Exhibit 10.1

 

EXECUTION COPY

 

SECOND AMENDED AND RESTATED

MANAGEMENT AGREEMENT

 

THIS SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT is made as of October 27,
2008 (this “Agreement”) by and between Gramercy Capital Corp., a Maryland
corporation (the “Parent”), GKK Capital LP, a Delaware limited partnership (the
“Operating Partnership” and with the Parent and Subsidiaries and other entities
controlled by either of them, the “Company”), and GKK Manager LLC, a Delaware
limited liability company (the “Manager”).

 

W I T N E S S E T H :

 

WHEREAS, the Parent and the Operating Partnership were formed by SL Green Realty
Corp., a Maryland corporation (with SL Green Operating Partnership, L.P., a
Delaware limited partnership (“SL Green OP”) and subsidiaries and other entities
controlled by either of them, “SL Green”) to continue SL Green’s specialty real
estate finance business in a separate company;

 

WHEREAS, the Parent and the Operating Partnership desire to have Manager
undertake the duties and responsibilities hereinafter set forth on behalf of the
Company as provided in this Agreement;

 

WHEREAS, Manager is willing to render such services on the terms and conditions
hereinafter set forth;

 

WHEREAS, the Parent, the Operating Partnership and the Manager entered into the
amended and restated management agreement as of April 19, 2006 (as amended by
the First Amendment to the Amended and Restated Management Agreement dated as of
September 18, 2007, the “Amended and Restated Management Agreement”) and the
Confirmatory Addendum to Management Agreement (the “Addendum”); and

 

WHEREAS, the Parent, the Operating Partnership and the Manager desire to amend
and restate the Amended and Restated Management Agreement (including the
Addendum) in its entirety.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the
parties hereto agree that the Amended and Restated Management Agreement
(including the Addendum) shall be amended and restated in its entirety as
follows:

 

1.                                      Definitions.

 

(a)                                  “Agreement” has the meaning assigned in the
first paragraph.

 

(b)                                 “Board of Directors” means the Board of
Directors of the Parent.

 

(c)                                  “Code” means the Internal Revenue Code of
1986, as amended.

 

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(d)                                 “Company” has the meaning assigned in the
first paragraph.

 

(e)                                  “Company Account” has the meaning assigned
in Section 5.

 

(f)                                    “Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

 

(g)                                 “Expenses” has the meaning assigned in
Section 9.

 

(h)                                 “GAAP” means generally accepted accounting
principles in effect in the U.S. on the date such principles are applied
consistently.

 

(i)                                     “Governing Instruments” means, with
respect to any Person, the articles of incorporation and bylaws in the case of a
corporation, the certificate of limited partnership (if applicable) and
partnership agreement in the case of a general or limited partnership or the
articles of formation and operating agreement in the case of a limited liability
company.

 

(j)                                     “Independent Directors” means the
members of the Board of Directors of Parent who are not officers or employees of
the Company, Manager or SL Green and who are otherwise “independent” in
accordance with the Parent’s Governing Instruments and, if applicable, the
rules of the New York Stock Exchange.

 

(k)                                  “Investment Company Act” means the
Investment Company Act of 1940, as amended.

 

(l)                                     “Investment Guidelines” means the
parameters and policies relating to Investments as determined by the Board of
Directors, as set forth in the public disclosure documents of the Parent and as
may be changed from time-to-time.

 

(m)                               “Investments” means the investments of the
Company.

 

(n)                                 “Manager” has the meaning assigned in the
first paragraph.

 

(o)                                 “Origination Agreement” means the Amended
and Restated Origination Agreement by and between the Parent and SL Green
Operating Partnership, L.P., dated as of April 19, 2006.

 

(p)                                 “Partnership Agreement” means the agreement
of limited partnership of the Operating Partnership, as amended from time to
time.

 

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

 

(r)                                    “REIT” means a corporation or trust which
qualifies as a real estate investment trust in accordance with Sections 856
through 860 of the Code.

 

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(s)                                  “Services Agreement” means the Services
Agreement by and among the Parent, the Operating Partnership, SL Green Realty
Corp. and SL Green Operating Partnership, L.P. dated as of the date hereof.

 

(t)                                    “Stockholders’ Equity” means, without
duplication, the sum of (i) the aggregate gross proceeds from the sales of the
Operating Partnership’s common and preferred equity capital, (ii) the aggregate
gross proceeds from the sales of trust preferred securities issued by the
Company, and (iii) the aggregate gross proceeds from the sales of any securities
issued by the Company that do not constitute indebtedness on the Parent’s
financial statements in accordance with GAAP.

 

(u)                                 “Subsidiary” means any direct or indirect
subsidiary of the Parent or the Operating Partnership, any partnership, the
general partner of which is the Parent or the Operating Partnership or any
direct or indirect subsidiary of the Parent or the Operating Partnership and any
limited liability company, the managing member of which is the Parent or the
Operating Partnership or any direct or indirect subsidiary of the Parent or the
Operating Partnership.

 

2.                                      Appointment and Duties of Manager.

 

(a)                                  Appointment.  The Company hereby appoints
Manager as its exclusive agent to manage the assets of the Company subject to
the further terms and conditions set forth in this Agreement, and Manager hereby
agrees to use its commercially reasonable efforts to perform each of the duties
set forth herein, provided funds are made available by the Company for such
purposes, as set forth in Section 9 hereof.

 

(b)                                 Duties.  Manager, in its capacity as manager
of the Company’s day-to-day operations, at all times will be subject to the
supervision of the Board of Directors and will have only such functions and
authority as the Company may delegate to it, including, without limitation, the
functions and authority identified herein and delegated to Manager hereby. 
Manager will perform (or cause to be performed) the following services and
activities for the Company:

 

(i)                                     serving as the Parent’s consultant with
respect to the periodic review of the investment criteria and parameters for
Investments, borrowings and operations for approval by the Board of Directors;

 

(ii)                                  investigating, analyzing and selecting
possible investment opportunities;

 

(iii)                               engaging and supervising, on the Company’s
behalf and at the Company’s expense, independent contractors which provide real
estate-related services, investment banking services, mortgage brokerage
services, securities brokerage services, legal services, accounting services,
due diligence services and other financial services and such other services as
may be required relating to the Company’s Investments;

 

(iv)                              negotiating, executing and closing on the
Company’s behalf the origination, acquisition, sale, exchange or other
disposition of any of the Company’s Investments;

 

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(v)                                 arranging, negotiating, coordinating and
managing operations of any joint venture or co-investment interests held by the
Company and conducting all matters with any joint venture or co-investment
partners;

 

(vi)                              providing executive and administrative
personnel;

 

(vii)                           administering the Company’s day-to-day
operations and performing and supervising the performance of other
administrative functions necessary to the Company’s management, as may be agreed
upon by Manager and the Board of Directors, including the collection of revenues
and the payment of the Company’s debts and obligations, maintenance of
appropriate computer services to perform such administrative functions, keeping
the Company’s books and records, organizing Board of Directors and committee
meetings, and other services related to the Parent’s obligations as a publicly
traded entity;

 

(viii)                        communicating on the Company’s behalf with the
holders of any of the Company’s equity or debt securities as required to satisfy
the reporting and other requirements of any governmental bodies or agencies or
trading markets and to maintain effective relations with such holders;

 

(ix)                                advising the Parent in connection with
policy decisions to be made by the Parent’s Board of Directors;

 

(x)                                   evaluating and recommending to the Board
of Directors modifications to the hedging strategies in effect and causing the
Company to engage in overall hedging strategies consistent with the Company’s
status as a REIT and with the Company’s Investment Guidelines;

 

(xi)                                advising the Company regarding the
maintenance of the Company’s status as a REIT and monitoring compliance with the
various REIT qualification tests and other rules set out in the Code and
Treasury Regulations thereunder;

 

(xii)                             advising the Company regarding the maintenance
of the Company’s exemption from the Investment Company Act and monitoring
compliance with the requirements for maintaining an exemption from the
Investment Company Act;

 

(xiii)                          assisting the Company in developing criteria for
Investment commitments meeting the Company’s objectives, and making available to
the Company its knowledge and experience with respect to real estate, real
estate securities and other real estate-related assets;

 

(xiv)                         representing, and making recommendations to, the
Company in connection with the purchase and finance and commitment to purchase
and finance of whole loans, mezzanine loans and interests therein, mortgage
loans and interests therein (including on a portfolio basis), real estate, real
estate securities and other real estate-related assets, and the sale and
commitment to sell such assets;

 

(xv)                            monitoring the operating performance of the
Company’s Investments and providing periodic reports with respect thereto to the
Board of Directors as requested by the Board of Directors, including comparative
information with respect to such operating

 

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performance, budgeted or projected operating results and compliance with the
Company’s Investment Guidelines;

 

(xvi)                         investing or reinvesting any money of the Company
(including investing in short-term investments pending investment in long-term
asset investments, payment of fees, costs and expenses, or payments of dividends
or distributions to the Company’s stockholders and partners), and advising the
Parent and the Operating Partnership as to their respective capital structures
and capital raising;

 

(xvii)                      causing the Parent and the Operating Partnership to
retain qualified accountants and legal counsel, as applicable, to assist in
developing appropriate accounting procedures, compliance procedures and testing
systems with respect to financial reporting obligations and Parent’s compliance
with the REIT provisions of the Code and to conduct quarterly compliance reviews
thereof;

 

(xviii)                   causing the Parent and the Operating Partnership to
qualify to do business in all applicable jurisdictions and to obtain and
maintain all appropriate licenses;

 

(xix)                           assisting the Parent and the Operating
Partnership in complying with all regulatory requirements applicable to the
Parent and the Operating Partnership in respect of its business activities,
including preparing or causing to be prepared all financial statements required
under applicable regulations and contractual undertakings and all reports and
documents, if any, required under the Exchange Act, the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder;

 

(xx)                              taking all necessary actions to enable the
Parent and the Operating Partnership to make required tax filings and reports,
including with respect to the Parent, soliciting stockholders for required
information to the extent provided by the REIT provisions of the Code;

 

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

 

(xxii)                        using commercially reasonable efforts to cause
expenses incurred by or on behalf of the Company to be reasonable or customary
and within any budgeted parameters or expense guidelines set by the Board of
Directors from time-to-time;

 

(xxiii)                     performing such other services as may be required
from time-to-time for management and other activities relating to the Company’s
assets as the Board of Directors shall reasonably request or Manager shall deem
appropriate under the particular circumstances;

 

(xxiv)                    using commercially reasonable efforts to cause the
Parent and the Operating Partnership to comply with all applicable laws,
including the regulatory requirements applicable to the Parent required by the
New York Stock Exchange and the Sarbanes-Oxley Act of 2002;

 

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(xxv)                       administering the issuance of any stock under the
stock incentive plan to the Company’s executive officers or the employees of the
Manager; and

 

(xxvi)                    taking the foregoing actions for the Subsidiaries.

 

(c)                                  Asset Management Subcontracts.  Manager may
enter into agreements with other parties, including its affiliates and/or SL
Green, for the purpose of engaging one or more asset managers for and on behalf,
and at the sole cost and expense, of the Company to provide asset management
and/or similar services to the Company with respect to the Investments, pursuant
to asset management agreement(s) with terms which are then customary for
agreements regarding the management of assets similar in type, quality and value
to the assets of the Company; provided, that any such agreements entered into
with affiliates of Manager shall be (i) on terms no more favorable to such
affiliate than would be obtained from a third party on an arm’s-length basis,
and (ii) approved by a majority of the Independent Directors.

 

(d)                                 Other Service Providers; Special Servicer. 
Subject to any required Board of Directors approval, Manager may retain for and
on behalf, and at the sole cost and expense, of the Company such services of
accountants, legal counsel, appraisers, insurers and brokers, among others,
including Manager’s affiliates, as Manager deems necessary or advisable in
connection with the management and operations of the Company and the provision
of its duties under this Agreement; provided, that any such agreement entered
into with an affiliate of Manager to perform any such services shall be engaged
(i) on terms no more favorable to such affiliate than would be obtained from a
third party on an arm’s-length basis, and (ii) approved by a majority of the
Independent Directors.  The Company hereby acknowledges and approves the terms
of the Services Agreement.  The Company agrees that with respect to any
Investments which entitle it to appoint a special servicer or a sub-servicer to
a special servicer, it shall use all commercially reasonable efforts to
designate the Manager as such special servicer or sub-servicer.  In such event
the fees to be paid to the Manager shall be based on then customary fees paid to
third-parties performing similar functions, and shall be approved by a majority
of the Independent Directors.

 

(e)                                  CDO’s.  If the Company forms, directly or
indirectly, a CDO, CLO, REMIC or other similar vehicle (collectively, “CDOs”)
and retains a collateral manager, the Company shall, or shall cause the
issuer(s) thereof or their related parties to, enter into a collateral
management agreement or other similar agreements with the Manager similar to
those agreements entered into in connection with the Company’s CDOs completed in
2006 and 2007 and on substantially the same terms and conditions, or upon the
then current customary market terms and conditions for similar agreements in
similar transactions, reasonably acceptable to the Manager, provided, however,
that the compensation paid to the Manager in connection therewith shall be as
set forth in Section 8(b) hereof.

 

(f)                                    Reporting Requirements.

 

(i)                                     As frequently as Manager may deem
necessary or advisable, or at the direction of the Board of Directors, Manager
shall prepare, or cause to be prepared, with respect to any Investment
(A) reports and information on the Company’s operations and asset performance
and (B) other information reasonably requested by the Company.

 

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(ii)                                  Manager shall prepare, or cause to be
prepared, all reports, financial or otherwise, with respect to the Parent and
the Operating Partnership reasonably required by the Board of Directors in order
for the Parent and the Operating Partnership to comply with its Governing
Instruments or any other materials required to be filed with any governmental
entity or agency, and shall prepare, or cause to be prepared, all materials and
data necessary to complete such reports and other materials including, without
limitation, an annual audit of the Company’s books of account by a nationally
recognized independent accounting firm of good reputation, initially Ernst &
Young, LLP.

 

(iii)                               Manager shall prepare regular reports for
the Board of Directors to enable the Board of Directors to review the Company’s
acquisitions, portfolio composition and characteristics, credit quality,
performance and compliance with the Investment Guidelines and policies approved
by the Board of Directors.

 

(g)                                 Use of Manager’s Funds.  Manager shall not
be required to expend money in excess of that contained in any applicable
Company Account or otherwise made available by the Company to be expended by
Manager hereunder.

 

(h)                                 Reliance by Manager.  In performing its
duties under this Section 2, Manager shall be entitled to rely on qualified
experts and professionals (including, without limitation, accountants, legal
counsel and other professional service providers) hired by Manager at the
Company’s sole cost and expense.

 

(i)                                     Payment and Reimbursement of Expenses. 
The Company shall pay all expenses, and reimburse Manager for Manager’s expenses
incurred on its behalf, in connection with any such services to the extent such
expenses are reimbursable by the Company to Manager pursuant to Section 9
hereof.

 

3.                                      Dedication; Other Activities.

 

(a)                                  Devotion of Time.  Manager will provide a
dedicated management team to deliver the management services to the Company
hereunder, the members of which team shall devote such of their time to the
management of the Company as the Manager deems necessary and appropriate,
commensurate with the level of activity of the Company from time to time.  The
Company shall have the benefit of Manager’s reasonable judgment and effort in
rendering services and, in furtherance of the foregoing, Manager shall not
undertake activities which, in its reasonable judgment, will substantially
adversely affect the performance of its obligations under this Agreement.

 

(b)                                 Other Activities.  Except to the extent set
forth in clause (a) above, nothing herein shall prevent Manager or any of its
affiliates or any of the officers and employees of any of the foregoing from
engaging in other businesses or from rendering services of any kind to any other
person or entity, including investment in, or advisory service to others
investing in, any type of real estate or real estate-related investment,
including investments which meet the principal investment objectives of the
Company.

 

(c)                                  Officers, Employees, Etc.  Manager’s or its
affiliates’ members, partners, officers, employees and agents may serve as
directors, officers, employees, agents, nominees or

 

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signatories for the Company or any Subsidiary, to the extent permitted by their
Governing Instruments, as may be amended from time to time, or by any
resolutions duly adopted by the Board of Directors pursuant to the Company’s
Governing Instruments.  When executing documents or otherwise acting in such
capacities for the Company or such other Subsidiary, such Persons shall use
their respective titles with respect to the Company or such Subsidiary.

 

4.                                      Agency.  Manager shall act as the agent
of the Company in making, acquiring, financing and disposing of Investments,
disbursing and collecting the Company’s funds, paying the debts and fulfilling
the obligations of the Company, supervising the performance of professionals
engaged by or on behalf of the Company and handling, prosecuting and settling
any claims of or against the Company, the Board of Directors, holders of the
Company’s securities or the Company’s representatives or assets.

 

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

 

6.                                      Records; Confidentiality.

 

(a)                                  Records.  Manager shall maintain
appropriate books of account and records relating to services performed under
this Agreement, and such books of account and records shall be accessible for
inspection by representatives of the Company at any time during normal business
hours.

 

(b)                                 Confidentiality.  Manager shall keep
confidential any nonpublic information obtained in connection with the services
rendered under this Agreement and shall not disclose any such information (or
use the same except in furtherance of its duties under this Agreement), except:
(i) to SL Green on the condition that SL Green observe the requirements of this
Section 6(b) as it applies to the Manager; (ii) in accordance with the
Origination Agreement and the Services Agreement; (iii) with the prior written
consent of the Board of Directors; (iv) to legal counsel, accountants and other
professional advisors; (v) to appraisers, financing sources and others in the
ordinary course of the Company’s business; (vi) to governmental officials having
jurisdiction over the Company; (vii) in connection with any governmental or
regulatory filings of the Company or disclosure or presentations to Company
investors; or (viii) as required by law or legal process to which Manager or any
Person to whom disclosure is permitted hereunder is a party.  The foregoing
shall not apply to information which has previously become available through the
actions of a Person other than Manager not resulting from Manager’s violation of
this Section 6(b).  The provisions of this Section 6(b) shall survive the
expiration or earlier termination of this Agreement for a period of one year.

 

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7.                                      Obligations of Manager; Restrictions.

 

(a)                                  Restrictions.  Manager shall refrain from
any action that, in its sole judgment made in good faith, (i) is not in
compliance with the Investment Guidelines, (ii) would adversely affect the
status of the Parent as a REIT, or (iii) would violate any law, rule or
regulation of any governmental body or agency having jurisdiction over the
Company or that would otherwise not be permitted by the Company’s Governing
Instruments.  If Manager is ordered to take any such action by the Board of
Directors, Manager shall promptly notify the Board of Directors of Manager’s
judgment that such action would adversely affect such status or violate any such
law, rule or regulation or Governing Instruments.  Notwithstanding the
foregoing, Manager, its affiliates and their respective members, stockholders,
partners, managers, directors, officers, employees and agents shall not be
liable to the Parent, the Operating Partnership or any Subsidiary, the Board of
Directors or any of the Company’s stockholders, members or partners for any act
or omission by Manager, its managers, directors, officers, employees or agents
taken in good faith or except as provided in Section 11 hereof.

 

(b)                                 Board of Directors Review.  The Board of
Directors will periodically review the Investment Guidelines and the Company’s
investment portfolio but will not review each proposed investment, except as set
forth below.  Investments must be approved as follows, unless otherwise agreed
by Manager and the Board of Directors:  an investment committee of the Board of
Directors must unanimously approve all transactions involving investments of
(i) $35 million or more with respect to first mortgage loans, (ii) $30 million
or more with respect to subordinated interests in whole loans, and (iii) $20
million or more with respect to mezzanine loans, preferred equity and commercial
real estate properties net leased to tenants; approval by the full Board of
Directors is required for investments (i) over $75 million with respect to first
mortgage loans, (ii) over $65 million with respect to subordinated interests in
whole loans, (iii) over $55 million with respect to mezzanine loans, and
(iv) over $50 million with respect to preferred equity and commercial real
estate properties net leased to tenants.  Manager will have full discretion to
invest on behalf of the Company with respect to investments under
(i) $35 million with respect to first mortgage loans, (ii) $30 million with
respect to subordinated interests in whole loans and, (iii) $20 million with
respect to mezzanine loans, preferred equity and commercial real estate
properties net leased to tenants.  Approval limits are based on the investment
amount less any origination fees, discounts or other up-front fees the Company
receives in connection with the investment.  Manager can rely upon the direction
of the Secretary of the Board of Directors to evidence the approval of the Board
of Directors.  Notwithstanding the foregoing, any Investment entered into with
an affiliate of Manager shall be approved by a majority of the Independent
Directors.

 

(c)                                  Insurance.  Manager shall maintain “errors
and omissions” insurance coverage and such other insurance coverage which is
customarily carried by property, asset and investment managers performing
functions similar to those of Manager under this Agreement with respect to
assets similar to the assets of the Company, in an amount which is comparable to
that customarily maintained by other managers or servicers of similar assets.

 

8.                                      Compensation.

 

(a)                                  Effective as of October 1, 2008, the
Manager shall receive an annual management fee equal to 1.50% of Stockholders’
Equity.   The annual management fee shall be calculated on a weighted average
basis and paid in cash monthly in arrears.  Manager shall make available the

 

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monthly calculation of the base management fee to the Company within fifteen
(15) days following the last day of each calendar month, and the Company shall
pay Manager the base annual management fee within five business days thereafter.

 

(b)                                 In connection with any and all CDOs formed,
owned or controlled, directly or indirectly, by the Company, the Manager shall
remit to the Company any and all management, service and similar fees that the
Manager is entitled to receive in connection with such CDOs for any period from
and after July 1, 2008.

 

9.                                      Expenses.  The Company shall pay all of
its expenses and shall reimburse Manager for its documented expenses incurred on
the Company’s behalf in accordance with this Agreement (collectively, the
“Expenses”).  Expenses include all costs and expenses which are expressly
designated elsewhere in this Agreement as the Company’s expenses, together with
the following:

 

(a)                                  expenses incurred in connection with any
issuance of securities, and transaction costs incident to investment activity
and financings;

 

(b)                                 travel and out-of pocket expenses incurred
in connection with the origination, purchase, financing, refinancing, sale or
disposition of an Investment;

 

(c)                                  costs of professional fees including, but
not limited to, legal, accounting, tax, auditing and other similar services
performed for the Company;

 

(d)                                 compensation and expenses, including
liability insurance, for the Company’s directors;

 

(e)                                  compensation and expenses of the Company’s
custodian and transfer agent;

 

(f)                                    costs associated with establishing and
maintaining bank accounts and credit facilities, other indebtedness or
securities offerings;

 

(g)                                 costs associated with any computer hardware
or software used for the Company;

 

(h)                                 costs and expenses incurred contracting with
third parties, including affiliates of Manager;

 

(i)                                     all other costs associated with the
Company’s business and operations, including, but not limited to, costs of
acquiring, owning, protecting, maintaining, developing and disposing of
investments, including appraisal, engineering and environmental studies,
reporting, audit and legal fees;

 

(j)                                     all insurance costs, including all costs
related to insurance for the Company’s directors and employees acting on
Manager’s behalf, in each case, in the course of the performance of Manager’s
duties pursuant to this Agreement;

 

(k)                                  expenses for offices of the Company and of
the Manager including furniture, fixture and equipment expenses;

 

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(l)                                     expenses connected with interest
payments and dividends made or caused to be made by the Company’s Board of
Directors;

 

(m)                               expenses incurred in connection with
communications to holders of securities of the Company and other bookkeeping and
clerical work, including without limitation, all costs of preparing and filing
SEC reports, all listing costs, costs of preparing and distributing annual
reports and proxy materials; and

 

(n)                                 all expenses actually incurred by Manager
which are reasonably necessary for the performance by Manager of its duties and
functions in accordance with the terms of this Agreement.

 

Manager is not entitled to be reimbursed for wages, salaries and benefits of its
officers and employees.  Subject to any required Board of Directors approval,
Manager may retain third parties including accountants, legal counsel, real
estate underwriters, brokers, among others, on the Company’s behalf, and be
reimbursed for such services.  The provisions of this Section 9 shall survive
the expiration or earlier termination of this Agreement to the extent such
expenses have previously been incurred or are incurred in connection with such
expiration or termination.

 

10.                               Expense Reports and Reimbursements.  Manager
shall prepare a statement documenting the Expenses incurred during, and deliver
the same to the Company within forty-five days following the end of each fiscal
quarter.  Expenses incurred by Manager on behalf of the Company shall be
reimbursed by the Company within forty-five days following delivery of the
expense statement by Manager.  The provisions of this Section 10 shall survive
the expiration or earlier termination of this Agreement.

 

11.                               Limits of Manager Responsibility;
Indemnification.  Pursuant to this Agreement, Manager will not assume any
responsibility other than to render the services called for hereunder and will
not be responsible for any action of the Company’s Board of Directors in
following or declining to follow its advice or recommendations.  Manager and its
affiliates and their respective members, stockholders, partners, managers,
directors, officers, employees and agents will not be liable to the Parent, the
Operating Partnership, any Subsidiary, any of their directors, officers,
stockholders, managers, owners or partners for acts or omissions performed or
not performed in accordance with and pursuant to this Agreement, except by
reason of acts or omissions constituting bad faith, willful misconduct, gross
negligence or reckless disregard of Manager’s duties under this Agreement.  The
Company agrees, to indemnify Manager and its affiliates and their respective
members, stockholders, partners, managers, directors, officers, employees and
agents with respect to all expenses, losses, actual damages, liabilities,
demands, charges and claims arising from acts or omissions of Manager performed
in good faith in accordance with and pursuant to this Agreement and not
resulting from the willful misconduct, gross negligence or reckless disregard of
Manager.  Manager agrees to indemnify Company and its directors and officers
with respect to all expenses, losses, actual damages, liabilities, demands,
charges and claims arising from acts of Manager constituting bad faith, willful
misconduct, gross negligence or reckless disregard of its duties under this
Agreement, as determined pursuant to a final, non-appealable order of a court of
competent jurisdiction.  The provisions of this Section 11 shall survive the
expiration or earlier termination of this Agreement.

 

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

 

13.                               Term; Termination.

 

(a)                                  Term.  This Agreement shall remain in full
force through December 31, 2009, unless terminated by the Company or Manager as
set forth below, and shall be renewed automatically for successive one (1) year
periods thereafter, until this Agreement is terminated in accordance with the
terms hereof.

 

(b)                                 Non-Renewal.  Either party may elect not to
renew this Agreement at the expiration of the initial term or any renewal term
for any or no reason by notice to the other party at least six (6) months prior
to the end of the term.

 

(c)                                  Termination by the Company.  The Company
may terminate this Agreement effective thirty (30) days after notice of
termination from the Parent and the Operating Partnership to Manager in the
event that any act of fraud, misappropriation of funds, or embezzlement against
the Company or other willful and material violation of this Agreement by Manager
in its corporate capacity (as distinguished from the acts of any employees of
Manager which are taken without the complicity of any of the executive officers
of Manager or SL Green); provided, that with respect to a willful and material
violation of this Agreement only, such willful and material violation continue
for a period of thirty (30) days after written notice thereof specifying such
violation and requesting that the same be remedied in such thirty (30) day
period.

 

(d)                                 Termination by Manager.  Manager may
terminate this Agreement effective upon thirty (30) days prior written notice of
termination to the Company in the event that the Company shall default in the
performance or observance of any material term, condition or covenant in this
Agreement and such default shall continue for a period of thirty (30) days after
written notice thereof specifying such default and requesting that the same be
remedied in such thirty (30) day period.

 

(e)                                  Termination Fees.  In the event this
Agreement is not renewed by the Company under Section 13(b) or is terminated
under Section 13(d), the Company shall pay Manager on the termination date a
termination fee equal to the management fee earned by the Manager during the
12-month period immediately preceding the effective date of the termination;
provided, however, that if prior to or in connection with such termination the
Company acquires the Manager or the Manager’s business and, as a result, becomes
self-managed pursuant to a separate agreement between or among the Manager, its
members or/and their respective affiliates and the Company, no termination fee
shall be due and payable to the Manager pursuant to this Section 13(e).  The
Company’s obligation to pay a termination fee shall survive the termination of
this Agreement.

 

(f)                                    Survival.  If this Agreement is
terminated pursuant to this Section 13, such termination shall be without any
further liability or obligation of either party to the other, except as
otherwise expressly provided herein.

 

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14.                               Action Upon Termination or Expiration of
Origination Period.  From and after the effective date of termination of this
Agreement pursuant to Section 13, Manager shall not be entitled to compensation
for further services under this Agreement but shall be paid all compensation
accruing to the date of termination, reimbursement for all Expenses and a
termination fee, if applicable.  Upon such termination or expiration, Manager
shall reasonably promptly:

 

(a)                                  after deducting any accrued compensation
and reimbursement for Expenses to which it is then entitled, pay over to the
Company all money collected and held for the account of the Company pursuant to
this Agreement;

 

(b)                                 deliver to the Board of Directors a full
accounting, including a statement showing all payments collected and all money
held by it, covering the period following the date of the last accounting
furnished to the Board of Directors with respect to the Company and through the
termination date; and

 

(c)                                  deliver to the Board of Directors all
property and documents of the Company provided to or obtained by Manager
pursuant to or in connection with this Agreement, including all copies and
extracts thereof in whatever form, then in Manager’s possession or under its
control.

 

15.                               Reserved.

 

16.                               Release of Money or other Property Upon
Written Request.  Manager agrees that any money or other property of the Company
held by Manager under this Agreement shall be held by Manager as custodian for
the Company, and Manager’s records shall be clearly and appropriately marked to
reflect the ownership of such money or other property by the Company.  Upon the
receipt by Manager of a written request signed by a duly authorized officer of
the Company requesting Manager to release to the Company any money or other
property then held by Manager for the account of the Company under this
Agreement, Manager shall release such money or other property to the Company
within a reasonable period of time, but in no event later than thirty (30) days
following such request.  Manager shall not be liable to the Parent, the
Operating Partnership, any Subsidiary or any of their respective directors,
officers, stockholders, managers, owners or partners for any acts or omissions
by the Company in connection with the money or other property released to the
Company in accordance with the terms hereof.  The Company shall indemnify
Manager and its affiliates and their respective members, stockholders, partners,
managers, directors, officers, employees and agents against any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever which arise in connection with Manager’s release of such money
or other property to the Company in accordance with the terms of this
Section 16.  Indemnification pursuant to this Section 16 shall be in addition to
any right to indemnification under Section 11.

 

17.                               Notices.  Unless expressly provided otherwise
in this Agreement, all notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received when delivered against receipt
or upon actual receipt of (a) personal delivery, (b) delivery by a reputable
overnight

 

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courier, (c) delivery by facsimile transmission against answerback, or
(d) delivery by registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below:

 

If to the Parent or the Operating Partnership:

Gramercy Capital Corp.

 

420 Lexington Avenue

 

New York, New York 10170

 

Attention: Robert Foley

 

 

If to Manager:

GKK Manager LLC

 

c/o SL Green Realty Corp.

 

420 Lexington Avenue

 

New York, New York 10170

 

Attention: Andrew S. Levine

 

Any party may change the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 17 for the giving of notice.

 

18.                               Binding Nature of Agreement; Successors and
Assigns.  This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and permitted assigns as provided in this Agreement.

 

19.                               Entire Agreement; Amendments.  This Agreement
contains the entire agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter of this Agreement.  The express terms of this Agreement controls
and supersedes any course of performance and/or usage of the trade inconsistent
with any of the terms of this Agreement.  This Agreement may not be modified or
amended other than by an agreement in writing signed by the parties hereto.  For
avoidance of doubt, the parties hereto acknowledge that as a result of the
restatement of the Amended and Restatement Management Agreement, the Addendum
shall be of no further force and effect.

 

20.                               Governing Law.  This Agreement and all
questions relating to its validity, interpretation, performance and enforcement
shall be governed by and construed, interpreted and enforced in accordance with
the internal laws of the State of New York, without regard to conflicts of laws
principles thereof.

 

21.                               Indulgences, Not Waivers.  Neither the failure
nor any delay on the part of a party to exercise any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy, power
or privilege with respect to any other occurrence.  No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.

 

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22.                               Titles Not to Affect Interpretation.  The
titles of sections, paragraphs and subparagraphs contained in this Agreement are
for convenience only, and they neither form a part of this Agreement nor are
they to be used in the construction or interpretation of this Agreement.

 

23.                               Execution in Counterparts.  This Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original as against any party whose signature appears thereon, and all of
which shall together constitute one and the same instrument.  This Agreement
shall become binding when one or more counterparts of this Agreement,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories.

 

24.                               Provisions Separable.  The provisions of this
Agreement are independent of and separable from each other, and no provision
shall be affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other or others of them may be invalid or unenforceable
in whole or in part.

 

25.                               Principles of Construction.  Words used herein
regardless of the number and gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context requires.  All references to
recitals, sections, paragraphs and schedules are to the recitals, sections,
paragraphs and schedules in or to this Agreement unless otherwise specified.

 

26.                               Assignment; Change of Control of the Manager. 
Manager may not assign its duties under this Agreement except as described in
this Section 26. The Manager may assign this Agreement, the Manager’s duties
hereunder or direct or indirect interests in the Manager so long as the assignee
or Manager, as the case may be, shall be controlled, directly or indirectly, by
SL Green Realty Corp.  For the avoidance of doubt, for the purposes of this
Section 26, SL Green Realty Corp. shall include any successor to SL Green Realty
Corp., whether by merger, consolidation or similar business combination
transaction, however characterized.  Furthermore, in the event the owners of
Manager seek to assign this Agreement or sell interests in the Manager which
will transfer to a person not affiliated with SL Green the power to direct or
control the Manager, Manager shall notify the Company as to the terms and
conditions on which such assignment or transfer is proposed to be made (the
“Transfer Notice”) at least thirty (30) days prior to the proposed completion of
such assignment or transfer.  The Company shall have thirty (30) days to
(i) match such offer, in which event Manager or its owners shall assign or
transfer the interest to the Company on the same terms and conditions as set
forth in the Transfer Notice or (ii) cause a third party to match such offer, in
which event Manager or its owners shall assign or transfer the interest to such
third party on the same terms and conditions as set forth in the Transfer
Notice, in each case within thirty (30) days after such matching offer.  If the
Company does not match the offer or cause a third party to match the offer
within thirty (30) days after the Transfer Notice is sent, Manager or its owners
shall be free to consummate the transaction described in the Transfer Notice. 
No transfer or assignment may be proposed hereunder unless the transferee has,
at the time of the Transfer Notice, (i) at least five years’ experience managing
assets of the type in which the Company invests or intends to invest and (ii) at
least $500 million of such assets under management.

 

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

 

 

GKK MANAGER LLC

 

a Delaware limited liability company

 

 

 

By:

/s/ Andrew S. Levine

 

Name:

Andrew S. Levine

 

Title:

Chief Legal Officer

 

 

 

 

 

GRAMERCY CAPITAL CORP.

 

a Maryland corporation

 

 

 

By:

/s/ Robert R. Foley

 

Name:

Robert R. Foley

 

Title:

Chief Operating Officer

 

 

 

 

 

GKK CAPITAL LP

 

a Delaware limited partnership

 

 

 

By:

/s/ Robert R. Foley

 

Name:

Robert R. Foley

 

Title:

Chief Operating Officer

 

[Signature Page for Second Amended and Restated Management Agreement]

 

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