Exhibit 10.5

Execution Copy

 

PROMISSORY NOTE

U.S. $11,000,000.00

 

September 27, 2006

 

FOR VALUE RECEIVED, PGRT EQUITY II LLC, a Delaware limited liability company,
having its principal place of business at 77 West Wacker Drive, Chicago,
Illinois 60601 (“Borrower”), absolutely and unconditionally promises to pay to
the order of CITICORP USA, INC., a Delaware corporation (“Lender”), the
principal sum of ELEVEN MILLION DOLLARS AND 00/100 CENTS (U.S. $11,000,000.00)
(the “Loan”) or such lesser amount as may be outstanding under the Loan
Agreement in lawful money of the United States of America which shall at the
time of payment be legal tender for payment of all debts and dues, public and
private, payable at such times, and in such amounts, as are specified in the
Loan Agreement (as defined below).

Borrower promises to pay interest on the unpaid principal amount of the Loan
from the date hereof until such principal amount is paid in full, at such
interest rates, and payable at such times and to such Persons, as are specified
in the Loan Agreement (as defined below).

This Note is the note referred to in, and is entitled to the benefits of, the
Loan Agreement, dated of even date herewith (said Agreement, as it may be
amended or otherwise modified from time to time, being the “Loan Agreement”),
between Borrower and Lender, and the other Loan Documents referred to therein
and entered into pursuant thereto. The Loan Agreement, among other things, (i)
provides for the Loan by the Lender in an amount not to exceed the amount first
above mentioned, the indebtedness of Borrower resulting from such Loan being
evidenced by this Note, and (ii) contains provisions for acceleration of the
maturity of the unpaid principal amount of this Note upon the happening of
certain stated events and also for prepayments on account of the principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified.

This Note is entitled to the benefit of a certain Guaranty and is secured as
provided in the other Loan Documents.

Demand, presentment, protest and notice of non-payment and protest are hereby
waived by Borrower.

This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

 

This Note, as the same may from time to time be amended, modified or restated,
shall constitute the “Note” as defined in the Loan Agreement.

Execution Copy

 

IN WITNESS WHEREOF, Borrower has duly executed this Note the day and year first
above written.

 

BORROWER:

PGRT EQUITY II LLC, a Delaware limited liability company

 

By:

PRIME GROUP REALTY, L.P., a

 

Delaware limited partnership, its Manager

By:  PRIME GROUP REALTY TRUST, a Maryland real estate investment trust, its
general partner

 

 

By: /s/ David Lichtenstein

 

Name: David Lichtenstein

 

Title: Chairman

 

 

Signature Page for PGRT Equity II Note