SEPARATION AND RELEASE AGREEMENT

 

This SEPARATION AND RELEASE AGREEMENT (the “Separation Agreement”) is made and
entered into as of the Effective Date (as defined below) by and among Gramercy
Capital Corp., a Maryland corporation (“Gramercy”), GKK Capital LP, a Delaware
limited partnership (the “Partnership”) (together with Gramercy, the “Gramercy
Parties”), and Roger M. Cozzi (the “Executive”).

 

WHEREAS, Gramercy and the Executive are parties to that certain Severance
Agreement, dated as of October 27, 2008 (the “Severance Agreement”);

 

WHEREAS, the Partnership is the successor to the obligations of GKK Manager LLC
(“GKK Manager”) under that certain Employment and Noncompetition Agreement,
dated as of October 27, 2008, between GKK Manager and the Executive (the
“Employment Agreement,” and together with the Severance Agreement, the
“Agreements”);

 

WHEREAS, the Gramercy Parties and the Executive are parties to that certain
Amendment to the Agreements, dated as of July 28, 2011 (the “Amendment”);

 

WHEREAS, pursuant to the Amendment, the term of each of the Agreements is
scheduled to expire on June 30, 2012 (the “Expiration Date”); and

 

WHEREAS, the parties hereto desire to set forth their responsibilities to one
another in connection with and following the expiration of the term of each of
the Agreements, as amended (the “Expiration”), and to amicably resolve any and
all issues relating to the foregoing;

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:

 

1. Employment to the Expiration Date. The Executive’s employment with the
Gramercy Parties shall continue to, and terminate as of the close of business
on, the Expiration Date in accordance with the terms of the Agreements, as
amended, unless earlier terminated thereunder, also in accordance with the terms
of the Agreements, as amended.

 

2. Confirmation of the Expiration; Resignation from Other Positions. The
Gramercy Parties and the Executive acknowledge that the term of each of the
Agreements, as amended, expires effective on the Expiration Date. The Executive
acknowledges that as of the date he signs this Separation Agreement, he has been
paid, or shall be paid pursuant to Sections 3 and 4 hereof, all amounts due and
payable to him through that date under the Agreements, as amended. The Executive
further acknowledges that from and after July 1, 2012, he shall no longer be an
employee of the Gramercy Parties and he shall be relieved of all his duties and
responsibilities under the Agreements, as amended (except the Continuing
Obligations described in Section 8 below). The Executive hereby irrevocably
resigns from any and all other positions that he holds with the Gramercy
Parties, including without limitation his position as a director of Gramercy,
effective on the Expiration Date. To the extent requested, the Executive shall
submit to the Gramercy Parties any reasonably requested documentation confirming
such resignations, provided that the Executive shall be given an opportunity to
review any such documentation with his counsel before submitting it to the
Gramercy Parties.

 

 

 

3. Discretionary Bonus. Pursuant to Section 2 of the Amendment, the Partnership
shall award the Executive a discretionary cash bonus for the period from January
1, 2012 through the Expiration Date of at least $650,000 (the “2012 Bonus”) and
shall pay half of the 2012 Bonus to the Executive as soon as practicable after
the Expiration Date and the remaining half on the thirtieth (30th) day following
the Expiration Date; provided the Executive remains employed by Gramercy and/or
the Partnership through the Expiration Date. The Executive acknowledges that
other than the non-contingent payments described in Section 4 below, the 2012
Bonus is the sole remaining amount owed to him under the Amendment and the
Agreements, as amended.

 

4. Non-Contingent Payments. No later than 30 days following the Expiration Date,
and in all events no later than the date required by applicable law, the
Gramercy Parties shall pay the following to the Executive: (a) the Executive’s
salary accrued and unpaid through the Expiration Date; (b) all vested benefits
accrued through the Expiration Date, if any, under the terms of any employee
benefit plans (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended) applicable to the Executive; (c) reimbursement
for any and all reasonable business expenses incurred by the Executive prior to
the Expiration Date pursuant to the terms of Gramercy’s expense reimbursement
policy; and (d) the Executive’s accrued but unused vacation time, which shall
total 3.5 days as of June 30, 2012, unless such vacation time is earlier used.

 

5. Separation Benefits. Provided that the Executive executes this Separation
Agreement and does not revoke his agreement in Section 10(a) below to release
all Claims of discrimination or retaliation under the Age Discrimination in
Employment Act (the “ADEA Release Agreement”) in accordance with the terms of
Section 11 below, the Gramercy Parties shall provide the following separation
benefits (the “Separation Benefits”) to the Executive:

 

A. Severance Pay. The Partnership shall pay the Executive severance pay (the
“Severance Pay”) consisting of a lump sum of $30,000, less tax-related
deductions and withholdings. The Partnership shall pay the Executive the
Severance Pay on the first regular payroll date after the ADEA Release Agreement
Effective Date (defined below).

 

B. Health Coverage Continuation. Provided that the Executive elects to continue
his health coverage to the extent authorized by and consistent with 29 U.S.C. §
1161 et seq. (commonly known as “COBRA”), the Partnership shall pay the premiums
for the same level of coverage as in effect on the Expiration Date until the
earliest of the following: (i) September 30, 2012; (ii) the Executive’s
eligibility for group medical care coverage through other employment; or (iii)
the end of the Executive’s eligibility under COBRA for continuation coverage for
medical, dental and vision care to the same extent as if he had remained
employed until September 30, 2012. The Executive agrees to notify the
Partnership promptly if he becomes eligible for group medical care coverage
through another employer. He also agrees to respond promptly and fully to any
reasonable requests for information by the Partnership concerning his
eligibility for such coverage. The Executive may continue coverage for himself
and any beneficiaries after September 30, 2012 at his own expense for the
remainder of the COBRA continuation period, to the extent he and they remain
eligible. Notwithstanding the foregoing, if the Partnership determines at any
time that its payments pursuant to this subsection may be taxable income to the
Executive, it may convert such payments to payroll payments directly to the
Executive on the Partnership’s regular payroll dates, which shall be subject to
tax-related deductions and withholdings.

 

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C. Reimbursement of Legal Expenses. The Partnership shall reimburse the
Executive’s reasonable legal costs incurred in connection with negotiating and
finalizing this Separation Agreement by means of a direct payment to the
Executive’s attorneys on receipt by the Partnership of an invoice for that
amount addressed to the Executive, provided that such invoice must be received
by the Partnership not later than August 15, 2012, and further provided that the
Partnership’s reimbursement obligation shall not exceed $4,000. Payment of the
invoice will be made as soon as practicable after receipt.

 

6. Tax Treatment. The Gramercy Parties shall undertake to make deductions,
withholdings and tax reports with respect to payments and benefits under this
Separation Agreement to the extent that it reasonably and in good faith
determines that it is required to make such deductions, withholdings and tax
reports. Payments under this Separation Agreement shall be in amounts net of any
such deductions or withholdings. Nothing in this Separation Agreement shall be
construed to require the Gramercy Parties to make any payments to compensate the
Executive for any adverse tax effect associated with any payments or benefits or
for any deduction or withholding from any payment or benefit.

 

7. Equity Rights. The Gramercy Parties acknowledge that the Executive has
certain equity rights under the LTIP Unit Award Agreement, as amended, and a
Restricted Stock Award between him and Gramercy dated January 4, 2012 and
pursuant to his ownership of equity in Gramercy (collectively, the “Equity
Rights”). This Separation Agreement is not intended to modify in any respect the
equity rights to which the Executive would otherwise be entitled pursuant to the
Equity Rights if he were not to agree to this Separation Agreement.

 

8. Continuing Obligations. The parties acknowledge and agree that the provisions
of Section 8 of the Employment Agreement (a copy of which is attached hereto as
Exhibit A) (the “Continuing Obligations”) shall continue in effect as if set
forth herein in accordance with their terms; provided, however, that (a) if the
Executive executes this Separation Agreement, Section 8(b)(ii)(A) of the
Employment Agreement shall not apply to the Executive’s solicitation of Tim
O’Connor, provided that Mr. O’Connor is no longer employed by or performing
services for the Gramercy Parties as of the date of such solicitation; and (b)
if the Executive executes this Separation Agreement, he shall not be bound by
the Continuing Obligation set forth Section 8(b)(i) of the Employment Agreement
nor by the restrictions on his investment activities contained in Section 8(c)
of the Employment Agreement from and after July 1, 2012. For the avoidance of
doubt, upon his execution of this Separation Agreement, Sections 8(b)(i) and
8(c) of the Employment Agreement shall be null and void as to any time period
subsequent to the Expiration Date, and the Executive shall accordingly have no
restriction on his investments nor in obtaining employment or engaging in
competitive activities subsequent to the Expiration Date. The Executive further
acknowledges and agrees that the Partnership shall be deemed to have complied
with its obligations under Section 8(e) of the Employment Agreement if it
(a) directs its executive officers, the members of its Board of Directors and
the persons listed on Exhibit B, during such persons’ affiliation with the
Employer as officers, directors or employees, as the case may be, not to
intentionally disclose or cause to be disclosed any negative, adverse or
derogatory comments or information about Executive and to respond to any
inquiries concerning the Executive by any third parties by disclosing only the
Executive’s title and dates of service, in each case, during the one year period
following the termination of the Executive’s employment and (b) does not issue
any statement in writing containing negative, adverse or derogatory comments or
information about Executive during such one-year period. If either party becomes
aware of a violation of Section 8(e) of the Employment Agreement, as modified
herein, after the Expiration Date, such party shall notify the other party in
writing of such violation within five (5) days of becoming aware of the
violation.

 

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9. Continuing Indemnification and Insurance Coverage. The Gramercy Parties
acknowledge that the provisions of Section 4 of each of the Agreements (the
“Continuing Indemnification”) shall continue in effect as if set forth herein.

 

10. Releases of Claims.

 

A. The Executive’s Release of Claims. In consideration for, among other terms,
the early release from the Continuing Obligation set forth in Section 8(b)(i) of
the Employment Agreement and, with respect to the ADEA Release Agreement, the
Separation Benefits and the Gramercy Parties’ release pursuant to Section 10(c)
(the “Gramercy Release”), to which the Executive acknowledges he would otherwise
not be entitled, the Executive voluntarily releases and forever discharges the
Gramercy Parties (which for purposes of this section shall include their
affiliated and related entities), their respective predecessors, successors and
assigns, their respective employee benefit plans and fiduciaries of such plans,
and the current and former officers, directors, shareholders, employees,
attorneys, accountants and agents of each of the foregoing in their official and
personal capacities (collectively referred to as the “Gramercy Releasees”)
generally from all claims, demands, debts, damages and liabilities of every name
and nature, known or unknown (“Claims”) that, as of the date when the Executive
signs this Separation Agreement, he has, ever had, now claims to have or ever
claimed to have had against any or all of the Gramercy Releasees. This release
includes, without limitation, all Claims:

 

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·relating to the Executive’s employment by and termination of employment with
the Gramercy Parties;

·of wrongful discharge or violation of public policy;

·of breach of contract;

·of defamation or other torts;

·of retaliation or discrimination under federal, state or local law (including,
without limitation, Claims of discrimination or retaliation under the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and Title
VII of the Civil Rights Act of 1964);

·under any other federal or state statute;

·for wages, bonuses, incentive compensation, stock, stock options, vacation pay
or any other compensation or benefits; and

·for damages or other remedies of any sort, including, without limitation,
compensatory damages, punitive damages, injunctive relief and attorney’s fees;

 

provided, however, that this release shall not affect the Equity Rights, the
Executive’s rights to the Continuing Indemnification, the Executive’s rights
under this Separation Agreement or any claims that accrue subsequent to the
effective date of this Separation Agreement. The Executive acknowledges that a
termination of his employment in accordance with this Separation Agreement and
pursuant to the expiration of the term of each of the Agreements, as amended,
shall not give rise to any Claims.

 

The Executive agrees not to accept damages of any nature, other equitable or
legal remedies for his own benefit or attorney’s fees or costs from any of the
Gramercy Releasees with respect to any Claim released by this Separation
Agreement. As a material inducement to the Gramercy Parties to enter into this
Separation Agreement, the Executive represents that he has not assigned any
Claim to any third party. For avoidance of doubt, in the event that an action is
brought against the Executive, nothing in this Section 10.A shall be deemed to
limit the affirmative defenses that the Executive may assert in such action,
except to the extent such affirmative defense is premised on the existence of a
Claim that has been released hereunder.

 

B. Consideration for the ADEA Release Agreement. Notwithstanding anything to the
contrary above, the sole consideration for the ADEA Release Agreement consists
of the Separation Benefits and the Gramercy Release.

 

C. Release of the Gramercy Parties’ Claims. Provided that the Executive executes
this Separation Agreement and does not revoke the ADEA Release Agreement in
accordance with the terms of Section 11 below, the Gramercy Parties, in
consideration for, among other terms, the Executive’s release pursuant to
Section 10(a), shall voluntarily release and forever discharge the Executive
generally from all Claims that, as of the date when the Gramercy Parties sign
this Separation Agreement, the Gramercy Parties have, ever had, now claim to
have or ever claimed to have had against the Executive, including, without
limitation, all Claims relating to the Executive’s employment by and termination
of employment with the Gramercy Parties or GKK Manager; provided that the
Gramercy Parties shall not release the Executive from any Claim relating to or
arising out of any act of fraud, intentional misappropriation of funds,
embezzlement or any other action with regard to the Gramercy Parties that
constitutes a felony under any federal or state statute committed or perpetrated
during the course of Executive’s employment with the Gramercy Parties or their
affiliates, in any event, that would have a material adverse effect on the
Gramercy Parties, or any other claims that may not be released by the Gramercy
Parties under applicable law. For purposes of this section, an act of fraud,
intentional misappropriation of funds, embezzlement or any other action with
regard to the Gramercy Parties that constitutes a felony under any federal or
state statute shall be deemed to have a material adverse effect on the Gramercy
Parties to the extent that (and only to the extent that): (i) the Executive
actually received an improper benefit or profit in money, property, or services
as a result of such act or (ii) such act was the result of the Executive’s
active and deliberate dishonesty. For avoidance of doubt, in the event that an
action is brought against any of the Gramercy Releasees, nothing in this Section
10.C shall be deemed to limit the affirmative defenses that any of the Gramercy
Releasees may assert in such action, except to the extent such affirmative
defense is premised on the existence of a Claim that has been released
hereunder.

 

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11. Time for Consideration; Effective Date. The Executive acknowledges that he
has been given the opportunity to consider this Separation Agreement for
twenty-one (21) days before signing it (the “Consideration Period”). To accept
this Separation Agreement, the Executive must return a signed original or a
signed PDF copy of this Separation Agreement so that it is received by Edward J.
Matey Jr. of the Gramercy Parties at or before the expiration of the
Consideration Period. If the Executive signs this Separation Agreement before
the end of the Consideration Period, he acknowledges by signing this Separation
Agreement that such decision was entirely voluntary and that he had the
opportunity to consider this Separation Agreement for the entire Consideration
Period. The Executive acknowledges and agrees that any changes or modifications
to this Separation Agreement shall not restart or in any way affect the
Consideration Period. For the period of seven (7) days from the date when the
Executive executes this Separation Agreement, he has the right to revoke the
ADEA Release Agreement by written notice that must be received by Mr. Matey
before the end of such revocation period. The ADEA Release Agreement shall
become effective on the business day immediately following the expiration of the
revocation period (the “ADEA Release Agreement Effective Date”), provided that
the Executive does not revoke the ADEA Release Agreement during the revocation
period. In the event that the Executive exercises his right to revoke the ADEA
Release Agreement during the revocation period, he acknowledges that all of the
terms and conditions of this Separation Agreement, other than the ADEA Release
Agreement, shall remain in full force and effect, except that the Executive
shall not receive the Separation Benefits and the Gramercy Release shall be null
and void.

 

12. Arbitration. Any controversy or claim arising out of or relating to this
Separation Agreement or the breach of this Separation Agreement (other than a
controversy or claim arising under Section 8 of this Separation Agreement, to
the extent necessary for the Gramercy Parties to avail themselves of the rights
and remedies referred to in Section 8 of the Employment Agreement) that is not
resolved by the Executive and the Gramercy Parties (or their affiliates, where
applicable) shall be submitted to arbitration in New York, New York in
accordance with New York law and the procedures of the American Arbitration
Association. The determination of the arbitrator(s) shall be conclusive and
binding on the Gramercy Parties (or their affiliates, where applicable) and the
Executive and judgment may be entered on the arbitrator(s)’ award in any court
having jurisdiction.

 

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13. Miscellaneous. This Separation Agreement contains the entire agreement
between the Executive and the Gramercy Parties with respect to the subject
matter hereof and supersedes any prior agreements or understandings between them
relating to such subject matter, except the agreements and understandings
relating to the Equity Rights (other than the Agreements, as amended), the
Continuing Obligations and the Continuing Indemnification. The terms of this
Separation Agreement are contractual in nature and not mere recitals. This
Separation Agreement shall be governed and construed in accordance with the laws
of the State of New York without regard to its conflict of law provisions. All
modifications and changes to this Separation Agreement must be in writing and
signed by the parties hereto. If any term or provision shall be invalid or
unenforceable, the remainder of the Separation Agreement shall not be affected
thereby and shall be valid and enforced to the fullest extent permitted by law.
This Separation Agreement shall be binding upon the parties and their respective
heirs, administrators, representatives, executors, successors and assigns and
shall inure to the benefit of each party and to their heirs, administrators,
representatives executors, successors and assigns.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have executed this Separation Agreement.

 

THE EXECUTIVE IS ADVISED TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS
SEPARATION AGREEMENT. THIS IS A LEGAL DOCUMENT. THE EXECUTIVE’S SIGNATURE WILL
COMMIT HIM TO ITS TERMS. BY SIGNING BELOW, THE EXECUTIVE ACKNOWLEDGES THAT HE
HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS
SEPARATION AGREEMENT AND THAT HE IS VOLUNTARILY ENTERING INTO THIS SEPARATION
AGREEMENT.

  

/s/ Roger M. Cozzi   June 12, 2012   Roger M. Cozzi   Date             GRAMERCY
CAPITAL CORP.                 By: /s/ Jon W. Clark   June 12, 2012 .   Jon W.
Clark   Date     Chief Financial Officer                 GKK CAPITAL LP        
        By: Gramercy Capital Corp., its general partner                 By: /s/
Jon W. Clark   June 12, 2012 .   Jon W. Clark   Date     Chief Financial Officer
     

 

 

 

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EXHIBIT A

 

Employment Agreement – Continuing Obligations

 

(See attached)

 

 

 

EXHIBIT B

 

List of Persons

 

Allan Rothschild

Janet Sanchez

Edward J. Matey Jr.

Michael Kavourias