EXECUTION VERSION

SUPPLEMENTAL INDENTURE
 
THIS SUPPLEMENTAL INDENTURE, dated as of June 14, 2010 (this “Supplemental
Indenture”), is entered into by and between GKK CAPITAL LP, a Delaware limited
partnership (the “Company”) and THE BANK OF NEW YORK MELLON TRUST COMPANY,
NATIONAL ASSOCIATION (the “Trustee”).
 
WHEREAS, the Company and the Trustee entered into a Junior Subordinated
Indenture dated as of January 30, 2009 (the “Original Indenture”), as amended by
that certain Supplemental Indenture dated as of October 14, 2009 (together with
the Original Indenture, the “Indenture”);
 
WHEREAS, the Company desires to amend the Indenture as set forth below; and
 
WHEREAS, execution and delivery by the Company of this Supplemental Indenture
has been duly authorized by all requisite corporate action and all other action
required to make this Supplemental Indenture a valid and binding instrument.
 
NOW, THEREFORE, in consideration of the foregoing, the Trustee and the Company
are entering into this Supplemental Indenture pursuant to Section 9.2 of the
Indenture as follows:
 
ARTICLE I
 
AMENDMENTS TO INDENTURE
 
Section 1.01  Relation to Indenture.  This Supplemental Indenture amends and
supplements the Indenture and shall be part and subject to all terms
thereof.  Except as amended and supplemented hereby, the Indenture and the
Securities issued thereunder shall continue in full force and effect.
 
Section 1.02  Definitions.  Each term used herein that is defined in the
Indenture shall have the meaning assigned to such term in the Indenture unless
otherwise specifically defined herein, in which case the definition set forth
herein shall govern.
 
Section 1.03  The definition of “Redemption Price” is hereby deleted in its
entirety and replaced with the following:
 
““Redemption Price” means, when used with respect to any Security to be
redeemed, in whole or in part, the In-Kind Redemption Price or the Optional
Redemption Price, as applicable, at which such Security or portion thereof is to
be redeemed as fixed by or pursuant to this Indenture.”
 
Section 1.04    The following sentences shall be added to the end of Section
11.1 of the Indenture:

 
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“Notwithstanding anything to the contrary herein, the Company, may, at its
option, redeem the Securities in whole at any time or in part from time to time
by delivering to the Holders certain replacement securities acceptable to the
Holders in par amounts greater than or equal to the Securities being redeemed,
exclusive of any accrued interest on the Securities being redeemed (the “In-Kind
Redemption Price”).  It being understood that the securities set forth on
Exhibit B hereto are acceptable to the Holders as replacement securities, which
if delivered to the Trustee together with a one-time payment of $5,000,000 in
the form of three-month Treasury bills issued by the U.S. Department of Treasury
to be delivered to the Trustee or as directed by the Trustee will permit the
redemption of the Securities in whole.  Notwithstanding anything to the contrary
herein, the Company shall not be required to pay accrued interest on the
Securities being redeemed in connection with the Company’s payment of the
In-Kind Redemption Price.  The Holders may agree to waive the notice
requirements set forth in Section 11.5 hereof with respect to any redemption
described in the two preceding sentences.”
 
Section 1.05   Section 11.3 of the Indenture is hereby deleted in its entirety
and replaced with the following:
 
“The election of the Company to redeem any Securities, in whole or in part,
shall be evidenced by or pursuant to a Board Resolution.  In case of any
redemption at the election of the Company, the Company shall, not less than two
(2) Business Days and not more than seventy five (75) days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee in writing of such date and of the principal amount of the
Securities to be redeemed and provide the additional information required to be
included in the notice or notices contemplated by Section 11.5.  In the case of
any redemption of Securities, in whole or in part, (a) prior to the expiration
of any restriction on such redemption provided in this Indenture or the
Securities or (b) pursuant to an election of the Company which is subject to a
condition specified in this Indenture or the Securities, the Company shall
furnish the Trustee with an Officers’ Certificate and an Opinion of Counsel
evidencing compliance with such restriction or condition.”
 
Section 1.06   Section 11.5(a) of the Indenture is hereby deleted in its
entirety and replaced with the following:
 
“Notice of redemption shall be given by the Company not less than two (2)
Business Days and not more than sixty (60) calendar days prior to the Redemption
Date to each Holder of Securities to be redeemed, in whole or in part.”
 
Section 1.07    Section 11.6 of the Indenture is hereby deleted in its entirety
and replaced with the following:
 
“Prior to 10:00 a.m., New York City time, on the Redemption Date specified in
the notice of redemption given as provided in Section 11.5, the Company will
deposit with the Trustee or with one or more Paying Agents (or if the Company is
acting as its own Paying Agent, the Company will segregate and hold in trust as
provided in Section 10.2) an amount of money or securities, as applicable,
sufficient to pay the Redemption Price of, and, if required, any accrued
interest (including any Additional Interest) on, all the Securities (or portions
thereof) that are to be redeemed on that date.”

 
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ARTICLE II
 
AGREEMENT TO BE BOUND
 
Section 2.01    The Trustee accepts the trust in this Supplemental Indenture
declared and provided upon the terms and conditions set forth in the
Indenture.  The Trustee shall not be responsible in any manner whatsoever for
the validity or sufficiency of this Supplemental Indenture or the due execution
hereof by the Company or for or in respect of the recitals and statements
contained herein, all of which recitals and statements are made solely by the
Company.
 
Section 2.02   This Supplemental Indenture shall become effective only upon the
satisfaction of the following conditions:  (i) the Trustee shall have received a
counterpart of this Supplemental Indenture duly executed by the Company and the
Trustee and consented and agreed to by each Holder of Outstanding Securities,
(ii) the delivery of an Opinion of Counsel relating to this Supplemental
Indenture in accordance with Sections 1.2 and 9.3 of the Indenture, (iii) the
delivery of an Officer’s Certificate relating to this Supplemental Indenture in
accordance with Sections 1.2 and 9.3 of the Indenture, (iv) the Trustee shall
have received a Board Resolution of the Company authorizing the Company to enter
into this Supplemental Indenture, and (v) the Company shall have paid all
attorneys’ fees and disbursements of the Trustee in connection with this
Supplemental Indenture, and all other amounts due and owing to the Trustee, if
any, which such expenses shall be paid simultaneously with the execution of this
Supplemental Indenture.
 
Section 2.03   By execution of this Supplemental Indenture, each of Taberna
Preferred Funding III, Ltd. (“Taberna III”) and Taberna Preferred Funding IV,
Ltd. (“Taberna IV”), collectively as Holders of 100% of the Outstanding
Securities, hereby in accordance with Section 9.2 of the Indenture, (i) consents
to the Trustee and the Company executing and delivering this Supplemental
Indenture, (ii) directs the Trustee to execute and deliver this Supplemental
Indenture, (iii) waives the requirement of the Trustee to deliver a copy of the
final form of this Supplemental Indenture pursuant to Section 9.3 of the
Indenture, and (iv) agrees to and do hereby release the Trustee for any action
taken or to be taken by the Trustee in connection with its execution and
delivery of this Supplemental Indenture and for any liability or responsibility
arising in connection herewith.
 
Section 2.04     Each of Taberna III and Taberna IV further acknowledges that
(i) neither the Company nor any of its affiliates has made or will make any
representations or warranties with respect to the performance and ratings of the
securities set forth in Exhibit B hereto and (ii) it has conducted independent
evaluation of the performance and ratings of such securities.
 
ARTICLE III
 
MISCELLANEOUS
 
Section 3.01    This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be deemed to be an original for all purposes;
but such counterparts shall together be deemed to constitute but one and the
same instrument.  The executed counterparts may be delivered by facsimile
transmission, which facsimile copies shall be deemed original copies.

 
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Section 3.02   The laws of the State of New York shall govern this Supplemental
Indenture without regard to the conflict of law principles thereof.
 
Section 3.03   In the event of any inconsistency between the terms and
conditions of this Supplemental Indenture and the terms and conditions of the
Indenture, the terms and conditions of this Supplemental Indenture shall
prevail.
 
[Remainder of Page Intentionally Left Blank]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed as of the day and year first above written.
 
GKK CAPITAL LP,
as Company
 
By: 
Gramercy Capital Corp.,
 
its general partner
     
By: 
/s/ Robert R. Foley
 
 
Name: Robert R. Foley
 
 
Title: Chief Operating Officer

 
THE BANK OF NEW YORK MELLON TRUST
COMPANY, NATIONAL ASSOCIATION,
as Trustee
 
By: 
/s/ Bill Marshall
 
Name: Bill Marshall
 
Title: Vice President

 
CONSENTED AND AGREED TO PURSUANT
TO SECTION 9.2 AND FOR PURPOSE OF
SECTIONS 2.03 AND 2.04 BY:
 
TABERNA PREFERRED FUNDING III, LTD.
TABERNA PREFERRED FUNDING IV, LTD.
   
By:
   TP Management LLC, as collateral manager
   
By: 
/s/ Constantine M. Dakolias
 
Name: Constantine M. Dakolias
 
Title: President

 

 
 

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