AMENDED AND RESTATED ADVISORY AGREEMENT AMONG PACIFIC OFFICE PROPERTIES TRUST, INC., PACIFIC OFFICE PROPERTIES, L.P. AND PACIFIC OFFICE MANAGEMENT, INC. Dated as of March 3, 2009

Exhibit 10.1

AMENDED AND RESTATED

ADVISORY AGREEMENT

AMONG

PACIFIC OFFICE PROPERTIES TRUST, INC.,

PACIFIC OFFICE PROPERTIES, L.P.

AND

PACIFIC OFFICE MANAGEMENT, INC.

Dated as of March 3, 2009

AMENDED AND RESTATED
ADVISORY AGREEMENT

     THIS AMENDED AND RESTATED ADVISORY AGREEMENT (“Agreement”), made as of March 3, 2009, among PACIFIC OFFICE PROPERTIES TRUST, INC., a Maryland corporation (“POP”), PACIFIC OFFICE PROPERTIES L.P., a Delaware limited partnership (the “Operating Partnership”, and together with POP, the “Company), and PACIFIC OFFICE MANAGEMENT, INC., a Delaware corporation (the “Advisor”).

     WHEREAS, POP, through the Operating Partnership, owns, manages, and operates real estate assets;

     WHEREAS, POP is and intends to continue to be qualified as a “real estate investment trust” within the meaning of Section 856(a) of the Internal Revenue Code of 1986, as amended;

     WHEREAS, the Company retained the Advisor for the purpose of providing day-to-day management and administrative services to the Company as described in that certain Advisory Agreement, dated as of March 19, 2008, among POP, the Operating Partnership and the Advisor (the “Original Agreement”); and

     WHEREAS, the parties desire that the terms and conditions of the Original Agreement be amended and restated in their entirety pursuant to the terms of this Agreement;

     NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein set forth, the parties hereto agree as follows:

1. DEFINITIONS

	1.1		Definitions. As used in this Agreement, the following terms have the meanings set forth below.
			“Advisor” has the meaning set forth in the Preamble.
			“Advisor Affiliate” means the Advisor, Xxxxxxx West Investment Partners, L.P., Xxxxxxx Hawaii Investment Partners, LLC, and any entity Controlling, Controlled by or under common Control with the Advisor.
			“Corporate Management Fee” has the meaning set forth in Section 6.1.
			“Board” means the Board of Directors of POP.

“Cause” means: (i) the Advisor’s continuous and intentional failure to perform its duties under this Agreement after written notice from the Company to the Advisor of such non-performance; (ii) the Advisor’s commission of any act of gross negligence in the performance of its duties under this Agreement; (iii) the Advisor’s commission of any act of fraud, misappropriation of funds, or embezzlement against the Company; (iv) the Advisor’s commission of any other willful and intentional misconduct which is materially injurious to the Company, monetarily or otherwise; and (v) the Advisor’s default in the performance or observance of any material term, condition or covenant contained in this Agreement to be performed or observed on its part, when such default continues for a period of thirty (30) days after written notice thereof from the Company specifying such default and requesting that the same be remedied within such thirty (30) day period; provided, however, the Advisor shall have an additional sixty (60) days to cure any such foregoing default if (A) such default cannot reasonably be cured within thirty (30) days but can be cured within ninety (90) days, and (B) the Advisor shall have commenced to cure such default within the initial thirty (30) day period and thereafter diligently proceeds to cure the same within ninety (90) days of the date of the Company’s original notice of the default.

“Code” means Internal Revenue Code of 1986, as amended from time to time.

“Common Stock” means shares of POP’s common stock, $.0001 par value per share, or Class B common stock, $.0001 par value per share.

“Company” has the meaning set forth in the Preamble.

“Company Account” has the meaning set forth in Section 3.6.

“Company Property” means any real property owned or ground leased,, directly or indirectly, by the Company, including any joint venture or other interest in real property owned directly or indirectly by the Company.

“Control” means the direct or indirect ownership or more than 50% of the beneficial equity interests and ownership of a majority of the voting interests of an entity.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“GAAP” means generally accepted accounting principles in the United States of America as of the date applicable.

“Independent Directors” means the directors of POP; (a) who are not employees of either the Company, the Advisor or any of their respective subsidiaries, (b) are not directors of the Advisor, and (c) do not have a material financial interest in the Advisor.

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“LP Direction Votes” has the meaning set forth in Section 4.1.

“Master Agreement” means that certain Master Formation and Contribution Agreement by and between Arizona Land Income Corporation, an Arizona corporation, and POP Venture, LLC, a Delaware limited liability company, dated as of October 3, 2006, as subsequently amended.

“Net Book Value of the Company Property” means the gross cost basis of the Company Property, less the accumulated depreciation and amortization attributable to the gross cost basis of the Company Property in accordance with accounting principles generally accepted in the United States and as reflected and or derived from the consolidated financial statements of the Company as of a date relevant.

“Operating Partnership” has the meaning set forth in the Preamble.

“Partnership Agreement” means the Agreement of Limited Partnership of the Operating Partnership, as hereafter amended, supplemented and modified.

“Partnership Units” shall have the meaning ascribed thereto in the Partnership Agreement.

“Person” means any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.

“POP” has the meaning set forth in the Preamble.

“Property Management Agreements” has the meaning set forth in Section 2.2.

“Proportionate Voting Preferred Stock” means shares of Proportionate Voting Preferred stock, $.0001 par value per share, of POP issued to the Advisor.

“Records” has the meaning set forth in Section 3.7.1.

“Securities Act” means the Securities Act of 1933, as amended from time to time.

“SOX” means The Xxxxxxxx-Xxxxx Act of 2002, as amended from time to time.

“Subsidiary” has the following meaning: a Person is a Subsidiary of another Person if the voting interests of such subsidiary Person are more than 50% owned by such other Person or a majority of the outstanding equity interests of such subsidiary Person are owned, directly or indirectly, by such other Person.

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2. ENGAGEMENT BY COMPANY

2.1 Engagement of Advisor. Subject to the terms and conditions hereinafter set forth, the Company hereby engages the Advisor as its agent to manage, operate and administer the assets, liabilities and business of the Company and its Subsidiaries, and the Advisor hereby agrees to perform each of the duties set forth herein in accordance with the provisions of this Agreement. By the execution and delivery of this Agreement, each party represents and warrants that (i) it is duly organized, validly existing, in good standing under the laws of the state of its organization and has all requisite power and authority to enter into and perform its obligations under this Agreement, (ii) the person signing this Agreement for such party is duly authorized to execute this Agreement on such party’s behalf, (iii) the execution and delivery of this Agreement by such party and the performance by such party of its obligations hereunder do not violate any provisions of such party’s constituent documents, constitute a breach or default by any such party under any material agreement to which such party is a signatory or cause such party to violate any federal or state law, regulation or rule applicable to such party.

2.2 Engagement of Advisor Affiliates. For each Company Property, the Company, or the subsidiary or affiliate of the Company that is the owner or ground lessee of such Company Property, shall enter into a separate property management agreement (collectively, the “Property Management Agreements") with an Advisor Affiliate designated by the Advisor, pursuant to which the Advisor Affiliate shall be entitled to receive fees for property management services. All property management fees payable to the Advisor Affiliate pursuant to a Property Management Agreement shall be market-rate compensation based on the prevailing market rates for similar services provided on an arms-length basis in the area in which the subject property is located, and shall require the prior written approval of a majority of Independent Directors of the Board. Such Property Management Agreements may only be terminated by the Company effective upon termination of this Agreement and shall contain commercially reasonable and customary terms for such arrangements. Notwithstanding anything in this Section 2.2 to the contrary, in the case of a Company Property for which an Advisor Affiliate provides property management services pursuant to a written agreement (each, an “Existing Management Agreement") at the time such property becomes Company Property, such Existing Management Agreement shall continue to remain in full force and effect to the extent so provided in such Existing Management Agreement, and the Company shall not be obligated to enter into a Property Management Agreement pursuant to this Section 2.2 for so long as such Existing Management Agreement remains in full force and effect.

3. RESPONSIBILITIES, AUTHORITY AND RIGHTS OF ADVISOR

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3.1 General Responsibilities. Subject to the supervision of the Board, the Advisor shall:

3.1.1. Provide executive and administrative personnel, office space and office services required in rendering services to the Company;

3.1.2. Manage, operate and administer the Company’s day-to-day operations, business and affairs including, without limitation, the authority to oversee and conduct the Company’s investment activities in accordance with guidelines and policies adopted and implemented by the Board, monitor leases, mortgages and debt obligations, make payment of the Company’s debt and obligations, make payment of dividends or distributions to POP’s stockholders, maintain the appropriate back-office infrastructure to perform such administrative functions, and perform such other services to the Company as the Company may direct from time to time;

3.1.3. Serve as the Company’s consultant with respect to the periodic review of the investment criteria and parameters for the investments, borrowings and operations of the Company and make recommendations as to the foregoing to the Board for its approval;

3.1.4. Counsel the Company in connection with policy decisions to be made by the Board;

3.1.5. Use commercially reasonably efforts to cause expenses incurred by the Company or on its behalf to be reasonable and customary and within any budgeted parameters or expense guidelines set by the Board from time to time;

3.1.6. Make recommendations to the Board regarding the Company’s capital structure and capital raising activities;

3.1.7. Coordinate and manage operations of any joint venture or co-investment interests held by the Company, and conduct all matters on behalf of the Company within the joint venture or otherwise with co-investment partners.

3.1.8. Communicate on behalf of the Company with the Company’s investors, stakeholders, analysts and other interested parties, which communication shall include, but not be limited to, the maintenance of an investor relations program on behalf of the Company;

3.1.9. Handle and resolve all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which the Company may be involved or to which the Company may be subject arising out of the Company’s day-to-day operations, subject to such limitations or parameters as may be imposed form time to time by the Board;

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3.1.10. Evaluate and recommend to the Board potential hedging activities on the Company’s behalf, consistent with POP’s status as a real estate investment trust and with the Company’s investment guidelines;

3.1.11. Investigate, analyze and select possible investment opportunities and originate, acquire, finance, retain, sell, negotiate for prepayment, restructure or dispose Company investments consistent with the guidelines adopted and implemented by the Board;

3.1.12. Assist the Company in developing criteria for asset purchase commitments that are specifically tailored to the Company’s investment objectives and make available to the Company its knowledge and experience with respect to real estate and other real estate related assets;

3.1.13. Supervise, on the Company’s behalf, the Advisor Affiliates who provide, at the Company’s expense, property management services and other services pursuant to Property Management Agreements contemplated in Section 2.2;

3.1.14. Subject to the activities to be performed by the Advisor pursuant to Section 6.3, engage and supervise, on the Company’s behalf and at the Company’s expense, independent contractors who provide investment banking, mortgage brokerage, securities brokerage and other financial services and such other services as may be required relating thereto;

3.1.15. Invest or reinvest any of the Company’s money or securities, including investing in short-term opportunities pending deployment of capital in long-term opportunities.

3.1.16. Make recommendations to the Board regarding payment of fees, costs and expenses, and payments of dividends or distributions to the Company’s stockholders and limited partners;

3.1.17. Cause the Company to obtain appropriate credit facilities or other financings for the investments consistent with the guidelines adopted and implemented by the Board.

3.1.18. Cause the Company to obtain insurance covering such risks, with such insurers and on such terms as the Company may reasonably determine.

3.1. 19. Monitor the operating performance of the investments and provide periodic reports with respect thereto the Board.

3.1.20. Make recommendations to the Company regarding the retention of independent accountants and legal counsel, as applicable, to assist in developing appropriate accounting procedures, compliance procedures and testing systems with respect to financial reporting obligations and compliance with the real estate investment trust provisions of the Code and the regulations promulgated thereunder and to conduct quarterly compliance reviews with respect thereto;

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3.1.21. Assist the Company in complying with all regulatory requirements applicable to it in respect of the Company’s business activities, including preparing or causing to be prepared all consolidated financial statements required under applicable regulations and contractual undertakings and all reports and documents, if any, required under the Exchange Act;

3.1.22. Take all necessary actions to enable the Company to make required tax filings and reports, including soliciting stockholders for required information to the extent provided by the real estate investment trust provisions of the Code and the regulations promulgated thereunder.

3.1.23. Make recommendations to the Company regarding the maintenance of the Company’s qualification for taxation as a real estate investment trust and monitor compliance with the various real estate investment trust qualification tests and other rules set out in the Code and the Treasury Regulations promulgated thereunder and use commercially reasonable efforts to cause the Company to qualify for taxation as a REIT.

3.1.24. Counsel the Company regarding the maintenance of the Company’s exclusion from status as an investment company under the Investment Company Act of 1940, as amended, and monitor compliance with the requirements for maintaining such exclusion and using commercially reasonable efforts to cause the Company to maintain such exclusion from status as an investment company under the Investment Company Act;

3.1.25. Cause the Company to qualify to do business in all applicable jurisdictions and to obtain and maintain all appropriate licenses.

3.1.26. Perform such other services as may be required from time to time for management and other activities relating to the Company’s assets as the Board shall reasonably request or the advisor shall deem appropriate under the particular circumstances; and

3.1.27. Use commercially reasonable efforts to cause the Company to comply with all other applicable laws.

3.2 Authority. The Advisor shall have full discretion and authority pursuant to this Agreement to perform the duties and services specified in Section 3.1 hereof in such manner as the Advisor reasonably considers appropriate, subject to the terms and restrictions contained in POP’s Articles of Incorporation and Bylaws, as the same may be amended from time to time, and further subject to the Operating Partnership’s Certificate of Limited Partnership and the Partnership Agreement. In furtherance of the foregoing, POP and the Operating Partnership hereby designate and appoint the Advisor as the agent

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and attorney-in-fact of POP and the Operating Partnership, with full power and authority and without further approval of POP and the Operating Partnership, for purposes of accomplishing on its behalf any of the foregoing matters or any matters which are properly the subject matter of this Agreement. The Advisor may execute, in the name and on behalf of POP and the Operating Partnership and their affiliates, all such documents and take all such other actions which the Advisor reasonably considers necessary or advisable to carry out its duties hereunder.

3.3 Subcontract of Services. The Company acknowledges and agrees that any services to be performed by the Advisor hereunder may be provided pursuant to subcontracts with third party providers or pursuant to arrangements with affiliates of POP. In such connection, the Advisor shall disclose to the Board upon its request the terms of any sub-contracting arrangement entered into by the Advisor with third parties or affiliates of POP with respect to the services to be provided by the Advisor hereunder.

3.4 Reporting Requirements. As frequently as the Advisor may deem necessary or advisable, or at the direction of the Board, the Advisor shall prepare, or cause to be prepared, with respect to any investment (i) reports and information on the Company’s operations and asset performance, and (ii) other information reasonably requested by the Company.

3.5 Devotion of Time: Exclusivity. The Advisor will provide a management team to deliver the management services to the Company hereunder, with the members of such management team devoting such of their time to the management of the Company as the Advisor deems reasonably necessary and appropriate for the proper performance of all of the Advisor’s duties hereunder, commensurate with the level of activity of the Company from time to time. The Company shall have the benefit of the Advisor’s reasonable judgment and effort in rendering services and, in furtherance of the foregoing, the Advisor shall not undertake activities which, in its reasonable judgment, will substantially adversely affect the performance of its obligations under this Agreement. The Advisor shall at all times have and operate as its sole business the activities, the actions, services, responsibilities, obligations and business contemplated by this Agreement. The Advisor shall take all reasonable steps to ensure that all of its officers, directors and managers and any persons or entities (and any officers, directors and managers of any such entity) to which it subcontracts any of its services hereunder shall agree, as a condition to their acting in such capacities, to agree not to compete with the Company or utilize any of the Company’s confidential information to the detriment of the Company.

3.6 Bank Accounts. At the direction of the Board, the Advisor may establish and maintain, as an agent and signatory on behalf of the Company, one or more bank accounts in the name of the Company or any other Subsidiary (any such account, a “Company Account"), collect and deposit funds into any such Company Account and disburse funds from any such Company Account, under such terms and conditions as the Board may approve. The Advisor shall from time-to-time render appropriate accountings of such collections and payments to the Board and, upon request, to the auditors of the Company.

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3.7 Book and Records; Confidentiality.

3.7.1 Records. The Advisor shall maintain appropriate books of account and records relating to services performed by the Advisor pursuant to this Agreement (the “Records”), and the Records shall be accessible for inspection by representatives of the Company at any time during normal business hours. The Advisor shall have responsibility for the maintenance and safekeeping of the Records.

3.7.2. Confidentiality. The Advisor shall keep confidential any nonpublic information obtained in connection with the services rendered under this Agreement and shall not disclose any such information (or use the same except in furtherance of its duties under this Agreement), except (i) with the prior written consent of the Board; (ii) to legal counsel, accountants, and other professional advisors; (iii) to appraisers, financing sources and others in the ordinary course of the Company’s business; (iv) to governmental officials having jurisdiction over the Company; (v) in connection with any governmental or regulatory filings of the Company or disclosure or presentations to Company investors; or (vi) as required by law or legal process to which the Advisor or any Person to whom disclosure is permitted hereunder is a party. The foregoing shall not apply to information which has previously become available through the actions of a Person other than the Advisor not resulting from the Advisor’s violation of this Section 3.7.2. The provisions of this Section 3.7.2 shall survive the expiration or earlier termination of this Agreement for a period of two years.

3.8 Obligations of the Advisor; Restrictions.

3.8.1. Internal Control. The Advisor shall (i) establish and maintain (and require property managers and other contractors to establish and maintain) a system of internal accounting and financial controls, (including, without limitation, internal controls to safeguard records and to permit the Company to comply with the Exchange Act and SOX, and designed to provide reasonable assurance of the reliability of financial reporting, the effectiveness and efficiency of operations and compliance with applicable laws), (ii) maintain records for each Company investment on a GAAP basis, (iii) develop accounting entries and reports required by the Company to meet its reporting requirements under applicable laws, (iv) consult with the Company, with respect to proposed or new accounting/reporting rules identified by the Advisor or the Company, and (v) prepare quarterly and annual financial statements as soon after the end of each such period as may be reasonably requested and general ledger journal entries and other information necessary for the Company’s compliance with applicable laws, including Regulations S-X, the Exchange Act, Securities Act and SOX, in accordance with GAAP and cooperate with the Company’s registered public accounting firm in connection with the auditing or review of such financial statements, the cost of

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any such audit or review to be paid by the Company. Without limiting the generality of the foregoing, the Advisor shall permit the Company’s registered public accounting firm to review, audit and analyze the operations and controls of the Advisor to the extent required by such accounting firm in connection with any audit or review by such accounting firm of the internal controls of the Company.

3.8.2. Management Letters. The Advisor shall provide to the Company, within fifteen (15) days of receipt by the Advisor, communications formally issued and submitted (devoid of draft qualification and duly executed) by the independent accounting firm of the Company required under Statement of Auditing Standards No. 112: Communicating Internal Control Related Matters Identified in an Audit or any replacement or substituted requirement (the “Management Letter”). In addition, the Advisor shall provide to the Company, within 15 days of submission by the Advisor, communications formally issued and submitted (devoid of draft qualifications and duly executed) to the independent accounting firm of the Company in response to the Management Letter.

3.8.3. Restrictions. The Advisor shall refrain from taking any action which, in its judgment made in good faith, or in the judgment of the Board as transmitted to the Advisor in writing, (i) would adversely affect the status of the Company as a real estate investment trust as defined and limited in the Code or the regulations and rulings thereunder, or (ii) is not in compliance with the investment guidelines and policies established by the Board, or (iii) violates any law, ordinance, rule or regulation of any governing body or agency having jurisdiction over the Company or its securities or would otherwise not be permitted by the Company’s constituent documents, or (iv) would make the Company subject to the Investment Company Act of 1940, as amended. If the Advisor is ordered to take any such action by the Board, the Advisor shall promptly notify the Board of the Advisor’s judgment that such action would adversely affect such status or violate any such law, ordinance, rule or regulation or constituent documents, and shall refrain from taking such action pending further clarification or instructions from the Board. In any event, the Advisor, the Advisor Affiliates and Subsidiaries, and their respective members, stockholders, partners, managers, directors, officers, employees and agents shall have no liability to the Company or the Operating Partnership, the Board or any of the Company’s stockholders, members or partners for any such action, and the Advisor shall be indemnified by the Company for any such action. In all events, the Advisor, its directors, managers, officers, stockholders and employees shall not be liable to the Company, the Board or the Company’s stockholders for any act or omission by the Advisor, its directors, officers, managers, stockholders or employees taken in good faith except as set forth in Section 5.1.

4. PROPORTIONATE VOTING PREFERRED STOCK

4.1 Voting. The Advisor shall cast all votes with respect to the share of Proportionate Voting Preferred Stock in proportion to the votes (the “LP Direction Votes”) that the

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Advisor receives from the holders of Partnership Units (other than POP) entitled to vote with respect to the share of Proportionate Voting Preferred Stock. The Advisor shall not cast any votes with respect to the share of Proportionate Voting Preferred Stock unless it receives LP Direction Votes with respect thereto.

4.2 Voting Procedure. In order to give effect to the provisions of Section 4.1, the Advisor agrees to promptly deliver definitive proxy materials or other approved solicitation documents received from the Company as to any matter as to which votes or consents are sought by POP from the holder of Proportionate Voting Preferred Stock. In connection with such delivery, the Advisor shall not make any recommendation to any holder of Common Stock or Partnership Units with respect to how or whether such holder should vote its Common Stock or Partnership Units.

5. INDEMNIFICATION

5.1 Indemnity.

5.1.1. The Company shall indemnify, defend and hold harmless the Advisor, and its directors, officers, stockholders, affiliates, agents and employees (collectively, the “Advisor Indemnitees”) from and against any and all liability, claims, demands, expenses, fees, fines, suits, losses and causes of action of every kind and nature arising from the performance by the Advisor of its obligations under this Agreement, other than any liability, claim, demand, expense, fee, fine, suit, loss or cause of action arising from (i) any acts of the Advisor or the Advisor Indemnitees which are outside the scope of authority of the Advisor under this Agreement, unless the Advisor or the Advisor Indemnitees acted in good faith and reasonably believed that it or their conduct was within the scope of authority granted to the Advisor under this Agreement, or (ii) breach of any material term of this Agreement where such breach constitutes gross negligence or willful misconduct, or (iii) violation by the Advisor or the Advisor Indemnitees of any applicable laws, subject to the provisions of Section 3.8.3 hereinabove.

5.1.2. The Advisor shall indemnify, defend and hold harmless the Company, and its directors, officers, stockholders, affiliates, agents and employees (collectively, the “Company Indemnitees”) from and against any and all liability, claims, demands, expenses, fees, fines, suits, losses and causes of action of every kind and nature arising from any (i) acts of the Advisor which are outside the scope of authority of the Advisor under this Agreement, unless the Advisor or the Advisor Indemnitees acted in good faith and reasonably believed that it or their conduct was within the scope of authority granted to the Advisor under this Agreement, or (ii) breach of any material term of this Agreement where such breach constitutes gross negligence or willful misconduct, or (iii) violation by the Advisor or the Advisor Indemnitees of any applicable laws, subject to the provisions of Section 3.8.3 hereinabove.

5.2 Additional Costs; Survival. The obligation to indemnify set forth in Section 5.1 above shall include the payment of reasonable attorneys’ fees and investigation costs, as

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well as other reasonable costs and expenses incurred by the indemnified party in connection with any such claim. At the option of, and upon receipt of notice from, the indemnified party, the indemnifying party shall promptly and diligently defend any such claim, demand, action or proceeding. The provisions of Sections 5.1 and 5.2 hereof shall survive the expiration or earlier termination of this Agreement.

5.3 Insurance. The Advisor shall have the right to be named as an additional insured on all policies of liability insurance maintained by the Company including, without limitation, the Commercial General Liability, Comprehensive Automobile Liability, Errors and Omissions, Umbrella and Excess Liability Insurance policy. Certificates of Insurance evidencing compliance with the provisions of the immediately preceding sentence shall be furnished to the Advisor on request.

6. COMPENSATION

     The Advisor agrees to accept from the Company, and the Company agrees to pay to the Advisor, the compensation set forth on Exhibit A attached hereto and made a part hereof by reference (the “Compensation Schedule”), on the terms and conditions set forth herein, as full and complete consideration for all of the services to be rendered by the Advisor pursuant to this Agreement. Except as otherwise herein provided, the Advisor shall not be entitled to receive any other fees or compensation from the Company.

7. EXPENSES

     Except as expressly set forth herein, the Advisor shall be responsible for, and shall not be entitled to reimbursement from the Company for, any expenses incurred by the Advisor in connection with the performance of its obligations under this Agreement (the “Advisor Expenses”). By way of example, but not limitation, the Advisor shall not be entitled to reimbursement for office rent, equipment costs, telecommunications expenses, office supplies, travel costs, or labor costs incurred with respect to employees or subcontractors engaged by the Advisor.

     The Company shall be responsible for all direct expenses incurred by the Company or the Operating Partnership for certain services for which the Company or the Operating Partnership is the primary service obligee (the “Company Direct Expenses”). The Company Direct Expenses are as follows: (i) fees and related expenses attributable to services rendered by the independent accounting firm retained by the Company for the quarterly review and annual audit of the Company’s financial statements; and (ii) fees and related expenses attributable to services rendered by the internal control consultants of the Company for the design, implementation, testing and periodic monitoring of the Company’s internal control structure; and (iii) fees paid to the directors of the Company as compensation for their service on the Board; and (iv) insurance premiums incurred for directors’ and officers’ coverage for the directors and officers of the Company and (vi) fees and expenses of audit and audit related services, legal services, printer services and filing fees resulting from any capital raising efforts and initiatives.

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     The annual Corporate Management Fee, as set forth on the Compensation Schedule, shall be reduced by an amount equal to the annual Company Direct Expenses up to an amount equal to fifty percent (50%) of the Corporate Management Fee. The Company Direct Expenses, whether paid by the Company or paid by the Advisor and reimbursed to the Advisor by the Company, shall reduce the Corporate Management Fee for the quarter in which such Company Direct Expenses were incurred; provided, however, that the Corporate Management Fee shall not be reduced by more than fifty percent (50%) annually. The quarterly reduction of the Corporate Management Fee for Company Direct Expenses shall occur in the calendar quarter following the quarter in which the Company Direct Expenses were incurred.

8. TERM OF AGREEMENT; TERMINATION

8.1 Term. Subject to any early termination provisions expressly set forth in this Agreement, the term of this Agreement shall commence on the date set forth above and shall terminate on March 19, 2018.

8.2 Right of Termination.

8.2.1 The Company shall have the right to terminate this Agreement, with or without Cause at any time upon thirty (30) days’ prior written notice to the Advisor, by the vote of a majority of the Company’s Independent Directors. In the event that this Agreement is terminated by the Company for Cause, the Advisor shall be entitled only to payment of all earned and unpaid Fees, as set forth on the Compensation Schedule, through the date of termination and all accrued and unreimbursed Company Direct Expenses through the date of termination. In the event that this Agreement shall have been terminated by the Company for Cause, the Company shall have the right to offset any direct damages to the Company caused by the actions giving rise to such termination for Cause against any amount otherwise payable under this Section 8.2.

8.2.2. The Advisor may terminate this Agreement effective upon 30 days prior written notice of termination to the Company in the event that the Company shall default in the performance or observance of any material term, condition or covenant in this Agreement and such default shall not be cured within thirty (30) days after written notice thereof to the Company which notice shall specify the nature of such default.

8.3 Internalization Fee. In the event that the Company terminates this Agreement in order to internalize its management and become self-managed, the Company will be obligated to pay the Advisor an internalization fee equal to $1,000,000 plus all accrued and unreimbursed Company Direct Expenses owed pursuant to Section 7. The Advisor shall not be reimbursed for any termination fees or other amounts owing to any third party retained on a subcontract basis by the Advisor with regard to the services to be provided by the Advisor hereunder.

8.4 Continued Responsibility. Notwithstanding termination of this Agreement as provided above, the Advisor (i) shall continue to perform all of its obligations under Section 4 of this Agreement, and (ii) shall use its best efforts to perform its duties under this Agreement until the effective date of the termination of this Agreement.

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8.5 Responsibilities Upon Termination. Upon termination of this Agreement, the Advisor shall forthwith deliver the following to the Company, as applicable, on the effective date of termination:

8.5.1. A final accounting reflecting the balance of funds held on behalf of the Company as of the date of termination;

8.5.2. All files, records, documents and other property of any kind relating to the Company, including, but not limited to, computer records, contracts, leases, warranties, bank statements, rent rolls, employment records, plans and specifications, inventories, correspondence, tenant records, receipts, paid and unpaid bills or invoices, maintenance records;

8.5.3. Agreements to terminate all agreements with Advisor Affiliates and third parties retained on a subcontracting basis by the Advisor, in each case, with respect to the services to be provided by the Advisor hereunder; and

8.5.4. Evidence of the change of Advisor’s name to something that is not confusingly similar to “Pacific Office.”

9. MISCELLANEOUS PROVISIONS

9.1 Notice. Any notice required or permitted under this Agreement shall be in writing and shall be given by being delivered to the following addresses of fax numbers of the parties hereto:

To the Company:		Pacific Office Properties Trust, Inc.
		000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
		Xxxxx Xxxxxx, Xxxxxxxxxx 00000
		Attn:		Xxx Xxxxx and
				Xxxxxx Xxxxxxx
To the Advisor:		Pacific Office Management, Inc.
		000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
		Xxxxx Xxxxxx, Xxxxxxxxxx 00000
		Attn:		Xxx Xxxxx and
				Xxxxxx Xxxxxxx

or to such other address or fax number as may be specified from time to time by such party in writing.

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9.2 No Joint Venture. Nothing in this Agreement shall be construed to make the Company and the Advisor partners or joint venturers or impose any liability as such on either of them.

9.3 Release of Money or Other Property Upon Written Request. The Advisor agrees that any money or other property of the Company held by the Advisor under this Agreement shall be held by the Advisor as custodian for the Company and the Advisor’s records shall be clearly and appropriately marked to reflect the ownership of such money or other property by the Company. Upon the receipt by the Advisor of a written request signed by a duly authorized officer of the Company requesting the Advisor to release the Company any money or other property then held by the Advisor for the account of the Company under this Agreement, the Advisor shall release such money or other property to the Company within a reasonable period of time, but in no event later than thirty (30) days following such request. The Advisor, its directors, officers, managers, stockholders and employees will not be liable to the Company, any Subsidiary, any of their directors, officers, stockholders, managers, owners or partners for any acts or omissions by the Company in connection with the money or other property released to the Company in accordance with the terms hereof. The Company shall indemnify the Advisor and its Advisor Affiliates, officers, directors, stockholders, employees, agents and successors and assigns against any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever which arise in connection with the Advisor’s release of such money or other property to the Company in accordance with the terms of this Section 9.3.

9.4 Entire Agreement: Amendment. This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof. This Agreement shall not be amended or modified in any respect unless agreed to in writing by the Company and the Advisor.

9.5 Governing Law Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to principles of conflicts of law. The parties: (x) agree that any suit, action or legal proceeding relating to this Agreement shall be brought exclusively in any federal court located in California, if federal jurisdiction is available, and, otherwise, in any state court located in such state; (y) consent to the jurisdiction of each such court in any such suit, action or proceeding; and (z) waive any objection which they may have to the laying of venue in any such suit, action or proceeding in either such court. Further, the parties hereby consent and submit to the personal jurisdiction of the California courts, both state and federal, and hereby waive any and all objections now or hereafter existing to personal jurisdiction of said courts over them. The parties waive, to the extent permitted under applicable law, any right they may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this section.

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9.6 Assignment. This Agreement may not be assigned by any party hereto without the prior written consent of the other parties hereto; provided, however, that the Advisor shall be permitted to assign this Agreement or any of its rights hereunder, and delegate any and all of its responsibilities and obligations hereunder, to an Advisor Affiliate, provided that the Advisor shall remain fully responsible to the Company for all errors or omissions of such assignee notwithstanding and following such assignment.

9.7 No Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

9.8 Headings. The headings of various Sections in this Agreement are for convenience only, and are not to be utilized in construing the content or meaning of the substantive provisions hereof.

9.9 Pronouns and Plurals. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

9.10 Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

9.11 Binding Effect. This Agreement shall be binding upon and insure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

9.12 Counterparts. This Agreement may be executed in any number of identical counterparts, any of which may contain the signatures of less than all parties, and all of which together shall constitute a single agreement.

9.13 Partial Invalidity. The provisions hereof shall be deemed independent and severable, and the invalidity or partial invalidity or enforceability of any one provision shall not affect the validity or enforceability of any other provision hereof.

9.14 Fax Signatures. Any signature page hereto delivered by a fax machine or telecopy machine shall be binding to the same extent as an original signature page, with regard to any agreement subject to the terms hereof or any amendment thereto. Any party who delivers such a signature page agrees to later deliver an original counterpart to any party that requests it.

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9.15 Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party. Any reference to any federal, state, local or foreign statute or law, statute, rule or regulation will be deemed to also refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The use of the word “including” and similar expressions means “including without limitation” and unless the context otherwise requires, “neither,” “nor,” “any,” “either” and “or” shall not be exclusive. Unless otherwise noted, all references to sections, exhibits and schedules are to sections, exhibits and schedules to this Agreement. All words used in this Agreement shall be construed to be of such gender or number as the circumstances require. The parties hereto intend that each representation, warranty and covenant contained herein shall have independent significance. If any party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party has not breach shall not detract from or mitigate the fact that such party is in breach of the first representation, warranty or covenant. All references to agreements hereunder include all exhibits and schedules to such agreements and shall mean such agreements as they may be amended, restated, supplemented or otherwise modified from time to time.

[Remainder of page intentionally left blank]

(Signature page follows.)

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

		PACIFIC OFFICE PROPERTIES TRUST, INC.
		By:		/s/ Xxxxxx X. Xxxxx
				Xxxxxx X. Xxxxx
				President and Chief Executive Officer
		PACIFIC OFFICE PROPERTIES L.P.
		By:		PACIFIC OFFICE PROPERTIES TRUST, INC., its general partner
				By:		/s/ Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx
						President and Chief Executive Officer
		PACIFIC OFFICE MANAGEMENT, INC.
		By:		/s/ Xxxxxx X. Xxxxx
				Xxxxxx X. Xxxxx
				President and Chief Executive Officer

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SCHEDULE A

Pacific Office Management, Inc.
Fee Summary

Fee		Description
This Schedule A sets forth the fees that the Advisor shall earn and the Company shall pay in accordance with Section 6 of the Agreement.
Asset Acquisition Fees		1.0% of the total purchase price of the property acquired by the Company including, but not limited to, assets acquired and wholly-owned by the Company and assets acquired in a venture with a co-investment partner. In the event such assets are acquired in a joint venture in which the Company or the Operating Partnership is a member or partner, directly or indirectly, the Asset Acquisition Fee shall be an amount equal to 1.0% of the purchase price of the property acquired by such joint venture, subject to the provisions set forth below.
Asset Disposition Fees		1.0% of the total sale price of any Company Property disposed of including, but not limited to, wholly-owned properties sold to independent third-parties, wholly-owned properties contributed to a joint venture in which the Company is a partner or joint venture and properties that were owned by a joint venture with a third party co-investment partner. In the event such assets are sold by a joint venture in which the Company or the Operating Partnership is a member or partner, directly or indirectly, the Asset Disposition Fee shall be an amount equal to 1.0% of the total sale price of the property sold by such joint venture, subject to the provisions set forth below.
Equity Placement Fees
o      Co-Investment Capital (including any new joint venture program)		An amount equal to .50% of the total amount of co-investment equity capital procured.

o     Issuance of Equity Securities		An amount equal to .50% of the total gross offering proceeds including, but not limited to, the issuance of common shares, senior common shares, preferred shares, the private placement of equity securities and the issuance of Operating Partnership units.
Debt Placement Fees
o     Financing		.50% of the principal amount of any new indebtedness originated including, but not limited to, secured financings on new property acquisitions, refinancings and unsecured financings on existing properties that are wholly owned by the Company, and on properties owned in a joint venture with co investment partners or entity-level financings.
o     Credit Facilities		.50% of the amount available under any credit line available to the Company upon origination.
o     Public Issuance of Debt Instruments		.50% of the principal amount of any indebtedness issued.

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Pacific Office Management, Inc.
Fee Summary

Fee		Description
Management Fees
o     Corporate Management		An amount equal to .10% of the Net Book Value of the Company Property, but, in no event, less than $1,500,000. per annum, less Company Direct Expenses up to a maximum reduction of $750,000 per annum
o     Leasing		Rates consistent with the market in which the Company Property is located
o     Property Management		Fees equal to 2.5% to 4.5% of the Company Property revenue, consistent with the market in which each Company Property is located
Construction Management
o     Tenant Improvements		As specified in the Asset Management Agreement or Property Management Agreement applicable to each Company Property, but, in no event, greater than an amount equal to 5.00% of the cost of any tenant improvement construction project.
o     Building Improvements/Development		An amount equal to 2.5% of total project costs for any redevelopment or capital improvement project for a Company Property, plus any direct costs incurred by the Advisor in connection with providing the related services.

Notwithstanding any terms and conditions in this Agreement, including the Compensation Schedule, in the event the Advisor and/or the Independent Directors reasonably believe that any fees set forth herein should be adjusted in connection with a particular transaction, or in connection with certain of the services provided by the Advisor, then the Advisor and the Company agree to adjust such fees.

Notwithstanding any provision set forth in this Agreement, including the Compensation Schedule, all fees paid to the Advisor pursuant to this Agreement shall be consistent with the market in which the Company Property is located, and, to the extent the fees set forth in the Compensation Schedule are in excess of the applicable market rates, the Advisor and the Company agree to adjust such fees to reflect market rates.