Document:

EX10.19 LOC Amendment

Exhibit 10.19

475876.1     
AMENDMENT TO LOAN DOCUMENTS (2013)

THIS THIRD AMENDMENT TO LOAN DOCUMENTS (2013) (“Amendment”), dated December 31, 2013, but effective as of December 31, 2013, by and between FIRST HAWAIIAN BANK, a Hawaii corporation (the “Lender”), and PACIFIC OFFICE PROPERTIES, L.P., a Delaware limited partnership (the “Borrower”); and SHIDLER EQUITIES L.P., a Hawaii limited partnership (the “Pledgor”);

		
	W I T N E S S E T H
	T H A T:

WHEREAS, the Lender and the Borrower entered into that certain credit agreement (the “Credit Agreement”), dated September 2, 2009, relating to a credit facility (the “Credit Facility”) in the principal amount of $10,000,000.00 made by the Lender to the Borrower; and

WHEREAS, in connection therewith, the Borrower and the Lender executed certain “Loan Documents”, as defined in the Credit Agreement; and

WHEREAS, pursuant to that certain Amendment to Loan Documents dated December 31, 2009, the principal amount of the Credit Facility was increased to $15,000,000.00; and

WHEREAS, pursuant to that certain Second Amendment to Loan Documents dated May 25, 2010, the principal amount of the Credit Facility was increased to $25,000,000.00; and

WHEREAS, the Borrower has requested the Lender to further extend the maturity date of the Credit Facility to December 31, 2015; and

WHEREAS, the Lender is willing to comply with such request, upon and subject to the terms and conditions hereinafter set forth; and

WHEREAS, as of December 31, 2013, the outstanding principal balance of the Credit Facility was $25,000,000.00;

NOW, THEREFORE, the Lender and the Borrower hereby agree as follows:

1.    Definitions. All capitalized terms used herein, unless otherwise defined herein, shall have the same meanings as those ascribed to them in the Credit Agreement.

2.    Representations and Warranties. As an essential inducement to the Lender to execute this Amendment, the Borrower hereby repeats, reaffirms and incorporates herein by reference all of the representations and warranties contained in Section 3 of the Credit Agreement.

3.    Amendment of Loan Documents. The Loan Documents are hereby amended as follows:

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(a)    The Maturity Date of the Credit Facility shall be December 31, 2015, or the date, following the occurrence of an Event of Default, on which the Lender notifies the Borrower that the entire Principal Balance, together with all accrued interest thereon, the amount of all outstanding Letters of Credit, and all fees, charges and expenses, and all other sums payable under the Credit Agreement, the Note and the other Loan Documents, shall become due and payable.

(b)    As used in the Credit Agreement and the other Loan Documents, the term “Maturity Date” shall mean the Maturity Date described in Paragraph 3(a) of this Amendment.

4.    Delivery of Related Documents. The Borrower shall deliver to the Lender on or before the closing of this Amendment, the following documents, all of which shall be in form and substance satisfactory to the Lender and its counsel:

(a)    Certificate of Secretary of Pacific Office Properties Trust, Inc., authorizing the Borrower to enter into and execute this Amendment.

(b)    Certificate of Secretary of Shidler Equities Corp., authorizing the Pledgor to consent to and execute this Amendment.

(c)    The Borrower shall have executed and delivered to the Lender a Compliance Certificate in the form of Exhibit “1” attached hereto and made a part hereof.

(d)    The Borrower shall have delivered to the Lender, and the Lender shall have approved (a) an opinion of legal counsel for the Borrower, in substantially the form set forth in Exhibit  “2” attached hereto and made a part hereof, and (b) an opinion of legal counsel for the Pledgor, in substantially the form set forth in Exhibit “3” attached hereto and made a part hereof.

(e)    The Borrower shall have delivered to the Lender and the Lender shall have satisfactorily reviewed recent financial statements of the Pledgor.

5.    Conformance. The Loan Documents are hereby amended to conform with this Amendment, but in all other respects such provisions are to be and continue in full force and effect.

6.    Continuance of Security. The performance of the obligations of the Borrower under the Loan Documents, as herein amended, shall be fully secured by and entitled to the benefits of all of the security documents agreements described in the Credit Agreement and the other Loan Documents, and any modifications, extensions, renewals or replacements thereof.

7.    Continuing Pledge. Pledgor hereby consents to the foregoing amendments, reaffirms its obligations under the Pledge, as amended by this Amendment, and covenants that the execution and delivery of this Amendment shall not in any way affect, impair or diminish its obligations under the Pledge.

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8.    No Offsets.  As of the date hereof, the Borrower has no claims, defenses or offsets against the Lender or against the Borrower’s obligations under the “Loan Documents”, as herein amended, whether in connection with the negotiations for or closing of the Credit Facility, of prior amendments of the Credit Facility, of this Amendment, or otherwise, and if any such claims, defenses or offsets exist, they are hereby irrevocably waived and released.  As of the date hereof, the Pledgor has no claims, defenses or offsets against the Lender or against the Pledgor’s obligations under the Pledge, whether in connection with the negotiations for or closing of the Credit Facility, of prior amendments of the Credit Facility, of this Amendment, or otherwise, and if any such claims, defenses or offsets exist, they are hereby irrevocably waived and released.

9.    No Waiver. This Amendment is made on the express condition that nothing herein contained shall in any way be construed as affecting, impairing or waiving any rights of the Lender under any of the Loan Documents, as herein amended.

10.    Entire Agreement. This Amendment incorporates all of the agreements between the parties relating to the amendment of the Loan Documents and supersedes all other prior or concurrent oral or written letters, agreements or understandings relating to such amendment.  This Amendment shall constitute and be deemed amendments to any inconsistent provisions of any commitment letter issued by the Lender to the Borrower in connection with the amendment to the Loan Documents, and, upon the execution of this Amendment, any such commitment letter shall be deemed superceded by this Amendment and cancelled.

11.    Headings. The headings of paragraphs and subparagraphs herein are inserted only for convenience and reference, and shall in no way define, limit or describe the scope or intent of any provisions of this Amendment.

12.    Governing Law; Severability. This Amendment is executed and delivered, and shall be construed and enforced, in accordance with and governed by the laws of the State of Hawaii.  If any provision of this Amendment is held to be invalid or unenforceable, the validity or enforceability of the other provisions of this Amendment shall remain unaffected.

13.    Submission to Jurisdiction; Waiver of Jury Trial. The Borrower hereby irrevocably and unconditionally submits, but only for the purposes of any action or proceeding which the Lender may bring to enforce any of the Loan Documents, as amended herein, to the jurisdiction of the courts of the State of Hawaii and the United States District Court for the District of Hawaii.  Such submission to such jurisdiction shall not prevent the Lender from commencing any such action or proceeding in any other court having jurisdiction.  The Borrower hereby knowingly, voluntarily and intentionally waives any right it may have to a jury trial in any legal proceeding which may be hereinafter instituted by the Lender or the Borrower to assert any of their respective claims arising out of or relating to any of the Loan Documents or any other agreement, instrument or document contemplated thereby. In such event, the Borrower, at the request of the Lender, shall cause its attorney of record to effectuate such waiver in compliance with the Hawaii Rules of Civil Procedure, as the same may be amended from time to time.

14.    Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same 

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instrument, and in making proof of this Amendment, it shall not be necessary to produce or account for more than one such counterpart.

15.    Expenses. The Borrower shall pay all expenses incurred by the Lender in negotiations for and documentation of this Amendment and the satisfaction of the conditions thereof, including, but not limited to, fees and expenses of legal counsel for the Lender (and each participant in, or purchaser of, the Credit Facility), and any other costs incurred by the Lender in connection with any of the matters described in this Amendment.

16.    Binding Effect. This Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that Borrower shall not assign this Amendment or any of the rights, duties or obligations of Borrower hereunder without the prior written consent of Lender.

17.    Compliance with OFAC Restrictions. The Lender and the Borrower are obligated to comply with the laws and regulations administered by the United States Office of Foreign Assets Control (“OFAC”), referred to as “OFAC Restrictions”.  In order to comply with OFAC Restrictions, the Lender may be required to temporarily suspend processing a transaction, which may result in delayed availability of funds, or may be prohibited from closing a transaction altogether.  The Borrower agrees to the foregoing, and further agrees that if the Lender is required by applicable OFAC Restrictions to suspend processing a transaction, or is prohibited from by applicable OFAC Restrictions from closing a transaction, the Lender will not be liable for any damages of any kind or nature (including, without limitation, actual, consequential, special, incidental, punitive, or indirect damages, whether arising out of claims for “lender liability” or any other cause), which the Borrower may suffer or incur in connection with such suspension of, or failure to close, a transaction.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment the day and year first above written.

FIRST HAWAIIAN BANK

By    /s/ Jan M. Sam    
Its Assistant Vice President

Lender

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PACIFIC OFFICE PROPERTIES, L.P.
a Delaware limited partnership

By    Pacific Office Properties Trust, Inc.
a Maryland corporation
Its General Partner

By    /s/ Lawrence J. Taff    
Its President/Chief Executive Officer

Borrower

SHIDLER EQUITIES L.P.

By    Shidler Equities Corp.
Its General Partner

By    /s/ Lawrence J. Taff    
Its Secretary

“Pledgor”

5EX10.22 Indemnification Amendment

Exhibit 10.22

THIRD AMENDMENT TO INDEMNIFICATION AGREEMENT

THIS THIRD AMENDMENT TO INDEMNIFICATION AGREEMENT (“Third Amendment”) is made as of December 31, 2013 (the “Effective Date”), by PACIFIC OFFICE PROPERTIES, L.P., a Delaware limited partnership, whose address is 841 Bishop Street, Suite 1700, Honolulu, Hawaii 96813 (“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 (together with any successor, assign or replacement lender, 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 Shidler Equities on the condition that Pacific Office indemnify Shidler Equities from any and all losses and expenses incurred by Shidler Equities in connection with the pledge of the certificate of deposit, which indemnification of Shidler Equities was set forth in that certain Indemnification Agreement dated September 2, 2009, executed by Pacific Office in favor of Shidler Equities (the “Indemnification Agreement”).

3.     At the request of Pacific Office, (i) the Lender 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 Shidler Equities (the “First Amendment to Loan Documents”), which terms required the principal amount of the certificate of deposit to be increased from $10,000,000 to $15,000,000, and (ii) Shidler Equities agreed 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, and in connection with such increase, Pacific Office and Shidler Equities agreed to amend the Indemnification Agreement to obligate Pacific Office for any and all losses and expenses incurred by Shidler Equities as a result of the pledge of the certificate of deposit, as increased to $15,000,000, such amendment having been set forth in that certain Amendment to Indemnification Agreement dated December 31, 2009, executed by Pacific Office and Shidler Equities (the “First Amendment to Indemnification Agreement”).

4.     At the request of Pacific Office, the Lender agreed to an additional increase in the principal amount of the line of credit from $15,000,000 to $25,000,000, on the terms of that certain Second Amendment to Loan Documents dated May 25, 2010, executed by the Lender, Pacific Office and Shidler Equities (the “Second Amendment to Loan Documents”), which terms require the principal amount of the certificate of deposit to be increased from $15,000,000 to $25,000,000 (such certificate of deposit in the original principal amount of $10,000,000, as

increased to $15,000,000, as further increased to $25,000,000 and/or any replacement, substitute or additional certificate of deposit or other collateral provided and pledged or encumbered by or at the direction of Shidler Equities to the Lender being referred to hereinafter as the “Certificate of Deposit”); and (ii) Shidler Equities agreed to provide and pledge to the Lender the required funds to increase the principal amount of the Certificate of Deposit from $15,000,000 to $25,000,000, and in connection with such increase, Pacific Office and Shidler Equities agreed to further amend the Indemnification Agreement to obligate Pacific Office for any and all losses and expenses incurred by Shidler Equities as a result of the pledge of the Certificate of Deposit, as increased to $25,000,000, such amendment having been set forth in that certain Second Amendment to Indemnification Agreement dated as of May 25, 2010, executed by Pacific Office and Shidler Equities (the “Second Amendment to Indemnification Agreement”).

5.     At the request of Pacific Office, the Lender has agreed to extend the scheduled maturity of the Line of Credit (as defined below) from December 31, 2013 to December 31, 2015, on the terms of that certain Third Amendment to Loan Documents dated as of December 31, 2013, executed by the Lender, Pacific Office and Shidler Equities (the “Third Amendment to Loan Documents”).

6.     Shidler Equities has agreed with Pacific Office that Shidler Equities will continue to provide and pledge to the Lender the Certificate of Deposit to the extent required by the Lender, on the condition that the Indemnification Agreement, as amended by the First Amendment to Indemnification Agreement and the Second Amendment to Indemnification Agreement, is further amended, in its entirety, as set forth below.

NOW, THEREFORE, to induce Shidler Equities to continue to provide and pledge to the Lender the Certificate of Deposit in the principal amount of $25,000,000, as security for the obligation of Pacific Office to repay the line of credit, as increased from $10,000,000  to $15,000,000, and as further increased from $15,000,000 to $25,000,000 (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 Shidler Equities hereby agree that as of the Effective Date, the Indemnification Agreement, as amended by the First Amendment to Indemnification Agreement and the Second Amendment to Indemnification Agreement, is further amended, in its entirety, to provide 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 any time be incurred by, imposed upon or awarded against Shidler Equities as a result of:

(a)     the failure by Pacific Office to cause the entire $25,000,000 principal amount of the Certificate of Deposit and all accrued interest to be disbursed to Shidler 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 were amended by the First Amendment to Loan

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Documents and the Second Amendment to Loan Documents and are being further amended by the Third Amendment to Loan Documents (the Credit Agreement, as amended by the First Amendment to Loan Documents, and as further amended by the Second Amendment to Loan Documents and the Third 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 Shidler 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 Shidler 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 Shidler Equities at the rate of seven percent (7%) per annum from the date of the withdrawal until paid by Pacific Office to Shidler Equities in full;

(c)     any bankruptcy or similar proceeding affecting Pacific Office;

(d)     any cost or expense being incurred by Shidler 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 Shidler 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 Shidler Equities shall be payable by Pacific Office upon demand.  Shidler 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 Shidler Equities in so doing, including, without limitation, reasonable attorneys’ fees, shall be paid by Pacific Office on demand.

2.     Fee to be Paid to Shidler Equities.  In consideration of Shidler Equities providing and pledging to the Lender the Certificate of Deposit as described above, Pacific Office agrees to pay to Shidler Equities an annual fee of two percent (2%) of the entire $25,000,000  principal amount of the Certificate of Deposit, which annual fee shall accrue, and shall be paid by Pacific Office to Shidler 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 $25,000,000 principal amount of the Certificate of Deposit and all accrued interest are disbursed to Shidler Equities.

3.     Repayment of the Line of Credit.  Pacific Office and Shidler Equities hereby acknowledge that the Line of Credit is to be repaid by Pacific Office and that Shidler Equities has no obligation to the Lender and/or to Pacific Office to repay the Line of Credit, in whole or in part.

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4.    Binding Effect.  The Indemnification Agreement, as amended, shall be binding upon and inure to the benefit of Pacific Office, Shidler 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 Shidler Equities further agree that this Third Amendment may be executed in counterparts, all of which taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, Pacific Office and Shidler Equities have executed this Third Amendment as of the Effective Date.

PACIFIC OFFICE PROPERTIES, L.P., 
a Delaware limited partnership

		
	By:
	Pacific Office Properties Trust, Inc., 

a Maryland corporation
Its General Partner

		
	By:
	/s/ Kimberly F. Aquino    

Kimberly F. Aquino
Vice President

Pacific Office

SHIDLER EQUITIES L.P.,
a Hawaii limited partnership

		
	By:
	Shidler Equities Corp.,

a Hawaii corporation
Its General Partner

		
	By:
	/s/ Jay H. Shidler    

Jay H. Shidler
President

Shidler Equities

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