Document:

exh10_3.htm

    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 233
Wilshire Boulevard, Suite 310, 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"), 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 is 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, 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 Shidler 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.           Shidler
Equities has agreed with Pacific Office that Shidler 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 Shidler 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 Shidler
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 Shidler Equities hereby agree that as of the Effective Date,
the Indemnification Agreement is 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 $15,000,000 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 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 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.

    

    
      
        
        

      

      
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    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 $15,000,000 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 $15,000,000 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.

    

    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 Amendment may be executed in counterparts, all of which
taken together shall constitute one and the same instrument.

    

    [REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
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      IN
WITNESS WHEREOF, Pacific Office and Shidler Equities have executed this
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/James R.
Ingebritsen

      Name: James R. Ingebritsen

      Title: Executive 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

      Name: Jay H. Shidler

      Title: President

      

      

      Shidler
Equities

      

      

      

      

      
        
           

        

        
          4$500,000 UNSECURED SUBORDINATED PROMISSORY NOTE

FOR VALUE RECEIVED, Environmental Solutions Worldwide, Inc., a Florida
corporation (hereinafter called "Borrower", "Maker" or the "Company"), hereby
promises to pay to Bengt G Odner with an address at [ ], (the "Lender" or
"Holder") or order, the sum of Five Hundred Thousand ($500,000) dollars, with
interest accruing at the annual rate of 9% upon the Company completing a
financing for the gross sum of $2 million dollars or more (the "Financing") or
in the event the Company does not complete a Financing by March 31, 2010, this
Note will be payable upon Demand of the Holder (as set forth herein). The
foregoing terms shall apply to this Unsecured Subordinated Promissory Note (the
"Note"):

                                    ARTICLE I
                               GENERAL PROVISIONS

         1.1 PAYMENT GRACE PERIOD. The Borrower shall have a twenty (20) day
grace period to pay the principal and interest due under this Note.

         1.2 PAYMENT TERMS. The Note principal and accrued interest shall be
payable upon the Company completing a Financing or in the event the Company does
not complete a financing by March 31, 2010, the Note will become a Demand Note
payable upon written demand being provided by the Lender to Maker in accordance
with Section 3.2 of this Note (the "Demand Date").

         1.3 INTEREST RATE. Interest payable on this Note shall accrue at the
annual rate of nine (9%) percent per annum and is payable on the Maturity Date
or any extension thereof unless otherwise provided for herein.

         1.4 ISSUANCE DATE. Shall be the date the Note is executed by the
Borrower as set forth below.

         1.5 RIGHT TO PRE-PAY. Borrower shall have the right to pre-pay this
Note at any time without penalty.

                                   ARTICLE II
                                EVENT OF DEFAULT

The occurrence of any of the following events of default ("Event of Default")
shall, at the option of the Holder hereof, make all sums of principal and
interest then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable in accordance with Article I, upon demand, without
presentment, or grace period, all of which hereby are expressly waived, except
as set forth below:

         2.1 BREACH OF COVENANT. The Borrower breaches any material covenant or
other term or condition of this Note in any material respect and such breach, if
subject to cure, continues for a period of twenty (20) days after written notice
to the Borrower from the Holder.

         2.2 BREACH OF REPRESENTATIONS AND WARRANTIES. Any material
representation or warranty of the Borrower made herein, or in any agreement,
statement or certificate given in writing pursuant hereto or in connection
therewith shall be false or misleading in any material respect as of the date
made.

         2.3 RECEIVER OR TRUSTEE. The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed.
<PAGE>

         2.4 JUDGMENTS. Any money judgment, writ or similar final process shall
be entered or filed against Borrower or any of its property or other assets for
more than fifty thousand ($50,000) dollars, and shall remain unvacated, unbonded
or unstayed for a period of thirty (30) days.

         2.5 BANKRUPTCY. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower and if
instituted against Borrower are not dismissed within thirty (30) days of
initiation.

         2.6 FAILURE TO DELIVER REPLACEMENT NOTE. Borrower's failure to timely
deliver if required a replacement Note.

         2.7 CROSS DEFAULT. A default by the Borrower of a material term,
covenant, warranty or undertaking of any other agreement to which the Borrower
and Holder are parties, or the occurrence of a material event of default under
any such other agreement, in each case, which is not cured after any required
notice and/or cure period

                                   ARTICLE III
                                  MISCELLANEOUS

         3.1 FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part
of Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

         3.2 NOTICES. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Borrower to: Environmental Solutions
Worldwide, Inc., 335 Connie Crescent, Concord Ontario L4K 5R2 with a copy by
telecopier only to: Baratta, Baratta & Aidala, LLP 546 Fifth Avenue, New York,
NY 10036, Attn: Joseph A. Baratta, Esq., telecopier number: (212) 750-8297, and
(ii) if to the Holder, to the name, address set forth on the front page of this
Note, with a copy by telecopier only to (INSERT LEGAL COUNSEL), telecopier
number: (INSERT FAX#).

         3.3 AMENDMENT PROVISION. The term "Note" and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.
<PAGE>

         3.4 ASSIGNABILITY. This Note shall be assignable by Holder upon Notice
to Maker and an assignment shall be binding upon the Borrower and its successors
and assigns, and shall inure to the benefit of the Holder and its successors and
assigns.

         3.5 COST OF COLLECTION. If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys' fees.

         3.6 GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of New York. Any action brought by either
party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York. Both parties and the individual
signing this Agreement on behalf of the Borrower agree to submit to the
jurisdiction of such courts. The prevailing party shall be entitled to recover
from the other party its reasonable attorney's fees and costs.

         3.7 MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.

         3.8 SUBORDINATION. This Note is subordinate to the Borrower's and/or
Borrower's wholly owned subsidiaries outstanding secured obligations.

         3.9 LEGAL REPRESENTATION. Holder warrants and represents that it has
been provided with sufficient opportunity to consult with its own legal and
financial advisors in connection with the transaction evidenced by this Note and
is not relying upon the Maker of this Note or legal or financial advisors of the
Maker in undertaking the transaction contemplated by this Note.

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an
authorized officer on this 29th day of December, 2009.

                                         ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

                                          By:________________________________
                                             Name:
                                             Title:
WITNESS:

-------------------------------

AGREED TO BY HOLDER:

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[                                         ]

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