EXHIBIT 10.48

ASSET SERVICING AGREEMENT

THIS ASSET SERVICING AGREEMENT (this “Agreement”), dated as of August 2, 2004,
is made by and between GKK Manager LLC, a Delaware limited liability company
(the “Manager”), and SLG Gramercy Services LLC, a Delaware limited liability
company (“Servicer”).

WHEREAS, Manager provides management services to Gramercy Capital Corp. (the
“Parent”) and GKK Capital LP, a Maryland limited partnership (the “Operating
Partnership” and collectively with the Parent, the “Company”) pursuant to that
certain Management Agreement dated as of the date hereof (the “Management
Agreement”), by and among the Company and the Manager;

WHEREAS, Manager desires to engage Servicer to manage and service certain assets
of the Company; and

WHEREAS, Servicer is willing to perform the services described herein on the
terms and conditions hereinafter set forth;

AGREEMENT

NOW THEREFORE, in consideration of the mutual agreements herein set forth and
intending to be legally bound, the parties hereto agree as follow:

1.             Services.

(a)           Servicer agrees to provide the following asset management services
(the “Services”) to the Manager upon request with respect to the Serviced Assets
(as defined in Section 3):

(i)            issuing bills and payment notices, and making all reasonable
efforts to collect all payments called for under the terms and provisions of the
Serviced Assets, and shall follow such collection procedures as are in
accordance with generally applicable servicing practices;

(ii)           establishing, and maintaining during the term of this Agreement,
the Company Account (as defined in the Management Agreement), and any sub or
related accounts in connection therewith (collectively, the “Accounts”).  The
Accounts shall relate solely to the Serviced Assets, and funds in the Accounts
shall be held in trust by the Servicer for the benefit of the Manager and shall
not be commingled with any other moneys.   The Servicer shall notify the Manager
in writing of the location and account number of the Accounts and shall
thereafter give the Manager written notice of any change of the location or
account number of the Accounts promptly following the date of such change;

(iii)          depositing into the Accounts all payments on account of principal
of the Serviced Assets, including any principal prepayments thereon and all
payments on account of interest or yield on the Serviced Assets, (including any
default interest or late charges), any exit fees and any other amounts received
with respect thereto (including, without limitation, any amounts received in
connection with the liquidation or other conversion of a Serviced Asset);

(iv)          making withdrawals from the Accounts of amounts on deposit therein
for (without duplication) the following purposes:

 

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(1)           to pay any amount deposited in the Accounts in error to the Person
entitled thereto;

(2)           to pay to itself its fees due hereunder and to reimburse itself
for any other amounts owed to it pursuant to the Agreement;

(3)           after the withdrawal pursuant to the immediately preceding clause
(2), to distribute to the Manager any amounts remaining in the Accounts; and

(4)           to clear and terminate the Accounts upon termination of this
Agreement;

(v)           preparing and distributing to Manager, on the date on which any
distribution is made to the Manager a report setting forth each Serviced Asset
(a) the servicing fee paid on such date, (b) any other amounts paid to the
Servicer on such date, and (c) any amounts of principal interest, yield, default
interest, late charges, exit fees and any other amounts distributed to Manager
on such day;

(vi)          processing requests for approvals and consents received by
Servicer in connection with the Serviced Assets for leases and draw requests
from escrow accounts and reserve funds;

(vii)         monitoring compliance with insurance requirements;

(viii)        monitoring real estate tax and insurance escrow deposits;

(ix)           reviewing periodic budgeting and financial reporting under the
Serviced Assets; and

(x)            issuing customary reporting with respect to each of the Serviced
Assets and the portfolio of all Serviced Assets, and as may be required of the
Manager under the Management Agreement.

(b)           To the extent Servicer accepts appointment as a special servicer
or sub-servicer to a special servicer of any Serviced Asset, Servicer agrees to
provide the following special asset management services (the “Special Services”)
to the Manager:

(i)            reviewing loan files of the Serviced Assets to:  (A) assess the
Company’s rights in and to collateral securing the subject loans, including bank
accounts, letters of credit and funds held in escrow; and (B) identify
guarantees, other credit support and additional sources of equity, if any;

(ii)           conducting due diligence with respect to the Serviced Assets with
an emphasis on exit strategies and exploring, developing and implementing
strategic opportunities and plans to restructure debt and equity positions;

(iii)          reviewing current operating statements of profit and loss and
past and current rent rolls to assess operating and financial performance and
the impact of existing and potential financial and operational issues relating
to the collateral for the Serviced Assets;

 

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(iv)          recommending short- and long-term strategic alternatives for the
management and disposition of the Serviced Assets based on the relevant market
and market trends;

(v)           overseeing rehabilitation projects and assessing whether new
appraisals or environmental assessment or physical needs reports are necessary
with respect to the collateral for the Serviced Assets;

(vi)          formulating appropriate courses of action and conducting
negotiations among all concerned parties regarding the workout of Serviced
Assets;

(vii)         structuring workout proposals and preparing analyses indicating
the viability thereof;

(viii)        evaluating liquidity concerns and capital adequacy and reserve
requirements and performing liquidity analyses of properties and ownership
entities with respect to the collateral for the Serviced Assets;

(ix)           preparing and delivering such reports relating to the Serviced
Assets as Manager shall reasonably request; and

(x)            performing such other services as may be required from time to
time for management and other activities relating to the Serviced Assets as the
Manager shall reasonably request.

2.             Term.  This Agreement shall remain in full force and effect
throughout the term of the Management Agreement as extended in accordance
therewith and terminate simultaneously with the expiration or earlier
termination of the Management Agreement, except that Servicer may terminate this
Agreement at any time on 60 days notice to Manager.

3.             Fees.

(a)           Servicer shall receive fees for Services rendered under this
Agreement equal to 0.15% per annum of the Book Value of each Serviced Asset. 
“Book Value” means the book value of a Serviced Asset as reflected in the
Company’s most recent financial statements.  “Serviced Assets” means the fixed
income investments of the Company, other than (i) any securities which are rated
investment grade by a nationally recognized rating agency, unless the investment
grade bonds have a first-loss position; (ii) securities (whether or not rated)
issued by any corporation which are not secured by any pledge of collateral; or
(iii) any securities issued by the U.S. government or other temporary
investments, such as commercial paper or money market investments, made by the
Company.  The fee shall be calculated and paid monthly on or before the fifth
day following each month end.  Manager shall be directly obligated to pay
accrued fees hereunder, whether or not reimbursed by the Company for such fees
as contemplated by the Management Agreement.

(b)           To the extent Servicer accepts appointment as a special servicer
or sub-servicer to a special servicer, Servicer shall receive fees in such
amounts as are customary for fees paid to third parties in similar instances,
which are approved by the Independent Directors of the Parent.  Such fees shall
be agreed upon by Servicer and such Independent Directors on a case-by-case
basis.  Manager and Special Servicer shall share equally any fees received by
Manager or Servicer for performance of Special Services (but not any Servicer
Termination Payment (as defined below)) shall be shared equally by Manager and
Servicer.

 

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(c)           To the extent Manager receives any payment from the Company on
account of a termination of the Management Agreement, and such payment is based
in whole or in part upon the fees for Services and/or Special Services (the
“Services Termination Payment”), the Servicer shall be entitled to fifty percent
of the Services Termination Payment.

4.             Confidentiality.

(a)           Servicer shall keep confidential any nonpublic information
obtained relating to the Serviced Assets and its performance of the Services and
shall not disclose any such information (or use the same except in furtherance
of its duties under this Agreement), except as permitted or contemplated by, and
subject to the limitations in, the Management Agreement.  The provisions of this
Section 4(a) shall survive the expiration or earlier termination of this
Agreement.

(b)           Promptly after the expiration or earlier termination of this
Agreement, Servicer shall return to Manager all confidential and proprietary
information provided to or obtained by Servicer pursuant to or in connection
with this Agreement and the performance of the Services hereunder, including all
copies and extracts thereof in whatever form, in its possession or under its
control.

5.             Notices.  All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and mailed, faxed or
delivered by hand or courier service:

(a)           If to Manager, to:

GKK Manager LLC
c/o SL Green Realty Corp.

420 Lexington Avenue
New York, New York 10170
Attention: General Counsel

(b)           If to Servicer, to:

SLG Management Services LLC

c/o SL Green Realty Corp.
420 Lexington Avenue
New York, New York 10170
Attention: President and General Counsel

 

6.             Cooperation; Further Assistance.  Each party hereto shall
cooperate with and provide assistance to the other parties consistent with the
terms and conditions hereof to enable (a) the full performance of all
obligations hereunder, and (b) the review and audit of books and records as they
relate to the provision of the Services; such cooperation and assistance to
include, without limitation, providing the other parties and their respective
representatives and agents (including, without limitation, outside auditors)
with reasonable access, during normal business hours and upon reasonable advance
notice, to its employees, representatives and agents and its books, records,
offices and properties relating to the Services.

7.             Entire Agreement.  Except for the applicable provisions of the
Management Agreement, this Agreement shall constitute the entire agreement among
the parties relating to the subject matter hereof and shall supersede all other
prior or contemporary agreements, understandings, negotiations and discussions
whether oral or written.

 

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8.             Amendment and Modification; Assignment.  Neither this Agreement
nor any of the terms or provisions hereof may be changed, supplemented, waived
or modified except by a written instrument executed by the parties hereto (or in
the case of a waiver, by the party granting such waiver).  Servicer shall have
the right to assign, sub-contract or delegate its rights and obligations
hereunder to one or more entities which (a) meet in all material respects the
then applicable rating criteria issued by Standard & Poor’s for rated servicers
of mortgage-backed securities and (b) are reasonably acceptable to the Manager.

9.             Counterparts.  This Agreement may be executed in two or more
counterparts, each of which may be signed by any of the parties hereto, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.

10.           Governing Law.  This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by,
construed, interpreted and enforced in accordance with the laws of the State of
New York.

11.           Invalid Provisions.  If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable, this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of hereof and the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.

12.           Definitions and Interpretation.

(a)           Defined Terms.  Capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Management Agreement.

(b)           Singular and Plural Forms.  The use herein of the singular form
shall also denote the plural form, and the use herein of the plural form shall
denote the singular form, as in each case the context may require.

 

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IN WITNESS WHEREOF, the parties to hereto have duly executed this Agreement as
of the day and year first written above.

GKK MANAGER LLC

 

By:

 

 

 

Name:

 

Title:

 

 

SLG GRAMERCY SERVICES LLC

 

By:

 

 

 

Name:

 

Title:

 

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