Exhibit 10.1


 


EXECUTION
COPY


 


SECOND AMENDED AND RESTATED


MANAGEMENT AGREEMENT


 


THIS SECOND  AMENDED AND
RESTATED MANAGEMENT AGREEMENT is made as of October 27, 2008 (this “Agreement”)
by and between Gramercy Capital Corp., a Maryland corporation (the “Parent”),
GKK Capital LP, a Delaware limited partnership (the “Operating Partnership” and
with the Parent and Subsidiaries and other entities controlled by either of
them, 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 were
formed by SL Green Realty Corp., a Maryland corporation (with SL Green
Operating Partnership, L.P., a Delaware 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;


 


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


 


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


 


WHEREAS, the Parent, the Operating Partnership and the
Manager entered into the amended and restated management agreement as of April 19,
2006 (as amended by the First Amendment to the Amended and Restated Management
Agreement dated as of September 18, 2007, the “Amended and Restated
Management Agreement”) and the Confirmatory Addendum to Management Agreement
(the “Addendum”); and


 


WHEREAS, the Parent, the Operating Partnership and the
Manager desire to amend and restate the Amended and Restated Management
Agreement (including the Addendum) in its entirety.


 


AGREEMENT


 


NOW, THEREFORE, in consideration of the mutual
agreements herein set forth, the parties hereto agree that the Amended and
Restated Management Agreement (including the Addendum) shall be amended and
restated in its entirety as follows:


 


1.                                      Definitions.


 


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


 


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


 


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


 

















 


(d)                                 “Company”
has the meaning assigned in the first paragraph.


 


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


 


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


 


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


 


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


 


(i)                                     “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.


 


(j)                                     “Independent
Directors” means the members of the Board of Directors of Parent who are not
officers or employees of the Company, 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.


 


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


 


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


 


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


 


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


 


(o)                                 “Origination
Agreement” means the Amended and Restated Origination Agreement by and between
the Parent and SL Green Operating Partnership, L.P., dated as of April 19,
2006.


 


(p)                                 “Partnership
Agreement” means the agreement of limited partnership of the Operating
Partnership, as amended from time to time.


 


(q)                                 “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.


 


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


 


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(s)                                  “Services
Agreement” means the Services Agreement by and among the Parent, the Operating
Partnership, SL Green Realty Corp. and SL Green Operating Partnership, L.P.
dated as of the date hereof.


 


(t)                                    “Stockholders’
Equity” means, without duplication, the sum of (i) the aggregate gross
proceeds from the sales of the Operating Partnership’s common and preferred
equity capital, (ii) the aggregate gross proceeds from the sales of trust
preferred securities issued by the Company, and (iii) the aggregate gross
proceeds from the sales of any securities issued by the Company that do not
constitute indebtedness on the Parent’s financial statements in accordance with
GAAP.


 


(u)                                 “Subsidiary”
means any direct or indirect subsidiary of the Parent or the Operating
Partnership, any partnership, the general partner of which is the Parent or the
Operating Partnership or any direct or indirect subsidiary of the Parent or the
Operating Partnership and any limited liability company, the managing member of
which is the Parent or the Operating Partnership or any direct or indirect
subsidiary of the Parent or the Operating Partnership.


 


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;


 


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(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 Parent’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;


 


(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 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 Board of Directors as requested by the
Board of Directors, including comparative information with respect to such
operating 


 


4

















 


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;


 


(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 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;


 


(xxiv)                    using
commercially reasonable efforts to cause the Parent and the Operating
Partnership to comply with all applicable laws, including the regulatory
requirements applicable to the Parent required by the New York Stock Exchange
and the Sarbanes-Oxley Act of 2002;


 


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(xxv)                       administering
the issuance of any stock under the stock incentive plan to the Company’s
executive officers or the employees of the Manager; and


 


(xxvi)                    taking the
foregoing actions for the Subsidiaries.


 


(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 Services
Agreement.  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 as such special servicer or sub-servicer.  In such event the fees to be paid to the
Manager 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.


 


(e)                                  CDO’s.  If the Company forms, directly or indirectly,
a CDO, CLO, REMIC or other similar vehicle (collectively, “CDOs”) and retains a
collateral manager, the Company shall, or shall cause the issuer(s) thereof
or their related parties to, enter into a collateral management agreement or
other similar agreements with the Manager similar to those agreements entered
into in connection with the Company’s CDOs completed in 2006 and 2007 and on
substantially the same terms and conditions, or upon the then current customary
market terms and conditions for similar agreements in similar transactions,
reasonably acceptable to the Manager, provided, however, that the compensation
paid to the Manager in connection therewith shall be as set forth in Section 8(b) hereof.


 


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


 


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(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.


 


(g)                                 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.


 


(h)                                 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.


 


(i)                                     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 Company
hereunder, the members of which team shall devote such of their time to the
management of the Company as the Manager deems necessary and appropriate,
commensurate with the level of activity of the Company from time to time.  The Company 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 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 


 


7

















 


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 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 Company’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 on the condition that SL Green observe the requirements of this Section 6(b) as
it applies to the Manager; (ii) in accordance with the Origination
Agreement and the Services 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 (viii) 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.


 


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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
affiliates and their respective members, stockholders, partners, managers,
directors, officers, employees and agents shall not be liable to the Parent,
the Operating Partnership or any Subsidiary, the Board of Directors or any of
the Company’s stockholders, members or partners for any act or omission by
Manager, its managers, directors, officers, employees or agents 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 of
the Board of Directors must unanimously approve all transactions involving
investments of (i) $35 million or more with respect to first mortgage
loans, (ii) $30 million or more with respect to subordinated interests in
whole loans, and (iii) $20 million or more with respect to mezzanine
loans, preferred equity and commercial real estate properties net leased to
tenants; approval by the full Board of Directors is required for investments (i) over
$75 million with respect to first mortgage loans, (ii) over $65 million
with respect to subordinated interests in whole loans, (iii) over $55
million with respect to mezzanine loans, and (iv) over $50 million with
respect to preferred equity and commercial real estate properties net leased to
tenants.  Manager will have full discretion to invest on behalf of the
Company with respect to investments under (i) $35 million with
respect to first mortgage loans, (ii) $30 million with respect to
subordinated interests in whole loans and, (iii) $20 million with respect
to mezzanine loans, preferred equity and commercial real estate properties net
leased to tenants.  Approval limits are based on the investment amount
less any origination fees, discounts or other up-front fees the Company
receives in connection with the investment. 
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)                                  Effective
as of October 1, 2008, the Manager shall receive an annual management fee
equal to 1.50% 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 


 


9

















 


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.


 


(b)                                 In
connection with any and all CDOs formed, owned or controlled, directly or
indirectly, by the Company, the Manager shall remit to the Company any and all
management, service and similar fees that the Manager is entitled to receive in
connection with such CDOs for any period from and after July 1, 2008.


 


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 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;


 


(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;


 


(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 and employees acting on Manager’s behalf, in each case, in the course
of the performance of Manager’s duties pursuant to this Agreement;


 


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


 


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(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.  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 and its affiliates and their
respective members, stockholders, partners, managers, directors, officers,
employees and agents will not be liable to the Parent, the Operating
Partnership, any Subsidiary, any of their directors, officers, stockholders,
managers, owners or 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 Company agrees, to indemnify Manager and
its affiliates and their respective members, stockholders, partners, managers,
directors, officers, 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.


 


11

















 


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, 2009, 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 Company 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
or SL Green); provided, that with respect to a willful and material
violation of this Agreement only, 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.


 


(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 the management fee earned by the Manager during the
12-month period immediately preceding the effective date of the termination;
provided, however, that if prior to or in connection with such termination the
Company acquires the Manager or the Manager’s business and, as a result,
becomes self-managed pursuant to a
separate agreement between or among the Manager, its members or/and their
respective affiliates and the Company, no termination fee shall be due
and payable to the Manager pursuant to this Section 13(e).  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.


 


12

















 


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 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, any Subsidiary or any
of their respective directors, officers, stockholders, managers, owners 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 affiliates and their respective members, stockholders, partners,
managers, directors, officers, employees and agents 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 to indemnification under Section 11.


 


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 


 


13

















 


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:
  Robert Foley

  
	
   

  	
   

  
	
  If to Manager:

  	
  GKK Manager LLC

  
	
   

  	
  c/o SL Green
  Realty Corp.

  
	
   

  	
  420 Lexington
  Avenue

  
	
   

  	
  New York, New
  York 10170

  
	
   

  	
  Attention:
  Andrew S. Levine

  



 


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 controls and supersedes 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.  For avoidance of doubt,
the parties hereto acknowledge that as a result of the restatement of the
Amended and Restatement Management Agreement, the Addendum shall be of no
further force and effect.


 


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 internal laws of the State of New York, without regard to conflicts of laws
principles thereof.


 


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.


 


14

















 


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.


 


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. The Manager may assign this Agreement, the
Manager’s duties hereunder or direct or indirect interests in the Manager so
long as the assignee or Manager, as the case may be, shall be controlled,
directly or indirectly, by SL Green Realty Corp.  For the avoidance of doubt, for the purposes
of this Section 26, SL Green Realty Corp. shall include any successor
to SL Green Realty Corp., whether by merger, consolidation or similar business
combination transaction, however characterized. 
Furthermore, 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.


 


15

















 


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:

  	
  /s/ Andrew S. Levine

  
	
   

  	
  Name:

  	
  Andrew S. Levine

  
	
   

  	
  Title:

  	
  Chief Legal Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRAMERCY CAPITAL CORP.

  
	
   

  	
  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert R. Foley

  
	
   

  	
  Name:

  	
  Robert R. Foley

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GKK CAPITAL LP

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert R. Foley

  
	
   

  	
  Name:

  	
  Robert R. Foley

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  
							



 


[Signature Page for Second Amended and Restated Management Agreement]