THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

First Potomac Realty Trust (FPO)

4/12/2006 Proxy Information

Mr. Donatelli is the son of Louis T. Donatelli.

The Company’s Relationship with Donatelli & Klein, Inc.

The Chairman of our Board of Trustees, Louis T. Donatelli, beneficially owns 252,717 units of limited partnership interest (“Units”) in our operating partnership, First Potomac Investment Limited Partnership (i.e. the “Operating Partnership”). His Units are directly held and indirectly held through DKEPA#7 Partnership (“DKE#7”), a former limited partner of Plaza 500 Limited Partnership. DKE#7 is a general partnership composed of Donatelli & Klein (23.3%), Douglas J. Donatelli (33.3%), Louis Donatelli’s daughter (10%) and an employee of D&K (33.3%). Louis Donatelli is the Chairman and sole shareholder of Donatelli & Klein, Inc. (“D&K”). Plaza 500 Limited Partnership is a former limited partner of our operating partnership and became a unitholder in December 1997 when it contributed one of our initial properties, Plaza 500, to our operating partnership. By contributing Plaza 500 to our operating partnership in exchange for Units, Plaza 500 Limited Partnership was able to defer any taxable gain that it would have otherwise realized upon the transfer of Plaza 500. On or about January 26, 2005, Plaza 500 Limited Partnership distributed out its Units to its partners (“Plaza 500 Partners”), including Louis Donatelli and DKE#7. The Plaza 500 Partners continue to defer any taxable gain from the transfer of Plaza 500 to our operating partnership. Certain transactions that we might undertake with regard to Plaza 500 could cause the Plaza 500 Partners to recognize part or all of any taxable gain that has thus far been deferred. Messrs. Donatelli will have a conflict of interest in our Board’s consideration of any proposed disposition of Plaza 500 because of the tax liability that could be recognized by the Plaza 500 Partners. Thus, decisions with respect to that property may not fully reflect your interests.

In addition, Louis Donatelli could have a conflict of interest because of the nature of the business of D&K. D&K is a real estate development and investment firm primarily focused on developing multifamily properties. In the past, D&K has acquired, redeveloped or repositioned commercial real estate in the Washington, D.C. metropolitan area, and thus could potentially compete with the Company. Mr. Donatelli entered into an employment agreement and a non-compete agreement, with us in October 2003 under which, subject to certain limitations, he and his affiliates, including D&K, agreed not to compete with us in acquiring, operating and developing industrial and flex properties in the Mid-Atlantic region, during the term of his employment and for an additional two-year period following his termination of employment with the Company. On February 28, 2006, the Company entered into an agreement with Mr. Donatelli whereby Mr. Donatelli’s employment agreement and non-compete agreement were terminated and Mr. Donatelli became a non-employee Chairman of the Company. Mr. Donatelli’s ability to compete with us will continue to be subject to the Company’s Code of Business Conduct and Ethics while he is Chairman.

Sublease of Former Corporate Office Space to Donatelli & Klein, Inc.

The Company moved its corporate headquarters in Bethesda, Maryland from 7200 Wisconsin Avenue to 7600 Wisconsin Avenue in August 2005. In September 2005, the Company subleased a portion of its former offices to D&K. The Company believes the space is sub-leased at market terms. Rent due under the terms of the sublease approximates $200,000 annually over the remaining five-year term of the original lease. The Company remains obligated as primary lessee under the terms of the original lease.

Merger of First Potomac Management, Inc. into the Company On February 28, 2006, the Company entered into an Agreement and Plan of Merger with First Potomac Management, Inc., (“FPM, Inc.”) and FPM Inc.’s stockholders, the Company’s Chairman, Louis T. Donatelli, four members of the Company’s senior management team, Douglas J. Donatelli, Nicholas R. Smith, James H. Dawson and Barry H. Bass, and a former officer of the Company, Kyung Rhee (“the Merger Agreement”). In connection with the Company’s initial public offering in October 2003, FPM, Inc. contributed all of its assets, including the property management contracts with the Operating Partnership, to First Potomac Management LLC (“FPM LLC”), in exchange for 100% of the membership interests in FPM LLC. FPM, Inc. then contributed those membership interests in FPM LLC to our Operating Partnership in exchange for 233,333 Units. FPM, Inc. has held these Units since October 2003. Pursuant to the Merger Agreement, effective March 9, 2006, FPM, Inc. merged with and into the Company (the “Merger”). In connection with the Merger, the shareholders of FPM, Inc. received 233,333 Common Shares in exchange for the 233,333 Units as follows: Louis Donatelli, 85,049 shares, Douglas Donatelli, 66,150, Nicholas Smith, 37,800 shares, James Dawson, 21,000 shares, Barry Bass, 11,667 shares, and Kyung Rhee, 11,677 shares. The Merger was approved unanimously by a vote of the independent and disinterested members of the Company’s Board of Trustees. Purchase of Operating Partnership Units In October 2002, prior to our initial public offering, our Operating Partnership issued 6,978 Units to Chief Financial Officer, Mr. Barry H. Bass for $14.07 per Unit. Mr. Bass purchased the Units with a combination of cash and a promissory note in the original principal amount of $68,173, maturing in July 2006 and bearing interest at 6% annually. As of March 13, 2006, the principal balance on the note was $6,313. Certain Other Relationships Certain other of our trustees and executive officers beneficially own Units as a result of contributions of properties and other assets to the Company: Douglas J. Donatelli (92,056 Units, or approximately 8.7% of the total number of Units issued and outstanding); Nicholas R. Smith (41,123 Units, or approximately 3.9%); Barry H. Bass (28,169 Units, or approximately 2.7%); James H. Dawson (11,385 Units, or approximately 1.1%); and Robert H. Arnold (37,948 Units owned by R.H. Arnold Company, LLC, or approximately 3.6%). These trustees and executive officers may have conflicting duties because, in their capacities as our trustees and executive officers, they have a duty to the Company, while at the same time, in our capacity as general partner of the Operating Partnership, they have a fiduciary duty to the limited partners. Conflicts may arise when the interests of our shareholders and the limited partners of the Operating Partnership diverge, particularly in circumstances in which there may be an adverse tax consequence to the limited partners, such as upon the sale of assets or the repayment of indebtedness. The partnership agreement of the Operating Partnership contains a provision that in the event of a conflict of interest between our shareholders and the limited partners of our Operating Partnership, we shall endeavor in good faith to resolve the conflict in a manner not adverse to either our shareholders or the limited partners of our Operating Partnership, and, if we, in our sole discretion as general partner of the Operating Partnership, determine that a conflict cannot be resolved in a manner not adverse to either our shareholders or the limited partners of our Operating Partnership, the conflict will be resolved in favor of our shareholders. In addition, our Board of Trustees has adopted a policy that any disposition of property controlled by a trustee, or in which a trustee has an interest, must be approved by a unanimous vote of the disinterested trustees.