Exhibit 10.3


 


EXECUTION COPY


 


AGREEMENT


 


THIS
AGREEMENT, dated as of October 27, 2008, is made by and among Gramercy
Capital Corp., a Maryland corporation (“Parent”), GKK Capital LP, a
Delaware limited partnership (the “Operating Partnership”), SL Green Operating
Partnership, L.P., a Delaware limited partnership (“SLGOP”), the
undersigned individual limited partners of the Operating Partnership (the “Individuals”)
and GKK Manager LLC, a Delaware limited
liability company (“Manager”).


 


RECITALS


 


WHEREAS, (i) Parent is the general partner and a limited partner
of the Operating Partnership, (ii) SLGOP is a limited partner of the
Operating Partnership and directly owns 54.4 Class B Units of the
Operating Partnership (“Class B Units”), (iii) the Individuals are limited
partners of the Operating Partnership and directly own an aggregate of 15.6 Class B
Units, and (iv) Manager is a limited partner of the Operating Partnership
and directly owns 30 Class B Units;


 


WHEREAS, Parent, Manager, SLGOP and the Individuals are
parties to the Third Amended and Restated Limited Partnership Agreement of the
Operating Partnership, as amended by the First Amendment to the Third Amended
and Restated Agreement of Limited Partnership of the Operating Partnership (as
amended, the “OP Agreement”); and


 


WHEREAS, pursuant to the OP Agreement, the holders of the Class B
Units (the “Class B Holders”) are entitled to receive quarterly
distributions from the Operating Partnership in respect of the Class B
Units (“Class B Distributions”);


 


NOW,
THEREFORE, the parties agree as follows:


 


(a)         Each
of the Class B Holders hereby waives its right to receive any Class B
Distributions payable in respect of the period having commenced on July 1,
2008 and ending on December 31, 2008.


 


(b)         Each
of the Class B Holders hereby acknowledges and agrees that notwithstanding
the waiver of its right to receive its portion of the Class B
Distributions as set forth above, it shall continue to be bound by the
provisions of Section 5.01.C of the OP Agreement as such provisions relate
to the refund of any distributions received by a Class B Holder pursuant
to such Section.


 


(c)         For
all periods from and after January 1, 2009, the Class B Holders shall
continue to receive distributions from the Operating Partnership as set forth
in Section 5 of the OP Agreement; provided,
however, that if permissible under applicable law and New York Stock
Exchange requirements (or the requirements of any other exchange on which the
shares of Parent’s common stock are listed at the time of payment), Parent may, at its option, elect to assume
directly and satisfy any Class B Holder’s right to receive Class B
Distributions by issuing to such Class B Holder on or prior to the time
such Class B Distribution would be due and payable, a number shares of
common stock of Parent equal in value to the amount distributable to such Class B
Holder in respect of the applicable Class B Distribution. For the purpose
hereof, the value of a share of common stock of Parent shall be determined
based on the average closing price of Parent’s common stock for each of
the 10 trading days prior to the date of such payment.


 


(d)         In
the event Parent elects to exercise its right by issuing common stock of Parent
pursuant to clause (c) above, Parent shall, prior to issuing such stock, and as
a condition to the exercise of such right, (i) enter into an ownership
waiver with respect to such issuance, which ownership waiver shall be
substantially similar to the ownership waivers previously granted by Parent to
SLGOP; provided, 


 

















 


however, that the
Parent’s obligation pursuant to this clause (d) shall be subject to SLGOP’s
ability to provide a representation letter regarding its ownership of Parent’s
common stock that is substantially similar to such letters previously provided
by SLGOP and (ii) amend and restate the existing registration rights
agreement to include the shares of Parent’s common stock issued in connection
with the issuance hereunder.


 


(e)           Without the prior written consent of
SLGOP and the Individuals, Parent shall not amend (i) Article V Section 4
or Article X of the Articles of Incorporation of Parent, or (ii) Article XII
of the Bylaws of Parent, in any case, in a manner that is adverse to SLGOP or
any of the Individuals, other than pursuant to any amendment that would only
apply to acts or omissions occurring after the date of such amendment.


 


(f)            Neither this Agreement nor any
right, interest or obligation under this Agreement may be assigned by any party
to this Agreement by operation of law or otherwise without the prior written
consent of the other party to this Agreement and any attempt to do so will be
void.  Subject to the foregoing, this
Agreement is binding upon, inures to the benefit of and is enforceable by the
parties to this Agreement and their respective successors and assigns.


 


(g)           Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto shall use its
respective commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement.


 


(h)           This Agreement may be signed in any
number of identical counterparts, each of which shall be an original (including
signatures delivered via facsimile or electronic mail) with the same effect as
if the signatures thereto and hereto were upon the same instrument.  The parties hereto may deliver this Agreement
and the other documents required to consummate the transaction contemplated
herein by facsimile or electronic mail and each party shall be permitted to
rely upon the signatures so transmitted to the same extent and effect as if
they were original signatures.  This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by each other party hereto.


 


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


 


 


	
   

  	
  GRAMERCY
  CAPITAL CORP.,

  
	
   

  	
  a Maryland
  corporation

  
	
   

  	
   

  
	
   

  	
       By:

  	
  /s/ John
  Roche

  
	
   

  	
   

  	
  Name: John Roche

  
	
   

  	
   

  	
  Title:
    Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  GKK CAPITAL LP,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
       By:

  	
  Gramercy
  Capital Corp., a Maryland corporation, its general partner

  
	
   

  	
   

  
	
   

  	
       By:

  	
  /s/ John
  Roche

  
	
   

  	
   

  	
  Name: John Roche

  
	
   

  	
   

  	
  Title:  
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SL GREEN OPERATING PARTNERSHIP, L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
       By:

  	
  SL Green
  Realty Corp., a Maryland corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
       By:

  	
  /s/ Andrew
  S. Levine

  
	
   

  	
   

  	
  Name: Andrew S. Levine

  
	
   

  	
   

  	
  Title:  
  Chief Legal Officer

  
	
   

  	
   

  
	
   

  	
  GKK MANAGER LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
       By:

  	
  GKK Manager
  Member Corp., a Delaware

  
	
   

  	
   

  	
  corporation,
  its managing member

  
	
   

  	
   

  	
   

  
	
   

  	
       By:

  	
  /s/ Andrew
  S. Levine

  
	
   

  	
   

  	
  Name: Andrew S. Levine

  
	
   

  	
   

  	
  Title:  
  Chief Legal Officer

  
					



 


[Signature Page to Agreement]


 

















 


[Certain Individual Signature Page]


 


[Signature Page to Agreement]