Exhibit 10.4

 

STOCKHOLDERS AGREEMENT

Dated as of November 2, 2007

By and Among

GRAMERCY CAPITAL CORP.,

 

SSF III GEMINI, LP

 

and

 

SL GREEN OPERATING PARTNERSHIP, L.P.

 

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STOCKHOLDERS AGREEMENT

STOCKHOLDERS AGREEMENT (this “Agreement”), dated as of November 2, 2007, by and
among Gramercy Capital Corp., a Maryland corporation (the “Company”), SSF III
Gemini, LP, a Delaware limited partnership (“SSF”) and SL Green Operating
Partnership, L.P., a Delaware limited partnership (“SLG”).  The parties hereto
and any other Person that shall hereafter acquire shares of the Common Stock (as
hereinafter defined) pursuant to the provisions of and subject to this Agreement
are referred to herein individually as a “Stockholder” and collectively as
“Stockholders.”

WITNESSETH:

WHEREAS, the Company has entered into a subscription agreement, dated as of
November 2, 2007 (the “Subscription Agreement”), with SSF, pursuant to which,
inter alia, the Company agreed to issue and sell, and SSF agreed to purchase,
for a purchase price of $26.25 per share (the “SSF Purchase Price”),
3,809,524 shares of Common Stock, for an aggregate purchase price, of 
$100,000,005.

WHEREAS, concurrently with the execution of this Agreement, the Company and SSF
will enter into a registration rights agreement, dated as of the date hereof
(the “Registration Rights Agreement”), to provide certain registration rights
with respect to the Common Stock purchased by SSF pursuant to the Subscription
Agreement.

WHEREAS, as of the date hereof, SLG is the record and beneficial owner of
7,624,583 shares of Common Stock.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1.             Definitions  As used in this Agreement, the following terms shall
have the meanings ascribed to them below:

1.1.          1934 Act.  The term “1934 Act” shall have the meaning set forth in
Section 6.18 hereof.

1.2.          Affiliate.  The term “Affiliate” shall mean, when used with
reference to a specified Person, (i) any Person that directly or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the specified Person; (ii) any Person who, from time to
time, is a member of the immediate family of a specified Person; (iii) any
Person who, from time to time, is an officer or director or manager of a
specified Person; or (iv) any Person who, directly or indirectly, is the
beneficial owner of 50% or more of any class of equity securities or other
ownership interests of the specified Person, or of which the specified Person is
directly or indirectly the owner of 50% or more of any class of equity
securities or other ownership interests.  For the avoidance of doubt, the
Company shall not be deemed an Affiliate of SLG for purposes of this Agreement.

1.3.          Agreement.  The term “Agreement” shall have the meaning set forth
in the introductory paragraph hereof.

1.4.          Board of Directors or Board.  The term “Board of Directors” or
“Board” shall mean the Board of Directors of the Company in office at the
applicable time as elected in accordance with the provisions of Section 2 of
this Agreement.

1.5.          Bona Fide Offer.  The term “Bona Fide Offer” shall mean any bona
fide arms’ length offer in writing from a Third Party or Third Parties who are
not Affiliates of SLG to purchase Common Stock from SLG or a Covered Transferee
of SLG.

 

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1.6.          Business Day.  The term “Business Day” shall mean each day other
than a Saturday, a Sunday or any other day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to be
closed.  A Business Day shall be deemed to commence at 9:00a.m. (New York City
time) and end at 5:00p.m. (New York City time).

1.7.          Closing Date.  The term “Closing Date” shall mean November 7,
2007.

1.8.          Common Stock.  The term “Common Stock” shall mean the common
stock, par value $.001 per share, of the Company.

1.9.          Company.  The term “Company” shall have the meaning set forth in
the introductory paragraph hereof.

1.10.        Confidential Information.  The term “Confidential Information”
shall have the meaning set forth in Section 6.18 hereof.

1.11.        Control.  The term “Control” (including “Controlling,” “Controlled
by” and “under common Control with”) shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person through the ownership of Voting Power, by contract or
otherwise.

1.12.        Covered Transferee.  The term “Covered Transferee” shall mean (A)
with respect to SSF, any Permitted Transferee that is a fund or client managed
by a registered investment advisor affiliated with Morgan Stanley Real Estate
Investing; and (B) with respect to SLG, shall mean SL Green Realty Corp. or any
direct or indirect subsidiary which is Controlled by SL Green Realty Corp.

1.13.        Duly Endorsed.  The term “Duly Endorsed” shall mean (i) duly
endorsed by the Person or Persons in whose name a stock certificate or
certificate representing a debt security is registered or (ii) accompanied by a
duly executed stock or security assignment separate from the certificate, in
each case with the signature(s) thereon guaranteed by a commercial bank or trust
company or a member of a national securities exchange or of the National
Association of Securities Dealers, Inc.

1.14.        Notice Period.  The term “Notice Period” shall have the meaning set
forth in Section 3.1(c) hereof.

1.15.        Observer.  The term “Observer” shall have the meaning set forth in
Section 2.1 hereof.

1.16.        Permitted Transferee.  The term “Permitted Transferee” shall mean
with respect to SSF, (i) the Company, or (ii) any Affiliate of SSF who, upon
such Transfer, becomes a party to this Agreement.

1.17.        Person.  The term “Person” shall mean an individual, partnership
corporation, limited liability company, joint venture, association, trust,
unincorporated organization or other governmental or legal entity.

1.18.        Pledgee.  The term “Pledgee” shall mean any lender who has made a
loan to SSF or any Permitted Transferee or any Affiliate thereof and to whom
either SSF, any Permitted Transferee or Affiliate thereof has pledged their
direct or indirect interests in any Common Stock as security for such loan.

1.19.        Registration Rights Agreement.  The term “Registration Rights
Agreement” shall have the meaning set forth in the Recitals.

 

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1.20.        Securities Act.  The term “Securities Act” shall mean the
Securities Act of 1933, as amended, or any federal statute then in effect which
has replaced such statute, and a reference to a particular section thereof shall
be deemed to include reference to the comparable section, if any, of any such
replacement federal statute.

1.21.        SLG.  The term “SLG” shall have the meaning set forth in the
introductory paragraph hereof.

1.22.        SLG Shares.  The term “SLG Shares” shall mean the shares of Common
Stock owned by SL Green Realty Corp. and/or any of its direct or indirect
subsidiaries that are Controlled by SL Green Realty Corp. from time to time.

1.23.        SSF.  The term “SSF” shall have the meaning set forth in the
introductory paragraph hereof.

1.24.        SSF Purchase Price.  The term “SSF Purchase Price” shall have the
meaning set forth in the Recitals.

1.25.        Stockholder or Stockholders.  The term “Stockholder” or
“Stockholders” shall have the meaning set forth in the introductory paragraph
hereof.

1.26.        Subscription Agreement.  The term “Subscription Agreement” shall
have the meaning set forth in the Recitals.

1.27.        Tag-Along Buyer.  The term “Tag-Along Buyer” shall have the meaning
set forth in Section 3.1(a) hereof.

1.28.        Tag-Along Notice.  The term “Tag-Along Notice” shall have the
meaning set forth in Section 3.1(b) hereof.

1.29.        Tag-Along Offeree.  The term “Tag-Along Offeree” shall have the
meaning set forth in Section 3.1(a) hereof.

1.30.        Tag-Along Stock.  The term “Tag-Along Stock” shall have the meaning
set forth in Section 3.1(a) hereof.

1.31.        Third Party.  The term “Third Party” shall mean (a) in the case of
SSF, any Person other than (i) the Company, (ii) SSF, and (iii) any of their
respective Affiliates, and (b) in the case of SLG, any Person other than (i) the
Company, (ii) SLG, (iii) any of their respective Affiliates and (iv) any
underwriter in connection with an underwritten offering of SLG Shares.

1.32.        Transfer.  The term “Transfer” shall mean any direct or indirect
sale, assignment, mortgage, transfer, pledge, gift, hypothecation or other
disposition or transfer of, or any act creating a trust (voting or
otherwise) with respect to, stock of the Company (other than any bona fide
pledge or hypothecation to a financial institution(s), in connection with any
loan from such financial institution(s)).

1.33.        Voting Power.  “Voting Power” shall mean voting securities or other
voting interests ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of board members or
Persons performing substantially equivalent tasks and responsibilities with
respect to a particular entity.

 

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2.             Board of Directors Observation Rights.

2.1.          Until the earlier of (a) the 18 month anniversary of the Closing
Date and (b) such time as SSF and its Covered Transferees no longer own a number
of shares of Common Stock equal to at least 75% of the number of shares of
Common Stock acquired by SSF as of the Closing Date (as adjusted for stock
splits, reverse stock splits and similar transactions), SSF shall have the right
to have one (1) representative who shall be an employee of Morgan Stanley or a
subsidiary thereof who is reasonably acceptable to the Company, present (whether
in person or by telephone) at all regularly scheduled quarterly meetings of the
Board of Directors and at any meeting of the Board of Directors to consider a
merger, bankruptcy or liquidation of the Company, or an acquisition by the
Company of a publicly-traded company (the “Observer”).  The initial Observer
shall be Hugh Macdonnell or Dipak Patel, who are  hereby deemed acceptable to
the Company.  While such Observer designated pursuant to this Section 2.1 shall
be entitled to participate in discussions, pose questions to, and consult with,
and make proposals and furnish advice to, the Board of Directors, such Observer
shall not be entitled to vote at any such meetings.  The Company shall deliver
to the Observer, concurrently with the delivery to members of the Board of
Directors, notices of such Board meetings, written information related thereto,
written information distributed to the members of the Board in connection with
such meetings and all other written information provided to members of the Board
of Directors in connection with such meetings in the same manner and at the same
time as distributed to the members of the Board of Directors.  Failure to
deliver notice to an Observer in connection with an Observer’s right to attend
any regularly scheduled quarterly or other meeting of the Board of Directors
shall not, of itself, impair the validity of any action taken by the Board or
such committee at such meeting.

2.2.          At each regularly quarterly scheduled meeting of the Board of
Directors, the chairman of each committee of the Board shall make a presentation
regarding such committee’s activities, since the previous quarterly scheduled
meeting of the Board, which presentation shall include a description of all
material issues discussed, and all actions taken, by such committee.  Such
presentation shall be deemed satisfied by delivery of minutes of all such
meetings.

3.             Tag-Along Rights.

3.1.          Tag-Along Rights Generally.

(a)           If at any time SLG and its Covered Transferees own an equal or
lesser number of shares of Common Stock, in the aggregate than owned at such
time by SSF and its Permitted Transferees, in the aggregate, and SLG and/or any
Covered Transferee of SLG elects to sell all or a portion of the SLG Shares to a
Third Party or the Company (a “Tag-Along Buyer”), then SLG shall first offer, in
accordance with the provisions of this Section 3, to SSF and to each of its
Permitted Transferees (for the purpose of this Section 3 only, each, a
“Tag-Along Offeree”) to include, at the option of the Tag-Along Offerees, in a
sale or other disposition to the Tag-Along Buyer, such number of shares of
Common Stock (the “Tag-Along Stock”) as shall be determined in accordance with
this Section 3.

(b)           Upon the receipt by SLG and/or a Covered Transferee of a Bona Fide
Offer or offers to purchase or otherwise acquire (or if SLG and/or a Covered
Transferee has otherwise agreed to Transfer) all or any portion of the SLG
Shares from a Tag-Along Buyer which SLG and/or a Covered Transferee desires to
accept, SLG and/or such Covered Transferee shall cause all of the material terms
and conditions of the Tag-Along Buyer’s offer to be reduced to writing and
shall, in a reasonable amount of time upon receipt thereof, provide a copy of
such written notice of such Tag-Along Buyer’s offer (the “Tag-Along Notice”) to
each of the Tag-Along Offerees in the manner set forth in Section 6.5 hereof. 
The Tag-Along Notice must contain an offer by the Tag-Along Buyer to purchase or
otherwise acquire shares of Tag-Along Stock from the Tag-Along Offerees
according to the terms and conditions of this

 

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Section 3 and, subject to Section 3.1(g) hereof, upon the same terms and
conditions as the terms and conditions contained in the Tag-Along Buyer’s offer
and shall be accompanied by a true, correct and complete copy of the Tag-Along
Buyer’s offer.  The Tag-Along Notice will include a good faith estimate of the
SLG expenses described in Section 3.1(d).

(c)           At any time within five (5) Business Days after its receipt of the
Tag-Along Notice (the “Notice Period”), a Tag-Along Offeree may irrevocably
accept the Tag-Along Buyer offer included in the Tag-Along Notice for up to such
number of shares of Tag-Along Stock as is determined in accordance with Section
3.2 by furnishing written notice of such acceptance to SLG and/or the applicable
Covered Transferee and such Tag-Along Buyer.  In the event that stock
certificates have been issued in respect of the Tag-Along Stock for which such
offer is accepted, such written notice of acceptance must be accompanied by the
certificate or certificates representing the shares of Tag-Along Stock (which
shall be free and clear of liens, other than those arising pursuant to the terms
of this Agreement), Duly Endorsed, to be sold or otherwise disposed of pursuant
to such offer by such Tag-Along Offeree, together with a limited
power-of-attorney authorizing SLG to sell or otherwise dispose of such shares of
stock pursuant to the terms and conditions of such Tag-Along Buyer’s offer and
the terms and conditions of this Section 3.  Any change in the material terms
(including price) of the Tag-Along Buyer’s offer shall trigger a new Notice
Period.

(d)           SLG and/or its Covered Transferees shall not transfer any shares
of Common Stock to any Tag-Along Buyer if such Tag-Along Buyer(s) decline(s) to
allow the participation of the Tag-Along Offerees.  SLG, the applicable Covered
Transferee and each Tag-Along Offeree transferring shares of Common Stock
pursuant to this Section 3 shall pay its pro rata share (based on the number of
shares of Common Stock to be sold) of the expenses incurred by SLG and the
Tag-Along Offeree(s) in connection with such Transfer and shall be obligated to
join on a pro rata but several basis in any indemnification or other obligations
that SLG and/or such Covered Transferee agrees to provide in connection with
such transfer (other than any such obligations that relate specifically to SLG,
such Covered Transferee or a particular Tag-Along Offeree such as
indemnification with respect to representations and warranties given by SLG,
such Covered Transferee or a particular Tag-Along Offeree regarding SLG, such
Covered Transferee or such Tag-Along Offeree’s title to and ownership of shares
of Common Stock); provided, that neither SLG, such Covered Transferee nor a
Tag-Along Offeree shall be obligated in connection with such Transfer to agree
to indemnify or hold harmless the transferees with respect to an amount in
excess of the net cash proceeds paid to SLG or such Tag-Along Offeree(s) in
connection with such Transfer.

(e)           Notwithstanding anything to the contrary contained in this Section
3, there shall be no liability on the part of SLG and/or any Covered Transferee
to any Stockholder in the event that the sale of Common Stock by SLG and/or such
Covered Transferee to the Tag-Along Buyer contemplated pursuant to this Section
3 and the accompanying Tag-Along Sale is not consummated for any reason
whatsoever.  Whether a sale of Company Stock by SLG and/or such Covered
Transferee to the Tag-Along Buyer contemplated pursuant to this Section 3 is
effected is in the sole and absolute discretion of SLG and/or the applicable
Covered Transferee.

(f)            In the event the consideration to be paid in connection with a
Tag-Along Sale consists of securities or assets other than cash, SLG and/or the
applicable Covered Transferee shall cause the Tag-Along Buyer to make available
to the Tag-Along Offerees such diligence information with respect thereto as
made available to SLG, subject to the execution by each Tag-Along Offeree of a
confidentiality agreement in substantially the same form as executed by SLG.

(g)           Except as set forth above, the terms and conditions of the
purchase from the Tag-Along Offerees pursuant to this Section 3 shall be the
same as the terms and conditions of the purchase from SLG.

 

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3.2.          Allocation of Shares of Tag-Along Stock.  The number of shares of
Common Stock that each Tag-Along Offeree shall have the right to sell pursuant
to the Tag-Along Buyer’s offer shall be calculated in accordance with the
following formula and shall not exceed: the product of (x) the total number of
shares of Common Stock proposed to be purchased by the Tag-Along Buyer as set
forth in the Tag-Along Notice (or such higher number of shares as such Tag-Along
Buyer may agree to) multiplied by (y) a fraction, (1) the numerator of which
shall be the total number of shares of Common Stock then owned by such Tag-Along
Offeree and (2) the denominator of which shall be the total number of shares of
Common Stock then owned by SLG, its Covered Transferees and all Tag-Along
Offeree(s) together; provided that SSF shall have the right to allocate in its
sole discretion, the number of shares so determined to be included in the
Transfer to the Tag-Along Buyer, among itself and any or all of its Permitted
Transferees; and provided, further, that all allocations referred to herein
shall be determined in good faith by the Company in accordance with the
provisions of this Section 3.  For the avoidance of doubt, the provisions of
this Section 3 shall apply to all shares of Common Stock owned by SSF and its
Permitted Transferees.

3.3.          Transfer Mechanics.  The purchase from the Tag-Along Offerees
pursuant to this Section 3 shall be on the same terms and conditions, including
any representations, warranties, covenants and, subject to Section 3.1(d),
indemnities and the per share price (which shall be paid by wire transfer of
immediately available funds, unless otherwise specified in the Tag-Along Notice
provided to the Tag-Along Offeree) and the date of sale or other disposition, as
are received by SLG and/or its Covered Transferee and stated in the Tag-Along
Notice provided to the Tag-Along Offerees.  Concurrently with the consummation
of the sale or other disposition of all or any portion of the SLG Shares and the
Tag-Along Stock to the Tag-Along Buyer pursuant to the Tag-Along Buyer’s offer,
SLG and/or the applicable Covered Transferee shall notify the Tag-Along Offerees
thereof, shall remit to each Tag-Along Offeree who accepted the Tag-Along
Buyer’s offer in accordance with the provisions of this Section 3 the total
sales price (or other consideration with respect thereto) of the shares of
Tag-Along Stock sold or otherwise disposed of pursuant thereto (together with
any shares of Tag-Along Stock which are not sold or otherwise disposed of
pursuant thereto), and shall furnish such other evidence of the completion and
time of completion of such sale or other disposition and the terms and
conditions thereof as maybe reasonably requested by the Tag-Along Offerees.  If,
at the end of 60 days following the receipt of the Tag-Along Notice, SLG and/ or
the applicable Covered Transferee has not completed the sale or other
disposition of the SLG Shares and Tag-Along Stock in accordance with the terms
and conditions of the Tag-Along Buyer’s offer, SLG and/or the applicable Covered
Transferee shall return to such Tag-Along Offeree all certificates representing
shares of Tag-Along Stock which such Tag-Along Offeree delivered for sale or
other disposition pursuant to this Section 3, and all the restrictions on
Transfer contained in this Agreement with respect to the SLG Shares shall again
be in effect.

3.4.          Waiver of Tag-Along Rights.  If within five (5) Business Days
following the receipt of the Tag-Along Notice, any Tag-Along Offeree has not
accepted the offer contained in the Tag-Along Notice, such Tag-Along Offeree
will be deemed to have waived any and all rights with respect to the sale or
other disposition of Tag-Along Stock described in the Tag-Along Notice;
provided, that such sale or disposition is completed on the terms set forth in
the Tag-Along Notice within 60 days after the termination of the Notice Period.
 Should such Transfer not be completed within 60 days following the Tag-Along
Notice, then SLG and/or its Covered Transferee shall not be permitted to sell or
dispose of any Common Stock without once again sending a new Tag-Along Notice to
the Tag-Along Offerees, and complying with the provisions of this Section 3, as
if no previous Tag-Along Notice had theretofore been sent by SLG and/or such
Covered Transferee.

3.5.          Exceptions to Tag-Along Rights.  The provisions of this Section 3
shall not be applicable to any Transfer of Common Stock (a) from any Stockholder
to any Permitted Transferee of such Stockholder, or from any Permitted
Transferee of any Stockholder to such Stockholder, provided, that in

 

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any Transfer to a Permitted Transferee such Permitted Transferee must agree in
writing to be bound by the terms and conditions of this Agreement pursuant to
the provisions of Section 5 hereof to the same extent as applicable to the
transferor of such Common Stock or (b) through any ordinary course brokerage
transactions other than block trades.

4.             Lock-Up Agreement.   Except as provided in Section 3 hereof, SSF
and each Permitted Transferee hereby agrees that for a period of six (6) months
after the Closing Date, it will not, directly or indirectly (1) offer, sell,
contract to sell, pledge, sell any option or contract to purchase, purchase any
option or contract to sell (including without limitation any short sale), grant
any option, right or warrant for the sale of or otherwise transfer or dispose of
any shares of such Common Stock acquired by it pursuant to the Subscription
Agreement or any securities convertible into or exercisable or exchangeable for
such Common Stock, enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such aforementioned transaction is to be settled by delivery of the Common
Stock or such other securities, in cash or otherwise, or (2) publicly disclose
the intention to make any such offer, sale, pledge or disposition, or to enter
into any such transaction, swap, hedge or other arrangement; provided, that SSF
or any Permitted Transferee may transfer any shares of Common Stock to a
Permitted Transferee, notwithstanding the foregoing restrictions, so long as the
Permitted Transferee agrees to become a party to this Agreement. 
Notwithstanding the foregoing, nothing in this Agreement shall be deemed to
prohibit SSF or any Permitted Transferee from pledging their direct or indirect
interests in any Common Stock originally acquired pursuant to the Subscription
Agreement as security for a loan contracted by SSF, such Permitted Transferee or
any Affiliate, or to prohibit any Pledgee thereof from exercising its rights
under or in connection with such pledge.  In the event that any such Pledgee
exercises its rights under a pledge, this Agreement, the Registration Rights
Agreement and any continuing rights under the Subscription Agreement (including,
without limitation, indemnity rights) shall immediately terminate without any
further action.

5.             Additional Stockholders.

5.1.          No Transfers of shares of Common Stock may be made by SLG or any
of its Covered Transferees to a Covered Transferee of SLG unless, prior to such
Transfer, any such Covered Transferee (other than the Company) agrees in writing
to be bound by the terms and conditions of this Agreement applicable to SLG.

5.2.          Transferee of Stockholders or the Company.  No Transfers of shares
of Common Stock acquired by SSF pursuant to the Subscription Agreement may be
made by SSF or any of its Permitted Transferees to a Person who is to be treated
as a Permitted Transferee of SSF hereunder (other than the Company) unless,
prior to such Transfer any such Transferee agrees in writing to be bound by the
terms and conditions of this Agreement applicable to SSF.   Nothing in this
Agreement shall be deemed to prevent or impose any restriction on the ability of
SSF or its Permitted Transferees to Transfer Common Stock acquired pursuant to
the Subscription Agreement to any Person after the expiration of the lock-up
period described in Section 4 hereof or to require that any Affiliate of SSF to
which such shares are Transferred after the expiration of such lock-up period be
treated as a Permitted Transferee hereunder; provided that such Transfer is in
accordance with the terms of the Subscription Agreement.

5.3.          Supplementary Agreement.  The supplementary agreement referred to
in Section 5.2 above shall become effective upon its execution by the Company
and the applicable Permitted Transferee, and it shall not require the signatures
or the consent of the other Stockholders (or their respective Permitted
Transferees).

 

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6.             Miscellaneous.

6.1.          Permitted Transferees and Other Securities.  If SSF transfers any
shares of Common Stock to a Permitted Transferee, then for purposes of Section 3
hereof, any references to a Stockholder shall also include such Permitted
Transferee.

6.2.          Binding Effect.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that in the
event that any Third Party becomes the owner of shares of Common Stock as a
result of foreclosure or other execution on a pledge of such securities to such
Third Party by SSF, such Third Party shall have no rights or obligations
pursuant to Section 2 of this Agreement.

6.3.          Recapitalizations, Exchanges Affecting the Common Stock.  Except
as otherwise specifically provided in Section 6.10, the provisions of this
Agreement shall apply, to the full extent set forth herein, with respect to the
Common Stock acquired by SSF pursuant to the Subscription Agreement and all
shares of Common Stock owned by SLG and to any and all shares of stock of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for, or in substitution of such Common Stock, by reason of a stock
dividend, stock split, stock issuance, reverse stock split, combination,
recapitalization, reclassification, merger, consolidation or otherwise.  Upon
the occurrence of any of such events, amounts hereunder shall be appropriately
adjusted.

6.4.          Amendments.  This Agreement may be amended only by a written
instrument signed by each of the parties hereto.

6.5.          Notices.  Any notice and other communication (facsimile
transmission shall not be a valid means of notice to Travelers under this
Agreement) provided for herein shall be dated and in writing and shall be deemed
to have been duly given when received by the party to whom such notice or other
communication is directed at the following addresses:

(a)           If to the Company, to it at the following address:

Gramercy Capital Corp.
420 Lexington Avenue
New York, New York 10170
Attn: Robert R. Foley

with a copy to:

Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019
Attention: Larry P. Medvinsky
Facsimile: 212-878-8149

(b)           If to SSF, to it at the following address:

SSF III Gemini, LP
c/o Morgan Stanley Real Estate Special Situations Fund III, L.P.
1585 Broadway, 37th Floor
New York, NY 10035

Attention: Hugh Macdonnell

 

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with a copy to:

Fried Frank Harris Shriver & Jacobson LLP

One New York Plaza
New York, NY 10004
Attention:  Steven G. Scheinfeld and John E. Sorkin

Facsimile: 212-859-4000

(c)           If to SLG, to it at the following address:

SL Green Realty Corp.
420 Lexington Avenue
New York, New York 10170
Attn: Gregory F. Hughes

with a copy to:

Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019
Attention: Larry P. Medvinsky
Facsimile: 212-878-8149

and

Greenberg Traurig, LLP

200 Park Avenue

New York, New York 10166

Attn: Judith Fryer and Kenneth Gerasimovich

Facsimile: 212-805-9203

 

6.6.          Applicable Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely in such State without giving effect to the
conflicts of law principles thereof (other than Section 5-1401 of the New York
General Obligation Law).

6.7.          Section Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.

6.8.          Counterparts.  This Agreement may be executed in two or more
counterparts and by facsimile or portable document format (pdf) transmission,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart.

6.9.          Expenses.  All legal and other costs and expenses incurred in
connection with this agreement shall be paid by the Company.

6.10.        Termination.  This Agreement (other than Sections 6.5, 6.6, 6.10,
6.11, 6.12, 6.14, 6.15 and 6.18) shall terminate on the earlier of (i) the
written consent of each of the parties hereto, or (ii) as to SSF (and its
Permitted Transferees), when SSF (collectively with its Permitted Transferees)
no longer beneficially owns or holds of record any shares of Common Stock
acquired pursuant to the Subscription

 

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Agreement (including, with respect to all Stockholders, any action in which the
Company is a constituent company in a merger and in connection therewith the
outstanding shares of Common Stock are converted into or exchanged for
securities of another Person and/or cash or other property).

6.11.        Entire Agreement.  This Agreement together with the Subscription
Agreement and the Registration Rights Agreement constitute the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein, and there are no restrictions, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof,
other than those expressly set forth or referred to herein or therein.  This
Agreement together with the Subscription Agreement and the Registration Rights
Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.

6.12.        Severability of Provisions.  Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

6.13.        Specific Performance.  The Company and each of the Stockholders
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party or parties would be irreparably harmed, no adequate remedy
at law would exist and damages would be difficult to determine.  It is
accordingly agreed that (x) in the event of a breach of any provision of this
Agreement, the aggrieved party shall be entitled to specific performance of this
Agreement and to enjoin any continuing breach of this Agreement (without the
necessity of proving actual damages and without posting bond or other security),
in addition to any other remedy to which such aggrieved party may be entitled at
law or in equity, and (y) such Stockholder hereby waives the defense, in any
action for specific performance or other equitable relief, that a remedy at law
would be adequate.

6.14.        Consent to Jurisdiction. The Company and each Stockholder, by its
execution hereof, (i) hereby irrevocably submits to the exclusive jurisdiction
of the federal and state courts located in the County of New York, State of New
York for the purposes of any claim or action arising out of or based upon this
Agreement or relating to the subject matter hereof, (ii) hereby waives, to the
extent not prohibited by applicable law, and agrees not to assert by way of
motion, as a defense or otherwise, in any such claim or action, any claim that
it or he is not subject personally to the jurisdiction of the above-named
courts, that its or his property is exempt or immune from attachment or
execution, that any such proceeding brought in the above-named court is
improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court, and (iii) hereby agrees not to commence any claim
or action arising out of or based upon this Agreement or relating to the subject
matter hereof other than before the above-named courts nor to make any motion or
take any other action seeking or intending to cause the transfer or removal of
any such claim or action to any court other than the above-named courts whether
on the grounds of inconvenient forum or otherwise.  The Company and each
Stockholder hereby consents to service of process in any such proceeding in any
manner permitted by New York law, and agrees that service of process by
registered or certified mail, return receipt requested, at its address specified
pursuant to Section 6.5 hereof is reasonably calculated to give actual notice.

6.15.        Waiver of Right to Jury Trial.  Each of the Company and the
Stockholders by its execution hereof, waives its right to a jury trial of any
claim or cause of action based upon or arising out of this Agreement or any
dealings between them relating to the subject matter of this transaction and the
relationship that is being established.  The scope of this waiver is intended to
be all encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this Agreement, including, without
limitation, contract aims, tort claims, breach of duty claims, and all other
common law and statutory claims.  Each of the Company and the Stockholders
acknowledges that this waiver is a

 

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material inducement to enter into a business relationship, that each has already
relied on the waiver in entering into this Agreement and that each will continue
to rely on the waiver in their related future dealings.  Each of the Company and
the Stockholders further warrants and represents that each has reviewed this
waiver with its legal counsel, and that each knowingly and voluntarily waives
its jury trial rights following consultation with legal counsel.  This waiver is
irrevocable, meaning that it shall apply to any subsequent amendments, renewals,
supplements or modifications to this Agreement or to any other documents or
agreements relating to the transaction contemplated hereby.  In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

6.16.        Restrictive Legend.  Each of SSF and its Permitted Transferees
acknowledges that each certificate representing shares of Common Stock to be
owned by them and subject to this Agreement shall be stamped or otherwise
imprinted with a legend in substantially the following form:

“The transfer of the Shares represented by this certificate are subject to
certain restrictions as set forth in a Stockholders Agreement, dated as of
November 2, 2007, by and between the Company and certain of its Stockholders, as
such agreement may be amended.  A copy of such Stockholders Agreement will be
furnished to any holder of this certificate upon request.”

6.17.        No Conflicting Agreement.  No Stockholder will, on or after the
date of this Agreement, enter into any agreement with respect to the shares of
Common Stock beneficially owned or held of record by it which conflicts with the
provisions hereof.

6.18.        Confidentiality.  Except with the prior written consent of the
Company (which consent may not be unreasonably withheld) and except as otherwise
required by law, the listing requirements of any securities exchange on which
the securities of such Stockholder are then traded or any reporting obligations
under the Securities Act or the Securities Exchange Act of 1934, as amended (the
“1934 Act”), each of SSF and its Permitted Transferees shall, and shall cause
each of its Affiliates to, (a) hold in strict confidence all confidential,
proprietary or other non-public formation or trade secrets relating to the
Company or its subsidiaries or their respective assets or operations (the
“Confidential Information”), and (b) not release or disclose in any manner
whatsoever to any other person any such Confidential Information (including
information relayed pursuant to Section 6 hereof); provided, that (i) the
foregoing provisions shall not apply to any disclosure, to the extent reasonably
required, to those of such Stockholder’s auditors, attorneys and other
representatives who agree to be bound by the provisions of this Section 6.18,
(ii) the foregoing provisions shall not apply here if such Stockholder or any of
its Affiliates is compelled to disclose such Confidential Information, by
judicial or administrative process or, in the reasonable opinion of its counsel,
by other requirements of law (provided, that (A) if legally permissible, prior
written notice of such disclosure is given to the Company, and (B) any such
disclosure is limited to only that portion of the Confidential Information which
such person is compelled to disclose), (iii) the term “Confidential Information”
shall not include information (A) which is or becomes generally available to the
public other than as a result of disclosure of such information by such
Stockholder or any of its Affiliates, (B) becomes available to such Stockholder
on a non-confidential basis from a source which is not, to such Stockholder’s
knowledge, bound by a confidentiality or other similar agreement, or by any
other legal, contractual or fiduciary obligation which prohibits disclosure of
such information to the other parties hereto, or (C) which can be demonstrated
to have been developed independently by the representatives of such Stockholder
which representatives have not had any access to any information which would
otherwise be deemed to be “Confidential Information” pursuant to the provisions
of this Section 6.18, and (iv) each of SSF and its Permitted Transferees
acknowledges and agrees that any information they may receive from the Company
in its reports to Stockholders is confidential, proprietary ion-public in
nature.

 

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6.19.        Effectiveness of Agreement.  This Agreement shall be of no force or
effect until the Closing Date.

 

 

[Signature Page Follows]

 

 

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

 

 

GRAMERCY CAPITAL CORP.,

 

a Maryland corporation

 

 

 

By:

/s/ MARC HOLLIDAY

 

Name: Marc Holliday

 

Title:  Chief Executive Officer and President

 

 

 

 

 

 

 

SL GREEN OPERATING PARTNERSHIP, L.P.,

 

a Delaware limited partnership

 

 

By: SL Green Realty Corp., its General Partner

 

 

By:

/s/ ANDREW MATHIAS

 

Name: Andrew Mathias

 

Title:  President

 

 

 

 

 

SSF III GEMINI, LP, a Delaware limited partnership

 

 

By: SSF III GEMINI GP, LLC,

 

its General Partner

 

 

 

By:

/s/ HUGH MACDONNELL

 

Name: Hugh MacDonnell

 

Title: Authorized Person

 

 

 

[Signature Page to Stockholders Agreement]

 

 

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