Exhibit 10.48


ASSET
SERVICING AGREEMENT


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


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


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


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


AGREEMENT


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


1.             Services.


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


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


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


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


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


 





















 


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


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


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


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


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


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


(vii)         monitoring
compliance with insurance requirements;


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


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


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


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


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


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


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


 


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


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


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


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


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


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


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


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


3.             Fees.


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


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


 


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


4.             Confidentiality.


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


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


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


(a)           If to Manager, to:


GKK Manager LLC 

c/o SL Green Realty Corp.


420 Lexington Avenue 

New York, New York 10170

Attention: General Counsel




(b)           If to Servicer, to:


SLG Management Services LLC


c/o SL Green Realty Corp. 

420 Lexington Avenue 

New York, New York 10170

Attention: President and General Counsel


 


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


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


 


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


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


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


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


12.           Definitions
and Interpretation.


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


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


 


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




	
  GKK MANAGER LLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  SLG GRAMERCY SERVICES LLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  






 


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