transferors.  Upon termination by written notice as
provided in this Section, this Agreement shall be void and of no further effect,
and there shall be no liability by reason of this Agreement or the termination
thereof on the part of either the Partnership, the Company or the directors,
officers, employees, agents, partners or stockholders of any of them.

Section 7.                      Counterparts.  This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.

Section 8.                      Notices.  All notices, requests, demands and
other communications which are required or permitted hereunder shall be in
writing and shall be deemed to have been duly given:  (a) when delivered
personally; (b) on the following business day when sent by overnight courier;
(c) on dispatch when sent by telecopy, so long as a copy of such communication
is immediately thereafter mailed as provided in this Section; and (d) when
mailed by first class mail, postage prepaid, to the main office of the
Partnership and to each Transferor at his respective address set forth on
Exhibit A hereto.
 
Section 9.                      Applicable Law.  This Agreement shall be
governed by the laws of the State of Delaware.

Section 10.                      No Implied Rights or Remedies.  Except as
otherwise expressly provided herein, nothing herein expressed or implied is
intended or shall be construed to confer upon or to give any person, other than
the Partnership and the Transferors, any rights or remedies under or by reason
of this Agreement.

Section 11.                      No Waiver.  No failure on the part of any of
the parties to this Agreement to exercise, no delay in exercising and no course
of dealing with respect to, any right or remedy under this Agreement will
operate as a waiver thereof.  No single or partial exercise of any right or
remedy under this Agreement will preclude any other further exercise thereof or
the exercise of any other right or remedy.

Section 12.                      Headings.  The headings in this Agreement are
inserted for convenience of reference only and shall not be a part of or control
or affect the meaning of this Agreement.

Section 13.                      Successors and Assigns.  This Agreement may not
be assigned without the written consent of all of its parties.  This Agreement
and all of its provisions shall be binding upon and inure to the benefit of the
parties and their respective successors, permitted assigns, heirs and legal
representatives.

 
 

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Section 14.                      Severability.  If any provision of this
Agreement shall be invalid or unenforceable, the other provisions of this
Agreement shall continue in full force, and the validity and enforceability of
such other provisions shall not be adversely affected.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

  PACIFIC OFFICE PROPERTIES, L.P.            By:  PACIFIC OFFICE PROPERTIES
TRUST, INC., its sole general partner          
 
By:
/s/ Lawrence J. Taff       Lawrence J. Taff       Chief Financial Officer      
   

 

TRANSFERORS:

  SHIDLER EQUITIES, L.P., a Hawaii limited partnership            By:  Shidler
Equities Corp., a Hawaii corporation          
 
By:
/s/ Jay H. Shidler       Name: Jay H. Shidler       Title: Its President    

 

  REYNOLDS PARTNERS, L.P., a Hawaii limited partnership            By:  JC
Reynolds, LLC, a Hawaii limited liability company, its general partner          
 
By:
/s/ James C. Reynolds       Name: James C. Reynolds            

  JRI EQUITIES, LLC, a California limited liability company          
 
By:
/s/ James R. Ingebritsen       Name:  James R. Ingebritsen       Title:  Its
Managing Member    

 

 
 

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  MJR EQUITIES, LLC, a California limited liability company          
 
By:
/s/ Matthew J. Root       Name:  Matthew J. Root       Title:  Its Managing
Member    

     
 
/s/ Lawrence J. Taff     Lawrence J. Taff        

 
 

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Exhibit A

 
 
Name & Address
 
 
Principal Amount of Notes to be Exchanged(1)
   
Number of Shares
of Company Common
Stock to be Received
                             
Shidler Equities, L.P.
  $ 1,237,107.00       323,850  
841 Bishop Street, Suite 1700
Honolulu, HI  96813
                                                   
Reynolds Partners, L.P.
  $ 765,925.28       200,504  
10188 Telesis Court, Suite 222
San Diego, CA  92121
                                                   
JRI Equities, LLC
  $ 337,103.54       88,247  
10188 Telesis Court, Suite 222
San Diego, CA  92121
                                                   
MJR Equities, LLC
  $ 337,103.54       88,247  
10188 Telesis Court, Suite 222
San Diego, CA  92121
                                                   
Lawrence J. Taff
  $ 337,103.54       88,247  
841 Bishop Street, Suite 1700
Honolulu, HI  96813
                                                   
TOTAL
  $ 3,014,342.90       789,095  

___________
(1)  Notes issued by the Partnership representing such Transferor’s interest in
the subordinated promissory note of the Partnership, dated as of August 14,
2008, held by STIRR SoCal Portfolio II, LLC, a Delaware limited liability
company, to be distributed to the Transferors pursuant to the Mutual Release and
Cancellation of Notes to be entered into as of the Closing Date.