Exhibit
10.2


 


Form of Registration Rights Agreement


 


REGISTRATION
RIGHTS AGREEMENT


 


This REGISTRATION RIGHTS
AGREEMENT (this “Agreement”),
dated as of December 3, 2004, is made and entered into by and among
Gramercy Capital Corp., a Maryland corporation (the “Company”),
and certain persons listed on Schedule 1 hereto (such persons, in
their capacity as holders of Registrable Securities, the “Holders”
and each the “Holder”).  Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in Section 1
hereto.


 


RECITAL


 


This AGREEMENT is made in
connection with the Subscription Agreement for the purchase of the Company’s
common stock, par value $0.001 per share (the “Common
Shares”) between the Company and each Holder, dated the date hereof.  In order to induce each Holder to purchase
Common Shares, the Company agrees to provide the registration rights provided
for in this Agreement to each Holder and its direct and indirect transferees.


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the premises and the mutual promises and covenants contained
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:


 


Section 1.  Definitions. 
As used in this Agreement, the following terms shall have the following
meanings:


 


“Affiliate”  shall mean, when used with reference to a
specified Person, (i) any Person that directly or indirectly through one or
more intermediaries, Controls or is Controlled by or is under common Control
with the specified Person; (ii) any Person who, from time to time, is a member
of the Immediate Family of a specified Person; (iii) any Person who, from time
to time, is an officer or director or manager of a specified Person; or (iv)
any Person who, directly or indirectly, is the beneficial owner of 50% or more
of any class of equity securities or other ownership interests of the specified
Person, or of which the specified Person is directly or indirectly the owner of
50% or more of any class of equity securities or other ownership interests.


 


“Adverse Effect” shall have the meaning set forth in Section 3(e)
hereof.


 


“Agreement”
shall mean this Registration Rights Agreement as originally executed and as
amended, supplemented or restated from time to time.


 


“Board”
shall mean the Board of Directors of the Company.


 


“Business
Day”  shall mean each day
other than a Saturday, a Sunday or any other day on which banking institutions
in the State of New York are authorized or obligated by law or executive order
to be closed.


 


“Common
Shares” shall mean the shares of common stock of the Company,
par value $0.001 per share, purchased by Holders pursuant to the subscription
agreements dated the date hereof.


 


“Commission”
shall mean the Securities and Exchange Commission and any successor thereto.


 





















 


“Company”
shall have the meaning set forth in the introductory paragraph hereof.


 


“Control”
(including the terms “Controlling,”
“Controlled by” and “under common Control with”) shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person through the ownership of
Voting Power, by contract or otherwise.


 


“Demand Party” shall have the meaning set forth in Section 3(a)
hereof.


 


“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended
(or any corresponding provision of succeeding law) and the rules and
regulations thereunder.


 


“Holder”
shall mean each holder of the Common Shares listed in Schedule 1 hereto,
in his, her or its capacity as a holder of Registrable Securities.  For purposes of this Agreement, the Company
may deem and treat the registered holder of a Registrable Security as each
Holder and absolute owner thereof, unless notified to the contrary in writing
by the registered Holder thereof.


 


“Person”
shall mean any individual, partnership, corporation, limited
liability company, joint venture, association, trust, unincorporated
organization or other governmental or legal entity.


 


“Public
Offering” shall mean any offering of Registrable Securities to
the public pursuant to an effective registration statement filed with the
Commission under the Securities Act, or any comparable document under any
similar federal statute then in force.


 


“Registrable
Securities” shall mean the Common Shares; provided, however,
such Registrable Securities shall cease to be Registrable Securities when (A) a
registration statement with respect to the sale of such Registrable Securities
shall have become effective under the Securities Act and all such Registrable
Securities shall have been disposed of in accordance with such registration
statement, (B) such Registrable Securities shall have been sold in accordance
with Rule 144 (or any successor provision) under the Securities Act, (C) such
Registrable Securities become eligible to be publicly sold without limitation
as to amount or manner of sale pursuant to Rule 144(k) (or any successor
provision) under the Securities Act, or (D) such Registrable Securities have
ceased to be outstanding.


 


“Registration
Expenses” shall mean (i) the fees and disbursements of counsel
and independent public accountants for the Company incurred in connection with
the Company’s performance of or compliance with this Agreement, including the
expenses of any special audits or “comfort” letters required by or incident to
such performance and compliance, and any premiums and other costs of policies
of insurance obtained by the Company against liabilities arising out of the
sale of any securities and (ii) all registration, filing and stock exchange
fees, all fees and expenses of complying with securities or “blue sky” laws,
all fees and expenses of custodians, transfer agents and registrars, all
printing expenses, messenger and delivery expenses; provided, however,
“Registration Expenses” shall not include any out-of-pocket expenses of
each Holder, legal fees and expenses of any counsel to a Holder, transfer
taxes, underwriting or brokerage commissions or discounts associated with
effecting any sales of Registrable Securities that may be offered, which
expenses shall be borne by each Holder of Registrable Securities individually
or on a pro rata basis with respect to the
Registrable Securities so sold.


 


“Securities
Act” shall mean the Securities Act of 1933, as amended (or any
successor corresponding provision of succeeding law), and the rules and
regulations thereunder.


 


“Shelf
Registration Statement” shall have the meaning set forth in Section 2(a)
hereof.


 


“Stand-Off
Period” shall have the meaning set forth in Section 6
hereof.


 


“Voting
Power” shall mean voting securities or other voting interests
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of board members or Persons performing
substantially equivalent tasks and responsibilities with respect to a
particular entity.


 





















 


Section 2.  Shelf Registrations.


 


a.  Shelf Registration. 
The Company agrees to file with the Commission no later than August 31,
2005 and during a period of time that the issuer of the Registrable Securities
is eligible to use Form S-3 (or any similar or successor form), a registration
statement under the Securities Act on Form S-3 (or any similar or successor
form) for the offering on a continuous or delayed basis in the future of the
Registrable Securities (the “Shelf Registration
Statement”), and will use commercially reasonable efforts to
cause such Shelf Registration Statement to be declared effective by the
Commission as soon as practicable thereafter. 
The Shelf Registration Statement shall be on an appropriate form and the
registration statement and any form of prospectus included therein (or
prospectus supplement relating thereto) shall reflect the plan of distribution
or method of sale as each Holder may from time to time notify the Company.


 


b.  Effectiveness. 
The Company shall use commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective for the period beginning on the
date on which the Shelf Registration Statement is declared effective and ending
on the date that all of the Registrable Securities registered under the Shelf
Registration Statement cease to be Registrable Securities.  During the period that the Shelf Registration
Statement is effective, the Company shall supplement or make amendments to the
Shelf Registration Statement, if required by the Securities Act or if
reasonably requested by each Holder (whether or not required by the form on
which the securities are being registered), including to reflect any specific plan
of distribution or method of sale, and shall use its commercially reasonable
efforts to have such supplements and amendments declared effective, if
required, as soon as practicable after filing.


 


Section 3.  Registration on Request.


 


a.  Request. 
If, at any time after August 31, 2005, the Company (i) is not
eligible to use Form S-3 or (ii) has failed to file the Shelf Registration, any
Holder or the Holders (individually or collectively, as the case may be, the “Demand Party”) may request in
writing that the Company effect the registration under the Securities Act of
all of the Common Shares held by such Demand Party.  Any such request will specify (i) the number
of Common Shares proposed to be sold and (ii) the intended method of
disposition thereof.  Subject to the
other provisions of this Section 3, the Company shall promptly give
written notice of such requested registration to each Holder that is not a
Demand Party, and thereupon will, as expeditiously as possible, use its
commercially reasonable efforts to effect the registration under the Securities
Act of the Common Shares which the Company has been so requested to register by
the Demand Party.


 


b.  Registration Statement Form. 
The Company shall select the registration statement form for any registration
pursuant to this Section 3; provided, however, that if any
registration requested pursuant to this Section 3 which is proposed by the
Company to be effected by the filing of a registration statement on Form S-3
(or any successor or similar short-form registration statement) shall be in
connection with an underwritten public offering, and if the managing
underwriter shall advise the Company in writing that, in its opinion, the use
of another form of registration statement is of material importance to the
success of such proposed offering, then such registration shall be effected on
such other form.


 


c.  Effective Registration Statement. 
A registration requested pursuant to this Section 3 will not be
deemed to have been effected:


 


(i)                                                                                     unless a registration statement with respect
thereto has become effective and remained effective in compliance with the
provisions of the Securities Act with respect to the disposition of all Common
Shares covered by such registration statement until the earlier of (x)


 





















 


such
time as all of such Common Shares have been disposed of in accordance with the
intended methods of disposition thereof set forth in such registration
statement or (y) one-hundred-eighty (180) days after the effective date of such
registration statement, except with respect to any registration statement filed
pursuant to Rule 415 under the Securities Act, in which case the Company shall
use its commercially reasonable efforts to keep such registration statement
effective until such time as all of the Common Shares cease to be Registrable
Shares; provided,  that if the
failure of any such registration statement to become or remain effective in
compliance with this Section 3 is due solely to acts or omissions of the
applicable Holders, such registration requested pursuant to this Section 3
will be deemed to have been effected;


 


(ii)                                                                                  if after it has become effective, the
registration statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or other governmental agency or authority
and does not thereafter become effective; or


 


(iii)                                                                               if the conditions to closing specified in
the underwriting agreement, if any, entered into in connection with such
registration are not satisfied or waived, other than by reason of a failure on
the part of the Demand Party or other Holders.


 


d.  Underwritten Offering.  At the
election of the Demand Party, a requested registration pursuant to this Section 3
may involve an underwritten offering, the investment banker(s), underwriter(s)
and manager(s) for such registration shall be selected by and, in such case,
the Holders of a majority of the Common Shares which the Company has been
requested to register; provided, however, that such investment
banker(s), underwriter(s) and manager(s) shall be reasonably satisfactory to
the Company.


 


e.  Priority in Requested Registrations. 
If a requested registration pursuant to this Section 3 involves an
underwritten offering and the managing underwriter advises the Company in
writing that, in its opinion, the number of securities to be included in such
registration would be likely to have an adverse effect on the price, timing or
distribution of the securities to be offered in such offering as contemplated
by the Holders (an “Adverse Effect”),
then the Company shall include in such registration Common Shares requested to
be included in such registration by the Demand Party and all other Holders of
Common Shares pursuant to this Section 3 on a pro rata
basis based on the number of Common Shares requested to be included, to the
extent that the managing underwriter believes that such Common Shares can be
sold in such offering without having an Adverse Effect.  If the managing underwriter of any
underwritten offering shall advise the Holders participating in a registration
pursuant to this Section 3 that the Common Shares covered by the
registration statement cannot be sold in such offering within a price range
acceptable to the Demand Party, then the Demand Party shall have the right to
notify the Company that it has determined that the registration statement be
abandoned or withdrawn, in which event the Company shall abandon or withdraw
such registration statement.


 


Section4.  Black-Out Periods.


 


Notwithstanding anything
herein to the contrary, the Company shall have the right, exercisable from time
to time by delivery of a notice authorized by the Board, on not more than two
occasions in any 12-month period, to require each Holder not to sell pursuant
to a registration statement or similar document under the Securities Act filed
pursuant to this Agreement or to suspend the effectiveness thereof if at the
time of the delivery of such notice, the Board has considered a plan to engage
no later than 60 days following the date of such notice in a firm commitment underwritten
public offering or if the Board has reasonably and in good faith determined
that such registration and offering, continued effectiveness or sale would
materially interfere with any material transaction involving the Company; provided,
however, that in no event shall the black-out period extend for more
than 60 days on any such


 





















 


occasion. 
The Company, as soon as practicable, shall (i) give each Holder prompt
written notice in the event that the Company has suspended sales of Registrable
Securities pursuant to this Section 3, (ii) give each Holder prompt
written notice of the completion of such offering or material transaction and
(iii) promptly file any amendment necessary for any registration statement or
prospectus of each Holder in connection with the completion of such event.


 


The Holder agrees by
acquisition of the Registrable Securities that upon receipt of any notice from
the Company of the happening of any event of the kind described in this Section 3,
such Holder will forthwith discontinue its disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such Holder’s receipt of the notice of completion of such
event.


 


Section 5.  Registration Procedures.


 


a.  In connection with the filing of any
registration statement as provided in this Agreement, the Company shall, as
expeditiously as reasonably practicable:


 


(i)                                                                                     prepare and, in any event within thirty
(30) days after the end of the period within which a request for registration
may be given to the Company, file with the Commission the requisite
registration statement (including a prospectus therein and any supplement
thereto) to effect such registration and use its commercially reasonable
efforts to cause such registration statement to become effective; provided,
however, that before filing such registration statement or any
amendments or supplements thereto, the Company will furnish copies of all such
documents proposed to be filed to counsel for the sellers of Registrable Securities
covered by such registration statement and provide reasonable time for such
sellers and their counsel to comment upon such documents if so requested by a
Holder;


 


(ii)                                                                                  prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to maintain the effectiveness
of such registration and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during the period in which such registration statement is required to
be kept effective;


 


(iii)                                                                               furnish to each Holder of the securities
being registered, without charge, such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits) other than those which are being incorporated
into such registration statement by reference, such number of copies of the
prospectus contained in such registration statements (including each complete
prospectus and any summary prospectus) and any other prospectus filed under
Rule 424 under the Securities Act in conformity with the requirements of the
Securities Act, and such other documents, including documents incorporated by
reference, as each Holder may reasonably request;


 


(iv)                                                                              use its commercially reasonable efforts
to register or qualify all Registrable Securities under such other securities
or “blue sky” laws of such jurisdictions as each Holder and the underwriters of
the securities being registered, if any, shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
statement remains in effect, and take any other action which may be reasonably
necessary or advisable to enable each Holder to consummate the disposition in
such jurisdiction of the securities owned by each Holder, except that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign company or to register as a broker or dealer in any
jurisdiction where it would not otherwise be required to qualify but for this Section 4(a)(iv),
or to consent to general service of process in any such jurisdiction, or to be
subject to any material tax obligation in any such jurisdiction where it is not
then so subject;


 





















 


(v)                                                                                 promptly notify each Holder at any time
when the Company becomes aware that a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were
made, and, at the request of each Holder, promptly prepare and furnish to each
Holder a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made;


 


(vi)                                                                              use its commercially reasonable efforts
to comply or continue to comply in all material respects with the Securities
Act and the Exchange Act and with all applicable rules and regulations of the
Commission thereunder so as to enable each Holder to sell its Registrable
Securities pursuant to Rule 144 promulgated under the Securities Act, as
further agreed to in Section 8 hereof;


 


(vii)                                                                           make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of
at least 12 months, but not more than 18 months, beginning with the first
calendar month after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act;


 


(viii)                                                                        provide a transfer agent and registrar and a
CUSIP number for all Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;


 


(ix)                                                                                use its commercially reasonable efforts
to cooperate with each Holder to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold and not bearing
any Securities Act legend; and enable certificates for such Registrable
Securities to be issued for such number of shares and registered in such names
as each Holder may reasonably request in writing at least two Business Days
prior to any sale of Registrable Securities;


 


(x)                                                                                   use its commercially reasonable efforts
to list all Registrable Securities covered by such registration statement on
any securities exchange or national quotation system on which any such class of
securities is then listed or quoted and cause to be satisfied all requirements
and conditions of such securities exchange or national quotation system to the
listing or quoting of such securities that are reasonably within the control of
the Company including, without limitation, registering the applicable class of
Registrable Securities under the Exchange Act, if appropriate, and using  commercially reasonable efforts to cause such
registration to become effective pursuant to the rules of the Commission;


 


(xi)                                                                                in connection with any sale, transfer or
other disposition by each Holder of any Registrable Securities pursuant to Rule
144 promulgated under the Securities Act, use its commercially reasonable
efforts to cooperate with such Holder to facilitate the timely preparation and
delivery of certificates representing the Registrable Securities to be sold and
not bearing any Securities Act legend, and enable certificates for such
Registrable Securities to be for such number of shares and registered in such
name as each Holder may reasonably request in writing at least three Business
Days prior to any sale of Registrable Securities;


 





















 


(xii)                                                                             notify each Holder, promptly after it
shall receive notice thereof, of the time when such registration statement, or
any post-effective amendments to the registration statement, shall have become
effective, or a supplement to any prospectus forming part of such registration
statement has been filed or when any document is filed with the Commission
which would be incorporated by reference into the prospectus;


 


(xiii)                                                                          notify each Holder of any request by the
Commission for the amendment or supplement of such registration statement or
prospectus for additional information;


 


(xiv)                                                                         advise each Holder, promptly after it
shall receive notice or obtain knowledge thereof, of (A) the issuance of any
stop order, injunction or other order or requirement by the Commission
suspending the effectiveness of such registration statement or the initiation
or threatening of any proceeding for such purpose and use all commercially
reasonable efforts to prevent the issuance of any stop order, injunction or
other order or requirement or to obtain its withdrawal if such stop order,
injunction or other order or requirement should be issued, (B) the suspension
of the registration of the subject shares of the Registrable Securities in any
state jurisdiction and (C) the removal of any such stop order, injunction or
other order or requirement or proceeding or the lifting of any such suspension;
and


 


(xv)                                                                            use its commercially reasonable efforts
(taking into account the interests of the Company) to make available the
executive officers of the Company to participate with the Holders of
Registrable Securities and any underwriters in “road shows” or other selling
efforts that may be reasonably requested by the Holders in connection with the
methods of distribution for the Registrable Securities.


 


b.  In
connection with the filing of any registration statement covering Registrable
Securities, each Holder shall furnish in writing to the Company such
information regarding itself (and any of its Affiliates), the Registrable
Securities to be sold, the intended method of distribution of such Registrable
Securities and such other information requested by the Company as is necessary
or advisable for inclusion in the registration statement relating to such
offering pursuant to the Securities Act. 
Such writing shall expressly state that it is being furnished to the
Company for use in the preparation of a registration statement, preliminary
prospectus, supplementary prospectus, final prospectus or amendment or supplement
thereto, as the case may be.


 


Each Holder agrees by
acquisition of the Registrable Securities that (i) upon receipt of any notice
from the Company of the happening of any event of the kind described in Section 4(a)(v),
such Holder will forthwith discontinue its disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such Holder’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4(a)(v); (ii) upon receipt
of any notice from the Company of the happening of any event of the kind
described in clause (A) of Section 4(a)(xiv), such Holder will
discontinue its disposition of Registrable Securities pursuant to such
registration statement until such Holder’s receipt of the notice described in
clause (C) of Section 4(a)(xiv); and (iii) upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (B) of Section 4(a)(xiv), each Holder will discontinue its
disposition of Registrable Securities pursuant to such registration statement
in the applicable state jurisdiction(s) until such Holder’s receipt of the
notice described in clause (C) of Section 4(a)(xiv).


 


Section 6.  Indemnification.


 


a.  Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder, its partners, officers, directors, trustees,
stockholders, employees, agents and investment advisers, and each Person, if
any, who controls each Holder within the meaning of


 





















 


the
Securities Act or the Exchange Act, together with the partners, officers,
directors, trustees, stockholders, employees, agents and investment advisers of
such controlling person, against any losses, claims, damages, liabilities and
expenses (including, without limitation, reasonable attorneys’ fees), joint or
several, to which each Holder or any such indemnitees may become subject under
the Securities Act, the Exchange Act, any federal or state law or otherwise,
insofar as such losses, claims, damages, liabilities and expenses (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such Registrable
Securities were registered and sold under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or any violation of
the Securities Act or state securities laws or rules thereunder by the Company
relating to any action or inaction by the Company in connection with such
registration, and the Company will reimburse each Holder for any reasonable
legal or any other expenses reasonably incurred by it in connection with investigating
or defending any such loss, claim, liability, action or proceedings; provided,
however, that the Company shall not be liable in any such case to a
Holder to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged statement or omission or alleged omission made in
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Holder specifically
stating that it is for use in the preparation thereof; and provided, further,
that the Company shall not be liable to such Holder or any other Person who
controls each Holder within the meaning of the Securities Act or the Exchange
Act in any such case to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of such
Person’s failure to send or give a copy of the final prospectus or supplement
to the Persons asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the
sale of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus or supplement.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of each Holder or
any such controlling Person and shall survive the transfer of such securities
by each Holder.


 


b.  Indemnification by each Holder. The Holder agrees to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section 5(a))
the Company, each member of the Board, each officer, employee, agent and
investment adviser of the Company and each other Person, if any, who controls
any of the foregoing within the meaning of the Securities Act or the Exchange
Act, with respect to any untrue statement or alleged untrue statement of a
material fact in or omission or alleged omission to state a material fact from
such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto,
if such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Holder regarding such Holder giving such
indemnification specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. 
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any such Board member,
officer, employee, agent, investment adviser or controlling Person and shall
survive the transfer of such securities by any Holder.  The obligation of a Holder to indemnify will
be several and not joint, among the Holders of Registrable Securities and the
liability of each such Holder of Registrable Securities will be in


 





















 


proportion to and limited in all events to the net amount
received by such Holder from the sale of Registrable Securities pursuant to
such registration statement.


 


c.  Notices of Claims, etc. 
Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in the
preceding paragraphs of this Section 5, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section 5, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice.  In case any such action is
brought against an indemnified party, unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to assume the defense thereof, for itself, if applicable,
together with any other indemnified party similarly notified, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to the
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof.


 


d.  Indemnification Payments.  To the extent
that the indemnifying party does not assume the defense of an action brought
against the indemnified party as provided in Section 5(c), the
indemnified party (or parties if there is more than one) shall be entitled to
the reasonable legal expenses of common counsel for the indemnified party (or
parties).  In such event, however, the
indemnifying party will not be liable for any settlement effected without the
written consent of such indemnifying party, which consent shall not be
unreasonably withheld.  The
indemnification required by this Section 5 shall be made by
periodic payments of the amount thereof during the course of an investigation
or defense, as and when bills are received or expense, loss, damage or
liability is incurred.  The indemnifying
party shall not settle any claim without the consent of the indemnified party
unless such settlement involves a complete release of such indemnified party
without any admission of liability by the indemnified party.


 


e.  Contribution. 
If, for any reason, the foregoing indemnity is unavailable, or is
insufficient to hold harmless an indemnified party, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of the expense, loss, damage or liability, (i) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission relates to information supplied by the indemnifying party or the indemnified
party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission) or (ii) if
the allocation provided by subclause (i) above is not permitted by applicable
law or provides a lesser sum to the indemnified party than the amount  hereinafter calculated, in the proportion as
is appropriate to reflect not only the relative fault of the indemnifying party
and the indemnified party, but also the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other, as
well as any other relevant equitable considerations.  No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any indemnifying party who was not
guilty of such fraudulent misrepresentation, and the liability for contribution
of each Holder of Registrable Securities will be in proportion to and limited
in all events to the net amount received by each Holder from the sale of
Registrable Securities pursuant to such registration statement.


 





















 


Section 7.  Market Stand-Off Agreement.  The Holder hereby agrees that it shall not,
to the extent requested by the Company or an underwriter of securities of the
Company, directly or indirectly sell, offer to sell (including without
limitation any short sale), grant any option or otherwise transfer or dispose
of any Registrable Securities (other than to donees or partners of each Holder
who agree to be similarly bound) within seven days prior to and for up to 90
days following the effective date of a registration statement of the Company
filed under the Securities Act (except the Shelf Registration Statement filed
for the benefit of the Holders pursuant to this Agreement) or the date of an
underwriting agreement with respect to an underwritten public offering of the
Company’s securities (the “Stand-Off Period”);
provided, however, that:


 


a.  with respect to the Stand-Off Period, such
agreement shall not be applicable to the Registrable Securities to be sold on
each Holder’s behalf to the public in an underwritten offering pursuant to such
registration statement;


 


b.  all
executive officers and directors of the Company then holding Common Stock of
the Company shall enter into similar agreements; and


 


c.  each Holder shall be allowed any concession
or proportionate release allowed to any (i) officer, or (ii) director of the
Company that entered into similar agreements.


 


In order to enforce the
foregoing covenant, the Company shall have the right to place restrictive
legends on the certificates representing the Registrable Securities subject to
this Section 6 and to impose stop transfer instructions with respect to
the Registrable Securities and such other Common Shares of each Holder (and the
Common Shares or securities of every other person subject to the foregoing
restriction) until the end of such period.


 


Once a registration
statement covering the Registrable Securities is effective, the provisions of
this Section 7 shall be of no further force and effect.


 


Section 8.  Covenants Relating To Rule 144.  At such times as the Company is obligated to
file reports in compliance with either Section 13 or 15(d) of the Exchange
Act, the Company covenants that it will file any reports required to be filed
by it under the Securities Act and the Exchange Act and that it will take such
further action as each Holder may reasonably request, all to the extent
required from time to time to enable each Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such rule may
be amended from time to time or (b) any similar rule or regulation hereafter adopted
by the Commission.  Upon the request of
each Holder, the Company will deliver to each Holder a written statement as to
whether it has complied with such requirements.


 


Section 9.  Miscellaneous.


 


a.  Termination; Survival.  The rights of
each Holder under this Agreement shall terminate upon the date that all of the
Registrable Securities held by each Holder may be sold during any three-month
period in a single transaction or series of transactions without volume
limitations under Rule 144 (or any successor provision) under the Securities
Act.  Notwithstanding the foregoing, the
obligations of the parties under Section 5 and paragraphs (d), (e) and (g)
of this Section 8 shall survive the termination of this Agreement.


 


b.  Expenses. 
All Registration Expenses incurred in connection with any Shelf
Registration Statement (including any prospectus or prospectus supplement)
prepared and/or filed pursuant to this Agreement shall be borne by the Company,
whether or not any registration statement related thereto becomes effective.


 





















 


c.  Counterparts. 
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the parties and
delivered to each of the other parties.


 


d.  Applicable Law; Jurisdiction. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.  The
parties consent to the exclusive jurisdiction of the United States District
Court for the Southern District of New York in connection with any civil action
concerning any controversy, dispute or claim arising out of or relating to this
Agreement, or any other agreement contemplated by, or otherwise with respect
to, this Agreement or the breach hereof, unless such court would not have
subject matter jurisdiction thereof, in which event the parties consent to the
jurisdiction of the State of New York. 
The parties hereby waive and agree not to assert in any litigation
concerning this Agreement the doctrine of forum non conveniens.


 


e.  Waiver Of Jury Trial. 
THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.


 


Prior Agreement;
Construction; Entire Agreement.  This
Agreement, including the exhibits and other documents referred to herein (which
form a part hereof), constitutes the entire agreement of the parties with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings between the parties, and all such prior agreements and
understandings are merged herein and shall not survive the execution and
delivery hereof.


 


Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent, postage prepaid, by registered, certified or express mail or
reputable overnight courier service or be telecopier and shall be deemed given
when so delivered by hand or, if mailed, three days after mailing (one Business
Day in the case of express mail or overnight courier service), addressed as
follows:


 


	
  If to each Holder:

  	
  To the address indicated for such Holder in
  Schedule 1 hereto.

  
	
   

  	
   

  
	
  If to the Company:

  	
  Gramercy Capital Corp.

  420 Lexington Avenue

  New York, New York 10170

  Attn: Robert R. Foley

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Clifford Chance US LLP

  31 West 52nd Street

  New York, New York 10019

  Attention:  Robert E. King Jr.

  Facsimile:  212-878-8375

  



 


Successors and Assigns.  This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of each
Holder.  The Company may assign its
rights or obligations hereunder to any successor to the


 





















 


Company’s business or with the prior written consent
of each Holder.  Notwithstanding the foregoing, no assignee of
the Company shall have any of the rights granted under this Agreement until
such assignee shall acknowledge its rights and obligations hereunder by a
signed written agreement pursuant to which such assignee accepts such rights
and obligations.  Each Holder may assign
its rights or obligations hereunder in whole or in part in connection with the
transfer, sale or other disposition of its Common Shares so long as such
assignee shall acknowledge its rights and obligations hereunder by a signed
written agreement pursuant to which such assignee accepts such rights and
obligations, upon which assignee shall be deemed to be a “Holder” for all
purposes hereunder.


 


f.  Headings. 
Headings are included solely for convenience of reference and if there
is any conflict between headings and the text of this Agreement, the text shall
control.


 


g.  Amendments And Waivers. 
The provisions of this Agreement may be amended or waived at any time
only by the written agreement of the Company and the Holders of a majority of
the Registrable Securities.  Any waiver,
permit, consent or approval of any kind or character on the part of each Holder
of any provision or condition of this Agreement must be made in writing and
shall be effective only to the extent specifically set forth in writing.  Any amendment or waiver effected
in accordance with this paragraph shall be binding upon each Holder of
Registrable Securities and the Company.


 


h.  Interpretation; Absence Of Presumption. 
For the purposes hereof, (i) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (ii) the terms “hereof,” “herein,”
and “herewith” and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section, paragraph or other references are to
the Sections, paragraphs, or other references to this Agreement unless
otherwise specified, (iii) the word “including” and words of similar import
when used in this Agreement shall mean “including, without limitation,” unless
the context otherwise requires or unless otherwise specified, (iv) the word “or”
shall not be exclusive and (v) provisions shall apply, when appropriate, to
successive events and transactions.


 


This Agreement
shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instruments to be drafted.


 


i.  Severability. 
If any provision of this Agreement shall be or shall be held or deemed
by a final order by a competent authority to be invalid, inoperative or
unenforceable, such circumstance shall not have the effect of rendering any
other provision or provisions herein contained invalid, inoperative or
unenforceable, but this Agreement shall be construed as if such invalid,
inoperative or unenforceable provision had never been contained herein so as to
give full force and effect to the remaining such terms and provisions.


 


j.  Specific Performance; Other Rights. 
The parties recognize that various other rights rendered under this
Agreement are unique and, accordingly, the parties shall, in addition to such
other remedies as may be available to them at law or in equity, have the right
to enforce the rights under this Agreement by actions for injunctive relief and
specific performance.


 


k.  Further Assurances. 
In connection with this Agreement, as well as all transactions and
covenants contemplated by this Agreement, each party hereto agrees to execute
and deliver or cause to be executed and delivered such additional documents and
instruments and to perform or cause to be performed such additional acts as may
be necessary or appropriate to effectuate,


 





















 


carry out and perform all of the terms, provisions and
conditions of this Agreement and all such transactions and covenants
contemplated by this Agreement.


 


1.  No Waiver.  The waiver of any breach of any term or
condition of this Agreement shall not operate as a waiver of any other breach
of such term or condition or of any other term or condition, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision
or of any other provision hereof.


 


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


 


	
   

  	
  GRAMERCY CAPITAL CORP.

  
	
   

  	
  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  HOLDERS

  
	
   

  	
   

  
	
   

  	
  [See subscription agreement signatures]

  



 





















 


Schedule 1


 


THE HOLDERS


 


	
  Name of the Holder

  	
   

  	
  Number of

  Common Shares

  Purchased

  	
   

  	
  Address of the Holder