Exhibit 10.3

 

EXECUTION COPY

 

AGREEMENT

 

THIS AGREEMENT, dated as of October 27, 2008, is made by and among Gramercy
Capital Corp., a Maryland corporation (“Parent”), GKK Capital LP, a Delaware
limited partnership (the “Operating Partnership”), SL Green Operating
Partnership, L.P., a Delaware limited partnership (“SLGOP”), the undersigned
individual limited partners of the Operating Partnership (the “Individuals”) and
GKK Manager LLC, a Delaware limited liability company (“Manager”).

 

RECITALS

 

WHEREAS, (i) Parent is the general partner and a limited partner of the
Operating Partnership, (ii) SLGOP is a limited partner of the Operating
Partnership and directly owns 54.4 Class B Units of the Operating Partnership
(“Class B Units”), (iii) the Individuals are limited partners of the Operating
Partnership and directly own an aggregate of 15.6 Class B Units, and
(iv) Manager is a limited partner of the Operating Partnership and directly owns
30 Class B Units;

 

WHEREAS, Parent, Manager, SLGOP and the Individuals are parties to the Third
Amended and Restated Limited Partnership Agreement of the Operating Partnership,
as amended by the First Amendment to the Third Amended and Restated Agreement of
Limited Partnership of the Operating Partnership (as amended, the “OP
Agreement”); and

 

WHEREAS, pursuant to the OP Agreement, the holders of the Class B Units (the
“Class B Holders”) are entitled to receive quarterly distributions from the
Operating Partnership in respect of the Class B Units (“Class B Distributions”);

 

NOW, THEREFORE, the parties agree as follows:

 

(a)         Each of the Class B Holders hereby waives its right to receive any
Class B Distributions payable in respect of the period having commenced on
July 1, 2008 and ending on December 31, 2008.

 

(b)         Each of the Class B Holders hereby acknowledges and agrees that
notwithstanding the waiver of its right to receive its portion of the Class B
Distributions as set forth above, it shall continue to be bound by the
provisions of Section 5.01.C of the OP Agreement as such provisions relate to
the refund of any distributions received by a Class B Holder pursuant to such
Section.

 

(c)         For all periods from and after January 1, 2009, the Class B Holders
shall continue to receive distributions from the Operating Partnership as set
forth in Section 5 of the OP Agreement; provided, however, that if permissible
under applicable law and New York Stock Exchange requirements (or the
requirements of any other exchange on which the shares of Parent’s common stock
are listed at the time of payment), Parent may, at its option, elect to assume
directly and satisfy any Class B Holder’s right to receive Class B Distributions
by issuing to such Class B Holder on or prior to the time such Class B
Distribution would be due and payable, a number shares of common stock of Parent
equal in value to the amount distributable to such Class B Holder in respect of
the applicable Class B Distribution. For the purpose hereof, the value of a
share of common stock of Parent shall be determined based on the average closing
price of Parent’s common stock for each of the 10 trading days prior to the date
of such payment.

 

(d)         In the event Parent elects to exercise its right by issuing common
stock of Parent pursuant to clause (c) above, Parent shall, prior to issuing
such stock, and as a condition to the exercise of such right, (i) enter into an
ownership waiver with respect to such issuance, which ownership waiver shall be
substantially similar to the ownership waivers previously granted by Parent to
SLGOP; provided,

 

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however, that the Parent’s obligation pursuant to this clause (d) shall be
subject to SLGOP’s ability to provide a representation letter regarding its
ownership of Parent’s common stock that is substantially similar to such letters
previously provided by SLGOP and (ii) amend and restate the existing
registration rights agreement to include the shares of Parent’s common stock
issued in connection with the issuance hereunder.

 

(e)           Without the prior written consent of SLGOP and the Individuals,
Parent shall not amend (i) Article V Section 4 or Article X of the Articles of
Incorporation of Parent, or (ii) Article XII of the Bylaws of Parent, in any
case, in a manner that is adverse to SLGOP or any of the Individuals, other than
pursuant to any amendment that would only apply to acts or omissions occurring
after the date of such amendment.

 

(f)            Neither this Agreement nor any right, interest or obligation
under this Agreement may be assigned by any party to this Agreement by operation
of law or otherwise without the prior written consent of the other party to this
Agreement and any attempt to do so will be void.  Subject to the foregoing, this
Agreement is binding upon, inures to the benefit of and is enforceable by the
parties to this Agreement and their respective successors and assigns.

 

(g)           Upon the terms and subject to the conditions of this Agreement,
each of the parties hereto shall use its respective commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement.

 

(h)           This Agreement may be signed in any number of identical
counterparts, each of which shall be an original (including signatures delivered
via facsimile or electronic mail) with the same effect as if the signatures
thereto and hereto were upon the same instrument.  The parties hereto may
deliver this Agreement and the other documents required to consummate the
transaction contemplated herein by facsimile or electronic mail and each party
shall be permitted to rely upon the signatures so transmitted to the same extent
and effect as if they were original signatures.  This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed
by each other party hereto.

 

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

 

 

 

GRAMERCY CAPITAL CORP.,

 

a Maryland corporation

 

 

 

     By:

/s/ John Roche

 

 

Name: John Roche

 

 

Title:   Chief Financial Officer

 

 

 

 

GKK CAPITAL LP,

 

a Delaware limited partnership

 

 

 

     By:

Gramercy Capital Corp., a Maryland corporation, its general partner

 

 

 

     By:

/s/ John Roche

 

 

Name: John Roche

 

 

Title:   Chief Financial Officer

 

 

 

 

SL GREEN OPERATING PARTNERSHIP, L.P.,

 

a Delaware limited partnership

 

 

 

 

     By:

SL Green Realty Corp., a Maryland corporation, its general partner

 

 

 

 

     By:

/s/ Andrew S. Levine

 

 

Name: Andrew S. Levine

 

 

Title:   Chief Legal Officer

 

 

 

GKK MANAGER LLC,

 

a Delaware limited liability company

 

 

 

     By:

GKK Manager Member Corp., a Delaware

 

 

corporation, its managing member

 

 

 

 

     By:

/s/ Andrew S. Levine

 

 

Name: Andrew S. Levine

 

 

Title:   Chief Legal Officer

 

[Signature Page to Agreement]

 

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[Certain Individual Signature Page]

 

[Signature Page to Agreement]

 

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