Exhibit 10.47


 


MANAGEMENT AGREEMENT


THIS MANAGEMENT AGREEMENT
is made as of August 2, 2004 (this “Agreement”) by and between Gramercy
Capital Corp., a Maryland corporation (the “Parent”), GKK Capital LP, a
Maryland limited partnership (the “Operating Partnership” and with the Parent,
collectively the “Company”), and GKK Manager LLC, a Delaware limited liability
company (the “Manager”).


W I T N E S S E T H :


WHEREAS, the Parent and
the Operating Partnership have been formed by SL Green Realty Corp. (with SL Green
Operating Partnership, L.P., a Maryland limited partnership (“SL Green OP”) and
subsidiaries and other entities controlled by either of them, “SL Green”) to
continue SL Green’s specialty real estate finance business in a separate
company, which is to originate for its own account and acquire whole loans,
subordinate interests in whole loans, mezzanine loans and other fixed income
real estate investments;


WHEREAS, the Parent
expects to qualify as a REIT (as defined below) and intends to conduct its operations
primarily through the Operating Partnership, of which the Parent will be the
sole general partner;


WHEREAS, the Company
desires to have Manager undertake the duties and responsibilities hereinafter
set forth on behalf of the Company as provided in this Agreement; and


WHEREAS, Manager is
willing to render such services on the terms and conditions hereinafter set
forth.


AGREEMENT


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


1.             Definitions.


(a)           “Agreement” has the
meaning assigned in the first paragraph.


(b)           “Asset Servicing
Agreement” means the Asset Servicing Agreement between Manager and SLG Gramercy
Services LLC, dated the date hereof.


(c)           “Board of Directors”
means the Board of Directors of the Parent.


(d)           “Closing Date” means
the date of this Agreement.


(e)           “Code” means the
Internal Revenue Code of 1986, as amended.


(f)            “Company” has the
meaning assigned in the first paragraph. 
All references herein to the Company shall, except as otherwise
expressly provided herein, be deemed to include the Parent, the Operating
Partnership and any Subsidiaries of the Parent and Operating Partnership.


(g)           “Company Account” has the meaning
assigned in Section 5.


 





















 


(h)           “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.


(i)            “Expenses” has the
meaning assigned in Section 9.


(j)            “GAAP” means
generally accepted accounting principles in effect in the U.S. on the date such
principles are applied consistently.


(k)           “Governing
Instruments” means, with respect to any Person, the articles of incorporation
and bylaws in the case of a corporation, the certificate of limited partnership
(if applicable) and partnership agreement in the case of a general or limited
partnership or the articles of formation and operating agreement in the case of
a limited liability company.


(l)            “Independent
Directors” means the members of the Board of Directors of Parent who are not
officers or employees of Manager or SL Green and who are otherwise
“independent” in accordance with the Parent’s Governing Instruments and, if
applicable, the rules of the New York Stock Exchange.


(m)          “Investment Company
Act” means the Investment Company Act of 1940, as amended.


(n)           “Investment
Guidelines” means the parameters and policies relating to Investments as
determined by the Board of Directors, as set forth in the initial public
offering prospectus of the Parent and as may be changed from time-to-time.


(o)           “Investments” means
the investments of the Company.


(p)           “Manager” has the
meaning assigned in the first paragraph.


(q)           “Partnership
Agreement” means the agreement of limited partnership of the Operating
Partnership.


(r)            “Outsource
Agreement” means the Outsource Agreement by and between the Manager and SL
Green Operating Partnership, L.P.


(s)           “Origination
Agreement” means the Origination Agreement between the Parent and SL Green
Operating Partnership, L.P., dated the date hereof.


(t)            “Person” means any
individual, corporation, partnership, joint venture, limited liability company,
estate, trust, unincorporated association, any federal, state, county or
municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the foregoing.


(u)           “REIT” means a
corporation or trust which qualifies as a real estate investment trust in
accordance with Sections 856 through 860 of the Code.


(v)            “Special Limited
Partnership Interest” means the interest in the Operating Partnership granted
to the Manager pursuant to the terms of the Partnership Agreement.


(w)          “Stockholders’ Equity” means the
aggregate gross proceeds from the sales of the Operating Partnership’s common
and preferred equity capital, as calculated under the Partnership Agreement.


 


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(x)            “Subsidiary” means
any subsidiary of the Company, any partnership, the general partner of which is
the Company or any subsidiary of the Company and any limited liability company,
the managing member of which is the Company or any subsidiary of the Company.


2.             Appointment and Duties of Manager.


(a)           Appointment.  The Company hereby appoints Manager as its
exclusive agent to manage the assets of the Company subject to the further
terms and conditions set forth in this Agreement, and Manager hereby agrees to
use its commercially reasonable efforts to perform each of the duties set forth
herein, provided funds are made available by the Company for such purposes, as
set forth in Section 9 hereof.


(b)           Duties.  Manager, in its capacity as manager of the
Company’s day-to-day operations, at all times will be subject to the
supervision of the Board of Directors and will have only such functions and
authority as the Company may delegate to it, including, without limitation, the
functions and authority identified herein and delegated to Manager hereby.  Manager will perform (or cause to be
performed) the following services and activities for the Company:


(i)            serving as the
Parent’s consultant with respect to the periodic review of the investment
criteria and parameters for Investments, borrowings and operations for approval
by the Board of Directors;


(ii)           investigating,
analyzing and selecting possible investment opportunities;


(iii)          engaging and
supervising, on the Company’s behalf and at the Company’s expense, independent
contractors which provide real estate-related services, investment banking
services, mortgage brokerage services, securities brokerage services, legal
services, accounting services, due diligence services and other financial
services and such other services as may be required relating to the Company’s
Investments;


(iv)          negotiating,
executing and closing on the Company’s behalf the origination, acquisition,
sale, exchange or other disposition of any of the Company’s Investments;


(v)           arranging,
negotiating, coordinating and managing operations of any joint venture or
co-investment interests held by the Company and conducting all matters with any
joint venture or co-investment partners;


(vi)          providing executive
and administrative personnel;


(vii)         administering the
Company’s day-to-day operations and performing and supervising the performance
of other administrative functions necessary to the Company’s management, as may
be agreed upon by Manager and the Board of Directors, including the collection
of revenues and the payment of the Company’s debts and obligations, maintenance
of appropriate computer services to perform such administrative functions,
keeping the Company’s books and records, organizing Board of Directors and
committee meetings, and other services related to the Company’s obligations as
a publicly traded entity;


(viii)        communicating on the Company’s behalf
with the holders of any of the Company’s equity or debt securities as required to
satisfy the reporting and other requirements of any governmental bodies or
agencies or trading markets and to maintain effective relations with such
holders;


 


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(ix)           advising the Parent
in connection with policy decisions to be made by the Parent’s Board of
Directors;


(x)            evaluating and
recommending to the Company’s Board of Directors modifications to the hedging
strategies in effect and causing the Company to engage in overall hedging
strategies consistent with the Company’s status as a REIT and with the
Company’s Investment Guidelines;


(xi)           advising the
Company regarding the maintenance of the Company’s status as a REIT and
monitoring compliance with the various REIT qualification tests and other rules
set out in the Code and Treasury Regulations thereunder;


(xii)          advising the
Company regarding the maintenance of the Company’s exemption from the
Investment Company Act and monitoring compliance with the requirements for
maintaining an exemption from the Investment Company Act;


(xiii)         assisting the
Company in developing criteria for Investment commitments meeting the Company’s
objectives, and making available to the Company its knowledge and experience
with respect to real estate, real estate securities and other real
estate-related assets;


(xiv)        representing, and
making recommendations to, the Company in connection with the purchase and
finance and commitment to purchase and finance of whole loans, mezzanine loans
and interests therein, mortgage loans and interests therein (including on a
portfolio basis), real estate, real estate securities and other real
estate-related assets, and the sale and commitment to sell such assets;


(xv)         monitoring the
operating performance of the Company’s Investments and providing periodic
reports with respect thereto to the Company’s Board of Directors as requested
by the Board of Directors, including comparative information with respect to
such operating performance, budgeted or projected operating results and
compliance with the Company’s Investment Guidelines;


(xvi)        investing or
reinvesting any money of the Company (including investing in short-term
investments pending investment in long-term asset investments, payment of fees,
costs and expenses, or payments of dividends or distributions to the Company’s
stockholders and partners), and advising the Parent and the Operating
Partnership as to their respective capital structures and capital raising;


(xvii)       causing the Parent
and the Operating Partnership to retain qualified accountants and legal
counsel, as applicable, to assist in developing appropriate accounting
procedures, compliance procedures and testing systems with respect to financial
reporting obligations and Parent’s compliance with the REIT provisions of the
Code and to conduct quarterly compliance reviews thereof;


(xviii)      causing the Parent
and the Operating Partnership to qualify to do business in all applicable
jurisdictions and to obtain and maintain all appropriate licenses;


(xix)         assisting the Parent and the Operating
Partnership in complying with all regulatory requirements applicable to the
Parent and the Operating Partnership in respect of its business activities,
including preparing or causing to be prepared all financial statements required
under applicable regulations and contractual undertakings and all reports and
documents, if any, required under the Exchange Act, the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder;


 


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(xx)          taking all necessary
actions to enable the Parent and the Operating Partnership to make required tax
filings and reports, including with respect to the Parent, soliciting
stockholders for required information to the extent provided by the REIT
provisions of the Code;


(xxi)         handling and
resolving all claims, disputes or controversies (including all litigation,
arbitration, settlement or other proceedings or negotiations) in which the
Company may be involved or to which the Company may be subject, arising out of
the Company’s day-to-day operations, subject to such limitations or parameters
as may be imposed from time-to-time by the Company’s Board of Directors;


(xxii)        using commercially
reasonable efforts to cause expenses incurred by or on behalf of the Company to
be reasonable or customary and within any budgeted parameters or expense
guidelines set by the Board of Directors from time-to-time;


(xxiii)       performing such
other services as may be required from time-to-time for management and other
activities relating to the Company’s assets as the Board of Directors shall
reasonably request or Manager shall deem appropriate under the particular
circumstances; and


(xxiv)       using commercially
reasonable efforts to cause the Parent and the Operating Partnership to comply
with all applicable laws.


(c)           Asset Management
Subcontracts.  Manager may enter into
agreements with other parties, including its affiliates and/or SL Green, for
the purpose of engaging one or more asset managers for and on behalf, and at the
sole cost and expense, of the Company to provide asset management and/or
similar services to the Company with respect to the Investments, pursuant to
asset management agreement(s) with terms which are then customary for
agreements regarding the management of assets similar in type, quality and
value to the assets of the Company; provided, that any such agreements entered
into with affiliates of Manager shall be (i) on terms no more favorable to such
affiliate than would be obtained from a third party on an arm’s-length basis,
and (ii) approved by a majority of the Independent Directors.


(d)           Other Service
Providers; Special Servicer.  Subject
to any required Board of Directors approval, Manager may retain for and on
behalf, and at the sole cost and expense, of the Company such services of
accountants, legal counsel, appraisers, insurers and brokers, among others,
including Manager’s affiliates, as Manager deems necessary or advisable in
connection with the management and operations of the Company and the provision
of its duties under this Agreement; provided, that any such agreement entered
into with an affiliate of Manager to perform any such services shall be engaged
(i) on terms no more favorable to such affiliate than would be obtained from a
third party on an arm’s-length basis, and (ii) approved by a majority of the
Independent Directors.  The Company
hereby acknowledges and approves the terms of the Asset Servicing Agreement and
the Outsource Agreement.  In connection
therewith, the Company agrees that with respect to any investments which
entitle it to appoint a special servicer or a sub-servicer to a special
servicer, it shall use all commercially reasonable efforts to designate the
Manager or SLG Gramercy Services LLC as such special servicer or sub-servicer.  In such event the fees to be paid to the
Manager or SLG Gramercy Services LLC shall be based on then customary fees paid
to third-parties performing similar functions, and shall be approved by a
majority of the Independent Directors of the Parent.


(e)           Reporting
Requirements.


(i)            As frequently as Manager may deem
necessary or advisable, or at the direction of the Board of Directors, Manager
shall prepare, or cause to be prepared, with respect to any Investment 


 


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(A) reports and
information on the Company’s operations and asset performance and
(B) other information reasonably requested by the Company.


(ii)           Manager shall
prepare, or cause to be prepared, all reports, financial or otherwise, with
respect to the Parent and the Operating Partnership reasonably required by the
Board of Directors in order for the Parent and the Operating Partnership to
comply with its Governing Instruments or any other materials required to be
filed with any governmental entity or agency, and shall prepare, or cause to be
prepared, all materials and data necessary to complete such reports and other
materials including, without limitation, an annual audit of the Company’s books
of account by a nationally recognized independent accounting firm of good
reputation, initially Ernst & Young, LLP.


(iii)          Manager shall
prepare regular reports for the Board of Directors to enable the Board of
Directors to review the Company’s acquisitions, portfolio composition and
characteristics, credit quality, performance and compliance with the Investment
Guidelines and policies approved by the Board of Directors.


(f)            Use of Manager’s
Funds.  Manager shall not be required
to expend money in excess of that contained in any applicable Company Account
or otherwise made available by the Company to be expended by Manager hereunder.


(g)           Reliance by
Manager.  In performing its duties
under this Section 2, Manager shall be entitled to rely on qualified experts
and professionals (including, without limitation, accountants, legal counsel
and other professional service providers) hired by Manager at the Company’s
sole cost and expense.


(h)           Payment and
Reimbursement of Expenses.  The
Company shall pay all expenses, and reimburse Manager for Manager’s expenses incurred
on its behalf, in connection with any such services to the extent such expenses
are reimbursable by the Company to Manager pursuant to Section 9 hereof.


3.             Dedication; Other Activities.


(a)           Devotion of Time.  Manager will provide a dedicated management
team to deliver the management services to the Parent and the Operating
Partnership hereunder, the members of which team shall devote such of their
time to the management of the Parent and the Operating Partnership as the
Manager deems necessary and appropriate, commensurate with the level of
activity of the Company from time to time. 
The Parent and the Operating Partnership shall have the benefit of
Manager’s reasonable judgment and effort in rendering services and, in
furtherance of the foregoing, Manager shall not undertake activities which, in
its reasonable judgment, will substantially adversely affect the performance of
its obligations under this Agreement.


(b)           Other Activities.  Except to the extent set forth (i) in clause
(a) above, nothing herein shall prevent Manager or any of its affiliates or any
of the officers and employees of any of the foregoing from engaging in other
businesses or from rendering services of any kind to any other person or
entity, including investment in, or advisory service to others investing in,
any type of real estate or real estate-related investment, including
investments which meet the principal investment objectives of the Company.


(c)           Officers, Employees, Etc.  Manager’s or its affiliates’ members,
partners, officers, employees and agents may serve as directors, officers,
employees, agents, nominees or signatories for the Company or any Subsidiary,
to the extent permitted by their Governing Instruments, as may be amended from
time to time, or by any resolutions duly adopted by the Board of Directors
pursuant to the 


 


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Company’s Governing
Instruments.  When executing documents or
otherwise acting in such capacities for the Company or such other Subsidiary,
such Persons shall use their respective titles with respect to the Company or
such Subsidiary.


4.             Agency.  Manager shall act as the agent of the Company
in making, acquiring, financing and disposing of Investments, disbursing and
collecting the Company’s funds, paying the debts and fulfilling the obligations
of the Company, supervising the performance of professionals engaged by or on
behalf of the Company and handling, prosecuting and settling any claims of or
against the Company, the Board of Directors, holders of the Parent’s or the
Operating Partnership’s securities or the Company’s representatives or assets.


5.             Bank
Accounts.  At the direction of
the Board of Directors, Manager may establish and maintain as an agent on
behalf of the Company one or more bank accounts in the name of the Parent and
the Operating Partnership or any other Subsidiary (any such account, a “Company
Account”), collect and deposit funds into any such Company Account and disburse
funds from any such Company Account, under such terms and conditions as the
Board of Directors may approve.  Manager
shall from time-to-time render appropriate accountings of such collections and
payments to the Board of Directors and, upon request, to the auditors of
Company.


6.             Records; Confidentiality.


(a)           Records.  Manager shall maintain appropriate books of
account and records relating to services performed under this Agreement, and
such books of account and records shall be accessible for inspection by
representatives of the Company at any time during normal business hours.


(b)           Confidentiality.  Manager shall keep confidential any nonpublic
information obtained in connection with the services rendered under this
Agreement and shall not disclose any such information (or use the same except
in furtherance of its duties under this Agreement), except: (i) to SL Green;
(ii) in accordance with the Origination Agreement, Outsource Agreement and
Asset Servicing Agreement; (iii) with the prior written consent of the Board of
Directors; (iv) to legal counsel, accountants and other professional advisors;
(v) to appraisers, financing sources and others in the ordinary course of the
Company’s business; (vi) to governmental officials having jurisdiction over the
Company; (vii) in connection with any governmental or regulatory filings of the
Company or disclosure or presentations to Company investors; or (vii) as
required by law or legal process to which Manager or any Person to whom
disclosure is permitted hereunder is a party. 
The foregoing shall not apply to information which has previously become
available through the actions of a Person other than Manager not resulting from
Manager’s violation of this Section 6(b). 
The provisions of this Section 6(b) shall survive the expiration or earlier
termination of this Agreement for a period of one year.


7.             Obligations of Manager; Restrictions.


(a)           Restrictions.  Manager shall refrain from any action that,
in its sole judgment made in good faith, (i) is not in compliance with the
Investment Guidelines, (ii) would adversely affect the status of the Parent as
a REIT, or (iii) would violate any law, rule or regulation of any governmental
body or agency having jurisdiction over the Company or that would otherwise not
be permitted by the Company’s Governing Instruments.  If Manager is ordered to take any such action
by the Board of Directors, Manager shall promptly notify the Board of Directors
of Manager’s judgment that such action would adversely affect such status or
violate any such law, rule or regulation or Governing Instruments.  Notwithstanding the foregoing, Manager, its
directors, officers, stockholders and employees shall not be liable to the
Parent, the Operating Partnership or any Subsidiary, the Board of Directors or
the Company’s


 


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stockholders or partners
for any act or omission by Manager, its directors, officers, stockholders or
employees taken in good faith or except as provided in Section 11 hereof.


(b)           Board of
Directors Review. The Board of Directors will periodically review the
Investment Guidelines and the Company’s investment portfolio but will not
review each proposed investment, except as set forth below.  Investments must be approved as follows,
unless otherwise agreed by Manager and the Board of Directors:  an investment committee must  approve unanimously capital commitments
between $15 million and $50 million; approval by the Company’s full Board of
Directors is required for investments in excess of $50 million.  Manager will have full discretion to invest
on behalf of the Company with respect to investments under $15 million.  The Chief Investment Officer or Manager may
approve any investment of less than $3 million. 
Manager can rely upon the direction of the Secretary of the Board of
Directors to evidence the approval of the Board of Directors.  Notwithstanding the foregoing, any Investment
entered into with an affiliate of Manager shall be approved by a majority of
the Independent Directors.


(c)           Insurance.  Manager shall maintain “errors and omissions”
insurance coverage and such other insurance coverage which is customarily
carried by property, asset and investment managers performing functions similar
to those of Manager under this Agreement with respect to assets similar to the
assets of the Company, in an amount which is comparable to that customarily
maintained by other managers or servicers of similar assets.


8.             Compensation.


(a)                           Manager
shall receive an annual management fee equal to 1.75% of Stockholders’
Equity.  The annual management fee shall
be calculated on a weighted average basis and paid in cash monthly in
arrears.  Manager shall make available
the monthly calculation of the base management fee to the Company within
fifteen (15) days following the last day of each calendar month, and the
Company shall pay Manager the base annual management fee within five business
days thereafter; provided, however, that such management fee may be offset by
the Manager against amounts due to the Company.


(b)           Upon execution of
this Agreement, Manager shall receive 100 units of Class B limited partner
interests in the Operating Partnership, subject to the terms ascribed to such
units in the limited partnership agreement of the Operating Partnership of even
date herewith.


9.             Expenses.  The Company shall pay all of its expenses and
shall reimburse Manager for its documented expenses incurred on the Company’s
behalf in accordance with this Agreement (collectively, the “Expenses”).  Expenses include all costs and expenses which
are expressly designated elsewhere in this Agreement as the Company’s expenses,
together with the following:


(a)           expenses incurred in
connection with the organization of the Company and any issuance of securities,
and transaction costs incident to investment activity and financings;


(b)           travel and out-of pocket
expenses incurred in connection with the origination, purchase, financing,
refinancing, sale or disposition of an Investment;


(c)           costs of
professional fees including, but not limited to, legal, accounting, tax,
auditing and other similar services performed for the Company;


(d)           compensation and expenses, including
liability insurance, for the Company’s directors;


 


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(e)           compensation and
expenses of the Company’s custodian and transfer agent;


(f)            costs associated
with establishing and maintaining bank accounts and credit facilities, other
indebtedness or securities offerings;


(g)           costs associated
with any computer hardware or software used for the Company;


(h)           costs and expenses
incurred contracting with third parties, including affiliates of Manager, and
including expenses under agreements for servicing and outsourcing described
under the Asset Servicing Agreement and Outsource Agreement;


(i)            all other costs
associated with the Company’s business and operations, including, but not
limited to, costs of acquiring, owning, protecting, maintaining, developing and
disposing of investments, including appraisal, engineering and environmental
studies, reporting, audit and legal fees;


(j)            all insurance
costs, including all costs related to insurance for the Company’s directors,
except for those related to Manager for itself and employees acting on
Manager’s behalf;


(k)           expenses for offices
of the Company and of the Manager including furniture, fixture and equipment
expenses;


(l)            expenses connected
with interest payments and dividends made or caused to be made by the Company’s
Board of Directors;


(m)          expenses incurred in
connection with communications to holders of securities of the Company and
other bookkeeping and clerical work, including without limitation, all costs of
preparing and filing SEC reports, all listing costs, costs of preparing and
distributing annual reports and proxy materials; and


(n)           all expenses
actually incurred by Manager which are reasonably necessary for the performance
by Manager of its duties and functions in accordance with the terms of this
Agreement.


Manager is not
entitled to be reimbursed for wages, salaries and benefits of its officers and
employees.  Subject to any required Board
of Directors approval, Manager may retain third parties including accountants,
legal counsel, real estate underwriters, brokers, among others, on the
Company’s behalf, and be reimbursed for such services.  The provisions of this Section 9 shall
survive the expiration or earlier termination of this Agreement to the extent
such expenses have previously been incurred or are incurred in connection with
such expiration or termination.


10.           Expense Reports and
Reimbursements.  Manager shall
prepare a statement documenting the Expenses incurred during, and deliver the
same to the Company within forty-five days following the end of each fiscal
quarter.  Expenses incurred by Manager on
behalf of the Company shall be reimbursed by the Company within forty-five days
following delivery of the expense statement by Manager; provided, however, that
such reimbursements may be offset by Manager against amounts due to the
Company.  The provisions of this Section
10 shall survive the expiration or earlier termination of this Agreement.


11.           Limits of Manager
Responsibility; Indemnification. 
Pursuant to this Agreement, Manager will not assume any responsibility
other than to render the services called for hereunder and will not be
responsible for any action of the Company’s Board of Directors in following or
declining to follow its advice or recommendations.  Manager, its directors and its officers will
not be liable to the Parent, the Operating Partnership, any Subsidiary, any of
their directors, officers, stockholders, managers, owners or 


 


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partners for acts or omissions performed or not performed in accordance
with and pursuant to this Agreement, except by reason of acts or omissions
constituting bad faith, willful misconduct, gross negligence or reckless
disregard of Manager’s duties under this Agreement.  The Parent and the Operating Partnership each
agree to indemnify Manager, its directors and its officers, its shareholders,
employees and agents with respect to all expenses, losses, actual damages,
liabilities, demands, charges and claims arising from acts or omissions of
Manager performed in good faith in accordance with and pursuant to this
Agreement and not resulting from the willful misconduct, gross negligence or
reckless disregard of Manager.  Manager
agrees to indemnify Company and its directors and officers with respect to all
expenses, losses, actual damages, liabilities, demands, charges and claims
arising from acts of Manager constituting bad faith, willful misconduct, gross
negligence or reckless disregard of its duties under this Agreement, as
determined pursuant to a final, non-appealable order of a court of competent
jurisdiction.  The provisions of this
Section 11 shall survive the expiration or earlier termination of this
Agreement.


12.           No Joint Venture.  Nothing in this Agreement shall be construed
to make the Company and Manager partners or joint venturers or impose any
liability as such on either of them.


13.           Term;
Termination.


(a)           Term.  This Agreement shall remain in full force
through December 31, 2007, unless terminated by the Company or Manager as set
forth below, and shall be renewed automatically for successive one (1) year
periods thereafter, until this Agreement is terminated in accordance with the
terms hereof.


(b)           Non-Renewal.  Either party may elect not to renew this
Agreement at the expiration of the initial term or any renewal term for any or
no reason by notice to the other party at least six (6) months prior to the end
of the term.


(c)           Termination by the
Company.  The Company may terminate
this Agreement effective thirty (30) days after notice of termination from the
Parent and the Operating Partnership to Manager in the event that any act of
fraud, misappropriation of funds, or embezzlement against the Parent or the
Operating Partnership or other willful and material violation of this Agreement
by Manager in its corporate capacity (as distinguished from the acts of any
employees of Manager which are taken without the complicity of any of the
executive officers of Manager); provided, that such willful and material
violation continue for a period of thirty (30) days after written notice
thereof specifying such violation and requesting that the same be remedied in
such thirty (30) day period.


(d)           Termination
by Manager.  Manager may terminate
this Agreement effective upon thirty (30) days prior written notice of
termination to the Company in the event that the Company shall default in the
performance or observance of any material term, condition or covenant in this
Agreement and such default shall continue for a period of thirty (30) days
after written notice thereof specifying such default and requesting that the
same be remedied in such thirty (30) day period.


 


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(e)           Termination Fees.  In the event this Agreement is not renewed by
the Company under Section 13(b) or is terminated under Section 13(d), the
Company shall pay Manager on the termination date a termination fee equal to
two times the sum of the higher of the aggregate annual fees paid under this
Agreement to Manager plus the higher of the aggregate annual fees paid under
the Asset Servicing Agreement to the Servicer thereunder, in both instances in
either of the two calendar years immediately preceding the effective date of
the termination; provided, however, that if immediately following such
termination the Company becomes self-managed, the termination fee payable will
be reduced by 50%.  The Company’s
obligation to pay a termination fee shall survive the termination of this
Agreement.


(f)            Survival.  If this Agreement is terminated pursuant to
this Section 13, such termination shall be without any further liability or
obligation of either party to the other, except as otherwise expressly provided
herein.


14.           Action Upon Termination or
Expiration of Origination Period. 
From and after the effective date of termination of this Agreement
pursuant to Section 13, Manager shall not be entitled to compensation for
further services under this Agreement but shall be paid all compensation
accruing to the date of termination, reimbursement for all Expenses and a
termination fee, if applicable.  Upon
such termination or expiration, Manager shall reasonably promptly:


(a)           after deducting any
accrued compensation and reimbursement for Expenses to which it is then
entitled, pay over to the Company all money collected and held for the account
of the Company pursuant to this Agreement;


(b)           deliver to the
Company’s Board of Directors a full accounting, including a statement showing
all payments collected and all money held by it, covering the period following
the date of the last accounting furnished to the Board of Directors with
respect to the Company and through the termination date; and


(c)           deliver to the Board
of Directors all property and documents of the Company provided to or obtained
by Manager pursuant to or in connection with this Agreement, including all
copies and extracts thereof in whatever form, then in Manager’s possession or
under its control.


15.           Reserved.


16.           Release of Money or other Property Upon Written Request.  Manager agrees that any money or other
property of the Company held by Manager under this Agreement shall be held by
Manager as custodian for the Company, and Manager’s records shall be clearly
and appropriately marked to reflect the ownership of such money or other
property by the Company.  Upon the
receipt by Manager of a written request signed by a duly authorized officer of
the Company requesting Manager to release to the Company any money or other
property then held by Manager for the account of the Company under this
Agreement, Manager shall release such money or other property to the Company
within a reasonable period of time, but in no event later than thirty (30) days
following such request.  Manager shall
not be liable to the Parent, the Operating Partnership, the Independent
Directors or the Parent’s or the Operating Partnership’s stockholders or
partners for any acts or omissions by the Company in connection with the money
or other property released to the Company in accordance with the terms
hereof.  The Company shall indemnify
Manager and its members, managers, officers and employees against any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever which arise in connection with Manager’s release of such
money or other property to the Company in accordance with the terms of this
Section 16.  Indemnification pursuant to
this Section 16 shall be in addition to any right of Manager to indemnification
under Section 11.


 


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17.           Notices.  Unless expressly provided otherwise in this
Agreement, all notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given, made and received when delivered against receipt or upon
actual receipt of (a) personal delivery, (b) delivery by a reputable overnight
courier, (c) delivery by facsimile transmission against answerback, or (d)
delivery by registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below:


	
  If to the Parent

  	
   

  	
   

  
	
  or the Operating
  Partnership:

  	
   

  	
  Gramercy Capital Corp.

  
	
   

  	
   

  	
  420 Lexington Avenue

  
	
   

  	
   

  	
  New York, New York
  10170

  
	
   

  	
   

  	
  Attention: Office of
  General Counsel

  
	
   

  	
   

  	
   

  
	
  If to Manager:

  	
   

  	
  GKK Manager LLC

  
	
   

  	
   

  	
  c/o SL Green Realty
  Corp.

  
	
   

  	
   

  	
  420 Lexington Avenue

  
	
   

  	
   

  	
  New York, New York
  10170

  
	
   

  	
   

  	
  Attention: General
  Counsel

  
	
   

  	
   

  	
   

  



Any party may change the
address to which communications or copies are to be sent by giving notice of
such change of address in conformity with the provisions of this Section 17 for
the giving of notice.


18.           Binding Nature of
Agreement; Successors and Assigns. 
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and permitted assigns as provided in this Agreement.


19.           Entire Agreement;
Amendments.  This Agreement
contains the entire agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter of this Agreement.  The
express terms of this Agreement control and supersede any course of performance
and/or usage of the trade inconsistent with any of the terms of this
Agreement.  This Agreement may not be
modified or amended other than by an agreement in writing signed by the parties
hereto.


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


21.           Indulgences, Not Waivers.  Neither the failure nor any delay on the part
of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.  No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.


22.           Titles Not to Affect Interpretation.  The titles of sections, paragraphs and
subparagraphs contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation of this Agreement.


 


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23.           Execution in 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.


24.           Provisions Separable.  The provisions of this Agreement are
independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or unenforceable in whole
or in part.


25.           Principles of Construction.  Words used herein regardless of the number
and gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context requires.  All
references to recitals, sections, paragraphs and schedules are to the recitals,
sections, paragraphs and schedules in or to this Agreement unless otherwise
specified.


26.           Assignment; Change of Control of the Manager.  Manager may not assign its duties under this
Agreement except as described in this Section 26.  In the event the owners of Manager seek to
assign this Agreement or sell interests in the Manager which will transfer to a
person not affiliated with SL Green the power to direct or control the Manager,
Manager shall notify the Company as to the terms and conditions on which such
assignment or transfer is proposed to be made (the “Transfer Notice”) at least
thirty (30) days prior to the proposed completion of such assignment or
transfer.  The Company shall have thirty
(30) days to (i) match such offer, in which event Manager or its owners shall
assign or transfer the interest to the Company on the same terms and conditions
as set forth in the Transfer Notice or (ii) cause a third party to match such
offer, in which event Manager or its owners shall assign or transfer the
interest to such third party on the same terms and conditions as set forth in
the Transfer Notice, in each case within thirty (30) days after such matching
offer.  If the Company does not match the
offer or cause a third party to match the offer within thirty (30) days after
the Transfer Notice is sent, Manager or its owners shall be free to consummate
the transaction described in the Transfer Notice.  No transfer or assignment may be proposed
hereunder unless the transferee has, at the time of the Transfer Notice, (i) at
least five years’ experience managing assets of the type in which the Company
invests or intends to invest and (ii) at least $500 million of such assets
under management.


 


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




	
  GKK MANAGER LLC

  	
   

  
	
  a Delaware
  limited liability company

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  GRAMERCY CAPITAL
  CORP.

  	
   

  
	
  a Maryland
  corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  GKK CAPITAL LP

  	
   

  
	
  a Maryland
  limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  






 


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