EXHIBIT
10.6
FIRST AMENDMENT TO AMENDED AND
RESTATED TAX INDEMNITY AGREEMENT
THIS FIRST AMENDMENT TO AMENDED
AND RESTATED TAX INDEMNITY AGREEMENT (the "Agreement") is made and entered into this
21st day of November, 2006 by and among PRIME GROUP REALTY,
L.P. , a Delaware limited partnership ("Prime"), RICHARD
A. HEISE ("Heise"), CTA GENERAL PARTNER, LLC ,
a Delaware limited liability company ("General Partner"), and
CONTINENTAL TOWERS, L.L.C. , a Delaware limited liability
company ("Newco").
WHEREAS , Prime, Heise, General Partner and Newco
entered into that certain Amended and Restated Tax Indemnity
Agreement dated as of January 10, 2006 ("TIA");
WHEREAS , Heise and General Partner are the only
partners in Continental Towers Associates-I, L.P., an Illinois
limited partnership ("CTA") and General Partner is the sole general
partner of CTA;
WHEREAS , CTA is the only member of Continental Towers
Associates II, LLC, a Delaware limited liability company
("CTAII");
WHEREAS , CTAII is the sole member of Continental Towers
Associates III, LLC, a Delaware limited liability company
("CTAIII");
WHEREAS, concurrently with the execution and delivery of
this First Amendment, (a) CTA, the owner of an undivided 36%
interest in the Real Estate (as defined in the TIA), will transfer
all of its right, title and interest in and to the Real Estate to
CTAIII; (b) Heise and General Partner will enter into a Dissolution
pursuant to which (i) Heise will redeem his 96.7429% partnership
interests in CTA in exchange for a 96.7429% membership interest in
CTAII, and (ii) General Partner will redeem its 3.2571% partnership
interest in CTA in exchange for a 3.2571% interest in CTAII; and
(iii) CTA will be dissolved; (c) CTAIII, as successor in interest
to CTA, and Newco, the owner of an undivided 64% interest in the
Real Estate, will enter into a First Amendment of the Co-Ownership
Agreement (as defined in the TIA); (d) CTAIII and Newco will
refinance the Senior Loan with CWCapital LLC; and
WHEREAS , the parties desire to amend the TIA to reflect
the new ownership structure for the Real Estate, the new Senior
Loan, and to make certain other changed to which the parties have
agreed;
NOW, THEREFORE
, in consideration of the matters
set forth in the recitals and the mutual covenants set forth
hereafter, the parties agree as follows:
1.
The definitions of " Senior
Lender ", " Senior Loan ", " Senior Loan
Documents " and " Senior Loan Agreement " in Section
1 of the TIA are hereby deleted in their entirety and the
following inserted in lieu thereof:
" Senior Lender " shall have
the meaning set forth in Section 2c .
" Senior Loan " shall have
the meaning set forth in Section 2c .
" Senior Loan Agreement "
shall have the meaning set forth in Section 2c .
" Senior Loan Documents "
shall have the meaning set forth in Section 2c .
2.
The definition of "Indemnification
Event" in Section 1 of the TIA is hereby amended by inserting ",
CTAII, CTAIII" after each reference to "CTA" in said
definition.
3.
The definition of "Tax Event" in
Section 1 of the TIA is hereby amended by deleting the reference to
"CTA" and inserting "CTAII" in lieu thereof.
4.
The following subsection c is hereby
inserted into Section 2 of the TIA as if fully set forth
therein:
"c.
New 2006 Transaction
. Prime, Heise, and certain
Affiliates of the foregoing are entering into the following
agreements (items (i), (ii), (iii) and (iv) below are collectively
referred to as the " New 2006 Transaction "):
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(i)
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CTA will form CTAII will cause CTAII
to form CTAIII.
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(ii)
Heise and General Partner will cause
CTA to transfer and assign by Special Warranty Deed all of its
right, title and interest in and to the Real Estate (being an
undivided 36% interest as a tenant in common with Newco) to CTAIII,
subject to the Junior Loan and the Senior Loan.
(iii)
Heise and General Partner will enter into that
certain Dissolution Agreement dated as of the date hereof pursuant
to which CTA will be dissolved and will distribute a 96.7429%
membership interest in CTAIII to Heise and a 3.2571% membership
interest in CTAII to CTA General Partner.
(iv)
Heise and General Partner will enter into
that