Exhibit 10.1

 

AGREEMENT

 

This agreement is made and entered on December 30, 2008 by and among SL Green
Operating Partnership, L.P., a Delaware limited partnership (“SLG OP”), GKK
Manager LLC, a Delaware limited liability company and a majority-owned
subsidiary of SLG OP (the “Manager”), GKK Capital LP, a Delaware limited
partnership (the “Partnership”) and Gramercy Capital Corp., a Maryland
corporation (“GKK”) and the sole general partner of the Partnership.  All
capitalized terms used herein but not otherwise defined shall have the meaning
ascribed to such terms in the Third Amended and Restated Agreement of Limited
Partnership of the Partnership (as amended, the “Partnership Agreement”).

 

WHEREAS, GKK, SLG OP, the Manager and the Holders of the Class B Units are
parties to the Partnership Agreement;

 

WHEREAS, in 2008 the Partnership distributed for the account of the Class B
Units an aggregate of approximately $5.1 million pursuant to Section 5.1(c) of
the Partnership Agreement;

 

WHEREAS, the Manager acts as the external manager of GKK pursuant to the Second
Amended and Restated Management Agreement between the Manager and GKK (as
amended);

 

WHEREAS, SLG OP and GKK have been negotiating the potential internalization of
the operations of the Manager into GKK (the “Internalization”);

 

WHEREAS, the transactions contemplated by this Agreement have been approved by a
special committee of disinterested directors of SL Green Realty Corp. and GKK;
and

 

WHEREAS, the Partnership, the Manager and the SLG OP now desire to enter into
this Agreement which modifies their respective rights and obligations to each
other in respect of certain distributions under the Partnership Agreement on the
terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the mutual agreements herein set forth, the
parties hereto agree as follows:

 

Section 1.               Class B Unit Distributions.  In full satisfaction of
all potential obligation that the Holders of the Class B Units may have to the
Partnership, and that the Partnership may have to the Holders of the Class B
Units, in each case under Section 5.01.C of the Partnership Agreement, in
respect of the recalculation of the distribution amount at the end of the 2008
calendar year,  (i) the Manager is paying to the Partnership $2.75 million in
cash simultaneously with the execution of this Agreement and (ii) SLG OP hereby
transfers to GKK, and GKK hereby acquires from SLG OP, 1.9 million shares of
common stock of GKK, consisting of (x) 265,000 shares that were acquired on
August 2, 2004, at the price of $13.95 per share, (y) 1,275,000 shares that were
acquired on January 3, 2005, at the price of $17.27 per share, and (z) 360,000
shares that were acquired on January 14, 2005, at the price of $25.80 per
share.  GKK and the Partnership agree to use commercially reasonable efforts to
assist SLG OP in obtaining the acknowledgement by the Bank of New York Mellon,
as transfer agent for the common stock of GKK, of such transfer of common stock
of GKK.

 

Section 2.               Internalization.  The parties acknowledge and agree
(i) to continue to negotiate the potential Internalization in good faith and
(ii) that any such Internalization is subject to the consent of certain lenders
of GKK and its subsidiaries. GKK and the Partnership agree to use their
commercially reasonable efforts to obtain the consents of such lenders.

 

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Section 3.               Governing Law.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Section 4.               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.

 

Section 5.               Third-Party Beneficiaries.  Other than the Holders of
the Class B Units (which are third party beneficiaries of this Agreement) and
the parties hereto, no other person shall have any rights hereunder, nor shall
any other person be entitled to rely upon the terms contained herein.

 

Section 6.               Waiver of Jury Trial.  EACH OF THE PARTIES HERETO
WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
RELATING TO THIS AGREEMENT.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES HERETO TO ENTER INTO THIS AGREEMENT.

 

Section 7.               Expenses.  Each party will pay its own costs and
expenses incurred in connection with the negotiation of this Agreement, and the
consummation of the transactions contemplated by this Agreement.

 

Section 8.               Entire Agreement.  This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, between them as to such
subject matter.

 

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

 

 

 

 

GKK CAPITAL LP

 

 

 

 

 

 

 

 

By:

GKK Capital Corp., its sole general partner

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Roger Cozzi

 

 

 

 

Name: Roger Cozzi

 

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

GRAMERCY CAPITAL CORP.

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Roger Cozzi

 

 

 

 

Name: Roger Cozzi

 

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

SL GREEN OPERATING PARTNERSHIP, L.P.

 

 

 

 

 

 

 

 

By:

SL Green Realty Corp., its sole general partner

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Marc Holliday

 

 

 

 

Name: Marc Holliday

 

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

 

GKK MANAGER LLC

 

 

 

 

 

 

 

 

By:

GKK Manager Member Corp., its managing
member

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Marc Holliday

 

 

 

 

Name: Marc Holliday

 

 

 

 

Title: Chief Executive Officer

 

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