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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">UNITED
STATES</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECURITIES
AND EXCHANGE COMMISSION</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
D.C. 20549</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FORM
8-K</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CURRENT
REPORT</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to Section 13 or 15(d) of</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Securities Exchange Act of 1934</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date of
Report (Date of earliest event reported):&#160;July 1, 2009</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">PACIFIC
      OFFICE PROPERTIES TRUST, INC.</font></div>
                  </td>
                </tr>
                <tr>
                  <td valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(Exact
      name of registrant as specified in its
charter)</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Maryland</font></div>
                  </td>
                  <td valign="top" width="30%" style="BORDER-BOTTOM: black 2px solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">001-9900</font></div>
                  </td>
                  <td valign="top" width="30%" style="BORDER-BOTTOM: black 2px solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">86-0602478</font></div>
                  </td>
                </tr>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(State
      or other jurisdiction</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(Commission</font></div>
                  </td>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(IRS
      Employer</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">of
      incorporation)</font></div>
                  </td>
                  <td valign="top" width="30%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">File
      Number)</font></div>
                  </td>
                  <td valign="top" width="30%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Identification
      No.)</font></div>
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                  <td valign="top" width="60%" style="BORDER-BOTTOM: black 2px solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">233
      Wilshire Blvd.</font></div>
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Suite
      830</font></div>
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Santa
      Monica, California</font></div>
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                  <td valign="top" width="30%" style="BORDER-BOTTOM: black 2px solid">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">90401</font></div>
                  </td>
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      of principal executive offices)</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(Zip
      Code)</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(310)
395-2083</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(</font>Registrant&#8217;s telephone
number, including area code)</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
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      applicable</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(Former
      name or former address, if changed since last
  report.)</font></div>
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                </tr>
            </table>
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div><br>
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        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
8.01.&#160;Other Events.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
current report on Form 8-K is being filed for the purpose of providing a
description of the common stock of Pacific Office Properties Trust, Inc. (the
&#8220;Company&#8221;).&#160;&#160;We may incorporate by reference the description of our
common stock set forth below into future registration statement filings that we
make under the Securities Act of 1933, as amended, in lieu of incorporation by
reference of a description of the common stock contained in a registration
statement filed under the Securities Exchange Act of 1934, as
amended.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DESCRIPTION
OF COMMON STOCK</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following description of our common stock contains a summary of the material
provisions of our amended and restated charter and our amended and restated
bylaws, as well as certain provisions of Maryland law.&#160;&#160;This
description does not purport to be complete and is subject to and qualified in
its entirety by reference to Maryland law and to our amended and restated
charter and amended and restated bylaws.&#160;&#160;Copies of our amended and
restated charter and our amended and restated bylaws will be filed as exhibits
to the registration statement into which this summary is incorporated by
reference or as exhibits to documents filed under the Securities Exchange Act of
1934, as amended, that are incorporated by reference into the registration
statement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a name="break101">General</a></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We are
currently authorized to issue 300,200,000 shares of stock, consisting of
200,200,000 shares of our common stock, par value $0.0001 per share, 200,000,000
of which are shares of common stock listed on the NYSE Amex under the symbol
&#8220;PCE,&#8221; which we refer to as Listed Common Stock, and 200,000 of which are shares
of Class B Common Stock, and 100,000,000 shares of preferred stock, par value
$0.0001 per share. The aggregate par value of all authorized shares of stock is
$30,200. Our board of directors, without any action by our stockholders, may
amend our charter from time to time to increase or decrease the aggregate number
of shares of stock or the number of shares of stock of any class or series that
we have authority to issue.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our board
of directors may reclassify any unissued shares of our common stock in one or
more classes or series of stock. It may also classify any unissued shares of
preferred stock and reclassify any previously classified but unissued shares of
preferred stock of any series in one or more classes or series of stock by
setting or changing the preferences, conversion or other rights, voting powers,
restrictions, limitations on dividends or other distributions, qualifications or
terms or conditions of redemption of the stock. Except as may be provided by the
board of directors in setting the terms of classified shares of stock or as may
otherwise be provided by contract approved by our board of directors, no holder
of shares of stock has any preemptive right to purchase or subscribe for any
additional shares of our stock or securities. Additionally, under the Maryland
General Corporation Law, or the MGCL, our board of directors may authorize the
amendment of our charter, with the approval of a majority of our board of
directors and without stockholder approval, to effect a reverse stock split that
results in a combination of shares of stock at a ratio of not more than ten
shares of stock into one share of stock in any 12-month period.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
Stock</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Voting
Rights.&#160;&#160;</font>Subject to the preferences of any class or series of
stock classified or reclassified by our board of directors, each share of common
stock is entitled to one vote on each matter to be voted upon by our
stockholders. Generally, all matters to be voted on by stockholders must be
approved by a majority (or, in the case of election of directors, by a
plurality) of the votes cast by all shares of common stock and Proportionate
Voting Preferred Stock (as described below) present in person or represented by
proxy, voting together as a single class, subject to any voting rights granted
to holders of any preferred stock.&#160;&#160;Our charter does not provide for
cumulative voting.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Liquidation
Distributions.&#160;&#160;</font>In the event of our liquidation, the Class B
Common Stock is not entitled to any portion of our assets that are allocated to
holders of our common stock, all of which will be distributed to the holders of
Listed Common Stock, subject to the preferences of any class or series of stock
hereafter classified or reclassified by our board of
directors.&#160;&#160;Except with respect to this preference of liquidation
accorded to the Listed Common Stock, Listed Common Stock and Class B Common
Stock are identical in all respects.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Dividends.&#160;&#160;</font>Holders
of our common stock are entitled to receive such distributions as authorized
from time to time by our board of directors and declared by us out of legally
available funds, subject to any preferential rights of other classes of
stock.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Transfer Agent and
Registrar.&#160;&#160;</font>The transfer agent and registrar for our Listed
Common Stock is Computershare Investor Service.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">NYSE Amex
Listing.</font>&#160;&#160;Our Listed Common Stock is currently traded on the
NYSE Amex under the symbol &#8220;PCE.&#8221;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
Stock</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our board
of directors has the authority, without further action by the stockholders, to
issue preferred stock in one or more series and to fix the rights, designation,
preferences, privileges, limitations and restrictions thereof, including
dividend rights, conversion rights, terms and rights of redemption, liquidation
preferences and sinking fund terms (any or all of which may be greater than the
rights of the common stock or the Proportionate Voting Preferred Stock). The
board of directors, without stockholder approval, can issue shares of preferred
stock with conversion, voting and other rights which could adversely affect the
rights of the holders of shares of common stock. Other than the one share of
Proportionate Voting Preferred Stock issued to our Advisor, Pacific Office
Management, Inc., in connection with our formation transaction, we have not
issued any shares of preferred stock and currently have no plans to issue
additional preferred stock.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Proportionate
Voting Preferred Stock</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As a part
of the formation transactions, our board of directors classified from our
unissued shares of preferred stock, and caused us to issue, one share of
Proportionate Voting Preferred Stock, which may be increased only by resolution
approved by all of the members of our board of directors. Any shares of
Proportionate Voting Preferred Stock redeemed, purchased or otherwise acquired
by us in any manner whatsoever will cease to be outstanding and will become
authorized but unissued shares of preferred stock, without designation as to
class or series until such shares are once more classified and designated. The
shares of Proportionate Voting Preferred Stock are not convertible or
exchangeable for any other property or securities of ours.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Voting Rights. </font>Holders of
shares of the Proportionate Voting Preferred Stock are entitled to vote on all
matters for which our common stockholders are entitled to vote. The holders vote
together with the holders of shares of common stock as one class on all matters.
The number of votes that the Proportionate Voting Preferred Stock is entitled to
cast initially equals the number of shares of our Listed Common Stock issuable
upon the redemption of the common units, referred to as Common Units, of Pacific
Office Properties, L.P., our Operating Partnership, and convertible preferred
limited partnership units of our Operating Partnership, referred to as Preferred
Units following conversion to Common Units, issued in connection with our
formation transactions. As those Operating Partnership units are redeemed, the
number of votes that the Proportionate Voting Preferred Stock will be entitled
to cast will be decreased by an equivalent number. As of March 31, 2009, the
Proportionate Voting Preferred Stock was entitled to cast 46,173,693 votes on
all matters for which our common stockholders are entitled to
vote.&#160;&#160;Our Advisor has agreed to cast its Proportionate Voting
Preferred Stock votes on any matter in direct proportion to votes that are cast
by limited partners of our Operating Partnership holding the Common Units and
Preferred Units issued in the formation transactions.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Liquidation Preference. </font>In
the event of any liquidation, dissolution or winding up of our affairs, before
any of our assets are distributed, paid or set aside for the holders of any
equity securities ranking junior to the Proportionate Voting Preferred Stock as
to the distribution of assets upon our liquidation, dissolution or winding up,
we will pay to the holders of shares of Proportionate Voting Preferred Stock,
out of our assets legally available for distribution to our stockholders, the
sum of $0.01 per share for each share of Proportionate Voting Preferred Stock
held by each such holder. After such payment, the holders of the Proportionate
Voting Preferred Stock will have no right or claim upon any of our remaining
assets.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Dividends. </font>The holder of the
Proportionate Voting Preferred Stock is not entitled to any regular or special
dividend, including any dividend or other distribution declared or paid with
respect to the shares of our common stock or any other class or series of our
stock.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restrictions
on Size of Holdings of Shares</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
charter contains certain restrictions on the number of shares of capital stock
that individual stockholders may own. In order for us to qualify as a real
estate investment trust, or REIT, under the Internal Revenue Code of 1986, as
amended, or the Code, among other purposes, no person, other than a person
designated by the board of directors as an Excepted Holder, may either
beneficially or constructively own more than 4.9% in economic value of the
aggregate of the outstanding shares of capital stock, or 4.9% in economic value
or number of shares, whichever is more restrictive, of the aggregate of the
outstanding shares of common stock. Further, not more than 50% in value of our
outstanding capital stock may be owned, directly or indirectly, by five or fewer
individuals (defined in the Code to include certain entities) during the last
half of a taxable year (other than the first year), and such shares of capital
stock must be beneficially owned by 100 or more persons during at least 335 days
of a taxable year of 12 months (other than the first year) or during a
proportionate part of a shorter taxable year. See &#8220;Anti-Takeover Measures &#8211;
<font style="DISPLAY: inline; FONT-STYLE: italic">Ownership Limitations and
Restrictions on Transfer</font>&#8221; below.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Anti-Takeover
Measures</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
provisions of our charter and our bylaws and of Maryland law may have the effect
of delaying, deferring or preventing a change of control of us. These provisions
are described below.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Classified
Board</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
significant effect of a classified board of directors may be to deter hostile
takeover attempts because an acquirer would experience delay in replacing a
majority of the directors. However, a classified board will also make it more
difficult for stockholders to effect a change in control of the board of
directors, even if such a change in control is sought due to dissatisfaction
with the performance of the directors.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><a name="break132"><br></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
existence of a classified board may deter so-called &#8220;creeping acquisitions&#8221; in
which a person or group seeks to acquire: (i) a controlling position without
paying a control premium to the selling stockholders; (ii) a position sufficient
to exert control over the corporation through a proxy contest or otherwise; or
(iii) a block of stock with a view toward attempting to promote a sale or
liquidation or a repurchase by the corporation of the block at a premium, or an
exchange of the block for assets of the corporation. Faced with a classified
board of directors, such a person or group would have to assess carefully its
ability to control or influence the corporation. If free of the necessity to act
in response to an immediately threatened change in control, the board of
directors can act in a more careful and deliberative manner to make and
implement appropriate business judgments in response to a creeping
acquisition.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
believe that the staggered three-year terms, with the election of approximately
one-third of our directors each year, will help to assure the continuity and
stability of our long-term policies in the future and permit our board of
directors to more effectively represent the interests of all stockholders, since
approximately two-thirds of our directors at any given time will have prior
experience as directors of the Company. The division of directors into three
classes will have the effect of making it more difficult to change the overall
composition of the board. Our board of directors, however, believes that the
benefits of maintaining continuity on the board outweigh this
effect.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Business
Combinations</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Maryland
law prohibits a business combination between a corporation and any interested
stockholder or any affiliate of an interested stockholder for five years
following the most recent date upon which the stockholder became an interested
stockholder. A business combination includes a merger, consolidation, share
exchange or, in circumstances specified in the statute, an asset transfer or
issuance or reclassification of equity securities. Generally, an interested
stockholder is anyone who owns 10% or more of the voting power of the
corporation&#8217;s voting stock or an affiliate or associate of the corporation who,
at any time within the two-year period prior to the date in question, was the
beneficial owner of 10% or more of the voting power of the then outstanding
stock of the corporation. A person is not an interested stockholder under the
statute if the board of directors approved in advance the transaction by which
he otherwise would have become an interested stockholder. However, in approving
a transaction, the board of directors may provide that its approval is subject
to compliance, at or after the time of approval, with any terms and conditions
determined by the board. After the five-year period has elapsed, a corporation
subject to the statute may not consummate a business combination with an
interested stockholder unless (i) the transaction has been recommended by the
board of directors and (ii) the transaction has been approved by (a) 80% of the
votes entitled to be cast by holders of outstanding shares of voting stock of
the corporation and (b) two-thirds of the votes entitled to be cast by holders
of voting stock other than shares owned by the interested stockholder with whom
or with whose affiliate the business combination is to be effected or held by an
affiliate or associate of the interested stockholder. This approval requirement
need not be met if certain fair price and terms criteria have been
satisfied.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
statute permits various exemptions from its provisions, including business
combinations that are exempted by the board of directors before the time that
the interested stockholder becomes an interested stockholder. However, our
charter elects to be governed by the Maryland business combination provisions,
except that these provisions will not apply to any business combination that was
effected pursuant to the Master Formation and Contribution Agreement, dated
October 3, 2006, as amended, which we refer to as the Master Agreement, between
our predecessor and POP Venture, LLC, a Delaware limited liability company, or
pursuant to any agreement that was executed and delivered pursuant to the Master
Agreement or to the extent that the interested stockholder in such business
combination was Jay H. Shidler.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Control
Share Acquisitions</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Maryland
law provides that &#8220;control shares&#8221; of a Maryland corporation acquired in a
&#8220;control share acquisition&#8221; have no voting rights except to the extent approved
by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding shares of stock as to which the acquiring person, officers of the
corporation and employees of the corporation who are directors of the
corporation are entitled to exercise or direct the exercise (except solely by
virtue of a revocable proxy) of the voting power of the shares in the election
of directors. Control shares are voting shares of stock which, if aggregated
with all other shares of stock previously acquired by a person, would entitle
the acquirer to exercise voting power in electing directors within one of the
following ranges of voting power: (i) one-tenth or more but less than one-third;
(ii) one-third or more but less than a majority; or (iii) a majority or more of
all voting power. Control shares do not include shares that the acquiring person
is entitled to vote as a result of having previously obtained stockholder
approval. A control share acquisition means the acquisition, directly or
indirectly, of control shares, subject to certain exceptions.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A person
who has made or proposes to make a control share acquisition, upon satisfaction
of certain conditions (including an undertaking to pay expenses), may compel the
board of directors to call a special meeting of stockholders to be held within
fifty (50) days of such demand to consider the voting rights of the
shares.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a name="break133">If voting rights are not approved at the meeting or if the
acquirer does not deliver an acquiring person statement as required by the
statute, then, subject to certain conditions and limitations, the corporation
may redeem any or all of the control shares, except those for which voting
rights have previously been approved, for fair value determined, without regard
to voting rights, as of the date of the last control share acquisition or of any
special meeting of stockholders at which the voting rights of such shares are
considered and not approved. If voting rights for control shares are approved at
a stockholders&#8217; meeting and the acquirer becomes entitled to vote a majority of
the shares entitled to vote, all other stockholders may exercise appraisal
rights. The fair value of the shares as determined for purposes of such
appraisal rights may not be less than the highest price per share paid in the
control share acquisition. The control share acquisition statute does not apply
to shares acquired in a merger, consolidation or share exchange if the
corporation is a party to the transaction or to acquisitions approved or
exempted by the charter or the bylaws of the corporation.</a></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
bylaws state that the control share acquisition statute of the MGCL will not
apply to any acquisition by any person of our stock. However, the exemption from
the control share acquisition provision may be repealed, in whole or in part, at
any time, whether before or after an acquisition of control shares and, upon a
repeal, will apply to any prior or subsequent control share
acquisition.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Title
3, Subtitle 8 of the MGCL</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subtitle
8 of Title 3 of the MGCL allows Maryland corporations with a class of equity
securities registered under the Securities Exchange Act of 1934 to elect to be
governed by all or any part of certain Maryland law provisions relating to
extraordinary actions and unsolicited takeovers. The election to be governed by
one or more of these provisions can be made by a Maryland corporation in its
charter or bylaws or by resolution adopted by the board of directors so long as
the corporation has at least three directors who, at the time of electing to be
subject to the provisions, are not:</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;officers
or employees of the corporation;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;persons
seeking to acquire control of the corporation;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;directors,
officers, affiliates or associates of any person seeking to acquire control;
or</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;nominated
or designated as directors by a person seeking to acquire control.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Articles
supplementary must be filed with the Maryland State Department of Assessments
and Taxation if a Maryland corporation elects to be subject to any or all of the
provisions by board resolution or bylaw amendment. Stockholder approval is not
required for the filing of articles supplementary.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subtitle
8 provides that a Maryland corporation can elect to be subject to all or any
portion of the following provisions notwithstanding any contrary provisions
contained in its existing charter or bylaws:</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
classified board;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
two-thirds vote requirement for removing a director;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
requirement that the number of directors be fixed only by vote of the
directors;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
requirement that a vacancy on the board be filled only by the majority vote of
the remaining directors and for the remainder of the full term of the class in
which the vacancy occurred; or</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
majority requirement for the calling of a special meeting of
stockholders.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to Subtitle 8, we have elected to provide that vacancies on our board of
directors may be filled only by the remaining directors and for the remainder of
the full term of the class in which the vacancy occurred.&#160;&#160;Through
provisions in our charter and bylaws unrelated to Subtitle 8, we already have a
classified board, vest in the board the exclusive power to fix the number of
directorships and require, unless called by our chairman of the board, our
president or the board of directors, the request of stockholders entitled to
cast a majority of all votes entitled to be cast to call a special
meeting.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Ownership
Limitations and Restrictions on Transfer</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
charter provides that no person or entity, other than Mr. Shidler, certain of
our founders or any individual as designated by our charter or our board of
directors (referred to as excepted individuals), may own, directly or
indirectly, more than 4.9% in economic value of our <a name="break134">aggregate
outstanding shares of capital stock or 4.9% in economic value or number of
shares, whichever is more restrictive, of our aggregate outstanding shares of
our capital stock. This ownership limit is not applicable to the acquisition of
shares by an underwriter with the purpose of distributing such shares in a
public offering. Our charter requires every stockholder who owns more than 2% of
our outstanding stock to give written notice, within thirty (30) days after the
end of each taxable year, setting forth such stockholder&#8217;s direct and indirect
ownership of our stock.</a></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If any
transfer of our shares results in any person or entity owning more than the
ownership limit (referred to as a prohibited owner), then the number of shares
of stock of which otherwise would cause such prohibited owner to violate the
ownership limit will automatically be transferred to a trust for the benefit of
a charitable beneficiary. The trustee will be appointed by us, and will be a
person unaffiliated with us and the prohibited owner. The prohibited owner will
not have any economic benefit, rights to dividends or other distributions and
will not possess any rights to vote or other rights attributable to the shares
of stock held in trust. The trustee will have all voting rights and rights to
dividends or other distributions with respect to shares of stock held in trust,
which rights will be exercised for the exclusive benefit of the charitable
beneficiary.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">6</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
excepted individuals are subject to an ownership limitation, the requirements of
which will be established by the board of directors. The board of directors may
from time to time increase the ownership limit and the ownership limitation of
the excepted individuals. No person or entity may own, directly or indirectly,
our shares of stock that would result in us failing to qualify as a REIT.
Additionally, no stockholder may transfer our shares of the stock if the result
of such transfer is ownership of our stock by less than 100 stockholders. To the
extent a transfer of shares of stock results in ownership by less than 100
stockholders, such shares of stock will be transferred to that number of trusts,
each having a distinct trustee and a charitable beneficiary or beneficiaries
that are distinct from those of each other trust, such that there is no
violation. In the event the board of directors determines a proposed transfer or
transfer will or has violated any of the aforementioned ownership limitations or
transfer restrictions, the board of directors will take action it deems
advisable to refuse to give effect to or to prevent such transfer.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Duties
of Directors</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Maryland
law requires a director of a Maryland corporation to perform his duties as a
director (including his duties as a member of a committee of the board on which
he serves): (i) in good faith; (ii) in a manner he reasonably believes to be in
the best interests of the corporation; and (iii) with the care that an
ordinarily prudent person in a like position would use under similar
circumstances. Maryland law provides that a person who performs his duties in
accordance with the above standard has no liability by reason of being or having
been a director of a corporation. An act of a director is presumed to satisfy
the standard.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition, the MGCL provides protection for Maryland corporations against
unsolicited takeovers by protecting the board of directors with regard to
actions taken in a takeover context. The MGCL provides that the duties of
directors will not require them to:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;accept,
recommend or respond to any proposal by a person seeking to acquire
control;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;make
a determination under the Maryland Business Combination Act or the Maryland
Control Share Acquisition Act;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;elect
to be subject or refrain from electing to be subject to any or all of the
elective provisions of Title 3, Subtitle 8 of the MGCL; or</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8226;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;act
or fail to act solely because of (i) the effect the act or failure to act may
have on an acquisition or potential acquisition of control or (ii) the amount or
type of consideration that may be offered or paid to stockholders in an
acquisition.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The MGCL
also provides that an act of a director relating to or affecting an acquisition
or a potential acquisition of control is not subject under the MGCL to a higher
duty or greater scrutiny than is applied to any other act of a director. This
provision creates a Maryland rule that is less exacting than case law in many
other jurisdictions which imposes an enhanced level of scrutiny when a board
implements anti-takeover measures in a change of control context and shifts the
burden of proof to the board to show that the defensive mechanism adopted by a
board is reasonable in relation to the threat posed.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Issuance
of Additional Shares</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a name="break135">Our charter allows the board of directors to authorize the
issuance of shares of our stock of any class or series, whether now or hereafter
authorized, or securities or rights convertible into shares of our stock of any
class or series, whether now or hereafter authorized, for such consideration as
the board deems advisable. Our shares of authorized and unissued common stock
and preferred stock may (within the limits imposed by applicable law) be issued
in one or more transactions, or could be issued with terms, provisions and
rights which would make more difficult and, therefore, less likely, a takeover
of us. The board of directors may classify any unissued shares of preferred
stock and reclassify any previously classified but unissued shares of preferred
stock of any series in one or more classes or series of stock by setting or
changing the preferences, conversion or other rights, voting powers,
restrictions, limitations on dividends or other distributions, qualifications or
terms or conditions of redemption of the stock. Any such issuance of additional
stock could have the effect of diluting the earnings per share and book value
per share of our existing shares of our common stock, and such additional shares
could be used to dilute the stock ownership of persons seeking to obtain control
of us.</a></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">7</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We offer
no assurances that the board of directors will not adopt further anti-takeover
measures available under Maryland law (some of which may not require stockholder
approval). Moreover, the availability of such measures under Maryland law,
whether or not implemented, may have the effect of discouraging a future
takeover attempt which a majority of our stockholders may deem to be in their
best interests or in which stockholders may receive a premium for their shares
over then-current market prices. As a result, stockholders who might desire to
participate in such transactions may not have the opportunity to do
so.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Limitation
of Liability and Indemnification Matters</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Indemnification
of Directors and Officers</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
Maryland, reasonable expenses may be advanced to a director or to an officer,
employee or agent who is not a director to the same extent that they may be
advanced to a director unless limited by the charter. Advances to directors,
officers, employees and agents prior to the final adjudication of a proceeding
may be generally authorized in the corporation&#8217;s charter or bylaws, by action of
the board of directors, or by contract. The director, officer, employee or agent
must give to the corporation a written affirmation of his good faith belief that
the standard of conduct necessary for indemnification by the corporation has
been met, and a written undertaking by him or on his behalf providing that if it
is ultimately determined that the standard of conduct has not been met, said
director, officer, employee or agent will repay the amount
advanced.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
Maryland law, unless limited by the charter, indemnification is mandatory if a
director or officer has been successful on the merits or otherwise in the
defense of any proceeding arising from his service as a director or officer
unless such indemnification is not otherwise permitted as described in the
following sentence. Indemnification is permitted unless it is established that
(i) the act or omission of the director or officer was material to the matter
giving rise to the proceeding and was committed in bad faith or was the result
of active and deliberate dishonesty; (ii) the director or officer actually
received an improper personal benefit in money, property or services; or (iii)
in the case of a criminal proceeding, the director or officer had reasonable
cause to believe his act or omission was unlawful. In addition to the foregoing,
a court of appropriate jurisdiction may, under certain circumstances, order
indemnification if it determines that the director or officer is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not the director or officer has met the standards of
conduct set forth in the preceding sentence or has been adjudged liable on the
basis that a personal benefit was improperly received in a proceeding charging
improper personal benefit to the director or the officer. If the proceeding was
an action by or in the right of the corporation or involved a determination that
the director or officer received an improper personal benefit, however, no
indemnification may be made if the individual is adjudged liable to the
corporation, except to the extent of expenses approved by a court of appropriate
jurisdiction.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Maryland
law also provides that, where indemnification is permissible, it must be
authorized for a specific proceeding after a determination has been made that
indemnification of the director is permissible in the circumstances because the
director has met the standard of conduct described above. Such determination
must be made by (i) the board of directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the proceeding or, if such
a quorum cannot be obtained, then by a majority vote of a committee of the board
consisting solely of one or more directors not, at the time, parties to such
proceeding and who were duly designated to act in the matter by a majority vote
of the full board in which the designated directors who are parties may
participate; (ii) special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in clause (i) or, if the requisite
quorum of the full board cannot be obtained and the committee cannot be
established, by a majority vote of the full board of directors in which
directors who are parties may participate; or (iii) a vote of the
stockholders.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition, Maryland law provides that a corporation may not indemnify a director
or advance expenses for a proceeding brought by that director against the
corporation, except for a proceeding brought to enforce indemnification, or
unless the charter, bylaws, resolution of the board of directors or an agreement
approved by the board of directors expressly provides otherwise.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">8</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
charter provides that we will indemnify our current and former directors and
officers, including the advancement of expenses under procedures permitted or
required by applicable law, unless it is established under the MGCL that (i) his
act or omission was <a name="break131">material to the matter giving rise to the
proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty; (ii) he actually received an improper personal benefit in
money, property or services; or (iii) in the case of a criminal proceeding, he
had reasonable cause to believe that his act or omission was unlawful (but in
the event of any amendment to the MGCL permitting us to provide broader
indemnification rights than are currently set forth in our charter, such rights
would be provided to the fullest extent required or permitted by the MGCL as so
amended). Our charter also provides that we may indemnify, including the
advancement of expenses under procedures permitted or required by applicable
law, our current and former employees and agents as may be authorized by the
board of directors in the specific case and permitted by applicable law or our
bylaws. However, we will not indemnify any indemnitee in connection with a
proceeding initiated by such indemnitee unless such proceeding was authorized by
the board of directors pursuant to a resolution approved by a majority of the
directors then in office, or where such proceeding is to enforce rights to
indemnification or in a contract approved by the board of directors pursuant to
a resolution approved by a majority of directors then in
office.</a></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Exculpation
of Directors and Officers</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The MGCL
permits a Maryland corporation to include in its charter a provision limiting
the liability of directors and officers to the corporation and its stockholders
for money damages, except for liability resulting from (i) actual receipt of an
improper benefit or profit in money, property or services or (ii) active and
deliberate dishonesty established by a final judgment and which is material to
the cause of action. Our charter contains a provision which eliminates
directors&#8217; and officers&#8217; liability to the maximum extent permitted by Maryland
law.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">9&#160;
</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">&#160;
</font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SIGNATURE</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">
        <div>
          <table border="0" cellpadding="0" cellspacing="0" width="100%">
              <tr>
                <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td colspan="2" valign="top" width="38%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">PACIFIC OFFICE PROPERTIES
      TRUST, INC.</font></font></td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              </tr>
              <tr>
                <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              </tr>
              <tr>
                <td align="left" valign="top" width="50%" style="BORDER-BOTTOM: #ffffff solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Dated:
      July 1, 2009</font></div>
                </td>
                <td valign="top" width="3%" style="BORDER-BOTTOM: #ffffff solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">By:
      </font></div>
                </td>
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      M. Kasim</font></td>
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form8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): July 1, 2009
PACIFIC
      OFFICE PROPERTIES TRUST, INC.
(Exact
      name of registrant as specified in its
charter)
Maryland
001-9900
86-0602478
(State
      or other jurisdiction
(Commission
(IRS
      Employer
of
      incorporation)
File
      Number)
Identification
      No.)
233
      Wilshire Blvd.
Suite
      830
Santa
      Monica, California
90401
(Address
      of principal executive offices)
(Zip
      Code)
(310)
395-2083
(
Registrant's telephone
number, including area code)
Not
      applicable
(Former
      name or former address, if changed since last
  report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
8.01. Other Events.
This
current report on Form 8-K is being filed for the purpose of providing a
description of the common stock of Pacific Office Properties Trust, Inc. (the
"Company").  We may incorporate by reference the description of our
common stock set forth below into future registration statement filings that we
make under the Securities Act of 1933, as amended, in lieu of incorporation by
reference of a description of the common stock contained in a registration
statement filed under the Securities Exchange Act of 1934, as
amended.
DESCRIPTION
OF COMMON STOCK
The
following description of our common stock contains a summary of the material
provisions of our amended and restated charter and our amended and restated
bylaws, as well as certain provisions of Maryland law.  This
description does not purport to be complete and is subject to and qualified in
its entirety by reference to Maryland law and to our amended and restated
charter and amended and restated bylaws.  Copies of our amended and
restated charter and our amended and restated bylaws will be filed as exhibits
to the registration statement into which this summary is incorporated by
reference or as exhibits to documents filed under the Securities Exchange Act of
1934, as amended, that are incorporated by reference into the registration
statement.
General
We are
currently authorized to issue 300,200,000 shares of stock, consisting of
200,200,000 shares of our common stock, par value $0.0001 per share, 200,000,000
of which are shares of common stock listed on the NYSE Amex under the symbol
"PCE," which we refer to as Listed Common Stock, and 200,000 of which are shares
of Class B Common Stock, and 100,000,000 shares of preferred stock, par value
$0.0001 per share. The aggregate par value of all authorized shares of stock is
$30,200. Our board of directors, without any action by our stockholders, may
amend our charter from time to time to increase or decrease the aggregate number
of shares of stock or the number of shares of stock of any class or series that
we have authority to issue.
Our board
of directors may reclassify any unissued shares of our common stock in one or
more classes or series of stock. It may also classify any unissued shares of
preferred stock and reclassify any previously classified but unissued shares of
preferred stock of any series in one or more classes or series of stock by
setting or changing the preferences, conversion or other rights, voting powers,
restrictions, limitations on dividends or other distributions, qualifications or
terms or conditions of redemption of the stock. Except as may be provided by the
board of directors in setting the terms of classified shares of stock or as may
otherwise be provided by contract approved by our board of directors, no holder
of shares of stock has any preemptive right to purchase or subscribe for any
additional shares of our stock or securities. Additionally, under the Maryland
General Corporation Law, or the MGCL, our board of directors may authorize the
amendment of our charter, with the approval of a majority of our board of
directors and without stockholder approval, to effect a reverse stock split that
results in a combination of shares of stock at a ratio of not more than ten
shares of stock into one share of stock in any 12-month period.
Common
Stock
Voting
Rights.
Subject to the preferences of any class or series of
stock classified or reclassified by our board of directors, each share of common
stock is entitled to one vote on each matter to be voted upon by our
stockholders. Generally, all matters to be voted on by stockholders must be
approved by a majority (or, in the case of election of directors, by a
plurality) of the votes cast by all shares of common stock and Proportionate
Voting Preferred Stock (as described below) present in person or represented by
proxy, voting together as a single class, subject to any voting rights granted
to holders of any preferred stock.  Our charter does not provide for
cumulative voting.
Liquidation
Distributions.
In the event of our liquidation, the Class B
Common Stock is not entitled to any portion of our assets that are allocated to
holders of our common stock, all of which will be distributed to the holders of
Listed Common Stock, subject to the preferences of any class or series of stock
hereafter classified or reclassified by our board of
directors.  Except with respect to this preference of liquidation
accorded to the Listed Common Stock, Listed Common Stock and Class B Common
Stock are identical in all respects.
2
Dividends.
Holders
of our common stock are entitled to receive such distributions as authorized
from time to time by our board of directors and declared by us out of legally
available funds, subject to any preferential rights of other classes of
stock.
Transfer Agent and
Registrar.
The transfer agent and registrar for our Listed
Common Stock is Computershare Investor Service.
NYSE Amex
Listing.
Our Listed Common Stock is currently traded on the
NYSE Amex under the symbol "PCE."
Preferred
Stock
Our board
of directors has the authority, without further action by the stockholders, to
issue preferred stock in one or more series and to fix the rights, designation,
preferences, privileges, limitations and restrictions thereof, including
dividend rights, conversion rights, terms and rights of redemption, liquidation
preferences and sinking fund terms (any or all of which may be greater than the
rights of the common stock or the Proportionate Voting Preferred Stock). The
board of directors, without stockholder approval, can issue shares of preferred
stock with conversion, voting and other rights which could adversely affect the
rights of the holders of shares of common stock. Other than the one share of
Proportionate Voting Preferred Stock issued to our Advisor, Pacific Office
Management, Inc., in connection with our formation transaction, we have not
issued any shares of preferred stock and currently have no plans to issue
additional preferred stock.
Proportionate
Voting Preferred Stock
As a part
of the formation transactions, our board of directors classified from our
unissued shares of preferred stock, and caused us to issue, one share of
Proportionate Voting Preferred Stock, which may be increased only by resolution
approved by all of the members of our board of directors. Any shares of
Proportionate Voting Preferred Stock redeemed, purchased or otherwise acquired
by us in any manner whatsoever will cease to be outstanding and will become
authorized but unissued shares of preferred stock, without designation as to
class or series until such shares are once more classified and designated. The
shares of Proportionate Voting Preferred Stock are not convertible or
exchangeable for any other property or securities of ours.
Voting Rights.
Holders of
shares of the Proportionate Voting Preferred Stock are entitled to vote on all
matters for which our common stockholders are entitled to vote. The holders vote
together with the holders of shares of common stock as one class on all matters.
The number of votes that the Proportionate Voting Preferred Stock is entitled to
cast initially equals the number of shares of our Listed Common Stock issuable
upon the redemption of the common units, referred to as Common Units, of Pacific
Office Properties, L.P., our Operating Partnership, and convertible preferred
limited partnership units of our Operating Partnership, referred to as Preferred
Units following conversion to Common Units, issued in connection with our
formation transactions. As those Operating Partnership units are redeemed, the
number of votes that the Proportionate Voting Preferred Stock will be entitled
to cast will be decreased by an equivalent number. As of March 31, 2009, the
Proportionate Voting Preferred Stock was entitled to cast 46,173,693 votes on
all matters for which our common stockholders are entitled to
vote.  Our Advisor has agreed to cast its Proportionate Voting
Preferred Stock votes on any matter in direct proportion to votes that are cast
by limited partners of our Operating Partnership holding the Common Units and
Preferred Units issued in the formation transactions.
Liquidation Preference.
In
the event of any liquidation, dissolution or winding up of our affairs, before
any of our assets are distributed, paid or set aside for the holders of any
equity securities ranking junior to the Proportionate Voting Preferred Stock as
to the distribution of assets upon our liquidation, dissolution or winding up,
we will pay to the holders of shares of Proportionate Voting Preferred Stock,
out of our assets legally available for distribution to our stockholders, the
sum of $0.01 per share for each share of Proportionate Voting Preferred Stock
held by each such holder. After such payment, the holders of the Proportionate
Voting Preferred Stock will have no right or claim upon any of our remaining
assets.
Dividends.
The holder of the
Proportionate Voting Preferred Stock is not entitled to any regular or special
dividend, including any dividend or other distribution declared or paid with
respect to the shares of our common stock or any other class or series of our
stock.
3
Restrictions
on Size of Holdings of Shares
Our
charter contains certain restrictions on the number of shares of capital stock
that individual stockholders may own. In order for us to qualify as a real
estate investment trust, or REIT, under the Internal Revenue Code of 1986, as
amended, or the Code, among other purposes, no person, other than a person
designated by the board of directors as an Excepted Holder, may either
beneficially or constructively own more than 4.9% in economic value of the
aggregate of the outstanding shares of capital stock, or 4.9% in economic value
or number of shares, whichever is more restrictive, of the aggregate of the
outstanding shares of common stock. Further, not more than 50% in value of our
outstanding capital stock may be owned, directly or indirectly, by five or fewer
individuals (defined in the Code to include certain entities) during the last
half of a taxable year (other than the first year), and such shares of capital
stock must be beneficially owned by 100 or more persons during at least 335 days
of a taxable year of 12 months (other than the first year) or during a
proportionate part of a shorter taxable year. See "Anti-Takeover Measures –
Ownership Limitations and
Restrictions on Transfer
" below.
Anti-Takeover
Measures
Certain
provisions of our charter and our bylaws and of Maryland law may have the effect
of delaying, deferring or preventing a change of control of us. These provisions
are described below.
Classified
Board
A
significant effect of a classified board of directors may be to deter hostile
takeover attempts because an acquirer would experience delay in replacing a
majority of the directors. However, a classified board will also make it more
difficult for stockholders to effect a change in control of the board of
directors, even if such a change in control is sought due to dissatisfaction
with the performance of the directors.
The
existence of a classified board may deter so-called "creeping acquisitions" in
which a person or group seeks to acquire: (i) a controlling position without
paying a control premium to the selling stockholders; (ii) a position sufficient
to exert control over the corporation through a proxy contest or otherwise; or
(iii) a block of stock with a view toward attempting to promote a sale or
liquidation or a repurchase by the corporation of the block at a premium, or an
exchange of the block for assets of the corporation. Faced with a classified
board of directors, such a person or group would have to assess carefully its
ability to control or influence the corporation. If free of the necessity to act
in response to an immediately threatened change in control, the board of
directors can act in a more careful and deliberative manner to make and
implement appropriate business judgments in response to a creeping
acquisition.
We
believe that the staggered three-year terms, with the election of approximately
one-third of our directors each year, will help to assure the continuity and
stability of our long-term policies in the future and permit our board of
directors to more effectively represent the interests of all stockholders, since
approximately two-thirds of our directors at any given time will have prior
experience as directors of the Company. The division of directors into three
classes will have the effect of making it more difficult to change the overall
composition of the board. Our board of directors, however, believes that the
benefits of maintaining continuity on the board outweigh this
effect.
Business
Combinations
Maryland
law prohibits a business combination between a corporation and any interested
stockholder or any affiliate of an interested stockholder for five years
following the most recent date upon which the stockholder became an interested
stockholder. A business combination includes a merger, consolidation, share
exchange or, in circumstances specified in the statute, an asset transfer or
issuance or reclassification of equity securities. Generally, an interested
stockholder is anyone who owns 10% or more of the voting power of the
corporation's voting stock or an affiliate or associate of the corporation who,
at any time within the two-year period prior to the date in question, was the
beneficial owner of 10% or more of the voting power of the then outstanding
stock of the corporation. A person is not an interested stockholder under the
statute if the board of directors approved in advance the transaction by which
he otherwise would have become an interested stockholder. However, in approving
a transaction, the board of directors may provide that its approval is subject
to compliance, at or after the time of approval, with any terms and conditions
determined by the board. After the five-year period has elapsed, a corporation
subject to the statute may not consummate a business combination with an
interested stockholder unless (i) the transaction has been recommended by the
board of directors and (ii) the transaction has been approved by (a) 80% of the
votes entitled to be cast by holders of outstanding shares of voting stock of
the corporation and (b) two-thirds of the votes entitled to be cast by holders
of voting stock other than shares owned by the interested stockholder with whom
or with whose affiliate the business combination is to be effected or held by an
affiliate or associate of the interested stockholder. This approval requirement
need not be met if certain fair price and terms criteria have been
satisfied.
4
The
statute permits various exemptions from its provisions, including business
combinations that are exempted by the board of directors before the time that
the interested stockholder becomes an interested stockholder. However, our
charter elects to be governed by the Maryland business combination provisions,
except that these provisions will not apply to any business combination that was
effected pursuant to the Master Formation and Contribution Agreement, dated
October 3, 2006, as amended, which we refer to as the Master Agreement, between
our predecessor and POP Venture, LLC, a Delaware limited liability company, or
pursuant to any agreement that was executed and delivered pursuant to the Master
Agreement or to the extent that the interested stockholder in such business
combination was Jay H. Shidler.
Control
Share Acquisitions
Maryland
law provides that "control shares" of a Maryland corporation acquired in a
"control share acquisition" have no voting rights except to the extent approved
by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding shares of stock as to which the acquiring person, officers of the
corporation and employees of the corporation who are directors of the
corporation are entitled to exercise or direct the exercise (except solely by
virtue of a revocable proxy) of the voting power of the shares in the election
of directors. Control shares are voting shares of stock which, if aggregated
with all other shares of stock previously acquired by a person, would entitle
the acquirer to exercise voting power in electing directors within one of the
following ranges of voting power: (i) one-tenth or more but less than one-third;
(ii) one-third or more but less than a majority; or (iii) a majority or more of
all voting power. Control shares do not include shares that the acquiring person
is entitled to vote as a result of having previously obtained stockholder
approval. A control share acquisition means the acquisition, directly or
indirectly, of control shares, subject to certain exceptions.
A person
who has made or proposes to make a control share acquisition, upon satisfaction
of certain conditions (including an undertaking to pay expenses), may compel the
board of directors to call a special meeting of stockholders to be held within
fifty (50) days of such demand to consider the voting rights of the
shares.
If voting rights are not approved at the meeting or if the
acquirer does not deliver an acquiring person statement as required by the
statute, then, subject to certain conditions and limitations, the corporation
may redeem any or all of the control shares, except those for which voting
rights have previously been approved, for fair value determined, without regard
to voting rights, as of the date of the last control share acquisition or of any
special meeting of stockholders at which the voting rights of such shares are
considered and not approved. If voting rights for control shares are approved at
a stockholders' meeting and the acquirer becomes entitled to vote a majority of
the shares entitled to vote, all other stockholders may exercise appraisal
rights. The fair value of the shares as determined for purposes of such
appraisal rights may not be less than the highest price per share paid in the
control share acquisition. The control share acquisition statute does not apply
to shares acquired in a merger, consolidation or share exchange if the
corporation is a party to the transaction or to acquisitions approved or
exempted by the charter or the bylaws of the corporation.
Our
bylaws state that the control share acquisition statute of the MGCL will not
apply to any acquisition by any person of our stock. However, the exemption from
the control share acquisition provision may be repealed, in whole or in part, at
any time, whether before or after an acquisition of control shares and, upon a
repeal, will apply to any prior or subsequent control share
acquisition.
Title
3, Subtitle 8 of the MGCL
Subtitle
8 of Title 3 of the MGCL allows Maryland corporations with a class of equity
securities registered under the Securities Exchange Act of 1934 to elect to be
governed by all or any part of certain Maryland law provisions relating to
extraordinary actions and unsolicited takeovers. The election to be governed by
one or more of these provisions can be made by a Maryland corporation in its
charter or bylaws or by resolution adopted by the board of directors so long as
the corporation has at least three directors who, at the time of electing to be
subject to the provisions, are not:
5
•
officers
or employees of the corporation;
•
persons
seeking to acquire control of the corporation;
•
directors,
officers, affiliates or associates of any person seeking to acquire control;
or
•
nominated
or designated as directors by a person seeking to acquire control.
Articles
supplementary must be filed with the Maryland State Department of Assessments
and Taxation if a Maryland corporation elects to be subject to any or all of the
provisions by board resolution or bylaw amendment. Stockholder approval is not
required for the filing of articles supplementary.
Subtitle
8 provides that a Maryland corporation can elect to be subject to all or any
portion of the following provisions notwithstanding any contrary provisions
contained in its existing charter or bylaws:
•
a
classified board;
•
a
two-thirds vote requirement for removing a director;
•
a
requirement that the number of directors be fixed only by vote of the
directors;
•
a
requirement that a vacancy on the board be filled only by the majority vote of
the remaining directors and for the remainder of the full term of the class in
which the vacancy occurred; or
•
a
majority requirement for the calling of a special meeting of
stockholders.
Pursuant
to Subtitle 8, we have elected to provide that vacancies on our board of
directors may be filled only by the remaining directors and for the remainder of
the full term of the class in which the vacancy occurred.  Through
provisions in our charter and bylaws unrelated to Subtitle 8, we already have a
classified board, vest in the board the exclusive power to fix the number of
directorships and require, unless called by our chairman of the board, our
president or the board of directors, the request of stockholders entitled to
cast a majority of all votes entitled to be cast to call a special
meeting.
Ownership
Limitations and Restrictions on Transfer
Our
charter provides that no person or entity, other than Mr. Shidler, certain of
our founders or any individual as designated by our charter or our board of
directors (referred to as excepted individuals), may own, directly or
indirectly, more than 4.9% in economic value of our
aggregate
outstanding shares of capital stock or 4.9% in economic value or number of
shares, whichever is more restrictive, of our aggregate outstanding shares of
our capital stock. This ownership limit is not applicable to the acquisition of
shares by an underwriter with the purpose of distributing such shares in a
public offering. Our charter requires every stockholder who owns more than 2% of
our outstanding stock to give written notice, within thirty (30) days after the
end of each taxable year, setting forth such stockholder's direct and indirect
ownership of our stock.
If any
transfer of our shares results in any person or entity owning more than the
ownership limit (referred to as a prohibited owner), then the number of shares
of stock of which otherwise would cause such prohibited owner to violate the
ownership limit will automatically be transferred to a trust for the benefit of
a charitable beneficiary. The trustee will be appointed by us, and will be a
person unaffiliated with us and the prohibited owner. The prohibited owner will
not have any economic benefit, rights to dividends or other distributions and
will not possess any rights to vote or other rights attributable to the shares
of stock held in trust. The trustee will have all voting rights and rights to
dividends or other distributions with respect to shares of stock held in trust,
which rights will be exercised for the exclusive benefit of the charitable
beneficiary.
6
The
excepted individuals are subject to an ownership limitation, the requirements of
which will be established by the board of directors. The board of directors may
from time to time increase the ownership limit and the ownership limitation of
the excepted individuals. No person or entity may own, directly or indirectly,
our shares of stock that would result in us failing to qualify as a REIT.
Additionally, no stockholder may transfer our shares of the stock if the result
of such transfer is ownership of our stock by less than 100 stockholders. To the
extent a transfer of shares of stock results in ownership by less than 100
stockholders, such shares of stock will be transferred to that number of trusts,
each having a distinct trustee and a charitable beneficiary or beneficiaries
that are distinct from those of each other trust, such that there is no
violation. In the event the board of directors determines a proposed transfer or
transfer will or has violated any of the aforementioned ownership limitations or
transfer restrictions, the board of directors will take action it deems
advisable to refuse to give effect to or to prevent such transfer.
Duties
of Directors
Maryland
law requires a director of a Maryland corporation to perform his duties as a
director (including his duties as a member of a committee of the board on which
he serves): (i) in good faith; (ii) in a manner he reasonably believes to be in
the best interests of the corporation; and (iii) with the care that an
ordinarily prudent person in a like position would use under similar
circumstances. Maryland law provides that a person who performs his duties in
accordance with the above standard has no liability by reason of being or having
been a director of a corporation. An act of a director is presumed to satisfy
the standard.
In
addition, the MGCL provides protection for Maryland corporations against
unsolicited takeovers by protecting the board of directors with regard to
actions taken in a takeover context. The MGCL provides that the duties of
directors will not require them to:
•
accept,
recommend or respond to any proposal by a person seeking to acquire
control;
•
make
a determination under the Maryland Business Combination Act or the Maryland
Control Share Acquisition Act;
•
elect
to be subject or refrain from electing to be subject to any or all of the
elective provisions of Title 3, Subtitle 8 of the MGCL; or
•
act
or fail to act solely because of (i) the effect the act or failure to act may
have on an acquisition or potential acquisition of control or (ii) the amount or
type of consideration that may be offered or paid to stockholders in an
acquisition.
The MGCL
also provides that an act of a director relating to or affecting an acquisition
or a potential acquisition of control is not subject under the MGCL to a higher
duty or greater scrutiny than is applied to any other act of a director. This
provision creates a Maryland rule that is less exacting than case law in many
other jurisdictions which imposes an enhanced level of scrutiny when a board
implements anti-takeover measures in a change of control context and shifts the
burden of proof to the board to show that the defensive mechanism adopted by a
board is reasonable in relation to the threat posed.
Issuance
of Additional Shares
Our charter allows the board of directors to authorize the
issuance of shares of our stock of any class or series, whether now or hereafter
authorized, or securities or rights convertible into shares of our stock of any
class or series, whether now or hereafter authorized, for such consideration as
the board deems advisable. Our shares of authorized and unissued common stock
and preferred stock may (within the limits imposed by applicable law) be issued
in one or more transactions, or could be issued with terms, provisions and
rights which would make more difficult and, therefore, less likely, a takeover
of us. The board of directors may classify any unissued shares of preferred
stock and reclassify any previously classified but unissued shares of preferred
stock of any series in one or more classes or series of stock by setting or
changing the preferences, conversion or other rights, voting powers,
restrictions, limitations on dividends or other distributions, qualifications or
terms or conditions of redemption of the stock. Any such issuance of additional
stock could have the effect of diluting the earnings per share and book value
per share of our existing shares of our common stock, and such additional shares
could be used to dilute the stock ownership of persons seeking to obtain control
of us.
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We offer
no assurances that the board of directors will not adopt further anti-takeover
measures available under Maryland law (some of which may not require stockholder
approval). Moreover, the availability of such measures under Maryland law,
whether or not implemented, may have the effect of discouraging a future
takeover attempt which a majority of our stockholders may deem to be in their
best interests or in which stockholders may receive a premium for their shares
over then-current market prices. As a result, stockholders who might desire to
participate in such transactions may not have the opportunity to do
so.
Limitation
of Liability and Indemnification Matters
Indemnification
of Directors and Officers
In
Maryland, reasonable expenses may be advanced to a director or to an officer,
employee or agent who is not a director to the same extent that they may be
advanced to a director unless limited by the charter. Advances to directors,
officers, employees and agents prior to the final adjudication of a proceeding
may be generally authorized in the corporation's charter or bylaws, by action of
the board of directors, or by contract. The director, officer, employee or agent
must give to the corporation a written affirmation of his good faith belief that
the standard of conduct necessary for indemnification by the corporation has
been met, and a written undertaking by him or on his behalf providing that if it
is ultimately determined that the standard of conduct has not been met, said
director, officer, employee or agent will repay the amount
advanced.
Under
Maryland law, unless limited by the charter, indemnification is mandatory if a
director or officer has been successful on the merits or otherwise in the
defense of any proceeding arising from his service as a director or officer
unless such indemnification is not otherwise permitted as described in the
following sentence. Indemnification is permitted unless it is established that
(i) the act or omission of the director or officer was material to the matter
giving rise to the proceeding and was committed in bad faith or was the result
of active and deliberate dishonesty; (ii) the director or officer actually
received an improper personal benefit in money, property or services; or (iii)
in the case of a criminal proceeding, the director or officer had reasonable
cause to believe his act or omission was unlawful. In addition to the foregoing,
a court of appropriate jurisdiction may, under certain circumstances, order
indemnification if it determines that the director or officer is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not the director or officer has met the standards of
conduct set forth in the preceding sentence or has been adjudged liable on the
basis that a personal benefit was improperly received in a proceeding charging
improper personal benefit to the director or the officer. If the proceeding was
an action by or in the right of the corporation or involved a determination that
the director or officer received an improper personal benefit, however, no
indemnification may be made if the individual is adjudged liable to the
corporation, except to the extent of expenses approved by a court of appropriate
jurisdiction.
Maryland
law also provides that, where indemnification is permissible, it must be
authorized for a specific proceeding after a determination has been made that
indemnification of the director is permissible in the circumstances because the
director has met the standard of conduct described above. Such determination
must be made by (i) the board of directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the proceeding or, if such
a quorum cannot be obtained, then by a majority vote of a committee of the board
consisting solely of one or more directors not, at the time, parties to such
proceeding and who were duly designated to act in the matter by a majority vote
of the full board in which the designated directors who are parties may
participate; (ii) special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in clause (i) or, if the requisite
quorum of the full board cannot be obtained and the committee cannot be
established, by a majority vote of the full board of directors in which
directors who are parties may participate; or (iii) a vote of the
stockholders.
In
addition, Maryland law provides that a corporation may not indemnify a director
or advance expenses for a proceeding brought by that director against the
corporation, except for a proceeding brought to enforce indemnification, or
unless the charter, bylaws, resolution of the board of directors or an agreement
approved by the board of directors expressly provides otherwise.
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Our
charter provides that we will indemnify our current and former directors and
officers, including the advancement of expenses under procedures permitted or
required by applicable law, unless it is established under the MGCL that (i) his
act or omission was
material to the matter giving rise to the
proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty; (ii) he actually received an improper personal benefit in
money, property or services; or (iii) in the case of a criminal proceeding, he
had reasonable cause to believe that his act or omission was unlawful (but in
the event of any amendment to the MGCL permitting us to provide broader
indemnification rights than are currently set forth in our charter, such rights
would be provided to the fullest extent required or permitted by the MGCL as so
amended). Our charter also provides that we may indemnify, including the
advancement of expenses under procedures permitted or required by applicable
law, our current and former employees and agents as may be authorized by the
board of directors in the specific case and permitted by applicable law or our
bylaws. However, we will not indemnify any indemnitee in connection with a
proceeding initiated by such indemnitee unless such proceeding was authorized by
the board of directors pursuant to a resolution approved by a majority of the
directors then in office, or where such proceeding is to enforce rights to
indemnification or in a contract approved by the board of directors pursuant to
a resolution approved by a majority of directors then in
office.
Exculpation
of Directors and Officers
The MGCL
permits a Maryland corporation to include in its charter a provision limiting
the liability of directors and officers to the corporation and its stockholders
for money damages, except for liability resulting from (i) actual receipt of an
improper benefit or profit in money, property or services or (ii) active and
deliberate dishonesty established by a final judgment and which is material to
the cause of action. Our charter contains a provision which eliminates
directors' and officers' liability to the maximum extent permitted by Maryland
law.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
PACIFIC OFFICE PROPERTIES
      TRUST, INC.
Dated:
      July 1, 2009
By:
/s/ James
      M. Kasim
James
      M. Kasim
Chief
      Financial Officer
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